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Facebook Briefly Trades Above I.P.O. Price

July 31, 2013 by

On Wednesday morning, shares of the world’s leading social network traded above $38 a share, the price at which the company first sold shares to the public more than a year ago.

The immediate catalyst for the rise was the company’s surprisingly strong second-quarter earnings report last Wednesday, which quelled many investors’ doubts about the company’s ability to make money from its legions of mobile users, and suggested that the company’s profit stream was growing.

Since last week’s report, shares have risen more than 40 percent. Early Wednesday, they touched $38.31 a share, although at midday, they were slightly below $37.

The company’s shares hit a low of $17.55 last fall, but since then investors have warmed to the company. Facebook has shown signs that it can significantly grow its advertising base and keep its 1.2 billion users engaged, despite competition from rival social networks like Twitter and other social sharing sites like Pinterest.

“Facebook was caught flat-footed by the shift to mobile,” said Mark Mahaney, an analyst with RBC Capital Markets. “It took them four or five quarters to catch up.”

Now, he said, “they appear to be set up as a sustainable high-growth business.”

Mr. Mahaney, whose firm has a $40 price target on the stock, said that across Wall Street, analysts had increased their projections of the company’s financial performance. Analysts now expect Facebook to grow its profits 30 to 35 percent a year through 2015.

Since stocks tend to trade as a multiple of a company’s future profits, those upgrades last week sent Facebook’s stock soaring.

Still, there are reasons to be concerned. Mobile messaging platforms like Snapchat and Whatsapp are grabbing the attention of many of Facebook’s younger users. Twitter is mounting a major effort to go after marketers, especially brands that typically advertise on television, as it prepares for its own likely public offering.

And Facebook risks turning off users with too many ads. Currently about 1 in 20 items in the news feed, the main flow of items that a Facebook user sees, are ads. During the company’s quarterly conference call with analysts, Mark Zuckerberg, the company’s chief executive, said that users were beginning to notice the number of ads, suggesting that the company cannot greatly increase their frequency without losing some users.

Although the company raised $16 billion from the initial public offering in May 2012, problems immediately followed.

The Nasdaq stock exchange botched the handling of buy and sell orders on the first day of trading. (A few months ago, regulators fined Nasdaq $10 million fine for the fiasco.) And in ensuing weeks, shares continued to fall. Many Wall Street investors questioned whether Facebook’s stock was truly worth $38 a share at the time of the offering.

Particularly worrisome was Facebook’s seemingly nonexistent mobile strategy at a time when Internet users were abandoning PCs for their smartphones. The company’s smartphone and iPad applications were clunky, and it was generating no revenue from mobile ads.

Facebook’s management, including Mr. Zuckerberg, recognized the problem and embarked on a crash course to revamp the company’s approach to mobile and better position the company for fast-growing emerging markets.

The company overhauled its apps, introduced ads into its users’ news feeds, and created a lucrative new category of revenue called app install ads. With the app install ads, a game maker, for example, can promote its new game in Facebook’s mobile software and give users an easy way to install the app with just a couple of clicks.

At the same time, Facebook introduced new advertising products meant to give marketers ways to more directly target specific groups of customers, which allowed the service to command higher advertising rates.

While mobile advertising continues to grow, and was about 41 percent of Facebook’s ad revenue in the second quarter, investors are also looking to new areas of potential profit growth. Those include video advertising in the news feed, which is expected to begin later this year, and the possible sale of ads in Instagram, the fast-growing photo and video sharing app that Facebook bought in 2012.

“All of those seem like relatively large low-hanging fruit, and they are starting to go after them,” Mr. Mahaney said.

Article source: http://www.nytimes.com/2013/08/01/technology/facebook-briefly-trades-above-ipo-price.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Media Decoder Blog: NBCUniversal Ad Campaign Bolsters Its ‘Upfront’ Presentations

April 2, 2013 by Leave a Comment

Just as April showers are supposed to bring May flowers, the many “upfront” presentations scheduled this month — wooing marketers and agencies before the start of the 2013-14 television season — are bringing complementary advertising efforts intended to reinforce those pitches.

For instance, the FX cable channel has started running ads, which include signs on New York streets, which carry the theme “Fearless.” The campaign is meant to reinforce the FX brand identity as a risk-taking channel, as evidenced by series like “Louie,” “Justified” and “Sons of Anarchy.”

