BIA/Kelsey 2014 Picks and Predictions

BIA/Kelsey’s 2014

Picks & Predictions

January 2014

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© 2014 BIA/Kelsey. All Rights Reserved.

Executive Summary

Every January, BIA/Kelsey issues its “Picks and

Predictions” for the year ahead, offering our best guess

of what the year will bring in local, social, mobile,

directional, vertical and video advertising and promotions.

This year’s predictions cover a wide range of hot

button local media topics, from native advertising

and media attribution to TV everywhere and the

influence of social content on search.

BIA/Kelsey analysts will present highlights of their 2014

predictions on a January 23 webinar.

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Industry Analysts with Keen Insights

JED WILLIAMS VP Consulting & Sr. Analyst, Social

PETER KRASILOVSKY VP Conferences, Sr. Analyst,

Loyalty & Transactions

GEOFF PRICE VP, Valuations &

Financial Consulting

MICHAEL BOLAND VP Content &

Sr. Analyst, Mobile

JEANNE DIXON DATILLO Sr. Analyst, Media Valuations

SUZANNE ACKLEY Senior Research Analyst

MARK FRATRIK VP, Research & Chief Economist

CHARLES LAUGHLIN SVP & Managing Editor

RICK DUCEY Managing Director

CELINE MATTHIESSEN VP, Insights & Analytics

STEVE MARSHALL Director, Research

REBECCA

WEINGARTNER Associate Analyst

MESHACH CISERO Associate Analyst

ABID CHAUDHRY Sr. Director, Industry

Strategy & Insight

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Quick Take: Our 2014 Predictions

No. 1: The New Era of Non-Advertising?

No. 2: Native Advertising Achieves Local Scale

No. 3: Attribution Boon for Transaction Marketing

No. 4: Digital Agencies Go Mainstream

No. 5: Big Data Drives Local Discovery

No. 6: The Sharing Economy Spawns Verticals

No. 7: Local SERPs Get a SoLo Makeover

No. 8: National Retailers Go Local

No. 9: TV vs. Social

No. 10: RIP PYP

No. 11: ‘SMBs’ Are Redefined

No. 12: Local-Digital Media Investment Soars

No. 13: Developers Shift to SMB-Facing Apps

No. 14: TV Everywhere Drives Video Innovation

No. 15: YPs Go on Verticals Acquisition Binge

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No. 1: The New Era of Non-Advertising?

“In 2014, we believe BIA/Kelsey

survey research (Local

Commerce Monitor™ and

Consumer Commerce Monitor™)

will demonstrate a clear move by

SMBs away from purchased

media (both print and online) to

other forms of customer outreach

and engagement, notably social

media and transaction marketing.”

STEPHEN MARSHALL

Research Director

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“After a year of intense buzz and heavy experimentation,

native advertising will begin to live up to its immense

potential in 2014 by achieving scale at the local level. The

challenge will be to divide native inventory between direct

sales efforts and exchanges. Smaller advertisers will need

help understanding the ROI that native advertising can deliver

as part of larger content marketing initiatives.”

JED WILLIAMS

VP Consulting & Senior Analyst, Social Media

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$2.9

$4.3 $4.9

$5.5 $6.1

$6.8 $1.4

$2.4

$3.1

$3.7

$4.4

$5.0

$0

$2

$4

$6

$8

$10

$12

$14

2012 2013 2014 2015 2016 2017

Social Display Social Native

US

$ B

illio

ns

2012-2016

CAGRs:

Total Social

CAGR 22.4%

Social Display

CAGR 18.3%

Social Native

CAGR 29.6%

Note: Numbers are rounded.

U.S. Social Display vs. Native Ad Spend: 2012-2017 Forecast


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No. 3: Attribution Boon for Transaction Marketing

PETER KRASILOVSKY

VP & Senior Analyst,

Transactions and Loyalty

“One of the biggest problems for

local marketers is proving attribution

– especially as users effortlessly

move from a banquet of ‘spreadable

media’ – everything from articles to

email to social media posts to

YouTube. It is another reason we

expect to see big things from

transactional and loyalty media in

2014 – the receipts say it all.”

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No. 4: Digital Agencies Go Mainstream

“The digital agency

business model will go

mainstream in 2014,

with offline media seeking

incremental growth from

digital. Cross-media

attribution will become a

much bigger issue as a

natural outcome of the

digital agencies’ growing

presence in the market.”

