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.

About these ads

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

The Mythical iTV: Steve Jobs’ Marketing Magic Is Still Alive And Well At Apple

From my Forbes.com blog The New Persuaders:

Image representing Steve Jobs as depicted in C...

Image via CrunchBase

Another day, another rumor that an Apple television may be coming.

Another recycled rumor, in fact. The Wall Street Journal reported this morning that China’s Foxconn, a major Apple supplier, is helping Apple test some prototypes for a large-screen television set. That follows similar (OK, identical) rumors a couple of days ago, last August, last May, and last December saying that Apple was enlisting Chinese suppliers to create an Apple TV set.

No surprise here, given that Apple CEO Tim Cook managed to stoke the fires of speculation last week by saying the company has “intense interest” in television. Of course, Cook himself said the very same thing last May, too.

So don’t hold your breath for an Apple TV that goes beyond the current Apple TV hockey puck. Even longtime Apple television forecaster Gene Munster at Piper Jaffray now says it won’t come before next November. And even then, it’s debatable how important a product it will be, since it’s widely assumed that Apple can’t add much to the current TV experience without deals to get access to live TV shows, or at least win the right to revamp the TV user interface to encompass the full range of pay-TV and Internet content available today. And those deals are nowhere in sight just yet.

But the new flurries of interest in the mythical machine point up something that should reassure Apple investors, at least: Apple cofounder Steve Jobs’ famous marketing magic is still at work at the company more than a year after his death.

Some investors have been worried about whether Cook, by all accounts an ace operations guy but not a showman like Jobs (as no one else really is, honestly), can keep Apple’s brand as blindingly shiny as it has been for so many years now. It’s time to give Cook credit for faithfully following Jobs’ playbook: Let fans wax on about how desirable a new Apple product will be, building demand to a fever pitch so that whatever comes out is guaranteed to get unparalleled attention. Indeed, a recent survey says they’re already willing to pay considerably more for an Apple TV–whatever it turns out to be.

No, Cook doesn’t yet deserve to be considered a master marketer like Jobs. But he’s off to a pretty good start.

Here’s A New Way You’ll Soon Get Targeted For Ads: Your Hashtags

Screen shot 2012-12-11 at 8.17.52 PMFrom my Forbes.com blog The New Persuaders:

Facebook has Sponsored Stories. Twitter has Promoted Tweets. Buzzfeed has Promoted Posts. They’re all based on social gestures and activities, each targeted to people, whether friends or birds of a feather, who might share similar interests. Now, a company has come up with a new way of targeting people using one of the most common social gestures of our time: the hashtag.

If you’re bothering to read this, you probably already know hashtags are those short subject labels, starting with a # or hash sign, that describe the topic a tweet or other shared item is about. They didn’t start with Twitter, but they became popular thanks to their common use in tweets. That use has spread to other social networks, from Pinterest to Instagram (though not very often on Facebook, for some reason).

Today, social ad firm RadiumOne announced it’s making hashtag targeting available to advertisers so they can reach like-minded consumers in real-time across the Web based on the hashtags they’re using. So, for example, says RadiumOne founder and CEO Gurbaksh Chahal, Nike can reach consumers who use the hashtag #nike, or #olympics, or #fitness with ads for running shoes. Or McDonald’s could target people who tag their tweet or Instagram photo #burgers or even #hungry. …

Read the complete post at The New Persuaders.

 

Here’s Why Facebook Likes Microsoft’s Atlas Ad Server

fbthumbsupFrom my Forbes.com blog The New Persuaders:

After spending years trying to dump its Atlas online ad-serving business, Microsoft reportedly is in talks with Facebook to sell the unit that helps advertisers and ad agencies place ads on websites and track their impact.

The news comes five months after Microsoft wrote down nearly the entire value of its $6.3 billion acquisition of aQuantive, of which Atlas was a part. Following its recent move to de-emphasize its own ad tech, Microsoft has been shopping the unit around, most recently to AppNexus. Business Insider reports that before Facebook talks began, the highest bid Atlas got was $30 million.

