INTERNET make MONEY

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IAB: U.S. Internet Advertising Q3 Revenue Up 22 Percent To $7.9 Billion

By Leena Rao, TechCrunch

The Interactive Advertising Bureau just released its third quarter numbers, with internet advertising revenues in the U.S. hitting $7.88 billion for the third quarter of 2011, up 22 percent from Q3 2010.
This also is a 2.7 percent increase from the record-setting revenues of the second quarter of 2011. This is the eighth consecutive quarter of year-over-year growth.
The IAB and PricewaterhouseCoopers both say that the uptick in ad spend is due to brand marketers recognizing where most of consumers spent their time—online. Obviously, despite the current economic conditions, advertisers are still shelling out on digital.

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Digital Success: Online Ad Revs Hit Nearly $8B

By Gavin O'Malley, Mediapost

For the third quarter of the year, online advertising revenues were up 22% year-over-year, according to the latest findings from the Interactive Advertising Bureau and PricewaterhouseCoopers US. That amounted to $7.88 billion for the quarter.

The figures also showed a 2.7% increase from the record-setting revenues of the second quarter of 2011. As a result, results for the third quarter of the year marked the eighth consecutive quarter of year-over-year growth, according to Randall Rothenberg, president and CEO of the IAB.

“Brand marketers recognize that their messages need to be where their consumers are spending time -- and that is increasingly in digital media,” Rothenberg said Wednesday. “Digital marketing has delivered the kind of results that have made more marketers stand up and take notice, as these latest numbers clearly demonstrate.”

The IAB and PwC recently reported that video ads commanded double-digit growth during the first half of the year -- up 42.1% year-over-year -- and moved close to the $1 billion mark, with $891 million in the half year of 2011.

Partly as a result, U.S. online ad revenues rose 23.2%  -- to a record $14.9 billion -- in the first half of the year.

“Beyond the impressive year-over-year growth of 22% seen during the third quarter of this year, the ongoing increases in Internet advertising revenues point to a new paradigm within the advertising world -- one in which digital is taking a bigger seat at the table,” David Silverman, a partner at PricewaterhouseCoopers, said Wednesday. “Moreover, even with a softened economy, digital advertising is making tremendous gains.”

Digital video made up 6% of online advertising during the first six months of the year -- or $891 million, according to the IAB. By contrast, banner ads represented a 23% share, or $3.4 billion.

FACEBOOK Beats TV

Facebook Is Serious TV Rival

By Wayne Friedman

Daytime is Facebook time, not TV time, for most media consumers.

Facebook is closing in on being a mass medium -- just like TV, according to a study by Frank N. Magid Associates Generational Strategies. More consumers use Facebook during workday hours -- 9 p.m. to 5 p.m. --than watch TV.

The survey says only baby boomers are the exception -- 35% report they are watching TV, versus 26% who say they are using Facebook.

Thirty-two percent of Gen Xers -- those 35-46 -- use Facebook during daytime. compared to 28% who watch television. Those 18-34 are using Facebook 44% compared to 32% for television.  Teen millennials use Facebook 30% versus 24% for TV. Younger groups 8-14, which the study calls "iGens," are the only younger viewers to give TV parity compared to Facebook -- at 16% each.

Things are different in prime time, where TV still dominates. Looking at 18-34 viewers/consumers, for example, 49% are using Facebook versus 24% who watch TV between 8 p.m. and 11 p.m. Even those hours after-work and before prime hours give the advantage to TV for these younger viewers/consumers: 43% versus 39%.

Baby boomers 47 to 65 are the biggest users of TV in prime time, with a 70% number. Those 8-14 are using TV at 39%. During prime time, the greatest usage for Facebook comes from teens 15-17, at 39%. The lowest usage is among the older crowd, 47 to 65 years, at 21%.

TV FAMILY FRIENDLY GOING BYE BYE

Is family-friendly TV going extinct?

The new fall season highlights how scripted TV shows with a broad family appeal have become a rarity, with 'Terra Nova' and 'The Middle' among the few.

By Greg Braxton

 

This season "Terra Nova" has exhumed the Cretaceous period, but can it also help resurrect another block of time that would seem equally challenging to revive — the family viewing hour?

The heavily promoted prime-time show, dubbed internally at Fox as "Little House on the Prairie with Dinosaurs," is an eco-action-adventure series built around a family of five that travels back 85 million years to give humans a second chance at caring for Earth. The ratings have been solid for the show, which counts Steven Spielberg and former News Corp. President Peter Chernin among its many executive producers, but — so far — are hardly enough to prompt a wave of copycat family-friendly scripted programming.

Instead, much of the fall season buzz has centered on the parade of wise-cracking women as with "2 Broke Girls," "New Girl" and "Whitney" or lackluster revamps of distinctive favorites such as the now-canceled "Charlie's Angels" and the struggling "Prime Suspect." Gone are the days in prime-time TV when shows like "The Cosby Show," "Home Improvement," "7th Heaven" or "The Bernie Mac Show" unabashedly courted a family audience.

