Internet TV Advertising – Taking Centre Stage

Internet TV Advertising

According to Nielsen’s online consumer landscape report, 24% of Australians are viewing some of their favourite TV programs on demand or via catch up TV. As a result, Mediacom estimates TV streamed from the internet now accounts for up to 12 per cent of total TV viewing (March 2012). There is thus little wonder why brands are flocking to take up internet TV advertising for Australia’s most popular TV programs.

So popular is internet TV advertising becoming; the cost to advertise is starting to outstrip the cost for placement during the traditional scheduled format. In fact last week it was reported that online TV advertising for the Voice reached a CPM of $75 whilst advertising during the scheduled TV slots for the hit format was $37 CPM.

But whilst online TV advertising is commanding a premium – it is still early days……

It’s big and it’s going to get bigger.

According to Comscore in late 2011, internet TV had already reached upwards of 12 million viewers per month in Australia. But where are the eyeballs going? Vincent Dempsey, Head of Digital Media at Ten, recently stated catch-up TV viewing on the 10 network (across mobile and TV) attracts 1.5 – 2 million unique visitors a month. Whilst ABCs’ iView recorded an average of 2.9 million visits per month (during 2011), which was up 48 per cent on the previous year.

Internet TV Advertising

However these already impressive audience figures are set to explode over the next 12 months with researcher Nielsen forecasting that by next year, six out of 10 Australians will get TV from the internet. This growth is set to have an on-flow effect to internet TV advertising revenue over the next 5 years with Frost and Sullivan predicting the Australian industry will grow from $54m in 2011 to $311m in 2016.

To integrate or not to integrate?

With fewer placements and the allure of direct response – internet TV advertising is obviously able to command a premium – but the real question is should internet TV advertising be used in isolation?

TV audience fragmentation is one of the key issues traditional scheduled TV advertisers are now trying to grapple with. Add to this the distraction of second screen usage and it’s no wonder that TV advertising is losing some of its appeal – however it is those who look to integrate that will gain the greatest benefit. As much of these audiences migrate between traditional scheduled TV and online viewing to accommodate their lifestyle and own timetable – integration of activities enables brands to maximise frequency. Catch Up TV is also one of the key factors fuelling growth in TV viewing – as opposed to decimating traditional viewing, thus through integration it provides brands with the opportunity tap into a larger audience overall.

Video: Does Television Advertising Influence Online Search?

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The Changing Face of Online Advertising

Online Advertising Progress

Over the next few years the online advertising landscape will change dramatically. Consumer consumption of video, mobile and social are all starting to play a role in the way we plan and buy media however by 2015 our online media schedules will look very different to how they look today.

Video Advertising

Video advertising is one of the fastest growing segments in the online advertising market. In fact it is growing so fast Google predicts by 2015, 50% of ad campaigns will include video ads bought on a cost-per-view basis (that means that user will have choice whether to watch it or not).

Video advertising is still however in its infancy despite the fact that consumption of video by Australian consumers is significant. According to the IAB, Australians are now watching almost 1 billion videos online each month which provides a lot of opportunity for advertisers. And even though video based advertising grew by 83% year on year in Australia, total video spend by advertisers equated to 5.3% ($33.4m) of total digital advertising spend. This demonstrates just how far the industry will come in 4 short years if Google’s predictions are correct.

Whilst video advertising provides a significant opportunity for marketers it is not without its challenges. As some video channels / networks allow viewers to skip advertisements, marketers will need to provide more than a traditional TV style commercial– engagement and entertainment will be far more important in the video ad space.

Mobile Advertising

By 2015 it is anticipated that mobile internet will surpass desktop internet usage – and with that mobile advertising is expected to undergo rapid growth. In fact according to Gartner, global mobile advertising spend will total $3.3 billion in 2011 and this figure will balloon to $20.6 billion by 2015.

