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Outfront Conference April 2012 AdvertiserPerceptions.com
VIDEO ADVERTISING CONVERGENCE What Adver+sers Think™
Speaker: Ken Pearl, CEO
Outfront Conference April 2012 AdvertiserPerceptions.com P 2
Adver&ser Percep&ons is the leader in providing the media industry with research-‐based, adver&ser insight and guidance necessary for strengthening media brands and increasing adver&ser sa&sfac&on. We specialize in determining, analyzing and communica&ng what adver&sers think — their plans, opinions and mo&va&ons.
Outfront Conference April 2012 AdvertiserPerceptions.com
TODAY’S DISCUSSION
• Advertiser Optimism • TV to Digital Migration • Decision Drivers • Preferences: Format,
Pricing and Length
Advertiser Perceptions of Digital Video Advertising
P 3
Outfront Conference April 2012 AdvertiserPerceptions.com
STUDIES USED
P 4
ADVERTISER INTELLIGENCE REPORTS • Wave 16 • Fall 2011 VIDEO ADVERTISING CONVERGENCE STUDY • Preliminary/Early Findings • Release: Late May 2012 DEMAND-SIDE OF DIGITAL VIDEO ADVERTISING STUDY • Conducted by Advertiser Perceptions for IAB • Fall 2011
Outfront Conference April 2012 AdvertiserPerceptions.com
METHOD • INTERVIEWS CONDUCTED ONLINE AND BY PHONE
• INCENTIVES INCLUDE CASH AND INFORMATION
Profiles of Leading US Advertisers Overall
Marketer 40% Agency 60% VP and Above 33% Director/Supervisor 33%
Manager/Planner/Buyer 33%
METHODOLOGY AND PROFILE OF LEADING U.S. ADVERTISERS Qualification: 100% Involved in Television and/or Digital Video Media Brand Selection Decisions
P 5
DIGITAL TV
Outfront Conference April 2012 AdvertiserPerceptions.com P 6
ADVERTISER OPTIMISM INDEX When More Plan to Increase than Decrease Ad Spending in the Next 12 Months
Outfront Conference April 2012 AdvertiserPerceptions.com
AIR Wave 11 Spring 2009
AIR Wave 12 Fall 2009
AIR Wave 13 Spring 2010
AIR Wave 14 Fall 2010
AIR Wave 15 Spring 2011
AIR Wave 16 Fall 2011
Broadcast TV -17 -8 0 -1 5 5 Cable TV 1 11 13 15 19 21 Digital (net) 40 55 60 59 48 52
-30
-20
-10
0
10
20
30
40
50
60
70
Optimism
Pessimism
ADVERTISER OPTIMISM
Base: All respondents Benchmarks represent differences between respondents increasing and decreasing ad spending in the next 12 months
Trends in Ad Spending, Next 12 Months Differences Between the Percent Increasing and Decreasing by Media
Optimism for Digital, Cable and Broadcast
Digital (+12)
Cable (+20)
Broadcast (+22)
P 7
Spring 2009 Fall 2011
Outfront Conference April 2012 AdvertiserPerceptions.com
48
49
50
51
52
53
54
55
Fall 2011 Digital Display 50 Digital Search 53 Digital Video 54
Search
ADVERTISER OPTIMISM DIGITAL VIDEO More Optimism About Increasing Video Ad Spending
Base: All respondents by applicable media Benchmarks represent differences between respondents increasing and decreasing ad spending in the next 12 months
P 8
Video
Display
Video
Digital Ad Spending, Next 12 Months Differences Between the Percent Increasing and Decreasing by Media
Outfront Conference April 2012 AdvertiserPerceptions.com
Q: Imagine the amount of your company's/your client's total (SEGMENT) advertising budget as a whole is a pie, and each of these media types is a share of the pie. In the next twelve months, would you expect the share spent on each to increase, decrease or stay the same? Base: All respondents by applicable media
Ad Spending, Next 12 Months Differences Between the Percent Increasing and Decreasing by Media
ADVERTISER DIGITAL VIDEO OPTIMISM BY AD CATEGORY
54
77
66 65 63 61 61 58 57
54 50 49
44 44 43 37 35
0
10
20
30
40
50
60
70
80
90
100
P 9
All Categories are Optimistic about Video
Most Op+mis+c Auto Consumer Electronics Financial Least Op+mis+c Beauty Telecom Energy
Outfront Conference April 2012 AdvertiserPerceptions.com
TV TO DIGITAL MIGRATION
P 10
Shifting Ad Dollars, Reasons Why and Issues
Outfront Conference April 2012 AdvertiserPerceptions.com
DIGITAL VIDEO AD SPENDING | NEXT 12 MONTHS Majority Plan to Increase Digital Video Advertising