Indeed, with the notable exception of "Terra Nova" and a handful of other programs, scripted shows in prime-time about families — for families — are on the verge of being as out of place as a T. Rex in the current Cenozoic era. The scarcity largely reflects societal and pop culture shifts over the past decades, but critics decry the conspicious absence of scripted family shows, especially in a seemingly boundless programming universe.

"It's very difficult to program a show with broad-based family appeal," said Brad Adgate, an analyst for Horizon Media in New York. "The notion that families are sitting in the living room and watching the same show together is more and more scarce. Shows have become so niche and hyper-targeted, so it's just hard to put on a show that will appeal to all age groups and genders."

Part of the reason families don't sit passively before the almighty television anymore is that the digital age has produced so many entertainment alternatives — iPods, video games, social media, not to mention an explosion of diverse programming on cable. As the TV audience has scattered, programming has become more targeted to the individual viewer, not groups.

Also, the family unit itself has markedly changed since the mid-1970s, when the Federal Communications Commission pressured the top three networks to institute a "family viewing hour" from 8 to 9 p.m. Over the last four decades — as divorce and single parenthood climbed sharply — the percentage of children younger than 18 living in a two-parent household slid from roughly 85% to 67%, according to statistics from the U.S. Census Bureau. Meanwhile, the family viewing hour policy, born from protests about the rising tide of sex and violence on TV in the early 1970s, was scrapped by the courts within a couple of years, leaving the networks to pledge their best effort in maintaining suitable family programming in that prime-time hour.

The dearth of family programming today can also be traced to a longstanding tension between the major networks and the creative community, which has gravitated toward darker and edgier material, particularly as cable became more of a force in Hollywood, said TV historian Tim Brooks. As shows have confronted more mature content, such as on HBO's mobster-filled "Boardwalk Empire" or AMC's meth-dealing chemistry teacher in "Breaking Bad," adults have followed.

And even current series that would seem family friendly — "Modern Family," "Glee" and Tim Allen's new "Last Man Standing" — juggle often sexually charged themes and language that many deem inappropriate for children.

"It's like someone put red pepper flakes in the Jell-O pudding," said Bill Cosby, the former Jell-O promoter and star of "The Cosby Show," whose success brought a flood of new family programming in the 1980s.

One of the few veteran prime-time series that appears specifically targeted for families is ABC's "The Middle," starring Patricia Heaton. The critically acclaimed show about a lower middle-class Midwestern family has been a decent ratings performer — last week it drew 8.8 million viewers, which put it in 36th place.

Brooks said there has been an evolution away from the scripted shows to reality programming such as "American Idol," which are now being touted as family fare: "It's the latest wave of reality that is filling the void. You see mostly clean-cut kids trying very hard. And audiences don't really make a distinction between a scripted show and a reality show."

But even those reality shows contain moments that might raise the ire of some parents. The pilot of Fox's "The X Factor" featured a contestant who removed his pants during his performance, which disgusted judge Paula Abdul so much she left the arena (the man's offending parts on the show were covered up).

The issue of family-friendly scripted television is particularly troubling to Melissa Henson, director of communications for the Parents Television Council, a Los Angeles-based watchdog group that most recently called for a boycott of NBC's "The Playboy Club," recently canceled. Pointing to films like "Dolphin Tale," "Real Steel" and Disney's re-release of "The Lion King" in 3-D, Henson was vexed over television's apparent lack of choices for families.

"Not everyone has the luxury of taking their kids to the movies," she said. "Being able to find something at home that families can watch at home is very important. There is a real hunger for programs like that.

I wish Hollywood would be less worried about being edgy and more focused on stories and characters instead of controversy," she added.

That appetite was a prime motivator in prompting Fox to develop "Terra Nova," said Terence Carter, Fox's senior vice president, drama development.

"Filling that need was absolutely part of our programming and development," Carter said. "Before the season, all of the executives talk about what might work. We looked at the negative space on TV and saw a real void there. 'American Idol' is one of the last great family shows, and we wanted to reclaim that in the scripted field. The arena we targeted was family adventure, as opposed to a family soap, which might skew much older."

"Terra Nova" was designed like a film that would play "on the biggest TV in the house" and hopefully would inspire the family to watch as a unit, he added.

"We wanted to reclaim that attention from theatrical venues," Carter said. "It's an opportunity to get those eyeballs back."

TV Statistics

TV's Reach and Frequency Problem

By Dave Morgan

One of the things that attracted me to television advertising is TV's dominant leadership position among media for delivering massive reach and frequency against consumer audiences in a short period of time. No other medium compares.

Thus, imagine my surprise to learn that most TV ad campaigns for mass awareness-focused brand advertisers in the U.S. rarely reach more than 75% of their target audience and typically deliver more than two-thirds of their ad impressions to only one-third of their target audience. Before starting Simulmedia, and spending a lot of time analyzing anonymous set-top box data - including directly-measured data on all of the ads viewed by more than 30 million viewers in the U.S. - I never understood or appreciated how hard it is for TV advertisers and their agencies to efficiently optimize the reach and frequency of their campaigns.

