Why the Amazon/Sizmek Deal Matters

Why the Amazon/Sizmek Deal Matters

Advertising Amazon

On May 31, Amazon said it will acquire assets from Sizmek, an advertising technology firm. The announcement consisted of three paragraphs with little detail. But the deal is valuable for Amazon as the company builds a stronger advertising platform to compete with Facebook and Google.

Amazon Advertising Gains Market Share

Amazon’s advertising business is slowly taking market share from Facebook and Google. According to eMarketer, Amazon will capture 8.8 percent of U.S. digital ad spending in 2019. This amount trails far behind Google (with 37.2 percent market share) and Facebook (22.1 percent). But Amazon is building its advertising operation from scratch, and in a short time it has emerged as a threat primarily to Google, as consumers shift their product searches away from Google and toward Amazon.

How Sizmek’s Assets Will Help Amazon

Amazon purchased Sizmek’s ad server and dynamic creative optimization tools, the latter of which helps personalize ads using data. Sizmek’s tools will bolster Amazon’s already strong warehouse of customer data with even more data from ad serving. Doing so will give Amazon more targeted ways to advertise to the millions of people who search for products on Amazon and willingly share their personal information with the company. The deal isn’t making Amazon bigger, but it will make Amazon smarter.

What Advertisers Should Do

At True Interactive, we help businesses capitalize on Amazon as an advertising platform as part of our broader digital advertising offerings. We’ve been actively blogging about the many features Amazon Advertising is developing, such as video ads on Amazon’s mobile app. Based on our own experience, we suggest advertisers:

  • Examine how partnering with Amazon Advertising will help you attract and acquire customers, even if you don’t sell products on Amazon. As The New York Times reported recently, Amazon is tapping into its rich vein of customer data to help companies create more targeted ads across the digital world – an “insanely powerful” capability, according to the article.
  • Watch as Amazon’s competitors evolve their platforms to compete with the Amazon threat. For instance, Google recently announced new features intended to make it a stronger mobile advertising platform (which we discussed here). And, don’t forget Microsoft. Its own advertising business, while small, gives businesses an alternative to the Big Three of Amazon, Facebook, and Google.

Online advertising is changing rapidly as the major players make acquisitions and develop their products organically. Advertisers will benefit so long as you remain vigilant and capitalize on these improvements. True Interactive can help you. As an outside party, we constantly evaluate new tools and ensure that our clients benefit from them with effective digital advertising campaigns. Contact us. We’d love to make your online advertising more powerful.

3D for Brands: No Longer a Novelty

3D for Brands: No Longer a Novelty

Advertising

3D is no longer a novelty. It’s becoming a way for businesses to share both advertisements and organic content. Case in point: Bing Ads recently teamed with Samsung to create 3D advertisements that display when consumers search for Samsung Galaxy devices on the Bing search engine.

Here’s how it works: an option for a 3D ad appears when an individual (using Bing) searches for the Samsung Galaxy S10 or S9 on their desktop. The ad, which expands to full screen size, can be manipulated by rotating the image, or zooming in on it. But it’s more than a zoom. Consumers see every aspect of the Samsung device plainly, from multiple angles, and can click on an image to access product details.

As Ravleen Beeston, UK head of sales for Microsoft Search Advertising, said in a statement to Netimperative, “These new 3D ads, unique to Bing, herald a new era of search advertising when it comes to displaying products through desktop search since they complement and enhance the experience for consumers looking to engage with a product.”

3D on Facebook

In addition, Facebook has made it possible for both businesses and consumers to post 3D photos, which makes organic content really pop. As discussed in this Digiday article, the 3D photos are “inherently thumb stopping.” If long-form video is showing a decline in effectiveness as attention spans likewise decline, 3D photos promise to be the next frontier. And brands are jumping at the chance to engage consumers in a fresh way. 3D can be especially useful for retailers trying to showcase products that require close inspection—expensive cellphones, for example, or even food. Food delivery service Bite Squad, for one, has capitalized on the opportunity by posting 3D photos, including one of BBQ from Famous Dave’s. “My goal is to catch your eyes as you [are] scrolling your feed,” Craig Key, CMO of Bite Squad, said, adding that just the sudden movement of an image can be a reason for users to scroll back up.

What You Should Do

At True Interactive, we recommend that you constantly look for ways to incorporate technology such as 3D if they are appropriate for your business:

  • Understand how 3D might add value to your paid and organic content. Don’t be gimmicky about using 3D. Have a specific goal in mind, such as increasing engagement with your ads, especially for products that require high levels of consideration.
  • Be aware of companies such as ThreeKit that provide technologies to help you design advertisements in 3D.
  • Work with an agency partner such as True Interactive that knows how to incorporate formats such as 3D into a larger advertising campaign.

