Unhappy With Google’s Mobilegeddon, Advertisers Spend More On Facebook

ADI_Global Display Ad CTR Growth

From my Forbes.com blog The New Persuaders:

When Google changed its formula for showing search results in April to favor websites it deems mobile-friendly, some businesses worried their sites would disappear from results. Mobilegeddon, as the algorithm change came to be called, was intended at least in part to spur publishers to quit sending people to sites that looked terrible or were downright unreadable on the smartphones where people spend more and more of their time online.

Perhaps that will happen eventually, but for now, according to a new report out today from Adobe, the change has indeed hurt brands that weren’t prepared. The Adobe Digital Index‘s second-quarter report on digital ads and social intelligence, which measures nearly a billion online ad impressions and 21 billion referred social visits from Facebook, Twitter, YouTube, and other social sites, shows that unprepared websites have lost 10% of their traffic compared with a year ago. And that decline is continuing to grow, says Adobe Digital Index principal analyst Tamara Gaffney.

Google has benefited, at least in the short term. Many marketers and ad agencies believe one clear goal was to boost mobile ad prices, which have continually lagged those of desktop computer ads. Indeed, prices measured as cost per click rose 16% from a year ago, according to Adobe.

But for marketers, the benefit is far less clear. Click-through rates on ads have fallen 9% from a year ago. “The bottom line is Google’s mobile business got better and marketers’ mobile business is getting worse,” says Gaffney. “They’re not getting the traffic they’re paying for.”

That situation obviously can’t last. …

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Why Most People Won’t Pay To Block Mobile Ads

From my Forbes.com blog The New Persuaders:

There’s no shortage of people who claim they’d pay extra to avoid having to view ads on their favorite site, or anywhere on the Internet. One even took the trouble to suggest how it might work in a recent opinion piece in the New York Times.

But as a new survey shows, it’s very unlikely the vast majority of people would be willing to shoulder the real cost of replacing the ad revenues that would be lost–revenues required to keep Facebook, Google, the New York Times, and most other commercial sites running. According to the survey by the Palo Alto-based mobile ad marketing firm AppLovin, two-thirds of respondents aren’t willing to pay any extra at all for the privilege of wiping ads from their iPhones and Androids.

The survey, conducted last month, used Google Consumer Surveys to ask 5,000 U.S. residents between 18 and 65 how much extra they’d be willing to pay on top of their phone bill to remove ads. Besides those who wouldn’t pay a dime, some 14.5% said they’d pay an extra $2 a month, but those who would pay $5, $10, $15, or $20 extra each fall into the single digit percentages.

Clearly there is some demand for paid ad blocking. Problem is, the amount even those few are willing to pay doesn’t come close to making up the revenue difference, at least by AppLovin’s reckoning. …

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Google Wants To Own Your Mobile Moments


From my Forbes.com blog The New Persuaders:

For a few months now, Google has been pushing a new vision of advertising in the mobile age: Advertisers, it says, must capture the “micro-moments” when peripatetic consumers land on an app, a video, a website or anywhere else.

That’s increasingly important because despite today’s mobile first” mantra among tech companies and publishers alike, the fact remains that people use all kinds of devices throughout the day to find what they’re looking for online–their phone, their tablet, a laptop, a desktop computer, even an Internet-connected TV. What’s more, these people are often open to commercial messages for only short periods of time in just the right context: the age-old right-place, right-time, right-message but faster and more fleeting than ever.

And so Internet publishers and their advertisers need to reach not just faceless audiences but actual people, or at least detailed profiles attached semi-anonymously to real people. This “people-based marketing” is something Facebook has made huge coin on, and even companies such as Google are playing catch-up.

So today, Google is aiming to close some gaps in its powerful but (in the mobile age) rather less dominant advertising system. …

Read the rest of the story and interview with Google display and video ads VP Neal Mohan.

Verizon’s Risky Bet on AOL’s Ad Business

From my story in MIT Technology Review:

In announcing plans to buy AOL for $4.4 billion, Verizon is betting that it can lead the future of television as it explodes from the living room to computers, smartphones, and tablets. But at least in the near term, it faces plenty of headwinds.

The deal, rumored earlier this year, catapults the largest provider of wireless Internet service into the media and advertising technology businesses, in direct competition with companies such as Google and Facebook. Already in the television business with its FIOS cable TV alternative, Verizon now has the potential to help advertisers reach specific audiences viewing online video and TV–still by far the most lucrative ad medium–on any screen. That’s something no other company has yet managed to do.

Although AOL is still known first for its declining but profitable dial-up Internet access business and second for owning prominent sites such as Huffington Post and TechCrunch, its growth is now driven chiefly by enabling the sale of ads–especially video ads–on other sites. The deal, expected to close this summer, would end AOL’s rocky history as an independent company, which began in the 1980s with its pioneering Internet access service and peaked in 2000 when it acquired Time Warner for $164 billion–later seen as one of the most disastrous mergers in corporate history.

Since then, the company has struggled to regain relevance. Under CEO and former Google executive Tim Armstrong for the past six years, it has attempted to build a media business; more recently, via acquisitions such as the 2013 purchase of video ad exchange Adap.tv, it has been cobbling together technologies to automate the sale of video advertising on other sites.

That ad tech business, whose revenues rose 19 percent in the first quarter, is probably what attracted Verizon more than AOL’s media business, which grew only 8 percent. Chairman and CEO Lowell McAdam said his company has been investing in advertising technologies that can reach consumers on any screen, from smartphones to computers to TVs. In fact, it’s expected to launch a service this summer that would bundle TV and video content into a cable TV alternative. …

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Yahoo Woos Mobile App Developers In Hopes Of Boosting Ad Business

Yahoo CEO Marissa Mayer

Yahoo CEO Marissa Mayer

From my Forbes blog:

Yahoo wants app developers to know it really, really likes them. But even if they return the affection, will that be enough to turn the company around?