Like video, mobile too will bring several challenges. Small screens / ad formats will make it more difficult for marketers to communicate their message. The power of mobile combined with local however will also provide new opportunities for marketers to connect with consumers when and where it is relevant. We have already seen the power of mobile and local via Foursquare which has enabled retail brands to connect with consumers however this is the tip of the iceberg. Over the next 4 years will see significant investment from Google, Facebook and start ups in the mobile / local space, which will also result in new ad formats and opportunities for brands to target new and existing customers.

Social Advertising

In 2011, US marketers are expected to spend $3.08 billion on social network advertising, which is roughly 10% of total ad spend online and an increase of 55% from 2010. Whilst we are behind the US when it comes to digital, marketers take up of social media in Australia is on the rise so there is no doubt that social advertising will make up a larger slice of the advertising pie in the future.

McDonald FarmvilleSocial advertising doesn’t just refer to display ads on Facebook. Whilst Facebook is one of the key social channels that marketers are advertising on, the social phenomenon is giving rise to new advertising opportunities. One of the growing trends in the social space is that of social gaming. As a result we are seeing social gaming organizations like Zynga building branded experiences into games. This includes McDonalds use of Farmville to provide virtual McCafe to players so they can work at double the speed as well as Honda’s virtual billboard in CarTown to name a few.

Social games aren’t however the only trend in the social advertising space. Social behaviour will also have an impact on how ads are consumed in years to come. According to Google just like most news articles on the web today can be commented on, shared, discussed, subscribed to and recommended, by 2015, 75% of ads on the web will be “social” in nature—across dozens of formats, sites and social communities.

Like mobile and video these social advertising trends will also present several challenges for marketers. Consumer’s ability to comment, share and rate advertising will change the fundamentals of advertising. Consumer’s will have a right of reply to a brand message and this is going to provide all sorts of challenges to marketers. Whilst new social advertising opportunities like those within social gaming platforms and across social networks will mean marketers need to become more creative, to deliver more than just their message.

What other trends do you think will impact online advertising in the coming years? Share your thoughts below.

Learn more about social and digital strategy by attending the iStrategy conference in Melbourne. With digitalmarketinglab you can save 10% off the cost of your ticket by entering this code: DML10.

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Latest Digital Statistics Compilation Australia

Digital Media Users

Since it has been a good 6 months since I have compiled a summary of Australian digital statistics, I felt it’s a good time for us to reflect on the second half of 2010. Enjoy!

Social – Facebook Usage

1. In December 2010 there were 9,361,520 Australia’s actively using Facebook.
2. In December 2010 – users by age group were as follows – 35% or roughly 3.2 million subscribers fell into the 20 to 29-year-old category. At 21% or nearly two million users each are the 30 to 39 and 13 to 19 age bands. More than 1.2 million users are in the 40 to 49-year-old band that makes up 13% of the total. And about 732,000 people between the ages of 50 and 59 form 8% of the total. The remaining 210,000 are aged 60 and above.
3. Facebook represents almost 1 in every 5 pages viewed on the web by Australians during September 2010. Facebook’s 19.3% share swamps Google.com.au’s 7.4% share of page views.
4. The average session time for a user visiting Facebook during September 2010 was 28 minutes and 58 seconds.

Sources
http://www.theaustralian.com.au/news/features/email-is-so-passe-for-facebook-generation/story-e6frg6z6-1225981885878
http://weblogs.hitwise.com/alan-long/2010/10/12_things_you_need_to_know_abo.html

Video Content StrategyVideo

5. More than three quarters of online Australians (77%) watched video content on their computer at least once in September and a further 26% watched video on their mobile phone.
6. In October 2010, Australian video viewers consumed an average of nearly 8 hours of video.
7. Males spend a significantly longer amount of time viewing online video than females. On average, males watched just over 10 hours of online video in October, while females averaged 5.2 hours. Males also consumed a higher number of videos on average at 113 videos per viewer, compared to females at 72 videos per viewer.

