Report: Facebook Doubles Revenue

Facebook has doubled its revenue in the first half of 2011, Reuters reports. Facebook made $1.6 billion in the first six months of this year, nearly double what it made in the same time in 2010. Facebook doubles ad revenue

The largest portion of Facebook's revenue is believed to come from advertising, showing that the company has created a viable ad business. Facebook Doubles Revenue

It isn't yet clear what the composition of the advertising was, but display advertising is where Facebook has been growing rapidly, outpacing Yahoo, which had a big head start, and Google, which is growing its display revenue fast, a business it has not been part of, in the past.

Nor is it clear whether local ads have started to have impact. Many of us probably suspect Facebook has done best in national advertising.

Online Video "On TVs" Lacks Ad Support

While more and more online video publishers are connecting with audiences in their living rooms with smart TV's, Blu-ray players and devices such as Roku and Google TV, advertising on these platforms is not yet in place.

Internet Ad Revenues Break Records

Internet advertising revenues in the United States were at $12.1 billion in that period, setting a new half-year record that represents an 11.3 percent increase over the first half of 2009, the Interactive Advertising Bureau and PwC.

This is also the highest second-quarter revenue on record, up 13.9 percent over the same period of 2009.

Display-related advertising—which includes banner ads, rich media, digital video and sponsorships—totaled more than $4.4 billion in the first six months of 2010, showing a significant increase of close to 16 percent over the same period in 2009.

Digital video continues to experience record growth, this year achieving the highest half-year performance ever and up 31 percent over first half 2009.

Search advertising remains the largest percentage of overall interactive spend at 47 percent, representing more than $5.7 billion for the first six months of 2010, up 11.6 percent from the same period in 2009.

Internet Ad Revenues Break Records, Climb to More Than $12 Billion for First Half of ’10

Microsoft Closing In-Game Ad Unit

Microsoft reportedly is closing will its in-game advertising unit Massive. Microsoft acquired Massive in 2006.

At the time of the acquisition, the exuberance for dynamic in-game advertising was at a peak. Since then, Microsoft’s Xbox Live has become a more-compelling venue for Microsoft, in part because Microsoft keeps all ad revenue it earns from Xbox Live, while it must share Massive’s ad revenue with game providers.

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Digital Advertising Grows, To Nobody's Surprise

It would come as no shock to anybody that the amount of digital advertising and digital media is growing at least in linear fashion, just about every year.

Nor would it shock anybody that digital growth rates far surpass that of traditional venues.

Here's the latest forecast from BIA/Kelsey.

Mobile Advertising Will Be Indistinguishable from Online Advertising by 2015

About one online marketing dollar in every five spent in 2010 will go to a mobile campaign, says Borrell Associates. By 2015, the mobile share will have grown to almost two of every three dollars spent. Part of the reason for this heady forecast is the expected growth in the number of smartphones, Borrell Associates says.

The rest of the spectacular gains are simply the growing "mobilization" of consumer devices. Within five years, the majority of phones, computers, game machines, e-readers, and GPS navigation devices will be true mobile devices, each capable of receiving mobile-targeted advertising.

In effect, there will no longer be any real distinction between mobile and online, says Borrell Associates.
The other big change is that mobile campaigns will assume greater prominence for local marketers as well.
Today less than seven cents of every mobile marketing dollar is spent locally, by locally owned businesses. About 93 percent of mobile advertising is "national" in focus.

This will change as the devices themselves improve and the tools available to local marketers become less expensive and easier to use. By 2015, a quarter of every mobile marketing dollar will be spent locally, Borrell Associates forecasts.

Slow Recovery Ahead for Total Media Ad Spending

Online ad spending will grow while traditional advertising channels will remain stagnant or decline, says eMarketer.

Marketers who turned to digital for its effectiveness and measureability in tough times will continue to appreciate those qualities as budgets go up, and with the world’s population spending more and more time with digital media, dollars will follow eyeballs, eMarketer predicts.

One also wonders whether the greater efficiency of online and mobile formats also is having some effect. Advertisers might reason they can achieve their objectives even while reducing overall spending.

