Narrative: Advertising Sustainability

Each narrative page (like this) has a page describing and evaluating the narrative, followed by all the posts on the site tagged with that narrative. Scroll down beyond the introduction to see the posts.

Each post below is tagged with
  • Company/Division names
  • Topics
  • and
  • Narratives
  • as appropriate.
    Yahoo Reports Fourth Quarter and Full Year 2016 Results – Yahoo (Jan 23, 2017)

    Yahoo’s results seem to have been well received, though it also announced that the Verizon acquisition now likely won’t close until Q2. The results themselves are a mixed bag, really – there’s been an interesting switch between search and display advertising performance over the past year, with erstwhile strength search taking something of a dive, while display advertising actually performs better. Overall revenue after traffic acquisition costs is still down year on year, but Q4 was stronger by far than the rest of 2016. Yahoo has changed the presentation of so many of its metrics that many of them are impossible to compare on a like for like basis year on year, but positive change overall is still hard to find in the results. Mostly, they’re probably better described as less bad rather than actually good. There’s plenty here for Verizon to sink its teeth into when the deal eventually does close.

    via Yahoo Reports Fourth Quarter and Full Year 2016 Results – Yahoo (further coverage on Techmeme)

    WhatsApp ‘enterprise’ platform for businesses already in app – Business Insider (Jan 12, 2017)

    The reporting here is based on a Twitter account that claims to be looking into WhatsApp’s code to find hints about what the app’s future business features might look like. Facebook has already said it wants to take WhatsApp in a similar direction to Messenger, with more hooks for businesses to communicate with users manually and through bots, and these would appear to be early signs of that happening in practice. WhatsApp is a challenging property for Facebook in this respect, because it has always eschewed advertising, and anything that smacks of that direction will likely be poorly received by its users, so Facebook is going to have to tread even more carefully than usual as it pursues this strategy. On the other hand, Facebook didn’t spend $22 billion to buy WhatsApp just to shut off its only revenue stream – this was always inevitable.

    via WhatsApp ‘enterprise’ platform for businesses already in app – Business Insider

    Facebook is going to start showing ads in the middle of its videos and sharing the money with publishers – Recode (Jan 9, 2017)

    Given Facebook’s massive push into video over the past year, it was inevitable that it would eventually begin monetizing – the question was always how. Since video autoplays on Facebook by default, pre-roll would never work, whereas post-roll ads simply cry out for abandonment. Some sort of mid-video ads therefore always seemed the likeliest option, and here they come – they’ll play at 20 seconds in or later. In an autoplay video, I suspect these will still be a user turnoff, but in the context of a longer live video they’ll be more palatable. As ever, the question is how many ads users will stand for – the beauty (for users, if not for monetization) of Facebook video is that there’s always more to choose from if one puts you off.

    via Facebook is going to start showing ads in the middle of its videos and sharing the money with publishers – Recode

    Apple’s Search Ads Are Generating Conversion Rates Higher Than 50% | Adweek (Jan 5, 2017)

    The numbers in this article, which appear to come straight from Apple, are fairly impressive – half of those who click on an ad in the App Store end up downloading the app. That’s measuring conversion rate differently from the usual method, which would be downloads / impressions, rather than clicks, but it’s still high. And the average cost is low too – 50 per click, and $1 per install, much lower than, say, Facebook. Advertising is never going to be a significant chunk of Apple’s revenue, but this could turn into a nice little revenue stream over time, and it has a lot in common with Google’s search advertising, combining timeliness and relevance.

    via Apple’s Search Ads Are Generating Conversion Rates Higher Than 50% | Adweek

    The Ad Tech Renaissance – Brian O’Kelley (Jan 3, 2017)

    This piece does a great job of breaking down the headline figures on the size of the online ad market into its constituent part, and argues that even though Google and Facebook dominate both ad dollars and growth in them, there’s more going on beneath the surface, and opportunities for other companies do exist in ad tech, even if not ad display. Separately, Brian argues that finding better ways to serve up ads on content sites is vital for their survival. I don’t know that I agree with all of this, but there’s some very good analysis here.

    via The ad tech renaissance

    YouTube Needs to Become a TV Star – Bloomberg Gadfly (Dec 29, 2016)

    This analysis does a great job of breaking down a couple of specific challenges relating to ad revenue from YouTube – its relatively low revenue per user, and the need to break into traditional television to tap into a bigger video advertising bucket. YouTube has evolved – notably introducing a subscription model – since Wojcicki took over, but arguably not enough. And YouTube is critical for Google growing its overall ad revenue.

    via YouTube Needs to Become a TV Star – Bloomberg Gadfly

    IAB: Digital Advertising Revenue Breaks Record In Q3 | Digital – AdAge (Dec 28, 2016)

    Great summary of US digital and mobile ad spending in the first three quarters of 2016. Overall spending is way up, driven by mobile, while search advertising is mostly shifting from desktop to mobile rather than growing, and video is the only desktop segment that’s growing. However, as we’ve seen from eMarketer and other estimates, a great majority of the total growth is going to two companies – Google and Facebook – so though this all sounds like good news for the broader industry, others largely have to fight over the crumbs that fall from the table.

    via IAB: Digital Advertising Revenue Breaks Record In Q3 | Digital – AdAge