bia/kelsey's top 10 predictions for local media in 2013

BIA/Kelsey’s Annual Analyst Picks & Predictions

January 23, 2013

2 © 2013 BIA/Kelsey. All Rights Reserved.

Agenda

Looking Back at 2012 and Setting the Context for 2013 Rick Ducey Charles Laughlin

Analyst Roundtable Discussion Moderator, Rick Ducey

Online Media Mobile Media Social Media Transactions and Loyalty Video Media Directional Media

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Executive Summary

At the beginning of every year, 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.

In previous years, the individual advisory services issued their own predictions, focused on each program’s core coverage area.

We took a different approach for 2013. This year’s predictions cover a wide range of

subjects, from mobile ad revenue to loyalty to cloud based SMB services to sales channel innovation.


BIA/Kelsey Analyst & Thought-Leadership Team

Michael Boland

Senior Analyst

Matt Booth

Chief Strategy Officer

Rick Ducey

Managing Director

Charles Laughlin

SVP, Managing Editor

Jed Williams

Senior Analyst

Peter Krasilovsky VP, Conferences

Senior Analyst

Suzanne Ackley

Senior Research Analyst

Jeanne Datillo Manager,

Media Valuations

Geoff Price

VP, Valuations & Financial Consulting

Celine Matthiessen Senior Analyst

Competitive Intelligence

Mark Fratrik VP/Chief

Economist

Steve Marshall

Director of Research


BIA/Kelsey Local Media Index 2011–2012

0

50

100

150

200

250

300

350

400

450

500

1/3/

2011

3/30

/201

1

6/24

/201

1

9/20

/201

1

12/1

4/20

11

3/13

/201

2

6/7/

2012

8/31

/201

2

11/2

9/20

12

Online Local BIA/Kelsey Local Media Index S&P 500Radio Broadcast TV Yellow PagesNewspaper Diversified Media CableOutdoor Onine Advertising & Search


Getting Ready for 2013

2013 Trend The Lowdown Nationalizing the Local Opportunity

National retailers will enter the local mix, driven in large part by social media.

Social Delivers Money will flow into social advertising as its reputation for ineffectiveness fades.

Mobile on the March Long-lagging mobile revenues will take off this year as new ad formats take better advantage of strong mobile usage.

The Cloud as Great Equalizer

Cloud-based computing will chip away at the advantages big businesses have over SMBs.

Focus on Selling Figuring out continuous contact and long tail selling will challenge traditional media companies.

BIA/Kelsey 2013 Leading in Local conferences

The National Impact March 18-20, Boston, MA SMB Digital Marketing Sept. 11-13, Austin, TX Interactive Local Media, Dec. 10-12, San Francisco, CA


Quick Take: Our 2013 Predictions

Reputation Management Meets Content Distribution

U.S. Mobile Ad Revenues Top $4 Billion

SMB Services Occupy the Cloud

Big Banks Bet on Offers & Loyalty

Finally, Props for Social Advertising

Double-Digit Bump for Online Video Spend

Native Ads Come into Focus

Local Sellers Innovate Around the Long Tail

National Retailers Go Local

Amazon + Apple + Facebook + Google = Acquisition Frenzy

No. 3

No. 1 No. 2

No. 4

No. 5

No. 9

No. 6

No. 10

No. 8 No. 7


Michael Boland Senior Analyst, Mobile

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

“U.S. mobile ad revenues will reach $4.2 billion, a 36 percent increase over 2012. The portion of this attributed to localized campaigns will be about $2.1 billion (50 percent).

Growth in mobile local ad spending will be driven by continued momentum in advertiser evolution to localize campaigns, due to

users’ mobile local intent (i.e., 50 percent of mobile searches are local). Premiums on higher-performing mobile ads will also drive

this local share shift.”

Source: BIA/Kelsey, 2012


No. 2: SMB Services Occupy the Cloud

“IT infrastructure has long been the predictor of which software solutions were available to businesses. Newer and smaller businesses lacked the required infrastructure for the more robust software packages typically available to enterprise clients.

Now that the IT market is moving towards cloud based computing, robust infrastructure is no

longer required for enterprise-type solutions. This will dramatically change the local ad market.

Watch for SaaS (software as a service) workflow solutions to make their way into the

local market this year and define SMB products and services for the next decade.”

Matt Booth Chief Strategy Officer, Sr. Analyst, Online Media


No. 3: Rep Mgmt. Meets Content Distribution

“Listings syndication, reviews monitoring, reputation scoring and social management have been converging toward a single dashboard. In 2013, the focus shifts to rich content distribution across publisher networks. Solutions must ingest, manage and syndicate coupons/offers/deals, social feeds, menus, photos, video and more.

Content distribution networks (e.g., SinglePlatform) gained traction – and funding

– by focusing on specific SMB content and building a publisher network for broad

distribution. This trend will continue, with additional rich SMB content ripe for this

distributed model.”

Jed Williams Senior Analyst, Social Media


No. 3: SMB Content Distribution Networks

Company Type of SMB Content Funding Publisher Network

Yext Real-Time Listings $65.8M 50+

SinglePlatform Menus Sold to Constant Contact for $100M 100+

Signpost Offers $5M 1200+

Local Vox Advertorial/Events $7.4M NYC-based

publisher network; Tribune Media


No. 4: Big Banks Bet on Offers and Loyalty

“Banks and other financial institutions have been testing the waters of the deals, offers and loyalty space for the past couple of years. In 2013, they will dive in feet first as they look to boost SMB retention, earn commissions and cut rewards spending.