Slow Recovery Ahead for Total Media Ad Spending - The eMarketer Blog

84% of Internet Users Never Click on Ads

About 84 percent of Internet users never click on any ads, comScore says.

Conversely, eight percent of users are responsible for 85 percent of activity.

Should we be surprised by that? Not really, considering the Pareto principle, commonly known as the "80/20" rule.

Despite that pattern of behavior, it seems unlikely most advertisers will stop relying on click-through rates.

Google Chief Predicts "Interactive Video Ads"

Google CEO Eric Schmidt says  "interactive video ads," are on the way, the Wall Street Journal reports.

The ads, which could appear anywhere on a Web page, would be like mini-Web pages, allowing Web users to watch a video, leave a comment and see real-time updates within the ads that are more customized to their interests.

Schmidt says he has pushed Google's ad teams to think about the potential for such ads, without specifically adding details.

Big Marketers Shifting Online Budgets to Video Sites

About 57 percent of advertisers surveyed by Advertiser Perceptions say they are shifting spending from television to online vide sites, said Randy Cohen, Advertiser Perceptions president.

The study suggets that 70 percent of big ad spenders, those budgeting $10 million or more,  were likely to move money from TV to online video.

Whether any political fallout was a factor, 70% of marketers more commonly preferred to target based on demographics, vs. 59% who more commonly used behavioral metrics.

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Mobile Ad Spending Isn't Hype, But is Dwarfed by Online Spending

Everyone would agree that 2009 was not the best of years for advertising spending. But spending might not reach 2008 levels until 2012 or 2013.

Advertising might not reach pre-recession levels until mid-decade. There is at least some thinking advertising might not even reach pre-recession levels during the current decade.

Mobile advertising, Apple and Google expect, will grow fastest, from a low base. But online Web advertising still will be two orders of magnitude bigger than mobile advertising by 2014, Yankee Group predicts.

TV Advertising the Google Way

Google is making it easier for online advertisers to get TV-style ads, with obvious implications for both PC-based an mobile-based screens.

Digital Ad Spending Exceeds Print for the First Time

U.S. advertisers are spending more in 2010 on digital media than on print, says Outsell.  Outsell's study collected data from 1,008 U.S. advertisers in December 2009.

Of the $368 billion marketers plan to spend this year, 32.5 percent will go toward digital; 30.3 percent to print. Digital spending includes e-mail, video advertising, display ads and search marketing. "It's a watershed moment," says the study's lead author, Outsell Vice President Chuck Richard.


Last year, print spending accounted for 32 percent of the total, compared with 30 percent for online.

Spending on Web sites and other digital media will rise 9.6 percent to $119.6 billion this year. Print expenditures will drop three percent to $111.5 billion while total ad spending will jump by 1.2 percent to $367.9 billion from $363.5 billion last year.

Advertisers will reduce spending on marketing for events, and on television, radio and movies this year. TV, radio and movie expenditures will drop by 3.8 percent to $84.6 billion, Outsell says.

Spending on events will decline less than one percent to $45.2 billion this year.


But the survey also suggests marketers will spend 16 percent less on mobile in 2010, compared to 2009.

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Is Mobile Marketing the "Best" Advertising Channel?

There's a very good reason many content providers, marketers, device manufacturers and application developers  are intrigued by the mobile platform as an advertising venue.

Some researchers say it can outperform every other alternative, including "fixed" online channels, by quite some margin.

Some of us would quibble about whether it is so vastly superior on some dimensions. Some of us would argue TV is just as powerful as mobile on the "emotion" scale, and that lumping "print" in the same category as 'TV" makes no sense. Print is a "lower emotion" channel, compared to TV or even radio.

And this matrix is only a look at "potential" effectiveness. Advertising effectiveness depends on the quality of the creative material and many other factors beyond the mere choice of channel. Still, the potential reach and effectiveness of mobile marketing is clear, if perhaps overstated in this analysis.

"People Don't Like Ads" Yes and No

Surveys for decades have shown that "consumers don't like ads." But there's a big caveat. People always say they don't like ads when those ads are interruptions of some desired experience.

But sometimes ads are part of the desired experience. If you are an outdoors enthusiast, ads about gear you can use outdoors are very interesting. If you are a runner, ads about shoes, clothing, nutrition and events are very interesting.