Audience fragmentation on TV is bad and getting worse. Thirty years ago, the vast majority of Americans had 13 or fewer channels to choose from, and only three major TV networks to watch. Ten years ago, few had more than 30 channels and only four major networks to watch. Today, most Americans have hundreds of channels to watch and the top network in most of the top markets in the U.S. - Univision - wasn't even considered a major TV network ten years ago. Twenty years ago, cable networks captured less than 10% of TV audiences. Today cable nets capture two-thirds of viewer time. For advertisers seeking big reach, buying broadcast network prime-time is still essential, but it's no longer enough; not even close.

Critical tools have not been able to keep up. While TV's media and measurement tools have evolved considerably over the past several decades, they have not been able to evolve at the pace that audience fragmentation occurred across networks, programs, dayparts and devices. When less than 10% of the total TV audience was on cable networks, the fact that most cable nets were either unmeasured or poorly measured mattered little. Today, the majority of viewing goes to cable networks, including about 20% of viewing that goes to cable networks that are either unmeasured or inadequately measured. So it's no surprise that capturing that elusive "last 20%" of campaign reach is so hard. Conventional measurement approaches are largely blind to a lot of TV's audience.

Expensive - and hard to radically evolve - planning and buying. One of the big advantages of TV advertising is that its "trading" processes and operations are so efficient. The processes for planning, buying, selling, trafficking and verifying TV ad campaigns have developed over decades and are probably ten times more efficient than they are for online advertising. Changing processes that have been set in stone for so long is a very expensive proposition, and not an attractive one when most of the marketplace is pushing to reduce fees and costs, not increase cost and complexity.

Wasn't broke enough to fix. In spite of its issues with declining campaign reach and increasing frequency imbalance which have been creeping up on it over the years, TV advertising has always been demonstrably better in this area than any alternatives, and the problems had not yet become acute. Now, with the Internet, and its massive scale, interactivity, dynamic ad delivery, census-level measurements and web video, connected TV's beginning to threaten conventional linear TV, the long-held notion that TV advertising wasn't broke enough to fix probably doesn't hold up any more.

What do you think? Does TV really have a reach and frequency problem?

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Interactive Marketing Spending to Hit $76.6 Billion in 2016

Forrester Predicts Huge Growth in Mobile, Search Along With Daily Deal Fatigue

By Cotton Delo, AdAge

A new report by Forrester Research forecasts that U.S. interactive marketing spending will reach $76.6 billion by 2016, equal to TV spending this year and comprising 35% of all advertising. That's a big jump considering that this year interactive will comprise 19% of all spending, according to Forrester.

Search and display will continue to be the biggest pieces of the interactive spending pie, comprising 44% and 36%, respectively, in 2016, though search will have lost share from 55% in 2011. Mobile paid advertising and search will experience astronomic growth and are surpassing email and social this year, according to the report.

"This is the first year we saw growth due to interactive tools really gaining legitimacy in the mix," said Forrester analyst Shar VanBoskirk, noting that search, display and email have become well-established lines in marketers' budgets.

The report, "U.S. Interactive Marketing Forecast, 2011 to 2016," projects the overall compound annual growth rate of interactive marketing spending at 17%, but the fastest-growing category is mobile at 38%, set to reach $8.2 billion in 2016. It attributes the surge to a push toward creating more targeted, dynamic mobile ads instead of so much repurposing of online ads; the rise of mobile commerce; and experimentation with new ad formats for tablets.

Search marketing will continue to be the biggest piece of the interactive spending pie -- rising from $18.8 billion to $33.3 billion between 2011 and 2016 -- but will actually lose share of all interactive spending in the same period, falling from 55% to 44%. Ms. VanBoskirk said the rise of biddable display media, the growth of mobile and investment in social networks and alternative search networks such as Facebook, YouTube and ratings and reviews sites such as Yelp will be factors in the drop-off of search's interactive market share.

Investment in display advertising will rise from $10.9 billion in 2011 to $27.6 billion in 2016, driven by greater than 20% compound annual growth rates in rich media, text listings and online video. The rise of biddable display media and improved online ad management tools are cited as key factors.

Email marketing is projected to have a growth rate of 10%, bringing it to $2.5 billion in 2016, but the total spending is kept down because of its low cost of reach 1,000 consumers, or CPM. And widespread adoption of social media will continue, reflected in a projected 26% growth rate, but total spending will reach only $5 billion in 2016 as it's also an inexpensive tool. (The report notes that listening platforms cost $5,000 to $10,000 per month, but a paid search budget can run up to $500,000 to $3 million per month.)

The report also predicts the rise of subsidized hardware from media giants such as Google and Yahoo, which would look to embed ads into the displays of smartphones, tablets and e-readers in return, creating the possibility of enhanced user targeting for advertisers. It also foresees the onset of daily deals fatigue.

