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Global Digital Media - Advertising and Marketing

This annual report offers a wealth of information on the worldwide development of advertising and marketing in the digital era. It includes information on both online and mobile advertising and offers analyses, statistics, forecasts and trends. It provides insight into the impact that digital media has had on the traditional media and the changes they are making to evolve in the new landscape. Information on the leaders to date, the Internet Media companies, is included along with a case study on Google. Brief regional information on developments in North America, Latin America, Europe, Middle East, Africa and Asia Pacific are also provided.

  Subjects covered include:

  •          Digital marketing;
  •          Online advertising and marketing industry including statistics;
  •          Mobile advertising and marketing industry including statistics;
  •          Analyses of changes in traditional media ;
  •          Internet media companies including case study on Google;
  •          Analyses of open networks;
  •          Analyses of net neutrality;
  •          Brief regional overviews.

Spending on advertising using digital media channels now makes up more than 10% of overall worldwide advertising spending. While the economic downturn is impacting upon advertising spending in 2009, the various advertising channels are being affected differently. There are two key elements which may absorb some of the negative impact however, particularly for digital marketers. Firstly advertisers are migrating from traditional media to new media as the web audience grows, potentially at the expense of the traditional media audience. Secondly the digital platform will enable digital advertisers to employ targeted advertising based on a user’s specific profile. This promises to increase the effectiveness of advertising and as such should enable digital marketers in the future to charge a significant premium relative to traditional advertising forms.

  Internet advertising is by far the most prominent digital media platform for advertising, although mobile advertising is beginning to gain traction, driven by advances in multimedia handsets and the increasing use of, and lower costs associated with, mobile data services. Internet advertising linked to keyword searches is the most popular form of online advertising, followed by display ads. This places leading Internet media companies such as Google and Yahoo at an advantage. Google in particular is well positioned; it is the most popular search engine worldwide and its revenue from online advertising is growing both in the US and internationally.

  The traditional media companies have made quantum leaps compared with the telcos in terms of advertising and marketing in the digital media era. While the Internet companies like Google have clearly been the leaders to date, media companies are also making great progress, launching events using their traditional media and supplementing them through new media activities. Despite this, the traditional media companies have a new challenge to face as the economic downturn impacts upon advertising spend.

  The shift to online news continues to the detriment of print newspaper publishing, and the slowdown in advertising spend is adding further pressure on an already struggling industry. While the business models for online news do not yet stack up, there are many publishers now attempting to increase revenues from online platforms. A recent initiative in the US sees publishers working together to create a model that will include online subscription charges, potentially providing a revenue source beyond advertising.

  Marketers must also overcome obstacles such as the vast differences in market sophistication around the world, the current dependence on regional, rather than global media buying habits and an industry-wide reluctance to move from offline pricing models. Marketers will also need to think of better ways to integrate advertising campaigns across different kinds of advertising ‘platforms.’

  Mass media forced advertising to take on a form that was irritating to customers, whereas the new media allows the advertisers to be far more engaging with those people for whom a particular advertisement makes sense. People realise that they have a choice - either pay for entertainment or accept advertising - and surveys indicate that people are not averse to information and advertising that is relevant to them. The new media allows people to indicate what they are interested in and advertisers then have an opportunity to communicate with these customers. Niche media will be a win-win for everybody.

  This report provides valuable insight into the developments taking place in the marketing and advertising sector in terms of digital media. It includes information on both online and mobile advertising including statistics and analyses. The report explores the impact that digital media has had on the traditional media and the changes they are making to evolve in the new landscape. Information on the leaders to date, the Internet media companies, is also included along with a case study on Google. The report also explores the issues surrounding open networks and net neutrality, as these are important to the continuing success and innovation of online services. Regional information on developments in North America, Latin America, Europe, Middle East, Africa and Asia Pacific are also provided.

