GigaOM » Mobile Advertising

YouTube’s mobile ad revenue triples as mobile views reach 40% in the US

Janko Roettgers — Wed, 05 Jun 2013 17:29:03 +0000

Mobile is quickly becoming the new normal for YouTube, and it’s starting to pay off: 40 percent of all of the service’s video views in the U.S. are now coming from mobile devices, a YouTube spokesperson told GigaOM on Wednesday. Worldwide, mobile is now responsible for 25 percent of all of YouTube’s video views.

This, and the roll-out of new mobile apps, has helped YouTube to triple its mobile ad revenue in the past six months, according to Bloomberg, which got YouTube VP of Sales Lucas Watson go on the record about the mobile growth.

Bloomberg is also guesstimating that “as much as $350 million in sales probably came from mobile video ads” in Google’s last quarter alone. However, that number isn’t coming from Google, and it’s based on a few assumptions from analysts, so I would take it with a grain of salt.

Still, even without a firm mobile revenue number, tripling mobile ad revenue in a six-month time frame is impressive, and it seems to be the direct result of YouTube launching its iPhone and iPad apps late last year, as well as rolling out a full-featured mobile web experience across all platforms. Previously, iOS users were accessing YouTube through an app built by Apple, and YouTube wasn’t able to monetize any of those views.

For more on YouTube’s mobile strategy, check out this interview I did with Shiva Rajaraman, YouTube’s director of product management, at last year’s Mobilize conference:

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AT&T CEO: A subsidized mobile internet is coming to an operator near you

Kevin Fitchard — Wed, 15 May 2013 15:59:02 +0000

If you’re waiting for the days of a “toll-free” mobile internet, you may not have to wait much longer. Speaking at a Morgan Stanley investor conference on Wednesday, AT&T Chairman and CEO Randall Stephenson said he anticipates content providers and app developers will soon start paying the network freight for their content, FierceWireless reported.

Content providers could do this through direct payments to carriers, Stephenson said, but according to Fierce, he also said they could subsidize data costs through some kind of advertising revenue share. The end result, though, would be the same: content providers who pay would see their traffic exempted from customers’ mobile data caps.

Randall Stephenson

Stephenson comments come a week after reports that arch-competitor Verizon Wireless is in discussions with ESPN for just such a toll-free data deal. What seemed like a crazy suggestion from AT&T and other carriers last year, now looks like it might become reality. But is it a reality we really want?

A content provider-subsidized internet would be appealing to many consumers, especially those on AT&T and Verizon since carriers have hunted the unlimited data plan to the point of extinction. Imagine streaming Netflix movies and ESPN games to your heart’s content without ever worrying about exceeding your data cap or incurring overage fees.

But as I pointed out last week there could be some major unintended — or if carriers are being really cynical, intended — consequences to adopting these kinds of subsidy models. Legally mobile operators aren’t subject to the same net neutrality guidelines as the wireline broadband providers, but if mobile carriers created two separate classes of mobile data traffic they could upset the delicate balance that makes the mobile internet the mobile internet:

… there are enormous consequences to such a deal. The biggest and most obvious consequence is that it favors one provider’s content over another. If all access is created equal, then no content has an inherent advantage over another — which is the whole idea behind the wireline network neutrality rules the FCC established in 2010. But if consumers know they can get ESPN’s content without incurring any additional charge, they’ll naturally gravitate toward that content.

There’s an even bigger risk that ESPN’s competitors won’t just get penalized in the eyes of the consumer. Their traffic flow could be penalized as well. Embedded deep within Verizon’s network are policy servers that can distinguish an ESPN packet from any other packet. Not only could Verizon use that technology to exempt ESPN traffic form data plans, it also could use that technology to prioritize ESPN’s traffic from all others. The [Wall Street] Journal’s story didn’t mention anything about traffic shaping, but you can bet its high on the list in any negotiation.

What’s particularly noteworthy about Stephenson’s comments, though, is the mention of using advertising as a former of subsidy currency. Stephenson could just be talking about inserting carrier-generated advertising into their app ad engines as compensation for their free ride on the network. But the other implication is that AT&T wants a true revenue share, taking a cut off the top of any revenue generated from YouTube ads or any Netflix subscription used on mobile.

