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Archive for December, 2012

eMarketer Cuts Forecast for Global Ad Spending Amid Economic Fears

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Analysis of information from more than 500 data sets on global ad spending suggests slowdown, though some markets remain at healthy spending levels

NEW YORK (December 28, 2012)—Global ad spending is growing slower than previously expected this year, according to a new forecast by eMarketer. And while the advertising industry is expected to continue growing spending at relatively healthy rates for the next several years, fears in many countries of continued or renewed economic slowdowns have caused advertisers to set spending levels slightly lower.

eMarketer estimates total media ad spending worldwide rose 5.4% this year to just under $519 billion—an uptick in the growth rate since 2011’s increase of 3.6%. Ad spending will continue to climb at a similar pace throughout eMarketer’s forecast period, which extends through 2016. By that year, eMarketer forecasts, worldwide ad spending will top $628 billion.

In May, eMarketer forecast total ad spending worldwide would grow 6.8%—more than a percentage point higher than the revised estimate—to $538 billion this year.

eMarketer is relatively distinct in its methodology for global ad spending. The company forms its forecasts through an analysis of various elements related to ad spending—including macro-level economic conditions, historical trends of the advertising market, estimates from other research firms, investment banks and other forecasters, and consumer media consumption trends—at a country and regional level before building its worldwide model.

In this case, eMarketer analyzed more than 500 data sets from over four dozen companies that track ad spending, looking at more than 29 countries and six major regions worldwide, to form its forecast.

The downward revision comes as a relative consensus among many major media buyers, research firms, and investment banks—whose ad spending estimates are each tracked and evaluated by eMarketer based on their respective methodologies, definitions and historical accuracy—suggests that spending levels in several major global ad markets have come in lower than previously thought.

Taking a bottom-up approach to evaluating the global ad spending market

eMarketer evaluated comparative data from many sources in each major global ad market before creating its figures for the global market. There are several major ad markets, including Brazil, China, Canada, Japan, the United States and the United Kingdom, that help buoy worldwide growth despite declines and flat spending in others.

eMarketer estimates the fastest growth during the forecast period will come from Latin America, where ad spending is up 11% this year to $34.66 billion. By 2016, ad spending in Latin America will reach $51.33 billion. Asia-Pacific, Eastern Europe and the Middle East and Africa will also enjoy higher-than-average growth rates, while growth in North America and Western Europe will be significantly slower. This year, Western Europe has struggled to grow ad spending at all, with several major countries posting spending declines.

In the US, the world’s biggest ad market by far, spending is estimated to be up 4.9% this year to $166 billion. That level of growth will moderate over the next several years, eMarketer predicts, and 2016 spending levels will near $190 billion.

By eMarketer’s analysis, most research firms have predicted slower ad spending growth in the US, though absolute dollar levels vary. While eMarketer’s growth projection is relatively bullish, our forecast of absolute spending levels is comparatively conservative.

The No. 2 country in the world in terms of ad spending is Japan, though it’s set to be replaced by China in 2014. eMarketer estimates spending is up 3% this year, in line with most research firms other than PricewaterhouseCoopers, which predicts significantly higher growth of nearly 10%. Estimates of absolute spending levels fall within about 10% of each other, with eMarketer’s figure of $47.3 billion at the low end of the range.

China, the third-largest ad market in the world, is growing ad spending much more quickly than mature markets like the US or Japan. eMarketer estimates ad spending in the country is up 13% this year, slightly higher than Warc’s November 2012 projection of 11.5% growth. Research firms that predicted significantly higher growth rates tended to make those forecasts earlier in 2012, when overall economic prognostications for China were more favorable. Still, eMarketer predicts double-digit growth rates through the rest of the forecast period in this massive country will help boost Asia-Pacific—and worldwide—growth rates.

The biggest ad spender in Europe, and the fourth-largest in the world, Germany will post near-flat growth of 1.5% this year, with spending reaching $27.7 billion. Some researchers have even forecast a decline in ad spending in Germany, but forecasts made in Q4 of this year expect growth of around 1% or just above. eMarketer expects this sluggish growth to continue in Germany throughout the forecast period.

Ad spending growth in the UK is somewhat better, and closer in line with US rates. eMarketer estimates spending reached $24 billion this year, somewhat higher than other firms’ predictions. ZenithOptimedia, which has the most recent estimate of ad spending in the country and comes in significantly lower than eMarketer, does not include directories spending in its figures.

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.

