eMarketer “Evidence of a Turning Tide”€¦ · Teens now spend more time online than with...
Transcript of eMarketer “Evidence of a Turning Tide”€¦ · Teens now spend more time online than with...
eMarketer
“Evidence of a Turning Tide”
IAB Annual MeetingSeptember 8, 2003
Aggregate Filter
Organize Analyze
1,200 sources
What we’ll cover:
I. Where have webeen?
II. Where are we going?
III. The 6 pillars of growth -- MORE:
#1. Internet users
#2. Time spent online
#3. Shopping & buying
#4. Broadband & Digital TV
#5. Rich media
#6. Relevancy
II. Where have we been?
Convincing traditional
advertisers that online
advertising works
I heard the Internetis the most measurable
medium ever!
So, how big was the online ad market last year?
Pick a number, any number…
Year 2002 Projections
(billions)
$4.9McCann
$4.8Lehman
Bros$4.0
Myers Group
$6.1CIBC
$7.0Smith
Barney
$5.6Jupiter
$6.6Forrester
$7.5Zenith Media
$7.0Kagan
$6.0Goldman
Sachs
$8.7Gartner
G2
$6.0VeronisSuhler
$6.4JP Morgan
$8.6Corzen
Source: eMarketer, 2003
$5.7CMR
$2.8Initiative
Media
$6.3PwC
$6.0MorganStanley
$6.0IAB/PwC
eMarketer
II. Where are we going?
“We think that advertising is on it’s way back.”
--David Wyss, Chief Economist, Standard & Poor’s
September 5, 2003
CMR reports6.8% growthfor 1st half
Merrill LynchS&P(Sept ’03):
4.8%
Among 500 media planners surveyed in August, has your demand for ad media…
Remained even43%
Increased39%
Decreased18%
Source: MediaPost/Insight Express, Sept 8, 2003
Just Released!
Online ad spendinggrowth in 2003
eMarketer 4.8%
CMR/TNS 7.4%
Source: eMarketer, 2003
PwC 4.8%
McCann 5.0%
0.0%GartnerG2 4.7%
JP Morgan 7.2%
Myers 2.6%CIBC
Goldman 0.7%
Veronis 10.0%
Jupiter Research 5.0%
Source: eMarketer, 2003, IAB, 2003; Goldman Sachs, 2003 (AOL)
$6.0 B
Removing the AOL factor
$6.3 B
2002 2003
+4.8%
$6.0 B
Don’t forget the AOL factor
$6.3 B(AOL)(AOL)
2002 2003
+15%
Vs. Total Media @ 4.9%
Online ad spending growth in 2004?
4.6%6.0%6.1%
7.9%11.3%
20.0%21.0%
25.0%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
GartnerG2
Veronis
PwC
eMarketer
JP Morgan
Myers
Jupiter
Lehman
Total Media= 6.1%
US online ad spending (in billions)
$7.2$6.8$6.3$6.0
$7.2$8.2
$4.6
$8.1
$0.0$1.0$2.0$3.0$4.0$5.0$6.0$7.0$8.0$9.0
1999 2000 2001 2002 2003 2004 2005 2006Source: eMarketer, 2003; IAB, 2003
The 6 Pillars of Growthfor Online Advertising.
#1. There are 155 million Internet#1. There are 155 million Internetusers, and 140 million are users, and 140 million are active, monthly users.active, monthly users.
