Transcript Social Networks

Hot Trends:
Social Networks, Mobile Marketing
and Online Video
October 3, 2008
Debra Aho Williamson
Senior Analyst
eMarketer Inc.
October 3, 2008
1
What’s On Tap Today
 Internet Ad Spending Trends
 Social Networking
 Mobile Marketing
 Online Video
October 3, 2008
2
Internet Ad Spending
October 3, 2008
3
Internet: Approaching 10% of
Worldwide Ad Spending
October 3, 2008
4
$25B in US Online Spending in ‘08
US Internet Ad Spending (billions)
Source: eMarketer, August 2008
October 3, 2008
5
Faltering Economy is Impacting
US Ad Budgets
October 3, 2008
6
Why Will Online Advertising Thrive
in a Difficult Economy?
 Online ads are more measurable than other media,
making them increasingly appealing to advertisers
 The Internet audience is huge, so the simple
process of advertising following eyeballs will lift
spending
 Internet ad prices are rising, thanks to targeting
and other techniques, which can push up overall
spending
October 3, 2008
7
Advertisers are Committed to
Increasing Online Spending
October 3, 2008
8
Social Networks, Mobile and
Online Video: THE GOOD
 High penetration
 Enviable user demographics
 Elusive “buzz” factor
 Engaged audience
October 3, 2008
9
Social Networks, Mobile and
Online Video: THE BAD
 Few"If
standardized
ad formats
a certain kind
of spending
 Consumers
who
disengaged
from
hasn't been
inare
your
[advertising]
ads
budget for three straight years,
 Questionable ROI
you'll likely cut it when things
 Measurement challenges
get tougher.”
--Russell Fradin, president, Adify
October 3, 2008
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And of Course, the Ugly
October 3, 2008
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Social Networks
October 3, 2008
12
Social Networks: Only One
of Many Types of Social Media
Source: Universal McCann
October 3, 2008
13
Is This Your Image of Social
Networking?
October 3, 2008
14
Social Network Growth Markets:
Mideast, Europe and Latin America
October 3, 2008
15
58% of Worldwide Internet Users
Have Created a Profile
October 3, 2008
16
US Usage Is Still Growing
Unique Visitors to MySpace and Facebook
75.5
million
(up 10%
from ‘07)
August 2007-August 2008 (thousands)
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Aug- Sep- Oct-07 Nov- Dec07
07
07
07
Jan08
Feb- Mar- Apr-08 May- Jun- Jul-08 Aug08
08
08
08
08
MySpace UV
41
million
(up 21%
from ‘07)
Facebook UV
Source: comScore Media Metrix
October 3, 2008
17
But Is It a Fad That’s
Losing Steam?US visits to social
network sites are
down 17% yearover-year vs.
August 2007
October 3, 2008
18
SN Ad Spending Growth Slows
in 2009 and Beyond
October 3, 2008
19
US Spending Still in Flux
12/07:
$2.7B
12/07:
$1.6B
+11%
+55%
+27%
+15%
+13%
Source: eMarketer, 2008
October 3, 2008
20
News Corp. Acknowledges This
“Social networking has gotten a disproportionately
lower share of digital advertising budgets. If you
compare the amount of traffic and the amount of users
we have with the portals, most of those guys have been
putting 50%, 60% of their budgets in portals, and 10%
of their budgets against social network sites.”
-- COO Peter Chernin at Merrill Lynch presentation, Sept. 2008
October 3, 2008
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Social Network Ad Experiments
Continue
MySpace home page takeovers
• Reach 40mm+ people/day
• Popular with movie studios
• “Dark Knight”: Trailer streamed
70mm times
October 3, 2008
22
What About HyperTargeting?
 Banner-ad targeting based on information
people provide in their profiles
 Updated in real-time
 Half of all ad insertions now include some form
of HyperTargeting
 Major brands: General Motors, Coke, Red
Bull, Target
 Double eCPMs vs. untargeted ads
October 3, 2008
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Facebook Continues to
Experiment With Viral Marketing
New Ad Features
“Facebook has always tried to push the
- Comment
envelope. And at times that
means directly on
anthem
ad to
stretching people and getting
- Become
be comfortable with things they
aren’ta fan of a
yet comfortable with. A lot ofbrand
this iswithout
just leaving
social norms catching up the
with
what
page
you’re on
technology is capable- Send
of.” a virtual gift to
Mark Zuckerberg, New Yorka Times,
friend
September 2008
October 3, 2008
24
On the Other Hand, Too Much
Targeting is Never a Good Thing
October 3, 2008
25
Mobile Marketing
October 3, 2008
26
2008: The First Year Ad Spending
Tracks Ahead of Subscribers
Worldwide Mobile Ad Spending and Subscribers
2006-2012 (millions)
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27
Mobile Usage Facts
 Over 85% of people 18-49 have a mobile phone (Pew
Internet & American Life Project, August 2008)
 In two years, the average number of text messages we
send every month has grown nearly 500% (Nielsen
Mobile, September 2008)
 39% of teens believe the mobile is the only type of
phone they will own (CTIA, Harris Interactive, September
2008)
 68% of consumers say the mobile Internet is an
important factor in their next mobile phone purchase
(AKQA/dotMobi, June 2008)
October 3, 2008
28
Why Mobile Advertising Trails
Mobile Subscribership
“Lack of awareness of the audience size, complexity
of the mobile marketing ecosystem and a lack of trust
among advertisers in the mobile advertising
investment.”
Privacy
Intrusiveness
October 3, 2008
29
Do Consumers Accept Mobile
Phone Advertising?
Source: Nielsen Co., September 2008
October 3, 2008
30
Where is the Money?
Or Here?
Text
Messaging
Mobile Search
Mobile Display Ads
October 3, 2008
31
Or Here?
Google Android
October 3, 2008
32
Messaging Dominates Ad
Spending
October 3, 2008
33
US: 36% of 2008 Mobile Spending
October 3, 2008
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BMW’s Snow Tire Campaign
in Germany
 Personalized MMS
message to customers,
showing image of their
car with a recommended
tire and price
 Option to call dealer
directly for appointment
 30% bought tires from
dealer during promotion
October 3, 2008
35
Mobile Marketing: A Two-Way
Street
Take a photo, send
it in a multimedia
message
Receive a picture
of a customized
Nike shoe
Save as wallpaper,
send to friends
Order personalized
shoes directly
October 3, 2008
36
The iPhone is Changing How
Consumers Use the Internet
October 3, 2008
37
Mobile Phone Applications:
New Advertising Medium
“The iPhone has changed users’
iPhone App Store
expectations
of what is possible
Stats
(9/08)
a mobile
• 100 in
million
apps device and UI, and
downloaded
in 60 finally showed the
the AppStore
days
promise of mobile data applications.”
• 700 games
--Kleiner Perkins VC firm
• 62 countries
October 3, 2008
38
Online Video
October 3, 2008
39
The Digital Landscape
Confounds Many in the Media Biz
“We don’t know what’s gonna
work. Predicting what the
media world is gonna look like
in eight years is incredibly
daunting. I defy anybody to do
that.”
-Jeff Zucker, president-CEO, NBC
Universal, September 2008
October 3, 2008
40
Consumers Love Online Video
October 3, 2008
41
Half of US Population Watches
Online
US Online Video Users, 2006-2012
(% of population)
Source: eMarketer, February 2008
October 3, 2008
42
71% of US Internet users watch
online videos at least once a week
% respondents,
Mar. 2008
Source: Universal McCann, April 2008
October 3, 2008
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Types of video content people
watch monthly: short, short, short
Full TV
shows =
27%
% total US video viewers, Feb. 2008
Source: eMarketer, February 2008
October 3, 2008
44
Websites Love Video, Too
 Average CPMs: $43 for video ads; $15
for display ads (Bain & Co. for the
Interactive Advertising Bureau)
 High sell-through rate: 90% for
premium content creators (TV
networks, etc.); 50% for content
aggregators (YuMe and Collins Stewart
LLC)
October 3, 2008
45
Video Ads: 2.6% of Online Spend in
2009
US Online Video Ad Spending
(millions and % of Internet total)
9.8%
6.8%
4.7%
“Video is the growth
3.4%
format on the
2.6%
Internet.”
2.0%
1.5%--
David Hallerman,
eMarketer
Source: eMarketer, September 2008
October 3, 2008
46
But Video Won’t Challenge Search
or Display -- Yet
US Online Ad Spending, by Format (billions)
2008 & 2013
Source: eMarketer, August 2008
October 3, 2008
47
Factors supporting a (future)
boom in online video spending
Broadband is reaching a “critical mass”
TV efficiency is declining yet still very expensive
Advertisers can replicate the sight, sound, motion – and
emotion – of television, but with better measurability
and targetability
There are vast opportunities for communication
among consumers (aka, viral)
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48
But There Are Significant Hurdles
What ad
formats
work
best?
Will
consumers
skip over
ads?
Can
consumergenerated
video be
monetized?
October 3, 2008
49
Four flavors of video ads
1)
Pre-roll (also, mid-roll or post-roll)