  Key highlights:

  •          Overall global advertising spend is expected to decline by at least 4-6% in 2009.
  •          With a slow down in advertising spend in the wake of the financial crisis, print newspaper publishers, which rely heavily on classified advertising, are now also facing further pressure beyond the shift to online news. This added pressure has led to the demise of some publishers around the world and also to a significant change in business models.
  •          A key long-term goal for participants in the mobile advertising market relates to mobile payments. Telecommunications providers aspire to not only provide the viewer and serve an advertisement but to enable the user to complete a purchasing transaction too. Despite the business models for mobile advertising still being trialled and developed, mobile advertising spend is also expected to flourish in the future.
  •          While increases in Internet advertising are expected to be very strong in China and India, they account for less than 6% and 2.5% of media spend respectively, pointing to fairly conventional marketing cultures, despite considerable web 2.0 interest in China.
  •          Online advertising in South Africa grew at one of the fastest rates of all countries in the English-speaking world in 2008 and is likely to repeat this performance in 2009.
  •          Open networks and Internet neutrality are required for both the Internet media companies to advance further and in general for continuing market innovation, economic growth, social discourse and the free flow of ideas.
  Data in this report is the latest available at the time of preparation and may not be for the current year.

  The following notes provide some background to our scenario forecasting methodology:
  •          This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur. The associated text describes what we see as the most likely growth trend within this band.
  •          The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15-20% around this data.
  •          All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.

