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)

The surveillance structure that underpins us all

GCHQ listeningHere’s another paragraph to add to the debate about privacy, surveillance, spying and the whole gamut of who does what, how and why with digital information that you think is yours and private but in reality is in the spies’ domain.

Last night, Channel 4 News broadcast a 10-minute report in its evening news show that revealed how Cable & Wireless, one of the UK’s largest communications firms, had a leading role in creating the surveillance system exposed by Edward Snowden in which the GCHQ plays a leading role.

I didn’t hear the words “alleged” or “allegedly” mentioned in the report.

The essence of Channel 4’s story is this:

[Cable & Wireless], which was bought by Vodafone in July 2012, was part of a programme called Mastering the Internet, under which British spies used private companies to help them gather and store swathes of internet traffic; a quarter of which passes through the UK. Top secret documents leaked by the whistleblower Edward Snowden and seen by Channel 4 News show that GCHQ developed what it called “partnerships” with private companies under codenames. Cable and Wireless was called Gerontic.

Watch the full story:

This is just another revelation in a litany of exposure of government surveillance – due largely to the actions of Edward Snowden – that suggests there is nothing any of us can really consider as private.

If what Channel 4’s report portrays is true, then fiction really is fact.

It’s not only governments, though – private companies are equally as bad, according to two reports in recent months.

Wired-Telegraph-data

Take a look at a sobering report in the November edition of Wired magazine in the UK that recounts the experiences and findings of reporter Madhumita Venkataramanan in her investigative piece entitled My identity for sale:

Earlier this year, I became curious about the personal-data economy. It has grown relentlessly into a multibillion-pound business of tracking, packaging and selling data picked up from our public records and our private lives. As I dug deeper into the world of trackers, it reinforced my anxieties about a profit-led system designed to log behaviour every time we interact with the connected world. I was aware that the data generated by apps and services I use daily – from geolocation and cookies to social-media tracking and credit-card transactions – was building a record of my past. Combine this with public information such as Land Registry, council tax and voter-registration data, daily location routes and social-media posts, and these benign data sets reveal a lot – such as whether you’re political, outgoing, ambitious, pessimistic, uptight or a risk taker. […]

And there’s more – check this report in the Telegraph on October 10 in which Sir Iain Lobban, Director of the GCHQ until the end of October 2014, says that big companies snoop on the public more than GCHQ does:

[…] In his first print interview, Sir Iain told the Daily Telegraph that the public should be more concerned with what private companies were during with their personal information.

“Look, who has the info on you? It’s the commercial companies, not us, who know everything – a massive sharing of data,” he said.

“The other day I bought a watch for my wife. Soon there were lots of pop-up watches advertising themselves on our computer, and she complained. ‘It’s that b***** Internet’ I tell her.”

Reality: anything you say or do online is up for grabs by the spies, whether from the government or from private companies. Reminds me of MAD magazine’s Spy vs Spy comic strip back in the day.

Spy vs. Spy

Yet this is no laughing matter.

(Photo at top by George Rex, used under Creative Commons license.)

The local newspaper is dead, long live the local newspaper

The decline in print and the rise in digitalThe closure of printed newspapers around the UK counts new casualties in the battle to stem the tide of declining circulations and the ever-diminishing number of titles in print with news this past week that Trinity Mirror is shutting down seven regional newspapers in southern England.

The news has particular interest to me as my local paper, The Wokingham Times, is one of those casualties.

Founded in 1903, the Times has gone through many evolutions especially during the past decade or so as it changed ownership a few times; and as alternative sources for local news emerged as the internet and the world wide web evolved, more online choices appeared and the ability for anyone and everyone to get online becomes almost ubiquitous and continues to be ever easier, cheaper and faster.

The closure is a picture you could paint in communities up and down the country.

Trinity Mirror, current owner of the title and its siblings in Berkshire (and Surrey), said in its announcement that it intends to develop and grow its digital business around the getreading.co.uk website which offers digital versions of its Berkshire titles – Reading Post, The Bracknell Times and The Wokingham Times – and also delivers content to mobile devices via an app.

It’s not hard to see why Trinity Mirror is making this move. As its statement says:

[…the getreading.co.uk website] has achieved unrivalled market leading penetration in the area – in the last year monthly unique users have grown by 68% (Jan-Oct 213 to Jan-Oct 2014) and the site continues to show phenomenal audience growth.

In its report, Press Gazette quotes Simon Edgley, managing director of Trinity Mirror Southern, from the company’s announcement:

This is a bold digital-only publishing transformation that will re-establish us as a growing media business that delivers the best quality journalism to our digital-savvy audience. We wholeheartedly believe that the future of our business here in Berkshire is online and this is an important and pioneering step that might, in time, be applicable to other existing markets or indeed new ones.

Bold indeed, with the inevitable human cost – 26 job losses in Berkshire (50 in total if you include the other closures, according to reports). The flip side of that is “the creation of around 10 new digital editorial roles and two digital commercial roles,” says Trinity Mirror in its announcement.

The type of hard commercial decisions made that will lead to the closure of seven print newspapers are confronting media companies across the UK and elsewhere – at all levels, nationally, regionally and locally – as trends continue to show the inexorable decline in print and the increasing growth in digital content that meets the preferences and needs of contemporary consumers who want to consume content wherever and whenever they want, with whatever device they wish, comment on and share that content with their networks, repurpose it, create additional insights from it, and more.

The move to digital is indeed inevitable as is the consequent human cost in lost jobs where current skills clearly aren’t what the media companies need as they evolve in the new digital-only environment to survive and grow.