RICK DUCEY

Managing Director & Senior Analyst, Video

http://www.comscore.com/

http://www.comscore.com/

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No. 5: Big Data Drives Local Discovery

MICHAEL BOLAND

VP Content &

Senior Analyst, Mobile

“Big data will continue to collide with mobile in

2014 and inspire app layer innovation in the form

of personalized local discovery tools like Google

Now. Push alerts will engage users outside of apps,

and swipe-able card-based interfaces will replace the

traditional SERP within apps. We see this already in

local discovery (weotta, Google Now), social (Tinder),

and multimedia (Swell). This same data-driven

content delivery ‘push’ won’t just apply to apps but

also to more relevant and effective ad delivery.”

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No. 6: The Sharing Economy Spawns Verticals

“One of the big local breakthroughs has

been the development of shared listing

sites for apartments (Airbnb), vacation

rentals (BRBO) and rides (Uber). In

2014, we expect shared listings to

become more ubiquitous, with

multiple entries per vertical, plus the

addition of many more verticals.”

PETER KRASILOVSKY

VP & Sr. Analyst, Transactions & Loyalty

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No. 7: Local SERPs Get a SoLo Makeover

“This year, search engine results pages will

get a makeover as search engines and now

social platforms (Facebook, Twitter, LinkedIn)

leverage social data points within search results.

This will reverberate across the PPC/SEO

spaces, as well as among companies that work

within mobile.”

ABID CHAUDHRY

Sr. Director, Industry Strategy & Insight

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PETER KRASILOVSKY

VP & Sr. Analyst, Transactions & Loyalty

“Retailers will increasingly look beyond

their own inventory and customer base

this year to become buyer hubs that

also incorporate local sellers. Amazon

has been signaling this trend in recent

years, with online stores, comparison

shopping, product inventory and product

listing ads bringing new revenue streams.

The rise of social media is accelerating

this sea change. One example of this

trend: QVC’s December 2012 acquisition

of social classifieds platform Oodle.”

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No. 9: TV vs. Social

“Social media platforms will more

aggressively grab ad dollars from

television, with the introduction of

video ads and the acquisitions of

partner tools like Facebook’s Sport

Stream. Another example – Twitter’s

deal with Nielsen to produce Twitter

TV ratings.”

MESHACH CISERO

Associate Analyst

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No. 10: RIP PYP

“In 2014, we anticipate more exits or

substantial pullbacks from the print

business by major global directory

organizations. Print may continue to drive

substantial leads and margin at many

organizations, but the argument is shifting

to whether publishers can justify the costs

associated with print. In 2014, the Nordic

publisher Eniro will complete its phase out

of print Yellow Pages, and the markets

have rewarded the company for

thoughtfully transforming itself into a true

post-print publisher.”

CHARLES LAUGHLIN

SVP & Senior Analyst,

Directional Media

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No. 11: ‘SMBs’ Are Redefined

ABID CHAUDHRY

Sr. Director, Industry

Strategy & Insight

“As digital local media advertising and marketing become

omni-channel integrated platforms, we will see a push to

redefine the core base of customers. In 2014, we will see

more breakouts of ‘SMB’ into multiple subcategories –

including ‘VSBs’ (sub 20 employees), ‘MBs’ and ‘brand

networks’ to cover multi-location businesses. Much of this

activity will be caused by the shift from performance

advertising to ‘engagement marketing.’ Other factors include

metrics-driven sales and varying price/cost models.”

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JED WILLIAMS

VP Consulting & Senior Analyst, Social Media

“The past year saw a moderate increase in total M&A deals

(private placements & acquisitions), but a sharp rise in

reported deal value (+65%). This surge in deal value will

continue in 2014. We expect 20% to 30% growth in deal

value this year, propelled by a few key sectors: vertical

commerce marketplaces; integrated customer relationship

and data management platforms; mobile advertising platforms

tied to native programmatic buying; and niche consumer-

facing social networks catering to mobile millennials.”

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JANUARY – SEPTEMBER

2012 2013 % Change

Deal Value 571.8 941.13 65%

Deal Volume 19 12 -37%

Online in Focus:

CRM / Scheduling

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“The local space’s love affair with consumer-based mobile

apps will give way to more attention to business-facing

mobile apps that help SMBs acquire new business and

run their business on the go. This will include lots of

operational tools like appointment scheduling and payment

processing and other back office tools that can be accessed

and managed in a mobile interface. The sweet spot is

categories like restaurants and home services where

proprietors are in constant motion.”

