30 trends that will shape european web & digital media business in 2012
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In 2011, over 940 web companies in the fields of ecommerce, advertising and digital media have been funded by US investors with a volume of more than 13,6 billion US$. This is the tip of the iceberg of our analysis that investigated most investments by US venture capital companies and business angel in 2011. Beside the data we collected, I wanted to find out, which specific trends in each of the most relevant web business segments can be derived from the identified investment patterns and which impact these trends will have on investment behavior in Europe/Germany. more on http://www.medien.nrw.deTRANSCRIPT
30 Trends that will shape European web & digital media business in 2012
Current and upcoming business opportunities for European
web eco system, derived from US VC-Deal-Flow 2011
by Marc Ziegler, March 2012
30 trends that will shape European web & digital media business in 2012 2 Marc Ziegler
Why this report?
Yes, there are hundreds of successful European, truly innovative startups out there, but the global web & digital media business is clearly dominated by players from the USA. The market dynamics and all major trends are created by US tech companies, whether we like it or not.
Goal of this analysis is to grasp these market dynamics in digital media business at an early stage in order to derive business opportunities for European startups prior to “common sense” observations.
This analysis suggests that US investors have a higher risk taking culture than their European, especially German counterparts and have an acute awareness for future web opportunities.
Therefore, this analysis focuses on investments, primarily carried out by US investors, although our prime source (Crunchbase) includes some investments by non-US companies that we have not sorted out.
The findings of our analysis do neither claim to be complete nor free of overlaps, nor to be a guide for cloning other hot startups. This report is simply a useful tool for founders and investors to challenge own market observations – not more, not less.
Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 3 Marc Ziegler
How we conducted the anaylsis
• Tech companies funded between Jan-Dec 2011
• 2 investment funding sizes: 100K-10M and 10M-1000M
• 95% US investors, 5% European
3.939 Mn US$
• Aggregating search results into 12 most relevant digital media segments
• Sorting out tech companies with no media connection (e.g. security, energy, nano)
• 1st: quantitative analysis • 2nd: identification of accu-
mulated new business mechanics within each digital media segment
• Derivation of trends
1 2 3 Clustering search results Identification of trends
Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 4 Marc Ziegler
Thesis 1: USA = „Home“ of digital media innovation
(Nearly) all successful business models in digital media originated in the US
Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 5 Marc Ziegler
Thesis 2: transfer USA => Germany (Europe)
2002 2004 2006 2008 2010 2012
Social networks
Portals Paid search
Couponing
LBS 12-18 months
9-12 months
3-4 months
Crowdsourcing
Vertical search
Successful business approaches in digital media (here some examples) always migrate to Germany/Europe – time lags are shrinking
Targeting
Auctions
Reverse auctions
Online classifieds
UGC
Content/gaming apps
Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
Productivity apps
Group deals
Real-time bidding
Daily deals
AR
Vertical networks
30 trends that will shape European web & digital media business in 2012 6 Marc Ziegler
Investment categories in digital media – overlaps may occur due to combined business mechanics by startups
eCommerce/ eTransaction websites that
convert traffic into sales (leads)
Advertising solutions
platforms & solu-tions that enhance the ad eco system
Content-driven platforms
all types of audio, video, picture and text content sites
Games
all types of non-console games &
gaming middleware
Productivity apps
mobile apps that enhance everyday
aspects of life
Search websites with a
focus on vertical & local search
(no e-commerce)
Social networks
social platforms to publish, consume
& engage
Crowdsourcing outsourcing of
intelligence and workforce to web
community
LBS services & tools
that increase user experiences at
point-of-location
B2B tools
tools that increase efficiency in digital media processes
B2B solutions
solutions that boost companies’ digital media business
Others
all other companies with a touch point
in digital media Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 7 Marc Ziegler
Overall summary - Investments in digital media tech companies 2011
13,6* bn US$ investments in
digital media comp.
2,6 bn US$ single investments
< 10 Mn US$
11,0** bn US$ single investments
> 10 Mn US$
942
690 252
no. of companies
* Share of international investments: < 15% (mostly in Chinese, Indian, Russian, Australian and Israeli startups)
** excluding Facebook, Groupon and Twitter
Source: Crunchbase, Marc Ziegler, Media Cluster of North Rhine-Westphalia
* Share of deals by international investors : < 5%
30 trends that will shape European web & digital media business in 2012 8 Marc Ziegler
Overall summary - Digital media investment clusters 2011
eCom- merce
3.939
138
Adver- tising
1.899
125
Games
1.660
57
Content
1.534
115
B2B solut.
