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Archive for January, 2012

After Strong 2011, Twitter Ad Revenues to Grow 86% to $259 Million in 2012

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Strong Growth Forecast for Both Twitter and LinkedIn

NEW YORK, NY (January 31, 2012)—Advertising revenues at Twitter grew 213% to $139.5 million in 2011—the company’s second full year of selling advertising—and strong international growth is expected to push the company’s ad revenues to $259.9 million in 2012, according to a new forecast by eMarketer.

By 2014, eMarketer estimates, global ad revenues at Twitter will reach $540 million.

The new forecast includes eMarketer’s first estimate for Twitter ad revenues in 2014. It also essentially confirms eMarketer’s previous projections from September, which were slightly cut after Twitter rolled out several advertising offerings later than expected, including its self-service platform.

“Twitter is positioning itself for strong growth over the next few years,” said eMarketer principal analyst Debra Aho Williamson. However, “to achieve a trajectory similar to Google and Facebook, Twitter still needs a proven, turn-key ad platform and a significantly bigger user base to deliver the reach advertisers demand.”
Twitter launched a self-service advertising platform in November, but Williamson said the “verdict is still out” on whether advertisers will adopt the program with the same enthusiasm that fueled rapid growth for Google and Facebook.

“Twitter does have an advantage over its competitors, however, in terms of advertising performance,” said Williamson. Last year, Twitter reported that 80% of advertisers return to use the products again, while the average engagement rate for Promoted Tweets is between 3% and 5%.

Another source of growth comes from Twitter’s international expansion. Currently, 90% of Twitter’s revenues come from US sources, with other countries contributing just $26 million to its ad revenues this year, eMarketer estimates. The site will have diversified its revenue sources slightly by 2014, but 83% of dollars will still come from the US.

“Twitter’s continued expansion of its international sales force will help more than double the company’s overseas revenue each year for the next two years,” said Williamson.

LinkedIn, which has lower ad revenues and a lower growth rate overall than Twitter, gets a greater share of its ad dollars from outside the US. This year, when the site will see $226 million in ad revenues, a 46.1% increase over 2011, 32% of that money will come from abroad.

By 2014, US advertisers will account for 60% of LinkedIn’s revenues of $405.6 million, according to eMarketer estimates. This forecast represents an upward revision of LinkedIn’s revenues and growth rate compared with eMarketer’s previous forecast, issued in September 2011, due to a stronger-than-expected advertising program at the site.

eMarketer forms its estimates for advertising spending on Twitter and LinkedIn through a meta-analysis of estimates on consumer usage, marketer usage, ad pricing and impressions, as well as revenue estimates from research firms, company reports and other sources. eMarketer also conducted interviews with industry executives who provided perspective on the companies’ advertising business and revenues.

About eMarketer
eMarketer is the authority on digital marketing, media and commerce, offering insights essential to navigating the changing, competitive and complex digital environment. By weighing and analyzing information from different sources, eMarketer provides businesspeople, marketers and advertisers with the most complete view of digital marketing available.
www.eMarketer.com

Media Contact:
Clark Fredricksen
Vice President, Communications, eMarketer
Tel. 212-763-6056
Twitter

Posted on January 31, 2012.    

January 27, 2012: eMarketer in the News

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Here are a few of the top stories in which eMarketer data and analysis were featured during the past week or so:

The New York Times – Yahoo’s Income Drops 5% in Struggle for Market Share
Investors hoping for any hint of what is next for Yahoo in Tuesday’s earnings announcement will have to wait a little longer. Instead, they got the same old story: more cost-controls and declining revenue. Read more.

Reuters – Twitter Is Much More Than Social: Co-Founder Dorsey
Twitter is much more than a social network and has no time to waste worrying about newcomers like Google+ as it becomes more important as an information service and builds its advertising business, co-founder Jack Dorsey said on Sunday. Read more.

USA Today – Consumers in the Middle of Google-Facebook Battle
For the past two years, each company has experimented with different ways to divine more and more about how people live their lives on the Internet, without sparking a revolt. Read more.

Forbes – Twitter Takes the World: Microblogs Explode Overseas, Attract Global Brands
It’s hard to pinpoint the exact moment, but sometime during the last six months the game changed dramatically for Twitter and its overseas imitators. Read more.

