Facebook’s Monster Mobile Ad Machine

January 27, 2016 by robhof

If there’s one number that stands out in Facebook’s by-all-accounts stellar fourth-quarter earnings report today, it’s the amount of advertising revenues from mobile devices: 80 percent.

Nobody should be surprised that mobile dominates Facebook’s revenues, which rose 52 percent in the quarter (66% on a constant currency basis), to $5.84 billion, from the previous year. A year ago, mobile ad sales were already 69 percent of the total.

But 80 percent is not only a nice round number, but one that says Facebook is inarguably and irrevocably a mobile company. Facebook Chief Operating Officer Sheryl Sandberg said during the earnings call that mobile ad revenues rocketed 81 percent, to $4.5 billion. It’s such a commanding number that those ads on the right side of the desktop home page, let alone in the desktop news feed, almost feel like holdovers from a bygone era.

Like 2012. That’s when Facebook’s initial public offering of shares stumbled largely because the social network had essentially zero revenues from mobile. Zero! …

Read the rest of the analysis.

‘Unboxing’ Videos A Gift To Marketers

December 7, 2015 by robhof

From my New York Times story:

One day last year, Jessica Nelson was surprised to find her toddler, Aiden, watching videos online in which people opened box after box of new toys, from Kinder Surprise chocolate eggs with trinkets inside to all manner of Disney merchandise.

“The next day we saw him watching more and more and more of them,” said Ms. Nelson, who lives in Toledo, Ohio. “He was pretty obsessed.”

She and her son, who turned 3 on Monday, had entered the world of “unboxing” videos, an extremely popular genre on YouTube where enthusiasts take products out of their packaging and examine them in obsessive detail. This year, according to YouTube, people have watched videos unveiling items like toys, sneakers and iPhones more than 1.1 billion times, for a total of 60 million hours.

The videos’ ability to captivate children has led toy makers, retailers and other companies to provide sponsorships and free toys to some of the most popular unboxing practitioners, who in turn can make a lucrative living. Hasbro and Clorox have ads that YouTube places on the videos.

Now, marketers are becoming even more involved. …

Read the rest of the story.

SF App Startup Cola Creates ‘Slack For The Rest Of Us’

November 12, 2015 by robhof

From my Forbes blog:

There’s no end of messaging apps that let you exchange texts, photos and videos with friends–Whatsapp, Snapchat, Instagram, Facebook Messenger and so on. There are also a lot of business-oriented apps such as Slack, HipChat, and Yammer.

But what about a messaging app that lets you address the space in between entertainment and work, which is to say coordinating and planning activities with a few friends or coworkers? That’s what Cola aims to do.

Today the San Francisco-based startup is launching a limited, private beta test of an app that uses messaging as the basis for a wide variety of common things people want to get done, from figuring out where and when to meet with friends and creating joint to-do lists to tracking expenses at work and even engaging in multi-player games. The idea, says cofounder and CEO David Temkin, is that messaging has emerged as the most important function of a smartphone and even the foundation of many apps on the smartphone, from Uber to DoorDash to Venmo. “We are entering an era when messaging is the central app, like the browser was for the Web,” says Temkin.

Indeed, Temkin hopes to make Cola the first “messaging OS,” a platform on which activities that need to be coordinated among a small number of people can get done using messaging as the essential delivery mechanism. …

Read the rest of the story.

Pingpad: A New Social Network For Getting Things Done

September 22, 2015 by robhof

Pingpad CEO and cofounder Ross Mayfield

From my Forbes blog:

There’s no lack of apps to communicate and collaborate with friends, family and colleagues. You use messaging apps such as Snapchat, WhatsApp or Facebook Messenger to ping friends, and maybe team collaboration darling Slack at work. You’ve got document sharing apps and services such as Google Docs, Quip or Microsoft Office Mobile, Dropbox for storing files, maybe Evernote for quick notes, and oh-so-many calendars for your job, your family, and your kids’ soccer teams. And of course there’s still email.

