Online advertising will pass a symbolic milestone this year, becoming one out of every four dollars spent by U.S. advertisers, according to new projections from the equity research team at J.P. Morgan. The growth, writes Internet sector analyst Doug Anmuth, is being fueled by advertisers shifting budgets from analogue media to follow consumer time spent with digital media, especially Internet-connected mobile devices, as well as the continuing momentum of social media platforms like Facebook. “As consumer behavior and time spent online rapidly shifts towards mobile, we expect advertising dollars to follow,” Anmuth writes in a report released to investors early this morning, adding: “We are projecting Internet advertising in the U.S. to grow to $43.5 billion in 2013.” That tally, which represents a 17.4% gain over 2012 online ad spending levels, puts online media at 25% of all U.S. ad budgets. Anmuth estimates about half of that growth will be coming from mobile Web ad spending, and without the mobile stimulus, online ad spending would grow only about 10% from 2012. Aside from mobile, Anmuth says social media has been a “key driver of brand advertiser spend due to its large reach and highly targetable user base.” The report, which also assigns an “overweight” recommendation on Facebook’s stock, cites a number of key moves by the social network to capitalize on its massive user reach, including a variety of new advertising formats, as well as the biddable media Facebook Exchange. Much of Facebook’s 2013 growth, however, is projected to come from its rapid expansion into mobile. “Facebook represented 40% of the growth in U.S. desktop display,” Anmuth projects, adding: ”However, in 2013, we estimate Facebook’s total desktop revenues to decline 4% due to the shift to mobile.”
It's one thing to budget higher for search ads during a two-month period around the holidays, but another to generate higher revenue and profit from the investment. The "Kenshoo 2012 Global Online Retail Holiday Shopping" report recapping aggregate client paid-search budgets and cost per clicks identifies higher returns on larger investments during the last two months in 2012. In the U.S. during the last two months of 2012, online sales revenue driven by paid search in the U.S. rose 23% compared to last year, along with a 16% increase in clicks and 20% in sales transactions, according to Kenshoo's report. In the U.S., return on ad spend (ROAS) rose one 1% year-on-year. Conversion rates rose 4%; and average order value, 3%. Retail search advertisers generated nearly $6 for every $1 spent on paid search. During the holiday season in the U.S., click-through rates averaged 1.94%; CPC, $0.54; ROAS, $5.78; conversion rate, 2.84%, and average order value, $109.46. Google product listing ads (PLAs) in aggregate did well. PLAs draw nearly 1.5 times the click-through rate (CTR) of text ads and convert 23% better, resulting in a 31% higher ROAS. The report highlights PLA ROAS at $4.82 vs. text ads at $3.68. Click-through and conversion rates are higher, with PLAs bringing 2.73% and 2.49% vs. text ads at 1.86% and 2.03%, respectively. The report notes that PLAs maintained a high ROAS for the first three weeks of December and the format seemed much less prone to weekly fluctuations. U.S. consumers generated 75% more search impressions, clicked on 36% more ads, and converted at rates 45% higher than in 2011. For the entire holiday-season period, Free Shipping Day delivered the highest paid-search conversion rate, at more than 4%. Globally, retail paid-search advertisers saw CPC rise 11% to $0.48 and budgets rose by 36%. Overall, retailers generated $7.49 for every $1 invested in paid search during the 2012 shopping season.
Music lovers tuned into Pandora, the Internet radio service, in December 2012 for more than 1.4 billion hours -- up 54% compared with the prior year. Active listeners also rose 41% to 67 million for the month. And on Dec. 24, Pandora members collectively listened to the equivalent of more than 5,692 years of music. During the holidays, 31% of people in the West preferred new holiday tracks compared with classics. Midwest listeners were the earliest adopters of holiday music. Some 52% of people in the Northeast care about music more than food at holiday parties, compared with other regions across the U.S. There are 67 million U.S. users, listening about 20 hours per month. One million are paid subscribers. The company is on track to generate between $422 million and $425 million in revenue this year, according to estimates. Pandora CRO John Trimble said the Chrysler Group recently joined the extensive roster of automotive brands to integrate Pandora into its vehicle, making it the 20th automotive brand partner. The service generates revenue from audio and visual ads, tapping into a wide audience across desktop and mobile, from cars to tablets and smartphones. Brands also run promotions to sponsor 30-day trials, Trimble said. Ads get targeted through signals from the member's registration data, such as gender, age, genre, and location. Pandora doesn't use services from companies like Triton Digital, which teamed with eXelate to target in-stream audio ads to digital radio listeners. Pandora, spawned from the Music Genome Project, a DNA map for each musical piece, relies on word of mouth marketing, email, advertising within the music service to listeners, search engine optimization and social.