The Hollywood Reporter – Amazon.com Weighs Separate Video Streaming Service to Challenge Netflix
BTIG analyst Richard Greenfield recently predicted that Amazon.com could this year launch a stand-alone video streaming service to challenge Netflix, which will report its latest quarterly financials after Wednesday’s market close. Read more.

Bloomberg Businessweek – Yahoo’s Revenue Trails Estimates as Demand for Ads Shrinks
Yahoo! Inc., the largest U.S. Web portal, reported revenue and forecast sales that fell short of estimates as ebbing demand for display advertising underscored the challenge facing new Chief Executive Officer Scott Thompson. Read more.

Bloomberg Businessweek – Facebook Said to Weigh Expanding European Head Office in Dublin
Facebook Inc. is seeking to more than double the size of its European headquarters in Dublin as the most popular social-networking site prepares for a possible $10 billion initial public offering, three people with knowledge of the matter said. Read more.

Advertising Age – New Yahoo CEO: Great Things in the Works, but I Can’t Share Them Yet
In his first earnings call since Yahoo named him CEO three weeks ago, Scott Thompson mixed bold proclamations of Yahoo’s potential with requests for just a bit more time to articulate his vision for the stalled internet behemoth. Read more.

Advertising Age – Mobile-Ad Spending Projected to Reach $2.61B in 2012
Mobile-ad spending in the U.S. is rising at a much faster clip than previously forecast and is projected to grow 80% this year, to $2.61 billion. Read more.

Advertising Age – Twitter to Roll Out More Brand Pages for Advertisers Who’ve Committed $25K
Twitter will start rolling out more brand pages next week for some brands and partners who have already committed to spending at least $25,000 on its ad products, including promoted tweets and trends. Read more.

Bloomberg – Amazon Fire Tablet Leaves Google Apps Behind
Since Google Inc. (GOOG) introduced its Android operating system in 2007, the company’s strategy has been simple: Give it to developers for free and make money when consumers click ads on the Web or through apps. That model is hitting a snag. Read more.

Los Angeles Times – Advertising Spending Online Expected to Surpass Print This Year
U.S. online advertising spending is expected to grow 23.3% to $39.5 billion this year, pushing it ahead of total advertising spending in print newspapers and magazines, according to an eMarketer report. Read more.

paidContent – Yahoo In Context: It’s Declining While The Online Ad Market Keeps Growing
Yahoo’s CEO Scott Thompson earlier today gave frank—and, the hopeful might say, encouraging—run down of the task ahead to turn around Yahoo (NSDQ: YHOO), an internet portal that was once on top of its game but has lately seem some serious decline. Read more.

Posted on January 27, 2012.    

New Forecast: US Mobile Ad Spending Soars Past Expectations

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Google captured more than half of US mobile ad revenues in 2011

NEW YORK (January 25, 2012)—The US mobile advertising market is growing far faster than expected, driven by the rapid ascension of Google’s mobile search advertising business, advertisers’ growing attraction to display inventory on tablet and smartphone devices, and the growing roster of mobile ad networks such as Google’s AdMob, Apple’s iAd, and Millennial Media.

eMarketer estimates mobile advertising spending in the US reached $1.45 billion in 2011, up 89% from $769.6 million in 2010. This year, US mobile ad spending will grow 80% to $2.61 billion. Despite rapid growth, however, mobile advertising accounted for less than 1% of total ad spending in the US in 2011, according to eMarketer.

eMarketer previously forecast US mobile ad spending would grow 47% to $1.8 billion in 2012, up from $1.2 billion last year. The significantly higher revision is the result of several factors, most notably a stream of new market data made available in the past few months from major advertising publishers and research firms.

“Right now there are many researchers out there looking at nearly the same empirical data about the mobile marketplace and drawing completely disparate conclusions,” said Noah Elkin, eMarketer principal analyst.

“In order to form the most complete picture possible about the mobile ad market, we think it’s essential to evaluate multiple information sources—rather than a single dataset—especially as the market remains immature,” added Elkin.

eMarketer forms its forecast for mobile advertising spending through a meta-analysis of estimates from research firms that track mobile ad spending and impressions, reported data from major mobile advertising publishers, and other sources. eMarketer also conducts interviews with executives at agencies, brands and mobile advertising publishers who provide perspective on the development of the mobile advertising business as a whole, as well as the revenues for individual companies.

