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Harnessing The Power Of MarTechAnna Bager & Patrick Dolan
November 27, 2018
Hello we are:
Patrick Dolan
President & COO, IAB
Anna Bager
EVP Industry Initiatives
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IAB EMPOWERS THE MEDIA AND MARKETING INDUSTRIES TO THRIVE IN THE DIGITAL ECONOMY.
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Half Year 2018 Year-Over-Year Digital Ad Revenue Growth
$ Bi
llions
*The Nielsen Company, Nielsen Ad Intel (Standard Calendar, Total includes B2B, FSI Coupons, Cinema, Out of Home), Oct. 2018. As of June 2017, Nielsen stopped tallying internet revenue.
Traditional Media Ad Revenue Change*(HY ‘17 vs. HY ‘18)
The Nielsen Company estimates traditionalmedia revenues for HY 2018 increased 3% from HY 2017
$40.3
$49.5
$0
$10
$20
$30
$40
$50
$60
HY 2017 HY 2018
Digital Ad Revenue Growth (HY 2017 vs. HY 2018)
21%
23%Growth
HY 2017 numbers have been restated to reflect the inclusion of podcast revenue.
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71%29%
However, Most Time Spent Online Tends to be on a Mobile Device
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Nearly three-quarters of all internet time is spent on a mobile device
Avg. Monthly Online MinutesTime Spent Online by Device
Desktop, Tablet or Smartphone (Mobile Browser or Apps)
Total Mobile
Minutes
Total Mobile
Minutes
IAB Digital Trends: Consumer Usage, Ad Revenue and Impact FY 2017 Report
Desktop Mobile
Half Year 2018 Ad Revenue: Digital vs. Traditional MediaHalf Year 2018 Ad Revenue ($ Billions)
PercentYoY Change
23%
5%
16%
-15%
-8%
-3%$2.7
$3.6
$5.2
$14.6
$26.6
$49.5
Radio**
Newspaper**
Magazines**
Cable TV**
Broadcast TV**
Digital*
% Change in Ad Revenue
from HY’17 to HY’18
Source:
*IAB Internet Ad Revenue Report
**The Nielsen Company, Nielsen Ad Intel (does not include Spanish Language TV), Oct. 2018.
As of June 2017, Nielsen stopped tallying internet revenue.
IAB/PwC:Nielsen:
$30.9 from mobile
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Total Social Media Revenue (Mobile + Desktop) Continues to Grow by Double-Digits
$7.0
$10.9
$16.3
$22.2
FY '14 FY '15 FY '16 FY '17 HY '18
1st Half Year 2nd Half Year
$7.0
$9.3
$9.5
$12.6
$13.1
?
US Social Media Ad Revenue ($ Billions)Across Formats and Devices
Half Year, Half Year and % YoY Growth
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$4.1
$4.4
$6.4
$2.9
Note: Half Year totals accurately reflect the sum of Half Year totals as rounded to two decimal places.
GrowthFY: 55%
1HY: 51%
Growth FY: 50%
1HY: 57%
Growth
1HY: 38%
GrowthFY: 36%
1HY: 37%
$ Bi
llions
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Total Video Ad Revenue (Mobile + Desktop) Continues to Climb
$2.6 $3.8 $5.2 $7.0
$3.3
$5.1
$6.7
?
FY '15 FY '16 FY '17 HY '18
1st Half Year 2nd Half Year
$8.9$6.4
$5.9
$11.9
US Total Video (Mobile + Desktop) Ad Revenue ($ Billions)Half Year, Half Year and % YoY Growth
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Note: Half Year totals accurately reflect the sum of Half Year totals as rounded to two decimal places.
Growth FY: 51%
1HY: 51%
GrowthFY: 33%
1HY: 36%
$ Bi
llions
*Note that HY’16 video revenue has been restated.
Growth
1HY: 35%
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Total Audio Ad Revenue (Mobile + Desktop) Grows by Double Digits Year Over Year
Total Audio Ad Revenue (Mobile + Desktop) ($ Millions)Half Year, Half Year and % YoY Growth
$425 M $603 M$935
$705 M
$971 M
?
FY '16 FY '17 HY '18
1st Half Year 2nd Half Year
$1.1B
$1.6B
Growth FY: 39%
1HY: 42%
Growth
1HY: 31%
M
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Reducing Fraud
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Cross Channel Attribution and Measurement
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Ad Blocking and Experence
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Government Legislation
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The Proliferation and Adoption of Devices to Access the Internet Has Impacted the Media Landscape
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Source: Nielsen Total Audience Report 2018
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Traditional outlets under pressure
Source: MediaRedef, Nielsen.
