commentary on 2009 iab-pwc internet advertising revenue report
Post on 17-Oct-2014
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This presentation was made as the official guest commentary to the IAB's 2009 Internet Advertising Revenue Report prepared by PricewaterhouseCoopers. The slides are narrated - press the play button to start the slidecast. Note: In August 2010 I left GCA Savvian to form LUMA Partners. I can be reached at [email protected].TRANSCRIPT
2009 Internet Advertising Revenue Report
Rethinking the Market Opportunity
April 7, 2010
Terence Kawaja GCA Savvian Advisors
CAGR = 12%
Notes: Source: IAB / PricewaterhouseCoopers internet advertising revenue reports.
Interactive Advertising is on a Long Term Growth Path…
Media Consumption vs. Ad Spend, 2009
Notes: Source: Wall Street research, 2010. (1) As a percentage of ad spending on the media channels indicated above only: TV, Newspaper, Radio, Magazines and Online.
…But Has Much More Upside Potential
The Crowded Display Ad Tech Landscape
Deals are Back and Consolidation is Coming
Recent Digital Media Acquisitions: Global Tech Transactions $10MM - $1.0Bn (1)
Notes: (1) Source: FactSet as of 2/28/10; Includes global announced acquisitions in the specified range of transaction sizes; excludes minority investments, JVs etc.; includes all transactions with target in Electronic Technology, Technology Services, and Communications sectors as defined by FactSet.
Transaction Volume ($Bn) Number of Transactions
Convergence in the Purchase Funnel
Purchase Funnel Metric Example Companies
CPM
CPC
CPL
CPA
Transaction
Customer
Search
Lead
Impression
Sale
Data
Going After the Elephant in the Room: TV
• Online video is currently a fraction of total TV and online spending
• The holy grail is achieved when digital video is part of the television budget
• Much of the media optimization techniques honed in online can be applied to TV audiences
• Shift in agency dynamic and marketer mindset is key
Notes: Source: VSS Communications, August 2009; eMarketer, December 2009.
US Video & Display Advertising, 2009 ($MM)
Achieving the Holy Grail: Solving for Attribution
Several links in the attribution chain are missing: – Online to online (the last click phenomenon) – Online to offline – Offline to online
Technology is improving data collection and analysis which will allow for the discovery of “digital footprints”
Once attribution is achieved, there is no reason all media cannot be optimized
Already, several interesting technologies have been deployed:
– TV set top box measurement – Mobile location-based services
TELEVISION
DIGITAL
RETAIL
Rethinking the Market Opportunity
Forecasts show the interactive channel growing to $50+ billion in 5 years
– Represents an linear, evolutionary approach – The challenge is to think revolution, not evolution – How does interactive get to a $100 billion marketplace? – Think new definition for “interactive” to go beyond online
• Digitally-addressable video (aka TV) • Offline commerce enablement • Mobile
Several reasons for a revolution – Innovation (eg. media optimization, real time phenomenon) – Simplification (less point solutions) – Consolidation (entry of larger players) – Attribution (eg. TV, offline retail)
Putting $100 Billion in Perspective
Healthcare reform for one year
War in Iraq and Afghanistan for a year
Cost of recent bank failures to the FDIC
A controlling stake in Google (at market)
Putting $100 Billion in Perspective
Healthcare reform for one year
War in Iraq and Afghanistan for a year
Cost of recent bank failures to the FDIC
A controlling stake in Google (at market)
Putting $100 Billion in Perspective
Healthcare reform for one year
War in Iraq and Afghanistan for a year
Cost of recent bank failures to the FDIC
A controlling stake in Google (at market)
Putting $100 Billion in Perspective
Healthcare reform for one year
War in Iraq and Afghanistan for a year
Cost of recent bank failures to the FDIC
A controlling stake in Google (at market)
Putting $100 Billion in Perspective
Healthcare reform for one year
War in Iraq and Afghanistan for a year
Cost of recent bank failures to the FDIC
A controlling stake in Google (at market)
GCA Savvian’s Digital Media Advisory Business
Leading investment banking firm with over 200 professionals worldwide
Services include advice on mergers and acquisitions, private capital finance and restructurings
Advised on over $60 billion in transactions since 2006
Advisor to media companies new and old
Think like principals; offer trusted advice to clients
TOKYO • SAN FRANCISCO • CHICAGO • NEW YORK • LONDON
Terence Kawaja Managing Director +1 212.999.7082 [email protected]
John Lambros Managing Director +1 212.999.7083 [email protected]
Steven Fletcher Managing Director +1 415.318.3661 [email protected]