Blog

Digital Advertising Predictions 2012

To be clear, I’m not doing the Mystic Meg references this year. If she couldn’t see the demise of her paymaster then what hope does she have to see digital advertising’s future?

So, I shall also get all clairvoyance references out of the way right at the start as I look into my crystal ball to read the 2012 cards. Or something like that. Yet I still hear the voices from beyond telling me that, in the UK, digital advertising will continue to grow; by which I mean it will take a larger share of all advertising and generate more money for businesses supported by digital advertising (I’ll find some numbers to prove that in a year from now). Given the state of many European economies, I’d be foolish to try to predict where the money will come from but I’d wager it’ll mainly be a shuffling of existing advertising monies rather than new cash.

Perhaps my references should be topical and sporting this year, with the 2012 games happening right here in London in the summer. Even at the kick-off of the year (see what I did?), they’re calling them the first digital Olympics. While we’re going to see a lift in advertising revenues caused by the impact of the games, the powers-that-be guard any use of the Olympic logos closely and only authorised brands can use it in advertising messages, which, I think, will mean the lift will be smaller than some might expect.

I’d be interested to see how the brands not partnering with the games get their messages out in 2012.

I am surprised not to see any of the big European mobile telephone brands on the 2012 official partner list. While we’ve all long-since given up on calling this – or any year – the year of mobile advertising, it could be the year mobile payments come of age (that is, of course, if anybody can get their phone to work in London during the months of the games). Paying for things, using your phone as the debit card, certainly appeals to the gadget geek in me. And, I really think that the introduction of mobile payments will have a positive knock-on effect on mobile advertising.

I’m also pretty confident that we’re going to see more and more “buzz” around television-companion apps. These apps primarily run on mobile-type devices but enhance, in some way, your big-screen viewing. The “enhancement” currently appears to mainly allow you to interact with others who are watching the same programme via Twitter or Facebook, or play along with a version of the game-show you are watching. This additional screen provides both a whole new place for advertisers and the prospect of some interesting battles for control of ad-messages there. How anybody will determine which ad you saw, the one on the television or the one on the app, will be an interesting technical and data challenge this year.

And that segues nicely into a prediction that picks up on a tipping point I missed from last year’s list (but at least acknowledged in my Report Card). We know that non-broadcast video, the kind that doesn’t make it on to a television via a traditional broadcaster, commands a large viewership and I think more and more brands, who are getting increasingly comfortable in social media environments, will spend money there. There’s a chance the wall-to-wall sporting coverage this summer will drive people to YouTube and the like. Of course, that’s also a big opportunity for video-on-demand services with the rights to more traditional programming. A bumper year for those is also on the cards (sorry, I had to get one more reference in) with increased ad loads (that’s a term I learnt in 2011 to mean “more ads”) and possibly the wider adoption of ad-selection opportunities, where the user chooses which advertisement to watch, as demonstrated by the Hulu service in America. We’ll see more and more of that here.

Report Card 2011

Almost nobody fails with these “predictions” because – like the best clairvoyant – we can’t predict the big stuff & we’re all looking for the trends which will get a little bigger or smaller. So, even with our ears to the ground, we’re vauge and can hang our hat on almost anything to prove we were right. Let’s face it, if anybody could have predicted the rise of Facebook or – insert any shining tech starlet here – we wouldn’t be making lousy predictions on the web, would we?

For a couple of years I have written my predictions for the twelve months ahead in digital advertising. Everybody’s at it and, of course, nobody takes it too seriously. “I’ll predict they’re all wrong”, one of my colleagues amsuingly suggested last week but, of course, it’s him that’s wrong. Almost nobody fails with these “predictions” because – like the best clairvoyant – we can’t predict the big stuff & we’re all looking for the trends which will get a little bigger or smaller. So, even with our ears to the ground, we’re vauge and can hang our hat on almost anything to prove we were right. Let’s face it, if anybody could have predicted the rise of Facebook or – insert any shining tech starlet here – we wouldn’t be making lousy predictions on the web, would we?

While I readily admit to following the pack and, probably, highlighting the trends everybody else is seeing, I do always start by reviewing last year’s “predictions” so see how far off reality my senses were. So, albeit a few weeks into the new year, I’m starting with a review of my 2011 predictions.

I began with “increased data usage in advertising targeting”. Of course this is probably impossible to prove either way. Publishers are certainly more confident in their data conversations but who knows if it’s really being used? Given Amazon registered a patent suggesting an ability to understand more about you based on your choice of wrapping paper I think we can safely say we have not come to the end of this trend. As for anybody falling foul of the data comissioners, well Facebook seemed to do the opposite and get a good grade from Europe. Not a bad result on that one but nothing amazingly forseen.