The most significant adjustment in this forecast comes as a result of Google’s exceptional mobile advertising performance—which has propelled mobile search advertising far faster than previously expected, said Elkin.

eMarketer estimates Google’s share of overall US mobile ad revenues reached 51.7%, or about $750 million, in 2011. The company is both the biggest catalyst and beneficiary of mobile search’s growing footprint, earning an estimated 95% of all US mobile search ad revenues. This is the first time eMarketer has estimated market share and revenues for major players in the mobile advertising market.

eMarketer estimates US mobile search advertising more than doubled in 2011, with spending rising to $652.5 million, up from just $253.2 million in 2010. This year, advertisers will spend $1.28 billion on mobile search ads in the US, eMarketer estimates. eMarketer previously forecast mobile search advertising would reach $349.4 million and $594.8 million in 2011 and 2012, respectively.

“Google has translated its dominance of overall online and desktop search advertising into dominance of mobile search and mobile advertising at a rapid pace,” said Elkin. “Given the pace of this market’s expansion, eMarketer’s estimates for mobile search may still be on the conservative side.”

Apple Inc. and Millennial Media, which do not sell mobile search ads, trail Google in terms of overall US mobile ad revenues and market share by significant margins. Apple’s iAd platform generated $92.4 million in revenues last year—translating to a 6.4% share of overall US mobile ad revenues—while Millennial earned $90.9 million, or a 6.3% share.

Competition between Google, Apple and Millennial for mobile display dollars is healthier. eMarketer estimates Google earned $127.5 million from US mobile display advertising in 2011, or a 24.8% share of total US mobile display revenues. Apple’s share of display revenues reached 18% in 2011, just over Millennial’s 17.7% share, eMarketer estimates.

“While Google remains a leader in mobile display, it’s too early to call the race,” said Elkin. “Both Apple and Millennial have healthy, $90-million-plus US businesses, while companies with larger international footprints such as InMobi, Amobee, and JumpTap shouldn’t be discounted either.”

eMarketer estimates US mobile display ad spending, which includes spending on banner and rich media ads, will grow 93.5% to $861.7 million in 2012, after reaching $445.4 million in 2011. Spending on mobile video advertising will grow an estimated 122% to $151.5 million this year, up from $68.2 in 2011.

Meanwhile, mobile messaging advertising, which includes SMS, MMS, and P2P messaging, will see its share of overall mobile spending decline more rapidly than previously—the result of advertisers increasingly moving mobile dollars toward display, search and video. However, as a widely used mobile communication medium, messaging will remain vital for marketers as a support mechanism for mobile couponing, loyalty and customer care campaigns, Elkin said.

About eMarketer
eMarketer is the authority on digital marketing, media and commerce, offering insights essential to navigating the changing, competitive and complex digital environment. By weighing and analyzing information from different sources, eMarketer provides businesspeople, marketers and advertisers with the most complete view of digital marketing available.
www.eMarketer.com

Media Contact:
Clark Fredricksen
Vice President, Communications, eMarketer
Tel. 212-763-6056
Twitter

Posted on January 25, 2012.    

January 20, 2012: eMarketer in the News

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Here are a few of the top stories in which eMarketer data and analysis were featured during the past week or so:

The Economist – Cheerio to the Chief
Fond of his informal title of “chief Yahoo”, Jerry Yang has been an influential figure at the internet firm for many years. But on January 17th Yahoo! announced that Mr Yang, who co-founded the business in 1995 with David Filo, had resigned from its board of directors and would also step down from all other positions he holds at the firm. Read more.

The Wall Street Journal – New Display Ad Push Adds to Bag of Tricks
Google Inc., long labeled as a one-trick pony that sells Web-search text ads and little else, is quickly learning another trick: selling online display ads. Read more.

The Wall Street Journal – Hulu to Create More Original Shows
Online video site Hulu LLC is increasing its output of original shows, the latest in an escalation of TV-like programs being made directly for the Internet, further blurring the lines between the Web and TV. Read more.

