This is one of several findings out today from a survey of 50 ad buyers that Cowen & Co says helped it to update and expand its coverage of Internet and New Media stocks. The advertisers are upbeat about 2013, seeing overall U.S. spending grow 4.6% vs 2012. That’s pretty good considering how much the election and Olympics boosted this year’s sales. But the additional dollars will mostly go to digital media — and especially those that appeal to smartphone and tablet owners. Digital will account for 33.5% of next year’s spending, up from 28.7% this year, Cowen analyst John Blackledge says. Meanwhile, TV’s market share will fall to 39.3% from 41.4%. The company notes that “TV consumption has remained static at 12-13 hrs/week” from 2004 to 2010. “Only Internet consumption has increased, from under 6 hrs/week in 2004 to 13 hrs/week in 2010.” The big surprise, though, is how eager advertisers are to spend on mobile. Cowen projects that smartphones, tablets and other portable devices will account for 26% of digital ad sales in 2018, up from 9% this year. But the firm says its survey suggests that the forecast may be too conservative — and that mobile could account for more than half of all digital ad sales in six years. That should concern moguls because Cowen says that “mobile ad dollars come at the expense of traditional ad mediums (TV, print, radio, etc).” Google is well-positioned to benefit, Blackledge says. But companies including Yahoo and AOL that depend heavily on display ads might run into trouble.
This has been one of the big sticking points for TV Everywhere: Advertisers and programmers say they still can’t tell who’s watching when a show is streamed to online audiences. That could result in lots of lost ad revenues. It’s the opposite of what you might expect. Internet users give up gobs of information about themselves every time they click a keyboard or mouse, while ad rates for conventional TV depend on imperfect surveys. But Internet server measurement “systematically overstates audience because it cannot distinguish one person using multiple browsers, account for cookie deletion, or distinguish content served to non-human audiences (i.e. crawlers, bots),” Bernstein Research’s Todd Juenger says this morning in a report. He provides the clearest explanation I’ve seen so far of what advertisers do and don’t know about viewers from different platforms. Here (with his permission) is how he explains what an advertiser on Glee might learn about the show’s multiple audiences:
The companies say they don’t expect the government to raise antitrust concerns: They’ll continue to compete with each other — but in a way that reduces “friction” for advertisers who want to move display ads between platforms. They’re positioning this alliance as a first step to distinguish their “high-quality inventory” from other sites that advertisers would consider less attractive. Other companies with “high-quality inventory” are welcome to join. The partners hope the program will help to drive up unit costs for their ads, but they say that they don’t know yet how much of an increase they might see. Here’s the release describing how the new plan will work:
REDMOND, Wash., SUNNYVALE, Calif. and NEW YORK, Nov. 8, 2011 – Yahoo! (NASDAQ:YHOO), Microsoft Corp. (NASDAQ: MSFT) and AOL (NYSE: AOL) today announced agreements that should dramatically improve the process of buying and selling premium online display inventory. The agreements will allow ad networks operated by Yahoo!, Microsoft and AOL to offer each other’s premium nonreserved online display inventory to their respective advertising customers.
While agencies and advertisers can continue to choose to partner across Yahoo! Network Plus, AOL’s Advertising.com and the Microsoft Media Network (each of which is differentiated by its capabilities around data, optimization, packaging and inventory), this partnership will also offer the efficiency of buying premium display inventory at scale to reach customers and audiences. Simultaneously, the partnership should enhance the demand for and value of each party’s display advertising offerings as well as provide better yield for both participating publishers and advertisers.