Post on 26-Mar-2015
October 3, 2008 1
Hot Trends:
Social Networks, Mobile Marketingand Online Video
October 3, 2008
Debra Aho Williamson
Senior Analyst
eMarketer Inc.
October 3, 2008 2
What’s On Tap Today
Internet Ad Spending TrendsSocial NetworkingMobile MarketingOnline Video
October 3, 2008 3
Internet Ad SpendingInternet Ad Spending
October 3, 2008 4
Internet: Approaching 10% of Worldwide Ad Spending
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Source: eMarketer, August 2008
$25B in US Online Spending in ‘08
US Internet Ad Spending (billions)
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Faltering Economy is Impacting US Ad Budgets
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Why Will Online Advertising Thrive in a Difficult Economy?
Online ads are more measurable than other media, making them increasingly appealing to advertisers
The Internet audience is huge, so the simple process of advertising following eyeballs will lift spending
Internet ad prices are rising, thanks to targeting and other techniques, which can push up overall spending
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Advertisers are Committed to Increasing Online Spending
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Social Networks, Mobile and Online Video: THE GOOD
High penetrationEnviable user demographicsElusive “buzz” factorEngaged audience
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Social Networks, Mobile and Online Video: THE BAD
Few standardized ad formatsConsumers who are disengaged from
adsQuestionable ROIMeasurement challenges
"If a certain kind of spending
hasn't been in your [advertising]
budget for three straight years,
you'll likely cut it when things
get tougher.”--Russell Fradin, president, Adify
And of Course, the Ugly
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October 3, 2008 12
Social NetworksSocial Networks
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Source: Universal McCann
Social Networks: Only One of Many Types of Social Media
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Is This Your Image of Social Networking?
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Social Network Growth Markets: Mideast, Europe and Latin America
58% of Worldwide Internet Users Have Created a Profile
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US Usage Is Still Growing
Unique Visitors to MySpace and FacebookAugust 2007-August 2008 (thousands) 75.5
million (up 10% from ‘07)
41 million
(up 21% from ‘07)
Source: comScore Media Metrix
October 3, 2008 18
But Is It a Fad That’s Losing Steam?US visits to social
network sites are down 17% year-
over-year vs. August 2007
SN Ad Spending Growth Slows in 2009 and Beyond
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US Spending Still in Flux
Source: eMarketer, 2008
+55% +27%+15% +13%
+11%
12/07: $1.6B
12/07: $2.7B
News Corp. Acknowledges This
October 3, 2008 21
“Social networking has gotten a disproportionately lower share of digital advertising budgets. If you
compare the amount of traffic and the amount of users we have with the portals, most of those guys have been putting 50%, 60% of their budgets in portals, and 10%
of their budgets against social network sites.”-- COO Peter Chernin at Merrill Lynch presentation, Sept. 2008
Social Network Ad Experiments Continue
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MySpace home page takeovers• Reach 40mm+ people/day• Popular with movie studios
• “Dark Knight”: Trailer streamed
70mm times
What About HyperTargeting?
Banner-ad targeting based on information people provide in their profiles
Updated in real-time Half of all ad insertions now include some form
of HyperTargeting Major brands: General Motors, Coke, Red
Bull, Target Double eCPMs vs. untargeted ads
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- Comment directly on
an ad
- Become a fan of a
brand without leaving
the page you’re on
- Send a virtual gift to
a friend
Facebook Continues to Experiment With Viral Marketing
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New Ad Features “Facebook has always tried to push
the envelope. And at times that means stretching people and getting them to be comfortable with things they aren’t
yet comfortable with. A lot of this is just social norms catching up with what
technology is capable of.” Mark Zuckerberg, New York Times,
September 2008
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On the Other Hand, Too Much Targeting is Never a Good Thing
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Mobile MarketingMobile Marketing
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2008: The First Year Ad Spending Tracks Ahead of Subscribers
Worldwide Mobile Ad Spending and Subscribers 2006-2012 (millions)
Mobile Usage Facts
Over 85% of people 18-49 have a mobile phone (Pew Internet & American Life Project, August 2008)
In two years, the average number of text messages we send every month has grown nearly 500% (Nielsen Mobile, September 2008)
39% of teens believe the mobile is the only type of phone they will own (CTIA, Harris Interactive, September 2008)
68% of consumers say the mobile Internet is an important factor in their next mobile phone purchase (AKQA/dotMobi, June 2008)
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Why Mobile Advertising Trails Mobile Subscribership
“Lack of awareness of the audience size, complexity of the mobile marketing ecosystem and a lack of trust
among advertisers in the mobile advertising investment.”
Privacy Privacy IntrusivenessIntrusiveness
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Do Consumers Accept Mobile Phone Advertising?
Source: Nielsen Co., September 2008
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Where is the Money?
Mobile Search Mobile Display Ads
Text Messaging
Or Here?
Or Here?
