Ad agency Dentsu, Recruit Holdings, and their joint venture Blogwatcher have inked a deal with San Diego-based Qualcomm Labs to license Gimbal. The new technology supports Android and iOS devices and allows advertisers to serve content on mobile devices. The technology, which works in applications on smartphones, gives Qualcomm a new business model to support mobile ad targeting. Japan-based Blogwatcher will begin integrating the technology in January by powering its wityou mobile application with Gimbal technology from Qualcomm Labs, the entrepreneurial arm of Qualcomm supporting mobile services. Consumers opt in, allowing the app to automatically select and deliver information relevant to the users in their current surroundings. Dentsu said it will use the technology as part of the integrated marketing solutions to clients. Ian Heidt, director of product management for Qualcomm Labs, said the technology pulls in information from a variety of sensors on the phone, how consumers use the phone, including the camera, and location to create a unique fingerprint. "In early trials in Japan, we've seen improvement on targeting," he said. "It shows how mobile and content change the behavior of consumers." Trials conducted by Blogwatcher in Japan found that consumers were three times more likely to click through and respond to WITYU notifications and offers as compared with non-contextualized and non-personalized offers. Click-through rates rose by more than 60% when specials and offers were delivered to consumers. Cheryl Goodman, senior director of business development and marketing for Qualcomm Labs, expects Dentsu to allow its U.S. subsidiaries to tap into Gimbal. Initially, Qualcomm Labs was launched as a technology incubator under parent company Qualcomm Technology. Making good on that promise, the telecommunications company recently announced support for its first round of start-ups: software developer Arynga, malware detector FatSkunk and mobile app developer Breadcrumbs. " Using a Smartphone from Shutterstock"
Adelphic Mobile, a start-up founded by former key players of Quattro and Apple’s iAd that is trying to develop a powerful and easy-to-use platform for advertisers and agencies to target mobile ads to consumers, this morning announced a $10 million round of funding led by Google Ventures. Original Adelphic investor Matrix Partners also participated in the round. As part of the investment, Google Ventures’ Rich Miner has joined the Adelphic board. Adelphic said the funding would be used to accelerate its product development, including a real-time platform capable of analyzing up to 30 different signals necessary to define mobile audiences, a bounty of information that has so far proved vexing for mobile advertising and audience-targeting developers. Miner, a general partner at Google Ventures and a co-founder of Google’s Android operating system, said the investment is purely a venture capital role and does not signal a strategic role by Google itself. He said Google Ventures operates as an independent VC and that he was attracted to Adelphic because of three things: The experience and reputation of its founders, the prospects for the technology they have developed and the potential size of the mobile advertising marketplace, should someone figure out a way to organize it. Aside from the infusion of working capital and the vote of confidence from having Google Ventures’ name attached to it, Miner said he would be a very active board member and would work to leverage the connections and strategic insights he has gained from related ventures to help accelerate Adelphic’s growth.