113.0117.8
131.3137.0
142.7155.0157.6158.0
169.0178.0
0.0 50.0 100.0 150.0 200.0
KaganMediaMark
NetRatingsHarris Poll
comScoreeMarketer
JupiterPew Research
eTForecastsArbitron
Millions “online” in 2002
Source: eMarketer, 2003; with 2002 baseline from Dept of Commerce, 2003
Out of 155 million users in total…
• Daily (52.7%) = 81.7• Several times per week (22.2%) = 34.4• About one time per week (8.0%) = 12.4• Monthly (7.8%) = 12.1• Less than 1X/month (14.1%) = 29.1
Total Online, per eMarketer = 155.0Source: eMarketer (total number online and calculation of segment sizes), 2002; Conference Board (percentage allocations of frequency), based on study conducted by NFO WorldGroup & Forrester Research among 7,000 households, 2002
140 MMmonthly
users
eMarketer’s active user base of 140 million is supported by other researchers
eMarketer 140.0 MeMarketer 140.0 M
comScore 142.7 McomScore 142.7 M
Nielsen//NetRatings 131.0 M**Nielsen//NetRatings 131.0 M** 140.8 M140.8 M
Harris Poll 140.0 MHarris Poll 140.0 M
Comparison with Top Panel Measurement Firms and Harris Poll*
Source: eMarketer, 2003*Harris Poll was conducted in Nov-Dec 2002 among 2,033 Americans**Nielsen//NetRating’s figure of 131 million does not include university users. Adding the 9.5 millionuniversity users measured by comScore yields a total user figure of 140.8 million
The total Internet user audience grew by 8.5% in 2002
124.0142.8
155.0 162.0 168.0 171.4
0.0
50.0
100.0
150.0
200.0
2000 2001 2002 2003 2004 2005
Source: eMarketer, 2003; baselines in 2000 and 2001 from Dept. of Commerce, 2002
+4.5%+8.5%
comScore data supports a growth rate of over 8% for the total Internet user base
100.0
120.0
140.0
160.0
Millions 134. 134. 135. 136. 137. 138. 139. 140. 141. 142. 143. 144. 144. 144.Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
Source: comScore Networks, 2003 (based on total at work/at home/at university users)
‘02 ‘03
December ’01 vs. 02 growth was 8.7%
Internet 59%
Comparative HH penetration rates in ‘02 (= REACH)
Radio & Television
Cable TV ~ 67%
Sources: eMarketer (Internet); Nielsen Media Research (television); RADAR, Fall 2000 (Radio); Television Bureau of Advertising, 2003 (Cable); MRI Spring 2002 (magazines); Scarborough Research/NAA Research, Spring 2002 (newspapers)
98%
Magazines 84%
Newspapers 55%
2004: 68%
“The two factors that seem to drive Internet
use the most are income and educational levels.”
--Tom Spooner, Pew Internet & American Life Project
Internet penetration goes up with HH income level
% of US HHs with Net Access
25.0%33.0%
44.0%57.0%
67.0%79.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
<15K $15K -24.9K
$25K -$34.9K
$35K -$49.9K
$50K -$74.9K
$75K+
Source: US Dept of Commerce, February 2002
Tower Group………….85%Pew Research………….82%Scarborough Research…79%
While African-Americans & Hispanics are still underrepresented online, they’re catching up fast
Total Pop(Census)
Source: eMarketer, 2003; various, as noted
75.1%
12.3%
12.5%
3.6%
White
Black
Hispanic
Asian
eMarketer(Dec 2002)
78.4%
9.2%
7.1%
4.6%
78.6%
10.2%
7.5%
3.7%
78.0%
9.0%
7.0%
N/a
Jupiter(HHs ’02)
Arbitron(Jan ’03)
#2. They spend an#2. They spend anaverage of 65average of 65minutes per day minutes per day online.online.
45.060.2
68.680.0
95.196.8
115.7
0 20 40 60 80 100 120 140
AOL/Roper (Mar '03)
NetRatings (Jan '03)
UCLA (Jun '02)
Arbriton (Jan '03)
Harris (Apr '02)
comScore (Jan '03)
Veronis (2002)
Average number of minutes Internet users spend online per day
Sources: eMarketer, 2003 (including all locations)
Notes: 1)Veronis figure based on home usage only, and assuming a user penetration rate of 60%; 2) NetRatings changed their methodology to include desktop apps in 10/02; 3) AOL/Roper data for adults only
Sweet Spot~ 65 mins
• Averages can be misleading. Many Internet users spend far more than 65 minutes per day online
WARNING!
– Broadband users– At work users– Experienced Internet users– Upper income/affluent– Teens…
For business decision-makers, the Internet dominates all other media
41%32%
23%
5% 3%0%
10%
20%
30%
40%
50%
Internet TV Radio Newps Mags
% of Business Decision-Makers Who Use Media for At Least 2 Hours Per Day Mon.-Fri.
