BIA/Kelsey estimates that in 2015 the total addressable market for in-home on-demand services, including shopping time, travel and child/elder care, is 22.8 billion hours of currently unpaid household work, representing approximately 3.5 percent of total household work, according to the U.S. Census Bureau’s American Time Use Survey. Using the reported average income of “1099 workers” from several sources of approximately $17 an hour, the total market this year, if fully engaged, could be worth up to $465 billion. At the current industry standard, a 20 percent share for the on-demand marketplace operators who connect customers and contractors, on-demand companies’ revenues potentially could be worth $93 billion in 2015.

We believe 2015 actual market penetration by on-demand companies appears, based on reported and leaked revenue data from various on-demand companies, to be approximately $18.5 billion, or 3.9 percent of total addressable market. Much of that revenue is captured in transportation, particularly by Uber, which is expected to book more than $10 billion in ride revenue in 2015. Note that Uber ride revenue includes drivers’ reported 80 percent share, giving Uber total fees of approximately $2 billion this year.

In short, there is 96.1 percent of a market unclaimed and it will grow at a compound annual rate of 13.50 percent through 2030 based on projected population growth and an increase in average on-demand earnings of 2.33 percent per year over that time, from $17-an-hour to $24-an-hour.

For now, Uber represents more than half of the revenue of organized 1099 labor. Much of Uber’s revenue comes from business travel, which is not included in the home services market, but it does claim considerable personal travel in cities where it is well known. Its rapid ascent suggests that similar growth could occur in any area where people have access to ad hoc networks of people and resources. Many of the carpools, childcare arrangements, cooking and helping services provided by neighbors to neighbors will be ingested into the formal economy through LODE organizations.

The household services market
Billions have been invested in home services companies in pursuit of work currently performed in the home by household members. In-home services, such as TaskRabbit, HomeJoy and InstaCart, cannot generate revenue if their offerings are too expensive for middle class households to replace with more profitable work in or out of the home. Affluent households can add these services at will, but their adoption of on-demand services will not deliver substantial economic growth, because workers must be able to afford to do contract work while substituting for their unpaid labor at home if there is to be a thriving market for local experience and services.

BIA/Kelsey Projected Addressable Market 2015-2030: Household On-Demand Labor

The rhetoric of LODE paints a vivid picture of on-demand workers busily exchanging services, sharing burdens while doing the jobs they most enjoy — it’s a promise on-demand companies are making to their prospective contractors. For example, a car to take the kids to school cannot cost $17 an hour for a mother making $12 an hour working at another task as an on-demand worker. If LODE home service workers are expected to adopt on-demand services as well as provide them, their earnings must exceed the cost of doing their own work at home.

The U.S. economy produced $16.77 trillion in GDP during 2013, the last year for which complete data is available. However, the calculation of GDP does not include unpaid household work. If it did, U.S. GDP would be several trillion dollars higher than it is reported today. Organizing this labor to bring it into the formal economy at a reasonable price with reasonable wages is the challenge to LODE companies if they expect to profit. That cannot be done while strangling the golden goose of ad hoc skilled and low-skilled labor with lower wages. Ultimately, both unpaid household labor and the work that can be exchanged for other services are essential to the economy, it’s time we counted both.

Household labor projections, 2015 – 2030
BIA/Kelsey has developed a model for projecting the addressable revenue in the home based on the householder’s ability to pay for services that they may forego doing themselves to make time for paid work in another area of their expertise. With reasonable and rising wages, household on-demand work can add up to $3.1 trillion to the U.S. economy by 2030 simply by formalizing transactions.

The long process of recognizing the value of work that contributes to the whole economy has ignored the unpaid work performed in the home by household members, particularly mothers. During the child-raising years, women doing unpaid household work an average of 32.4 hours each week on food preparation, cleaning, laundry, household management, shopping and more than 10 hours caring directly for children or adults. Men, by contrast, average 17 hours of unpaid household work each week, 60 percent of which involves food preparation and lawn care. Many of the questions about the future of work in the face of automation and robotic replacements for human labor will revolve around how to recognize the value of human engagement. Suggestions about a “guaranteed income,” recently floated by author Martin Ford in Rise of the Robots, among others, reflect how contributions to raising productive and engaged citizens will become compensated in the future.

Our research suggests that creating markets can, if they provide genuine incentives for doing great work, catalyze organized work in a variety of niche markets that previously existed in the dark economy, the work and exchanges that are not currently accounted for in a corporate profit and loss statement. Making “1099 labor” a cost within an on-demand company’s books blesses and confirms its value in the market.

