The next "great frontier in advertising" will put on mobile phones the quality and the creativity of TV ads. Google CEO Eric Schmidt sent that message, among others, while speaking at the Mobile World Congress Tuesday. "Historically, information was something held to the elite, the rich people, the educated people," he says, but because of the proliferation of mobile devices, about 2 billion people will enter the conversation in the next three to four years. That conversation for Google focuses on near field communication; confusions related to Google's operating systems; and the exhaustion within the next six months of Internet Protocol 4 addresses and movement toward the next version, IPv6. Similar to television ads, display ads tell stories. As Google gets better at targeting mobile ads, consumers will see more useful information through opt-in personalization features. Near field communication chips will assist in serving those "narrative" stories on mobile phones. The chips have an 80-character encryption key that advertisers can use for secure electronic transactions. Schmidt says a combination of technologies will help serve coupons, alert the merchant of the consumer's intent to find the store and ready the transaction before he arrives. It's all opt-in. A variant of this mobile model will transform electronic payments and commerce, he says. Attempting to dispel confusion about Android vs. Chrome, Schmidt says to think Gingerbread for mobile phones, and Honeycomb for tablets. The next one will begin with an "I" name after a dessert, and it will combine the "G" and "H" releases that occur about every six months. Android supports touch devices. Chrome OS, which supports keyboard devices, is unrelated. It's an operating system largely targeted at netbooks and PCs. In time, the technologies will merge. When an audience member asked about the transition from IPv4 to IPv6, the next generation of Internet protocol, Schmidt called it "one of the great urgent problems" the Internet world faces today. "The good news is the technology is there and works well," he says. "It's just a matter of making sure we do a number of these tests to ensure we get full IPv6 routing." Schmidt also spoke about searches related to medical queries. Medical-related search queries on Google account for between 3% and 4% of searches. Google wants to automate services that would direct consumers to emergency telephone numbers or even make a call to an emergency service through Google Voice. Acknowledging Wael Ghonim's social movement on Facebook and Twitter to express the voice of Egyptians, Schmidt told attendees it's the nature of collaborative technology that changes the power dynamic between governments and citizens. He also acknowledged Bing as a formidable search competitor and thought Google should have inked the deal with Nokia, rather than Microsoft. "We would like [Nokia] to adopt Android at some point in the future, the offer remains open," he says. "We think Android is a good choice for Nokia, and we're sorry they made a different choice. We certainly tried."
Bonnier Corp. became one of the first publishers to take advantage of Apple's new digital subscription service by offering an annual subscription to the iPad edition of Popular Science. The company will charge $14.99 a year for 12 issues, a time-limited price that will eventually return to the standard rate of $19.99 for an annual subscription. Single issue downloads will still be available for $4.99. "Our iPad readers let us know they wanted the ability to buy annual subscriptions using their existing iTunes account, and we're happy to deliver on their demands," stated Gregg Hano, vice president, group publisher of Popular Science. The company said other titles including Popular Photography, Science Illustrated, and TransWorld SNOWboarding would follow in adopting a subscription model this winter. Apple earlier Tuesday announced the new subscription offering for magazines, newspapers, videos and music through its iTunes App Store. Apple will collect 30% of subscriptions sold via the App Store, but allow publishers to keep all the revenue from digital subscriptions sold through their own Web sites. Traditional publishers have been pushing for the ability to offer subscriptions to iPad versions of their properties rather than each issue on a stand-alone basis. Consumers have typically had to pay $4.99 for iPad magazine issues, well above print subscription rates. "The Daily," News Corp.'s tablet-only newspaper launched earlier this month, was one of the only iPad publications with a subscription model before today, charging 99 cents a week or $39.99 per year. Bonnier said Popular Science subscribers will receive a notification every month that the new iPad issue is available for download, and the subscription will automatically renew annually unless a customer chooses to cancel. The publisher last month began working with high-profile creative agency CP+B to develop ad formats tailored to the iPad and other tablet computers.