Source: Nielsen//NetRatings @Plan, MORI Research and Washingtonpost.com, Sept 2002
Teens now spend more time online than with television (avg hours/day)
Sources: 1) Grunwald Associates, March 2003 (teens aged 13 – 17 years); includes e-mail and IM. 2) HarrisInteractive/Teenage Research, July 2003 (teens aged 12 – 17 years)
TV
Web
Grunwald* 3.1
Harris 1.9
Grunwald* 3.5
Harris 2.4
And for some dayparts, the Internet beats all other media
59%
34%
16%7%
0%
20%
40%
60%
80%
Internet Radio Newspaper TV
% Using Medium During 8:00 - 11:00 am
Source: MORI Research, January 2003(among Internet users)
comScore panel measurement data shows growth has slowed – avg mins per visitor per day
0.010.020.030.040.050.060.070.080.0
Mins per user 55.2 57.0 57.9 56.8 54.3 54.3 53.3 53.4 57.8 58.3 59.6 56.8 60.2 62.3 57.8 56.9 53.5 55.6 55.8
Jan '02
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec '02
Jan '03
Feb Mar Apr May Jun Jul
Source: comScore Media Metrix, 2003 (based on a panel of 1.5 million active Internet users
December ’01 vs. 02 growth = 12.5%
FY ‘02 vs. Jan - July ’03 = 2.2%
Arbitron (9 ‘02) -31%Magazines Newspapers
-27%Television
-37%
Gartner G2 (10 ‘02) -20%-15%-20%
Scarborough (5 ‘02) -15%-20%-23%
Pew (6 ‘02) -18%N/a-37%
UCLA (11 ‘02) -36%-38%-30%Source: eMarketer, 2003
TV
Mags Newspapers
% Decrease inTV/Mag/NwsprUse Due to Web
Some say online’s not getting its fair share!!!
8.8% 4.4%
#3. More people are shopping#3. More people are shoppingand buying online, andand buying online, andmore often.more often.
“We actually feel that people who are seeking information online are further along in the continuum path.”
--Christine Sakdalan, Novartis
INTERNET
Awareness
Gatheringpre-purchaseinformation Purchase
BrandLoyalty
RepeatPurchase Interest,
Attitudes,Consideration
The Internet can impact at ALL points along the consumer buying cycle
Trial
93.3 M Shoppers(71% of users)
73.3 M Buyers(56% of users)
Which media source do you prefer to use for each type of information?
Web
Source: Forrester Research, 2002; Base: 10,000 telephone sample
TV Newsp Radio MagsReference info 1% 2% <1% 2%
Travel info 3% 9% 1% 9%
Health info 14% 12% 2% 20%
Product reviews 11% 11% 1% 21%Auto info 4% 24% 1% 9%
Financial info 9% 19% 1% 1%
Technology news 12% 11% 12% 13%
54%
51%
39%
31%
30%
28%
24%
Where consumers prefer to get information:“When you are planning a purchase, which source do you consider the best source for getting information?”
% Saying Internet
63%
62%
61%
0% 20% 40% 60% 80%
Start process of learning about aproduct/service
Learn about features and benefitsof a product
Learn about different brands
Source: AOL/RoperASW, CyberStudy 2003
[Among 1,001 adults,in telephone survey]
#4. They are increasingly#4. They are increasinglyon broadband.on broadband.
Millions of broadband households in the US, for 2002
18.917.9
17.216.716.7
15.915.715.5
19.3
16.116.0
0 5 10 15 20 25
GartnerYankee (Aug '03)
Strategy AnalyticseMarketer (Mar '03)
Morgan Stanley (Oct '03)
Kinetic Strategies (Mar '03)OECD (Dec '02)
Informa (May '02)World Bank (Mar '03)
Jupiter (Oct '02)Probe (Jul '03)
Source: eMarketer, 2003
FCC 17.4 M
43.1%41.3%
40.7%40.0%39.6%39.5%
38.9%38.6%
36.3%34.0%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
Informa
Strategy Analytics
eMarketer
Probe Research
World Bank
Morgan Stanley
Gartner
Yankee Group
Jupiter
PwC
All researchers are predicting at least 34% growth for 2003 (vs. 2002)
Source: eMarketer, 2003
36.5
30.324.2
17.2
11.2
6.2
0 10 20 30 40
2000
2001
2002
2003
2004
2005
Sources: eMarketer, 2003; OECD (baseline years of 2000, 2001)
Broadband reaching “critical mass”(millions of households on broadband)
22% ofall HHs
32%
~ 90% of at work users are on broadband
% of home users getting online at least once or several times per day
46%
73%
0% 20% 40% 60% 80%
Broadband
Dial-up
Source: Pew Internet & American Life Project, June 2002
Average weekly hours spent online
8.2
12.6
0.02.04.06.08.0
10.012.014.0
BroadbandDial-upSource: Arbitron Research, January 2003
Forrester:58% Lift
54% Lift
For broadband users, time spent online rivals radio usage
Radio31%
TV36%
Internet27%
Newsps6%
Source: Arbitron Research, January 2003
Broadbandusage pullsmostly fromtelevision
By 2005, there will be more broadband users and than dial-up users in US:
Broadband51%
Dial-up49%
Sources: eMarketer, 2003
87.5 Million83.9 Million
While 32% of all households will be onbroadband in 2005, about 50%, or
56 million, will be watching Digital TV.”
