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Page 1: Host Introduction: “State of the Industry: Follow the Money”

Twitter: #iMediaSummit

1Friday, February 7, 14

Page 2: Host Introduction: “State of the Industry: Follow the Money”

Follow the Money

February 10, 2014

Presented by Geoffrey RamseyChairman, Founder@geofframsey

2Friday, February 7, 14

Page 3: Host Introduction: “State of the Industry: Follow the Money”

383 builds

782 data sources

50 slides

WARNING!

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Page 4: Host Introduction: “State of the Industry: Follow the Money”

About the numbers you are about to see

88.9%

$5.6B2.4

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Page 5: Host Introduction: “State of the Industry: Follow the Money”

The eMarketer process

• Reported revenues from major ad-selling companies;

• Data from “benchmark” sources, including quarterly reports from the IAB & PwC;

• Estimates from primary research firms, investment banks, independent analysts, agency forecast units;

• Consumer internet and mobile usage trends;

• Surveys among marketers, publishers, etc;

• eMarketer interviews with executives at ad agencies, brands, publishers and other leaders

5Friday, February 7, 14

Page 6: Host Introduction: “State of the Industry: Follow the Money”

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Page 7: Host Introduction: “State of the Industry: Follow the Money”

The Twitter Story

Time

EstimatedRevenue

Aug2012

$545

Feb2013

$583

$500

$500

$250

Feb 52014

2013actual

IPO

Twitter WW Ad Revenue for 2013 (millions)

$595

2% marginof error

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Page 8: Host Introduction: “State of the Industry: Follow the Money”

Yes, total media spending will continue to rise in 2014...

$187.3

2007

If you strip out digital,

1%

63% of marketers plan to cut spend on traditional media in order to fund

digital efforts

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Page 9: Host Introduction: “State of the Industry: Follow the Money”

Digital will grow nearly 13% this year

27.0% 31.7%

40%share of US

digital $

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Page 10: Host Introduction: “State of the Industry: Follow the Money”

13% growth in 2014???

But that’s not the big story.

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Page 11: Host Introduction: “State of the Industry: Follow the Money”

Desktopocalypse???

Are we reaching the “End of Days” for our desktop-centric ad ecosystem???

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Page 12: Host Introduction: “State of the Industry: Follow the Money”

$36Bin mobile

ads

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Page 13: Host Introduction: “State of the Industry: Follow the Money”

What I am NOT saying...Desktop ad business

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Page 14: Host Introduction: “State of the Industry: Follow the Money”

Mobile ad spending is on a tear

8X

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Page 15: Host Introduction: “State of the Industry: Follow the Money”

Mobile’s slice of the digital ad spending pie

Source: eMarketer, 2014

= 12% in 2012

= 22.5% in 2013

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Page 16: Host Introduction: “State of the Industry: Follow the Money”

= 57% of the digital pie in 2017

Source: eMarketer, 2014

$36Bin mobile

ads

Mobile = >1/2

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Page 17: Host Introduction: “State of the Industry: Follow the Money”

What you may be thinking...

$36Bin mobile

ads

“Stoned” “Screwy”

“Stupid”“Sponsored”

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Page 18: Host Introduction: “State of the Industry: Follow the Money”

8 Reasons To Believe Mobile Ad Spending

Will Eclipse Desktop by 2017

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Page 19: Host Introduction: “State of the Industry: Follow the Money”

Smartphones

Connected Consoles

ConnectedConsoles

Desktop PCs

Social Machines Social Machines

Laptop PCsConnected TVs

Ambient Surfaces

#1. Mobile devices have moved to the center of consumers’ multi-platform universe ...

Connected Cars

Wearable Technology

Tablets

©2014 eMarketer Inc.

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Page 20: Host Introduction: “State of the Industry: Follow the Money”

... they’ve become the remote control for our lives

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Page 21: Host Introduction: “State of the Industry: Follow the Money”

#2. Smartphone and tablet penetration are ramping up

50%eMarketer  (year  end  2014)

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Page 22: Host Introduction: “State of the Industry: Follow the Money”

% of population on smartphones, by age group (2014)

TotalUnder 11

12 - 1718 - 2425 - 3435 - 4445 - 5455 - 64

65+0% 40% 80%

19%53.4%

59.9%76.8%

79.1%75.9%

51.4%3.8%

50.1%

Source: eMarketer, 2014

50%

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Page 23: Host Introduction: “State of the Industry: Follow the Money”

In 2017, two-thirds are on smartphones

TotalUnder 11

12 - 1718 - 2425 - 3435 - 4445 - 5455 - 64

65+0% 50% 100%

25%74%

82%92%93%94%

73%6%

64%

Source: eMarketer, 2014

64%

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Page 24: Host Introduction: “State of the Industry: Follow the Money”

Nearly 1/2 of the population will use a tablet by 2017

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Page 25: Host Introduction: “State of the Industry: Follow the Money”

#3. Smartphone and tablet adoption have brought us to a new inflection point in terms of time spent

©2014 eMarketer Inc.

