Transcript
Peter Krasilovsky VP and Program Director, BIA/Kelsey
BOLO 2011
Interactive Local Media: The New Wave
2© 2011 BIA/Kelsey
About Us: Navigating The Local Ecosystem
Search Engines
Broadcasters
Re-sellers
Technology Providers
Yellow Page Companies
Verticals and Newspapers
VCs, PEGs
3© 2011 BIA/Kelsey
Our BIA/Kelsey Word Cloud
4© 2011 BIA/Kelsey
Come to ILM West San Francisco December 12-14
Bob Pittman, CEO, Clear Channel
Also:Kara Swisher, AllThingsDZorik Gordon, ReachLocalTodd Rowe, GoogleJohn Paton, Digital First
5© 2011 BIA/Kelsey
Today’s Local SuperForum Agenda
1. Sizing The Local Market and Hot Trends (Krasilovsky)
2. Local Opportunities in Media (Triplett, AZ Republic)
3. The Local Search Opportunity (Yeich, Relevant Ads)
4. Local opportunities in Rich Media (Simon, Local.com)
6© 2011 BIA/Kelsey
Local = $132 Billion: Local/Local vs. National/Local
• Local/Local SMBs make up 38% ($50.5 Billion) • National/Local make up 62% ($82.5 Billion)
38%
62%
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Interactive is Minority of Today’sLocal Spending
Newspapers18.9%
Direct Mail28.7%
TV13.9%
Radio10.8%
Yellow Pages8.3%
OOH4.9%
Cable4.1%
Magazine2.4%
Online / Interactive 6.9%
ERPM*0.8%
Mobile0.3%
2010 U.S. Local Media Revenues — $133.2 Billion
Digital revenues associated with traditional media (e.g., Web sites associated with local TV stations, local radio stations, newspapers and magazines) are included in the revenues for the traditional media. Revenues for Internet Yellow Pages that are associated with print Yellow Pages are included in the overall Yellow Pages media category.
*ERPM = E-Mail, Reputation and Presence Management
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US: 2010 Interactive Ad Market $29.8 B
Search; $12.90
Display; $8.80
Classifieds & Ver-ticals; $4.90
ERPM, $0.46
Lead Gen.; $2.20
Local Video; $0.03
Mobile Display; $0.02
Mobile Search; $0.04 SMS & Other; $0.10
Source: Proprietary research by The Kelsey Group, mid-2007. Sample: 1,200 SMB advertisers in 4 major US MSAs).Methodology: Telephone survey. Cosponsor: ConStat.
Search has gotten local advertisers
online
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US: 2013 Interactive Ad Market $58.57B(CAGR 15%)
Search; $26.70
Display; $12.60
Classifieds & Verticals, $4.94
ERPM, $3.1
Lead Gen.; $6.30
Local Video; $1.80
Mobile Display; $0.57
Mobile Search; $2.27 SMS & Other; $0.27
Display will grow at a
slower rate; major revenue
growth will come from targeted
“directional media” and
mobile.
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Bracket Very Low Low Medium High
Range of Annual Spend $0 - $1,500 $1,500 -
$5,000$5,000 - $19,000 $19,000+
Av. Annual Spend on Adv.(Monthly Spend)
$410 ($34)
$2,516($210)
$8,436($703)
$25,564($2,130)
Percent of SMBs (by count) 61% 16% 17% 5%
Percent of Total Ad Spend 7% 12% 42% 39%
*Base: LCM respondents that have a “web site or homepage”.
Source: BIA/Kelsey estimates based on LCM data, Estimates are sensitive to assumptions.
Local Local Spending: The Big Guys Spend Disproportionally More
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Auto Dealer Marketing Spend: Online
Onli
ne C
lassif
ieds
Mkt
gSEO
Display
/Ban
ner
Onli
ne P
ay P
er L
ead
Keywor
ds IYP
Oth
er0%
10%20%30%40%50%60%
Spend
Spend
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Use of Media Has Exploded for Both SMBs and Consumers
The ratio of media used by Consumers is 2x what SMBs buy.
SMBs
Consumers
*Number of different media used by consumers when shopping for local products or services.
Note: Each survey wave typically identifies a larger number of media to choose from, so there is some “longer menu” effect captured in this data.
Sources: BIA/Kelsey surveys.
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Local Use of Social Media Is Widespread
Blog
Other Social Network
0% 10% 20% 30% 40% 50% 60%
19%
22%
25%
43%
48%
Local business SMB usage of various “social media” is already intense. In our research, nearly half reported using Facebook for advertising or promotion. 40% said they have a Facebook page specifically for their business.
Use of Social Media
Sources: Local Commerce Monitor – Wave 14 (BIA/Kelsey and Constat)
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New Businesses are Younger; Use More Social Media
0-3 Years 4-6 Years 7-10 Years
11+ Years0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
17%22%
28%
37%
32% 32%
18%
7%
Print YP
Print YP: Overall 29%
Use of Print Yellow Pages vs. Twitter(by Age of Business) Wave 14 (Q4 2010)
Twitter: Overall 19%
Twitter versus YP usage tells a story about embrace of social media. While Yellow Pages usage stays at 29%, Twitter use has grown 2X to 19%. Usage levels by SMB age suggests further growth by Twitter and erosion of PYP in most age brackets.
