PALO ALTO, Calif., Feb. 23 /PRNewswire-FirstCall/ -- Piper Jaffray &
Co. Internet Media and Marketing research team today published an in-depth,
comprehensive research report titled, "The User Revolution," discussing the
new advertising ecosystem and the rise of the Internet as a mass medium. In
the report, the team outlines its expectations that global online
advertising revenue will reach $81.1 billion by 2011, representing a 21
percent compound-annual-growth-rate (2006-2011).
The report defines user revolution as a major trend that is happening
primarily with consumers, who are taking control of content consumption and
branding. "The historically passive consumer is changing rapidly, not only
becoming more informed and confident about purchase decisions, but also
increasingly taking control of the consumption of information and content
that used to be distributed by networks, studios, publishers and
retailers," said Safa Rashtchy, senior research analyst at Piper Jaffray.
"We believe this will cause a significant rise in prominence of the
Internet as a major content consumption and marketing medium."
There are 12 key themes discussed in "The User Revolution" report:
1. Global online advertising revenue to reach $81.1 billion by 2011.
2. Communitainment: Internet has increasingly become a principal medium
for community, communication and entertainment -- three areas that
have collided and are impacting each other's growth -- generating a
new type of activity: communitainment. Communitainment is taking time
away from other, traditional, types of content consumption on the
Internet.
3. Usites -- The increasing popular category of user generated sites,
which we are calling Usites, are driving traffic away from other
destinations and pose a challenge to the advertisers and publishers.
4. The Internet is now a mainstream medium: The web is the leading
medium at work and the second leading medium at home behind
television.
5. Internet usage patterns are changing, favoring Usites,
communitainment sites, search, and away from traditional portals.
6. User Generated Brands. The consumers are taking control of content
consumption and branding.
7. Media Fragmentation: Advertisers increasingly will need to buy more
inventory, from nearly all types of media, especially the Internet,
to have the desired impact.
8. The Golden Search: search has become the new portal.
9. Google's dominance is likely to expand, partly fueled by a wide
variety of non-search related products that create a virtuous cycle
of brand affinity for Google.
10. Video ads will be the driver of the next major growth in brand
advertising and getting additional dollars shifted from traditional
media to online.
11. Ad networks are experiencing increased demand due to increasing
Internet fragmentation, desire for more targeted inventory,
increasing usage of networks for branding and increased site
visibility.
12. Agencies are rapidly evolving into more sophisticated,
technology-savvy entities that combine best of breed offerings.
The report also lists the most important companies to watch during this
revolution, companies that are likely to benefit most, or be highly
impacted by these trends. These companies include: Google (and YouTube),
Yahoo!, Disney, News Corp., Time Warner, Microsoft, InterActive, Facebook,
Craigslist, Brightcove, Yelp, SINA Corp., Baidu, aQuantive, ValueClick,
24/7 Media, Netflix, Wikipedia, MobiTV, Digg and Hakia.
"Like many major social trends, the changes will not happen overnight
and we expect the User Revolution, which has just begun, to last several
years before the new regime is fully established and the old statues have
all been toppled over," said Rashtchy.
About Piper Jaffray
Piper Jaffray Companies is a leading, international middle market
investment bank and institutional securities firm, serving the needs of
middle market corporations, private equity groups, public entities,
nonprofit clients and institutional investors. Founded in 1895, Piper
Jaffray provides a comprehensive set of products and services, including
equity and debt capital markets products; public finance services; mergers
and acquisitions advisory services; high-yield and structured products;
institutional equity and fixed-income sales and trading; and equity and
high-yield research. With headquarters in Minneapolis, Piper Jaffray has 25
offices across the United States and international locations in London and
Shanghai. The firm's UK operating subsidiary, Piper Jaffray Ltd., is
authorized and regulated by the Financial Services Authority and is a
member of the London Stock Exchange. Piper Jaffray & Co. is the firm's
principal operating subsidiary. (NYSE: PJC) ( http://www.piperjaffray.com )
Since 1895. Member SIPC and NYSE.
Disclaimers
Piper Jaffray does and seeks to do business with companies covered in
its research reports. As a result, investors should be aware that the firm
may have a conflict of interest that could affect the objectivity of this
report. Investors should consider this report as only a single factor in
making their investment decisions. This report should be read in
conjunction with important disclosure information at the following site:
http://www.piperjaffray.com/researchdisclosures .
SOURCE Piper Jaffray & Co.
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