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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

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


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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

Questions about why eMarketer projects ad spending growth at 23.3%


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Total online ad spending

(what’s behind the growth)


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


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


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


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About ¼ of media time is internet time


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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

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


Consolidation in the online ad business is not new though

Consolidation in the online ad business is not new, though


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

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

2008

72%

2002

72%

2004

71%

2006

69%

2009

71%

2010

72%

2011

72%

2012

??%

Source: IAB/PwC, 2002-2011


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Ad formats

(several imbalanced arenas)


Search will continue to get the largest share of ad dollars

Search will continue to get the largest share of ad dollars

% Total Digital

2012

Source: eMarketer, January 2012


Is search a model for other forms of digital advertising

Is search a model for other forms of digital advertising?


The digital space mixes branding with

The digital space mixes branding with…


Direct response marketing which often means

…direct response marketing, which often means…


Even a single ad can dissolve the classic division between the two

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


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


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


Even among top 5 display ad growth is highly uneven

Even among top 5, display ad growth is highly uneven


In fact display spending is less consolidated than the total market

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


Impressions match money the not top 5 get about half of display impressions

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


Display growth without social and mobile paints a different picture

Display growth without social and mobile paints a different picture

% Change 2012

Source: eMarketer, February 2012


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Video growth

(cross-channel possibilities)


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

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

Source: eMarketer, January 2012


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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

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

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

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


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Social and Mobile

(beyond the hype)


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


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


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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

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


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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

And mobile search is mainly Google (another huge cluster)


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

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


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Conclusions


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Conclusions:

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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