A deal to resolve a class-action lawsuit stemming from Facebook's sponsored stories program took a major step forward this week, when U.S. District Court Judge Richard Seeborg granted the agreement preliminary approval. The deal requires Facebook to pay users up to $10 if they were featured in a "sponsored stories" ad. The company also agreed to allow minors under 18 to opt out of appearing in all sponsored stories ads, and to give adult users a mechanism to control their appearance in future sponsored stories -- but apparently only on an advertiser-by-advertiser basis. That agreement "appears to be the product of serious, informed, noncollusive negotiations and falls within the range of possible approval as fair, reasonable and adequate," Seeborg wrote in a order tentatively approving the deal. In August, Seeborg rejected a prior settlement that didn't call for Facebook to compensate individual users. Seeborg scheduled a hearing for next June, when he will hear arguments about whether to grant the deal final approval. If the settlement is finalized, the deal will resolve a class-action lawsuit by a group of consumers alleging that Facebook's sponsored stories program violates a California law about endorsements. That law says companies need people's permission before using their names or images in ads. In the case of minors, companies need parental consent. While the current settlement provides for small payouts to users who were featured in ads, it's not yet clear how much money -- if any -- individuals will receive. The terms require Facebook to create a fund of up to $20 million, a significant portion of which will probably go toward taxes, court costs and reimbursing attorneys. Whatever is left will be used to compensate individuals in the U.S. who appeared in sponsored ads. Those people can put in for $10 each, but the amount they receive will depend on how many people put in claims. If the claims are so numerous that the fund can't pay applicants $10 each, they will receive a pro rata share. But if the pro rata share drops to less than $5, the judge will decide whether each user should receive a small award, or earmark the entire amount for public interest organizations and law schools. The University of San Diego's Center for Public Interest Law and Children’s Advocacy Institute opposed the revised deal, arguing that Facebook should obtain opt-in consent to the program from the parents of minors. Seeborg said in his ruling that Facebook and the Web users who sued should address that argument when they file a motion for final approval. Internet legal expert Venkat Balasubramani, who has followed the litigation closely, says he believes Seeborg is leaning toward green-lighting the deal. Balasubramani adds that the revisions to the settlement -- including the potential payout to users -- appear to address some concerns about the plan.
Austin-based independent T3 has named Greg Pomaro senior vice president-executive media director of its San Francisco office. Pomaro joins from Interpublic, where he was senior vice president-client services of its Mediabrands Audience Platform unit.The move marks another high-profile get for T3, which earlier this year hired former GSD&Mer Jim Firestone as chief strategy officer and former BBDOers Rick Doerr and Joe Volpicelli as senior vice president-managing director/New York and senior vice president-executive creative director, respectively.T3 CEO Gay Gaddis attributed the moves to the attraction of T3’s reputation for “independence and collaboration.”The agency emphasized that Pomaro will “lead strategic audience-centric programs,” suggesting that T3 will join the movement of agencies shifting from “media-buying” to “audience-buying,” as Pomaro’s former shop Mediabrands has done.Prior to Interpublic’s MAP unit, Pomaro was a client business partner overseeing Microsoft’s North America account at Interpublic’s Universal McCann unit. Prior to that, he led media and online investment at Razorfish’s Seattle office.
Since reports that Apple was planning to launch its own streaming music service began circulating in September, Pandora has faced increased investor uncertainty. Concerns about the company’s ability to compete directly with the tech behemoth have pushed down Pandora’s stock more than 25%. Its shares dipped in after-hours trading Tuesday after the Internet radio service provided fourth-quarter revenue and earnings guidance that fell well below analysts’ expectations. For the current quarter, Pandora projected revenue in the range of $120 million to $123 million, with an expected loss of 6 cents to 9 cents per share on an adjusted basis. Analysts had anticipated fourth-quarter earnings of 1 cent a share on revenue of $130 million. During the company’s earnings conference call, Pandora CEO Joe Kennedy said the disappointing fourth-quarter forecast reflects concerns among its advertisers about the fiscal cliff and related economic uncertainty heading into 2013. Pandora’s fiscal fourth quarter is unusual in that it ends January 31, rather than at the end of the calendar year. The company’s results for its fiscal third quarter ending Oct. 31 were better. Pandora reported a profit of one cent per share on sales of $120 million, up 60% from the year-earlier period. Analysts on average had forecast earnings per share of a penny on revenue of $117 million. Excluding stock-based compensation of $7.1 million, Pandora would have had earnings of 5 cents a share. The company said total listener hours -- a key audience metric -- grew 67% to 3.5 billion during the third quarter, compared to 2.1 billion for the third quarter of fiscal 2012. It recently reported that listener hours in October alone grew 65% to 1.2 billion. Active listeners In October increased 47% to 59 million, down slightly from 49% growth in September. Advertising, which generates the bulk of Pandora’s revenue, rose 60% to $106 million in the quarter, while subscription sales contributed $13.7 million, up 52% from a year ago. Building up advertising on the mobile side has been a key focus this year for Pandora, which gets the vast majority of its usage through mobile devices. During the quarter, Kennedy said the company increased mobile monetization at “record levels” and increased total mobile revenue by 112% to $74 million. Enhancing its mobile presence, Pandora launched upgraded versions of its iOS and Android apps in October. In addition to the looming threat of Apple, Pandora also faces growing costs for acquiring music rights. It is among companies lobbying Congress to pass the Internet Radio Fairness Act, legislation that would reduce royalties paid by Web radio services. Higher user growth for Pandora has also meant higher royalty costs each time a user plays a song. For the full year, Pandora forecasts revenue in the range of $422 million to $425, down from the range of $425 million and $432 million it had projected in the second quarter. The net loss per share is projected at 9 cents to 12 cents, up four to eight cents. Pandora shares were down more than 17% in after-hours trading to $7.80 following the company’s release of third-quarter results and its fourth-quarter and full-year outlook.
