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.
Upfront Digital: Apple Shops for TV Parts | Too Much Ad Space | MS Anti-Google Ad
Upfront Digital:
• Apple has been “shopping around for TV parts,” reports AllThingsD, meaning an Apple-platform smart TV is inching toward reality. Piper Jaffray analyst Gene Munster wrote in a note to clients that Apple has been talking to TV component vendors. This following some January meetings in Asia, supposedly to scope out manufacturing facilities, which led Piper Jaffray to believe Apple is looking to manufacture large-scale LCD displays.
• Citing “inventory oversupply” in the mobile ad space, Digiday reports that during Q3 of 2011, only 18 percent of impressions were filled by the top 20 U.S. mobile ad networks, and 10 percent worldwide. This says Digiday makes it “increasingly difficult for publishers to generate revenues from their mobile audiences.”
• About.com (a New York Times company) with its evergreen content may not seem a serious ad outlet, but, it is serious enough for Charles Schwab and Procter & Gamble. Now the online outlet has launched Real Recipes, a free app for iPhone and iPod Touch, to deliver About.com’s “deep catalogue of culinary content” (more than 25,000 recipes and numerous menu-planning tools) to the digital space.
• Former “NBC Dateline” anchor will bypass television and anchor straight from the web, reports TV Newser. In a video message on the StonePhillipsReports.com website, Phillips declared that after 20 years in broadcast news, he will now report on stories important to himself. First out of the lineup—head injuries in youth football, in a story called “Hard Hits, Hard Numbers.” As yet, Phillips is not accepting advertising, just donations. Dateline NBC did not review Phillips’ contract in 2007, and he has not been on broadcast television since.
• In an attempt to promote its Bing search engine over Google, Microsoft has launched its “Putting People First” campaign in the Wall Street Journal, New York Times and USA Today. As Social Times describes, Microsoft argues in the ad that Google sells out users to advertisers by using personal information to influence the type of advertising each customer sees. Microsoft products including Hotmail, Microsoft Office, Internet Explorer and Bing, are far safer and more private, the company claims.
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.
Google Display Ads Reach $5 Billion, Double from 2010
Google CEO Larry Page in a Thursday analyst call reported that its display ad business has doubled since 2010. Display ads include network and YouTube ads, which has reached a $5 billion per year business. The ramification according to AdAge is that Google is becoming less dependent on search advertising alone.
Google went on to report that its DoubleClick ad exchange had reached year-over-year (YOY) 130% growth, driven in part by its precise category targeting (e.g., hybrid car buyers and adventure travelers). Brand advertisers are flocking to YouTube’s TrueView format, which emulates the pay-per-click model of AdWords AdSense. Three of those brand advertisers are Ford, GM and L’Oreal.
Bloomberg BusinessWeek observes that Google’s expansion into new markets and onto mobile devices, where it charges less per click, contributed to an 8% drop in its average pay-per-click.
Research: Brand Ads Will Outpace Direct Response Online in 2012
Digiday has released some compelling research about online ad spend budgets in 2012. According to a survey of 450 digital marketing and media professionals, brand advertising will overtake direct response online for the first time. Among their findings:
- 64% of marketers will increase their online brand ad budgets in 2012;
- 22% will increase spending by more than 20 percent;
- 60% of marketers are allocating money away from direct response to brand advertising;
- 69% of brand marketers will increase their spends in mobile advertising, 63% in social, and 57% in video.
As Forbes sees it, online ad channels like Facebook, YouTube and mobile phones have paved the way for online advertising to be “A much more mainstream activity for brand advertisers for which TV remains far and away the medium of choice.”According to the survey, marketers expect the same metrics online as they get offline, and then a few more. Of those metrics, 80% value brand lift; 57% expect sales increase; 31% expect increased interaction rates, and 29% expect higher click-throughs and shares and reposts.
“Prepare for greater scrutiny,” Digiday warns media sellers. “Only 6% of brands and 16% of agencies surveyed said they “strongly believe” media sellers’ claims that they can reach the custom or niche audiences that brands seek.”
Forbes adds the caveat that the report was sponsored by ad technology company Vizu; but sees the report as another indication of online ads going mainstream.
