Former Interpublic Group account executive Ray Volpe and the holding company continue to battle in court over the company’s profit from its investment in Facebook and how much of those proceeds, if any, belong to Volpe. The case has taken a new twist -- in the form of an unusual letter writing campaign to the judge hearing the case.Volpe sued this summer in New York State Supreme Court, arguing that he is entitled to the entire profit on IPG’s original investment of $2.5 million. Volpe contends that IPG CEO Michael Roth OK'd a deal via email that gave Volpe and Howard Draft, now executive chairman of Draftfcb, rights to all profits on the block of Facebook shares that IPG bought in 2006. Volpe essentially argues that the email exchange with Roth constituted a verbal and enforceable contract.Facebook granted IPG the right to buy the shares on condition that the company’s clients would also buy $10 million worth of advertising on Facebook over a specified time. Volpe argues that he orchestrated the agreement and brought it to IPG. The catch to being awarded the profits on the stock investment, according to Volpe, was that he and Draft were held personally responsible for making sure that clients bought the $10 million in advertising that IPG agreed would be sold. Any balance due would be deducted from their year-end bonuses, per Volpe. Last year, the company sold half of its Facebook investment for a pre-tax profit of $132 million. The remaining half, which IPG has retained for now, was valued at $95 million as of Sept. 30 -- reflecting the decline in Facebook shares since it went public earlier this year.IPG has asked the court to dismiss the case. It argued that there was no agreement to give Volpe and Draft the profits on the entire block of shares and that even if there was a verbal agreement to do so, as Volpe contends, Volpe’s employment contract with IPG at the time specifically stated that it could not be altered by verbal agreement. Thus, the “side agreement” that Volpe argues grants him the Facebook stock profits would not be enforceable.In October, Volpe responded to IPG’s dismissal request -- asking the court to deny it, and citing a number of past precedents that allegedly support his case. Then, earlier this month, having run out of motions to file, Volpe’s lawyers continued to press their client’s case with a letter to New York State Supreme Court Justice Eileen Bransten citing yet another decision allegedly supporting Volpe’s argument. It was handed down shortly before they filed the motion opposing IPG’s dismissal request, but didn't mention it in their brief. “The papers before this court -- together with this letter -- adequately detail why IPG’s [dismissal] motion must be denied,” Volpe’s lawyer wrote.IPG responded last week with its own letter to Justice Bransten, arguing that Volpe’s letter was out of line and not allowed under the court’s established procedures. “Plaintiff resorts to more and improper argument ... in an attempt to distract from the dispositive issues. Even if considered, it gets Plaintiff nowhere,” IPG argued.Both IPG and Volpe have raised the prospect of oral argument. Justice Bransten has not yet ruled on whether she will hear it.
Only one in five Web users say they notice the "AdChoices" icon, which is aimed at telling consumers about online behavioral advertising, according to research unveiled today by the University of Pennsylvania's Joe Turow. Most Web users -- 55% -- say they don't know whether they have seen the icon, while 24% say they have not, according to Turow. Those findings come from a survey of 1,503 Americans about attitudes regarding online ad targeting. Turow's study also found that the overwhelming majority of respondents -- 86% -- disliked targeted political ads. (That data was released in July, but survey results about the AdChoices icon wasn't made public at the time.) Turow, a professor at the Annenberg School for Communication, presented his research Tuesday at a meeting convened by the Commerce Department. The AdChoices icon -- the centerpiece of the ad industry's self-regulatory efforts -- is served in around 1 trillion ad impressions each month. The icons consist of a lower-case 'i' inside a triangle and are accompanied by the phrase AdChoices; they typically appear in the top corner of behaviorally targeted ads. Consumers who click on an icon are taken to pages where they can learn more about online behavioral advertising -- or how companies mine users' Web-surfing history in order to serve them ads -- and opt out of that form of advertising. Turow says that the 20% awareness rate seems low, given the large number of impressions served. "I would hope the awareness would be substantially higher than that," he says. But the Interactive Advertising Bureau's general counsel Mike Zaneis says he believes Turow's findings show the self-regulatory program is making progress. "Twenty percent of market awareness for an icon program after a little more than one year in operation is progress that any brand marketer could envy," he says. A study released in April by researchers from Carnegie Mellon University also raised questions about whether the icons effectively inform Web users about data-based advertising. For that report, researchers examined how 1,500 Web users interpreted the icons, taglines and landing pages. Most users "mistakenly believed that ads would pop up if they clicked on disclosure icons and taglines," the report says. More than six in 10 users -- 63% -- believed that opting out would stop online tracking; most ad networks only promise to stop sending targeted ads to people who opt out, although some also stop tracking those users. But Lou Mastria, managing director of the umbrella group Digital Advertising Alliance, says it's premature to draw negative conclusions -- especially given that the group launched a new educational initiative earlier this year. That campaign directs Web users to the site www.youradchoices.com, which features three videos and an opt-out mechanism. "There's a little bit of a rush to judge the icon, even though we haven't been in the market that long," Mastria says. "It's very early days."
