Tracking Advanced Video Advertising Adoption

Transcription

1 Tracking Advanced Video Advertising Adoption Analyst Webinar Presented by: Yoav Schreiber Date: May 27, 2010 Washington DC / Paris

2 Agenda State of the Advertising Market Video Advertising Opportunity Tracking Activity and Maturity Audience Poll Results Analysis of Data Conclusions Q&A 2

3 State of the Advertising Market TV Advertising: Growth from the Bottom? The Majority of Advertising Revenue Appears to be Coming Back Comcast, 1Q 2010 Earnings Advertising Revenue Growth 1Q 2010 y/y Comcast % Cablevision % Time Warner Cable % Charter + 9.3% Source: Company Earnings 3 3

4 State of the Advertising Market Internet Advertising: Growth Driven by Traffic Google 1Q 2010 advertising revenue grew 22% y/y Aggregate paid clicks grew 15% y/y Will Google TV extend AdWords into the TV screen? Google Advertising Revenue (B) $6.5 $5.3 Google Site (AdWords) $4.44b (+20% y/y) Google Network (AdSense) $2.04b (+24% y/y) 1Q09 1Q10 Source: Company Earnings 4 4

5 $ millions State of the Advertising Market Internet Outpaced Cable and Broadcast TV Advertising Revenue within the first five years! 20,000 Annual Advertising Revenue, First 15 Years (current inflation-adjusted dollars) 15,000 10,000 Interactivity Addressability Accountability Broadcast Cable Internet 5,000 - Year 1 Year 2 Year 3 Year 4 Year 5 Year 15 Source: IAB/PricewaterhouseCoopers Internet Advertising Revenue Report 5 5

6 Video Advertising Opportunity Video Consumption on Each Platform Percent of time consuming video on each platform Penetration and Growth Mobile 1% Internet 2% Rental 3% VoD/DVR 20% Broadcast TV 76% Source: Rentrak 138m monthly users in 4Q09 (Nielsen) 16% monthly y/y usage growth in 4Q09 (Nielsen) 7b VoD transactions in 2009 (Rentrak) 91m monthly TSTV users in 4Q09 (Nielsen) VoD penetration >46m households (Rentrak) 25% monthly y/y usage growth in 4Q09 (Nielsen) 287m monthly users in 4Q09 (Nielsen) 1% monthly y/y usage growth in 4Q09 (Nielsen) Source: Rentrak 6 6

7 Video Advertising Opportunity Video Monetization Opportunity Percent of time consuming video on each platform Mobile 1% Internet 2% Rental 3% Spending ~$750m 2009 online video advertising revenue $5b expected by 2014 (emarketer) ~$130m advanced video advertising revenue in 2010; $4b expected by 2013 (Parks Associates) VoD/DVR 20% >50% of advertisements viewed in realtime or within 3 day commercial measurement period (Nielsen) Broadcast TV 76% Source: Rentrak ~$40b in U.S. Broadcast and Cable TV advertising revenue (IAB, Kantar Media, Yankee Group) Source: Rentrak 7 7

8 Tracking Activity and Maturity Timing Dashboard for Advanced Video Advertising Tool to help vendors and service providers assess market activity and readiness Uncovers gaps and opportunities Tracks frequency of advanced video advertising formats Tracks progress maturing from technical to commercial viability 8 8

9 Tracking Activity and Maturity Advanced Video Advertising Formats Request for Information (RFI): Interact with advertiser/merchant to request fulfillment via mail, phone, , SMS Dynamic On Demand Ad Insertion (ODAI): Dynamically generated playlist of ads addressable to the on demand consumer, with flexible insertion models Addressable Linear: Replacement of original advertising in linear feed with local or targeted advertising addressable to the user, STB, or household Interactive Telescoping: Offering to receive more content by transitioning from a linear spot to longer form advertising content Graphic overlays: Dynamic generation of localized information onto a linear feed Voting/polling: Interactive engagement with real-time aggregation of results 9 9

10 Tracking Activity and Maturity Stages of Advanced Video Advertising Maturity Interoperability and partner integrations determine technical viability scale Trials and deployments determine commercial viability scale Advertisers and brands critical to ultimate commercial viability High Scale Partnerships Deployments Technical Viability Commercial Viability Interoperability Trials Low Scale 10 10

11 Audience Poll Ad Format of Highest Interest to Media Buyers/Advertisers 38% Interactivity 62% Addressability 57% N=152 Most significant barriers to advanced video advertising 36% 36% 22% 18% Process Workflow Incomplete Standards Privacy Issues Limited Inventory Regulatory Ad format expected to be first to achieve broad adoption 38% 26% 19% N=152 8% 6% 3% On Demand Insertion Addressable Linear RFI Voting Polling Graphic Overlay Telescoping N=

