Category: Last Week

Our spin doctor is still in the house so, lest somebody say something about this being a good day to bury news, let’s start with the biggest news. Google’s reported fourth-quarter profit surged 29% to $2.54 billion. Yikes, that’s a lot of money. Somewhat overshadowed by news late on Thursday evening that Larry Page, Google’s co-founder, is taking over the reins from long-time chief Eric Schmidt.  I wonder if there are more changes afoot?

So, that’s an opening totally fitting with last week’s four pillars of digital advertising news which bodes well for the rest of this week’s review, doesn’t it?  Having started with Spend Watch, why not continue in that mode. As they say in television, cue titles ..

Spend Watch

I’ve not done a Facebook revenue prediction this year. It seems like everybody has one on a reasonably regular basis so why not me? Thus, deep breath, Facebook is expected to make over £2.5 billion ($4 billion) from advertising in 2011, it has been estimated by eMarketer and reported on by the IAB. Compare that to the numbers reported in Advertising Age that the social network took in $1.86 billion in worldwide advertising revenue for 2010 (which was still a 151% increase over the company’s estimated 2009 advertising revenue). Pretty impressive numbers, although, of course, somebody had to find the flaw. Those numbers were “not as impressive as Google’s growth in its pre-IPO days” according to SFGate.

Elsewhere, ad-spending hit a record high in Malaysia; social gaming to top $1 billion in 2011 and advertising is expected to make up for 20% of game developers’ revenues next year, according to another eMarketer report (quoted by Coast Digital) and a Winterberry Group report at MarketingProfs says, “Within digital, social media ad spend is expected to increase more than 35%”. A healthy growth report from our spin doctor then.

The Bedford Report, er, reported that “ZenithOptimedia … expects China overtaking Germany as the world’s third-largest ad market behind the United States and Japan” and

China has achieved double digit internet growth rate since 2006 and currently housed 420 million Internet users. There are also 755 million mobile subscribers in China, making it the world’s largest mobile market.

Such a big market for advertisers. And, I don’t often quote data from an advertiser’s perspective but last week I saw that Cadbury’s had reported between £2 and £3 in sales for every £1 it spent on internet advertising – which seems like some more pretty decent numbers to me, spin doctor or not.

Video

Crossing the line from Spend Watch to Video we read, via RapidTV, that in France, video advertising passed from €12 million to €30 million in turnover over one year. While back in the UK, the IAB released new 2011 best practice guidelines for video and called for a “mature” approach to video ads.  As the money flows into online video advertising we’re seeing the technology around the delivery gain traction. This week, for example, Rocket Fuel Inc. announced Video Booster which, apparently, allows “brands to engage audiences and reach campaign objectives with unparalleled precision and efficiency”. How long before bidding on video ads becomes mainstream?

Real Time

Kendall Allen at Advertising Age wrote this week that “Our industry is ecstatic over bidded media” and questioning if it’s quite as big as we think. I had believed that a lot of the real-time buzz was from the buy-side of the business but Kendall notes buyers are, “still waiting for this holy grail of audience intelligence at scale”. Perhaps helping us get a little nearer audiences at scale, Adobe announced the inquisitional of leading data management platform, Demdex.

The new world of real-time buying and selling of media was covered, last week, in a piece at Marketing Week entitled, “New era dawns for display advertising” which is worth of read.  Of particular interest to those in the digital display business is a comment from former American Express head of digital acquisition Matthew Turner,

“We’re now looking at digital display as an always on channel, rather than as [intermittent] campaign activity, explains Turner. We have historically run digital display on a campaign basis, but we’re now at a point where we’ve got such a level of high-quality inventory through exchanges that we’re able to think about display as a way of always building awareness or running direct response, similar to the way in which we treat search.”

Is that something we should be considering for the future? Will the idea of advertising campaigns disappear? Perhaps our vision of the right message to the right person at the right time means that brands need to be constantly in-market. How else can the be assured of being at the right time?

Privacy

The last of our pillars this week is privacy. ClickZ reported on “Mixed Messages on Future of Privacy Law in 2011” for US citizens while The Wall Street Journal noted “EU’s Push on Internet Cookies Fizzles Out” which suggested that Europe was generally in favour of industry self-regulation and quoted the EU document saying

[it’s not necessary] to obtain consent for each individual operation of gaining access to or storing of information on a user’s terminal, if the initial information and consent covered such further use.

Elsewhere, Better Advertising (sorry, Evidon) are working with Collective (they call themselves “the leader in understanding and delivering audiences”) “to power ad notice for more than 28 premium publishers and advertising networks” using  Collective’s media management platform. More notice should be a good thing, right?

