where’s the money: online ad-trends outlook
DESCRIPTION
Presentation by Peter Conti, Jr., Executive VP at Borrell & Associates. This meeting was sponsored by Charter Media.TRANSCRIPT
AAF BirminghamJanuary 19, 2011
WHERE’S THE MONEY: ONLINE AD-TRENDS OUTLOOK
Agenda Digital advertising trends Local advertisers speak What next?
© 2011 Borrell Associates Inc.
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ResearchAdvertising revenues & spending
Consulting Advertising strategy & tactics
Industry Conferences
Locally focused Offline and especially online advertising
About Borrell Associates
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Our Research
Online ad spending data for any US market Sales data from 4,400+ local Web sites Quarterly Delphi Panel surveys Ongoing in-market sales consulting Major data partnerships:
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Forecasting Sources
Borrell’s model of marketing spending Many government & private inputs
IRS, BLS, D&B, 10Ks, trade associations Developing for 20+ years
Ongoing surveys of local advertisers Ongoing surveys of local media company sites
“Skate to where the puck will be, not where it is.” - Wayne Gretzky
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Local U.S. Ad Spending
2010 2011 2012 2016Online $13.5 $15.3 $18.3 $27.2
Newspaper $21.3 $18.4 $18.5 $19.7Radio $12.6 $12.1 $11.4 $12.5
Broadcast TV $10.5 $10.5 $11.4 $10.2Direct Mail $9.5 $8.2 $8.3 $7.3Other Print $8.4 $8.1 $7.9 $6.1Directories $6.6 $5.0 $5.3 $4.3
Cable $3.3 $3.2 $3.6 $3.9Cinema $0.7 $1.0 $1.4 $2.1
Out-of-Home $1.2 $1.1 $1.2 $1.3Telemarketing $1.0 $0.8 $0.9 $0.9
$88.6 $83.7 $88.0 $95.5($ Billion)
This Just In!
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Dedicated Digital-Ad Sales AEs
Promotions
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Local U.S. Non-Ad Spending
2010 2011 2012 2016
Promotions $114.3 $169.8 $177.5 $273.7
Online Promos $0.8 $1.4 $1.7 $5.9
Online PR $1.2 $1.2 $1.3 $1.4
Ad Production $20.5 $17.6 $19.9 $25.1
Sales Materials $0.9 $0.8 $0.9 $0.9
P.R. $0.3 $0.3 $0.3 $0.4
Research $0.2 $0.1 $0.1 $0.1
$138.3 $191.2 $201.7 $307.6
($ Billion)
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Promotions defined
Discounts, coupons, rebates
Samples, premiums Contests,
sweepstakes Webinars Viral marketing Text messaging
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The Growth is in Promotions
2010 2011 2012 2016 $-
$50
$100
$150
$200
$250
$300
$350
$400
$89 $84 $88
$- $- $-
$96
$114 $170 $177
$- $- $-
$274
Local PromoLocal Ads
$ B
illio
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Big Money with Promotions
Augusta GA
Ferguson Extreme Kitchen Contest
253 entries 7,627 registrations 30,000 votes $50,000 prize, $50,000
sponsorship package Turned a contest that ran 6 weeks
into a program that ran 4 months
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Online Promotions Skyrocket
© 2010, Borrell Associates, Inc. All rights reserved. (Borrell Associates Q4, 2009, US Totals, in
billions)
388%Local
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Local Promotions Increase Share
© 2010, Borrell Associates, Inc. All rights reserved. (Borrell Associates Q4, 2009, US Totals, in billions)
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Local Advertising vs. Local Promotions
11% Growth in Advertising 26% Growth in Promotions
© 2010, Borrell Associates, Inc. All rights reserved. (Borrell Associates Q4, 2009, US Totals, in billions)
$1.56 will be spent on local promotions
…for every $1in local advertising
in 2014
Social
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Do you have a social network site or page?
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Sur
vey
Q1
2011
Q3 2010 Q4 2010 Q1 2011 Q2 2011
45%
58%64% 67%
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SMBs Online Spending
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SMBs use of Social Marketing Platforms
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Business Category Leaders in Social
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SMBs Measure of Social Networking Success
Mobile
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Likely to include mobile in 2011?
