The end of the digital beginning Association of Canadian Advertisers August 27, 2012 Michael Paterson & Aurlie Olives
The end of the digital beginning
Mobile advertising coming to your device Digital is business as usual Location based advertising Mobile distribution of content The value of social networks PwC LLP
pwc.com/ca/emoutlook
Slide 2
What we said 5 years ago about 2012
2012 will see a broad scale roll out of IPTV and VOD will steal revenue from Pay-Per-View Sports rights and sponsorship deals will become more lucrative. Value of online and mobile rights will also rise significantly. PwC LLP
Mobile television will be available in 2008 and become a $100m market by 2011 as new technology enables faster download speeds
The Internet will constitute 19 % of advertising in 2012
Slide 3
2011 Actual Vs Forecasted
Segments with Strong Growth % Growth Internet Advertising
22.8% Vs 18.2%
Internet Access
17.5% Vs. 12.1%
TV Advertising
TV Subscriptions
Radio
Actual Growth Projected Growth
Out-of-Home Advertising
0% PwC LLP
5%
10%
15%
20% Slide 4
25%
2011 Actual Vs Forecasted
Segments with Weak Growth % Growth Filmed Entertainment
Video Games
Consumer and Educational Book Publishing
-3.5% Vs 1.7%
Consumer Magazine Publishing
Newspaper Publishing
-3.0% Vs. 0.6%
Actual Growth Projected Growth
Recorded Music
-8% PwC LLP
-6%
-4%
-2%
0%
2%
4%
6% Slide 5
Entertainment and media growth rates 20122016
Canada 6.5% UK 3.1% Germany 2.7% Russia 10.1%
US 5.2%
France 3.4%
China 12.0%
Japan 2.8%
Brazil 10.6%
India 14.3%
Mature: 4.1% PwC LLP
BRIC: 11.8% Slide 6
Poll Question What will be the fastest growing segment over next five years? a) Out of home advertising b) Television Subscriptions c) Television advertising d) Video Games Spending e) Filmed Entertainment PwC LLP Slide 7
PwC LLP Text emoutlook and your question to 37607 or Tweet #EMOutlook to @eusisdm
Slide 8
Money Makers: Advertising Segments
Internet Advertising Television Advertising
+15.7% Out of Home Advertising
+ 5.4% Radio Advertising
+6.0% Online Newspaper Advertising
+4.3%
+ 11.1% PwC LLP Slide 9
Global advertising spending segment
2011
Global advertising CAGR to 2016: 6.4%
2016
Internet Advertising 18% Television 36%
Internet Advertising 27%
Other 10%
Television 36%
Out-of-Home 6%
Other 7% Out-ofHome 6% Newspapers 18% Consumer Magazines 5% Radio 5%
Consumer Magazines 6%
Radio 6%
Newspapers 14%
Segment data here includes online/mobile advertising in the segments and excludes it from the Internet Advertising total PwC LLP Slide 10
Canadian advertising spending by segment
Canada 2011 Internet advertising 22%
Canadian advertising CAGR to 2016: 6.6%
Canada 2016
Television advertising 28%
Internet advertising 33%
Television advertising 27%
Others 10% Newspapers 18% Radio 13% Out-of-home 4% Consumer magazine 4% Newspapers 13% Others 8% Radio 11%
Out-of-home 4% Consumer magazine 5%
Segment data here includes online/mobile advertising in the segments and excludes it from the Internet Advertising total PwC LLP Slide 11
Money Makers: Consumer Segments
Mobile TV +38%
Over-the-top Streaming +18%
eBooks +46%
Recorded Digital Music +12.8%
Satellite Radio +12%
PwC LLP Slide 12
Digital spending drives global growth
2500000
Digital is defined as:
online and mobile Internet advertising mobile TV subscriptions digital music electronic home video online and wireless video games digital consumer magazine circulation spending digital newspaper circulation spending digital trade magazine circulation spending electronic consumer, educational, and professional books satellite radio subscriptions broadband and mobile Internet access
Mobile Internet access spending & advertising Mobile is still an underutilized advertising medium given the time people spend with the mobile devices on uses other than calling. Mobile internet access in Canada $5,000 $4,000 $3,000 $2,000 $1,000 $0 2012 2013 2014 2015 2016 $500 $400 $300 $200 $100 $0 2012 2013 2014
Social
Mobile
Local
Mobile internet advertising
2015
2016
PwC LLP
Slide 18
Local Location-Based Marketing
Social Local
Mobile
PwC LLP
Slide 19
The Entertainment & Media Value Chain
PwC LLP
Slide 20
Integrating digital across the business
-Key Priorities Cost optimisation and process integration Rights and royalty optimisation Metadata modelling Back catalogue consolidation and commercialisation Digital content and publishing integration Talent . . .
PwC LLP
Slide 21
Poll Question What will be your biggest challenge to monetize digital content or earn digital advertising revenue in next five years? a) Internal skills, resources or systems not adequate b) Consumers believe they should pay less or not pay for digitally distributed content c) Piracy d) Finding the right business model(s) e) The general economy
PwC LLP
Slide 22
The raw materials - talent and innovation The proportion of E&M CEOs who told us talent constraints have caused them to cancel or delay a key strategic initiative in the past year:
Text emoutlook and your question to 37607 or Tweet #EMOutlook to @eusisdm PwC LLP
Slide 23
The Millennials challenge
Talent and innovation ...set free by leaders who understand behavior
