While the U.S. online ad spend will approach $40 billion in 2012, just three formats will dominate that spend, forecasts eMarketer: search, banners, and video adverts. Those three formats will capture 80% of the online ad spending through 2016.
Search will dominate, hovering just below 50% for the next five years, though it will lose some ground to online video; that format will see the highest persistent growth in spending, and will nearly double in percent of total spend from 7.9% in 2012 to 15% in 2016. Banners will retain their #2 status, with 23.4% share of total spend in 2012, and 20.5% in 2016, also losing ground to video ads.
Video ads are expected to grow by 55% in spending this year, after a healthy growth of 42.1% in 2011. That growth (the highest in a single year through 2012) is fueled in part by the 2012 election and summer Olympic Games. (Consider the PAC and campaign ads you’ve seen already.)
Each of these three formats fits nicely into the mobile format, and mobile display ads (chiefly banner and video) are expected to grow by 93.5% to $861.7 in 2016.
eMarketer has projected that U.S. online ad spending will grow 23.3% in 2012 to nearly $40 billion, and nearly $53 billion in 2013. This will make 2012 the first year in which online ad spends will surpass the total spent on print ads, with $39.5 billion online versus $33.8 billion in magazines and newspapers.
ESPN Chief: We’ll Protect Broadcaster Value From Online Erosion
ESPN is pay TV’s most expensive basic offering, observes Deadline Hollywood, at an estimated $4.69 per customer per month. Still, ESPN President John Skipper defends ESPN as “bringing great value and getting paid for that value.” Skipper made the remark at yesterday’s D: Dive Into Media conference, hosted by AllThingsD.
“The rates we get from distributors are directly correlated to the value we provide,” Skipper said. Moreover, Skipper will be certain that it retains its value, by closely guarding its TV viewership. ESPN acquires rights for its content on all devices, but Skipper pledges the channel will not use digital platforms to draw viewers away from cable and satellite. “We don’t cannibalize ourself, we use those platforms to cross-promote,” with mobile alerts and fantasy game applications, among other offerings.
Digital rights could give ESPN a leg up over such rising competitors as NBC Sports Network. But as AllThingsD describes, the value of that guarded distributorship is strong local ad sales, and the draw of 3-D and HD content, which ESPN has pioneered. Skipper added that he believes the espnW web site, a women’s sports outlet, will become a cable channel.
Twitter “100% Focused on Advertising” Says CEO
Twitter CEO Dick Costolo said yesterday that while the company is tempted to pursue e-commerce and brand-sentiment analytics, it is focused near-term on its ad products, reports Ad Age.
Costolo was speaking at All Things D's media conference on Monday night. As tempting as it is to produce a slew of related products, Costolo said the company does not need to add more components to its business. Rather, “We just need to scale it up" he said, referring to the ad business. He went on to describe the company’s strategy of increasing the number of advertisers, and expansion into geographic markets.
At present, Twitter offers a streamlined ad inventory, which has most of that functionality. The portfolio includes:
- Promoted tweets that appear in search results, and in target geographies
- Promoted trends, currently in beta, placing advertisers alongside discussion strings
- Promoted accounts, which appear at a premium in Twitter’s “Who To Follow” suggestions
- Enhanced profile pages, visible without logging into Twitter; in use by just a few invited companies (like Coca-Cola and Virgin Atlantic, depicted below), but reportedly available to all brands as of February 1
- And Advertiser Analytics, three dashboards depicting campaign metrics like total impressions, retweets, replies and follows.
Costolo ducked the question about the Enhanced Profile price—is it truly $25,000? But with prompting by a reporter/interviewer, Costolo described the price as seeming “Perfectly reasonable.” Enhanced profiles enable rich background graphics, embedded video and guided promotions, versus the simple 140-word "micro-blogs" available at no cost.
2012 Forecasts Revised, Mobile Ad Spend to Reach $2.61 Billion
Mobile ad spending will leap 80% to $2.61 billion, predicts eMarketer. The thinktank earlier forecast a growth of 47% over 2011 to $1.8 billion, but several market influencers have taken the ad industry by surprise.