Pittsburgh-based Marc USA has been selected to handle digital media duties for health insurer Capital Blue Cross, one of Pennsylvania’s largest health insurers, the agency has confirmed. The client spent nearly $4 million on measured media in 2011, according to Kantar Media. The client’s digital ad budget was not immediately available. The selection comes as Marc has been expanding its digital staff to handle recent new business assignments in the digital sector from new and existing clients. The agency doubled the size of its digital team to more than 50 specialists in 2012. In fact, the agency indicated that it is now doing some type of digital media work for nearly every client. The shop’s client roster includes Rite Aid, Nature Made and TrueValue, among others. Earlier this year, it pitched and retained the Pennsylvania Lottery account. The digital staff will continue to expand, said Marc USA CEO Michele Fabrizi, noting that the shop is looking to fill nine additional positions mostly in the interactive and social media disciplines. Fifteen staffers are already dedicated to the social media space. The agency has added $10 million from new assignments over the past year, Fabrizi confirmed. “This was our biggest annual revenue gain in the last five years,” she said. The agency doesn’t disclose total revenues. In addition to Pittsburgh, Marc has offices in Chicago and Miami, with a total of 200 employees and $300 million in annual billings. Services include advertising, strategic planning, research, PR, social marketing, media planning/buying, interactive marketing, direct and customer relationship marketing and sales promotion.
Google's Buzz debacle is still causing legal headaches for the company. Three Gmail users this week filed a new potential class-action lawsuit accusing the company of violating their privacy when it launched the now-defunct Buzz.Google previously agreed to pay $8.5 million to settle class-action litigation about Buzz, but the three users who sued this week objected to that settlement. They allege in court papers filed with the Eastern District of New York that Google violated the federal Stored Communications Law when it launched Buzz in early 2010.At launch, Buzz revealed information about the names of users' email contacts, if users activated the service without changing the defaults. The design meant that confidential information could inadvertently become public, including the names of Gmail users' doctors, lawyers or coworkers.Google revised Buzz shortly after unveiling the service, but was unable to stem widespread criticism by privacy advocates and consumers, a wave of lawsuits by Gmail users, and a Federal Trade Commission enforcement action.Google settled the FTC charges by agreeing to create a comprehensive privacy program and submit to independent privacy audits for the next 20 years. Google also promised that it will obtain people's express consent before sharing their information more broadly than its privacy policy allowed at the time of collection. The company resolved the private class-action litigation, agreeing to pay $6 million to various privacy organizations and $2.5 million to attorneys who brought the case. Individual users whose privacy was breached didn't receive anything. The settlement agreement, approved by U.S. District Court Judge James Ware in San Jose, Calif., provided that users who didn't agree with the resolution could opt out.Todd Bank, the New York-based lawyer who is representing the three Gmail users who sued this week, says his clients hope "to obtain real relief for as many class members as possible. The original settlement gave no benefit to any class member."Of the three people who just filed suit, only one -- Albert Rudgayzer -- says he successfully opted out of the Buzz settlement. He is seeking to represent a class of around 500 other Gmail users who opted out.The other two Gmail users say they were affected by discrepancies between the notices they received and the actual settlement agreement. Lillian Ganci says she would have opted out from the settlement, but that the notice that was sent to her explaining the agreement was misleading. She says the notice indicated that users would have to provide a reason for opting out, when the agreement didn't actually require that users offer reasons.The third user, Michael Amalfitano, says he unsuccessfully attempted to opt out of the settlement. Bank says Amalfitano followed the instructions in the notice, and sent an opt-out request that was postmarked by the deadline provided. But Bank says the request was turned down -- apparently because it wasn't received by the date set out in the settlement agreement.Amalfitano and Ganci seek to represent an estimated 20,000 users.
