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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.
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:
- 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.)
- 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
- 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
- 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
- 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.
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.
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.
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.
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.
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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How Demand Media Creates High-Quality Content at Scale [INFOGRAPHIC]
On the heels of a widely successful IPO and a strong first earnings report as a public company, Demand Media has delivered another positive sign for investors seeking continued momentum for 2011 and beyond.
Today, the Santa Monica, CA-based content and social media company announced 48% growth in revenues and a 121% increase in adjusted net income year over year. (A full review of Demand Media’s Q1 2011 financial results can be viewed here.) Well-received redesigns of flagship Demand Media properties like eHow, LIVESTRONG.com and Cracked and high-profile celebrity partnerships with Rachael Ray for eHow Food and Tyra Banks for typeF.com are driving continued growth in content and media revenues (77% increase YoY.)
The increased scrutiny that comes with being a public company has manifested in investor worries about the impact of Google’s “Panda” algorithm tweak, but Demand Media has fought hard to reaffirm its continued commitment to producing high quality content. As a writer for Demand Media Studios and a member of the Demand Media Blog Distribution Network, I can attest to the validity of these assertions, and I am continuously impressed by the quality of content being produced by my fellow freelancers.
My team and I created an infographic that presents the detailed content creation process of Demand Media using text, graphics and images repurposed from OnlineMBA and Demand Media’s Content Matters. (Click on the infographic to view the full-size version.)
This infographic portrays how Demand Media utilizes a network of proven professional writers and copy editors, with every piece of content run through a rigorous quality control and review process. Articles that do not meet the strict Demand Media content quality standards are rejected and never published.
The continued efforts of Demand Media to improve content quality and focus on the creation of compelling, actionable content on its growing platform of top-rated properties are delivering strong financial results and positive user responses, and are a strong sign for scrutinizing investors.
Related: Learn more about how Demand Media offers advertisers a unique opportunity to reach action-ready consumers through intent targeting.
Is Google Offers Too Late to Compete? [Update]
[UPDATE: 4/21/11] In the four months since Google’s failed $6 billion Groupon acquisition bid, the company has faced increasingly vocal criticism on everything from lack of innovation to weak leadership. Today Google launched sign-up pages for its very own Groupon clone, Google Offers.
Following the company’s release of Google +1, this release will do little to calm the fears that Google is resorting to a “copy-cat” strategy as it falls further behind in social and perhaps is even losing its dominance in search. Further hampering Google’s progress is Groupon’s poaching of Google VP of Sales Operations Margo Georgiadis to fill the role of COO. With virtually zero differentiation in the company’s plunge into local deals, what makes Google believe it can compete with established heavyweights like Groupon and LivingSocial?
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More than a month after Groupon spurned a $6 billion acquisition offer from Google, the worldwide search engine leader is preparing to announce its own local deals service, Google Offers. According to Mashable, “Google will pay out 80% of a business’ revenue share three days after its deal runs. Google will hold the remaining 20% for 60 days to cover refunds before sending the rest.”
Groupon holds a dominant share of the local deals market, with LivingSocial trailing in a distant second and dozens of clones controlling minuscule shares. Reports of a similar service from Facebook have surfaced recently, and with Groupon supposedly preparing for a $15 billion IPO, questions are arising whether the market is saturated and if it can sustain another large competitor this late in the cycle.
The local deals market is by no means mature, and traditional marketing laws call for a strong number one versus number two competition over the long run, but the rules of Silicon Valley reward the first market entrants above all else. So with an established leader in Groupon controlling a heavy share and runner-up LivingSocial fresh off their blowout Amazon deal (which garnered over one million downloads), is Google Offers too late?
With little room for differentiation in the basic deals platform, Google’s opportunity to steal share from Groupon lies in its ability to integrate search, social, maps and location, and capitalize on the power of its online reach under the rejiggered executive management team led by some familiar faces. Pre-loaded mobile applications on its Android platforms and packaged search and local deals are likely components of Google’s strategic plan. It will take time to build these features out, but perhaps more than any time in the company’s history since its IPO, this is a critical inflection point for Google.
Google’s official response to a Mashable inquiry reveals the early development efforts of Offers:
“Google is communicating with small businesses to enlist their support and participation in a test of a pre-paid offers/vouchers program. This initiative is part of an ongoing effort at Google to make new products, such as the recent Offer Ads beta, that connect businesses with customers in new ways. We do not have more details to share at this time, but will keep you posted.”
The potential viability of Offers is a snapshot into the current environment at the still highly regarded online behemoth. It is widely known that more than 90% of Google’s revenues come from search engine advertising, and a recent string of disappointing product failures has some industry insiders questioning the company’s ability to create new and sustainable innovations.
After announcing a record-breaking quarter, with profits jumping to $2.5 billion, Google is hardly faltering. Google’s efforts in display advertising and mobile are paying off, and search is as powerful as ever. But with news that Eric Schmidt will step down on April 4th and co-founder Larry Page will take over as CEO, investors and insiders will be keeping a close eye on Google over the next year. As one blogger questioned, will Page’s return to the helm be similar to Steve Jobs’ triumphant reclamation of the Apple throne in 1997, or more like Jerry Yang’s short-lived return to Yahoo! in 2007?
