Piper Jaffray Report - The User Revolution: The New Advertising Ecosystem and the Rise of the Internet as a Mass Medium

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The User Revolution: The New Advertising Ecosystem and the Rise of the Internet as a Mass Medium

(Piper Jaffray, February 2007)

This 425-page PDF from Piper Jaffray takes a deep and wide look at the state of the online world. Among the highlights:

• We expect global online advertising revenue to reach $81.1 billion by 2011, representing a 21% CAGR (2006-2011).
• The advertising world is going through a revolution, one that we call the “User Revolution” as it is happening primarily with the consumers, who are taking control of content consumption and branding.
• The Internet has increasingly become a principal medium for community, communication, and entertainment—three areas that have collided together and are impacting each other’s growth—generating a new type of activity that we call communitainment.
• The Internet has become a mainstream media outlet that is now rivaling traditional media such as radio, television, newspapers, and magazines for reach and advertising dollars.
• The proliferation of online and offline media outlets has resulted in shrinking television audiences and an increasingly fragmented media landscape.
• Search is the second most commonly used application on the Web with 550 million searches daily in the United States, and search marketing is a $15.8 billion global industry growing to $44.5 billion over the next five years.
• We believe Google's wide variety of non-search-related products creates a virtuous cycle of brand affinity that drives incremental search volume.
• We believe Internet video ads could become a game changer for large brand advertisers, who are used to the 15 or 30 second TV commercial.
• Portals maintain the highest reach, but the fastest growing category of destinations is communitainment sites such as MySpace and Facebook.
• Ad networks are experiencing increased demand due to increasing Internet fragmentation, desire for more targeted inventory, increasing usage of networks for branding, and increased site visibility.
• Agencies are rapidly evolving into more sophisticated, technology-savvy entities that combine best of breed offerings.
• We expect companies such as Google (and YouTube), Yahoo!, Disney, News Corp., Time Warner, Microsoft, InterActive, Facebook, Craigslist, Brightcove, Yelp, SINA Corp., Baidu, aQuantive, ValueClick, 24/7 Media, Netflix , Wikipedia, MobiTV, Digg, and Hakia to be the most important players to watch.

Hans Rosling - gapminder.org

Great video of Hans Rosling who leads gapminder.org.

http://www.ted.com/tedtalks/tedtalksplayer.cfm?key=hans_rosling

They developed trendalyzer which is software that makes data much more visual. As the amount of data continues to grow at a ridiculous rate, tools and people that can make it easily digestible for decision making will be very valuable.

This is why Google bought them on March 21, 2007

See their tool in action

Sir Ken Robinson - Excerpt of Speech

Sir Ken has a great message about the needs for education to be reformed to be more focused on creativity. Our current education system is still focused on educating for the industrial revolution.

Click here for a short video.

He spoke at the Performics client summit as well as MSN's AdSummit. Great stuff.

Turn Customer Input into Innovation -The Customer Knows Best? Better Think Again

3/4/2002

Few customers are well versed in any given industry's emerging technologies, materials, or processes. That's why whole departments are dedicated to R&D. Yet many companies allow customers to drive the innovations in product development and leave little room for creativity among the experts in the organization. It's important to listen to what your customers say, but how you listen can make or break the success of new products. The following excerpt from Harvard Business Review describes a methodology for listening, and understanding the customer's desired outcome.

by Anthony W. Ulwick

Full excerpt below
http://hbswk.hbs.edu/archive/2815.html

Real Estate Sites - Chicago Tribune, March 9, 2007

Came across a few sites talking about and taking advantage of the transformation of real estate marketing in the digital era

www.wellcomemat.com - provide more high quality video vs. YouTube and allowing agents to embed into their own sites

www.futureofrealestatemarketing.com - blog on all things marketing for the residential real estate industry

MediaPost - Center for Media Research - March 6, 2007

Newspapers Outsell TV Broadcasters With Local Online Video Ads

According to a new report from Borrell Associates, local online video advertising, worth about $161 million in 2006, is expected to grow to $371 million this year, or 5% of all local online advertising, and to exceed $5 billion in next five years.

In 2006 the market for locally targeted online video ads became a legitimate market in Chicago , New York and Los Angeles (the three largest markets) worth more than $5 million each. The next 37 largest markets each saw more than $1 million in revenue from online video, according to Borrell. The study claims that "infomercials" are said to drive the increase in the advertising market, not traditional 15-second commercials

In 2006 newspapers sold approximately $81 million in local online video commercials in comparison to $32 million sold by TV broadcasters. And, according to a report from the Television Bureau of Advertising, online TV revenues were up 41% in 2006.

The study also found that print media is using the Internet as a new medium to reach TV advertisers, while TV broadcasters have been utilizing the Internet to reach traditional print advertisers. The trend has led to most local TV websites hosting classified ads, and nearly half of the newspaper websites offering video content. This shift in website advertising is changing local advertising with banners and paid listings decreasing, and video ads and paid search increasing.

Broadcasters, are expected to bounce back this year, though. With an increasing number of video streams available on TV Websites, 80% of broadcasters surveyed expect to sell streaming video ads this year, up from 72% who did last year.

According to the study, online competition with newspapers and broadcast TV stations is expected to increase with both sides continuing to develop video products for the Web. Automotive advertisers will be key in the competition, along with real estate, health and employment.

Borrell concludes that the online video advertising market is expected to increasingly revolve around the strength of Websites' video content.

15 sites for Local Search

Good summary of some sites focused on the local opportunity

http://uncommented-business.blogspot.com/2007/03/15-sites-for-promoting-your-local.html

Entreprenuer of the Year - Inc. December 2006

Great article on how an entrepreneur is making a difference and using business to revitalize a small midwestern town.

Create Jobs, Eliminate Waste, Preserve Value

By: Leigh Buchanan

PAGE 1 of 7

Those six words explain a lot: Why Ken Hendricks is worth $2.6 billion, how he came to be a walking textbook on identifying and exploiting business opportunities, how he manages to make (relatively) few enemies while treating Beloit, Wisconsin, like one vast fixer-upper--and why he is our Entrepreneur of the Year.

See full article here