Last year I called my second prediction “The Cloak Of Transparency” and I think this is one that didn’t (but should have) come true. Being more accessible with explanations of data usage can only be a good thing. I am, however, releived that we are not bombarded with opt-in/out boxes at every online interaction. My prediction about this was off but somebody will meet the need soon, I’m certain. My favourite article on the subject in 2011 was by Kevin Curtin who encouraged somebody (maybe, everbybody) to sell his data. As for my point about data validation services, did I miss any?

Did digital advertising grow in 2011? I think we really need to wait a while to get the numbers in, don’t you? But if Hearst Digital can report that their “U.S. digital media businesses were solidly profitable for the first time” [source] I think I am onto a winner with that one. Since 2000 digital advertising has “has leapfrogged every traditional advertising vehicle except television” suggested The Chicago Tribune, which must be a good sign. Back in October, the IAB reported UK internet advertising expenditure growing 13.5% to £2.256 billion in the first half of 2011. The cards are looking good for that one. And take a look at some of the excellent creative you may have missed in 2011. That one came true and, in an uncertain economy, I’ll happily take credit for being right on that.

Also back in October, an Econsultancy/Rubicon Project report suggested 44% of publishers were then selling their online display inventory via real-time bidding (handy if you’re in RTB, huh?). I’m using RTB as a proxy for the traded environment here, as I can’t find any stats talking more generally about trading. Without a doubt, there were even more ways to sell inventory on offer to publishers last year and, therefore, businesses need to understand the trading environment better. With 30 billion UK RTB-traded impressions seen during last year’s European RTB Insight Report, somebody ought to be making sure the money’s right. Of course, publisher’s might want to put analysts on managing their direct sold campaigns, which was a suggestion repeated a number of times in 2011.

But where was the exodus from the City to digital that I suggested might happen? Perhaps that prediction failed because the City bonus culture didn’t.

My final prediction last year was about advertising and social media. How could I fail with this one? Twitter claims 60 billion tweets in 2011 and the most re-tweeted was from a commercial organisation: the Wendy’s hamburger brand. There’s a long way to go here but Twitter did introduce an advertising play in 2011 and it will only grow in 2012. Groupon, the couponing site that IPO’d (can I say it like that?) last year, earned an average return of 6,352% for private investors and generated top line growth of 700% in the nine months ending Sept 30 2011 (year over year) [source]: impressive sounding numbers, if nothing else. So, I think my suggestions that coupon sites would still be strong came true. While new Daily Deal sites came – and some disappeared – in 2011, there is more to come from this sector I’d wager. Last year I didn’t say much about video; I think it’s a given that it’s now part of the online/digital mix. But online video continues to grow as a viable advertising medium, and not just with long form content. This year charlieissocoollike became the first UK channel to reach one million subscribers which suggests a continually growing audience for well-produced, non-broadcast video content. YouTube counts as social media, right? Oh good. Tick, then.

Of course you can never go wrong saying that there will be a “raft of technology announcements” in the coming year, I don’t think that was wrong. I may even use that again for my 2012 predictions which will be with you soon enough.

So, there we go. I think I identified the trends well enough and, while these predictions aren’t going to make anybody rich, they weren’t awful.

Let’s see what the crystal ball thinks we’ll do in 2012.

Curns’ Ad Links for 19 September 2011

Curns’ Ad Links for 11 February 2011

Curns’ Ad Links for 10 February 2011

Elsewhere: Watching The Decline of New Labour

His belief in a parliamentary democracy and MPs who work on behalf of their constituents is clear and often put him at odds with senior party colleagues. The fact that he does not follow the party line all the time is what makes his account all the more memorable.

