Facebook grew 48% this year; Apple shrank for the first time in a decade

April 27, 2016

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Facebook are reporting their annual earnings today.

After a string of strong quarterly performances, the social media giant has a high bar to impress investors.

Analysts expect 48% revenue growth versus last year, with mobile ads accounting for 80% of the total.

Meanwhile Apple posted its first revenue decline in more than a decade.

Sales of the iPhone, the company’s most important product, fell for the first time.

Apple also missed expectations (paywall) for its revenue, earnings, and quarterly guidance, sending shares down more than 6%.

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The next booming ad market? Older folks

April 26, 2016

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In just 100 years, the shift in global population from young to old has been astonishing.

In the mid 1950’s there were three times as many people under five as over 65.

By 2050 there will be twice as many people over 65 as there will be under 5.

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According to the Ad Contrarian: One of the most startling demographic shifts in human history is under way, and marketers — completely obsessed with millennials — are paying no attention to it.

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Making ads “personal” is not the answer

April 26, 2016

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Everyone in ad agency constantly bangs on about how we need to use data to make targeted “personal ads”.

There are two problems with this. The first is data privacy laws.

Some believe that new data laws already passed in the UK will make current data approaches illegal by 2018. That’s even without the limits applied by the EU.

Secondly, a personal targeted approach does not mean that ads “feel” personal.

An alternative approach, outlined by Dentsu Aegis Network’s head of data Scott Thompson  is to target what he calls “event clusters” rather than people, which pretty soon, may be illegal anyway.

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Netflix stock has plunged

April 26, 2016

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Netflix expects to add two million new international customers in 2016, according to a statement Monday on its website.

That is way less than most investors were expecting.

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They were hoping for 3.45million new subscribers.

The problem is that Netflix has not expanded into non-English language foreign territories fast enough.

Shares slid 13 percent to $94.34 at the close Tuesday in New York, the most since October 2014, making it the second-biggest laggard in the Standard and Poor’s 500 Index.

The stock had already fallen 2.8 percent to $108.40 at Monday’s close, weighed down by Amazon.com Inc.’s introduction of a competing standalone video-streaming service.

With the losses, Netflix has shed about $7.4 billion in market value since Friday.

This year, Netflix will spend $5 billion on programming, exceeding any other U.S. TV network, reports Bloomberg BusinessTechnology.

To help pay for that growing budget, the company will begin raising prices next month for millions of U.S. and foreign customers.

Investors have permitted the company to run at close to break-even because of its promise of significant profits starting next year.

 

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The benefit of bots

April 25, 2016

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Why is Facebook and Microsoft going on about bots? Why are they the next big thing?

The answer is Natural Language processing.

For the first time in yonks, computers can take what we say and put it into structured instructions it can use, says Alastair Little at Dentsu Aegis Network.

This means that  – in theory – we can say what we want to a computer and they will understand it.

The benefit for brands is that we can now order their products on whatever platform – Snapchat, Facebook, What’sApp – without having to open an App and figure put how to use it.

So wherever we are we can call a taxi and never have to go on Uber’s app again.

(And, in some cases never leave Facebook again.)

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Amazon Prime is going to war with Netflix

April 25, 2016

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Amazon Prime is going to war with Netflix.

That’s not surprising. Over 30% of all North American internet traffic is for Netflix. Put simply, the internet is Netflix and a bunch of other fun stuff.

Now Amazon want a piece of that sizeable pie.

Amazon is now offering a separate monthly subscription just for its TV and movie collection — the part it calls Prime Video.

Amazon has never made Prime Video available as its own product before. It’s always been a part of the bundle.

Amazon is clearly positioning Prime Video as a head-on competitor to Netflix (and Hulu.)

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Content websites are now in panic mode. The reason? Facebook

April 25, 2016

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As I predicted in January, the content website biz is in trouble.

And they are panicking. 

According to The New York Times, earlier this month, a couple of inventive young go-getters at BuzzFeed tied enough rubber bands around the centre of a watermelon to make it explode.

Nearly a million people watched the giant berry burst on Facebook Live. It racked up more than 10 million views in the days that followed.

How can the news biz compete with that? Answer: it can’t.

This month, Mashable, a site that had just raised $15 million, laid off 30 people. Salon and even Buzzfeed have had to field enquiries from worried investors.

As social networks have grown, visits to websites in some ways have become unnecessary detours, leading to the weakened traffic numbers for news sites.

Advertisers have followed suit. In the first quarter of 2016, 85 cents of every new dollar spent in online advertising will go to Google or Facebook, said Brian Nowak, a Morgan Stanley analyst.

Publishers are responding in a variety of ways.

With the help of venture capital funding, companies like BuzzFeed and Vox are investing heavily in video production with a focus on TV and film.

Others, like Mashable, are diverting resources to increasing their audience on Facebook, hoping that enough money — through revenue-sharing arrangements with the company — will follow.

Others have tried affiliate marketing or native content.

Most would admit that if they were launching today, they would not be a website at all. They would be a Facebook page.

As for monetizing it? That question has not been answered.

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Retail, beauty and fashion LOVE advertising on Instagram. The reason is simple

April 25, 2016

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Seven months ago, Instagram opened advertising to all brands.

After retail, beauty and fashion are the biggest categories to advertise.

The nature of advertisers suggest Instagram’s high-end look and feel resembles (and can perhaps be a replacement for) the pages of glossy magazines.

Meanwhile Snapchat and Facebook encourage video, humor, filters and participation, all characteristics of consumer product campaigns.

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