Interested in exploring the opportunities inherent in 3D? Call us.

Advertising Powers Google’s Future

Advertising Powers Google’s Future

Google

In recent weeks, we have seen a flurry of earnings announcements from the major digital advertising platforms, including the big three: Amazon, Facebook, and Google. Together these companies account for 62 percent of all digital ad spend, according to eMarketer.

Google dominates with 37.1 percent market share. And yet, during earnings season, Amazon and Facebook have dominated the news even though Google’s ad business grew by 20 percent (year over year) for the final quarter of 2018. Google’s advertising revenues for the quarter were $32.6 billion, accounting for 83 percent of Alphabet’s revenue. For the full year, Google achieved $116.3 billion in ad revenue compared to $10 billion achieved by Amazon Advertising.

Where’s the Love for Google?

So where’s the love for Google? Here’s what I think is happening:

  • Surprise is more interesting than predictability. Facebook surprised analysts by reporting strong advertising growth for 2018, as we noted on our blog. Here is a company that has been rocked by data privacy scandals for months. And yet, the world’s largest social media platform just keeps growing, which raises questions about how important data privacy really is to Facebook’s community. As for Google? Advertising growth is expected. Even when Google surpasses analysts’ estimations, the pundits say “Yes, but . . . “ With Google’s latest quarterly earnings, analysts noted that Alphabet is spending more to support its ad business.

Google’s Advantages

But make no mistake: Google is going to continue to grow its ad business and in doing so will draw upon several advantages, such as:

  • A massive user base that relies on Google across multiple platforms and apps ranging from the Google search engine to Google Maps and YouTube.
  • A head start in using artificial intelligence to make advertising smarter and more effective. True, Google faces competition from Amazon and Facebook. But as I’ve noted, Google’s extensive AI tools are rapidly evolving.
  • Global reach. Amazon and Facebook are improving their advertising products to support international ad campaigns, but Google commands an already established global presence.
  • Strong content marketing that educates advertises on Google’s products. You can see for yourself from Google’s blogs.

What Businesses Should Do

My advice to businesses:

  • Stay abreast of advances in Google’s ad tools, especially with AI.

To maximize the value of your digital ad spend, contact True Interactive. We’re here to help.

Get Ready for LinkedIn Live

Get Ready for LinkedIn Live

Social media

Live, from Sunnyvale, California: it’s LinkedIn Live!

LinkedIn is rolling out a new feature that makes it possible for businesses and people to create live content. With LinkedIn Live, members of LinkedIn’s 562-million-strong community will be able to livestream content just like they can with Facebook Live. Yes, that’s right: now you can do all the things you do on Facebook to create engagement through live video, such as offering behind-the-scenes glimpses of conferences or trade shows, coverage of news stories in your industry, announcements of your own, launches of new products, thought leadership, and instructional content, depending on the nature of your business.

LinkedIn Users Want Video

And your company’s rock stars will be able to do the same. When the feature becomes available (it’s in beta only right now), live video will humanize your brand by making your thought leaders, brand ambassadors, and company executives more accessible and authentic through the power of live video.

In addition, LinkedIn will work with partners such as Wirecast, Switcher Studio, Wowza Media Systems, Socialive, and Brandlive to make video content more polished than what you’re accustomed to seeing on Facebook Live. Microsoft, LinkedIn’s owner, is supporting LinkedIn Live with the Microsoft cloud-computing business, Azure Media Services.

LinkedIn told TechCrunch that live video is the most requested feature among its members, and the use of recorded video has been booming. Pete Davies, the director of product management at LinkedIn, told TechCrunch, “Video is the fastest growing format on our platform right now, and the one most likely to get people talking.”

Late to the Game?

Some have asked whether LinkedIn is late to the game. I think that’s the wrong question. The real issue is how brands will capitalize on LinkedIn Live to create video content that complements what they’re already sharing on platforms such as Facebook and Instagram. LinkedIn is going to offer options to broadcast across LinkedIn as well as to more targeted groups within LinkedIn, which is important because businesses and people will be able to use live video more strategically. Imagine, for example, using live video as part of drip campaign with prospects, or for colleges to recruit talent.

Questions You Should Ask

It may take some time for LinkedIn Live to achieve a bigger rollout. I suggest that businesses prepare now. Start asking:

  • How might I incorporate LinkedIn Live into my existing marketing and recruitment campaigns?
  • Which of my employees on LinkedIn possesses the magic combination of large followers and video savvy to capitalize on LinkedIn Live?
  • Are my corporate social media guidelines properly reflecting the use of live video? They should be if you’re using other platforms such as Facebook, but now is a good time to do a gut check.
  • What upcoming events and news lend themselves to LinkedIn Live? What does your upcoming calendar look like?

