Mobile can grow, but publishers are losing out on revenue

A guest post by Simon Birkenhead, CEO of Axonix, an advertising technology company backed by Telefonica and Blackstone.

Location-based mobile adFacebook recently announced its Q3 results and, for many in the industry, the most headline-grabbing statistic was that mobile ads now make up an incredible 66% of the social network’s total advertising revenue.

And yet, I reacted to the announcement with little surprise.

After all, it shouldn’t be news to anyone that mobile advertising is growing at a remarkable rate – especially when you consider there are currently more data connections in the UK than there are people. In August this year, mobile internet usage in the UK overtook desktop, meaning a majority of website visits now come from tablets and smartphones.

In the first half of 2014, mobile advertising in the UK exceeded £700 million – that’s around 20% of all digital ad spend and a whopping 68% growth over 2013. That’s more than radio and cinema advertising combined, and is fast approaching the scale of outdoor advertising.

However, despite this explosive growth of mobile advertising, I believe brands, publishers and consumers are still not being well served by mobile ads, and this is preventing mobile advertising from growing even faster.

Facebook, it seems, has done a great job at figuring out how to best present ads within their users’ mobile newsfeeds. However, most publishers I speak with say they invest a tiny fraction of their time thinking about how to optimise their own users’ mobile ad experiences. This is despite some publishers admitting they now see close to 50% of their traffic from mobile devices.

Facebook mobile ads

App developers also continue to stick rigidly to the tiny banner ad rather than exploring more engaging, and valuable, alternatives such as video and full-screen interstitials. Throw in the fact that mobile ads are often poorly targeted and it is no wonder brands struggle to find success through mobile.

So how to get it right? The winners will ultimately be those publishers who can provide a platform where brands can run engaging mobile ads that reach the right person with a super relevant message at the right time. On mobile this is even more critical, and even more difficult to achieve, because of the very mobility inherent in mobile device.

The heavily-touted silver bullet to this challenge – and one of the buzzwords of 2014 throughout all forms of advertising, not just mobile – is programmatic.

Programmatic advertising through ‘ad exchanges’ brings the ability to buy and sell advertising in an automated fashion in real-time, one ad impression at a time.

And it’s struck a real chord.

Publishers and brands alike are embracing programmatic advertising as the primary way business should be conducted. It enables real-time audience targeting at scale, a benefit that’s even more relevant for mobile because of its uniquely personal characteristics. Better targeting means improved ad relevancy, increasing the value for both consumers and advertisers, and delivering a higher price for publishers’ media space.

There are also significant cost efficiencies generated by outsourcing most of the heavy lifting to computer algorithms and reducing the dependency on expensive media buying/sales teams. Unlike the ‘secret sauce’ of ad networks, ad exchanges like Axonix can provide full transparency to both buyer and seller of the media space.

Such immense mobile growth in such a short space of time was always going to bring both challenges and opportunities for app developers and publishers. So now is the time to get equipped with the facts and best practices to capitalise on the opportunities presented by programmatic mobile advertising.

Whether an app or mobile content is free, freemium or paid-for, monetization of mobile ad space through ad exchanges allows publishers to optimise ad revenues whilst slashing costs.

Just as it is inevitable that consumers’ usage of mobile devices will continue to grow, so it is inevitable that marketing budgets will continue to follow those consumer eyeballs.

So get ahead of this disruption. Just as Facebook has rebuilt its entire ad business around mobile, it will be those publishers and app developers that harness the programmatic opportunity and offer a platform for more intelligent mobile advertising who will find themselves in the best stead to capture these budgets in the future.

Simon BirkenheadSimon Birkenhead is CEO of Axonix, a leading mobile ad exchange that helps mobile publishers to maximize their ad revenues. He has 20 years experience in digital marketing, mobile advertising and business management, the majority of which has been within high tech companies at the cutting edge of their industries.

He has launched three digital advertising start-ups, including Axonix, and was the first hire into Google’s Global Agencies Team in 2008, establishing this as the benchmark sales team for engagement at global exec level with the Big 6 advertising agency groups.

Simon is a mentor and Board advisor to a number of new technology companies and is a regular speaker at industry conferences, including Mobile World Congress, Festival of Media and Ad:Tech.

(Starbucks image: via Forbes; Facebook ads image: Facebook via Wired)

Scotland referendum results via WhatsApp and more

Yes / No

Tomorrow, the United Kingdom will not be the same no matter what happens in Scotland today as citizens there cast their votes in a referendum to decide whether Scotland will separate from the UK and become an independent country, or not.

