Posted by } INGRID LUNDEN
Twitter started on mobile, and that’s where the service is going. In the S-1 form that the company filed today for its public offering, Twitter called mobile the “primary driver of our business.” It said that 75% of its 218.3 million+ monthly active users are accessing the site from mobile devices — or 161.25 million users. And mobile accounts for 65% of all its ad revenues. All in all, the word “mobile” comes up 130 times in the 160+ page document.
From the intro to the filing:
Mobile has become the primary driver of our business. Our mobile products are critical to the value we create for our users, and they enable our users to create, distribute and discover content in the moment and on-the-go. The 140 character constraint of a Tweet emanates from our origins as an SMS-based messaging system, and we leverage this simplicity to develop products that seamlessly bridge our user experience across all devices. In the three months ended June 30, 2013, 75% of our average MAUs accessed Twitter from a mobile device, including mobile phones and tablets, and over 65% of our advertising revenue was generated from mobile devices. We expect that the proportion of active users on, and advertising revenue generated from, mobile devices, will continue to grow in the near term.
If you recall, when Facebook filed its S-1 before going public, the company had no revenues in mobile and made a big point of spelling that out, with 425 million of its 845 million monthly active usersaccessing the service from mobile devices (those are from the initial S-1, which got revised up several times before the company finally listed).
Twitter is in a significantly different position. Not only does the company have a majority of its users accessing from mobile devices, but it already make a majority of its ad revenues from these platforms. (The main ad unit currently on Android and iOS, Promoted Products, was introduced in February 2012.)
While there have been a lot of changes to the basic desktop product over the last couple of years, in 2013 you could argue that the biggest product moves that Twitter has made have been in mobile, from the launch of the Vine video app (to follow through on the photo filters that it launched near the end of 2012) through to its experiments with Twitter Music (also a mobile app), and its acquisition of MoPub (a specialist in mobile ad-tech).
Twitter pretty much says it all about mobile and its ambitions to push the envelope in that area, in a bit of very typical S-1 jargon: “If new or enhanced products or services fail to engage users and advertisers, we may fail to attract or retain users or to generate sufficient revenue or operating profit to justify our investments, and our business and operating results could be adversely affected.”
With 130 mentions of mobile in the S-1, here are a few of the interesting points that jumped out at me in a first reading:
– The big threat in mobile for Twitter is in Asia. Specifically, it pinpoints the rise of multiple local messaging apps. “Increased competition from local websites, mobile applications and services that provide real-time communications, such as Sina Weibo in China, LINE in Japan and Kakao in South Korea, which have expanded and may continue to expand their geographic footprint,” it writes.
– Mobile can be misleading. “Our metrics are also affected by mobile applications that automatically contact our servers for regular updates with no user action involved, and this activity can cause our system to count the user associated with such a device as an active user on the day such contact occurs.”
– Mobile growth. The 75% MAU number is from the end of June 2013; a year before that it was 66%.
– Mobile and user engagement. Twitter makes its most clearest statements in here for why it is that it makes new products for mobile. “Our most engaged users are generally those who access Twitter via our mobile applications,” it notes. “In the three months ended June 30, 2013, a substantial majority of timeline views were on mobile devices, and the increase in timeline views was driven by mobile user engagement…we plan to continue to develop and improve our mobile applications to further drive user adoption.”
Posted By } JACK KRAWCZYK
Native advertising may be the buzzword stealing the attention of the advertising technology landscape, though a much quieter revolution is brewing around the space: the fight for the logged-in user overtaking cookie-based advertising.
You see it manifesting itself from all corners: Google’s relentless investment in Google+, Facebook releasing Custom Audiences, and most recently Twitter’s acquisition of MoPub. Data management companies like Datalogix and Catalina Marketing are creeping up, matching what takes place online into offline purchases.
At the center of this brew: the logged-in user. An ever increasingly valuable asset in the world of digital advertising with an inherently limited distribution, the logged-in user is quietly becoming the lynchpin from which mobile advertising will blossom.
Cookies have historically been the little text file that can, producing a swarm of cross-publisher tracking data that have fueled the $40 billion+ digital advertising industry in the United States over the past 20 years. Monitoring your behavior from site to site, the cookie was able to compile unique information about your browsing habits across ad networks.
