According to a new Nielsen report, display advertising – including banner ads – grew 26.3% in the first quarter, led mostly Asia-Pacific and Latin America, where display advertising grew 33.2% and 48.2%, respectively. The one major caveat to the study is that Nielsen hasn’t developed a system to measure search and mobile, as accurate tracking of those categories is difficult. Nonetheless, the display advertising figures reported by Nielsen are in line with other researchers’ numbers as well; the IAB reported that display advertising grew by 9% in the US in 2012, which fits with the Nielsen numbers. It still appears, however, that TV will retain its overall dominance in ad spending – at least in the short term.
If you surf the Internet with any frequency, you tend to know exactly where, on any given page, to find what you’re looking for. Often that means rapidly scrolling past a wealth of material – and ads. The Washington Post, troubled by the logic that “above-the-fold” ad space is inherently more valuable, conducted a study to measure user behaviors on a number of page types, finding that in some scenarios, “below-the-fold” ads actually work better than their counterparts higher on the page. This research led to the creation of a “Superview” unit that follows a user’s viewing window for the first seven seconds they are on a page, before floating back to the top. This innovation has resulted in viewability increases from 9 percent to 19 percent, with some vendors seeing even greater leaps. This evaluation of web advertising offers an opening to discuss the future of premium ad space online, and could drastically alter how we think about web advertising.
In a very public move to bring facial recognition technology to the fore, Amscreen, a European outdoor advertising firm, is debuting ads using face detection this week. Called OptimEyes, the technology will let advertisers know how many people are viewing the ads – in addition to their rough age and gender. The goal is to use the technology to let advertisers see the results of their advertising spending, which has proved difficult offline. The technology will ultimately allow advertisers to tailor ads specifically to certain audiences as they walk by – though public privacy concerns still abound about the extend to which this technology records, stores, and shares data.
If music and business history have taught us anything, it’s that Jay-Z is almost always right. His latest career move, a groundbreaking deal with Samsung where the company pre-ordered 1 million Jay-Z records for $5 million as a gift for its Galaxy users, is already proving that some institutionalized sectors of the music industry are struggling to keep up with the new rules Jay’s creating. Case in point: Billboard and Nielsen Soundscan won’t count the million copies Samsung purchased as official sales because they don’t recognize bulk sales or free-to-consumer product.
In the late 1990’s, when a 20-something Jay-Z was selling CDs out of his car and getting rejected by major labels, record sales were roughly double their 2013 value. A decade and a digital revolution later, when it comes to the classic “consumer,” it’s a buyer’s and stealer’s market. But Jay-Z is introducing us to the new buyer on the block— the big brand. He’s coming to town like a lovable Santa Clause with a big bag of money and he’s ready to buy you your favorite record as long as you leave him a cookie and some milk.
When Amazon sold Lady Gaga’s Born This Way album for $0.99 during its release week, it was playing Santa Claus in the same way. It happily lost millions to subsidize Gaga album purchases in order to get more people onto its music platform and using its Cloud service. Everybody won, including Gaga, who went platinum in one week while making fans happy and receiving her cut of the full price from Amazon.
But as often happens with big successes, detractors started lining up crying that Gaga and Interscope were cheating (Interscope claims it wasn’t even told about the promotion). Billboard soon announced a new set of certification rules and declared that albums sold for less than $3.49 wouldn’t be counted. The danger here is that next time Amazon wants to line an artists’ pockets and give a $0.99 deal to fans, labels will be tempted to raise that price to at least $3.49 so that it doesn’t deflate sales metrics. Similar considerations will likely make deals like the Jay-Z / Samsung partnership feel like a bittersweet victory to labels or artists rather than what it truly is: a 100% win. As soon as sales executives at labels start worrying that brand purchased albums cannibalize official sales and make them look bad, you open Pandora’s box.
The music industry needs to endorse a simple rule: anything that helps sell more records is good. Anything that complicates that process is bad. Jay-Z gets it, and rightly fired back on Twitter: “If 1 Million records gets SOLD and billboard doesn’t report it, did it happen? Ha. #newrules #magnacartaholygrail Platinum!!! VII IV XIII.”
Understandably, Billboard and Nielsen don’t want charts to be susceptible to manipulation. After all, the industry’s history has been littered with cases of pricing drops and “two for one” deals with retailers aimed at getting music to the top of the charts. And the danger with bulk sales and low price points is that a company can sell millions of units for next to nothing to juice their numbers. For that reason a threshold for price point makes sense, BUT that threshold shouldn’t be tied exclusively to the listener making the purchase. And not all bulk sales should be written off. If Amazon or Samsung are willing to drop millions on music, it’s because artists like Gaga and Jay-Z have earned valuable cultural capital and are making music people want.
The hard truth is that people may never purchase music in the quantity they used to, and it may become vital to let brands do some of the buying as a way to make up the difference. Music does make a great gift, and that model may make sense in a variety of scenarios for a growing number of artists in the years to come. Take Kiip for example, a startup that has helped brands like Pepsi gift free Amazon music as a surprise reward for mobile gamers when they achieve something noteworthy in the game.
