Online Advertising Performance Outlook

Optimizing the Value of Online Advertising Spend and Digital Media Channel Performance in Furthering Customer Acquisition

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According to the McKinsey Quarterly, “the rapid growth of online advertising hides a serious challenge: the digital world has developed faster than the tools needed to measure it. This problem has made it difficult for marketers to fully exploit the web’s promise as the most targeted and measurable medium in the history of marketing…Hobbled by nascent technologies, inconsistent metrics and a reliance on outdated media models, marketers are failing to tap the digital world’s full power.” The journal went on to state that “unless this problem is addressed, the inability to make accurate measurements of digital advertising’s effectiveness across channels and consumer touchpoints will continue to promote the misallocation of media budgets and to impede the industry’s growth.” 

The CMO Council and Vizu, a Nielsen company, collaborated on a thought leadership white paper to address the fragmented digital landscape and create new content based on insights and best practices from innovators and leaders in global digital campaign design, development, localization, execution and performance measurement. The white paper focuses on showcasing the growth, challenges and opportunities the digital media channel offers leading CMOs around customer acquisition and engagement. The goal of this initiative was to highlight the challenges digital presents, as well as best practices among marketers to provide insight into ways to maximize the impact and reap the full benefits of digital marketing efforts.


Facts & Stats

New research from Berg Insight reveals that the "real-time mobile location-based advertising and marketing" industry will grow in value at a compound annual growth rate of 65% from €526 ($688) million as of 2012 to €6.5 ($8.5) billion in 2017. That figure would make up just under one-third of all mobile advertising spend, predicts Berg. MediaPost

The report also found that online consumption is heavier in rapidly growing markets such as UAE and China, where total online time accounted for 7.3 and 6.1 hours of average daily media consumption, respectively. In China, the report found, only 35% of media time is spent with traditional media. MediaPost

Global consumption of digital media now accounts for 57% of daily media time. Overall, consumers now spend an average of 10.7 hours a day with all forms of media -- and 5.6 hours of that on digital, according to the Global Web Index study. MediaPost

Overall, more media time is spent online than offline in 23 out of the 31 major markets tracked by the Global Web Index study. MediaPost

North America led the world in overall digital advertising investment with an estimated $38.3 billion; Asia-Pacific came in second with $30.6 billion -- followed by Western Europe with $24.1 billion, according to the study, entitled This Year, Next Year: Interaction 2013. MediaPost

Internet ad spending rose 16.2% in 2012, representing 19.5% of all global ad spending last year, according to the report. MediaPost

Internet ad spending hit $99 billion in 2012, just shy of the 12-figure mark held by only one other medium -- television -- according to new estimates from GroupM. Based on its current trajectory, Internet ad spending will break into the 12 figures this year, totaling $113.5 billion. MediaPost

Between 2012 and 2017, online/digital media's share of total local advertising spend will increase from 17.4 percent to 27.6 percent while traditional media's share will decrease from 82.6 percent to 72.4 percent. Mobile Marketer

Growth will be stronger in online/digital advertising revenues, which are expected to grow at a compound annual growth rate of 12.3 percent and reach a total of $41.1 billion by 2017. Mobile Marketer

The online/digital media component of local advertising – which includes mobile – will grow at a nice pace over the few years while traditional media is expected to shrink. Mobile Marketer

Traditional media is going down, while online digital is growing at a 12.3 percent compound annual growth rate. Mobile Marketer

The mobile portion of local advertising spend is expected to reach $6.4 billion by 2017 while the online portion will total $6.3 billion, according to the report. Mobile Marketer

Marketers from companies with more than $500 million in annual revenue are devoting the largest portion of their digital marketing budgets to digital or online advertising (12.5%) and content creation and management (11.6%), per survey results from a Gartner report. MarketingCharts

The fastest-growing mobile targeting technique was targeting based on geo-precise mobile search behaviors, or search behavioral targeting, which grew at a 212 percent between the first quarter and the fourth-quarter of 2012. Mobile Marketer

Mobile local ad network xAd found that 95 percent of national advertisers are now leveraging some form of mobile location-based targeting. Mobile Marketer

24 percent of U.S. smartphone users see at least one mobile ad a week. About 50 percent of U.S. consumers surveyed said they were fine with ads that allow them to interact with free content. ClickZ