The campaigning is done; now it’s up to the voters of Scotland to decide what they want for their country and the union with England that’s been in place since 1707.

Obviously media of all types – mainstream, social – and from all over the world are devoting huge time and resources to coverage of an event that has got the world’s attention especially in countries where the flames of separatism may be further fanned on the outcome in Scotland.

I’ll be following events as time permits during the day on TV and online. It’s once the polls close at 10pm tonight that interest will be most strong as the votes are counted with the first results to be declared expected sometime around 3am on Friday morning.

What appeals to me is the idea of key news as it breaks coming to me in a way that lets me focus just on that and gives me just the facts. I can choose whether to look for more detail, if I want, whether that’s online or via more traditional news channels.

So an idea from Channel 4 News in the UK is most interesting – broadcast breaking news on the results as it happens, directly to your smartphone via WhatsApp and Snapchat:

[…] We’re going to publish all of our best content, as well as live updates, via Snapchat and Whatsapp, from the moment the polls close on Thursday night right up to when the results are announced on Friday morning – ahead of publishing it anywhere else.

That last sentence is most interesting: “ahead of publishing it anywhere else.” Before TV?

My interest is WhatsApp; here’s how to set it up:

WhatsApp the message INDYREF to 07768555671 and add us to your contacts list to sign up for all of our best overnight news and analysis, pictures and video, delivered to you ahead of all the other social networks.
If you change your mind, WhatsApp STOP to the same number.

I’d added C4News to my WhatsApp and can’t wait to see how this plays out.

C4News

It’s great to see such innovation from mainstream broadcasters, especially communication methods that clearly show the broadcaster not only gets audience preferences by demographic according to social medium but also is able to execute an idea well.

Channel 4 is not alone in this. BBC News, for instance, announced this week that its content will be available on smartphone instant messaging platform LINE. Earlier this year, the BBC experimented with WhatsApp and WeChat in English and Hindi.

And Sky News launched its Stand Up Be Counted initiative, described as “a place for 16 – 25 year olds to safely upload and share the videos, pictures or blogs they make on the issues that matter most to them.” It’s been a very active place in relation to the Scottish referendum.

Innovation really is thriving.

(Via Journalism.co.uk; picture at top via The Guardian.)

Weighing up the worth of sharing AP content or not

Retweet to your followers?

A news item on Techmeme caught my eye, so I clicked to read it.

Oregon sues Oracle over failed health care website,” the headline said, linking to a report by the Associated Press about a lawsuit against Oracle filed by the US state of Oregon alleging some pretty serious malfeasance on Oracle’s part over a health care website.

It’s the kind of business story that interests me, and one I tend to share on Twitter as some of my community there might also be interested in it. It’s also the kind of thing I might share in my Flipboard magazine – which, if I choose, can also re-share that share across Twitter, Google+, LinkedIn and Facebook – to bring it to a wider audience. It might even become a news item or discussion topic for the weekly business podcast I co-host.

Much depends on the topic, who it’s about, which publication it’s in, how credible and timely it is, how well presented the story is, etc.

I don’t especially seek out stories or reports by the AP. Yet I encounter AP reports a lot, either direct reports filed by an AP journalist like this one, or as a newswire story reported in another online publication.

(AP) Orgeon sues Oracle...

In whatever case, as with all sharing of content published online by others, I’m mindful of copyright.

But get a load of the AP’s copyright statement at the foot of this story (and in every story on their website).

AP copyright text

The yellow highlight in the screenshot is my emphasis of the off-putting wording:

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

I’m not a lawyer, but that looks to me like the AP won’t allow the kind of sharing I do across social networks, eg, retweeting a link to their story, never mind any content from it. Wouldn’t that be regarded as “broadcasting”?

That’s not what they intend, surely?

Well, take a look at the terms of use referenced in the full footer statement, in particular numbers 5 and 6:

AP Terms of Use

(Number 6 even mentions ‘fax’ which makes me think this wording was written in the command-and-control heyday of the mid- to late-90s and unchanged since.)

