Posts Tagged ‘emarketer’

Publishers and broadcasters who develop mobile Web sites are not just reaching a younger audience now. They’re also serving the wants and needs of their baby boomer audience as well, according to EMarketer. While there’ s been a rush to cell phone usage from boomers, their use of smart phones and Web use via their mobile devices has developed more slowly. But it is developing.

Of all boomers 85 percent now have mobile phones, though the majority are feature (as opposed to smart) phones. Only 55 percent consider their mobile devices a necessity, however.

Boomers made up 30.6 percent of all mobile phone users in August 2009, according to ComScore. However, they made up only 19.6 percent of all touch-screen users and 21.1 percent of smartphone users. The younger the boomer, it seemed, the more likely were the use of touch screen and smart phone, with the 45-54 age group predominating in the use

“Boomers are underrepresented among smartphone users but are becoming more interested in the devices,” said Lisa E. Phillips, eMarketer senior analyst, in the report. “Smartphones are now well established in the marketplace, which should help to convince the portions of the boomer cohort that are not early adopters. The business aspect of smartphones should appeal to the many boomers who say they plan to continue working after retirement age.’

The price of smart phones is a factor for this age group, but as prices come down, and as carriers expand on and lower time restrictions for their free-phone-buy-for-loyal-customer offers more and more boomers are expecting to upgrade to smart phones and Web access via mobile

Though the numbers are tapering off just slightly as a result of what might be saturation, those who look online for health information are still firmly in the majority. EMarketer points out several sources that attest to this. Harris Interactive’s latest annual survey indicated 154 million respondents look for health help on the Web, or 78 percent of those surveyed. According to Rodale’s “Consumer Reaction to DTC Advertising of Prescription Drugs” survey, almost 50 percent of consumers said online health videos were a top resource for information on medical conditions and prescription drugs. The most popular video sources were health sites such as WebMD, pharmaceutical sites, video-sharing sites such as AstraZeneca’s YouTube channel devoted to asthma-fighting Symbicort, and social networking Web sites.

“Consumers are becoming increasingly active and engaged in making decisions on their health,” Melody Toorneman, AstraZeneca’s director of the online channel, told eMarketer. “Social media channels are often where they go to seek information, support and interactive dialogue with friends, family and peers who are experiencing the same health issue.” Publishers would do well to keep this hefty interest in mind as they determine content.

As marketers slash ad budgets in this economy eMarketer has predicted a decline of more than eight percent in U.S. total media ad spend in 2009, after a nearly four percent decrease in 2008. But, the research firm reported, word-of-mouth marketing is growing, primarily due to the rise of new media channels, such as blogs, social networks and other online communities. PQ Media found that US word-of-mouth spending on online communities increased 26.6 percent in 2008 to $119 million. While PQ  predicts a slowed pace from its annual 37.6 percent each year since 2003, the firm said that word-of-mouth marketing will continue to rise nearly 15 percent each year until 2013.

U.S. ad spending on social networks will fall 3 percent in 2009 to $1.14 billion in 2009, from $1.18 billion in 2008. That’s a significant turnaround from previous years. Spending grew an estimated 33 percent in 2008 and 129 percent in 2007.

The reason, says EMarketer which released the results, is due to a drop in spending at MySpace.

EMarketer estimated in its December 2008 forecast that marketers would spend $630 million to advertise on MySpace in 2009. That estimate has now been reduced 15 percent to just 495 million.

News Corp. executives said in a May 6 conference call with financial analysts that ad revenues fell 16 percent at Fox Interactive Media (FIM) in the January–March 2009 quarter, compared with the previous year. MySpace makes up the bulk of FIM’s revenues. (News Corp. does not break out MySpace revenues separately.)

MySpace’s woes are not reflected in estimates for other social networking companies. Ad spend on Facebook is expected to increase 9.5 percent in 2009, to $230 million, while US ad spending on widgets and applications is projected to reach $70 million, up 75 percent from 2008. U.S. spending on all other social network sites combined is expected to rise 1.5 percent to $345 million.

EMarketer has also issued estimates for ad spending on MySpace and Facebook outside the U.S., the first time the research firm has reached beyond the U.S.

Overall, marketers worldwide are expected to spend $520 million to advertise on MySpace in 2009, with $495 million coming from the US and $25 million from other markets. Non-US spending on Facebook is expected to reach $70 million this year, for a total of $300 million in 2009.

Online research company eMarketer recently cut its online ad spending forecast for 2009 to $24.5 billion — or 4.5 percent over 2008. Initial predictions saw a 8.9 percent growth to $25.7 billion.

If the company’s right, that’s the lowest growth rate since the dot-com crash.

And in an interview with Media Life Magazine, eMarketer senior analyst David Hallerman predicts double-digit growth again. But not until 2011.

“Our projection of 4.5 percent is a classic good news-bad news situation,” Hallerman said. “The bad news is it will be the lowest positive gain ever for U.S. online ad spending.