If you are a surfer, ads about surfboards are very interesting.

So it comes as absolutely no surprise that 38 percent of respondents to a Parks Associates survey say they do not want to receive ads for any reaon. About 37 percent of respondents say they are neutral about ads and 25 percent are open to getting them.

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The study also confirms the notion that people will not mind getting ads when those messages are personally relevant, timely and valuable. To be sure, 18 percent of respondents say they don't mind seeing personally relevant ads, with 39 percent reporting they are indifferent and 43 percent not interested.

The problem with surveys, though, is that they sometimes cannot capture the complexity of consumer attitudes. Just about any survey will show that people dislike ads. But if asked whether they would rather pay money to gain access to desired content, for example, or get that same access for free, in exchange for the presence of ads, most people say they'll accept the ads.

Targeting and value make the difference. If the ads are relevant, they are unobjectionable, for the most part. If the user gets something in exchange for receipt of the ads, and the ads also are relevant, surveys show people are accepting, if not entirely happy all the time.

Does Social Media Advertising Work?

Some observers rightly will ask whether "free to use" social networks can survive forever without a clear revenue model of some sort. The general expectation is that viable revenue models can be created using some forms of advertising or marketing by brands hoping to reach their potential customers.

So far, the evidence is mixed, if promising. Reasonable observers will note that the way advertising or marketing messages are handled will be crucial. But lots of major retailers alread are betting that social marketing will pay off.

Telecommunications firms, Web media, retailers, financial and entertainment firms, automotive and health companies are among the companies already making use of advertising or other social network promotional opportunities.

Still, social media advertising and marketing remains a "work in progress." A new study by MomConnection provides evidence on that score. According to recent findings from MomConnection.com, 60 percent of users report having used a social network in the past 24 hours, turning to online communities and social networks for advice, support and connection.

But the survey also suggests that they do not use social networks as a resource when it comes to product decision-making. In other words, social networks are used to share information about products users already have experience with, rather than to choose new products they have not used before.

Moms are four times more likely to turn to their personal offline network of friends and family than online social networks for product recommendations and buying advice.

The study found that social networks are not a channel where most moms are receptive to gathering product information, but rather is largely for entertainment and personal communication.

Still, the results suggest that social networks might be growing in influence. About 24 percent of respondents indicated that they have used Facebook for product information and buying advice, while five percent have used Myspace for product information, while three percent have used Twitter.  

The survey also found that the respondents interact with brands on a surprisingly high level, actively requesting information and resources from the companies whose products they use. Some 81 percent have visited a brand's Web site for more information while 65 percent have signed up to receive a newsletter from a brand.

Some 36 percent have posted a link or joined a fan group on Facebook. Also, it appears that users become important "influencers" once they have formed an opinion about products and services. About 94 percent of respondents report they give advice to other moms in at least one product category.

Advertising is Changing from "Push" to "Pull"

Consumer packaged goods companies that typically have preferred mass media are making a significant move into social media messaging, says eMarketer. And where pushing ad messages to potential customers has been the dominant focus, social media allows retailers to engage in different ways.

“By looking at social media as a way to listen to consumers, respond to their needs and create ongoing dialogue—instead of as another way to advertise to them—CPG companies can reinvigorate their marketing and create new bonds with consumers,” says Debra Aho Williamson, eMarketer senior analyst.

That doesn't mean consumer retailers are abandoning traditional advertising by any means, she says. So far, social media advertising represents only a small fraction of the total dollars going to that channel, according to Nielsen AdRelevance.

And here's the difference: many mass market retailers consider social media to be "earned" media, historically the province of public relations, more than "paid" advertising. For that reason, more effort is going into blogger relations programs and promotional interactions that complement display advertising, for example.

Social media more frequently is seen as a way to “humanize their brand and create loyalty simply by being available when consumers have a problem, question or compliment,” says Williamson.

Telecommunications firms are leaders in the social media messaging space, as are Web media firms. About 20 percent of all social network site advertising over the last year (September 2008 to September 2009) has been spent by communications firms, while 19 percent was spent by Web media firms.

