As Mobile Video Ads Soar At Facebook, Big Brands Pile In

Facebook CEO Mark Zuckerberg

Facebook CEO Mark Zuckerberg

From my Forbes blog:

Facebook’s second-quarter results today didn’t thrill investors, who knocked shares down more than 3% in after-hours trading. They don’t like to hear about an 82% jump in expenses to get revenue growth of half that much–even less so when Mark Zuckerberg, CEO and founder of the social network, says that spending won’t slow down much anytime soon.

But advertisers were a different story–in particular, big brand advertisers like Procter & Gamble and Under Armour that are looking to reach people via the mobile devices they carry with them all the time. Mobile ad revenues shot up 74% from a year ago, considerably faster than ads overall, which rose 55% after taking out currency impacts, and it’s now 76% of ad revenue.

In particular, Facebook is starting to become a must-buy for big brands that still spend the most on television, because it has the reach and the impact they want. Now, according to ad agency executives, they think Facebook is finally poised to capture more TV ad dollars that Chief Operating Officer Sheryl Sandberg has spent years pursuing.

“We see Facebook at a core pivot point,” says David Hewitt, VP and mobile lead at the digital agency SapientNitro. “It’s now a safe bet to put a lot of money into.”

In the last six to eight months, he says, brands have started to understand the reach Facebook has among smartphone users–some 844 million people each day. “It’s hard to get reach on mobile,” he says, but now “Facebook checks that box” in a way that few others online besides Google can. …

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Have Scammers Hijacked Your Phone For Mobile Ad Fraud?

From my Forbes blog:

For years, scammers have been hijacking people’s computers into so-called botnets, opening hidden browser windows and automatically clicking on ads. That’s fooling advertisers and their ad agencies into thinking real people saw their ads, costing them billions of dollars a year in wasted spending.

Now, the fraudsters have started moving to mobile phones. Using a technique that one ad fraud detection company calls mobile device hijacking, the scammers use mobile apps such as games that run as many as 20 ads a minute, then simulate random clicks. Forensiq, a New York firm that provides ad fraud detection and prevention, today is releasing one of the first studies to look at the relatively new technique.

Already, the company says, more than 12 million devices have been infected–about 1% of devices Forensiq observed in the U.S. and 2% to 3% in Europe and Asia. Forensiq figures that the hijacking affects some 13% of all in-app advertising impressions.

The cost to advertisers is adding up quickly, Forensiq founder and CEO David Sendroff said in an interview. He projects that in-app ad fraud, which the company estimated at $857 million last year, will pass $1 billion worldwide this year.

Users generally don’t see any of this happening on their phone, at least not directly. But the apps–some 5,000 identified by Forensiq–still can be a plague on their phones. Forensiq found that in as little as an hour, a malicious app can download two gigabytes of images and videos, draining battery life and potentially burning through data limits. …

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The Real Star Of Google’s Second Quarter Was YouTube

From my Forbes.com blog The New Persuaders:

Sure, Google’s search revenues looked pretty good in the second quarter reported today–especially on mobile devices. And the company managed to reduce expense growth enough to improve profits more than expected. The result: Shares shot up in extended trading after today’s close by nearly 12%.

But the real star of the quarter–and more importantly, Google made clear, its future–is YouTube. The search giant took pains to mention the reality and the potential of its video site multiple times, along with some key metrics that are, as they say, up and to the right:

* More than 1 billion people, almost a third of the Internet population, are collectively watching hundreds of millions of hours of video a day on YouTube, and average watch time rose 60% from a year ago, to its highest level in two years.

* The number of advertisers on YouTube is up 40% from a year ago.

* The average spending of the top 100 advertisers on YouTube is up more than 60% from a year ago.

* Revenues from ads bought through Google Preferred, which allows advertisers to buy space on top YouTube channels, tripled from a year ago.

Google executives have been saying for years that YouTube, which to many young people is television, will start stealing ad dollars from what is still the most lucrative advertising medium. Now, it seems to be implying that is finally starting to happen–or at the very least, that it’s on the cusp at long last. …

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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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3-D Imaging Firm Matterport Raises $30 Million For Mobile Push

From my Forbes.com blog The New Persuaders:

As virtual reality headsets such as Samsung Gear, Google’s Cardboard, and hotly anticipated devices from Magic Leap and Facebook’s Oculus Rift have gotten big press lately, one question is what we’ll actually do on these things besides play even cooler games.

Matterport, which last year started selling a $4,500 3-D scanning camera currently aimed mainly at real estate firms that want to provide a more immersive experience for potential buyers, hopes to enable a lot more applications to be created more easily. Today, the Mountain View-based company announced it has raised a $30 million Series C funding round led by Qualcomm Ventures to build out that vision.

The company plans to use the money in part to develop software to make it possible for almost anyone to capture 3-D content using future tablets and smartphones that incorporate 3-D sensors. In particular, CEO Bill Brown said in an interview, “We want to make it very easy for third-party apps to create and use this type of content.” Today, Matterport began accepting applications to its developer program.

As much buzz as Magic Leap, Oculus, and other VR devices have gotten, compelling content and apps will be key to making them the mass-market product that their makers keep insisting they will be. As Ben Miller, director of content development at WEVR, a VR studio in Venice, Calif., put it recently, there is no killer app for VR yet.

Matterport has found one that, if it isn’t a killer, is at least promising: real estate. …

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Google Wants To Own Your Mobile Moments

googmoments

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.