This is an old idea the mobile industry first proposed way before the advent of the smartphone – in an age when the mobile internet was still a walled garden and carriers its gatekeepers. The idea was that operators would become equal partners with content providers, and that’s a scary proposition. I doubt that content providers want to give the gate keys back to the carriers.

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Why mobile must be part of the shopping experience

Thu, 25 Apr 2013 20:10:17 +0000

From shopping and buying to owning and using products, consumers’ experiences largely determine the success of both retailers and brands. By voting with their feet, wallets, and social media, consumers reward companies that make their lives easy, risk-free, and pleasurable. As proof, you can witness the extraordinary success of Amazon, Zappos, Starbucks, and others. However, as the failures of Kmart, Best Buy, Dell, Nokia, and many more illustrate, consumers also penalize with a vengeance companies that fail to meet their expectations.

Given the importance of the topic, this report provides an end-to-end view of consumers’ experience, from discovery to shopping and buying to post-purchase activities such as service and support. Data from a recent immr survey (co-sponsored by GigaOM Research) of U.S. smartphone owners was used to answer questions relating to:

Shopping experiences in brick-and-mortar stores: Relatively few (one in four) consumers are happy with their shopping experiences in brick-and-mortar stores. As an online retailer, Amazon leads on this important metric by a 2-to-1 margin.
Satisfaction with specific shopping experiences: From discovering to shopping to buying and using products and services, consumers reveal substantial opportunities to improve the overall shopping experience. Opportunities also exist in a number of special cases, including shopping for gifts, services, and events and entertainment. The latter two are especially important for local businesses.
Mobile’s impact on the shopping experience: Mobile apps significantly improve consumers’ experiences. Individuals who use a mobile app for a specific shopping experience, such as finding or comparing products, are much happier with their shopping experience than non-users.

Recommendations are presented for retailers and brands to fill these voids and help consumers along the shopping journey.

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With new Twitter ads product, you are what you tweet — to advertisers, anyway

Eliza Kern — Wed, 17 Apr 2013 16:58:29 +0000

Twitter has launched a new advertising product that will allow brands to advertise specifically to consumers based on the words they’re tweeting. That means the content of your tweets is going to start having a greater affect on the ads you see on Twitter.

Previously, advertisers could target Twitter users based on their general interest graph, only part of which was based on the actual content of a user’s tweets. But this is a brand new product that could be huge for Twitter.

It both improves the targeting and makes ads more relevant for users, and also gives advertisers more chances to surface tweets on your stream when you’re tweeting about related topics. The company has been ramping up advertising and money-making products this year, working to improve the quality of ads on Twitter and the users it can reach.

Twitter explained what this means for the user logging into Twitter:

For example: let’s say a user tweets about enjoying the latest album from their favorite band, and it so happens that band is due to play a concert at a local venue. That venue could now run a geotargeted campaign using keywords for that band with a Tweet containing a link to buy the tickets. That way, the user who tweeted about the new album may soon see that Promoted Tweet in their timeline letting them know tickets are for sale in their area.

The company emphasized that this doesn’t mean users will necessarily see more advertising, and in fact, by allowing advertisers to target the words in your tweets, Twitter believes the product could make ads even more relevant for you, as they do in the concert example. And for advertisers, there’s a lot more intent inherent in the words you’re tweeting — tweeting about your favorite music artist is probably more of a committent on your part than just following the artist on Twitter.

Here’s a screenshot of what the product will look like for advertisers, who can pick the keywords to target:

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It’s no Facebook Phone: Home looks nice but could have limited impact

Eliza Kern — Thu, 04 Apr 2013 21:35:37 +0000

As Facebook delves deeper into our online lives and builds an advertising business around the information it collects, what better way to reach consumers than the most prominent screen on the phones in their pockets?

Facebook’s Android announcements on Thursday, which essentially create Facebook-centric launchers for Android phones, further underscored that the future of the company is mobile. ”Facebook Home” makes some nice UI improvements around messaging, but considering the long-time buzz surrounding the potential for a “Facebook phone,” this particular announcement did not seem revolutionary.

The biggest message from Facebook on Thursday in Menlo Park was was that the company wants to improve our ability to communicate with loved ones on mobile. That’s not exactly a new theme. Facebook’s Home basically presents a package of the company’s apps that users can download from the Google Play store that creates a dominant Facebook home screen of photos and an integrated launcher for apps and notifications on Android. The company also announced an HTC First phone with a deeply-integrated version of Facebook Home pre-installed.