This is a significant shift. At some level, one might note that retailer spending is shifting from "advertising" to "public relations;" from "ads" to Web-based interactions on social sites. That means spending for Web operations overall is growing, most likely displacing spending that previously would have been devoted to tradtional display advertising.

The shfit from a "push" approach to a "pull" approach is tangible, if seminal.

Impulse Purchases Key for Mobile Marketing Messages

A significant number of American consumers are interested in receiving opt-in marketing messages, according to a new survey by Harris Interactive. It also appears impulse purchases are prime candidates for mobile marketing messages.

The survey of 2,029 mobile phone users, ages 18 and older shows 42 percent of users between the ages of 18 and 34 and 33 percent of those between 35 to 44 are at least somewhat interested in receiving alerts about sales on their cell phones from their favorite establishments.

Men are more interested than women. About 51 percent of men ages 18 to 34, and 34 percent of women of the same age range are at least somewhat interested in receiving opt-in shopping alerts on their cell phones.

Only one percent of cell phone owners currently receive alerts about sales at their favorite establishments on their phones, yet 26 percent would be at least somewhat interested in receiving such alerts, assuming they were permission-based.

Of those interested in receiving alerts, 53 percent would be at least somewhat interested in being notified about restaurant specials around them.

About 43 percent say they would be interested in getting information about movie or event tickets. About 39 percent are interested in getting weather information, while 37 percent indicated interest in information about clearance sales.

Sizable percentages expressed interest in specific products such as pizza, clothes, fast food, electronics, music, happy hour specials or bar and night club offers.

Impulse purchases seem particularly germane. The survey found that about 90 percent of U.S. adults have made an impulse purchase when they were out shopping in a store, based on a sale or special offer going on around where they were.

Nearly a quarter of adults owning cell phones (22 percent) make this type of impulse purchase at least once per week or more often.

9% of SMBs Use Twitter for Marketing

About nine percent of small and medium-sized businesses currently use Twitter to market their businesses, say researchers at BIA/Kelsey.  In addition, 32 percent of SMBs indicated they plan to include social media in their marketing mix in the next 12 months by using a page on a social site such as Facebook, LinkedIn or MySpace.

Furthermore, 39 percent of SMBs plan to include customer ratings or reviews on their own Web sites, and 31 percent plan to include links or ads placed on social sites or blogs.

"Social media is clearly gaining traction among SMB advertisers," says Steve Marshall, director of research and consulting, BIA/Kelsey.

You might not be surprised if any study suggests Twitter is used disproportionately by younger people. What the BIA/Kelsey study suggests it also is used by "younger businesses."

About 16 percent of SMBs in business three years or less say they use Twitter for marketing or promotion. About 11 percent of SMBs in business four to six years say they use Twitter for such purposes.

Some six percent of SMBs in business seven to 10 years say they use Twitter for some form of marketing while just two percent of firms in business for 11 or more years say they do so.

Android: What's in it for Google

Why is Google so aggressive about giving away millions of copies of its royalty-free mobile operating system? It is expected to lead directly to mobile search revenue. Jeffries &Co. thinks Google mobile search revenue will cross the $500 million mark in 2011, up from roughly $180 million in 2009, for example.

Android devices will be available on all four leading U.S. mobile carriers in 2010, so the issue is how much penetration the Android operating system will be able to get.

Beyond what Android means for Google, the issue is what it means for the service providers selling devices powered by Android.

There is speculation that Verizon, for example, plans a major initiative centered around Android to battle the Apple iPhone. Verizon apparently has been mulling the value of getting the Apple iPhone, but might have decided to push Android devices and applications instead.

T-Mobile executives have to be wondering what they will do now that Verizon has positioned itself as a major proponent of Android, as T-Mobile had been touting Android early on as a differentiator.

But if all the top-four providers are selling Android devices, using the software to differentiate user experience might become key. Apple prefers to maintain a uniform interface. Android actually enables differentiated user interfaces. So the issue is whether Android supporters will be able to create end user experiences pitched to particular end user segments that are compelling enough to create viable device segments.

Twitter, social networking, Web browsing, email, voice and texting are examples of lead end user applications that have, or can be, the center of "application specific" device sales and usage modes.

Google expects to win by growing its ad business, no matter how many distinct new niches can be created.