Sources:
http://www.nielsen-online.com/pr/OCR_GOS-oct10.pdf
http://www.comscore.com/

Mobile

8. According to the AIMIA mobile survey, the proportion of respondents who own a Nokia or Motorola handset has declined over the last few years, while those owning an Apple handset has increased. The top handset brands of respondents this year were Nokia (41%), Apple (21%), Samsung (12%), Sony Ericsson (9%), LG (6%), Motorola (3%) and Blackberry (3%).
9. 24% of respondents used their mobile phone for banking at least on a monthly basis, compared to 19% last year.
10. 12% of respondents used their mobile phone to buy things for their mobile phone at least once on a monthly basis, compared to 10% last year.
11. 9% of respondents used their mobile phone to buy things not for their mobile phone, at least on a monthly basis, compared to 8% last year.
12. In September 2010, one third of Australians (36%) accessed the Internet via their mobile phone in the past 30 days and 13 percent accessed the Internet via a handheld media device other than a mobile.

Sources;
http://www.aimia.com.au/home/news/member-news/aimia-releases-sixth-annual-australian-mobile-phone-lifestyle-index
http://www.nielsen-online.com/pr/OCR_GOS-oct10.pdf

Online Shopping

13. In the past year, shoppers have spent $10 to $12 billion online, about 5 per cent of total retail sales of $250 billion.
14. Market researchers Frost & Sullivan predict that online spend will grow to $18 billion by 2014.
15. Online spending grew 12% in Australia in 2010

Sources;
http://www.smh.com.au/business/switchedon-consumers-signal-sea-change-in-retail-20110107-19iq7.html

Mobile AdvertisingOnline Advertising

16. According to the PricewaterhouseCoopers’ Media and Entertainment Outlook 2010 – 2014 report, online advertising in Australia is forecasted to grow at a compound annual growth rate of 15.4% every year for the next four years. While the same forecast for print growth is 1.9% and for free TV is 3.9%.
17. In Q3 2010, general display and classifieds advertising accounted for 26.5% and 24.6% respectively, of total advertising expenditure, while search & directories advertising comprised of the remaining 48.9%.
18. CPM based pricing continued as the dominant expenditure type with 75% of advertising expenditure allocated to CPM buys whilst 25% was on a direct response basis.
19. Finance, motor vehicles and computers & communications continue to be the dominant industries using general display advertising, comprising 44.3% of the general display spending. Motor vehicle (manufacturers) was the largest subcategory at 10.5% of general display spending for the quarter, marginally down from 10.7% in Q2 2010.

Source;
http://www.iabaustralia.com.au

Video: Digital Media In Australia – Facts & Figures

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4 New Mobile, Video & Paid Search Tools & Innovations

Paid Search Marketing

Every day a new tool or innovation hits the market and sometimes it is difficult to keep up with them all. The performance advertising market, obviously dominated by Google, is one of the areas receiving a lot of attention and investment at present, thus I felt it appropriate to share some of the latest developments and new innovations in the sector in the past month alone.

1) Google Innovations Lab & Remarketing Tool

iAd Apple Mobile AdvertisingPaid search innovation for Google is increasing at a rapid pace as Facebook is set to nab $2 billion in advertising revenue from the search giant in the next 2 years. This combined with keyword inflation which is diminishing advertiser value is testing Google’s ability to continue to grow ad revenue. One way Google is attempting to drive innovation is through Google’s Innovations Lab. The lab provides a sneak peak into some of the new formats Google is offering, along with the ability to provide Google with feedback on the new formats. In particular one interesting new format is the Google remarketing tool – which allows advertisers to remarket to consumers by delivering tailored messages based on user onsite interaction.

For more information visit: http://www.google.com/ads/innovations/remarketing.html

2) Mobile Phone Application Targeting – Google & Apple

In February Google announced its new mobile app targeting in Australia, which allows advertisers to target specific mobile apps through their content network. However it seems that a not so likely competitor is set to take it to the search giant in the mobile advertising space. Apple is expected to launch its ad network on the 7th of April – likely to be termed iAd. At this stage it is unclear if the network will provide app advertising, or other ad formats on the iPhone however what is clear is that with mobile search and advertising still growing the battle to own the mobile advertising market is sure to be a battle of the titans.

