The economic recovery might be faltering in some sectors, but not in online advertising. More money was spent in online ads during the first half of 2010 than in any previous six month period, according to the IAB. Between January and June, $5.7 billion went to search advertising and another $4.4 billion was spent on display ads. With those figures expected to grow in the second half of the year, it's not surprising that Google, the king of search, and Apple, the company building many of the devices the display ads are being shown on, both reported phenomenal quarterly results. With 23% growth over the same quarter in '09, Google’s $5.5 billion in revenue blew away expectations and started convincing Wall Street that its buyouts of AdMob and DoubleClick were starting to pay off. Investors were similarly dazzled by Steve Jobs and Apple’s record-setting revenue figure: $20.3 billion. Although the 4.2 million iPads the company sold in Q3 were slightly fewer than the Street had expected (a shortfall Jobs attributed to supply chain constraints), the device was still the fastest selling new product in history. In the same period, Apple also had a 91% increase in smartphone sales over Q3 of last year.
How has the online ad boom benefited content producers? Earnings at newspaper companies varied widely. The New York Times Co. saw a 14.6% rise in its online ads, which was nearly enough to offset the declines in print advertising and circulation. Total revenue was down 2.7% to $554.3 million. Print declines at Gannett were offset by a 10.2% rise in digital revenues. The media company’s total revenue was flat at $1.31 billion for the quarter. The McClatchy Company saw little boost from the online ad spending spree: Its digital revenues were only up 1.6% and total revenues dropped 5.7% to $327.7 million. Struggling Yahoo, saw revenues up 2% to 1.6 billion, but advertising results were mixed. It continues to lose search market share -- and search ad dollars -- to Google and Bing, but display ads were up 17%. Yahoo honcho Carol Bartz snapped in a Fox Business TV interview, "Do I look like a wimp? I am here to stay." That's not the case with execs who have departed the company as rumors persist that AOL might buy out Yahoo.
For a 164-year-old news cooperative, the Associated Press is offering some surprisingly fresh ideas to address the challenges of new media. “A one-dimensional, web-based marketplace will be supplanted by a multi-dimensional, multi-platform opportunity,” AP CEO Tom Curley observed at an Austin meeting of the Southern Newspapers Publishers Association. Having been caught off-guard by the growth in the web, Curley is pushing his members to prepare their businesses for the proliferation of mobile news consumption. With longtime mobile partner Verve Wireless, the AP is offering what paidContent’s Staci Kramer describes as a “templated, turnkey publishing and advertising solution” for smartphones and, soon, the iPad and other forthcoming tablet PCs. In addition to offering an easy way for consumers and advertisers to use content, those apps will also feature a new ad tool, "iCircular," that will help sell coupons and other circulars that are inserted into newspapers' print editions, according to the AP. More than 70 publishers and broadcasters have already used the AP template to launch branded apps and Curley hopes many more will join in. He told conference attendees that by 2012 “the consumption of news will almost certainly have shifted to screen-based viewing. In other words,” Curley warned, “there will be more touch screens than front pages.”
Another big idea the AP CEO announced at the newspaper meeting was the creation of a digital rights clearinghouse. The organization, which could be up and running by the end of the year, would be independent of AP to avoid antitrust concerns. The AP has been trying to work on a way to collect royalties for reuse of articles online with a system similar to the way ASCAP works in music publishing. The clearinghouse would digitally tag content to identify how frequently it is read, what ads would match well with it, and reduce unauthorized distribution of the material. But the AP has been criticized for past efforts at setting up ways to license digital content, including a deal with iCopyright to charge $2.50 per word to bloggers who want to quote even just 5 words from an AP story. Techdirt’s Mike Masnick doubts that the new licensing scheme will work: "It makes no sense at all from the publisher side -- especially given [that] AP gets to keep a 20% cut of any revenue." Others were more hopeful. “The availability of free news content (plagiarized or not) on the Internet is always going to be a problem for professional news agencies,” writes Cian O’Sullivan of GoMo News. “But with proposals like this, AP shows that it is really working to come up with a way for traditional news content to co-exist with digital media.”
Social networking giant Facebook shrugged off the negative Hollywood spin in "The Social Network" and made important inroads with Bing and Skype deals. Bing users who are on Facebook can see the “likes” and preferences of their friends reflected in search results. It's not a surprise that Microsoft would make such a deal with Facebook, as it bought a 1.6% stake in the startup three years ago, and the companies collaborate on ad sales, according to PaidContent's Joseph Tartakoff. A handful of marketing experts told MediaPost’s Laurie Sullivan that social search optimization will become the foundation of any online marketing push. “Say good-bye to siloed advertising campaigns,” Sullivan writes. Microsoft and Facebook were careful to note at the launch of the “Liked Results” feature that only publicly available data would be used by Bing, and search queries would not be shared with Facebook. The feature can also be turned off. Yet the Wall Street Journal, which recently broke a story about how some of Facebook’s third party apps were illegally sharing personal information with advertisers, still warns that “the sharing of personal data between the two giants could raise privacy concerns.”
