Category: Worldwide

Slow Recovery Ahead for Total Media Ad Spending

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eMarketer recently published its first ever worldwide ad spending projections, forecasting double-digit growth in the online space as the global economy continues to improve.

That fast digital growth will be supported by rising spending around the world, with increases coming especially quickly to the developing markets in Asia-Pacific, Eastern Europe, Latin America and the Middle East and Africa.

The outlook for total media spending is also positive, but less so. The advertising market as a whole took a significantly bigger hit during 2009—down 10.5% around the world compared with a small rise of 2% in the online space. By 2014, eMarketer predicts $564 billion in total ad spending around the world.

In addition, its recovery will be slower. Marketers who turned to digital for its effectiveness and measureability in tough times will continue to appreciate those qualities as budgets go up, and with the world’s population spending more and more time with digital media, dollars will follow eyeballs.

Even the gains that overall ad spending will make in coming years will be largely due to spending online, which is included in the total. Traditional media, for the most part, will remain stagnant or in decline.

To purchase the full report, “Worldwide Ad Spending,” click here. Total Access clients, log in and view the report now.

Posted: July 13, 2010. Filed under: Advertising,eMarketer,The Economy,Worldwide  

Brighter Outlook for Germany’s Display Advertising Market

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A new forecast from the Online-Vermarkterkreis (OVK) sees spending on Internet display advertising rising between 8% and 9% in Germany during 2010. The OVK noted that interest in a range of display formats, including video and banners, has been growing faster than expected since the beginning of the year, prompting it to revise its predictions upward.

Advertisers were also more willing to invest than last year, said the OVK, now that the worst of the global economic crisis appears to be over.

Further rises in Germany’s online population are also encouraging marketers to boost their Internet presence. The most recent edition of “Internet Facts” prepared by the Arbeitsgemeinschaft Online Forschung (AGOF) reported that 49.7 million residents had been online in Q1 2010. 

Men still dominate online, accounting for 53.7% of Web users in Germany. The direct correlation between youth and Internet use remains too; 97% of individuals ages 14 to 19 were estimated to be online in Q1 2010, compared to 71% of those ages 50 to 59. These figures are unchanged from Q4 2009.

 Internet Users vs. Non-Internet Users in Germany, by Age, October-December 2009 (% of respondents in each group)

Interestingly, 35.2 million people in Germany were estimated to go online only or primarily for private reasons, and did not use the Net for work. Almost 64% of respondents said they regularly shopped or bought items online – roughly the same number who said they used the Web to follow world news.

Detailed results from “Internet Facts 2010 – I” are available here.

Posted: July 2, 2010. Filed under: Advertising,Consumers & E-Commerce,Demographics,The Economy,Usage,Worldwide  

A World Cup Full of Digital Potential (Even in the US)

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With the 2010 World Cup fast approaching, it’s a good time to reflect on how this event will unfold online, and how much the digital world has changed since the last time soccer’s global superpowers convened four years ago.

Back in June 2006, independently owned YouTube was getting about 100 million video views per month, compared with 6 billion in January 2010. Facebook was a closed network for college and high school students. Twitter did not exist as a public entity. World Cup organizer FIFA did not stream live games, so any streaming happened on P2P or pirate networks. There was only a smattering of post-match highlights on the Web.

Fast forward four years, and we can expect a surfeit of digital activity, starting with the live streams of the matches. In the US, ESPN/ABC and Univision have broadcast rights in English and Spanish, respectively, and those rights extend to the Web. Both entities will be streaming every match live on their digital platforms.

With ESPN, this comes with a catch. The company’s parent, Disney, has been in a stalemate with some ISPs over carriage fees, so ESPN3 (formerly ESPN360.com) is not available on, say, Time Warner Cable. This shuts out tens of millions of potential streaming customers. Univision, on the other hand, has no such restrictions, so anyone willing to stream matches in Spanish will be able to do so.

Both ESPN and Univision will carry the streams for free on an ad-supported basis. In global soccer, that means discreet banner ads that don’t interrupt the flow of the game – great news for fans, not so great news for marketers.

Still, the potential streaming audience in the US is huge. While the stereotype is that most Americans don’t care about soccer, the reality is many do, especially expatriates of foreign Fútbol powerhouses. Out of the 32 teams competing in the tournament, 11 have US-based populations of at least 1 million, according to Census Bureau surveys of ethnicity and ancestry in the US population.

Some of these groups will be more transfixed by the tournament than others. I expect the vast majority of the 30 million Mexican Americans in the US to follow the team’s every move. It’s telling that Mexico played a round of pre-World Cup exhibition games in the US, where it drew sellout crowds in Chicago, Houston, New York and even Charlotte, N.C.

Other nations with large US immigrant populations—Germany, England, Italy, France, the Netherlands—will also create a huge demand for World Cup streaming content. However, the numbers of these nations’ US-based contingents are harder to gauge. The US Census Bureau estimates that 50+ million people in the US self-identify as having German ancestry, but does that mean they’ll all be waving the flag when Germany takes the field? Probably not.

The same could be said for the 27.5 million people of English ancestry, the 17.7 million Italians and the 9.4 million French. These ethnic groups are well-assimilated into the general population, and they don’t identify with the motherland to the extent that other, smaller groups might. That’s not to say there won’t be huge numbers of rabid German, English, Italian and French fans cheering on their teams.

