David Kirkpatrick

October 19, 2010

Facebook ads are effective

Filed under: Business, Technology — Tags: , , , , — David Kirkpatrick @ 11:58 pm

Not surprising at all. Ad buyers have an immense amount of control over how much is spent and targeting, and with all the user-provided information Facebook can seriously drill down and find an audience for any campaign.

From the link:

Chances are that at least one or two will be targeted to the activities and interests you post on Facebook, or the city you live in, your gender, or even your relationship status. These little ads are typically purchased through Facebook’s “self service” system, which enables small- and big-time advertisers to create an ad in minutes to lure specific demographic groups with a few lines of text and a graphic or photo.

Rather suddenly, these little come-ons have turned into the leading source of Facebook’s revenue. My estimates, as an analyst at eMarketer, the New York-based market research firm, show that self-service ads account for at least half of Facebook’s total ad revenue, projected to be $1.3 billion this year. That’s way more business than anyone could have expected, given that there are no upfront charges to placing these ads and that Facebook only earns revenue when viewers click on them or when a certain threshold of impressions is reached.

 

August 18, 2010

Social networking advertising tops $1.5B

And not surprisingly Facebook is getting half of the $1.68 billion in social media/web 2.0 advertising forecasted for 2010. Facebook offers a very attractive advertising model in terms of very granular audience targeting coupled with a flexible set of criteria for creating an ad campaign. Expect to see more advertising dollars going into social networking in the future, particularly if it proves out to be very effective.

From the link:

Just after Facebook hit 500 million users last month, some analysts increased their 2010 forecasts for spending on social media advertising.

U.S. advertising is expected to increase 20% over last year to $1.68 billion, up from December’s forecast of $1.3 billion, according to a study by digital research group EMarketer.

“That’s primarily due to the strong performance of Facebook and somewhat due to the fact that we started adding Twitter to our analysis,” said Debra Aho Williamson, an analyst.

The study, conducted every six months, also measures sites such as MySpace, LinkedIn and Classmates.com as well as popular sites in China, Japan and Russia for worldwide figures.

Half of that $1.68 billion spent by U.S. advertisers will go to Facebook, according to the study. By 2011, advertisers will spend $1.06 billion on the San Francisco company — a 112% increase from 2009.

July 8, 2010

Twitter adds an income stream

Filed under: Business, Technology — Tags: , , , , — David Kirkpatrick @ 1:08 pm

And it sounds both sensible and quite unobtrusive. Kudos to Twitter for looking for ways to create revenue without wrecking a unique web experience.

From the link:

You’re probably familiar with the “Groupons” of the world—social buying sites that offer deals on everything from oil changes to spa treatments, provided a certain number of people commit to purchasing it.

Today Twitter joined this trend with the launch of @earlybird Exclusive Offers, a Twitter account that will promote time-bound deals, sneak-peaks and events exclusively for its followers.

To receive alerts on these deals, Twitter users will need to follow the @earlybird account. @Earlybird will tweet the deals, which will appear in your stream, just like any other tweet from users you follow.

At first, Twitter will be partnering with with select advertisers—large international brands, it says—to develop offers solely for the Twitter community. These brands will determine the price, quantity for sale and the duration of the deal. Twitter, in turn, will earn a cut of the money that the brand brings in from sales.

May 25, 2010

Even more on social media and privacy

And this one isn’t just limited to Facebook.

Social networking sites may be sharing a lot more of your identifying data with their advertisers than you realize.

From the link:

A report in the Wall Street Journal indicates that a number of social networking sites (including Facebook, MySpace, and Digg) may be sharing users’ personal information with advertisers. Since the Journal started looking into this possible breach of privacy, both Facebook and MySpace have moved to make changes.

The practice is actually a somewhat defensible one–and most of the companies involved did try to defend it–in which the advertisers receive information on the last page viewed before the user clicked on their ad. This is common practice all over the web, and, in most cases, is no issue–advertisers receive information on the last page viewed, which cannot be traced back to the user. In the case of social networking sites, the information on the last page viewed often reveals user names or profile ID numbers that could potentially be used to look up the individuals.