Facebook's traffic in China has rebounded in early 2011 after dipping as low as 30,000 people last year, according to new data from Inside Facebook. The number of active monthly users jumped to 700,000 in early February, up from just over 100,000 at the beginning of January 2011. During 2010, the monthly total did not exceed that level. The Facebook-tracking blog has previously reported that access to Facebook and Twitter was blocked in China in July 2009 after riots broke out between police and protesters in the Xinjiang province. Before then, Facebook had about 1 million active monthly users -- still a tiny fraction of China's 300 million Internet users and 1.3 billion people, but more than it has been since. China, of course, is know for operating one of the largest and most sophisticated Internet filtering systems in the world. Its so-called Great Firewall uses a wide variety of overlapping techniques for blocking content and Web tools deemed politically threatening by the Chinese government, according to the OpenNet Initiative, which monitors Internet censorship globally. In an effort to pry open the vast market, Facebook CEO Mark Zuckerberg traveled to China in December to meet with some of the country's top technology executives. He has not hidden his interest in expanding there. "How can you connect the whole world if you leave out a billion people?" he told a group of entrepreneurs at Stanford University last fall. With an estimated 600 million users worldwide -- 70% of whom are outside the U.S. -- Facebook could grow that much larger with a significant presence in China. Whether Zuckerberg's trip led to any loosening of restrictions that led to the spike in Facebook traffic since January isn't clear. "There are so many complexities with the China market, and so many different ways that users may be getting around firewall constraints, that I'd take individual data points with a grain of salt," said Susan Su at Inside Facebook. "Instead, I think it's wise to look at the 700,000 number as a sort of alert to keep watching this area in the weeks and months to come." At the same time, Facebook's role as a tool in organizing and mobilizing revolts that overthrew governments in Tunisia and Egypt can't be lost on Chinese officials. Despite a speech today by Secretary of State Hillary Clinton reiterating a call for greater Internet freedom globally, it doesn't appear China will take any significant step to lift its online clampdown. In the speech at George Washington University, Clinton noted that China's economic growth has been strong even while Internet censorship has been high. That's because many businesses have been willing to accept restrictive Internet rules to gain access to its markets. "But those restrictions will have long-term costs that threaten one day to become a noose that restrains growth and development," she said. Whether Facebook's traffic in China continues to increase during the year or shrink back to lower levels could be one indicator of where the government's Internet policy is headed. And what -- if any -- restrictions Facebook is willing to accept to build its business in China is another question.
PointRoll is losing its CEO Jason Tafler at a critical time for the rich media provider. In his place, the Gannett-owned unit has promoted Robert Gatto, senior vice president of sales, to the post. In a memo to staffers issued Tuesday morning, Tafler said he plans to move back to Canada to spend more time with his family. Along with CareerBuilder, PointRoll has recently been credited with driving growth at Gannett's digital arm. "PointRoll is in a very strong position, coming off its most successful year ever with an even stronger 2011 predicted," said Gatto on Tuesday. For 2010, Gannett recently reported digital revenue of about $1 billion -- up 8% year-over-year, and a full 18% of the company's total revenue. Tafler has helmed PointRoll since early 2008, when former CEO Chris Saridakis was named SVP and chief digital officer for Gannett amid a major management shakeup. Last April, Saridakis left Gannett altogether to lead the marketing services segment of ecommerce services provider GSI Commerce. There were rumors that Saridakis left the publisher over a pay-wall dispute, which he denied to Online Media Daily at the time. "I was incredibly frustrated by their lack of decision-making, and the fact they haven't thought [a subscription] model through," he said. Gatto will be succeeded in his role as senior vice president of sales by Sarah Ripmaster. Ripmaster was most recently vice president of major accounts at PointRoll -- where, among other duties, she led automotive sales and strategy for various automotive agencies. Gatto came to Gannett in 2004 when TKG Holdings -- a joint venture owned by Gannett, Knight Ridder (now owned by The McClatchy Company), and Tribune Company acquired ShopLocal. Gannett later acquired all of the online shopping circular provider in mid-2008.
Bolstering its management team in an increasingly hostile market, video ad network YuMe on Tuesday appointed Bryan Everett executive vice president of business development, and Ed Haslam as senior vice president of marketing. In his new role, Everett will be expected to accelerate the adoption of YuMe's ACE technology platform and its publisher ad network. He most recently served as executive vice president of business development at Kontera, a provider of semantic advertising and information technology provider. Prior to YuMe, Haslam served as co-founder and vice president of marketing at Groupon's Ludic Labs, which developed the social media community Diddit.com and local commerce service OfferFoundry.com. As senior vice president of marketing, Haslam will be chiefly responsible for driving YuMe's ad technology platform. "Bryan and Ed have consistently built and led teams that provide results," said Michael Mathieu, CEO of YuMe. Ranked as one of the top video ad network online, publishers including MSN, MSNBC Digital Network, IDG Entertainment and Glam Media use YuMe's ACE ad management platform. The company offers over 20 different ad units spanning different types of pre-, mid- and post-rolls, overlays and page takeovers that advertisers can customize further by choosing different features. Its broader efforts include encouraging marketers to experiment with different formats and features in video advertising. Today, over 70% of the U.S. online audience watches video online, while Forrester expects the number of streams consumed to more than double by 2013. Driving this growth is an explosion of video content from users, professional studios and marketers. Last year, YuMe closed a $25 million round of funding, led by new investor Menlo Ventures. Existing investors Accel Partners, BV Capital, DAG Ventures and Khosla Ventures also participated in the round.