--Ben Macklin, Senior Analyst, eMarketer
#5. Use of rich media continues #5. Use of rich media continues to grow.to grow.
Among 1,000 top publishers, rich media units as a % of total ads served
1.7%
7.9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Q1, 2002 Q1, 2003
Source: Nielsen//NetRatings and Dynamic Logic, June 2003
Jupiter: Rich & Streaming
media = 39% in ‘08
Jupiter Research = 8%Advertising.com = ~9%
Rich media ads are more effective
The TV tide is turning
“Reaching our consumer targets is no longer TV driven. The days of spending hundreds of millions of dollars on TV advertising are over.”
– Bill Lamar Jr., SVP Marketing, McDonalds
“[With Rich Media], you get a higher level of engagement with the product.”
– Neil Perry, Director of Internet Marketing, McDonalds
Rich media advertisers spend more $, but also pay more attention to targeting
7%49%
26%21%
67%30%
0% 20% 40% 60% 80%
Highly Targeted
Targeted
Diversified
Eyeblaster Ads All Online Ads Source: Nielsen//NetRatings, May 2002
“Rich media are appropriate only when they’re presented in a space that is relevant to the user’s goals or needs.”
–Jakob NielsenUsability Guru
#6. The Internet is getting #6. The Internet is getting more more relevantrelevant..
77% of marketers are currently using – or evaluating – search
IAB: Search = 15.4% of total online ad spend in ’02,
and 21% in Q4
“Search is the ultimate online marketing tool, because the behavior of search is more of an indicator of purchase intentthan any other online activity.”
--Frederick Marckini, CEO, iProspect
Search will continue to grow…
• Could top $7 billion by 2007 (Safa)
• Meets the need for measurement and accountability
• Leading to the development of truly relevant online advertising, i.e., “contextual” ads
• In addition to the media value, search provides valuable, real-time learning about consumers and how they express their needs
But as the pay-for-performance market heats up…• The bidding costs for advertisers will
increase, particularly as larger firms step in
• And so too will the time, money and effort it takes to keep your listings up on top
• Besides, if you target only those who’ve done their research and are ready to buy – NOW –you’ll miss 80% of your market opportunity!
It’s like putting all of your ad budget into the Yellow Pages:
ABC Paint Company, Inc.
Search is only one way that Internet users begin an online shopping expedition
WebSideStory = 13.4%
(March ’03)
InternetStores
TelevisionDirect Mail,TV, etc
Yellow Pages
Public Relations
Magazines,Newspapers
Promotion
Outdoor
The Bigger picture: The Internet is best used when integrated within the overall media mix
BRAND
Radio
Sales force
We have a ways to go…
Who directs the media integration effort???
74%
6%22%
93%
4% 1%0%
20%
40%
60%
80%
100%
Agencies Clients OtherAgencies Clients Sources: New York American
Marketing Association, for Advertising Age, March 2003
Can eMarketer help your business?
• Streamline your e-business research sources(and reduce costs)
• Eliminate critical data gaps
• Provide you with an objective, bird’s-eye view of the entire e-business landscape
• Make better, more informed decisions about Internet and online marketing ventures
More information is available:
For more information on every aspect of online advertising, e-mail marketing, B2B marketing online, online demographics, usage patterns, e-commerce, e-business, broadband or wireless trends, contact eMarketer at:
www.emarketer.com, or 212-677-6300
You can also call or e-mail Kimberly Pagan directly at:T: [email protected]
Geoffrey [email protected]: 212.677.6042
Free Daily Newsletterwww.eMarketer.com
The Source for E-BusinessResearch and Analysis