"That will create consolidation and thin out the number of daily deal offers that are available," Ms. VanBoskirk said.

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Interactive Marketing To Garner $77B By 2016

By Gavin O'Malley, Mediapost

By 2016, advertisers will spend $77 billion on interactive marketing -- or as much as they do on TV today, according to a new report from Forrester Research.

By then, search marketing, display advertising, mobile marketing, email marketing and social media will account for 35% of all ad spending.

"We expect this growth to help firms become adaptive, kill off daily deals, re-emphasize marketing's 'p's,' (product, price, place, and promotion) and turn consumer electronics into audience-targeting tools," says Forrester analyst and report author Shar VanBoskirk.

A number of key factors will enable this growth over the next five years, according to VanBoskirk, chief among them: larger interactive teams for marketers, publishers and service providers.

Over the last three years, for example, one unnamed financial services firm Forrester consulted grew its interactive team from 18 to 70 people. "Now, it is a top advertiser on many display networks, has tripled its email marketing volume, and has a social PR effort underway," VanBoskirk reports.

Along with sustained excitement about emerging media, Forrester also expects marketers to increasingly invest in interactive channels because they will generate better results over time. Furthermore, firms looking to differentiate in the age of the customer will invest to create customized experiences across their customers' preferred touchpoints, Forrester believes.

As a result, Forrester projects that by 2015, smartphone adoption will grow 150%, while 82 million consumers will own a tablet.

That said, digital's rising tide is not guaranteed to continue lifting all boats. For instance, while search will continue as the largest piece of the interactive marketing pie -- growing to more than $33 billion over the next five years -- it will lose share from 55% today to 44% of all interactive spend by 2016, Forrester predicts.

In place of search, marketers will increasingly focus their search marketing strategies on "getting found" by users -- through any medium -- not just search engines. Investment in paid search, search engine optimization agency fees and SEO technology will taper to a 12% compound annual growth rate, according to research.

Representing a boon for display advertising -- investment in contextual listings, static image ads and rich media ads (including pre-roll, mid-roll, and post-roll online video) will reach $27.6 billion by 2016.

All display categories -- except for static image ads -- will post greater than 20% CAGRs, which will boost display to 36% of interactive spend in five years, Forrester boldly predicts.

Also of great significance, spending on mobile paid advertising and search has surpassed email -- and social will rocket to a 38% CAGR or $8.2 billion by 2016. This will be driven by more relevant mobile advertising, increased tablet adoption and mobile commerce.

Forrester is predicting the end of daily deals, as "standing out above the clutter becomes harder for marketers as ad exposures grow."

Added VanBoskirk: "Consumers will grow so conditioned to micro-impulse offers they'll lose practice at considered decisions ... Facing a cultural descent into maladroit judgment, employers (and spouses) will blacklist impulse deals to keep people intentional."

TABLETS NOT SMARTPHONES

Video Viewers Embrace Tablets, Not Smartphones

By Mark Walsh

When it comes to viewing premium video, consumers have more options than ever, from TVs to PCs, tablets and game consoles. How are people dealing with all these choices? A new PwC study [http://www.pwc.com/us/en/industry/entertainment-media/publications/assets/PM-12-0011emc-consumer-research-11.pdf. ] finds that while traditional TV is still king, consumers are more receptive to new video platforms than they were a year ago, especially tablets.

But the willingness to embrace alternative screens does not appear to extend to mobile phones, whose small screens and slower network connections limit their appeal for watching TV shows and movies. The large screen of the home TV remains the favored way to watch video, with two-thirds of those surveyed indicating interest in tuning in the TV set.

Still, more than half (58%) said they spend more time now viewing movies and TV shows online than they did a year ago. "This was further validated in qualitative discussions, where consumers confirmed that they spend more time using their Internet-connected devices, especially iPads," stated the PwC report.

The study emphasized that people considered tablets a "wholly different mobile viewing experience" compared to smartphones, given screen size. Less than one-quarter (23%) had an interest in watching premium video on smartphones. PwC said the lack of enthusiasm for mobile video is consistent with research it has done over the last 18 months.

Nielsen estimates that about 10% of U.S. mobile users watch video on their handsets. Other data suggests this audience may be small but that viewing activity is growing. Mobile video ad network Rhythm NewMedia said video views of full-length TV shows increased 200% in the second quarter.

Among other platforms, the PwC study did not quantitatively measure video consumption through game consoles. But it noted some consumers mentioned them as a convenient alternative for watching video. "This choice was primarily influenced by which room the console was in when they decided to watch a movie. It was definitely not considered to be their primary platform for viewing movies," the report stated.

The research also noted growing interest from a year ago in cloud- based media storage offerings. The idea of a digital locker for music, shows, movies or other content especially appealed to more mature audiences, people in their late-30s to mid-40s, given their understanding of storage technology. Younger people were also intrigued, but had concerns about pricing.

Film studios including Warner Bros., Miramax and Universal this year have begun offering movie streaming through Facebook, while Facebook commerce (F-commerce) provider Milyoni's "social theater" platform allows people to interact while watching movies on the social-networking site.