Building from the Census’ American Time Use Survey, which describes in detail the activities that Americans do to support their home’s daily needs, BIA/Kelsey estimated the total number of hours of work currently performed without pay in the following categories:

• Food & drink preparation
• Cleaning
• Laundry and sewing
• Household management
• Lawn and garden care
• Maintenance and repair
• Caring for and helping household members (including eldercare)
• Caring for and helping household children
• Grocery shopping
• Travel related to unpaid household work

All these categories contribute to the overall estimated value of the on-demand household market in 2015. In the next posting, we’ll dig into the home cleaning and laundry markets, providing total and addressable market sizes. You’ll be surprised how many billion-dollar companies could be supported, if on-demand labor is given its chance at prosperity, too.

We estimate that 18 percent of the U.S. population can conveniently access local on-demand services today, mostly in the central cores of major metropolitan areas. Based on an April 2015 report by PricewaterhouseCoopers, “The Sharing Economy,” which found that 19 percent of internet users have tried an on-demand service — which we believe overstates the share of the population that can access these services because poor and unemployed people endure much lower connectivity rates — we have high confidence that our 18 percent addressable market estimate is sound.

Additionally, we adjusted the resulting hours of addressable on-demand labor by subtracting the U6 unemployment rate, which includes underemployed and frustrated workers who are highly unlikely to purchase on-demand services, to arrive at the most conservative estimate of LODE hours worked and revenue. Interestingly, when unemployment exceeds 12 percent or wages fall below the exchange threshold at which a worker can trade one form of labor for another form of service, our model produces negative results.

Building on this model, we’ll be delivering the first of our Local On-Demand Economy Insight papers, detailing each of the categories of unpaid work that could be displaced by LODE, as well as sizing existing industries that are threatened by the on-demand approach, shortly after BIA/Kelsey NOW. Join us at the show.

The post LODE in 2015: An $18.5 Billion U.S.Market appeared first on BIA/Kelsey - Local Media Watch.

In the overall advertising mix, digital will grow to make up one third of media spend in the next 5 years, according to Ducey. Within the audio ads, digital will take a 21 percent share in the next four years. That leaves less than 80 percent of audio ad dollars for “traditional” or broadcast radio. “This will be a blessing and a challenge to broadcast radio,” said Ducey.

Much of this opportunity in digital will lie in interactive forms of audio ads. The connected car is one area Ducey cites, due to a need for hands free interaction. Xapp Media, for example, pioneers an format that prompts users to engage through voice commands (see our previous video demo). The ads will appear within the growing inventory sources of streaming apps that serve audio ads in addition to standard display.

Download the report here (free report sponsored by Xapp Media).

The post The Internet Radio Revolution Has Arrived: A Conversation with Rick Ducey appeared first on BIA/Kelsey - Local Media Watch.

It’s been a busy few days for Twitter since announcing 15 New Types of Ads to users’ feeds. Word has traveled quickly during this period of uncertainty around Twitter’s sustainability as an advertising player. Now Twitter has continued the flow of news by announcing this morning it will acquire Cover, an Android-based lock-screen app. This extends the social media giant’s mobile ambitions.

Cover is a lock screen replacement that provides users with quick access to apps based on a contextual information and user history. For example, Cover will fill the lock screen with email, Instagram, Twitter and news apps because those are the applications that are checked first in the morning. The app utilizes data it learns for prior usage and behavior to predict which applications will be used in a given moment.

Cover has yet to specify what the acquisition means for the company but Twitter’s current crop of promoted advertising products haven’t resonated with mobile game and e-commerce companies. These entities’ advertising decisions are driven by app downloads and purchases Cover may be an answer to that problem. Twitter also has been testing a mobile-app install ad product as well. It is similar to the popular Facebook product which has been successful in pulling mobile advertising revenues.

In fact, this move parallels to what Facebook has done with Home, in carving out user engagement on the home and lock screen. That effort has been somewhat anemic so far for Facebook , but Twitter clearly sees some opportunity in a parallel effort.

Cover’s post-acquisition future could involve revenue through application discovery and promotion. Twitter could leverage the app by suggesting third party apps for the right occasion that users haven’t downloaded or purchased yet. Coupled with Twitter’s geo-targeting capabilities it could suggest apps based on nearby events or or other geographically relevant tie-ins.

