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  • Google Makes Deal With Local Publishers In U.S.

    Google and The Local Media Consortium, which is made up of 800 newspapers and 200 local broadcast outlets from 41 member companies throughout the U.S., announced a strategic partnership, which will see Google providing the consortium’s members with ad products.

    The consortium will launch a private ad exchange powered by Google’s DoubleClick Ad Exchange technology. Additionally, members will have access to DoubleClick for Publishers, and the option to run AdSense ads on their sites and Google Custom Search-powered search results.

    “The Local Media Consortium represents the best of what the web has to offer in terms of content and engaged local audiences,” said Laurent Cordier, Managing Director, Americas Partnerships, News & Magazines for Google. “We’re looking forward to working with their leadership and members to build on this partnership and help grow the businesses of valued newspapers and news stations from across the country.”

    “By partnering with Google we are able to bring Google’s digital tools, technology and sales opportunities to all of our media members and our advertisers across the country,” said Patrick J. Talamantes, President and CEO of consortium member The McClatchy Company. “The vast size and scale of the Consortium’s collective audience makes this kind of partnership possible with one of the world’s top digital companies. We’re excited about the possibilities of this partnership.”

    Consortium member sites account for 10 billion monthly ad impressions, 2 billion page views and 240 million monthly unique visitors.

    Terms of the deal were not disclosed.

    Image via Google

  • Google Acquires Spider.io To Get Better At Fighting Ad Fraud

    Google announced on Friday that it has acquired spider.io, an ad fraud-fighting technology company. Google will include this technology in its video and display ad products as a complement to measures it has already taken.

    Google VP of Display Advertising Neal Mohan recaps some of these in a blog post:

    Advertising helps fund the digital world we love today — inspiring videos, informative websites, entertaining apps and services that connect us with friends around the world. But this vibrant ecosystem only flourishes if marketers can buy media online with the confidence that their ads are reaching real people, that results they see are based on actual interest. To grow the pie for everyone, we need to take head on the issue of online fraud.

    This is a fight we’ve taken seriously from the beginning. Over the years, we’ve invested significantly in the technology and talent to prevent fraud and create greater accountability online. For example, we put extensive resources towards keeping bad actors out of our ad systems — last year alone, we turned down millions of applications from sites looking to join our network because of suspected fraudulent activity. We also introduced new measurement tools, like MRC-accredited Active View, which lets advertisers buy only those ads that are viewable on a page. Active View offers greater peace of mind to all media buyers, but is especially important for brand marketers who want to know, first and foremost, that their ad has a chance to be seen.

    Integrating the spider.io tech into video and display ad products is just priority number one for the acquisition. Google’s long-term goal is to improve metrics used by advertisers and publishers to determine the value of digital media, and give them a “cleaner picture” of which campaigns are performing the best.

    The company says it can also use spider.io’s technology to scale efforts on weeding out bad actors.

    Terms of the acquisition were not disclosed.

    Images via spider.io

  • Twitter Launches ‘Twitter Marketing Platform Program’

    Twitter announced the launch of the Twitter Marketing Platform Program, a new brand encompassing its network of partners – both through its Ads API and in measurement and targeting.

    “The companies in our new Marketing Platform Program have helped their clients reach new levels of success by improving their clients’ direct response, branding, and live initiatives across multiple verticals,” says Tony Wang, VP of Global Revenue Partnerships and Development at Twitter.

    This comes as the Twitter Ads API turns one year old:

    Twitter plans to expand into more countries:

    Image via Twitter

  • Facebook Ads Get Even More Targeting Options

    Facebook announced that it is about to begin rolling out improved “Core Audiences” targeting options, which are built into all of its ad buying interfaces. These will allow advertisers to target “precise audiences” based on location, demographic, interests and behaviors.

    “Say you’re a retailer that wants to show ads to people that live near your brick-and-mortar locations,” Facebook explains in a blog post. “With flexible location targeting, you can build campaigns around any combination of geographies: country and city (France and London), country and state (Canada and New York), state and city (California and Las Vegas), state and ZIP code (US only), etc. It’s also easier to exclude certain areas — i.e., New York City, except 11211, or the UK, excluding Cambridge.”

    Remember those stories from earlier this week about Facebook knowing when you’re about to start a relationship, and when you fall in love?

    Facebook is also encouraging advertisers to target people who have recently declared their love on the social network. Core Audiences now features additional values for relationship status, such as civil unions and domestic partnerships, and timely changes in life events, such as getting engaged or married. It will also now let you target people that have gotten engaged or married in the past year or the last three or six months.

    Core Audiences also now includes workplace and job title information, as well as expanded education information.

    “We know that people have a ton of interests, and that marketers want to reach people specifically based on them,” Facebook says. “So we simplified how you can do this on Facebook by redefining our interest-based targeting segments so each has one simple meaning. Rather than having multiple targeting options like broad categories and keywords, we developed a new methodology that increases the precision of interest-based targeting by allowing advertisers to simply choose one segment. Now, if you want to reach baseball fans, just choose “baseball” as your targeting segment — it’ll pull in all the people that have liked or expressed interest in baseball-related topics on Facebook.”

    Finally, Core Audiences is getting a new targeting option in behaviors, which includes Partner Categories. This enables marketers to target users based on things they purchase and the devices they use.

    Additionally, in the U.S., Facebook is adding Partner Categories to the Ads Create Tool. These were previously only available in the Power Editor.

    Image via Facebook

  • Yahoo Gemini Puts Mobile Search, Native Ads In One Marketplace

    Yahoo announced the launch of a new mobile search and native advertising marketplace called Yahoo Gemini. Advertisers can use it to buy, manage and optimize mobile search and native ad spend from a single place.

    The product is available through Yahoo Ad Manager, the company’s existing self-service buying platform.

    “Mobile is the fastest-growing market segment, and we have innovated how our users communicate, consume content and search for information across multiple devices,” said Yahoo’s Jay Rossiter and Adam Cahan in a joint blog post. “We are equally committed to building products that simplify the buying process and improve the experience for advertisers. Yahoo Gemini is the latest way we are helping advertisers reach millions of people directly on their mobile devices with smart, integrated, multi-channel campaigns.”

    A Yahoo representative told AdWeek it believes the offering can help it attract more brand marketers.

    As the report notes, Yahoo’s mobile search ads used to be available via the Bing Ads Platform. Perhaps Gemini is part of Yahoo’s apparent strategy of relying less on its partnership with Microsoft, which CEO Marissa Mayer “hates,” according to reports.

    Image via Yahoo

  • Google Announces Worldwide Availability Of Shopping Campaigns

    Back in October, Google announced a new kind of product listing ad campaign: shopping campaigns. The company said on Tuesday that these are now available to all advertisers around the world.

    The campaign type is designed to let advertisers manage and promote products, and browse their inventory directly in AdWords.

    “We received great feedback from advertisers so far, who say that Shopping campaigns help them save time organizing their inventory and discovering new opportunities to optimize and grow their traffic online,” says Google Shopping Director of Product Management Eric Tholomé.

    He shares some of that feedback here.

    Google just put out these videos on setting up, optimizing and getting the most out of Shopping Campaigns:

    Google has added the ability to bulk edit product groups at scale since first launching Shopping Campaigns. The company says it will launch API support and a bid simulator soon.

  • Google Reportedly Enters $100 Million Partnership With Magna Global

    Google has reportedly struck an “upfront” deal with Interpublic Group’s Magna Global, which oversees $37 billion in media billings globally.

    USA Today reports that Magna Global has committed $100 million of client money to Google properties including YouTube, the Display Network and mobile. The deal is for a year with the option to renew, and Magna gets access to Google ad inventory, data and “the chance to work more closely on client marketing campaigns” with Google.