The AOL On Network on Wednesday is expected to announce a partnership with online video platform Kaltura. The deal makes around 420,000 premium videos within the AOL On Network accessible from Kaltura's open-source video platform, which is used by 150,000 companies, including Best Buy, HBO and TMZ. “It opens up places where The AOL On Network's content can live that have traditionally been against the two-player experience,” says Frank Besteiro, head of business development for The AOL On Network. “As a media company, our thoughts are on mass distribution for our content, and that means making our content player agnostic.” As a result of the partnership, Kaltura’s publishers will be able to access and search the AOL video catalog, then add videos to their own accounts. Regarding the business arrangements of deals, Besteiro said: “We will set up individual agreements with partners interested in taking our content through their Kaltura players. We can sell or they can sell both options as available to partners.” Despite an explosion in online video, Kaltura co-founder Michal Tsur said quality content remains in high demand. “The goal [of working with AOL] is to provide a solution for publishers that have views but lack actual content,” Tsur said. Added Besteiro: “Mass video views are the objective for this partnership. The ability to drive video views of our content across all platforms and devices is what every media company is looking to achieve.”Kaltura recently launched new multiplatform functionality with support for iOS, Android, Xbox and Google TV, extending the reach of AOL content to users of mobile devices and connected TVs. Launched just this past April, The AOL On Network brings AOL's entire video offering under one umbrella, and reaches more than 75 million unique visitors per month, according to AOL, citing comScore data.
Google has introduced the ability to read and share reviews in Google Shopping. The company on Tuesday announced the addition of Shortlists to Google Shopping, allowing consumers to bookmark and then compare product features on Google Shopping and other sites across the Web before making a purchase. Shortlist allows consumers to add notes and details about a specific product. The price appears alongside notes and images. Friends can keep track of products and prices, as well as share the Shortlist to compare notes and add comments. More holiday shoppers will find "motivation" online this year, according to the National Retail Federation’s holiday consumer spending survey conducted by BIGinsight. Some 47.3% of consumers said they will look for holiday gift ideas online, compared with 45.2% who will find their inspiration for the perfect gift in the store, 40.4% from friends and family, 36.2% from advertising circulars, and 35.4% on television. Consumers will also take to their phones this holiday season buying gifts from apps. Google added Google Shopper 3.0 for Android to browse and research gifts on mobile devices. Among smartphone or tablet owners, 68% have used their mobile device to make a purchase in the past, according to Qualcomm Snapdragon, which manufactures processors for more than 500 mobile devices. Findings from the holiday shopping survey conducted by Ipsos suggest about half of average smartphone or tablet owners said they would definitely or probably be motivated to walk into a store if they received on-the-spot coupons for a retailer on their mobile device. Consumers are becoming more comfortable with the idea of mobile device apps as a form of payment. Some 58% of smartphone or tablet owners said they are comfortable making purchases on their mobile device. About 62% of consumers ages 18 to 34 are most likely to admit being comfortable making purchases on their mobile device, compared with 51% of those ages 35 to 50.
Gearing up for the holiday shopping season, Toys “R” Us has launched revamped mobile apps and mobile sites that add features for ordering and shipping, as well as scanning products in-store. The rollout includes updated Toys “R” Us and Babies “R” Us apps for iOS and Android and a new tablet-optimized site for both brands. The refreshed mobile offerings extend popular shopping services, including “Buy Online, Pick Up In Store” and “Ship to Store,” through their smartphones and tablets. They also provide a unified shopping cart between the Toys “R” Us and Babies “R” Us apps and sites so shoppers can switch between the two brands without having to make separate purchases. Milton Pappas, vice president, e-commerce customer experience at Toys “R” Us, said the app enhancements would enable someone to place an order via mobile and pick it up at their local store within three hours -- a boon for last-minute holiday shoppers. The redesigned apps also enable users to scan a product barcode or QR code to get more information. Customers are taken to a page showing product details and user reviews, and giving them the ability to add the item to their shopping cart. Mobile users can enter their ZIP code to see local ads and deals. Customers can also access deals through the company’s “R” mobile messaging program, which sends up to two text messages per week about coupons and offers. The Toys “R” Us iPhone app (all versions) has a rating of 2.5 out of five stars in the App Store, based on just 102 ratings. The Android version has an average rating of 4.3 stars in the Google Playstore, but is based on input from only 14 users.