Then there are the Americans. Historically, the World Cup has not sparked the passion of US fans, even when the championship was held in the States in 1994. Then again, the U.S. hasn’t played particularly well in past cups, so a stellar performance this year could ignite a frenzy along the lines of the “miracle on ice” of the 1980 Winter Olympics, when the US defeated arch-rival the USSR to take the gold medal in men’s ice hockey.

Outside the US, the potential streaming audience is essentially as large as the Internet penetration levels of participating countries, plus those of soccer-crazed nations like China. Easily in the billions. However, it should be noted that in most countries, it’s entirely acceptable to stop everything to watch World Cup games on TV. Work comes to a complete standstill, so there’s no need to “sneak a peek” at lunch time the way US employees do during March Madness. In 2006, the World Cup Final drew more than 700 million TV viewers worldwide, compared to an estimated 154 million total viewers for the 2010 Super Bowl.

In Argentina, for instance, the minister of education authorized the country’s schools to broadcast World Cup games to students during the school day. His rationale (as if he needed any) was that watching the games had “pedagogic” value. In the same breath, he admitted that without such a policy, kids would skip school with “total complicity” from their parents.

Even if live streaming isn’t as important to global audiences as it might be to immigrant populations in the US, you can fully expect the global Web to light up with millions of post-game highlight videos and social media updates during the course of the tournament.

FIFA expects 5.5 billion page views on its site alone, up from 4.2 billion during the 2006 World Cup. And this is just the tip of the iceberg. Other sports sites with larger audiences, such as ESPN.com, will see much more activity than they do on a regular basis.

So what is the value of all this content? Hard to put a number on it, but a study by Global Web Index—a joint project by Lightspeed Research and Trendstream—estimates that FIFA is “undervaluing online World Cup rights” by bundling them into broadcast deals. The study’s author believes that significant numbers of people around the globe would pay to stream the World Cup and that FIFA is missing an opportunity to squeeze more revenue out of this content.

“This research shows that online football rights for the 2010 World Cup are massively undervalued,” said Tom Smith, Director of Global Web Index. “There is proven appetite for streaming all sports online and more importantly, consumers are increasingly paying for it. There’s a whole new generation of younger consumers, as well as specific markets like China and South Korea where paying for sports online is quickly becoming the norm. This research shows that the days when online sports rights are thrown in as a sweetener with the TV rights may be about to be shown the red card.”

Does this mean that FIFA will charge users for streaming the 2014 World Cup? I can’t imagine it hasn’t crossed their minds.

Posted: June 3, 2010. Filed under: Advertising,Demographics,Online Video,Social Media,Word of Mouth,Worldwide  

Online Ad Spending in Asia-Pacific Is Heating Up. Fast.

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Several recent reports have drawn some interesting conclusions about the online advertising market in the Asia-Pacific region. The takeaway: Things are heating up much faster than expected.

The Nielsen Company recently reported double digit growth for Q1 2010 advertising spending in Indonesia, Taiwan and Thailand over the same period in 2009. Ad spending in the first quarter of 2010 totaled IDR13.2 trillion ($1.27 billion), NT$9.9 billion ($299.5 million) and THB22.79 billion ($664.4 million), respectively. Out of those three countries, Indonesia recorded the highest growth at 26%, followed by Taiwan (22.8%) and Thailand (10.8%).

Online ad spending led the rebound in Thailand, growing 68.29%, mostly due to lower levels of investment. It’s important to note that Nielsen Indonesia did not include online advertising and Taiwan did not separate out figures on Internet ad sales from its total advertising spending.

Nielsen’s Hong Kong office also recently reported that online ad revenues reached HK$255 million ($32.7 million in US dollars) in Q4 2009 to boost full year spending to HK$869 million ($111.4 million US). The total number of advertisers and campaigns more than doubled from Q4 2008 to Q4 2009, signaling an acceptance of online ads among advertisers in Hong Kong.

The Interactive Advertising Bureaus of Australia, New Zealand and Singapore also recently released their latest data for total advertising spending, with the Web leading the way. Online advertising in Australia was up 17% in the first quarter of 2010 year-over-year, propelled by a surge in search and directory spending. In May, IAB New Zealand reported a 12.3% increase in Q1 2010 and IAB Singapore estimates that online spending grew 30.2% from the first half of 2008 through the first half of 2009.

I know it’s quite a bit of data to digest in a short blog post, but it boils down to one point: Online advertising saw sustained growth throughout Asia-Pacific, compared to a 9.8% contraction in total advertising spending worldwide from 2008 to 2009 as estimated by ZenithOptimedia.

It’s not anything new to say that Asia is a huge opportunity for marketers looking to reach out overseas to seemingly untapped masses. The region’s exploding mobile market, for example, offers plenty of potential for advertisers. (There are more mobile Internet users in China right now than there are people living in the United States. If that’s not potential I don’t know what is.) What this data does show, however, is that online advertising is booming in the Asian market, and for the first time, marketers won’t be able to count on Asia being “untapped” much longer, at least online.

Note: All currency conversions were made using the average 2009 exchange rate.

Posted: June 2, 2010. Filed under: Advertising,Asia,Worldwide  
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