And this week, the NBCUniversal division of Comcast will introduce a trade campaign that carries the theme “Content. Consumers. Collaboration. Amplified.” The campaign, with a budget estimated at $1 million, is intended to convey that NBCUniversal offers marketers and agencies a broad, diverse collection of networks, channels and Web sites on which to run ads – more than just a network, NBC, which has ratings problems in prime time and personnel problems in its morning and late-night slots.

Each ad will offer its own, modified version of “Amplified,” as in “Digital. Amplified,” “Comedy. Amplified,” “Social. Amplified” and “Journalism. Amplified.” There will also be an online presence for the campaign, at amplified.nbcuni.com, as well as print ads that use augmented reality, through a free app, Aurasma, to present short video clips.

The “Amplified” campaign is being created internally at NBCUniversal, by its integrated media group division. An agency named All Day Every Day, with offices in New York and Los Angeles, is working on the elements at amplified.nbcuni.com.

The goal is to promote “the power of our portfolio” and “our storytelling capabilities” for marketers, said Linda Yaccarino, president for advertising sales at NBCUniversal.

Asked if the campaign is being mounted now to help promote NBC, Ms. Yaccarino said it was being introduced because it was an “important time of year,” referring to the upfronts.

John Shea, executive vice president and chief marketing officer for integrated media at NBCUniversal, said, “The important thing we want our clients to know as we go into the upfront, and beyond, is that we’re able to work with them as one seamless portfolio.”

Several NBCUniversal cable channels like Oxygen have already made their upfront presentations, while others, including Bravo, E! and Syfy, will host them this week and next.

NBCUniversal also plans a companywide digital presentation-cum-party in New York on April 24, before the week of so-called Digital Content NewFronts begins the following week.

The print ads are scheduled to start appearing on Wednesday, in publications that include The Hollywood Reporter, The New York Times and The Wall Street Journal. There will be online ads as well, on cynopsis.com and mediapost.com.

Article source: http://mediadecoder.blogs.nytimes.com/2013/04/02/nbcuniversal-ad-campaign-bolsters-its-upfront-presentations/?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Advertising: Paper Finds a Fit in a Wi-Fi Society

February 28, 2013 by Leave a Comment

The switch in subject matter began last week, when the Domtar Corporation and its agency, the Charlotte, N.C., office of Eric Mower Associates, added four video clips-cum-commercials to a campaign that carries the theme “Paper because.” The humorous videos are billed as entries in a series of “Really, Really Short Films” that started with the introduction of the campaign, aimed at so-called thought leaders in fields like business and education, in September 2010.

The first batch of videos, as well as the second, released in December 2011, offered wacky vignettes in a workplace where a crusade to go “paperless” was carried to extremes. For instance, in one video, titled “Black Market,” an office worker begs her colleague for “more of that stuff you got me last week,” which turns out to be 20 sheets of paper. The new videos, by contrast, take place in locations like homes and restaurants.

The videos are in addition to other elements of the “Paper because” campaign, which include, of course, print advertisements. Those ads make “Paper because” points like “A lot of places worth going to don’t get a signal, and hopefully never will.”

Estimates are that Domtar has spent more than $10 million on the campaign.

The new videos are indicative of how marketers and agencies approach long-running campaigns. How long should ads continue as they are? When ought changes come? Ads may run past the point they are effective, but they may be replaced before consumers have absorbed the pitch because those who were involved in making them have had their fill.

“When you work on a project, sometimes you’re tired of it before it goes out,” said Kathy Wholley, director for advertising and communications at the Domtar operations center in Fort Mill, S.C.

It is important to remember that “this campaign is still reaching people for the first time,” she added, noting messages on Twitter that say something like this: “ ‘Look what I just found. This video is hilarious.’ ”

Still, taking a fresh look at a continuing campaign makes sense, Ms. Wholley said, as in this instance, when a thought emerged about how “there are times and places” outside the office world “where paper is appropriate and useful.”

In one new video, “Anniversary,” a couple is seated in a restaurant. The wife gives a card to her husband, who, it turns out, sent her an e-card she did not receive. At the end, the scene fades to black and the husband’s plaintive voice is heard as the wife leaves: “Honey? Where are you going? Did you check your spam filter? Did you?”

Another commercial, “Waiter,” takes place at a restaurant table being waited on by a waiter without pad, pen or pencil. “I got it,” he insists, referring to the customers’ orders, which he recites back twice — wrong each time.

A third commercial, “Bridal Shower,” takes place in the home of a bride-to-be who receives an ugly vase as a gift. She is glum until she learns the gift-giver included the receipt. The video ends with these words: “Paper can make any gift, the perfect gift.”

