us solomo ( social local mobile spends 2016 onwards)
TRANSCRIPT
Guiding Media. Inspiring Innovation. Leading Local.
BIA/Kelsey's U.S. Local Advertising Forecast for 2016
Key Findings
November 11, 2015
Mark R. Fratrik Ph.D. Sr. VP, Chief Economist,
BIA/Kelsey
Richard V. Ducey Ph.D. Managing Director
BIA/Kelsey
Michael Boland Chief Analyst, VP Content,
BIA/Kelsey
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America’s Veterans.
Our Gratitude. Our Respect.
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Advertisers of all types want to reach local audiences.
$146.6 billion will be invested in media platforms by advertisers targeting local audiences in 2016.
Where is the spend now and where is it headed?
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BIA/Kelsey’s U.S. Local Advertising Forecast 2016 Power Brew: Mobile, Social, Video
Location Targeted Mobile Ad Spending
Social Advertising Spending
Local Video Display Spending
What does this all mean?
More on the forecast at BIA/Kelsey’s NEXT
Let’s Discuss!
Mark R. Fratrik Ph.D. SVP, Chief Economist
BIA/Kelsey
Richard V. Ducey Ph.D. Managing Director
BIA/Kelsey
Michael Boland VP, Content , Chief Analyst
BIA/Kelsey
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BIA/Kelsey Snapshot
Strategic & Advisory Services National and Local Market Ad Forecasts
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We are a leading consultancy focused on local. We use our data, expertise and industry relationships – built up in over 30+ years of operations – to help our clients succeed.
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National Forecast
U.S. LOCAL ADVERTISING FORECAST 2016 National Overview (Total U.S. Spending In Local Markets)
Individual Media Breakouts
Five-year forecast
Local ad market (2016 - 2020)
Comprehensive and authoritative view of “local” advertising
Market Forecasts
MARKET AD VIEW 1 market 12 media
12 verticals
VERTICAL AD VIEW 1 market 1 vertical 12 media
MEDIA AD VIEW PLUS 1 market 12 media
94 verticals
BIA/Kelsey’s forecasting suite provides the big picture on local.
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Forecasting Objectives
Why we do a forecast: Continuously monitor the local marketplace and twice annually
we publish a forecast that offers a five-year national overview of total U.S. spending in local markets and market-based advertising revenue estimates for 12 media.
Present an overall assessment of the local market.
Provide a 360-degree view of the market for local advertising —defined as some form of targeted messaging to specific geographic markets — spent by national, regional and SMB advertisers.
Offer an independent, objective and credible five-year forecast of the market situation.
Give clients a view into the key drivers and assumptions behind the top-line forecasts.
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Forecasting Methodology
BIA/Kelsey gathers as much proprietary and secondary information as available by segment.
We then generate preliminary forecasts by segment and discuss them with leaders in our key media — online, mobile, Yellow Pages, TV, radio, etc.
Our process includes using third-party and public company reports to adjust and fine-tune forecasts.
We tie a bottom-up approach with a top-down approach.
Our forecast utilizes long-standing industry expertise and knowledge to adjust drivers and key assumptions.
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About Our U.S. Local Advertising Forecast
BIA/Kelsey’s U.S. Local Advertising Forecast offers a comprehensive and authoritative view of the local landscape.
It delivers an objective and credible five-year market outlook.
It includes a national overview of total U.S. spending in local markets and market-based advertising revenue estimates for twelve media:
1. Direct Mail 2. Directories 3. Local Video 4. Local Over-the-Air Television 5. Local Cable Television 6. Local Magazines
7. Mobile 8. Newspaper 9. Online 10. Out-of-Home/OOH Video 11. Radio (Over-the-air, online) 12. Social
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“Local” Defined
BIA/Kelsey defines local advertising as:
All advertising platforms that provide access to local audiences for national, regional and local marketers.