This meant that companies like American Express could drop a tracking cookie once you logged into their site to uniquely identify you as an existing Amex customer. Then while later browsing the Internet, Amex could work with an ad exchange to bid on all users that had their existing cookie. Voila: retargeting!
This approach has built the display advertising industry, but it’s facing two major problems: One, cookies from external sources are dying; two, cookies do not translate to mobile. Enter the logged-in user revolution.
Without trivializing the evolution of the ad unit driven by native advertising, logged-in users are rapidly becoming the asset from which mobile marketing will be evaluated for its efficacy, regardless of the format with which the ad is presented to the user. The reason for this? Logged-in users are uniquely keyed by their email address.
ROI has always been at the core for measuring ad spend. The logged-in user is driving us to improve the resonant impact of advertising on purchase behavior.
Traditional media formats like TV and radio have needed to rely on post-exposure surveys because they have never had ways to isolate unique ad impressions. TV and radio ad spend ROI has always been a best guess, as the Nielsen panel, which dictates the $60 billion+ spent on the medium, only pulls from 25,000 households (0.2 percent of the U.S.).
Google entered the picture and changed direct response advertising from an inferred impact model into a direct keyword to conversion ROI report. The limitation of search, however, is that consumers are most often not in the mindset of making a purchase.
For this reason, brand advertising has typically commanded two-thirds of marketers’ budgets. This comprises $91 billion of total ad spend in the United States each year. Dollars that search does not gain access to. Dollars that will be driven by the logged-in user.
The goal of brand advertising is to drive a lasting image, memory or emotion between a consumer and the brand driving the advertising. This resonance then turns to increase consideration of that brand, driving purchase intent and ultimately transforming into a transaction/purchase with that brand.
The challenge with the dollars spent to drive this resonance, however, was that the scale of information and data would often break down between initial exposure and ultimate transaction. Cookies would expire and surveys would be too narrow to follow, but that problem begins to disappear with the logged-in user.
Solving for the impact of resonant advertising is what makes the logged-in user so powerful. Each logged-in user is keyed against a unique identifier: Their email address. Transactions in both the digital and offline space are increasingly tied to CRM systems keyed off of an email. From beginning to end, advertising experiences that have a logged-in user have the data to close the circle on understanding how ad exposure leads to purchase behavior and evolution.
The new wave of ad tech companies poised to win are those who are set up to be privacy-friendly brokers of matching the data of publishers’ logged-in ad impressions against shifts in behavior in sales. Privacy and opt-outs are paramount to the success of these programs, setting the foundation for evaluating the impact of ad spend using mechanisms previously unavailable to advertisers.
The Facebook Exchange (FBX) has found that it doesn’t matter the ad unit, it’s about how you convert the user to a conversion event. Companies like Triggit have found that ROI is driven through effective targeting. Expanding beyond the FBX, Videology quietly acquired Collider to drive the idea that content isn’t so much king as the reporting behind who was the recipient of that content.
Taking this beyond the walls of their own experience, publishers with a logged-in user who can be anonymously quantified in ROI are beginning to enter the ad network game. Driving an understanding of the map between unique user identification and its value to a brand, acquisitions like MoPub allow Twitter to extend the reach of their most valuable asset: the logged-in user.
Partnering with large panel data services such as Datalogix and Catalina Marketing, consumer technology firms are poised to close the loop on the impact of advertising on their platforms. Combining point-of-sale data against email addresses, they are able to match ad impressions and engagement data against logged in users to determine the full picture of advertising ROI.
Native advertising formats are becoming increasingly effective at driving up front engagement with advertising, driving the activity to manipulate purchase behavior. This trend will continue for the near future, but as we evolve the native advertising discussion let’s not lose sight of what will ultimately drive the price of an engagement: its value to the advertiser.
That value? It will come from those publishers that own and understand the logged in user. The revolution is coming.
Disclosure: I do not own a financial stake in any of the companies mentioned.
[Illustrations: Bryce Durbin]
The Mobile advertising market is growing fast with more and more companies promoting their products on mobileplatforms. Our infographic on Global Mobile Advertising covers the latest statistics and trends of mobile advertising spending. How much advertisers are spending on mobile ads, Mobile ad spending by category and lot more.