ReachLocal has acquired DealOn Media for about $10 million. The daily deals site operates in 18 U.S. markets, such as New York and Los Angeles, with more on the way. DealOn offers a daily deal service, a white-label and co-branded deals platform, and the recently launched OfferEx platform, which enables other deal sites and publishers to supply and/or resell deals through an exchange. ReachLocal will not attempt to compete with Groupon because it's a direct-to-consumer service rather than a tool for publishers, says Zorik Gordon, cofounder and CEO of ReachLocal. "We see the opportunities in supplying publishers with quality deals to sell on their sites, because they don't have the resources to do it themselves." Gordon wanted the DealOn's OfferEx exchange, designed to connect media sites with companies that want to offer deals and discounts to consumers. Along with a product suite for publishers, about 30 employees support DealOn, founded in 2009. In December, Rich Razgaitis, DealOn CEO, told MediaPost the co-branded white-label platform will do for daily deals what DoubleClick did for publishers. DealOn will remain as a stand-alone company under ReachLocal. "Citysearch's offering is a classic example of what's been missing in the ecosystem," Gordon says. "Most of the deals you see are sources by Groupon, and I'm sure they would like to find secondary sources for deals as well." Publishers like Citysearch will find new ways to source deals. Gordon wants DealOn to supply them. Group buying strategies that sell and promote products and services will likely go the way of Facebook in time, meaning the coupons could pull from big repositories to complement search engine marketing campaigns. But some search marketing experts like Ben Kirshner, CEO at Elite SEM, believe it will take years before agencies will successfully integrate SEM and group buying campaigns. "We can make the buy for the client, but the client will have to decide the budget for the service." Since ReachLocal went through an IPO in the past year, the company has grown. "Today, we supply Google with more local SMB dollars than any other company, and we're probably the biggest supplier of display ad dollars in the space," Gordon says, with "more than $300 million in ad budgets."
Launching an attack on the Federal Communications Commission's open Internet order, a leading GOP lawmaker said at a congressional hearing that the new regulations would "entrench a one-size-fits-all regulatory approach to Net neutrality that circumvents Congress's authority." Rep. Bob Goodlatte (R-Va.), chair of the House Judiciary Intellectual Property, Competition and the Internet subcommittee, called Tuesday's hearing the first step toward ensuring that Congress, and not the FCC, makes any rules regarding the Web. He added that the Internet "must be allowed to grow and innovate" without becoming mired in regulations. Goodlatte said he was concerned that Internet service providers could engage in anti-consumer behavior; he had attempted to rein in ISPs with proposed legislation 10 years ago. But, he said, the FCC wasn't the appropriate body to regulate Web traffic. He specifically criticized the FCC for its "mission creep," saying that the agency shouldn't regulate the Web the way it regulates TV. "I hope that courts will rebuff them again" he added, referring to an appellate court decision last year vacating the FCC's decision to sanction Comcast for violating neutrality principles. Last December, the FCC voted 3-2 to ban all broadband providers -- wireline and wireless -- from blocking sites or competing applications. The rules also ban wireline providers from engaging in unreasonable discrimination. The rules contain an exception for reasonable network management practices. Republican lawmakers have made nixing those rules a priority. Earlier this year, Rep. Marsha Blackburn (R-Tenn.) reintroduced a bill that would strip the FCC of authority to regulate the Internet. The measure -- which quickly garnered support from 60 other Congress members -- would ban the FCC from issuing "any regulations regarding the Internet or IP-enabled services." Other GOP members have said they favor blocking the rules under the Congressional Review Act, which allows Congress to strike down administrative agencies' decisions by a majority vote in the House and Senate. Democrats, however, stressed at the hearing that most Americans only have a choice of one or two Internet service providers. Net neutrality advocates argue that the dearth of providers leaves consumers without good options if their ISP starts blocking particular sites. The committee also heard from three witnesses on Tuesday, including Brett Glass, who runs the wireless company Lariat, Net neutrality critic Larry Downes and neutrality proponent Gigi Sohn, executive director of advocacy group Public Knowledge. Glass criticized the rules as vague because they don't define what would constitute reasonable network management. "This lays the groundwork for protracted, expensive legal wrangling that no small business can afford," he testified. He also argued that the neutrality regulations "address prospective harms rather than any actual problem." Gigi Sohn disagreed with Glass's assertion that the regulations did not address actual problems. She pointed to AT&T's ban on Sling Media's iPhone app for watching home TV remotely. In 2009, AT&T restricted the SlingPlayer app to the Wi-Fi network, sparking complaints to the FCC that the carrier was discriminating against Sling. AT&T lifted the ban last year. All of the FCC commissioners are expected to testify at a separate hearing on Wednesday about the new regulations.