Decline & Fall: Diaries 2005–2010Decline & Fall: Diaries 2005–2010 by Chris Mullin

My rating: 5 of 5 stars

The second volume of Chris Mullin’s diaries that I have read and, as an inside account of the British Parliament at the end of the first decade of the 21st century, it’s both reassuring to see that many representatives in The House are not in it purely for self gain, having loftier aims that benefit us all, and disappointing to discover that Honourable Members, just like the any group anywhere, can be back-stabbing and self-serving. Mullin clearly falls into the former but his ringside seat for the end of the Blair era, the expenses debacle, the arrival of Gordon Brown and the self-destruction of New Labour is fascinating. I don’t know if the diaries are well edited, or well written in the first place, but you are drawn in by the stories the diaries reveal and gripped as the details of parliamentary life are unveiled. His belief in a parliamentary democracy and MPs who work on behalf of their constituents is clear and often put him at odds with senior party colleagues. The fact that he does not follow the party line all the time is what makes his account all the more memorable. The book’s easy to follow as Mullin does not fall into the trap of reducing most people to nicknames or initials and, therefore, can be read without constant reference to a ‘cast of characters’. This volume ends as Gordon Brown leaves number 10 and Mullin retires from The House (he did not contest the 2010 election) but before that point some of the most interesting events of recent times are recorded with a charm and wit that’s compelling.

View all my reviews

Curns’ Ad Links for 27 January 2011

Curns’ Ad Links for 26 January 2011

Curns’ Ad Links for 25 January 2011

Last Week In Digital Advertising #10

Is that something we should be considering for the future? Will the idea of advertising campaigns disappear? Perhaps our vision of the right message to the right person at the right time means that brands need to be constantly in-market. How else can the be assured of being at the right time?

Our spin doctor is still in the house so, lest somebody say something about this being a good day to bury news, let’s start with the biggest news. Google’s reported fourth-quarter profit surged 29% to $2.54 billion. Yikes, that’s a lot of money. Somewhat overshadowed by news late on Thursday evening that Larry Page, Google’s co-founder, is taking over the reins from long-time chief Eric Schmidt.  I wonder if there are more changes afoot?

So, that’s an opening totally fitting with last week’s four pillars of digital advertising news which bodes well for the rest of this week’s review, doesn’t it?  Having started with Spend Watch, why not continue in that mode. As they say in television, cue titles ..

Spend Watch

I’ve not done a Facebook revenue prediction this year. It seems like everybody has one on a reasonably regular basis so why not me? Thus, deep breath, Facebook is expected to make over £2.5 billion ($4 billion) from advertising in 2011, it has been estimated by eMarketer and reported on by the IAB. Compare that to the numbers reported in Advertising Age that the social network took in $1.86 billion in worldwide advertising revenue for 2010 (which was still a 151% increase over the company’s estimated 2009 advertising revenue). Pretty impressive numbers, although, of course, somebody had to find the flaw. Those numbers were “not as impressive as Google’s growth in its pre-IPO days” according to SFGate.

Elsewhere, ad-spending hit a record high in Malaysia; social gaming to top $1 billion in 2011 and advertising is expected to make up for 20% of game developers’ revenues next year, according to another eMarketer report (quoted by Coast Digital) and a Winterberry Group report at MarketingProfs says, “Within digital, social media ad spend is expected to increase more than 35%”. A healthy growth report from our spin doctor then.

The Bedford Report, er, reported that “ZenithOptimedia … expects China overtaking Germany as the world’s third-largest ad market behind the United States and Japan” and

China has achieved double digit internet growth rate since 2006 and currently housed 420 million Internet users. There are also 755 million mobile subscribers in China, making it the world’s largest mobile market.

Such a big market for advertisers. And, I don’t often quote data from an advertiser’s perspective but last week I saw that Cadbury’s had reported between £2 and £3 in sales for every £1 it spent on internet advertising – which seems like some more pretty decent numbers to me, spin doctor or not.

Video

Crossing the line from Spend Watch to Video we read, via RapidTV, that in France, video advertising passed from €12 million to €30 million in turnover over one year. While back in the UK, the IAB released new 2011 best practice guidelines for video and called for a “mature” approach to video ads.  As the money flows into online video advertising we’re seeing the technology around the delivery gain traction. This week, for example, Rocket Fuel Inc. announced Video Booster which, apparently, allows “brands to engage audiences and reach campaign objectives with unparalleled precision and efficiency”. How long before bidding on video ads becomes mainstream?

Real Time

Kendall Allen at Advertising Age wrote this week that “Our industry is ecstatic over bidded media” and questioning if it’s quite as big as we think. I had believed that a lot of the real-time buzz was from the buy-side of the business but Kendall notes buyers are, “still waiting for this holy grail of audience intelligence at scale”. Perhaps helping us get a little nearer audiences at scale, Adobe announced the inquisitional of leading data management platform, Demdex.

