1. Publicidad y Nuevos Medios
Wally Swain
SVP, América Latina
27 de febrero de 2008

2. Agenda Yankee Group Vision and Advertising On-line Advertising
Mobile Advertising
Conclusions
Q&A

3. Agenda Yankee Group Vision and Advertising On-line Advertising
Mobile Advertising
Conclusions
Q&A

4. A global communications revolution is underway
Three network technologies are unleashing the next wave of the network effect:
IP as a de facto standard
broadband
wireless
Barriers protecting traditional networks are falling
Business models, laws and social norms are all under attack as well
We are accelerating towards ubiquitous connectivity, when all people and will be connected anywhere

5. Revolution will lead to the Anywhere Network
The Anywhere Network is Yankee Group’s vision of a seamless and always-accessible intelligent infrastructure that provides a connection for everyone to everything from anywhere
Where is the Anywhere Network developing?
What are the sustainable business models?
How will technology and regulation effect change?
How will devices evolve in concert with the network?

6. Consumers Will Connect to Everything from Anywhere
Regardless of their physical location, consumers' access to content and applications will affect all service sectors.
Image source: Flickr

7. Content Delivery Value Chain Who pays for TV content and how?
Disney
Chanel
CableCo
This simple flow of money does not pay for television content production.
And would not apply to Internet where Consumers will only pay subscriptions for very specialized content.
Production
Program
Deliver
Consume
Subscription
Rights
Purchase

8. Content Delivery Value Chain Who pays for TV content and how?
Disney
Chanel
CableCo
Most of the value chain is paid for by Consumers buying the goods Advertisers need to sell.
This is the New Media model content providers hope to exploit.
Production
Program
Deliver
Consume
Purchase
Rights
Subscription
Product
Placement
TV Ads Ad
Insertion
Buy
Goods
Advertisers

9. Content Delivery Value Chain Implications for Intenet
UGC
YouTube
Carrier
The great benefit of User-Generated Content is that Internet brands like YouTube get content for FREE.
carriers have no equivalent of ad-insertion.
Production
Program
Deliver
Consume
Display
Ads
Buy
Goods
Advertisers

10. Digital Advertising & Marketing: Perspective
Objective
Type of Marketing
Digital Tools
Advertising is a tool that marketers use to:
Build brand awareness
Engage customers and prospects
And ultimately increase sales.
The marketing funnel describes these different types of marketing objectives
There are different types of media choices:
Print
Radio
Television
Out of home
Online
Site sponsorships
Awareness
Brand Advertising
Video advertising
marketing
Direct marketing
Rich media
Direct response
Text/Search ads
The goal of this slide is to level set the audiences. Marketers know these things implicitly. Technology people who are interested in marketing, especially some form of digital advertising, can always use a refresher.
The primary difference between awareness and intent is that we know that we need to be marketing to people to make them aware of a brand well before they buy. In digital media, intent is best described as “I’m interested in learning more about…” which is when most people do internet searches.
Key notes:
Intent advertising is worth less on a cost per thousand (CPM) basis than brand/awareness advertising. Prime time television shows earn CPMs of ~$35-40, whereas the average online CPM is closer to $2.
To understand the role of awareness. Just remember that the day that someone decides to buy a $50,000 car is the wrong time to start advertising Mercedes to that person. It’s way too late.
In the digital tools:
Site sponsorships = main page (e.g. portal) takeovers
Video advertising = TV ads delivered as pre-, mid- or post-roll in online video clip
Rich media = popup windows, other forms of video windows, casual games, etc.
marketing = this should need no explanation
SEO = Search Engine Optimization for websites
SEM = Search Engine Marketing
Text/search = the types of ads that Google sells…
Intent

11. Digital Advertising Landscape
Buy Side
Sell Side
Ad Network
Brands
and
Advertisers
Consumers
Agencies
Direct
Audience
Targeting
Publishers
Websites
Portals
Online publications
Video content
Gaming
Mobile operators
Social Networks
Web 2.0 apps
Telecommunications
Digital television
Distribution (CATV, DBS, IPTV, etc.)
Syndication & other secondary dist
Ad exchange
Ad Server
Targeting Platform
Enabling Tech
Brands use advertising to reach a group of customers described by a demographic or psychographic profile
There are many types of enablers, including networks, exchanges and technologies
Publishers create and own content. Historically, individual types of content have had clearly defined audiences relevant to advertisers. Interactive targeting is a way to re-define online audiences for advertisers
The target. The goal. Advertisers need to get in front of consumers a minimum of three times with a message in order for consumers to retain it.
Large advertisers work with ad agencies, though smaller advertisers may purchase directly. Interactive makes this easy.
Source: The Yankee Group

