Google introduced publisher metrics and benchmark data identifying trends in display advertising to answer questions behind industry assumptions on real-time bidding, mobile, video, display and more. The Publisher Edition became the first in a series of publications looking at aggregate global data collected from across the company's display advertising products. The aggregate data from across DoubleClick Ad Exchange, DoubleClick for Publishers, and Google AdSense platforms analyze categories, such as the rise and the fall of CPMs, based on a variety of verticals and regions, seasonal sell-through rates, and mobile and video impressions. The goal is to provide insight into the overall publisher landscape, focused on trends in the display business. For instance, Google expects advertisers to continue investments in RTB in 2012. The amount spent on the Ad Exchange through RTB rose from 58% at the end of 2010 to 72% by the end of 2011. The company attributes the increase in part to the average 188% revenue lift in the U.S. when the Ad Exchange wins the auction compared with fixed up-front sales of nonguaranteed display advertising. Google also has been monitoring the growth of Web ad impressions globally for both desktop and mobile. For mobile, the data tries to identify why some publisher verticals grow faster than others. Ad impressions on the Ad Exchange and AdSense platforms rose 250% during Q3 and Q4 2011 on mobile. Globally, all publisher verticals, with the exception of Travel, experienced double-digit growth in Q4. The strongest vertical market in mobile was Shopping, with 69% growth, followed by Food & Drink at 61%. Video impressions also grew nearly 70% during the second half of 2011 across the DFP video platform. The average video ad midpoint and completion rates came in at 79% and 72%, respectively. About 51% of video ads run between 15 and 30 seconds long, with 36% running more than 30 seconds, and only 13% running less than 15 seconds. Google also saw a 175% rise in impressions on the 640 x 360 ad unit that fits wide-screen players, and a decrease in standard aspect-ratio video player impressions. It has been assumed that sell-through rates rise at year's end. New metrics suggest global publisher sell-through rates on average rose from 36% to 42% in the fourth quarter, compared with the year. Overall, according to Google's report, publishers sold more unreserved than reserved impressions last year, and all regions exhibited similar compositions in channel mix. Although reserved ad inventory sold by the publisher's sales team and unreserved impressions rose incrementally each quarter, reserved impressions grew at a faster rate in the fourth quarter of the year: 64% in Q1 2011, 62% in Q2, 62% in Q3, and 58% in Q4 for unreserved. Compare that with 36% in Q1 2011, 38% in Q2, 38% in Q3, and 42% in Q4 for reserved.
Worldwide mobile payment transactions will surpass $171.5 billion in 2012, up 62% from $106 million last year, according to a Gartner estimate. The number of mobile payment users will reach 212 million, up from 160 in 2011. Looking further out, global mobile transaction volume is projected to grow 42% annually between 2011 and 2016, leading to a market worth $617 billion and 448 million users in four years. Gartner expects Web access fees to account for the vast majority of payments in North America and Western Europe, at 88% and 80%, respectively. SMS remains the dominant access technology in developing markets, given the limitations of mobile devices and ubiquity of SMS. Transactions using NFC (Near Field Communication) -- the wireless technology behind mobile payments initiatives like Google Wallet and Isis -- will remain fairly low through 2015, but growth will start to ramp up from 2016. "NFC payment involves a change in user behavior and requires collaboration among stakeholders that includes banks, mobile carriers, card networks and merchants," said Sandy Shen, research director at Gartner. "It takes time for both to happen, so we don't expect NFC payments to come into the mass market before 2015. In the meantime, ticketing -- rather than retail payment -- will drive NFC transactions." In mature markets, the research firm also expects strong growth in merchandise purchases via mobile, pointing to leaders in the space like Amazon, eBay and Starbucks. With the coffee giant’s Starbucks Card Mobile app being rolled out nationwide after a successful pilot program, Gartner predicts a large number of retailers will introduce their own mobile payment services. For developing markets, money transfer and airtime top-ups will account for most transaction volume. Money transfers will also make up the largest portion of transaction value, due to the demand for secure and efficient ways to store and send money. Ticketing/parking is another strong area for m-payments growth in emerging regions. Eastern Europe is forecast to have the highest user growth between 2011 and 2016, in part because of a smaller user base. Asia-Pacific tops all regions in the number of users, followed by Africa. “This also contributes to high transaction volume, where the two regions combined will account for more than 60% of the global mobile payments volume in 2016,” per Gartner. Africa leads all regions in transaction value through the forecast period, resulting from a higher proportion of money transfers that have higher value per transaction than in other areas. North America will be the third-largest region by value in 2016 -- double the amount in Western Europe. Because the mobile payments arena will be defined by fragmented services and solutions for the next two years, Gartner sees opportunities for technology providers catering to local markets. "The demand of these segments can only be satisfied by specialized or local players who can better understand the segment and have specific solutions to meet the unique challenges," said Shen.
