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MonetizingDigital Content
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If you're not stubborn, you'll give up on experiments too soon. And if you're not flexible, you'll pound your head against the wall and you won't see a different solution to a problem you're trying to solve.”
Jeff BezosAmazon CEO, now working on increasing digital revenue at his newspaper, the Washington Post
“
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1. What’s NowMonetizing Digital Content
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Let’s start with a quick snapshot of where revenue is headed and what trends are driving growth and innovation.
1. What’s Now
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Revenue Snapshot1. What’s Now
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Digital Ads Growing Fast
Source: eMarketer, March 2016
Digital media ad revenue will surpass TV in late 2016, somewhat faster than expected
US Total Media Ad Spending Share, by Media
0%
25%
50%
75%
100%
2014 2015 2016 2017 2018 2019 2020
44.9%43.1%40.8%38.4%35.8%32.6%28.3%
32.9%33.7%34.8%35.8%36.8%37.7%39.1%
TV DigitalPrint RadioOther
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Digital offers more platforms and ad models compared to television and is therefore better positioned to reach the audiences advertisers want. And this is causing money to move.
Why?
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Half of buyers shifting budget to digital video are relocating from TVMarketers Moving Budgets
2015 Percentage of Buyers Shifting Broadcast & Cable TV Budgets By Channel & FormatSource: AOL US State of the Video Industry Report (Oct. 2015)
Desktop Video
Desktop Display
Mobile Display
OTT/connected TV
Mobile Video
0 % 17.5 % 35 % 52.5 % 70 %
Total buyers
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Not All is Gloomy for TV Local channels have some advantages national networks do not:
Existing relationships with advertisers make TV stations a logical starting point for transition to digital ad buys
Bundling across TV, web and mobile for single local channel property
Bundling across duopoly partners Ability for local TV stations to extend inventory digitally, either on their own or through using services like CNN’s VAN
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Signs are strong that revenue can come from sources other thanadvertising.
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Source: The Media Insight Project, Nov. 2015
53% regularly consume paid news content
Millennials who purchase paid news content
Use both print & digitalUse only printUse only digital
21%
38%
41%
Millennials Willing to Pay
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Source: The Media Insight Project, Nov. 2015
Older millennials more likely to pay out of their own pocketMillennials Willing to Pay
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Ages 18-21 22-24 25-29 30-34
Millennials who purchase content
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Entertainment more popular on paid media spectrum, but news consumption is significant
Millennials Willing to Pay
Source: The Media Insight Project, Nov. 2015
Using paid entertainment subscriptions, products, or services
Movies or TV downloads
Cable TV
Music
Video games
Digital news apps
Digital magazine
Digital newspaper
0% 10% 20% 30% 40% 50% 60% 70% 80%
Pay personallySomeone else pays
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Source: August Borrell Associates
Rapid growth predicted for 2016 and beyond, with digital revenues doubling each even-year election cycle
Digital Political Ads Extend TV
U.S. Total online/digital political ad spending (millions)
$0.00
$1,000.00
$2,000.00
$3,000.00
$4,000.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 (P) 2017 (F) 2018 (F) 2019 (F) 2020 (F)
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Mobile Trends1. What’s Now
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49% digital growth in past two years, led by apps, mobile webMobile Usage Time Soaring
Source: comScore Media Metrix Multi-Platform & Mobile Metrix, US, Total Audience
Growth in Digital Media Time Spent, total minutes by platform
June-2013 June-2014 June-2015
1,972
1,624
1,285 12,983
10,3576,831
9,1758,0167,943
DesktopMobile AppMobile Browser
+49%
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Source: comScore Media Metrix
Average Monthly Hours per App Visitor by Age
Millennials use apps on phones, older people use apps on tabletsYounger = Mobile Apps
0
20
40
60
80
100
Total Age 18-24 Age 25-34 Age 35-44 Age 45-54 Age 55-64 Age 65+
SmartphoneTablet
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Audience finds it easier and quicker to accessBut Mobile Web Can Reach Further
Source: comScore Media Metrix
Number of Web Properties vs. Mobile Apps Reaching New Unique Visitor Records, June 2015
Mobile Web Mobile App
123
533
123
