Host Introduction: “State of the Industry: Follow the Money”

Twitter: #iMediaSummit
Friday, February 7, 14

1

February 10, 2014

Follow the Money

Presented by
Geoffrey Ramsey
Chairman, Founder
@geofframsey

2

WARNING!
782 data sources
383 builds
50 slides


3

About the numbers you are about to see

8.9%
8
2.4


$5.6B

4

The eMarketer process
• Reported revenues from major ad-selling companies;
• Data from “benchmark” sources, including quarterly reports from
the IAB & PwC;

• Estimates from primary research firms, investment banks,
independent analysts, agency forecast units;

• Consumer internet and mobile usage trends;
• Surveys among marketers, publishers, etc;
• eMarketer interviews with executives at ad agencies, brands,
publishers and other leaders


5

The Twitter Story
Estimated
Revenue

$545

Twitter WW Ad Revenue for 2013 (millions)

2% margin
of error
$583

2013
actual

$595

$500

$250

Aug
2012

Feb
2013

Time

Feb 5
2014
7

Yes, total media spending will
continue to rise in 2014...
$187.3
63% of marketers plan to

cut spend on traditional
media in order to fund
digital efforts

If you strip
out digital,
1%

2007


8

Digital will grow nearly 13% this year

%
0
4

27.0%

31.7%

US
of
are
sh
al $
git
di


9

13% growth
in 2014???

But that’s not the big story.


10

Desktopocalypse???

Are we reaching the “End of Days” for our
desktop-centric ad ecosystem???

11

$36B

in mobile
ads


12

Desktop ad business


What I am NOT saying...

13

Mobile ad spending is on a tear

8X


14

Mobile’s slice of the digital ad spending pie
= 12% in 2012
= 22.5% in 2013

Source: eMarketer, 2014

15

$36B

in mobile
ads

= 57% of the digital
pie in 2017

Mobile
= >1/2


16

What you may be thinking...
“Sponsored”

“Stupid”

$36B
“Stoned”


in mobile
ads

“Screwy”

17

8 Reasons To Believe
Mobile Ad Spending
Will Eclipse Desktop by
2017

18

#1. Mobile devices
have moved to the
center of
consumers’
multi-platform
universe ...

Social Machines
Social Machines

Ambient Surfaces
Desktop PCs

Laptop PCs
Connected TVs

Connected Cars

Smartphones

Tablets

Wearable
Technology
Connected
Connected
Consoles
Consoles
©2014 eMarketer Inc.

19

... they’ve
become the
remote
control for
our lives


20

#2. Smartphone and tablet
penetration are ramping up

eMarketer
(year
end
2014)


50%
21

% of population on smartphones, by
age group (2014)
Total
Under 11
12 - 17
18 - 24
25 - 34
35 - 44
45 - 54
55 - 64
65+

50%

50.1%
3.8%

51.4%
75.9%
79.1%
76.8%
59.9%
53.4%
19%
0%

40%

80%


22

In 2017, two-thirds are on smartphones
Total
Under 11
12 - 17
18 - 24
25 - 34
35 - 44
45 - 54
55 - 64
65+

64%

64%
6%

73%
94%
93%
92%
82%
74%
25%
0%

50%

100%


23

Nearly 1/2 of the population will use a
tablet by 2017


24

#3. Smartphone and tablet adoption
have brought us to a new inflection
point in terms of time spent

2 hours 21 minutes
19.4% of daily media time

2 hours 19 minutes
19.2% of daily media time
Source: eMarketer, July 2013


25

Time spent in hours: minutes

4:31
TV
(38%)

~1/2
2:21

5:16
Total
Digital
(45%)

Mobile


26

Millward Brown and Dynamics
Logic

Nielsen

MAGNAGLOBAL

USC Annenberg School Center for the Digital Future
Gfk MRI

Experian Simmons

Donald W. Reynolds Journalism Institute (RJI) at the University of Missouri

Yankee Group

~1/2

Adobe/Keynote Systems

BabyCenter
Interactive Advertising Bureau
(IAB)

The Media Audit

Ipsos Mendelsohn

GroupM


Syncapse

McKinsey & Company
Arbitron Mobile

Terra Networks and comScore

Chinet

Moosylvania

Deloitte

Frand N. Magid Associates

Credit Suisse

Barkley

Fleishman-Hillard

Television Bureau of Advertising (TVB)

Gfk

Interpret

Yahoo! and
Interpret

Temkin Group

Tremor Media

Google and Sterling Brands

Forrester Research
Council for Research Excellence

Hitwise Mobile

comScore

Online Publisher Association (OPA)

Edison Research

Nielsen and BabyCenter LLC

Zokem
The Diffusion Group

InMobi and Mobext
27

With mobile: being online has become a
persistent, anywhere state

Some of you have
Mobile users check
their that within the
done phones 100X daily
past 10 minutes
Source: Mobile Posse and Phoenix Marketing
International, 2013


28

#4. Mobile is now ~20% of Web traffic and
search volume

40%
mobile

1/5

Sources:
Web traffic: comScore; StatCounter;
Adobe (pageviews), 2013;
Paid search click share on Google:
The Search Agency, 2013;
US search clicks: Kenshoo, 2013

29

#5. Mobile commerce is exploding
m-commerce sales
(and as a % of total ecommerce)

$41.7 B

16%
2013

2.7X

$113.6 B

26%
2017
eMarketer, Sept, 2014


30

Smartphone impact goes way beyond
direct sales
$15 B*

58% influenced by ads

$139 $159 B**

Sources:
*eMarketer, 2013;
**MMA; Deloitte Digital, 2013

31

When consumers were asked in a survey,
“What is your primary device for
opening marketing emails?”...