First is stronger-than-expected adoption of Google’s mobile search advertising business. Second are powerful tablet and smartphone sales—U.S. ownership of tablets and e-readers suddenly doubled over the holidays—and advertisers’ interest in those platforms. Third is a growing number of mobile ad networks, including Google AdMob and Apple iAd.
Mobile search ads will be the strongest segment, at $1.28 billion. Mobile display ads (e.g., banner and rich media ads) will grow 93.5% to $861.7.
eMarketer Principal Analyst Noah Elkin described the mobile ad space as an immature market—thus, one that defies ready analysis. Numerous analyst groups have made their own forecasts on the 2012 mobile ad spend, including Pricewaterhouse Coopers, ZenithOptimedia and J.P. Morgan, all reaching vastly different numbers. eMarketer’s revised forecast represents the second-highest forecast, with only Forrester Research predicting a higher spend at $2.78 billion.
Advertising to Millennials? Do It Digitally and Keep It Short, Says Study
“The 79 million Millennials in the U.S. have an estimated purchasing power of $170 billion dollars per year," said comScore Vice President Bert Miklosi. "Their comfort-level with the Internet and technology in general makes the digital medium an ideal platform for reaching these individuals.”
The digital market research firm has released its report Next-Generation Strategies for Advertising to Millennials. The report highlights results from the company’s study that identifies unique characteristics of the “Millennial generation” (persons born between 1981 and 2000, thus, 12-31 years of age). comScore examined Millennials’ responses to different types of advertising, including TV and digital, compared to older generations, and how marketers can most effectively target this demographic segment.
The medium is ideal, but the Millenial is generally more difficult to persuade via advertising than their older counterparts. This said Miklosi underscores “the importance of creative and messaging optimization in driving worthwhile returns from an investment in advertising to this segment.” Also true, to quote the report, “It is harder for advertising to achieve breakthrough and catch the attention of Millennials, who are notorious for multitasking and short attention spans.” In fact, their immediate recall is the lowest of any age group—at 43%, 9% lower than that of seniors. Still, their delayed recall was strongest among age groups, at 24%.
Courtesy comScore, Inc.
Other key findings:
- The defining characteristics of Millennials include their comfort-level with new technologies and cultural diversity, as well as being accustomed to on-demand access to entertainment, continual stimulation and extreme multitasking.
- Millennials tend to be less interested and more difficult to connect with, capture attention, impress, convince and entertain. Millennials also appear to be more price-sensitive, perhaps due to lower disposable incomes.
- Digital advertising performs better in relative terms among Millennials than does television advertising.
- Across generations including Millennials, the presence of key creative elements in advertising, coined by comScore as the Validated Drivers, were shown to relate strongly to successful advertising.
- Millennials are highly engaged with the content that they choose to view, within both television and digital environments. Engagement has been shown to amplify the effectiveness of advertising, so when targeting Millennials, it is important to utilize engaging content to help boost returns from investments in advertising.
Interactive Video Ads Strong in Completion, Action, Finds Benchmark Study
Interactive in-stream ads keep viewers attention found PointRoll, a marketing solutions technology provider and a Gannett Company. PointRoll has announced the findings of its 2011 Video Benchmark Study, which revealed that 78% of viewers completed 100% of interactive in-stream ads, compared to 69% who completed 100% in-stream ads without interactive elements. Further, interaction rates (wherein users took an action within the ad) were more than 300% higher than those of in-banner video ads. The study compared campaign results from April–December 2011.
In interactive ads, automotives are particularly strong in holding viewers attention. Fully 80.66% of in-stream interactive ad viewers watched the ads to 100% completion. Non-profits held strong interest as well at 70.66%, and entertainment at 69.77%.
Non-interactive ads paint a different picture. Consumer goods leads the pack, with 96.85% of viewers going to 100% completion, and consumer electronics second at 82.89%. Last in the field—restaurants and food service, at 9.03%.
A key metric is interaction rate, versus click-through rate. Automotives garnered a 12.29% interaction rate, but only 0.25% click throughs. Consumer goods achieved a 2.07% interaction rate, but only 0.62% in click throughs.