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In 2015, mobile ad spending comprised more than half of all digital, surpassing desktop for the first time, and faster than earlier predicted
Ad Dollars Follow Usage
Source: eMarketer
US Mobile Ad Spending, 2014-2019
2014 2015 2016 2017 2018 2019
Ad spending (in billions)
$65.49
$57.95
$50.84
$42.01
$30.45
$19.15
% change% of digital ad spending% of total media ad spending
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Mobile CPMs higher, growing faster than desktop, even with inventory increasing
CPMs Growing Too
Source: PubMatic Quarterly Mobile Index
Average mobile CPMs in 3Q15 were 34% higher than desktop CPMs
34%
Mobile CPMs grew at a rate of 12% year over year in 3Q15, compared to 10% for desktop
12%++
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But Developing Can Be DifficultMobile most difficult to develop and manage according to publishers
Security issues
Performance issues (crashes and bugs)
Operational issues (difficulty building and updating apps efficiently)
Fragmented nature of mobile (multiple device types and operating systems)
Integration issues with back-end systems
Discoverability issues (lack of traction/adoption of apps)
Lack of usage
Inability to keep pace with operating system updates
0% 10% 20% 30% 40% 50%
% respondents
Source: Ad Monsters, eMarketer, Sept. 2015
Challenges Faced When Developing/Managing Mobile Apps
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And So Can Cashing InMobile most difficult to monetize according to publishers
SmartphoneTabletOTT/TVDesktop
13%
67%41%
6%
Source: Ad Monsters, eMarketer, Sept. 2015
Type of Screen that Causes the Most Monetization Trouble
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News Sites Seeing the TrendMobile users surpassed desktop at the end of 2014
Source: comScore
Selected 25 News Sites: Desktop & Mobile Unique Visitor Trend
0
5,000
10,000
15,000
20,000
25,000
Jun-2014 Aug-2014 Oct-2014 Dec-2014 Feb-2015 Apr-2015 Jun-2015
MobileDesktop
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Mobile Web WinningNews users flock to mobile web in greater numbers, but spend more time with apps
Source: comScore
% of Mobile Visitors % of Mobile Time Spent
55%
93%
45%
7%
Mobile AppMobile Web BrowserSelected 25 News Sites: % of total mobile audience
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Links from social media, where many people first hear about breaking news, drive almost exclusively to mobile web sites rather than apps.
Why?
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Messaging Next Big Thing?Most people use messaging, but advertising not a factor yet
Source: eMarketer
Mobile Phone Messaging App Users Worldwide, 2014-2019
2014 2015 2016 2017 2018 2019
2.19b2.00b
1.81b
1.61b
1.40b
1.07b
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USA Today’s mobile web site offers users a way to share stories via SMS or through the WhatsApp messaging service
Messaging as Social Platform
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Source: DCN
Users initiate contact with publisher via messaging app, are presented with options and can choose content with a simple response.
Messaging and chat may best be used to engage users and drive them to other places where they can be properly monetized
Not Ad Platform, but Barker?
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Source: DCN
NBC News is the first to use an app like Kik to interact with its audience via messaging.
Not Ad Platform, but Barker?
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Not Ad Platform, but Barker?
Ideal for content verticals (follow one sports team, weather for my area, etc.)
Monetization comes from other platforms where user is referred or in messaging-specific methods still to be developed
$ $
Automated as part of existing workflow
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Video MonetizationTrends
1. What’s Now
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Fastest growing segments of digital advertisingOnline and Mobile
Source: ZenithOptmedia’s Online Video Forecast 2015
US Video Ad Consumption (minutes per day on average)
Total Video Mobile Video
30.4
57.6
22.5
48.1
20152016
$
Ad Revenue in2016
8.5b
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Four times as many ad-supported channels in 4Q15 over 4Q14YouTube Embraces Ads
Source: Open Slate, Wall Street Journal, Oct. 2015
Ad-supported channels on YouTube
2014 2015
837,738
146,755
20142015
+471%
Spending Increase by top advertisers, YOY
60%
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Source: Open Slate, Wall Street Journal, Oct. 2015
YouTube proving broad but not deepBut More is Not Always Better
144 YouTube channels sport 1,000,000 or more
subscribers.
Yet more than 5,000,000 other channels have less
than a thousand subscribers each.
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Source: Wall Street Journal, Oct. 2015
Media companies participating with wary eyesYouTube Also Embraces Subscription
Revenue increases are despite YouTube rolling out a subscription service for ad-free viewing across the site.
