In one of the first detailed analyses of the seasonal fluctuations in the supply-and-demand of online display advertising attributable to Thanksgiving and Black Friday, real-time bidding volume crashed as the supply of online ad impressions plummeted due to holiday usage patterns. The result was a spike in the average prices paid by advertisers bidding on inventory during Thanksgiving week. The analysis released this morning by independent online trading desk Accordant Media suggests that some of the decline in RTB volume during the period was due to pre-holiday inventory sales. “On one hand, publishers may have achieved higher upfront sell-through (lower RTB inventory) for Black Friday ahead of Cyber Monday, and on the other hand, consumers were probably offline more over the holiday period which also means lower impression volumes,” explains Craig Schinn, vice president-analytics at Accordant. Whatever the reasons, the facts are that average daily trading volume for RTB impressions fell between 10% and 30% during Thanksgiving week vs. corresponding market averages. The decline peaked on Thanksgiving day, which saw average RTB impressions volume fall 30% over an average Thursday’s trading volume. While that might not seem surprising given the seasonal repast, Accordant notes that Black Friday auction volume was also down 20% over a typical Friday. “The decreased inventory levels made for a much more frenetic ad-buying environment,” the Accordant report notes, adding: “With auction CPMs as much as 50% higher, buyers face greater pressure to make certain they are finding the quality audience they are looking for or face overall campaign performance challenges.”
Rich media is increasingly threatened by the rise of mobile platforms, and the continued reign of Facebook and its limited ad opportunities. Yet nearly two-thirds of marketers -- 64% -- expect investment in rich media online advertising campaigns to increase beyond that of standard banner ads in 2013, according to new research from Adform. How is that possible? For one, nearly half of marketers identified better integration of online display advertising with mobile as the lead driver for increased investment in online display marketing over the next year. According to Gustav Mellentin, CEO at Adform, what should worry rich media providers is industry fragmentation, and confusion among digital marketers with regard to emerging ad standards and platform choices. For instance, when presented with a list of seven common industry acronyms, a full third of marketers -- 33% -- surveyed cannot decipher the term RTB (real-time bidding). Adform also found that 39% of marketers do not recognize the term DSP (demand side platform); 47% do not understand the term SSP (supply side platform); and only 13% can identify DCO (dynamic creative optimization). Marketers are also frustrated with the many separate platforms they use to run their campaigns, Mellentin found. According to the survey, 42% of marketers are frustrated with using multiple platforms to run campaigns, while 40% would prefer to use a fully functioning single platform to run all elements of their digital marketing campaigns. Still, “the online display advertising market continues to grow strongly in the U.S., a trend which is only set to continue in 2013 with greater investment in rich media and better integration with mobile,” according to Mellentin. Forrester Research recently predicted that online display ad spend in the U.S. would reach $12.7 billion, this year, and would grow by 17% annually to be worth $28 billion by 2017.
Online businesses face a serious challenge adjusting to an increasingly mobile world. Some, like Facebook, are dealing better with the “mobile problem” than others like Zynga. But few will be left unaffected by the mobile transformation underway. The key to surviving the upheaval is not to adopt a mobile-only strategy, but to extend existing business models to mobile to bridge the digital and physical worlds, according to a new Forrester report authored by analyst Thomas Husson. That means focusing on ways to build mobile engagement as customers shift from PCs to smartphones and tablets. Husson casts a skeptical eye on mobile business models, which he argues are still largely unproven. Even seeming mobile success stories like "Angry Birds" maker Rovio and Web radio service Pandora don't look as impressive under closer scrutiny. Mobile may have triggered Angry Birds' popularity, but it has given way to real world merchandising as the company's primary revenue driver. Still, companies can hardly afford to ignore the mobile revolution. Smartphones and tablets are going mainstream. Global use of the mobile Web and apps will continue to skyrocket. Mobile opportunities will improve as advertisers master mobile engagement and the promise of SoLoMo (social, location, mobile) moves closer to reality through increased knowledge about mobile customers. So how do companies close the mobile monetization gap while maintaining their current businesses? Husson advises they “obsess about mobile engagement.” That includes developing content and services tailored to mobile devices -- personalized, immediate and contextual. As an example, the report points to the popular Nike+ FuelBand app and bracelet for tracking daily physical activity. Adapting key performance metrics and measurement systems for mobile is another important step. That means determining what is working in mobile and the resulting ROI. Have the data to answer questions like: When will customers engage and how many minutes will they spend with your mobile services? Collecting such data, however, requires getting permission from consumers and meeting expectations of privacy. Husson also recommends that companies build mobile centers of excellence internally to serve as hubs that bring together mobile, social, cloud and big data technologies to build apps and other “smart” products. The recent launch of Mondelez International's Mobile Futures program is an example. All such steps require funding. Husson says he knows of several companies that each plan to spend more than $100 million in the next three years to make their businesses mobile-ready. “There is no excuse for a lack of investment,” he wrote.
