Topic: Advertising
EFF withdraws Verizon spyware claims – CNET (Mar 31, 2017)
This is an example of the hysteria we’re all being subjected to around the recent overturning of privacy rules regarding ISPs by the US Congress, and the dangerous places it can lead. The EFF, a consumer rights group particularly concerned with privacy, first wrote and then essentially entirely withdrew a post hyperventilating about a new app Verizon is testing on one obscure smartphone, once it gave Verizon a chance to respond and it provided an entirely reasonable response. In and of itself, this story isn’t that important, but it is symptomatic of a lot of the overblown rhetoric we’ve seen in the past week about carriers selling browser histories. The reality is that, because the new rules never actually went into effect, this week’s congressional action changed absolutely nothing from the status quo. And carriers no more have any intention of literally selling anyone’s browser history than Google or anyone else does – what they may do is use your browsing history to target advertising or their own products, just as Google, Facebook, and many other entities already do. Reasonable people can disagree on whether that’s a good thing or not, but it’s a fact of life for all of us already if we use these services. To pretend that what’s happened this week is the beginning of what EFF calls the privacy apocalypse is a total disservice to everyone involved, a form of crying wolf which is likely to make it much harder to get real attention onto real issues in the future.
via CNET (EFF’s withdrawn post here)
Chase Had Ads on 400,000 Sites. Then on Just 5,000. Same Results – The New York Times (Mar 30, 2017)
This is a great illustration of the broader fallout from the recent YouTube / Google backlash from advertisers: in this case, JP Morgan is dramatically narrowing the number and range of sites on which it will advertise, and it’s about to do the same thing with YouTube as well. In both cases, it’s taking that action itself to whitelist sites and channels rather than relying on any Google tools to do so. In other words, even if Google doesn’t choose to solve the problem by limiting ads to a smaller number of sites or YouTube channels, advertisers may go ahead and do so anyway. That’s going to be bad for the long tail of creators and sites, who may see both overall ad volumes and prices drop significantly. This isn’t nearly over, and even if Google and YouTube address some advertiser concerns, I suspect we’ll see ongoing fallout and a narrowing of where big brands advertise going forward. See also this post from music video service Vevo, which is making a pitch that its YouTube channel and videos are a safe space within the platform.
via New York Times
Behind the Decline at China’s Tech Giant Baidu — The Information (Mar 29, 2017)
This is a fascinating piece, and well worth a read if you’re interested in the Chinese tech market. It’s a market I follow less closely, but I was struck by Baidu’s recent decline in fortunes and Alibaba’s rapid rise in the ad business when I was doing research for a recent piece on global ad revenue leaders. Baidu has always been referred to as the Chinese Google, and although that’s a horrible oversimplification, it’s hard to avoid the sense in reading this article that part of its trouble stems from pursuing many of the same areas and strategies as Google but with less success. Even the resentment among the successful search advertising employees of higher profile but non revenue generating businesses is reminiscent of the situation at Alphabet, though the latter has been reining in some of its excesses lately. Even outside the Chinese, context, though, this is a good cautionary tale on how quickly seemingly indomitable Internet companies can see their fortunes turn south.
via The Information
Twitter will start putting ads in front of Periscope videos – The Verge (Mar 28, 2017)
Like Facebook, Twitter is pushing ads into more and more places, including videos on its platform, in an attempt to drive ad growth at a time when that rate of growth has been slowing. In Facebook’s case, the slowdown is due to saturating ad load, whereas for Twitter it’s a combination of anemic user growth and ineffective ad formats. Pre-roll ads for live video are likely to be a bit of a turnoff for users, but if the video is important (and long) enough then they may just put up with them anyway. But this is yet another sign that Twitter is willing to try lots of new things when it comes to finding new sources of revenue, on top of last week’s reports about testing a paid subscription service.
via The Verge
Spotify Acquires MightyTV to Improve Ad Targeting (Mar 27, 2017)
When I saw some of the headlines about Spotify buying a company which is good at recommendations, I assumed that would be the focus of the acquisition, but it turns out that the focus is actually on improving Spotify’s ad targeting. So you won’t see better music recommendations, and if you’re a paid user you won’t see any change as a result of this buy at all. I was a Spotify subscriber for a time, but have never used the ad-based service, so I don’t know how the targeting is at this point, but if it’s anything like other online video and audio services, it could use some help, so this seems smart. But of course good targeting requires good data on users, and I’m curious to see how Spotify will improve in that department – by itself, it presumably knows relatively little about its users beyond their musical tastes, so better targeting would likely require buying in third party data to enhance its user profiles. And therein, of course, lies the inherent tension in all ad-based business models – user privacy versus effective targeting.
