How Did I Do On My 2012 Predictions?

2012: The Year Ahead

Photo: Mike Licht, NotionsCapital.com

From my Forbes.com blog The New Persuaders:

It’s that time of year: time to reflect on the past year, time to get wasted and watch a glass ball smash into the ground, time for people like me who foolishly offered predictions for the past year to face the music. So here’s how I did on my 2012 predictions:

* Facebook goes public, but won’t start an IPO landslide: Bingo! Indeed, Facebook’s ill-received IPO led to a months-long drought in IPOs as investors realized they were not a sure route to riches. The situation may be improving, but mostly for enterprise more than consumer companies.

* Facebook’s ad business booms–but not at Google’s expense: Bingo! While Facebook’s revenues slowed even before its IPO as it continued to experiment with new ad formats and scrambled to provide mobile ad units, ad revenues have since accelerated, up 36% in the third quarter over last year. At the same time, while Google’s revenue growth disappointed investors in the third quarter, it was mostly thanks to the impact of its Motorola acquisition, not a shortfall in its core ad business.

* Image ads finally find a home on the Web: Half-right. YouTube proved there’s a real market for TV-like video ads if you give viewers the choice to view them or not, as its revenues were expected to hit $3.6 billion in 2012, according to Citibank. But Facebook’s struggles to attract brand advertising despite a TV-scale audience, while partially successful, show that no one has yet come up with brand ad formats that work consistently and at large scale online. Or at least brands, which still spend most of their money on TV ads, don’t believe it yet. And they write the checks.

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Peering Over Fiscal Cliff, Marketers Cut Global Ad Spending

adrevsFrom my Forbes.com blog The New Persuaders:

Global ad spending is slowing down, prompting a prominent market researcher to cut its estimate of growth this year. eMarketer says ad revenues worldwide will rise 5.4% this year, to $519 billion, down from its 6.8% growth estimate seven months ago.

The culprit, not surprisingly: worries about the economy. No doubt the last couple of months of concern over the U.S. going over the fiscal cliff, thereby potentially triggering a recession, has marketers spooked about committing too much when it looks like consumer spending could follow national finances off the cliff.

That 5.4% increase is still a big improvement over 2011’s 3.6% growth, though partly thanks to the Olympics and the election. And eMarketer, whose forecasts are based on analysis of economic conditions and other researchers’ estimates, reckons growth will be fairly steady at about 5% through 2016.

What’s more, online ad spending, not specifically addressed in this report, is expected to grow much faster. In particular, mobile ad spending, while still relatively small, will grow like crazy–nearly tripling this year, to $4 billion in the U.S. thanks to surging “native” ads from Facebook and Twitter.

But slower-than-expected ad spending could have ripple effects on a wide swath of companies depending on a strong advertising market, from Google and Facebook to hundreds of startups.

And it gets even worse for the many companies chiefly dependent on ad spending in North America, the world’s biggest market. Here, eMarketer expects growth of 4.9% this year, dropping precipitously to 3.5% next year and bumping up and down around that rate for several more years.

Propping up growth are surging ad markets in China, India, Indonesia, South America, and even Russia.

Calling Dick Tracy: Will Apple Really Launch An iWatch? Very Doubtful

dicktracyFrom my Forbes.com blog The New Persuaders:

Even in a holiday week, the Apple rumors continue–and today, it’s that the company may produce a smart watch in the first half of next year.

Yes, another techie watch, the bane of the technology industry nearly since the dawn of the microchip. Here’s why I’m not betting on seeing an iWatch anytime soon:

* We all already carry a watch. It’s called a cell phone. And in case you hadn’t noticed, it can tell you the time–more reliably than you can make a call on it, in fact.

* Even Apple would have trouble making a watch with a screen look fashionable enough to wear all the time. Seriously, half the population will never wear anything like this, and I’m betting that even most of the male half would look askance.

* Anything with a screen that would fit on your wrist is too small to do the vast majority of stuff you can do on a smartphone. Don’t even think about anything resembling a keyboard, and Siri isn’t nearly there when it comes to voice commands for a wide variety of applications. The screen also would be too small to run ads on, which, come to think of it, might be a plus for Apple as a way to stick it to Google.

* Apple supposedly isn’t designing this thing. According to the report, Intel would design the watch and Apple would produce it. Sorry, no. Only in the Bizarro universe would this kind of thing happen.

All this is not to say that Apple won’t move into wearable computing at some point. …

Read the rest of the post at The New Persuaders.

Going Native: Disqus Says Promoted Discovery Ads Getting Traction

disqusadFrom my Forbes.com blog The New Persuaders:

Any blogger or media site knows there can be a lot of garbage in the comments on their posts and stories. Now, there’s a little gold in them, too.

A couple of months after quietly rolling out an ad system to select advertisers and publishers, commenting service Disqus is revealing a bit about the initial results. The ads build upon an article discovery feature Disqus introduced over the summer, a box below the comments that provides links to related articles either on the site or elsewhere on the Web. Disqus, which claims 75% market share among independent commenting systems such as those from Facebook and Livefyre, says 900 million unique visitors a month view 6 billion pages monthly on 2 million websites.

Promoted Discovery units are a way for publishers and advertisers (which also may be other publishers) to buy links that will send traffic their way. They barely look like ads, but that’s the point of so-called native monetization, also employed in Facebook’s Sponsored Stories and Twitter’s Promoted Tweets: They seek to avoid disrupting the flow of what people are doing, especially in a social setting–or, if you’re a cynic, they seek to conceal the fact that they’re ads. Either way, though, they often get more clicks and other engagement. …

Read the complete post at The New Persuaders.

