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M A R C H 2 2, 2 0 1 2




                         Digital Ad Trends—
                         What’s Behind the
                         Spending Boom


                                          Sponsored by:



David Hallerman
Principal Analyst
                                              ©2012 eMarketer Inc.
What we’ll look at today…



 Online ad spend: growth factors
 Consolidation: one form of imbalance
 Ad formats: imbalance skews the picture
 Video, video: cross-channel central
 Social: its true place in the scheme of things
 Mobile: opportunity but also imbalance
 Three numbers: 23.3 and 24.1 and 15.2

                                               ©2012 eMarketer Inc.
Questions about why eMarketer
projects ad spending growth at 23.3%
Total digital ad
spending
(what’s creating the growth)
Total online
ad spending
makes huge
gains
annually, but
its growth
rate is
slowing




                ©2012 eMarketer Inc.
Eight of 15
researchers
estimate
spending in
2012 at $35
billion or
higher




              ©2012 eMarketer Inc.
One factor:
This year’s
elections will
help online
ad spending
grow by
about the
same rate as
last year




                 ©2012 eMarketer Inc.
Key reasons for total market growth


  The “more” factors. That is, more…
   Time: consumer time on digital rising rapidly
   Inventory: a result of more visits, sites, time
   Measurable: the need to be accountable
   Video: professional content to support ads
   Mobile: time, usage and expectations
   Brands: entry points increasing
   Dollars: budget focus makes digital central
Twitter – #eMwebinar                             ©2012 eMarketer Inc.
Digital’s
rising share
of total
media ad
spending is
finally
starting to
match media
usage time




               ©2012 eMarketer Inc.
About 24%
of media
time is
internet
time, but
multitasking
and
inattention
mean not all
time is a
good time to
advertise

               ©2012 eMarketer Inc.
Consolidation
(the game continues but
players change)
Bottom line questions…




                         ©2012 eMarketer Inc.
Turn into the
big bucks?




                ©2012 eMarketer Inc.
Or turn out to be just small change?




                                       ©2012 eMarketer Inc.
Or slip away
like a handful
of water?




                 ©2012 eMarketer Inc.
The top ad-selling companies are
shifting places




                                   ©2012 eMarketer Inc.
Five companies will get more than two-
thirds of digital ad revenues in 2012




                                     ©2012 eMarketer Inc.
Consolidation
in the online
ad business
is not new,
though—the
rich grow
richer, but
unevenly




                Twitter – #eMwebinar   ©2012 eMarketer Inc.
Reality
check:
Forget
growth
rates;
instead see
Google way
on top and
continued
consolidation
overall


                ©2012 eMarketer Inc.
Share of total internet ad revenues
among top 10 ad-selling companies



 2002       2004        2006            2008
 72%        71%         69%             72%




 2009       2010        2011            2012
 71%        72%         72%             ??%


                                      Source: IAB/PwC, 2002-2011
                                                ©2012 eMarketer Inc.
The
imbalanced
market can
sometimes
be a little
crazy-making
for many
other
ad-selling
companies



               ©2012 eMarketer Inc.
Ad formats
(several imbalanced arenas)
Video ad
spending
will jump
more than
twice as
much as any
other format
or the
overall
market
But by dollar
share,
there’s
search—and
then there’s
everything
else




                Twitter – #eMwebinar
Search market share among top 4 sites
is probably not news
However, search growth has become a
two-company competition
Is search a model for other forms of
digital advertising?
The digital space mixes branding with…
…direct response marketing, which
often means…
…even a single ad can dissolve the
classic division between the two
Display advertising
(a diverse market)
Display
dollars in
2015 will
increase by
more than
half from
2012—but
growth rate
will decline
from 24.1%
to 10.8%
Video share
up, banner
share down,
sponsorship
a potentially
profitable
niche




                Twitter – #eMwebinar   ©2012 eMarketer Inc.
Significant disparity of display revenue
growth at top 5 companies