AOL’s Advertising.com unit late Tuesday announced the acquisition of ad-targeting and retargeting specialist Buysight. Terms of the deal were not disclosed, but Buysight -- formerly Permuto -- has raised about $16 million since its launch in 2008. “We strongly believe that both brand and performance display as well as mobile and video campaigns benefit from dynamic, targeted creatives and messaging,” Ned Brody, CEO of AOL’s Advertising.com Group, said. Specifically, Brody is counting on Buysight to improve AdLearn, Ad.com Group’s optimization engine. Simply put, retargeting is the practice of serving consumers ads -- usually in the form of a banner -- for products or services based on content they have previously viewed online. And retargeting has become big business. In September, Criteo, a New York-based retargeting startup, raised $40 million on an $800 million valuation. Also of note, Jason Kelly -- formerly of Google and AdMeld -- recently took the helm at Sociomantic Labs, a rapidly growing Berlin-based retargeting firm. Also driving the retargeting business is its increasing cross-pollination with real-time bidding, which has made online ad-buying more efficient -- and by many measures, more effective. The Ad.com Group includes Advertising.com, Adtech, the AOL On Network, goviral and Pictela. AOL brought in Brody in May to implement what it called a more “segmented” operational strategy, which included aligning its operating focus around brand measurement and management. Along with a continued focus on consumer brands, AOL has recently sought to scale its enterprise advertising and publishing brands with the Ad.com Group.
Fashion commerce community Poshmark just closed $12 million in Series B financing, led by Menlo Ventures. Applying the age-old clothing swap system to an increasingly mobile world, Poshmark encourages members to buy and sell fashion among themselves. The start-up also coordinates “Posh Parties” -- real-time shopping events where a mostly female user-base gathers to shop, share, and sell items from their smartphones. Since its launch a year ago, users have flooded the marketplace with $100 million in items, according to Poshmark founder and CEO Manish Chandra. Rather than embracing the elitism that is associated with some fashion brands and communities, Chandra said Poshmark nurtures an “inclusive community where diverse women across America” can bond through shopping and swapping. Illustrating the strength of its community, Chandra said Poshmark is currently recording over 2 million monthly interactions between its members. Chandra plans to use the additional capital to scale the company’s infrastructure, expand into new platforms, and hire more staff. Existing investors, including Mayfield Fund, Inventus Capital, and SoftTech VC, also participated in this round. Poshmark has now raised a total of $15.5 million to date. Familiar with the online side of “fashion,” Menlo Ventures and Mayfield Fund portfolios are also invested in Fab.com, a design-centered deal site, which already boasts 10 million registered members worldwide.