Depending on what those individuals have made public, advertisers can then see anything from hometowns to real names.

The Journal interviewed some of the advertisers who received the data (including Google’s (GOOG) DoubleClick and Yahoo’s (YHOO) Right Media), who said they were unaware of the data and had not used it.

For some reason I find that last claim from DoubleClick and Right Media a bit hard to believe.

April 20, 2010

Twitter and advertising

Yep, they’re going there.

I may not completely enjoy the experience, but it’s an overdue move.

From the link:

Twitter is finally taking off the training wheels and moving into the world where real businesses tread with the launch today of its first advertising model .

The microblogging phenomenon has long avoided coming up with a business plan or even talking about one. Just last October, Twitter CEO Evan Williams told an audience at the Web 2.0 Summit in San Francisco that the company wanted to focus on developing the site , instead of on a business model.

But the time has come for Twitter to figure out how to make money over the long haul.

It’s a decision that makes the company look less like a grand hobby and more like an actual business , said Rob Enderle, an analyst with the Enderle Group.

But, will the masses revolt?

From the link:

Now that Twitter has begun to display ads–pardon me, Promoted Tweets–in users’ search results, the big question is how millions of loyal Twitter fans will respond. Reaction on the micro-blogging site has been muted thus far–more questions than commentary, actually–and it’s apparent that most users haven’t seen the new ads yet.

According to a blog post by Twitter co-founder Biz Stone, the ad program will be rolled out gradually, with Promoted Tweets (such as the Starbucks (SBUX) example below) appearing atop some Twitter.com search result pages.

Of course, the very idea of product-pitching tweets won’t sit well with a good number of Twitter users, who’ve grown accustomed to the ad-free (and unprofitable) service.

January 27, 2010

Online privacy and advertising

The two have quite the tempestuous relationship. In many ways hyper-targeted advertising can help consumers and certainly advertisers prefer to spend money on people who might actually use the pitched product/service/etc. At the same time there are legitimate concerns about online privacy rights, and how data about your online habits can be used and misused.

This article outlines a reasonable middle ground for the moment, and offers a visual clue to web users on when they’ve been selectively targeted for certain ads.

From the link:

Trying to ward off regulators, the advertising industry has agreed on a standard icon — a little “i” — that it will add to most online ads that use demographics and behavioral data to tell consumers what is happening.

Jules Polonetsky, the co-chairman and director of the Future of Privacy Forum, an advocacy group that helped create the symbol, compared it to the triangle made up of three arrows that tells consumers that something is recyclable.

The idea was “to come up with a recycling symbol — people will look at it, and once they know what it is, they’ll get it, and always get it,” Mr. Polonetsky said.

Most major companies running online ads are expected to begin adding the icon to their ads by midsummer, along with phrases like “Why did I get this ad?”

And, the symbol:

The icon will be used in online ads that go to users based on demographics

January 21, 2010

OK Go on today’s music industry

Filed under: Arts, Business, Media, Technology — Tags: , , , , , , , — David Kirkpatrick @ 1:23 am

Short version: YouTube, change your tracking metrics so our label (EMI) will let our fans embed our videos again. Long version (after reading through the lines): the industry is completely broken, but we’re in too deep to walk away.

From the link:

We’ve been flooded with complaints recently because our YouTube videos can’t be embedded on websites, and in certain countries can’t be seen at all. And we want you to know: we hear you, and we’re sorry. We wish there was something we could do. Believe us, we want you to pass our videos around more than you do, but, crazy as it may seem, it’s now far harder for bands to make videos accessible online than it was four years ago.

See, here’s the deal. The recordings and the videos we make are owned by a record label, EMI. The label fronts the money for us to make recordings – for this album they paid for us to spend a few months with one of the world’s best producers in a converted barn in Amish country wringing our souls and playing tympani and twiddling knobs – and they put up most of the cash that it takes to distribute and promote our albums, including the costs of pressing CDs, advertising, and making videos. We make our videos ourselves, and we keep them dirt cheap, but still, it all adds up, and it adds up to a great deal more than we have in our bank account, which is why we have a record label in the first place.