MICHAEL BOLAND

VP Content & Senior Analyst, Mobile

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No. 14: TV Everywhere Drives Video Innovation

“In 2014, TV broadcasters

will extend their value

propositions cross-screen.

This will further validate the

online and mobile video

categories and drive

innovations and standard

setting in cross-screen

measurement, buying and

analytics.”

RICK DUCEY

Managing Director & Senior Analyst, Video

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No. 15: YPs Go on Verticals Acquisition Binge

CHARLES LAUGHLIN

SVP & Senior Analyst,

Directional Media

“As directory publishers hasten their

retreat from print, they need to

accelerate growth in their digital

properties, with growth in higher margin

owned media preferred over the lower

margins associated with reseller

products. We expect acquisition of

vertical content around key local

business categories will be a key

priority for global directory organizations

healthy enough for acquisition activity.”

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A Look Back at Our 2013 Predictions

No. 1: U.S. Mobile Ad Revenues Top $4 Billion

No. 2: SMB Services Occupy the Cloud

No. 3: Rep Management Meets Content Distribution

No. 4: Big Banks Bet on Offers and Loyalty

No. 5: Amazon + Apple + Facebook + Google = Acquisition Frenzy


No. 7: Double-Digit Bump for Online Video Spend

No. 8: Native Ads Come into Focus

No. 9: Finally, Props for Social Advertising

No. 10: Local Sellers Innovate Around the Long Tail

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Our 2013 Predictions Report Card

2013 Prediction Grade Comment

U.S. Mobile Ad

Revenues Top $4

Billion

A

Based on the estimates we have seen, we appear to have hit the

mark on this prediction. Total 2013 mobile ad revenue will very

likely exceed $4 billion.

SMB Services

Occupy the Cloud B

There is clear momentum towards the cloud and SaaS products

for SMB, but there wasn’t as much movement in 2013 as we

expected – due to the notoriously slow adoption of SMBs.

Rep Management

Meets Content

Distribution

A-

Last year, presence, reputation and content platforms converged

in two complementary dimensions: discovery & engagement. The

bigger tectonic shift is the foundational role that content now

occupies in the advertising/marketing ecosystem.

Big Banks Bet on

Offers and Loyalty B

Banks’ interest in offers and loyalty turned out to be a mixed bag.

While, we saw major banks rollout significant transaction

marketing programs, the efforts weren’t always high priorities for

the banks, which placed their bets in other, safer areas.

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Amazon + Apple +

Facebook +

Google =

Acquisition Frenzy

B

Amazon, Apple, Facebook and Google each made small

acquisitions in 2013, some of which touched on local, such as

mapping and payments. However, “frenzy” was too strong of a word.

National Retailers

Go Local A

After years of nonchalance towards local marketing, national

retailers (and brands) ramped up geo-targeting efforts significantly in

2013 as improved technology and marketing programs really

leveraged the local opportunity.

Double-Digit Bump

for Online Video

Spend

A+

BIA/Kelsey’s Consumer Commerce Monitor™ showed that 15.4% of

consumers regularly use online video for locally purchased products

or services. And our Local Commerce Monitor™ survey of SMBs

shows more than 40% of SMBs use video for advertising and

promotion and these companies spend more than 2X non-video

advertisers. Moreover, 55% of this group plans to increase their ad

spend in 2014.

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Finally, Props for

Social Advertising A

Social moved beyond novelty and into an integrated advertising

mix that drives engagement and transactions with measurable

ROI. We’ve gone from “what’s the value of a Facebook like?” to

dashboard friendly analytics showing return on spend. Industry

players have developed better platforms and metrics around

social as part of an integrated, cross-channel media mix.

Native Ads Come

into Focus A

Native advertising concepts came into focus for publishers and

channels of all shapes & sizes, driven by innovation on social

networks, extending to pioneering publishers (BuzzFeed, Forbes,

ShareThrough) and beginning to find traction with local media.

Local Sellers

Innovate Around

the Long Tail

C+

Traditional media companies were active in the past year in

reorganizing their sales forces to focus increasingly on expanding

digital growth, with new products targeting new customer

categories. There was less focus than expected on the long tail.

QUESTIONS & COMMENTS:

CHARLES LAUGHLIN

[email protected]

(312) 502-9414


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BIA/Kelsey 2014 Picks and Predictions

Marketing

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