To pay or not to pay -- that is the question many folks in the media have been asking themselves over the past several years. While online publishers continue to grapple with this issue, one thing is clear - consumers overwhelmingly prefer free content. The Federal Trade Commission's recommendation to legislate a "do-not-track" list may force publishers into a decision they might regret later. It may also force a polarized opt-out solution where compromises are not clear to consumers. The government should be clear and up front when talking about all the ramifications of "do-not-track" with consumers and say what it really means: I want to pay for my content, so please don't serve me targeted ads. Consumers can't have it both ways, and given the choice between paying for content and being served targeted ads, they would choose the former over the latter. Every time a consumer visits a site, the content being consumed is supported through ads. From TV to radio to print, it's a system that has clearly worked and has been performing the same value for the Internet. So do consumers love ads? Most will tell you no. Think about the difference between the TV ad model and the Web ad model. In TV, you are forced to stop enjoying content in order to watch several minutes of ads. On the Web, the ad experience is more integrated and more targeted. There are only two ways that advertising grabs attention. Ads can become more relevant or more interruptive. The job of ad targeting is to reduce the amount of ads a consumer would see by showing the relevant ones. The more monetization a publisher can get from an ad, the fewer ad slots that publisher will need to put on a page. The alternative is to go untargeted but interruptive -- think interstitials or pop-ups). So, given a choice, a consumer wants free content and fewer ads. Without targeting, the consumer would suffer both outcomes -- more payment for content and more ads per page. Subsidizing content for consumers with targeted ads should not give marketers a free hand to do whatever they want with data. Madison Avenue and federal regulators have every right to be concerned. In order to meet the needs of both consumers and publishers, the advertising community must work in concert with lawmakers in providing practical bookend solutions that give choice and transparency to consumers that take into account the benefits of ad-supported content and the need for broad opt-out tactics. We have already witnessed strong progress on the industry's part in applying consumer-friendly standards to online behavioral advertising across the Internet through such programs like Online Behavioral Advertising (OBA) and the Digital Advertising Alliance (DAA). The online advertising community can do more, like working with publishers on developing their own data collection disclosure standards in building more transparency with their users. This will provide the reform the government is demanding and looking for, and enable a thriving digital ad economy to continue on its path to recovery from the Great Recession. While the rise of government interference has been based on the need for more transparency in regulating online marketers in tracking the behavior of consumers, what federal regulators are not saying is that there's a cost to their intervention. Let's not forget that advertisers pay top ad dollars to reach target audiences, who are more likely to buy their products. Eighty percent of online ads rely on third-party cookies for some form of audience targeting. Without the ability to offer audience segmentation, publishers will be faced with increasing pressure to find new ways such as pay-wall mechanisms to generate revenue and remain solvent. And it's a price that many consumers are not willing to pay. According to a recent survey by Marketing Sherpa, 87% of more than 1,300 consumers surveyed said that they would accept receiving ads based on their tracked online behavior, as long as the content they were viewing was free. Further, the paid wall strategy doesn't come with any guarantees. Last year, when The Times of London and Sunday Times started to charge readers for content, their readership decreased by more than 60%. Ad-supported content has proven to be the most reliable and added government regulation will only exacerbate this shift to a paid content model. This will have a profound impact on the publishing industry and the community it serves, and it will cannibalize audiences highly coveted by advertisers.