A fourth commercial, “Tech Support,” brings to life a Catch-22 for the 21st century. A man is at home, talking to a woman in a call center about a router he bought.

“I’m having trouble connecting to the Internet,” says the man, who is upset there is no manual. The woman replies, somewhat bored, “You have to download the PDF from the Web site.”

The man is incredulous. “So you want me to get on the Internet to download a PDF from your Web site so I can get on the Internet?” he asks.

The first two video series were “focused on office situations,” said Patrick Short, partner and creative director at Mower in Charlotte, because “a lot of sales” for Domtar are made “with office paper.” For the next iteration, “we thought to open it up and take it out of that environment,” he added, using “ideas and concepts coming from personal experiences.”

“I’ve been in restaurants where the waiter” who refused to write down the orders “comes back three times,” Mr. Short said, and he was once frustrated when “I bought something from Apple and there was no manual with it.”

Mr. Short, an art director, works on the campaign with Ruben Lopez, an associate creative director at Mower who is a copywriter. Whereas the first videos were “a little bit over the top,” Mr. Short said, the new videos are “more like ‘Seinfeld’ moments,” making them more “relatable” to viewers.

At the coming South by Southwest Music and Media Conference in Austin, Tex., Mr. Short said, Domtar and Mower will offer attendees “a ‘paper hot spot’ instead of a Wi-Fi hot spot.”

The new videos appear as ads on the Web sites of publications like National Geographic and The New York Times. The new videos, and their predecessors, can also be watched on the Web site of the campaign, paperbecause.com; the Domtar corporate Web site, Domtar.com; the Domtar fan page on Facebook; and the campaign’s channel on YouTube, youtube.com/paperbecause.

As for gibes about a campaign that uses video to promote the merits of paper, Ms. Wholley said: “We actually think it gives us a little more credibility. It shows we don’t have our heads in the sand.”

Article source: http://www.nytimes.com/2013/02/28/business/media/paper-finds-a-fit-in-a-wi-fi-society.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Automated Bidding Systems Test Old Ways of Selling Ads

November 16, 2012 by Leave a Comment

In digital advertising, that formula is being increasingly tested by fast-paced, algorithmic bidding systems that target individual consumers rather than the aggregate audience publishers serve up. In the world of “programmatic buying” technologies, context matters less than tracking those consumers wherever they go. And that kind of buying is the reason that shoe ad follows you whether you’re on Weather.com or on a local news blog.

That shift is punishing traditional online publishers, like newspaper, broadcast and magazine sites, who are receiving a much lower percentage of ad dollars as marketers use programmatic buying across a much broader canvas. Some sites, like CNN.com, refuse to even accept advertising through programmatic buying because they do not want to cede control over what ads will appear.

“It’s allowing advertisers to assign value to media rather than publishers,” said Ben Winkler, the chief digital officer at OMD, an agency in the Omnicom Media Group. Publishers, he said, “can’t control the price, but they can control the quality of the content and the audience on that site.”

About 10 percent of the display ads that consumers see online have been sold through programmatic bidding channels, according to Walter Knapp, the executive vice president of platform revenue and operations at Federated Media, one of the world’s largest digital advertising networks.

Advertisers like Nike, Comcast, Progressive and Procter Gamble are now using the programmatic buying, and luxury advertisers are starting to follow. According to data from Forrester Research, all ads traded on exchanges, as programmatic ads are, increased more than 17.5 percent to about 629 billion impressions (the number of times an ad appears) in 2012, from 535 billion in 2011.

That growth is affecting publishers of all stripes, but few are willing to discuss their internal numbers. “For a publisher to admit they’ve been hurt is tough for the big guys,” said John Ebbert, the executive editor and publisher of the Web site AdExchanger.

When The New York Times Company announced its earnings last month, the company posted a profit, but said that digital advertising fell 2.2 percent. Jim Follo, the company’s senior vice president and chief financial officer, attributed the dip, in part, on a “shift toward ad exchanges, real-time bidding and other programmatic buying channels that allow advertisers to buy audience at scale.”

Programmatic buying began as a way for advertisers to place lower-cost ads for products like teeth-whitening products and belly fat pills that filled up the back pages of Web sites. But the practice has gained in sophistication and breadth, with major advertisers and many of the world’s largest ad agencies creating private exchanges to automate the buying and selling of ads.

