The recent report that Apple plans to launch its own Web radio service sent tremors through the online music industry. As the biggest player in digital music, the company’s expansion to music streaming could have major repercussions for Pandora and Spotify. A new study by NPD Group points to the possible reasoning behind Apple introducing a competing service. The research firm found that 64% of iTunes buyers also listened to online radio, and nearly 60% use Pandora. That suggests Pandora to date has enjoyed a certain peaceful coexistence with Apple in the digital music space. But that could change if the latter were to start its own radio offering. “The rising popularity of online radio helps explain Apple’s rumored interest in streaming radio,” said Russ Crupnick, SVP of industry analysis for NPD. “As listening migrates from downloads on laptops to streams on phones and tablets, it would make sense for iTunes to offer customers the same integrated experience they have been known for by adding a streaming capability.” Online radio and on-demand services remain the fastest-growing form of music consumption in the U.S. in the second quarter, according to NPD. Consumer awareness of Pandora’s free ad-supported radio service represented half of all Internet users, while one-third were also aware of the company’s paid subscription service, Pandora One. Clear Channel’s iHeartRadio had 25% awareness, followed by Spotify, at 19%, which is twice the level at its launch in 2011. Half of those aware of Pandora used the service in the second quarter, compared to a quarter of those who recognized iHeartRadio or Spotify. Apple continued to dominate digital music purchases, with iTunes boasting a 64% share of the digital music downloads and 29% share of all music sold at retail. Amazon’s MP3 store was a distant second with a 16% share, followed by Google Play, eMusic, Zune Music Pass and others, each with a share of 5% or lower. NPD projects the digital music market to grow by about 10%, on a unit basis, this year. “Despite increased usage of streaming radio and on-demand services, the market for digital ownership is still growing as the market evolves from the desktop to the pocket, and Apple remains well-positioned as the market leader," said Crupnick.
LONDON -- For all the talk about mobile media, industry executives probably don't yet understand the extent to which consumers are living their lives on mobile devices and platforms, Rob Grimshaw, managing director of FT.com, said during a keynote Tuesday morning at OMMA Mobile Europe. There are 1.1 billion subscribers of 3G services; there is 37% growth worldwide and 29% of U.S. adults have a tablet or eReader. Mobile usage is overtaking desktop usage, and for those in emerging countries, the Internet is predominantly mobile. Mobile changes the way we engage with content totally. You carry it around, and it gives you all the things that you want at any time -- the news you're following and the relationships with family or friends, for example, he said. According to Grimshaw, there are now more people accessing FT on mobile in the morning than desktop, especially in the early part of the day. Most importantly, there's a disparity between time spent on mobile devices and the ad spend: only 1% of ad spend is dedicated to mobile, compared to the 10% of our time spent on mobile. The mismatch, Grimshaw said, is driven by ad servers and the lack of connection to mobile devices, and lack of user and browser tracking. This means advertisers can't deliver the experience they want. From an FT point of view, the business has had to solve these problems for itself. The lack of appreciation of how big mobile is is also holding back market development. If consumer time spent on mobile gets beyond 10% and publishers don't capitalise on this, it could be disastrous, warned Grimshaw. The technical barriers that have to be overcome include an increasing number of players, device manufacturers, ad networks, platform creators etc. Publishers need to be aware: if they don't move quickly, the party will be over. The marketplace can get to scale, but where is the money going to go? Grimshaw cited figures: Google takes around 54% of ad revenues on mobile. Together with other players including Facebook, Apple, Pandora, Twitter and Millennial Media, they make up two-thirds of the market. Publishers have not featured yet, and are being squeezed into that one-third rest-of-market. The way to deal with this is to try to get ahead of the curve, Grimshaw advised. The creation of a single subscription across all devices and apps was the right approach for FT. As consumers adopt new devices, they find the FT is already there. The FT Web app signals the major strategic challenges that publishers will face and benefits of taking a bold approach -- it allows download without gong to the app store. FT did this because going under iTunes terms would have fundamentally damaged its direct relationship with consumers. Moreover, it couldn't have enabled a multichannel experience, or wouldn't have been able to manage subscription churn. But most importantly, Apple takes 30% of the revenue. If you're a publisher with your own billing platform, why would you pay 30% to use someone else's? Grimshaw asked. "It was the most nerve-wracking day putting it out there,' he revealed. 'But it has worked, and has demonstrated that you don't need to go through a big platform." Over the last 12 months, as FT has stepped out of IOS and into HTML5, it has seen 77% audience growth (from May 2011 and May 2012). Discoverability is easier and "it's easier to reach the audience outside of environments like Apple iTunes. You can forge your own direction," Grimshaw said. FT is turning this into money: 15-20% of subscriptions sold every week are on a mobile device. People are transacting on devices, he stressed. Advertisers are interested and making the investment. FT is serving rich media ads and providing the sort of tracking found on the desktop. FT.com is now making 10% of ad revenues on mobile devices. Advertisers view mobile as a branding environment when given the right tools, targeting and formats to express their message, he added. .
