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Connected Television and IntoNow Are Poised to Disrupt Integrated Brand Advertising

Earlier this year, Yahoo! made a splash with its acquisition of 12-week old media check-in app IntoNow for approximately $27 million. The tech media circles, often critical of Yahoo! in recent years, praised the move in spite of the multi-million dollar price tag and the fact that IntoNow was just 12-weeks old.

IntoNow utilizes wavelength recognition to listen to and identify television programs with the tap of a button, and has become an important tool in Yahoo!’s previously-maligned foray into social. IntoNow combines the addictive check-in elements of Foursquare and the clever utility of Shazaam with the seemingly unstoppable power of Facebook and Twitter. While this conflagration of new media stars yields hordes of adoring users and Silicon Valley praise, IntoNow is poised to tap into the well-established mega-billions of the traditional media television industry.

IntoNow - From Yahoo!

The Internet is transforming television, and the first-glance value of IntoNow is obvious. Anything that gets users in front of television screens, especially if paired with live event coverage a la CoverItLive, holds immense value to television networks seeing more and more eyeballs transition to the smaller screens of laptops, tablets and smartphones.

However, the multi-billion dollar potential of IntoNow and Internet-connected televisions (including Yahoo!’s ConnectedTV) lies in the value these tools can deliver to brand advertisers and CMOs desperately seeking ways to integrate campaigns across the increasing number of platforms used by consumers. The possibilities are endless:

  1. A consumer “checks in” to the live airing of the latest White Collar episode and receives a reward from USA Network (a badge, points, a sneak preview video, a behind-the-scenes look, etc.)
  2. IntoNow utilizes a Pandora-esque algorithm to provide recommendations and offers brand advertisers the ability to provide highly relevant Sponsored Recommendations based on a user’s viewing habits
  3. Yahoo! pairs ConnectedTV and IntoNow with its own real-time ad bidding and exchange technology to deliver contextually matched, highly targeted ads based on what a user is watching right now
  4. A signed-in Yahoo! user receives time-sensitive television and movie recommendations from networks, Fandango, movie studios and the many advertisers Yahoo! already has relationships with based on their explicit IntoNow viewing habits and the inferred interests derived from them
  5. A viewer “checks in” to American Idol and is given the option to “Like” the show’s Facebook page, read the Idols’ tweets or purchase and download a song from the night’s episode directly from iTunes

The power of IntoNow in the right hands makes Yahoo!’s purchasing price of $27 million seem like chump change, and paired with ConnectedTV and real-time ad delivery, may be the spark that ignites Yahoo!’s rebound. Matching advertisers and brands with consumers is a ceaseless quest, and IntoNow gives Yahoo! a plethora of options to deliver value to a vast range of customers while capturing the always-critical adoration of its users. Execution matters above all else, and we’ve seen dozens of hot, nimble startups fall victim to the oppressive tides within a large and entrenched public organization.

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Twitter and Facebook Seek Big Ad Dollars with Opposing Strategies

Defying the overall economic trends witnessed across the United States and the rest of the world, Silicon Valley is once again a thriving, dominant ecosystem that some are calling “the last great American frontier.” Spurned by widespread popularity of social pillars including Facebook and Twitter, the seemingly insatiable appetite for tech IPOs and innovations in content and brand integration, the prospects for online advertising are brighter than ever before.

The IAB reported 2010 online ad revenues of $26 billion, a 15 percent increase from 2009 and a new record. While search remains a dominant revenue generator – accounting for 46 percent of total spending with 12 percent YoY growth – relatively newer formats including sponsorships, mobile formats and site takeovers are experiencing massive growth. Many entrepreneurs and venture capitalists, with big valuation dollar signs in their eyes, are literally betting their fortunes on this growth trajectory continuing, hoping advertisers follow the paths of the hundreds of millions of users interacting on Facebook and Twitter every day.

IAB - Online Ad Spend Classification

Facing looming pressure to generate new revenues off their massive engaged user bases and hoping to disprove critics who argue social media advertising is ineffective, Facebook and Twitter have accelerated their monetization programs. However, the two social icons are tackling the same issue with two very different strategies.

Facebook, which enjoys healthy, highly profitable partnerships with gaming companies like Zynga, has exploded past Yahoo! to become the largest seller of online display advertising (in the United States, excluding Yahoo! media network partner sites.) While Facebook is home to the online “Pages” of virtually all of the world’s largest brands, the company’s automated ad-buying system is targeted toward smaller advertisers, allowing them to custom-target based on a wide range of demographic and geographic variables.

Adam Bain - Twitter President of Global Revenue

Twitter, still several years behind Facebook in monetization development, is just beginning to build out its sales force and will not possess an automated ad-buying system until late 2011. Under the direction of Adam Bain, Twitter’s President of Global Revenue, the company has slowly rolled out advertising platforms including Promoted Tweets, Trends and Accounts that have been targeted exclusively toward the largest brand advertisers on the Web. As Twitter’s ad auction infrastructures develop further and the sales team grows in size, and if usage continues to skyrocket with the help of  key platform integrations like Apple’s iOS 5, the company’s $150 million in projected 2010 revenues will likely swell dramatically, helping to justify the reported $8-10 billion valuation.