Friday saw my Twitter feed tell me that The Wall Street Journal’s opinion page comes out against US “Do Not Track” proposals. Of course they were the news organisation to highlight some of the issues around online ad tracking so it would be fascinating to read what they say in an opinion piece. It’s behind a pay-wall so if you have a subscription read it (http://on.wsj.com/fU6qbW) and let me know in the comments.

Now, away from my pillars what else did we learn last week? For starters, “Almost a quarter of Irish consumers are “strongly negative” towards online advertising” [Belfast Telegraph]; TGI’s James McCombe noted that,  from a marketing point of view, mobile Twitterers are an attractive target in their own right [MediaTel]; Bonnier announced that it was  developing next-generation ad formats for tablet magazines in a move said to “addresses a fundamental need in the industry: all-new advertising for all-new advertising platforms” [SFGate] and, back to where we started with news from Google, and Mashable’s exclusive report that the search giant is preparing to launch Google Offers – a Groupon-style daily deals offering. Interesting to me as I was going to add ‘Coupons’ or deals to our four digital advertising news pillars but wondered if they would/could  sustain the hype for a year.  Well, let’s see if they make any news next week when I’ll kick myself for not putting them up there.

At the starting blocks of 2011 and I can already see the trends emerging for the topics that will be the mainstay of Last Week In Digital Advertising for the next twelve months. Should I just give up now? Regardless, here we go for the first view of the new year and, periodically, I’ll check-in with this list to see if we’re talking about other things. And yes, I am well aware that this isn’t dissimilar in concept to my already published 2011 Digital Advertising Predictions but it is based on what the recent buzz has been and continues with my idea of a news review.

Privacy

Clearly, one of the most significant things we’ll be talking about all year is privacy and, quite rightly too. Despite the fact that direct mail has been tracking our lifestyle choices and lifestages for years, doing it in real-time via a computer appears much more intrusive and, as an industry, we have to clearer about what we are doing. Spanfeller Media Group CEO Jim Spanfeller was asked by AdExchanger what he saw at the heart of the consumer debate about privacy:

I think the bigger issue is that people want control. They want control over their experiences. And so I agree. I think there are people, lots of people, who will give up data about themselves willingly in return for something.

And control seems to be a key theme of the privacy story this week. eMarketer quotes a survey by PreferenceCentral which found that “the more people know about behavioral targeting, the less willing they are to receive free content in exchange for relevant ads” but principal analyst David Hallerman wonders if, “people really view behavioral targeting as an invasion of privacy, or do they dislike it because they have no control over how marketers are using their personal data?” Publishers, unlike most marketers, have first party relationships with consumers and, Jonathan Mendez argues, there is an implicit understanding that this data is going to be used to make the user’s experience better. That’s a good position for publishers as long as the data is treated with care.

Kevin Lee at ClickZ writes under the headline “If Tracking Is Outlawed, Only Outlaws Will Have Tracking” and suggests that ads should have more space devoted to explaining what data the ad used in the hope that consumers will “leave well enough alone and prefer targeted ads to untargeted ads”. Of course we have an embryonic system to show such information in the form of the Better Advertising initiatives who, this week, became Evidon. The name chosen to “evoke a connection with the word “evident,” which expresses our commitment to bringing clarity to the online community”. Their blog has more. Clear? Well, Mozilla’s aiming to making it all clearer with their alpha release of privacy icons which they are proposing are adopted to let users know how data is used. I like the idea.

Interesting to see The Wall Street Journal run a piece on how Google is trying to square using all their data with the privacy implications of that use. An interesting piece but amusing to see an article on privacy based on a leaked, internal, confidential document. Not sure I see the public interest value in raising privacy flags on a bunch of ideas that aren’t products but, nonetheless, interesting reading.

Video

Video is at a crucial turning point, so says Jill Druschke in AdWeek and I suspect we’re right. It is one of the things to watch on my Horoscope for 2011. And, while I think cross-media comparison of ad-spend has some holes and should be read with caution, it is worth noting that online video represents only 7% of the entire ad market. Things are moving, though. New Media Age reported that “video ad network WebTV Enterprise saw ad revenues triple last year” with a 244% rise in video ad revenue in 2010 compared to the previous year and seems be a decent indicator for that sector of the ad business.

MediaTel noted that worldwide PVR sales are expected to hit the 50 million mark in 2014 but will, eventually, be overtaken by internet-enabled television sets. Around 350 million connected TVs are expected to be sold worldwide by 2015, according to Parks Associates (source: MediaTel). Adding a note of caution into the discussion, however, news that a new content distribution network built by BT will ensure greater bandwidth for users wanting to watch online video without disruption, even during peak online usage times (source: MediaTel). If such initiatives lead to a 2-tier web will consumers pay for it or head straight back to broadcast? An interesting one to watch.