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Google AndroidGoogle Android
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Messaging Dominates Ad Spending
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US: 36% of 2008 Mobile Spending
BMW’s Snow Tire Campaign in Germany
Personalized MMS message to customers, showing image of their car with a recommended tire and price
Option to call dealer directly for appointment
30% bought tires from dealer during promotion
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Mobile Marketing: A Two-Way Street
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Take a photo, send
it in a multimedia
message
Receive a picture
of a customized
Nike shoe
Save as wallpaper, send to friends
Order personalized shoes directly
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The iPhone is Changing How Consumers Use the Internet
iPhone App Store Stats (9/08)
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Mobile Phone Applications: New Advertising Medium
• 100 million apps downloaded in 60
days
• 700 games
• 62 countries
“The iPhone has changed users’
expectations of what is possible
in a mobile device and UI, and
the AppStore finally showed the
promise of mobile data applications.”--Kleiner Perkins VC firm
October 3, 2008 39
Online VideoOnline Video
The Digital Landscape Confounds Many in the Media Biz
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“We don’t know what’s gonna work. Predicting what the
media world is gonna look like in eight years is incredibly
daunting. I defy anybody to do that.”
-Jeff Zucker, president-CEO, NBC Universal, September 2008
“We don’t know what’s gonna work. Predicting what the
media world is gonna look like in eight years is incredibly
daunting. I defy anybody to do that.”
-Jeff Zucker, president-CEO, NBC Universal, September 2008
October 3, 2008 41
Consumers Love Online Video
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Half of US Population Watches Online
Source: eMarketer, February 2008
US Online Video Users, 2006-2012 (% of population)
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71% of US Internet users watch online videos at least once a week
Source: Universal McCann, April 2008
% respondents,Mar. 2008
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Types of video content people watch monthly: short, short, short
Source: eMarketer, February 2008
Full TV shows =
27%
% total US video viewers, Feb. 2008
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Websites Love Video, Too
Average CPMs: $43 for video ads; $15 for display ads (Bain & Co. for the Interactive Advertising Bureau)
High sell-through rate: 90% for premium content creators (TV networks, etc.); 50% for content aggregators (YuMe and Collins Stewart LLC)
October 3, 2008 46
Video Ads: 2.6% of Online Spend in 2009
Source: eMarketer, September 2008
1.5%2.0%
2.6%
3.4%
4.7%
6.8%
9.8%
US Online Video Ad Spending (millions and % of Internet total)
“Video is the growth format on the
Internet.” -- David Hallerman,
eMarketer
October 3, 2008 47
But Video Won’t Challenge Search or Display -- Yet
US Online Ad Spending, by Format (billions)
2008 & 2013
Source: eMarketer, August 2008
October 3, 2008 48
Factors supporting a (future) boom in online video spendingBroadband is reaching a “critical mass”
TV efficiency is declining yet still very expensive
Advertisers can replicate the sight, sound, motion – and emotion – of television, but with better measurability and targetability
There are vast opportunities for communication among consumers (aka, viral)
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But There Are Significant Hurdles
Can
consumer-
generated
video be
monetized?
What ad
formats
work
best?
Will
consumers
skip over
ads?
October 3, 2008 50
Four flavors of video ads
1) Pre-roll (also, mid-roll or post-roll)
(the ad runs in-stream with video content)
2) Overlays (aka, bugs or tickers)
(the ad runs at bottom of video, not interrupting content)
3) Skins (aka, player skins)
4) (the ad runs surrounding video content window)
5) In-page banners
(the ad runs in a box, not connected to video content)
October 3, 2008 51
In-Stream May Be Most Effective Ad Type
LiveRail*
• ~ 80% preroll completion rate
• 11.5% clickthrough rate
• 88% of all video ads
*provider of video ad technology
YouTube Experiments with Overlays
October 3, 2008 52
New:
Ad runs
post-roll (after clip) if
user doesn’t
click on overlay
But Ads on User-Generated Video Trail Consumer Usage
October 3, 2008 53
Source: The Diffusion Group, July 2008
Zappos Gets Clicks for ItsVideo Ad Campaign
October 3, 2008 54
Ad appeared on 50
sites targeted
to females
Video plays only after user clicks
on it
Simplicity: Ad served by same company that serves rest of Zappos’ ads
Result: 5% clickthrough rate (vs. just 0.3% for
banner ads)
October 3, 2008 55
When It Comes to Video Ads, One Attitude Does Not Fit All
67% Will See an Online Video Ad At Least 1x a Month in 2008
October 3, 2008 56
The eMarketer View
Social networks are here to stay. Evolving ad models mean new opportunities to connect with consumers
Mobile: The iPhone and phones based on Google’s Android will be the new benchmarks for mobile content
Video: The time to start online video advertising is now; the audience has reached critical mass
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Thank you !
Debra Aho Williamson
Senior Analyst
eMarketer Inc.