Facebook eased concerns about its ability to make money in mobile when it reported third-quarter earnings showing mobile ad revenue had jumped to $150 million from $10 million in the second quarter. That amounted to 14% of its total ad revenue in the latest quarter. CEO Mark Zuckerberg suggested in the analyst conference call that the results dispelled the "myth" that the social network could not monetize its 600 million mobile users. He reiterated that the company expected to make more money eventually from mobile per amount of time spent than on the desktop. Facebook also expects the growth of mobile usage to outpace that through PCs for the foreseeable future. But there remains the question of whether Facebook can continue to ramp up mobile advertising fast enough to make up for the decline in desktop revenue. If not, "Facebook could have a problem," noted Macquarie analyst Ben Schachter in a research note following the company’s third-quarter report. Other analysts also highlighted this challenge, even as Facebook begins solving its mobile “problem.” The company’s desktop revenue, for instance, fell 4% in the third quarter from the prior quarter. Facebook CFO Brian Ebersman indicated that the trend wasn’t just seasonal. “I think that we opened up a lot of inventory on mobile in this quarter, and so we had advertisers who shifted some spend that might’ve been on the desktop computer into mobile feeds,” he said during the conference call. But he also noted that the introduction of newsfeed ads -- both on the desktop and mobile -- has led to improved ad performance across both platforms. One factor influencing the shift of ad spending from mobile to desktop is how many Facebook users are mobile-only. In its quarterly 10-Q report filed with the SEC, the company said the number of these users had increased 24% from 102 million in the second quarter. That equates to about 10% of Facebook’s 1 billion users overall. The other 478 million mobile users also accessed the site via PC. Despite the rapid rise in mobile-only users, Brian Wieser, senior research analyst at Pivot Research Group, pointed out that few were in developed markets, like the U.S. and Europe, where Facebook makes most of its money. Still, he stated in a research note: “If a marketer decided they wanted to reach a certain group of consumers and accomplish a certain goal, a loss of users on Facebook’s conventional Web site could erode Facebook’s otherwise dominant position versus another standalone Web publisher (practically, Yahoo or AOL in the United States).” Wieser estimated that Facebook had 18% of the total U.S. Internet advertising marketplace in the third quarter. Still, Facebook said in its quarterly report that it expects "usage through personal computers may be flat or continue to decline in certain markets, including key developed markets such as the United States, in part due to our focus on developing mobile products to encourage mobile usage of Facebook." Can the company increase mobile ad revenue quickly enough to offset a decline on the desktop? Given how new the mobile ads are -- Facebook only started running these ads in March -- Macquarie’s Schachter indicated it’s still difficult to project how smoothly Facebook can continue to make the transition toward mobile. In recent months, Facebook has launched a wide range of new ad initiatives retargeting users on the site, based on their activity across the Web, to promote mobile apps. The Facebook Ad Exchange, which came out of beta in September, could help Facebook bolster desktop ad revenue.
In an effort to turn readers into mobile content contributors, DailyCandy just debuted a mobile app for the iPhone, iPad and iPod touch. Dubbed DailyCandy Scout, the app encourages readers to share local discoveries in real time. “DailyCandy Scout enables a two-way dialog with our vast community,” said Alison Moore, DailyCandy’s recently appointed EVP and GM. DailyCandy editors will be curating the crowdsourced content, as well as programming the app with regular “Scout Challenges.” At launch, initial challenges include “Scout That Street Style,” “Flaunt Those Fall Kicks,” “Demonstrate Your Good Jeans” and the Halloween-themed mission, “Display Your Disguise.” Marketing partners are being invited to co-create Scout Challenges, which showcase new products and brand experiences. Fast fashion retailer H&M has signed on as DailyCandy Scout’s launch sponsor, partnering to promote the “Scout That Street Style” challenge within the app experience. The Scout deemed to have the best eye for capturing a candid fashion pose will win a $500 H&M shopping trip. “Sponsored challenges in DailyCandy Scout enable marketers to incorporate their offerings into a viral consumer discovery process,” said Fernando Romero, vice president, sales for DailyCandy. Adding to the mix, a “Scout Society” -- made up of chosen tastemakers, designers, shop owners, chefs, and the like -- will be expected to contribute personal discoveries, and interact with the broader community. In return for their participation, DailyCandy plans to reward contributors with prizes, and the chance to have their work featured across various platforms. According to Moore, DailyCandy now has more than 6 million users. In mid-2008, Comcast acquired DailyCandy for $125 million. Following Comcast’s merger with NBC Universal last year, DailyCandy became part of NBCU's Entertainment & Digital Networks and Integrated Media division.