The new world of real-time buying and selling of media was covered, last week, in a piece at Marketing Week entitled, “New era dawns for display advertising” which is worth of read.  Of particular interest to those in the digital display business is a comment from former American Express head of digital acquisition Matthew Turner,

“We’re now looking at digital display as an always on channel, rather than as [intermittent] campaign activity, explains Turner. We have historically run digital display on a campaign basis, but we’re now at a point where we’ve got such a level of high-quality inventory through exchanges that we’re able to think about display as a way of always building awareness or running direct response, similar to the way in which we treat search.”

Is that something we should be considering for the future? Will the idea of advertising campaigns disappear? Perhaps our vision of the right message to the right person at the right time means that brands need to be constantly in-market. How else can the be assured of being at the right time?

Privacy

The last of our pillars this week is privacy. ClickZ reported on “Mixed Messages on Future of Privacy Law in 2011” for US citizens while The Wall Street Journal noted “EU’s Push on Internet Cookies Fizzles Out” which suggested that Europe was generally in favour of industry self-regulation and quoted the EU document saying

[it’s not necessary] to obtain consent for each individual operation of gaining access to or storing of information on a user’s terminal, if the initial information and consent covered such further use.

Elsewhere, Better Advertising (sorry, Evidon) are working with Collective (they call themselves “the leader in understanding and delivering audiences”) “to power ad notice for more than 28 premium publishers and advertising networks” using  Collective’s media management platform. More notice should be a good thing, right?

Friday saw my Twitter feed tell me that The Wall Street Journal’s opinion page comes out against US “Do Not Track” proposals. Of course they were the news organisation to highlight some of the issues around online ad tracking so it would be fascinating to read what they say in an opinion piece. It’s behind a pay-wall so if you have a subscription read it (http://on.wsj.com/fU6qbW) and let me know in the comments.

Now, away from my pillars what else did we learn last week? For starters, “Almost a quarter of Irish consumers are “strongly negative” towards online advertising” [Belfast Telegraph]; TGI’s James McCombe noted that,  from a marketing point of view, mobile Twitterers are an attractive target in their own right [MediaTel]; Bonnier announced that it was  developing next-generation ad formats for tablet magazines in a move said to “addresses a fundamental need in the industry: all-new advertising for all-new advertising platforms” [SFGate] and, back to where we started with news from Google, and Mashable’s exclusive report that the search giant is preparing to launch Google Offers – a Groupon-style daily deals offering. Interesting to me as I was going to add ‘Coupons’ or deals to our four digital advertising news pillars but wondered if they would/could  sustain the hype for a year.  Well, let’s see if they make any news next week when I’ll kick myself for not putting them up there.

Curns’ Ad Links for 21 January 2011

Curns’ Ad Links for 20 January 2011

Last Week In Digital Advertising #9

At the starting blocks of 2011 and I can already see the trends emerging for the topics that will be the mainstay of Last Week In Digital Advertising for the next twelve months. Should I just give up now? Regardless, here we go for the first view of the new year and, periodically, I’ll check-in with this list to see if we’re talking about other things.

At the starting blocks of 2011 and I can already see the trends emerging for the topics that will be the mainstay of Last Week In Digital Advertising for the next twelve months. Should I just give up now? Regardless, here we go for the first view of the new year and, periodically, I’ll check-in with this list to see if we’re talking about other things. And yes, I am well aware that this isn’t dissimilar in concept to my already published 2011 Digital Advertising Predictions but it is based on what the recent buzz has been and continues with my idea of a news review.

Privacy

Clearly, one of the most significant things we’ll be talking about all year is privacy and, quite rightly too. Despite the fact that direct mail has been tracking our lifestyle choices and lifestages for years, doing it in real-time via a computer appears much more intrusive and, as an industry, we have to clearer about what we are doing. Spanfeller Media Group CEO Jim Spanfeller was asked by AdExchanger what he saw at the heart of the consumer debate about privacy:

I think the bigger issue is that people want control. They want control over their experiences. And so I agree. I think there are people, lots of people, who will give up data about themselves willingly in return for something.

And control seems to be a key theme of the privacy story this week. eMarketer quotes a survey by PreferenceCentral which found that “the more people know about behavioral targeting, the less willing they are to receive free content in exchange for relevant ads” but principal analyst David Hallerman wonders if, “people really view behavioral targeting as an invasion of privacy, or do they dislike it because they have no control over how marketers are using their personal data?” Publishers, unlike most marketers, have first party relationships with consumers and, Jonathan Mendez argues, there is an implicit understanding that this data is going to be used to make the user’s experience better. That’s a good position for publishers as long as the data is treated with care.