Mobile is where most of the world is headed, as we spend increasing amounts of time staring at our phones and tablets. A company like Facebook, as hungry for user data as any other online advertising business, likes a product like Home because it gives the company greater data about its users. Also, Wall Street has pretty much mandated that Facebook has to make more money through mobile advertising. While ads won’t roll out immediately to the rotating photos on the cover screen, the company didn’t rule it out, meaning it’s probably coming.

But as Om so aptly noted earlier today, people already spend a good deal of time on Facebook on mobile — about 30 minutes per day. But the only people who will use Facebook Home are those who choose it, either by purchasing the HTC First phone through AT&T, or downloading Facebook Home through the Google Play store. It’s not a product that everyone will immediately have to or choose to use, the way the revamped News Feed will shortly roll out to everyone. And it’s certainly not something Apple iPhone users will likely see any time soon.

My favorite aspect of the new features through Android revolved around messaging. Messaging and chat apps on mobile are huge, especially for users in Asia, and Facebook needed to make improvements there to push back the third-party apps encroaching on that space. There’s already a good deal banter on the internet making fun of the “Chat Heads,” which are bubble photos of your friends that live on the screen and show you activity and messages from each person. But as a frequent texter who carries on a variety of iMessage threads at any one time, I might appreciate the ability to conduct chats on top of other apps so you don’t have to stop what you’re doing.

Mark Zuckerberg checks out one of the new phones with the Facebook Home at Menlo Park headquarters.

Facebook’s business both as a social network and an advertising network completely revolve around sharing, as Zuckerberg said Thursday when he emphasized the importance of a social, connected world. If users stop sharing data with Facebook it will have a problem, so it’s worth asking how Home might encourage people to share more. The revolving cover photos on the homescreen certainly bring photos to the forefront and encourage likes and commenting, which you can do from that screen, and Home’s emphasis on messaging could increase how often people use Facebook Messenger if it’s featured more prominently.

Zuckerberg noted that people check their phone’s lock screens hundreds of times a day, but might only check the Facebook app 12 or 15 times, and Home aims to change that. So Home, if you choose to use it, would have you checking Facebook more often and consuming more visual content. But will it have you sharing substantially more? That doesn’t seem like a given.

Fundamentally, keeping users inside Facebook is great for Facebook (and when the company eventually rolls out ads to the cover screen photos, it could be quite lucrative.) But for Android users who already have the Facebook app and can customize their launchers? There doesn’t seem to be a lot about this announcement that changes that experience.

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Facebook’s mobile hype, eyeballs and dollars grow. Is that enough?

Om Malik — Wed, 03 Apr 2013 17:27:28 +0000

Facebook is likely to announce its own interpretation of Android tomorrow, perhaps in partnership with HTC. This will be company’s first full-scale assault on the mobile business, a move that is being watched with much interest in the executives offices of Google, Apple and Twitter. But even without, the company seems to be doing quite well on the mobile — relatively, speaking.

For instance, Flurry Analytics pointed out Wednesday in a new release that in the U.S., smartphone users spend 18 percent of their time spent on smartphones on Facebook. And what’s more important, Facebook tends to keep the Facebook Mobile users inside the app, instead of sending them out to other apps or browsers. As Flurry noted:

…it appears that mobile, once perceived as Facebook’s Achilles’ heel, has become Facebook’s biggest opportunity. Consumers are spending an average of nearly 30 minutes per day on Facebook. Add to that Facebook’s massive reach, as well as their roughly billion mobile users per month and you have a sizable mobile black hole sucking up peoples’ time. The 30 minutes a day is a worldwide average which means a large group spends even more time on Facebook (possibly hours) watching and participating in what has become the ultimate reality show in which the actors are you and your friends.

Well, that does translate into big dollars for the company. According to market research firm eMarketer, Facebook is likely to bring in about $965 million in mobile advertising in 2013 and will see that number grow to $1.51 billion in 2014.