1.088
92
Prod. apps
888
112
B2B tools
696
111
Search
571
54
Social netw.
347 40
Crowd- sourcing
260 43
LBS 236 21
Others
476
34
no. of companies
total funding per cluster (in Mn US$)
Source: Crunchbase, Marc Ziegler, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 9 Marc Ziegler
Ranking of investment clusters according to funding vol.
Source: Crunchbase, Marc Ziegler, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 10 Marc Ziegler
Ranking of investment clusters according to funding vol.
Investment category < 10 Mn > 10 Mn Overall
eCommerce/eTransaction 5. 1. 1.
Advertising solutions 1. 2. 2.
Games 9. 3. 3.
Content-driven platforms 6. 4. 4.
B2B solutions 3. 5. 5.
Productivity apps/tools 4. 6. 6.
B2B tools 2. 8. 7.
Search 8. 7. 8.
Social networks 10. 9. 9.
Crowdsourcing 7. 11. 10.
LBS 11. 10. 11. Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 11 Marc Ziegler
Categories with investment volumes above average
Ø 3,7 Mn US$ Investments < 10Mn US$ 4,6 4,9
Advertising solutions
B2B solutions
Ø 43,8 Mn US$ Investments > 10Mn US$ 56,1
63,7
Content- driven
platforms
eCommerce/ eTransaction
62,1
Games
Source: Crunchbase, Marc Ziegler, Media Cluster of North Rhine-Westphalia
high operating costs (e.g. inter-nationalization),
high profit potent.
Many multi-browser games
publisher among top-funded comp.
30 trends that will shape European web & digital media business in 2012 12 Marc Ziegler
Details on „eCommerce“ (1)
10 biggest single investments 2011 in eCommerce/eTransaction platforms (Mn US$)
576
305 230 200
165 150 138 123 120 112
3.939 Mn US$ 138 companies
daily deals
group buying
couponing member-only (daily) deals
Source: Crunchbase, Media Cluster of North Rhine-Westphalia
Chinese fashion
eCommerce
30 trends that will shape European web & digital media business in 2012 13 Marc Ziegler
Details on „eCommerce“ (2)
Hottest verticals: mobility/car sharing, fashion & apparel, food delivery, home design, travel
Major trends (some of them ongoing)
Group deals/daily deals/couponing
• … still investors’ darling, but …
• stronger verticaliza-tion to be observed
• especially fashion & apparels, grocery, home design, mums & kids
Neighborhood commerce
• eTransaction on a local scale gain momentum
• Mostly people from the neighborhood offer goods and services to let or to sell (topics: mobility, cooking, nanny, …)
Socially assisted commerce
• … another ongoing serious trend is social shopping
• These sites support social interaction, user contributions and recommenda-tions to assist in buying products & services
UGC monetizing platforms
• platforms that convert user generated content into sales also scored on investor side
• Most of these sites deal with design, fotos and articles from the community
Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 14 Marc Ziegler
10 biggest single investments 2011 in advertising solutions (Mn US$)
1.899 Mn US$ 125 companies
Details on „advertising solutions“ (1)
200 200
61 52 51 50 49 48 37 35
long-tail ad marketplace
mobile ad network
next gen. paid search
multichannel marketing solut.
In-app monetization
TV targeting
digital marketing services
In-video monetization
Source: Crunchbase, Media Cluster of North Rhine-Westphalia
watch ad later
30 trends that will shape European web & digital media business in 2012 15 Marc Ziegler
Details on „advertising solutions“ (2)
Major trends (some of them ongoing)
Targeting solutions
• more sophistication
• tracking targeting performance
• targeted television advertising
• search-Retargeting
• overall: stronger specialization on social media/contextual behavior
Real-time bidding solutions
• demand-side-platforms
• matching supply and demand of ad inventory as well as performance adjust-ments in real-time
• … similar to Google, potentials for hub role within ad eco system
Data-driven marketing
• big data solutions that analyze…
• … ad performance across multiple platforms
• … demographic trends and deliver inventory accordingly
• … local information for contextual ads
In-app, in-game, in-video solutions • different approa-
ches to increase monetization within apps, games and videos
• … in most cases via analyzing user behavior (clicks, social media com-munication, purchases, etc.)
Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 16 Marc Ziegler
Details on „productivity apps/tools“ (1)
Biggest single investments 2011 in productivity apps/tools (Mn US$)
250
129
50 30 23 19 16 15
888 Mn US$ 112 companies
10 10
file management
pers. traffic management
personal communication
personal finance
personal fitness
personal learning
Source: Crunchbase, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 17 Marc Ziegler
Details on „productivity apps/tools“ (2)
Further hot app genres: health/wellness/fitness, kids & family, travel
Major trends (beside productivity “champion” file management)
Personal finance
• Tools helping to better organize everyday’s finance life, related to …
• … accounts, debts, loans, bills, receipts, fixed expenditures, bank transactions etc.
Content produc-tion & discovery
• Tools that ease the (self-)production, adaptation, organi-zation & discovery of various media assets / contents such as …
• … pictures, videos, music, articles, …
Personal learning / educ.
• Tools that enhance the personal lear-ning experience by: tracking progress, exchanging with others / bench-marking, grade tracking, etc.
• Fields of interest: languages, college, science
Personal communication
• Tools that improve cross-platform com-munication capabili-ties, such as …
• … inbox notification management, dialing without numbers, real-time radiation indication
Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 18 Marc Ziegler
Details on „games“ (1)
Biggest single investments 2011 in games (Mn US$)
490
350
200
85 42 40 30 30 26 24
1.660 Mn US$ 57 companies
Multi-platform video game streaming
(social) browser games
MMSGs
Mobile games
Source: Crunchbase, Media Cluster of North Rhine-Westphalia
entertain- ment
software distribution
* * partially secondary investment
30 trends that will shape European web & digital media business in 2012 19 Marc Ziegler
Details on „games“ (2)
Major trends
(differentiated) social games
• Players in pursuit of finding USPs in the space of social games such as …
• … cross-platform distribution approaches, mobile, AR, social bench-marking, kids, edutainment
Gamification of real-world markets • Non-entertainment
companies increa-singly discover the power of games to address real-world challenges, as …
• … in the fields of health, wellness, education, research, recruiting, etc.
In-game (traffic) monetization
• Beside p-a-y-go and subscription-based gaming biz models, various in-game re-venue sources have been developed:
• Real rewards for in-game achievements
• Performance-based advertising tools
Cross-platform game middleware • Rapid game
creation techno-logies
• Solutions for cross-platform game development
Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 20 Marc Ziegler
Details on „content“ (1)
Biggest single investments 2011 in content (Mn US$)
250
100 85
66 50 46 45 40
1.534 Mn US$ 115 companies live
strea- ming/ VOD
MOD
content sharing/
discovery
legal content platform
(e)Book retailer
content discovery
interactive out-of-home
entertainment
Source: Crunchbase, Media Cluster of North Rhine-Westphalia
33
cognitive enhance-
ment
32
music detection
30 trends that will shape European web & digital media business in 2012 21 Marc Ziegler
Details on „content“ (2) Major trends
Enhanced music/ audio experience
• platforms & tools for increased digital audio excitement, such as …
• creating & sharing audio content in real-time, detecting music, do-it-yourself music-related sites & apps, music per-sonalization suites
Next level of content discovery • platforms that
intelligently aggre-gate content from various sources & channels to create new (and mostly dashboard-driven) user experiences
• focus varies: either by type of content or distribution platform
eLearning plat-forms/tools & more • environments for
sharing & discovering learning materials & curricula with co-students & teachers
• video-based learning communities, social prep-center, online course creator suites, interactive tutorials for coder, designer …
Multi-chan. video sharing, casting
• web video enter-tainment beyond youtube, such as …
• …sharing (mobile) videos in real-time
• … social live video casting & commu-nication, social video upload.