3) YouTube In Video Display Ads

Although invideo ads were introduced onto the YouTube scene in 2007, YouTube has released a new tool through Google AdWords to allow advertisers to create animated invideo advertising that enables advertisers to target users invideo in a few simple steps. These ads can be targeting according to demographics, content categories or even placed at a video-by-video level. The ads appear for several seconds part way through a video and fade away if they’re not clicked on. With video usage sharply increasing there is no doubt that new services such as these will see high take up rates in video advertising in the year/s to come.

For more information visit http://www.youtube.com/t/ads_invideo

Adwords Sales FunnelGoogle Search Funnels;

The age old argument of click attribution seems to be over – well at least Google thinks it is. Google has launched a new tool for Google AdWords customers to enable advertisers to attribute value across the search funnel not just attribute the conversion to the final click. There is no doubt Google’s latest tool has been built to demonstrate value from broader more expensive keywords to increase revenues however there is some definite advertiser benefit in here as well.

AdWords Search Funnels provide a set of reports to describe the ad click and impression behavior on Google that leads to a conversion. Some of these reports include the first and last click analysis as well as assisted conversions. Search funnels is available through accessing the conversions tab in the reporting module of AdWords.

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The Long & Short of It – Paid Search That Is

Google Adwords

Over the past few weeks there has been a floury of industry talk surrounding AdWords including Google’s immediate and long term plans. Now a staple part of the digital strategy diet – AdWords it seems that despite its success Google is continuing its innovation assault on paid search to keep buzz going and to give us new and exciting opportunities in the short, medium and long term.

So what are they are what is the verdict?

Short Term

Google opportunities is a new tab which has been beta tested in the US and is now being rolled out to Australia and the UK as the next stage of testing. The tool provides advertisers with additional ideas for keywords that could be targeting complete with search volumes., as well as budget suggestions.

Verdict?

I have taken it for a little test drive and I would have to say this hasn’t rocked my paid search world. The tool provides similar functionality to the old campaign optimiser tool however is a little less labour intensive providing suggestions for an entire campaign rather having to optimise each ad group one at a time. In addition it demonstrates how many additional clicks you could achieve if you increased your budget to a certain level. The big difference however is that this tool has a prominent position in the main navigation which provides Google with more opportunity to recommend campaign changes to increase advertiser spend. On a more positive note however I am led to believe that this is just the start of a larger set of new tools that will help advertisers streamline campaign management.

Google AdwordsMedium Term

Google knew the opportunity that video presented before many of us. Their purchase of YouTube and introduction of universal search demonstrated that Google was able to foresee how big the video opportunity would be and now they are taking it one step further. In the US Google is currently beta testing video ads in AdWords search results for the entertainment sector. The new AdWords feature remains in closed beta however Google intentions are clear.

Verdict?

This is definitely a good move for Google. The online advertising industry is far more dynamic than it was 5 years ago and Google knows it must move with the times and offer more interactive inventory to its standard search results . If organic search provides blended formats – why shouldn’t paid search? In addition as the next stage of the online advertising industry will be social advertising (whereby users can share advertising messages with friends) Google needs to provide more interactive ad units that will entice users to engage in such an activity. This is definitely just the beginning and I believe there will be a lot of innovation by Google in this area in the next 12 months.

Long Term

At a recent conference in the US, discussion focused on the long term possibilities of paid search. It is believed that eventually we will see a move away from a model of keyword targeting to a model whereby advertisers provide Google with a summary of product or service offering, pricing and product descriptions and it will do the rest. Whilst this is very early days, possibly at least 5 years away, such conclusions come at a time where keyword portfolio’s have been shown to be continually expanding from changes in search behaviour, making the optimisation process even more arduous. Thus Google knows to stay competitive it must make ease of use simpler for advertisers.

