presentation to the market research council - iab.com trends: opportunities and challenges...

Digital Trends: Opportunities and ChallengesPresentation to the Market Research Council

KRISTINA SRUOGINISMay 12, 2017Yale Club, New York, NY

IAB EMPOWERS THE MEDIA

AND MARKETING INDUSTRIES TO

THRIVE IN THE DIGITAL ECONOMY.

We Are Digital Media’s Biggest “Tent”

3

650+ LEADING MEDIA COMPANIES RESPONSIBLE FOR SELLING 86% OF U.S. DIGITAL ADVERTISING

4

What IAB Does and How We Do It

5

Consumer Usage Translates into Digital Ad Revenue

Consumers Use Digital and Mobile

The Proliferation and Adoption of Devices to Access the Internet Has Impacted the Media Landscape

6

91% 92%

68%64%

45%

24% 23%

90%87%

83%

66%

46%43%

35%

Computer TV Smartphone Tablet DVR Smart TV Video streaming device

2015

2017

Devices OwnedAmong Adults 18+

Q1.0. Which of the following devices do you or your household personally own?

Base: Adults 18+, 2017 n=802; 2015 n=651

IAB Research Using Maru/Matchbox’s Springboard America Online Panel,

Representative of General US Adult 18+ Online Population, March 2017

N/A

Total Connected TV:

2015 – 36%

2017 – 57%

260,182257,101

Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16

Total Unduplicated Internet Audience

Total UnduplicatedInternet Audience

7

The total audience accessing the internet via computer or mobile device is 257 million monthly visitors (or 80% of the US population of 320M).

Monthly Unique Visitors (000), Dec 2015 – Dec 2016

(of any site or app via computer or mobile device)

ComScore US Media Metrix MultiPlatform Dec. 2015 to Dec. 2016, Total Unduplicated Internet Audience.

Source: IAB Digital Usage Trend Report Full Year 2016

Computer and Mobile

257 Million Americans Access the Internet Monthly on Computers or Mobile Devices

1,448,481

1,498,667


Total Minutes (MM)

Total Minutes (MM)

% Change

12/15 - 12/16

3%

Time Spent Online Via Computer or Mobile Device Has Grown

8

Monthly Total Minutes (MM) Dec 2015 – Dec 2016

(of any site, stream or app via computer or mobile device)

Source: ComScore US Media Metrix MultiPlatform Dec. 2015 to Dec. 2016

IAB Digital Usage Trend Report Full Year 2016Effective with January 2016 data, the comScore audience product suite (Media Metrix MP, Media Metrix, Video Metrix, Mobile Metrix) underwent methodology and processing enhancements affecting all markets and all audience products.

Users spend roughly 1.5 trillion minutes per month online

Online Advertising Revenue Continues Its Incredible Growth

9

Quarterly Online Ad Revenue Comparisons — Q1 2010 – Q4 2016

Source: IAB Full Year and Q4 2016 Internet Advertising Revenue Report

1996

$267M

FY 2016

$72.5B

Record

Revenue

$ B

illio

ns

*The Nielsen Company, MonitorPlus (Standard Calendar, Total includes B2B, National Internet (Display only), FSI Coupons), Apr. 2017

Total Media Ad

Revenue Growth(FY 2015 vs. FY 2016)

The Nielsen Company

estimates total media

revenues for FY 2016

increased by 1% from

FY’15 to $121.1B*

$59.6

$72.5

$0

$10

$20

$30

$40

$50

$60

$70

$80

FY 2015 FY 2016

Digital Ad Revenue Growth (FY 2015 vs. FY 2016)

22%


Full Year 2016 Year-Over-Year Full Year 2016 Digital Ad Revenue Has Grown by Double Digits from the Previous Year to $72.5 Billion

11

What’s Driving Growth?

Consumer Usage Trends

100% 97% 97% 95% 92% 91% 91%87% 87% 83% 79% 76%

0%

50%

100%

% of Total Internet Population

Monthly Total Unique Visitors/Viewers (000), Dec 2016

(to any site or app via computer or mobile device)

Consumer Adoption of Digital

12IAB Digital Usage Trend Report Full Year 2016Source: comScore US Media Metrix Multi-Platform, Dec ’16, Total Unduplicated Internet Audience

Top Categories by Unique Visitors as a % of Total Online Pop.

