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Analysts Mixed Over '09 Online Ad Spend Predictions November 19, 2008

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by Gavin O’Malley, Wednesday, Nov 19, 2008 8:00 AM ET borrell chartBorrell Associates raised eyebrows recently with its bleak prediction that online ad spending will top out next year. But following a brief radio silence, industry thought leaders are responding–and in some cases, challenging the research firm’s prognosis.

“There is definitely a softness in the market that we haven’t seen in years,” said Clark Kokich, CEO of the Microsoft-owned online ad agency Razorfish.

“Online ad spends are now a significant part of the media mix, and they’re not going to be immune from scrutiny,” Kokich added. “If consumer spending continues to decline, clients will have to rein in their spending.”

Read The Rest—>Analysts Mixed Over ‘09 Online Ad Spend Predictions

Google Opens Ad Network To Third-Party Ad Tags May 20, 2008

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by Gavin O’Malley, Tuesday, May 20, 2008 7:45 AM ET
headshot of Jason McKay Pres of UnicastTo give advertisers an easier time of running campaigns across multiple networks, Google on Monday opened its ad network for certified partners to serve and track their ads.

“This will empower advertisers to work with approved third parties to serve and track display ads, including rich-media ads, across the Google content network through AdWords,” said Rajas Moonka, a senior business product manager at Google, in a blog post.

For their part, participating rich media agencies are happy to have access to Google’s massive content network.

“We were in talks with Google for a year on this,” said Jason McKay, president of Unicast. “From an advertiser perspective, I think Google’s done a fine job at monetizing their network, but cooperation can only help the situation.”

As of Monday, the other certified agencies include Eyeblaster, EyeWonder, Interpolls, PointRoll, and Google’s own DoubleClick Rich Media. The certified ad-servers are DoubleClick and Mediaplex, while Google said it plans to add more agencies to the network as they become certified. In March, Google announced that it had closed its $3.1 billion acquisition of DoubleClick.

The move could be perceived as a lack of confidence on Google’s part to effectively sell all of its ad inventory, according to Forrester Research analyst Charlene Li. “It does raise the question,” she said.

More likely, said Li, Google is deftly opening its doors to specialists who can generate more revenue for everyone to share. “If others can better monetize your inventory, and create more revenue, you let them,” insisted Li.

The network was previously closed, according to Moonka, while Google built the proper tools to review ad compliance with its own standards.

“Advertisers and agencies will now be able to manage their Google content network campaigns with the same systems they use for other online campaigns,” Moonka said. “For publishers on the network, this program offers a way to expand their advertiser base and enable advertisers to better understand the value of their inventory.”


Gavin O’Malley can be reached at gavin@mediapost.com

CondéNet Links With MySpace May 14, 2008

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by Gavin O’Malley, Wednesday, May 14, 2008 7:00 AM ET Product Manager for Distr Content of CondeNetFurther exploring the latest trend in online content distribution, CondéNet has launched MySpace applications for its top properties, including Style.com, Epicurious.com, Wired.com and its teen girl-focused flip.com.

“The idea that users don’t have to come to our sites to consume our content isn’t new,” said Chris Gonzalez, product manager of distributed content at CondéNet. “But, like widgets, social networking applications are dynamic and fully interactive.”

Two weeks ago, Style.com was the first to debut its application, Fashion Flash, which offers bits and bites on fashion, shopping, beauty and celebrity style. In its first week, more than 1,200 users installed the tool–without any promotion or marketing, according to Gonzalez.

The Epicurious.com application, Recipe of the Day, will serve up a different food dish each day, drawing from a selection of some 25,000 professionally created and tested recipes.

The applications are the result of a Developer Platform, which MySpace launched in February, and which features documentation and API tools for developers to build and test applications. The platform was a direct response to the success that rival Facebook has had with its own open developer program.

Users can “friend” the applications and embed them on their profile pages. As a result, the applications can access users’ publicly available profile information, including friends lists, interests, photo albums and video, as well as status and mood.

Notably, Gonzalez made a point to draw a distinction between flip.com and the other sites involved in the new application initiative.

In January, the stand-alone teen community had an audience of just 300,000 users after a year of operation. As a result, CondéNet decided to relaunch flip solely as an application, which users can attach to their social network pages of choice. The first to get the new flip application was Facebook.

“These are all sites that are successful on their own,” Gonzalez said. “The case of flip is a little bit different.”

To date, there are no plans to monetize these new content distribution channels, Gonzalez said.