Logo TV founder Matt Farber has a new idea -- and new venue -- for Gwist, his upcoming project. Gwist -- "TV With a Gay Twist" -- is the latest YouTube partner channel. Given the approval of gay marriage referendums in the recent election, Farber has timed his project well. It debuts Jan. 14. Farber has launched several successful LGBT media brands, including Viacom’s Logo, Clear Channel’s “Radio With a Twist” and Sony’s “Music With A Twist” record label. He calls Gwist "a natural next step," adding that "social media and the universal distribution aspects of online and mobile video are suited for niche programming." In June, Farber -- the president of DoubleBounce, a TV production company -- merged with Bark Bark, a cross-platform brand integration agency, to become partner and head of content. On the advertising front, Gwist has teamed with Bud Light, Orbitz and the Atlantic City Alliance, the city's tourism marketing arm, to include brand integrations into specific shows. Bark Bark, which has produced campaigns for AMC, Bravo and History, will handle those duties for Gwist. In addition, Gwist has partnered with the Gay Ad Network. Gwist will feature 10 short-form series with established gay stars, such as Judy Gold, host of “The Untitled Spousal Equivalent Game," "The Randy Rainbow Show," with celebrity spoofs and comedy sketches from YouTube star Randy Rainbow, and "Cuentin’s Caddy Commentary," an animated talk show from animator Matthew I. Jenkins of Adult Swim’s "Aqua Teen Hunger Force." Working closely with YouTube, Gwist will also incorporate the Google+ Hangouts platform into its programming. “We want producers and talent to see Gwist as a creative playground," says Farber.
On Tuesday Walt Disney gave Netflix, the big subscription service, a shot in the arm. It inked an executive deal for the pay TV window. News of the agreement with Disney sent Netflix's stock up nearly 11% to $84.35 in midday trading.Beginning in 2016, Netflix customers can watch movies from Disney, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios and Disneynature as soon as they are made available for pay TV. The programming pact includes all video electronic devices -- television, tablets, computers and mobile phones. Under a multiyear pact, Netflix will also gain access to major animated films from the Disney library, such as "Dumbo" and "Alice In Wonderland." In addition to getting first crack at Disney animated theatrical movies, Disney's direct-to-video films -- a part of the deal -- will be available on Netflix in 2013.Almost a year ago, Netflix lost Disney films and other content when its deal with pay TV site Starz expired. A deal with Disney is considered crucial, according to various analysts, given the high volume of kids TV-film viewing on Netflix. It's also why Netflix recently did a deal with DreamWorks Animation. The exclusive pay TV move with Disney gives Netflix a step up against pay TV competitors such as HBO, Showtime and Starz. Financial terms of the Disney-Netflix deal were not disclosed.
The Times, they are a-changin’ -- their business model, that is. The venerable British publication is offering a new digital subscription package which bundles a steeply discounted Nexus 7 tablet computer along with an 18-month subscription to the newspaper. The new subscription offer includes a 32 GB Nexus 7 tablet for £50, or about $80.50, compared to a retail price of £200, or roughly $322. The 18-month digital subscription costs £17.33 (or $28) per month, if paid on a monthly basis, for a total price of £362 or $583; if purchased all at once, the “Digital Pack” subscription costs £299 or $482. The Times issued a new, updated version of its Android app in November. The Times isn’t the first publisher or retailer to offer newspaper subscriptions bundled with devices. Barnes & Noble offered a one-year digital subscription to The New York Times with various Nook devices, and last year the Philadelphia Media Group, which publishes The Philadelphia Inquirer and the Philadelphia Daily News, revealed plans to market a relatively cheap tablet-style reader using Google's Android operating system to readers. In November, NPD DisplaySearch, which tracks consumer electronics trends, predicted that 80 million tablets will be sold in 2013 in North America, compared to 63.8 million laptops. NPD attributed this surge in part to strong demand for cheaper tablet models, around the $199 price point, from Apple, Google, and Amazon. According to Pew, around 25% of U.S. adults owned a tablet computer in July. That's up from 19% in January 2012 and 5% in November 2010.