Facebook, the No. 2 mobile ad publisher in the country, accounted for 9.5% of mobile ad revenues in 2012 and is expected to take 13.2% this year. In the mobile display market, however, Facebook is on top, projected to grab nearly three in 10 dollars this year. eMarketer revised Facebook’s share of US mobile display advertising ad revenue upward by several percentage points after fourth quarter results came in higher than previously expected.

Now here is the problem: if folks are spending so much time on mobile already and all they can make is a billion dollars, how does the company start to goose up the overall revenues and justify its massive market capitalization? Any thoughts?

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Report: Twitter ad revenues higher than expected on strong mobile numbers

Jeff John Roberts — Wed, 27 Mar 2013 15:13:56 +0000

A research firm predicts that Twitter will earn nearly $1 billion in advertising revenue in 2014, largely on the strength of mobile ad sales. The figure exceeds the firm’s earlier predictions and reflects Twitter’s ongoing emergence as a force in mobile marketing.

According to eMarketer, Twitter will pull in $528 million this year and $950 million in 2014 with 53 percent of that money coming from mobile ads. The firm had earlier pegged the 2014 number at $800 million.

There are two takeaways from these figures. One is the obvious observation that Twitter is killing it, and fulfilling predictions that it will become a media and advertising behemoth. The other is that Twitter is one of the only companies to crack the mobile morass — the problem, faced by many websites, in which users are moving to mobile devices but ad dollars are not.

Twitter is sitting pretty here because its mobile experience is highly conducive to so-called “native ad units” (sponsored or promoted tweets) that drop easily into its regular story flow. Twitter’s surging mobile numbers could also bode well for Facebook which is ramping up its own advertising efforts, and will likely expand options for marketers to drop “sponsored stories” (another type of native ad unit) into its mobile News Feed.

The other figure that jumps out from the eMarketer report is how much of Twitter’s ad money still comes from the U.S. The firm says that the figure was 90% in 2012 and predicts it will be 83% in 2013.

Twitter continues to hire high profile figures to drive advertising ambitions; in February, it announced the hiring of Jeffrey Graham, a Googler and former New York Times executive.

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Opera and Skyfire marry data compression with video optimization in $155M merger

David Meyer — Fri, 15 Feb 2013 09:00:49 +0000

Before this week, you may have been forgiven for thinking of Opera as a worthy but dull and fading player in the browser space. No longer. Not only has the Norwegian firm caused quite a bit of upset by dropping its own engines and frameworks in favor of WebKit, Chromium and V8, but now it’s gone and bought Skyfire for a cool $155 million.

From a consumer app perspective, the two companies have remarkable similarities. Opera’s browsers are best known for using server-side compression as a way of saving on data costs, and Skyfire uses server-side rendering for video, making it a go-to browser for those who really miss Flash on today’s platforms. This deal is doubtlessly about uniting those two strengths, but that’s not its main thrust.

This is really about mobile carriers: about offering them more control over the quality of their services, and about giving them ways to monetize their subscribers’ mobile web usage. And it may just be a push whose time has come. The key there is the carriers’ current shift to software-defined networking (SDN), which in itself is intended to give operators the ability to fine-tune parts of their networks in ways that were not previously possible.

As it happens, Skyfire offers operators a video optimization technology called Rocket, that is supposed to free up capacity – as much as 60 percent, the company claims — at cell sites that are currently feeling the strain of the mobile video explosion. Skyfire also has a toolbar called Horizon that carriers can preinstall on their phones in order to offer customers context-relevant coupons, for example. Mountain View-based Skyfire has three deals with U.S. carriers for the Rocket Optimizer and Horizon (Verizon was a big investor), and is apparently trialling them with ten other operators around the world.

Opera, meanwhile, has its Turbo compression technology, but it also has a mobile advertising platform called Mediaworks and a carrier service called Web Pass, which allows them to offer pay-per-use mobile web access through the browser. Across these two companies, there’s a lot to play with –- in terms of both technology and geographical reach (Skyfire is strong in North America and Opera in the developing world).

As Opera CEO Lars Boilesen put it in a statement:

“Both companies have evolved far beyond their browser roots. Skyfire adds capabilities to our portfolio around video, app optimization, smartphones and tablets, and strength in North America. With video expected to consume over two-thirds of global mobile bandwidth by 2015, and as time spent on Android and iOS apps explodes, we are excited to extend Opera’s solutions for operators.”