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Source: The Wall Street Journal
Pitches advertisers in “NewFronts” presentation, offers guaranteed placement on top channels from major brands
YouTube Takes on TV
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Out-of-Stream ads (OoS), video ads that play outside other video content, have exploded in popularity since they create new, separate video ad inventory
Out-of-Stream Ads in Favor
Out-stream ads
In-stream video ads
Banner video ads
0% 20% 40% 60% 80%
AgenciesAdvertisersMedia/publishing companies
Source: Forrester Research, eMarketer
Types of Video Ads that Will be Important to Their Clients’ Overall Ad Portfolio
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OoS Offers FlexibilityMany ways to work OoS ads into a page, potentially expanding a site’s inventory greatly
1 2 3
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Out-of-Stream addresses other concerns of publishersMany Factors Favor OoS
Source: Forrester Research, eMarketer
Reasons the Media/Publishing Professionals Offer Out-Stream Video Ads
More inventory means we are able to execute video sales programmatically
Let’s us offer additional premium inventory for video ad content
Provides a better (less obtrusive) end-user experience than other digital video advertising
Delivers better ROI than other ad formats
0% 10% 20% 30% 40% 50% 60% 70%
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Game Changer?Interactive ads within streaming TV content
Hulu replaces five :30 video ads with one :30 interactive ad within program streams, increasing value despite shorter ad durations.
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Techniques like OoS and interactive streaming ads are just a few of many tools now at the disposal of publishers to extend ad inventory beyond traditional web limits. Video is often a main vehicle for this new inventory, but there are many more expanded options now available, as you will see later in this presentation.
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Social Media MonetizationTrends
1. What’s Now
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Social Media Ads Soaring2015 worldwide ad revenue totals one-third higher than in 2014
By 2017 social will represent 16% of all digital ad spending.
33%
Source: eMarketer
20152014
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Facebook Cementing Its Lead#1 social media advertising platform, and still growing
Source: Facebook
minutes people use mobile are spent on Facebook.
1 out of 5
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Facebook Cementing Its Lead#1 social media advertising platform, and still growing
1 out of 6minutes people are on the internet are spent on Facebook.
Source: Facebook
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Mobile-Only Majority?Not only do Facebook users flock to mobile, many do it in place of desktop
In 3Q15, nearly half of Facebook’s users only accessed by phone and NEVER interacted with it on a computer
Source: Facebook, eMarketer
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Ads That Like Your LikesIn 2015, Facebook began targeting ads based on your Likes and Shares
Facebook, like many of the sites you visit, has long targeted ads based on the content you view
Now it is targeting ads based on things you like or share with your Facebook friends
More than that, it’s also beginning to target ads to you based on what your friends like and share
Source: Facebook, eMarketer
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Twitter is News User ChoiceTwitter users consume more news than other social media users
…of Twitter users use the service for news, 74% of those doing it daily
86%
…of users want to be alerted to breaking news
40%
…of users access Twitter on their phones
82%
Source: American Press Institute
…get their news on Twitter by scrolling their timelines or browsing tweets of those they follow; only 34% get news from trending topics
94%
…follow news organizations and even more, 73% follow individual journalists or commentators
62%
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44%
Breaking News Drives UsagePeople look for current news, not topics
Source: American Press Institute
What Drives Social Media Users to Look for News and Info, % Twitter users
28%28%
Traffic and weather
National news, general
Technology
0 10 20 30 40 50 60 70 80
Current events, general
Politics and government, general
Local stories/my townor city
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Twitter is a very powerful tool to drive users to news sites. But Twitter is not finding the easy path to monetization that Facebook has. If Twitter attempts to keep more traffic in its service in order to make money off of it, it could threaten how we as publishers profit from our presence on the network.
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Emerging Trends1. What’s Now
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10% 20% 30% 40% 50%
Audience watched the episode in full during live airing
Watched on a DVR within the first 7 days of airing
Watched streaming to a PC, smartphone or tablet
Watched on VOD within 35 days
Watched via a connected TV device
Watched on DVR between 8 and 35 days later
Viewing FragmentationViewers are spread across multiple platforms, even for the same show
Source: Nielson
Viewers watching one broadcast network drama
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So, how do we derive value from all these viewing patterns?
?
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Total Audience MeasurementNielsen and others look to count people across all platforms, allow advertisers to make smarter buys, but it’s not clear yet if any of these services will measure the true total audience. For example, web site live streaming still is not measured fully.