NPR’s – Co-Founder Jerry Yang To Leave Yahoo!
Jerry Yang has resigned from Yahoo’s board and severed all ties with the company that he co-founded 17 years ago. Yang is leaving at a time when the Internet behemoth has struggled to remain relevant. David Hallerman tracks Yahoo’s ad sales at eMarketer. He says for many investors, Yahoo has lost its luster. Read more.

USA Today – Yahoo Co-founder Yang Exits the Company
Jerry Yang, Yahoo’s oft-criticized co-founder and former CEO, resigned from the board and will no longer be a part of the Internet pioneer, Yahoo said late Tuesday. Read more.

Advertising Age – Online Ad Spending to Pass Print for the First Time, Forecast Says
Online advertising spending will cruise past print in the United States this year for the first time, according to a new forecast by eMarketer. Read more.

Advertising Age Age – Trying to Decide on a Cause-Marketing Category? Consumer Location is Key
Purpose marketing, cause marketing — the phrases are among the biggest buzzwords in the industry today, and with good reason. Read more.

Bloomberg – Facebook Said to Weigh Doubling Size of European Headquarters in Dublin
Facebook Inc. is seeking to more than double the size of its European headquarters in Dublin as the most popular social-networking site prepares for a possible $10 billion initial public offering, three people with knowledge of the matter said. Read more.

Bloomberg – Accel Facebook Bet Poised to Become Biggest Venture Profit: Tech
A few months after struggling to raise a new fund in 2005, Accel Partners bet $12.2 million on a website run by a college dropout. Seven years later, that wager is poised to be the most profitable ever for a venture firm. Read more.

Business Insider – Online Ad Spending To Rival That Of TV By 2016
Most of the business press is leading with the news that this year, for the first time, internet ad spending is set to eclipse total spending on all print media. That is news for sure. Read more.

The Hollywood Reporter – Forecast: U.S. Online Ad Spending Will Outpace Print This Year
U.S. online advertising spending will grow 23.3 percent to $39.5 billion this year, pushing it past spending on newspapers and magazines, according to the latest forecast from research firm eMarketer. Read more.

CNBC – Online Advertising, Led By Google, to Pass Print Officially This Year
After a steady transition over the last decade, total U.S. online advertising revenue will officially surpass spending for ads in newspapers and magazines this year, according to forecasts from multiple research firms. Read more.

Posted on January 20, 2012.    

eMarketer Webinar: Measuring Social Media Success

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To listen and watch playback of the webinar, Measuring Social Media Success, click here. You can view the PowerPoint deck below.

View more presentations from eMarketer

The webinar will address these key questions:

  • Why is it important for marketers to get social media measurement right?
  • Why do marketers believe effective measurement is a challenge?
  • What metrics do marketers pay attention to to determine social media marketing success?
  • How can marketers focus on the metrics that matter to their business?

About Debra Aho Williamson

Debra is eMarketer’s lead analyst focusing on social media marketing and the demographics of social media users. A founding executive editor of pioneering internet business publication The Industry Standard, Debra is quoted for her analysis in the business press and invited to speak at major digital marketing internet events.

Sponsored by Clickable.

Posted on January 20, 2012.    

January 13, 2012: eMarketer in the News

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Here are a few of the top stories in which eMarketer data and analysis were featured during the past week or so:

The Wall Street Journal – Hulu to Create More Original Shows
Online video site Hulu LLC is increasing its output of original shows, the latest in an escalation of TV-like programs being made directly for the Internet, further blurring the lines between the Web and TV. Read more.

The Wall Street Journal – Facebook’s Zuckerberg Takes Long View
Facebook Inc. is gearing up for what is expected to be one of the biggest-ever initial public offerings for a Web company. But as the social network moves to an IPO it must prove to investors that it is ready for the big time. Read more.

Ad Week – With $25M Investment, eMarketer Girds for New Growth
eMarketer announced that private investment firm Stripes Group has taken a $25 million minority stake in the company. The new funding will be used to pay back early investors, including eMarketer’s major shareholder, Beehive Ventures LLC, as well as improve service and spur growth, the company said. Read more.

Advertising Age – eMarketer Nabs $25M to Accelerate Growth
EMarketer has had its fair share of suitors recently, according to Geoff Ramsey, co-founder and CEO. “We get calls from private equity firms and other companies all the time,” he said. Mr. Ramsey and his company have now turned away possible acquirers for the foreseeable future, instead taking on a $25 million investment from Stripes Group, a firm that targets growth investments in mature, profitable businesses. Read more.

