Mobile Advertising Mar 10
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Transcript of Mobile Advertising Mar 10
MOBILE ADVERTISING
STRATEGY CONSULTING AND EXECUTION
FEB 2010
BIG MOVEMENTS OVER THE LAST FEW MONTHS…
• Both Google and Apple showed strong interest in “in-Application” advertising where ads are running within a connected application using the standard MMA size banner format. Google’s Android team needed to find a way to attract developers to their ecosystem and Apple’s iSlate tablet team are rumored to have really pressed for the Quattro acquisition also because of the need to get developers on board
• Other OEMs like Nokia, BlackBerry, Sony Ericsson are contemplating a move in mobile advertising as it has become a recognized and viable business model for distributing content and applications over the mobile medium.
• Some operators jumped into the game early. Vodafone and Telefonica invested in Amobee and are deploying its platform in 38 countries, Orange bought mobile ad-network and agency Unanimis. The GSMA has made mobile advertising one of its key areas for development starting with measurement but moving towards aggregation.
$750 Million – AdMob-AdMob Estimated Revenues in 09 - $70M
$265 Million – Quattro -Quattro Estimated Revenues in 09 - $30M
FROM REACH & FREQUENCY TO MAKING EACH “LOCAL” IMPRESSION COUNT
The advertising ecosystem has been focused on getting big brands with big budgets tospend on expensive media: for instance Television
The focus has been on getting the highest reach and frequency
New Media – Yahoo!, AOL, Google, Facebook and now Mobile is shifting the focus fromcounting the people you can reach to reaching the people that count… These arepeople who can act on an impression. Google has also broken the “time dimension” ofadvertising by placing an ad at the moment in time a user expresses an interest insomething. They have also figured out a way to monetize a users “intention” asopposed to monetize a users “attention”.
It is time that a new player figures out how to monetize and maximize the “space”dimension of advertising
MARKET SIZING – AS MANY FORECASTS AS THERE ARE
METHODS OF MEASURING AND DEFINING MOBILE ADVERTISING
1. Berg Insight estimates that the total value of global mobile advertising market was $1.014 B in 2008.
2. Ovum USA: $1.3bn in 2010 Accounts for text delivery advertising only
3. Yankee Group USA: $2B in 2010 Mobile advertisement only
4. Jupiter Research USA: $2.1bn in 2011
5. eMarketer USA: $4.7bn by 2011 WW: $11.3bn by 2011Mobile advertisement only
6. Shosteck Group WW: grow to $9.6bn by 2010 Mobile advertisement only
7. Informa Telecoms and Media WW: $11.5bn by 2011 Mobile advertisement only
8. Strategy Analytics USA: 17% of total online ad spending by 2010
9. ABI Research WW: $19bn by 2011 Mobile marketing and advertising combined
Mobile Advertising is a very different market to market with countries like Indonesia and South Africa showing strong growth in WAP banners and places like India and Eastern Europe still focused on text messaging. The US and now UK are more and more focused on in-App and rich media advertising due to the exploding Smartphone market.
GLOBAL MOBILE ADVERTISING SPENDING
Source: Chetan Sharma Consulting
The average size of campaigns is rising from $30,000-50,000 two years ago to $100,000-$150,000 in mid-2009 with many exceeding $1 million solely focused on mobile.
BLIND AD NETWORKS
Usually the largest in terms of publishers, advertisers and impressions.
Serve a high volume of advertising to an extensive base of mostly independentmobile publishers (mobile sites and applications)
Usually, advertisers can not choose specific mobile sites
Performance advertising, CPC in particular, is the norm. The CPC varies with supplyand demand, determined through a self-service auction system.
The cheapest option is run of network (RON) adverts (i.e. no targeting), which insome countries may start at US$0.01 CPC.
Some blind networks also offer brand advertising, on the CPM model - for marketersthat want exposure, maybe to create awareness of a new product.
Advertisers should expect a range of self-service tools that help them track andoptimize their campaign in real time.
Publishers receive a revenue share, perhaps 55-65 percent of what the advertiserpays.