                                       ©2012 eMarketer Inc.
However, display spending is less
consolidated than the total market
Impressions match money: The not-top-5
get about half of display impressions
Weighing the imbalances in digital ad
spending helps focus budget choices
Display growth without social and
mobile paints a different picture
Three more ways of parsing the current
display market
The video focus
(cross-channel possibilities)
Even as
online video
advertising
growth rates
slow,
spending
will double in
only two
years




                 Twitter – #eMwebinar
Display’s overall market growth at 24.1%
is due mainly to video’s strength…
…where about half or more of marketers
expect to increase spending in 2012
Key
indicators:
Comparing
growth vs.
dollars
shows
mobile video
gaining more
but more
money goes
on the
desktop
As seen on the web? (Nah!) TV’s power
is still unmatched for many goals




                                    ©2012 eMarketer Inc.
In a typical week, US consumers watch
video mainly on TV, however…
TV forever? Containers may change, but
the content basically remains the same
Social and mobile
(beyond the hype)
Social sites
will see
greater ad
growth in
2012 than
the overall
market —
43% vs. 23%
(but social is
much more
than just
advertising)

                 Twitter – #eMwebinar   ©2012 eMarketer Inc.
More
marketers
plan display
spending
increases on
social media
than, say, on
content
publisher
sites



                ©2012 eMarketer Inc.
Facebook is
the social ad
revenue
leader, but
other social
sites are
slowly
gaining on it




                ©2012 eMarketer Inc.
The social
space is
large and
getting
larger —
does that
mean it’s due
for shakeout?




                ©2012 eMarketer Inc.
Mobile ad
spending
will rise from
$1.45 billion
last year to
$2.61 billion
this year,
driven by
everything
but text
messaging


                 ©2012 eMarketer Inc.
About half of mobile spending went to
Google — far more than even Apple




                                        ©2012 eMarketer Inc.
The mobile
market is
mainly
search, with
a large slice
slice of
banners and
rich media




                Twitter – #eMwebinar
                                       ©2012 eMarketer Inc.
And mobile search is mainly Google
(another huge cluster)




                                     ©2012 eMarketer Inc.
Mobile display: one more market that’s
concentrated, but a bit less so




                                     ©2012 eMarketer Inc.
Getting your share of the mobile market
often means playing with the big dogs
Conclusions




              ©2012 eMarketer Inc.
Conclusions:
Ad spending growth is uneven, but…
 The 23.3% projection for 2012 is for the overall market.
 But the overall market is imbalanced.
 Some of the imbalanced elements:
       search nearly 50% of whole, and growing at 27%
       video growth at 55%, but makes up only 8% of total
       five companies will get nearly 67% of ad revenues
       social dominated by Facebook, with 70% of category ad dollars
       mobile display dominated by three networks (60%), and mobile
        search is nearly all Google (95%)
 Display online, and video in particular, offer more opportunities for
  lessening the imbalance than does search, social or mobile.
 But note how display growth (sans social and mobile) at 15.2% more
  accurately represents the mainstream online ad market.

                                                                ©2012 eMarketer Inc.
Consumers Reward Brand Transparency


              Lack Favorability Towards                                                                          Impact of Transparency on
                    OBA Concept                                                                                    Perceptions of Online
                                                                                                                        Advertising
                                Like
                                                                                                                     55%
                                                                    Do not like
                                                                                                                                        51%




    Neutral


                                                                                                         I would be inclined to      I would be more
                                                                                                         do more business            inclined to click on an
                                                                                                         with ad advertiser or       advertisement that
                                                                                                         publisher who gives         gives me the option to
                                                                                                         me the option to opt-       opt-out of OBA
                                                                                                         out of OBA

BASE: Total Qualified Respondents (n=1004)
Q75 Please indicate the degree to which you agree or disagree with each of the following statements related to online advertising.
Addressing Consumer Concerns with DAA-
       Compliant Self Regulation
                          DAA Evolution




The Digital Advertising    Self-Regulatory Program       Advertising Preferences Icon
Alliance (DAA)             For Behavioral Advertising

          DAA – AdChoices Program Growth and News

                              Substantial growth: 400+ companies comply

                              900 billion compliant impressions per month

                              All top-15 global advertisers participate, including:
                             American Express, AT&T, Disney, General Motors, Kraft
                             Foods, Microsoft and Walmart

                              Feb, 2012: The DAA announced that it will immediately
                             begin work to add support for browser based DNT header
                             signals. Planning to integrate by end of year.
How Does DAA Compliance Work?