Google's policies on Arbitrage ruffled a few feathers in Oakland, Calif. after Ask.com CEO Doug Leeds said rumors began spreading across the Internet that the Q&A site committed arbitrage. Google's policy describes arbitrage as when advertisers use AdWords to drive traffic to their Web sites at a low cost, and pay for traffic by earning money from the ads placed on those Web sites. The rules state a Web site may get suspended if it has excessive advertising or designed for the sole or primary purpose of showing ads. "Arbitrage means you're trying to get a click and send the user to an app or site with a bunch of ads," Leeds said. "That's not what we're about." Leeds told MediaPost that Ask.com offers something a little different than traditional search engine query results. It offers an information service supported by content and monetized with ads to drive traffic. He believes the explanation on Search Engine Land prompted by a SEL reader jumps to conclusions because of the recent change in the company's content business model. Ironically, Google's mantra has been for marketers to create ads that answer customers' questions in queries. Google declined to comment on the situation. "In general, we don't comment on specific advertisers or ads," said a Google spokesperson. "We're constantly reviewing and updating our policies, and search partners are subject to these policies." Leeds said alienating users with a short-term arbitrage play is not what the company is about, adding that the company has been working with Google to ensure compliance. The strategy is working. Leeds said daily queries rose Oct. 24 by 25% year-to-date, because site visitors get answers to the questions they seek, so they come back. Mobile query growth rose 45% in Q3 2012 compared with the year-ago quarter. And the company has seen 69% year-to-date page-view growth in Ask's Q&A community. In September, Ask.com held 3.5% of search market share -- up from 3.2% sequentially, according to comScore. Piper Jaffray Analyst Gene Munster said the search business at InteractiveCorp "could demonstrate a clearer growth opportunity in mobile, particularly in search." Based on certain acquisitions and improvements in the company's strategy, Munster estimates 11% growth in the company's search business in 2014. Growth continues from investments in acquisitions, such as About.com, as well as branding campaigns. Next week, Ask will launch two new spots as part of its national cinema campaign with National CineMedia, which began in July 2012 across 40,000 screens nationally. The branding campaign illustrates Ask's investment in marketing, which contradicts the definition of an arbitrage business. Arbitragers don’t spend money in offline brand awareness.
Democrat and Republican character traits and preferences can provide brands with attributes to build audience segments. Research from Tribal Fusion, a digital advertising agency, demonstrates how data assists brands to better understand customers through their political affiliations. Now, with the right data, political affiliations are more easily matched to other attributes. When it comes to the arts and music, David Letterman and Keith Urban attract Republican voters, though Democrats tend to have a higher interest in music. Bryan Melmed, director of insights strategy at digital ad company Tribal Fusion, said that's because most are young professionals. "We're not trying to prove causation, but rather correlation," he said. Melmed doesn't recommend advertisers directly target ads to one particular party over another, but attributes connected to political affiliations have become useful shortcuts to other characteristics that suggest receptiveness to specific products or categories. The data suggests Republicans are receptive to home goods, for example. They show more interest in humidifiers, plumbing, garden fountains, and hot tubs. They also show higher interest in woodworking, tools, and other do-it-yourself topics. Democrats spend more money on pets. They are more likely to buy cat toys. Most bird owners are Democrats. They also are more interested in baby showers, adoption and pregnancy topics. The findings come from Tribal Fusion Insights. It encompasses contextual, behavioral and demographic data of more than 50,000 property topics and describes more than 80% of online population. Tribal Fusion identified more than 35 million Democrats and 23 million Republicans on its network in August. The study revealed that 12,560 behaviors were statistically significant predictors of partisan outlook. Lift was calculated using a one-sided 90% confidence interval. When it comes to technology, Democrats are twice as interested in data storage, but Republicans are twice as interested in data mining. Republicans are far more likely to buy car electronics or cars. Republicans prefer Olympus cameras. Democrats prefer Canon. Democrats heavily favor the phone carrier MetroPCS, whereas Republicans prefer Virgin Mobile.