Another note of caution was injected into the video discussion by Netimpreative, who note that “Online video rentals ‘failed to live up to hype’ in 2010” quoting Screen Digest’s figures that, in the US, network-delivered rentals and sales via the Internet and subscription TV systems accounted for $2.3 billion, representing 12.2% of the total market. At this stage, is 12% that bad?

Real Time

We’re moving to a more automated world, that’s for sure. How far we go is still to be seen but publishers everywhere are being encouraged to look at real-time trading systems. Eric Picard’s “Why publishers are afraid of real-time bidding” has some interesting things to say about data leakage and pricing while Jonathan Mendez suggests that real-time systems can make data pricing “more automated and more intelligent” (yes, second quote but it’s a good piece).

There is still some way to go. According to eMarketer, “Less a third of US publishers (31%) offered media buyers the possibility of real-time bidding on their ad inventory in 2010” but that will grow this year and it’s time for publishers to look at real-time systems in more detail. At ClickZ, Rob Beeler asks “What can a publisher – and more specifically, ad operations – do to ensure that RTB will help grow the business?”

Spend Watch

We can’t resist any little change in the revenue forecast numbers and I know I’ll be quoting lots of articles that predict even tiny changes in spend throughout the year. This last week or so we had a nice crop. New Media Age ran with “Display overtakes search in 2011 ad spend growth predictions” Advertising Age ran with “Local Advertisers Finally Join Ad Recovery” as in the third quarter of 2010, smaller US advertisers increased spending 8.1%, compared with a 9.1% hike in the top 1,000. The Economist told us that global spending on advertising will grow by 4.5% in 2011, led by online advertising which will increase by 16%.

In the land of mobile game advertising, Juniper Research discovered marketers spent $87 million worldwide advertising on mobile games in 2010. By 2015, the amount will be 10 times greater, at nearly $900 million (quoted at Miki Devic’s posterous blog). And talking mobile, I was surprised to see that only 12% of the UK population have mobile internet access, according to The British Population Survey and quoted by Netimperative.

Those will be four of the big news sectors I’ll be following in the coming weeks but what else did we learn this week? The Internet is now the main national and international news source for people ages 18 to 29 in the US says Pew Research (quoted at Mashable); SNL Kagan told us the number of location-based services users nearly tripled in 2010, reaching 33.2 million (via eMarketer); Internet Retailer reported that this Christmas shopping-related Google searches from mobile devices are up 230% and, of course, we heard again and again about the unstoppable rise of Facebook.

I’m already watching to see if any of these trends make next week’s news.

One week in, and I’m already moving things around – but you don’t want to know about that, do you? It’s just to confuse you a little. I’m taking my cue from Inception: create something that everybody thinks they understand and then throw in the curve ball.  Suffice to say the ‘product’ guy in me was thinking that my little review of the week is best located somewhere that allowed me to do more than just write this weekly missive which is why it’s moved here.  I have no idea what the ‘do more’ bit actually is – so you’ll have to hang around (or, I imagine, you could ask Mystic Meg).

So, where did we leave off?  Well, it really does seem like a the conversation was broken mid-stream as we find ourselves more-or-less at the same point we finished on. There remains considerable discussion around the Wall Street Journal’s ‘investigations’ into advertising tracking. As @exchangewire asked, “When is this hysteria going to cease”? Here they are, asking it. ClickZ asked, perhaps a little hysterically (but only in a journalistic sense, you understand) if this was the end of behavioural targeting and challenged everybody – including consumers – to be aware and modify behaviours where necessary. Sage advice.

USA Today claimed in what,  sadly, will not be the last of the cookie puns, “these ‘cookies’ aren’t tasty; you’re left hungry for privacy” but at least published an opinion piece, in which Randall Rothenberg, president and CEO of the US Interactive Advertising Bureau, asked people not to fall for the “wild debate” about websites using “tracking tools” to “spy” on people. And he has a point. A quick hop across to a site called Web Design Resources and you’ll find a piece suggesting digital advertisers “invented advertising technology that would scour through the cookies on your personal machine”.  Such language is neither an accurate portrayal of what’s happening nor helpful in explaining exactly what is going on, so the challenge is to move on from this kind of language to better education.