Programmatic buying includes a number of different technologies and strategies, but it essentially allows advertisers to bid, often in real time, on ad space largely based on the value they have assigned to the consumer on the other side of the screen. Say, for example, that Nike wants to sell running gear to a particular consumer who has a high likelihood of buying shoes based on the data it has collected, including the type of Web sites that consumer typically visits. Because the ad-buying is done through computer trading, the price for that space can change rapidly.

“Accessing media is a commodity now,” said Sheldon Gilbert, the founder and chief executive of Proclivity Media, a company that specializes in digital advertising technologies. “Instead of having to commit four months in advance, you can now bid and buy an individual impression in real time.”

In the short run, the growth in programmatic buying has forced overall ad prices to fall. A media buyer who would have once spent $50,000 worth of advertising on a publisher’s site, at, say, an $8 cost-per-thousand, can now buy ad impressions on any Web site on which they happen to find their intended audience and pay less per ad, Mr. Ebbert said.

“There is no scarcity of premium online,” said Dan Salmon, an equity research analyst at BMO Capital Markets. “There’s only one Super Bowl, but there are lots of different places to buy banner ads online.”

While the “halo effect” of buying an ad against premium content has not disappeared entirely — many advertisers still want front-page placement on popular Web sites — the shift is prompting publishers to rethink how they sell their ads.

Clark Fredricksen, the vice president for communications at eMarketer, a data company, said that publishers were “going to have to double down to prove the value of their inventory as they compete with other, cheaper inventory.”

And some publishers are jumping into the game themselves. During the most recent AOL earnings call, Tim Armstrong, the company’s chairman and chief executive, said it was bullish on programmatic buying, despite being a publisher itself with properties that include TechCrunch and The Huffington Post. The company trades its ads through its own ad network, Ad.com, and others like it.

“We will continue to invest in people and technology to capture the programmatic business of advertising,” Mr. Armstrong said.

Like AOL, Weather.com is also aggressively moving into programmatic bidding. “Instead of thinking of us a publisher, think of us as a marketing engine,” said Curt Hecht, the chief global revenue officer for the Weather Company.

Neal Mohan, the vice president for product management at Google, which sells advertising though its DoubleClick network, says that in the long run, publishers could see higher returns from programmatic advertising. In the last year, the number of advertisers and publishers using the DoubleClick platform has doubled, Mr. Mohan said, while the rates for those using the platform have increased 11 percent. But that means publishers will have to play by different rules.

“Context still matters and so does placement,” Mr. Ebbert said. “But it’s only one element.”

Article source: http://www.nytimes.com/2012/11/16/business/media/automated-bidding-systems-test-old-ways-of-selling-ads.html?partner=rss&emc=rss

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Ad Companies Face a Widening Talent Gap

October 31, 2011 by Leave a Comment

A talent gap is growing between the skills that many new advertising jobs require and the number of people who have those skills. The dilemma, one familiar to many industries across the country, is particularly acute for jobs that require hard-core quantitative, mathematical and technical skills.

The talent pool, advertising technology company executives say, is not a deep one. And those who have the skills are in high demand, often fetching annual salaries that can reach $100,000.

“There is pain for hiring in digital at all levels,” said John Ebbert, managing editor of AdExchanger.com, a Web site dedicated to advertising technology.

“The marketers, the publishers, the ad tech companies, the agencies, data management companies — they’re all going for the same type of employee.”

The job board on AdExchanger, which is updated every 45 days, has postings for positions with titles like “Yield Optimization Manager” and “Director of Platform Marketing.” The number of jobs on the board has nearly doubled in the past year, Mr. Ebbert said, to 80 jobs every 45 days from 40.

The digital talent gap is driven in part by the enormous amount of user data that ad tech companies are collecting for agencies and marketers — data that is instrumental in directing ads to consumers and analyzing trends. New hires are needed for a variety of tasks, including writing code, creating digital advertisements, Web site development and statistical analysis.

“The demand has far outstripped the supply,” said Joe Zawadzki, the chief executive of MediaMath, an ad tech company in New York. “The number of things that you need to know is high and the number of people that have grown up knowing it is low.”

Mr. Zawadzki said that as of last week his company had 13 positions open and had gone to job boards, recruiters and even hosted technology-focused meet-ups to find people. In September, the company hired its first senior vice president for human capital to help with recruitment.

On average, Mr. Zawadzki said, it takes two to three months to find the right person — someone with a combination of pure quantitative skills, applied marketing skills and an understanding of how the advertising technology business works. With a limited talent pool, many ad tech firms are after the same people.