257 Million consumers accessed the internet in the month of December

The vast majority visited sites or apps for activities ranging from entertainment to social media to shopping

Consumers Have Adopted Digital as a Way of Life

13

Consumers shop online, date online, socialize online, hail cabs via apps and are entertained online


Consumers Shop Online

Source: Prosper Insights 2017 Media Behaviors Insights

88%Purchase Products Online

Regularly or occasionallyUS Adults 18+

(Prosper Media Behavior Insights. 2017)

64%Download Apps



56%Read Product Reviews

In Store to Decide Between Products



Hail Cabs Over Mobile Apps

Socialize Online

Date OnlineComparison Shop on Smartphones in Stores

Are Entertained Online

While These Activities Offer Opportunities, They Also Bring Challenges

14

Consumers shop online, date online, socialize online, hail cabs via apps, are entertained online…

Consumers Shop Online

Source: Prosper Insights 2017 Media Behaviors Insights

88%Purchase Products Online



64%Download Apps



Hail Cabs Over Mobile Apps

Socialize Online

Date OnlineComparison Shop on Smartphones in Stores

Are Entertained Online56%

Read Product ReviewsIn Store

to Decide Between Products Regularly or occasionally

US Adults 18+


Powered by: Data

Challenge: Data Quality

Powered by: Geolocation Data

Challenge: Location Data Quality

Powered by: Data


Powered by: Data

Challenge: Walled Gardens

Powered by: Data

Challenge: Attribution

Powered by: Beacons


The Data That Underpins Popular Online Activities Enables…

15

Opportunities:

Shopping:

Beacons allow for customized offers to consumers when in or near a store

Geolocation allows advertisers to connect ads to consumers’ in-store visits

Taxi Services:

Location data enables Uber and other taxi services to function

Challenges:

Location data can be inaccurate

Matching location data with users poses measurement challenges

16

Note: Multiple choice list provided; panelists were able to select up to 5 use cases; 84 panelists responded

Cross-Channel Program Measurement, Audience Engagement Still Among Top Priorities for Coming Year

2017

Measurement and Data Challenges Are Top Priorities

23%

23%

33%

38%

38%

40%

40%

43%

48%

57%

Online to offline (or offline to online) retargeting

Online retargeting

Yield optimization

Predictive modeling and/or segmentation

Programmatic media buying for emerging formats

General audience analytics

Advertising content/experience optimization

Cross-channel audience identification/matching

Programmatic media buying for established formats

Cross-channel measurement and attribution

“Which use cases do you expect will most occupy your time,attention and resources during 2017?”

Key Challenges + IAB Data & Ad Effectiveness Plans

17

DA

TA

AD

EF

FE

CT

IVE

NE

SS

Challenges Key Proposed Initiatives

IDENTITY • Identity Standards

• Identity Validation Service

DATA QUALITY • Data Quality Guidelines/Standards

• Data Lexicon enhancements

DATA EXPERTISE • Data Maturity Model enhancements

• Training/Events

CONSUMER(Experience, Privacy)

• LEAN, DEAL evolution

• Coalition for Better Ads rollout

• Identity Standards

MEASUREMENT • Industry metrics standards: audience, engagement, cross-media

ATTRIBUTION • Attribution Primer enhancements

• Multi-touch Attribution Guidance (done)

AUTOMATION • Clarifying “programmatic”

• Mobile programmatic monetization

• Header bidding guidance

• Training/Events

18

Consumer Adoption of Social Media


45,255

52,971

56,160

79,441

79,812

81,974

84,937

106,311

166,807

172,004

181,590

Twitter

PINTEREST

Weather

Yahoo Sites

PANDORA

Snapchat, Inc

Amazon Sites

Apple Inc.

Facebook

Google Sites

Total

Top 10 Properties Accessed by Mobile Appby Unique Visitors (000) Dec. 2016

Top 10 Mobile Apps

Social Media is Now an Integral Part of Most Consumers’ Lives

19

9 out of 10 users access social media at least once a month

4 out of the top 10 mobile apps are social media apps


91% of Internet Population

Access Social Media MonthlyUnique users via any device via app or site

(ComScore MMX Dec. 2016)

233M Unique UsersAccess Social Media Monthly

Using any device via app or site(ComScore MMX Dec. 2016)

296B MinutesAre Spent Monthly on

Social MediaUsing any device via app or site

(ComScore MMX Dec. 2016)

Source: IAB Digital Usage Trend Report Full Year 2016, ComScore MMX Dec. 2016

IAB Full Year 2016 and Q4 2016 Internet Advertising Revenue Report

As a Result, Social Media Ad Revenue Continues to Climb

$2.9

$4.5

$7.0

$10.9

$16.3

FY'12 FY '13 FY '14 FY '15 FY '16

1st Half Year 2nd Half Year

$4.4

$6.4

$7.0

$9.3

US Social Media Ad Revenue ($ Billions)Across Formats and Devices

Full Year, Half Year and % YoY Growth

20

$2.6

$2.9

$4.1

$1.9$1.2

$1.7

Note: Full Year totals accurately reflect the sum of Half Year totals as rounded to two decimal places.