The PwC study found social media was the channel people were least willing to pay extra for to obtain premium content, in part because there's typically no charge for using most social networks.

Two-thirds of survey participants said they wouldn't pay anything to watch movies and TV via social properties. But because distribution through social media is still nascent, the consulting firm suggested there is still an opportunity for Hollywood studios and TV networks to leverage Facebook and other social sites.

Overall, the report showed people would rather rent rather than buy when it comes to video-on-demand because they view it as less expensive and less of a burden on their computers' hard drive. Getting faster access to movies (within four weeks of the theatrical release) rated as the most appealing feature of VOD offerings, but most viewers were willing to pay only an extra $5 to do so on top of an existing price.

The PwC findings were based on a survey of 312 U.S. adults ages 18 to 59 conducted in spring 2011.

Interactive Marketing Spending 4 CAST

Interactive Marketing Spending to Hit $76.6 Billion in 2016

Forrester Predicts Huge Growth in Mobile, Search Along With Daily Deal Fatigue

By Cotton Delo, AdAge

A new report by Forrester Research forecasts that U.S. interactive marketing spending will reach $76.6 billion by 2016, equal to TV spending this year and comprising 35% of all advertising. That's a big jump considering that this year interactive will comprise 19% of all spending, according to Forrester.

Search and display will continue to be the biggest pieces of the interactive spending pie, comprising 44% and 36%, respectively, in 2016, though search will have lost share from 55% in 2011. Mobile paid advertising and search will experience astronomic growth and are surpassing email and social this year, according to the report.

"This is the first year we saw growth due to interactive tools really gaining legitimacy in the mix," said Forrester analyst Shar VanBoskirk, noting that search, display and email have become well-established lines in marketers' budgets.

The report, "U.S. Interactive Marketing Forecast, 2011 to 2016," projects the overall compound annual growth rate of interactive marketing spending at 17%, but the fastest-growing category is mobile at 38%, set to reach $8.2 billion in 2016. It attributes the surge to a push toward creating more targeted, dynamic mobile ads instead of so much repurposing of online ads; the rise of mobile commerce; and experimentation with new ad formats for tablets.

Search marketing will continue to be the biggest piece of the interactive spending pie -- rising from $18.8 billion to $33.3 billion between 2011 and 2016 -- but will actually lose share of all interactive spending in the same period, falling from 55% to 44%. Ms. VanBoskirk said the rise of biddable display media, the growth of mobile and investment in social networks and alternative search networks such as Facebook, YouTube and ratings and reviews sites such as Yelp will be factors in the drop-off of search's interactive market share.

Investment in display advertising will rise from $10.9 billion in 2011 to $27.6 billion in 2016, driven by greater than 20% compound annual growth rates in rich media, text listings and online video. The rise of biddable display media and improved online ad management tools are cited as key factors.

Email marketing is projected to have a growth rate of 10%, bringing it to $2.5 billion in 2016, but the total spending is kept down because of its low cost of reach 1,000 consumers, or CPM. And widespread adoption of social media will continue, reflected in a projected 26% growth rate, but total spending will reach only $5 billion in 2016 as it's also an inexpensive tool. (The report notes that listening platforms cost $5,000 to $10,000 per month, but a paid search budget can run up to $500,000 to $3 million per month.)

The report also predicts the rise of subsidized hardware from media giants such as Google and Yahoo, which would look to embed ads into the displays of smartphones, tablets and e-readers in return, creating the possibility of enhanced user targeting for advertisers. It also foresees the onset of daily deals fatigue.

"That will create consolidation and thin out the number of daily deal offers that are available," Ms. VanBoskirk said.

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Interactive Marketing To Garner $77B By 2016

By Gavin O'Malley, Mediapost

By 2016, advertisers will spend $77 billion on interactive marketing -- or as much as they do on TV today, according to a new report from Forrester Research.

By then, search marketing, display advertising, mobile marketing, email marketing and social media will account for 35% of all ad spending.

"We expect this growth to help firms become adaptive, kill off daily deals, re-emphasize marketing's 'p's,' (product, price, place, and promotion) and turn consumer electronics into audience-targeting tools," says Forrester analyst and report author Shar VanBoskirk.

A number of key factors will enable this growth over the next five years, according to VanBoskirk, chief among them: larger interactive teams for marketers, publishers and service providers.

Over the last three years, for example, one unnamed financial services firm Forrester consulted grew its interactive team from 18 to 70 people. "Now, it is a top advertiser on many display networks, has tripled its email marketing volume, and has a social PR effort underway," VanBoskirk reports.

Along with sustained excitement about emerging media, Forrester also expects marketers to increasingly invest in interactive channels because they will generate better results over time. Furthermore, firms looking to differentiate in the age of the customer will invest to create customized experiences across their customers' preferred touchpoints, Forrester believes.

As a result, Forrester projects that by 2015, smartphone adoption will grow 150%, while 82 million consumers will own a tablet.