    The report quotes Torrence Boone, managing director of agency business development for Google in the Americas: “There’s the notion of being able to tap into scarcity around inventory, which is critical and underpins the upfront model in TV. That model is porting over to digital.”

    He reportedly also hinted that Google is readying a new class of “scare, premium ad inventory.”

    On Friday, Magna announced a strategic partnership with comScore, Experian and Rentrak to launch “high definition buying,” a cross-platform data set with solutions for planning, buying and optimizing media across TV, digital, video and mobile.

    “By creating a new marketplace for our clients based on a more accurate way of targeting most valued customers and understanding which messaging motivates key buying decisions, we will further our goal of delivering the most effective plans for each and every campaign,” said IPG CEO Jacki Kelley. While MAGNA negotiates with all media on behalf of the organization, the investment we have made in tools like High Definition Buying separates us from our competitors. We believe that no client is alike and therefore no media plan should ever be duplicated if we are indeed to drive true business outcomes,”

    High Definition Buying became available immediately.

    Image via Magna Global

  • YouTube Names Ad Blitz Winners, ‘Puppy Love’ Takes Top Spot

    While most of the world has long since moved on, YouTube has finally announced the winners of its 2014 Ad Blitz, ranking users’ favorite Super Bowl commercials.

    It’ no surprise, but Budweiser’s “Puppy Love” took the top spot. It’s currently up to over 47 million views.

    Coca Cola’s “America the Beautiful” commercial took second place. That one has over 10 million views.

    Chrysler’s “America’s Import” took third place (over 11 million views).

    Durcell’s “Trust Your Power” took fourth (22 million views):

    Jaguar’s “British Villains’ Rendezvous” rounded out the top five (11 million views):

    “Not only did these spots receive the most votes on YouTube, but they also attracted more than 101 million views combined,” says Kariyushi Casper, Ad Blitz Interactive Project Manager.

    The list is a bit different than USA Today’s, but everyone seems to love “Puppy Love”.

    Image via YouTube

  • Ashley Madison Put Up a Rather Interesting Billboard in Little Rock

    Ashley Madison, the online dating site for married people with the slogan “life’s short, have an affair,” has put up a rather interesting billboard in Little Rock, Arkansas.

    I should say a rather interesting and rather appropriate billboard for Little Rock, Arkansas, home of our nation’s 42nd President.

    “Who said cheaters never prosper. Happy Presidents Day!” reads the billboard, which features images of Bill Clinton, John F. Kennedy, and Franklin D. Roosevelt. Presidents Day is next Monday, February 17th.

    Of course, Little Rock is the capital and largest city in Arkansas, home to Bill Clinton. He served as both the 40th and 42nd Governor of the state before taking a job at a much higher office. As we all know, Clinton was impeached in a ridiculous spectacle in 1998–all over an affair he had with 22-year-old White House intern Monica Lewinsky, and his subsequent “perjury and obstruction of justice.”

    Though FDR’s extracurricular activities never got him impeached, the New Deal President is rumored to have had affairs with multiple women. Kennedy, on the other hand–well, we all know about Kennedy.

    “Throughout history, men in positions of power – in particular, men in politics – have sought the romantic company of women who were not their wives,” says Noel Biderman. CEO and Founder, AshleyMadison.com. “We picked these three Presidents for the campaign, as each had well-known affairs during their Presidencies. Yet, despite their extra-marital dalliances, Americans revere each of these men as great leaders. That is because Americans love a champion, and they’re willing to forgive these types of transgressions when it comes to a so called winner.”

    It’s interesting that all three politicians Ashley Madison chose to include in their new ad campaign are Democrats. I guess they decided that Larry Craig tapping his foot in the Minneapolis airport bathroom didn’t make for the best mental image.

    Image via Ashley Madison

  • Yelp Pushes Through The Controversies With Big Growth And A 5-Star Quarter

    Whether you think it’s a great business tool or you think it’s killing your business, Yelp appears to be unstoppable, and continues to grow substantially. This week, the company released its earnings report for the fourth quarter and full year 2013, and revealed that cumulative reviews have grown 47% from the same time the previous year to 53 million, while average unique monthly visitors grew 39% to 120 million. Active local business accounts grew a whopping 69%. That’s not to mention the 72% revenue increase.

    Has Yelp been good or bad for your business? Let us know in the comments.

    The company performed so well, its stock surged, while other Internet companies like Twitter and LinkedIn saw their shares fall upon earnings releases this week. Barron’s says Yelp had a “five-star Q4”.

    The release came just after a widely followed legal battle involving Yelp reviews came to a close. A building contractor sued a Yelp reviewer for defamation after she accused him of damaging her home and stealing from her. Ultimately, a jury decided both parties had defamed each other, and neither was awarded damages. The business owner expressed “shock” at the outcome, while the reviewer considered it a victory for free speech.

    Last week, Yelp posted on its blog encouraging users not to be afraid to leave negative reviews, pointing out that these kinds of suits are rare.

    “But despite this press hype, it’s important to keep in mind that the First Amendment guarantees the rights of consumers to express their opinion about a business and honestly describe their experience,” wrote Yelp Senior Director of Litigation Aaron Schur. “These strong protections are why these suits are unlikely, especially when a reviewer has thoughtfully shared their views (Yelp provides guidance on how to do this in our Content Guidelines). We find the most useful reviews include a rich narrative, a wealth of detail and perhaps a helpful tip for others who are looking to spend their hard-earned money at that local business.”

    He said, “Businesses that try to sue their customers into silence rarely prevail, end up wasting their own time and money and usually bring additional, unwanted attention to the original criticism (a phenomenon known as the Streisand effect). Many states (though, unfortunately not Virginia) have laws designed to further protect consumers from being intimidated or silenced by these types of lawsuits. These Anti-SLAPP laws allow consumers to quickly end meritless lawsuits and require the business to pay the consumer’s legal fees when the business loses.”

    Anti-SLAPP law is a focus of new Yelp efforts in Washington. The company hired lobbyist Laurent Crenshaw, who is lobbying for the cause, which would prevent strategic lawsuits against public participation.

    This week, Yelp also became part of the Internet Association, also aimed at helping shape Internet policy. It includes Airbnb, Amazon, AOL, eBay, Expedia, Facebook, Gilt, Google, IAC, LinkedIn, Lyft, Monster Worldwide, Netflix, Practice Fusion, Rackspace, reddit,Salesforce.com, SurveyMonkey, TripAdvisor, Twitter, Uber Technologies, Inc., Yahoo!, and Zynga.

    “Yelp is a welcome and notable addition to The Internet Association. Yelp is a perfect example of how the Internet has transformed small business for the better and how the Internet provides economic value throughout the economy. Yelp’s listings, ratings and reviews have revolutionized the way consumers find businesses and the way small businesses do operate,” said Michael Beckerman, President and CEO of The Internet Association. “With 85 percent of consumers reading online reviews to find local businesses, Yelp’s online review service brings consumers closer to small businesses and local economies. Having them share their story — and advocating for issues like anti-SLAPP and protecting free speech online — strengthens The Internet Association’s voice as we educate policymakers on the impact of the Internet upon communities worldwide.”

    The Virginia case and Yelp-related lawsuits in general were brought up in the Q&A portion of the earnings call, and CEO Jeremy Stoppelman indicated that suits have basically done nothing to hurt its business. He said Yelp continues to see great user engagement, and that the company does everything it can to protect free speech online (the company was recently ordered to identify anonymous reviewers). According to Stoppleman, the number of cases it sees for its site is “extremely rare.”