The software company Cybersitter has scored a preliminary victory in a lawsuit against Google for allegedly infringing trademark on AdWords. In a ruling issued this week, U.S. District Court Judge Ronald Lew in the Central District of California rejected Google's bid to transfer the case to its home court, the Northern District of California. Cybersitter, which sells software that blocks adult content, alleges in its lawsuit that a rival content-blocking company, Net Nanny, paid to have its ads shown to Web users who search for "Cybersitter" on Google. Cybersitter was an AdWords advertiser, which meant that the company agreed to Google's terms of service -- including a requirement to litigate all ad-related disputes in court in Santa Clara County, California. Google argued that those terms required Cybersitter's case should be transferred from the Los Angeles area to northern California, but Lew ruled that the gist of Cybersitter's complaints against Google weren't encompassed by the company's AdWords contract. Other judges have ruled in Google's favor on this issue, effectively forcing companies in faraway locales to litigate their cases in the San Francisco area. For example, in 2010 a federal judge in Corpus Christi, Texas transferred a trademark infringement lawsuit by an AdWords marketer to Google's hometown. In that case, U.S. District Court Judge Janis Graham Jack ruled that the marketer, Flowbee -- which manufactures home haircutting systems -- must litigate any matters against Google in California because the AdWords contract provided that any claims related to Google's ad programs would be tried in that state. Lew also denied Google's motion to dismiss several claims before trial, including allegations that the company violated California's false advertising and unfair competition laws. Google had argued that it's immune from those claims under the Communications Decency Act, which says that Web companies aren't responsible if third parties violate state laws. But Lew ruled that more evidence was needed to determine whether Google helped develop the allegedly false ads, in which case the company could lose its immunity. News of the decision was first reported Friday by Santa Clara University law professor Eric Goldman. He says he expects that Google will eventually prevail, but that the ruling signals that the company "may have an uphill battle with this judge."
Publicis Groupe’s Zenith has retained its Travelocity media assignment after a review, the companies have confirmed. The client spent about $55 million on ads in 2011, according to Kantar Media.The company kicked off its media review in August. Zenith, which won the business in 2010, will continue to provide national and local strategy, as well as buying and planning for traditional media. It will expand the scope of its assignment to online video.Bruce Horner, Travelocity Media & Alliances Lead, stated: “We are eager to collectively continue to find innovative ways to use media to showcase The Roaming Gnome and build the Travelocity brand.” The Roaming Gnome is the iconic character seen in Travelocity ads.Dave Penski, CEO of Zenith, called the client a “a valued and dynamic brand.”Two years ago, Zenith won the Travelocity media business while sibling agency Leo Burnett won the creative assignment. This summer, the online travel services company held a separate review for creative work and switched to McKinney, now a unit of South Korea-based agency holding company Cheil Worldwide.McKinney, previously an independent shop, had handled creative chores for Travelocity prior to the shift to Burnett. McKinney created the client’s “Roaming Gnome” back in 2004.
There may be a good reason we haven't heard as many jokes this year about AT&T involving dropped calls or marginal coverage. Apparently the former punch line has enjoyed a brand rebound. According to the YouGov BrandIndex that tracks consumer attitudes toward the major carriers, AT&T saw the greatest improvement in public perception among the big four this year. While Verizon maintains a comfortable lead in brand equity, and Sprint still runs second, AT&T broke free from its place in the cellar of brand reputation, shared with T-Mobile, during the summer months. On YouGov’s BrandIndex, Verizon consistently achieved a score of 70 through much of 2012. Sprint enjoyed a big but temporary brand boost early in the year -- scaling from 60 to the mid 70s, actually surpassing Verizon for one month. The burst of positive consumer feeling appears to have been in response to its announcement of 4G LTE rollouts. Nevertheless, Spirnt settled quickly back into an index rating in the mid-to-low 60s throughout the rest of the year and is currently at 63. AT&T and T-Mobile contested the dubious distinction of being the least-favored carrier brand for much of the first half of the year, with both trading places with brand index scores in the mid-40s, well below Sprint and Verizon. But in June, perhaps also in response to its own 4G marketing push, AT&T broke away from T-Mobile and is now at 53.
