Online Ad Spend to Overtake TV by 2016

Television advertising may be doing just fine despite the slumping economy. But within the next five years, it’s going to be eclipsed by online ads, according to a new report from market watcher Forrester Research. By 2016, Forrester says, advertisers will spend almost $77 billion online, comprising 35% of overall ad spending.

Within online advertising, however, lots of changes are ahead. According to Forrester:
* Mobile ads will overtake social ads and email marketing already this year: They’ll hit $8.2 billion in revenues by 2016 as advertisers will want to reach people while they’re on mobile phones and tablets, not just searching at their desk.
* Search ads’ market share will fall: Although search advertising will remain the largest segment, growing to $33 billion, its share of online ads will fall from today’s 55% to 44%. No wonder Google is rushing headlong into display and mobile advertising, not to mention social media.
* Display ads will rise anew: Mostly thanks to rich media ads such as video, these mainstays of most Web sites will see a resurgence, hitting nearly $28 billion and 37% market share of online ads by 2016 as brand advertisers hike spending online. Display ads offer more image-oriented messaging than the mostly direct-response search advertising. What’s more, advertisers will want to reach people wherever they are online, in particular on social media sites such as Facebook, not just while they’re searching on Google. Should be good news for Yahoo–maybe.
* Daily deals will decline: “Consumers will grow so conditioned to micro-impulse offers that they’ll lose practice at considered decisions — in all walks of life, not just when buying spa treatments,” writes study author Shar VanBoskirk. “Facing a cultural descent into maladroit judgment, employers (and spouses) will blacklist impulse deals to keep people intentional.” Look out, Groupon, LivingSocial et. al.–consumers may soon grow weary of your come-ons, if they’re not already.
* Social media will grow relatively slowly: In another surprise forecast, Forrester says spending on social media by marketers will hit only $4.4 billion, or 7% of online ad spend, by 2016. That’s partly because they can set up Facebook pages one time with relatively little ongoing cost, and partly because Facebook, Twitter and other social sites don’t offer much in the way of ad formats yet. Hmm, maybe Facebook’s right not to rush into an IPO yet?

Mobile User Click-through Rate Trends

Affluent Americans More Reachable via Internet

August 15, 2011

inShare9

Affluent Americans (those with a household income of $100,000 or more) use the internet and more frequently than the general population and are more likely to be aware of new products, companies and sites after viewing online ads, according to an August 2011 study from the Internet Advertising Bureau (IAB). For example, data from “Affluent Consumers in a Digital World” indicates 98% of affluent consumers use the internet, 24% more than the 79% of the general population that goes online.

In addition, affluent consumers spend 26.2 hours online weekly, 21% more time than the 21.7 hours the overall population spends online in an average week. The general population, on the other hand, spends about twice as much time weekly with TV and radio, 34 hours and 16 hours, compared to 17.6 hours watching TV and 7.5 hours listening to the radio among afffluents, respectively.

Digital Ads Produce Higher Awareness in Affluents

Compared with non-affluent consumers, affluent consumers are also somewhat more likely to be aware of new products (55% compared to 49%), new companies (51% compared to 49%), and new websites (46% compared to 44%) after viewing digital ads. In addition, 59% of affluent consumers reported taking action based on a digital ad during the preceding six months.
Furthermore, 37% of affluent consumers say they are most likely to pay attention to an online ad that relates to whatever website they are on (such as a car ad on a car site), almost 16% more than the 32% of overall consumers who say this.
According to the survey, affluent consumers overall currently comprise 21% of US households, have 70% of all consumer wealth, and spend 3.2 times more than other Americans on purchases.

Click Through Rate by Creative Ad Size

Click Through Rate by Industry Vertical

Video Ads Most Likely to Inspire Action

Seeing Digital Ad Above The Fold First Increases Action Odds Sevenfold

A new study by Casale Media, based on their analysis of nearly two billion ad impressions generated during the 1Q
2011, shows that online ads appearing "above the fold" are nearly seven times more effective at generating a click
through than those appearing "below the fold," and that the more times someone sees an ad the more likely they
are to click through and take action.
Users are three to four times more likely to act on an ad if it is the first or second one they see during their session,
says the report. Ad effectiveness plummets as the user progresses through their online viewing.
And, repetition works to an extent. Ads shown five times or more to a user were 12-14 times more effective than ads
shown less than five times.
Three criteria relating to the serving of online banner ads were examined:
• Placement relative to the page fold
• Moment of delivery within a user's session
• Frequency of exposure.
On the premise that advertising is all about capturing the attention of one's audience, the study tests the hypothesis
that not all impressions are created equal, by evaluating the effect of three ad placement variables (page positioning,
view order and frequency) on campaign performance (quantified in terms of click and action rates).
Three ad delivery parameters were examined to evaluate their influence on the number of resulting clicks and
actions:
Daily Clips
Thursday, August 4, 2011 Page 11
• Page positioning (above/below-the-fold): advertising delivered above the website fold is visible as soon as
the page is loaded, i.e. scrolling is not required.
• View order: ads are assigned a ranking according to their order of delivery within a user's session, e.g. the
very first ad to be delivered is considered to be in "first impression" position. View order relates to where in
the "tail" inventory is positioned, e.g. early impressions are considered to be "short tail", while impressions
delivered late in a user's site browsing session would be considered "long tail".
• Frequency: this refers to the number of times an ad is shown to a user over a fixed period of time.
The analysis revealed that when displayed above-the-fold, ads are almost 7 times more effective at generating a
click than ads delivered below the fold. The ratio is virtually identical when considering whether an action was
completed. These results support the findings of numerous studies based on eye tracking data, according to which
users spend the vast majority of their time looking at information positioned within a page's initially viewable area.
The impressions sampled for this study are segmented into eight different tiers ranging from 1st-2nd position to
255th and beyond. The data corresponding to each tier shows that both clickthrough and action rates decrease
rapidly as users progress through their online journeys: ads ranking in 3rd to 6th position see their click and action
rates plummet compared with ads showing as 1st/2nd impressions (almost 3-fold and more than 4-fold
respectively).
This data suggests quite clearly that as users are exposed to more and more ads within their browsing session,
those ads become less and less effective at capturing the user's attention, to the point of oblivion (a.k.a. banner
blindness). The earlier an ad is shown to a user, the more likely it is to be noticed and therefore, effective.
This echoes a common practice in print advertising, where "early" pages, situated near the main editorial content,
carry a higher advertising rate. Interestingly, the data shows that there is still value to extract even from very low
ranking impressions. Although these will makeup some proportion of any inventory, they should be excluded from
cases where an advertiser buys and values campaigns based on exposure alone.
It has been said that it takes nine times for a marketing message to move a prospect from a state of total apathy to
purchasing readiness. The results of this study certainly lean in the same direction, as both click and action rates
dramatically increase, almost 12- and 14- fold respectively, for ads that have been shown 5 times and over.
As in offline advertising, several exposures are required to achieve some degree of familiarity and to register with
users. However, it is also a well known fact that over-frequencied ads can be counterproductive. To mitigate the
effect, "frequency capping" mechanisms may be implemented to limit the number of times an ad is delivered to the
same user or "frequency optimization" to determine the optimal cap for a specific campaign.
The report concludes with some final thoughts:
• Relying blindly on a single indicator, such as a reach table, or technique like hyper-targeting, could prove a
mistake
• The basic requirement of getting an advertising message in front of eyeballs should not be taken for
granted. Without delivery above-the-fold, early session placement and frequency optimization, campaign
performance may suffer
• Diversification might mitigate the risk, but most of all, vigilance should be applied