Media Contact:

Clark Fredricksen
Vice President, Communications, eMarketer
Tel. 212-763-6056

Posted on December 28, 2012.    

eMarketer: Unexpected Growth from Facebook, Google Lead to Significant Uptick in US Mobile Advertising

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“Native” display ad formats, search propel faster-than-expected growth


NEW YORK, NY (December 17, 2012)—US mobile ad spending is growing more quickly than previously expected, due in large part to the success of so-called “native” ad formats like Facebook’s mobile newsfeed ads and Twitter’s Promoted Products. These products represent a seamless experience across platforms for consumers – which means platform owners are able to successfully earn (or, in some cases, not lose) revenue as consumers continue to increase time spent on mobile devices with smaller screens unsuited to much of the inventory that accounts for the bulk desktop display advertising.

eMarketer expects overall spending on mobile advertising in the US, including display, search and messaging-based ads served to mobile phones and tablets, will rise 180% this year to top $4 billion. eMarketer’s previous forecast, made in September 2012, was for substantially smaller growth of 80%, to just $2.61 billion. Now eMarketer expects US mobile ad spending to reach $7.19 billion next year and nearly $21 billion by 2016, a significant upward revision.

Facebook’s Q3 mobile performance is one major reason for the change. The social networking giant offered no mobile ad opportunities at the beginning of 2012 but grew its mobile business at an astonishing – and unexpected – rate. Before Facebook’s Q3 earnings call, most researchers and analysts expected US mobile ad revenues of roughly $45 to $100 million, according to figures examined by eMarketer. While the company’s total ad revenues were, for the most part, unsurprising, the share of revenues attributed to mobile advertising was far from it.

eMarketer, which bases its figures on a meta-analysis of data from research firms, investment banks and other sources on ad revenues, ad impressions, ad pricing and other factors, now estimates Facebook’s US mobile ad revenues will hit $339 million in 2012.

Google also posted better-than-expected mobile ad growth in Q3. Fueled primarily by direct-response advertisers, Google now controls a 56.6% share of the US mobile advertising market, eMarketer estimates.

Mobile Search

Most of Google’s mobile ad revenues come from search, and eMarketer estimates Google maintains a 93.3% share of the overall $1.99 billion US mobile search ad market. Spending on mobile search ads in the US is expected to jump 55% to $3.6 billion next year—of which Google is expected to earn a 92.4% share.

Search, however, is not enjoying growth at quite the same level as native display formats, though it is growing quickly. Shifting consumer behavior has dramatically increased the volume of mobile searches and paid clicks on mobile devices, but advertisers remain hesitant to pay rates per mobile click comparable to those on the desktop, as mobile searchers are still less likely to convert into purchasers than their desktop counterparts.

Mobile Display

Facebook is now expected to earn more display revenue than any other mobile publisher this year thanks to its ability to—more or less—redistribute revenue from mobile to desktop through its native display products. eMarketer estimates the company will take home an 18.4% share of the US mobile display advertising market in 2012.

Still, Google’s mobile display business is also growing quickly and the company will earn $315 million in US mobile display ad revenues, driven primarily by the underlying strength of its AdMob network and its pre-existing relationships with advertisers looking to extend their display efforts to mobile devices. As a result, Google’s share of US mobile display advertising will reach 17% this year—higher than all but Facebook. The bulk of future growth for Google’s mobile display business, eMarketer predicts, will come from mobile monetization of YouTube.

Twitter’s 2012 US mobile ad revenues have also been revised upward to $134.9 million from $116.8 million expected as of September, representing 3.5% of the total US mobile ad market and 7.3% of the mobile display ad market. Strong performance from competitors such as Google and Facebook suggests Twitter will also have a faster-than-expected transition of native ad inventory from desktop to mobile devices. Additionally, the nature of Twitter’s Promoted Products and their integration with the platforms core user experience allows for this transition to be seamless across platforms, meaning rising mobile usage will boost mobile ad revenues without negative effects on user experience.

Apple, which currently holds an estimated 6.7% of the US mobile display ad market, has the potential to capture more market share in the long run, eMarketer believes, because of a strong capacity to invest and expand that business if it is successful. The company can continue to leverage the success of its iOS platform on iPhones and iPads in favor of iAds, as it has begun to do by phasing users out of native YouTube and Google Maps apps.

Millennial Media, by contrast, which has performed similarly to Apple in the past, has less potential to scale mobile ads in this way. But Millennial does have an outsized presence in the marketplace despite its 5.1% share of the after-TAC market. The company is well-positioned to use its vast audience to implement new technologies, such as geofencing – something companies other than ad networks will likely adopt much later. Overall, Millennial is in a position to capitalize on overall mobile ad market expansion, though against rivals with control over operating systems, devices and app marketplaces.