Showing continued investment interest in online ad networks, Rockbridge Growth Equity on Thursday announced the acquisition of Triad Retail Media. Founded in 2004, Triad has made a good business of placing ads on retailers’ Web sites, including those operated by Walmart, Sam’s Club, eBay, Toys “R” Us and CVS, along with more recent additions like HomeDepot.com and Shopping.com. Along with rivals like Akamai's Acerno and OwnerIQ, Triad is also recognized as a pioneer in the collection of online shopping data. Financial terms of the deal were not disclosed, but Rockbridge typically seeks to make investments in companies with enterprise values in the $100 million to $200 million range. According to Greg Murtagh, founder and CEO of Triad Retail Media, the deal offers the perfect opportunity for Triad to scale its business. “Rockbridge has a deep operating knowledge in digital media and data and analytics,” he said. As Murtagh was quick to note, however, Triad has had no trouble growing thus far. Since 2010, the company has nearly doubled in top-line revenue -- from $87 million to $171 million -- in 2012, according to Murtagh. Revenue grew by 40%, last year, and he expects revenue to double again within three years. Led by Brian Hermelin, Kevin Prokop, and Quicken Loans founder and Cleveland Cavaliers owner Dan Gilbert, Rockbridge invests in business and technology services companies focused on the digital media, marketing services, financial services and consumer-direct marketing sectors. Among some 60 investments, Rockbridge presently has stakes in Quicken Loans, the Cleveland Cavaliers, Title Source and Fathead. Falcon Investment Advisors partnered with Rockbridge on the transaction.
The Kindle Fire was on fire in December, seeing the biggest gain in usage among Android devices during the holiday season, according to new data from app advertising and analytics firm Localytics. The firm said ad impressions generated by the 7-inch Kindle Fire HD shot up 322% between November and December, based on data from tens of thousands of apps that use its software to track usage across more than 60 million mobile devices. Samsung tablet models also saw healthy -- if more modest -- gains, with impression from the Galaxy Note II increasing 80%, the 10-inch Galaxy Tab 2 (78%), and 7-inch Galaxy Tab 3 (72%). Among the top 20 Android devices on the Localytics platform, eight are now tablets or crossovers. The Samsung Galaxy S II and III smartphones top that list, with about 8.5% share each. The Kindle Fire has the largest share among tablets, at 1.9%. Findings from competing app analytics firm Flurry late last month suggested tablets were an especially popular gift during the 2012 holiday season. Tablet activations slightly outpaced those for smartphones -- 51% to 49% -- a big change from last year when smartphone activations last outnumbered those for tablets by a 4:1 ratio. The Localytics report also offered further evidence of gains made by Apple’s answer to the Kindle Fire -- the 7-inch iPad Mini. Among iOS devices, the Mini increased its share to 6% in December from 2% the prior month. The fourth-generation iPad gained even more ground, rising from 2% to 8% share last month. Also, Localytics found that the iPhone 5 released in September had grown its share among Apple smartphones from 5% to 18%. The iPhone 4S remains the most popular Apple handset, with 40% of the market, just ahead of the iPhone 4’s 36% share. Besides selling more devices more devices last month, companies like Amazon, Google and Apple also benefit from growing sales of digital and physical goods through tablets and smartphones. An eMarketer report on Wednesday estimated U.S. m-commerce last year rose 81% to almost $25 billion, with that total expected to grow 55% to $38.4 billion in 2013. Tablets are expected to drive the bulk of m-commerce activity.