Growth

FY: 53%

1HY: 50%

Growth

FY: 57%

1HY: 58%

Growth

FY: 50%

1HY: 57% Growth

FY: 55%

1HY: 51%

$ B

illio

ns

• Total Social Media Revenue (Mobile + Desktop) is up 50% to $16.3 Billion in FY 2016

Native Advertising is Growing: Seamless Integration with Content Offers Higher Engagement

21 Source: IAB Deep Dive On In-feed Ad Units, July 2015. BI Intelligence, 2016. Comparing Resonance for Native and Pre-roll Video Ads with Real-time Metrics, Nielsen, 2013.

Types of in-feed native ads

74%

26%

2021

By 2021, native display ad revenue (including banner, rich media, sponsorship, and video ads) in the U.S., is expected to

make up 74% of total U.S. display ad revenue, up from a 56% share in 2016.

A Nielsen case study illustrates that native video ads generate a higher brand lift than pre-roll video ads that carry the same

creative message across five brand campaigns

Native Advertising Opportunity: 42% of Original Digital Video Ad Spending in 2016 Was on Native Advertising

22

Native Original Digital Video is expected to increase: Over half (56%) allocated more of their budget to native

42%

58%

Q164 What percent of the ad dollars you spent in 2016 on professionally produced original digital video programming/content was spent on native advertising?

Base: Total Respondents

Share of Original Digital Video Ad Dollars Allocated to Native Advertising

56%Increased

Spend

On Native

Original

Digital Video

Ad Spendof ODV Ad Spend in 2016

was on Native Advertising

Streaming Audio is Growing in Importance

23

3 of the top 10 mobile apps by time spent online are exclusively streaming audio apps.

Digital audio ad revenue has grown, largely due to mobile

Digital Audio Ad Revenue

(Mobile + Desktop) FY 2016

19%

81%

Total Audio

% of Ad Revenue Derived from Mobile vs. Desktop

Mobile

Desktop

$1.1B

167,353

119,245

89,645

41,87136,055

22,329 22,246

15,167 12,90111,621

Total Facebook Google PANDORA Spotify Apple GasBuddy Snapchat Soundcloud Netflix Verizon

Source: IAB Digital Usage Trend Report Full Year 2016, IAB/PWC FY 2016 Internet Ad Revenue Report

by Minutes Spent (000) Dec. 2016

Top Mobile Apps864,328

Programmatic Opportunity and Challenge

24

Programmatic Opportunity: Automation allows buying efficiently at scale

Programmatic Challenge:

- Absence of universally accepted definitions causes difficulty in measuring and quantifying the market

- Nearly half of a programmatic ad buy goes to tech companies

Source: IAB/PWC Programmatic Ad Revenue Study, 2014. eMarketer.

Nearly Half To Ad Tech Companies

Opportunity: Challenge:

25

Consumer Adoption of Mobile


IAB Full Year 2016 and Q4 2016 Internet Advertising Revenue Report

Mobile Advertising Revenue Growth:Mobile Revenue is Over 10x Larger Than It Was 5 Years Ago

$1.2$3.0

$5.3

$8.2

$15.5

$3.4

$7.1

$12.4

$

FY'12 FY '13 FY '14 FY '15 FY'16

1st Half Year 2nd Half Year

US Mobile Ad Revenue ($ Billions)Full Year, Half Year and % YoY Growth

26

$2.1

$4.0

$20.7

$7.1

$12.5

Note: Full Year totals accurately reflect the sum of Half Year totals as rounded to two decimal places.