12. Advertisers spend significant dollars on traditional media
TV Gets 41% of Spend
Spending shifts from Newspapers to Internet
Internet gets 9% -- More than Magazines or Billboards
Source: TVB, NAA, RAB, IAB, Yankee Group

13. Colombian Advertising Spend Internet not even tracked by IBOPE

14. Agenda Yankee Group Vision and Advertising On-line Advertising
Mobile Advertising
Conclusions
Q&A

15. In the US, Consumers spend less time focused on television.

16. Internet delivered video represents both a threat and an opportunity
Q. What types of video do you watch online?
n = 517
Source: Yankee Group Anywhere Consumer: 2007 U.S. Entertainment Survey

17. Online Advertising as a percent of total will triple

18. Advertisers will pay equivalent amounts for Internet “viewers”

19. Internet video transforms the viewing landscape
Source: Yankee Group, 2007
mike

20. Where do advertisers spend their online dollars?
Source: Internet Advertising Bureau, 2007

21. Search provides context and permits targeting?
Google or Yahoo show me FREE how to get the information I want.
Ski resorts and ski manufactures pay them to get access to someone who is interested in skiing.

22. Targeting The carrier opportunity is to support targeting
Dayparting
Geographical
Demographic
Context
Dayparting is the well-established practice of selling advertising based upon time of day when different products have greater appeal, such as coffee in the morning and pizza at night.
Geographical targeting is the practice of correlating an IP address to a particular postal code or demographic market area (DMA).
Demographic targeting combines IP network information with addresses and credit reports to determine the age, gender and income of online households and users.
Contextual targeting relates to content on specific web pages. Large publishers and advertising networks use software to scan web site text and apply classification schema to individual pages, links, s and other content. Ads are then served according to network or publisher taxonomies. In the future, developments in software are expected to enable publishers to apply similar taxonomies to video and audio content, including telephone calls and interactive video.
Behavioral targeting (BT) is a well-understood targeting product that relies on user behavior, advertising networks and third-party browser cookies to serve ads based upon advertiser-defined preferences. The behavior in question can be clicking on specific parts of a web site or browsing to other types of sites.
Psychographic profiling places social networking users into groups based upon contextual analysis of their published user profiles, including overlays of behavioral, demographic, dayparts and geographic information. Fox Interactive Media recently launched a psychographic program on MySpace, classifying users by one of a dozen enthusiast areas.
Behavioral
Psychographic

23. How does the carrier support targeting?
Dayparting
Time of day context for user
Geographic
Cross-reference IP address and physical location
Demographic
Cross-reference IP address, carrier CRM and recent activity
Context
Consolidate recent activities across multiple sites
Behavioral
Click sequence capture across multiple websites
Psychographic
Portals and multiple website profiling
The challenge is that many users would view this as intrusive or – worse – as a violation of privacy

24. Where is online advertising going?
Narrowband
Broadband
Novelty
Essential
Text
Video, audio, multimedia
PC Centric
Multiple devices
Productivity and publishing
Entertainment
Anonymous
Aware
Work and home
Anywhere
Advertising separated from content
Contextual Integrated
Response advertising
Response and branding
Push / publish advertising
Participatory
A place to go
Everywhere you go

25. Recommendations for Advertising Networks, Operators and Enabling Technology Vendors
Help publishers develop their business. Publishers will be challenged to cobble together various technologies and services into a cohesive technology plan and product road map. Think “sell through” and not “sell to.”
Innovate with marketer segments. Clarify marketing expectations and how they relate to new interactive products and technologies.
Solve workflow and automation challenges for advertisers. What technologies can ad networks and technology vendors build into services so that agencies can benefit? And this means more than a web interface. The last thing anyone needs is another username and password.
Plan on video standards from the beginning. Digital media is disruptive, and we’ve already seen the fragmentation that comes with different forms of distribution for video. Although the ad formats may vary from the internet to broadcast television, there will be standards. So plan for them.

26. Agenda Yankee Group Vision and Advertising On-line Advertising
Mobile Advertising
Conclusions
Q&A

27. POWER SHIFTS IN VALUE CHAIN
Carriers are the most powerful stakeholders in the mobile advertising industry
ADVERTISERS
AGENCIES
ENABLERS
PUBLISHERS
CARRIERS
Reebok
Adidas
Anheuser Bush
P&G
Ford
Daimler-Chrysler
Budweiser
Carat Interactive
WPP
Omnicom
Mindshare
Ogilvy
ipsh
Admob
Enpocket/Nokia
Third Screen Media
Millennial
MSFT
JumpTap
Medio Systems
MediaFLO
MobiTV
USA Today
TWC
Turner
Disney (ESPN, ABC)
CBS
NBC
Viacom (MTV,
Comedy Central)
100s of sites…
Telefonica
America Movil
AT&T
Verizon Wireless
Sprint Nextel
T-Mobile
Orange
Vodafone 3
EXAMPLE COMPANIES
CONSUMERS
INFLUENCE ON CHAIN
High
Medium
Low
Medium
High
POWER SHIFTS IN VALUE CHAIN
Carriers have eyeballs, and are just starting to sell inventory and exert influence down chain
Off deck publishers are acting independently, but are developing two prong strategy (on deck and off deck). Their power stems from the appeal of their content and internet relationships
Enablers have bifurcated strategy – appealing directly to publishers and working with carriers
Agencies and advertisers hold the purse strings. Mobile comprises tiny portion of ad buy.
Source: The Yankee Group