Device’s Screen Size May Determine Conversion Likelihood
While search advertisers experience higher click-through-rates for mobile phone and tablet search campaigns than for desktop search campaigns (at 166% and 137% respectively) according to a November 2011 report from Macquarie Group, those clicks are less likely to convert to sales in a direct relationship to screen size. The report employed Efficient Frontier advertiser data. Efficient Frontier found that mobile conversion rates were at just 31% of the average desktop campaign’s, while tablet conversion rates were much more on par (96%). Meanwhile, the average cost-per-click (CPC) on mobile phone search campaigns was slightly higher (108%) than for desktop search campaigns, although CPCs for tablet campaigns were on average 85% of desktop search campaign CPCs.
Report: Social Media Grows 25%, Now 16% of All Online Time
The internet continues to grow at the fastest rate of any medium, at an average of 14.2% a year between 2010 and 2013. Display is the fastest-growing segment, growing by 16.4% a year, driven mainly by online video and social media, according to ZenithOptimedia, "Global Ad Expenditure to Return to Pre-recession Peak Level."
In the US, social media use has jumped 25% over the last year, and now accounts for 16% of all time spent online, and 34% of display impressions. Paid search is growing by 14.4% a year, but its growth is being slightly restrained by the shift in search behaviour from desktop to mobile devices, where costs are currently lower.
Television is the next fastest-growing medium, at 6.2% a year. It is also the largest contributor to global growth, accounting for 49% of new ad dollars between 2010 and 2013. Television’s share of the global ad market has risen steadily over time and shows no sign of reaching a plateau: it attracted 40.1% of spend in 2010, up from 37.3% in 2005, and we forecast it to attract 41.4% in 2013.
Television ad expenditure are forecast to grow by US$35.4 billion, from US$179.6 to US$215.0 billion between 2010 and 2013.
MySpace Owners See Room for Artists, Celebs | Google, Facebook Plug-ins Slow Sites, Impact Commerce?
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Specific Media, the company that purchased ailing social network MySpace, plans to make the website a place to interact with celebrities and artists and to view content produced specifically for Myspace, writes the Los Angeles Times. "Thirty-five million unique users in the U.S. every single month come to it. That is a massive property online,” said Tim Vanderhook, who co-owns the company with his brother, Chris.
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Forrester has released a new research series called Community Speaks, based upon a market research online community (MROC) of more than 2,000 participants. The series provides market researchers with qualitative consumer insights built from data on topics such as customer experience and loyalty, consumer technology adoption, and media and Internet behaviors and attitudes.
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Calculating that the Google’s +1 plug-in and a Facebook’s ‘like’ plug-in slows page-load time by 1.2 seconds, and citing research that indicates that 10% of site traffic is lost for every extra second a site takes to load, the Tag Man Blog has an interesting take on what kind of impact the two plug-ins could make to an e-commerce site. That translates to more than a 10% loss in visitors, and by extension, in conversion. Otherwise put, an online business with $35 million in revenue could lose over $3.5 million in sales using just these two plug-ins.
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Search optimization company SEOmoz has introduced a search product that allows marketers to see inbound links to their brands' sites as well as other link-identifying information. The company's Open Site Explorer search engine shows what other companies are linking to a particular website, top pages and content on a domain. The software also indicates what content is drawing the most links to competitors' websites and allows users to compare up to five domains side by side, writes B-to-B Online.
Chart: Retail Search Sector Data, Q2 2011
About this chart: Source: Efficient Frontier / Context Optional, "Global Digital Marketing Performance Report," July 2011. The analysis was completed based on data from Efficient Frontier search engine marketing customers and the resulting Efficient Frontier’s Customer Index. The Efficient Frontier Customer Index represents a subset of Efficient Frontier clients who have spend data for six consecutive quarters or more whose resulting SEM metrics are then normalized to average industry category contributions established by multiple third party data providers.
Chart: U.S. Finance Sector Data, Q2 2011
About this chart: Source: Efficient Frontier / Context Optional, "Global Digital Marketing Performance Report," July 2011. The analysis was completed based on data from Efficient Frontier search engine marketing customers and the resulting Efficient Frontier’s Customer Index. The Efficient Frontier Customer Index represents a subset of Efficient Frontier clients who have spend data for six consecutive quarters or more whose resulting SEM metrics are then normalized to average industry category contributions established by multiple third party data providers.