Image Credit: Mashable
As Bing Sees Big Gains, Is Microsoft Cool Again?
Under the tutelage of Bill Gates, Microsoft exploded into one of the world’s largest and most valuable companies, generating billions of dollars in profits annually for shareholders. The dot-com boom made many employees and investors millionaires, and the company appeared unstoppable.
As the company matured, growth stabilized and new tech darlings like Google stole the spotlight. Delayed product launches of centerpiece operating systems, failed products and advertising campaigns, broken acquisition deals and an apparent lack of internal innovation gave Microsoft a reputation as a “has been” that had passed its prime, and current CEO Steve Ballmer lost the confidence of many investors.
However, new data is showing that Microsoft may be experiencing a reversal of fortunes, as the company’s investments in search are beginning to pay off. The brutally competitive search engine market has had one dominant player for the last decade – Google – which has held as much as 80 percent of the United States search market.
In October 2010, the U.S. search marketshare breakdown was as follows: Google (72.15%); Yahoo + Bing (23.64%). The most recent Hitwise data shows Bing has made substantial gains at the expense of Google and Yahoo. Bing-powered search now controls 30.01% of the U.S. search market, while Google’s share has fallen to 64.42%. (See below: Image courtesy of Mashable.)
These gains may be the result of a major multi-platform ad push by Microsoft for Bing, but the trend is a positive sign for investors and spectators that have remained loyal to the company.
Strong performance in search, high expectations for tablet and PC versions of the upcoming Windows 8 platform, new developer confidence in the Windows Phone platform following the recent Nokia partnership announcement, the smashing success of Kinect and Xbox 360 and widespread adoption of Microsoft’s iPhone and iPad apps are powerful indicators of a possible Microsoft mindshare and marketshare resurgence.
Less than a decade after Wall Street and Silicon Valley critics alike pronounced the death of Apple as a legitimate player in the lucrative personal computer market, the world has witnessed the resurgence of the Cupertino-based company as the dominant force in the rapidly-growing world of consumer electronics. Could we be seeing the beginning of an Apple-esque Microsoft turnaround? Critics will call it wishful thinking, but with Google in the process of a massive leadership change, Yahoo! undergoing a drawn-out transition phase and the tenure of Apple CEO Steve Jobs uncertain, the competitive landscape is changing and Microsoft has substantial opportunities in search, PCs and mobile.
Twitter Microsites Offer Networks Real-Time Engagement
In a television era dominated by DVRs and Netflix, network executives are facing incessant pressure from advertising partners to increase the number of eyeballs that are watching programs in real-time. Traditional media has often been lambasted for fighting change, but the recent trend toward connected television and the ubiquitous popularity of social media has forced many media giants to embrace these technologies.
Twitter, the micro-blogging site that easily connects users across the globes with one-click follows and hashtags, has become a valuable real-time thermometer for networks to gauge viewer feedback during programs. What began as networks monitoring chatter on the main site feeds has evolved into the launch of enhanced microsites developed and powered by Twitter, and several major brands have already come on board. Visa and the NFL partnered with Twitter to launch a microsite covering the Super Bowl XLV. Women’s Wear Daily, Bobbi Brown and Bergdorfs sponsored a microsite for New York Fashion Week. HBO created a Twitter microsite for True Blood fanatics.
These microsites provide encompassing coverage of live events with real-time tweets, pictures and aggregated news. Brands can deliver real-time updates and become a destination for consumers to share knowledge and engage in active conversations on a particular topic with like-minded individuals. Most importantly, these microsites are a platform for branded content alongside user-generated content, integrating two incredibly powerful forces in Web 2.0 marketing. Brands can subsidize the costs of developing these sites by partnering with sponsors (i.e. “New York Fashion Week: Presented by American Express”) that obtain prime real estate alongside highly relevant content and engaged audiences.
For networks, these microsites encourage and facilitate real-time conversations that cannot occur on a comparable scale outside of the live program time slots. Networks can use these microsites to provide advertisers with more in-depth viewer metrics (i.e. 250,000 unique tweets, 50,000 hashtag mentions, etc.) that can command premium ad rates.
These microsites have significant potential beyond enhancing live, lean forward television viewing experiences. Imagine brands like Apple and conventions like CES implementing these sites for major product launches and events. It’s more important than ever to go where your customers and users are, and microsites offer networks and brands the opportunity to drive engagement and become a central online conversation destination.
Will more Twitter microsites pop up in 2011 and beyond? Would you use a microsite to tweet on your connected TV?
Are the Yahoo! Layoffs a Good Sign?
It had been rumored for weeks that Yahoo! was preparing to lay off as much as 20% of its workforce, and the company had remained relatively quiet as the media battled to get an accurate figure. On Tuesday, the company confirmed that it had let go approximately 560 employees, nearly 4% of its total workforce.
