Debra aho williamson senior analyst emarketer inc
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Debra Aho Williamson Senior Analyst eMarketer Inc. Hot Trends: Social Networks, Mobile Marketing and Online Video October 3, 2008. What’s On Tap Today. Internet Ad Spending Trends Social Networking Mobile Marketing Online Video. Internet Ad Spending.

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Debra aho williamson senior analyst emarketer inc

Debra Aho Williamson

Senior Analyst

eMarketer Inc.

Hot Trends: Social Networks, Mobile Marketingand Online Video October 3, 2008

October 3, 2008


What s on tap today

What’s On Tap Today

  • Internet Ad Spending Trends

  • Social Networking

  • Mobile Marketing

  • Online Video

October 3, 2008


Hot trends social networks mobile marketing and online video october 3 2008

Internet Ad Spending

October 3, 2008


Internet approaching 10 of worldwide ad spending

Internet: Approaching 10% of Worldwide Ad Spending

October 3, 2008


25b in us online spending in 08

$25B in US Online Spending in ‘08

US Internet Ad Spending (billions)

Source: eMarketer, August 2008

October 3, 2008


Faltering economy is impacting us ad budgets

Faltering Economy is Impacting US Ad Budgets

October 3, 2008


Why will online advertising thrive in a difficult economy

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

October 3, 2008


Advertisers are committed to increasing online spending

Advertisers are Committed to Increasing Online Spending

October 3, 2008


Social networks mobile and online video the good

High penetration

Enviable user demographics

Elusive “buzz” factor

Engaged audience

Social Networks, Mobile and Online Video: THE GOOD

October 3, 2008


Social networks mobile and online video the bad

Few standardized ad formats

Consumers who are disengaged from ads

Questionable ROI

Measurement challenges

Social Networks, Mobile and Online Video: THE BAD

"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

October 3, 2008


And of course the ugly

And of Course, the Ugly

October 3, 2008


Hot trends social networks mobile marketing and online video october 3 2008

Social Networks

October 3, 2008


Social networks only one of many types of social media

Social Networks: Only One of Many Types of Social Media

Source: Universal McCann

October 3, 2008


Is this your image of social networking

Is This Your Image of Social Networking?

October 3, 2008


Social network growth markets mideast europe and latin america

Social Network Growth Markets: Mideast, Europe and Latin America

October 3, 2008


58 of worldwide internet users have created a profile

58% of Worldwide Internet Users Have Created a Profile

October 3, 2008


Us usage is still growing

US Usage Is Still Growing

Unique Visitors to MySpace and Facebook

August 2007-August 2008 (thousands)

75.5 million (up 10% from ‘07)

41 million (up 21% from ‘07)

Source: comScore Media Metrix

October 3, 2008


But is it a fad that s losing steam

US visits to social network sites are down 17% year-over-year vs. August 2007

But Is It a Fad That’s Losing Steam?

October 3, 2008


Sn ad spending growth slows in 2009 and beyond

SN Ad Spending Growth Slows in 2009 and Beyond

October 3, 2008


Us spending still in flux

US Spending Still in Flux

12/07:

$2.7B

12/07:

$1.6B

+11%

+13%

+15%

+27%

+55%

Source: eMarketer, 2008

October 3, 2008


News corp acknowledges this

News Corp. Acknowledges This

“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

October 3, 2008


Social network ad experiments continue

Social Network Ad Experiments Continue

  • MySpace home page takeovers

  • Reach 40mm+ people/day

  • Popular with movie studios

  • “Dark Knight”: Trailer streamed

  • 70mm times

October 3, 2008


What about hypertargeting

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

October 3, 2008


Facebook continues to experiment with viral marketing

Facebook Continues to Experiment With Viral Marketing

“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 upwith what technology is capable of.”

Mark Zuckerberg, New York Times, September 2008

New Ad Features

  • 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

October 3, 2008


On the other hand too much targeting is never a good thing

On the Other Hand, Too Much Targeting is Never a Good Thing

October 3, 2008


Hot trends social networks mobile marketing and online video october 3 2008

Mobile Marketing

October 3, 2008


2008 the first year ad spending tracks ahead of subscribers

2008: The First Year Ad Spending Tracks Ahead of Subscribers

Worldwide Mobile Ad Spending and Subscribers 2006-2012 (millions)

October 3, 2008


Mobile usage facts

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)

October 3, 2008


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.”