=
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Duration-Based AdvertisingTheory that the amount of time a consumer is exposed to an ad matters more than knowing just that he or she viewed it
The Financial Times ran a nine-month test where it charged for display ads only if they were in view for five seconds or longer.
The test consisted of 17 campaigns for 13 clients, including BP and Microsoft.
An analysis showed that this so-called cost-per-hour approach produced 58% higher brand consideration and 79% higher ad recall.
It also generated $2.2 million in additional revenue.
Source: FT, Digiday
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Growth of OTT ServicesOver-the-Top (OTT) video delivery presents challenges and opportunities
Any video service that uses the internet to bypass TV operators to reach consumer directly. Content can be short form, longer programs or even streaming channels. Content is delivered to a smart TV, set-top box or other connected device.
Source: FT, Digiday
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OTT Known Universe
“The Creators”(Production companies, studios)
“Old Guard”(Disney, NBC Universal, CBS/
Viacom, Fox)
“Pay TV Operators”(Comcast, AT&T, DirecTV)
Consumers
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OTT Known Universe
“The Creators”(Production companies, studios, sports leagues, publishers, personalities)
“New Kids”(YouTube, Social Media, Web
Originals like Crackle)
“Streamers” (Netflix, Hulu, Amazon)
“Old Guard”(Disney, NBC Universal, CBS/
Viacom, Fox)
“Set-top Boxes” (Apple, TiVo, Roku, Amazon)
“Pay TV Operators”(Comcast, AT&T, DirecTV)
“Smart TVs”(Samsung, LG, Vizio)
Consumers
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Fast Growth, But Upside StillVast majority of video viewers already use OTT services, but growth in users will be steady for foreseeable future
Source: eMarketer
US Over The Top (OTT) Video Service Users, 2014–2019
2014 2015 2016 2017 2018 2019
Millions of internet users
199.6196.2191.9186.9181.0173.0
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Growth Across All ServicesBut even mostly mature services like YouTube, Netflix, Hulu and Amazon will see significant growth in users over the next few years
Source: eMarketer
OTT video service user growth (% change)
0%
5%
10%
15%
20%
25%
2014 2015 2016 2017 2018 2019
YoutubeNetflixAmazonHulu
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Very important
Somewhat important
Neutral
Not important
Least important
Uncertain/Not Applicable
0% 5% 10% 15% 20% 25% 30% 35% 40%
Role of Live in OTTIncreasingly, live concurrent video, video being streamed at the same time it is broadcast, is helping attract and retain OTT users
Source: Level 3, Streaming Media Magazine, Unisphere Research
How important is live linear content to OTT programmers’ business plans
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Video Ads in Search ResultsGoogle and Bing experimenting with ads containing video and other media in search results instead of just text
Said one Forrester analyst: “If advertisers could buy video, their favorite format, on search, their favorite place to reach consumers, it would be a gusher of money for Google.”
Source: Digiday, Forrester
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Digital Assistants Deliver AdsSiri and Cortana already deliver search results and other requested info. Why not ads too?
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What About Wearables?With total product shipments to reach 180 million by 2018, the opportunity is very enticing for marketers
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Source:Source:
Watches Lead the WayWith fitness trackers a close second
Source: The Consumer Technology Association, eMarketer, Dec. 2015
US Internet Users Who Plan to Purchase Health/Fitness Devices/Technologies, by Type, 2015
Won’tPurchase
Will Purchase
16%
19%
19%21%
25%
Smart Watch Fitness AppWearable Fitnes Device Smart ApparelSleep Tracker
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Augmented Reality AdsLocation-based advertising finding new home on AR apps
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Virtual Reality Ideal for AdsFacebook’s acquisition of Oculus has spurred marketers like Coca-Cola, Nissan and HBO to look at how to integrate advertising
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Virtual Reality Ideal for AdsFacebook’s acquisition of Oculus has spurred marketers like Coca-Cola, Nissan and HBO to look at how to integrate advertising
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Facebook 360º AdsEven without a VR headset Facebook is launching 360º ads in users’ feeds, like this one for the latest Star Wars movie
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Internet of Things Next?The Internet of Things (IoT), common household and personal items connected to the Internet, could be the new frontier. Growth in usage, personal nature and pervasive placement of IoT items may make them irresistible to advertisers.