Late last year, music-streaming service Spotify introduced apps from industry publishers, including Rolling Stone, Billboard and Pitchfork, allowing outside partners to offer their own custom playlists built on the company’s catalog of over 18 million songs. This spring, Spotify followed up by adding apps from brands such AT&T, Intel and McDonald’s. Now the company is launching its first in-house-created app to help users discover new music based on trending data like social buzz, playlists and what people are listening to and sharing. On board as launch partner for the new Emerge app is Chevy, which is using the app to promote the Sonic. The centerpiece of Emerge is a monthly competition in which Spotify posts a list of 10 up-and-coming acts that get pared down each week until one is left as the winner. During each cycle, the company tracks the same data for each artist, but adds a layer of human curation by incorporating milestones happening offline -- like a big sold-out show or a TV appearance. “By listening and sharing, users push their favorite artists to the top of the Emerge charts, we don’t have a voting feature in the traditional sense,” said Maureen Traynor, head of brand partnerships for Spotify. Winning or “Recently Emerged” artists are archived in a new tab in the app. Increased exposure is the reward via Spotify. Branding for the Sonic is integrated throughout the app and the sponsorship extends the campaign kicked off last year to associate the car with discovering firsts in one’s life. That theme is linked to new music discovery through the Emerge app. In a section called “Sonic Firsts,” for example, the brand asks several of the artists spotlighted in the app to discuss their first concert memories. Another page highlights the car’s connection to music and “firsts” in prior ads, including the spot that debuted during the Super Bowl showing a Sonic being parachuted out the back of a C-130 cargo plane at 20,000 feet. “No adventure should go without music. That’s why Sonic is teaming up with Spotify to launch Emerge. Sonic and Emerge want to help new artists get discovered, get to the top and experience their very own first,” states ad copy within the app. Working with Chevy on the Emerge execution were Commonwealth Advertising, handling creative, Carat for media planning, and Fleishman as social media agency. As the first internally developed app for Spotify, Traynor said the company built, “what we think will be a great fit not only for our users, but also a great opportunity for brands to get involved.” The Chevy sponsorship of Emerge runs through at least the end of the year, but the opportunity to advertise in the app going forward will be open to other Spotify ad partners as well. Spotify has about 15 million users overall, 4 million of whom are paid monthly subscribers. The fee is $9.99 a month in the U.S. The free version of Spotify is supported by display and audio advertising.
New research shows that in addition to being generally nifty, tablet computers make it easier for people with moderate vision loss to read, thanks to displays that are clearer and brighter than print on paper. That’s according to a new study by New Jersey’s Robert Wood Johnson Medical School, which tracked the reading speeds of 100 subjects with moderate central vision impairment when using iPads and Kindle tablets. Subjects reading text in 18-point font on the iPad gained at least 42 words per minute in their average reading speed compared to print, while subjects reading the same size text on a Kindle gained an average of 12 words per minute compared to their print reading speed. Patients with the worst vision (which the study defined as 20/40 or worse in both eyes) showed the biggest improvements when reading on tablet devices instead of print text. People with the worst vision loss also said the iPad provided the most comfortable reading experience. The study authors suggest that back-illumination may be the key to the iPad’s improved readability, because it enhances the contrast between words and background. Daniel Roth, M.D., an associate clinical professor at Robert Wood Johnson School of Medicine and the study’s lead author, stated: “Our findings show that at a relatively low cost, digital tablets can improve the lives of people with vision loss and help them reconnect with the larger world.” These results are especially significant because tablet ownership is increasing among older adults, who are more likely to suffer vision loss. According to data released by Pew’s Internet & American Life Project, 27% of American adults ages 50-64 and 13% of adults ages 65+ owned a tablet computer in August of this year. Those figures are up from 15% and 7%, respectively, in January of this year, and just 4% and 2%, respectively, in November 2010.