“At the same time, when you compare it to any other medium, it’s the only one showing positive growth this year. The assumption of some economic recovery happening is only part of that. The other part is firmly based in the shift of marketing dollars online because it’s more accountable and more targetable.”

Newspapers and media companies looking to build traffic should strongly consider creating niche social network sites.

An EMarketer report this morning cites Children with Diabetes, a Johnson & Johnson-owned ad-supported social network for families who have children with diabetes. Nearly one-half of the site’s traffic comes from search, according to Joseph Natale, vice president at Children with Diabetes.

Children with Diabetes has some 32,000 pages of content optimized with words like “children,” “diabetes” and “juvenile diabetes.”

A newspaper could create a similar site but focused on the publication’s local community.

Newspapers should note that social media sites are not as strong on increasing brand building and reach as other areas of marketing and sales. A survey of executives by the Marketing Executives Networking Group found that 85.4 percent cited customer engagement as the main benefit of social media marketing, followed by direct customer communications (65 percent), speedy feedback/results (59.9 percent) and learning customer preferences (59.1 percent).

Brand building came in at 48.2 percent and reach was lower at 37.2 percent.

Full story with charts here.

We all know that online video is hot. Viewership is expected to grow by more than two-thirds in the next five years, from 563 million in 2008 to 941 million in 2013, says EMarketer. The 2013 estimate represents just over one-half of the 1.8 billion consumers expected to use the Internet that year.

That number is skewed a bit, though, by Western adoption rates. In Australia, Germany, India, Japan, the U.K. and the U.S., more than three-quarters of consumers in surveyed in Q3 2008 by IBM Global Business Services said they watched video on their PCs. And that’s today. By 2013, the sky’s the limit.

The explosion of online video viewership has been truly dramatic. A study by the USC Annenberg School Center for the Digital Future and the World Internet Project found that as recently as 2007, a majority of Internet users in eight out of the 13 countries surveyed (including the U.S.) said they never downloaded or watched online video at all!

We’ve been reporting on online ad spend estimates in the U.S. Now EMarketer weighs in on what’s happening in the U.K.

Earlier this year, the research firm’s prediction was that U.K. online advertising would hit £3.36 billion ($6.41 billion) in 2008—a rise of 27.1 percent over the previous year.

Indeed, according to the Internet Advertising Bureau U.K., PricewaterhouseCoopers, and the World Advertising Research Center, the Internet’s share of all U.K. ad spending rose from 2.5 percent to 18.7 percent in the last five years.

That was then. This is now.

The International Monetary Fund predicts that the U.K. will experience a deeper recession than any other developed nation in 2009, with the economy shrinking by 1.3 percent, and struggling to reach 0.4 percent growth in 2010.

As a result, EMarketer trimmed its projections for U.K. online ad spending in 2008 and 2009 to £3.34 billion ($6.15 billion) and £3.58 billion ($5.30 billion), respectively.

“The good news is that even though advertising in traditional media is down sharply, online is bucking the trend,” says Karin von Abrams, a senior analyst at EMarketer. Online ad spending will still grow in 2009, but at a lower rate of under 10 percent.

China may have the world’s largest number of Internet users, but you wouldn’t know that from the amount marketers in the country spend on online advertising – less than 5 percent of their ad budgets, half of what their counterparts in the U.S. spend. The data comes from Nielsen.

The flip side: online ad spending is growing quickly. Q3 Internet ad spending grew 42 percent from the same period in 2007 to $541 million. That was more than twice as fast as ad spending growth in TV, newspapers or magazines. For all of 2008,

EMarketer estimated that China’s online ad spend would be $1.4 billion, which is 37percent more than in 2007.

GroupM went even higher, predicting $2.3 billion in 2008, up nearly two-thirds over 2007. The company said advertisers would spend a whopping $3.2 billion online in 2009.

Analysts from eMarketer weigh in on how the next year in online marketing, e-commerce, social networking and more will unfold. Here’s a quick overview.

Online ad spending

Analyst David Hallerman predicts online video ad spending will run counter to overall economic developments, and rise by 45 percent in 2009 to reach $850 million. Even though advertisers are increasingly budget conscious, they agree that the best way to woo online audiences to open their shrinking wallets is through “messages that reach their hearts and minds – hence more video.”

Search marketing

Hallerman also says that search marketing spending will grow by 14.9 percent in 2009, to $12.3 billion. He calls search marketing “recession-resistant” as it is highly measurable and advertisers will increasingly look “secure and effective methods to combat fear in an economic meltdown.”

Total ad spend

Finally, Hallerman comments that total U.S. Internet ad spending will increase to $25.7 billion in 2009, an 8.9 percent growth rate. While that will be the lowest year-over-year increase for online advertising ever, it will still be more than nearly all other media.

Demographics: multicultural ads ascend

Lisa E. Phillips says that multicultural marketing will be on the upswing in 2009 with more African-Americans and Hispanics going online. More language and culture specific messages will be required.

