Friday, March 16, 2012 | Edited by Daniel Moores
Mobile and Video Grab a Greater Share of Digital Ad Budgets

Marketers must diversify their ad investments across a wider variety of digital channels to keep up with today's media consumption habits.

Not surprisingly, digital ad agency ValueClick media found U.S. marketers' digital advertising budget allocation for 2012 was expected to mirror popular consumer usage trends, resulting in more spending on mobile and video efforts.

Almost half (49%) of U.S. marketers surveyed by ValueClick planned to boost video ad spending, and 65% noted increases to their mobile budgets for 2012. These two channels also saw the smallest number of marketers who said they planned to decrease spending: 3% for mobile and 2% for video.

In December 2011, 66% of U.S. marketers said they planned to spend between 1% and 24% of their 2012 digital budget on mobile, compared to 50% last year. In addition, 52% of U.S. marketers planned to allocate a similar portion to video, up nearly 27% from 2011.

Additional data showed the vast majority of respondents (94%) planned to purchase standard mobile banner ads. Roughly half also planned to buy mobile rich media ads (53%) and mobile video ads (49%).

Such high levels of interest in standard mobile display ads will help U.S. mobile ad spending skew further toward rich media and banner advertising this year. Ad spending on these two formats will comprise one-third of total US mobile ad spending in 2012, or $861.7 million, according to eMarketer estimates. Video will account for 5.8%, or $151.5 million, of the year's $2.61 billion in total US mobile ad spending.

The greatest share of U.S. mobile ad spending will continue to go to search, expected to account for 49% of all ad dollars this year. This is unsurprising, given that mobile is still working to achieve mass reach and scale—two common prerequisites for display advertisers. In the meantime, mobile search advertising will continue to dominate mobile ad spending.

In terms of mobile campaign measurement practices, additional data from ValueClick showed that, in December 2011, marketers were just slightly more likely to measure their mobile efforts with brand-health metrics as opposed to direct-response measures. And ValueClick found the highest percentage (63%) of U.S. marketers measured mobile performance using clickthrough rate.

For now, mobile appears to be a channel equally employed for branding and direct-response objectives, and measurement metrics reflect that near-equal division.

(Source: eMarketer, 03/12/12)
Ad Execs Bullish On Digital, Marketers More So On Social

Data Reveals 'Disconnect' with Agencies

Advertising executives -– both marketers and their agency representatives -– continue to increase their optimism toward digital media options, and are beginning to swing toward it as more of a "branding" than a performance "option," but there are some significant disconnects between the way they look at various digital media silos.

While agency executives tend to be far more bullish on the overall use of digital media, marketers are much more optimistic about budgeting for social media.

The findings, which are part of new, detailed analysis coming out of Advertiser Perceptions' Fall 2011 survey on ad executive attitudes and optimism about media, show the overall index for digital -– including online display, search and video advertising –- trending upward, but the sentiment appears to be driven primarily by agencies. That insight is interesting, because the bottom line of big agencies appears to be benefitting from their continuing shift toward a greater reliance on digital media, according to a Pivotal Research analysis released Monday.

"But there is a discrepancy in the way marketers and agencies are seeing it," says Randy Cohen, a partner in AP -- which produces an ongoing series of ad industry tracking studies under its Advertiser Intelligence Reports banner, including this one. "It's a disconnect," he says, adding, "but agencies tend to do what marketers want them to."

If that's the case, social media should be the primary beneficiary, according to Cohen, because marketer sentiment is building much more favorably toward social networks versus the rest of the digital mix.

"The mindset is that they're going to turn into a big share of the digital pie going to social in the next few months," says Cohen, citing data suggesting that "social media rules the day in mindshare."

In fact, the data shows that Facebook continues to build in overall ad industry "buying intentions," and currently ranks nearly twice as strong as the next-biggest media options. Interestingly, the Google Display Network, and Google's AdWords/Display platform, have shifted into the No. 2 and No 3 spots among ad executive buying intentions for this year, supplanting once-dominant Yahoo's display ad platform, and previous third-place ranker YouTube.