    “They just don’t impact our business,” he said.

    Fortune appears to be shining on the company this week. In addition to its own stellar financial performance and subsequent reaction from investors, the EU announced what could be the end of a lengthy antitrust probe into Google’s search business, and the concessions the search giant is making include what could amount to a great deal more traffic for Yelp in Europe.

    On some types of search results, like local business queries, Google will highlight three alternative sites to find results at the top of the results page. As you can see below from the example the EU provided, this includes Yelp. That gives the company a great deal more visibility in the search engine. As the company discussed on the earnings call, international expansion – especially in Europe – is one of Yelp’s top priorities.

    Yelp in Google

    It’s possible that Google is already sending an increasing amount of traffic to Yelp. On the call, one analyst asked about visibility improving in Google search results on mobile. Stoppelman kind of dodged the question, simply saying they’ve had great performance from their mobile website.

    He did note that Yelp will likely get into the app indexing so people can access content from the Yelp Android app from mobile search results.

    “I think that’s a nice feature,” he said.

    “Each year we get closer to achieving our goal of becoming the de facto local search engine for the world, and we expect more progress along this line in 2014,” Stoppelman said earlier in the call. “As smartphone and tablet usage continues to skyrocket, we’ve placed special emphasis on becoming platform agnostic so that consumers can get the same great experience on Yelp on a range of different devices.”

    Mobile has indeed become huge for Yelp in recent months, particularly as it has added the ability to review businesses from its apps.

    “In the fourth quarter, 1.1 million reviews or 30% of new reviews were posted on mobile,” said Stoppelman.

    The company says continuing to build out mobile features is a priority this year, and it’s focused on bringing all functionality from desktop to mobile.

    One analyst on the call suggested that Yelp has an issue retaining advertisers, and asked if retention is a priority. COO Geoff Donaker said the repeat rate has been hovering in the same range for quite a while, but considers it a “relatively stable” metric. “Certainly, acquisition is the primary focus of our efforts,” he said, adding that they feel like they’re still getting started.

    Last summer, Yelp launched a “call to action” feature for advertisers, aimed at reducing friction in the customer-to-business transaction process. The feature, Yelp says, is driving 40,000 customer leads per week to its advertisers.

    Yelp advertising has been something of a hot button issue with businesses accusing Yelp of holding their positive reviews hostage (with ad contracts being the ransom), but Yelp has continued to deny such allegations, shrugging them off as conspiracy theories with no evidence. Still, these stories keep coming back into the spotlight.

    Either way, Yelp is only growing rapidly, and its ultimate goal is to be everywhere in the world. It’s certainly continuing to make tremendous strides toward that goal.

    For businesses who appreciate what Yelp has to offer them, the company has teamed up with the U.S. Small Business Administration, and will be hosting a series of live events and webinars over the next few months.

    Do you appreciate what Yelp does for your business? Let us know in the comments.

    Image via Yelp (Flickr)

  • Esurance Saw 2.6 Billion Social Impressions from That Super Bowl Cash Giveaway Twitter Stunt

    If you look to social media engagement as the benchmark for success, Esurance’s (non) Super Bowl ad campaign hit a grand slam – er, scored a touchdown I guess.

    If you tweeted out the hashtag #EsuranceSave30 in the day and a half following the Super Bowl, you weren’t alone. According to the company, they saw 5.4 million uses of that hashtag in the 36 hours following the big game – 200,000 of which came in the first minute after the Esurance ad aired.

    If you don’t have 30 seconds to watch that video and missed the Super Bowl, here’s a quick rundown. The premise of Esurance’s ad was that they wanted to give away the $1.5 million they saved by airing an ad after the Super Bowl as opposed to during the Super Bowl. All people had to do was tweet that hashtag and/or follow Esurance on Twitter to enter the sweepstakes.

    The company just handed out the prize last night with the help of Jimmy Kimmel.

    “The sweepstakes demonstrated the power of a hashtag when #EsuranceSave30 was tweeted more than 5 million times in less than thirty six hours, said Leo Burnett Chief Creative Officer Susan Credle. “Esurance trending over the Super Bowl Sunday night is proof that when you use mass media to announce a social media idea, it works really, really well.”

    Here are some more stats about Esurance’s social media-based ad experiment:

    – 1.4 million hashtag uses in the first hour and 4.5 million in the first 24 hours
    – 2.6 billion social impressions on Twitter
    – 332,000 views of the Esurance commercial on YouTube
    – 261,000 new followers on the official Esurance Twitter account — an increase of nearly 3,000 percent
    – A 12x spike in visits to the Esurance website in the first hours of the sweepstakes

    It seems like the experiment payed off – if the goal was to get people talking. What this will or will not do for the company’s bottom line remains to be seen.

    Image via YouTube

  • AOL Earnings Released, Company Posts Strongest Quarter In 10 Years

    AOL Earnings Released, Company Posts Strongest Quarter In 10 Years

    AOL just released its Q4 earnings report, delivering its strongest revenue growth in a decade.

    Total revenue grew 13% year-over-year, mostly due to global ad revenue growth, which grew 23% itself. This includes 63% growth in third party network revenue and 7% growth in global display. Global search revenue decreased by 2%.

    CEO Tim Armstrong said, “2013 was AOL’s most successful year in the last decade, and we accomplished our goal of industry level growth at scale for AOL. AOL’s exceptionally talented team continues to execute against our strategy and our results show meaningful progress in the most important areas of media and technology. AOL plans to invest in our market leading strategies in 2014, while we continue to grow the company.”

    Earnings per share didn’t quite meet Wall Street expectations. It will be interesting to see how the coming quarters look without Patch. AOL announced it would get rid of (while keeping a minority stake in) Patch last month with the deal to close early in the quarter.

    Shares are up in pre-market trading.

    Here’s the release in its entirety:

    NEW YORK–()–AOL Inc. (NYSE:AOL) released fourth quarter 2013 results today.

    “AOL’s exceptionally talented team continues to execute against our strategy and our results show meaningful progress in the most important areas of media and technology. AOL plans to invest in our market leading strategies in 2014, while we continue to grow the company.”

    “2013 was AOL’s most successful year in the last decade, and we accomplished our goal of industry level growth at scale for AOL,” said Tim Armstrong, AOL Chairman and CEO. “AOL’s exceptionally talented team continues to execute against our strategy and our results show meaningful progress in the most important areas of media and technology. AOL plans to invest in our market leading strategies in 2014, while we continue to grow the company.”

    Summary Results
    In millions (except per share amounts)
    Q4 2013 Q4 2012 Change FY 2013 FY 2012 Change
    Revenue
    Advertising $ 507.0 $ 410.6 23 % $ 1,613.4 $ 1,418.5 14 %
    Global Display 181.7 169.8 7 % 610.2 575.4 6 %
    Global Search 101.7 103.6 -2 % 388.5 371.5 5 %
    AOL Properties 283.4 273.4 4 % 998.7 946.9 5 %
    Third Party Network 223.6 137.2 63 % 614.7 471.6 30 %
    Subscription 156.7 174.2 -10 % 650.1 705.3 -8 %
    Other 15.3 14.7 4 % 56.4 67.9 -17 %
    Total revenues $ 679.0 $ 599.5 13 % $ 2,319.9 $ 2,191.7 6 %
    Adjusted operating income before depreciation and amortization (Adjusted OIBDA) (1) $ 147.3 $ 123.3 19 % $ 480.7 $ 412.6 17 %
    Operating income $ 71.8 $ 68.2 5 % $ 190.3 $ 1,201.9 -84 %
    Net income attributable to AOL Inc. $ 36.0 $ 35.7 1 % $ 92.4 $ 1,048.4 -91 %
    Diluted EPS $ 0.43 $ 0.41 5 % $ 1.13 $ 11.21 -90 %
    Cash provided by operating activities $ 90.0 $ 76.7 17 % $ 318.9 $ 365.6 -13 %
    Free Cash Flow (1) $ 60.4 $ 46.3 30 % $ 192.1 $ 245.1 -22 %
    (1) See Page 9 for a reconciliation of Adjusted OIBDA and Free Cash Flow to the GAAP financial measures we consider most comparable.

