Archive for May, 2013

Social Advertisers Rely on Branded Pages More Than Paid Ads

More than seven in 10 market to customers via branded pages

Although it’s been one year since Facebook’s underwhelming initial public offering, the bloom has not quite come off the social media rose. eMarketer estimates that US social network ad spending will grow 31.6% in 2013, to total $4.2 billion by the end of the year.

But brands are looking deeper than just pumping money into targeted display ads delivered on social media platforms.

In Q1 2013, Forrester Consulting, on behalf of digital marketing firm Kenshoo Social, surveyed US advertisers who spend at least $100,000 on social media ads annually. The research firm found that 73% of respondents used branded pages on social networks to deliver messages, making it the most popular social media tactic among social advertisers. By comparison, 56% had purchased ads on a social media platform, while 52% had created branded accounts on microblogs such as Twitter. Meanwhile, business-focused social networks got scant attention from these ad buyers.

Six in 10 social advertisers who either purchased ads or paid to promote content on social media properties rotated through multiple pieces of creative. A much smaller group—35%—were interested in targeting several niche audiences, a sign that advertisers may be writing off some of the potential benefits of ad targeting on social media.

While demographic targeting on social networks was the most common way for advertisers to zoom in on prospective customers, just half of respondents said they used this technique. Even smaller numbers engaged in geographic targeting (43%), targeting based on users’ interests (41%), targeting fans (38%) and targeting based on a user’s previous actions (37%). With social media networks accruing a wealth of information on their users, advertisers who fail to narrow messaging are missing out.
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Ad Agencies See Effectiveness in Online Video

Ad execs think online video ads are equally or more effective than television ads at reaching audiences

The online video advertising ecosystem has gained both prominence and complexity, but that might be because buyers have found that the ads really work. A March 2013 survey of US advertising agency executives conducted by online video ad platform BrightRoll found that the vast majority of respondents (75%) said online video ads were equally or more effective than traditional TV. Nine out of 10 also thought online video ads had equal or greater impact than display ads.

Ad execs may be responding to US consumers’ seemingly endless demand for online video. Video monetization firm FreeWheel reported that in Q4 2012, total video views among US internet users climbed 23% year over year.

The popularity of digital video viewing is helping drive the expansion of the online video ad market. eMarketer estimates that video ad spending in the US will grow 41.4% this year, to reach $4.1 billion. BrightRoll found that the greatest percentage of advertising professionals—one-quarter—expected online video ads to see the highest growth rate of any ad category, with mobile video a close second.

The growing complexity of the online video ad market means that advertisers now have a variety of ways to measure return on investment. But which method is best? This year, 36% of ad executives indicated that their clients placed the highest value on gross rating points (GRP) or target rating points (TRP) to measure the size of their audience. Still, another 30% said clients valued the percent of impressions that reached their target audience, while 24% named the percent of unique viewers in target.

Ad buyers are faced with an increasingly complicated equation when it comes to online video ads, and they need to consider which sites to purchase ads on, what format the ads will take and how to measure their effectiveness.
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Mobile Marketing Spending Translates to Sales, Brand Lift

Mobile web and apps get most investment

Spending on mobile marketing keeps rising, as brands learn the power of reaching consumers on these devices, and consumers become increasingly mobile-first.

The Mobile Marketing Association (MMA), in partnership with IHS Global Insight, studied US mobile marketing expenditures and their impact on sales for the “Mobile Marketing Impact Study,” released in May. The study found that this year spending on mobile marketing—including mobile advertising, mobile customer-relationship management and mobile direct-response marketing on nonmobile media—will reach $10.46 billion. By 2015, spending on the channel will approach $20 billion.

That spending will translate to an economywide impact of $216.9 billion in sales in 2013, according to the MMA’s projections, rising to $401 billion in sales in 2015, a ratio of about $1 in mobile spending to $20 in sales, also known as the marketing impact ratio (MIR). The study noted the seeming lack of diminishing returns for mobile investment. As companies spent more money on mobile marketing, their MIR did not decrease.

Mobile advertising accounts for the biggest share of total mobile marketing spending, at just under 50% of expenditures this year, or $4.87 billion—a share that will hold relatively steady through 2015. eMarketer estimates higher US mobile ad spending, projected to reach $7.3 billion this year.