HONOLULU – This happened in an elevator at a very swanky resort. I was there attending a global franchisee meeting with my new client, Diners Club International. In the car with me was one other person, an astonishingly attractive woman. And she was staring at me. The lady was being rude, but how can I blame her? She was, as I say, a woman. And I am me. So deeply did she train her eyes on my body, it was as if she were trying to X-ray my soul. Although, as it turned out, what entranced her was not, strictly speaking, my irresistible self. It was my name badge. “Diners Club,” she said. “Does that still exist?” Hmmph. Yes, you loathsome harpie. It exists. It is large and growing in Japan, most of South America, much of Europe and the Middle East and very soon at great scale in Russia and China. Due to the benign (or perhaps malign) neglect under the previous owner, Citi, Diners Club was permitted to wither on the vine. Under the banner of Discover since 2008, however, the iconic creator of the charge-card industry has commenced a revival. For the past four years it has been the beneficiary of major investment -- most toward achieving parity with American Express and Visa on merchant acceptance in dozens of countries around the globe. Now, perhaps the discourteous elevator crone was confused by Diners Club’s challenges in North America. The card exists here almost exclusively for corporate issuers in a peculiar joint branding with MasterCard under the aegis of the franchisee, Bank of Montreal -- which was interested only in Diners’ commercial accounts. The deal was a tradeoff sacrificing autonomy and brand profile for a ton of instant volume. But although Discover’s and MasterCard’s networks have overnight given Diners essentially universal acceptance in the world’s biggest card market, there are virtually no personal Diners Club cards out there to accept. Furthermore, most of 62 years of brand equity went right out la fenetre. That cloak of invisibility, as I discovered riding the elevator, is the sort of thing that can lead to consumer confusion. What a wonderful introduction for me to my client’s daily reality. Now, you may ask, what in the world would prompt the new president of Diners, Eduardo Tobon, to seek my assistance in his new journey? It sure as hell isn’t decades of experience in banking or payments. I squandered those decades making fun of TV commercials and interviewing strangers with a microphone. No -- what got Eduardo’s attention was my assertion that Diners Club is better positioned for the changes overtaking marketing than any other brand in the world. Any other brand in the world. The revolutionary brainchild of Frank X. McNamara, who invented the card after a 1949 embarrassment of being caught without cash to pay a restaurant tab, has with its competitors over the decades become commodified. There is very little that cards can do anymore to distinguish themselves from the competition, unless to get into a margin-killing arms race over rewards. Once upon a time American Express conferred prestige, but as it went increasingly mass market it became just another card. No less Diners. But at this particular moment in history, Diners alone has an immense -- one might even say “priceless” -- advantage: It is a club. Much of the conference was devoted to the notion that in an increasingly socially mediated world, club-ness is invaluable. Or, one also might even say, membership has its privileges. The power of belonging was hardly original to me. Diners’ ad agency, DraftFCB, had already begun rolling out a magnificent campaign called “Belong” around the world. It is, literally and figuratively, a thing of beauty. The theme is not just a call to action; it arouses something primal. But here is what I told the franchisees -- and what, in the interest of transparency, my client is happy to hear me say in public: An ad campaign, no matter how brilliant, is at best only a starting point. Diners Club must return to its roots and be a genuine club -- not merely by conferring special privileges, but by facilitating conversation among members, by ceding certain decisions to members, by furnishing physical and virtual clubhouses for members -- and not least, by giving members a reason to feel proud. Only then will the paid ad messages truly resonate. How convenient that the rise of social media has made those very goals eminently -– and imminently -- achievable. In short, Diners Club is the global brand most suited for the Relationship Era. “Belong” can and must be a watchword. In the meantime, it’s just a lovely slogan.