“We do believe there is a future in distributed media,” he said. “But this is still an area for experimentation.”

Gavin O’Malley can be reached at gavin@mediapost.com

WPP's G2 Grabs Refinery July 6, 2007

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WPP’s G2 Grabs Refinery
by Gavin O’Malley, Friday, Jul 6, 2007 6:00 AM ET
IN AN IRONIC TWIST ON this week’s theme of American independence, WPP Group’s G2 Worldwide has acquired Refinery — one of the few remaining independent digital agencies in North America. Headquartered near that most “liberated” of U.S. cities, Philadelphia, the 12-year-old Refinery generated revenue of $21 million last year. With a staff of 79, its clients include Merck, Campbell’s, Merrill Lynch and Amgen. The shop will now be integrated with G2’s North American business unit, G2 Interactive, operating under the leadership of president John Paulson.

Refinery is the latest in a string of acquisitions for G2, which specializes in digital communications, direct marketing, shopper marketing and design. Last month, it acquired Star Echo, a China-based agency offering activation marketing throughout that region. Other recent grabs include MDS Boole, a data and metrics consultancy in Spain.

Rather than expanding for expansion’s sake, however, Refinery offers G2 specific technical expertise, particularly in the area of search engine marketing. (Refinery owes its strength in SEM to its acquisition of Philadelphia-based search engine marketing firm directMASS in 2005.)

“In today’s market, it is not enough to excel at strategy and creative….We have to be able to deliver the goods in technology, analytics and operational excellence too,” Joe Celia, chairman and CEO, G2 Worldwide, said in a statement.

Industrywide, independent ad agencies have become a rare breed. Publicis Groupe arguably sounded the death knell in December with its agreement to buy online and direct marketing shop Digitas. And this year, in response to Google’s plan to buy DoubleClick, Microsoft agreed to take Avenue A/Razorfish off the market with its planned acquisition of aQuantive.

Remaining heavies include AKQA, Wieden+Kennedy and imc2 — all privately held –along with the publicly traded Sapient, followed by a slew of smaller shops, including Glow Interactive, IQ Interactive, i33 Communications, Slingshot, and Greater Than One.

In this increasingly digital age, interactive agencies have also attracted non-traditional suitors. Earlier this year, for example, magazine publisher Meredith acquired Genex, a top 50 interactive shop, along with New Media Strategies, a firm specializing in online social media and word-of-mouth marketing strategies.

This year, G2 has expanded its client roster with digital wins in North America from Campbell’s and Canon; Visa for the Olympics in Asia; and additional assignments in Europe and Latin America from longtime client The Coca-Cola Company.

With 86 offices in 42 countries around the world, G2’s other clients include The Absolut Spirits Company, Adobe, The Coca-Cola Company, GlaxoSmithKline, Kodak, Kraft, Mars, Nokia, Pfizer, Procter & Gamble and Volkswagen.

Behind only Aegis Group, WPP’s GroupM Interaction is the second-largest digital network holding company–with 1,224 digital staffers worldwide, 619 of whom are stationed stateside–according to agency billings researcher RECMA.

Univision Taps Maven To Power Consumer Video Portal June 11, 2007

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Univision Taps Maven To Power Consumer Video Portal
by Gavin O’Malley, Monday, Jun 11, 2007 6:00 AM ET
UNIVISION ONLINE HAS TAPPED MAVEN Networks to power its new consumer video portal targeting the Hispanic community.

Univision last week launched a video portal on its Web site, Univision.com, where visitors can now view clips from Univision TV shows, interviews with Hispanic celebrities, music videos, news and sports clips.

Specifically, Maven is helping Univision scale its digital delivery platform as the online Hispanic community continues to grow, and with it Univision.com’s audience.

“Hispanic online users are expected to grow to over 20 million by 2010, and clearly this is a vital audience,” said Hilmi Ozguc, founder and CEO of Maven Networks.

The interactive subsidiary of Univision Communications has also partnered with major wireless carriers to launch a wireless video subscription service through Univision Movil, and plans to launch a new social networking service shortly.

The video portal is part of Unilever’s larger effort to vacuum in online ad dollars with new digital initiatives including a Web-only novella being co-produced with Unilever. The novella, which is expected to debut in July, features Unilever’s Caress body-care brand and follows extensive research by Unilever about how to target a growing young Latin female audience.

Univision has long dominated the three Spanish-language networks, with the NBC Universal-owned Telemundo and Telefutura left fighting for distant second place.