Nielsen's study found that on average over 50 percent of global smartphone users see at least one mobile ad a week. Over 50 percent of those surveyed in a variety of major markets said they didn't mind mobile ads if they give them the opportunity to check out free content. Meanwhile, those in developing nations are the least likely to engage with mobile ads. ClickZ

Globally, 54 percent of users discover mobile ads via apps, 40 percent on a search engine, 27 percent on a retailer Web site and 23 percent on a video Web site. Mobile Marketer

Digital marketing spending is forecast to grow by 10.2%, a slower rate than the 11.5% increase forecast in August 2012, but a healthy rate nonetheless. MarketingCharts

In Duke University's latest 'The CMO Survey' - CMOs forecast a 2.7% decline in traditional advertising spend over the next 12 months, after predicting a 1.9% decrease in August 2012, an 0.8% decrease in February 2012, and a 1.3% increase in August 2011. MarketingCharts

Ad budgets are also expected to rise, with 58% expecting them to increase significantly (8.2%) or modestly (50%). MarketingCharts

Perhaps the most telling measure for advertisers, teens were twice as likely to say that offline ads had introduced them to a product they then went on to buy (46% vs. 23%). MarketingCharts

Teens were even clearer in their assessment of which ads they try not to pay attention to, with 48% choosing online ads against 21% choosing offline ads. In terms of the ads they like to watch, 37% opted for offline compared to 17% for online. MarketingCharts

In terms of likability, offline ads were easily preferred by respondents. For example, when asked which ads really get on their nerves, teens were twice as likely to point to online than offline ads (45% vs. 23%). MarketingCharts

Local online advertising revenue will reach $24.5 billion this year, up 30.8% over last year, according to a report from Borrell & Associates. BtoB Online

According to the survey, 54.0% of respondents said they will spend the same on total advertising this year as last, 20.0% will spend more and 16.0% will spend less. BtoB Online

North America accounts for the greatest share of all digital ad spending, at 39.0% as of the end of 2012, although the fastest growth in spending is from such emerging markets as India, Indonesia and Mexico, eMarketer said. BtoB Online

eMarketer projected that digital advertising budgets will grow 15.1% this year, to $118.4 billion, putting global digital ad spending levels—including online and mobile—at 21.7% of total advertising expenditures. BtoB Online

Digital ad spending worldwide reached $102.8 billion last year, up 17.8% over 2011, and will continue to enjoy double-digital growth through 2015, according to a report by eMarketer. BtoB Online

Purchasing inventory via ad exchanges (like Google AdWords, or Facebook Ads where you bid on online advertising) is expected to increase in 2013. Net Better Business Advice 

Frost & Sullivan is predicting the online video advertising market to grow by over 50% in 2013. It was worth $86 million in 2012, and the analyst house is forecasting it to be worth $442 million by 2016. Nett Better Business Adivce 

The US will remain the dominant territory for online advertising expenditure. Its share of online advertising revenues stay at 40% of the global total, although its online ad spend will grow from $26,040 million in 2010 to $58,133 million in 2017. The UK will retain second place, recording $11,724 million in 2017. China will overtake Japan to take third place in 2014. China's online advertising revenues will grow from $2,600 million in 2010 to $10,808 million in 2017. BusinessWire

Global online advertising revenues will reach $143 billion in 2017, according to a new report from Digital TV Research. The Online Advertising Forecasts report estimates that the 2017 total is more than double the $66 billion recorded in 2010 and considerably up from the $92 billion predicted for 2012. BusinessWire

A report commissioned by the IAB and carried out by PwC has online spend from the first half of 2012 up 14% to $17 billion, up by $0.2 billion from the last half of 2011; dead-tree advertising, on the other hand, spent $35.8 billion throughout the whole of last year. Fast Company

Global online advertising revenues will reach $143 billion (€112.6 billion) in 2017, according to a new report from Digital TV Research. The Online Advertising Forecasts report estimates that the 2017 total is more than double the $66 billion recorded in 2010 and considerably up from the $92 billion predicted for 2012. Broadband TV News

The US will remain the dominant territory for online advertising expenditure. Its share of online advertising revenues will stay at 40% of the global total, although its online ad spend will grow from $26,040 million in 2010 to $58,133 million in 2017. Broadband TV News