28. Carriers’ bread and butter is about core (voice) transactional revenues and data’s future promise
US Revenue Forecast
2006
Voice $121.8B
Data $16.2B (12%)
$53
$52
Blended ARPU
$51
2011
Voice $136.3B
Data $39.4B (22%)
Source: Yankee Group, 1Q07

29. FURTHER REQUIREMENTS FOR GROWTH
Mobile advertising: drivers, inhibitors, and further requirements for growth
DRIVERS
INHIBITORS
Huge TAM. Volume of Handsets, time spent on mobile platform, growth trajectory of mobile for Internet, Video and other entertainment
Untapped medium
Advertisers, publishers and carriers need to replace declining revenues traditional channels
Appeal and promise of targeting and proximity to commerce
Network and device advancements
Mobile carriers need for control
Unproven business models
Lack of standards
Inherent display and form factor limitations
Fractured ad buying/selling ecosystem
Lack of real metrics
Privacy and personalization concerns
Uncertain consumer tolerance
FURTHER REQUIREMENTS FOR GROWTH
More success stories with measurability of effectiveness
More cohesive carrier participation
Consumer value creation – through better content, easier access, and (for some segments and experiences) subsidies
Scale. Advertisers require breadth as well as targeting

30. Motivations differ but agree on priorities – Grow mobile advertising!
MOTIVATIONS WITHIN THE VALUE CHAIN
Advertisers and Agencies
Enablers
Publishers
Service providers
Losing eyeballs in traditional forms of media (Television, print)
Need reach and breadth of audience
Want early mover advantage
Need metrics of efficiency – ROI
Appeal of localized personalized targeting
Another touch point for integrated experience
Stake early claim in market
Take risk for early position and hope for outrageous reward
Pure play vendors want to create market for their technology
Integrators looking to position in growth category
Another revenue stream
Take control of business models
Position for growth as extension of Internet business models
Grow advertising revenues across platforms
Balance between going alone and cooperating with behemoth carriers that possess and control customers
Grow data revenues and data service appeal
Buttress declining ARPU from basic connectivity
Take bounty on any traffic on network
Differentiate service plans from competitors
Leverage “three screen appeal” to advertisers
Protecting consumer privacy while leveraging consumer context
Source: The Yankee Group

31. Carrier and non-carrier channels (participation)
Mobile is confusing for advertisers – with multiple, fragmented platforms/technologies and channels to market
Mobile platforms
Messaging (SMS, MMS, A2P, P2P) – largely used for marketing/promotional campaigns
Mobile Internet/Web – like the web, largely used for banner/display or text ads, with various click through mechanics options
E.g., Click-to-Call, Click-to-Coupon, Click-to-Locate, Click-to-URL, Click-to-Data Capture (SMS or address), Click-to-Survey, Click-to-Contest, etc.)
Mobile Search – sponsored, click-to-call
Mobile Video/TV – pre- and post-roll, within broadcast channels
Downloadable applications (games, etc.)
On-device portals
Idle Screen
Other (Bluetooth, RFID, NFC, etc.)
Carrier and non-carrier channels (participation)
On-deck/portal – within the walled garden
Off-deck/portal – outside the walled garden (D2C)

32. Where are mobile operators’ opportunities in advertising?

33. Mobile advertising by platform/channels – who’s got the power in the value-chain

34. Messaging and mobile web: where today’s reach is in mobile
Active Usage of Mobile Features/Capabilities (Use Once a Month or More)
Messaging
Personalization
In 2007, nearly 13% of consumers were
active mobile web browsers, and
19% of consumers had
attempted to use the Mobile web
(up from 6% and 18% respectively
from 2006).
Entertainment
Web
Source: Yankee Group US Mobile User Surveys, Anywhere Consumer: 2007 US Web/Data Survey.