Extending its push messaging services into the iOS Passbook interface, Urban Airship has acquired startup Tello. Tello recently introduced its PassTools product, which enables app developers to create coupons, tickets and loyalty cards for the Passbook mobile wallet that Apple introduced in iOS 6. "The combination of push messaging, passes and location-targeting offer an easy yet sophisticated solution for businesses to drive more successful pass programs," says Urban Airship CEO Scott Kveton in a statement. As local marketing analyst Greg Sterling explores at MarketingLand, Tello started out as a customer service product and was founded in 2010 with backing from True Ventures and Bullpen Capital. But with PassTools it introduced templates, analytics and an API that helps companies manage and measure their Passbook presence. Tello says it has seen thousands of customers for its PassTools in just its first few months -- including retailers, sports teams, wireless carriers and local businesses. Urban Airship, which already is a major provider of push messaging using the iOS alerts system, will marry its messaging with Passbook functionality. The company says that by blending push messages with Passbook and its inherent geo-fencing features, Passbook loyalty cards and coupons could take on the functionality of “mini-apps” that can create dialogues with users with dynamic notifications. Sterling speculates that combining Passbook presence with messaging could allow marketers to test different offers and maintain persistent communications with a customer even in lieu of having their own stand-alone app.
Talk about your "top 1%." According to analyst Canalys, half of all app revenue generated by both Apple iOS and Google Android in the first 20 days of November went to only 25 developers, virtually all game makers. Companies such as Zynga, Electronic Arts, Disney, Kabam, Rovio, Glu, Gameloft and TeamLava all were atop the list of big earners in this list of 25 developers who among them generated $60 million in estimated direct paid and in-app purchase revenue in 20 days. Canalys used its App Interrogator online analytics tool to survey app sales activity worldwide. The top revenue earners are dominated by games publishers, and in fact only Internet radio provider Pandora is among the top 25. The recipe for success among these big money makers in apps is having a portfolio of offerings, says Canalys VP and Principal Analyst Chris Jones. “Part of the story here is that successful game developers almost invariably have multiple titles generating revenue,” he says. Zynga, for instance, has 15 titles among the top 300-grossing iPhone games and nine in Google Play. Even Rovio's major franchise Angry Birds has multiple variants. Canalys says that the dominance of these game makers in the two major app stores presents greater challenges to non-gaming apps. Discoverability is tougher when nearly half of the top 300 paid apps in iOS and 116 in Google Play are games.
The New York Post recently wrote that mobile advertising suffers from a “fat finger” problem, meaning users often click on banner ads in apps, games and browsers on their small mobile screen by mistake. These accidental taps might increase click-through stats, but they also waste brands’ valuable advertising dollars. How do we fix this seemingly unavoidable and expensive problem? Forget about users who just click and find the ones who buy. Using advanced tracking and optimization technology, mobile advertisers can avoid consumers with fat fingers and focus on those who click with a purpose. According to estimates by Trademob, as many as 40% of mobile ad clicks are accidental or caused by fraud associated with sophisticated bots. The “fat finger” problem is real. So what are advertisers paying for if all these clicks from clumsy thumbs instead of excited new customers ready to open their wallets? The only way for advertisers to truly address the issue is to move beyond baseline targeting methods and find users based on their actions after the initial click. With the right technology, all of this can be done accurately and in real time. The only way to track advertising beyond the initial click is to use a conversion page, which shares real-time information about user behavior to match each conversion to a particular banner ad. From there, the information can be matched against a user’s actions over time, making each successive ad increasingly effective for the marketer and relevant to the user. This is only possible if you can create a “unique user,” which has historically been a challenge for mobile. Advertisers can use this strategy to identify which users do not convert into customers and avoid them altogether. That means serving all future advertising not only to targeted demographics, but to those most likely to engage beyond the first click, based on factors such as what sites users traffic and what types of phones they use. Advertisers are only beginning to realize mobile’s potential above and beyond many other media. For each of the past four years, global mobile data traffic has more than doubled, and average smartphone usage nearly tripled in 2011, according to Cisco’s Global Mobile Data Traffic Forecast Update. Estimates show that global mobile data traffic will be 18 times as large in 2016 as it was in 2011. As mobile usage grows, brands need to target those users most relevant by capitalizing on tools to track and recognize unique users, something they haven’t done to date. To seize on this immense opportunity to connect with new audiences, brands must ensure that their ads are served to the right user, in the right environment and at the right time. With new technology, we can fix mobile advertising’s “fat finger” problem and ensure mobile advertising budgets are dollars well spent.