Univision.com, meanwhile, is the most visited Spanish-language Web site in the United States with over 15 million unique browsers per month, according to internal metrics accredited by the MRC.

Univision Online showed strong growth in the first quarter, increasing page impressions by 27% and unique visits by 46% year-over-year, the company reported in March.

Media companies using Maven’s Internet TV platform to stream video online include 20th Century Fox, A&E Television Networks, CBS’s CSTV, Hearst, Sony Pictures Television and Univision Online.


Gavin O’Malley can be reached at gavin@mediapost.com

NBC Digital Under New Management May 30, 2007

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NBC Digital Under New Management
by Gavin O’Malley, Wednesday, May 30, 2007 6:00 AM ET
THE DIGITAL END OF NBC Entertainment came under new management Tuesday with the appointment of Ben Silverman and Marc Graboff as co-chairmen of NBC Entertainment and NBC Universal Television Studio.

Along with overseeing all aspects of the network’s prime-time, late-night and daytime programming–along with the network and studio’s creative, marketing, business and financial components–Silverman and Graboff will now run the entertainment division’s digital efforts, including NBC.com.

Silverman–best known for producing “The Office,” “Ugly Betty,” and “The Biggest Loser,” as well as bringing “Who Wants to be a Millionaire?” and “Big Brother” stateside–brings extensive digital expertise to his new role, according to NBC President and CEO Jeff Zucker.

“Ben has been a leader in creating digital extensions,” Zucker said during a press call on Tuesday.

Kevin Reilly, who served as president of NBC Entertainment for the past three years, will leave the company.

Jeff Gaspin, recently appointed president of NBC Universal Cable and Digital Content, will maintain his digital responsibilities with an added focus on content distribution efforts, according to Zucker.

In addition, Vivi Zigler, executive vice president, NBC digital entertainment and new media, will continue reporting to Gaspin along with Silverman and Graboff.

Despite NBC’s continued failure to improve its prime-time rating, the management change was solely a result of Silverman’s availability, Zucker said.

“This was really a matter of opportunity and Ben becoming available,” he said. Zucker, though, did admit: “One of our major goals is to turn around NBC’s prime-time performance.”

Per the appointment, Silverman’s production company, Reveille, is getting a two-year extension to the current first-look deal between it and NBCU. (NBCU, however, is not buying Reveille, as members of the media have speculated.) NBC’s existing agreements with Reveille will be unaffected by Silverman’s appointment, Zucker said.

The appointments represent another stage of NBC’s realignment being implemented by the company’s president-CEO Jeff Zucker.

In February, Beth Comstock was appointed president of NBC Universal Integrated Media, where she is now heading sales for two broadcast networks, several cable channels and all digital outlets. (Zucker set the bar high for Comstock–forecasting in December that NBCU could bring in $1 billion in digital revenue in 2009.)

Gaspin, meanwhile, was appointed president of NBC Universal Cable and Digital Content; he had long been responsible for the network’s digital content as president of cable entertainment, digital content and cross-network strategy.


Gavin O’Malley can be reached at gavin@mediapost.com

IAB: Online Ads Soar 35% in 2006, To $16.9 Billion May 24, 2007

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IAB: Online Ads Soar 35% in 2006, To $16.9 Billion
by Gavin O’Malley, Thursday, May 24, 2007 6:00 AM ET
BRANDED DISPLAY ADS AND SEARCH placements helped the online ad industry post its best year ever in 2006, according to numbers released Wednesday by the Internet Advertising Bureau and PricewaterhouseCoopers. Overall, revenue increased 35% last year to $16.9 billion–due in large part to record fourth-quarter revenue of $4.8 billion.

Both search revenue and display revenue climbed 31% year-over-year, to $6.8 billion and $5.4 billion, respectively. Search accounted for 40% of last year’s revenues, slightly lower than the 41% it commanded in 2005. Display advertising, classifieds and referrals accounted for 32%, 18% and 8% of last year’s full revenues, respectively.

“The ability for these marketers to achieve both performance-based and branding objectives with interactive advertising is the foundation for this exceptional growth,” explained David Silverman, partner, Assurance, PricewaterhouseCoopers.

Consumer-related advertisers accounted for the largest revenue category at 52%–up from 51% in 2005. Financial services, the second-largest category, accounted for 16%, followed by computing advertisers with a 10% share.