Verdict?

In principle something has to change as keyword portfolio management is becoming increasingly difficult. Obviously however until semantic search becomes a reality such a concept is not feasible. One thing though is for sure, given the rapid pace of digital, there is no doubt that in 5 years time paid search will take on a completely different form to maintain relevance in this dynamic space.
What do you think about the latest Google paid search innovations? Would like to know your thought.

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Online Ad Industry Stats & Forecasts

It is widely publicised that the Australian public are spending an increasing amount of time on the web, however the pace at which Australian organisations are turning to advertise on the web is still somewhat slow.

According to the IAB the Australian online advertising industry in 2008 achieved revenues of $1.7 billion and is expected to achieve $2 billion in 2009. However the Australian advertising industry as a whole is estimated to be worth approx $13 billion thus online advertising only represents 13% of entire spend, whilst TV still represents 30% of overall spend.

Despite the lower than expected investment in online advertising, the market is continuing to show growth whilst other sectors are experiencing decline in these more challenging economic times.

This article explores the current trends and my forecasts for the online advertising market;

Online Advertising Spend in Australia

Share of Market: 51.2% in Q1 2009

Key market statistics
• Analysis by Frost and Sullivan in late 2008 demonstrated that 75% of advertisers now spend more than 10% of total media spend on search related activities. This represents 10% growth in the past 12 months in Australia.
• Keyword sponsorship presents 51% of the total search spend, 30% is spent on directory advertising and 19% of is spent on contextual search.

Future Forecasts

Trend 1 – In-house Management
A survey in early 2009 revealed that fewer advertisers were satisfied with their returns from PPC. As the market will continue to expand, PPC costs will continue to rise and organisations will begin to seek ways to improve their return. This will result in a higher portion of organisations bringing their paid search function in house.

Trend 2 – Contextual Search Growth
The contextual search market will continue to grow as a result of key market drivers which are;
1) Google continues to grow its inventory and capabilities for its third party portfolio of sites providing a low cost alternative search product to increase audience reach
2) Organisations will continue to invest in CPC advertising models rather than CPM.

Display Advertising

Share of Market: 24.9% of the total online advertising spend in Australia.

CPC Display AdvertisingThe market in detail
The largest sectors consuming display advertising are; Finance, Computers & Communications and Motor Vehicles which comprise of 46 percent of the General Display spending.

The lack of investment from the retail sector online is clearly displayed in this category. In Australia retail is the largest advertising category representing 20% of all expenditure – however it does not feature prominently within the display category.

Future Forecasts

Trend 1 – CPC Display Advertising
Overall display advertising will have a bumpy road ahead. Overall display advertising will grow inline with online advertising growth however, it will retain a smaller portion of the market than currently held. Why? Advertisers seek to invest in online advertising that will deliver against financial metrics rather than soft measures. As a result of lower than expected growth and competition from Google’s contextual advertising product, some platform will emerge with a new CPC model.

Trend 2 – Social Advertising
In the coming years display advertising in Australia will evolve to incorporate social tools to allow greater interaction with ads and enable users to share them across the web improving reach and ROI.

Trend 3 – Social Networking Display Advertising
Display advertising across social networks will grow substantially over the coming years as brands attempt to tap into the social phenomenon.

Classifieds

Share of Market: 23.9% in Q1 2009.
Anticipated Future Growth of Market; The classifieds segment is anticipated to grow by 18% in both 2009 and 2010. This growth is mainly due to the continued shift from offline to online media in the real estate and automotive sectors. The recruitment classifieds market which represents 45% of the total market will experience decline in the coming years due to the decline in advertising caused by the recession.

The market in detail
• The fastest growing online classifieds sector in 2008 was real estate which experienced 38 percent growth.
• Automotive was the second fastest growing sector, increasing by 31 percent.
• General and personal online classifieds advertising, accounts for 10% of online classifieds, and will experience the slowest growth due to the relative maturity of these markets.

