Google reported $12 billion -- up 35% sequentially -- in consolidated revenue for Q2 2012, which includes a sub-period for Motorola. Remove traffic acquisition and revenue from acquisition and the company generated $8.3 billion. The company's owned-and-operated sites pulled in $7.5 billion -- up 21% compared with Q2 2011, contributing 69% of Google's revenue. Partner sites generated $3 billion in revenue -- or 27% -- in the second quarter of 2012, representing a 20% increase from second quarter of 2011. Improved support in Sitelinks, AdMob's integration into AdWords, and expanded match for keyword variances contributed to Google's positive quarter earnings. Advertisers taking advantage of exact and phrase matching continue to see on average a 3% increase in clicks, according to Google CFO Patrick Pichette during the company's Q2 2012 earnings call. Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of members, rose 42%, compared with the second quarter of 2011 and increased 1% sequentially. The average cost-per-click fell 16%, compared with the year-ago quarter, and rose 1% sequentially. While CPCs remains an important metric, analyzed independently it's not a clear indication of the business's health, according to Google. Among the successes for the quarter, YouTube seems to have found its business model in Q2. The company will power NBC's live streaming of the Olympics in the U.S. Users now upload 72 hours of video per minute. A new study from Pew Center shows that site visitors want news, especially for videos of major events and natural disasters. Google also reported that Motorola Mobility brought in $1.2 billion in revenue, with $843 million from the mobile segment and $407 million from the home segment. Its operating loss was $233 million. Google's quality team made 72 ad improvement to improve monetization, Pichette said. There are more than 1 million Android devices activated every day; and there are about 400 million Android devices worldwide and 310 million Chrome users worldwide. About 250 million users have signed up for Google+ and have access to search for more than 100 million places. Microsoft also reported earnings Thursday. Its online service department, which includes Bing, rose 12% in advertising revenue, driven by search improvement. During Yahoo's earnings call earlier in the week, Tim Morse, company CFO, said search queries continue to rise, despite the numbers reported by comScore. Revenue from display grew 1%, compared with the year-ago quarter, reversing declines in the past two consecutive quarters. Search grew 4% driven by 7% improvement on Yahoo's owned-and-operated sites. O&O search query volume grew slightly globally, and generated higher gains for revenue per search (RPS). Yahoo executives, however, were unable to report better RPS gains from the Microsoft Search Alliance, but the company continues to benefit from the agreement's RPS guarantee.
A new Wall Street report suggests Netflix will lower its forecast of adding 7 million U.S. streaming-service customers in 2012 by as much as 10%. But that should not come as a surprise to investors who have already harbored doubts, according to author Oppenheimer, which projects a 6.6 million increase. Still, the report was positive on Netflix as it prepares to announce its second-quarter results next week. Oppenheimer projects Netflix will report 24 million streaming customers in the U.S., which would be a 2.6% increase over last quarter. That would be above the 23.6 million Netflix had projected on the low end for the April-June quarter. Oppenheimer’s bullishness on Netflix included projections that the service accounts for nearly 20% of TV viewing in subscriber homes. Comparing the $8 Netflix charge with about $75 for a cable subscription, Oppenheimer wrote that “this suggests a very strong value proposition for Netflix customers.” Also, research firm ForeSee shows the Netflix brand may be recovering from hits taken last year as it looked to separate its DVD-mail service and rebrand it. The company scored an 81 on its consumer satisfaction in May, according to Oppenheimer -- up from the 79 nadir in late 2011. In the second quarter, Oppenheimer projects customers on average streamed 34 hours of content a month -- up from 32 in the quarter before and 19 in the 2011 second quarter. In the second quarter, a Netflix subscriber watched an average of 148 TV hours and 34 streaming hours on Netflix, with Netflix accounting for 19% of the combined figure.