Traditional brands under pressure
Source: https://www.zerohedge.com/news/2017-04-05/fortune-500s-fastest-growing-and-shrinking-companies
Rank Sector Number of companies Weighted growth
1 Healthcare 45 12.6%2 Technology 47 6.3%3 Food & Drug Stores 10 3.2%4 Retail 45 2.1%5 Telecommunications 11 2.0%6 Transportation 19 1.8%7 Financial Services 78 1.1%8 Business Services 19 0.5%9 Defense & Aerospace 12 0.4%10 Engineering & Construction 12 0.4%11 Apparel 5 0.3%12 Automotives 17 0.2%13 Media 11 0.0%14 Restaurants and Leisure 11 -0.1%15 Household Products 15 -0.3%16 Materials 20 -0.6%17 Chemicals 14 -0.8%18 Industrials 15 -1.2%19 Food, Beverages and Tobacco 29 -1.4%20 Energy 64 -19.0%
Fortune 500 – Growth rate by sectorWeighted revenue growth by sector (2014-16)
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Traditional retail stores are in decline…
2017: largest number of retail closings in U.S. historyMore than 8,000 U.S. retail stores shuttered in 2017, ~4x 2016 closures662 retail bankruptcies in 2017, up 30% from year prior
3http://time.com/4865957/death-and-life-shopping-mall/file:///C:/Users/randall/Downloads/kp-pixlee-2017-digitally-native%20(1).pdf
Source: https://www.bloomberg.com/graphics/2017-retail-debt/https://money.cnn.com/2017/10/25/news/economy/store-closings-2017/index.html
https://money.cnn.com/2017/12/26/news/companies/retail-toughest-year-store-closings/index.html17
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...as growth in digital channels accelerates
Consumers shop online, date online, socialize online, hail cabs via apps and are entertained onlineConsumers Shop Online
Source: IAB, Prosper Insights 2017 Media Behaviors Insights Data
88%Purchase Products Online
Regularly or occasionallyUS Adults 18+
64%Download Apps
Regularly or occasionallyUS Adults 18+
56%Read Product Reviews
In Store to Decide Between Products
Regularly or occasionallyUS Adults 18+
Hail Cabs Over Mobile Apps
Socialize Online
Date OnlineComparison Shop on Smartphones in StoresAre Entertained Online
direct brands are nipping at the big brands’ heels...
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“dunn’s rules”
Source: https://medium.com/@dunn/digitally-native-vertical-brands-b26a26f2cf83
1. Its primary means of interacting, transacting, and story-telling to consumers is via the web.
2. The DNVB requires the commercialization of an e-commerce channel, but that channel is an enablement layer — it’s not the core asset.
3. The profit losing nature and small scale of the DNVBs leads most traditional retailers to ignore or underestimate these little tadpoles.
4. Some big companies now believe they can make these brands themselves.5. It is not e-commerce, it’s vertical commerce. The product gross margins are at least double that of
e-commerce (e.g. 65% versus 30%). The contribution margins can be 4–5x higher (e.g. 40–50% versus 10%).
6. The digitally-native vertical brand is maniacally focused on the customer experience.7. The digitally-native vertical brand drives a lot more customer intimacy than it’s competition. The
data is better because every transaction and interaction is captured. It’s one CRM. It’s one store, where everybody knows your name.
8. Deeper data on the consumer drives enables the DNVB to stay closer to the customer than its brick and mortar driven peers, and the ownership of the brand end-to-end fuels more affinity for a vertical commerce brand than even the best e-commerce experiences.
9. While born digitally, the DNVB need not end up digital-only.
Andy Dunn, founder, Bonobos
““
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Story telling invokes emotion and drives sales
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Shoppable ads
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Experience connects brands with audience
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New Devices and Formats Offer Consumers More Ways to Be Connected Online
IoT Opportunity: More ways for marketers to seamlessly connect with consumersIoT Challenge: New devices and formats will continue to provide measurement challenges for the industry
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Data and Programmatic drive customized communications
Programmatic Opportunity: Automated means to buy efficiently at scaleProgrammatic Challenge: Absence of universally accepted definitions causes difficulty in measuring and quantifying the market
Source: eMarketer. IAB/PWC Programmatic Ad Revenue Study.
Nearly Half To Ad Tech Companies
Opportunity:
Challenge:
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