The shift toward social also represents a bit of a paradox, says Cohen, because most ad executives still rank it mostly as a "performance" medium versus a "brand-focused medium," with indexes of 137 and 69, respectively, against those two criteria.

Cohen says that's a paradox, because the overall sentiment toward digital media is that it is shifting more into a brand-focused advertising option. He says AP's most recent data shows those two criteria to be almost even, with 49% of the respondents citing "brand" versus 51% citing "performance" as the main criteria for buying digital media over the next 12 months. That's good news for the online industry, which has been trying to overcome its performance roots in hopes of attracting bigger brand dollars.

Cohen says the fact that marketers are so keen on social, and that they still see it primarily as a performance medium, indicates how much "confusion" there currently is in the digital advertising marketplace.

He attributes that to the fact that options that might be perceived as being more brand-focused, like online video and display advertising networks, and the major portals are not seen as "the new shiny thing" that Facebook and other social media platforms currently are in the minds of marketers.

One thing that does bode well for online video advertising networks heading into this year's upfront advertising marketplace is that it is currently trending stronger than any other digital ad option except for mobile, which is still nascent. On the downside, agency executives are much more optimistic about online video's prospects than their clients are. According to AP's data, there currently is a 14-point index gap between the two on their plans to buy online video over the next 12 months: a 58 for agencies, and a 44 for marketers. Moreover, while agencies gained two index points, marketers dropped two points from AP's Spring 2011 survey.

(Source: Online Media Daily, 03/14/12)

How You Can Make Money:
Use this article to help agencies and advertisers understand the importance of branding with digital advertising and get away from buying only on CPM, CPC, CPA...
Generation C: Connected Americans 18-34

According to Nielsen and NM Incite's U.S. Digital Consumer Report, "Generation C" is taking their personal connection with each other and content to new levels, new devices, and new experiences like no other age group.

Born between the launch of the VCR and the commercialization of the Internet, Americans 18-34 are redefining media consumption with their unique embrace of all things digital.

Americans 18-34 make up 23% of the U.S. population, says the report, yet they represent an outsized portion of consumers:
  • Watching online video (27%)
  • Visiting social networking/blog sites (27%)
  • Owning tablets (33%)
  • Using a smartphone (39%)
Their ownership and use of connected devices makes this group incredibly unique consumers, representing both a challenge and opportunity for marketers and content providers alike. Generation C is engaging in new ways and there are more touch points for marketers to reach them.

More information from the Nielsen U.S. Digital Consumer Report shows that since 2000, the number of Americans with Internet access has more than doubled from 132.2 million to 274 million, and online content is increasingly part of Americans' entertainment fare. At the end of 2011, about one-third of consumers streamed long-form content such as a movie or TV show from the Internet through a paid subscription service like Netflix or Hulu-Plus.

With 12 million unique video consumers streaming from Hulu and 6.2 million from Netflix in October 2011, who's watching Netflix and Hulu on home computers, asks the report:
  • Though 31% of Hulu's audience falls into the 18-34 age range, more than a third of users are over the age of 50. Netflix skews slightly younger, with 40% of users in the 18-34 age range and 17% over 50.
  • Women make up the majority of users for both Netflix and Hulu, 57% and 59% respectively, and they account for 64% of total time spent watching video content on Netflix and Hulu. This is particularly noteworthy, says the report, as women stream less online video overall than men.
  • Both services have an audience that is more than three-quarters white, with relatively even audience percentages for African-Americans and Asians. Hispanics are more likely to watch video on Netflix than Hulu, making up 16% of Netflix's audience compared to 11% for Hulu.
(Source: The Center for Media Research, 03/09/12)

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Daily Sales Tip: Show Your Product

Are you heading to the Apple Store to buy "The new iPad" that goes on sale today?

Advertisers tell us they like when digital salespeople show the products they are selling on a tablet or laptop when presenting recommendations.

If you don't use a tablet or laptop in your presentations, now is a good time to get one. The new iPad starts at $499, but we've seen the older iPad2 drop in price to as low as $359 and it is still capable of showing sample display ads, web pages, podcasts, online video, station images, streaming and presentations.

Source: John Potter, VP/Training, RAB

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