12 Analysis of Data Announced Advanced Video Advertising Activity Advertising Format Stage of Maturity Interoperability Partnership Trial Deployment Total RFI Addressable Linear Dynamic ODAI Telescoping 1 1 n/a n/a 2 Overlays 2 n/a n/a n/a 2 Voting/Polling n/a 1 n/a 1 2 Total SeaChange ARRIS This Technology NDS Concurrent BlackArrow FourthWall Media OpenTV Microsoft Cisco Ericsson Visible world Invidi RGB Networks Canoe Ventures Avail-TVN Zodiac Motorola ActiveVideo Clearleap Sigma-Systems Nielsen Rentrak TNS Fox Communications Discovery Comm. NBC-Universal Rainbow Media Cablevision October 2009 May Comcast Virgin Media Cox Communications Charter Communications Sunflower Broadband Bresnan Communications Comcast Media Center Horry Telephone 12

13 Analysis of Data Dynamic On Demand Insertion Dominant Advertising Format Aligned with growth in on demand consumption De-facto addressability But Greater Combined Activity within RFI and Addressable Linear Leverage established workflows/processes Growing base of interactive/ebif and IP/Hybrid devices Advertising Format % of Total Cases 38% 22% 22% 6% 6% 6% Request for Information Addressable Linear Dynamic On Demand Insertion Telescoping Graphic Overlays Voting/Polling 13 13

14 Analysis of Data Progressing Towards Increased Technical Viability Scale 59% of activity in interoperability and partnership stages Preliminary Evidence of Commercial Viability Over 40% of activity already in market trials/deployments Which advertising formats most mature? Stage of Maturity % of Total Cases 34% 25% 19% 22% Interoperability Partnership Trial Deployment 14 14

15 Analysis of Data RFI Technical Viability: Integration issues being solved by Canoe Innovation Lab, CableLabs AdLab Pace of EBIF adoption (North America) and IP/Hybrid STB deployments (global) RFI Commercial Viability: Charter Communications capturing census-level data in 3Q 2010 Will it drive brand participation? Canoe RFI not addressable below national program level Is interactivity sufficient to sustain advertiser/brand involvement? Deployment, 14% RFI Stage of Maturity Trial, 14% Partnership, 14% Interoperability, 57% 15 15

16 Analysis of Data Addressable Linear Technical Viability: Dueling audience measurement and ad insertion approaches Panels (NDS Dynamic/TNS) vs. census (Concurrent/Rentrak) STB vs. network/headend ad insertion Addressable Linear Commercial Viability Comcast household addressable linear advertising trial in Baltimore, MD Included major brands (Walgreens, Walmart), enhancing commercial viability Horry Telephone deploys addressable linear advertising Commercial viability of RGB/SeaChange partnership Addressable Linear Stage of Maturity Deployment, 29% Interoperability, 29% Trial, 14% Partnership, 29% 16 16

17 Analysis of Data Dynamic On Demand Ad Insertion: Highest commercial viability of all formats with trials and deployments constituting 58% of activity Virgin Media pre-standard deployment & national footprint proves value-prop Comcast will expansion of Florida trial raise commercial viability with brands? Cox Arizona trial refreshes 4 adds/week: limited inventory/addressability? Dynamic On Demand Insertion Stage of Maturity Deployment, 25% Interoperability, 17% Partnership, 25% Trial, 33% 17 17

18 Conclusions RFI and addressable linear enhance existing spots - Deliver interactivity and measurability Addressability still elusive Measurement data critical to gaining advertiser/brand buy-in Format Drivers Obstacles Interactive Request for Information (RFI) Broad & growing base of deployed agents to drive interactive ads Does it extend beyond direct mail on steroids? Canoe RFI emphasizing interactivity > addressability Addressable Linear Dynamic On Demand Ad Insertion Established workflow/process Relatively clear/understood market opportunity Relatively established technical implementation Fragmented implementations Addressability hurdle Less understood market opportunity What is the return for on demand ads? 18 18

19 Conclusions Content and Kingmakers The future of advertising is not about social, not about viral videos, not about mobile, not about any new medium or any new ad unit but about data. Those who know what to do with this will be the new kingmakers, the new rulers of Madison Avenue or the creators of a new Avenue of media. Source: Death of the Impression/Rise of the Data Economy Michael D. Andrew February 19, 2010 MediaPost Publications 19 19

20 Thank You Insert Photo For more information, please contact Yoav Schreiber Senior Analyst, Digital Media Infrastructure yschreiber Washington, D.C Signal Hill Plaza, Suite 200 Sterling, VA 20164, United States Phone Toll free Fax Paris, France Bureaux de Sèvres - 2, rue Troyon Sevres Cedex, France Phone +33 (0)