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© 2006 Outsell, Inc. All rights reserved. 1

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© 2006 Outsell, Inc. All rights reserved. 2

Outsell Ad Spending Study: Where and Why Advertisers Move Online

SSP 28th Annual Meeting

June 9, 2006

Bette S. Brunelle VP and Lead AnalystOutsell, Inc.

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© 2006 Outsell, Inc. All rights reserved. 3

And what are you doing to attract them?

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© 2006 Outsell, Inc. All rights reserved. 4

About This Study

§ Outsell’s annual Ad Spending Study focuses on never-before-tracked areas such as advertisers’ views about Google vs. Yahoo! and Microsoft; performance of keyword ads vs. contextual and behavioral ads; adoption rates/penetration of online advertising; budget allocation, growth rates, and trade-offs across all types of advertising; and the purpose and media-type of ads.

§ The study is based on a survey Outsell fielded to 1,200 advertisers in November 2005, all responsible for ad spending or specifying ad budgets, controlling an estimated $2.4 billion in advertising. Confidence level is 95% +/- 3%.

§ This is the only study to analyze differences across advertisers and the markets they target: B2B, B2C, and Healthcare.

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© 2006 Outsell, Inc. All rights reserved. 5

3%

4%

9%

38%

46%Business

Consumers

Healthcare Institutionsor Practitioners

Government

Education

Source: Outsell’s Advertising Tracking DatabaseBase = 924 (Q5a, A)

Who Advertisers TargetPrimary Market Sectors Targeted

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© 2006 Outsell, Inc. All rights reserved. 6

Industries of the Advertisers Surveyed

1%1%

1%

4%

4%

5%

9%

11%

12%

13%

19%

20%Healthcare

Business Services

Manufacturing

Other Services

High Tech

Biotech/Pharma/Chemical/Food

Financial Services

Travel

Education

Legal Services

Government

Other

(By Segment)

Source: Outsell’s Advertising Tracking DatabaseBase = 1,214 (Q5, A)

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© 2006 Outsell, Inc. All rights reserved. 7

16%18%

19%

29% 29%

3%

23% 23%

6%

32%31%

2%

Online Media Print Media Events TV, Radio & Other Media

2005 Share of Budget 2006 Share of Budget Spending Growth Rate

Source: Outsell’s Advertising Tracking DatabaseBase = 625 (M3, A)

Allocation of Total Marketing Budget – Spending % by Media Type

Online Spend Growth Outpaces Print

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© 2006 Outsell, Inc. All rights reserved. 8

24%

2%

23%

2%

20%

3%

15%

6%

10%

2%

4%

9%

4%

6%

GeneralMagazines &Newspapers

Direct MailMktg.

TradeMagazines

Other PrintMedia

Custom PrintPubs.

Directories Newsletters

2006 Spending Growth Rate

Source: Outsell’s Advertising Tracking DatabaseBase = 436 (M4, A)

Puny Growth in All Major Print Categories; Targeted Pubs Have Edge

3.3% Total Print Spending Growth

Spending % by Print Type and Spending Growth Rate

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© 2006 Outsell, Inc. All rights reserved. 9

9%10%

24%21% 21%

8%

42% 43%

8%

29%26%

-3%

Online Media Print Media Events TV, Radio & Other Media

2005 Share of Budget 2006 Share of Budget Spending Growth Rate

Source: Outsell’s Advertising Tracking DatabaseBase = 80 (M3, A)

Healthcare Online Spend Outpaces Other MarketsHC Allocation of Total Marketing Budget – Spending % by Media Type

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© 2006 Outsell, Inc. All rights reserved. 10

37%

11%13%

30%

10%

42%

9%

66%

8%

29%

8%

41%

7%

44%

4%7%

3%

-30%

1%

188%

1%

-36%

Company'sOwn Site

OtherOnlineMedia

SponsoringContent

SearchEngines

Trade WebSite

E-mailMktg.

Webinars Gen. Bus.Site

OnlineDirectories

WeblogMktg.

WirelessMktg.

2006 Spending Growth Rate

Source: Outsell’s Advertising Tracking DatabaseBase = 80 (M5, A)

23.5% Total Online Spending Growth

Healthcare Search Engine Growth Sizzles

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© 2006 Outsell, Inc. All rights reserved. 11

24%

29%

6%

21%

7%

21%

2%

12%15%

11% 11%

4%

22%

2%

42%

OnlineGrowth

TradeMagazines

Direct MailMktg.

Other PrintMedia

Custom PrintPubs.