35% said
desktop

65% said
smartphones
or tablets

Source: Moveable Ink, Q4, 2013


32

#6. Marketers are pumped for mobile
Survey: Most Exciting Digital Opportunities in 2013,
according to Companies Worldwide
0%
Content Marketing
Targeting & Personalization
Social Media Engagement
Mobile Optimization

% of US Marketers Planning to
Increase their Mobile Spend
15%

64%
67%
69%
70%
74%
79%
85%

......
......
......
......
......
......
......

30%

Advertiser Perceptions
Econsultancy 30%
Nielsen and Vizu
Ignition One
35%
IAB and Ovum
Technorati Media
35%
ANA

45%

43%

43% of B2B
marketers


Source: Econsultancy and Adobe, Jan, 2013
33

#7. The tech titans are all going mobile

%
9
4

ide
ldw
or
w

34

Net US Google display ad revenues
Desktop

$4

$3.70

Mobile
$2.88

$3
$2.33

$2

$2.18

$1.94
$1.24

$1

$0.66
$0.31

$0
2012

2013

2014

2015
eMarketer, December 2013


35

% of advertising revenue coming
from mobile in Q4, 2013

53%

72%

75%
36

#8. Social media is increasingly
becoming a mobile activity

69%

ep
xc
E


on
ti

of social users
access social
networks on
their phones

37

US digital users spend 1:10 (hr:mins)
per day on social media
#2 activity,
after email*

29%
29%

19%
Source: eMarketer, 2013;
*Deloitte, Nov, 2013

38

Ad spending on social networks is
also on the rise Social media = 12% of
total digital ad spend

Fueled partly by:

69%

39

67% of US internet users go to any
social network
CreditDonkey........... 44%
Broadcom................ 31%
InSites Consulting... 25%

Facebook

Reuters....................
Hub Research.......... 23% 26%
GlobalWebIndex....... 20%
Pew......................22%
22%

Pinterest*

17%

Instagram*

15%

Twitter

6%

Tumblr*
0%


60%

comScore................. 19% 20%
Broadcom................

Pew........................... 18% 15%
Hub Research..........
Allstate Corp............ 16% 14%
GlobaWebIndex.......
eMarketer................. 15%
Epsilon...................... 8%

30%

60%

Source: eMarketer, 2013;
*Pew Internet & American Life, Dec, 2013
40

Video ad spending will continue to see
70% of senior ad-buying
double-digit growth
execs plan to move some of
their TV dollars to digital
––IAB, 2013

27%

of digital
display $s

???
= 1/5 of digital
video ad spend


41

For each year (2014 - 2017), net additional TV
$s will exceed net additional digital video $s

In 2014...
$2.2

$68.5
6%
TV

11%
$1.64

$5.8
Digital Video
42

Mobile
1. Improvements in mobile measurement––including
ability to integrate mobile and assign attribution
2. Advancement of Geo-targeting capabilities

“Exchanges, Trading Desks and
bidding for audiences recognizes that
3. Growth in Native Advertising movement––which is
marketers want to reach audiences,
rather than underwrite space.”
expanding rapidly in mobile, e.g., Facebook, Twitter,
––Rishad etc
BuzzFeed, Tobaccowala, Chairman of DigitasLBi and Razorfish

4. Programmatic buying is moving fast towards mobile

43

Look for programmatic buying to rapidly
spread through mobile, social and video
US Digital Real-Time Bidding
Display Ad Spending (in billions)

85% of advertisers*

$9.0

72% of publishers**

$8.72

$6.64

% Growth
JMP....................... 50%
IDC....................... 49%

eMarketer........ 43%
JP Morgan............ 49%

$1.92
2012

$3.39

2013

$4.86

22%

28%

of display
spend $4.5

of display
spend
2014

$6.8

$2.3

2015

$0
2016

Sources: eMarketer, 2014;
*IAB and Winterberry Group, 2013;
**IAB; OPA, 2013

44

Final
advice.


45

Admit if you
have a
problem.
43%
“Poorly
Integrated”

46%
“Improving”


46

Mobile is the
least
integrated


47

Get on top of the data
Harvest cross-screen identities
by tapping into the streams of
data emanating from mobile,
social and video activities

Think of it as an antidote to
fragmentation!

48

Fight multi-tasking behavior with
multi-channel marketing

Smart use of data––across platforms––
will be the only way to keep up with
rising consumer expectations.
By ensuring consistent messaging and offer
availability across every channel, you can provide
consumers with multiple options in terms of their
entry point into the purchase process.

49

“Thank You”

Geoffrey Ramsey
Chairman, Co-Founder
geoff@emarketer.com


#iMediaSummit
@geofframsey

50

Host Introduction: “State of the Industry: Follow the Money”

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Host Introduction: “State of the Industry: Follow the Money”