$36.6

$21.1

Growth

FY: 110%

1HY: 145%

Growth

FY: 66%

1HY: 54%Growth

FY: 76%

1HY: 75%

Growth

FY: 77%

1HY: 89%$ B

illio

ns


Total Tablet Minutes

Total Smartphone Minutes

Consumers are Spending More Time Online on Mobile Devices

27

195 Million Americans Used a Mobile Device Online in Dec. 2016

US adults spent nearly 1 trillion minutes online with their mobile devices in Dec. 2016

Source: comScore US Media Metrix Multi-Platform, Dec ’15 – Dec ’16, Total Internet Time Spent (MM)

(Monthly Minutes Spent Online (MM), Dec. 2015 – Dec. 2016)

IAB Digital Usage Trend Report Full Year 2016

Total Minutes: Digital and Mobile Audience Trend

83%85%

17% 15%

Total Minutes

950MTotal Minutes

1.0B(Mobile Includes Browser and Apps)

Effective with January 2016 data, the comScore audience product suite (Media Metrix MP, Media Metrix, Video Metrix, Mobile Metrix) underwent methodology and processing enhancements affecting all markets and all audience products.

787,541

878,654

160,767

156,199

46%

25%

28%

Mobile Only Users

Most Consumers Use Both Desktop and Mobile to Access the Internet

28 IAB Digital Usage Trend Report Full Year 2016

ComScore MultiPlatform Dec. 2016. Total Audience, Home and Work. Desktop. Mobile.

Those Who ONLY Use Computers to Access the Internet Skew Older

Those Who ONLY Use Mobile to Access the Internet Skew Younger

17%

21%

62%

Desktop Only Users

A55+

A35-54

A18-34

10%

12%

78%

Total Unique Visitors

Desktop Only

Mobile Only

Both Desktopand Mobile

Desktop Only Users Mobile Only Users

Composition of Total Monthly Unique Visitors Who Only Use Desktop, Mobile


Total Tablet Minutes

Total Smartphone Minutes

Total Computer Minutes

But Time Spent Online is Shifting to Mobile, Especially to Smartphones

29

While users continue to spend more time online overall (up 3%), most of that growth is driven by consumers on smartphones

Time spent online on smartphones is up 10%

Source: comScore US Media Metrix Multi-Platform, Dec ’15 – Dec ’16, Total Internet Time Spent (MM)

(Monthly Minutes Spent Online (MM), Dec. 2015 – Dec. 2016)


Total Minutes: Digital and Mobile Audience Trend

35% 31%

54%59%

11% 10%

Total Minutes

1.45BTotal Minutes

1.48B(Mobile Includes Browser and Apps)

Effective with January 2016 data, the comScore audience product suite (Media Metrix MP, Media Metrix, Video Metrix, Mobile Metrix) underwent methodology and processing enhancements affecting all markets and all audience products.

3%

Total

Minutes

10%

Tablet

-8%

-3%

Smartphone

Computer

31% 33%

19% 19%14%

72%

36%

13%

42%

61%

31%

69% 67% 81% 81% 86% 28% 64% 87% 58% 39% 69%

0%

50%

100%

% Mobile

% Computer

Monthly Minutes (000), Dec 2016

(to any site or app via computer or mobile device)

Most Top Categories by Time Spent Online Are Accessed Primarily from Mobile Devices

30IAB Digital Usage Trend Report Full Year 2016Source: comScore US Media Metrix Multi-Platform, Dec ’16, Total Unduplicated Internet Audience, Total Minutes

Top Categories by Time Spent on Any Device

Source: comScore US Media Metrix Multi-Platform, Dec ’16, Total Monthly Unique Users Accessing Mobile App (MM)

More Time is Spent on Mobile Apps Than on Mobile Web

31

Total Mobile Minutes on Browser vs. In App


14%

86%

Total Browser Minutes Total App Minutes

Dec. 2016

Source: comScore US Mobile Metrix, Dec ’16, Total Minutes (000) Browsing, Applications

Total Mobile Minutes Online (000)

182 Million Users

Accessed Mobile Apps

In Dec. 2016

170 Million Users

Accessed Mobile Web

In Dec. 2016

Most use both mobile apps and mobile web, however they spend more time on mobile apps.

Mobile Video Opportunity: Vertical Video

32

As users typically use mobile apps in vertical orientation on smartphones, vertical video grows in importance

Half of marketers and advertisers surveyed purchased vertical video ads in 2016

Q189 Have you bought ads in vertical video in 2016?


Yes51%

No49%

Bought Vertical Video Ads in 2016

Source: IAB 2017 Video Ad Spend Study

Mobile Video Challenge: Most Apps are Used in Fixed Vertical View but Some Interstitial Video Ads are Displayed Horizontally Anyway

33

When Using Apps in Vertical Orientation, Many Users Don’t Switch Video Orientation to Watch Horizontal Videos

65%35%

% of Total Internet Minutes

Total MobileMinutes

Total ComputerMinutes

• The share of time spent online using a mobile device continues to grow, up from 65% a year ago.

