Post on 10-Jul-2015
TheLocalMedia&Advertising Experts
How National Brands Might Focus
On Local Search in a Mobile
Wearable, Connected WorldRick Ducey
December 11, 2014
Park City, UT
© 2014 BIA/Kelsey. All Rights Reserved.
2
BIA/Kelsey’s US Local Forecast: 2015-2019
All Paid Ad Spending Targeting Local Audiences
Mobile
Search
National vs Local marketers
What Will Search Look Like Next?
Mobile, Wearable, Connected World
Getting to the “Connected Me”
What it Means for National Brands
Topics
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National OverviewTotal U.S. Spending in Local Markets
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4
Local Ad Market Currently
Dominated by Traditional Media
Newspapers Print
11.5%
Newspapers Online
2.4%
Direct Mail
27.4%
TV O-T-A
13.9%
TV Online
0.7%
Radio O-T-A
10.3%
Radio Online*
0.8%
Print Yellow Pages
2.2%
Internet YP
1.6%
OOH
5.8%
Cable
4.9%
Magazine
1.3%
Magazine Online
0.2%
Online / Interactive
10.7%
1.5%
Mobile
4.7%
2015 U.S. Local Media Revenues — $139.3 Billion
*Notes: “O-T-A” means “over the air.”
Radio online revenues include online revenue from terrestrial and online streaming services.
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Steady Shift Toward Digital Media
$106.1 $104.2 $105.6 $103.9 $105.0 $103.5
$31.0 $35.0$39.4 $44.5
$49.7 $55.0
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
2014 2015 2016 2017 2018 2019
Traditional Online/Digital
US$ B
illio
ns
2014-2019
CAGRs:
Total Media
CAGR 3.0%
Online/Digital
Media
CAGR 12.2%
Traditional
Media
CAGR -0.5%
$139.3
Note: Numbers are rounded.
$137.0$145.0
$148.4$154.7
$158.5
© 2014 BIA/Kelsey. All Rights Reserved.
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Local Ad Market Less Dominated
by Traditional Media in 2019
Newspapers Print
8.2%Newspapers Online
2.4%
Direct Mail
24.2%
TV O-T-A
13.8%TV Online
0.9%
Radio O-T-A
9.6%
Radio Online*
1.2%
Print Yellow Pages
0.9%
Internet YP
1.7%
OOH
5.8%
Cable
4.7%
Magazine
0.9%
Magazine Online
0.3%
Online / Interactive
12.5%
1.7%
Mobile
11.3%
2019 U.S. Local Media Revenues — $158.5 Billion
*Notes: “O-T-A” means “over the air.”
Radio online revenues include online revenue from terrestrial and online streaming services.
© 2014 BIA/Kelsey. All Rights Reserved.
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Total US Local Advertising
$83.0 $83.6 $84.7 $85.7 $88.1 $89.7
$50.2$54.4 $56.1
$61.4 $63.4$68.9
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
2013 2014 2015 2016 2017 2018
Bill
ion
s
Total Local Advertisers Revs. Spending
Local Advertisers National Advertisers
62.3% 60.6% 60.2% 58.3% 58.1% 56.5%
37.7% 39.4% 39.8% 41.7% 41.9% 43.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 2016 2017 2018
Total Local Advertisers Revs. Distribution
Local Advertisers National Advertisers
Source: BIA/Kelsey, 2014
Note: “Local” refers to advertising that targets local audiences.
National advertisers increase share of total ad spend targeting local
audiences.
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US Local Mobile Advertising
$0.4$0.8
$1.5$2.2
$3.4
$4.7
$2.4
$3.7
$5.6
$7.0
$9.1
$11.0
$0
$2
$4
$6
$8
$10
$12
2013 2014 2015 2016 2017 2018
Bill
ion
s
Local Mobile Advertisers Revs. Spending
Local Advertisers National Advertisers
15.0% 18.0% 21.0% 24.0% 27.0% 30.0%
85.0% 82.0% 79.0% 76.0% 73.0% 70.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 2016 2017 2018
Local Mobile Advertisers Revs. Distribution
Local Advertisers National Advertisers
Source: BIA/Kelsey, 2014
Note: “Local” refers to advertising that targets local audiences.
Local advertisers increase share of Mobile ad spend targeting local audiences.
© 2014 BIA/Kelsey. All Rights Reserved.
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© 2014 BIA/Kelsey. All Rights Reserved.
Mobile and Search
Forecast
9
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Mobile Local Ad Spend: Five-Year Forecast
$4.3
$6.6
$9.1
$12.1
$15.1
$17.9
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
2014 2015 2016 2017 2018 2019
US$ B
illio
ns
Note: Numbers are rounded.
