Advertising – Page 2 – Tech Narratives

Topic: Advertising

Each post below is tagged with

Company/Division names

Topics

and

Narratives

as appropriate.

Pandora Users Can Now Watch Video Ads In Exchange for Skips and Playbacks (Sep 19, 2017)

Pandora has been testing a new ad model for some time and is now launching it broadly. The model offers users an opportunity to trade watching a video ad for extra skips and playbacks, both of which are normally limited under its ad-based option. That’s a familiar model from the mobile gaming market, where games often offer users additional lives or other in-game features in return for watching video ads, although anecdotal evidence from my own family suggests that those ads aren’t really being “watched” in any meaningful way – they basically insert a 30-second delay in game play during which the player does something else. Pandora says a high percentage – 42% – of its active user base has signed up for this program, which is called Video Plus, so that’s a good start, but the key metrics here aren’t the number of signups or even the number of times people agree to trade an ad view for in-app functionality, but brand recall and other more traditional ad metrics which would demonstrate that users are actually watching and taking in the content of video ads. There’s no mention of any of that in the Adweek article linked below, and whether this new model ultimately succeeds or fails will depend entirely on whether brands actually see a decent return on the investment.

via Adweek

Pandora

Google Reportedly Offers to Auction Shopping Slots to Competitors to Placate EU (Sep 18, 2017)

A few weeks back, when Google filed its proposed response to the European Commission’s investigation into its Shopping feature, I suggested that there were only a few ways in which it might comply with the Commission’s requirements: “kill its Shopping product entirely in the EU; relegate it to either the organic or paid slots on a page rather than giving it the current prominent placement it enjoys; or create a broader “comparison shopping” section above the regular search results featuring both its own and competing services.” In the end, it sounds like what Google has proposed is a combination of those things – allowing other comparison shopping sites to bid to appear in the Shopping section where its own results currently appear exclusively, while placing an artificial cap on its own maximum bids to avoid dominating the results after the change.

The latter highlights the unlikelihood that the solution will be palatable to Google’s competitors or the EU – either it forces itself to sit out entirely from the bidding process, or it will regularly beat out competitors. Google knows better than anyone else what placement in that slot is currently worth, because it’s the only company that’s ever occupied it, and it therefore enjoys an unfair advantage. It could therefore set arbitrary caps in line with what it thinks those slots are worth, allowing competing companies to take the slots it doesn’t want to and reserving the best for itself. Either this has to be an open marketplace, in which case Google’s massive scale will likely allow it to beat out competitors for every slot it actually wants (as the WSJ points out it already does in many cases), or Google has to be excluded. This is where I go back to the solutions I proposed – either open up the Shopping slot in a similar fashion to Microsoft’s Windows browser choice options, or do away with the feature entirely. This proposed solution seems unlikely to pass muster with the EC.

via WSJ

EU vs US Tech

Facebook Faces Increasing Regulatory Barriers Around the World (Sep 18, 2017)

The New York Times has a long piece which dives deeply into the growing regulatory barriers facing Facebook in many of the markets where it operates, including the markets where it has the most headroom in terms of user growth. China is a particular focus, and the story there should be familiar based on earlier items I’ve linked to (see all previous posts tagged with both Facebook and China). But the piece also talks about Europe, whose strong privacy laws have already caused Facebook problems in individual countries, and the fact that Europe and not the US is often the model other countries around the world look to in regulating telecoms and technology markets. I saw this very clearly when I was a regulation analyst early in my career and the US was always the outlier, while the rest of the world tended to adopt European-style regulation in various areas a few years after Europe did so. That could put severe limits on Facebook’s normal business model of collating all the data created by users across its various apps and using it to target advertising. In other countries, it’s having to work uncomfortably closely with unpleasant regimes which would limit their citizens’ freedom of expression. Perhaps we shouldn’t wonder that Facebook seems to have pivoted from emphasizing user growth to focusing on community building – that user growth is potentially going to become considerably tougher, and the community building focus makes a great platform for arguing that Facebook is a force for good in countries where it’s allowed to operate unfettered.

via The New York Times

Facebook Announces Ad Targeting Changes in Response to Racist Keywords (Sep 15, 2017)

This content requires a subscription to Tech Narratives. Subscribe now by clicking on this link, or read more about subscriptions here.

$
Facebook

Facebook's Power

Apple’s New Safari Cookie Blocking Angers Major Advertising Trade Groups (Sep 14, 2017)

This content requires a subscription to Tech Narratives. Subscribe now by clicking on this link, or read more about subscriptions here.

$
Apple

Advertising Sustainability

Facebook Allowed Advertisers to Target Ads to Antisemitic Users (Sep 14, 2017)

This content requires a subscription to Tech Narratives. Subscribe now by clicking on this link, or read more about subscriptions here.