Publicis Groupe reported a 15.5% gain in revenue in the second quarter to nearly $2 billion. Organic growth, which excludes acquisitions and currency fluctuations, was much lower at 1.6%.The holding company attributed the low organic growth (considered a key performance indicator for the advertising industry) to continuing economic turmoil in Europe, a tough comparision to the same period a year ago when it had 7.6% organic growth, and the loss of the General Motors media assignment in the quarter.For the first half, revenue was up 14.3% to nearly $3.8 billion with net income of $336 million -- up 19%. Organic growth for the first six months was 2.8%. By comparison, Omnicom Group, reporting results earlier in the week, had organic growth of 5.1% for both the second quarter and the first half of the year.Publicis Groupe chairman Maurice Levy said the low organic growth for the second quarter was attributable to “essentially non-recurring events.” Levy said that third-quarter organic results “should see a return to much higher growth, at rates far closer to our usual performance.” Last year the company posted organic growth of 5.7% and in 2010 produced 8.3% organic growth.“The world economic situation is both volatile and uncertain,” Levy stated. “We need to maintain the greatest possible vigilance regarding our cost and investment.” At the same time, he said a company priority was to strengthen its competitive profile, “in terms of our operations, our product and our penetration of certain marketers.”The company didn’t provide a net new business win figure for the first half. It did report winning new business totaling $1.8 billion. That was net of losses with the exception of the largest -- departure of the $3 billion GM media assignment. Wins included Digitas’ pickup of the nearly $600 million Sprint business, as well as that shop’s Delta and MillerCoors account wins.Digital now accounts for one-third of the holding company’s revenue -- up from 29% in 2011 -- and organic growth in that sector grew nearly 10% during the first half.Publicis said it was able to maintain an operating profit margin rate of 13.5% for the half, which was unchanged from the prior-year period.Despite recent ad spending and economic growth downgrade predictions, Publicis stated that its growth for the second half of 2012 “will be higher than in the first half-year.” The company said it would continue to focus on building its digital asset portfolio and expansion (through acquisition) into high-growth economies around the world. It restated its “medium term” target of generating 75% of its revenue from digital communications and high-growth countries.
Some applications of brand identity to mobile media are such no-brainers you have to wonder why they didn’t appear sooner. History Channel launched this week the History Here app for iPhone, which leveraged geolocation and the company’s deep database of historical data. Open the app and allow location tracking and the app finds you and pops up nearby pieces of historical interest. The app is drawing from a database of 3,500 locations. I live five miles from the Delaware Memorial Bridge and I never even knew it was the second-largest twin suspension bridge in the world. Go figure. Most of the listings have images and all of the items have bite-sized descriptions, a link to any available Web site and a click-to-call link. In our search of the historic Philadelphia city center, the map blossomed with location pins and could serve essentially as a walking guide. The user can deploy map or list mode and determine the radius for a search. The app is free and ad-supported. The company appears to be using the banner space to cross-promote other apps in the History/A&E cable channel universe of mobile downloads as well as the mobile-optimized History Channel store.
The TV upfront business came in more or less as predicted, with modest price increases for national players. Now comes the usual next mystery: Whither the scatter markets? Group M downgraded its global and U.S. forecast with a note that TV ad revenues may have peaked -- because Internet advertising, or the growing segment of Internet video advertising, could ding any further overall rises. Traditionally, following average upfront price increases, national advertisers would probably pay modest scatter hikes of maybe 4% to 10%. In the upfront/scatter gamble game, some marketers hold back money because... who knows what may happen? Estimates are that CBS pulled in the best upfront results, with perhaps an 8% hike in cost-per-thousand viewers. ABC and Fox were next with 6% to 7%, followed by NBC with 5%. On the cable front, some media buyers say the NBC Universal slew of networks got pricing up in the 8% range, with Turner Broadcasting’s networks just a tick behind at 7% to 7.5%. Top-rated syndicated programmers got 5% hikes on returning talk shows, but one veteran media buyer reckons the many mid-level shows were in the 1% range or flat. Overall, the national upfront plunked down around $21 billion, out of overall TV dollars sitting at around $60 billion to 70 billion. Where does Internet video fit in? Down the list at perhaps around $2.5-$3 billion, according to some estimates. If Group M predictions come to be, I'm guessing the first damage to any national TV media process for networks and programmers will happen on the scatter level. With many national advertisers looking to make last-minute decisions -- and scatter deals still pegged without guarantees -- some of that money may move to the Internet. But the initial dollars won't go to less-than-professional or original, short-form Web video series. Instead, the money will flow to "premium" video areas like Hulu and network video app destinations that are controlled by the big network players. This means advertisers will just be shifting dollars from one pocket to another. With digital video providers already complaining about the "scarcity" of premium, this echoes the theory that traditional TV advertising is all about desiring the precious few big-rated programs. Digitally, areas like preroll can be pricy alternatives to the rest of the Internet. Considering the efforts Nielsen is making to merge traditional TV viewership metrics with Web video, one can only imagine that the next wave of TV deals will have a strong Internet component. That will reveal itself in scatter market activity.