Adobe will attempt to capture more of the publishing market by appealing to small companies and individuals creating content in apps for iPads. The platform, Creative Cloud publishing, now supports a folio feature, allowing content creators to build single pieces of the marketing material, brochure and publication into an iPad app, rather than a dashboard filled with a library of publications. Marketers point to stand-alone self-publishing as the next phase for branded content. Mascord Living Spaces created a free app allowing consumers to view photography from some of the publisher's favorite homes. It allows viewers to search the latest designs and take a 360-degree spin to get an inside look at design philosophies of Alan Mascord Design Associates, a company that remodels and designs custom homes. Today, Adobe's publishing tool remains available only for Macs, but Adobe plans to add Windows 8 support for App Builder on its product roadmap. While the design process can occur in a Windows operating system, the platform does not submit the content for publishing. The designer must submit apps on a Mac to the Apple iTunes store. The content is built into an iOS tablet application, rather than made available on the Web. All content is automatically optimized based on the iPad the content is viewed on. Designers can insert still images, videos, or interactive ads into the apps, but the platform does not provide the insertion of dynamic ads or geographic targeting. It does allow designers to plug in their iPad and preview the content during the design process, explains Annmarie Beliard, product marketing manager at Adobe. Designers produce the creative in one platform and then submit the final application to Apple in the Digital Publishing suite. Single Edition is the latest feature of Adobe's digital publishing tool Creative Cloud, a membership-based hub for making, sharing and delivering creative work.
Digitaria, the San Diego-based digital agency within WPP’s JWT unit, is expanding its presence in the Midwest, announcing a major hire -- former SapientNitro executive Doug Ruhl -- who will establish a foothold in Chicago. Ruhl, who will split his time between JWT’s Chicago offices and Digitaria’s Minneapolis office, joined as vice president-business development from director of marketing services in SapientNitro’s Chicago office. The move comes as Digitaria has been making a major push in Minneapolis, absorbing JWT’s offices in that market, where Digitaria CEO Dan Khabie has even set up shop. The agency said Ruhl will work closely with the Minneapolis office, as well as the JWT team in Chicago, as part of Digitaria’s Midwest expansion. Since merging JWT with Digitaria in Minneapolis, the agency has won assignments from Best Buy and Life Time Fitness, and has extended and expanded its assignments with the office’s largest client.
AT&T's plans to limit the availability of the FaceTime video chat app will harm "individuals and innovators alike," a coalition of consumer groups argue in a letter to the telecom. Free Press, Public Knowledge and The New America Foundation's Open Technology Institute are asking AT&T to back away from its plan to prevent consumers who subscribe to older, individual data plans from accessing FaceTime over the 3G or LTE network. The telecom says all subscribers will be able to access FaceTime on WiFi, but only those on the new shared data plans will be able to run FaceTime on one of the data networks -- which often are more widely available than WiFi. The consumer groups argue that AT&T's restrictions on FaceTime violate the Federal Communications Commission's open Internet rules, which prohibit wireless providers from blocking the use of competing apps. "As long as you're buying a data plan from AT&T, you should be able to use that data however you choose," says Joel Kelsey, legislative director at Free Press. He says the groups plan to file a complaint with the FCC if AT&T does not revise its plan. (FCC regulations require groups to give broadband providers at least 10 days notice before filing a formal complaint about neutrality violations.) AT&T's move is seen as hindering consumers on older, individual plans who want to use FaceTime for voice calls. That group typically pays for calls by purchasing a block of minutes (such as $40 a month for 450 minutes), and also pays charges for the broadband data they consume (such as $30 a month for 3 GB of data). Telephone calls made through apps aren't counted against subscribers' minutes, so some consumers could save money by staying with an older plan and using FaceTime to make phone calls. While the groups argue that AT&T's restrictions violate the neutrality regulations, it's not yet clear that those rules will survive in court. Verizon and MetroPCS recently asked a federal appeals court to vacate the rules on the grounds that the FCC lacks authority to regulate broadband. For now, the watchdogs are urging AT&T to "reconsider its behavior and the impact that blocking FaceTime will have on its customers, particularly the deaf and hard of hearing, as well as all who use this application to communicate with family and friends over the Internet." AT&T was recently criticized for imposing a FaceTime "deaf tax" in an op-ed by Brendan Gramer that appeared in Wired. He says that as a deaf person, he expected to be able to use FaceTime "to communicate with friends and family in my natural language: American Sign Language." He added: "But then I found out that AT&T will block mobile FaceTime unless customers sign up for an expensive unlimited voice plan. I wasn’t thrilled with the thought of having to pay this AT&T 'deaf tax' just to use the mobile data I’m already paying for." AT&T did not respond to Online Media Daily's request for comment about the letter from consumer groups at press time.