More details, including technical information on how to create live content on LinkedIn, will be forthcoming. For now, get ready. And contact True Interactive to build a stronger digital brand. We’re here to help.

Facebook Shares an Advertising Roadmap for 2019

Facebook Shares an Advertising Roadmap for 2019

Facebook

Call it was the meltdown that wasn’t.

As Facebook prepared to announce its quarterly earnings January 30, there was a lot of public speculation that its scandal-ridden year might finally scare away advertisers and members.

The doubters were wrong.

Here’s what Facebook announced:

  • A 9-percent year-over-year increase in monthly active users, with 2.32 billion as of December 31, 2018.

  • Fourth-quarter revenues of $16.9 billion, up 30 percent year-over-year. That number beat Wall Street’s expectations of $16.4 billion.

Facebook is not only weathering months of data-privacy scandals, it is actually getting stronger. At True Interactive, we’ve shared our concerns about Facebook’s scandals and their possible impact on advertisers. We still think it’s important that advertisers watch Facebook closely. The threat of government regulation looms large. The number of fake and duplicate accounts are on the rise, by Facebook’s own admission (116 million fake accounts and 255 million duplicate accounts exist on the site). But advertisers should also be aware of some other numbers:

  • 93 percent of Facebook’s advertising revenue comes from mobile.
  • 500 million people use Instagram Stories daily.

  • 2 million advertisers are now focusing on Stories.

Stories play a big part in Facebook’s growth plans for 2019, which Mark Zuckerberg published in a Facebook post. I have excerpted some highlights and used boldface to emphasize some points that jump out at me:

Messaging is the area that’s growing the most quickly, and this year people are going to feel these apps becoming the center of their social experience in more ways. We’ll roll out payments on WhatsApp in some more countries. Private sharing in groups and stories will become more central to the experience. We’re going to onboard millions of more businesses that people can interact with.

On Facebook, I also expect this to be the year where Watch becomes more mainstream. There are now 400 million people who use it every month, and people spend on average over 20 minutes on Watch daily. This means we’re finding ways for video to grow outside of News Feed so it doesn’t displace the social interactions that people primarily come to our services for.

In Instagram, one of the areas I’m most excited about this year is commerce and shopping. There’s a lot of natural activity happening here, and this year I expect us to deliver some qualitatively new experiences around that.

Longer term, I remain very focused on building technology that brings people together in new ways, including through AR and VR. I’m looking forward to Oculus Quest shipping this spring — the feedback there so far has been very positive.

The numbers tell me this:

  • Advertisers need to understand how to capitalize on messaging. In September I wrote an Adweek column about Facebook monetizing WhatsApp. Clearly, Facebook is going full steam ahead here.
  • If you aren’t using Stories, you’re behind. Stories are now table stakes for brand building on Facebook’s platform, which includes Instagram Stories.
  • Figure out how Facebook Watch plays into your strategy. So far adoption numbers are underwhelming. But these are early days. The success of Facebook Live shows that Facebook knows how to make video a branding platform.
  • Integrate your Instagram with commerce. Brands are getting better at giving users compelling reasons to stop scrolling and buy. Expect new features to make social shopping more of an experience.
  • Augmented reality and virtual reality are branding plays for forward-thinking businesses, but AR and VR still have a long way to go.

Facebook is not as weak as its doubters said it was. Neither is Facebook as powerful as some would have you think. The company has issues. It’s not the cool place for Gen Z to hang out. A potential recession coming up could take a bite out of its advertising revenues. And as I mentioned, regulation is a constant threat. But Facebook remains a strong platform for advertisers with exciting features worth embracing. For more insight into how to succeed with digital media, including Facebook, contact True Interactive. We’re here to help.

Why Netflix Might Embrace Advertising

Why Netflix Might Embrace Advertising

Advertising

Netflix and its boosters are celebrating the company’s first ever Best Picture Oscar nomination for Roma – but the company is also catching fire from investors. Although its fourth-quarter 2018 financial results beat Wall Street estimates for earnings per share, revenue fell below projections.

Netflix also faces other formidable challenges, such as increased competition from streaming services (e.g., Amazon and Hulu), the entrance of new services such as Disney+, and the enormous cost of spending on original content. So perhaps it’s no surprise that Netflix has raised prices. But in recent months, Netflix has also been testing ads between episodes, and its customers have not been happy about this development. The company said that trailer tests were just a way to surface new programs to loyal viewers, claiming it will help members “discover stories they will enjoy faster.”

With pressure coming from multiple sides, how can Netflix increase revenue and expand its subscriber base without losing its customers?

Competition from Hulu

We’ve seen at least one streaming service employ advertising: Hulu. When Hulu first launched in 2007, all content was completely free and supported by advertisements. In 2010, the company launched its first subscription option while maintaining the original ad-supported tier. Then in late 2016, the brand migrated towards a subscription model. Today Hulu offers ad-supported and ad-free pricing tiers.