via Spotify
Eric Feinberg, the Man Behind Google’s Brand-Safety Crisis – AdAge (Mar 27, 2017)
This is a fascinating little piece on a guy who claims to have technology that would help Google from showing ads on problematic videos and websites, and who has apparently been responsible for raising the issue with reporters. Unfortunately, there’s fairly little evidence of that connection in this article, and I haven’t been able to establish one independently. But it would be striking if a guy trying to sell his technology was behind this crisis for Google and YouTube. None of that is to say that the issues aren’t real, but as we all know none of this is particularly new, so it would help explain why all this has suddenly come to a head now.
via AdAge
YouTube Details Fixes While Additional Advertisers Join Boycott (Mar 24, 2017)
This story just keeps going, and in some ways it’s more of the same, but these two pieces are worth calling out specifically. The Bloomberg piece mentions a memo sent to advertisers late this week providing more detail than the blog post on Monday, though sadly the article doesn’t provide many of those details. The Journal piece, meanwhile, provides lots of examples of ads from big brands still showing up next to bad videos, with some of those brands adding their names to the list of boycotters. Importantly, the changes in the memo are supposed to be implemented by Sunday, so if advertisers are happy with the changes, we could see something of a return to normal early next week. As per my Techpinions piece yesterday, I still think that’s something of a long shot, although I argued that none of these brands really want to abandon YouTube or Google permanently, and will likely return to the fold once they extract some concessions over data and analytics. But if those fixes don’t go down well, and there continue to be widespread and easily found examples of ads showing against bad videos, then this could drag on for months.
via Bloomberg (memo) and WSJ (bad ads still appearing, and more advertisers bail)
Facebook, Amazon, Twitter and YouTube are bidding to stream the NFL’s Thursday night games – Recode (Mar 24, 2017)
When Twitter won these rights last time around in their first year as a separate set from television rights, it turned out to be something very different from what many of us expected. Rather than a massive splurge on a very valuable set of rights, it turned out that the winner merely got the right to show the games along with advertising mostly already sold by broadcasters, meaning there was very little additional revenue opportunity, and as such Twitter got the rights for a paltry $10 million. These NFL games have actually been a good fit with Twitter’s overall live strategy, which has mostly been focused on winning audiences rather than lots of new revenue, but it seems others are interested in taking another crack this year. It would obviously fit well with Facebook’s recent push into professionally produced live video, but also with YouTube’s recent investment in e-sports rights and with Amazon’s foray into TV bundles and Twitch video streaming. It’s less of a good fit with Apple’s current focus in the TV space, so it’s not surprising that its name doesn’t appear here. I’ll be very interested to see if the NFL is pitching the same kind of package as last time or whether the winning bidder will have the right to sell more of its own ads this time around.
via Recode
AT&T pulls Google, YouTube ads over extremist videos – USA Today (Mar 22, 2017)
In my first piece about the UK backlash against YouTube by advertisers last week, I said that I saw no reason why the trend shouldn’t spread to the US, because the same issues applied here too. Now we’re starting to see signs that – despite YouTube’s somewhat vague reassurances earlier this week that it would do better – US advertisers are indeed beginning to jump on the bandwagon too. And the first big name is AT&T, one of the biggest advertisers in the US, and that’s likely to lead to more. As I’ve said in previous pieces on this topic, this is a thorny issue for YouTube, which can’t simply remove all ads from more obscure videos. Even its existing standards for which videos are suitable for advertisers are sometimes controversial, as this Guardian piece suggests, so going further down that road is likely to alienate at least some smaller creators, and of course have implications for Google’s revenue as well. At least some financial analysts are already downgrading Alphabet on that basis, and if this continues to snowball I’ve no doubt we’ll see more of that. Update: this story is moving fast: Verizon, Enterprise, and GSK have also joined in.
via USA Today
Almost 20% of digital ad spending could be wasted – Axios (Mar 22, 2017)
The first thing I thought of when I saw this headline was the famous quote from John Wanamaker about half his advertising dollars being wasted, but not knowing which half (and Sara Fischer told me she had included a reference to it, but removed it for brevity’s sake). The difference here is that the “waste” referred to isn’t poorly targeted advertising, but fraud and “invalid traffic” – in other words, ads that no-one sees at all but which are nonetheless recorded as having been seen and therefore paid for. Fraud – especially in programmatic, where 29% of dollars are apparently wasted – is one of several big issues for online advertising at the moment, and it isn’t going away soon, even though the authors of this report have a proposed solution.