Key players in the market: Admoda, AdMob, BuzzCity, InMobi
Source: mobiThinking
PREMIUM BLIND AD NETWORKS
Higher proportion of premium publishers (i.e. mobile sites of well-known brands, likenewspapers, broadcasters or operator portals), than blind networks, some onexclusive relationships.Attract more brand advertising, paid for on CPM modelCosts vary considerably – campaigns targeted at top-tier inventory can be as high asUS$20 CPM.A lot of advertising will still be blind or semi-blind (i.e. targeted at a channel), but fora premium price you may be able to buy a specific spot on a site of your choice.Performance advertising is also available – and sometimes search advertising (basedon key words) – paid for by CPC, for marketers who want an active response to ads.The cheapest option is run of network (RON) adverts (i.e. no targeting), which insome countries may start at US$0.05 - US$0.10 CPC.Advertisers should expect a mix of self-service and direct sales and support and awealth of targeting options.Publishers should expect to receive a majority share of advertising revenue –percentages are often negotiated on a case-by-case basis.Key players: Millennial Media, Jumptap, Madhouse, Quattro Wireless
Source: mobiThinking
PREMIUM AD NETWORKS
Premium networks focus on a limited number of prestige publishers – mobileoperators and big-brand, big-traffic sites, perhaps newspapers or broadcasters.
The vast majority of campaigns are brand advertising, so the predominant (maybeonly) pricing model is CPM model.
Under CPM, costs vary considerably, ranging from US$5-US$75.
Some may also offer performance advertising for marketers who want an activeresponse to their ads paid for by CPC; but expect to pay considerably more than on ablind network as CPC can range from US$0.05-US$0.50.
Premium networks attract big brand advertisers who are prepared to pay premiumprices to secure the prime locations on top-tier mobile destinations
Advertisers should expect more direct sales and support, than self-service and awealth of targeting options.
Publishers should expect to receive a majority share of advertising revenue, perhaps50–70 percent. Deals are usually negotiated on a case-by-case basis.
Key players: Microsoft, YOC, Advertising.com/AOL, Nokia Interactive Advertising,Pudding Media
Source: mobiThinking
MobientoStartechMobileraTechnomartKickmobileOut there mediaMD FactoryMo2oMobext
RingRingAdmodaAdshandyMojivaBuzzcityQuattroMoVoxxAppertaSmaato
AdMobVeltiYOC4th ScreenEnpocket/NokiaMicrosoft/ScreentonicDadaMADSAdlink Media
MOBILE AD-NETWORKS (ACTIVE IN THE UK)
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BangoNew York and Cambridge, UK
ProductsSite analysis: unique visitors, visits, page views, avg time on site etc. Filter by page, operator, country, device Campaign analysis: Goal comparison Works with Google, Yahoo, Microsoft, AdMob, Decktrade APIs for data integration
MobilyticsPart of Mobile Visions, Inc., Princeton, NJ
ProductsSite analysis: unique visitors, visits, page views, avg time on site etc. Filter by page, operator, country, device Campaign analysis: Goal comparison, revenue tracking APIs for data integration
AmethonSydney, Melbourne and New York
Products:Site analysis: unique visitors, visits, page views, avg time on site etc. Filter by page, operator, country, device
Customers:Go2Media, BlueCentral Hosting Solutions, Gambit Group, News Digital Media, Mobango
FlurrySan Francisco
• Cutting edge analytics, deployment and monetisation tools• Real-time usage data• Across all handset types• Free service to developers with VAS• Seed round from DFJ, Borealis Ventures, Draper Richards
Pinch MediaNY
• Seed round from Union Square and First Round Capital• iPhone focused• Analytics and development tools focused on developers and publishers• Advertising solutions• Advertising effectiveness
MediaLetsNY and SFO
• Raised $4m Series A in May ’09 (Foundry, DFJ Gotham)• iPhone focused• Analytics platforms focused on apps developers, ad agencies• Work to cleverly integrate advertising into apps
MobclixSan Francisco, CA
• iPhone applications and services to iPhone developers• Operates a real-time analytics and media advertising platform. Provides mobile based advertising campaigns creation, management, and deployment services. • Offers application sentiment and trends information
SPECIALIST MOBILE ANALYTICS COMPANIES
Mobile Banner Ads instances by Sector (Jan 08 UK)
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%
Internet Retail (Mobile Content)
Broadcasting & Cable TV
Publishing
Automobile Manufacturers
Internet Software & Services
Movies & Entertainment
Specialized Consumer Services
Computer Hardware
Food Retail
Home Furnishings
Percentage of ads served
MOBILE BANNER ADS INSTANCES BY SECTOR
Source: TGI M:Metrics 2008 – Base: All GB adults (aged 15+)
167
152
137
137
136
126
119
110
107
105
98
94
93
91
89
88
87
77
72
56
0 20 40 60 80 100 120 140 160 180
Jaguar/Daimler
Audi
Land Rover/Range Rover
Fiat
Mitsubishi
Mercedes Benz
Citroen
BMW
Vauxhall
Peugeot
Ford
Hyundai
Renault
Honda
Toyota
Volkswagen
Volvo
Nissan
Suzuki
Skoda
UK: MOBILE MEDIA INDEX FOR CAR BRANDS
- MOBILE MEDIA SUITS THE HIGH END
MOBILE MEDIA AUDIENCE RECEPTIVE TO ADVERTISING
“I’m tempted to buy products I’ve seen advertised”
25
30
35
Mob
ile m
edia
Mag
azin
es
Cin
ema
Inte
rnet
New
spap
ers
Rad
io TV
Out
door
% o
f m
ed
ia c
on
su
me
rs w
ho
ag
ree
Source: TGI M:Metrics 2008 – Base: All GB adults (aged 15+)
WHY ARE OPERATORS GETTING IN THE ADVERTISING GAME
• Some have very large “media” audiences in their own right. Many of the largest operators in Europe and in the UK are also media companies or are tightly coupled to media companies.