35. Disintermediation/Google-ization is happening already
When you browse the mobile web, what types of sites do you access?
About 40% of rank web browsing among the top five mobile apps they are interested in.
About 20% of regularly browse the mobile web.
Despite carriers’ tries to close the door on Google, its PC web dominance has easily transferred to the mobile web.
Source: Yankee Group Anywhere Consumer: 2007 US Web/Data Survey, Teens and Technology Survey

36. Consumers still uncertain about ad-supported mobile experiences
How Would You Like to Pay for these Mobile phone services (select one answer for each service shown)?
Variable bases, and represents includes those respondents who listed the above services/applications among the top five for future use.
Source: Yankee Group Anywhere Consumer: 2007 US Web/Data Survey

37. Preferred Payment Model Mobile Application Included
Consumers most open to ad-supported models within mobile entertainment experiences
Preferred Payment Model
Mobile Application Included
Pay Fee
View Ads
Don’t Know
Communication Tools
Text Messaging
Photo Messaging
Video Messaging
Mobile IM
Push-To-Talk
52.40%
19.70%
27.87%
Entertainment Services
Game Downloads
Adult Content
Listen to Music or Radio
Watch TV or Video
39.60%
27.30%
33.11%
Web Access & Productivity
Information/Directions
Post/upload photos
Access Social Networks / Online communities
Internet Browsing
Receive Text Alert
46.70%
20.90%
32.45%
Personalization
Graphics/wallpapers
Ringtones
Ringback tones
46.40%
23.70%
29.90%
Consumers express mixed feelings towards mobile service payment models, but are clearly willing to pay directly for core Communication Tools like SMS, IM and
Consumers are open to advertising supported Entertainment Services, like gaming or multimedia downloads
This may prove to be a viable model, given higher reported click-through rates for mobile advertising
Of the 30% of respondents interested in using the mobile internet, 6% reportedly clicked through (3X traditional rates)
n = varies, % are aggregate – weighted average
Source: Yankee Group Anywhere Consumer: 2007 US Web/Data Survey (online survey of 1,500 adult US mobile consumers)

38. Gap between what adults say they will pay for multimedia services and what it currently costs
Percent of Respondents Interested in Spending Monthly and Amount Willing to Spend per Month
n=variable bases among top 5 applications interested in using and willing to pay monthly fee
Source: Yankee Group Anywhere Consumer: 2007 US Web/Data Survey

39. US carrier approach to ad enablement
Attitudes on Advertising
Current Activity and Early Initiatives
Assessment
Verizon
Outpacing all competitors in churn management – with primary focus on retention and share grab
Taking tempered, controlled approach
Most vocal about consumer privacy concerns relating to mobile advertising
Quietly launched on deck mobile web advertising on secondary pages using TSM
Using Medio Systems for search
Advertising served in Media FLO mobile TV services; targeted/mobile-specific advertising will be served in the future
Most expressed concern about use of personal data to target
Verizon Wireless not integrated strategically with wireline, which may affect cross-channel opportunities
Sprint Nextel
First mover in mobile data
Highest data ARPU
Losing share and more in need of supplemental revenue
Launched on deck mobile web advertising initiative using Enpocket / Nokia
Working with Microsoft for on deck search and MobiTV for video/TV
View local search as critical component of advertising strategy
Risk of under-funding behind strategy
WiMAX play could provide some level of differentiation
AT&T
Largest nationwide carrier, with number 2 carriers (VZW) nipping its heels
Mass market push around 3-screen vision
Most open to new business models
Expressed concern over not affecting transactional data revenue and consumer experience in advertising
Trials of WAP banner and text ads launched in June to gauge consumer acceptance
Yahoo! Go enabled on some handsets
Using Infospace for on-deck search
Advertising will be served in Media FLO mobile TV services; targeted/mobile-specific advertising will be served in future
3 screen vision way ahead of 3 screen capabilities, but most likely to look for cross channel opportunities
T - Mobile
Value play
Customer base most attractive to deploy advertising against
Limited data offers
3G spectrum now available
Using Medio for on-deck search
Potential to be most disruptive with advertising play (e.g., 100% ad-supported business models)

40. What carriers need to do to move the market forward
Prove the appeal of mobile to advertisers by building the inventory
Test user acceptance
Ensure standardization and reporting
Look to monetize across on- and off-deck environments
Build more sophisticated targeting, including location-based elements
Partner where you lack skills
Take a tempered approach

41. Agenda Yankee Group Vision and Advertising On-line Advertising
Mobile Advertising
Conclusions
Q&A

42. Conclusions In the US, Internet advertising is 10% of total.
Growth has come at the expense of Newspapers.
LA advertisers speed less on Newspapers today so direct analogies may not apply
Consumers live with ad-supported models in TV and Internet Search but don’t know what it means in Mobile
Carrier opportunity is supporting Targetting
Speed is of the essence
Good Luck!
New costumer demands will require carriers to re-think their strategy to focus more on an open application layer of their network and partner with third parties to innovate new services
IMS allows carriers to promptly meet the demands of a new communications scenario by consolidating services across a single platform, transforming dumb into intelligent network.

43. !
Muchas Gracias!
Wally Swain