    Q4 Consolidated AOL Revenue Trends:

    • Q4 total revenue grew 13% year-over-year, driven by global advertising revenue growth.
    • Global advertising revenue grew 23% year-over-year reflecting:
      • 63% growth in Third Party Network revenue driven by growth in the sale of premium formats across AOL’s programmatic platform and by the inclusion of revenue from Adap.tv. Third Party Network Revenue grew 20% excluding Adap.tv.
      • 7% growth in global display revenue driven by improved pricing related to growth in the sale of premium formats across AOL’s properties.
      • 2% decline in global search revenue driven primarily by fewer search queries resulting from a decline in domestic AOL subscribers.
    • Subscription revenue declined 10% year-over-year and domestic AOL subscriber monthly average churn was 1.3% in Q4 2013 compared to a 10% decline year-over-year in subscription revenue and 1.8% monthly average churn in Q4 2012.

    Q4 Consolidated AOL Profitability Trends:

    • Operating income, net income and diluted EPS were negatively impacted by a pre-tax restructuring charge of $13.2 million, largely related to a reduction in personnel, including Patch.
    • Adjusted OIBDA grew 19% year-over-year, driven by total revenue growth and a 25% decline in general and administrative expenses, partially offset by a 17% growth in costs of revenue expenses.
    • Cost of revenues increased $70.5 million year-over-year, reflecting a $67.4 million increase in total Traffic Acquisition Costs (TAC). TAC increases were driven by the inclusion of Adap.tv, growth in Third Party Network revenue and growth in our search marketing related efforts. Increased expenses associated with Adap.tv offset approximately $11 million of special (expense) items from Q4 2012 that did not reoccur in Q4 2013.
    • General and administrative expenses declined $27.6 million in Q4 2013 year-over-year, due to a decline in marketing costs primarily related to AOL’s continued cost reduction efforts, and a decline in legal and consulting fees.

    AOL Asset, Cash & Cash Flow Trends:

    • AOL had $207.3 million of cash and equivalents at December 31, 2013. Q4 cash provided by operating activities and Free Cash Flow were $90.0 million and $60.4 million, up 17% and 30% year-over-year, respectively.
    • AOL repurchased 0.9 million shares of common stock at an average price of $34.60 in Q4 2013, or approximately $32.6 million in aggregate. In 2013, AOL repurchased 3.9 million shares at an average price of $34.75, or approximately $135 million in aggregate. AOL has approximately $115 million left in its current share repurchase authorization.
    • On December 31, 2013, AOL entered into an agreement to contribute Patch into a new joint venture which will be operated and majority owned by Hale Global. In connection with the transaction, AOL incurred $5.8 million in restructuring charges in Q4 2013. The transaction closed on January 29, 2014.
    • On January 23, 2014, AOL acquired Gravity, a premier personalization technology and publisher solutions business, for approximately $82 million in cash. An additional approximately $8 million of consideration will be deferred and paid over a two-year service period for certain Gravity employees. As part of the transaction, AOL will acquire approximately $12 million of net operating losses, which is expected to result in a future cash tax benefit to AOL of approximately $5 million.
    DISCUSSION OF SEGMENT RESULTS
    Q4’13 Q4’12 Change
    (In millions)
    Revenue
    Brand Group 222.0 213.2 4 %
    Membership Group 209.3 230.8 -9 %
    AOL Networks 275.0 183.5 50 %
    Corporate & Other 0.0 0.3 -100 %
    Intersegment eliminations (27.3 ) (28.3 ) 4 %
    Total Revenue $ 679.0 $ 599.5 13 %
    Adjusted OIBDA
    Brand Group 35.6 8.8 305 %
    Membership Group 145.9 158.7 -8 %
    AOL Networks 5.9 6.4 -8 %
    Corporate & Other (40.1 ) (50.6 ) 21 %
    Total Adjusted OIBDA $ 147.3 $ 123.3 19 %

    Brand Group

    Brand Group revenue growth reflects continued growth in global display. Brand Group display revenue grew 6% globally driven by improved pricing as a result of growth in premium format impressions. Brand Group search revenue was flat year-over-year.

    Brand Group Adjusted OIBDA improved significantly versus the prior year period, primarily due to the growth in display revenue discussed above as well as a reduction in personnel, primarily at Patch, and lower marketing costs. Lower year-over-year Brand Group operating expenses were partially offset by growth in TAC associated with AOL’s search marketing-related efforts.

    Membership Group

    Membership Group revenue declines reflect a 10% decline in subscription revenue driven by 10% fewer domestic AOL subscribers year-over-year. Membership Group revenue declines were partially offset by a 28% year-over-year reduction in churn rate to 1.3% and by 4% year-over-year growth in domestic average monthly subscription revenue per AOL subscriber (ARPU). Reduced churn and ARPU growth continues to reflect the benefits of AOL’s retention program and the impact of a price rationalization program. The decrease in Membership Group revenue year-over-year was also impacted by a decrease in search revenue of 7% due to fewer search queries resulting from a decline in domestic AOL subscribers.

    Membership Group Adjusted OIBDA declines primarily reflect the decline in subscription revenue discussed above, partially offset by a decline in costs associated with the decline in subscribers.

    AOL Networks

    AOL Networks revenue increased 50% year-over-year, driven by significant growth in Third Party Network revenue which includes Adap.tv. Excluding Adap.tv, Third Party Network revenue grew approximately 20% year-over-year, driven by growth in the sale of premium formats across AOL’s programmatic platform. AOL Networks’ year-over-year revenue comparison was negatively impacted by the divestiture of StudioNow in Q1 2013. StudioNow contributed $1.4 million in revenue to AOL Networks in Q4 2012.

    AOL Networks Adjusted OIBDA declined $0.5 million year-over-year driven by increased investments in our programmatic platforms and premium formats.

    Corporate & Other

    Corporate & Other Adjusted OIBDA improved significantly year-over-year, primarily driven by declines in marketing costs as a result of AOL’s broader cost reduction efforts, and a decline in legal costs.

    Tax

    AOL had Q4 2013 pre-tax income of $70.8 million and income tax expense of $35.3 million, resulting in an effective tax rate of 49.9%. This compares to an effective tax rate of 47.2% for Q4 2012. The effective tax rate for Q4 2013 differed from the statutory U.S. federal income tax rate of 35.0% primarily due to the impact of foreign losses that did not produce a tax benefit. The effective tax rate for Q4 2012 differed from the statutory U.S. federal income tax rate due to the impact of foreign losses that did not produce a tax benefit and the impact of changes in state tax rates and apportionment on AOL’s deferred tax assets.

    Cash Flow

    Q4 2013 cash provided by operating activities was $90.0 million, while Free Cash Flow was $60.4 million, both up year-over-year primarily due to growth in Adjusted OIBDA, partially offset by timing of working capital.