I’d say number 5 makes it clear that this is what they intend. Even retweeting a link on Twitter isn’t something they’d like you to do by the looks of it:

5. Except as provided in this agreement, you may not copy, reproduce, publish, transmit, transfer, sell, rent, modify, create derivative works from, distribute, repost, perform, display, or in any way commercially exploit the Materials carried on this site, nor may you infringe upon any of the copyrights or other intellectual property rights contained in the Materials. You may not remove or alter, nor cause to be removed or altered, any copyright, trademark, or other proprietary notices or visual marks and logos from the Materials.

I suppose the key words here are “commercially exploit” which I guess means making money from the AP’s intellectual property without permission, recognizing their rights or paying them for usage.

Yet surely there are better ways in communicating such intent that don’t leave you feeling that whatever you do to amplify their story under the fair use or fair dealing aspects of copyright laws, you should probably look over your shoulder just in case you see a lawyer bearing down on you.

I contrast this unfriendly attitude with that of an arch-competitor of the AP – Reuters.

Reuters actively encourages you to share its content!

Look at this same story, for instance, as reported by Reuters on its website – with social share buttons arrayed at the top:

(Reuters) Oregon sues Oracle...

Not only that, the footer in the story repeats those social share buttons and also tells you how many of your friends have recommended the story on Facebook and/or urges you to be the first to do so, as it does in every news story on the Reuters website.

Reuters encouraging sharing...

And not a copyright notice or terms of use link anywhere except among general site links in a specific area at the very bottom of the website, each of which is written in far less draconian language. Much more concise and contemporary, too.

Comparing these two different approaches to creating and publishing copyrighted content that others inevitably would wish to share, which one gives you confidence in sharing with your social online communities? Which one behaves like trusting you is the default rather than the other way around? At a time of continuing evolution of mainstream media and how people use online to get, consume and share their news, which one appears equally confident in making content available online that will be shared and so actively encourages it?

In essence, which one is the publisher who gets it about content-sharing, trends, behaviours and the social web?

I know which one gives me that confidence.

PS: As it happens, I shared the AP story on Google+ as I wanted to highlight some of the text that I couldn’t do in Twitter (more than 140 characters). Plus my community there is, broadly, more tech-oriented and so I thought I might get some interesting comments back. None yet though…

Scaling visual messaging and the attraction for marketers

WhatsApp

The rise of mobile messaging apps like WhatsApp – used by at least 500,000,000 people a month around the world who share 700 million photos and 100 million videos every single day – is one growing facet of a multi-dimensioned object that I call “the visual social web.”

It’s not a separate thing to the social web; rather, it’s a part of it that I think will have greater significance to people who use such a service, because it’s about pictures not only words.

And what about words. aka text messaging? That was the prime reason for many to start using a service like WhatsApp: that and the fact that it lets you send and receive the equivalent of SMS messages without incurring charges from your mobile operator (because it can use wifi not only cellular networks for such messaging transmission and reception).

According to some metrics, WhatsApp users send and receive 64 billion text messages every day – it’s almost mind-boggling – so text is a huge part of overall online communication between individuals.

Yet it’s visual messaging that I think is the more disruptive, primarily because of the appeal it has for marketers who want to get their story-telling out to their target audience across social networks that are richer and more appealing than just words alone. I’m sure you will have seen or at least heard about numerous studies and research in the past year that confirm the old saying that a picture is worth a thousand words.

The WhatsApp metrics about photos and videos are compelling indeed in this regard, and I would expect: 1) to see those metrics increase even more; and 2) to see more interest by marketers in visual story-telling that actually engages people, not simply broadcast messages to them.

For all that to be in place, you need to know a lot more about those you wish to engage with, what marketers traditionally call the target audience that I mentioned earlier.

That made me think about a dark side that I can see happening. Maybe it’s the big hurdle for marketers to jump over in their learnings about how to really connect with people in the mobile online world.

I’m referring to news this week that Tumblr plans to scan all the images on its site for insight into a person’s sentiment about a brand.

That makes total sense to me as part of the essential need to better understand your target audience. If technology has evolved to make it possible to actually do that at scale, what a tool!

And the dark side I mentioned? Steve Hall at AdRants explains it succinctly:

[…] One wonders what will become of all the people who post “I hate brand xxx” photos. Will the brand police swoop in and pummel the person with trollish commentary? And if someone has positive things to say about a brand will they incessantly be held up as a poster child for said brand on social media? And if anything remotely like this happens, will Tumblr users game the system for their own benefit? Or simply punk a brand by enlisting all their followers for a bit of viral shenanigans?

As someone said nearly a decade ago, it’s not what the software does, it’s what the user does.

