Mon945Krasilovsky

Peter Krasilovsky VP and Program DirectorBOLO Presentation, Scottsdale

October 18, 2010

Online and Mobile Opportunities in Local

2© 2010 BIA/Kelsey

About BIA/Kelsey: Tracking the Transition of Local Media Since 1985

• Local-Themed Forecasts, Analysis and Valuations• Major “thought leader” events• Five strategic research programs, including:

1. Interactive Local Media

2. Vertical Marketplaces

3. Digital Strategies for Broadcasting

4. Mobile Local Media

5. Digital Yellow Pages

3© 2010 BIA/Kelsey

Some of BIA/Kelsey’s 100+ Clients

4© 2010 BIA/Kelsey

Our Discussion Today

1. Issues with Local

2. Defining and Sizing the Local Market

3. A Look at Local Advertisers

4. The Impact of Mobile Local Media

5© 2010 BIA/Kelsey

The Trouble with Local

• Ad agencies haven’t really been a big part of the world of local online advertising.

• Apart from some geotargeting, little attention has been paid to local ad products (geo-target banners, local search, couponing, directory and social).

• Basically, local has been deemed “too fragmented” and hard to track.

6© 2010 BIA/Kelsey

Limited Agency Support

• Agency support has largely been limited to Certified Marketing Representatives (CMR).

• CMRs primarily move Yellow Pages/directional media dollars to IYPs and other local “service” media.

7© 2010 BIA/Kelsey

New Attention Being Paid to Local

• Recently, we’ve been seeing ambitious local initiatives at several agencies (General Motors, United Airlines, Dunkin Donuts etc.)

• The initiatives have been spurred from the client side, as national and regional clients increasingly see local as a critical channel.

• Firms such as AdReady, Mixpo and PaperG have acted as agencies for clients as they provide local “versioning.”

8© 2010 BIA/Kelsey

GM ‘Dying’ to Spend Locally

“We have 700 local dealer groups, and they’re dying to spend it locally. At the end of the day, we’re looking for local eyeballs. For GM, (local media is) just a couple of points. But we’re talking about a $1 billion account.”

GM Plan Works Media Director Jeff Hughes

9© 2010 BIA/Kelsey

What’s Driving Local Now?

1. Local provides client insights and understanding.

2. Geotargeting tools work increasingly well, and local contextual content has dramatically improved

3. Advertisers are cutting newspaper and TV spending, and looking for new ways to reach people locally

4. Local advertisers are getting used to online media

Trend: Regional advertising is especially hot. Biggest gains are from government and politics; financial; insurance; and energy/utilities.

10© 2010 BIA/Kelsey

Local is a High Stakes, High Volume Game

• The Local Ad Market brings in $133 Billion annually.• Local/Local SMBs make up 38% ($50.5 Billion) • National/Local make up 62% ($82.5 Billion)


Traditional Media Still Dominates Local Ad Spending

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


US: 2008 Interactive Ad Market $29.18B

Source: Proprietary research by The Kelsey Group, mid-2007. Sample: 1,200 SMB advertisers in 4 major US MSAs).Methodology: Telephone survey. Cosponsor: ConStat.

Turn Around Time is a Key

Driver of Segments for

SMBs; National &

Aggregators Buy

Performance & Identity


US: 2013 Interactive Ad Market $58.57B(CAGR 15%)

Source: Kelsey Group

Turn Around Time is a Key

Driver of Segments for

SMBs; National &

Aggregators Buy

Performance & Identity


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)

Av. Annual Spend on Website*

$911 $628 $2,670 $6,117

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 Advertiser Spending Widely Varies


High Spenders account for almost as much total spending as Medium Spenders. Each of these brackets far exceeds total spending accounted for by the much more numerous Low and Very Low spenders.

High Spenders Account for a Large Portion of Ad Spending

Source: Kelsey Group estimates based on LCM XI data, Nov. 2007. Estimates are sensitive to assumptions.

Share of Total Ad Spending


Online Makes up 22% of SMB Spending

Source: Local Commerce Monitor Wave XIII August 2009; Wave XII August 2008. (Sample for each Super-Vertical approximately 300.) Methodology: Online. Co-sponsor: ConStat.


How SMBs Make Buying Decisions

31%

57%

0% 20% 40% 60%

Media Performance

Other People (Partner,

News, Friends, Family,

Advisors)

Source: Local Commerce Monitor Wave XII August 2008. (Sample: 299). Methodology: Online. Co-sponsor: ConStat.

No.1 reported issue for buying decisions is ‘media performance’ at 31 percent…sort of… BUT…57 percent of business owners base media buying decisions on what other people say and do


SMBs: Influences on Media Buying Decisions

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Not Just YP and Newspapers. Local Consumers Turn to Multiple Media Sources

• Parallels the fragmentation seen in the use of media by SMB advertisers

Nu

mb

er o

f D

iffe

ren

t S

ou

rces

Use

d (

Pas

t Y

ear)

Number of Sources Used in Shopping for Local Products or Services

Sources: LCM SMB survey. Methodology: Online. Co-sponsor: Constat.


Mobile Local Media Increasingly Important, Too

US

$ B

illio

ns

Note: Numbers are rounded.

$130.6

$133.3 $133.2

$137.3

$140.2

$145.2

$156.3


Mobile = Local

• Portability and location awareness of mobile ~ Immediacy of local

• Local intent: Mobile vs. Online


Example: Placecast ShopAlerts

• Geo-fencing: opt-in message sent within virtual parameter.

• .5 mile urban; 1 mile in rural• Opt-in prompted through

other media • 3 promotions per week max,

plus valued content• Example: North Face –

1000 retail geofences– 60% found it “innovative”, – 79% +likelihood of store visit– 65% made a purchase – 73% of will use in the future


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


Local’s Share of Mobile Search Volume

Local Local

Non-LocalNon-Local


Commercial Searches in Past Six Months

Searches for local products or services now exceed out-of-market searches by a wide margin.

Out-of-market searches

Local searches

Source: Mobile Market View Wave III, October 2009, sample = 504; Wave II, October 2008, sample = 512; Wave I, September 2007, sample = 500. Methodology: Online. Cosponsor: ConStat.


Things to Think About

1. Local has become a major channel for advertising. It can reach consumers throughout the sales funnel.

2. It is increasingly easy to work with local via vendors and networks

3. Small business advertisers are more ready to advertise than previously, and can be effectively targeted.

4. Multiple ad channels can target the local consumer.

5. Mobile is an especially effective channel for local targeting.


Come to Interactive Local Media:10!

Questions and comments:Peter Krasilovsky | [email protected] | 760.918.0450

Mon945Krasilovsky

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