Q: Imagine the amount of your total online display (not including search) advertising budget as a whole is a pie, and each of these media types is a share of the pie. In the next 12 months, would you expect the share spent on each to increase, stay the same or decrease? Base: ALL RESPONDENTS
• Agencies are more Bullish than Marketers
• TV and Digital Media Decision Makers are Aligned
55% Marketers
69% Agencies
P 11
Source: IAB Demand Side of Digital Video Advertising Study, 2011 –Conducted by Advertiser Perceptions
Outfront Conference April 2012 AdvertiserPerceptions.com
DIGITAL VIDEO AD SPENDING | NEXT 12 MONTHS Average Digital Video Advertising Share of Budget Increase…
Q: What overall increase in digital video advertising do you expect in the next 12 months compared to the past 12 months? Base: ALL RESPONDENTS
55% Marketers
69% Agencies
P 12
Source: IAB Demand Side of Digital Video Advertising Study, 2011 –Conducted by Advertiser Perceptions
22%
Outfront Conference April 2012 AdvertiserPerceptions.com
TELEVISION TO DIGITAL MIGRATION BEGINS TV Ad Budgets are Starting to be Used for Digital Spending
Q: For each website/network/DSP that you will primarily place digital video on, please tell us if the money for digital video primarily come s from …? (Select one.) Base: All Digital Respondents
Percent of Respondents Stating Budget Source for Digital Video Advertising
53%
14%
33%
Digital TV Both
P 13
TV Ad Budgets Paying for Digital Video Adver&sing
Outfront Conference April 2012 AdvertiserPerceptions.com
DIGITAL VIDEO ADVERTISING | REASONS WHY
Q: Why are you (extremely/somewhat likely)to shift ad dollars from television advertising to digital video advertising in the next 12 months? Base: Those extremely/somewhat likely to shift ad dollars from television advertising to digital video advertising in the next 12 months.
Total Ad Budget
P 14
Source: IAB Demand Side of Digital Video Advertising Study, 2011 –Conducted by Advertiser Perceptions
In their own words (unaided)
Digital TV
“More Targetable”
“Produc&on is Less Expensive”
“Overall More Efficient”
“More Bang for the Buck”
Outfront Conference April 2012 AdvertiserPerceptions.com
TOP TWO AIDED REASONS FOR MIGRATION
Source: IAB Demand Side of Digital Video Advertising Study, 2011 –Conducted by Advertiser Perceptions
REASONS Better ROI
Agencies 53%
Marketers 62%
REASONS Audience is Moving
Agencies 47%
Marketers 41%
Better ROI…followed by It’s Where the Audience is Moving
P 15
Digital Media Decision Makers
55%
TV Media Decision Makers
57%
Digital Media Decision Makers
44%
TV Media Decision Makers
50%
Outfront Conference April 2012 AdvertiserPerceptions.com
In their own words (unaided) DIGITAL VIDEO ADVERTISING | WHY NOT
P 16
Source: IAB Demand Side of Digital Video Advertising Study, 2011 –Conducted by Advertiser Perceptions
Digital TV
“Client Experience”
“Proven Effec&veness”
“Mass Reach” Less about, Why Not Digital More about, Why Television
Outfront Conference April 2012 AdvertiserPerceptions.com
TOP TWO AIDED REASONS WHY NOT
Source: IAB Demand Side of Digital Video Advertising Study, 2011 –Conducted by Advertiser Perceptions
REASONS ROI
Agencies 36%
Marketers 56%
REASONS Standard Metrics
Agencies 44%
Marketers 38%
Less Effective ROI…followed by Lack of Standard Metrics
P 17
Digital Media Decision Makers
44%
TV Media Decision Makers
43%
Digital Media Decision Makers
41%
TV Media Decision Makers
43%
Outfront Conference April 2012 AdvertiserPerceptions.com
MEDIA DECISION MAKING
P 18
Criteria Used, What’s Important to Most and Who Decides
Outfront Conference April 2012 AdvertiserPerceptions.com
Ad Results are #1
148
134 121 121 119
112 114 102
83 75
56 49
0
20
40
60
80
100
120
140
160
IMPORTANT MEDIA SELECTION CRITERIA | DIGITAL VIDEO
Q: Please think about MEDIA TYPE advertising spending on (SEGMENT) generally. Please tell us how important each of these criteria are in determining where to spend your company's advertising dollars. Base: Total digital video respondents. Index 100 = total average of all related media brands
Index of Percent Rating Media Selection Criteria Very Important (5 on a 5-Point Scale)
P 19
Important to Most Ad Results Audience Composi+on Targe+ng Op+miza+on Audience Reach Important to Fewest Cross-‐Media Integra+on Marke+ng Services Image/Environment
