Facebook’s first real ad network has a surprisingly narrow scope. App developers will probably take to it, but other advertisers should stick with Google for now and wait for future Facebook mobile innovation.
Various leaked reports of Yahoo’s strategy presentation to employees don’t reveal much more than a focus on personalization and acqui-hiring. Yahoo has valuable assets in content and audience, but it must focus on brand advertising and data analysis for targeting.
Yahoo isn’t giving up on ad technology, but the real action in online advertising is in social media. Facebook is getting hammered for not growing social media ad revenues fast enough, but it and Twitter are starting to take the right steps.
Google received an ultimatum from the European Commission’s antitrust head the same week it re-invented its vertical shopping search site as a pay-to-play program for merchants. While it’s a mistake to characterize Google as a one-trick pony, it’s worth examining just how vulnerable Google may be in its core businesses.
It looks like Facebook has set its IPO for May 18. The Wall Street Journal tries to be skeptical about Facebook’s business model, but several of the critical advertisers and agencies it quotes admit they’re increasing their spending on the social network. And a nifty comparison chart (what you can get in advertising for $1 million) hints at the ROI doubt on pretty much every kind of brand advertising. I don’t want to sound like a Facebook apologist – and certainly, its ad salespeople should answer their phones – but it’s always challenging to prove the value of brand advertising. Digital media should be more measurable, and online surveys and other techniques mean that testing ad effectiveness online can be cheaper than in traditional media. But it’s partly up to Facebook to start connecting those dots, and doing some of the media plan testing required. That, and prove that social marketing actually is more effective than display advertising.
Last week Yahoo announced it had hired Scott Thompson, currently the president of eBay’s PayPal business, as its new CEO. Thompson has product and technology cred, which means Yahoo should be fixable. With that in mind, here’s what he should do to get Yahoo growing again in order to retain its position as one of the biggest players in online advertising.
Call me a skeptical believer in social media marketing. I do think it will amount to something – in fact social media will help online advertising get beyond its direct-marketing roots into brand advertising. But right now Facebook’s revenues come from cheap inventory. It’s hard to spend a lot on social media yet; the industry hasn’t figured out what is the killer social format. But it’s showing signs of being a worthwhile marketing tool. Forrester has just published its Groundswell awards for B2B social media marketing. Take a look to see how smart marketers are saving money versus traditional marketing programs. And here’s a story of how a big ad agency, Draftfcb, is using Facebook to test its creative. That’s another cost-effective use of the medium – as a real-time focus group to help ensure advertisers spend their TV dollars wisely.
Amidst reports that it was having trouble unloading $1 billion worth of shares at a very rich valuation, Facebook last week started testing its first home-grown social commerce product, Facebook Deals. Already facing stiff competition from Groupon and LivingSocial, will Deals be Facebook’s next billion-dollar business? Competitors, marketers and developers hoping to leverage the Facebook platform need to figure out how Facebook will continue to grow.
YouTube has improved its monetization efforts, with more than 80 of the top 100 videos on the site serving ads now, up from 60 a year ago. That could help make YouTube a $1.3 billion business in 2011, according to a forecast from Citi.
“Dogs on skateboards. Cats playing the piano. Who would want to put their brand next to that?!” It’s the most common refrain in the web video biz.
Well, honestly, I’ve seen much worse on commercial TV, and you have too. And if millions of people are watching Tillman the skateboarding dog (at least 18 million views) and Nora the piano-playing cat (at least 12 million views), isn’t that audience valuable? Why are people so scared of advertising on user-generated content?
YouTube’s daily hits are irregular, and that’s a big part of its charm. You’re not tuning in at 8 p.m. for your favorite show; you’re getting sent a link by one of your friends, clicking on something related, browsing around to today’s top hit, and looking up from your screen half an hour later. According to comScore, YouTube viewers watch an average of 49.7 videos per month on the site. The real action on YouTube on a daily basis is unpredictable — it often comes from first-time uploaders with compelling content that separates them from the pack.
Yet YouTube only shows advertising against videos from its partners. Users are allowed to be partners, but only if they have an established library and audience. One of the top criteria for becoming a user partner is “You regularly upload videos that are viewed by thousands of YouTube users.”