Posted by } James Green
The increase of real-time bidding (RTB) spend on desktop has soared over the past few years, growing from $986 million in 2011 to an expected total of more than 3 billion in 2013. Targeting capabilities like site and search retargeting have helped marketers expand their reach, achieve more efficient pricing and ultimately a strong ROI.
As RTB demand increased from the marketer side, publishers have opened up more and more inventory on the exchanges, which has created larger reach and an even richer ad experience for audience-based media buying.
A study released earlier this year said that global RTB inventory grew by 61% year over year (Q4 2011/Q4 2012). The last bastion of display to fall to RTB is premium inventory and that is already happening. Premium inventory creates more creative opportunities for large brand advertisers, which leads to larger budgets for audience-buying.
Despite this frenzy, we are about to see a decline. Display advertising, defined as a non-text ad that you see on a desktop or laptop, is supposed to max out in 2013 at about $32 billion globally, and then start a gradual decline of up to $3 billion between 2014 and 2017. RTB will still increase during these years at the expense of more traditional IO – site-specific display deals. However, if display advertising is reaching its zenith, then RTB will max out, too. Print, radio and TV advertising increased separately for 50 years or more before they started a decline. Display begins to decline after about 15 years? What gives?
Part of the answer is the inevitability of numbers. Gartner shared data in April that showed tablet sales will surpass desktop and laptop combined by 2015. Other data, released in April by the IDC, cited that shipments of desktops and laptops dropped 14% year over year (Q1 2012 / Q1 2013). Therefore, if you’re selling fewer laptops and desktops, then you’ll deliver fewer ads to fewer eyeballs on them.
All of these points combined with the fact that more than 90% of consumers are using smartphones should be enough to move the needle in mobile advertising. However, just because you are buying off the exchanges on desktops doesn’t mean it’s a simple transition or addition to tap into mobile RTB. In fact, while display advertising has grown to mean all ads on desktops and laptops, mobile advertising is nowhere near as homogeneous.
In display, we just have the Web, but in mobile, we not only have different form factors (phone vs. tablet) with different usage patterns, but we also have apps. Even the simplest mobile ad — a Web ad on a tablet, has to contend with the conundrum of Device ID vs. Advertiser ID (Apple) vs. Cookies. Even if you’ve solved this problem, very few of us have the login data necessary to identify customer #12345 if we see them on a laptop, tablet or phone. Different forms of advertising delivered across different devices will have different levels of impact. People are more likely to be susceptible to suggestion on their tablet than they are on their smartphone, due to the trifecta of device size, time and location of use.
Finally after all of the famous “years of mobile,” the massive number of tablets that Apple has shipped has created the critical mass to make a significant dent in the market. We’ve got to think beyond desktops and the @eb. Tablets are the place to focus on next. Stay tuned.
Posted By: Tim Peterson
The long-awaited ad tech consolidation picked up its pace this week, as four online ad companies — retargeting firm Criteo, ad targeter Media6Degrees, ad buying company X+1 and Yahoo – each acquired a mobile ad tech startup over the course of three days.
Mobile ad tech acquisitions aren’t an altogether new trend. Google picked up mobile ad network AdMob in 2009, and Apple followed suit in buying rival ad net Quattro Wireless in 2010. But those deals were largely about being able to run ads on mobile. The recent spate is about getting closer to targeting mobile ads as though they were desktop ones.
“Every ad tech company that’s good at the web has to get good at mobile,” said David Pakman, a partner at VC firm Venrock and investor inMedia6Degrees.
Criteo, Media6Degrees and X+1 in particular have built businesses on the ability to target people online with ads based on their browsing behavior. To do so they largely rely on cookies that can be dropped on a browser and track the kinds of sites someone visits in order to build an audience profile and target ads accordingly.
Problem is, cookies don’t really work on mobile. That means these companies may not get a slice of the growing mobile ad pie and be left fighting over desktop advertising’s shrinking crumbs.
Desktop ad spending is expected to plateau at $35.4 billion next year then proceed downhill, according to eMarketer estimates. Mobile display ad spending, meanwhile, is on a steady upswing. U.S. mobile ad revenues increased by 111% in 2012 to hit $3.4 billion, according to the Interactive Advertising Bureau, and eMarketer expects mobile display ad spending to rise by 100% in 2013 and 54% in 2014.