Whew. And therein lies the problem, says Ross Mayfield. The 44-year-old serial entrepreneur knows collaborative software, having co-founded Socialtext in 2002 to commercialize the seminal group-edited Web pages called wikis. Now, he believes that precisely because of the explosion of communications, collaboration, and productivity apps since then, there’s a need for a much more simple way to bring them all together. When Mayfield and his future wife were planning their wedding, for instance, he needed to use a wide array of apps and Web services to keep track of catering and location options, as well as arrange activities such as a wishing tree that required help from friends. The scattered nature of all those tools made it difficult for multiple people to use, especially on the go.

Today, Mayfield’s year-old startup, Pingpad, is launching a free app on Apple’s and Google’s app stores and a connected service on the Web that aims to elevate messaging into a way for people to get things done–and not just at work. Unlike at Socialtext and largely unlike most collaboration services all the way from Lotus Notes to Yammer to Slack, the nine-person company isn’t chiefly aimed at businesses. “We had a lot of innovation around collaboration in the 2000s,” he said in an interview in the makeshift upstairs office at his newly rented house near downtown Palo Alto. “But very little of it reached consumers.” …

Already, messaging has started to become something of an atomic unit of many kinds of apps. Even non-messaging apps such as Uber, Instagram, Meerkat, Facebook, and Twitter are appealing in part because they have short messages at their core to make their services quick and easy to use. That has some experts comparing the impact of messaging to that of operating systems such as Microsoft’s Windows that serve as platforms for many applications. “We see messaging as the new OS–all sorts of activity will happen inside of it,” says Marc Canter, co-founder of Cola, a messaging startup not quite ready to announce its service. …

Read the rest of the story.

With Graph Search, Can Facebook Kill LinkedIn, Yelp–Even Google?

January 15, 2013 by robhof

Facebook CEO Mark Zuckerberg introduces Graph Search (Photo: Robert Hof)

From my Forbes.com blog The New Persuaders:

Facebook took pains today to tell the world that its new social search service, Graph Search, is only a very limited tool that it will roll out very slowly over a period of months and years.

But CEO Mark Zuckerberg and his search staff couldn’t help but reveal their enthusiasm for the vast possibilities. For all their professed modesty, what struck me at the company’s press event introducing the service was how specific and broad-ranging Zuckerberg and his Graph Search leaders were about what it could provide: just about everything, potentially, that every company from LinkedIn to Yelp to Foursquare to Match.com to … yes, even Google provides today.

That’s an exaggeration, of course, that even Facebook folks surely didn’t intend. All of those companies have distinct, well-developed services with extensive user bases that are unlikely to shrivel up no matter how good Graph Search turns out to be. In most cases, they will probably retain a durable advantage for years to come. And as Zuckerberg said, it’s very, very early for Facebook search, and search is a devilishly complex discipline to do well.

Still, to hear it from Facebook itself, Graph Search will offers ways to provide similar services, sometimes in potentially easier and more effective ways:

* Recruiting: One of the first examples Facebook provided today was that Graph Search could help in finding qualified candidates for jobs. For instance, Lars Rasmussen, the Facebook director of engineering who heads the Graph Search team, mentioned that he could find people from NASA Ames Research Center who are friends of Facebook employees.

As investors, who bid up LinkedIn’s share a fraction today, no doubt recognize, that company has a pretty good if not exclusive hold on recruiters. And given that finding friends who worked somewhere is a rather specific subset of qualified candidates for a position, there’s not much chance recruiters will abandon LinkedIn for Facebook anytime soon. But Facebook, already used in various ways by recruiters, could siphon off activities that might otherwise have gone to LinkedIn. … Read more at The New Persuaders. But to conclude …

No, Facebook won’t kill any of these companies, certainly not anytime soon. They’re too strong, Facebook has too much still to build and then to prove, and rarely does a company kill another healthy company no matter how good its products are.

Investors may be thinking as much, as they sold Facebook shares to the tune of a 2.7% drop in price today. But if anyone doubted Facebook’s ability to keep disrupting the status quo, they surely shouldn’t doubt it anymore. Even with its baby steps into the search business, Facebook has again set new terms of engagement in the battle for the soul, or at least the cash register, of the Internet.