• … VOD services
Further hot topics: social TV guides, textbook rental sites, eBook hubs, tech & financial content sites Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 22 Marc Ziegler
Details on „crowdsourcing“ (1)
Biggest single investments 2011 in crowdsourcing (Mn US$)
35
26 25 19 17
260 Mn US$ 43 companies
10 10 10 10 8
UGC monetization crowdfunding
crowd- lending
social trading
people powered antivirus
corporate idea
sourcing
Source: Crunchbase, Media Cluster of North Rhine-Westphalia * see also under eCommerce trends
* *
30 trends that will shape European web & digital media business in 2012 23 Marc Ziegler
Details on „crowdsourcing“ (2) Major trends
Crowdfunding/ -investing
• enforced by tre-mendous kickstarter success, various other crowdfunding platforms evolved that have speciali-zed in …
• … social projects, private investments, creative ventures and big ideas/trends
Crowdsourced labor/jobs/tasks
• platforms that target companies who are outsourcing tasks to the crowd (and users who search for such tasks) in the fields of …
• … design/graphic arts, programming, translation, text cre-ation, research, …
Enterprise / brand empowerment
• solutions for corporations that engage and activate brand audiences, especially within social networks …
• … to measure brand awareness
• … for assistance to “spread the word”
Community opinion aid
• platforms that help individuals to sort out the wheat from the chaff in terms of “taste bench-marking”
• mostly these sites are related to fashion, food, enter-tainment, travel, lifestyle, …
Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
Further hot topics: social lending, collaborative trading, enterprise innovation, social benchmarking
30 trends that will shape European web & digital media business in 2012 24 Marc Ziegler
Details on „search“ (1)
Biggest single investments 2011 in search (Mn US$)
200
84
30 27 23
571 Mn US$ 54 companies
18 15 12 11 10
car search
local service search/ review
editorial supported
search
job search
caregiver search
(mobile) real-estate
search
wedding search
meta local
search
Source: Crunchbase, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 25 Marc Ziegler
Details on „search“ (2)
Major trends
Comment on ma-jor search trends
• the “search” invest-ment cluster does not reveal as many distinct trends as others
• however, as in pre-vious years, most of new search plat-forms tend towards increased speziali-zation and include SoLoMo functiona-lities
App search / app discovery
• platforms that help to search for apps in general (discover & experiences new apps) or business apps in specific
• most of these include reviews from the community
• also purpose: market research
Travel-related search
• platforms that allow a better search experience beyond monothematic que-ries, mostly fueled with community know-how
• multi-parameter requests, finding private homes to stay, local reviews
Job-related search
• even the highly contested job search market generates new approaches with supporting specs:
• internship search, job-related metrics, employer reviews, job advices, focus on job verticals etc.
Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 26 Marc Ziegler
Details on „location-based services“ (1)
Biggest single investments 2011 in LBS (Mn US$)
110
50
15 13 10
Lashou.com
236 Mn US$ 21 companies
10 5 4 3,5
family tracking
P2P payment
real-time urban
navigation
geo-location service
(Russia’s Foursquare)
geo- location social
network
LBS game
gadget location (LaaS)
real-time location tracking
Source: Crunchbase, Media Cluster of North Rhine-Westphalia
1,0
geo-location (shared
interests)
30 trends that will shape European web & digital media business in 2012 27 Marc Ziegler
Major trends
Comments on major LBS trends • due to the small and
heterogeneous field of players in this segment, few dis-tinctive trends could be retrieved
• small number of “pure” LBS compa-nies results from the fact that LBS fea-tures are often inte-grated into products with different core
Geo-location services
• investors identified geo-location related services as a promising field of business. These services cover a wide range of functional-ities and focus such as …
• real-time location tracking
• family tracking & neighborhood safety
• find interest-alike people nearby
• LBS + gaming elements
Other LB-Services (but no distinct trends)
• P2P/NFC mobile payments
• WIFI location solutions for retailers
• LBS-enhanced local search
• local guides/ local discovery
• LBS-based social networks (e.g. for mums & dads)
• urban navigation services
• on-demand delivery services
Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
Details on „location-based services“ (2)
30 trends that will shape European web & digital media business in 2012 28 Marc Ziegler
Details on „B2B solutions“ (1)
Biggest single investments 2011 in B2B solutions (Mn US$)
155 136
54 50 35
1.088 Mn US$ 92 companies
33 24 20 19 19
Source: Crunchbase, Media Cluster of North Rhine-Westphalia
online- degree progam
kits
online video
platform on-demand
billing & subscriber
managemnt.
mobile app developm. solutions
inflight commu- nication solution
event organizer & ticketing platform
social enter- prise softw.