Kevin Lee at ClickZ writes under the headline “If Tracking Is Outlawed, Only Outlaws Will Have Tracking” and suggests that ads should have more space devoted to explaining what data the ad used in the hope that consumers will “leave well enough alone and prefer targeted ads to untargeted ads”. Of course we have an embryonic system to show such information in the form of the Better Advertising initiatives who, this week, became Evidon. The name chosen to “evoke a connection with the word “evident,” which expresses our commitment to bringing clarity to the online community”. Their blog has more. Clear? Well, Mozilla’s aiming to making it all clearer with their alpha release of privacy icons which they are proposing are adopted to let users know how data is used. I like the idea.

Interesting to see The Wall Street Journal run a piece on how Google is trying to square using all their data with the privacy implications of that use. An interesting piece but amusing to see an article on privacy based on a leaked, internal, confidential document. Not sure I see the public interest value in raising privacy flags on a bunch of ideas that aren’t products but, nonetheless, interesting reading.

Video

Video is at a crucial turning point, so says Jill Druschke in AdWeek and I suspect we’re right. It is one of the things to watch on my Horoscope for 2011. And, while I think cross-media comparison of ad-spend has some holes and should be read with caution, it is worth noting that online video represents only 7% of the entire ad market. Things are moving, though. New Media Age reported that “video ad network WebTV Enterprise saw ad revenues triple last year” with a 244% rise in video ad revenue in 2010 compared to the previous year and seems be a decent indicator for that sector of the ad business.

MediaTel noted that worldwide PVR sales are expected to hit the 50 million mark in 2014 but will, eventually, be overtaken by internet-enabled television sets. Around 350 million connected TVs are expected to be sold worldwide by 2015, according to Parks Associates (source: MediaTel). Adding a note of caution into the discussion, however, news that a new content distribution network built by BT will ensure greater bandwidth for users wanting to watch online video without disruption, even during peak online usage times (source: MediaTel). If such initiatives lead to a 2-tier web will consumers pay for it or head straight back to broadcast? An interesting one to watch.

Another note of caution was injected into the video discussion by Netimpreative, who note that “Online video rentals ‘failed to live up to hype’ in 2010” quoting Screen Digest’s figures that, in the US, network-delivered rentals and sales via the Internet and subscription TV systems accounted for $2.3 billion, representing 12.2% of the total market. At this stage, is 12% that bad?

Real Time

We’re moving to a more automated world, that’s for sure. How far we go is still to be seen but publishers everywhere are being encouraged to look at real-time trading systems. Eric Picard’s “Why publishers are afraid of real-time bidding” has some interesting things to say about data leakage and pricing while Jonathan Mendez suggests that real-time systems can make data pricing “more automated and more intelligent” (yes, second quote but it’s a good piece).

There is still some way to go. According to eMarketer, “Less a third of US publishers (31%) offered media buyers the possibility of real-time bidding on their ad inventory in 2010” but that will grow this year and it’s time for publishers to look at real-time systems in more detail. At ClickZ, Rob Beeler asks “What can a publisher – and more specifically, ad operations – do to ensure that RTB will help grow the business?”

Spend Watch

We can’t resist any little change in the revenue forecast numbers and I know I’ll be quoting lots of articles that predict even tiny changes in spend throughout the year. This last week or so we had a nice crop. New Media Age ran with “Display overtakes search in 2011 ad spend growth predictions” Advertising Age ran with “Local Advertisers Finally Join Ad Recovery” as in the third quarter of 2010, smaller US advertisers increased spending 8.1%, compared with a 9.1% hike in the top 1,000. The Economist told us that global spending on advertising will grow by 4.5% in 2011, led by online advertising which will increase by 16%.

In the land of mobile game advertising, Juniper Research discovered marketers spent $87 million worldwide advertising on mobile games in 2010. By 2015, the amount will be 10 times greater, at nearly $900 million (quoted at Miki Devic’s posterous blog). And talking mobile, I was surprised to see that only 12% of the UK population have mobile internet access, according to The British Population Survey and quoted by Netimperative.

Those will be four of the big news sectors I’ll be following in the coming weeks but what else did we learn this week? The Internet is now the main national and international news source for people ages 18 to 29 in the US says Pew Research (quoted at Mashable); SNL Kagan told us the number of location-based services users nearly tripled in 2010, reaching 33.2 million (via eMarketer); Internet Retailer reported that this Christmas shopping-related Google searches from mobile devices are up 230% and, of course, we heard again and again about the unstoppable rise of Facebook.

I’m already watching to see if any of these trends make next week’s news.

Curns’ Ad Links for 14 January 2011