Over Two-Thirds of All Internet Time is Spent on a Mobile Device

34ComScore US Media Metrix Multi-Platform, Dec ’15 – Dec ’16, Total Internet Time Spent (MM)

Monthly Minutes Spent Online (MM), Dec 2015 vs. Dec 2016

Source: IAB Digital Usage Trend Report Full Year 2016

69%31%

Dec. 2015 Dec. 2016

(Mobile Browser and Apps)

9% YoY Growthin Mobile Minutes

Total

Mobile

Minutes

Total

Desktop

Minutes

Total

Mobile

Minutes

Total

Desktop

Minutes

$ B

illio

ns $59.6

$72.5

$0

$10

$20

$30

$40

$50

$60

$70

$80

FY 2015 FY 2016

Mobile as a Percentage of Digital Ad Revenue Growth

(FY 2015 vs. FY 2016)

22%

51%is

Mobile

35%was

Mobile

77%$36.6

$20.7


Mobile Advertising Has Grown to Account for Over Half of Digital Ad Revenue for Full Year 2016

Consumer Usage Shift to Mobile Devices Translates into Mobile Ad Revenue

69%

51%

31%

49%

Time Spent Online on MobileDevices

Mobile Ad Revenue

Desktop

Mobile

ComScore US Media Metrix Multi-Platform, Dec ’16, Total Internet Time Spent (MM)

Mobile as a Percent of Digital

Time Spent vs. Ad Revenue

Source: IAB Digital Usage Trend Report Full Year 2016, IAB 2016 Full Year and Q4 2016 Internet Advertising Revenue Report

Dec. ‘16 Full Year 2016

Mobile Advertising Revenue is Catching Up to Consumer Usage But Still Has Room for Growth

Media Time: 0:00 Ad Dollars: $

37

Consumer Adoption of Video


FY'12 FY '13 FY '14 FY'15 FY'16

FY Desktop Video FY Mobile Video

Source: IAB Internet Advertising Revenue Reports, Conducted by PWC, Full Year 2012-2016

US Desktop and Mobile Video Ad Revenue ($ Billions)Full Year and % YoY Growth

$3.3B$2.8B

$2.3B

$1.0B $1.3B $1.5B $2.0B

$1.7B

$4.2B

$9.1B

$4.9B

*Half Year totals accurately reflect the sum of half year totals as rounded to two decimal places.

Prior to 2016, mobile video was included in mobile ad revenue

$5.9B

$4.2B

53%

GrowthTotal Video

19%Growth

17%Growth

30%Growth

16%Growth

145%Growth

2016 Digital Video Ad Revenue: $9.1 BillionDigital Video Ad Revenue Growth Accelerates with Mobile Video

IAB.com/AdRevenueReport

$2.4

$3.0

$4.4

Original Digital Video: Typical Buyer Will Spend $4.4M in 2017 on Original Digital Video Advertising

Buyers anticipate spending an average of $4.4 million on original digital video in 2017, up 80% from2015

9 in 10 advertisers (88%) increased original digital video budgets as a result of attending the NewFronts

Average Dollar Amount Spent on Original Digital Video —3 Year Trend (in millions)

by Marketers and Advertisers

2015 2016 2017% Change in Original Digital Video

Dollar Spend 2015 – 2017

Q143. Previously you said your company will spend [INSERT RANGE] on digital video/mobile video in 2017. We’d like to get a bit more detail on that and prior year’s spending.

To the best of your knowledge, what exactly was that spending amount in 2015 and 2016? What do you anticipate spending in 2017?

Q145 What portion of your total digital video advertising budget for [your company’s/your client’s] biggest most important product or service in the [INSERT ASSIGNED

MARKET SECTOR] market was spent advertising on each type of content in 2015 and 2016? And what do you anticipate those shares will be in 2017?


80%

Increase2015-2017

Source: IAB 2017 Video Ad Spend Study

Digital Video Viewing is Now Mainstream: The Majority Stream Video Regularly

40

232 Million Users StreamDigital Video (ComScore, Dec. 2016)

42 BillionVideos Streamed

(ComScore, Dec. 2016)

162 TrillionMinutes of Video

Streamed(ComScore, Dec. 2016)

Source: ComScore VMX Desktop Dec. 2016, Total Internet.