 Advertising User Experience




1.   A simple ad tag        2.   If clicked the icon    3.   Consumers have option to
     inserts the DAA icon        launches privacy            click to Preference Manager
                                 notice inside the ad        and opt out of selected
                                                             tracking networks




                                                                                      a
Consumer favorability increases 50% with
                                  “Powered By TRUSTe” DAA Compliance


                                                                             Impact on
                                                                         Feelings Towards
                                                                           the Advertiser




BASE: Total Qualified Respondents
Q935/Q950 And, how does having this information available make you feel about the advertiser?
About TRUSTe

Leader in Privacy Management Solutions
    14 years of privacy experience
    Robust technology platform
    #1 privacy brand & trustmark


Comprehensive Solution Suite
    All media and devices
    Global coverage
    Self- and full-service options


 Leading Provider to Leading Brands
    Over 5,000 clients
    Leading DAA AdChoices Icon Provider
    Over 100 Billion DAA Compliant Ads Served
Q&A Session
                             Learn more about digital advertising with
                               an eMarketer corporate subscription
Digital Ad Trends—
What’s Behind the
                            Over 120 reports are published each year.
  Spending Boom
                            Following are a few of the recent ones
                            focusing on spending:

                             US Digital Ad Spending: Key Trends for 2012

                             Local Online Advertising: Digital Trends, Challenges and
                              Opportunities
David Hallerman              Western Europe Mobile Ad Spending

You will receive an email    Western Europe Digital Advertising: Spending and Trends
 tomorrow with a link to
   view the deck and
   webinar recording.
                                 To learn more: www.emarketer.com/products
    Sponsored by:                  800-405-0844 or webinars@emarketer.com
     TRUSTe
                                                                             ©2012 eMarketer Inc.

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eMarketer Webinar: Digital Ad Trends—What's Behind the Spending Boom