Percent n
Very likely 12.4% 604
Somewhat likely 23.5% 1,142
Not very likely 30.0% 1,457
Not at all likely 22.4% 1,086
Don’t know 11.6% 563Total 100.0% 4,852
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U.S. Total Mobile Ad $ in Perspective
2011
Offline Ad Spending$182.1 B
Online Ad Spending$48.9 B
“Stationary”Online Ad Spend
$38.7 B
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Mobile – Local vs. National Ad Spending
'10 '11 '12 '13 '14 '15 '16 $-
$5
$10
$15
$20
$25
$30
$35
National Local
($ B
illio
n)
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Local Mobile Ad Formats 2010/2011($
Mill
ion)
2010 2011 $-
$100
$200
$300
$400
$500
$600
$700
$800
$900
EmailAudioTargeted DisplayVideoRoS DisplaySearch
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Local Mobile Formats 2010-2016($
Bill
ion)
'10 '11 '12 '13 '14 '15 '16$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
Audio
RoS Display
Video
Search
Targeted Display
Online
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Local Online Advertising – Historic Shares
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2002 2003 2004 2005 2006 2007 2008 2009 2010
Other
Local Cable
Directories
Radio
Broadcast TV
Newspapers
Pureplay
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U.S. Local, Online Ad Formats, 2011/2016
2011$
$2
$4
$6
$8
$10
$12
$14
$16
$18
$2,401
$629
$5,615
$5,288
$1,509 Targeted Display
Static Display/RoS
Paid Search
Direct/Email
Video
Audio
2016$
$5
$10
$15
$20
$25
$30
$817
$4,491
$643
$4,210
$2,144
$14,596
Targeted Display
Static Dis-play/RoS
Paid Search
Direct/email
Video
Audio
($ in Billions)
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Targeted Ads
1. IP-based geographical
2. Search
3. Explicit Profile Data
4. Behavioral (Implicit Profile Data)
5. Mobile/Location-based
6. Contextual
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IP-based geo-targeting
As determined by a user’s IP address Used for local advertisers to reach their
audience 25-50 miles accuracy Better suited for regional advertisers to reach
DMA level
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Search targeting
Used when searching for places, businesses, housing, entertainment, etc.
Based on querying Allows for highly relevant advertising Performs well, high value
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Explicit Profile Data Targeting
Registration quality data Collected either offline or online Data may be associated with a cookie Not about where user has been but what they
have said about themselves First party data commands a premium over
third party data
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Behavioral (Implicit Profile Data)
Based on profiles that are inferred from an individual user’s technical footprint and viewing behavior
Data collected through online activities – specific pages, searches, CTs
Used in conjunction with Explicit Profile Data Higher probability of user interest Higher ad rates, CPA, PPC
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Mobile/Location-based Targeting
Targeting through mobile devices – smartphones, GPS (tablets), some laptops
Confirmed location (GPS) Most available ad inventory has only DMA-
level targeting Confirmed-location targeting is extremely
accurate
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Contextual Targeting
Based on content being viewed on an individual Web page
Based on geography and the target Can range from niche to mass Accurate, commands higher price Sometimes layered with IP targeting
Birmingham-Hoover, AL Metro
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Local Online Ad Spending
2011 2016$0.0
$10.0$20.0$30.0$40.0$50.0$60.0$70.0$80.0$90.0
$100.0
$53.0
$91.6
Birmingham-Hoover
($ i
n M
illi
on
s)
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Online Ad Formats 2011/2016
2011$0
$10
$20
$30
$40
$50
$60
$8.1
$1.9
$19.5
$17.5
$5.2Targeted Display
Static Dis-play/RoS
Paid Search
Direct/Email
Video
Audio
2016$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
$2.5
$15.1
$2.0
$14.6
$7.1
$50.4
Targeted Display
Static Dis-play/RoS
Paid Search
Direct/email
Video
Audio
($ in Millions)
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Top Online Business Categories 2016
Retail Home Improvement
Recruitment
Real Estate Services
Food Stores - Retail
Furniture Sales
Automotive Sales
General Merchandise Stores
$0.0 $5.0 $10.0 $15.0 $20.0 $25.0
$1.94
$3.16
$3.47
$3.82
$6.25
$12.59
$21.36
Birmingham-Hoover
($ in Millions)
© 2011 Borrell Associates Inc.
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Under Siege from Ad Sellers
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Avg # of AEs contact you per month
23 25 20 24Sales pitches taken per month
7 7 8 8
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Sur
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Q1
2011
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0%
10%
20%
30%
40%
Less likely to buy More likely to buy
U.S. 2010 to 2011 Online Ad Spending Change
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Marketing Advisors
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Sur
vey
Q1
2011
Which of these types of information sourcesdo you use to find out about new advertising and marketing opportunities?
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Confidence in rep ad package advice
Very con-fident
Somewhat confident
Not very confident
Not at all confident
Do not have print
rep
Don't know0%
10%
20%
30%
40%
50%
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Sur
vey
Q1
2011
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Effort seen in reps to listen & understand
A great deal of effort
Some effort Not very much effort
No effort at all
Don’t know0%
10%
20%
30%
40%
50%
60%
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Sur
vey
Q1
2011
What can local media do? Be consultants, educators Develop ad-centric sites Participate in promotions Go after non-traditional advertisers
© 2011 Borrell Associates Inc.
Thank You
© 2011 Borrell Associates Inc. All Rights Reserved
Peter Conti, Executive VPBorrell Associates [email protected]: 804-360-9434