Connected TVs Are Now the Norm: More Consumers Own Connected TVs Than Don’t

41

57%

43%

2017

36%

74%

Own a Connected TV or Device Don't Own

2015

Q1.0. Which of the following devices do you or your household personally own?

Base: 2017 Adults 18+, n=802; 2015 total, n=651



• Higher Connected TV ownership

among 18-34s (70%).

• No major difference between pay

TV subscribers (58%) and Cord

Cutters/Nevers (54%)

Connected TV Device Ownership

(including smart TVs and video streaming devices)

Up 57%Connected TV

Ownership

Since 2015

The Changing TV Experience:

42

62%

27%

11%

51%

27%

22%

Only / Mostly watching traditional live TV Half watching traditional live TV, halfstreaming digital video to the TV

Only / Mostly streaming digital video to theTV

2015 2017

Time Spent Watching Traditional Live TV vs. Streaming Digital VideoAmong Connected TV Owners

Q8.1A. Overall, about how much of your viewing time would you say is spent watching traditional live TV vs. streaming digital video to your TV set? My video viewing time is spent...

Base: Those who own a Connected TV device, 2017 n=461, 2015 n=153



22% of Connected TV Owners Use Their TV Primarily for Streaming Digital Video, Double That of 2015

The Changing TV Experience:

58% 53%40%

22% 30%39%

TV Shows Subscription Service Original Shows Original Digital Videos

A lot

A little

81% 82% 79%

Explosion of Video Content Poses Content Discovery Challenges and Ad Opportunities

43

Among Viewers of Each

Q12. Do ads for [INSERT VIDEO_TYPE] influence you to watch

Base: Viewers of each video type

IAB Research using MARU/Matchbox's Springboard America Online Panel


% Who Say Ads Have Influence On What They Watch

66% agree “I wish there was one place where I could find all the video I want”

Source: IAB 2017 Changing TV ExperienceIAB 2017 Video Content Discovery Study

Q19. How much do you agree or disagree with the following statements about finding videos to watch? (Agree/Strongly Agree)

Social media has a strong influence on what videos I watch

Base: Viewers of each video type

IAB Research using MARU/Matchbox's Springboard America Online Panel


19%25%

30%

13%

20%

27%

TV Shows Subscription Service OriginalShows

Original Digital Videos

A lot

A little

32%

45%

57%

Social Media Influences What Viewers Watch, Especially Original Digital Video

44

Over half of Original Digital Video Viewers say social media has a strong influence on what they watch

Among Viewers of Each

% Who say social media has a strong influence on what they watch

Virtual Reality/Augmented Reality/360 Video

The promise of immersive storytelling with Virtual

Reality, Augmented Reality, and 360 video has led

brand marketers to experiment with the formats

Consumers have shown a high engagement and

interactivity rate and time spent with the formats

The VR install base is still small but growing.

According to eMarketer, VR users worldwide will grow

from 6.5 million in 2016 to 24.4 million in 2020

Vertical Video

According to Snap,

vertical video ads

have up to nine times

more completed

views than horizontal

video ads

Live Video

Major platforms like

Facebook, Snapchat,

and Twitter are making

a big push into live

video.

New Ad Formats Offer Engaging Ad Experiences: Vertical Video, VR, AR, 360 Video, Live Video

45

Video Opportunity: Buyers Show Interest in New Video Formats and Plan to Advertise in Them

46

Q185 In the next 12 months do you plan to buy advertising in any of the following formats?


Q186 How will you buy Augmented Reality, Virtual Reality, 360 Video advertising formats?

Base: Total Respondents Who Intend to Buy Any Listed Formats

More than 3 in 4 intend to buy either virtual reality, 360 video or augmented reality advertising in the next 12 months

51%

46%

39%

23%

Virtual Reality

360 Video

Augmented Reality

None of the aboveIntend to Purchase

Augmented Reality

Agency: 32%

Marketer: 46%

Purchase Individually

TV Primary: 64%

Digital Primary: 44%

Tie-In with Something Else

TV Primary: 36%

Digital Primary: 55%

Individual deal47%

Tie-in with something

else52%

Other1%

Method of Buying These FormatsAdvertising Formats Intend to Buy Next 12 Months

More Than 3 in 4 agree the 2016 NewFronts encouraged advertisers to plan VR / 360 degree advertising

Source: 2017 IAB Video Ad Spend Study

Video Challenge: Lack of Standardized Measurement Causes Market Inefficiency and Confusion