    CONSOLIDATED OPERATING METRICS
    Q4 2013 Q4 2012 Y/Y Change Q3 2013 Q/Q Change
    Subscriber Information
    Domestic AOL subscribers (in thousands) (1) 2,501 2,794 -10 % 2,508 0 %
    ARPU (1) $ 20.01 $ 19.27 4 % $ 20.15 -1 %
    Domestic AOL subscriber monthly average churn (2) 1.3 % 1.8 % -28 % 1.4 % -7 %
    Unique Visitors (in millions) (3)
    Domestic average monthly unique visitors to AOL Properties 120 113 6 % 115 4 %
    Domestic average monthly unique visitors to AOL Advertising Network 207 187 11 % 196 5 %
    (1) Domestic AOL subscribers include subscribers participating in introductory free-trial periods and subscribers that are paying no monthly fees or reduced monthly fees through member service and retention programs. Individuals who are only registered for our free offerings, including subscribers who have migrated from paid subscription plans, are not included in the AOL subscriber numbers presented above. Additionally, only those individuals whose subscription includes AOL-brand dial-up access service are included in the AOL subscriber numbers above. ARPU is calculated as domestic average monthly subscription revenue per AOL subscriber.
    (2) Churn represents the percentage of AOL subscribers that are either terminated or cancel our services, factoring in new and reactivated subscribers. Monthly average churn is calculated as the monthly average number of terminations plus cancellations divided by the initial AOL subscriber base plus any new registrations and reactivations for the applicable period.
    (3) See “Unique Visitor Metrics” on page 10 of this press release.

    Webcast and Conference Call Information

    AOL Inc. will host a conference call to discuss fourth quarter 2013 financial results on Thursday, February 6, 2014, at 8:00 am ET. To access the call, parties in the United States and Canada should call toll-free (800) 237.9752 and other international parties should call (617) 847.8706. Additionally, a live webcast of the conference call, together with supplemental financial information, can be accessed through the Company’s Investor Relations website at http://ir.aol.com. In addition, an archive of the webcast can be accessed through the link above for one year following the conference call, and an audio replay of the call will be available for two weeks following the conference call by calling (888) 286.8010 and other international parties should call (617) 801.6888. The access code for the replay is 64912086.

    FINANCIAL STATEMENTS

    AOL Inc.
    Consolidated Statements of Operations
    (In millions, except per share amounts)
    Three Months Ended December 31, Years Ended December 31,
    2013 2012 2013 2012
    (unaudited) (unaudited) (unaudited)
    Revenues:
    Advertising $ 507.0 $ 410.6 $ 1,613.4 $ 1,418.5
    Subscription 156.7 174.2 650.1 705.3
    Other 15.3 14.7 56.4 67.9
    Total revenues 679.0 599.5 2,319.9 2,191.7
    Costs of revenues 494.6 424.1 1,706.2 1,587.2
    General and administrative 84.4 112.0 322.0 413.2
    Amortization of intangible assets 15.4 9.6 45.1 38.2
    Restructuring costs 13.2 2.4 41.3 10.1
    Goodwill impairment charge – – 17.5 –
    Income from licensing of intellectual property – – – (96.0 )
    (Gain) loss on disposal of assets, net (0.4 ) (16.8 ) (2.5 ) (962.9 )
    Operating income 71.8 68.2 190.3 1,201.9
    Other income (loss), net (1.0 ) (1.1 ) (6.6 ) 8.2
    Income from operations before income taxes 70.8 67.1 183.7 1,210.1
    Income tax provision 35.3 31.7 93.1 162.4
    Net income $ 35.5 $ 35.4 $ 90.6 $ 1,047.7
    Net (income) loss attributable to noncontrolling interests 0.5 0.3 1.8 0.7
    Net income attributable to AOL Inc. $ 36.0 $ 35.7 $ 92.4 $ 1,048.4
    Per share information attributable to AOL Inc. common stockholders:
    Basic net income per common share $ 0.46 $ 0.43 $ 1.19 $ 11.51
    Diluted net income per common share $ 0.43 $ 0.41 $ 1.13 $ 11.21
    Shares used in computing basic income per common share 78.9 83.7 77.6 91.1
    Shares used in computing diluted income per common share 83.5 88.1 82.0 93.5
    Cash dividends paid per common share $ – $ 5.15 $ – $ 5.15
    Depreciation expense by function:
    Costs of revenues $ 28.9 $ 30.3 $ 119.0 $ 126.5
    General and administrative 2.6 2.8 9.9 12.2
    Total depreciation expense $ 31.5 $ 33.1 $ 128.9 $ 138.7
    Equity-based compensation by function:
    Costs of revenues $ 10.4 $ 5.3 $ 29.2 $ 18.9
    General and administrative 5.2 5.9 17.8 20.6
    Total equity-based compensation $ 15.6 $ 11.2 $ 47.0 $ 39.5
    Traffic Acquisition Costs (included in costs of revenues) $ 171.5 $ 104.1 $ 479.4 $ 356.9
    Third Party Network Traffic Acquisition Costs $ 144.9 $ 85.6 $ 393.8 $ 306.7
    AOL Inc.
    Consolidated Balance Sheets
    (In millions, except per share amounts)
    December 31, December 31,
    2013 2012
    Assets (unaudited)
    Current assets:
    Cash and equivalents $ 207.3 $ 466.6
    Accounts receivable, net of allowances of $8.3 and $6.6, respectively 491.0 351.9
    Prepaid expenses and other current assets 34.1 28.5
    Deferred income taxes, net 30.7 40.6
    Total current assets 763.1 887.6
    Property and equipment, net 467.9 478.3
    Goodwill 1,361.7 1,084.1
    Intangible assets, net 208.4 133.2
    Long-term deferred income taxes, net 110.6 148.8
    Other long-term assets 71.7 65.3
    Total assets $ 2,983.4 $ 2,797.3
    Liabilities, Redeemable Noncontrolling Interest and Equity
    Current liabilities:
    Accounts payable $ 101.0 $ 76.1
    Accrued compensation and benefits 127.0 151.4
    Accrued expenses and other current liabilities 197.3 175.3
    Deferred revenue 67.2 57.8
    Current portion of obligations under capital leases 55.5 49.6
    Total current liabilities 548.0 510.2
    Long-term portion of obligations under capital leases 56.2 56.3
    Long-term deferred income taxes 4.4 5.8
    Other long-term liabilities 97.6 73.8
    Total liabilities 706.2 646.1
    Redeemable noncontrolling interest 9.7 13.4
    Equity:
    Common stock, $0.01 par value, 114.1 million shares issued and 79.2 million shares
    outstanding as of December 31, 2013 and 110.1 million shares issued and 76.6
    million shares outstanding as of December 31, 2012    		 1.1 1.1
    Additional paid-in capital 3,592.7 3,457.5
    Accumulated other comprehensive income (loss), net (290.4 ) (294.1 )
    Accumulated deficit (93.6 ) (188.0 )
    Treasury stock, at cost, 34.9 million shares as of December 31, 2013 and
    33.5 million shares as of December 31, 2012    		 (942.9 ) (838.4 )
    Total stockholders’ equity 2,266.9 2,138.1
    Noncontrolling interest 0.6 (0.3 )
    Total equity 2,267.5 2,137.8
    Total liabilities, redeemable noncontrolling interest and equity $ 2,983.4 $ 2,797.3
    AOL Inc.
    Consolidated Statements of Cash Flows
    (In millions)
    Years Ended December 31,
    2013 2012
    (unaudited)
    Operating Activities
    Net income $ 90.6 $ 1,047.7
    Adjustments for non-cash and non-operating items:
    Depreciation and amortization 174.0 176.9
    Asset impairments and write-offs 30.6 6.1
    (Gain) loss on step acquisitions and disposal of assets, net (1.5 ) (975.5 )
    Equity-based compensation 47.0 39.5
    Deferred income taxes 51.5 124.1
    Other non-cash adjustments 4.4 (2.6 )
    Changes in operating assets and liabilities, net of acquisitions
    Receivables (104.5 ) (33.4 )
    Accrued expenses 21.7 4.6
    Deferred revenue 7.9 (12.7 )
    Other balance sheet changes (2.8 ) (9.1 )
    Cash provided by operating activities 318.9 365.6
    Investing Activities
    Investments and acquisitions, net of cash acquired (337.9 ) (32.0 )
    Proceeds from disposal of assets, net 1.5 952.3
    Capital expenditures and product development costs (65.7 ) (64.9 )
    Cash (used) provided by investing activities (402.1 ) 855.4
    Financing Activities
    Repurchase of common stock (134.8 ) (698.7 )
    Principal payments on capital leases (61.1 ) (55.6 )
    Tax withholdings related to net share settlements of restricted stock units (16.5 ) (7.6 )
    Proceeds from exercise of stock options 35.3 35.2
    Cash dividends paid – (434.4 )
    Cash dividend equivalent payments on restricted stock units (4.4 ) –
    Other financing activities 6.1 0.3
    Cash used by financing activities (175.4 ) (1,160.8 )
    Effect of exchange rate changes on cash and equivalents (0.7 ) (1.1 )
    (Decrease) increase in cash and equivalents (259.3 ) 59.1
    Cash and equivalents at beginning of period 466.6 407.5
    Cash and equivalents at end of period $ 207.3 $ 466.6