Does it mean there is no place for print any more? Not necessarily – looking at it purely in commercial terms, if your market analysis, business plan and the numbers add up, you may have a workable proposition.

And The Guardian’s report on the Berkshire closures includes this:

The Reading Chronicle, which has been published since 1825, will become the town’s only print title. Editor Lesley Potter said it was a sad day for those losing their jobs and for the people of Reading.

“We have been fierce rivals over the years, but we have always had a healthy respect for one another. We at the Reading Chronicle have absolutely no intention of abandoning print.”

You have to feel a touch of sadness at developments like this even as they mark another milestone in the transition of news and information, how it’s produced and presented to readers, and what they do with it.

So print newspapers gradually vanish but they continue online in name and purpose, mirroring the look, feel and presentation of their analogue forbears.

It’s called progress.

FT conference bots to star at #FTInnovate

I bought a robot...

I’m looking forward to being at FT Innovate 2014 that takes place in London on November 19-20.

This latest edition of the Financial Times’ annual tech-focused business conference will concentrate on the digital “big bang” – and the digital natives, digital pioneers, digital technologies and digital practices it is spawning – and how it’s transforming the way businesses innovate.

The speaker line-up is impressive, and the agenda for the two days looks pretty compelling.

And here’s a nice bit of innovation that may appeal to you if you’d like to be there but can’t physically go – drive one of the FT’s “conference bots.”

Here’s what’s happening in London as outlined in an email from the event organizer:

Attendees at this year’s FT Innovate conference will notice a few unusual delegates mingling amongst them.

For the first time, 3 robots will be roaming the conference, listening to our expert panel of speakers, participating in the interactive roundtable discussions and connecting with the senior innovation managers who will be attending during the networking breaks.

The FT Innovate team are offering 3 lucky winners the chance to remotely control one of our robots from their own home or office. The conference takes place on 19-20 November 2014 so you’ll just need to be available on these dates and have access to a laptop/tablet with a video camera and high speed internet connection.

If you would like the chance to control one of our FT Innovate robots, enter our draw today by completing this short form. The closing date for entries is midnight on Thursday 13 November and 3 winners will be selected at random and notified by Friday 14 November 2014.

Of course, we think it’s even better to be there in person, and a limited number of delegate tickets are still available. To register, and for more information on the programme and speakers, visit www.ftinnovate.com.

Looks a lot more fun than just following a Twitter hashtag. Which you can do, of course: #FTInnovate.

See you there!

Get up to speed on social business at the Enterprise 2.0 Summit London

OUTATIME

If you want to know what’s happening in social business in the UK, an event in London next month is right up your street.

Organized by my friend David Terrar, the Enterprise 2.0 Summit London on November 26 is a conference on driving business value with digital and social transformation, co-produced by Kongress Media and Agile Elephant.

Speakers and contributors include some of the UK’s leading social business influencers – Andrew Grill (who’s staked his career on the growth of social business), Anne McCrossan, Benjamin Ellis, Euan Semple and Lee Bryant, to name but a few – along with European case studies from Barclays, Shell, Deutsche Bank, Euroclear, Sanofi Pasteur and CEMEX.

So if you want to get up to speed on topics such as:

  • Key drivers for the adoption of social technologies in large organizations
  • Aligning social ideas with organization structure and management culture
  • Key factors for the engagement of remote staff
  • Success factors for leveraging social adoption and business transformation
  • Discussion about the structure and building blocks for the future of organizations
  • Success factors for enabling internal connections and sharing of insights

…then the Enterprise 2.0 Summit London is for you.

The venue is the attractive Carlton House Terrace facilities of the British Academy, in between Buckingham Palace and Trafalgar Square in the heart of London.

I’ll be there, too, to listen and learn. And a definite highlight of the event will be live blogging and cartoons by Adam Tinworth and Matthew Buck respectively.

So why not sign up and come to this one-day event to listen and learn, too? (There’s also a pre-conference workshop on November 25.) See you on November 26!

Bonus links:

A chat about wearable tech and more

Media Bullseye RoundtableI was honoured to be guest co-host on the Media Bullseye Roundtable podcast this week with Chip Griffin, the founder and CEO of CustomScoop, and the Roundtable’s prime host.

The Media Bullseye Roundtable is a weekly roundtable discussion hosted by Chip and a different guest co-host in each episode, exploring three topical communication-related issues.

In this week’s episode, we spent 30 minutes discussing three terrific topics:

  1. The impact of wearable technology on communicators (a topic I’m very focused on these days, especially in what I see as too much complacency over the lack of clear understanding about wearable tech in the workplace).
  2. The role of social media in international political movements, sparked by an article about recent protests in Hong Kong.
  3. The ways in which communicators have tried to monetize content beyond simply being a marketing tool, inspired by a post on Spin Sucks by Gini Dietrich.

You might enjoy hearing or reading what we discussed that may prompt some thoughts of your own that you can share as part of continuing the conversation.

Listen to the podcast right here:

Chip has also published a transcript so you can read rather than listen if you prefer.

I’ve known Chip for almost a decade since CustomScoop became involved as a sponsor in 2005 of For Immediate Release: The Hobson and Holtz Report podcast that Shel Holtz and I present each week. (CustomScoop offers FIR listeners a free trial of its news and social media monitoring service.)

A few months ago, we were delighted to welcome the Roundtable into the FIR Podcast Network. And Chip started another podcast this month – Chats with Chip – that is the latest network show.

Enjoy the show(s)!

  • If you’d like to contribute comments to this discussion – or about any other topic in FIR Podcast Network content – a good place is the FIR Podcast Community on Google+.