There is no question that as mobile and tablet advertising help companies achieve their brand goals, and thereby drive sales, it is spurring bigger outlays. InsightExpress found that in 2013, mobile and tablet advertising got strong results across brand health metrics, raising ad awareness, purchase intent and brand favorability. Tablets performed particularly well.

Breaking down how companies are apportioning their mobile advertising dollars, the mobile web will see the greatest share of money spent, as brands work to mobile-optimize their sites. In 2013, the MMA predicts companies will invest $3.16 billion in the mobile web, translating to about two-thirds of spending. By 2015, that share will drop down to 58%, as mobile apps get significantly more investment.

Dollars spent on mobile apps will rise by 158% between 2013 and 2015, according to the MMA, to reach $3.26 billion in spending in 2015.
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Online Video Advertising Moves Front and Center

Video and TV often bought together

The process of buying video ads has become increasingly complex, with more websites, ad networks, exchanges, and demand-side platforms (DSPs) than ever before, according to a new eMarketer report, “Buying Online Video Advertising: Making the Most of Your Budget.” But buying online video ad space is, at its core, similar to buying traditional TV advertising. For advertisers, it starts with knowing how to reach their target audience mixed with a good grasp of brand objectives and how they shift at different stages.

What’s at stake here is money—a lot of money. And the total is growing rapidly. Estimates from eMarketer indicate that US digital video ad spending will nearly double in only four years, climbing from $4.14 billion this year to $8.04 billion in 2016.

Besides the basics of defining audience and objectives, marketers typically need to factor in a variety of elements when choosing where and how to buy digital video advertising, including costs, types of ad and pricing formats, whether to buy direct from video sites or to buy audiences via ad networks, and whether to use real-time bidding (RTB). In addition, many advertisers must consider how digital video ad buys tie into their television buys.

Evaluating costs means more than simply calculating how much the advertiser pays the publisher. When marketers choose which video sites to advertise on, and where on those sites to place ads, they also need to factor in the video buy’s effectiveness.

Many marketers can find the road to that intersection in the type of site, and the ad’s location within that site. In a somewhat rough estimate from Credit Suisse, the CPM for midtier sites and placements in 2013 will be approximately $25 and reach nearly $33 for premium destinations.

The Credit Suisse data focused on traditional CPMs, but many advertisers are looking for engagement and prefer cost-per-click or cost-per-completion arrangements. And several marketers are moving toward some kind of cost-per-action pricing.

One advantage of this completion-based pricing method tends to be a more involved audience—and marketers who get a better picture of audience interest.

Advertisers must also choose a video format for their ad. Video ad formats vary widely, ranging from in-stream ads such as pre-rolls and mid-rolls to page takeovers and interactive units. Video ad sites’ offerings are rarely uniform.

“Do they have certain ad units that are proprietary to them where the audience can choose multiple videos to watch? Will they allow us to put a skin around the video so it really looks like it’s our own content and that we actually own that page?” said Erica Bigley, digital media manager at Ford Motor Co. “All of the partners we work with do each one of those a little bit differently, so we know which one will work best for what we’re trying to push at that time.”

The interactivity of user’s choice is just one active ad format marketers can decide to include in their online video campaigns. A Q2 2012 study from Millward BrownDynamic Logic and YuMe found that in most cases, interactive ads delivered greater brand metric results.

While marketers often place television and digital video in separate buckets, some are beginning to look at them as a single universe—T/V (television/video).

“We’re pretty much approaching all of our major broadcast partnerships in concert with our digital programs,” said David Matathia, director of marketing communications at Hyundai Motor America. “When we’re working with network partners, it’s now rare to see a standalone TV or a standalone digital deal. It’s almost become standard practice to package digital and broadcast together.”
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Mobile Gets One Out of Five Paid Search Clicks

CPC rates are declining

Global paid search ad spending continues to rise, with year-over-year growth in Q1 2013 reaching 15%, according to Kenshoo’s “Global Search Advertising Trends” report. In the US, year-over-year growth reached 24%.

Much of that increased search ad spending is going toward mobile devices, as consumers do an increasing percentage of their browsing and research on smartphones and tablets. But search advertisers, especially in the US, still put a premium on desktop search.

