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Eric Schmidt - 2011 IAB Annual Leadership Meeting

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Events like this are impossible without your support. So again, please join me in thanking the sponsors of the 2011 iab annual meeting. And now it's my honor to introduce tonight's keynote speaker Dr. Eric Schmidt. We're incredibly excited to have him here tonight to speak with us. And we will also be taking questions from the audience. Please join me in welcoming Eric to the stage. [Applause] Hi. Thank you so much. Thank you all, and this is going to be an incredible conference. I'm so glad people could come back. Let me start by thanking Randall Rothenberg for coming back. Right? Pretty good. Pretty exciting... [Applause] Helped build this, and is a good partner for all of us and we are obviously a very proud member of iab - and obviously, what you guys are doing - we are all doing togerther - makes a huge difference. Everybody here is a fan of MSNBC's "Morning Joe". Right? - Joe Scarborough. Good guy. Right? He talks of a world where computers offer a cold substitute to human contact. He says that technology is winning the battle against actual human contact. I think he's wrong. I think he's way wrong. I think in fact the inverse is true. And that we are going to a world where, humans do what humans can do best. and computers will do what they do best. What I wanna talk about is the future: Digital technology, of networks, of devices and of advertising in that context. And I'm absolutely convinced that computers make a huge positive difference in all the things that are ocurring that we talked about in the opening keynote, and you will to be hearing for the next two days, are a net win for humanity. That this will allow us to spend more time with the people we care about - 'cause it will simplify our lives. To explore new places and to make the world a better place, which I think is what life is all about. There are lots and lots of examples of this, erm... in the issues in Egypt a team from Twitter and Google put together in a weekend someting called peak2tweet. So when they shut down the Internet - always a mistake - Right? People get on the phone and get their tweets out. Right? This is the future. There's a company called [Bushidi] that I particularly like 'cause they use crowd sourcing. They use literaly information on the street of whereever they are, to figure out what's going on, and in many cases make the world a better place. It started off in Kenya , given the abuses in the kenyan election - remember that in 2008? They were heavily used in the 2010 Haiti earhquake, and now they are working in russian wildfires, floods in the Balkans, forest fires in Italy... There's a particularly interesting case where this type of crowd sourcing technology is being used in the Sudan, where actor George Clooney and a set of volunteers are monitoring what's happening in troop movements, 'cause you could imagine that what the government says, is not quite what's really happening on the ground. Right? Welcome to the new world. Where people are empowered and we find out what people are... what literary what is going on. Another example: improving our senses. uh.. an engeneer at Google built an application - he happens to be color blind - for these Android phones. Where you take...you basically look through it and it makes the color correction, so that the person who is color blind can see colors the way they should have been. Think about what that means to them. Right? This is what this technology allows. So the combination of the advent of smart phones and the development of wireless networks. Now again in the United States with the roll out of LTE 20 Megabits on this relatively unloaded networks capable of up to 50 megabits, average download speeds of 10 megabits You can have a lot of fun! Right? There's a lot of stuff that you can do. With a backend of cloud computing with the kind of computational power that we dreamed of for many many years. The important thing, is that all of us are making this possible. Through building the businesses that help pay, pay for the servers, pay for the engeneers pay for the experiences and provide tremendous sharehold of values as everybody here knows. So when I think about the next 10 years in advertising, I wanna start by talking about what are comsumers doing. Threy are spending more time online. Right? It's interesting that there's an estimate that about a third of our media tme is now online In my world, you know, it's 80%. But for the average American, it's about 1/3. I saw this is growing pretty quickly. There are also some interesting statistics. Those of you who have children. You've now live determined that there are only two stages of your child: sleeping and online. Right? From the moment they are awake they are online. So that's 16... 80 hours. Whatever it is. And they are going to be consuming digital media, doing everything that they do, which... and again, this is our future. This is our future customers, this is our future businesses, and it is going to be very very big, and it will be true of course [for a while]. Um, our current modeling indicates that within 5 years more than 50% of the media consumption will be digital. And in fact... I'm old enough to remember that when colour televisions came out everybody said: "Oh we have colour!" Well, it's going to get to the point where we don't have digital media, we just have media. And that's when we know we really won. From humble beginnings, all of us. Right? Trying to make the world a beter place. Trying to use this new technology in a new ways. We're ultimately going to be the majority of the way advertising works and the way media works. It will take a while, but