eCommerce check-out
30 trends that will shape European web & digital media business in 2012 29 Marc Ziegler
Details on „B2B solutions“ (2)
Major trends
Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
Mobile payment solutions
Social commerce solutions
Publishing/app/video monetization services
White label app storefronts
(Cross-platform) app development suites Mobile device identification/profiling
(Mobile) payment processing
Video management platforms
Event organizing platforms
Personalized customer experiences & engagement
eCommerce checkout / order fulfillment
Billing & subscriber management
In-restaurant solutions
Mobile shopping solutions
Real-time shopping-cart recovery
In-flight entertainment & communication
Augmented human intelligence
Social loyalty & rewards
iPad POS solutions Context-sensitive commerce platforms
30 trends that will shape European web & digital media business in 2012 30 Marc Ziegler
Details on „B2B tools“ (1)
Biggest single investments 2011 in B2B tools (Mn US$)
100
33 25 25 24
Source: Crunchbase, Media Cluster of North Rhine-Westphalia
696 Mn US$ 111 companies
20 18 17 16 16
financial office tool
talent intelli- gence
social marketing
SaaS
fb power tool for
musicians
customer retention
eLearning tools
brand consumer engage-
ment
video rights
manage- ment
adaptive learning
realtime frame- works
30 trends that will shape European web & digital media business in 2012 31 Marc Ziegler
Details on „B2B tools“ (2)
Major trends
Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
Social media monitoring/analytics
Social media engagement
Control & centralize social media
Social media tools
Social media performance tracking
Social media campaign mgmnt.
Developer tools
App analytics (Adaptive) eLearning tools
Business productivity tools for SME
Social recruiting tools
SDK for social apps
Twitter filter
Gesture-based interfaces
Backend as a service
Online accounting/invoicing Big data analytics/visualization
(universal) tag management
(Real-time) user behavior analytics
SEO improvement tools
Instant loyalty programs
Rental marketing tools
Community building tools
Social talent engine
30 trends that will shape European web & digital media business in 2012 32 Marc Ziegler
Estimated digital media investment radar for Germany/Europe – what will be top on investor’s list in 2012?
Market biz & capitalization potential
Cha
nces
to g
et fu
nded
in G
ER*
low
low
high
high
1
5 6
7
9 10
1 2 3 4 5 6 7 8 9 10
11
12
13
14
15
Group/daily deals/coup.
16
Neighborhood com. Social commerce UGC monetizing Targeting solutions Real-time bidding Data-driven marketing In-app/-video/-game adv. Personal finance Content prod.+discovery Personal learning Personal communication Social games Gamification In-game monetization Cross-platf. middleware
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Enhanced music exper. Next level content disc. eLearning platforms Multichannel video Crowdfunding Crowdsourced work Brand empowerment Community opinion aid App search Travel search Job search Geo-location services
B2B solutions B2B tools
11
12
13 14
15
16
17 18
19
21
22
23 24 25
26
27
28
29
30
* assuming that team is excellent and respective product has USP Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
2 3 4
8 20
hot
funding chances within B2B sectors vary and could possibly be higher
30 trends that will shape European web & digital media business in 2012 33 Marc Ziegler
Conclusions from VC deal flow analysis 2011
Consumer web topics (although this is a rather fuzzy aggregated notion) remain investment segment No. 1 in digital media
However, investments in B2B startups are unmistakably on the rise, especially in seed, angel and series A rounds. It remains to be seen, if German investors follow that line …
The leading position of e-commerce platforms & advertising solutions in the investment ranking reflects the relevance of their corresponding business models within the global web eco system – and will dominate investment activities in the future too
Productivity apps/tools and (slightly behind) crowdsourcing services gain momentum and are firing the imagination of investors in Europe/Germany too
Within all “older” digital media categories (such as content, e-commerce, search, social networks) a higher degree of specialization along the following parameters can be observed: social-local-mobile, contextual, rich media, real-time, personal/on-demand, Facebook-integration …
The hottest overall company? Impossible to tell! There were so many innovative startups with disruptive potential. Find out yourself. There are a couple mentioned within this slide deck …
Source: Marc Ziegler, Media Cluster of North Rhine-Westphalia
30 trends that will shape European web & digital media business in 2012 34 Marc Ziegler
Contact details / acknowledgement / copyright Marc Ziegler Mediencluster NRW GmbH Fon +49-151-24151900 eMail: [email protected] Twitter: @medienziegler web: www.medien.nrw.de
Acknowledgement A big thank you to my colleague Sebastian Lautwein, who gave me a big hand in the first phase of this analysis by identifying and clustering hundreds of funded digital media startups.
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„30 Trends that will shape European web & digital media business in 2012“ by Marc Ziegler is licensed under Creative Commons Attribution-ShareAlike 3.0 Unported License.