Business Insider, as it has done for previous Yahoo! and AOL layoffs, set up an anonymous forum for Yahoos to share their insights, vent their frustrations, or simply to come together in an undoubtedly tough time for the company.
Nobody likes layoffs. They can place severe hardship on employees and their families that depend on their salary and benefits to subsist, and can deal an emotional blow to employees’ confidence and feelings of self-worth. The Yahoo! layoffs are no different. But is there something positive that can be gleaned from them?
Critics have hammered Yahoo! for having an undefined mission and top executives have come under fire for not being able to answer the simple question: “What does Yahoo! do?” According to Yahoo!, the layoffs are helping the company shift its position in the market through restructuring to more successfully accomplish its short- and long-term strategic objectives.
Kara Swisher of All Things D obtained an internal memo sent to employees from Yahoo! CEO Carol Bartz, which you can read in-full here. In the memo, Bartz notes that a majority of the layoffs are in Chief Product Officer Blake Irving’s products division. Every large company has product groups that are underperforming, and eliminating these groups is a part of operating a successful business. Bartz also notes that Yahoo!’s dedication to the Microsoft Search Alliance remains strong and resources will continue to flow to the company’s key properties.
Holiday layoffs are unpleasant, but with growing pressure for Bartz to deliver on her promises to turn around the Silicon Valley tech giant, they were necessary. Tech companies must be nimble, and a heavy products division hampers the innovation Yahoo! so desperately needs. Bartz has been scrutinized by some for slashing budgets and trimming jobs while taking home $47.5 million in total compensation in 2009, making her one of the highest-paid CEOs in the country.
Yahoo! asserts these layoffs were much more than a cost-cutting measure, and Bartz acknowledges that she cannot cut Yahoo! to greatness. The layoffs are part of a comprehensive restructuring initiative, and are an integral part of the process that can allow Yahoo! to focus explicitly on its core competencies in search, content verticals, and advertising.
This is no consolation for the ex-Yahoos now out of a job, but it is a good step in the re-emergence of a company that was once one of the darlings of the Valley. As for the former Yahoos, reports of a generous severance package (two months of pay, a bonus, and outplacement services) and the fortune of being in a strong hiring environment may help soothe some of the pain of being let go.
NOTE: Tech industry bretheren Mashable, Eventbrite, and others have reached out to the displaced Yahoos, encouraging them to apply for open positions.
The Hidden Force Behind Google, Microsoft, and Facebook
“If we’re innovating, if people have the tools to let their imaginations run, then there’s nothing we can’t do in this country.” President Barack Obama
At a political fundraiser in the humble home of revered Google executive Marissa Mayer – a mere stone’s throw from the famed garage that spawned Hewlett-Packard – President Barack Obama delivered these energizing words to approximately 50 Silicon Valley and Washington, D.C. heavy-hitter Democrats who reportedly paid $30,000 each to attend the intimate meet-and-greet in Palo Alto, CA. While these words may be perceived by some to be little more than populist political Utopianism, they speak to the heart of what Silicon Valley and burgeoning entrepreneurial pockets across the globe were built on.
The inextinguishable fire that burns deep within every entrepreneur is fueled by the kindling wealth of knowledge, tools and skills accumulated through experience and education. The latter is perhaps the most under-recognized factor leading to effective entrepreneurial success.
To be certain, visionaries by the likes of Steve Jobs, Mark Zuckerberg, Bill Gates, Jerry Yang, Sergey Brin and Larry Page each have an overwhelming presence of talent, passion, creativity, insight and natural intelligence within them. However, it would be incorrect to assert that these personal traits and qualities are the sole defining characteristics leading to their success. Siamak Taghaddos, the 29-year old millionaire co-founder and co-CEO of Grasshopper Group, noted that “education helped polish the inherent entrepreneur” within him and his partner, David Hauser. As Malcolm Gladwell famously outlined in “Outliers“, Bill Gates had unlimited access to a computer at the exclusive middle school he attended in the late 1960s to early 1970s – a time at which computers were far from being considered “personal”. Google founders Sergey Brin and Larry Page join Yahoo! founders Jerry Yang and David Filo as (sort of) alumni of Stanford’s famed school of computer science.
These tech legends understand the importance of education, and they want to pass along that gift to young students today in hope of giving them the tools they received along their path to success. Mark Zuckerberg recently donated $100 million to New Jersey public schools, and the Bill & Melinda Gates Foundation, with its $33.5 billion (and growing) endowment, has contributed billions to initiatives that advance and improve education across the globe.
Most would agree that education facilitates learning, growth and development. But what many fail to recognize is that education allows passionate young individuals to discover and nurture the entrepreneur within them. It offers them the chance to mine their natural talents and fuse them with new tools, knowledge and skills that can catapult them to a higher level of thinking and understanding.
Education has helped cultivate bright young minds and shape them into entrepreneurial successes and legends of industry, and its importance can no longer be underestimated and ignored.