Mobile advertising remains a nascent business, but mobile ad tech is beginning to mature. Asher Delug, CEO of mobile ad network Airpush, looked to mobile ad network Millennial Media‘s recent stock turnaround as boosting financial interest in the sector. “While [Millennial's stock] was so low, it kind of put a freeze on mobile ad tech IPOs that were in the pipeline as well as mobile ad tech private funding deals.”
The warming interest has enabled an overcrowding of companies focused on automating mobile ad buying. Mr. Delug said Media6Degrees’ purchase of EveryScreen Media ”is indicative of the fact that a lot of these mobile [ad buying companies] are about to start consolidating by going out of business or getting acquired.”
Many may fold, but not all as their online counterparts seek to pick up mobile skills.
“Because big companies have not invested adequately to be the leaders they all want to be, now is a good time for them to acquire companies to allow them to catch up, particularly when they don’t have to pay huge numbers to get in the game,” said Jeff Green, CEO of online ad buying company The Trade Desk.
Yahoo’s mobile problem
Yahoo is perhaps the best example of a company in need of better mobile ad tech. The company attributed its flagging second-quarter display advertising revenue to consumers’ migration to the portal’s less lucrative mobile properties and ad buyers’ adoption of automated ad buying that lets them place auction-style bids for impressions tied to particular users in real-time that are typically cheaper than deals worked out with Yahoo’s direct sales team, like booking a hotel room the day of your stay when the hotelier might be pressured to cut prices so as to not miss out on money from vacancies.
To help address its two pain points, Yahoo has purchased AdMovate, a virtually unknown ad tech company that is less than a year old and specializes in automated mobile ad buying (the company could have helped itself yesterday by announcing the AdMovate deal prior to earnings, which the company debated doing, said Yahoo SVP-display advertising and advertising technology Scott Burke). Mr. Burke said Admovate’s team of five engineers — a couple of whom had previously worked at online ad buying firm Turn — will join Yahoo’s Sunnyvale, CA-based display advertising team to focus on “how to make programmatic buying work well in mobile.”
“They’ll be kind of joining the core area where we’re building out programmatic capabilities around [Yahoo's ad exchange] Right Media.,” Mr. Burke said. “We’re also looking now at investments for accessing programmatically all of our inventory, so not just non-guaranteed but exploring ways to do programmatic guaranteed or what the industry is calling programmatic premium is a related area of investment. And the AdMovate guys will extend a lot of that thinking into mobile.”
Mr. Burke acknowledged the mobile ad tech acquisition trend but described it as another form of hiring. “We would have hired them individually off the street, but they weren’t looking,” he said, adding that Yahoo has hired more than 150 advertising engineers since Ms. Mayer charged him with rebuilding the display team last fall. Mr. Burke echoed Mr. Green‘s claim that mobile ad tech startups are relatively easy buys these days because of the pressure on the fledgling companies to scale with limited cash on hand.
“That’s how these guys felt. They knew they’d have to go raise money, they’d have to invest in a lot of capital infrastructure to scale up a programmatic [business]. I’ve already got all that. It’s essentially free for these guys to come in and exercise their skills at much larger scale,” Mr. Burke said.
In particular the AdMovate team’s skills center on mobile targeting, having spent the startup’s short existence trying to figure out how to handle cookies and identify users on mobile devices without infringing on their privacy. “Especially for Yahoo, because we’re such a big media property, we also have to invest in how we target users that aren’t logged in,” Mr. Burke said.
For now Yahoo’s mobile focus is as much on mobile web as Yahoo’s mobile apps, but Mr. Burke said the emphasis in the long run is on mobile apps. That’s not surprising given Yahoo’s aggression over the last year in acquiring mobile app companies like Summly and Stamped as well as the company’s plans to develop new mobile ad products.
Apps eclipse mobile web
Consider how mobile app usage has eclipsed time spent on the mobile web. Of the more than two-and-a-half hours a day people spend on their smartphones and tablets, 80% is within apps versus 20% on web, according to mobile app advertising and analytics firm Flurry.