Google is drawing broad outside support in its 7-year-old copyright battle with the Authors Guild. The Web companies Yahoo, Pinterest and Electronic Arts last week notified the federal court that they wish to file friend-of-the-court briefs arguing that the Authors Guild shouldn't be able to bring a class-action against Google. Yahoo and the other companies say they "are interested in the development of clear, consistent, and fair principles of law involving intellectual property and related claims, especially in this case with respect to class actions." In addition, library organizations and a coalition of more than 100 professors filed separate briefs backing Google in the litigation. The dispute between Google and the Authors Guild dates to 2005, when the Authors Guild alleged in court that Google infringed copyright by scanning books from libraries and displaying snippets of some of them in its search engine, in response to queries. One of the many contested issues centers on whether the Authors Guild is entitled to class-action status. Google argues that class-action status isn't appropriate, arguing that many individual authors feel differently than the Authors Guild about the book project. The tech company says that a survey it commissioned shows that many writers benefit from the project and want it to continue. Earlier this year, U.S. Circuit Court Judge Denny Chin rejected Google's argument and said the case could move forward as a class-action. Chin said it wouldn't be fair to require writers to sue Google individually. Google appealed that decision to the 2nd Circuit, which stayed all trial court proceedings until the class-action question is resolved. The professors -- all authors themselves -- argue in their friend-of-the-court brief that they disagree with the Authors Guild's stance. "Academic authors typically benefit from Google Books, both because it makes their books more accessible to the public than ever before and because they use Google Books in conducting their own research," they argue. A separate friend-of-the-court brief by the American Library Association, the Association of College and Research Libraries and the Association of Research Libraries argues that certifying the Authors Guild as a class-action could harm libraries generally. "Class certification ... would set a precedent that any mass digitization initiative is subject to class action claims," they argue. "The mere threat of having to defend against such claims creates a disincentive for libraries, universities, and others to engage in socially beneficial digitization efforts, even where there is a strong fair use justification," notes the ALA.
U.K. marketers will increase spending by 14% to $8.8 billion for online and mobile campaigns this year, up to $10.7 billion in 2014, and $12.4 billion in 2016, according to an eMarketer digital advertising report released Monday. Comparing U.K. with U.S. budgets, marketers in the United States will spend $166 billion, up to $189 billion in 2016, according to the research firm. Paid search will continue to account for more than half of digital ad spending for marketers, as mobile search volume rises. Marketers will spend 15.3% more in 2012 on paid-search ads -- reaching $5.2 billion, or 58.5%, of all U.K. digital spending. Within four years the dollar amount will rise to $7.1 billion, but market share will slip to 57.1%. Estimates for paid search released Monday rose a bit since eMarketer's May 2012 forecast, to a compound annual growth rate of 9.7% on paid-search spending between 2011 and 2016, rather than 8.5% as estimated in May. The revision prompted by greater-than-anticipated search spending in the first half of the year, as reported by the Interactive Advertising Bureau U.K. This year, about $2.0 billion or 23% of all U.K. digital ad spending will go to display advertising such as banners, rich media, video and sponsorships. eMarketer estimates. The steady gains, in part, will come from an increase in use of real-time bidding and video formats, although doubts about the speed of economic recovery will lead some advertisers to focus on proven search tactics. Online video ads in the U.K. should rise from $273 million in 2012 to about $1.4 billion in 2016, according to eMarketer. The estimates include social video and video advertising on mobile devices. Mobile advertising will grow 120% in 2012, as spending on mobile platforms reaches $721 million. In 2016, mobile ad spending is expected to reach roughly $3.5 billion. Nearly 83% of all residents will be mobile phone users this year in the U.K., the world’s third-largest market for mobile advertising, and more than one-third of those will have a smartphone, according to eMarketer. In 2012, only the U.S. and Japan, with projected mobile ad spending of $2.4 billion and $1.7 billion, respectively, will outrank the U.K.’s $721 million market share. The annual rate of growth, estimated at 120% for 2012, is expected to remain above 50% until 2016, when mobile ad spending in the U.K. will approach $3.5 billion, according to eMarketer.