1. Global Digital Media Advertising and Marketing Industry
1.1 Digital marketing and advertising overview
1.1.1 Digital advertising cost considerations
1.1.2 Digital advertising agencies
1.1.3 New advertising models
1.2 Online advertising
1.2.1 Internet use
1.2.2 Internet advertising spend statistics
1.2.3 Who are the big spenders?
1.2.4 Benefits of Internet advertising
1.2.5 Changes in Internet advertising
1.2.6 Infrastructure bottleneck in Internet economy
1.2.7 Online advertising models
1.2.8 Key online advertising categories
1.2.9 Dubious advertising tactics
1.3 Mobile advertising
1.3.1 Overview
1.3.2 Mobile advertising spend statistics
1.3.3 Consumer attitudes to mobile advertising
1.3.4 Ads in exchange for free mobiles
1.3.5 Mobile image ads from Google
1.3.6 Location-Based Advertising (LBA)
2. Internet Versus Traditional Media Companies
2.1 Traditional media industry
2.1.1 Introduction
2.1.2 Continental shift in competition
2.1.3 Distinct industry realignments
2.1.4 Advertising spending moving to online
2.1.5 TV broadcasters
2.1.6 Radio broadcasters
2.1.7 Newspaper publishers
2.1.8 The video and DVD rental companies
2.1.9 The anomaly of the mass media
2.2 Internet media companies
2.2.1 Introduction and analyses
2.2.2 Internet media companies
2.2.3 Key areas for Internet media companies
2.2.4 Case study: Google, the leader
2.2.5 Brief case study: eBay/Skype
2.2.6 Other key developments/analysis
3. Open Networks and Internet Neutrality
3.1 Open networks analysis
3.1.1 Economic Stimulus packages and open networks
3.1.2 Open access principles
3.1.3 Examples of open access
3.1.4 Unbundling of the local loop
3.1.5 Rethink of Universal Service Obligations/Funds
3.1.6 Conclusion: open networks engine for innovation and growth
3.2 Net neutrality analysis
3.2.1 Introduction
3.2.2 Network neutrality - a global issue
3.2.3 Carriers in competition with content providers
3.2.4 Network neutrality and non-discrimination
3.2.5 Developments in the USA
3.2.6 No-one owns the Internet
4. Regional Overviews
4.1 North America
4.2 Latin America
4.2.1 Overview
4.2.2 Argentina
4.2.3 Chile
4.2.4 Brazil
4.3 Europe
4.3.1 Europe moving to online advertising model
4.4 Africa
4.4.1 Online advertising
4.4.2 Online retail
4.4.3 Online media
4.4.4 M-commerce
4.4.5 Mobile advertising
4.4.6 Location-based services (LBS)
4.4.7 Manobi
4.4.8 Interactive TV (iTV)
4.4.9 Mobile TV
4.5 Middle East
4.5.1 Middle East advertising market
4.5.2 Online advertising market remains small
4.5.3 Mobile advertising market promising
4.6 Asia
4.6.1 Market overview
4.6.2 Advertising and marketing in selected Asian markets
4.7 Pacific region
4.7.1 Australia
4.7.2 New Zealand
5. Glossary of Abbreviations
List of Tables and Exhibits
Table 1 - Worldwide advertising spending - 2008 - 2009
Table 2 - Most popular forms of online advertising
Table 3 - Worldwide Internet users - 1990 - 2009
Table 4 - Worldwide online advertising spending - 2007 - 2009
Table 5 - USA online advertising spending - 2000 - 2009
Table 6 - Worldwide interactive advertising revenue - 2012
Table 7 - Worldwide online game ad spend - 2007 - 2008; 2012
Table 8 - Worldwide social network advertising spend - 2008 - 2010
Table 9 - USA social network advertising spend - 2008 - 2009
Table 10 - US online advertising revenue - top four portals - 2006 - 2008
Table 11 - Worldwide mobile ad spending - 2008; 2013
Table 12 - Worldwide mobile TV ad spending - 2008; 2013
Table 13 - Worldwide advertising spend versus online advertising spend - 2009
Table 14 - Online news readership versus print news in the US - 2006; 2008
Table 15 - Visitors to top web properties worldwide - 2008
Table 16 - Search engine worldwide market share - 2009
Table 17 - Free projections - Paris fibre - 2006; 2008; 2010; 2012; 2014
Table 18 - Forecast fibre subscribers in the Netherlands - 2008 - 2011; 2017
Table 19 - US online advertising by type of advertising - 2007 - 2008
Table 20 - US online advertising revenues and market shares - top 3 providers - 2008
Table 21 - US leading Internet advertising by industry and impressions - October 2008
Table 22 - B2C sales in Argentina - 2003 - 2007
Table 23 - E-commerce transactions in Chile - 2001 - 2008
Table 24 - Advertising spend in Europe - 2006 - 2010
Table 25 - Online advertising spend in Europe - 2005 - 2010
Table 26 - Online advertising revenue in South Africa - 2003; 2006 - 2009
Table 27 - Online retail in South Africa - revenue, annual growth, number of sites - 2003 - 2007
Table 28 - 3G subscribers as a percentage of total subscribers - selected Middle Eastern countries - 2006 - 2008
Table 29 - Advertising market in China - Q3 2008
Table 30 - Online retail market in China - 2003 - 2008
Table 31 - Breakdown of e-commerce users in China - 2008
Table 32 - Market share of online search engines in China - 2005 - 2008
Table 33 - Top 10 online advertising brands in Hong Kong - Q1 2008
Table 34 - Advertising expenditures by medium in Japan - 2006 - 2008
Table 35 - Advertising ratio by medium in Japan - 2006 - 2008
Exhibit 1 - Digital advertising cost considerations
Exhibit 2 - Top three largest global advertising agencies - 2008
Exhibit 3 - Examples of digital advertising agencies
Exhibit 4 - Top sectors for online advertising spending
Exhibit 5 - Google-Yahoo online ad deal aborted
Exhibit 6 - Digital media marketing commandments
Exhibit 7 - Anarchy Online by Funcom
Exhibit 8 - Hulu - an interesting business model
Exhibit 9 - Examples of leading Internet media companies
Exhibit 10 - Key areas of focus for Internet media companies
Exhibit 11 - Definition: cloud computing
Exhibit 12 - Examples of alternative search engines
Exhibit 13 - Google key activities - 2006 - 2007
Exhibit 14 - Interesting items sold on eBay
Exhibit 15 - Open Access Principles
Exhibit 16 - Implications of ending net neutrality

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