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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

slide3

Internet 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

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

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

slide12

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

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

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

slide26

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

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

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

slide39

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

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

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