WPP has merged its publishing content marketing agency Forward with Tenthavenue, which was formed in 2011 to oversee a number of the holding company’s global out-of-home and related assets.Forward is the latest specialist shop to be folded under the Tenthavenue portfolio of agencies. It also oversees Spafax, a separate content shop; Kinetic, the out-of-home agency; and Joule, the mobile marketing agency. Collectively, Tenthavenue has 56 offices across 24 countries worldwide. Commenting on the merger, Rupert Day, CEO of Tenthavenue stated: “Forward, with its offices in the UK and China, builds on Tenthavenue’s capability to deliver relevant content aligned with specific client objectives across different environments.” Forward was established 26 years ago and became part of the WPP group in 2001. It opened one of its first international offices in China in June of last year. It specializes in creating custom, targeted content designed to build brand loyalty and drive sales. The shop creates content for a number of channels, including printed magazines, Web sites, online magazines and content-rich emails.Simon Hobbs, CEO of Forward, stated that the shop's capabilities “sit really well with Tenthavenue’s, and we believe that Joule’s mobile offering and Kinetic’s outdoor specialism, combined and aligned with our content offering, will be very attractive to clients.” Combining its strengths with sister content shop Spafax will add strength to Tenthavenue’s growing global network, he added.
This week, Sony Pictures Television announced that Jerry Seinfeld’s “Comedians in Cars Getting Coffee” was renewed for a second season. Wait -- “season” and “renewed?” Them’s TV words, alright, although the series -- 10 episodes in the first year, 24 on order for the second -- is strictly an online affair. With each episode coming in at somewhere between 11 and 17 minutes, they are either very short films or very long commercials. Without ads or product placement, they offer a take on all of Seinfeld’s obsessions: collectible cars, fellow celebrity comedians, and tiny observations on fellow celebrity comedians in cars, stopping for warm beverages. Before I get to my observations on his online observations, however, I first have to cop to my insane hatred of Seinfeld. I know -- how crazy is it to hate the guy who gave us (arguably) the greatest sitcom in TV history? (Or as Jerry might say, “What’s up with that?”) Imagine a world with no close talkers. No “No Soup for You!” No “Not that there’s anything wrong with that.” Well, I tell you what’s wrong with it. It’s a beautiful, hermetically sealed world, the world of Jerry. I like the show a lot more now in reruns, but what was obviously missing all along, among the characters living in New York City, was any of the diversity of New York, and increasingly the country: There were no non-white faces (who weren’t complete caricatures as delivery guys, etc.), no gay people, and, well, no women who were not Elaine or Playboy Playmate types making one or two appearances in supporting roles as dates. And when you think about it, Elaine fit in (and was so funny) because she was so tiny, mean, and aggressive -- a manly type. She did a lot of hitting, slapping, pushing, and shoving. Because Jerry was surrounded with this band of misanthropic eccentrics, he could seem rational and nice. And now, having watched many seasons of Larry David’s “Curb Your Enthusiasm,” it becomes clear that much of the funny stuff cames from David. The difference, however, is that in “Curb” (which is harder to watch) the humor comes from the fact that Larry, a true misanthrope, constantly gets his comeuppance for his smugness, insensitivity, and intolerance of other people. Whereas Jerry lived in a universe that made him look like a saint. Perhaps that’s why, post-Seinfeld, in the real world, even with all of his fame, money, and power, Jerry has mostly created a mess. Remember his god-awful “Bee” movie? Jerry and crew have such a problem writing for women that in his movie, the drones were female and the worker bees were male. His NBC flop “Marriage Ref” had a regressive 1950s, “Oh-Lucy!” style set-up that was actually so cruel and reprehensible for the couples who got judged by celebrity panelists (aka Jerry’s friends) that one of them actually sued the show (and got divorced.) And then there were the two long-form spots Seinfeld made with BIll Gates for Microsoft in 2008. In a company famous for being poignantly out of touch in terms of consumer communication, these were glacial bombs, with the humor coming from making fun of average people, Latinos, and Indians. And by the way, Seinfeld got paid $10 million to make Bill Gates his little bitch in those two spots, which ran for a total of three weeks. Okay, I’ll admit that one of my issues is that I have total sour grapes over how rich the guy is. So the smug concept of this latest series: “Aren’t I so great that I can kill time and remind people how many cars and famous friends I have and I don’t even have to work?” just burned my biscuits all over again. I watched some of the episodes from the first