Despite the jump upward, mobile still represents a small slice of the total ad pie. Just 2.4% of total ad spending in the US will go toward mobile ads in 2012, eMarketer estimates. Mobile is expected to reach an 11% share of total US ad spending by 2016—when it will overtake radio but still be below print.

DEFINITIONS AND NOTES: Estimates of average time spent with media are based on the total US adult population according to the US Census 2008 release, not the number of users of each medium. Mobile includes all nonvoice activities on all mobile devices, including VOIP and video chat services such as Skype. Online includes all internet activities on desktop and laptop computers and other nonmobile connected devices such as internet-connected TVs. Print includes offline magazines and newspapers. Radio excludes online radio. TV includes live, DVR and other prerecorded video such as video downloaded from the internet but saved locally. Other includes video gaming, cinema, outdoor, etc.

Note: Display data includes banners and ads such as Facebook’s Sponsored Stories and Twitter’s Promoted Tweets, rich media and video on WAP sites, mobile HTML sites and embedded in-application/in-game advertising. Search data includes advertising on search engines, search applications and carrier portals. These figures represent net mobile advertising revenues after companies pay traffic acquisition costs to partner sites. Revenues for publishers (such as Facebook, Pandora or Twitter) may come from inventory purchased via ad networks (such as Millennial Media or iAd).

Methodology: Estimates are based on the analysis of estimates from other research firms; reported and estimated revenues from major mobile ad publishers; consumer mobile usage trends; and eMarketer interviews with executives at ad agencies, brands, mobile ad publishers and other industry leaders.

Posted on December 17, 2012.    

eMarketer Expands Coverage of Industry Verticals

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Company adds new reports, staff to boost coverage of healthcare and pharmaceuticals, consumer packaged-goods, automotive, and other industries

NEW YORK, NY (December 12, 2012) – eMarketer announced today that it will significantly expand its coverage of several major verticals to meet growing demand from eMarketer clients focused on those industries.

eMarketer will create dozens of additional reports next year on the travel, healthcare and pharmaceutical, consumer packaged-goods, and automotive sectors, in addition to the thousands of charts, interviews and articles it already publishes on those verticals.

“We are pleased to deliver even more dedicated, industry-focused information to clients, especially as demand for eMarketer insights derived from multiple research perspectives grows across all verticals,” said eMarketer President Lisa Church.

To support clients’ growing need for industry-focused information on the digital marketplace, eMarketer also recently added several new hires to its editorial staff.

eMarketer hired Patricia Orsini earlier this year to boost its coverage of the consumer packaged goods market. She previously worked at, Adweek and Gannett.

The company also hired Richard Meyer, who has spent 17 years in the healthcare marketing industry, to cover the pharmaceutical and healthcare markets. He previously worked at Online Strategic Solutions, Medtronic-Diabetes and Eli Lilly & Company.

Michael Hudson, previously a columnist at the Detroit News and an editor at, was hired this summer to focus on the automotive industry.

eMarketer hired Dan Marcec in March to cover marketing trends in the travel industry.

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.

Media Contact:

Clark Fredricksen
Vice President, Communications, eMarketer
Tel. 212-763-6056

Posted on December 12, 2012.    

The Digital Privacy Dilemma

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Consumers Care—Sometimes—About Privacy, Though Their Actions Often Say Otherwise

New York, NY (December 12, 2012) – When consumers are asked whether they worry about digital privacy, they say yes, they are concerned. However, a new eMarketer report, “The Digital Privacy Dilemma,” finds that the degree of such concern is not terribly high. And while voicing worry about privacy, they often compromise that privacy in their behavior.

The report looks at some of the reasons behind consumers’ competing feelings and answers key questions including:

  • Looking beyond simple care-or-don’t-care numbers, how much do consumers care about digital privacy?
  • What steps, if any, do consumers take to keep personal information private?
  • How do consumers feel about online behavioral advertising that relies on usage of data about their digital activities?

In polling of US internet users conducted by Harris Interactive in June 2012 for TRUSTe, a company that provides privacy-related services to businesses, nearly all the respondents said they worried about digital privacy at least sometimes. But fewer than half said they did so “frequently” or “always.” While the findings suggest that serious worriers constitute more than a niche audience, they’re less than a landslide of online consumers.

This does not mean digital privacy is merely the preoccupation of a few oddballs. When ordinary people do think about the matter—as most do at least occasionally—they’re wary of having companies track their online activity. Moreover, they tend to conflate issues like identity theft with marketers’ collection and usage of data about their digital activity. Many claim to have taken specific steps to limit their leakage of personal information.