it's clearly going to happen, because it's a better model for all sorts of reasons. Um.. I think everybody knows that the smart phone is a definying cultural icon - the iconic device of our time. I had predicted last year it would take two years for the smart phone to surpass PC. To show you how wrong I am. They passed the two weeks ago. So the fact that the matter is smart... and they're not gonna keep... and PCs are not gonna catch up. If you look at all of the data, that says in between tablets and mobile devices and applications: This is where people are going. I call this mobile first. The next generation of developers and partners and companies are built... they build with a mobile first approach. Build your application first for mobility, for... again these new devices, and figure out how to take advantage of the many many interesting things that you can do with a phone or a tablete like a GPS, that you know where people are. All of a sudden you can provide a better answer, a better service, and so on and so forth. Now, what people do with phones? I was looking at the Superball..right? 'Cause it's obvious that the right way to do Superball ads. Right? Is to preview view them on YouTube at a time to create buzz, Furthermore, you should have a whole bunch of them, and see which ones perform best and then put that one in your expensive 3 million dollars slot. Right? It's obvious if you think about it. Because it reduces your risk and increases your return. Mobile searches on spike, on Chrysler spiked 102 times during the game. Wheares their desktop searches only spiked 48 per cent. 48 times, excuse me. For Godaddy, of course it's a well known Superball advertiser, mobile searches increased 315 times compared to 38 times on desktops. So we know now know not only are people doing this YouTube, essentially, tested out model but they're also now beginning to see the benefits on their mobile devices first. What else would they do, they shop, right? 78% of smartphone end users now are using their phones while they're shopping. Right? And this was of course a great return for retailers, because they have all of this information. But this is the future. and everybody will adapt, because people are fundamentally better off with a better and smarter and more empowered and [...] customer. On and on and on. More than 200 million YouTube mobile playbacks per day. It's happening, and it's Happening faster. We look at the charts internally and it's happening faster than all of our predictions. Everything we talked about and certainly [not opening], and everything you're here about says, do mobile. So when I look at it from an advertizing perspective I see the union of the mobile device and advertizing in particular display advertizing, has been the thing that's going to really revolutionize us. Now the online display advertising industry is doing very well. We're all having good quarters and so forth and the investments in that tough turnaround we all went though, we've emerged! Every single person in this room has emerged stronger and more focused as a result. It's all a good news story. It's interesting that online display advertising is growing faster than the overall markets. I've got example after example, and we have more and more major brand advertisers now moving to this. Pretty much every brand advertiser of any significance now has current and coordinated campaigns across display media. Because it works. Because they can measure it. And because the technology has finally caught up with the promises that we've talked about for so long. I was looking at how big could this market be. Crude estimate $62 billion dollar business for online advertising. $26 bi in the United States that gives you a sort of sense of the scale of this. And online display advertising market $17 billion and about $9 billion in the US. When I modelled it looking at the trends using some of the assumptions that I'm sort of talking about. I concluded that the overall display advertising business can be a two hundred billion dollar business convoy. That gives you a sense of the scale and the market we're all working into. There will be many many winners. We'll be one of them but there will be many others. There are lots of ways of playing this. Lots of ways of adding value. As you focus on that value-added advertising the customer, which is fundamentally about solving the problem they have, which is learning about a product and deciding to buy. You solve that problem, you solve the advertiser problem and you solve the publisher problem. And that's again the secret of our approach as I'll take you through. Now from our perspective this all happened... We started with our acquisition of DoubleClick a few years ago, which turned out to be a very very fortunate acquisition. We had a YouTube, of course Invite Media, Teracent, AdMob, other technology companies as well as a lot of stuff that [we've gone for sales]. And we were doing very very well. We had more than two million publisher partners, and our ad exchange revenues is growing many hundreds of times. So all of a sudden now we hit that sweet spot, we figured out the tools and the technology that people need. And what's interesting is, when I look at it. What's it going to take to go from our current sort of couple decades, on the order of 10 billion, 20 billion kind of display [?] around, around all these companies that are represented in the room. How do we get to a 200 billion dollar number?

Video Details

Duration: 41 minutes and 22 seconds
Country: United States
Language: English
Genre: None
Views: 68
Posted by: aviatorone on Mar 10, 2011

Eric Schmidt speaks at the IAB Annual Leadership Meeting in Palm Springs, Calif. on February 27, 2011.

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