The Wall Street Journal, of course, printed other opinions too. Jim Harper published an interesting counter-argument, reminding those who need such reminders that cookie debates have been running for, more-or-less, as long as the web has been a major route to media consumption and it was considered an advertising channel. He tried to put some of the extremes of the ‘the cookie monster is coming’ argument into perspective:

“Surreptitious” use of cookies is one of the weaker complaints. Cookies have been integral to Web browsing since the beginning, and their privacy consequences have been a subject of public discussion for over a decade. Cookies are a surreptitious threat to privacy the way smoking is a surreptitious threat to health. If you don’t know about it, you haven’t been paying attention.

He even ventured as far as to suggest that we need to consider the trade off: think about what you get back from allowing cookies to be set but I am not seeing much mainstream media pick up on this. Now, where is all this going? New Media Age, quoted a TNS survey which is may be helpful (although I suspect not) in suggesting 65% of people see targeted ads as an abuse of their privacy, even though 64% welcome more relevant ads. Go figure how we’ll make that work. It’s all in the asking, huh? Obviously, much more discussion – and a lot of work – to come.  And as Tech firms come out to be clear that their data is anonymous, non-personal information, perhaps Bizo Blog, quoted on an AdMosters forum, said it best, “there are no monsters hiding under the bed”.

What else did we learn last week? How about the – not so shocking – information that “Canadians spend more time on the Internet than they do watching TV, listening to the radio or reading newspapers” yet advertisers are not allocating budgets to reflect that? Still, digital ad revenues in Canada got to $1.82B in 2009. Which, if reporting is to believed, is only marginally ahead of predictions for Facebook’s advertising revenues this year (at $1.3B). And yes, I am well aware those two stories are – probably – quoting different versions of the dollar, but it’s a much nicer segue to leave it like that. Facebook is, according to unnamed sources quoted by Net Imperative (in turn, quoting unnamed sources in the New York Times – gee, I can see how these rumours start), planning a strategic alliance with AOL, whose revenue, from subscriptions and advertising, in 2009 was four-times that of the predicted Facebook revenue (at $4.2B) but heading full pace off the end of that pier.

The enormous rise of Facebook was, amongst others, a reason ClickZ posed the question “Social: The Next Frontier of Behavioral Targeting?”. Really, as I noted on Twitter, you do not need the question mark there. Yes, it won’t come as a shock to anybody.

In other snippets, I thought it worth noting BrightRoll’s launch a self-service ad exchange for trading video inventory, as an indicator that online video will need the same sophisticated optimisation, trading and data tools as more ‘traditional’ formats have today. And need them quickly. eMarketer reported that almost 59% of US adults had watched full length TV shows online, “reflecting a shift in the content mix from short user-generated clips to full-length professional content”.

Not much mention of mobile this week, although ClickZ (who must get an award for being my favourite source of news this week), reported that, as mobile advertising becomes something agencies use more and more,  “companies in the space are continuing to attract investment” and cited Apple’s iAd as giving a boost to the market. My little 3 tweets we learnt about iAd (1, 2, 3) was sourced for an LA Times article on the topic but I think those tweets said it all and don’t need repeating.

So, did we reach the end of the week more informed or more confused? I’d love to extend Scott Portugal’s “confused sea condition” metaphor and ramble on about lifeboats and the like. But I can’t extend it any more than I did in a tweet on Friday – so I, sort of, blew that. His article was about ad technologies and how to survive changing market conditions and is worth a read (no Mae West needed). One thing I did want to follow-up on was a report suggesting that “One cannot be confident whether the findings of most IAE [internet ad effectiveness] studies are right or wrong” which is, perhaps, something to think about.

Now, why not comment and follow all this week’s industry news at @curns or even send me your ideas for digital advertising news? Go on, you know you want to.

Apologies for the uninspiring title of this first entry. What can I say, inspiration has left me and run off into the night. Still, it’s probably going to be the only post with images so look at the pretty pictures and ignore the banality of the title. Unless the title becomes a regular feature, in which case I should note, somewhere, that last week began on 2nd August 2010 (Yes, my week starts on a Monday. Hey, I’m nothing but a traditionalist in that sense).

The aim behind this space is to allow a little more commentary on links that I posted via Twitter. 140 characters is great at making you think of ways not to use ‘text speak’ but not a great amount of space to say why you think something is important. And that’s the point of this place – to try to add some context around why I considered last week’s work-related tweets important. Fortunately, I decided not to attempt to justify the personal ones in my tweet feed and, as this week didn’t have a Grand Prix, of the Formula One variety, I don’t have to justify my opinions on that either.

I started the week by moving into a new office (hence the pictures) and being the subject of a press release. I’m only linking to the version without a picture (misplaced vanity?) but I’m incredibly excited to be at aiMatch, I think what’s coming will appeal to many of the biggest digital publishers. However, that’s not the purpose of writing here but, if you’re interested, check us out. And, for clarity, anything I comment herein is my view, I don’t pretend to be representing the views of any of my colleagues (who I know are capable of talking for themselves).