“Half my job is maintaining a mental Rolodex of people that are at various places,” Mr. Zawadzki said.

Edwin Lee, 40, is typical of the candidates that many ad tech companies are competing for. Mr. Lee, an economics major at Stanford who has a master’s degree in business administration from the University of Southern California, was hired as an account director at MediaMath in September. He came to the company after leaving a Silicon Valley start-up and began his new job after entertaining a variety of options, including other small start-ups and Google.

“For me it was like, ‘The world’s my oyster here — what do I want to do?’ ” said Mr. Lee, who describes his new job as “helping companies and clients make sense of something they don’t really understand and they hear a lot about.”

The difficulty in finding qualified candidates is affecting advertising agencies as well, said Jerry Neumann, a venture capitalist from Neu Venture Capital who invests in ad tech companies like 33 Across and YieldBot.

Agencies have not traditionally hired for skills like “number crunching, data visualization, quantitative analysis,” Mr. Neumann said. “They’ve never needed those in the past.” Instead, media buyers and even those on the creative side of agencies need to prepare for a new digital reality.

“The kind of media buying that’s happening now is much more quantitative” Mr. Neumann said. “The agencies are staffed for qualitative.”

Article source: http://feeds.nytimes.com/click.phdo?i=123f4a2190c0ed5f8e51ccd05735a768

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Advertising: Now Banks Take a Turn at Coupons

June 14, 2011 by Leave a Comment

A company called BillShrink has worked with more than 2,000 banks to offer a new service — part loyalty card, part daily deal — called Statement Rewards. Under the program, online bank statements may include deals and discounts for bank customers based on their recent spending.

If, for example, a customer spent more than $100 at Starbucks in a month, Starbucks could offer a $5 coupon, complete with a small corporate logo, right under the statement’s listing for the last Starbucks purchase.

The same deals could appear on a smartphone so a customer walking near a Starbucks could see how close they were geographically — and financially — to getting a discount at the nearest store.

In the process, marketers gain access to preferred customers, while the banks and BillShrink get a small piece of each transaction. And the consumer now receives a bank statement, which most people regard as confidential and private, that is loaded with advertising.

The service comes at a time when marketers are increasingly moving to offer daily deals and loyalty programs to their customers and banks are reeling from legislation that has curbed fees they charge to consumers and retailers.

“The banking world is in a very tumultuous situation,” said Schwark Satyavolu, the co-founder and chief executive of BillShrink. “They need to do things that are consumer friendly, where the consumer actually gains when they make some revenue.”

BillShrink worked with Jack Henry Associates on the service, which will be introduced this week. In addition to the geo-location technology that allows deals to be sent to smartphone applications, marketers can also track customers’ purchases and set silver, gold and platinum reward levels that give bonuses for each level. They can also dangle future rewards in front of customers in exchange for a few more purchases at a retailer.

Customers will be able to use their debit cards to redeem their rewards, eliminating the need to carry multiple loyalty cards. “Your debit card or credit card becomes the master loyalty card,” Mr. Satyavolu said.

Despite the obvious marketing angle, the service may also help consumers think more favorably about the banks they do business with, said Deborah Wood, the general manager of marketing and industry research for Jack Henry Associates. “The consumer probably hasn’t looked at the bank as a way to save money,” Ms. Wood said.

The bank deals may appear intrusive to some users who are wary of aggressive marketing techniques, but users will be able to opt out of the service. Jack Gillis, the director of public affairs at the Consumer Federation of America, said the deals were indicative of a larger trend — the prevalence of advertising in our lives.

“Is there an advertising-free space we can live in?” Mr. Gillis asked. But given the ubiquitous nature of advertising, consumers have become increasingly accustomed to highly tailored ads. “If in fact you are purchasing things from a retail establishment, you are probably going to appreciate a discount,” Mr. Gillis said.

Daniel J. Kim, the founder and chief concept officer for Red Mango, a frozen yogurt company, said the company was considering using the Statement Rewards platform precisely because it allowed the company to offer deals based on how much customers spend and where they are located. “I think there’s a tremendous opportunity for personalization,” Mr. Kim said. “Before social media we just didn’t have access to this type of consumer.”

Jack Henry’s network of banks reaches nearly seven million customers in the United States and the range of banks included in the initial stage hold $7 million to $30 billion in assets. The average bank in the BillShrink program holds $500 million to $1 billion.

Article source: http://feeds.nytimes.com/click.phdo?i=10bcb4b959f4c5f13f11079789186746

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