With billions of ad dollars at stake, online video networks are fighting hard for a bigger piece of the pie. To that end, Adap.tv on Tuesday debuted a new tool, which it believes is the best way yet for advertisers to plan their online video buys. “In minutes, an optimal digital video media plan can be created, leveraging the best data sources available, such as Nielsen,” said Toby Gabriner, President of Adap.tv. “Planners can then easily buy the recommended inventory, automatically optimize the campaign once it launches, and measure its effectiveness using both TV- and online-based metrics.” Pulling out all the stops, Gabriner made the announcement at the first annual “Adapt Conference” in New York.The so-called “Unified Planner" comes fully integrated into the Adap.tv Platform, which is an automated system to plan, buy and measure video ads.At the company's conference on Tuesday, Gabriner touted the suite’s ability to specify target audiences and campaign goals, including parameters such as reach, frequency and TRPs. The solution will also recommend specific sites, which Adapt.tv says will more effectively deliver advertisers’ target audiences. Planners have long complained that planning, buying and managing video ads is a less-than-elegant experience. Whether Adapt.tv’s new service can change this perception only time will tell. Earlier this year, Forrester estimated that domestic digital video ad spending will explode by over 250% by 2016 -- from $2 billion in 2011 to $5.4 billion. The estimate was largely attributed to a renaissance in quality, brand-safe video content, a proliferation in video-friendly devices and the maturing of younger online adept consumers.
Razorfish mobile lead Paul Gelb has left the agency to become head of strategy for MoPub, a startup that helps publishers and developers monetize their smartphone apps. In his new role, Gelb is charged with leading the startup’s efforts to strengthen its presence among ad agencies and brand advertisers in connection with in-app advertising. “As MoPub’s head of strategy, we’ll be able to leverage his insights on the advertiser side to help publishers drive more revenue. His contributions to building MoPub’s footprint with agencies and brand advertisers will be impactful to our publishers,” said MoPub CEO Jim Payne, in announcing the hire Tuesday. Started by a team of AdMob and Google veterans two years ago, MoPub has raised $6.5 million to date and last year launched a real-time bidded exchange managing mobile inventory for iOS and Android. The company says it now serves 15 billion ads per month across 10,000 apps and 5,000 publishers. MoPub recently reported that average bids per ad request in the second quarter increased 300% from the prior quarter. “MoPub is cracking the problem of monetization for publishers with their exclusive focus on mobile,” stated Gelb. “It is clear that the industry has reached a point where a platform exclusively focused on mobile is needed to maximize the opportunities in this dynamic, high-growth channel." Gelb is credited with founding the mobile practice at Razorfish, which a Forrester Wave report earlier this year ranked it as one of the four digital agencies for mobile along with AKQA, Ogilvy and TribalDDB. Razorfish’s mobile practice generated $45 million in annual revenue and added over 70 mobile clients, including Unilever, Kellogg’s, Citibank and JPMorgan under Gelb’s leadership, according to his LinkedIn bio.