Advertising Age – Twitter’s Redesign Isn’t Really Helping Advertisers
Certainly Twitter will need to attract brands to the platform to hit the $400 million mark in ad revenue that eMarketer is forecasting by 2013. The question for marketers is this: Has Twitter adequately addressed advertisers’ needs? The answer is: not very well. Read more.

Mashable – 5 Strategies for Creating Magnetic Content Online
Brands are content publishers. And the Holy Grail of brand-produced content is magnetic content — an emerging buzzword eMarketer describes as a form of marketing that “involves blurring the lines between content and advertising,” and calls out as one of the top trends for 2012. Read more.

MediaPost – Why Can’t I Be You: Online Video Vs. TV
The TV is struggling to stay relevant in a world of rich media, connected devices and a world where online video has grown to over 50% of the U.S. population, according to eMarketer, and is now a mass market platform. Read more.

paidContent – Interactive TV Advertising: Not Huge Now, Will This Be The Year It Grows?
Last week’s CES event brought a clutch of announcements around interactive TV services—specifically around more content getting pushed to devices. That points to growing attention to the medium: will advertising follow? Read more.

Posted on January 17, 2012.    

January 6, 2012: eMarketer in the News

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Here are a few of the top stories in which eMarketer data and analysis were featured during the past week or so:

The Wall Street Journal – Yahoo Leaves Investors in Limbo
The company’s choice for its new chief executive, Scott Thompson, looks uninspired. It suggests either that the company had a tough time finding a new leader or that the board hasn’t learned from its poor decision to hire Carol Bartz. In either case, it may be time for shareholders to take a more active role in the company. Read more.

The New York Times - Yahoo’s Renovator in Chief
After a few months’ search, the struggling Internet media company announced on Wednesday that its new chief executive would be Scott Thompson, the president of PayPal, the online payment service owned by eBay. Read more.

The Economist – Scott Lands
Yahoo! has finally found itself a new leader. On January 4th the company announced that Scott Thompson, the former head of PayPal, an online-payments business owned by eBay, would start work as its chief executive next week. When he takes over the corner office in Sunnyvale, Mr Thompson will find an in-tray overflowing with bad news. Read more.

The Wall Street Journal - Despite New CEO, Yahoo Still Faces Problems
Scott Thompson, the 54-year-old president of eBay’s PayPal electronic payments unit, is tasked with turning around Yahoo’s core online-advertising business, the company said. Read more.

Fortune - Web Advertising’s Master Auctioneers
When you visit just about any website these days, ads appear as the site loads. But what you can’t see is that many of those ads were not predestined for your eyes — advertisers won the spots in near-instantaneous auctions occurring in the quarter of a second between click and use of the site. Read more.

Forbes – Facebook Dresses Up for IPO With More Ads
As Facebook’s much-hyped IPO approaches, the company has stepped on the gas to bolster its monetization; however, this could come at the expense of aggravating users. Read more.

Bloomberg BusinessWeek - Apple Is Said to Hire Executive Todd Teresi to Run IAd
Apple Inc. hired Adobe Systems Inc. executive Todd Teresi to lead its iAd mobile-advertising business, three people with knowledge of the matter said, filling a role in an area where the company has struggled. Read more.

USA Today – Yahoo Names PayPal Exec Scott Thompson as CEO
Internet pioneer Yahoo on Wednesday named Scott Thompson its next CEO in an effort to reverse the flagging fortunes of its online ad business, which has been battered by rivals Google and Facebook. Read more.

Advertising Age – Yahoo’s New CEO: We Will Focus on Both Content and Technology
The appointment of PayPal president Scott Thompson, whose background is in tech and products rather than media, came as a surprise to current as well as former Yahoo execs. Read more.

paidContent – What’s Coming in 2012: Digital Advertising Up Close and Personal
According to figures from ZenithOptimedia, global advertising revenues will reach $486 billion in 2012, a rise of 4.7 percent compared to 2011. With wider economic pressures bearing down on the overall ad market, digital ad spend is still seeing healthy growth. Read more.

Posted on January 6, 2012.