13 Questions For 2013 In The World Of Online Advertising

January 8, 2013 by robhof

Cross-posted at my Forbes.com blog The New Persuaders:

For the past few years, I’ve offered predictions here and on The New Persuaders for what’s likely to come in the next year. This year, I’m going to shake it up and throw out a few questions instead. I think I know the answers to some of them, but if many won’t be answered definitively by year-end, they remain top of mind for me and probably for many others in online media and advertising.

So in this, the first full week of the new year, here are some questions to which I hope to start finding answers:

* Will image advertising finally take off online? I have to believe that as people spend more and more time online instead of reading print publications and watching TV, brand marketers will want and need to reach them there with ads that are aimed at creating consideration for later purchases, not just eliciting an immediate sale like Google’s search ads and too many banner ads. We’re already starting to see signs of such advertising with the early success of Facebook’s Sponsored Stories, Twitter’s Promoted Tweets, and YouTube’s TrueView ads–not to mention the explosion of tablets, which provide a lean-back experience more compatible with image advertising. This won’t be a sudden change, since brand marketers and agencies don’t move quickly, but you can’t tell me there aren’t going to be increasingly compelling ways for brands to influence people online.

* Can advertisers and publishers make ads more personal without scaring people? That’s the $64 billion question, and it likely won’t get answered in full this year. It’s easy for headline-hungry politicians to make a big deal out of Facebook’s latest privacy gaffe or the Wall Street Journal’s or the New York Times’ latest scare story about an ad that followed somebody all over the Web. That’s especially so since Facebook really does push the privacy envelope too far at times, and too many advertisers idiotically chase one more sales conversion at the cost of scaring off hundreds of others or inviting onerous legislation. But making ads more useful to each individual person is not only crucial to online commerce, it’s potentially better for most consumers as well–seriously, I don’t need to see another ad for a fitness center or a new credit card, but that ad for Camper van Beethoven’s new CD had me in a split-second. The answer lies in these two words, everyone: transparency and choice.

* Will mobile advertising work? Well, some of it already does, to hear Google and Facebook tell it. And while those already devalued digital dimes so far turn to pennies when it comes to ads on smartphones and tablets, this still feels more like growing pains than a crisis in online advertising. Sure, the screens are small and people don’t like to be interrupted in their mobile cocoons. So a different kind of advertising is probably needed–clearly, banners don’t cut it on a four-inch screen. But the value to advertisers of knowing your location and maybe the apps you’re using, coupled with knowledge of what your friends like–all with permission, of course–is huge. That permission may be really tough to earn. But if advertisers can offer tangible value, perhaps in the form of useful services related to what you’re doing or looking for or shopping for–and isn’t that the ultimate native ad?–people may loosen their hold on that information.

I have a lot more questions, but I’ve got to stop before too much of 2013 is gone.

Check out more questions at the full post.

Why Do Obama Supporters Appear In Facebook Ads As Romney Fans?

October 31, 2012 by robhof

From my Forbes.com blog The New Persuaders:

Recently, I’ve been seeing a Sponsored Story ad on Facebook pages indicating that several friends “like” Republican presidential candidate Mitt Romney. No surprise there. Sponsored Stories are those personalized ads the social network allows advertisers to run that show friends have “liked” a brand, and they’re increasingly common as Facebook doubles down on social advertising.

But what on Earth was the name of a friend, who I know is a vocal Obama supporter, doing on a Romney ad? The answer raises questions about how effective, or at least how accurate, these ads are–not necessarily due to a particular fault by Facebook but thanks to the byzantine rules and privacy features that have developed over years of user outrage and resulting Facebook accommodations.

Anyway, I asked my friend if he knew he was shilling for Romney. His response:

“Lol…..I liked him so I could see his FB feed. You should read my comments.” [Hint: They’re not complimentary.]

To be clear, you can see Romney’s posts on his page without “liking” him, but to see them in your own news feed, you need to “like” him. And once you do, like it or not, you become potential fodder for an ad that will appear to your friends.

Another friend of a friend who’s an Obama supporter also was surprised to see his name on a Romney ad. He told his friend:

“I never liked his page. I commented on one of their crazy lies.. gave them a serious piece of my mind ya know!!!!! All kinds of people have been telling me why do u like Mitt???? I’m pissed!!!” …

Read the complete post at The New Persuaders.