    SUPPLEMENTAL INFORMATION – UNAUDITED

    Items impacting comparability: The following table represents certain items that impacted the comparability of net income attributable to AOL Inc. for the three months and years ended December 31, 2013 and 2012 (In millions, except per share amounts):

    Three Months Ended
    December 31,    		 Year Ended
    December 31,
    2013 2012 2013 2012
    Restructuring costs $ (13.2 ) $ (2.4 ) $ (41.3 ) $ (10.1 )
    Equity-based compensation expense (15.6 ) (11.2 ) (47.0 ) (39.5 )
    Asset impairments and write-offs (0.2 ) (3.1 ) (30.6 ) (6.1 )
    Gain (loss) on disposal of assets, net (1) 0.4 17.6 2.5 964.2
    Costs related to proxy contest – (0.1 ) – (8.9 )
    Costs related to patent sale and return of proceeds to shareholders – (7.1 ) – (15.7 )
    Income from licensing of intellectual property – – – 96.0
    Tax, legal and other settlements – (1.0 ) – (8.6 )
    Acquisition-related costs (2) – (5.1 ) – (5.1 )
    Gain on consolidation of Ad.com Japan (3) – – – 10.8
    Pre-tax impact (28.6 ) (12.4 ) (116.4 ) 977.0
    Income tax impact (4) 11.3 2.1 38.1 (48.2 )
    After-tax impact of items impacting comparability of net income $ (17.3 ) $ (10.3 ) $ (78.3 ) $ 928.8
    Impact per basic common share $ (0.22 ) $ (0.12 ) $ (1.01 ) $ 10.20
    Impact per diluted common share $ (0.21 ) $ (0.12 ) $ (0.95 ) $ 9.93
    Effective tax rate (5) 39.4 % 39.2 % 39.4 % 39.2 %
    (1) Gain on disposal of assets for the three months ended December 31, 2012 relates primarily to the release of a VAT indemnification liability reserve associated with the sales of our German and UK access businesses in 2006 and 2007. The statute of limitations on this indemnification expired on December 31, 2012. For the year ended December 31, 2012, gain on disposal of assets also includes the gain on the sale of the patents of $946.1 million in the second quarter of 2012.
    (2) Acquisition-related costs for the three months and year ended December 31, 2012 includes approximately $4.7 million related to a bonus paid to employees of an acquired company and accounted for as compensation expense.
    (3) During the three months ended March 31, 2012, AOL purchased an additional interest in a joint venture, Ad.com Japan, and gained control of the board and day-to-day operations of the joint venture. As a result, beginning in February 2012, AOL consolidated the results of Ad.com Japan and upon closing of the transaction, AOL recorded a noncash gain of approximately $10.8 million related to our pre-existing investment in Ad.com Japan.
    (4) Income tax impact is calculated by applying the normalized effective tax rate to deductible items. The income tax impacts for certain items such as gain (loss) on disposal of assets and gain on consolidation of Ad.com Japan are calculated by using the actual tax expense for the transactions. The goodwill impairment charge of $17.5 million recorded in the third quarter of 2013 is not deductible for income tax purposes.
    (5) For the three months and year ended December 31, 2013, the effective tax rate was calculated based on AOL’s 2013 normalized annual effective tax rate. The effective tax rate for the three months and year ended December 31, 2012 was calculated based upon AOL’s 2012 normalized annual effective tax rate.
    AOL Inc.
    Reconciliation of Adjusted OIBDA to Operating Income and Free Cash Flow to Cash Provided by Operating Activities
    (In millions)
    Three Months Ended December 31, Years Ended December 31,
    2013 2012 2013 2012
    Operating income $ 71.8 $ 68.2 $ 190.3 $ 1,201.9
    Add: Depreciation 31.5 33.1 128.9 138.7
    Add: Amortization of intangible assets 15.4 9.6 45.1 38.2
    Add: Restructuring costs 13.2 2.4 41.3 10.1
    Add: Equity-based compensation 15.6 11.2 47.0 39.5
    Add: Asset impairments and write-offs 0.2 3.1 30.6 6.1
    Add: Losses/(gains) on disposal of assets, net (0.4 ) (17.6 ) (2.5 ) (964.2 )
    Add: Special items (1) – 13.3 – (57.7 )
    Adjusted OIBDA $ 147.3 $ 123.3 $ 480.7 $ 412.6
    Cash provided by operating activities $ 90.0 $ 76.7 $ 318.9 $ 365.6
    Less: Capital expenditures and product development costs 13.0 15.9 65.7 64.9
    Less: Principal payments on capital leases 16.6 14.5 61.1 55.6
    Free Cash Flow $ 60.4 $ 46.3 $ 192.1 $ 245.1
    (1) Special items for the three months ended December 31, 2012 include costs related to the patent sale of $7.1 million (including a year-end employee bonus as a result of the patent transaction) and acquisition-related costs of $5.1 million. Special items for the year ended December 31, 2012 also include patent licensing income of $96.0 million and additional costs related to the patent sale of $8.6 million, as well as proxy contest costs of $8.9 million and the Virginia tax settlement of $7.6 million.

    Note Regarding Non-GAAP Financial Measures

    This press release and its attachments include the financial measures Adjusted OIBDA and Free Cash Flow, both of which are defined as non-GAAP financial measures by the Securities and Exchange Commission (SEC). These measures may be different than similarly-titled non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles (GAAP). Explanations of our non-GAAP financial measures are as follows:

    Adjusted OIBDA. We define Adjusted OIBDA as operating income before depreciation and amortization excluding the impact of restructuring costs, non-cash equity-based compensation, gains and losses on all disposals of assets, noncash asset impairments and write-offs and special items. We consider Adjusted OIBDA to be a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business on a consistent basis across reporting periods, as it eliminates the effect of noncash items such as depreciation of tangible assets, amortization of intangible assets that were primarily recognized in business combinations, asset impairments and write-offs, as well as the effect of restructurings, gains and losses on asset sales and special items, which we do not believe are indicative of our core operating performance. We exclude the impacts of equity-based compensation to allow us to be more closely aligned with the industry and analyst community. A limitation of this measure, however, is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our business or the current or future expected cash expenditures for restructuring costs. The Adjusted OIBDA measure also does not include equity-based compensation, which is and will remain a key element of our overall long-term compensation package. Moreover, the Adjusted OIBDA measures do not reflect gains and losses on asset sales, impairment charges and write-offs related to goodwill, intangible assets and fixed assets or special items which impact our operating performance. We evaluate the investments in such tangible and intangible assets through other financial measures, such as capital expenditure budgets, investment spending levels and return on capital.