Digital advertising firm RGM Group on Wednesday announced closing $21 million in funding from Riordan, Lewis & Haden Equity Partners. The Los Angeles-based company plans to use the new investment capital to ramp up its national sales force and technology development efforts. In connection with the funding, RGM named former FastClick CEO Kurt Johnson as its new chief executive, succeeding founder Kamran Razavi. Razavi will assume the newly created role of chief strategy officer at RGM. Started in 2004, the company has carved a profitable niche catering to premium brand advertisers online. The core of its three-pronged business is an ad network composed of 300 individually selected online publications across 14 specific content channels. The RGA Alliance includes sites for well-known titles like Frommer’s, Men’s Fitness, and SmartMoney as well as niche sites, like Digital Trends and Urbanspoon. The network reaches up to 143 million unique U.S. visitors and generates 8 billion page views per month. Razavi said the network is completely transparent for both publishers and advertisers. Marketers can make buys focusing on specific sites or channels and target according to different demographic, psychographic and behavioral criteria. Advertisers using the platform to reach affluent consumers include American Express, Jaguar and Sony. These blue-chip brands have turned to RGM “to have their messaging come up beside, or in line, with premium content and premium context and the delivery format in which their ad is received,” said Razavi. Razavi said the click-through rates for its ad formats typically exceed the online display average of about 0.9%. The billboard unit, for example, has a CTR of up to 2% while the persistent overlay has a rate of 1% to 1.5%, he said. In addition to RGM Alliance, the company runs a business called RGM Exclusive providing exclusive media representation for a smaller group of high-end publishers OpenTable, JustLuxe.com and MenuPages.com. Razavi expects the number of publishers it represents exclusively to increase to seven to 10 in the next two years. Johnson previously served as CFO of ValueClick after the ad company acquired ad network FastClick in 2005. Johnson will oversee RGM’s next growth phase, which includes plans to double its head count to about 50 in the next year, especially with the expansion of its sales staff in New York. The company also plans to open a Chicago office this year to complement its presence in L.A., San Diego, San Francisco and Manhattan. Along with Johnson, RGM has added Rob Rodin, Chris Lewis and Ryan Smiley as board members in relation to the firm’s investment.
Back in the days when the Internet was young and social media hadn’t been invented, many of the thrusting young Turks leading the digital charge were keen on declaring that the “old media” companies didn’t “get it.” They were dinosaurs hell bent on their inevitable path to extinction. Much the same was said of bricks-and-mortar retailers and pretty much any large established business. Well, it’s roughly 25 years since those cries began to be heard — and repeated endlessly, along with the phrase “paradigm shift.” There seems to be a remarkably large number of those seemingly tenacious dinosaurs going about their business alongside relatively few genuinely successful (large) digital businesses that started during those halcyon years. The real impact of digital was less about replacing one set of companies with another, and much more about changing aspects of how those companies do business. Often this adaptation has involved acquiring the new digital innovators; on occasion it, has been based on internal investment and innovation. In the TV world, one of the consequences has been that the conversation has moved well beyond the early and primitive debate best characterized as “TV vs. the Web.” Now, in our cross-platform world, we’re now talking about “video” rather than “TV” and – critically – how and where it is consumed and what those insights mean for advertisers, programmers and the business of buying and selling media. Right now, there is no credible doubt that TV remains the pivotal video medium. While online and mobile video (tablet on cellphone) may prevail in certain out-of-home environments, overall and in-home, TV is still the big dog. And that’s fine. The real question here is how these media can be leveraged in tandem to add value to each other and – more importantly – to the advertiser’s proposition when consumers are in relevant setting and receptive mind-states. But that isn’t to say that TV itself isn’t evolving. While the level of DVR penetration and usage, along with VOD consumption remains small compared to scheduled TV, those forms of on demand consumption continue to grow. Similarly, as the currently tiny share held by OTT providers, such as Roku and AppleTV, continue to grow, one has to ponder what the response of the content providers will be. If history is any guide, release windows across these platforms will continue to shrink. If music and movies are anything to go by, the whole concept of distribution windows may come to look like a quaint little relic of the past in five-to-10 years. There are some that say the OTT providers represent a serious threat to the cable and satellite companies and possibly even to the networks themselves. By unleashing access to a rapidly growing world of professionally produced content – as well as “the Web on your TV” as the saying once had it, the theory is that the MSOs and the networks could ultimately be displaced. I’m not so sure about that. Apart from the fact that the content has to be licensed from somewhere and leaving aside my jaded memory of the similar dotcom era predictions, the MSOs are already taking steps to secure their position in the cross-platform ecosystem. With Both TV Everywhere and XFinity leading the charge for the MSOs and HBO GO showing the way for channels, nothing is a foregone conclusion. Rumors are already circulating to the effect that Roku is an acquisition target – and why not? Roku and others that gain traction in the space will almost certainly be acquired in due course — possibly by a cable or satellite company seeking to broaden its footprint. More intriguingly, they could be bought by a consortium of networks and channels looking to be less dependent on the seemingly ever-more-fractious relationship between themselves and the MSOs. And then we will have come full circle. The dinosaurs that were meant to be driven to extinction by the ice age of alternative distribution, will have done what they did in real life for tens of millions of years — adapted with admirable dexterity in order to thrive in a changing landscape.