Oh, and the drawing of the rabbit in the hat: there’s a little more information on that on the original Flickr picture (although I am very impressed, I don’t own stock in the company so the review is true!).

But onto the main business of the day. What stories did I link to that need a little explanation about why I considered them important. Well, although I didn’t mention it directly, The Wall Street Journal’s piece entitled “The Web’s New Gold Mine: Your Secrets” influenced much comment around the web throughout the week. There’s a great deal of validity to the piece but, as with many articles about digital privacy, I think, by grouping many of the different tracking stories together without the space for full explanation simply serves to scare more than inform. On Friday, I did link to George Simpson’s amusing rebuttal on MediaPost which attempted to point out the WSJ’s apparent hypocrisy as they, according to George, happily say they’ll link the personal data they store to online data they collect along with their “64 third party partners”.  Privacy is something that this industry does take very seriously and I’m all for a more informed discussion because, as I have pointed out before, data is going to be increasingly important in the digital advertising ecosystem to get relevant advertising in front of people. Finally, on this topic, I linked to a video interview the very same WSJ did with Sir Martin Sorrell where he addressed this issue and it was good to hear that, he too, believes hidden tracking to be a problem and that transparency is a good thing.

If reports are to be believed then, according to netimperative, audience targeting – which is what most of the data is used for –  is now the “cornerstone of most online ad campaigns, helping to boost revenue for both branding and direct response” so I handily linked (thank me later) to their 4 steps to avoid behavioural targeting pitfalls. The quoted survey (as @exchangewire pointed out) was based on US figures but, to me, the useful nugget was the confirmation of the higher publisher returns for properly managed audience targeting.

At the start of the week I also linked to the Financial Times’ opinion of digital advertising tracking and note that their editorial acknowledges the advantages of targeted advertising,

There is nothing wrong in principle with advertisers using data about people based on their browsing habits. Such information enables them to place more relevant adverts – ones that are more likely to be of interest – on the sites that people visit. If executed correctly, that can benefit not only publishers but their customers (link)

Sadly, most of the FT’s piece is behind their paywall so I didn’t get to the meat. I hope the extract reflects the content. In the aforementioned WSJ interview, Sir Martin also discussed paywalls, something many digital publishers are paying close attention to, and stated a belief that the ability for advertising to finance media, as has been done in the past, is going away because of industry fragmentation. Nothing new there but timely as Rupert Murdoch was reported to have said that the paywall model was going well (“encouraging” was the word he used, as reported in New Media Age on Friday).

There has been much encouraging news of late about increased ad spend. This week it was the turn of the Irish to announce that in 2009 online advertising in Ireland approached the €100m threshold. To shamelessly steal the other headlines from the IAB’s piece, the online ad sector achieved 10% of Irish ad spend 2009 and 75% of study participants predict growth or strong growth for 2010. There’s much more than those headlines in the original article. I like good industry news, so enjoyed quoting Businessweek’s interview with Facebook’s COO, Sheryl Sandberg, that, on Facebook, “some advertisers have increased spending by as much as 20-fold or more”. Pretty impressive numbers, huh?

It won’t come as a revelation to hear that much ad spend, for the sake of an easy link I’m guessing in Ireland and on Facebook  as everywhere else, is shifting to mobile. Commsdealer reported that ad agencies are increasingly going mobile with TV losing ground quickly and telecoms.com noted “that competition in the mobile advertising space is getting heated, with Amobee on Wednesday announcing a major European deal with publishing house Gruner and Jahr”. As an industry we have been saying for the last ten years that ‘this is the year of mobile advertising’ but we may be at a tipping point, partly thanks to the popularity of the iPhone. Friday saw the news that UK iPhone users would total 6.4m this year or, to see it another way, the number of iPhones in UK will grow 200% during 2010. One Friday tweet said that I thought Dave Morgan was bold to suggest that mobile’s personal nature, scale, ease of use and great person-to-person-to-place connectivity would lead to location based services devastating local media. I have a feeling his prediction that 25% of their revenue base will be lost by 2014 may not be far wrong. As another of my tweets said this week, “4Sq may (or may not) be a fad right now but localisation & geo-awareness isn’t”. Still, to add some balance The Wall Street Journal (very popular this week, I’ll admit), suggested that some advertisers were still a little skittish about using cellphones for advertising and so were turning more and more to “immersive—and possibly intrusive—mobile ads”.  More at Newest Cellphone Ads Crave Entire Screen.

Now, why not follow all this week’s industry news at @curns or even send me your ideas for digital advertising news.