Outfront Conference April 2012 AdvertiserPerceptions.com
Slightly More Agencies Care About… • Targeting • Optimization • Engagement • Content • Image
0
20
40
60
80
100
120
140
160
Agency Marketer
IMPORTANT SELECTION CRITERIA FOR DIGITAL VIDEO AGENCIES AND MARKETERS AGREE ON MOST
Q: Please think about MEDIA TYPE advertising spending on (SEGMENT) generally. Please tell us how important each of these criteria are in determining where to spend your company's advertising dollars. Base: Total digital video respondents Index 100 = total average of all related media brands
Index of Percent Rating Media Selection Criteria Very Important (5 on a 5-Point Scale)
P 20
Outfront Conference April 2012 AdvertiserPerceptions.com
AD RESULTS MATTERS MOST | DIGITAL VIDEO AGENCIES / MARKETERS
19%
26%
32%
32%
37%
43%
44%
48%
55%
56%
61%
0% 10% 20% 30% 40% 50% 60% 70%
Time Spent on Website
Number of Page Views
Number of Impressions
Number of Visitors
Impact on Offline Response and/or Retail Traffic
Click-thru Rates
Impact on Product Awareness
Impact on Brand Awareness
Impact on Sales
Return on Advertising Investment (ROI, ROA, Sales
Conversion Rates
Agency Rank
Fall 2011
17%
26%
26%
29%
37%
43%
44%
45%
56%
63%
63%
0% 10% 20% 30% 40% 50% 60% 70%
Time Spent on Website
Number of Impressions
Number of Page Views
Number of Visitors
Impact on Offline Response and/or Retail Traffic
Impact on Product Awareness
Impact on Brand Awareness
Click-thru Rates
Return on Advertising Investment (ROI, ROA, Sales
Conversion Rates
Impact on Sales
Marketer Rank
Fall 2011
Q: How important are these aspects of ad results?
Base: Respondents rating ad results 3-5 on a 5 point scale.
Percent Rating Criteria Very Important (5 on a 5-Point Scale)
P 21
Outfront Conference April 2012 AdvertiserPerceptions.com
22
Q: To the best of your knowledge, please tell us which role/function is most responsible in the following aspects of decision-making for digital video advertising. Base: ALL RESPONDENTS
Respondentsà Total Agency Marketer Whether to Use Digital Video Adver+sing: Agency (Net) 47% 55% 28%
Marketer (Net) 41% 33% 60%
How Much Budget to Allocate for Digital Video Adver+sing: Agency (Net) 55% 65% 31%
Marketer (Net) 37% 28% 59%
Crea+ve, Tac+cs, and Placement Digital Video Adver+sing: Agency (Net) 62% 71% 41%
Marketer (Net) 26% 17% 47%
WHO IS RESPONSIBLE FOR DIGITAL VIDEO AD DECISIONS? Roles are Unclear…Except for Creative, Tactics and Placement Decisions
Outfront Conference April 2012 AdvertiserPerceptions.com
DIGITAL VIDEO ADVERTISING
P 23
Preferences: Format, Pricing and Length
Outfront Conference April 2012 AdvertiserPerceptions.com
Format, Pricing and Length DIGITAL VIDEO ADVERTISING PREFERENCES
Source: IAB Demand Side of Digital Video Advertising Study, 2011 –Conducted by Advertiser Perceptions
P 24
?
EXPANDABLE BANNER
IN-‐ BANNER
RICH MEDIA OVERLAY
?
10 SECONDS
30 SECONDS
60 SECONDS
?
CPV
CPC CPM
Format
Pricing
Length
Outfront Conference April 2012 AdvertiserPerceptions.com
Pre-Roll, 15 Seconds, CPM Pricing DIGITAL VIDEO ADVERTISING PREFERENCES
DIGITAL VIDEO
ADVERTISING
PRICING CPM
FORMAT Pre-‐Roll
LENGTH 15 Seconds
Source: IAB Demand Side of Digital Video Advertising Study, 2011 –Conducted by Advertiser Perceptions
P 25
Outfront Conference April 2012 AdvertiserPerceptions.com
ANSWERS • Advertisers are optimistic about Digital Video Advertising • The Migration of ad dollars from Television to Digital has begun • Primary Reasons Why?
– ROI – Audience Shift
• Why Not? – ROI Concerns – Lack of Standard Metrics
• Ad Results, Audience, Targeting and Optimization are key decision drivers
• Preferences – Format: Pre-Roll – Length: 15 Seconds – Pricing: CPM
VIDEO ADVERTISING CONVERGENCE SUMMARY
P 26
Outfront Conference April 2012 AdvertiserPerceptions.com
VIDEO ADVERTISING CONVERGENCE THERE’S A LOT WE STILL NEED TO KNOW
P 27
Learn More About the Video Adver2sing Convergence Study at… adver+serpercep+ons.com/solu+ons/digital-‐video-‐convergence/
Outfront Conference April 2012 AdvertiserPerceptions.com P 28
Adver&serPercep&ons.com