That said, digital's rising tide is not guaranteed to continue lifting all boats. For instance, while search will continue as the largest piece of the interactive marketing pie -- growing to more than $33 billion over the next five years -- it will lose share from 55% today to 44% of all interactive spend by 2016, Forrester predicts.

In place of search, marketers will increasingly focus their search marketing strategies on "getting found" by users -- through any medium -- not just search engines. Investment in paid search, search engine optimization agency fees and SEO technology will taper to a 12% compound annual growth rate, according to research.

Representing a boon for display advertising -- investment in contextual listings, static image ads and rich media ads (including pre-roll, mid-roll, and post-roll online video) will reach $27.6 billion by 2016.

All display categories -- except for static image ads -- will post greater than 20% CAGRs, which will boost display to 36% of interactive spend in five years, Forrester boldly predicts.

Also of great significance, spending on mobile paid advertising and search has surpassed email -- and social will rocket to a 38% CAGR or $8.2 billion by 2016. This will be driven by more relevant mobile advertising, increased tablet adoption and mobile commerce.

Forrester is predicting the end of daily deals, as "standing out above the clutter becomes harder for marketers as ad exposures grow."

Added VanBoskirk: "Consumers will grow so conditioned to micro-impulse offers they'll lose practice at considered decisions ... Facing a cultural descent into maladroit judgment, employers (and spouses) will blacklist impulse deals to keep people intentional."

SOCIAL MEDIA SPENDING

Date: Friday, September 2, 2011, 3:00am MST
Patrick O'Grady    Reporter - Phoenix Business Journal
            Social media in its various forms, from micro blogging to video posting, is growing. More marketing money is pouring into the sector.
            Google Inc.    is the dominant provider of video and social media traffic. Its products include YouTube as well as the recently launched Google+. But social media sites such as Facebook, Twitter and LinkedIn all rank among the 50 most-visited websites, garnering tens of millions of unique visitors per month.
            That leads to more ad spending, and Forrester research is anticipating that ad spending on online media will grow from about 19 percent this year to 35 percent of the total media buy in 2016.
Patrick O'Grady reports on technology, solar energy, utilities, manufacturing, aerospace, defense, sustainability, telecommunications, the Arizona Corporation Commission and other related topics.

Popular Apps

App Popularity: Gaming Or News?

By Gavin O'Malley

Gaming or news apps -- which are more engaging? It all depends on a user's mood, according to a new report from analytics firm Localytics.

IPad users spend the longest periods of time reading news, listening to music and accessing health and fitness apps, Localytics finds.

Based on data from apps subscribing to the firm's analytics platform, users spend over two-and-a-half times as much time on news apps than on apps in general.

Yet Localytics also looked at data on sessions per app per month -- separated by app verticals -- to see which type of app receives the largest number of user interactions per month.

While news apps still rank near the top of the average sessions list, games apps dominate in an impressive fashion. With games, news and music apps rounding out the top of the frequency engagement list, another view of the most engaging apps appears.

Compared with the overall average session length for iPad users, apps in the "news" category clocked in with sessions two-and-a-half times longer, followed by music apps, 228% of the average; health and fitness apps, 210%; and reference apps, 162%.

However, it appears that iPad users spend shorter-than-expected periods of time playing games and interacting with their entertainment apps.

According to Localytics, getting a news app onto an iPad user's device seems to generate extremely long interactions between app and user, while iPad users play short, more casual games, rather than in-depth time-consuming ones.

Sports apps, meanwhile, may be used more to check scores than to truly delve into sports stories and news, while iPads and tablets seem conducive to deeper, more information-packed experiences, such as reference and health apps.

"These levels of interaction do have an important message to app marketers: Know your audience, and pick the right type of app to generate the most engagement possible," Localytics suggests.

"While a business tool may be a very useful app to create for your clients, an engaging news app can generate up to three times the engagement per session," it adds.

To determine time spent on apps, Localytics analyzed the average session length -- that is, the average time a user spends between opening an app and finishing and closing it -- and compared it across categories.

MOST POPULAR YOUTUBE CHANNEL

What's the Most Popular Channel on YouTube?

ComScore Measures Largest Channels; Music Brands Top the List

By Edmund Lee

Viewers pining for MTV's early era of three-minute lip-synched dramatizations have long known to turn to that grand repository of all video: YouTube. But what they may not know is just how many video-crazed citizens congregate regularly around the video-sharing site.

According to ComScore, which will start publishing data on YouTube's channel partners tomorrow, 40% of YouTube's audience clicked over in July to watch music videos, more than any other category. Vevo accounted for 38% of YouTube's entire monthly viewers, easily the most-watched channel within the video-sharing site, and second-place Warner Music accounted for 20% of all viewers in July. Vevo is a joint venture between Sony Music Entertainment, Universal Music Group and Abu Dhabi Media, and it licenses music videos from EMI. (See chart below for full ranking.)

