Ad revenue-2009-future-of-online-advertising-091020133325-phpapp02
description
Transcript of Ad revenue-2009-future-of-online-advertising-091020133325-phpapp02
Ad Revenue 2009 Conference
The Future of Online Advertising & The Second Channel
October 8, 2009 New York City
2 © comScore, Inc. Proprietary and Confidential.
Industry Snapshot
3 © comScore, Inc. Proprietary and Confidential.
The Opportunity
33% of total time spent is online
Yet only 14% of all ad dollars are online
3
4 © comScore, Inc. Proprietary and Confidential.
2008 U.S. Measured Media Spend: $186 Billion
Dire
ct
Res
pons
e B
rand
ing
$118 B
$68 B
2008 U.S. Online Media Spend:
$26 Billion
5% 30%
$6 B
$20 B
Source: Lehman Brothers, ThinkEquity Partners
Online as Percent of Total
Online Advertising is Leaving Branding Dollars on the Table
Only 5% of total branding dollars are going to Online!
5 © comScore, Inc. Proprietary and Confidential.
Source: DoubleClick DART for Advertisers: 2008
Media/ Entertainment
Retail Tech CPG B2B Wellness Auto Telecom Travel Financial Services
Rich Media Click-Through Rates by Industry
Click Rates on Ads are Minimal but Forrester Study Says 35% of Marketers Still Use Click for Evaluating Branding Campaigns
Industry-wide click thru rate only 0.1%!
6 © comScore, Inc. Proprietary and Confidential.
Half as Many Clickers in 2009 vs. 2007
Only 16% of internet users clicked on at least one display ad in March 2009
50% decline year over year July 2007 March 2009
Source: comScore, Inc. custom analysis, Total US Online Population, persons, July 2007 and March 2009 data periods
7 © comScore, Inc. Proprietary and Confidential.
Heavy Clickers Account for an Even Larger Proportion of Total Clicks in 2009
Heavy and Moderate clickers are only 8% of the internet population but account for 85% of all clicks
Heavy Moderate Light Non
July 2007 March 2009
Source: comScore, Inc. custom analysis, Total US Online Population, persons, July 2007 and March 2009 data periods
8 © comScore, Inc. Proprietary and Confidential.
$100K or more
$60K – $99.9K
under $60K
Percent of Clicks by Household Income Segment
March 2009
Index
116
102
90
Source: comScore, Inc. custom analysis, Clicks distributions by household income segment (persons), March 2009 data period. Indices are vs. Total US Internet Population.
Where the Clicks Come From
Upper Income Clickers Represent Only 4 % of Internet Users
45 +
35 - 44
18 - 34
March 2009
Index
96
123
89
Percent of Clicks by Age Segment
9 © comScore, Inc. Proprietary and Confidential.
View Thru Impact of Display Advertising
10 © comScore, Inc. Proprietary and Confidential.
OPA & comScore: “The Silent Click” Exposure to Display Ads Correlates with Significant Consumer Activity
29%
18%
0% 10% 20% 30%
Visit Advertisers' Sites
Search Advertised Brands
UVs Exposed to Advertising
Base: 86.2MM Exposed to at least one of top 20 advertisers
• About one in five consumers searched on the advertised brand
• Separately, about one-third visited the advertiser’s site in February
11 © comScore, Inc. Proprietary and Confidential.
These Advertiser Site Visitors are More Engaged than the Sites’ Usual Visitors
22
41 34
62
Minutes/UV Pages/UV
Advertiser Site Engagement All UVs to Advertiser Sites UVs Exposed to Advertising
• Consumers exposed to the display advertising spent over 50% more time than the average visitors to these sites the next month
• This rise in time spent is matched by a similar increase in page views
Sources: All UVs comScore MediaMetrix, 02/09 Exposed UVs comScore Marketing Solutions, 02/09
12 © comScore, Inc. Proprietary and Confidential.
Greater Spending for Advertiser Site Visitors Exposed to Biggest Campaigns
These figures represent the average e-commerce spending in February for visitors to the 53 brands’ sites – comparing visitors exposed to these brands’ January online ad campaigns with those not exposed
$242
$227
$200 $225 $250
Exposed to Top Campaigns
Unexposed to Top Campaigns
E-commerce $/Advertiser Site Visitor Feb ‘09
+7%
Bases: Unexposed 99.2MM; 86.2MM Exposed Source: comScore Marketing Solutions, 02/09
13 © comScore, Inc. Proprietary and Confidential.
More E-Commerce Spending by Those Exposed to Related Online Advertising
$623
$569
$500 $550 $600 $650
Exposed
Unexposed
Travel $/Advertiser Visitor Feb ‘09
$209
$171
$100 $150 $200 $250
Exposed
Unexposed
Consumer Electronics $/Advertiser Visitor Feb ‘09
$84
$74
$65 $70 $75 $80 $85
Exposed
Unexposed
CPG $/Advertiser Visitor Feb ‘09
+9% +22%
+14%
Source: comScore Marketing Solutions, 02/09
14 © comScore, Inc. Proprietary and Confidential.
Ad Networks Friend or Foe?
15 © comScore, Inc. Proprietary and Confidential.
The rise of the Ad Network
An estimated 80% of a publisher’s inventory goes unsold
Today, more than 300 ad networks – Seven years ago, only fifteen
But why? – Analogy to stock market – As stock market grew, many flocked to become brokers to sell stocks – Similar trend with online advertising – As the market grew and as number of buyers & sellers increased, so did the
number of ad networks to serve them
The result … – A fragmented market of ad networks to try and help publishers to sell up to
80% of their remnant inventory
15
16 © comScore, Inc. Proprietary and Confidential.
16
The Press Coverage on Ad Nets is Active and Varied
''We must not trade our advertising inventory like pork bellies.'‘ - Wenda Harris Millard, former CEO at Martha Stewart Living Omnimedia
“What (publishers) should not do is allow some sort of invisible hand (or should I say hands) to price their inventory against a backdrop of objectives that can and often does change at a moment’s notice. – Jim Spanfeller, CEO Forbes.com
17 © comScore, Inc. Proprietary and Confidential.
17
The popularity of Ad Networks has skyrocketed over the past 5 years
0
10
20
30
40
50
60
70
2004 2005 2006 2007 2008
# of Ad Networks Reported by comScore
18 © comScore, Inc. Proprietary and Confidential.
Today’s leading Ad Networks
18
19 © comScore, Inc. Proprietary and Confidential.
Why are so many joining the ranks?
Estimated 80% of publisher inventory goes unsold
Ability to translate core expertise with content and sales
The rise of the vertical ad networks – Attempting to gain higher CPM rates for like, quality content – Capitalize on core expertise
Ease of monetizing inventory
Advertisers benefit from scale, cost efficiencies
It can be very profitable – Very strong margins
19
20 © comScore, Inc. Proprietary and Confidential.
Summary
Huge advertising opportunities exist for online
We have to get away from the Click – Dependency on clickers simply holding us back
Focus on View Thru and Sales Impact – Display advertising has been proven to work – Branded search, site visitation, online/offline sales lift
Educate advertisers on what’s important
Choose your partners wisely
21 © comScore, Inc. Proprietary and Confidential.
Thank you