This document provides an overview of digital advertising trends presented by Rohith Murthy, Head of NABE Labs. Some key points: - Mobile internet and app usage is growing faster than desktop, with people using mobile to do everything online and more. However, mobile ad spend and engagement is still low compared to other media. - Location-based mobile ads and apps have potential but face challenges around user privacy and ad relevance. The future is "phygital" - combining physical and digital experiences through mobile, apps, analytics and location. - Predictions include mobile becoming dominant but not the only screen, and ads adding value by solving problems, seamlessly integrating the physical world, and allowing direct fulfill

1. What will
advertising look
like in a
Digital age?
Rohith Murthy
Head, NABE Labs (Centrade)
1

2. What we will cover
• A bit about me
• We’ll take a look at the landscape
• Identify few key trends
• See what’s working and what’s not?
• Make a few predictions
• Q&A
2

3. A Word on Me and my Experience
3

4. Me
• Singapore National born in Silicon valley of India and residing in Romania
for 3 years
• Background in Computer Engineering from National University of
Singapore
• 10 years at Citibank working in Asia Pacific and Europe region across
multiple functions - Operations, Technology and Digital.
• Led Digital transformation of Citibank in Romania - Awarded ‘Best
Consumer/Corporate Internet Bank’ by Global Finance Magazine in 2011
and 2012. Expanded role to manage Czech and Hungary.
• Developed and institutionalized a unique ‘Digital Hub’ model for the bank
combining the best expertise and skills of Asia and Eastern European
centers of excellence to launch first-in-market and innovative digital
products for the bank.
• Now heading up NABE Labs - a newly created Digital division of Centrade
group of companies
4

5. How is our 21 year old Internet
doing so far?
5

6. Few Praiseworthy metrics
• 2.5+ Bn Internet users worldwide (35% of
global population)
• 1.1 Bn Smartphone users out of 5 Bn mobile
users
• 1 Bn active monthly users on Facebook
• 4 Bn hours of video watched on You tube per
month
• 144 Bn emails sent per day
Source: Pingdom, Jan 2013
6

7. And Few not so..
• 68.8% of all email was Spam
• 2/3 of world is still not connected to the net
• Only 15% of global internet is mobile.
• Social media accounts for only 16% customer
engagement
• Online video mere 1.7% of total ad spend in
US
Source: Pingdom, Jan 2013; eMarketer Sep 2012, Marketing Pilgrim
7

8. Ramping fast but still has upside
8

9. And what do people do on Mobile?
9

10. Pretty much everything..
10

11. Consumption on Mobile
• They love playing Games and Social
networking (70% of overall usage)
• They are consuming huge amounts of media
(News, Magazines, Music, Video) - 25% of
total time spend on media
• They are using it to make Shopping decisions
in Retail stores.
• They are using it to Shop (Paypal and Square
payments growing rapidly)
Source: Nielsen Mobile Connected Device Report, Inmobi
11

12. The future (and present) is Mobile
12

13. What about our Good Old Media?
13

14. How much is the World spending?
• Digital Ad spend crosses $100 Bn for first time
• Mobile Ad spend doubles in 2012 but still low
14

15. Who is Spending?
• As a % of total ad spend, Western Europe’s
digital spending (24.9%) > North America’s
(24.6%)
• Only 7% of all ad $ go to digital in Middle East
& Africa
• Mobile search and display ad spending up
220% in North America, up 138% in China
Source: eMarketer, Dec 2012
15

16. Where is US spending?
• Search continues to be preferred ad format at 47.1%
• Google still completely dominant; Facebook growing
16

17. So lets summarize
• Smartphone sales > PC sales & set to be >
Feature phones
• Mobile internet scaling faster than desktop
• People are using mobile to do everything they
do online and more
• 1 in 5 Ad $ going already to digital
• More money coming to Mobile
Source: eMarketer, Dec 2012
17

18. So is Mobile the Poster Boy of
Media?
18

19. Well..
• Consumer Time spent on media on Mobile is low
• Ad spend share on Mobile is lowest.
19

20. What are we doing wrong?
20

21. Problems with Mobile Ads
• Because of mobile phone screen size, Ads are Tiny
• Because they are tiny, you can’t say much on them
• Because you can’t say much on them, they appear
intrusive.
• Because they appear intrusive, people won’t click
on them.
• The mobile ad ecosystem is rather confusing and
very fragmented
• The quality of mobile ads that exist today are poor
21

22. And No, increasing the screen size
is not the solution!
22

23. But Mobile has something that
Desktop didn’t
23

24. That something is ‘Apps’
24

25. App Consumption - Downloads
• 40 Bn App downloads on Apple App store and growing
25

26. App Consumption - Time
• Overtook Web and catching up with TV
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27. Apps vs. Mobile web
Total'Mobile'App'And'Web'Dura:on'On'Android'And'iOS'
160"
140"
120"
Minutes'Spent'Per'Month'(Biillions')'
100"
80"
60" Apps'
40"
20"
Mobile'Web''
0"
Mar+11" Apr+11" May+11" Jun+11" Jul+11" Aug+11" Sep+11" Oct+11" Nov+11" Dec+11" Jan+12" Feb+12" Mar+12" Apr+12" May+12" Jun+12" Jul+12" Aug+12"
Source:(Nielsen(Smartphone(Analy5cs(
• People spend more time on apps than mobile web
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28. App vs. Ads
• Mobile monetization is mostly from Apps
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29. But Apps alone won’t Monetize
29