Twitter has always possessed some aspects of “mobile-first” (140 characters is born from carrier-dictated SMS character limit). Through last week’s new ad products and today’s acquisition, it further cements itself as mobile player. Through this, we’ll see Twitter to ratchet up the share of ad it dollars — currently 75 percent — coming from mobile

The post Twitter’s Cover Acquisition: The Continued March Towards Mobile-First appeared first on BIA/Kelsey - Local Media Watch.

It’s been a busy few days for Twitter since announcing 15 New Types of Ads to users’ feeds. Word has traveled quickly during this period of uncertainty around Twitter’s sustainability as an advertising player. Now Twitter has continued the flow of news by announcing this morning it will acquire Cover, an Android-based lock-screen app. This extends the social media giant’s mobile ambitions.

Cover is a lock screen replacement that provides users with quick access to apps based on a contextual information and user history. For example, Cover will fill the lock screen with email, Instagram, Twitter and news apps because those are the applications that are checked first in the morning. The app utilizes data it learns for prior usage and behavior to predict which applications will be used in a given moment.

Cover has yet to specify what the acquisition means for the company but Twitter’s current crop of promoted advertising products haven’t resonated with mobile game and e-commerce companies. These entities’ advertising decisions are driven by app downloads and purchases Cover may be an answer to that problem. Twitter also has been testing a mobile-app install ad product as well. It is similar to the popular Facebook product which has been successful in pulling mobile advertising revenues.

In fact, this move parallels to what Facebook has done with Home, in carving out user engagement on the home and lock screen. That effort has been somewhat anemic so far for Facebook , but Twitter clearly sees some opportunity in a parallel effort.

Cover’s post-acquisition future could involve revenue through application discovery and promotion. Twitter could leverage the app by suggesting third party apps for the right occasion that users haven’t downloaded or purchased yet. Coupled with Twitter’s geo-targeting capabilities it could suggest apps based on nearby events or or other geographically relevant tie-ins.

Twitter has always possessed some aspects of “mobile-first” (140 characters is born from carrier-dictated SMS character limit). Through last week’s new ad products and today’s acquisition, it further cements itself as mobile player. Through this, we’ll see Twitter to ratchet up the share of ad it dollars — currently 75 percent — coming from mobile

The post Twitter's Cover Acquisition: The Continued March Towards Mobile-First appeared first on BIA/Kelsey - Local Media Watch.

Continuing our progression of weekly video recaps, this week we move from monologue to dialogue. BIA/Kelsey CEO Tom Buono and I had the chance to sit down and talk about some of the notable happenings in the world of mobile and location based advertising.

The mobile predictions mentioned in the conversation are further detailed here, and more on the mobile ad forecast is here. Our National-Local conference will be in May in Atlanta (more here). See the video below and let us know if you’d like to be featured or interviewed.

The post BIA/Kelsey Video Diaries: The State of Mobile Local appeared first on BIA/Kelsey - Local Media Watch.

Mobile local advertising’s promise — besides hyper-targeted ad placement — has always been clearer ROI (enter John Wanamaker quote).  This has taken form in “beyond-the-click” activity like call tracking and mapping/navigation.

Location based data provider Placed has just taken this a step further with the launch of Placed Attribution. Using a combination of GPS and its “Insights” panels (think comScore for the offline world) it tracks mobile users’ visits to stores to which they previously had ad exposure.

We predicted Placed would go this route in a blog post last October about Placed Panels:

The outcome will be some powerful user behavior intel — in line with some of the triangulated data sets we’ve written about from the likes of JiWire. The pervasive nature of the tracking will make it that much more robust and uncover all kinds of new data.

One thing that comes to mind is tracking the effectiveness of marketing campaigns. Given that user behavior and proximity to real world locations can be measured, showing up at a store after seeing an ad now becomes a bit more transparent in the aggregate.

Today’s move was a natural one, and will be fulfilled through a natural partner: xAd. The mobile local ad network and leading ad tech provider is essentially the launch partner for Placed Attributions. The analytics will join xAd’s already robust mobile local campaign reporting.

A few examples of the data are below and in a sample report available here. We’ll take a deeper look at Placed Attributions in practice as it rolls out. Until then, it has the potential to join the “big data meets local” movement that we believe will accelerate mobile local advertising’s growth.

The post Placed Gets Closer to the “Attribution” Holy Grail appeared first on BIA/Kelsey - Local Media Watch.