GeneralMagazines &Newspapers

Newsletters Directories

2006 Spending Growth Rate

Source: Outsell’s Advertising Tracking DatabaseBase = 80 (M4, A)

8.1% Total Print Spending Growth

Healthcare Print Relatively Healthy

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© 2006 Outsell, Inc. All rights reserved. 12

67%

52%

37% 38%43%

35%29%

38%

51%46%

51%

46%

61%56% 56%

48%

Google Yahoo! MSN Other SearchEngines

Google Yahoo! Other Behavioral Ads

% Extremely/Somewhat Effective Percent Using

Source: Outsell’s Advertising Tracking DatabaseBases = 80 (M10, A)

Search Keyword Contextual Placement

Healthcare Advertisers Value Keyword Ads

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© 2006 Outsell, Inc. All rights reserved. 13

24%

42%

9%

31%

10%

28%

3%

Online Growth Conferences Exhibitions Other Events

2006 Spending Growth Rate

Source: Outsell’s Advertising Tracking DatabaseBase = 80 (M6, A)

7.6% Total Event Spending Growth

Healthcare Conferences Lead StrongEvent Spending

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© 2006 Outsell, Inc. All rights reserved. 14Source: Outsell’s Advertising Tracking DatabaseBase = 80 (M13, A)

76%

69%

57% 56%

52% 52%48%

42%

Depth of thequalificationprofiles you

receive for eachlead

Maximize volumeof leads at all

stages ofqualification

Lead trackingdata and reports

Receiving ratingsof leads from hot

to cold

Self-managed adcampaign

Leads formattedfor direct loadinginto CRM systems

Consultant-managed ad

campaign

Guaranteedminimum

performance

% Extremely/Somewhat Important

Healthcare Advertisers Driven by Depth of Leads

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© 2006 Outsell, Inc. All rights reserved. 15

33%39%40%

44%44%45%51%

59%62%

67%

79%

86%

94%

84%90%

64% 64%

81%

70%

60%65%

68% 66%71%

Even

ts

Direct

mail mktg

.

Print

trade

mag

s

E-mail

mktg.

Webina

rs

Spon

sorin

g con

tent

Print

mags/n

ewsp

apers

Print

newsle

tters

Online d

irecto

ries

Inform

ation

al Web

site

Searc

h eng

ine sit

e

Print

direc

tories

% Extremely/Somewhat Effective (Traditional) Percent Using

Source: Outsell’s Advertising Tracking Database, Revised March 2006Base = 77 (M12, H)

For Healthcare Leads, Traditional Is Tops, for NowEffectiveness and Usage of Marketing Tactics for Lead Generation

% Extremely/Somewhat Effective (Online)

84% to 94% Using Traditional Up to 71% Using

Online for Leads

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© 2006 Outsell, Inc. All rights reserved. 16

What are you doing to attract advertisers?

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© 2006 Outsell, Inc. All rights reserved. 17

330 Primrose Road, Suite 510

Burlingame, CA 94010

Tel: (650) 342-6060

Fax: (650) 342-7135

http://www.outsellinc.com

Come By and Visit Us

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© 2006 Outsell, Inc. All rights reserved. 18

Outsell BackgroundOutsell is the leading research and advisory firm providing actionable market analytics for the information industry. Founded in 1994, Outsell helps publishers, commercial information providers, and content software technology vendors identify, maintain, and grow markets and revenue streams. Outsell also works with information management executives in top corporations, government agencies, and educational institutions to benchmark spending, optimize performance, and demonstrate best practices. Outsell invests heavily in unique information industry data assets that form the core of its high-quality, fact-based research, analysis, and recommendations for clients worldwide.

Outsell, Inc.'s information, analysis, opinion, and reports (the "Information") are based on qualitative and/or quantitative res earch methods and its staff's extensive professional expertise in the industry. Outsell, Inc. has used its best efforts and judgment in the compilation and presentation of the Information and believes the Information is accurate as of the date furnished, but the industry and the Information are subject to rapid change. Except as af oresaid, Outsell, Inc. makes no other representations or warranties, express or implied, concerning or relating to the Information.

Outsell, Inc. is the sole and exclusive owner of all copyrights in this report, including but not limited to the textual and graphic content and the organization, layout, and display of the information and data contained herein. As a user of this report, you acknowledge that you are a licensee of Outsell's copyrights and that Outsell, Inc. retains title to all Outsell copyrights in the report. You are not permitted to resell, distribute, disseminate, disclose, copy, or otherwise make use of the information contained in this report, except for use within your own work group within your company, unless your organization has obtained a content license from Outsell. Wherever and whenever the document, or any portion thereof, is disseminated by your organization with the permission of Outsell, Inc., it must bear the following in a prominent location: “© Outsell, Inc. All rights reserved.” To purchase multiple copies of and/or licensing rights for this report, please e-mail us at [email protected].