Facebook’s Mobile App Install Ads Get Moving

October 17, 2012 by robhof

From my Forbes.com blog The New Persuaders:

Exhortations to install apps are likely a significant chunk of Facebook’s advertising revenues, and now they’re poised to become an even bigger factor in the social network’s future. Today, two months after offering app install ads for mobile devices to a select group of app developers and their marketing partners, Facebook opened up the ads to anyone.

These ads appear right in people’s mobile news feeds, providing prime placement for games and other apps in Apple’s App Store for iPhones and iPads and Google’s Play store for Android devices. Not surprisingly, Facebook says in a blog post that mobile app install ads are already working:

In early results, beta partners like Kabam, Fab, TinyCo and Big Fish were able to reach a more relevant audience and efficiently drive installs. For example, TinyCo saw 50% higher CTRs and significantly higher conversion rates compared to their current mobile channels, as well as a significant increase in player engagement.

A select subset of Preferred Marketing Developers (PMDs) has been testing mobile app install ads and saw similarly positive results. For example, Nanigans’ clients efficiently achieved 8-10x the reach compared to other mobile ad buys. Ad Parlor saw consistent CTR’s from news feed of 1-2% from engaged users looking for iPhone and Android games that their friends were playing.

No doubt those numbers will come down as the novelty factor in any new ad or feature wears off. Still, even a fraction of those results would still be valuable to advertisers.

That’s assuming–and this is a fair assumption given Facebook’s wariness about ad overload–that the company doesn’t go over the top and overload people’s mobile news feeds with the ads. Avoiding overload is especially important for these ads because unlike many of Facebook’s marquee ads, they don’t have a social component, meaning they appear strictly in response to developers paying for them, not because a friend liked an app.

Too many of these ads that don’t have the appeal of a friend’s connection, and the dreaded banner blindness is likely to set in.

There also more coming to improve these ads, according to Facebook engineer Vijaye Raji:

In coming months, we’ll continue to make updates that improve the user experience and the performance of mobile app install ads. For example, you may be able to customize your ad unit based on your audience, ensure that your ads are only shown to people who have not installed your app on iOS or Android devices, and allow people to start installing your app without leaving Facebook.

Facebook’s New Gift Service: Nice, But Not Yet An E-Commerce Game Changer

September 27, 2012 by robhof

From my Forbes.com blog The New Persuaders:

Just in time for prime gift-giving holidays like Friday’s World Rabies Day (or if you prefer, Ask A Stupid Question Day), Facebook today launched a social gift service. It’s rolling out to only a select few for now.

I must be one of them, because I was able to send something to my wife to try it out. But in its current form, I doubt I’m going to use it much.

This isn’t the 2.0 version of the Facebook Gifts virtual-gift service that the company shut down two years ago, by the way. In fact, the new Gifts is built upon, and run by, the folks at Karma, the gift-giving service Facebook acquired in May.

It actually looks pretty good. And while I have ordered precisely one gift that obviously has not yet been delivered, so I can’t judge the entire gift-giving process, it worked quite smoothly. I clicked on my wife’s Timeline, clicked the gift button, and off I went to order her some caramels. She can even pick her own flavor–that’s pretty cool.

In this case, I obviously know her address, so one advantage of Facebook Gifts–not having to know or ask for someone’s address–is moot in my case. What’s more, I didn’t get an automatic reminder I might get if it were her birthday, so that bit of friction elimination wasn’t a factor for me either. But it’s fast and easy to send gifts to friends, and that’s great–not just for consumers, but for Facebook, which can use a service that brings in revenues not dependent upon its brand of advertising that many large marketers are still doubtful about.

So what isn’t great, at least for me?

* A lot of the most prominent gifts are pretty vanilla–teddy bears, spa appointments, flowers, cupcakes. Maybe they’re fine products. Maybe they’re the sort of thing most people give their friends. But for a service with a tagline “real friends, real gifts,” too many of these products seem just too impersonal. Products, especially gifts, are not necessarily fungible, and all the less so for close friends for whom you’re supposed to be getting something special. And if they’re not close friends–and let’s be honest, most people don’t have several hundred close friends–I probably won’t be sending them many gifts, from Facebook or anywhere else. …

Read the complete post at The New Persuaders.