season, and here, the hemetically sealed setup suits the project just fine. He gets to pick the car and the comedian, and it’s a tiny, insidery world. The high level of production really helps -- apparently there are three mounted cameras in each car. I wish, as with some reality series, that we’d get a pull-back shot to show the entire production team in action. That doesn’t happen. But there’s a beautiful eye for detail in some of the shots (keys in the ignition, motors, headlights) that dovetails with Seinfeld's fetishism of observational details. And without being a guy from “60 Minutes,” the long format does allow him to get new information out of his famous friends. The Michael Richards one is interesting. He talks about his infamous breakdown on stage that resulted in him shouting the “N” word repeatedly. Richards, who is a great physical comedian and can’t stop clowning, admits to having many recriminations from the incident. But it's pretty telling that he still seems to think he is the victim. The visit with Carl Reiner and Mel Brooks, at 90-year old Carl Reiner’s L.A. home, is worth its weight in gold. In real life, Mel Brooks seems to have become the 2,000-year-old man -- no acting necessary. He tells Jerry he’s never seen his act (not sure if he’s kidding) but that one guy he does like is Louis C.K. I thought that was genius. Alec Baldwin is technically not a comedian, but great company here. He might be thinking along the sour-grapes line as well, when he actually says to Seinfeld, “Your life has been one unbroken block of green lights, hasn’t it?" Seinfeld’s constant knee-slapping crack-ups to anything said get annoying. These were worth watching, however. (With the exception of the one with Larry David. He eats a pancake.) I’m hoping that in the second season, Jerry discovers that there are actually gay, female, and non-white comedians. That would be a Festivus for the rest of us.
Among the many announcements emanating from CES this year -- in addition to technology for plants to tell you they need a sip of water and tablets that are so huge you have to hire an assistant just to carry them -- came one from textbook publisher McGraw-Hill called SmartBook, an adaptive ebook that adjusts the reading experience to each student’s pace and mastery level. Content is still structured somewhat like a textbook -- but instead of asking students to read it thoroughly from start to finish, the SmartBook coaches the student on how to read the material and quizzes them on various concepts as they move through each section. Depending on their responses, they are guided along to different highlighted passages. “It changes what is normally a static product to something that’s individualized to the learner,” one exec told The New York Times. While on the face of it this seems like a splendid way to encourage slower learners, there is something ominous about "different highlighted passages." It reminds us that the results of Google searches for the same term are different for each person, under the guise of a "better personalized experience." Or that retailers will raise the prices on their site if they think you are coming from an affluent neighborhood or are otherwise data- tagged as a big spender (or MacBook user.) It you follow this out to its logical conclusion, then, as our world becomes more and more electronically driven, we could end up with almost no shared experiences. Just as the online ad world is obsessed with the notion that a more relevant ad produces better results for the publisher and the market, so, too, all industries are looking to mine data to pander to your individual tastes and proclivities under the assumption that the more personalized the product, the more useful you will find it. Up to a point, that is all perhaps true. But isn't there another point -- the one of diminishing returns -- where everything becomes SO personalized that we will no longer be able to share our experiences? There was something to be said socially for the days of just three TV networks and the conversations generated around -- yes -- the water cooler, about an episode of a hit TV show broadcast the night before. It was the days of appointment TV, and you were distraught if you missed the show and thus the subsequent conversation. Those shared moments brought us together, not always in agreement, but in community nonetheless in a way that now seems quaint. The emergence of social media has connected the world and enabled us to share experiences in real-time in a way never before in history, but at a price. Just as in the ad business -- where three-martini lunches gave way to phone calls, which yielded to emails and texts -- we are losing face-to-face contact with one another at an appalling rate. There is nothing but the advance of technology from stopping entertainment companies from "individualizing" everything from movies to TV shows, from video games to books, to try and meet the expectations of each reader or viewer. While that might seem appealing, I can just hear one kid-to-kid SmartBook conversation about “Moby Dick” ending with the question "What whale?"