Online ad companies may be able to perform rudimentary ad targeting on mobile web sites, but “they’re totally blind to the in-app market,” said Mr. Delug. In-app ad targeting requires back-end technology to access an app’s first-party data, such as users’ device IDs, in order to recognize what apps someone uses and show them ads based on that behavioral information. Mr. Delug pointed to Criteo’s acquisition of mobile app tracking company Ad-X as an example of “the ultimate Trojan Horse data strategy” because the startup’s “data assets could be some of the best ones in the industry.”
Part of the push to figure out mobile targeting may be how it can benefit companies’ online advertising businesses. That is, if online ad companies are able to figure out how to target ads on mobile without cookies, they could apply that online and mitigate the doomsday scenario that looms as desktop browsers like Mozilla’s Firefox seek to prevent the use of third-party cookies
“If you’re good at anonymous targeting on mobile, which you kind of have to be, that technology is transferable back to the [desktop] web. It’s a hedge against uncertainty around cookie-based targeting on the web,” Mr. Pakman said.
A Yahoo DSP?
That could further explain why Mr. Burke sees AdMovate as strengthening Yahoo’s buy-side capabilities. More than a few ears perked up when Yahoo CEO Marissa Mayer said during yesterday’s earnings webcast that Yahoo has a programmatic buying service, or demand-side platform, and that the company is looking into “can we partner with other providers to be their DSP.”
Asked about Ms. Mayer’s statement, Mr. Burke said Yahoo has “historically” been providing buy-side capabilities “for key clients, and so it hasn’t been the case where we’ve launched anything that we would call a DSP in market,” though the size of Yahoo’s ad tech business means the company wouldn’t bucket a product or service as such.
“Nothing to announce as far as an overarching brand and name, but it’s an active area and we’re going to market with a more sophisticated buy-side and pitch it to key agency clients and trading desk partners,” he said.
View the Wibinar here.
The explosion in popularity of smartphones, tablets and the app revolution has fuelled a more than doubling in mobile advertising to £500m this year – just four years after the sector struggled to attract £25m.
Breakneck growth is continuing in the second half – fuelled by the popularity of Apple and Google’s app stores as smartphone ownership nears 60% of the UK’s adult population – with forecasts putting UK mobile spend at as much as £511m for the full year.
In 2011, the IAB put mobile ad spend at £203m.
Mobile search accounts for almost three-quarters of all UK mobile ad spend.
Total UK internet advertising spend rose 12.6% year on year in the first six months to £2.59bn, comfortably on track to pass £5bn for the year. The total digital display advertising market, including mobile, rose 10.6% in the first half to £591m.
One of the biggest beneficiaries of the rise of digital display advertising, albeit not on mobile, has been Facebook. Enders Analysis puts Facebook UK’s full-year ad revenues at £236m, a healthy 35% year-on-year rise.
However, these figures actually represent a cut of 18% on more bullish estimates made earlier in the year.
Enders analyst Ian Maude said the downgrade is the result of factors including a steeper-than-expected slowdown in the rate of Facebook’s ad revenue growth, marketers reassessing the value of ploughing money into gathering friends and likes to brand pages, and the social networking site’s well-documented struggle to make money out of mobile.
Jamie Matthews, chief executive of Initials Marketing, believes the scope for growth for mobile marketing remains massive.
“The £500m mark is just the start,” he says. “Facebook is racing to develop a mobile ad strategy to tap into its 550 million monthly mobile users, and more than half of big companies do not yet have a coherent mobile marketing strategy. I would expect mobile advertising to continue to grow at a staggering rate for some years yet.”
The biggest segment of the internet advertising market continues to be paid-for searches, which are dominated by Google.
Spend on search advertising rose 16% in the first half to crack £1.5bn, a 60% share of the overall market.
The rise of mobile ad spend in the UK
2009: £37.6m, up 32% year on year
2010: £83m, up 116% year on year
2011: £203m, up 157% year on year
2012: £181.5m in the first half, up 132% year on year.
Posted by } Alex Spencer
2011 was a year of rapid growth and change in the mobile advertising industry. It was the year that saw smartphones, Tablets and the mobile internet become mainstream among consumers, and that saw marketers and advertisers increase spend and begin prioritising mobile. 2012 looks set to be even more of a critical year in the development of the industry. From Adfonic’s own data and knowledge of the industry we predict that the following developments will become hot topics over the next 12 months.