In the same statement, Skyfire CEO Jeffrey Glueck (who will hang onto that title while also becoming Opera’s Operator Business Unit EVP) said:

“Opera practically invented cloud compression to improve mobile user experience, and the team at Skyfire is proud to join forces and advance cloud solutions together. Opera’s over 100 carrier relationships, global sales team, and delivery organization can accelerate the global commercialization of Skyfire’s technology. Opera’s Mediaworks advertising unit with AdMarvel, Mobile Theory and 4th Screen Advertising will strengthen Skyfire Horizon by offering mobile operators a complete turnkey solution including ad optimization, ad sales, and rich analytics. The synergies across all the product lines for both companies are tremendous.”

Glueck also wrote a separate blog post that’s worth a read. In it, he expresses excitement about pushing Skyfire’s technology into the developing world, and also gives a nod to the rise of SDN:

“This is a major milestone for our Skyfire family and validation of our vision for cloud computing and network function virtualization (NFV) to solve huge problems on mobile networks, from handling the explosion of video over cell towers, to finding ways for mobile operators to regain relevance and monetize in an over-the-top world. Back in 2007, when Nitin Bhandari and Erik Swenson started Skyfire, the idea that Tier One mobile network operators would entrust the cloud for core network roles was considered bleeding edge. Now it’s a topic everyone is talking about, and Skyfire is making NVF combined with Software Defined Networking a reality.”

So what’s next for the merged companies? For a start, they will out new products for carriers over the next year that build on Web Pass with new ways of offering mobile web access, such as “toll-free data” and “ad-supported data”.

And by the way, if you love your Flash video and you’re worried about the future of the Skyfire browser, don’t be – Skyfire will continue to develop and support it.

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Svbtle and Medium are trying to reinvent blogging — but who’s going to pay for it?

Mathew Ingram — Tue, 08 Jan 2013 23:04:25 +0000

Depending on how you define it, blogging is about 15 years old now, and many believe that it has either been killed off by social networks such as Twitter and Facebook or forced to go upscale like The Huffington Post. But there are those who are trying to reinvent the heart of blogging for a new era, including the blog platform Svbtle — which announced on Tuesday that it has raised a round of financing from a group of angel investors — and Medium, the startup founded by former Twitter CEO Evan Williams.

Since the “democratization of content” that was created by both blogs and social media is fairly well established now, both Svbtle and Medium seem to be focused on the process of curation and design rather than simply giving writers a new place to publish their content. How they are going to monetize this new form of curated blogging remains a mystery, however.

Svbtle was born last March, when designer and developer Dustin Curtis decided to create what he thought was a more elegant and simple way of posting content (interestingly enough, this is almost exactly the same motivation that David Karp has said was behind his creation of the Tumblr network in 2007). And while Svbtle seemed at first like a personal project involving Curtis and some of his writer and designer friends, it has grown fairly substantially, with more than 200 bloggers generating what Svbtle says in its blog post are “millions upon millions of pageviews” a month.

Svbtle admits it doesn’t know how it will make money

Curtis told TechCrunch that he raised the unspecified amount of funding from a group that includes SV Angel, the CrunchFund and New York-based incubator Betaworks (the startup also got some earlier funding through the Y Combinator program) because he wanted to hire developers, but also because he needed a “cushion for experimentation.” Among other things, the Svbtle founder admitted he doesn’t really have any idea how the company is going to monetize the content it is curating on the network.

As Curtis put it in the TechCrunch interview: “Monetizing content, especially written content, is extremely difficult. I think Svbtle’s biggest innovation will be in this area, but I don’t know what it is yet.” But he provided some clues in a response on Twitter on Tuesday:

You can't make money in publishing by monetizing the content. You have to monetize the delivery system.
—
dustin curtis (@dcurtis) November 21, 2012

Medium is also focusing on curation and design

In many ways, Svbtle seems to be aimed at the same kind of market niche as Medium, the startup that Evan Williams founded last fall after leaving active duty at Twitter — where he was a co-founder and CEO — along with Biz Stone and Jason Goldman, both of whom were co-founders and/or early staffers at Twitter and Blogger. Reinventing blogging seems like a particularly fitting task for Williams, since Blogger (which was acquired by Google in 2003) was one of the early success stories in what was then a brand-new way of publishing and distributing content online.