$
Facebook

eMarketer Says Cord Cutting to Accelerate, TV Ad Spend Growth to Slow (Sep 13, 2017)

Analyst firm eMarketer has some new numbers out on cord cutting and the impact it will have on traditional TV ad spending. Specifically, it says that later this year there will be over 22 million cord cutting households in the US, up about 5.5 million from 2016, while TV ad spending growth will slow down meaningfully, though it’s still projecting growth over the next few years. I’m in agreement with the broad trend described by eMarketer around cord-cutting: my own analysis has consistently shown accelerating cord cutting behavior, though at a rather slower rate than eMarketer is projecting – far closer to 2 million in the past year than the over 5 million eMarketer is suggesting by the end of this year. On ad spending, I’m also in agreement that growth will slow, but I think it will turn negative soon (it was already negative for the major TV companies over the past year, according to my own data gathering, thanks in part to last year’s strong election-related spending). I think a decline in the traditional TV ad business is inevitable at this point in the coming years, and the results will begin to be felt as traditional TV companies start to reduce spending to bring costs in line, which in turn will have significant effects on the overall industry.

via eMarketer

Industry

★ Facebook Limits Monetization of Content Including Controversial News (Sep 13, 2017)

Facebook has announced that it’s making changes to the type of content that can be monetized on its site, introducing some serious limitations to which content ads will run against. On the one hand, this is clearly an echo of changes YouTube made earlier this year in response to the boycott and broader backlash against ads showing up next to undesirable content, and therefore a sop to advertisers. But on the other hand, it means content creators who may in some cases have built businesses out of creating content in some of the now unmonetizable categories will understandably be upset. Some of the bans on monetization are entirely common sense in nature, while others are likely to be more controversial, notably a ban on monetizing content about highly controversial issues, seemingly including news coverage of those issues. That’s one that Facebook is definitely going to want to clarify to avoid charges of censorship.

via TechCrunch

Facebook

Facebook's Power

Roku Launches its Own Channel Showing Ad-Supported Movies (Sep 6, 2017)

This content requires a subscription to Tech Narratives. Subscribe now by clicking on this link, or read more about subscriptions here.

$
Roku

Disrupting TV

LinkedIn Launches Audience Network for Syndicating Sponsored Content (Sep 6, 2017)

This content requires a subscription to Tech Narratives. Subscribe now by clicking on this link, or read more about subscriptions here.

Advertising

Advertising Sustainability

Facebook is Criticized for Claiming to Reach More People than Census Shows in US (Sep 6, 2017)

This content requires a subscription to Tech Narratives. Subscribe now by clicking on this link, or read more about subscriptions here.

$
Facebook

Verizon Kicks off New Loyalty Program, Requires Access to Usage Data (Sep 5, 2017)

This content requires a subscription to Tech Narratives. Subscribe now by clicking on this link, or read more about subscriptions here.

$
Verizon

WhatsApp Tests App For Businesses, Says Will Begin Charging Them Soon (Sep 5, 2017)

This content requires a subscription to Tech Narratives. Subscribe now by clicking on this link, or read more about subscriptions here.

Advertising Sustainability

★ Roku Files to Go Public, Loses Money, Sees Ads as Core of Future Business Model (Sep 1, 2017)

Roku today made public its S-1 filing with the SEC as the first step towards a long-awaited IPO. I’ve been tweeting charts and nuggets from the filing for the last couple of hours in this thread, but I’ll provide a brief summary here. The long and the short of it is that Roku is growing at a decent clip, is currently unprofitable with little sign of that changing, and is in the midst of a big shift in its business model. Whereas for most of its history selling its streaming boxes has been its core revenue stream, it’s recently added a platform licensing business, but that’s not actually where its new revenue streams are coming from. Rather, it licenses its platform very cheaply and monetizes usage by taking a cut of certain subscriptions sold through its platform and serving up ads. It’s the latter which is a surprisingly important part of its business model (though there have been signs of this shift) and which is a major focus of much of the text in the S-1 filing. Last year, this advertising and subscription revenue share was nearly $50 million out of its $400 million in total revenue, and half of its platform revenue, and that accounted for essentially all of its growth in 2016. In that sense, though Roku on paper looks like principally a hardware company, it’s in some ways more like a Facebook or a Google – a company that collects millions of data points on its customers (18TB of uncompressed data per day) and will use that to target advertising. In that sense, Roku is an unusual player in the streaming space, given how many modern streaming services eschew advertising, but sees itself as a key beneficiary of the move of TV advertising dollars from traditional channels to streaming. This is going to be a fascinating IPO to watch and I’ll have plenty more analysis on Roku in the next few days.

via Roku Form S-1 (SEC)