30. App Monetization
Es+mated)App)Store)Revenues)
$6,000#
$5,000#
$4,000#
(millions))
$3,000#
$2,000#
$1,000#
$0#
2008# 2009# 2010# 2011# 2012#
Source:(news(reports,(company(releases#
• Most Apps are Free. Freemium model dominant
• Revenue/app not that significant
30

31. But Mobile has one more thing..
31

32. Location, Location, Location
32

33. Your mobile phone can tell you
where you are
33

34. And that makes it more clickable
The$Closer$Users$Are$To$A$Business,$The$More$Likely$They$Are$To$
Click$Through$A$Mobile$Banner$Ad$For$That$Business$
60%$
50%$ 48%$CTR$Li*$
40%$CTR$Li*$
40%$
30%$
26%$CTR$Li*$
20%$
10%$
5%$CTR$Li*$
0%$
Less$Than$1$Mile$ 1$To$2$Miles$ 2$To$5$Miles$ 5$To$10$Miles$
Source:(YP,(Q4(2012(Local(Insights(Digital(Report(
34

35. And more Monetizable
Adver&sed(CPMs/eCPM(For(Selected(Mobile(Ad(Pla6orms(And(
Formats(
xAd!local! !$3.50!!
LSN!Mobile!local!ads!! !$5.00!!
Adsmobi!video!ads! !$5.00!!
Flurry!video!ads! !$10.00!!
!$(!!!! !$2.00!! !$4.00!! !$6.00!! !$8.00!! !$10.00!! !$12.00!!
Source:(Ad(pla.orms,(BII(Research,(Greg(Sterling(Of(Opus(Research(
35

36. So are Location-based Mobile
Apps the Future?
36

37. Few Things to Consider
37

38. Challenges with LBS Ads
• You need a specific App on your mobile phone to
receive the Ad (Remember Apple’s iOS restrictions)
• You need to have that specific App open and to be
looking at it at that time to see the Ad (Push
notification is not that customizable)
• The Ad must be persuasive enough for you to have
a sudden impulse rush to make a purchase at that
location. For e.g. You must be hungry to enjoy 50%
off pizza in nearby restaurant.
• Privacy issue - People turn off LBS if they find it
irrelevant and intrusive.
38

39. Historical Context
• If I know you go to supermarket every Sunday
to buy groceries
• If I know you buy groceries with your wife and
are incredibly bored at that time
• If I know you love to eat in nearby restaurant
and push you an offer you cannot refuse
39

40. Your mobile phone can tell you
where you are and where you
were
40

41. Context = Analytics
41

42. So now its
Mobile + App + Analytics +
Location
42

43. But what if there is a very long
queue outside that store
OR
you simply don’t have the time
43

44. Mobile Advertising is what happens Before the Click
Equally Important is what happens After the Click
44

45. Human Experience = Simple +
Emotion + Social + Utility +
Fulfillment+ Interaction with Physical
objects
45

46. World’s first virtual grocery store
• Opened in South Korea by Tesco Homeplus
• Pictures of the items in store are posted on
subway walls with QR codes underneath them
• Users download the app, scan the QR code of
item they want to shop and add it to their
shopping cart
• Products delivered to their homes in preferred
time
46

47. 47

48. A few more examples
48

49. Mobile + App + Analytics +
Location + Human Experience
49

50. So the future of Advertising
is not just Digital (or Mobile)
but Phygital (Physical + Digital)
50

51. Few Predictions (until 2015)
• Mobile will be dominant screen but not only one.
• Facebook & Google will split Ad market share
• Simple, Social and Location aware ( present & past)
opt-in messages will be norm
• Will add value (Utility) and solve problems
• Will seamlessly integrate into Real World and allow
Interaction & Straight-through Fulfillment.
• Consumers move from Loyalty to Cult groups. Brands
move from Competition to Long-lasting Rivalries.
51

52. About NABE Labs
• NABE means ‘Hub’ in German and ‘Cooking Pot’ in
Japanese
• We are a Digital Division of Centrade group
• We craft and create Innovative and Best-in-Class Digital
Products (Web, Mobile, Social).
• We Hub, Collaborate and Partner with best skills and
experience across Asia and Eastern Europe to build Novel,
Audacious and Bold Experiences for our clients and
consumers
• We are currently working on building Next Generation Digital
Banking and Advertising experiences and First-in-Market
Mobile Apps & Games
52

53. Few things we are working on
53

54. If you have a
Novel, Audacious and Bold Idea,
Lets Talk!
Drop us a note - info@nabelabs.com
54

55. Q&A
55

56. First, I get to ask you all questions
56

57. You can turn on your phones now
57

58. Question 1
58

59. Which was most viewed ad on YouTube in 2012?
1. “Blown mind” – Old Spice
2. “The Next Big thing is already here” – Samsung
3. “My Time is now” – Nike
59

60. Question 2
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61. In March 2012, upon reaching 25 billion app downloads, Apple revealed
an ‘All-time’ top downloaded apps list.
Which pair (Paid and Free) was most downloaded app on iPhone?
1. Angry Birds (Paid) and Angry Birds (Free)
2. Angry Birds (Paid) and Facebook (Free)
3. Angry Birds (Paid) and Google Search (Free)
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62. Question 3
62

63. Which of the below brands has more Fans on Facebook?
1. Coca Cola
2. Disney
3. MTV
63

64. Now your turn to ask me questions
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65. Thank You
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