Years ago, a friend of mine sold his company to a national telecommunication company. With time on his hands, and being a serial entrepreneur, he set out on his next project. Watching his two children come home every night with overstuffed backpacks full of books, he decided his next venture would be to lighten their load. With a track record of technology innovations, he developed an e-reader years before the iPad and Kindle. The reader had an interactive notepad on one side and the e-reader on the other side. He provided much of the funding and line up production in South Korea and China. Next, he would need the education system to play along. And that’s where the story ends. He preached of the value of democratizing education to school systems, locally and nationally. The opportunity to generate new revenue streams by promoting college professors, courses and information beyond the classroom to the reach of every student with Internet access. But the old guard was too wedded to their legacy business models, and their traditional thinking of a “campus education” and as a result, they never got on board. That was until now. Massive Open Online Courses or MOOCs are changing the mindset of some of the most prestigious colleges in the U.S. Leading universities like Harvard, MIT and Johns Hopkins are now putting some of their marque courses online -- many of them for free. MOOC platform providers like Coursera, edX and Udacity believe higher education is a basic human right and have seen a surge in interest. Coursera now has more than 1.7 million registered students. Brian Caffo, a professor at Johns Hopkins University, teaches what he calls a “math biostatistics boot camp” that usually draws a few dozen graduate students. (15,000 students from around the world signed up for the free online course.) Bringing higher education to the masses also comes with paradigm-shifting challenges. It has the potential of redefining the value of a “campus education” and to disrupt the traditional business model. Nick Anderson of TheWashington Post suggests that MOOC platforms pose a key question for universities: “Are they undercutting time-tested financial models that rely on students willing to pay a high price for a degree from a prestigious institution…or are they accelerating the onset of a democratized, globalized version of higher education?” Burck Smith likens it to the challenge newspapers faced when they first launched Web sites. Smith, the CEO of StraighterLine, which sells low-cost online courses, says: “Free content has never really been a successful business model.” Perhaps Mr. Smith is wrong. With two kids not far from college, I’d like to suggest that theirs could be a new business model built on free content: advertising. In this new world, universities become, in a sense, content houses -- similar to publishers. By making the best universities, courses and professors available to the masses, the opportunity to draw huge audiences and to build brands worldwide is created. For example, the eight courses made available by Johns Hopkins have drawn more than 170,000 students from around the world. Where there are highly engaged and defined eyeballs, there are advertisers wanting to gain access, especially given the fact that courses are available in multiple formats and devices. Although this “revolution” is in its early stages, it has the potential to redefine the college experience, education and business model. As the story of my friend attests, the industry is slow to change, but with cost of an average public college education at $27,435, “free” sounds pretty good to me.
Everything has a prime time — both media consumption and activities. It may not always be particularly marked, but it’s generally there. Sometimes, there is more than one clear statistical peak in the day. (Drive-time radio is a longstanding example.) One of the more recent behavioral phenomena to emerge as a consistent pattern in a specific time span: mobile shopping. Although clearly a pursuit of a minority of the adult population, when including shopping via the mobile Web and using apps, all indications are that total numbers are growing — both total mobile shoppers and total spend. While this is good news for the mobile industry, retailers still view mobile shopping with uncertainty as they strategize how to deal with the much-reported threat of “showrooming” or comparison shopping. According to USA TouchPoints data, in terms of total reach within the 18-64 population, those shopping via mobile in an average week account for a little over 6% reach with a slight skew to women. Of those, just over 19% shop this way during the week and almost 27% do so on weekends. In terms of dayparts, the clear candidate for prime-time status right now appears to be late afternoon to mid-evening — 4 p.m.-8 p.m., during which average reach among mobile shoppers never drops below 8% and gets as high as 13%. This is perhaps surprising, considering this is also when families return home, meals are prepared, people commute etc. It is also an indication of when some of the feared comparison shopping is concluded. Are these the post-browsing and window-shopping hours? Interestingly, this is not all a young persons activity. While 18-34 years olds are best represented at just over 9% weekly reach, 18-49-year olds are not far behind at 7.5% and 25-54-year olds register 6.5% reach. While it is possible that the younger demo may increase their mobile shopping more quickly than the other groups, there is really nothing to suggest that in the data, the ubiquity of the mobile phone is a key factor that would mitigate against a really significant divide opening along age lines. Perhaps counter-intuitively, auction-based purchases via mobile (like eBay) attract higher levels of reach on an average weekday at 6% (perhaps monitoring bids or items previously placed via computer) and coupons sites and apps, such as Groupon, attain higher reach over the weekend at 8.5% of mobile shoppers. This may be a reflection of the expansion of the category beyond the strict confines of the deal of the day model to something users can gain value from in a manner more in keeping with their lifestyles — catching up on recent deals they saw or missed. However, a the variables stand now, they will undoubtedly continue to show increases in volume as mobile shopping establishes its place as we enter this holiday season and beyond.