DIGITAL MARKETING HUB v2.0 - AdExchanger

Digital Marketing Hub v2.0
BMO Capital Markets
Exhibit 10. Global Marketing Spending by Category
Absolute 2009 2010 2011E 2012E 2020E
Advertising 439.5 468.0 491.1 522.2 661.2
Marketing services 279.9 300.1 315.5 329.8 468.4
Total paid impressions 719.4 768.2 806.6 851.9 1,129.6
Ad Agency /Marketing BPO Fees 58.5 62.3 67.6 71.0 109.4
Data/Intelligence 47.0 46.8 48.2 49.6 53.0
Software/Technology 9.0 10.3 11.2 12.1 20.3
TOTAL Marketing 834.0 887.5 933.6 984.6 1,312.4
'12-'20
Growth 2009 2010 2011E 2012E CAGR
Advertising -6.6% 6.5% 4.9% 6.3% 3.1%
Marketing services -5.8% 7.2% 5.1% 4.5% 4.5%
Total impression -6.3% 6.8% 5.0% 5.6% 3.7%
Ad Agency/Marketing BPO fees -15.3% 6.4% 8.6% 5.0% 5.6%
Data/Intelligence -11.6% -0.6% 3.1% 2.8% 0.9%
Software/Technology nm 13.5% 9.0% 8.0% 6.7%
TOTAL Marketing 6.4% 5.2% 5.5% 3.7%
Source: GroupM, DMA, Winterberry/Acxiom/Teradata, IDC, DemandTec, AdAge Data Center and BMO
Capital Markets for 2020 estimates.
While impression spending will remain the dominant portion of marketing budgets,
technology is winning share. This shift is being driven in part by the fundamental move to
more “audience-based” media buying and away from “contextual” media buying (e.g., buying
ads on ESPN.com in order to reach more young males). “Audience-based” media buying targets
impressions based on anonymous user profiles created by a mosaic of data sources.
Data and intelligence spending has been hit in recent years by pullbacks in market research
spending (especially custom work); however, as IP audience-based buying proliferates,
the harvest and leveraging of IP marketing data should help compensate. Said another
way, we expect marketing data & intelligence spending (already ~$50B globally) to shift
from more manually driven processes to more automated ones.
And there’s also a significant pool of money that is often overlooked: trade promotion.
These are the subsidies paid by marketers (in particular consumer packaged goods makers) to
retailers for special pricing, preferential shelf placement, gifts or demonstrations. While estimates
are scarce, trade promotion management software provider DemandTec (owned by
IBM) estimates the market to be around $125-$175 billion for merchandising, promotion and
trade-based pricing in the US.
A member of BMO
Financial Group
22
June 7, 2012