(Hat tip: boing boing)

OK Go – This Too Shall Pass from OK Go on Vimeo.

October 19, 2009

A small business primer for Google’s AdWords

Filed under: Business, Media, Technology — Tags: , , , , , — David Kirkpatrick @ 3:34 pm

A very informative AdWords/AdSense 101 for small business from the New York Times. Easy to understand and informative, this article is a great primer for anyone looking for a bit more guidance in using AdWords.

From the link:

Here are the basics: Google AdWords are keyword-driven ads that show up along the right-hand side of a Google search page under the rubric “sponsored links.” People who search for terms related to those you select — say, “widgets for sale” — will see your ad alongside the results of their search. How high up your ad appears on the list of sponsored links will depend, in part, on how much you’re willing to spend on your campaign. The more you spend and the more relevant your ad, the higher it will rank. Because AdWords is a pay-per-click service, you pay Google only when someone clicks on your ad.

February 16, 2009

Internet advertising is drowning …

… in a sea of endless content. This is a case of supply (web pages to advertise on) wildly outstripping demand (eyeballs to view those pages and ads).

From the WSJ:

What does the Internet display-ad market have in common with Zimbabwe?

Both are printing nearly-limitless amounts of their main currency, vastly diminishing its value and undermining their future. The currency, for Web sites, is their ad inventory. And while Zimbabwe, under different management, can change course, the same isn’t true of the display-ad market. Web sites keep generating new content and extra pages on which ads can run.

That is why the sudden sharp weakness in online display advertising, which hit fourth-quarter revenue at companies ranging from Yahoo to Time Warner‘s AOL and New York Times Co., isn’t just about a cyclical downturn caused by the recession.

For sure, part of it is due to depressed demand among advertisers, including those who buy “brand image” ads that suit the display format. AOL, for instance, whose display revenues fell 25% in the quarter, cited “softness” in categories such as “personal finance, technology, autos and retail,” which clearly relate to the economy.

But weak demand is simply highlighting the more fundamental oversupply problem — and pressuring prices. The cost per thousand views of display ads on big Web sites sold through ad networks — rather than sales forces of individual sites, which usually handle premium inventory — fell 54% in the fourth quarter compared with the year earlier, estimates PubMatic, which offers online services to publishers.

September 8, 2008

Yahoo-Google pact gets “thumbs down” from ad group

The online ad partnership between Google and Yahoo is opposed by the Association of National Advertisers. The group sent a letter to the Justice Department to voice its concerns.

From the link:

The Association of National Advertisers said on its Web site that the letter to Thomas Barnett, assistant attorney general in charge of the Justice Department’s antitrust division, came after a “comprehensive, independent analysis” and meetings with Google and Yahoo executives.

The ANA did not disclose the text of the letter but said it states its concern that “a Google-Yahoo partnership will control 90 percent of search advertising inventory and … will likely diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers for high quality, affordable search advertising.”

The ANA says it represents 400 companies – including Apple Inc., The Coca-Cola Co., Exxon Mobil Corp., Proctor & Gamble Co. and General Motors Corp. – with 9,000 brands.

August 10, 2008

Yahoo changes targeted ad policy

Filed under: Business, Technology — Tags: , , , , — David Kirkpatrick @ 4:37 pm

Yahoo is letting users opt out of targeted ads running on its own sites.

From the link:

Yahoo has been offering that opt-out choice only to ads the company runs on outside, partner sites. Yahoo said Friday it now would extend that option to ads displayed on its own sites, to boost users’ trust – and in doing so, perhaps draw visitors from its rivals.

The option will likely be available by the end of the month.

Yahoo spokeswoman Kelley Benander said the change has been in the works for some time, but the company decided to announce it early in response to an inquiry from the House Energy and Commerce Committee, whose subcommittee on the Internet held a hearing last month questioning online advertising practices.

Visitors who decline would still see ads, but not ones delivered through “behavioral targeting” – in which a site displays ads for golf carts, for instance, to visitors who frequent golf sites, even when they are reading about Paris Hilton. Instead, they’d see a generic ad.

The policy change does not affect Yahoo’s other targeted ads, such as those tied to search terms or location