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Total U.S. Spending in Local Markets National & Individual Media Overview
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Newspapers Print 9.8%
Newspapers Online 2.6%
Direct Mail 25.6%
TV O-T-A 14.5%
TV Online 0.7%
Radio O-T-A 10.0%
Radio Online* 0.8%
Print Yellow Pages 1.7%
Internet YP 1.6%
OOH 5.6%
Cable 5.1%
Magazine 1.0%
Magazine Online 0.3%
Online / Interactive 11.3%
Email 1.6%
Mobile 7.7%
2016 U.S. Local Advertising Revenues — $146.6 Billion
Local Ad Market 2016
Source: BIA/Kelsey, October 2015 *Note: Radio online revenues include online revenue from terrestrial and online streaming services.
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$103.3 $104.0 $102.0 $102.9 $101.2 $102.8
$38.0 $42.6 $47.8 $53.5 $59.3 $66.0
$141.3 $146.6 $149.7 $156.4 $160.4
$168.9
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
2015 2016 2017 2018 2019 2020
Traditional Online/Digital
US$
Bill
ions
Note: Numbers are rounded.
2015-2020
CAGRs:
Total CAGR 3.6%
Online/Digital CAGR 11.7%
Traditional Media
CAGR -0.1%
US$
Bill
ions
Note: Numbers are rounded.
Steady Spend Shift into Digital Media
Source: BIA/Kelsey, October 2015
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Mobile
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In addition to interviews and company reports, BIA/Kelsey’s mobile forecast is based on:
Mobile usage trends
Evolving mobile content and ad formats
Advertiser adoption patterns
Ad performance measurements (e.g., clickthrough and cost-per-click rates)
This top-down forecasting methodology is then vetted against a bottom-up approach. The latter applies revenues for top players in each mobile advertising segment (e.g., Facebook, Google and ad networks).
For location-targeted ad revenues, measurement criteria include geographic ad placement, location-specific copy and calls to action (e.g., call local store).
Revenues from advertising that appears on tablets are not included in BIA/Kelsey’s classification of mobile.*
Mobile-Specific Forecast Methodology
*Rationale for BIA/Kelsey’s separation of smartphone and tablet ad revenues is explained here.
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It includes large national advertisers and SMBs.
Location-specific ad copy or calls to action (e.g., call local store) will classify a given ad as location targeted.
What is Location Targeted Mobile Advertising? Location-targeted mobile advertising is defined as… Mobile advertising that is targeted based on a user’s location, or including proximity-relevant content to trigger local offline conversions.
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$8.5
$11.3
$0
$2
$4
$6
$8
$10
$12
2015 2016
US$
Bill
ions
Note: Numbers are rounded.
Location-Targeted Mobile Ad Spend
Source: BIA/Kelsey, October 2015
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$14.2 $18.1
$8.5
$11.3
$0
$5
$10
$15
$20
$25
$30
$35
2015 2016
Non-location Targeted Location Targeted
US$
Bill
ions
Note: Numbers are rounded.
Location-Targeted vs. Non-Location Targeted Ad Spend in Mobile
39%
37%
Source: BIA/Kelsey, October 2015
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Local Share of Mobile Ad Spend by Format
Traditional Display 18.6%
Search 52.1%
SMS 1.2%
Video 5.8%
Audio 1.9%
Native Social 18.5%
2016
Source: BIA/Kelsey, October 2015
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Social Media
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Social Media Advertising Definition
Social media advertising is defined as money spent on advertising formats across social networks.
Social advertising is included in BIA/Kelsey’s display revenue forecast, which falls within the online/interactive advertising category.
BIA/Kelsey’s definition of social advertising does not include revenues derived from the following:
Virtual currency
Social marketing/measurement platforms and services
Social commerce
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U.S. Social Local vs. National Ad Spend
$6.9
$9.0
$2.4
$3.3 $9.3
$12.3
$0
$2
$4
$6
$8
$10
$12
$14
2015 2016
National Local
US$
Bill
ions
Note: Numbers are rounded.
Source: BIA/Kelsey, October 2015
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Social Media Advertising by Company
*Other includes ad revenue from all other U.S. social networks (e.g., Pinterest, Tumblr and Foursquare).