There’s no guarantee the deal will happen. But why is Facebook interested? Some speculate that it’s a way for Facebook to close the final technology gap on a plan for an ad network, similar to Google’s AdSense, that would place Facebook ads on other websites. Could be. But I tend to agree with one AppNexus Senior VP that there’s an even bigger goal that goes along with that: proving Facebook ads work.

That has been the No. 1 social network’s overriding task for the past year, especially since its underwhelming IPO. It has released vollies of case studies showing how its ads actually do spur sales down the line. But for whatever reason, most likely the difficulty of applying success by one company or industry with its social ads to others, many advertisers and agencies remain skeptical.

Atlas would enable Facebook to track the impact of its ads, which it’s already quantifying through a deal with Datalogix, which tracks in-store sales, not just on Facebook but on other websites as well. Privacy advocates are not happy about the Datalogix deal, and adding an Atlas-powered ad network won’t make them any happier.

But Facebook may finally be on the verge of closing the elusive loop between its ads and ultimate sales that result from them in a way that to date no one but Google has done really well and on a huge scale.

Will Google Dodge An FTC Antitrust Bullet?

Image representing Google as depicted in Crunc...

From my Forbes.com blog The New Persuaders:

The Federal Trade Commission‘s antitrust investigation of Google is about to come to a head, by most accounts. But it’s a complex case touching on several aspects of antitrust law and whether Google’s search and other activities violate any of them, and the implications for Google, its investors, and Internet users could be huge.

Two attorneys intimately aware of the case provided contrasting views at a webinar this morning conducted by the investment firm International Strategy & Investment and its senior managing director Bill WhymanGary Reback is an antitrust lawyer most famous for representing Netscape in its antitrust case against Microsoft in the 1990s. He now represents several vertical-search companies, such as NexTag, that have complained about Google practices. Geoffrey Manne is a lecturer in law at Lewis & Clark Law School and executive director of the International Center for Law & Economics,which receives financial support from Google and other companies. He has written extensively about his belief that there is no strong antitrust case against Google.

The main takeaway: Despite a Bloomberg story last week that said the FTC was wavering and unlikely to attack Google’s core search business–and another today that repeats that assertion–there’s no agreement by the two sides on what the FTC will end up doing. Reback seemed to acknowledge that Google might find a way to maneuver politically around the FTC to avoid a full-scale assault on the way it conducts its search business. But he also noted that the European Union is closely watching the outcome and may act on its own if the FTC does nothing more than a settlement on the more minor issues.

One key point on timing: Press reports say there’s a Dec. 3 meeting between FTC Chairman Jon Leibowitz & EU Competition Commissioner Joaquin Almunia. What’s more, Leibowitz is expected to leave for private practice around the end of the year, so that could affect the case one way or another. And if it means anything, Bloomberg says Google CEO Larry Page met with the FTC today. …

Read the complete post at The New Persuaders.

Sorry, Retailers–Cyber Monday’s Days Are Numbered

Two cliches in one ad!

From my Forbes.com blog The New Persuaders:

Not long after Cyber Monday was invented in 2005 as an online alternative to Black Friday, I called it a “marketing myth” because it was actually not even close to a top holiday shopping day.

Then a funny thing happened–Cyber Monday, created by the National Retail Foundation’s Shop.org online unit, became a self-fulfilling prophecy as retailers jumped on the term and began offering special sales that day after the Thanksgiving holiday. By the following year, it had turned into a real phenomenon, at least for many retailers, and last year it became the heaviest shopping day ever to date. It might even happen again this year.

But now, even as many retailers have made Cyber Monday sales a stock part of their holiday strategy, I’m betting its days are numbered. Why?

* Early sales. Smart retailers noticed that before Cyber Monday, at least (and perhaps still), the period leading up to the big day actually were even more active shopping days. And in their never-ending attempt to get a step ahead of rivals, many retailers ran not just pre-Cyber Monday sales, but pre-Black Friday sales as early as the evening before Thanksgiving. Apparently they worked. They almost certainly will cannibalize Cyber Monday sales. …

Read the complete post at The New Persuaders.

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