Within the consumer category, the biggest sub-categories were retail, with a 47% share; automotive with 22%; and leisure with 13%. The industry remained highly concentrated among the top 10 sellers, which accounted for 69% of revenue last year. Still, this was less than the 72% that top sellers controlled in 2005.

The IAB expects last year’s growth to continue apace, according to Randall Rothenberg, president and CEO of the bureau. “We have every confidence that this growth trend will continue as marketers allocate more of their total marketing dollars to interactive and the industry delivers effective and innovative platforms for connecting with consumers,” Rothenberg said Wednesday.

Search, display, classifieds and lead-generation all will continue to grow at a healthy rate, with an increase in both performance-based and CPM, or impression-based pricing, the IAB said. In addition, consumer advertisers will continue to represent the largest category of Internet ad spending.

ADVERTISING FORMATS

2006 (Ttl =$16,879)

2005 (Ttl = $12,542M)

Type of Advertising

$

% share of market

$

% share of market

Display Advertising

3,685

22%

2,508

20%

Sponsorship

496

3%

627

5%

Slotting Fees

0

0%

125

1%

Rich Media (including Broadband Video)

1,192

7%

1,004

8%

All Display

5,373

32%

4,264

34%

Keyword Search

6,799

40%

5,142

41%

Classifieds

3,059

18%

2,132

17%

E-mail

338

2%

251

2%

Lead Generation*

1,310

8%

753

6%

TOTALS:

16,879

100%

12,542

100%


INDUSTRY CONCENTRATION

FY 2006

FY 2005

Top 10

69% ($11,647)

72% ($9,030)

Top 25

82% ($13,841)

86% ($10,786)

Top 50

92% ($15,529)

95% ($11,915)

PRICING MODELS

FY 2006

FY 2005

CPM or Impression

48% ($8,102)

46% ($5,769)

Performance Deals

47% ($7,933)

41% ($5,142)

Hybrid

5% ($844)

13% ($1,630)

Source: PricewaterhouseCoopers/Interactive Advertising Bureau

Get the full report here.

Gavin O’Malley can be reached at gavin@mediapost.com

Has Facebook's Ship Already Sailed? May 22, 2007

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Has Facebook’s Ship Already Sailed?
by Gavin O’Malley, Tuesday, May 22, 2007 5:51 AM ET
WHILE FORTUNES ARE FOREVER CHANGING for Web companies, analysts are now willing to assert that Facebook missed the boat when it refused to be acquired last year.

“They’re not going to see that kind of money again,” said Jupiter Media analyst Emily Riley at an industry event on Monday.

Riley, of course, was referring to Yahoo’s effort to buy the thriving social network for around $1 billion–a deal that never materialized because Facebook’s young founder and CEO Mark Zuckerberg reportedly wanted to grow the company independently.

“Boy, did he miss a big opportunity,” mused David Rittenhouse, group planning director at neo@Ogilvy, at the same event Monday.

And while Yahoo is now said to be courting another social network, Bebo, for $1 billion, analysts identify two major changes which could make it harder for community sites to strike it rich in the future.

First, industry eyes have now switched their focus from social networks to ad networks following a string of acquisitions sparked by Google’s agreement to buy DoubleClick for $3.1 billion last month. (That deal now looks quaint next to last week’s deal from Microsoft to buy aQuantive for a staggering $6 billion.)

“The buzz over social networks has moved on now to ad networks,” said Riley.

Seconding the notion, Gartner analyst Andrew Frank said: “I think there’s definitely a sense that the market is focused somewhere else.”

The other reason social networks face an increasingly uncertain future is a growing industry-wide suspicion that such sites may never–relatively speaking–become strong revenue drivers.

“There’s now a considerable, and I’d say legitimate, suspicion of that,” Frank said. “I think there’s strong evidence that however one makes money [from social networks], it’s not as easy as translating eyeballs into CPMs.”

Facebook has grown three times as fast as MySpace in the past year, according to Nielsen//NetRatings, even though its 14.4 million monthly visitors still trail MySpace’s 57 million.

But, while sites like MySpace and Facebook have shown a preternatural ability to attract huge communities, they have yet to reflect their popularity in dollars earned.

“The business strategy has been getting an audience, then getting acquired,” joked neo@Ogilvy’s Rittenhouse. Riley, however, is confident that a select few social networks will eventually transform themselves into money-making machines.

“They’re going to have to,” she said. “Otherwise they won’t survive.”

In that vein, Facebook now plans to become more like a Web portal by hosting a wide range of content within its network, The Wall Street Journal reported Monday.