Expanding its global footprint, KBM Group, Young & Rubicam Group’s database marketing agency, has agreed to acquire France-based Predictys. Financial terms of the deal were not disclosed. With its database, including information from 140 million opted-in consumers from among more than 25 co-op partners, Predictys serves various clients from Snapfish, a Web-based photo-sharing and printing service owned by Hewlett-Packard, to insurance provider Swiss Life. With vast amounts of data being generated by consumers online, socially and via mobile devices, brands are trying to leverage "big data" to target specific consumer demographics. “Marketing that is customer-intelligent delights consumers and so enables companies to stay competitive," according to Gary Laben, CEO of KBM Group. “By adding Predictys' data resources to our own, we can better offer our global clients a way to harness data to forge customer engagements.” Working closely with its parent company's Wunderman unit, KBM Group positions itself as a “data engine." Founded in 2007, Predictys' database powers its digital automated marketing services for customer acquisition via proprietary automated systems for managing and optimizing email marketing campaigns. According to a Forrester report, the demand is growing for customer intelligence to support next-generation marketing, which is focused on appealing to customers through relevancy, rather than campaign selling, focused on continuous customer engagement and dialogue. The report explored how the shifting marketing environment has impacted organizational needs for different kinds of services from their marketing partners, specifically from marketing service providers, direct agencies and digital agencies. The shift is from a narrow focus on data and managing data to a more strategic, analytically driven focus on understanding customers and insightful customer intelligence. KBM Group and Wunderman were recognized for conforming closely to the study's model of “customer engagement agency” in the digital space.
New findings from Rhythm NewMedia suggest people like watching video better on tablets than smartphones. Depending on the mobile app, users watched from 50% to 175% more videos on tablets than smartphones in the first quarter across the Rhythm mobile ad network. Because smartphones are far more widespread than tablets to date, however, they still account for the vast majority of time spent watching mobile video: 79% versus 21% for tablets on premium properties. The latter figure is roughly proportionate to estimated tablet penetration of 15% to 20% among U.S. mobile users. Across both types of screens, entertainment news properties like E! Online and TMZ are proving especially sticky. Of the top 10 video clips in the category, more than half are watched twice per unique viewer. When it comes to advertising, virtually all campaigns (93%) on the Rhythm network included in-stream video ads, either as a commercial break in full TV episodes or before video clips. That’s the same rate as the prior quarter, but up from 66% in the year-earlier period. Adding social media buttons to in-stream ads helped increase the average engagement rate (defined as any type of interaction) from 0.9% to 1.48%. The report also highlighted the benefits of combining different ad formats in a campaign. Pairing full-page mobile ads with in-stream video ads, for instance, increased average engagement from 9.3% to 10.7%, while adding video ads to a banner campaigns on tablets lifted interaction rates from 0.6% to 0.8%. Full-page ads on tablets had a 20% interaction rate -- more than twice that on smartphones. Rhythm said its mobile video ad inventory on more than 200 apps and sites owned by publishers, such as NBC Universal, ABC, IAC, and Warner Bros., accounted for nearly a third (32%) of all monthly mobile video viewing. That estimate is based on Nielsen data showing that mobile subscribers in the fourth quarter of 2011 watched mobile video an average of four hours and 20 minutes a month. Nielsen’s cross-platform report for the fourth quarter indicated the mobile video audience is still small but growing. Some 33.5 million watch video on their phones, up 35% from 27.4 million a year ago. The data from Rhythm NewMedia is based on ads served across iPhone, iPod Touch, iPad, Android and other devices in the first quarter. It covers ad campaigns from more than 140 brands including P&G, McDonald’s, Disney, Paramount, General Motors, Ford, AT&T and Macy’s.