Digital know-how is a limiting factor on consumers’ actions, though. In a February 2012 Pew survey that focused on search engine usage, just 38% of online adults said they were “aware of ways to limit how much personal information websites can collect about them.” Even among college graduates, fewer than half (44%) claimed to have such knowledge.

Among respondents who claimed to know how to keep personal information away from the websites they use, large majorities in Pew’s polling said they were taking several steps along those lines.

“Consumers aren’t very aware of—and show scant interest in learning about—the “value exchange,” in which usage of digital information helps support the free content they enjoy,” said eMarketer. “Nor is there reason to think greater transparency about how companies use such data will quickly resolve the worries people feel.”

Though consumers likely don’t care as much about digital privacy as survey toplines suggest, a marketer would be unwise to ignore the unease they do feel about it.

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.

Media Contact:

Clark Fredricksen
Vice President, Communications, eMarketer
Tel. 212-763-6056

Posted on December 12, 2012.    

As Mobile Gains Ground in Mexico, Advertisers Take Note

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Mobile advertising represented about 7% of digital ad spending in 2011

New York, NY (December 5, 2012) – Mobile phone adoption in Mexico has been slow, hobbled by general economic conditions and by a lack of competition in the mobile space, which has kept prices high for advanced mobile devices and for data plans. Compounding the situation, cultural preferences have helped hold back widespread adoption of postpaid phone plans, which tends to be a bellwether for increased mobile use. But a new eMarketer report, “Mobile Mexico: Overcoming Obstacles to Growth” finds that there are clear signs of mobile growth on the horizon.

The report answers key questions for brands looking to explore Mexico’s mobile advertising market, including:

  • Why is Mexico’s mobile market lagging behind those of similarly developed countries?
  • What is the profile of the typical mobile user in Mexico?
  • When will Mexico’s smartphone user audience reach critical mass for marketers?

The nation’s two largest mobile carriers, which provide service to roughly 90% of Mexico’s mobile lines, have launched limited 4G-LTE services and are expected to continue expanding those networks. They are also offering aggressive subsidies for advanced mobile devices in order to lure prepaid plan holders into more lucrative and longer-lasting postpaid data plans. These strategies could mean lower price points for entry-level and lower-income consumers interested in acquiring 3G devices, and further growth among early 4G adopters with higher incomes.

Growth can’t be taken for granted, though. eMarketer estimates the number of mobile connections in Mexico at 98 million for the year 2012, equal to 85.2% of the total population. By comparison, the number of mobile connections as a percentage of population in Brazil is 134%, according to eMarketer’s estimates.

Perhaps the most telling statistics about Mexico’s mobile market have to do with its notably slow adoption of postpaid mobile plans, which are typically key drivers of increased use of more advanced mobile platforms. According to GSM Association and A.T. Kearney, 86% of Mexico’s mobile subscriptions last year were prepaid.

But advertisers in Mexico are not necessarily waiting for extensive smartphone and postpaid plan uptake before forgoing ahead with mobile efforts.

This year, IAB México and PricewaterhouseCoopers (PwC) released 2011 mobile ad spending data for Mexico and estimated that mobile advertising represented about 7% of digital ad spending that year. By comparison, the local branches of the Interactive Advertising Bureau (IAB) and PwC in Spain, the UK and the US estimated that mobile ad spending in those countries represented only 2%, 4% and 5%, respectively, of digital ad spending in 2011.

And SMS marketing and advertising are still popular as well. According to March 2012 data from IAB México and Millward Brown, SMS ads were the type of mobile ads most commonly recalled by Mexico’s mobile device owners.

As Gerardo Fernández Velarde, head of marketing and operations at C-MOVIL, the mobile subsidiary of Corporación Interamericana de Entretenimiento (CIE), explained: “Many marketers think they need to build an app or something similar for smartphones, but that is not actually true. In Mexico, 80% to 85% of [mobile] users have feature phones, and the marketers can begin by campaigning with SMS, mobile sites, etc.”

Posted on December 5, 2012.    

eMarketer in the News: November 30, 2012

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The Wall Street Journal – Investors Cool on Foursquare
November 20, 2012: Foursquare is expected to bring in about $2 million in revenue this year, people familiar with the matter said, by selling targeted coupons. That is well behind the pace set by Facebook, which generated $153 million in revenue selling ads in its fourth year, and Twitter, which sold $45 million in ads at the same point in its history, according to research firm eMarketer. Read more.