Scavenger Hunt

Online Display Advertising Examples

Newspaper Site Generate Big Traffic In Q4

COMSCORE / NAA
Newspaper sites generated an average monthly audience of over 105 million unique visitors -- 62% of all adult Internet users -- during the fourth quarter of 2010, according to a study from comScore and the Newspaper Association of America.
By Staff
NetNewsCheck, January 25, 2011 2:48 PM EST
Newspaper Web sites generated a tremendous amount of traffic during the fourth quarter of 2010, drawing an average monthly audience of 105.3 million unique visitors -- 62% of all adult Internet users, according to a study from comScore and the Newspaper Association of America.

The study also found that newspaper sites continue to attract key demographics, reaching 58% of 25-to-34-year-olds and 73% of individuals in households earning more than $100,000 a year on average throughout the quarter.

Visitors to newspaper sites also generated an average of 4.1 billion page views each month, spending nearly 3.4 billion minutes browsing the sites during the quarter

"Newspaper Web sites stand out in today’s online environment, with trusted brands and high-quality journalism attracting an impressive audience that sets them apart from other players in the digital space," NAA president and CEO John Sturm said in a release. "As publishers continue to reinvent their business models, digital is at the forefront of a multiplatform transition that has seen steady growth in online advertising revenue."

Marketing Charts Q3 2010

Marketing Charts Data q3 2010

Trends in Consumers' Time Spent with Media

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Trends in Consumers’ Time Spent with Media

DECEMBER 28, 2010


Lisa E. Phillips—Senior Analyst
There are only so many hours per day that consumers can spend watching TV, reading newspapers and surfing the internet. But as marketers may suspect, the time devoted to media is undergoing some not-so-subtle changes.
eMarketer recently conducted a meta-analysis of data from dozens of research firms using a variety of methodologies. The result is a series of estimates of how much time consumers spend with all major media, regardless of multitasking or simultaneous usage, from 2008 to 2010. The estimates apply to average media usage of the general public, not solely to the users of each medium.

The average time spent with all major media combined increased from about 10.6 hours in 2008 to 11 hours in 2010, according to eMarketer. TV and video (not including online video) captured the lion’s share of all media time, about 40% each year. The internet’s share of media time increased over the same period, from 21.5% to 23.5%, as did mobile’s share, from 5% to 7.5%. The share of time spent with magazines and newspapers fluctuated between 10% and 7.5%, while radio and all other media—video games, movies in theaters and outdoor media—declined.

To account for multitasking, an hour spent watching TV and surfing the internet was counted as 1 hour for TV plus 1 hour for internet use. Also, use of each medium is discrete: Time spent listening to the radio does not include streaming stations from the internet, for example.

In 2010, consumers spent an average of 4 hours and 24 minutes each day watching TV and video, while being online for 2 hours and 35 minutes. Mobile devices received an average of 50 minutes’ worth of attention every day—the same amount of time allotted to newspapers and magazines combined. eMarketer expects that time spent with mobile devices will continue to increase, most likely taking time away from print media.

In fact, time spent with mobile devices is rising faster than all other media. In 2010, consumers spent 28.2% more time with mobile devices, which covers all mobile activities on all mobile devices. That gain was even higher than the 21.9% growth in 2009. Time spent on the internet showed moderate but steady gains, at more than 6% each year since 2008. All other major media posted declines: TV and video lost 1.1% in 2010, while magazines and newspapers lost 9.1% each. However, as consumers continue to consume more media every day, those losses are not immediately significant.

Marketers need to pay attention to these trends as they project budgets and develop marketing strategies for the coming year—and years. Mobile devices will claim more and more media time per day, while TV, print and radio will slowly lose ground to digital media. Those trends have been most apparent with print media in recent years, but are now beginning to show up in TV and radio usage as well.
Correction: An earlier version of this article incorrectly stated that the share of time spent with newspapers between 2008 and 2010 fluctuated between 8.5% and 11.5%.