(the ad runs in-stream with video content)
2)
Overlays (aka, bugs or tickers)

(the ad runs at bottom of video, not interrupting content)
3)
Skins (aka, player skins)

(the ad runs surrounding video content window)
4)
In-page banners

(the ad runs in a box, not connected to video content)
October 3, 2008
50
In-Stream May Be Most Effective
Ad Type
LiveRail*
• ~ 80% preroll
completion
rate
• 11.5%
clickthrough
rate
• 88% of all
video ads
*provider of video ad technology
October 3, 2008
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YouTube Experiments with
Overlays
New:
Ad runs
post-roll
(after clip) if
user doesn’t
click on
overlay
October 3, 2008
52
But Ads on User-Generated Video
Trail Consumer Usage
Source: The Diffusion Group, July 2008
October 3, 2008
53
Zappos Gets Clicks for Its
Video Ad Campaign
Simplicity: Ad
Ad appeared on 50
sites targeted
to females
Video plays only
after user clicks
on it
served by same
company that
serves rest of
Zappos’ ads
Result: 5%
clickthrough rate
(vs. just 0.3% for
banner ads)
October 3, 2008
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When It Comes to Video Ads,
One Attitude Does Not Fit All
October 3, 2008
55
67% Will See an Online Video Ad
At Least 1x a Month in 2008
US Online Video Advertising Viewer Penetration, 20072012 (% of Internet users)
90%
66.8%
80%
70%
72.0%
75.1%
77.7%
2010
2011
80.6%
59.2%
60%
50%
40%
30%
20%
10%
0%
2007
2008
2009
2012
October 3, 2008
56
The eMarketer View
 Social networks are here to stay. Evolving ad
models mean new opportunities to connect with
consumers
 Mobile: The iPhone and phones based on Google’s
Android will be the new benchmarks for mobile
content
 Video: The time to start online video advertising is
now; the audience has reached critical mass
October 3, 2008
57
Thank you !
Debra Aho Williamson
Senior Analyst
eMarketer Inc.
October 3, 2008
58