47 Source: IAB Video Ad Spend Study, 2016.

Biggest obstacles to digital/mobile video advertising to ad buyers In the 2016 IAB Video Ad Spend

Study, measurement is cited as

the biggest challenge to digital

video buying among ad buyers

The variances in digital

measurement results and lack of

standards have created friction

and inefficiencies in selling and

buying digital video

To name a few, digital video

measurement challenges include

varied definitions of a ‘view’, lack

of agreement on viewability, and

which engagement metrics matter

EXAMPLE: What constitutes a digital video ad view? Currently in the marketplace, the definition

varies from publisher to publisher – some follow one second threshold, some follow three seconds;

some are using the ad load, some are using the ad call; some have autoplay, some have user-

initiated start.

8 in 10 Agree that an Independent Measurement Audit Influences their Decision to Work with a Media Brand

48

Q142 How much do you agree with the following statement?


Source: 2017 IAB Video Ad Spend Study

28%

34%

23%

53%

50%

56%

81%

84%

79%

Total

Agency

Marketer

Agree Completely Agree Somewhat

% Who Agree that:

Knowing that a media company has undergone an independent measurement

audit (i.e. MRC accreditation) influences my decision to work with them

49

Ad Revenue is Growing Because Digital Works

Digital Ad Impact

Because Digital Works: Digital Ads Influence Purchases

50

22%

20%

16%

14%13%

10%

12%

10% 9%9%

Please tell us which of the following media influences your ELECTRONICS/CLOTHING purchases (US Adults 18+)

IAB Online Holiday Shoppers and Digital Influence, Dec. 2016

• Internet advertising, email ads and social media are especially influential

25%

18%

14%

9% 9%

7% 7%6%

5% 4%

Digital Purchase Influence on Electronics Digital Purchase Influence on Clothing

Why the Growth in Digital Advertising?

Digital Is Impactful: Significant Lift Shown in Ad Awareness, Brand Familiarity and Consideration After Exposure to Desktop or Mobile Ads

51

10%

88%

29%

50%44%

20% 20%

10%

92%

36%

61%

48%

24% 24%

Unaided Awareness Aided Awareness Aided Ad Awareness Brand Familiarity Brand Favorability Brand Consideration Seek Information

Control Digital Exposed (Desktop, Mobile Web or Mobile In-App)

0 3.1 7.0 10.9 4.6 4.5 3.6Delta

(Exp.% -Ctrl%)

Indicates significant increase over control at 90% confidence

• Desktop and mobile were a key component of the total campaign impact

24%

Lift

22%

Lift23%

Lift

PercentagePoint

ChangeAfter Digital Ad Exposure

Launch of New Major Auto Brand Model

Source: IAB Cross Media Ad Effectiveness Study, 2017.

52

It’s Not Just About Digital

Cross Media Advertising

58%

46%

35%

But It’s Not Just About Desktop Or Mobile Or Even Digital… We Live In A Cross-media World

53

Consumers use all media… often simultaneously

Among pay TV customers with a 2nd screen device

Q4.0.1.Which of the following devices, if any, do you use simultaneously while watching traditional live TV programming on a TV screen?

Q4.0.2. Which of the following devices, if any, do you use simultaneously while watching digital video streamed to a TV screen?

Base: Those who own a computer/tablet/smartphone and have pay TV / Connected TV



81%

Smartphone TabletComputer

Use any device while watching TV

Devices Used While Watching Traditional TV

29% say their activities on other devices are

mostly/completely related to TV or commercials

Source: IAB 2017 Changing TV Experience

Cross Media Opportunity: Ads are More Influential When Shown Across Media

54 Indicates significant increase over control at 90% confidence

Digital AND Traditional Advertising Combinations Improved Ad Impact of an Auto Campaign:

Unaided Brand Awareness: Brand Familiarity:

56%

Lift from Desktop

+ Print Ads (9 ppt)

Seeking Info:

Launch of New Model by Major Auto Brand

19%

Lift from

Desktop + Print

Ads (9 ppt)

211%

Lift from

Desktop +

Mobile Web + TV(19 ppt)

ppt = percentage point lift from control

Brand Favorability: Brand Consideration:

28%

Lift from Desktop

+ Print Ads (11 ppt)

50%

Lift from Desktop

+ Print Ads (8 ppt)


Expanding Upon Digital…

55

• Digital alone can be a healthy driver of campaign performance• 24% growth in aided ad awareness and 23% growth in brand consideration when exposed to ads

on desktop or mobile (auto brand)

