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2011 in Digital: Transitioning To a Post-PC World 1 We Have Entered the Post-PC Era Publishing Model • Collaboration • Personalization • “Intelligent Web” – People HTML only websites • Shift from flat “push publishing” web to creativity, information sharing and collaboration (social networks, blogs, wikis, etc.) • Connection of siloed information to create more personal environments • Recommendations automatically served based on user’s web habits Email – Text only E-Commerce Flat Content – Digitization of news, books, music and other media Siloed Services – Search agents/shopping agents SMS (Short Message Service) • Content Ownership – Users “own” the information • MMS (Multimedia Messaging Service) • Social Media Sharing – Robust network of users sharing media across the globe • Mobile Applications – Digital distribution of rich media and gaming applications • Rich Mobile Platforms – Widespread adoption of smartphones • Ubiquitous Connectivity – Widespread broadband adoption, mobile Internet access & devices • Open Identity – Ability to seamlessly use one “screen name” to access the entire web • Semantic Web – Ability of the internet to “understand” and respond with relevant response • Ubiquitous Collaboration – Widespread and highly viral creative content collaboration between brands and consumers 2 Before 2011 Began, Gaming & Entertainment was Reimagined with Xbox Kinect 3 Q1: Smartphones Outship Feature Phones, Ushering in a New Era of Mobile 4 Social Sharing (& Music) Drives Usage Up Mobile Search Grows 4-Fold Mobile Commerce Takes Off And Advertisers Follow… 5 Mobile is More Human • More Connected with always on, always on you access • More Accessible with voice, motion and location awareness as user interface • More Fun through social networking, music, video, gaming • More Affordable with WiFi nearly ubiquitous and pricing tiers 6 US Mobile Ad Spending to Reach $4B by 2015 Smartphones shift ad formats from messaging to rich media & video Search sees strongest growth Mobile enters global advertisers playbook in 2011 15M 3G subscribers in Russia (Q2 ‘11) According to MTS Retail 2.8 million smartphones have been sold in Russia in H1 2011 (28% higher than in H1 2010. 7 2012 Mobile Mobilizes Commerce 8 Q2: Time Spent on Social Sites Surpasses Portals 9 Today… Social Media Cannot Be Ignored Social media accounts for 1 out of every 6 minutes spent online in the U.S. Source: The Network Effect: Facebook, Linkedin, Twitter & Tumblr Reach New Heights in May. comScore Media Metrix, June 2011. © 2011. All rights reserved. VivaKi. Proprietary and Confidential. 10 Russia is a Leader in Social Usage 11 US Social Ad Spending to Reach $4B by 2012 • • eMarketer estimates that US ad revenues at social networking sites will exceed $3 billion this year Social networking sites will claim 10.8% of all US online ad spend this year (2011) and will garner 12.1% in 2012 • • Worldwide social network ad revenues will near $8 billion Facebook will represent >7% of total online revenues 12 2012 Valuing Social Media We know Social can play a strong role in engagement, branding and acquisition But we need to invest more resources in understanding how it works in context with all media 13 Q2: TV Universe Declines for the 1st Time Ever 3.0 2007 2008 2009 2010 2.7 2.6 2.52.5 2011 (STD) 2.6 2.32.2 2.12.1 2.2 1.91.9 1.8 1.6 A25-54 A18-49 A18-34 14 Video Drives Display Ad Spending to Surpass $20B by 2015 • Online video leads growth – accounting for a third of all online spend by 2015 A18-34 adapting to on-demand video quickest • According to comScore, there have been 42.3 million users in Russia, who watched an online video • They spend 12 hours and watch 101 videos a month on average. 15 COST Managing an Increasingly Complex Digital Video Marketplace Requires New Approaches SCALE Long Form TV 100% professionally produced studio TV content that is repurposed for online viewing. Professional Online Professionally produced short form TV and professionally produced online content Aggregated Content Publishers that aggregate content from multiple sources. 16 2012 Creating More Supply 24+ hours of video is uploaded to YouTube every minute and 2+ billion videos are viewed every 24 hours. • • • 100+ Content Producers/Talent creating and curating channels January launch / Sept. upfront Can buy-out genres, channels or ROS – sold only thru YT 17 Q4: AOL + MSN +Yahoo!: Frenemies Join Forces 18 The Buying Landscape Is Getting More Crowded 19 Crowded Value Chain = CPM Leakage 20 2012 Creating Value for Clients & Partners Targeting Inventory Analytics Leveraging data to create pinpoint accurate audiences Automating media buying with a focus on premium partners Turning results into actionable insights Talent & Technology Dedicated expertise that exclusively focuses on a rapidly evolving & complex marketplace 21 US Display Ad Spending to Near $15B in 2012 – 50% of Which Goes to the Big 5 • eMarketer predicts US display ad spending to be $14.82 billion in 2012, representing 40% of all online media spend. • Over half of that is captured by the Big 5: Facebook, Yahoo!, Google, Microsoft and AOL 22 2012 Global Growth Opportunity for Top 5 and Top 25 • 81% of Big 5 monthly uniques are international • The Top 25…look beyond US borders for opportunity (Yandex, Mail.ru in top 25) 23 2012 Create Content that Crosses Screens [YOUR AD HERE] [YOUR AD HERE] [YOUR AD HERE] 24 2012 Lead the Change • 73% growth in Internet users since ‘08 • Second largest market in Europe • Smartphone sales up 28% YAY • Top 5 market for social network usage • High video consumption, limited supply • Strong growth by top local players (and increased investment by Top 5) 25 Thank You 26