Future Forecasts
Trend 1 – Recruitment Sector Fragmentation & Evolution

The recruitment market is starting to experience fragmentation and this will gather pace over the coming years. In addition we will continue to see the introduction of vertical niche job sites. These trends will drive user uptake of aggregator sites to simplify the job hunting process.

In addition to the above recruitment advertising platforms and professional networking sites will evolve and hybrids will begin to become the norm. With this trend we could see a change in the revenue model of recruitment sites – which could involve candidate charges to access networks, or even pay per response models.

Mobile AdvertisingMobile Advertising

Share of Market: .5% of the total advertising market in Australia.
Value of Market: $7 million
Anticipated Future Growth: Mobile advertising is expected to surge to $20 million in 2009 and $250 million by 2013 according to Telyste.

Spend By Sector
In 2007, 50% of mobile advertising spend was concentrated among media and entertainment, banking, financial services and insurance industries, the report found.

Trend – Migration of Budgets
As penetration of the iPhone and Android continues in Australia, the most innovative sectors will invest in this channel – particularly those that can benefit from location based advertising. As a result we may see the migration of local search budgets to the mobile platform.

If you have any additional online advertising statistics or see any additional trends please share them below.

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Google Content Network – Why Its Now All That

If you have used PPC for a while, chances are you have dabbled in the past with the “content network/placement” with little success. If so you are not alone.

In the past the Google Content network provided limited campaign control, lack of advertising format options and a large but somewhat hit and miss mix of sites which left marketers with another under performing Ad Network.

Over the past few years Google has invested significant efforts into this network particularly through acquisition of partner sites to now offer an array of ad formats and new advertising alternatives which will provide other advertising networks a run for their money.

Digital Marketing Lab has reviewed the Google placement network to bring you the Pro’s & Cons of the new and improved Google network.

Pros

Media Placement & Format Options
Ad Placement

The Google network is not limited to text based advertising.

Google has been working extremely hard to get advertisers to offer various advertising formats. Australian sites such as TheAge, Sydney Morning Herald & The Brisbane Times are just some of the sites which are offering image and video advertising opportunities.

With the rise of rich media, Google has been quick to ensure it has dynamic ad inventory to provide advertisers with the flexibility to choose the most appropriate format for their message. Google’s acquisition of video giant YouTube has also opened up a plethora of opportunities for video content sponsorship and in video branding.

The growing popularity of other online media has also lead Google to innovate by offering;
– Feed Placements
– In Game Placements
– Mobile Placements

Small Fish in Big Pond

Never before could small businesses dream of advertising with some of the majors and even if they did they would be facing high CPMs. Google’s network allows cost per click advertising in various formats and for all budgets making it accessible to advertisers of all sizes.

Cons

Positioning
Ad Positioning

Ad positioning may still be an issue on the network with some of the prime inventory sold through other networks / through internal media sales teams thus it is difficult to ensure effective placement.

Big Budgets – Big Losers

For big advertisers who can command significant reductions in rate cards, the CPA/CPC may not be as favourable on the Google network and the reporting may not be to the depth required to effectively manage these campaigns.

Niche Advertising

For niche advertisers the content network may not provide the depth of inventory needed by the advertiser – resulting in low impression rates/visitors and lack of sites to project the message.

What’s next

With social networks providing competition for Google through behavioural advertising, Google just announced its new behavioural targeting product. In mid March the internet giant announced its beta testing of behavioural advertising. Google is able to offer behavioural advertising through utilising cookies to track web users across its content network.

For more details on Google’s behavioural targeting click here http://googleblog.blogspot.com/2009/03/making-ads-more-interesting.html

The verdict

Google is definitely shaping up to provide a strong advertising network, in its pursuit for internet domination. The content network is definitely worth further investigation by brands in Australia to determine its application as part of an advertising strategy. I would continue to watch this space as I am sure there is much more to come from Google.

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