Worldwide Internet advertising expenditures are expected to surpass $106 billion in 2011,
according to IDC’s Digital Marketplace Model and Forecast. The U.S. will account for the
largest share of spend with $45 billion projected this year. Marketing Charts

According to Kantar Media Intelligence, Internet display advertising had the second largest
growth rate among media sectors (7.7 percent) during the first nine months of 2010. Kantar Media

comScore, Inc. reports that U.S. Internet users received a record 1.3 trillion display ads
during the third quarter of 2010, a 22 percent increase versus year ago. The average Internet user was delivered more than 6,000 display ads over the course of one calendar quarter. Tech Crunch

According to TNS Media Intelligence and AdAge, top categories for Internet marketing and
advertising are financial services, telco/ISPs, retail, automotive, general services, media,
travel/hospitality, technology, education, health care and pharmaceuticals, entertainment,
insurance, food and beverage, personal care, toys and games, real estate and home goods. Advertising Age

According to a study by the Pew Research Center in 2010, 81 percent of online news users
“do not mind” online advertising. However 77 percent said they tend to ignore ads with 42
percent saying they “never” click on them and 35 percent claiming they “hardly ever” click on ads. The Guardian


Studies & White Papers


April 2013 - Online Vides Ad Views Reach Record High on 13.2 Billion in March - MarketingCharts 

April 2013 - 2013 Ad Spend Up Worldwide, Nielsen Finds - MediaPost

April 2013 - Consumers Say They Prefer Targeted to Random Online Ads - MarketingCharts

April 2013 - Mobile Grows Quickest, But Search is Still King of Online Advertising - MarketingCharts 

April 2013 - Berg: Mobile Location-Based Advertising To Reach $8.5 Billion By 2017 - MediaPost

April 2013 - Global Ad Spend Up 3.2% in 2012 - MarketingCharts

April 2013 - Local Online Media Is Thriving - MediaPost

April 2013 - Global Ad Spend Growth to Barely Outpace Forecast Inflation This Year - MarketingCharts

April 2013 - Huh: Online Nearly Matches TV in Daily Usage - MediaLife 

April 2013 - Mobile Advertising Grows So Fast That Analysts Revise Forecasts - Ad Age

March 2013 - Global Media Shift: Online Tops Offline Usage - MediaPost

March 2013 - GroupM: Internet Ad Spend Breaks Into 12 Figures - MediaPost

March 2013 - Initial 2013 Broadcast Spending Reflects Tough Commps With 2012, Digital Continues to Expand Share Of Agency Budgets - MediaPost

March 2013 - Kantar Reports U.S. Ad Spending Up 3% Last Year - BtoB Online 

March 2013 - Advertising, Content Eat Up Biggest Share of Digital Marketing Budgets - MarketingCharts

March 2013 - 12 Verticals Increase Mobile Advertising Spend Year-Over-Year: Report - Mobile Marketer

March 2013 - Kantar Media Reports U.S. Ad Spending 3% Last Year - BtoB Online

March 2013 - U.S. Ad Economy Expands For Third Consecutive Year: Big, Mid-Tall Advertisers Biggest Factors - Mobile Marketer

March 2013 - Local Advertising Spend on Mobile to Reach $1.98 this year: Report - Mobile Marketer

March 2013 - More Precise Mobile Location Targeting Use By Advertisers is Skyrocketing: Report - Mobile Marketer

March 2013 - Despite Challenges, Agencies See Rising Demand for Dynamic Rich Media Ads - MarketingCharts 

March 2013 - Local-Mobile Ads: Search Behavioral Targeting Provides Biggest Lift - MarketingCharts

March 2013 - Multiple Screens Force Ad Industry To Revamp Rich Media Ads - MediaPost

March 2013 - 2012 Proves Slow Growth Year For Ad Companies - MediaPost

March 2013 - New IAB Chair Explains 'Three Fundamental Truths' of Online Advertising - BtoB Online 

February 2013 - Mobile Advertising Grew 11pc in Q4: comScore - Mobile Marketer

February 2013 - 57 Percent of Americans See a Mobile Ad at Least Once a Day - ClickZ

February 2013 - 39% of Inc. 500 Execs Say Social Has Been Unnecessary For Growth - MarketingCharts 

February 2013 - 59pc of Users as Comfortable with Mobile Advertising as With TV, Online Ads: Study - Mobile Marketer 