Kids of all ages want personal TV/video-type products -- and most clamor for the Apple brand-name attached.A Nielsen study shows that Apple's iPad tops the list for young and older kids -- one of a number of devices that are scoring well from one dominant company, Apple.Kids 6-12 "interest in buying in the next six months" registered a 48% score for a full-size iPad, up from 44% a year ago. Right behind comes a strong 36% score for the new iPad Mini and the same number for the iPod Touch. iPhone also scored well, at 33%.Only the Nintendo Wii U could break Apple's dominance here -- coming in second to the iPad with a 39% score. Just behind other Apple products was the 31% score for a "computer" and a 31% for the Kinect for the Xbox 360 gaming system.Even with older kids 13 years+, iPad was still at the top of the list for their prospective buying six months from now -- albeit at a lower score than for younger kids. Twenty-one percent of this age group voted their desire for a full-size iPad, down from 24% a year ago.But other Apple products for older kids and teens drew less attention -- a 14% for the iPhone and 11% for the iPad Mini. Among this consumer group, Nielsen concludes they were more accepting of non-Apple products. For example, Amazon’s Kindle Fire had a 10% score; and Samsung Galaxy, a 9% number.After the iPad, older kids and teens were interested in a "computer" (19%); "tablet computer other an iPad" (18%); and Nintendo Wii U (17%). After the iPhone at 14%, comes "Smart TV" (13%); E-Reader (13%); and "Smartphone other than iPhone" (12%).While Apple products scored high on the list, there was one Apple product that came in at the bottom: Apple TV. Kids 6-12 only registered a 4% purchasing desire for Apple TV, while kids 13 and older tallied a 2% number.
Digital wunderkind JT Batson, a key player in the formation of media-buying data processor Mediaocean, has joined analog media giant Cumulus Media as chief revenue officer. Batson, whose most recent role was chief strategy officer at Mediaocean, had been the head of digital operations at one of its predecessors, Donovan Data Systems. Mediaocean was formed earlier this year when Donovan merged with VC-funded startup MediaBank. Prior to Donovan, Batson was mainly involved in sales of digital startups, including Rubicon Project and Mozilla’s Firefox browser. The move is another vote of confidence for analog media, especially radio, which is where Cumulus’ business is focused. “My big bet here is that we can build the best local sales force at scale,” says Batson, noting: “We are starting with a huge head start -- over 1,600 salespeople in 110 cities. If we can have success with this, then we can win big. Outside of Google, no one has really cracked this.” Although many on Madison Avenue may see radio as an inherently local media business, Batson says the “legacy” of big media companies like Cumulus is that they still make most of their money from national advertisers, vs. search giant Google, which generates most of its revenues from small businesses, although the notion of “national,” “local,” and even “global” is somewhat semantic on the Internet. Still, digital native Batson sees a more fundamental shift taking place as “the traditional TV model shifts,” noting: “Those who can bring both national and local advertisers to a piece of content will be able to win.”
The Thanksgiving mobile overnights are in, and shoppers weren’t just busting down department store doors late Thursday. They were also obliterating mobile commerce records. Sitting back on their couches, tryptophan-dazed and gadgets at the ready, Americans made 65.3% more purchases with their phones last Thursday than they had on Thanksgiving 2011, according to IBM Smarter Commerce, which traditionally tracks online commerce activity. The foreshadowed “Mobile Thursday” scenario appeared to come true. Shoppers got the jump on the late T-Day and Black Friday mayhem and were lured by early online deals to help drive overall Internet retail business sales up 17.4% over last year. But mobile was the clear driver this time. Tablets figured prominently in the device-based purchasing, IBM reports. iPad tappers and swipers made up 10.7% of all online shopping on Thursday. Overall, as of Thursday noon, 26.5% of visitors to retail sites were coming from devices, up substantially from the 15.11% seen last year. The share of purchases was at 14.1%, up four points from last year. IBM saw the iPhone leading, with 9.6% of all traffic, followed by the iPad with 9.3% and Android devices with 7.3%. The mobile mania continued into Black Friday, when IBM also saw mobile purchasing up 14.3%. IGM Smarter Commerce Strategy Director Jay Henderson told The Boston Globe: “Mobile is really having a breakout year.” IGM Smarter Commerce measures activity across more than 500 retailers and about half of the top 100 sites, IBM tells Seeking Alpha. A number of individual mobile entities reported a record-breaking Thanksgiving as well. Rue La La saw a 75% increase in mobile sales over last year, half of which came from the iPad. The “couch commerce” effect was apparent in their usage logs. The largest increase in traffic came after 8 p.m. EST, when the flash sale site opened its virtual doors to a special Holiday Dash boutique of offers. Th design-oriented e-commerce site Fab reported that 40% of its Thanksgiving Day sales came through mobile devices, according to Business Insider. Branding Brand, a mobile commerce platform for major brands such as American Eagle, The Children’s Place, Costco, Sephora, Drug Store and Steve Madden, said visits to its client sites on Thanksgiving increased 103% to produce overall sales increase of 221%. Average order size was up 19% this year over same day last year. In terms of e-commerce share, the company saw 20.25% of total online traffic coming from smartphones. Despite the more comprehensive penetration of Android devices in the market, Apple’s iOS continued to funnel far and away the most shoppers to Branding Brand sties, 63% of visitors and 70% of orders.
