Second Screen market growth evidence: 53m Tablets ship, Twitter wins the Super Bowl and buys BlueFin

So Twitter "won the Super Bowl", bought BlueFin and last Friday we heard that 53m tablets shipped worldwide in Q4 of 2012.  So what?

When a bird breaks through its shell to be born, the world shouts its a market "revolution", but the tiny bird itself has been making progress steadily for a long while--more of a "rapid evolution" with one very publicly acknowledged milestone.


Let's pretend for a moment you believe our research that estimates the current second screen companion experience consumer revenue at $490m in 2012.  Keep in mind this is made up of m-commerce (including Amazon/eBay but also content syndication -- content people purchase like MLB's data-only feed for companion screen experiences) and advertising (the current global mobile/on-line video advertising market is $6B, the current TV advertising market is $200B).

So if you believe that figure, you say to yourself that "it must be being captured by existing large players (CBS, Twitter, MLB) in the market as clearly my company is not getting a huge share of that" (CBS, for example sold $10-12m of second screen advertising in the Super Bowl).

But then you start asking yourself if you believe the market will grow to $5.9B by 2017, and ask yourself if can you find a way to take a share of that market.  If you believe you can, then you will be constantly asking yourself for evidence that the second screen market is moving on that kind of growth trajectory--because if you want for the egg shell to break, it is already too late to invest.

Evidence from the last 3 days:

• Twitter won the Super Bowl.  As discussed in many articles and podcasts yesterday, Twitter was in 26 of 52 nationally televised commercials from kick-off to game ending.  Facebook was mentioned 4 times and Google+ mentioned none.  Why is this significant evidence?  Before you can believe advertising revenue can transition from CPMs (cost per 1000 impressions/views) to CPCs (cost per click or action) you have to first get believe the individual consumer will participate.  Advertisers clearly believe that Social TV, an important component of the second screen experience, is valuable enough to push its message to that platform.  More importantly, it is instantly measurable.  Oreo was smart enough to Tweet "You can still dunk in the dark." during the blackout and while 15,000 retweets are not as valuable at the 100m people reached during their commercial, having their brand be relevant and engaging in real-time with consumers might be.  So the evidence is not only that consumers are grabbing their smartphones and Tweeting during the game, but that advertisers want to engage them in that manner because its engagement is very measurable.
• Twitter bought BlueFin.  Remember the web in the late 1990s?  Many of us sat around pondering the future of banner ads as click-thru ratios dropped from the 90% to 0.5% (where it sits today).  I remember arguing that it was non-sensical for a marketing manager to move advertising dollars from print, radio and TV to the web.  But then AdSense came along (whom Google wisely purchased), and it provided perhaps the most important catalyst to the growth of the online advertising market--measurable results.  So in the first year, most marketing managers experimented and threw 1-2% of their budget "online".  But as they measured the results, they could quickly and scientifically understand the cost of customer acquisition through various channels, only paying when someone was delivered to their store front.  Keeping that in context with the first paragraph above, and you can see Twitter clearly believes they can accelerate the pace of investment from TV advertisers into some form of enhanced second screen or social TV-based experiences by giving them the tools to measure the results.  Ask yourself the question again at the end of the first paragraph above?  What is more valuable, 15k engaged retweets (in theory, from 15k social influencers) or 100m "impressions"?  I guarantee BlueFin has a well-educated opinion on that question.

• 52.5m tablets shipped globally in Q4 2012.  Keep in mind that at least in the forecast presented from the Second Screen Society and the intersection, we don't believe that some amazing consumer experience, some super ad-syncing technology, or some massively developed user base will be the catalyst to the growth of the market from $490m to $5.9B in 5 years (while I am sure some of that will come to pass and be helpful).  We believe that it is the proliferation of tablets and smartphones and the consumer's apparent natural tendency to drift to them during lulls in programming that create the behavioral shift towards second screen companion experiences.  But as intended consequences or not, we are rapidly approaching a day where just about every consumer with cash in their wallet will have a personal second screen device that they are using to engage in and around the first screen (in-sync with programming or not)--and that will drive advertisers and retailers to focus their efforts more and more to driving measure revenue opportunities in the second screen space.

Interested in discussing this live?  We're at AppsWorld this Friday (February 8th) and are hosting dedicated conferences in Beverly Hills on February 26th and in Las Vegas for NAB's "2nd Screen Sunday" on April 6th.  www.2ndscreensummit.com  

@ChuckParkerTech

@S32Day