The new measurement data may be a boon to YouTube and its channel partners as the company hopes to entice bigger advertisers with the third-party validation of its audience, much the way that Neilsen has counted TV for decades. ComScore also cuts the data by age group and "gross ratings points," a TV measurement that shows how many people saw an ad and how often.

At the same time, online video hardly has the same depth or reach of TV, where audiences tune in for hours at a time. ComScore's data reveals that of the top 20 measured channels on YouTube, viewers on average are watching a total of 22.5 minutes a month.

Allen Debevoise, CEO of third-ranked YouTube channel Machinima, said a more accurate analogy pits YouTube as a cable provider and content partners such as Machinima as network programmers. "Machinima is a network in the same way that MTV Network is on Comcast with a broad array of channels," he explained.

Machinima,with an audience of 16.9 million, produces and buys various programs related to gaming, mostly clips that show people how to master video games. Mr. Debevoise said Machinima, which splits part of its ad revenue with YouTube, can sell advertising into a broader category, such as gaming and movies based on ComScore's new data. He pointed out the measurement data does not include mobile viewing, a fast-growing area for his company.

Earlier this year, YouTube reached out to a select group of its most popular content partners to participate in ComScore's initial measurement program, and while most partners agreed, some didn't respond or did not wish to be part of ComScore's analysis, according to people familiar with the matter. ComScore's inaugural ranking therefore does not include every single YouTube creator but the measurement firm said the list reflects most of the top content creators. The top three ranked channels would still remain in their positions in a comprehensive list.

The Google-owned YouTube insists this initiative differs from its pending channel strategy, a deal that includes a $100 million fund that YouTube will tap to pay partners to create higher-quality video clips that would appeal to major advertisers.

"This was really part of our strategy to provide flexibility to our partners," YouTube Senior Product Manager Baljeet Singh said. YouTube's new channel initiative will include ComScore data as well, Mr. Singh said.

Other top channels on YouTube include Demand Media studios, which publishes a wealth of how-to content in the form of short videos, with 15.2 million July viewers. Major media companies listed include Associated Press, with 6.6 million viewers, and Hearst Television, which owns 29 local TV stations, with 3.1 million watchers. BBC Worldwide had a YouTube audience of 2 million.

Amidst the lineup of startups and corporate-backed producers sit a few YouTube stars, small operators with no more than a handful of people. Philip DeFranco's "DeFranco Update," Ryan Higa's "Nigahiga" and comedy duo Ian Hecox and Anthony Padilla's "Smosh" channel all cracked the top 20, but other small-time YouTube stars would have leap-frogged this group had they agreed to be measured, according to ComScore.

PC's ARE DEAD

Internet-Connected Device Shipments Forecast To Top PCs By 2013

IHS iSuppli: Consumers Soon More Likely to Access Net Through TVs

By Todd Spangler, Multichannel News

In a few years, consumers will be more likely to access Internet content through their TVs than their personal computers.

That's the conclusion of research firm IHS iSuppli, which projects that worldwide shipments of Internet-enabled consumer electronics devices -- including TVs, game consoles, Blu-Ray Disc players, set-tops and media tablets -- will exceed PCs for the first time in 2013.

The connected-device category will grow threefold from 2010 to 2013, from 161 million last year to 503.6 million units in 2013, the firm predicted. By comparison, PC shipments grow from 222.3 million to 253.3 million over the same time period.

"These new figures are the latest evidence that the Internet is not just for PCs anymore," IHS principal analyst for consumer platforms Jordan Selburn said. "In the future, consumers will be more likely to access the Internet through their televisions than via their PCs."

The latest report presents a more bullish outlook than iSuppli (since acquired by IHS) had forecast in 2009, when it projected 376.5 million connected devices shipping by 2013.

In 2015, shipments of Internet-enabled consumer devices will be 780.8 million units, well above PC shipments of 479.1 million.

IHS excludes PCs and smartphones -- which are tracked separately as data processing and wireless communications equipment, respectively -- from the Internet-enabled consumer electronics devices category. Although IHS designates tablets as wireless devices, the firm included them in the Internet-enabled consumer electronics category "because of the key role they are playing in the market for the connected home."

Media tablets are projected to become the fastest-growing subcategory, driven by Apple's iPad, IHS said. Tablets are set to grab the top spot in 2011 with projected shipments of 61.9 million, up 214% from 19.7 million last year.

By 2015, more than 300 million media tablets will ship -- a 15-fold increase greater from 2010, yielding a five-year compound annual growth rate of 73.3%.

IHS expects other Internet-enabled devices that will grow rapidly in the next few years will be Blu-ray players (with a CAGR of 37.9% over 2010-15) and set-top boxes.

Heavy Streaming Video Viewers Watch Less TV, Nielsen Says

By Wayne Friedman

 The Nielsen Company now says streaming of Internet video may come at the expense of some traditional TV viewing, especially among young TV/video users.

According to Nielsen's new "State of the Media: Cross Platform Report" obtained by Media Daily News, the media research company says: "The new trend among TV and Internet homes shows the lightest traditional television users streaming significantly more Internet video via their computers, and the heaviest streamers under-indexing for traditional TV viewership. This behavior is led by those ages 18-34."