The two distinct strategies employed by Facebook and Twitter are likely to merge and overlap as each company builds its sales and ad-serving infrastructure, but it appears each company understands how businesses of all kinds use their services and has structured their early monetization platforms accordingly.

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AllThingsD Redesign Delivers Context, Cohesion for the Influential Brand

Led by the sharp, snarky commentary of Kara Swisher and the perennial influence of Walt Mossberg, AllThingsD has risen to the forefront of Silicon Valley technology, Internet and media journalism. With decades of collective experience, Swisher and Mossberg have transformed a bare-bones, underfunded blog into an influential establishment and a trusted voice in a highly competitive industry. After years of strong growth and several recent talent additions, AllThingsD has gone live with an entirely redesigned website aimed at delivering better context and a more cohesive brand identity for the multi-columned site.

Kara Swisher has long been a source of unrivaled inside information at Silicon Valley icons like Yahoo! and Microsoft, and Walt Mossberg is widely considered one of the most credible gadget and technology analysts on the Web, so AllThingsD has greatly benefited from the respective personal brands of this powerful duo. However, with nine full-time columnists, each with their own column title, the AllThingsD brand name was often lost in the fragmentation of the site.

AllThingsD Redesign

The site is now unified under the AllThingsD.com domain, and is vertically categorized (i.e. News, Social, Mobile, Media, etc.) in an effort to provide better context for its users. More than any other element, context is the most vital component of the AllThingsD redesign. The site had consistently increased the quantity of content it produced daily, and the new design utilizes verticals that combine content from all nine columnists, providing users an all-encompassing resource from multiple perspectives. To appease the die-hard fans of any particular columnist, the new design still allows users to search by writer, acknowledging the continuing importance of each writer’s personal brand even in the new era of AllThingsD brand unity.

Beyond the functional and strategic elements of the redesign, the new AllThingsD is simply better looking. The much-wider layout helps cater to the higher-resolution videos and images the site has been sharing more frequently, and allows for much more aesthetically pleasing featured posts on the homepage.

Congratulations to Kara, Walt and the rest of the AllThingsD team on the beautiful redesign and your continued success as a leading voice on All Things Digital!

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Online Advertising Has Plenty of Room to Grow – Mobile, Social and Branded Content

In the wake of the explosive LinkedIn IPO, which saw a 109% first day gain that valued the nine-year old company with over 100 million users at $8.9 billion, an intense spotlight has been focused on the new wave of Web-based companies that have taken venture capitalists and private and secondary markets by storm. The highly anticipated and inevitable IPOs of Web titans Facebook and Groupon have – rightly or wrongly – brought up fears of a “bubble” reminiscent of the dot-com bust that wiped away the fortunes of millions and oversaw the collapse of hundreds of “companies” that rushed to go public without revenues, not to mention profits.

(My take? We’re not in a bubble. Not yet. The lessons from a decade ago are fresh enough in the minds of VCs and investors, and the simple fact that we are being cautious and asking questions proves we are eons away from the insanity of 2000.)

The promise of the new media era is dependent on a new era of advertising, one that is integrated across many platforms, channels and formats. The booming success of Google and others dependent on online advertising may lead some to think that the market is saturated, leaving little opportunity for new entrants or growth for existing players. However, the data paints a dramatically different picture. The IAB projects double-digit growth in global online advertising spending for each of the next four years, reaching nearly $100 billion by 2014, or 17.4% of combined global ad spending.

Online Ad Spend Totals

There is a significant trend that one doesn’t need to dive through troves of data to recognize: people across the world are spending more time online. The time spent online on computers, tablets and smartphones is dramatically increasing year over year, but even these markets are relatively under-served. Just 82 million of more than 330 million Americans access the Internet on their mobile phones, and just 31% of wireless subscribers own a smartphone. Even with the billions of dollars in profits enjoyed by Apple, Google, Nokia and Microsoft in the mobile sector, the market is just getting started. More users with more Web-enabled smartphones means more ad dollars flowing to Web companies from the world’s biggest spenders.

So does this mean the tens of billions of dollars spent on television advertising will magically flow online? No. New value is created by reaching consumers online, and that means new dollars will be spent. Television advertising offers benefits that the hottest social media and branded content companies could never provide, and vice versa. It is the value of connecting and conversing with consumers in the new media era that will entice advertisers to direct new dollars from their ad budgets toward online campaigns.

eHow Style Site Takeover

The power to connect brands and consumers where the conversations are happening (social) and at the point of intent (branded content, action-oriented content) provides the opportunity for companies that offer these services to capitalize on the significant upside potential in the online advertising market. Online advertising isn’t just text links and banner ads. The new formats enabled by tablet and mobile technology and revolutionary business models ensure Silicon Valley’s best executors will reap the rewards of a booming online advertising market in the coming years.

Hat Tip: AdWeek – The Changing Scope of Online Advertising 

IAB Report: 2010 Internet Advertising Reveneus Increase 15% to $26 Billion, A New Record

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