Netflix has agreed to change the way it retains information about customers in order to settle a class-action privacy lawsuit, according to court papers filed on Friday. The settlement, which is still awaiting approval, also requires Netflix to pay around $6.75 million to various privacy organizations and up to $2.25 million to the lawyers who sued the company. Netflix said in a February SEC filing that it had agreed to settle the privacy lawsuit for $9 million, but didn't reveal further details at the time. The agreement specifically calls for Netflix to "decouple" former customers' movie-rental history from their personal information by one year after they cancel their accounts. In the past, Netflix allegedly stored the information for up to two years after cancellation. If approved by U.S. District Court Judge Edward Davila, the deal will resolve a lawsuit filed in 2011 by former customers who accused Netflix of violating the Video Privacy Protection Act. That law was enacted in 1988, after a Washington newspaper obtained and printed the movie rental records of Supreme Court nominee Robert Bork. The VPPA bans movie rental services from disclosing customers' records without their written consent. It requires video rental services to destroy users' personal information “as soon as practicable, but no later than one year from the date the information is no longer necessary for the purpose for which it was collected.” Former Netflix users alleged in their lawsuit that they continued to receive marketing emails after canceling their Netflix subscriptions. "From these e-mails, it became apparent that Netflix retained its former customers’ personal contact information," their lawyers say in a motion seeking preliminary approval of the settlement. "Former customers who logged back into their canceled accounts were able to view all of the video materials they had watched as Netflix customers ... This strongly suggested that Netflix also maintained its former customers’ video programming selections." Davila scheduled a hearing for June 29 on the request for preliminary approval of the settlement. Like some other recent settlements of privacy lawsuits, one notable feature of the deal is that it doesn't provide for monetary compensation to users (other than $30,000 total to a handful of users who were named in the complaint). For that reason, the settlement could be vulnerable to challenge, says Internet legal expert Venkat Balasubramani. "Courts have increasingly scrutinized settlements without a monetary component," he says. In one recent case, the 9th Circuit Court of Appeals (which encompasses the Northern District of California, where the suit against Netflix was brought) rejected a proposed class-action settlement involving Motorola. Consumers in that lawsuit alleged that Motorola didn't disclose the risk of hearing loss posed by Bluetooth headsets. The proposed settlement would have required Motorola to donate $100,000 to various health-related organizations, while the attorneys who sued would have received $800,000. In its order rejecting the settlement, the 9th Circuit said one sign of a questionable deal is "when the class receives no monetary distribution but class counsel are amply rewarded." That court is still considering whether to uphold Facebook's Beacon settlement, which calls for the company to pay more than $6 million to launch a new privacy foundation, and for the lawyers who sued to split around $2.3 million. That deal doesn't provide for monetary damages to the users (except for the 19 who were named in the complaint). Even though Netflix agreed to settle this lawsuit, the company might have had enough legal ammunition to win at trial. That's because the 7th Circuit Court of Appeals ruled in a separate lawsuit against Redbox that consumers don't have the right to sue for violations of the portion of the video privacy law that deals with retaining records, as opposed to disclosing them.