  • 1. M A R C H 2 2, 2 0 1 2 Digital Ad Trends— What’s Behind the Spending Boom Sponsored by: David Hallerman Principal Analyst ©2012 eMarketer Inc.
  • 2. What we’ll look at today…  Online ad spend: growth factors  Consolidation: one form of imbalance  Ad formats: imbalance skews the picture  Video, video: cross-channel central  Social: its true place in the scheme of things  Mobile: opportunity but also imbalance  Three numbers: 23.3 and 24.1 and 15.2 ©2012 eMarketer Inc.
  • 3. Questions about why eMarketer projects ad spending growth at 23.3%
  • 4. Total digital ad spending (what’s creating the growth)
  • 5. Total online ad spending makes huge gains annually, but its growth rate is slowing ©2012 eMarketer Inc.
  • 6. Eight of 15 researchers estimate spending in 2012 at $35 billion or higher ©2012 eMarketer Inc.
  • 7. One factor: This year’s elections will help online ad spending grow by about the same rate as last year ©2012 eMarketer Inc.
  • 8. Key reasons for total market growth The “more” factors. That is, more…  Time: consumer time on digital rising rapidly  Inventory: a result of more visits, sites, time  Measurable: the need to be accountable  Video: professional content to support ads  Mobile: time, usage and expectations  Brands: entry points increasing  Dollars: budget focus makes digital central Twitter – #eMwebinar ©2012 eMarketer Inc.
  • 9. Digital’s rising share of total media ad spending is finally starting to match media usage time ©2012 eMarketer Inc.
  • 10. About 24% of media time is internet time, but multitasking and inattention mean not all time is a good time to advertise ©2012 eMarketer Inc.
  • 11. Consolidation (the game continues but players change)
  • 12. Bottom line questions… ©2012 eMarketer Inc.
  • 13. Turn into the big bucks? ©2012 eMarketer Inc.
  • 14. Or turn out to be just small change? ©2012 eMarketer Inc.
  • 15. Or slip away like a handful of water? ©2012 eMarketer Inc.
  • 16. The top ad-selling companies are shifting places ©2012 eMarketer Inc.
  • 17. Five companies will get more than two- thirds of digital ad revenues in 2012 ©2012 eMarketer Inc.
  • 18. Consolidation in the online ad business is not new, though—the rich grow richer, but unevenly Twitter – #eMwebinar ©2012 eMarketer Inc.
  • 19. Reality check: Forget growth rates; instead see Google way on top and continued consolidation overall ©2012 eMarketer Inc.
  • 20. Share of total internet ad revenues among top 10 ad-selling companies 2002 2004 2006 2008 72% 71% 69% 72% 2009 2010 2011 2012 71% 72% 72% ??% Source: IAB/PwC, 2002-2011 ©2012 eMarketer Inc.
  • 21. The imbalanced market can sometimes be a little crazy-making for many other ad-selling companies ©2012 eMarketer Inc.
  • 23. Video ad spending will jump more than twice as much as any other format or the overall market
  • 24. But by dollar share, there’s search—and then there’s everything else Twitter – #eMwebinar
  • 25. Search market share among top 4 sites is probably not news
  • 26. However, search growth has become a two-company competition
  • 27. Is search a model for other forms of digital advertising?
  • 28. The digital space mixes branding with…
  • 29. …direct response marketing, which often means…
  • 30. …even a single ad can dissolve the classic division between the two
  • 32. Display dollars in 2015 will increase by more than half from 2012—but growth rate will decline from 24.1% to 10.8%
  • 33. Video share up, banner share down, sponsorship a potentially profitable niche Twitter – #eMwebinar ©2012 eMarketer Inc.
  • 34. Significant disparity of display revenue growth at top 5 companies ©2012 eMarketer Inc.
  • 35. However, display spending is less consolidated than the total market
  • 36. Impressions match money: The not-top-5 get about half of display impressions
  • 37. Weighing the imbalances in digital ad spending helps focus budget choices
  • 38. Display growth without social and mobile paints a different picture
  • 39. Three more ways of parsing the current display market
  • 41. Even as online video advertising growth rates slow, spending will double in only two years Twitter – #eMwebinar
  • 42. Display’s overall market growth at 24.1% is due mainly to video’s strength…
  • 43. …where about half or more of marketers expect to increase spending in 2012
  • 45. As seen on the web? (Nah!) TV’s power is still unmatched for many goals ©2012 eMarketer Inc.
  • 46. In a typical week, US consumers watch video mainly on TV, however…
  • 47. TV forever? Containers may change, but the content basically remains the same
  • 49. Social sites will see greater ad growth in 2012 than the overall market — 43% vs. 23% (but social is much more than just advertising) Twitter – #eMwebinar ©2012 eMarketer Inc.
  • 50. More marketers plan display spending increases on social media than, say, on content publisher sites ©2012 eMarketer Inc.
  • 51. Facebook is the social ad revenue leader, but other social sites are slowly gaining on it ©2012 eMarketer Inc.
  • 52. The social space is large and getting larger — does that mean it’s due for shakeout? ©2012 eMarketer Inc.
  • 53. Mobile ad spending will rise from $1.45 billion last year to $2.61 billion this year, driven by everything but text messaging ©2012 eMarketer Inc.