In its final analysis of Black Friday e-commerce activity, IBM reported this weekend that mobile platforms were responsible for 16.26% of overall online sales for the day, up 65.24% from the same day last year. Just as significant is mobile’s place in the overall shopping mix, with 24.04% of traffic to over 500 major sites monitored by IBM coming from smartphones or tablets. While activity was up, the conversion rate on mobile traffic declined slightly from last year, to 2.72% from 2.78%. For all online e-commerce traffic, the conversion rate was 4.58%. Nevertheless, IBM finds that mobile devices play a considerable role in shopping, with 58% of consumers using their device to look for bargains at some point on Black Friday, as did 41% using tablets. Among devices, the iPad surged in use this year, responsible on Friday for 9.75% of traffic, up 105.26% from its 4.75% share last year. iPhone was far and away responsible for the most smartphone traffic to e-commerce (8.71% of overall activity, up 61.90%), while Android has a 5.53% share, with slower 36.54% growth. Despite Apple’s declining share in the tablet market, little of that fragmentation was evident on Friday when 88% of tablet traffic came from the iPad. The Barnes & Noble Nook was ahead of the Amazon Kindle, with 3.1% of the tablet traffic compared to 2.4%.
Why, oh why, are the Big 4 broadcast networks doing so poorly this fall? This question is being bandied about everywhere, including this very publication. Is it DVRs? Is it Netflix and Hulu? Is it programming competition from cable? Is it Wii? Is it YouTube? Is it live plus 3 days ratings versus live plus 7 days? Those are the questions. Here’s the answer: Yes. The Big 4 are failing because, as has been obvious for almost a decade, they must fail. Fragmentation and ad avoidance have killed their business model -- duh. Their inexorable downward trajectory will be interrupted only in outlier years, bumped by such things as the Olympics, close elections and the rare hit reality show. Meantime, the only ratings grabbers beyond competition shows will be sporting events and live awards programs commanding real-time attention. Period. That was true in 2005, when I first started saying it. It was probably true in 2000, before I started saying it. And it will be true until the shakeout begins, whereupon it will only be a question of whether any survive into the 2030s. Or 2020s. The tipping point will be when the law of diminished returns kicks in, which could be any day now. What has kept the nets afloat, paradoxically enough, is the very fragmentation that is decimating them. As the mass audience has gradually but enormously eroded, the value of any mass audience has increased all out of proportion to actual reach. It’s like the last gas station before Death Valley: $10 a gallon. The Big 4 have kept revenues flowing by doing nothing more visionary than gouging at the pump. But the traffic on the desert highway is now so light, even the gougers won’t long be able to keep their pumps running. That’s the simple economics of the situation. Even if the Big 4 had the wherewithal to produce the likes of Homeland, Breaking Bad, Mad Men, Girls, and Game of Thrones -- and for reasons of budget and FCC nannying they emphatically do not -- they would suffer an end-stage condition. But they can’t even program themselves into survivability, because the one aspect of their business model that stubbornly pertains is the sanctity of the lowest common denominator. The question, therefore, should not be how the Big 4 can cure what ails them. They cannot cure what ails them. The only relevant set of questions concerns what will succeed the Big 4. Is there a place for an all-live network? Is there a place for two? If CBS is a cable channel, what will it present? Cable channels are -- in varying degrees -- vertical. Comedy Central and Discovery have organizing principles, and therefore constituencies. CBS, NBC, ABC and Fox have no organizing principles. They have decades of brand equity, but literally zero brand meaning. They are, in short, irrelevant. They exist to sustain the affiliates, who in turn exist to sustain the nets in a sad symbiosis of mutual obsolescence. Advertisers aren’t served. Audiences aren’t served. The only thing being served is inertia.
OMMA magazine has named Digitas Agency of the Year for 2012, marking the third consecutive year the Publicis unit has won the prestigious award recognizing innovation and leadership in digital media and advertising services. Other winners include AKQA (silver), 72andSunny (small), Wieden + Kennedy (creative), Pereira & O’Dell (social), Mullen/Mediahub (media planning and buying), Covario (search), Digitaria (design), PHD (mobile). The winners will be celebrated at an awards gala Jan. 29, 2013 in New York City. Click here to see MEDIA magazine’s agencies of the year.