Mobile Local Ad Spend Will More than Quadruple 2014-2019
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Local vs. National Ad Spend in Mobile
$8.98$12.16
$15.13$18.42
$21.26$23.77$4.27
$6.58
$9.09
$12.08
$15.06
$17.86
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
2014 2015 2016 2017 2018 2019
Non-location Targeted Location Targeted
US$ B
illio
ns
Note: Numbers are rounded.
$13.25
$18.75
$24.22
$30.50
$36.32
$41.63
43%
32%
Location Targeted Spend Will Also More than Quadruple 2014-2019
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Location Targeted Mobile Ad Revenues:
Key Takeaways
Defined as advertising targeted based on a user’s location.
It includes large national advertisers and SMBs.
Location specific ad copy or calls to action (i.e., call local store), will also
classify a given ad as location targeted.
National Brands and Agencies executing locally:
Adoption of mobile local advertising tactics (i.e., geo-fencing, click-to-call,
click to map).
National advertisers’ natural evolution to adopt effective, increasingly
available, and currently undervalued mobile local ad inventory.
Innovation among ad networks and ad tech providers will drive value.
© 2014 BIA/Kelsey. All Rights Reserved.
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Location Targeted Mobile Ad Revenues:
Key Takeaways (cont’d)
Ad premiums will result from higher performance for
location targeted mobile ads vs. non-location targeted
ads.
These performance deltas (such as click through rates)
are a function of:
Higher relevance, immediacy and alignment with consumer
local buying intent.
All of which are more prevalent in mobile than in other print
and digital media.
For example, half of mobile searches have intent to find local
information or products, compared to the 17 percent of desktop
searches that carry comparative local intent.
© 2014 BIA/Kelsey. All Rights Reserved.
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Location Targeted vs. Non-Location Targeted
Ad Revenues: Key Takeaways
Location targeted mobile advertising is a subset of
overall U.S. mobile advertising revenues The share of the overall mobile ad revenue pie attributed to location
based campaigns will grow from 32 percent ($4.3 billion) in 2014 to 43
percent ($17.9 billion) in 2019.
This growth is driven by Google (33 percent of paid clicks now come
from mobile devices); and Facebook (53 percent of ad revenues
attributed to mobile, up from 23 percent last March).
Google’s Enhanced Campaigns will drive much of this growth by forcing
mobile ads on search advertisers (default campaign) and a mobile
advertising learning curve and adoption cycle for all search advertisers,
including SMBs.
Enhanced Campaigns will also notably close the current gap between
mobile ad rates and desktop equivalents.
This will play out as an influx of advertisers in Google’s bid marketplace
for mobile keywords will naturally boost bid pressure and thus CPCs.
This shift is already underway.
*For a more thorough analysis of Enhanced Campaigns, see our blog analysis
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Core search volume from PCs is expected to decrease by -
2.8% in 2014, as an increasing share of search volume
shifts to mobile devices.
In January 2014, for first time Americans used smartphone and
tablet apps more than PCs to access the Internet.
Mobile devices accounted for 60% of total digital media time
spent in May, up from 50% a year ago according to comScore.
Local desktop search revenues are expected to grow at a
muted 2.6% CAGR through 2019. Major drivers include:
Increasing click-through rates, with
CPCs decreasing over the next few years.
The lower CPCs and increased volume of mobile search are
pushing down overall CPCs for the online search industry.
Local Search
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Local Search
$7.1
$7.2
$7.4
$7.6
$7.8
$8.1
$6.6
$6.8
$7.0
$7.2
$7.4
$7.6
$7.8
$8.0
$8.2
2014 2015 2016 2017 2018 2019
CAGR +2.6%
US$ B
illio
ns
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Mobile Search Owned by Google
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What are smartphone users searching for?
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Local Share of Mobile Ad Spend by Format
Display
26.1%
Search
51.1%
SMS
2.6%
Video
7.5%
Native/
Social
12.8%
2015
Display
21.9%
Search
46.5%
SMS
1.5%
Video
6.0%
Native/
Social
24.2%
2019
Native/Social Paid Ads Will Double 2015-2019, Mobile Local Search Declines
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Majority of search has
moved from desktop to
mobile.
Is the next migration from
mobile to wearable?
What’s next in Local Search?
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Let’s see, am I the only one wondering about
this?
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What’s going on with
wearables?
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Form Factors for Wearable Tech
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High Awareness and Familiarity
Source: Ipsos MediaCT, October 2014
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Wearables Rank High in Purchase Intent
Source: Ipsos MediaCT, October 2014
Almost a fifth of US Adults Intend to Purchase Wearable Technology
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Key Uses and Purchase Criteria for Smart
Watches – It’s About Tracking Activity
Top Three Uses
1. Activity tracking
2. Time telling
3. Basic apps
Top Three Purchase
Criteria
1. Price
2. Functionality
3. Activity tracker
Source: GfK, as cited in press release, September 8, 2014.