Facebook, 76.8%
Twitter, 15.9% LinkedIn, 4.0%
Other*, 3.3%
2016
Source: BIA/Kelsey, October 2015
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Local Video
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This estimate involves combining the advertising revenues from several media:
Local Television – all its core over-the-air advertising revenues (excludes digital revenues and retransmission consent fees).
Local Cable – all its local cable systems’ advertising revenues.
Out-of-Home – digital cinema advertising revenues and advertising revenues from out-of-home video delivery (e.g., taxi cab video).
Online – portion of local online revenues that are generated by video advertising by pure-play online companies and online sites of other local media (newspapers, television, radio and directories).
Mobile – revenue generated from selling advertising related to mobile video services.
Definitions
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Local Video Advertising Trends
Local television stations continue to dominate the local video marketplace.
Local cable systems also continue to make strong inroads in political advertising.
Online video has seen some substantial growth in recent years.
Out-of-home video continues to grow though at a slower rate.
Mobile video (CAGR +29.1 percent) is expected to see rapid growth.
BIA/Kelsey U.S. Local Advertising Forecast 2016
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$20.2 $22.3
$6.8 $7.5 $0.7 $0.9 $1.4 $1.5 $0.4 $0.7
$0
$5
$10
$15
$20
$25
$30
$35
$40
2015 2016
Local Television Local Cable Online Video OOH - Video Mobile Video
US$
Bill
ions
Local Video Advertising Revenues
Source: BIA/Kelsey, October 2015
28 © 2015 BIA/Kelsey. All Rights Reserved. | Source: BIA/Kelsey, October 2015
Local Television 67.6%
Local Cable 22.9%
Online Video 2.9% OOH - Video
4.6%
Mobile Video 2.0%
Local Video Advertising Revenues Distribution Across Media
2016
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Online
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$7.8
$8.2
$7.5
$7.6
$7.7
$7.8
$7.9
$8.0
$8.1
$8.2
$8.3
2015 2016
US$
Bill
ions
Note: Numbers are rounded.
Local Search
Source: BIA/Kelsey, October 2015
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Recap of Top Findings
Total local advertising revenues in the U.S. will reach $146.6 billion in 2016, up from $141.3 billion this year.
Online/digital revenues will grow to $42.6 billion in 2016, 29.1 percent of total local media revenues, up from $38 billion in 2015.
For 2016, we expect total local ad revenues to nudge upward, resulting from a slightly stronger U.S. economy and a substantial amount of political advertising.
Mobile, social and video—what BIA/Kelsey refers to as the “power brew” for local advertisers—are among the categories that are fueling growth in the local online/digital segment.
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Conclusions
The overall media marketplace is an ever changing landscape with new options growing faster than ever imagined (i.e., mobile, social, online video).
The future of location-targeted mobile marketing will involve less static banners; more native and offline-oriented calls-to-action (call, message, find, schedule, or transact with local businesses).
Traditional media still very relevant in overall advertising mixes.
All participants (traditional and already established online/digital companies) need to be attentive and capable of adapting to new options being introduced every day.
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Our ad forecast delivers a comprehensive and reliable view of the local advertising landscape and provide five-year market outlooks of U.S. spending.
For a complete understanding of entire local advertising marketplace, purchase our U.S. Local Advertising Forecast 2016.
Details About the U.S. Advertising Forecast
DETAILS: www.biakelsey.com/USAdvertisingForecast
Understand the market outlook now and in five years
Gain insights around the key drivers and assumptions behind top-line numbers
Drill down into specific media to track activity and opportunity
Access critical analysis around today's most important topics
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Q&A
Questions & Comments:
Guiding Media. Inspiring Innovation. Leading Local.
© 2015 BIA/Kelsey. All Rights Reserved. This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract. Any unauthorized distribution could result in termination of the client relationship, fines and other civil or criminal penalties under federal law. BIA/Kelsey disclaims all warranties regarding the accuracy of the
information herein and similarly disclaims any liability for direct, indirect or consequential damages that may result from the use or interpretation of this information.
Mark R. Fratrik SVP and Chief Economist [email protected]
(703) 802-2982
Michael Boland Chief Analyst, VP Content [email protected]
(415) 508-8462