As promised, here are the “day 2″ thoughts on the fate of the iPad. Obviously, lots of talk about the device this week — whether it’s a viable device, whether it’s a Kindle killer, etc. The former question is more important and the answer is yes.

The User Take

The timing is right as touch screens have assimilated into the mainstream. The “lean back” nature of the device makes it perfect for reading or watching video on the couch; the size makes it suitable for a kitchen device; and the portability + 10-hour battery make it a no brainer for travelers and commuters (there are well-covered technical limitations, but to focus on the big picture … ).

Besides form factor, the 140,000 iPhone apps compatible with the device on day 1, give it an extra boost. This is especially true for iPhone owners who have spent time and money building app libraries. The timing is also right for Apple’s content deals, as newspapers and other industries are hoping for iTunes help, a la music industry.

Will it fit? In other words, can Apple pull off a third device class between laptop and smartphone? I believe yes. We’re too early in mobile device lifespans to discount a device class. The same “in-between device” logic made against the iPad can be used to argue that the smartphone itself lies “in between” a dumb phone and an iPad-like device.

Don’t assume smartphones have “won” yet as a device category. With still relatively low penetration of mobile devices, the market can still adopt form factors on either end that do smartphones’ hybrid functions better (an ongoing debate). Pan back: Again, it’s still early and the market has made few decisive judgments.

The Advertiser Take

The other interesting angle here is advertising. Like user acclimation to mobile, advertiser demand levels have likewise risen for the many reasons we talk about here daily. The iPad gives the growing ecosystem of in-app advertising a boost by increasing usage, traffic and ad coverage — a function of inventory and screen size.

In this light, it makes Apple’s Quattro acquisition that much greater, as we speculated. Quattro will likely be positioned as the preferred ad network that is integrated with the SDK workflow for app developers. Meanwhile other major mobile ad networks have announced support for the iPad app format (same SDK with option for iPad optimization via more pixels).

Apps aside, it also makes mobile Web advertising a bit more interesting. One question is whether this will be mobile advertising, or is it the same ads you see when browsing via laptop? The answer is both: The iPad renders the “real Web” but does so through the mobile Safari Web browser.

This means that it doesn’t read Flash ads (Apple is likely awaiting broader adoption of HTML 5 among other reasons), and that certain ad networks (like Google) differentiate to a certain degree which ads are seen on mobile browsers. So it can be seen as a mobile browsing experience to a certain degree. As such, it will bring more users and inventory to the mobile web.

No One Really Knows Yet

Like the reverberation throughout the tech media and blogosphere over the past 2 days, this is mostly speculation. The market is yet to react, and the device’s true use cases and killer apps are yet to be seen. But judging by the rapid fire rollouts of the iPhone and other past Apple products, you can bet to see a lot more from this device that hasn’t even been mentioned yet.

The post More on the iPad: Will It Pop or Flop? appeared first on BIA/Kelsey - Local Media Watch.

Later this week, we’ll publish reports across BIA/Kelsey’s coverage areas that predict market trends and events of the coming year. Part of that involved looking back on past predictions to calibrate our handicapping abilities.

There was one nugget I remembered after yesterday’s announcement that Apple will buy mobile ad network Quattro Wireless for $275 million. From the July 2008 report “The iPhone Era: Mobile Local Search Gets its Due”:

…As a matter of speculation, Apple sits in an interesting spot here. Though the company has created an open system for mobile application development and access (when compared with the traditional mobile environment), it remains somewhat of a closed system (versus the Web). In other words, applications still require Apple’s approval for inclusion in the App Store.

Does this put Apple in a position of leverage with respect to its terms of agreement and its potential to be a central repository for ad buying and placement throughout its universe of applications? This would be a significant departure from its traditional model and its mission to be a consumer-driven product company. One can’t help but wonder, given this positioning, if it will opportunistically bolt an ad network onto its business model.

Of course, the acquisition was done for more reasons than those we speculated. Most notably, Quattro’s relationships with publishers and advertisers gives Apple a greater ability to monetize growing sources of in-app ad inventory … but also to appeal to more app publishers to do the same.

In this way, it could be building a publisher network akin to AdSense for Mobile, but within the walled garden of the App Store. Rumors indicate it tried to do something similar with the failed attempt to acquire Quattro competitor AdMob last quarter.

Quattro’s relationships with publishers outside the app world likewise represent a growing opportunity for Apple. This could have many other dimensions, including ad inventory/opportunities that arise from the rumored (but inevitable) Apple  tablet.

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