The ad-supported tier has served Hulu well by increasing brand awareness and expanding its subscriber base. Granted, Netflix does not need to boost brand recognition. However, Netflix (and Amazon, for that matter) could benefit from this strategy if it wants to enter into new markets, which should be a priority for Netflix given the financial turmoil the brand has been recently experiencing.

Providing an ad-supported service plan might sound like a step backwards to Netflix stockholders. If Hulu moved away from it, why would Netflix bother?

  1. Original Content

The creation of original content is perhaps the most dramatic change in the way streaming services operate. Whereas audiences used to turn to streaming services to watch, say Finding Nemo, people now use these services for original movies and shows, a reality that was underscored by Netflix’s Roma being nominated for 10 Academy Awards.

With Disney’s new movie streaming platform launching later this year, it is clear that movie streaming companies no longer want to simply be a content warehouse, storing thousands of movies and TV shows made by third parties. Netflix, Hulu and Amazon want to lure potential customers into becoming subscribers through their exclusive movies and shows. This means that streaming platforms have the bargaining power, as they all have some unique value nobody will find elsewhere.

The quality content matters. Unique content attracts more paying subscribers, which gives Netflix a bigger platform for potential advertising. With 139 million subscribers worldwide, Netflix could easily increase that number by introducing an ad-supported tier. Doing so would also help relieve some of the financial pressure caused by the expensive production costs of original content – around $12 billion in 2018 alone, and expected to grow by 25 percent  to a whopping $15 billion mark in 2019.

  1. Google/Facebook Duopoly

It’s no secret that a large number of companies today are directing a good portion of their ad spend to Google and Facebook/Instagram (and, increasingly, Amazon). Other channels simply cannot match the performance, scale, and targeting capabilities of these tech giants. The growth of these platforms also reflects the strength of the digital advertising industry and suggests that there is room for more businesses to launch advertising based on their built-in audiences. As noted, Netflix has a growing audience with 139 million subscribers – and Netflix aspires to grow more especially outside the United States.

3 Targeting Capabilities

Knowledge is power. Think about all the behavioral data and Netflix has on its subscribers. Netflix can offer advertisers advanced interest targeting based on their activity on each platform. By using algorithms and machine learning, Netflix can predict which type of content a specific user may want to consume next. This data could also be used to serve users ads that are relevant, and for marketers, effective. In addition, with the help of pixels, Netflix would be able to collect data outside its environment just like Google and Facebook do, thus providing advertisers with more insights on the consumer behavior outside the streaming services and the customer journey.

It’s too soon yet to know if Netflix will launch an ad-supported tier. However, I wouldn’t be surprised if it does in the near future, as companies built on the “ad-free” premise are now acknowledging their advertising potential and evaluating the cost-benefit relationship of introducing ads to their platforms, just like Whatsapp. Is advertising revenue too tempting for Netflix?

To maximize the value of your online advertising, contact True Interactive. We’re here to help.

A Reckoning for Facebook and Mark Zuckerberg?

A Reckoning for Facebook and Mark Zuckerberg?

Facebook

One year ago, I predicted that Facebook could be facing a tough year due to the steady decline in users and the admission by former Facebook executives that the social media platform was designed to get its users addicted and was ripping apart the fabric of society. For those reasons, I cautioned Facebook advertisers to expect diminished performance from their Facebook ads. And as we enter 2019, we’re experiencing a serious case of Facebook déjà vu.

With the most recent revelation that Facebook gave some of the world’s largest technology companies including Bing, Amazon, Netflix, and Spotify more intrusive access to users’ personal data than previously disclosed, Facebook once again finds itself in hot water. Much of the negative publicity in 2018 focused on privacy concerns about Facebook. A few months back, news broke that Facebook could face a fine of $1.63 billion by the European Union for a massive data breach, and in April, Facebook CEO Mark Zuckerberg was grilled by Congress over data privacy concerns. Two questions loom large:

  • Could 2019 be the year Mark Zuckerberg is forced to step aside? Zuckerberg accepting a diminished role is not out of the question given the reality that Facebook has failed to address its problems on its own. What Facebook does not want is tight government regulation, and the company may need to offer up a C-level sacrifice to avoid such an action.
  • Will advertisers scale back? Businesses have continued to advertise on Facebook despite its scandals, partly because Facebook is too big to ignore and partly because there’s nowhere else for Facebook’s users to go. But Facebook is vulnerable to another platform coming along and challenging its dominance – which could change things for users and advertisers.

Advertisers may want to think twice about associating their brands with a social media giant under such scrutiny. Given the current tumultuous state of Facebook, I once again recommend advertisers proceed with caution when it comes to their investment in Facebook marketing and also lower performance expectations.