Sources: BIA/Kelsey surveys
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The Move Away from Horizontal Media
• Inevitably, there is a move away from Horizontal media (newspapers, Yellow Pages) to specific Vertical media focusing on one segment or theme.
• Verticalization is a smart move as horizontal media begins to decline.
• Verticals provide different entry points for consumers, and boast synergies among related categories (i.e. dining, events)
• The promise of vertical media is:– Focused content– Higher value search– Better leads – Better conversion rates
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Verticals: High CPM Rates
•CPM rates for verticals are highly attractive. They range from $5 to $60 depending on the vertical. As a general rule, rates are higher when they are more specifically tailored towards high value customers.
•Sources: Adify, Centro
Vertical Category
Typical CPM
Tech $10-22
Moms $15
Travel $8-9
Local $7-9
Sports $3-4
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Vertical Features for Different Generations
LEGAL SHOPPERS• Gen Y – Divorce,
custody, family law• Gen X – Wills & Estates• Boomers – Most diverse
legal needs
AUTOMOTIVE SHOPPERS• Gen Y – 2x more likely to go
online to buy/sell a car• Gen X – 2-4x more likely to
have used Craigslist.com• Boomers – 2-3x more likely
to have contacted in person
INSURANCE SHOPPERS• Gen Y – 2-4x more likely
to be researching employer insurance
• Gen X – Least likely to want to talk live
• Boomers – Quote aggregators
RESTAURANT SHOPPERS• Gen Y – Chain Restaurants /
Take-out - Delivery• Gen X – Independents
*AT&T – Compete Vertical Shoppers Study. See slide 5 for limitations. As previously noted, not subject to 3rd party review.
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Verticals Increase The Size of The Funnel at The Initial Search Level (Awareness)
Purchase
Vertical Lead
Web Search
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Vertical Users: Greater Tolerance for Advertising When It Is Relevant
• Vertical sites have a major advantage over other publishers:
“Consumers love our advertising.”
Mitch Golub, President, Cars.com
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Increased Vertical Spending is Projected
4%
11%
0%
20%
Wave X Wave XI
Spend More on Verticals? (Print or Online)
Source: BIA/Kelsey LCM survey.
Verticals, (“Specialized Directories”) offer more targeted opportunities and often reach new more affluent target audiences
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Classifieds on WalMart? Deals from AARP?
• The new marketplace platforms have extended the reach of items and services to be sold.
• Walmart, MasterCard and AARP are among the non-media brands that are now posting classifieds and offering deals.
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Group Buying: THIS is ECommerce
• More than 95 percent of $2.5 billion space is oriented toward local.
• Daily deal publishers earn ecommerce revenues with a no money down model.
• Deals represent an alternative to a non-intuitive, search-centric approach.
• Deal participants can see higher impressions than traditional media. They can be upsold with product add-ons.
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The Disruptive Potential of Deals
• The ability to effectively target consumers based on transaction and search is creating an inevitable clash between:– Destination deal sites (Groupon and Living Social) – Search giants (Google); – Sales leaders (AT&T) – Financial Institutions (MasterCard, Visa, Amex).
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Chicago’s Most Subscribed Media
• The size of Groupon’s base in each market generally follows population size. The exception of Chicago, its headquarters. Although Chicago is the #3 market by population, it is Groupon’s largest market.
• Groupon’s email subscriber count in Chicago is much larger than both major Chicago papers together.
Weekday Circulation Subscribers
Groupon 1,505,000
Chicago Tribune 441,508
Chicago Sun-Times 251,108
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Advertising + ECommerce
“They get huge exposure exclusively about their business….300,000 emails (in Chicago)….. It is better than Thrillist and Daily Candy, which have CPMs of $250. That would be about $75,000. But with us, it’s all free.”
Andrew Mason, CEO, Groupon
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BIA/Kelsey Forecast: Deals U.S. Gross Revenues (Sept. 2011)
2010 2011 2012 2013 2014 20150
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
$873
$1,970
$2,455
$2,987
$3,564
$4,171
US
$ M
illio
ns
+36.7% CAGR
Source: BIA/Kelsey (2011)
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The New Retail Constellation: Cracking The Code on Impulse Buying
Retail
Rating and Reviews
Video
Inventory
Offers
Deals
Sharing
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Mobile Ad Spend: Local vs. National
2009 2010 2011 2012 2013 2014$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$279 $386 $493 $607 $733$922
$213
$404$692
$985
$1,402
$2,025
Non-Location Targeted Location Targeted
US
$ M
illio
ns
Note: Numbers are rounded.
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Intent on Local
• “Local search on the mobile device indexes higher than the desktop by about 2 to 3 times,”
-- Diana Pouliot, Mobile Ad Sales Director for Google
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Mobile Local Advertising: Evolving Towards Local (Eventually)
• Majority of the roughly $800 million U.S. mobile ad spend is brand advertisers and agencies.
• Market evolutions: move toward local– Better geotargeting for national brands (national – local)– More adoption by SMBs (local – local)
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Use of Mobile Advertising By SMBs
Usage levels of mobile advertising (all formats) by SMBs remains very low – still in the single digits.
SMB Use of Mobile Advertising
Source: Local Commerce Monitor Wave 14. November 2010.
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Local Mobile: Not Just Advertising
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Thank You
Questions and Comments
Peter Krasilovsky
pkrasilovsky@biakelsey.com
Personal Blog: www.localonliner.com
Company Blog: www.blog.biakelsey.com
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