  • 54. About half of mobile spending went to Google — far more than even Apple ©2012 eMarketer Inc.
  • 55. The mobile market is mainly search, with a large slice slice of banners and rich media Twitter – #eMwebinar ©2012 eMarketer Inc.
  • 56. And mobile search is mainly Google (another huge cluster) ©2012 eMarketer Inc.
  • 57. Mobile display: one more market that’s concentrated, but a bit less so ©2012 eMarketer Inc.
  • 58. Getting your share of the mobile market often means playing with the big dogs
  • 59. Conclusions ©2012 eMarketer Inc.
  • 60. Conclusions: Ad spending growth is uneven, but…  The 23.3% projection for 2012 is for the overall market.  But the overall market is imbalanced.  Some of the imbalanced elements:  search nearly 50% of whole, and growing at 27%  video growth at 55%, but makes up only 8% of total  five companies will get nearly 67% of ad revenues  social dominated by Facebook, with 70% of category ad dollars  mobile display dominated by three networks (60%), and mobile search is nearly all Google (95%)  Display online, and video in particular, offer more opportunities for lessening the imbalance than does search, social or mobile.  But note how display growth (sans social and mobile) at 15.2% more accurately represents the mainstream online ad market. ©2012 eMarketer Inc.
  • 61. Consumers Reward Brand Transparency Lack Favorability Towards Impact of Transparency on OBA Concept Perceptions of Online Advertising Like 55% Do not like 51% Neutral I would be inclined to I would be more do more business inclined to click on an with ad advertiser or advertisement that publisher who gives gives me the option to me the option to opt- opt-out of OBA out of OBA BASE: Total Qualified Respondents (n=1004) Q75 Please indicate the degree to which you agree or disagree with each of the following statements related to online advertising.
  • 62. Addressing Consumer Concerns with DAA- Compliant Self Regulation DAA Evolution The Digital Advertising Self-Regulatory Program Advertising Preferences Icon Alliance (DAA) For Behavioral Advertising DAA – AdChoices Program Growth and News  Substantial growth: 400+ companies comply  900 billion compliant impressions per month  All top-15 global advertisers participate, including: American Express, AT&T, Disney, General Motors, Kraft Foods, Microsoft and Walmart  Feb, 2012: The DAA announced that it will immediately begin work to add support for browser based DNT header signals. Planning to integrate by end of year.
  • 63. How Does DAA Compliance Work? Advertising User Experience 1. A simple ad tag 2. If clicked the icon 3. Consumers have option to inserts the DAA icon launches privacy click to Preference Manager notice inside the ad and opt out of selected tracking networks a
  • 64. Consumer favorability increases 50% with “Powered By TRUSTe” DAA Compliance Impact on Feelings Towards the Advertiser BASE: Total Qualified Respondents Q935/Q950 And, how does having this information available make you feel about the advertiser?
  • 65. About TRUSTe Leader in Privacy Management Solutions  14 years of privacy experience  Robust technology platform  #1 privacy brand & trustmark Comprehensive Solution Suite  All media and devices  Global coverage  Self- and full-service options  Leading Provider to Leading Brands  Over 5,000 clients  Leading DAA AdChoices Icon Provider  Over 100 Billion DAA Compliant Ads Served
  • 66. Q&A Session Learn more about digital advertising with an eMarketer corporate subscription Digital Ad Trends— What’s Behind the Over 120 reports are published each year. Spending Boom Following are a few of the recent ones focusing on spending:  US Digital Ad Spending: Key Trends for 2012  Local Online Advertising: Digital Trends, Challenges and Opportunities David Hallerman  Western Europe Mobile Ad Spending You will receive an email  Western Europe Digital Advertising: Spending and Trends tomorrow with a link to view the deck and webinar recording. To learn more: www.emarketer.com/products Sponsored by: 800-405-0844 or webinars@emarketer.com TRUSTe ©2012 eMarketer Inc.

Editor's Notes

  1. Consumer Example->>>>>Focus on simple / easy for the consumer’ !!!!!3 StepsServe icon – ability to customizeShow notice – ability to customizeOffer opt-out mechanismAll TRUSTe hosted and managedCan get a trial up and running in a few daysCan have you fully operational in a few weeks or less
  2. TRUSTe can help you with your Privacy Management StrategyWe are the leader in Privacy Management SolutionsHave over a decade of experienceMany of you in attendance today are TRUSTe customersYou also probably know us by our famous Certified Privacy Seal – seen on thousands of websites, billions of consumer impressions per yearThe gold standard for companies to demonstrate their commitment to managing customer privacyWe work with companies of all sizesAcross all industriesAnd have extensive international experienceWe can help you assess your needs and put together a solution for youYou can start by visiting TRUSTe.comWe have lots of resources including our consumer research reports and past / upcoming educational webinarsIf we can help you, give us a call.I will turn things back over to Chris for some closing comments.