Narrative: Advertising Sustainability
Each narrative page (like this) has a page describing and evaluating the narrative, followed by all the posts on the site tagged with that narrative. Scroll down beyond the introduction to see the posts.
Google Confirms Plans to Block Some Ads in Chrome in Future (Jun 1, 2017)
There were reports a while back that Google was planning to incorporate some limited ad blocking features into its Chrome browser, and Google has now confirmed those reports and explained exactly what it’s planning. As the reports suggested, Google isn’t planning to implement a broad ad blocker but rather will block just those ads deemed annoying by the Coalition for Better Ads, of which Google is a member. It sounds like Google has started reaching out to publishers to explain the forthcoming change and will be providing detailed guidance on how they can ensure their sites are in compliance. As I said when the earlier reports surfaced, it’s smart for Google to be part of the push for limited ad blockers even if that may seem counterintuitive, because if it can focus that activity on egregious ads rather than all ads indiscriminately, it has a much better shot at protecting its own massive ad revenue than if others take more of a blanket approach. We can be certain that none of Google’s own sites or ad formats will be affected by this filter, but we can also guess that there will be something of an outcry from publishers feeling that Google is favoring itself while disadvantaging others. It’s going to be fascinating to watch this play out over the next few months.
via AdAge
YouTube Clarifies Content Policies for Creators and Advertisers (Jun 1, 2017)
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Google Execs Say Assistant Will Monetize Through E-Commerce and Ads (May 24, 2017)
Though the original headline on this piece focuses on the e-commerce aspect, the actual content of the article makes clear that Google has every intention of serving up ads too. Google launched Shopping on Home a while back, so hearing that Google intends to monetize through e-commerce isn’t a huge surprise, but it’s interesting to hear confirmation from Google that this is its main focus, because though this is obviously a strength and a motivator for Amazon in this space, it clearly isn’t Google’s main focus. However, as I said, advertising is clearly a big part of that picture too, and it sounds like ads will mostly be served up as they are in other Google search products: alongside organic results when people are looking for something specific. The big question, then, is how that’s done – the first screen of classic Google search results has now been taken over by ads, something that only takes a scroll to get past, but that same experience on a voice device that majors on providing a single answer won’t fly. Linear interfaces like voice assistants can’t take up users’ time with ads before they get to the organic results. So despite these comments, there’s still lots we don’t know about how Google is going to make additional money from Home. And then there’s the point I made previously about the fact that charging real money for a device like this breaks the usual implied contract of free services coming with ads – users won’t have the same expectation of an ad-supported business model on a device like Home that they do with a free online service.
via Recode
Google Expands In-Store Sales Attribution to More Ad Types (May 23, 2017)
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Big TV Networks Trash Google and Facebook While Aping Their Techniques (May 19, 2017)
I’ve been watching the news from the recent TV upfronts and waiting for the definitive article that summarizes what’s been said and done, and while I’m not convinced this is it, it does a good job of characterizing the basic trends at issue. The two big underlying trends are the continuing decline of live linear viewing of traditional TV and the massive growth of online advertising, which could be presumed to have put an enormous dent in TV ad spending but actually haven’t. However, the TV companies still see online advertising platforms as a big threat, and spent an unusual amount of time during the upfronts trashing Facebook and Google (though mostly not by name) while talking up their own massive reach. At the same time, though, these companies are increasingly mimicking the very same things that make Facebook and Google’s ad platforms attractive: detailed targeting of ads and tracking of what happens after viewers see them. At the same time, the TV networks seem somewhat lost on the content side, rebooting old shows and formats, latching onto new gimmicks like live musicals, and generally showing a lack of imagination in protecting and rejuvenating their brands. Meanwhile, the strongest audiences on traditional TV are live sports fans and older generations watching procedural franchises like CSI and NCIS. And of course the big online platforms are investing in lots of both traditional sports content and some new formats of their own. Therefore, though each side would like to paint itself as providing unique value, the two are increasing converging on a similar set of content and ad capabilities, while the audience continues to shift from traditional linear TV to a host of online and streaming alternatives, which will inevitably pull ad dollars that way too.
via LA Times
Some UK Advertisers Still Staying Off YouTube (May 12, 2017)
As a reminder, the boycott of YouTube and Google which began a couple of months ago kicked off in the UK, where some high-profile press coverage of major brands’ ads showing up next to undesirable content caused some brands to pull their advertising from YouTube and in some cases Google’s other platforms. Although the hubbub over the boycott both there and here seems to have died down considerably, especially after Alphabet itself played down the impact in its recent earnings call, there are still advertisers which are staying off Google’s platforms in the UK. This article lists several ongoing holdouts including Channel 4, Marks & Spencer, Toyota, Tesco, and Pepsi, while others including McDonalds and RBS have returned. The quotes from marketers in the article makes clear that this is still about more than just dodgy content and extends to other frustrations advertisers have with online ad platforms, and that they’re using the boycott as a way to apply pressure to achieve those other aims.