 The typical research view had been that the heaviest TV/media consumers are big users across all services and platforms. Previous research has shown, for example, that TV viewing and usage did not suffer because of new platforms like the Internet.

As evidence, Nielsen says in the first quarter of 2011, the heaviest streamers group -- those who view 18.8 minutes of streaming video a day -- also watch 272.4 minutes of traditional TV a day. The lightest streamers, those viewing 0.1 minutes of streaming video, watch 290.0 traditional TV minutes a day.

 In the fourth quarter of 2010, the heaviest streamers were at 14.5 minutes of daily streaming, and 262.7 minutes of traditional TV. The lightest streamers registered 0.0 minutes of streaming and 270.7 minutes of traditional TV time.

 Looking at the key 18-34 users -- those who are generally more Internet-savvy -- Nielsen says the heaviest streamers in this group were watching 27.1 minutes a day of streaming video as of the first quarter 2011, with traditional TV viewing at 212.1 minutes. By comparison, the lightest 18-34 streamers are looking at 0.1 minutes of streaming video and watching 246.5 minutes of traditional TV content.

 Although Nielsen says this group is small versus the general population, the results are significant. Nielsen adds that more than a third of the TV/Internet population don't stream any video, and that less than 1% don't watch TV at all.

 The news is still good for television overall.

 U.S. TV viewers watch 158 hours, 47 minutes of TV a month -- 22 more minutes than a year ago. (This includes any time-shifted playback activity.) This amounts to around 10 hours a day for the heaviest of TV users, and around one hour a day for the lightest TV users.

Nielsen says: "While certain segments of the population are migrating toward specific services and viewing habits, the resounding trend is this: Americans are spending more time watching video content on traditional TV, mobile devices and via the Internet than ever before."

Latest snapshot of TV viewing

Over three-quarters of Americans (77%) have watched a TV show on the Internet rather than on a traditional television. 30% of US adults say, however, they’re not interested in giving up their cable TV in favor of watching TV shows on the net. However, over half of those with cable would stop paying for cable, if certain stipulations were met (56%).

Half of U.S. adults say they have watched a show on the Internet that they never previously saw on a traditional television (51%), according to findings of a recent Harris Interactive survey.

Younger adults are more likely to have watched a TV show on the Internet than are those older—88% of those 18-34 years have, compared to 84% of those 35-44 years, 75% of those 45-54 years and 64% of those 55+.

Men and women are equally likely to have watched a TV show on the Internet—just over three quarters say they have done so (76% and 77%, respectively). Almost nine in ten Americans currently have cable TV (87%) and a majority would stop paying for it in favor of watching TV shows on the Internet if certain conditions were met (56%):

--Two in five say they would stop paying for cable TV in favor of watching TV shows on the Internet if they could get all of the programs that they wanted to watch for free online (44%);

--A quarter of adults say that they would need to get all the shows they wanted to watch online at the same time that they air on TV (25%);

--16% would do so if they could get all the programs they wanted to watch for a small fee online and the same number say they would do so if it was less complicated to set their TV up with Internet.

--Looking by age, majorities of those aged 18-34, 35-44 and 45-54 with cable would be interested in giving up their cable TV if certain conditions were met (between 59% and 62%) yet less than half of those 55+ say the same (45%); and, Men are more interested in stopping their cable TV paid subscription than women are (60% vs. 52%).

RBR-TVBR observation: It all eventually will boil down to what the cord is bringing into the monitor—as simple as that. If an online broadcaster could deliver the same content as a cable MSO for less of a fee, there would be plenty that would make the switch. With iPTV sets abundant now, the consumer is ready, but will the cable and broadcast networks let go and let all of their programming simulcast on the net? Right now many people are just preferring cable TV because the screen is bigger and they’d have to watch internet TV on their laptop or PC—uncomfortable.

TELEVISION loosing viewers

Fighting for Attention

The Web is drawing viewers' eyes away from TV, yet it's far from the only distraction

By Mike Chapman

If there wasn’t already enough proof that the old boob tube is under assault from the home computer: Three-quarters of respondents to the most recent Adweek/Harris Interactive poll confirmed that they have watched a TV show online, and nearly 70 percent have watched a show online before watching it on an actual television.

Yet the threat to television watching is coming from old media too. Of those people still tuning in, many say they aren’t necessarily paying attention while they have it on. Some 44 percent of our respondents said they’re reading a book, magazine, or paperback while watching TV.

(Reading, in fact, was the second-most popular activity after surfing the Web.) Thirty-seven percent are texting while watching, and 40 percent are connecting with friends via Facebook and other sites. (No wonder Lost fans didn’t understand the show’s ending last year!)

The good news for TV (and the advertisers who love its reach)? Only 3 percent of our respondents said they don’t watch TV at all. We’d say 97 percent means it’s a medium that isn’t going anywhere—not yet, anyway.