via Axios
Google Announces First Steps in Better Preventing Ads Appearing on Hate Videos (Mar 21, 2017)
Last week, there was a blowup in the UK over ads showing up next to videos promoting hate and terrorism, and Google issued an initial response in Europe without promising any specific changes. It’s now talking about the problem on a global basis and getting slightly more specific about how it’ll tackle the problem. Given that the initial post highlighted the challenge of human curation, Google’s promise to do better in policing content is too vague to be reassuring – how will it do this? By hiring thousands more people to check individual videos? Better computer video analysis? On the other hand, it’s finer-grained controls for advertisers and tighter default settings are very much in line with the solutions I proposed last week, but come with other risks. If by default advertisers’ ads won’t show against the long tail of YouTube content, that will dramatically reduce the attractiveness of posting video to YouTube for creators, and revenue for YouTube as well. So the devil is in the detail here, and detail is something this post is incredibly short on. Hopefully we’ll see a lot more specifics as Google works its way through this. There are no easy solutions here though. Update: one other thing worth noting, which I had intended to include earlier but forgot: Google is going to be cracking down on some content not just from an advertising perspective but in terms of what can be posted to YouTube in the first place, which feels like a significant shift.
via Google
Google to Revamp Ad Policies After U.K., Big Brands Boycott – Bloomberg (Mar 17, 2017)
This situation in the UK doesn’t seem to be getting much attention here in the US, but it should be, because although the boycott is UK-only for now, the issues at stake aren’t UK-specific at all and could easily spread to other markets. What’s happened is that some UK companies as well as the UK government have become increasingly concerned that their ads on YouTube have been appearing next to some pretty undesirable videos featuring extremism or promoting terrorism, and Google’s tools for avoiding this don’t seem to be doing their jobs. As a result, several companies and the government have now stopped advertising on Google at all as a protest until Google fixes things. A blog post from Google makes clear just how hard it is to police the video on YouTube – 400 hours of video are uploaded every hour, and it stopped ads from showing on 300 million videos last year, which provides some sense of the scale and the impossibility of monitoring all this with human beings alone. Google is never going to be able to police the content itself at sufficient scale and with sufficient accuracy to solve the problem directly. The solution is therefore probably paring back the kinds of videos on which at least certain ads would appear – such as limiting big brand advertising to channels with long histories, large numbers of subscribers, and a good track record. However, it’s likely that many brands would choose to limit themselves to this higher quality material, which in turn would mean the long tail of videos on YouTube might go un-monetized or monetized at a much lower rate, which would have a severe impact on not just creators but YouTube’s financials. Not only could this problem spread to other markets, but Facebook will have to deal with many of the same issues as it ramps up video advertising on its platform.
via Bloomberg
Google Home is playing audio ads for Beauty and the Beast – The Verge (Mar 16, 2017)
This feels like an extremely stupid move for Google. Though Google claims this wasn’t an ad, that’s utterly disingenuous, and inserting ads this early in the Google Home lifecycle (if ever) is a huge mistake – this is just the kind of thing that will put people off buying a Google Home, especially because it fits a narrative of Google only being interested in advertising. This is a hardware product, for which users have paid a decent price, and it shouldn’t be playing ads, especially without an opt-out – there is no indication that users would hear ads in any of the marketing material. I just tried my own Google Home to see if it would play this message, but it didn’t, suggesting that Google may have stopped playing the message. If so, good, but it never should have happened in the first place, unless Google wants to kneecap its own product this early in its competition with Amazon’s Echo.
via The Verge
Google, Facebook Increase Their Grip on Digital Ad Market – eMarketer (Mar 14, 2017)
The timing of this new data from eMarketer is perfect, because I just wrote a piece for Techpinions subscribers today about the battle for third place in online advertising. The reality is that Facebook and Google have been dominant for some time in this space and that shows very little sign of changing. As I argued in my piece this morning, some of the big Chinese names are actually the strongest contenders for third place on a global basis, but they mostly operate only in China, so it’s largely other US companies which are competing in the rest of the world, and they’re all pretty small in comparison to the big two. Between them, Google and Facebook appear to have search and display advertising pretty well sown up, with only the crumbs left for other players, who largely have to compete among themselves rather than having any prospect of taking meaningful share from the big two. As I also pointed out this morning, though Snapchat gets lots of attention, it’s currently behind even Amazon, let alone other bigger names like Microsoft and Yahoo, and will have to wait years to break into the top five. Meanwhile, Twitter is a cautionary tale about even once promising companies stalling before they reach their perceived potential.