    Free Cash Flow. We define Free Cash Flow as cash provided by operating activities, less capital expenditures, product development costs and principal payments on capital leases. We consider Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after capital expenditures, capitalized product development costs and principal payments on capital leases, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening the balance sheet. Analysis of Free Cash Flow also facilitates management’s comparisons of our operating results to competitors’ operating results. A limitation on the use of this metric is that Free Cash Flow does not represent the total increase or decrease in cash for the period because it excludes certain non-operating cash flows.

    Unique Visitor Metrics

    We utilize unique visitor numbers to evaluate the performance of AOL Properties. In addition, we utilize unique visitor numbers to evaluate the reach of the AOL Advertising Network, which includes both AOL Properties and the Third Party Network. Unique visitor numbers provide an indication of our consumer reach. Although our consumer reach does not correlate directly to advertising revenue, we believe that our ability to broadly reach diverse demographic and geographic audiences is attractive to brand advertisers seeking to promote their brands to a variety of consumers without having to partner with multiple content providers. The source for our unique visitor information is a third party (comScore Media Metrix, or “Media Metrix”).

    Cautionary Statement Concerning Forward-Looking Statements

    This press release and our conference call at 8:00 a.m. Eastern Time today may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding business strategies, market potential, future financial and operational performance and other matters. Words such as “anticipates,” “estimates,” “expects,” “projects,” “forecasts,” “intends,” “plans,” “will,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance identify forward-looking statements. These forward-looking statements are based on management’s current expectations and beliefs about future events. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances. Except as required by law, we are under no obligation to, and expressly disclaim any obligation to, update or alter any forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise. Various factors could adversely affect our operations, business or financial results in the future and cause our actual results to differ materially from those contained in the forward-looking statements, including those factors discussed in detail in the “Risk Factors” sections contained in our Annual Report on Form 10-K for the year ended December 31, 2012 (the “Annual Report”) and in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 (the “Quarterly Report”), filed with the Securities and Exchange Commission. In addition, we operate a web services company in a highly competitive, rapidly changing and consumer- and technology-driven industry. This industry is affected by government regulation, economic, strategic, political and social conditions, consumer response to new and existing products and services, technological developments and, particularly in view of new technologies, the continued ability to protect intellectual property rights. Our actual results could differ materially from management’s expectations because of changes in such factors. Achieving our business and financial objectives, including improved financial results and maintenance of a strong balance sheet and liquidity position, could be adversely affected by the factors discussed or referenced under the “Risk Factors” sections contained in the Annual Report and Quarterly Report as well as, among other things: 1) changes in our plans, strategies and intentions; 2) stock price volatility; 3) future borrowing and restrictive covenants under the new revolving credit facility; 4) the impact of significant acquisitions, dispositions and other similar transactions; 5) our ability to attract and retain key employees; 6) any negative unintended consequences of cost reductions, restructuring actions or similar efforts, including with respect to any associated savings, charges or other amounts; 7) adoption of new products and services; 8) our ability to attract and retain unique visitors to our properties; 9) asset impairments; and 10) the impact of “cyber-attacks.”

     

    Image via Wikimeda Commons

  • Amazon Enters Video Ad Deal With FreeWheel

    Amazon Enters Video Ad Deal With FreeWheel

    Video ad tech provider FreeWheel announced a partnership with Amazon, which will see it powering the e-commerce giant’s video ad platform.

    Amazon users will see more game trailers, movie trailers, how-to videos and other video content appear across various product categories as a result. These will be short videos surfaced within relevant search results, the company says.

    According to the announcement, the partnership will integrate relevant brands and e-commerce ad experiences with Amazon’s video content. For example, a video game trailer could include a “shop now” button so customers can go to the title’s page on Amazon. A movie trailer might include a short pre-roll ad for new products.

    Amazon Media Group VP of Global Advertising Sales Lisa Utzschneider said, “Our customers love video. We’re excited to be connecting customers and advertisers through our video content, in ways that help customers discover and learn about great, relevant products. We benefit from FreeWheel’s video advertising expertise as we work to provide a great customer and advertiser experience.”

    FreeWheel Founder and Co-CEO Doug Knopper added, “We are thrilled to be teaming with such a significant player in the online content space. It’s exciting to be expanding our collaboration set and to be working with a new type of digital content provider.”

    Terms of the deal weren’t disclosed.

    Image via Wikimedia Commons

  • Google Announces DoubleClick Search Commerce Suite

    Google just announced the DoubleClick Search Commerce Suite, which the company describes as offering “a smarter, faster, product-centric layer to search management.”

    The suite gives advertisers tools for updating and creating text ads and product listing ad campaigns based on product catalog, real-time data and measurements.

    “We designed the DoubleClick Search Commerce Suite with products at the core, letting you efficiently build, manage, and optimize campaigns by seamlessly integrating with your existing product investments,” Google says in a blog post. “As the only platform directly integrated with Google Merchant Center, we make your product inventory visible and accessible within DoubleClick Search — meaning there’s no need to navigate a separate interface, manage a manual upload, or wait for a separate team to deliver product feed data. Instead, anyone on your marketing team can act on live updates, as they happen.”

    “For example, inventory-aware campaigns uses this live product information to automatically create and update text ads, keywords, and bids based on real-time changes to your Google Merchant Center feed — inclusive of updates to pricing, availability, product descriptions, and more — with no extra work, and at no extra cost to set up,” Google adds.

    Google is also adding dynamic product listing ads creation and product listing ads optimization capabilities. More details on these here.

    Image via Google

  • Google Ordered To Pay AdWords Royalties Over Patent Infringement

    A court has ruled that Google must pay 1.36% of its U.S. AdWords earnings from 2012 to 2016 to holding company (or patent troll, if you prefer) Vringo, which bought some old Lycos patents in 2011, which Google is said to be infringing upon. Those expire in 2016.

    Vringo already won about $30 million after suing Google, Microsoft, AOL, Gannett and Target. Google was ordered to pay $15.8 million before, but Vringo wanted more, and has now won the ongoing royalties mentioned above.

    Ars Technica reports:

    Today, Vringo got the payout it was looking for: a 1.36 percent running royalty on US-based revenue from AdWords, Google’s flagship program. US District Judge Raymond Jackson had already ruled last week (PDF) that the AdWords program, which was tweaked by Google after the Vringo verdict, wasn’t “colorably different” from the old infringing program. He gave Google and Vringo one last session to hammer out a royalty rate, and when they couldn’t, he went ahead and set it (PDF)—at almost exactly the rate Vringo was seeking.

    Because some aspects of Google’s revenue are opaque, it’s impossible to know exactly what Vringo’s win would be worth—and the company is a long way from cashing a check. But if the royalty rate were to be upheld on appeal, Google would surely have to pay hundreds of millions of dollars.

    According to Greg Sterling at Search Engine Land, they’re looking at potentially $1 billion.

    Google is obviously expected to appeal.

    Meanwhile, the company is reportedly nearing a settlement with the EU over an ongoing antitrust probe, which could help Google avoid a substantial fine.

    Image via Google

  • Demand Media Enters New Ad Partnership In Latin America

    Demand Media announced that it has entered into a digital advertising partnership with Cisneros Interactive’s RedMas, which will see RedMas gain exclusive representation for branded digital ad solutions eHow en Español, in certain Latin American countries.

