Facebook is for branding and has the enormous reach that brand advertisers are looking for. So it will start to erode branding dollars that used to go towards TV.

1. Augustine Fou- 1 -
Future of Advertising
2014 - $117B
2017E - $136B
branding performance
“Soup and Soda” “Cars and Computers”
Television ($69B, 2014) Digital ($48B, 2014)
Display
(Facebook)
22%
Search
(Google)
46%
Other
32%55% 45%
Broadcast Cable
Television ($75B, 2017E) Digital ($61B, 2017E)
49%
Other
9%49% 51%
Broadcast Cable Branding
(Facebook)
Performance
(Google)
42%

2. Augustine Fou- 2 -
Key Points
• Overall advertising industry “pie” will still grow -- $108B
(2013) to $131B (2017E); digital grows fastest
• Traditional dollars will continue to flow to digital,
primarily from print and radio channels
• Within “traditional” ad spend will continue to flow from
broadcast TV to cable TV for more targeted audiences.
• Digital branding (e.g. Facebook) will absorb most of this
new flow, rather than “performance” (e.g. search)
• Other tactics that are neither “performance” (e.g. digital
video) nor has the reach of Facebook will “shake out”
Augustine Fou- 2 -

3. Augustine Fou- 3 -
Digital is a Performance Channel
Source: IAB 2013 1H Report

4. Augustine Fou- 4 -
Within The Digital Channel
Display and social
(display) are for awareness
Search (organic and paid)
are most useful just before
the decision to purchase.
Source: Google Think Insights

5. Augustine Fou- 5 -
Digital Ad Spending Spectrum
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Direct Response
Branding

6. Augustine Fou- 6 -
UPDATE: January 2014
Source: Nielsen via Marketing Charts, January 23, 2014
This includes
mobile display
and social
display

7. Augustine Fou- 7 -
Combined Projections Aug 2013
Source: eMarketer, August 2013
eMarketer shows
TV still growing
strongly
Digital will
continue to grow
at the expense of
print and other
offline forms

8. Augustine Fou- 8 -
UPDATE: July 2013
Source: The Creative Group via MarketingCharts July 2013

9. Augustine Fou- 9 -
UPDATE: April 18, 2013
Source: PwC/IAB via Marketing Charts April 18, 2013

10. Augustine Fou- 10 -
Cable TV vs Broadcast TV
Augustine Fou- 10 -
Source: Kantar Media September 2013
H1 2013
Cable TV +10.1%
Spanish TV +9.4%
Network TV -0.6%
Digital Display +5.3%

11. Augustine Fou- 11 -
Facebook is for Awareness
Augustine Fou- 11 -
Source: AdAge RBC Capital Survey September 2013

12. Augustine Fou- 12 -
ZenithOptimedia Projections
Source: Zenith Optimedia via Marketing Charts April 29, 2013

13. Augustine Fou- 13 -
Related Articles
http://www.slideshare.net/augustinefou/grand-unified-theory-of-marketing-by-
augustine-fou-2014-update
http://www.slideshare.net/augustinefou/what-influences-consumers-purchase-decisions-
most-corroborated-by-augustine-fou
Trends in Advertising
By: Augustine Fou, Nov 15, 2012
Branding Today: Why It’s Ineffective, Irrelevamt, Irritating, and Impotent
By: Augustine Fou, June 21, 2012
Search Kicks Display in Effectiveness
By Augustine Fou, April 2012
Display Ad Benchmarks
By Augustine Fou, August 2013
Augustine Fou- 13 -

14. Augustine Fou- 14 -
Dr. Augustine Fou – Chief Digital Strategist
“Facebook is for branding and has the
reach to cannibalize revenues from TV;
Google will remain performance oriented
and better serve specific industries and
sectors – like cars and computers.”
FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM)
MCKINSEY CONSULTANT
CLIENT SIDE / AGENCY SIDE EXPERIENCE
PROFESSOR AND COLUMNIST
ENTREPRENEUR / SMALL BUSINESS OWNER
PHD MATERIALS SCIENCE (MIT '95) AT AGE 23
Augustine Fou@acfou
ClickZ Articles: http://bit.ly/augustine-fou-clickz
Slideshares: http://bit.ly/augustine-fou-slideshares
LinkedIn: http://linkd.in/augustinefou

15. Augustine Fou- 15 -
APPENDIX
Augustine Fou- 15 -

16. Augustine Fou- 16 -
U.S. Media Spending 2014
TV Digital Print Radio
Outdoor $7 (4%)
Directories $6 (3%)
$69 billion
39%
$48 billion
27%
$32
18%
$16
9%
Display
$8 billion
19%
Search
$18 billion
43%
Video $3 (7%)
Mobile
$4B$3B
display search
16%
Other
$5
11%
Lead Gen $2 (4%)
• classifieds
• sponsorship
• rich media
• email
Source: Emarketer Aug 2013
Source: IAB October 2013

17. Augustine Fou- 17 -
Source Data eMarketer Aug 2013

18. Augustine Fou- 18 -
Source Data IAB October 2013

19. Augustine Fou- 19 -
Future of Advertising
2012 - $107B
2016E - $104B
branding performance
“Soup and Soda” “Cars and Computers”
Television 65% ($70B, 2012) Digital 35% ($37B, 2012)
Display
(Facebook)
22%
Search
(Google)
46%
Other
32%55% 45%
Broadcast Cable
Television 58% ($61B, 2016E) Digital 42% ($43B, 2016E)
42% 49%
Other
9%51% 49%
Broadcast Cable Branding
(Facebook)
Performance
(Google)

20. Augustine Fou- 20 -
22%
46%
32%
57%
43%
Future of Advertising
42%
49%
9%
51%
49%
Facebook (display)
Google (search)
Other
Broadcast TV
Cable TV
2012
(outer ring)
2016
(inner ring)
• Overall advertising pie
will shrink as greater
efficiencies are realized
via digital
• Digital will grow at the
expense of traditional
• Facebook (display) will
cannibalize branding
dollars from traditional
and from other smaller-
reach types of digital

21. Augustine Fou- 21 -
Online Ad Revenue Growth
UK numbers

22. Augustine Fou- 22 -
1st screen 2nd screen 3rd screen
• Television
• Print
• Radio
• Display Ads • Search Ads
• Search Optimization
• Email
• Social Media
Marketing
• Mobile Marketing
awareness consideration choice purchase advocacy
• In-store
… all tactics have their place
The Marketing Continuum

23. Augustine Fou- 23 -
Even Mix of Brand and DR
Source: Vizu/CMO Council 2013

24. Augustine Fou- 24 -
Internet Revenues Catching TV
Source: IAB/PwC FY 2011 Report, April 2012

25. Augustine Fou- 25 -
From CPM to Performance
Source: IAB 2012 Annual Report