via eMarketer
Snap’s revenue growth looks like it will come from more ads, not more users – Recode (Mar 13, 2017)
In a sense, there’s really nothing new here – the key quote comes from the S-1/A filing from a month ago. The article, though, argues that Snap will make money from higher ARPU over time rather than from user growth. While it clearly won’t be going for user growth in emerging markets for the reasons stated in its S-1/A, I don’t read that as not being focused on user growth – it clearly will be but that focus will be on mature markets, where it still has tons of headroom, at least in theory. It’s worth noting some other things here: Kurt talks about Facebook as the comparator, and it’s clearly the obvious one, but Twitter is another. And whereas Facebook has now reached a nearly $20 ARPU in the US quarterly, Twitter has stagnated at around $6-7 over the past year. Just because Facebook was able to keep growing ARPU seemingly indefinitely, that doesn’t mean Snapchat will be able to. And I’d argue that with such a simple, non-stream-based interface, Snap probably has far fewer places to put ads, meaning its ceiling is likely quite a bit lower than Facebook’s. It’s also worth remembering that Facebook’s ARPU numbers are at least a little misleading – the user number is only for the core Facebook app, whereas the revenue number includes Instagram, WhatsApp, and Messenger too. Lastly, part of rising ARPU at Facebook is price per ad, not just more ads shown, which is a reflection of new demand outstripping new supply, something else that’s not guaranteed with Snapchat. Overall, I’d be very wary of drawing too many conclusions about Snapchat’s potential from Facebook.
via Recode
WPP CEO Sir Martin Sorrell: Amazon keeps me up worrying at night – Business Insider (Mar 3, 2017)
WPP is one of the world’s largest ad agencies, and Martin Sorrell is its CEO. As such, what he says about trends in advertising is worth listening to, and he says he worries more about Amazon than almost anything else. That’s because Amazon’s ad business is both growing fast and has the potential to displace agencies and work directly with advertisers, much as Facebook does. This story is fascinating, because it’s a great reminder that Amazon is building a decent-sized ad business largely under the radar – hardly anyone ever talks about it, but it’s becoming pretty big. This article cites eMarketer forecasts, which are about the only estimates I ever seem to see, and which suggest the ad business is getting pretty big – over a billion dollars in 2016. You may not have thought about it much, but certain searches on Amazon lead to pages literally full of ads. Given how many people now start product searches on Amazon, it’s in an enviable, Google-like position of being able to serve up ads that are directly relevant to what consumers are interested in right now. That combination of relevance and timeliness is rare – almost everyone else can manage relevance, but timeliness is much tougher. Though Amazon isn’t going to rival Google or Facebook’s scale in the near future, it’s arguably got a strong shot at becoming number three in online advertising in the near term.
via Business Insider
Google unveils playable ads for Android game developers and other tools – TechCrunch (Mar 1, 2017)
This feels like a clever little idea from Google – showing people ads for games in which a tiny version of the game itself is embedded, making the ad playable. It could also be part of an eventual path to Progressive Web Apps and other web-app hybrids Google is working on, just as some of these tools are already served up in search results. There are some other clever enhancements here too – it feels like app ads are far from done as a medium.
via TechCrunch
Twitch will start selling games and giving its streamers a cut – The Verge (Feb 27, 2017)
Amazon’s Twitch acquisition was one of the most interesting it’s made, and one of the few big ones it’s made which weren’t in the e-commerce space. Since the acquisition, it’s pursued two separate tracks with Twitch, one focused on the core gamer space it’s always served, and the second broadening its reach and appeal beyond gaming and becoming something of a YouTube clone. This announcement belongs in that first strand, though it also ties in the online sales angle by putting a buy button next to video game video encouraging viewers to buy the game being played in the video. This is a unique take on the ad revenue sharing model YouTube popularized, and could be pretty lucrative for at least some channel owners over time. It’s also a great way to provide very relevant advertising around a video platform, something that’s often tough to do beyond broad demographic profiling.
via The Verge
Facebook is starting to put ads in the middle of its videos – Recode (Feb 23, 2017)
This was reported as being on the way back in January, but now it’s official and expanding. That means Facebook is finally going to start trying to make some real money from all the video it’s been trying to get natively onto its platform, hopefully justifying all the effort it’s put into its video push over the last couple of years. For users, of course, that means you’re going to start seeing ads in yet more places on Facebook, though only on longer videos (ads can’t run until the 20 second mark on recorded videos or the 4 minute mark on live videos). Given that the vast majority of videos I see on Facebook are under a minute, I don’t imagine I’m going to be seeing that many. But that’s also why Facebook has been tweaking its algorithm to help promote longer videos. And of course all these ads can potentially go into the videos Facebook will show on its TV app.
via Recode
Google Agrees to YouTube Metrics Audit to Ease Advertisers’ Concerns – WSJ (Feb 21, 2017)
It’s interesting to see Google working with the MRC around auditing now too – Facebook just announced MRC auditing a couple of weeks ago, but it had of course had an embarrassing series of screwups relating to metrics for advertisers and content providers, whereas YouTube didn’t. However, this is reflective of a broader mistrust of online advertising by big brands and marketers, and an inconsistency in the use of major metrics like viewability. From what I’ve read, the MRC standards are pretty minimal as far as what counts as a view, but at least there’s consistency there, which is a start.
via Google Agrees to YouTube Metrics Audit to Ease Advertisers’ Concerns – WSJ