2 hours 21 minutes19.4% of daily media time

2 hours 19 minutes19.2% of daily media time

Source: eMarketer, July 2013

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Page 26: Host Introduction: “State of the Industry: Follow the Money”

Time spent in hours: minutes

4:31 5:16

TV(38%)

2:21Mobile

TotalDigital

(45%)

~1/2

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Page 27: Host Introduction: “State of the Industry: Follow the Money”

Adobe/Keynote Systems

Arbitron Mobile

Chinet

BabyCenter

Barkley

comScoreCouncil for Research Excellence

Credit Suisse

Deloitte

Donald W. Reynolds Journalism Institute (RJI) at the University of Missouri

Edison Research

Experian Simmons

Fleishman-Hillard

Forrester Research

Frand N. Magid Associates

Gfk MRI

Google and Sterling Brands

GroupM

Hitwise Mobile

InMobi and Mobext

Interpret

Interactive Advertising Bureau (IAB)

Ipsos Mendelsohn

MAGNAGLOBAL

McKinsey & Company

Millward Brown and Dynamics Logic

Moosylvania

Nielsen

Nielsen and BabyCenter LLC

Online Publisher Association (OPA)

SyncapseTelevision Bureau of Advertising (TVB)

Temkin Group

Terra Networks and comScore

The Diffusion Group

The Media Audit

Tremor Media

Yahoo! and Interpret

Yankee Group

USC Annenberg School Center for the Digital Future

Zokem

Gfk ~1/2

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Page 28: Host Introduction: “State of the Industry: Follow the Money”

With mobile: being online has become a persistent, anywhere state

Mobile users check their phones 100X daily

Source: Mobile Posse and Phoenix Marketing International, 2013

Some of you have done that within the

past 10 minutes

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Page 29: Host Introduction: “State of the Industry: Follow the Money”

#4. Mobile is now ~20% of Web traffic and search volume

1/5Sources:Web traffic: comScore; StatCounter; Adobe (pageviews), 2013;Paid search click share on Google: The Search Agency, 2013;US search clicks: Kenshoo, 2013

40%mobile

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Page 30: Host Introduction: “State of the Industry: Follow the Money”

#5. Mobile commerce is exploding

eMarketer, Sept, 2014

$41.7 B

2013

16%

2017

2.7X

m-commerce sales(and as a % of total ecommerce)

$113.6 B

26%

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Page 31: Host Introduction: “State of the Industry: Follow the Money”

Smartphone impact goes way beyond direct sales

Sources:*eMarketer, 2013;**MMA; Deloitte Digital, 2013

$15 B*

$139 - $159 B**

58% influenced by ads

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Page 32: Host Introduction: “State of the Industry: Follow the Money”

When consumers were asked in a survey, “What is your primary device for opening marketing emails?”...

©2014 eMarketer Inc.

65% said smartphones

or tabletsSource: Moveable Ink, Q4, 2013

35% said desktop

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Page 33: Host Introduction: “State of the Industry: Follow the Money”

0% 15% 30%45%

30%

35%

35%

43%

Content Marketing

Targeting & Personalization

Social Media Engagement

Mobile Optimization

Source: Econsultancy and Adobe, Jan, 2013

#6. Marketers are pumped for mobile

Survey: Most Exciting Digital Opportunities in 2013, according to Companies Worldwide

% of US Marketers Planning to Increase their Mobile Spend

64% ...... Advertiser Perceptions67% ...... Econsultancy69% ...... Nielsen and Vizu70% ...... Ignition One74% ...... IAB and Ovum79% ...... Technorati Media85% ...... ANA

43% of B2B marketers

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Page 34: Host Introduction: “State of the Industry: Follow the Money”

#7. The tech titans are all going mobile

49%worldwide

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Page 35: Host Introduction: “State of the Industry: Follow the Money”

Net US Google display ad revenues

eMarketer, December 2013

$0

$1

$2

$3

$4

2012 2013 2014 2015

$2.18

$1.24

$0.66$0.31

$3.70

$2.88

$2.33

$1.94

DesktopMobile

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Page 36: Host Introduction: “State of the Industry: Follow the Money”