The Wall Street Journal – ComScore To Include Mobile Traffic in New Measurement
November 29, 2012: This year, for example, Americans will spend about 11.7% of their daily media consumption with mobile devices, but mobile will only make up 0.9% of advertising spending, according to eMarketer. Read more.

Bloomberg Businessweek – Web Advertising to Grow Faster Than Broad Market in 2013
November 20, 2012: Mobile ads, which still make up a smaller part of total spending, may grow 51 percent to $9.7 billion, according to New York-based eMarketer. Read more.

CNBC – Retailers Are Hoping for a Pinterest Holiday
November 19, 2012: This holiday shopping season will mark a turning point for Pinterest. The social scrapbooking platform valued at $1.5 billion isn’t making money itself yet. But it’s been helping retailers connect with customers since it launched a year and a half ago, and now it’s actively trying to help brands cash in. And this all-important shopping season companies are increasingly using it to drive online sales, according to a new study by eMarketer. Read more.

Fast Company – Why Marketers Need to Get Mobile
November 20, 2012: eMarketer estimates that in 2012, U.S. consumers will spend an average 82 minutes per day on their mobile device, which is more than double from 2010. Read more.

CNN – Adam Bain: Twitter’s Adman Delivers
November 27, 2012: With 140 million active users, Twitter has now become a staple for advertisers. It is expected to pull in $288 million in ad revenue this year, according to eMarketer, a 107% jump over 2011, and is now valued at $8 billion. Read more.

Adweek – Real-Time Bidding’s Biggest Buyers
November 26, 2012: eMarketer expects spending on real-time bidding to nearly double this year. In fact, the share of brands that buy their display ads via a programmatic pipeline of ad tech firms versus direct relationships with publishers will make up 13 percent of U.S. display spending in 2013, the research firm projected. Read more.

Posted on December 3, 2012.    

Mobile Speeds Up the Search for Fast Food

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Restaurants are the most common mobile search

New York, NY (December 3, 2012) – For consumers, the question of what to eat is often followed by “What’s nearby?” Today, smartphones are where many are turning for guidance, according to a new eMarketer report, “Mobile Fast Food Marketing: How QSRs and Fast Casuals Are Getting Quicker and Faster.” With the help of store locators, menu finders, mobile coupons and ordering apps, searchers are making more dining decisions while on the move.

This report looks at how consumers are using mobile to find and order fast food, and how fast food marketers are using mobile to communicate with customers. It answers key questions including:

  • How many restaurant searchers are in their cars when looking for a place to eat?
  • Do restaurant marketers need to have apps?
  • Are fast food diners ready for mobile ordering?
  • What’s the level of consumer interest in mobile payments and wallets?

Fast food, for eMarketer purposes, is used to refer to quick-service restaurants (QSRs) like McDonald’s and fast casuals like Five Guys Burgers and Fries. The two segments are increasingly blurred for both customers and marketers, and mobile is having a major impact on trends in both industries. Mobile is high on the list of technologies both fast casuals and quick-service restaurants plan to adopt.

There is good reason for fast food marketers to focus on mobile. Fast food customers are more likely to own smartphones than the general public. Forty-four percent of consumers who eat fast food at least monthly owned smartphones in the last quarter of 2011, according to foodservice research firm Sandelman & Associates. That’s 14 percentage points higher than eMarketer’s estimate of overall smartphone ownership for the same period.

And they are using the phones to look for dining options.

According to local search advertising company YP, 24% of mobile searches on its network in September 2012 were for restaurants, the largest share of any category.

When consumers use their phones for fast food restaurant searching, proximity is very important. A June 2012 xAd and Telmetrics study found that 64% of smartphone users searching for restaurants expected results within walking or driving distance.

The same study also pointed up the immediacy of mobile restaurant searchers. Nearly two-thirds (64%) purchased their meal within an hour of their search. Eighty-four percent of smartphone users eventually converted.

So there is plenty of reason for marketers to seek out—and make themselves seamlessly available to—these mobile users on the hunt for the next meal.

To do so, some are using mobile coupons and loyalty programs to gain customers, as well creating mobile-optimized websites. Some are even going a step further and providing ordering capabilities through a mobile website and apps. For a smartphone user putting in an order while heading out the door, fast food is getting unmistakably faster.

“From the appropriation of factory assembly lines to the invention of drive-thru windows, the fast food industry has always looked for new ways to streamline the process of moving meals from kitchen to customer,” said eMarketer. “Mobile is the latest tool to help further that goal for restaurant operator and patron alike.”

Posted on December 3, 2012.