    Demand Media will provide RedMas’ sales force with training and assistance on offering its ad solutions – including custom content, brand sponsorships and rich media units – to brands in the region.

    The company has worked with brands like Netflix, P&G, Sony, Coca-Cola, Nissan, Renault, Claro and Nokia.

    Stewart Marlborough, executive vice president of media at Demand Media, said, “Our international sites are experiencing explosive growth, particularly eHow en Español, which has increased its unique visitors nearly six-fold from the previous year and now attracts more than 25 million monthly uniques1. Our partnership with RedMas significantly expands our digital advertising footprint in the fast-growing Latin American market. The biggest brands and advertisers in the region will now have access to premium, affluent and intent-driven audiences ready to take action on advertisers’ contextually relevant messages.”

    “Representing inventory from eHow en Español provides RedMas with the opportunity to meet the increasing demand for more premium branded inventory from advertisers in the region,” said Victor Kong, president of Cisneros Interactive. “This product is an excellent complement to RedMas’ existing product line, and will significantly improve our offering of top quality branding solutions, especially those targeting young women and mothers.”

    The partnership covers Argentina, Bolivia, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Mexico, Panama, Paraguay, Peru, Uruguay, and Venezuela.

  • Netflix: Ads Are Not Something We’re Contemplating

    Netflix says it has no intentions of including ads in or around its content.

    The company released its quarterly earnings report on Wednesday. Shortly afterwards, the company held a Google+ Hangout with company execs and analysts. One analyst suggested that investors think Netflix is at the point where people would tolerate pre-roll ads similar to those seen in movie theaters.

    When asked if this is something Netflix would consider doing, CEO Reed Hastings said, “We have no plans to go towards advertising-based models. Our brand, at least over the next couple of years, and at this point, really stands for that commercial-free experience that we have where the consumer’s in control of the experience. They get to watch when they want. They get to pause it when they want. They can play it when they want, and watch it how and where they want. So it’s fundamental to that control orientation that we don’t cram advertisements down people’s throats. So I really don’t see that.”

    Asked if the company’s contracts would even allow for ads, Hastings said, “You know, at a certain price, anything’s allowable. I’m sure Ted [Content Chief Sarandos] could take take a lot more money, but it’s not something we’re contemplating.”

    Sarandos added, “It tends to be a separate set of rights, and to your point, Reed, we’ve got to go to great extremes to give consumers control of the content, you know, going all the way to the extreme of putting the entire season out at one time, so the notion of frustrating them for the first or the last couple of minutes seems a little out of step with that.”

    The highlight of the above hangout that has everyone talking is what Hastings said about HBO’s CEO.

    Image via YouTube

  • Apple’s Iconic, Creepy 1984 Ad Turns 30

    On January 22nd, 1984, Apple unveiled one of the most famous advertisements of all time on the biggest night in advertising.

    The minute-long commercial would introduce the Macintosh personal computer and would only be shown once, on CBS, during the third quarter of Super Bowl XVIII (with a minor exception). The ad sparked controversy, and Apple was even hit with a cease and desist order from the estate of George Orwell, whose famous novel 1984 clearly influenced the entire concept of the ad.

    Most interpretations of the ad see the hammer-wielding runner as a representation of Apple (or at least the new Macintosh), who frees humanity from Big Brother, conformity, and whatever dystopian future that’s projected. Read IBM. “See why 1984 won’t be like 1984,” reads the text at the end.

    The ad was directed by acclaimed director Ridley Scott, who had just directed the seminal classic Blade Runner.

    Here’s Steve Jobs discussing the legendary ad at a 1983 keynote:

    “It is now 1984. It appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money. Dealers initially welcoming IBM with open arms now fear an IBM dominated and controlled future. They are increasingly turning back to Apple as the only force that can ensure their future freedom. IBM wants it all and is aiming its guns on its last obstacle to industry control: Apple. Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right about 1984?”

    So, happy birthday creepy, yet highly inventive Apple ad. Maybe we’ll see some sort of updated version like we got 10 years ago, when Apple made a few slick additions to herald the coming of a new iPod:

    Image via YouTube

  • Google Launches AdSense Direct For Direct Ad Deals

    Google has announced the launch of AdSense Direct, a way for publishers to manage their directly sold ad deals from within their AdSense accounts.

    The feature also enables publishers to show these ads on their site without having to actually make changes to their code.

    “To use AdSense Direct, you’ll first need to arrange a direct deal with an advertiser — this can be any advertiser, regardless of whether or not they’re using AdWords,” explains product manager Matt Goodridge. “Once you’ve both agreed on the terms of the deal, enter the details into your AdSense account. You’ll get a link to send to the advertiser, where they can upload their ad and pay for the deal with Google Wallet. Once you approve the ad creative, the campaign will be ready to launch at the time period specified.”

    Google says AdSense Direct will help publishers maximize their revenue, save time and control their brand.

    “You’ll never miss an opportunity to earn revenue as your ad space will automatically revert back to showing AdSense ads as soon as a direct deal ends,” says Goodridge. “There’s no need to create contracts for every direct deal, as both parties contract with Google. Invoicing and payments are also handled automatically; your earnings from these deals will be included in your monthly AdSense payments cycle.”

    If you’re using AdSense Direct, Google will review all creatives submitted by advertisers before they run.

    The feature is available in the U.S. for now, but will hit other countries later this year.

    Image via YouTube

  • Yahoo Continues To Beat Google As Top U.S. Desktop Web Property

    Back in August, Yahoo made headlines for being the top web property in the U.S. on desktop computers, based on data from comScore, which releases its report each month. That was the first time Yahoo sites beat Google sites in two years, and it didn’t even include Tumblr traffic.

    At the time, a comScore spokesperson said that it could just be a seasonal/month-to-month fluctuation, with the numbers being pretty close to Google’s. In other words, Google could have easily gotten the top spot back the next month.

    But that didn’t happen. While the numbers may still not be too far apart, Yahoo has topped the list ever since.

    The data for December is now out with Yahoo sitting on top once again:

    comscore

    According to comScore’s report, Yahoo is also beating Google in the Ad Focus rankings (desktop only), though the companies come in at number three and four, with the top two spots going to AddThis and ShareThis.

    Lead image via Wikimedia Commons, Chart via comScore

  • Mobile Ad Revenue to Hit $18 Billion This Year

    As established consumer markets shift from traditional PC to mobile devices, advertisers have been scrambling to catch up and evolve along with mobile technology. Now that marketers are beginning to get a handle on mobile advertising, mobile ad revenues are now set to climb significantly in the coming years.

    Market research firm Gartner this week released a report predicting that mobile ad revenue in 2014 will climb to $18 billion. That represents a 37% increase from the $13.1 billion in mobile ad revenue taken in globally in 2013. Gartner also predicts that the industry will more than double by 2017, hitting an estimated $41.9 billion during that year.

    “Over the next few years, growth in mobile advertising spending will slow due to ad space inventory supply growing faster than demand, as the number of mobile websites and applications increases faster than brands request ad space on mobile device screens,” said Stephanie Baghdassarian, research director at Gartner. “However, from 2015 to 2017, growth will be fueled by improved market conditions, such as provider consolidation, measurement standardization and new targeting technologies, along with a sustained interest in the mobile medium from advertisers.”

    Gartner believes that display ads will remain the largest portion of mobile ad revenue for the next few years. Mobile video ads, however, will see huge growth as advertisers seek to leverage the growing tablet install base. Also, location is predicted to play a larger role in future mobile advertising, making mobile ads a better proposition for local businesses.