• Several have already been generating advertising revenues from their on-line ISP, portal and IPTV businesses: Orange (Wanadoo), Vodafone Germany (ARCOR), Telefonica (Terra and Imagenio)
• Since they own the customer they are the only ones who can provide truly “ad-funded” business models. They can zero rate traffic associated to an ad being delivered on a phone.
• Operators have visibility across all mobile media consumption: video, games, music, messaging, browsing, searching, etc. Ultimately, advertisers will be able to build a relationship with mobile consumers and take them on “customer journeys”.
• Operators are the only ones who can “frequency cap” across multiple inventory types which is of importance to brands and advertisers.
• Operators have more information about their subscribers (age, gender, location, type of billing plan, etc), and can also use this to create relevancy.
• Operators (in the short term) have access to new inventory formats that Google, Microsoft and Yahoo! won't. One example of this is peer to peer SMS ad insertion.
Here are some exampled of operator driven mobile advertising initiatives:
€ 20
€ 10
€ 1
€50
Premium
Medium
Remnant
CURRENT OPERATOR CENTRIC APPROACH - A HOLISTIC
APPROACH TO MEDIA SALES
Over 25 mobile ad-networks
IN-GAME ADVERTISING (CASHED)
BANNERS IN VIDEO PORTAL
IN SMS CLIENTApplication main menu Message
composition
Message
sending
Interstitial ad
Options on the
ad
More Info on the adInterstitial adBack to inbox
MOBILE VIDEO AD FORMATS
Buffering… …10 – 30 secs video
ad…
…40 – 90 secs video… …10 – 30 secs video ad
10 to 30 second Ad (Video or animated GIF)
during buffering…
Video Content Requested 10 to 30 second Ad
(Video or animated GIF)
at the end…
ON DEVICE PORTAL
TRADITIONAL HYPER-LOCAL/LOCAL ADVERTISING MEDIA SEGMENTS
More than 60 percent of small and medium businesses advertise locally in the Yellow Pages and
on their company websites, while 40 percent use direct mail. 1/4 of local ad spend is on
Yellow Pages or Local Listings:
• Yellowpages / local business directories
• Newspaper classified
• Magazine advertising
• Outdoor advertising
Name Location Description $ Revenue Q3'08 $ Revenue Q3'09
R. H. Donnelley US yellow pages 648 million 534 million
Marchex US local search advertising
company
37,152 22,172
Yell Group Plc UK Operates directory
businesses in UK, Spain, US
and LATAM
1,023 million 982 million
Idearc Inc. US 735 million 611 million
Seat Pagine Gialle Italy largest in Italy and second
larget directory publisher
in UK
397 million 345 million
Local Insight Regatta
Holdings
US Yellow pages and online
search
135 million 144 million
Mobile advertising strategic evaluation
Value chain analysis
Market sizing, trends and new areas of focus
• Behavioral and contextual targeting
• New ad formats: Apps (connected vs. cashed)
• Post click analysis and ad effectiveness
• Proximity and hyper local advertising
Project management:
• Inventory management
• Ad sales channel management
• Sales forecasting, trafficking and reporting
Ad-Network selection and inventory yield optimization
Mobile advertising technology vendor selection / audit
Media sales partner selection
EXICON – MOBILE ADVERTISING STRATEGY & EXECUTION
Patrick Parodi
Follow me @paparodi
THANK YOU