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

ADI_Global Display Ad CTR Growth

From my 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 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 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, 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.