Oh, and check this out – ‘Selfie Stick’ Takes Rooftopping Self-Portraits to the Next Level of Crazy:

Rooftop selfie...

The new frontier for marketers?

(Screenshot at top via Mashable)

Fake LinkedIn profiles are not okay, Okay

Okay App

Would you imagine that a new company has profiles on the business social network LinkedIn that build up a solid picture of smart and influential staff members working for a legitimate business – yet the profiles are fakes?

That’s what Okay App has done according to Hans Kullin, who writes about his suspicions being proven after he received a couple of requests to connect:

[…] It didn’t take much investigation to find out that these LinkedIn profiles were completely fake, as were several others from the same app company. First of all, their resumés were very short and looked a lot like each other. Then there was the obvious fact that their profile pictures were stolen, unless one of them was the identical twin of a Miss Ecuador 2012 contestant. The photo of “Chloe Anderson” is in fact the Norwegian model Polina Barbasova.

linkedin-chloe-500x176

[…] Why would anyone do this on purpose, one might ask. I suspect the answer is to get in touch with online influencers who in turn would spread the word about the app in social media.

Wearing my devil’s advocate hat for a moment, it could just be overly-earnest employees, maybe simply sharing a copy-and-paste boilerplate CV text with each other and taking “the Facebook approach” to using a photo of a favourite celebrity or glamorous star instead of one that’s the real you.

Definitely not a good idea on a place like LinkedIn where the intertwining of what you say, how you present yourself and the networking, recommendation and verification effects are largely built on trust.

If they don’t know better, a good place to look is LinkedIn itself which has some handy tips on how to create an effective LinkedIn profile.

So, assuming Okay App is a legit business – the CEO’s LinkedIn profile looks real enough – I’d say they have a trust mountain to climb. How big a mountain depends on what they do to address accusations of fakery, especially if Hans’ story gains traction. If LinkedIn profiles are fakes, what else might not be real?

Defining Twitter by more than the numbers

Twitter user growth

Twitter reported its financial results for the second quarter 2014 this week:

  • Q2 revenue of $312 million, up 124% year-over-year
  • Q2 net loss of $145 million and non-GAAP net income of $15 million
  • Q2 GAAP EPS of ($0.24) and non-GAAP EPS of $0.02
  • Q2 adjusted EBITDA of $54 million, representing an adjusted EBITDA margin of 17%

Depending on which media report or commentary you read, it’s either an unimpressive financial performance, or a strong performance to silence critics.

Either way, a common view in mainstream media reports is that the results exceeded financial analysts’ expectations.

One other significant element in the earnings announcement is growth in the number of users, as the Financial Times chart above shows – a consistent increase every quarter since mid 2010 to arrive at today’s number of 271 million average monthly active users, an increase of 24 per cent over the same period last year.

The combination of financial results that exceed expectations and continuing user growth are facts that the stock market and investors like. Indeed, the FT’s report includes a bottom-line statement:

[…] Shares rose to $51.25 in after-hours trading, the highest price since Twitter reported its first results as a public company in February, prompting the stock to plummet. The stock is almost double the price at which Twitter listed last year.

One other aspect I find interesting relates to what Twitter is, ie, how people now describe Twitter.

In media reports, you’ll see it described variously as a “micro-blogging service” – that moniker arose in the very early days of Twitter – or a “social-networking service,” both labels used in a BBC News report. It’s a “social network,” says the Telegraph. The FT calls it a “messaging platform” while The Wall Street Journal says it’s a “social media company.”

And Twitter? How does the company describe itself? From the ‘About’ paragraph in the earnings report:

Twitter (NYSE: TWTR) is a global platform for public self-expression and conversation in real time. By developing a fundamentally new way for people to create, distribute and discover content, we have democratized content creation and distribution, enabling any voice to echo around the world instantly and unfiltered. The service can be accessed at Twitter.com, via the Twitter mobile application and via text message. Available in more than 35 languages, Twitter has 271 million monthly active users. For more information, visit discover.twitter.com or follow @twitter.

Compare that to the mission statement on the Twitter corporate page:

Our mission: To give everyone the power to create and share ideas and information instantly, without barriers.

And note the latest user metrics on that page:

  • 271 million monthly active users
  • 500 million Tweets are sent per day
  • 78 percent of Twitter active users are on mobile
  • 77 percent of accounts are outside the U.S.
  • Twitter supports 35+ languages
  • Vine: More than 40 million users

Clear?