% of advertising revenue coming from mobile in Q4, 2013

53% 72% 75%

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Page 37: Host Introduction: “State of the Industry: Follow the Money”

#8. Social media is increasingly becoming a mobile activity

69%of social users access social networks on their phonesException

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Page 38: Host Introduction: “State of the Industry: Follow the Money”

US digital users spend 1:10 (hr:mins) per day on social media

29%

29%

19%

Source: eMarketer, 2013;*Deloitte, Nov, 2013

#2 activity, after email*

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Page 39: Host Introduction: “State of the Industry: Follow the Money”

Ad spending on social networks is also on the rise Social media = 12% of

total digital ad spend

Fueled partly by:

69%39Friday, February 7, 14

Page 40: Host Introduction: “State of the Industry: Follow the Money”

67% of US internet users go to any social network

Source: eMarketer, 2013;*Pew Internet & American Life, Dec, 2013

Facebook

Pinterest*

Instagram*

Twitter

Tumblr*

0% 30% 60%

6%

15%

17%

22%

60%

CreditDonkey........... 44%Broadcom................ 31%InSites Consulting... 25%

GlobalWebIndex....... 20%comScore................. 19%Pew........................... 18%Allstate Corp............ 16%eMarketer................. 15%Epsilon...................... 8%

Hub Research.......... 23%Reuters.................... 26%

Broadcom................ 20%Pew......................22%

Hub Research.......... 15%GlobaWebIndex....... 14%

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Page 41: Host Introduction: “State of the Industry: Follow the Money”

Video ad spending will continue to see double-digit growth

27%of digitaldisplay $s

70% of senior ad-buying execs plan to move some of their TV dollars to digital

––IAB, 2013

= 1/5 of digital video ad spend

???

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Page 42: Host Introduction: “State of the Industry: Follow the Money”

For each year (2014 - 2017), net additional TV $s will exceed net additional digital video $s

$68.5

$5.8TV Digital Video

$2.2

$1.64

In 2014...

6%

11%

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Page 43: Host Introduction: “State of the Industry: Follow the Money”

1. Improvements in mobile measurement––including ability to integrate mobile and assign attribution

2. Advancement of Geo-targeting capabilities

3. Growth in Native Advertising movement––which is expanding rapidly in mobile, e.g., Facebook, Twitter, BuzzFeed, etc

4. Programmatic buying is moving fast towards mobile

Mobile

“Exchanges, Trading Desks and bidding for audiences recognizes that marketers want to reach audiences, rather than underwrite space.”

––Rishad Tobaccowala, Chairman of DigitasLBi and Razorfish

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Page 44: Host Introduction: “State of the Industry: Follow the Money”

Look for programmatic buying to rapidly spread through mobile, social and video

85% of advertisers*

72% of publishers**

Sources: eMarketer, 2014;*IAB and Winterberry Group, 2013; **IAB; OPA, 2013

$0

$2.3

$4.5

$6.8

$9.0

$1.92$3.39

$4.86

$6.64

$8.72

20122013

20142015

2016

% Growth

eMarketer........ 43%

JMP....................... 50%IDC....................... 49%

JP Morgan............ 49%

US Digital Real-Time Bidding Display Ad Spending (in billions)

22%of display

spend

28%of display

spend

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Page 45: Host Introduction: “State of the Industry: Follow the Money”

Final advice.

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Page 46: Host Introduction: “State of the Industry: Follow the Money”

Admit if you have a problem.

43%“Poorly

Integrated”

46%“Improving”

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Page 47: Host Introduction: “State of the Industry: Follow the Money”

Mobile is the least integrated

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Page 48: Host Introduction: “State of the Industry: Follow the Money”

Get on top of the data

Harvest cross-screen identities by tapping into the streams of data emanating from mobile, social and video activities

Think of it as an antidote to fragmentation!

©2013 eMarketer Inc.

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Page 49: Host Introduction: “State of the Industry: Follow the Money”

By ensuring consistent messaging and offer availability across every channel, you can provide consumers with multiple options in terms of their entry point into the purchase process.

Fight multi-tasking behavior with multi-channel marketing

©2013 eMarketer Inc.

Smart use of data––across platforms––will be the only way to keep up with

rising consumer expectations.

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Page 50: Host Introduction: “State of the Industry: Follow the Money”

“Thank You”

Geoffrey RamseyChairman, [email protected] @geofframsey

#iMediaSummit

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