Today, at its Mobile Developer Conference in San Francisco, the Internet company rolled out a suite of new products and services aimed at helping mobile app developers make money. It’s the latest and most aggressive move in a two-year effort to prove that it has fully joined the mobile revolution.

More than 1,000 mobile app developers gathered to hear how the still struggling Internet company plans to help them acquire, analyze and make money from users through advertising, app purchases, and other means. Yahoo billed the conference as the first annual, but it’s an outgrowth of an annual conference held for years the mobile analytics and ad network Flurry, which Yahoo bought last year. That was clear when Flurry CEO Simon Khalaf got somewhat more enthusiastic cheers from the audience than Mayer when he was introduced.

Yahoo offers the software tools–including a way for apps to embed in their software Yahoo search, video and so-called native ads that match the context where they’re running, as well as a new analytics dashboard from Flurry–for free. In return, it hopes the apps, 630,000 of which use Flurry’s software, will run its ads, for which they get 60% of the revenues. Yahoo hopes that will vastly expand the places its ads run, especially on mobile devices where people increasingly spend most of their time and, increasingly, money online. That in turn could make Yahoo more attractive to advertisers. …

Read more details in the full post.

The One Missing Ingredient In Facebook’s All-Out Drive For TV Ad Dollars

From my Forbes blog:

Beyond plans to spend like crazy on everything from search to virtual reality, Facebook gave investors little to complain about in its fourth-quarter results reported Jan. 28. Ad revenues jumped a stunning 53%, and they would have been five points higher but for currency fluctuations. Mobile ads rose to 69% of those revenues, up from 53% a year ago, a sure sign of the company’s progress in making advertising on phones and tablets compelling. Annual revenues blew past $10 billion for the first time.

But investors pay for future profits, so it’s important to step back a bit and assess how well Facebook is positioned vs. an always-growing pack of rivals–Snapchat, Pinterest, Google and YouTube, Twitter, and yes, even Yahoo. In particular, it’s not yet clear that Facebook has cracked the opportunity for brand advertising, the kind of image ads that dominate television, where most advertising dollars are still spent.

What’s the problem? One ad agency executive I talked to has an idea, and it involves not only advertising but the reality of Facebook’s core service, its news feed. The issue, says Craig Elimeliah, senior vice president and director of creative technology at RAPP, is that Facebook has saturated its most lucrative audience, the U.S. and to some extent Europe. There’s the rest of the world, but CEO Mark Zuckerberg says the Internet.org effort to get them online is one of Facebook’s 10-year projects, not three to five years.

To keep growing–not just audience but time spent on the site, which leads to revenues–Facebook must give people more reasons to use it than they have, Elimeliah says. While Facebook has frequently changed up the look and the algorithms of the news feed, we’re still doing basically the same things on it that we have for years: watching a bunch of cat videos, fake news stories from the Onion, and photos from friends. Nothing wrong with all that, but it’s pretty passive, especially for a social network in the hyperconnected age of Snapchat.

“They really haven’t evolved the engagement on the platform much,” says Elimeliah. “There’s a lot of noise and clutter.” He thinks the rise of Snapchat shows how young people want closer, more immediate interactions with friends, and advertising that works in that context. Indeed, Elimeliah says he’s “blown away” by Snapchat Discover, its just-announced content and advertising service (check out the video below). The “low-friction” experience is already getting kudos from media types. “It blows Facebook out of the water from an engagement standpoint,” he says, because it fits so well into the intimate and yes, ephemeral Snapchat service.

Facebook needs to make sure it provides the right context for those ads–a place where ads not only seem natural but play in a context that isn’t quite as noisy and distracting as the current news feed. Video ads also seem unlikely to be effective unless they are made to be consumed on the go and provide actionable information–so they can’t be simply downsized TV spots. “I don’t know if the Facebook platform can make that kind of change,” Elimeliah says. …

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The One-Second Rule: New Viewability Metric Exposes How Low Online Advertising Standards Still Are

From my Forbes blog:

Who could argue with the notion that advertisers shouldn’t be charged for an ad unless someone actually views it?

That’s the logic behind today’s announcement of the blessing by an ad industry group of a new standard for viewable ad impressions. The Media Rating Council, which had been studying how to ensure consistent measurement of viewable impressions, today lifted a moratorium it had placed on the metric way back in November 2012 while it examined how to ensure the many ratings firms out there could come up with similar metrics using their various methods of calculating viewability.

The move does make sense, especially for the brand advertisers that have been keeping most of their budgets in television to date. It’s now widely known that at least a third and maybe more than half of online ads are never seen for a variety of reasons, from the ad appearing off the visible part of a screen to outright fraud, such as embedding an ad behind a pixel so it can’t be viewed but gets counted as an “impression.”

That couldn’t last, though it sure lasted many years longer than it should have. The new standard suggests that online ads can be credibly included on the same ad buyer spreadsheet as TV ads. “Practically speaking, it means that—as of today—for brand advertising, agencies can and will expect guarantees on viewable display impressions, with video to come soon after,” Sherrill Mane, senior VP of research, analytics and measurement at the online ad industry trade group IAB, said in a blog post. “This means that one of the major obstacles to being included in brand allocations has finally been removed.”

What’s still absurd about the situation is the appallingly low standard for viewability. …

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