This service would have a social component so that online retailers and content owners will encourage Facebook members to send content or product recommendations to their network of friends. It is not clear what financial agreements Facebook would make with these new partners. Facebook did not respond to requests for comment on Monday.

Whether or not they appeal to potential suitors, social startups can take heart in the fact that there’s still money to be made. Indeed, eMarketer estimated earlier this year that social ad spending will reach $865 million this year, and nearly $2.2 billion in 2010.


Gavin O’Malley can be reached at gavin@mediapost.com

NBC Digital Goes Social With MyNBC May 15, 2007

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NBC Digital Goes Social With MyNBC
by Gavin O’Malley, Tuesday, May 15, 2007 6:00 AM ET
WATCH OUT, MYSPACE–BECAUSE NBC DIGITAL this fall plans to launch its own social network, which will be integrated into NBC.com to encourage visitor interaction and involvement.

The community initiative, dubbed MyNBC, is part of a larger effort by the ailing network to boost its digital offerings for consumers and advertisers. Nearly all of NBC’s properties will get additional online attention, including “360 degree” experiences for “Heroes” and “The Office.”

“We are allowing our users to interact with their favorite shows on a deeper level, and are providing full immersion in our content,” explained Jeff Gaspin, president, NBC Universal Cable and Digital Content.

NBC is certainly not the first media company to follow the lead of MySpace and embrace social networking to grow audience participation.

USA Today, for one, recently succeeded in boosting traffic by an impressive 380% in just over a month by adding social networking features to its site. Through the use of video, blogs, dynamic content-sharing and recommendation tools, the Gannett-owned publisher also managed to boost unique visitor rates by 21% since February, according to Nielsen//NetRatings.

Beginning this fall, fans of “The Office” will be able to engross themselves within the show’s world by creating their own company branches online and completing weekly “corporate tasks.” The show’s producers will also make original content available over multiple platforms.

Also this fall, NBC.com plans to host behind-the-scenes “virtual tours” of shows, their sets, and their production processes. In another gimmick, users can register online for an NBC “Talent Scout” game, in which they gain access to three top “casting agencies” to create their own dream team of NBC talent. When any of their stars perform a trademark phrase or action, the online “agent” earns commission in the form of points.

Along with additions to its existing Web-exclusive content, NBC.com will also debut a Web-exclusive soap opera named “Coastal Dreams.”

Digital add-ons will support returning programs, including “30 Rock,” “Deal or No Deal,” Las Vegas,” and “ER,” among others.


Gavin O’Malley can be reached at gavin@mediapost.com

YouTube Will Share Revenue With Top Producers May 7, 2007

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YouTube Will Share Revenue With Top Producers
by Gavin O’Malley, Monday, May 7, 2007 6:00 AM ET
MAKING GOOD ON ITS PLEDGE to start compensating independent producers, YouTube will begin sharing ad revenue with some of its most popular personalities.

“Up until now there’s been a distinction between the content you create and the content created by YouTube’s professional content partners,” YouTube said Friday on its company blog. “Now some of your favorite YouTube members–including LisaNova, renetto, HappySlip, smosh, and valsartdiary–will begin to participate in the same revenue-sharing and promotional opportunities that are available to YouTube’s other partners.”

YouTube co-founder Chad Hurley hinted at such a revenue share earlier this year while at the World Economic Forum in Davos, Switzerland.

The move comes as YouTube faces greater competition from rival video-sharing sites, many of whom already offer payment for consumer-generated media.

Revver was the first when it announced plans back in October 2005 to split ad revenues with indie producers evenly. Then late last year, Metacafe introduced its producer rewards program, which pays video creators $5 for every 1,000 views of their video shorts.

Discussing its new “partners,” YouTube said: “Because they have built and sustained large, persistent audiences through the creation of engaging videos, their content has become attractive for advertisers, which has helped them earn the opportunity to participate on YouTube as a partner.”

Participating user-partners will be treated as other content partners, according to YouTube, and will have the ability to control the monetization of the videos they create. Once they have selected a video to be monetized, YouTube will place advertising adjacent to their content so participating user-partners can begin earning revenue.

Content creators who have had the privilege of participating in YouTube’s partner program until now have included video game companies, universities, and large production houses.

Added YouTube: “We hope that this program inspires people to keep creating original videos, building audiences and engaging with the YouTube community.”


Gavin O’Malley can be reached at gavin@mediapost.com