Let’s also give credit where it’s due: Samsung is pushing the envelope on how brands interact with artists and their fans, and so far it’s paying off big. The company actually announced the release of Jay-Z’s new album during a three minute commercial that aired during Game 5 of the NBA finals. That clip, a behind the scenes look at the making of the record that ends with a short Samsung Galaxy title card and “The Next Big Thing Is Here” tag line, has since been viewed close to 13 millions times on YouTube in four days. The alignment of that tag line with trend setting music couldn’t be more perfect, and despite a reported $20 million dollars the company is paying Jay-Z (on top of buying a million albums)— it’s money well spent.
It’s also notable that as far as corporate sponsorship goes, the spot is fairly focused on Jay-Z and doesn’t come across as heavy-handed product shilling. This is another hallmark of the more successful recent partnerships between musicians and brands: they work best for everyone when the brand doesn’t ask for too much of the spotlight. Take a look at State Farm’s subtle product placement in OK Go’s “This Too Shall Pass” video for another prime example.
Bottom line: when it comes to branded content the brands look cooler when the bands looks cooler, and that’s certainly the best experience for fans. Samsung’s campaign also incorporates a MagnaCartaHolyGrail.com microsite and a special app where Galaxy users can access the album 72 hours before it’s street date— an interesting evolution of the branded content model in which non-branded content is delivered as a follow-up.
Some would argue that the Samsung / Jay-Z model is disruptive to companies like Apple, Google, and Amazon that make their money selling downloads and streams. Samsung is certainly cutting out the distribution middleman, but some would also argue that major digital distributors are using music as a loss leader to attract consumers to their other offerings. In that regard, Samsung is pretty much playing the same card and acting as distributor. And I expect that in the future we may see iTunes, Amazon, or Google Play increasingly working with big brands to deliver pre-purchased music to fans.
For the music industry, the job of measuring success and popularity in an increasingly fragmented landscape will only get harder. Ironically, in February Billboard started factoring YouTube views into its Hot 100 formula, which makes it easier than ever to buy your way onto the charts. After all, labels regularly buy legitimate video views through ads on channels like YouTube, VEVO, Facebook, and Spotify. Do those purchased views make those songs or videos truly popular? But ultimately I could care less how people measure things, as long as their methods don’t undermine the legitimacy of new and necessary opportunities to drive more revenue for the industry overall.
When it comes to dollars and cents it doesn’t matter who bought your record, it only matters that you sold it legitimately to a buyer who had no intention of helping you game the system to manipulate the Billboard charts. As far as I’m concerned, Jay-Z should get bonus sales points for coming up with an innovative way to find more music buyers in the marketplace. As anyone in the industry can tell you, we need as many of them these days as we can get.
Facebook announced yesterday that it has more than one million businesses actively advertising on the social network. The “vast majority” of those businesses and advertisers are small businesses, according to Dan Levy, Facebook’s director of small business. Much of the feedback from these small businesses is to keep advertising simple on Facebook, and perhaps with that message in mind Facebook announced plans to cut the number of ad products in half in order to streamline the ad experience for those looking to use the network for marketing.
Coupled with the news from earlier today that desktop ad spending is decreasing, ComScore released new data that 46% of advertisements – even targeted advertisements – on websites are never seen by website visitors. This comes after more than a year of additional tracking by the company, which counts 22 of the top 25 U.S. advertisers as clients. But this new data likely comes from the fact that ComScore has reached out beyond premium ad publishers and blue-chip advertisers in the past year, and indeed many of the “lower tier” sites have in-view rates well below 50%. Nonetheless, the numbers paint an even starker picture for the world of desktop advertising and its future, especially compared to the targeting capabilities of the mobile environment.
According to a new study released from eMarketer, desktop-based advertising will peak in 2014 as more spending goes towards mobile advertising. The study suggests that U.S. desktop advertising will reach $35.39 billion in 2014, but by 2015 that number will begin to drop and by 2017 the figure will be $32.51 billion, which is nearly identical to numbers posted in 2012. Simultaneously, mobile advertising will continue its meteoric rise, hitting $11.76 billion this year alone. And by 2017, Mobile will almost equal desktop, reaching $27.98 billion. So far, Twitter has benefited the most from the mobile transition; the company will make more money from mobile advertising than from desktop advertising last year and mobile will take a bigger and bigger share of the company’s profits through 2015.
Twitter today inked a deal with WpP to expand its data-driven marketing. The deal will focus on tapping and interpreting Twitter’s massive data collection, and the deal will span several WPP unites including GroupM, Kantar, and Wunderman. This will likely mean more effective ad campaigns for marketers across the platform, and it will help expand Twitters footprint to regions like Japan, Turkey, Mexico and Brazil. This comes on the heels of Twitter’s Starcom MediaVest deal in April, which granted millions of dollars to preferred ad slots for clients like Microsoft, Coca-Cola, and Procter & Gamble.
LocalResponse uses special algorithms to monitor social media and power re-targeting based on users’ published social interactions. So for example, if a user tweets “I’m hungry”, Pizza Hut can re-target them with a banner ad.
As app stores become cluttered with apps from nearly every brand, the competition to reach the top of the stack and be discovered is fierce. Facebook added a solution to this problem to their mobile service in October. “App Install Ads” display a large photo and direct link to the appropriate app store purchase page in the mobile news feed, providing fast turnover for brands and revenue for Facebook to the tune of $375 million last quarter. The removal of a typical web link from the equation makes the install process even easier on consumers, so the concept is likely to stick as part of Facebook’s efforts to make itself a natural fit into the mobile sphere long-term.