It’s happened to almost everyone. You go to a blog -- say, to find a trick in Excel -- then suddenly, you hear loud audio. You desperately scan the page to mute whatever is making the noise, scrolling down and find a video player embedded there, autoplaying a video you did not intend to watch, often with a VAST-standard pre-roll ad in front of it. This is more common than most marketers think, and rarely disclosed. Sometimes, this is transparently sold -- usually billed as “autoplay pre-roll” -- but not always. There is even a blog dedicated to publishing examples of this, posting screenshots of top brands like Audi and Verizon running the ads and showing the source code of the vendors that place them. Why tell this story? Because “fake pre-roll” is a perfect example of a conversation we are all forced to have, and should not have to, given what is possible. When buying digital video, marketers deserve at a minimum to know everything they know with TV, such as exactly what content an ad appears against and real data on audience reach, which Nielsen is making possible through its online GRP reporting. But digital allows for so much more information. Marketers should not only know exactly where an ad is running, who it is reaching and whether it is achieving their goals, but also -- and this is what is missing -- be able to control these variables at all times without “leaning on vendors” (as one marketer put it). Real-time buying promises to bring about this change in digital video. A recent Forrester report (full disclosure: TubeMogul commissioned the report) compares benefits of real-time buying of video to traditional, broad-based buying (i.e. from ad networks). The benefits come down to one word: control. Brand marketers can evaluate impression-by-impression, which allows them to constantly tweak budgets, audience mix, sites they are advertising on and more based on audience data. They can fluidly shift budgets based on performance rather than issuing RFPs every quarter, sending IOs and emailing vendors to get better results. And, finally, they can dynamically exclude autoplaying pre-roll. To be sure, the RTB opportunity in video is not perfect yet, and issues remain. Forrester points out that education, structural issues, inventory quality and getting the right measurement for impact -- often-cited problems for digital video in general -- are acute in the market. But control is everything, and marketers should not have to send angry emails every week to get it -- we can all do better.
I'm one of the fortunate ones. I emerged from college and grad school without accumulating any debt, owing less to my scrimp-and-save moxie than to parents who were willing to do just about anything – cut tuition checks, endow classics departments, build cross-campus monorails, whatever - to get me out of the house. And while my first few jobs may have teetered on the cusp of indentured servitude, especially in their implicit adverbs-for-cubicle-sanctuary promise, the absence of debt allowed me to spend my post-rent dollars on taffy and iToys. Again, I was very lucky. I do not lose sight of this. But in the [mumbles into sleeve, sounds air horn] years since I completed my education, costs have spiraled way the hell out of control, to the extent that I'm already bracing myself for my infant son's cost-effective pursuit of a career in the sweeping of chimneys. That's why we need more web resources like the ones rolled out earlier this week by the National College Finance Center and more video-intensive campaigns like "Don't Major In Debt." Using simple terms (and often simple math), both programs break down the largely theoretical nature of college loans for a generation of grads, students and would-be matriculants who might not understand the potential heft of their debt burden. The campaign enjoys a little celebrity cachet courtesy of Jane Lynch, who backstops her involvement with a play on her Glee teacher/loon. But the real value comes in the form of simple, casually rendered testimonials from recent and soon-to-be graduates. We hear from Travis, who calculates that he goes $1.25 deeper into debt with every passing hour, and from Shannon, who describes the urgency she feels to address a situation that could quickly devolve into a personal-finance apocalypse. Best, we hear from Joshua, who describes what it takes to come out on the other side. Rather than bemoan their inability to travel and purchase shiny items, the three students address their situations unemotionally. In essence, they say, "Here's my circumstance. Take from it what you will." It's a smart approach, one that should awaken would-be education debtors to the true cost of borrowing more powerfully than would an in-your-face approach. Nobody needs an overdramatization of goony debt collectors showing up on the doorstep of petite post-grads, accompanied by a "read the fine print, son" voiceover by Samuel L. Jackson or some such badass. Still, I can't help but wish the campaign was a little more expansive in its thinking. Of the testimonial videos, all feature graduates with degrees that don't exactly make 21st century employers feel all tingly downstairs (television writing, literature, performance studies). Maybe this will come in future installments, but it'd be interesting to hear from someone with a degree in a career-bait area of study - statistics, say, or one that pairs cash-register words like "biomedical" or "petroleum" with "engineering." I also wish the campaign would add a splash of humor - maybe in the form of a slap-some-sense-into-that-square-head-of-yours component, which could be delivered by an overeducated, overcaffeinated classics grad. "Listen, idiot, you can follow your chocolate rainbow ponytail dreams or you can afford rent and fresh vegetables. Don't make the same mistakes I did, no matter how intellectually rewarding 'Monologue, Mockery and Modernism: Semantic Recontextualization on The Daily Show With Jon Stewart' might sound to you as a 19-year-old hemp enthusiast." Etc. These mini-quibbles (quiblettes?) aside, "Don't Major in Debt" ranks as one of the worthier and most tonally precise PSA campaigns in some time. The clips inform without resorting to scare tactics and dispense advice without filtering it through peanut-gallery-caliber chatter. I'm zipping it over to every 16-year-old in my extended family/friend network; I hope you'll do the same.