With the iPad being one of 2011′s most popular Christmas presents, and with the new Kindle Fire making tablets more affordable and accessible, we can expect to see tablet devices replacing lower-end laptops and notebooks over the course of 2012. It is not unrealistic to expect that Tablet ownership will more than double.
Rich media going mass market
Rich media is already emerging as a game-changer for the mobile advertising industry, as it offers the consumer a more engaging and interactive experience and facilitates superior branding opportunities for advertisers. Until now, rich media advertisements for mobile have, for the most part, been offered as a premium or niche service across a small number of high end mobile publishers. In 2012, mobile ad networks will be offering rich media on a global scale, giving advertisers access to millions of consumers and challenging budgets across other media channels.
Advertising spend shifting towards mobile
As smartphone penetration booms, consumer mobile usage will continue to increase and extend across new times of the day. For example, one of the most quoted use cases in 2011 has been consumer use of tablet or smartphone devices during TV commercials. Consumers are browsing mobile sites and using apps on their tablets and smartphones in place of TV commercial consumption, which suggests that the perception of mobile as primarily an extension of the PC internet will finally disappear. It is becoming increasingly clear that mobile operates as an alternative to the “fixed internet” for many people and this can no longer be ignored. Advertising budgets will increasingly follow the consumer over to mobile.
Phasing out of feature phones
Smartphones are now becoming more economically accessible to all consumer segments as a result of the large range of Android devices coupled with Apple’s pricing strategy for older phones. As the number of services and options begin to concentrate on tablet and smartphone platforms, advertisers and agencies will slowly phase out features phones from their plans.
Apple and UDIDs
During 2010 and 2011, much investment poured into app tracked campaigns enabling advertisers to deliver installed apps at low cost. A new common approach, superseding UDIDs, will become mainstream across agencies, advertisers, ad networks and other players in the ecosystem, as Apple plans to phase out access to the UDID on its mobile devices.
Mobile web versus applications
During 2011, there were hints (driven predominantly by large industry players opting for HTML5 over a multi-app approach) of the mobile web challenging applications as the way forward for mobile internet usage. During 2012, we are likely to see this debate evolve with the potential for some major decisions by digital players to impact the market and force some rethinking.
There is likely to be more integration across marketing channels, platforms and other parties that will enable geo-location services and advertising to ramp up during 2012. Driven predominantly out of the US (where most geo-location business is currently concentrated) we are likely to see more demand for campaigns targeted to smaller areas (ring-fencing) with a view to driving footfall into retail stores, restaurants and other outlets.
Increasing use of mobile payments
While this may not be the year that mobile payments become mainstream, many players will come together to make significant progress in piecing together the mobile commerce ecosystem. The success of Google Wallet last year will drive industry players forward in 2012, with major advertising events like the Olympics providing a springboard for new, exciting innovations around mobile commerce.
Facebook and mobile advertising
Facebook has been holding back on pushing mobile advertising aggressively. With close to 1bn users online, and over 300m users now accessing Facebook via their mobile, it provides a significant game-changer and possible milestone for the mobile advertising industry. However Facebook decides to execute on mobile advertising will, without a doubt, have a big impact on the digital industry in general.
Further progress on standards and privacy
With mobile advertising moving at such a fast pace in terms of innovation and market demand, there will be increasing requirements for further standardisation (ad formats, for example, including rich media) and frameworks and policies driven by the trade bodies on privacy and data.
I have now left YOC after 4 years since launching their UK operations. It has been an absolute pleasure working for such a fantastic organisation and I wish my old colleagues all the best for the future.
I am now looking at the next big thing and will update all via my blog in due course. It is exciting times for mobile and we are all moving at an incredible rate. So many fantastic new start ups with so many ingenious ideas all to make our lives better. I believe we strive to help people communicate, engage, consume, learn, inform and so much more.
This global society that we have born is the future and will change lives forever to come. No borders, no politics, no fuss. A generation of globally connected people wanting to share experiences and information from across all corners of the globe.
I am privileged to be part of such an amazing evolution of communication…