Kenshoo found that in the US, the allocation of paid search ad spending across devices is not keeping up with the distribution of clicks. In Q1 2013, the tablet and phone accounted for nearly 20% of paid search clicks, but the devices only garnered about 14% of search spending. The biggest lag was on the phone, which accounted for about 9% of clicks but only 5% of total spend.

In the UK, by comparison, there is a much narrower gap between mobile spend and clicks: Mobile devices get 28% of clicks and 25% of spend.

In terms of cost-per-click (CPC) rates, globally prices are trending downward, and that is especially true in the US. In Q1 2013, the average US CPC was 38 cents, down from a one-year high of approximately 47 cents in Q3 2012.

The computer still garnered the highest CPC rates in the US, at 56 cents in Q1 2013, while the phone was a comparatively inexpensive 30 cents per click, and tablet paid search clicks were right in the middle, at 46 cents.

eMarketer expects total US search spending to reach nearly $20 billion this year and top $25 billion in 2017. Mobile search spending tripled last year, according to eMarketer, and is expected to increase another 80% this year, to reach $3.6 billion. By 2017, more than half of search spending will go toward mobile formats.
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THE SMALL SCREEN CAPTURED BIG AD REVENUE IN 2012

Advertisers gravitated to the small screen in 2012 and pulled away from newspapers and magazines, according to Nielsen’s quarterly Global AdView Pulse report. The $350 billion in global TV ad spending represented a 4.3 percent year-over-year increase, and a strong second half in North America contributed to a 3.2 percent rise in global ad spending for the year. Overall, TV ad spending accounted for 62.8 percent of global ad dollars in 2012.

Ad spending in print mediums other than magazines and newspapers did rise in 2012, but the percentage increases trailed those in the TV realm. While spending in newspapers and magazines dipped for the year (-1.6 and -0.2 percent, respectively), these mediums remain key ways for advertisers to communicate with consumer, as they maintained the second and third place spots based on share of overall ad spend. Newspapers accounted for nearly 20 percent and magazines accounted for 8 percent, proving that they remain major mediums for advertisers to communicate with consumers.

Display Internet advertising, although measured in a smaller subset of countries, grew 9.9 percent in 2012. Latin America played a noteworthy role in the increase, as Internet ad spend in this region jumped 21.2 percent for the year. The 7.4 percent annual increase in Internet advertising in Europe was also noteworthy, given the region’s current economic situation.

Cinema ad spend continued to climb each quarter throughout 2012, which helped the sector see a spike of nearly 6 percent for the full year. While cinema spending remains relatively small, accounting for just 0.3 percent share of ad spend, regions like Europe (7.4% increase YOY) and Asian Pacific (10.3% increase YOY) continue to contribute to the medium’s growing importance among advertisers looking to reach theatre-going consumers.

“With 63 percent of ad dollars being spent to advertise on TV, it’s clear that the medium is widely regarded as the most efficient and effective way to reach consumers, continuing to grow especially in emerging markets,” said Randall Beard, Global Head, Advertiser Solutions for Nielsen. “As we move into 2013, we’ll be monitoring which regions, sectors and media types continue to drive global advertising, and which emerge and propel the industry to new heights.”

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METHODOLOGY

Nielsen Global AdView Pulse measures ad spending for TV, newspapers, magazines, radio, outdoor, cinema and Internet display advertising. . Ad spend is based mainly on published rate-cards.  Some markets may exclude select media due to data availability.

The external data sources for the other countries included in the report are:

Argentina: IBOPE

Brazil: IBOPE

Croatia: Nielsen in association with Ipsos

Egypt: PARC (Pan Arab Research Centre)

France: Yacast

Greece: Media Services

Hong Kong: admanGo

Japan: Nihon Daily Tsushinsha

Kuwait: PARC (Pan Arab Research Centre)

Lebanon: PARC (Pan Arab Research Centre)

Mexico: IBOPE

Pan-Arab Media: PARC (Pan Arab Research Centre)

Portugal: Mediamonitor

Saudi Arabia: PARC (Pan Arab Research Centre)

Spain: Arce Media

Switzerland: Nielsen in association with Media Focus

UAE: PARC (Pan Arab Research Centre)

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