Why Mobile Advertising Trails Mobile Subscribership

Privacy Intrusiveness

October 3, 2008


Do consumers accept mobile phone advertising

Do Consumers Accept Mobile Phone Advertising?

Source: Nielsen Co., September 2008

October 3, 2008


Where is the money

Or Here?

Text Messaging

Mobile Display Ads

Mobile Search

Where is the Money?

October 3, 2008


Or here

Or Here?

Google Android

October 3, 2008


Messaging dominates ad spending

Messaging Dominates Ad Spending

October 3, 2008


Us 36 of 2008 mobile spending

US: 36% of 2008 Mobile Spending

October 3, 2008


Bmw s snow tire campaign in germany

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

October 3, 2008


Mobile marketing a two way street

Mobile Marketing: A Two-Way Street

Save as wallpaper, send to friends

Take a photo, send

it in a multimedia

message

Receive a picture

of a customized

Nike shoe

Order personalized shoes directly

October 3, 2008


The iphone is changing how consumers use the internet

The iPhone is Changing How Consumers Use the Internet

October 3, 2008


Mobile phone applications new advertising medium

“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

Mobile Phone Applications: New Advertising Medium

iPhone App Store Stats (9/08)

  • 100 million apps downloaded in 60 days

  • 700 games

  • 62 countries

October 3, 2008


Hot trends social networks mobile marketing and online video october 3 2008

Online Video

October 3, 2008


The digital landscape confounds many in the media biz

The Digital Landscape Confounds Many in the Media Biz

“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


Consumers love online video

Consumers Love Online Video

October 3, 2008


Half of us population watches online

Half of US Population Watches Online

US Online Video Users, 2006-2012 (% of population)

Source: eMarketer, February 2008

October 3, 2008


71 of us internet users watch online videos at least once a week

71% of US Internet users watch online videos at least once a week

% respondents,

Mar. 2008

Source: Universal McCann, April 2008

October 3, 2008


Types of video content people watch monthly short short short

Types of video content people watch monthly: short,short, short

Full TV shows = 27%

% total US video viewers, Feb. 2008

Source: eMarketer, February 2008

October 3, 2008


Websites love video too

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


Video ads 2 6 of online spend in 2009

9.8%

6.8%

4.7%

3.4%

2.6%

2.0%

1.5%

Video Ads: 2.6% of Online Spend in 2009

US Online Video Ad Spending

(millions and % of Internet total)

“Video is the growth format on the Internet.”

-- David Hallerman, eMarketer

Source: eMarketer, September 2008

October 3, 2008


But video won t challenge search or display yet

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


Factors supporting a future boom in online video spending

Factors supporting a (future) boom in online video spending

  • Broadband 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)

October 3, 2008


But there are significant hurdles

But There Are Significant Hurdles

Can

consumer-

generated

video be

monetized?

Will

consumers

skip over

ads?

What ad

formats

work

best?

October 3, 2008


Four flavors of video ads

Pre-roll (also, mid-roll or post-roll)

(the ad runs in-stream with video content)

Overlays (aka, bugs or tickers)

(the ad runs at bottom of video, not interrupting content)

Skins (aka, player skins)

(the ad runs surrounding video content window)

In-page banners

(the ad runs in a box, not connected to video content)

Four flavors of video ads

October 3, 2008


In stream may be most effective ad type

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

October 3, 2008


Youtube experiments with overlays

YouTube Experiments with Overlays

New:

Ad runs

post-roll (after clip) if

user doesn’t

click on overlay

October 3, 2008


But ads on user generated video trail consumer usage

But Ads on User-Generated Video Trail Consumer Usage

Source: The Diffusion Group, July 2008

October 3, 2008


Zappos gets clicks for its video ad campaign

Zappos Gets Clicks for ItsVideo Ad Campaign

Simplicity: Ad served by same company that serves rest of Zappos’ ads

Ad appeared on 50

sites targeted

to females

Video plays only after user clicks

on it

Result: 5% clickthrough rate (vs. just 0.3% for banner ads)

October 3, 2008


When it comes to video ads one attitude does not fit all

When It Comes to Video Ads, One Attitude Does Not Fit All

October 3, 2008


67 will see an online video ad at least 1x a month in 2008

67% Will See an Online Video Ad At Least 1x a Month in 2008

October 3, 2008


The emarketer view

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

October 3, 2008


Debra aho williamson senior analyst emarketer inc1

Debra Aho Williamson

Senior Analyst

eMarketer Inc.

Thank you !

October 3, 2008


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