 

Instagram Backs Off New Photo Policy–But Here’s How It Might Really Make Money

Image representing Kevin Systrom as depicted i...

Instagram cofounder Kevin Systrom (Image: CrunchBase)

From my Forbes.com blog The New Persuaders:

Not surprisingly, the Facebook-owned mobile photo-posting service Instagram has backed off the language in its new privacy and terms of service policies that set off a firestorm online. The worry was that people’s Instagram photos could be sold without users getting compensated (never really true) or could be used in ads (which did certainly look likely).

Apparently, neither will be the case, at least for now. Instagram cofounder Kevin Systrom just posted on the company’s blog under the title “Thank you, and we’re listening”:

I’m writing this today to let you know we’re listening and to commit to you that we will be doing more to answer your questions, fix any mistakes, and eliminate the confusion. As we review your feedback and stories in the press, we’re going to modify specific parts of the terms to make it more clear what will happen with your photos.

Legal documents are easy to misinterpret. So I’d like to address specific concerns we’ve heard from everyone:

Advertising on Instagram From the start, Instagram was created to become a business. Advertising is one of many ways that Instagram can become a self-sustaining business, but not the only one. Our intention in updating the terms was to communicate that we’d like to experiment with innovative advertising that feels appropriate on Instagram. Instead it was interpreted by many that we were going to sell your photos to others without any compensation. This is not true and it is our mistake that this language is confusing. To be clear: it is not our intention to sell your photos. We are working on updated language in the terms to make sure this is clear.

Systrom then provides clues to how Instagram might really make money from advertising on the site:

To provide context, we envision a future where both users and brands alike may promote their photos & accounts to increase engagement and to build a more meaningful following. Let’s say a business wanted to promote their account to gain more followers and Instagram was able to feature them in some way. In order to help make a more relevant and useful promotion, it would be helpful to see which of the people you follow also follow this business. In this way, some of the data you produce — like the actions you take (eg, following the account) and your profile photo — might show up if you are following this business.

The language we proposed also raised question about whether your photos can be part of an advertisement. We do not have plans for anything like this and because of that we’re going to remove the language that raised the question. Our main goal is to avoid things likes advertising banners you see in other apps that would hurt the Instagram user experience. Instead, we want to create meaningful ways to help you discover new and interesting accounts and content while building a self-sustaining business at the same time.

So it seems that whatever advertising Instagram does, it will be quite a bit like Facebook’s Sponsored Stories, or even precisely like them. Although that won’t comfort people who don’t like the possibility that their actions can become an ad, they’re already subject to those terms if they use Facebook.

I wouldn’t be surprised to see Instagram follow Facebook’s well-worn playbook, which calls for the company to push the envelope, then back off a bit, rinse, repeat. But for now, pending future changes, your cute cat photos are safe from becoming ads for your local pet salon.

Google Cuts ‘Fat Finger’ Accidental Clicks On Mobile Ads

gmobileadFrom my Forbes.com blog The New Persuaders:

Advertisers have long known about a problem with mobile ads: fat fingers.

That is, people accidentally click an ad on those little smartphone screens thanks to clumsy digits (or purposely big or hard-to-avoid ads). Realizing their mistake, they back up instantly, but the advertiser gets charged while getting only a wisp of attention from a consumer they probably didn’t want to reach anyway. Today, Google is introducing a tweak to in-app image ads that should reduce those unintentional clicks considerably.

It’s a big issue. Recent studies indicate that up to about 40% of mobile ad clicks are accidental or even fraudulent, based on the fact that people “view” the ad two seconds or less. The result, of course, is not only that advertisers get charged even though consumers had no interest in the ad, but that they obviously aren’t going to end up buying the product or service.

This may be one reason advertisers pay much less per impression for mobile ads. And that’s a problem that has investors concerned about every company from Google and Facebook to a raft of mobile and app startups, as more and more online activity moves from stationary computers to smartphones and tablets.

Google found most of the accidental clicks on app image ads happened at the outer edges of the ad, no doubt because people were trying to scroll up or click on adjacent content. So now, Google has added a prompt to “Visit site” whenever people click on the outskirts of the ad. It’s an extra click, but it also ensures that’s really what the person wanted to do. …

Read the rest of the post at The New Persuaders.

Here Are The Top 20 Ads You Actually Chose To Watch On YouTube This Year

From my Forbes.com blog The New Persuaders:

 

A big reason YouTube has been on a roll lately, due to hit $3.6 billion in gross sales this year, is its TrueView ads that advertisers pay for only if people view them at least 30 seconds. At least 65% of ads inside videos use this format now.

So what did people choose to watch this year? YouTube this morning revealed the top 20 most popular ads of 2012. The YouTube Ads Leaderboard was chosen based on what the Google video unit thinks are the most potent signals of viewer choice – the ad’s number of views, how much of it people chose to watch, and the percentage of non-ad views, with all of the ads here eliciting at least as many “organic” views as paid.

What’s most striking about the ads, which range from repurposed TV ads to spots created just for YouTube, is the popularity of the longer-form commercials. Many of the top ads are five minutes long or more.

The message: Create an ad that’s good enough, and the supposed short attention span of online viewers vanishes.

Here’s the complete list, with links for easy viewing:

1. Nike “My Time Is Now
13. Old Spice “Old Spice | Blown Mind
14. Old Spice “Old Spice | Bounce
19. Old Spice “Old Spice | Bed
20. Old Spice “Old Spice | Vending Machine
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