Privacy concerns have not stopped Skype from integrating Facebook in its latest update. The Internet calling company has added a Facebook News Feed tab to its software. Now Skype users can call or text their Facebook friends directly from the new tab. Geo-location businesses might also move to counter the Bing-Facebook tie-up, if they aren’t already. As ClickZ’s Christopher Heine notes, the Bing deal "could be seen as a shot across the bow to Foursquare and local businesses that have been staying loyal to it and other geo-social platforms instead of migrating efforts to Facebook Places. Now, getting people to check in on Places will extend the reach of such an action beyond Facebook.com and to Bing's search share." Bing’s powerful search competitor Google moved to update its social algorithms and the presentation of the results. While it has been drawing real-time status information from Twitter, MySpace, and Facebook for months, it now displays this below relevant hyperlinks as well as in a social box at the bottom of the page. But Google still lacks the complete access to Facebook’s deep data of users' "likes" -- for now.
In 2006, Starbucks CEO Howard Shultz first began talking about how his coffee chain could provide its customers with a "digital fill-up." A 2007 initiative to install "Now Playing" kiosks linked to iTunes was neither widely adapted nor frequently used. Now, with the launch of the Starbucks Digital Network, his vision has been realized. SDN is not intended to bolster its bottom line as it is to improve the Starbucks experience -- which could of course still boost sales. The network is a free, WiFi-powered, in-store-only web portal powered by Yahoo that has launched at every Starbucks shop across the nation. Starbucks chose to team with Yahoo because, as exec Adam Brotman told Mashable’s Jennifer Van Grove, “they’re so strong in the three areas we knew we needed help with -- technology, content and search.” SDN features text, audio, and video content divided into six sections: News, Entertainment, Wellness, Business and Careers, Local and a customer-personalized Starbucks channel. Some of the content, which Brotman described as “snackable,” is unique only to Starbucks. For example, the Wellness channel features free apps to plot biking or running routes provided by Rodale, the publisher of Men’s Health and Runner’s World. The Local channel will feature Zagat reviews of nearby restaurants and stories from AOL’s hyper-local Patch network.
What’s in it for content providers? Mostly, free exposure to the 30 million customers Brotman says log in to the Starbucks WiFi network each month, the majority of which do so on smartphones or iPads. Taken as a whole, SDN is intended to be "the digital version of the community corkboard," as Brotman said in multiple interviews. CNET’s Caroline McCarthy calls this approach “hyper-hyper-local -- not only are you in a given neighborhood in a given city, but you're in a specific coffee shop” open to specific content and advertising. It is conceivable that SDN could attract some premium ad dollars, if the network serves as more than just a log-in landing page. Mashable reports that there is a revenue share if users make purchases from SDN partners, but little else is known about the precise business arrangements. Brotman did, however, say that Starbucks is open to adding new premium content to its network. "Our hope is that any site that has a pay wall -- if it’s a good fit for the SDN -- would love to explore awareness and trial." PCWorld’s Brennon Slattery may have identified one serious downside to the venture: "This could greatly increase the number of loafers hogging chairs and rotting away for hours at their laptops [at Starbucks]."
After years of fits and starts, mobile marketing is finally breaking through to the masses. According to eMarketer, U.S. mobile ad spending will grow 79% to $743 million this year. The rate of increase is expected to slow somewhat in 2011 to 48%, but will still hit $1.1 billion, which will more than double by 2014. The new estimates are upward revisions of earlier projections. eMarketer attributes the accelerating growth to Google’s acquisition of AdMob and Apple’s introduction of iAd. Mashable’s Adam Ostrow points out that, according to eMarketer’s own studies, mobile advertising is growing faster than even social media advertising. At the moment, text advertising makes up 79% of the mobile ad market, but the relative importance of SMS ads are likely to decline as the adoption of display-ad-capable smartphones increases. The headline figures sound about right to paidContent’s Tricia Duryee and Ad Age’s Kunur Patel, both of whom used a data point from Google's recent earnings report: Google estimated its annualized 2010 worldwide mobile ad revenue at $1 billion. The company declined to release country-by-country stats, but Patel noted that Google’s numbers benefit from being in many markets “where mobile is more prevalent than desktops, such as India.”
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“Serious journalism does pay,” says Julie Schoenfeld, CEO of Perfect Market. And her firm has the research to prove it. Perfect Market studied more than 15 million articles on 21 newspaper websites over a three-month period this summer and found that pieces focused on serious topics such as unemployment benefits, the Gulf oil spill, and mortgage rates were the highest earning stories, based on advertising revenue per page view. The most valuable subject was Social Security, which generated $129 for 1,000 page views. Racy stories about Lindsay Lohan averaged only $2.50 for every 1,000 page views. Viewer engagement with a story and advertising synergy are what make a topic valuable. As Perfect Market's chief strategy officer Roberston Barrett explained to the New York Times, “There are not a lot of contextual ads on Lindsay Lohan stories.” AdAge’s Nat Ives suggests that this study may have exposed a flaw in the search-driven, algorithmically assigned stories produced by content farms like Demand Media. Too often “publishers end up chasing trends to increase raw page views, but that is not necessarily the best revenue strategy,” said Tim Ruder, the chief revenue officer at Perfect Market.
Over the past 12 weeks, [Eventbrite] said that Facebook netted $2.25 per shared item, a share on Twitter was worth $0.43, a share on business-oriented social network LinkedIn brought in $0.90, and a share via regular old email to an acquaintance was worth $2.34.
Kenneth Musante, WebNewser, on how Eventbrite was able to correlate sharing with ticket sales to events
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