via Marketing Week
Facebook Hiring For Original Video Content Roles (May 4, 2017)
Facebook has a job opening on its site for a “Film Producer”, and the description for the role talks about “motion picture content” in a way that makes it sounds like this person is being hired to make movies. On the face of it, that’s an odd thing to do: movies aren’t made by in-house producers, they’re made on an ad hoc basis using the filmmakers (directors, producers, cinematographers, writers etc.) who make sense for a particular project, so if you’re looking to make original content you hire people good at commissioning it, not the people who actually make it. However, the detail of the posting makes it seem as though what this person will be responsible for creating probably isn’t movies for consumption by Facebook’s audience. I think Facebook means video where it says either film or motion picture, especially as it talks about “shareable content”, and a 90-minute movie is not overly shareable. I actually wonder whether this person will be creating content for internal use or to promote Facebook to its audience rather than to be enjoyed by the audience as entertainment. But Facebook’s earnings call this week reinforced the idea that Facebook is getting more serious about creating and seeding video content on the site to boost its video ad revenues, which are very dependent on longer-form video.
via CNBC
Snapchat Claims Unique Audiences Despite Facebook Growth (May 3, 2017)
Snapchat claims that it is still able to reach unique audiences despite Facebook’s rapid growth. That’s quite a claim since Facebook’s monthly active users now equate to two thirds of the entire US population and it reaches 52% of the US population daily. But app analytics firm App Annie has some numbers which suggest that Snapchat’s audience does include a chunk of users who aren’t active on Facebook or Instagram the same day. So Snapchat’s argument is really one about reaching a narrow base of users that can’t be reached another way, which is really an argument for Snapchat as a complementary ad platform rather than a core platform, given that the reach of both Facebook and Google is far wider. Snapchat’s reach at the end of last year was about one third of Facebook’s in the US, and far lower than that in most markets around the world, so it remains very much a niche play despite its success in a demographic that matters to advertisers.
via Bloomberg
News Corp Launches Tool to Help Brands Avoid Advertising Against Undesirable Content (May 2, 2017)
I commented on a piece a little while ago about how Chase had a member of staff manually go through the sites where its ads were appearing and pare that number back in order to ensure that its ads were appearing on high quality sites against reputable content. That effort paid off for Chase, which saw essentially the same end results from its advertising on 5,000 as it had on 400,000, but it’s a heck of a lot of work to go through. So a service that offers to help brands work through similar decisions without having to do all the work is bound to be appealing, and that’s what News Corp is offering through its Storyful product. News Corp itself isn’t a major destination for online advertising, but the Murdoch empire in total certainly is, thanks to 21st Century Fox and its significant TV ad revenue (21CF alone had around 75% as much ad revenue in 2016 as Facebook did in the US). But this Storyful product is an expansion of News Corp’s ad offerings into a new area which isn’t directly tied to its online ad platform (or those of 21CF). So although the article sets this up as part of a broader war between Murdoch and Google, this is pretty peripheral stuff. But it’s clearly aimed at taking advantage of some of Google’s recent troubles in this area.
via Bloomberg
★ Alphabet Reports Strong Growth and Profits, Shrugs Off YouTube Boycott (Apr 27, 2017)
Alphabet was the third of the big three tech companies to report earnings today, and one of two (along with Amazon) which saw a very favorable response from the market to better than expected results. Its growth was strong once again off the back of ongoing positive ad revenue trends and a second straight quarter of strong growth in Other revenue in the Google segment, which includes its hardware sales. However, whereas Q4 saw something like $600-700 million in hardware sales, Q1 saw a much smaller bump from hardware – likely around $300 million. Other Bets revenue – mostly from Nest, Fiber, and Verily – continued to grow rapidly (47% year on year) though losses also grew. Google’s traffic acquisition costs continue to rise fairly rapidly due to the increased payments Google has to make for mobile search traffic acquisition (notably on the iPhone) – it rose from 8.5% of revenue from Google’s own sites to 10.4% in one year. Meanwhile, clicks or their equivalents on ads on Google’s own sites continue to rise rapidly, while the cost-per-click continues to fall due to the rise of mobile and video advertising. So far, the former is more than offsetting the latter, and there’s no indication just yet that there’s an end in sight. But Google’s own sites now contribute over 80% of total ad revenue, while third party websites running Google ads are down below 20% and the gap between the two continues to widen as Google continues to be far more successful driving growth on its own sites. That’s a reflection both of a deliberate strategy – Google’s margins on its own sites are much higher – but also of the broader trend away from traditional desktop display ads and towards mobile, search, and native advertising.
via Alphabet