01.13

DAVE MARTIN’S WEEKLY FAST FIVE #35

Below is a recap of the five advertising/media stories that I found to be the most interesting/important/informative from this past week, along with a brief POV on each.
 
STORY 1
 
“SPONSORED STORIES” BECOME “FEATURED” ON FACEBOOK
Why it matters: The Facebook newsfeed is a precious place. Many of us rely on it daily to maintain contact with our closest family members and friends. But is it the right place to run ads?  This is a nut Facebook has been trying to crack for many years. Have they finally got it right? 
 
POV: Some consumers are already responding poorly to the new “Featured” ads (formerly “Sponsored Stories”) quietly showing up in their newsfeeds. And while these ads are only placed into the newsfeeds of consumers who have Liked the brand’s Fan Page, the ads almost seem to position the user to their friends as some kind of endorser without their permission. Separately, a lawsuit in San Jose is moving forward accusing Facebook of using the likeness (photos) of their users paid advertising without their explicit permission. The new ad products and the lawsuit are both going to be PR challenges for Facebook, but likely won’t slow their growth to 1B users by next fall.
 
STORY 2
 
DIGITAL BRAND ADS TO SURPASS DIRECT RESPONSE IN 2012
Why it matters: There is a bifurcation of the digital media industry happening right before our eyes, as brand marketers shift more of their dollars into online video advertising and direct response marketers shift more of their dollars into performance display media, often purchased on an ad exchange with third- and first-party data used for targeting. The reason this matters is because the ubiquity of online video finally means brand advertisers have an online advertising option with impact and reach closer to that of TV.
 
POV: Banners have never been great for brand advertising because they have so little impact on the consumer viewing them. For that reason it makes less and less sense to pay for banners on a cost-per-impression basis (hoping for clicks). Instead, we are seeing more banners being sold against a performance metric like a click, conversion, engagement or view. On the other end of the spectrum, video ads online have been proven in many cases to have an even bigger impact on the viewer than TV ads. For video advertising it makes complete sense to buy them on a cost-per-impression basis because, unlike standard banners, the impression itself has great value. That value means brands that may not have a DR goal are coming online in a big way. Look for this trend to continue.
 
STORY 3
 
BING HAS SURPASSED YAHOO IN SHARE OF U.S. SEARCHES
Why it matters: Bing and Yahoo now combine for nearly one-third of all searches, with Bing finally edging out Yahoo for the number two spot (behind you-know-who). But it comes at a price. Bing’s aggressive ad campaign may have put them on the map, but is the investment worth what is still a minority share of searches?
 
POV: Bing has been powering Yahoo’s search since 2009. This partnership was a great move for both sides because it meant that instead of competing against each other and Google, they only had to compete against Google. While Yahoo had to sacrifice about 10 percent of their search revenue to MSN in the deal, the quality and consistency of search results and the data collected in the process has enormous value for all parties involved (including consumers). And with the wild growth of mobile search advertising, Bing and Yahoo are in a better position than ever to grab a sizeable share of the mobile search business.
 
STORY 4
 
FACEBOOK TO REACH 1B WORLDWIDE USERS IN 2012
Why it matters: When Facebook crosses this milestone it will mean that their platform effectively reaches one in every seven people on the planet and one in every two worldwide Internet users. To add a little more perspective, the total worldwide Super Bowl audience in 2011 was somewhere around 300 million and the viewership of the World Cup finals in 2011 was approximately 700 million. Combine them and you have Facebook’s reach by fall of this year.
 
POV: Facebook is already the biggest media network in human history by far, and while they might be plateauing in some countries, they are still years away from their peak. And with every new user, Facebook’s massive database of human connections continues to grow exponentially. Facebook is learning how to better leverage their data for advertisers and content creators (like Zynga). Can we count on them to maintain a responsible approach to consumer privacy as they penetrate every country in the world? 
 
STORY 5
 
MYSPACE ANNOUNCES MYSPACE TV
Why it matters: This is the first move MySpace has made since their redesign to try to innovate their offering to benefit their users. Since MySpace was recently bumped off of Top Ten social sites (e.g., StumbleUpon), the former giant has some big gaps to fill. This recent social TV idea and their related hardware partnerships show a lot of promise.
 
POV: MySpace has made so many mistakes; this is not one of them. MySpace committing to the second screen experience and allowing socialization of TV viewership is a brilliant strategy that should be commended. While there are many up-and-coming products and technologies that service the social viewing niche, none of them have a significant social footprint already in place (MySpace still sees nearly 25 million unique users per month). There’s only one problem: Facebook. There is an extremely good chance Facebook TV has been in the works for months (or years). Watch for Facebook to announce a product that competes directly with MySpace TV within 60 days.
 
WEEKLY BONUS: THE SUPER BOWL IS COMING
 

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