Despite rumors to the contrary, display advertising is not dead, according to an upbeat report on the formats from Google-Owned DoubleClick. But among the key growth areas, mobile clearly stands out. The explosive use of the mobile Web has led to growth of more than 250% in impressions across the Ad Exchange and AdSense platforms from the company between Q3 and Q4 2011. Mobile is growing at a faster rate than desktop in part from the rise of mobile-only populations globally. But among those segments trying to fill all of that inventory tsunami, shopping-related publishers are leading the way with 69% growth in mobile Web impressions, followed by Food and Drink (61%), People & Society (47%), Reference (45%), Books and Literature (45%), Online Communities (43%) and Law and Government (41%). The smallest rate of impression growth among mobile publishing segments was Travel, arguably among the most saturated and mature, with 9% growth. In fact 19 of the 22 publishing categories DoubleClick organizes around for mobile Web say ad impression growth of 25% or more. Compare that to desktop ad impression growth, where Shopping also led the way but with a 37% rate, followed by Pets and Animals (29%).
One of the legends of the PC and electronic gaming industry and early champion of mobile gaming Trip Hawkins is leaving his longtime post as CEO of Digital Chocolate. In a blog post at the company site, Hawkins said that his departure marks a “next stage” of streamlining and narrowed focus for the company. He will continue to consult and advise the company. There have been rumors of large layoffs looming for the company –- up to 180 people. According to TechCrunch, an employees from the Mexico office Tweeted that the operation there had been shut down. Traffic to its suite of social games across Facebook and mobile platforms has been in decline. Nevertheless, it acquired sandlot games in August of 2011 and hired new executives as recently as January. More than $12 million in financing was attained in 2011 alone. Hawkins says he just marked the 30th anniversary of his founding and incorporating Electronic Arts. Between EA and Digital Chocolate he led the game console-turned-software company 3DO. He has been at Digital Chocolate since he founded it eight years ago. He was also among the first workers at the fledgling Apple in the late 1970s.
Just about everyone I know in the advertising and marketing world is a devoted follower of AMC’s weekly show, "Mad Men." If you happened to catch a recent episode, a central topic was whether Sterling, Cooper, Draper, Pryce -- the mythical agency that is central to the show -- would award bonuses to its staff. On the show, it’s a subject on everyone’s mind. But in the real world, everyone might care about bonuses, yet few are willing to talk about them, and even fewer are focused on how they should be paid. In this case, life does not imitate art. Recognizing that what our industry needs most is better information, two years ago my colleagues and I set out to conduct the first comprehensive survey of incentive compensation practices in the marketing services arena. Earlier this year we targeted some 4,000 advertising, new media, information, interactive, and digital executives with a second study, designed to update what we know. The good news, no surprise, is business appears to be getting better, with executives reporting that 2011 performance was better than 2010, with prospects for this year projected to be even better. Revenues were up, profits were up, and business appears to be on the rebound. The bad news: while most of the shops we surveyed pay their employees cash bonuses at year-end, bonus payments did not keep pace with revenue and profit growth. Compared with what previously was customary, it appears most agencies are allocating fewer dollars to incentives, a trend we first spotted nearly three years ago. But what really is a cause for concern is how bonuses are allocated. Bonus plans should be strategic, meaning tied to corporate objectives, and designed to encourage an agency’s behavior toward managing cost and driving profitability. Instead, bonus plans tend to be arbitrary and ad hoc, with senior management determining who should be paid what, with those on the receiving end having no point of reference about payment, other than their bonus history; “I received $X last year, so I should receive $Y this year.” There is, in short, no goal alignment between corporate objectives and individual objectives. Among all the shops we surveyed, digital agencies appear to offer the greatest opportunity for improvement. Digital agencies enjoyed strong top-line growth that, frankly, was not matched by bottom-line profits. There are many reason for this -- a focus on growth, investments in personnel, space, technology -- but little attention is paid on how to use a strategically crafted bonus plan to ensure that staff is focused not just on top-line revenue, but also on managing cost to improve profitability, a missed opportunity if ever there was one. Agencies are paying greater attention than ever before to managing costs and growing profits. A bonus plan that is strategic -- not arbitrary, tied not just to individual goals, but also to corporate goals, is a powerful tool in an owners’ arsenal. As executives plan for this year and beyond, it makes great sense to revisit their bonus plans, to ensure they are doing all they can to help deliver better results. If you would like to see the full study, visit www.palazzonyc.com to request a copy.