We expect major acquisitions and investment in the offers space,

building on 2012 investments. The big question is whether the deals

space will implode before it completely transitions to a broader

offers and loyalty platform.”

Peter Krasilovsky VP & Senior Analyst, Transactions & Loyalty


No. 4: Banks ‘Buy’ Vs. ‘Build’

Financial institutions made at least four acquisitions of transaction marketing related firms in 2012. That’s just the “buy” versus “build” component. Overall activity last year with vendors, etc. was intense.

Financial Institution Transaction Marketing Co. Date of Acquisition

JP Morgan Chase Bloomspot December 20

Capitol One Bundle.com November 30

MasterCard TruAxis September 6

BarclayCard Analog Analytics June 4


No. 5: AMZN + AAPL + FB+ GOOG = Acquisition Frenzy

“Together, these four dominant online brands represent roughly $900 billion of market capitalization and $90 billion of ready cash. As their respective services increasingly overlap, we see a fluid acquisition market developing in 2013-14. This frenzy will be driven primarily by pressure to grow.

However, we also expect to see these companies acquire for

external talent and expertise. The year 2013 will be kind to owners of

fast-growing Internet services, mobile or SaaS businesses.”

Apple Google Facebook AMZN

Market Cap (mid-Jan.) $472B $238B $68B $124B

Available Cash (mid-Jan.)

$29B $45B $10B $5B

Plenty of Cash & Cap

Sources: BIA/Kelsey, company reports, 2013

Matt Booth Chief Strategy Officer, Sr. Analyst, Online Media


No. 6: National Retailers Go Local

“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 telegraphing this trend in recent years, with online stores, comparison shopping,

product inventory and product listing ads adding new revenue streams to the mix. The rise of social media

is rapidly accelerating this sea change. QVC’s December acquisition of social classifieds Oodle is

an example of this trend.” Peter Krasilovsky VP & Senior Analyst, Transactions & Loyalty


No. 7: Double Digit Bump for Online Video Spend

“Online video ad spend will continue to increase by double digits, driven by more advertisers seeing it as a complement to TV advertising with new incremental spending but also drawing spend share away from display, print and TV.”

Source: BIA/Kelsey, 2012

Rick Ducey Managing Director & Senior Analyst, Video


No. 8: Native Ads Come into Focus

“This year we expect to see native advertising gain clearer definition and scalable solutions. Social networks continue to drive innovation in native, with formats combining social context and in-stream integration.

These formats will begin to be bought and sold programmatically, enabling larger,

optimized buys and more precise targeting. As programmatic buying

accelerates, it will encourage more local publishers to participate by

opening up native inventory to contextually-targeted placement.”

Jed Williams Senior Analyst, Social Media


No. 8: Native Advertising in Social Media

Facebook Mobile App Install Ads Twitter Promoted Tweets


No. 9: Finally, Props for Social Advertising

“We expect 2013 to be the year that social advertising gains more respect as new research reveals stronger links to purchase decisions.”

New ARF study released Jan 16, 2013 (“Digital & Social Media in the Purchase Decision Process”) indicates that, “digital and social media have empowered consumers and that brands have an important role in facilitating conversations amongst consumers and themselves.”

Sources: comScore, ARF, 2012

Rick Ducey Managing Director & Senior Analyst, Video

http://thearf.org/index.php


No. 10: Innovation Around the Long Tail

“Directory publishers and others with large deployed sales forces face a dilemma. Acquiring and retaining new customers with a sales force built on high margins just isn’t economically viable. The average spend is too low and the churn is too high.

This year we expect to see publishers invest and innovate around the challenge

of profitably acquiring long-tail advertisers. This will involve greater use

of resellers, low-cost telesales, direct marketing and self-service.”

Charles Laughlin SVP & Senior Analyst, Directional Media


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SESSIONS INCLUDE: SuperForum: Applying Five Local Channels to

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The Mobile/Social SuperForum: From National to Local

Local Services Marketing: Adding in Social, Mobile and Content

The Deals/Loyalty + Rewards Landscape: Big Shifts in Local Commerce

Geolocal: New Targeting, New Search, New Maps

Local Deals and Sales: The New Online and Mobile Models

Media Leaders: Applying The Lessons of Leading in Local

VIKRAM SHARMA CEO, Gannett Digital Marketing Services

DOM MOREA SVP, First Data

BRIAN HALLIGAN CEO, HubSpot; Senior Lecturer, MIT

DAVID KIDDER Author, The Startup Playbook

http://www.biakelsey.com/LeadinginLocalBoston/Shotland.asp

http://www.biakelsey.com/LeadinginLocalBoston/Morea.asp

http://www.biakelsey.com/LeadinginLocalBoston/Halligan.asp

http://www.biakelsey.com/LeadinginLocalBoston/Kidder.asp


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Questions and Comments:

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© 2013 BIA/Kelsey. All Rights Reserved.

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bia/kelsey's top 10 predictions for local media in 2013

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