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M A R C H 8, 2 0 1 2. Inside the eMarketer Forecast: What to tell your CEO about the 23% growth rate…. David Hallerman Principal Analyst. What we’ll look at this morning…. Online ad spend: growth and concentration Time and money: increasingly even

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M A R C H 8, 2 0 1 2

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M A R C H 8, 2 0 1 2

Inside the eMarketer Forecast:

What to tell your CEO about the 23% growth rate…

David Hallerman

Principal Analyst

What we’ll look at this morning…

  • Online ad spend: growth and concentration

  • Time and money: increasingly even

  • Ad formats: imbalance skews the picture

  • Video, video: cross-channel central

  • Social: what is its true place

  • Mobile: increasing opportunity

  • Three numbers:23.3and24.1and15.2

Questions about why eMarketer projects ad spending growth at 23.3%

Total online ad spending

(what’s behind the growth)

Total online ad spending, huge gains annually, but growth rate is slowing down

One factor: this year’s elections will help online ad spending grow by about the same rate as last year

8 of 15 researchers put their estimates for 2012 at $35 billion or higher

About ¼ of media time is internet time

Digital’s share of total media ad spending is finally starting to match media usage time

Five companies will get more than 2/3 of digital ad revenues in 2012

Consolidation in the online ad business is not new, though

Share of total internet ad revenues among top 10 ad-selling companies

















Source: IAB/PwC, 2002-2011

Ad formats

(several imbalanced arenas)

Search will continue to get the largest share of ad dollars

% Total Digital


Source: eMarketer, January 2012

Is search a model for other forms of digital advertising?

The digital space mixes branding with…

…direct response marketing, which often means…

…even a single ad can dissolve the classic division between the two

Display dollars in 2015 will increase by more than half from 2012 — but growth rate will decline from 24.1% to 10.8%

Video share up, banner share down, sponsorship a potentially profitable niche

Even among top 5, display ad growth is highly uneven

In fact, display spending is less consolidated than the total market

Impressions match money: The not-top-5 get about half of display impressions

Display growth without social and mobile paints a different picture

% Change 2012

Source: eMarketer, February 2012

Video growth

(cross-channel possibilities)

Video growth in 2012 will be twice as much, or more, than other formats

Source: eMarketer, January 2012

However, as measured by share of total video impressions, the mid-tier is getting squeezed out

As seen on the web? (Nah!) TV’s power is still unmatched for many goals

In a typical week, US consumers watch video mainly on TV, however…

% Total Video Hours, Average Week in

Q3 2011

Source: Nielsen, February 2012

TV forever? Containers may change, but the content basically remains the same

Social and Mobile

(beyond the hype)

Social network sites will see greater ad growth in 2012 than the overall market —43% vs. 23% (but much more than advertising)

The social space is large, getting larger — does that mean due for shakeout?

Total mobile ad growth will be driven by everything but text messaging, from $1.45 billion last year to $2.61 billion this year

About half of mobile spending went to Google — far more than even Apple

The mobile market is mainly search, with a large slice slice of banners and rich media

And mobile search is mainly Google (another huge cluster)

Mobile display, one more market that’s concentrated, but a bit less so



Ad spending growth is uneven, but…

  • The 23.3% projection for 2012 is for the overall market.

  • But the overall market is imbalanced.

  • Some of the imbalanced elements:

    • five companies will get nearly 67% of ad revenues

    • search nearly 50% of whole, and growing at 27%

    • video growth at 55%, but makes up only 8% of total

    • social dominated by Facebook, with 70% of category ad dollars

    • mobile display dominated by three networks, and mobile search is nearly all Google

  • Display online, and video in particular, offer more opportunities for lessening the imbalance than does search, social, or mobile.

  • Display growth (sans social and mobile) at 15.2% more accurately represents the mainstream online ad market.

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