And like the Svbtle network, Medium seems to be focusing on the curation process as a way of adding value to the blog market: it is invitation-only, although the company has said it plans to open up to more contributors in the future. And Medium recently hired a content editor, former literary agent Kate Lee, whose job appears to be finding new writers and encouraging them to blog on Medium — as well as perhaps finding ways of distributing that content in other forms such as ebooks. But much like Svbtle, the company hasn’t given many hints about how it plans to monetize its network.

Blog networks like Pajamas Media and others were a staple of the early days of blogging too, but most failed to achieve any kind of actual business success — although some managed to earn advertising revenue through ad networks like The Deck and Federated Media, which was an early backer of blogs like TechCrunch and Laughing Squid. The Huffington Post arguably started in the same way, with a core of unpaid bloggers that eventually became a business, and so did Talking Points Memo.

Can Svbtle or Medium find an alternate route to success, possibly by imitating the “artisanal” approach taken by entities like Marco Arment’s The Magazine, which is iOS-only? That remains to be seen. But one thing seems clear: just when you thought blogging was dead, someone comes along to reinvent it.

Post and thumbnail images courtesy of Flickr user Wesley Fryer

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Context is king in mobile advertising, as InMobi snaps up Overlay Media

David Meyer — Tue, 08 Jan 2013 13:03:38 +0000

Mobile advertising may be one of those services that few consumers actually want, but it is arguably integral to funding the future of other mobile services. It’s also becoming an increasingly fascinating space to watch for its pace of technological development, particularly in terms of tracking user behavior as a way of establishing context, so as to better target those ads.

There are two spots of news today that show just how important the engineering side of mobile advertising is becoming. The first is the acquisition of a Bristol, England, company called Overlay Media by InMobi, one of the biggest players in mobile advertising. The takeover actually happened in the second half of last year – all staff moved over to InMobi and everyone’s apparently having a blast – but was only announced on Tuesday.

Making sense of sensor data

Overlay Media’s business is (or was, at least) not in mobile advertising. The company provides what it calls ‘the context engine’ to developers and mobile handset manufacturers, so they can build context into their services without needing to start from scratch. After all, modern smartphones are heaving with sensors, so there’s a lot that can be done here.

Ian Anderson, the founder of Overlay Media, came up with the idea while working on his PhD, which was all about mobile and wearable computing.

“We felt, looking at phones, that there was going to be a need for software that would allow people who didn’t have expertise in context to build it into their services,” he told me. “We were thinking we didn’t have the creativity to create apps, but we knew there would be a need to provide context data.”

How true. For the last few years, Overlay Media has been quietly working with handset manufacturers, who Anderson declined to name, on their medium-term research and development. And he predicts results soon.

“I do start to believe that context awareness will start to happen this year. It’s exciting to see these things we’ve been working on for some time start to appear in products.

“You will see a phased approach for context awareness — I don’t think the consumer is ready for what is technically possible. So you will see device behavior change [based on context]. You may see the shortcuts on your homescreen change when you’re at home or at work. Managing address books [may be improved] to quickly find people based on context.

“You’re going to see some very rich experiences down the line. If you’re walking down the road, the font size on your email client will become larger because you have less attention as you’re trying to avoid the lamppost.”

Thankfully, Anderson insisted that the InMobi acquisition will not kill off this collaboration. He wouldn’t go into how InMobi itself will be making use of the context engine, though.

New CEO at rival Madvertise

The other bit of news relates to one of InMobi’s key competitors, Germany’s Madvertise. There, chief executive Carsten Frien has decided to step down (the second major Berlin CEO resignation this week, following that of Delivery Hero chief Fabian Siegel), and his replacement is a proper tech veteran, Christof Wittig. (Frien will stay on the advisory board, by the way.)

Wittig was most recently managing director of Silicon Valley’s Kii Capital, and has founded several players such as Kii itself, a mobile backend-as-a-service outfit, and the open-source database firm db4objects.

As Frien put it in his valedictory statement: “I am very happy that we have been able to sign up a proven technology CEO with deep international experience to lead the next phase of growth for Madvertise.”

Mobile advertising really is an ‘arms race’. And, as with the actual arms industry, the product itself may not be to everyone’s liking, but the pace of development requires some pretty useful technological innovation.

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