In-banner video is surprisingly soft at holding attention, with an average among all categories, with a 100% completion rate of 38.82%.
Mobile Video Leads Ad Support Growth, Mobile Music Leads Revenues
While revenues of ad-supported mobile content revenues will top $1 billion by 2015, mobile video will lead the way in growth, eMarketer predicts. US-based ad revenues from mobile video reached just $37.5 million in 2011, but eMarketer predicts that advertisers will spend $213.6 million on placements by 2015.
Still, those revenues will be lower than for mobile games at $269.1 million for mobile games in 2015, and $591.5 million for mobile music. At present, mobile music leads the pack with a $181.4 million ad spend in 2011—73.9% of the total, and a projected 79.3% in 2015. eMarketer projects for 2012 that 29.9% of mobile content revenues, or $1.07 billion, will come from advertising support.
Republican Debates Big Draw for ABC
ABC is claiming big ratings for its “Your Voice, Your Vote – Republican Presidential Debate in New Hampshire” broadcast, reports TVByTheNumbers. Nielsen tallied 6.25 million viewers, including 1.73 million Adults 25-54 and 1.40 million Adults 18-49; this makes the debate the #1 non-sports broadcast among total viewers, age 18-49 and 25-54. The ABC debate topped the Fox News Channel’s December 15 debate with 1.31 million viewers. Timing might have been the draw: the debate aired between the critical Iowa caucus and New Hampshire primary. ABCNews streamed the debate on both ABCNews.com and Yahoo!
MediaPost Urges Caution in Online Ad Inventory
MediaPost has found some “eyeopeners” regarding online advertising, after a survey of .5 million unique domains. Among their findings:
- About 10% of domains selling ad impressions in scale-buying environments (networks, SSPs and exchanges) are non-English language sites. There is always chaff among the wheat in scale buying (e.g., porn sites, sites with hate speech), but non-English sites topped that chaff by percentage.
- About 21% of the sites MediaPost surveyed in late 2010 no longer exist, but, are still on whitelists; media buyers are paying for exposure on non-existent venues.
- “There’s a serious quality issue out there, folks,” MediaPost’s Andrew Lerner observed, which is a challenge to brands and marketers. About 58% available in real-time bidding (RTB) and large networks are what Lerner called “sub-standard environments for advertisers,” which use sub-standard publishing or editorial principles. Thus, nearly six of 10 domains are ones an ad buyer might actually choose to avoid.
Despite those findings, MediaPost observes that the higher-quality sites are more likely to deliver click-throughs, CPA and brand metrics. And while MediaPost did not reveal the names of any of the hate speech or substandard properties, a quick check of several “White Pride” sites (including kkk.com) revealed no advertisements.
Barnes & Noble Considers Spinning Off Nook Business, will Shed Publishing
Advertisers looking to the ereader and tablet platforms may find the field narrowing. B&N is considering spinning off its Nook business, a move that TechCrunch says will “doom” the ereader. The move is a strategic one to shelter the burgeoning epub business from B&N’s losses. The Nook ereader dominated B&N online sales in 2011, for $327 million in revenue. B&N sold 70% more Nook devices over last year than the year prior. Still, Business Insider calls the spinoff a “terrible idea.” Nook's only advantage in the market is Barnes & Noble's retail: that the Nook is heavily promoted in B&N stores, and B&N still has heft in the book business to get publishing deals.” Business Insider sees the Nook as a valiant effort that is doomed. “In the long term…Kindle economics are too powerful. Amazon will undercut and overmarket Barnes & Noble at every turn.”
Barnes & Noble has also put its Sterling Publishing arm up for sale, reports the Wall Street Journal. It had acquired Sterling in 2003. WSJ speculates that competition from Amazon.com is forcing B&N to “recast itself as a technology company” with its Nook ereader and tablets as its anchor. The Sterling catalog includes classics, as well as puzzle books, children’s books, gardening and cooking titles. B&N in December posted a loss of $6.6 million (17 cents a share) for Q3, versus a loss of $12.6 million (22 cents a share) for the same quarter in 2010.