Note: n=1,000 US respondents
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Among Intended Purchasers, Majority
Attracted to Fitness Monitors and Watches
Source: Ipsos MediaCT, October 2014
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About 40% of Internet Users Plan To or Do
Track Fitness/Health
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It’s mostly about the “connected wrist” for
device sales
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Wearable Use Among Internet Users Doubled
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Tracking Fitness is the Major Use Case
Fitness
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Wearables Have Low Use Rates at the
Moment
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Privacy is not the main barrier to adoption of
wearables.
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So what does all this mean
for national brands and
local search?
35
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Google Now is just the beginning.
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Connected Me
Mobile
Internet of Things
Big Data
Social
Channels
Connected Home
Connected Car
Media Analytics
Wearable Technology Creates the “Connected Me”
and Further Fuels a Data Storm of SignalsConnected Me Data Combined with Other Data Puts Targeting into HyperDrive
and Brings Us Closer to Nirvana of “Closed Loop” Marketing
Source: BIA/Kelsey, 2014
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38
Younger demos will be into wearables sooner and in
greater force than older demos.
Early adopters are more fitness oriented.
Wearables continue to pack in more sensors.
Location signals from GPS, Bluetooth beacons, cell towers
establish your current context and historical time and
space movement patterns.
Advertisers will know when you are sleeping, and not
sends ads.
More physically active consumers will get targeted
differently than those less physically active.
And most importantly, Santa really will know if you’ve
been good or bad!
The Connected Me
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39
Implications for National Brands in the
Connected Me World of Local Search
Connected Me SEO zones
Personal
Auto
Residential
Work
Time
Activity
Biometric Signals Create
New Intent Context
Physiological search
Moods
Body temp
Heart rate
Content marketing
Just right content
New UIs and form factors
Social
New types of native
advertising
Ecommerce
Impulse purchase ideas
based on activities
Rules-based
Privacy
Off grid times and zones
For National Brands – Local SEO will morph into Connected Me SEO and
Be Rules-Based Around Location, Activity, Biometrics, Permissions
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Getting to the Always On,
Connected Me Campaign
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Attribution – ultimate consumer data for closed loop
marketing.
Research – already into personal, wearable devices, just a few
steps away from survey samples to large scale personal data.
Testing – Move from A/B testing to machine learning at the
individual level, Connected Me supports granular optimization.
Social – Connected Me signaling can spawn organically created
affinity groups around brands
Loyalty – Super relevant and targeted loyalty programs fine-
tuned to the individual build deeper consumer relationships
and retention
The “Always On Aware Campaign” is bathed in
new signals and constant context refreshes.The Connected Me Enables the Always On, Aware Campaign
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Context: Location and Intent Driven Search
Where am I?
GPS
Bluetooth beacons
WiFi
Cell towers
Time
Geofencing
Track
Street level
Store level
Augmented Reality
What am I doing?
Activity recognition
Activity View
What will I do next?
Predictive view
Where will I be next and
what will I want?
Where Am I and What Do I Want Next?
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Explicit Search vs Context Driven Search
Current Local Searches
Business hours
Business directions
Business address
Is it in stock?
Connected Me Searches
You’re getting hungry,
nearby places you like to eat.
“Your heart rate is up, try a
decaf cappuccino at these
restaurants.”
“You’ve met today’s calorie
goal, time for a treat.”
“Too much sun exposure, $5
off sun screen at these
stores.”
“Join the 1,000 Steps a Day
Club and get these offers.”
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Explicit
Key phrase
Implicit
Context
Conversational
Filters
Reviews
Connected Me
Integrates external and
internal signals
Contextual history creates
base cases
Self-learning and predictive
Individualized user experience
Final Thoughts on Search EvolutionBig Data, Connected Me signals, machine learning, predictive algorithms
and rules-based scenarios will take Local Search to a new level.
© 2014 BIA/Kelsey. All Rights Reserved. This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract. Any unauthorized distribution could
result in termination of the client relationship, fines and other civil or criminal penalties under federal law. BIA/Kelsey disclaims all warranties regarding the accuracy of the
information herein and similarly disclaims any liability for direct, indirect or consequential damages that may result from the use or interpretation of this information.
Questions & Comments:
TheLocalMedia&Advertising Experts
Rick Ducey
Managing Director
BIA/Kelsey
rducey@biakelsey.com
@rducey
(703) 818-2425