Retail e-commerce: big declines

Jeffrey Grau has gloomy news: online retail sales (excluding travel) will grow by only 4 percent in 2009, although he notes that online sales growth was already on a downward slope as the number of online buyers approaches saturation. Most retail e-commerce sales growth in the future will come from increased spending by consumers who have long been online buyers, he says.

E-commerce for social networking

EMarketer’s Debra Aho Williamson believes that e-commerce will be a growing revenue stream for social networking sites. She expects both MySpace and Facebook will enhance their self-serve advertising systems to sell real world goods and services.

But at the same time, she also predicts tough sailing for smaller and niche social networks, many of which may need to shut down or be acquired by larger players. Marketers that have built their own social network platforms will need to migrate them to existing services.

Since Facebook is already a de facto business networking site (because of the number of businesspeople who use it), Williamson says the company will develop ad programs aimed at B2B companies and that will directly affect existing business-focused networks like LinkedIn.

Twitter may have turned down Facebook’s all-stock offering in late 2008, but it will still end up being acquired, Williamson predicts. And the company that buys it will use the Twitter infrastructure to offer targeted marketing and analytics to advertisers.

Traditional media will continue to hurt

Carol Krol weighs in on newspaper advertising which, not surprisingly, will continue to decline in the new year more than any other medium. Industry-wide cutbacks will continue, and there will be more consolidation. “The industry was limping before the recession; expect more newspaper companies to become casualties,” she writes. Also look for more newspapers to reduce their publishing frequency similar to the Christian Science Monitor, The Detroit Free Press and The Detroit News, she adds.

As for TV ad spending, it will decline 4.2 percent to $66.9 billion in 2009. And YouTube will start to carry full-length television programs supported by ads, in keeping with the company’s Q4 2008 announcement. Other online streamers will follow suit.

Consumers love using social networking sites more than ever, but advertising spending has not kept pace. EMarketer has revised its projections for U.S. social network ad spending, down from a projection of $1.4 billion in May to $1.2 billion now. In 2009, spending will be up to $1.3 billion, says EMarketer, but that’s well bellow the previous projection of $1.8 billion.

Care to guess why the lower projections. It’s the economy, of course. But it’s also that new formats for online ad spending like social networks, which can’t always show a proven ROI, will be hit particularly hard.

Some more specifics from the research company:

MySpace will bring in $585 million in U.S. ad spending in 2008, down nearly 23 percent from the previous estimate of $755 million.

The projection for Facebook is down 21 percent to $210 million for the year.

Still wondering how important video will be to your site? Take a look at the results of a Nielsen study conducted over the summer. Nearly 80 percent of the US online population now watches online video at least once a month. That ranges from news clips to sports highlights to full-length TV episodes. But it also means video on your site.

Who’s coming? Surprisingly, an older demographic than you’d think. While a combined 39 percent of US viewers were under age 35, the single largest cluster of users was in the 45-to-54-year-old group at 20 percent. Older users were also well represented, with a combined 22 percent ages 55 and older.

Nielsen also reports that on the Web, online video viewers in the U.S. skew toward women by 55 percent to 45 percent, according to a May 2008 Nielsen study. For mobile video, it was the opposite, with men watching more on the road than women by a 6 to 4 margin.

EMarketer has more.

Contextual ad company ContextWeb has launched new functionality that targets Spanish-speakers through its category and keyword targeting technology. To head up the new operation, the company has hired Time Warner’s Joe Kutchera as director of Spanish-language markets.

The Spanish language market is growing rapidly: EMarketer estimates that 52 percent of Hispanics or 23 million are online and will grow to 29 million by 2012.

Prior to joining ContextWeb, Mr. Kutchera built a number of Time Warner’s interactive properties including Warner Bros. Online, This Old House Online, Fortune, CNN Money and Time Inc Mexico’s CNN Expansion, Chilango and Quien.

ContextWeb is aiming first at Spanish speakers in the U.S. It will then branch out to Mexico and eventually all of Latin America.

Founded in 2000, ContextWeb was recognized by Deloitte as the 16th fastest growing company in the New York area. The company’s investors include Draper Fisher Jurvetson (“DFJ”), DFJ Gotham Ventures, Updata Partners, Investor Growth Capital and Gold Hill Capital.

Good news from Detroit…sort of. Car sales are down but online advertising is up. A study by Nielsen Online AdRelevance said that online ad spending by the auto industry in the first half of 2008 was up 45 percent over 2007, excluding paid search and online video.

EMarketer estimates that online ad spending by automakers will nearly double by 2012 to $5.61 billion, up from $2.98 billion in 2008.

John Kovac, senior director of consumer advertising at AutoTrader.com, said that the rationale is clear.

“We are important to dealers’ media mix right now because we are an efficient media form for them,” he said. “Every dollar that’s spent has to have a return. Whether that’s search, investment in SEO, integrated partnerships or display, we’re looking to get more efficient.”

The full report with charts is here.