• 11% increase in unaided brand awareness and 5% growth in brand favorability when exposed to ads on mobile (CPG brand)

• Digital, when combined with traditional media, drives campaign success• 211% increase in unaided brand awareness when exposed on desktop, mobile & TV (auto brand)

• 50% growth of brand consideration when exposed on desktop & print (auto brand)

• Combined exposure to digital & TV accounted for 63% of the growth in brand association (CPG brand)


Marketers Are Increasing Spending in Cross Media Advertising

56

Q180c. You said in 2017 you anticipate spending [FILL IN % FROM Q180a_3]% of your advertising budget on cross-platform buys. Thinking about dollars (as opposed to share of budget) you anticipate spending in 2017, would this be an increase, the same amount, or a decrease compared to dollars spent on cross-platform in 2016?

Base: : Total Respondents Who Anticipate Spending More on Cross-Platform Buys

Cross-Platform Spending Will Continue to Grow in 2017, Driven by Agencies

+58

59%

67%

53%

40%

33%

46%

1%

0%

1%

Total

Agency

Marketer

Increase Maintain Decrease

Change in YOY Spending on Cross-Platform—2017 vs. 2016

58%

67%

52%

Net Optimism

(Increase Minus

Decrease)

Source: IAB 2017 Video Ad Spend Study.

32% 33%31%

34% 35% 34%38% 38% 38%

Total Agency Marketer

More Than One-Third of Advertisers’ 2017 Budget Will Be Spent on Cross Platform (TV + Digital Video) Buys

57

Q180a What share of your advertising budget was spent on cross-platform buys (TV and digital video from the same programmer/TV network) in 2015? In 2016? And what share do you anticipate spending in 2017?


Average Percent Share of Ad Budgets Spent on Cross-Platform—3 Year Trend

= % Change in Share Spent

on Cross Platform 2015 – 2017

+19%Increase

2015-2017

+15%Increase

2015-2017

+23%Increase

2015-2017

2015 2016 2017 2015 2016 2017 2015 2016 2017

Source: IAB 2017 Video Ad Spend Study.

58

Digital Trends on the Horizon:Connected Devices & IoT

The Future

62% of US Adults Own at Least One Connected Device

59

62%

97%

65%M

Own a connecteddevice

Heard ofconnected

devices

Interested inPurchasing a

connected Device

Among those who don’t, nearly all have heard of them and about two-thirds are interested in buying one

Q1. Which of the following have you heard of and do you personally own?

Base: Total, n=1209. US Adults 18+

Connected Device Ownership

Among Total US Adults 18 and older

Q2. How interested are you in purchasing each of these devices?

Base: Floating – aware but don’t own device.

Connected Device Awareness & Interest

Among Total US Adults 18 and older who don’t own a connected device

Text next to the numbers indicates that that group over indexes on that attribute. For ex., M = more likely among men, W = more likely among women, Asian = more likely among Asians, 18-34 = more likely among 18-34 year olds, 35-54 = more likely among 18-34 year olds, 55+ = more likely among 55 year olds and older

IAB The Internet of Things, Dec. 2016

IoT Connected Devices:

Connected cars

Wearables

Fitness Trackers

Smartwatches

VR headsets

Smart Glasses

Connected/smart TVs

Internet-Enabled

Voice Command

Home Control Systems

Smart Appliances

Strong Growth of Connected Devices is Predicted

60

New Devices and Formats Offer Consumers More Ways to Be Connected Online

61

IoT Opportunity: More ways for marketers to seamlessly connect with consumers

IoT Challenge: Adoption of new devices and formats will continue to pose measurement challenges for the industry

Cross Device Challenges: Understanding Media Consumption Habits to Identify Marketable Moments

62

We know consumers are using all types of media throughout the day.

The challenge is to understand their individual media consumption habits across their devices

The key is to understand ‘Marketable Moments’ – When is the best time to reach a consumer and on which device in order to influence the purchase of an advertiser’s product.

This 1 to 1 marketing will be enabled by new data inputs at scale… but only if the foundations for measurement and data are set today.

Accurate device graphs are just the beginning

Digital Trends: Opportunities and ChallengesMarket Research Council Presentation

KRISTINA SRUOGINIS

May 12, 2017

Yale Club, New York, NY

Questions?

[email protected]

IAB.com/ResearchHub

mailto:[email protected]

presentation to the market research council - iab.com trends: opportunities and challenges...

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