February 2013 - CMOs to Rein in Traditional Ad Spend, Press on With Digital Marketing - MarketingCharts

February 2013 - Facebook Advertising Adoption Grows, As Do Budgets - MarketingCharts

February 2013 - American Teens Prefer Offline to Online Ads - MarketingCharts 

February 2013 - Cross-Platform Will Dictate Content, Ad Strategies in 2013 - MediaPost

February 2013 - Exclusive Survey: What Advertisers Really Think About Facebook - Ad Age

February 2013 - At the IAB Annual Meeting: Study Shows Digital Boosts Advertiser Reach - BtoB Online 

February 2013 - Mobile Ad Options Expand, Incorporating Unique Device Capabilities - eMarketer 

February 2013 - Study: Ads on Social Networks Perform 2.5 Times Better Than Ads on Other Channels - BtoB Online

February 2013 - ComScore Says 5.3 Trilion Ads Shown in 2012, But 3 in 10 Are Never Seen - Tech Crunch

February 2013 - Display Ad Market Growth Looks LIke it's Being Driven by Small and Mid-Sized Advertisers - MarketingCharts

February 2013 - Targeting & Measurability Important Benefits of Online Advertising - MediaBizNet

January 2013 - Mobile Drives Online Ad Growth - Warc

January 2013 - Measurable Online Advertising Becomes Increasingly Popular - BDaily Business News 

January 2013 - Local Mobile Ad Spend to Surpass National Advertising by Next Year: BIA/Kelsey - Mobile Commerce Daily 

January 2013 - Online Advertisers - Stressing Revenues - Forecast Raised Targets - Marketing Charts 

January 2013 - Digital Ad Growth to Remian Double-Digit - BtoB Online

January 2013 - Local Online Advertising to Grow 31% this Year - BtoB Online 

January 2013 - Global Ad Spend Growth Forecast Downgraded - MarketingCharts 

December 2012 - Analysts Predict Changes in Online Advertising for 2013 - Nett Better Business Advice 

December 2012 - 2013 Predicitions for Online Ad, Marketing Experts - MediaPost

December 2012 - Forecast: Solid Growth For Global Ad Spend - MediaPost

December 2012 - U.S. Ad Spending Increases 7.1% in Q3 - BtoB Online 

December 2012 - Online Media Measurement Further Outpacing Traditional - MarketingVox

December 2012 - Online Adveritising Spending to Outpace Print and Magazine by 2015: Forecast - Miyanville

December 2012 - Study: Nearly a Quarter of Major Brands Using Online Video Advertising - BtoB Online 

November 2012 - Study: Global Online Ad Revenue to Hit $143 Billion by 2017 - Hollywood Reporter

January 2013 - Digital Ad Growth to Remain Double-Digit - BtoB Online 

January 2013 - Local Online Advertising to Grow 31% this Year - BtoB Online 

November 2012 - Online Advertising Expenditure to Eclipse Traditional Media - Castleford

November 2012 - Marketers Exepct Growth in Rich Media Advertising - BtoB Online

November 2012 - Research and Markets: Online Advertising Forecasts - Business Wire

November 2012 - Strata Survey Finds 91.9% of Ad Agencies Using Social - BtoB Online

November 2012 - How Ads Track You on Your Smartphone Mobile, Ad Tracking Explained - Adweek

November 2012 - Online Ad Spend to Reach $143 Billion by 2017 - Broadband TV News

November 2012 - How to Profit in a Changing Advertising Industry - The OTC Investor

Novermber 2012 - Big Data Platforms Hold Big Promise for Future Ad Performance - Marketing Charts

November 2012 - Forecast: Real-Time Bidding Will Account for 13% of Total Online Display Spending - BtoB Online

September 2012 - Why Brands Need to Rethink Their Online Advertising Strategy - Forbes

July 2011 - Digital Fragmentation: Sub-specialist Silos and the "Special Ones" - eConsultancy

May 2012 - Measure Marketing's Worth - McKinsey Quarterly

May 2012 - Bridging the Digital Divide - Marketing Land

April 2012 - Demystifying Social Media - McKinsey Quarterly

November 2008 - Whither the Click? comScore Brand Metrix Norms Prove “View-Thru” Value of Online Advertising - comScore



Program Themes

  • Online Video
  • Online Advertising
  • Advertising Effectiveness
  • Advertising Trends