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  • Report: FTC Is Concerned About Google’s DoubleClick

    Google purchased DoubleClick back in 2007. While it was enough to draw heavy scrutiny from the Federal Trade Commission, the FTC ultimately gave the deal a greenlight as it couldn’t find any grounds to prevent it from going through.

    That was not without stipulation, however.

    The FTC said at the time, “The markets within the online advertising space continue to quickly evolve, and predicting their future course is not a simple task. Accounting for the dynamic nature of an industry requires solid grounding in facts and the careful application of tested antitrust analysis. Because the evidence did not support the theories of potential competitive harm, there was no basis on which to seek to impose conditions on this merger. We want to be clear, however, that we will closely watch these markets and, should Google engage in unlawful tying or other anticompetitive conduct, the Commission intends to act quickly.”

    The emphasis above is ours, but it’s that part that’s come into question. You can read the FTC’s whole statement here.

    Digiday has a lengthy report about how media buyers say Google is using its DoubleClick Ad Exchange as leverage in negotiations in getting them to use DoubleClick Bid Manager. Digiday’s John McDermott reports:

    Executives at media agencies told Digiday that Google is now trying to coerce them to use the two ad tech components together, effectively selling them as a single product in an industry practice referred to as “tying.” Specifically, Google is demanding that ad impressions bought on DoubleClick Ad Exchange, or AdX, be bought using DoubleClick Bid Manager, or DBM, if they are to count toward satisfying the agencies’ buying agreements with Google. That is, Google will not recognize AdX impressions that are not bought via DBM.

    The move calls into question the various roles Google plays in the digital advertising system it dominates. Google is the operator of the largest ad exchange, AdX, while also operating a leading DSP, namely, DBM. Pressuring ad buyers to use them together raises questions about fair play since Google can effectively use access to AdX to limit competition within the DSP market.

    McDermott also says the publication has been told by different ad tech companies that the FTC has been asking them (this year) about whether or not they think Google is abusing its power in relation to DoubleClick. While the FTC hasn’t launched a formal investigation as far as anybody knows, it would seem that it has been poking around, which could mean that one is on the horizon.

    The FTC is not publicly commenting on the matter, and Google has said it’s not aware of a probe.

    Image via DoubleClick

  • Facebook Launches Mobile App Ad Improvements

    Facebook Launches Mobile App Ad Improvements

    Facebook announced new buying, creative, and targeting options for mobile app ads aimed at helping marketers more effectively advertise during the holiday season, and presumably getting them to spend more money.

    For one, marketers can now buy Facebook mobile app ads with guaranteed reach and frequency.

    “This allows advertisers to boost awareness while controlling how often someone sees an ad,” Facebook is telling businesses. “For example, advertisers can set their app ad campaign to reach 5 million people with a frequency cap of three impressions per person for one week. Since reach and frequency optimizes for unique reach, it should only be used for campaigns with brand awareness goals, like those for app launches or updates.”

    Additionally, mobile app ads in News Feed will now support video creative, and mobile app advertisers can start targeting Amazon Fire tablets.

    “As more and more people upload, share and discover video on Facebook, marketers are realizing the value of video at every stage of the buying cycle, from awareness to conversion,” Facebook says. “This holiday season and moving forward, when eligible, video mobile app ads will play automatically in News Feed. Additionally, advertisers are now able to purchase mobile app ads with video creative through Power Editor.”

    As far as Amazon Tablets are concerned, you may be interested to know that Amazon sold three times as many on Black Friday as it did during the same time last year.

    Facebook already offered targeting for Apple, Samsung, and HTC devices. Now marketers will be able to advertise Amazon Appstore apps on Facebook to the appropriate audience.

    If you’re a developer, Facebook has some things related to all of this to tell you too.

    If you’re running a business or at least marketing one, check out the company’s blog post for some tips on holiday mobile app advertising.

    Image via Facebook

  • Ace Metrix Ranks Top 10 Holiday Ads

    Ace Metrix Ranks Top 10 Holiday Ads

    Television and video advertising analytics firm Ace Metrix announced the top 10 highest scoring holiday ads heading into Thanksgiving.

    “As is true throughout the year, advertisers develop ads based on a variety of creative strategies. During the holiday season, however, it is even more challenging to break through the clutter and to grab the attention of increasingly distracted consumers,” said Ace Metrix CEO Peter Daboll. “Many of the ads on this list not only generated product passion and delivered on persuasive components, but they demonstrated extraordinary breakthrough power necessary to rise above the noise of the season and to drive performance for the brand.”

    These are determined by the Ace Score, which is describes as the measure of ad creative effectiveness based on viewer reaction to national TV ads. A sample of over 500 people, which the firm says is representative of the U.S. TV viewing audience, scores each ad. Results are presented on a scale of 1 to 950, and take into account attributes like Persuasion, Likability, Information, Attention, Change, Relevance, Desire and Watchability.

    Here’s the rankings at a glance, followed by a few of the actual ads.

    Image via BusinessWire

  • Twitter Tests Card-Linked ‘Offers’ With A Few Brands

    Twitter announced that it’s testing a new offering for advertisers called Twitter Offers, whicn enables them to provide card-linked promotions to users.

    When a Twitter users sees a Twitter Offer in their timeline, they can add it to their credit or debit card, and redeem it in real time using their card at the store that offered the deal.

    “Because the offer is tied to their card, redemption is seamless and easy: there are no coupons to redeem at the point of purchase. After the purchase, the cash back savings appear on their card statement within a few days,” says group product manager Tarun Jain.

    twitter offers

    “With Twitter Offers, advertisers will be able to attribute redemptions directly to their campaigns on Twitter, so that they can effectively measure the ROI from their promotions, even when redemption happens offline,” adds Jain. “Additionally, we make it easy for merchants to get up and running because they can use their existing payment network, there’s no change to the consumer purchase process, no employee training and no new hardware or software to install. By leveraging Twitter’s robust targeting capabilities, advertisers can tailor their promotions and campaigns to the right audience, while optimizing for performance.”

    twitter offers

    Twitter will encrypt and store users’ card information so future offers are easier to take advantage of. The info can also be removed at any time if the user prefers.

    Twitter is only testing the Offers with a few brands for now, and it’s only in the U.S. until further notice.

    This follows Twitter’s previously announced testing of a buy button, which you can currently use from select brands.

    Images via Twitter

  • Big Facebook Spenders Get Special Ad Tool ‘Grapevine’ [Report]

    Facebook reportedly has a marketing program called Grapevine, which it shares with some of its highest-paying advertisers, that gives those advertisers access to unprecedented user data on an anonymous basis.

    This is according to AdWeek, which cites anonymous sources, and reported on a similar offering as far back as 2012.

    Facebook is explicitly inviting brands to the program based on bankroll, the report says, adding that those spending in the millions on campaigns or a half a million on a single ad are those who are gaining access.

    The report compares it to Twitter’s firehose of tweets, but acknowledge that much of Facebook’s data is not public.

    As far as what advertisers can get out of it, the report gives an example of a shampoo brand being able to gain insights into what users are saying about frizzy hair, and then being able to tailor ads based on that.

    Sounds a little overpriced to me, but then again, I’m not the one spending the money.

    It’s often been theorized that marketers will get more out of Facebook the more money they spend. Grapevine would certainly seem to qualify as far as that goes.

    If you plan on spending millions on Facebook ads, feel free to let us know how Grapevine goes for you.

    Image via Thinkstock

  • Google Launches ‘Contributor’ To Get People To Pay For Publishers’ Content

    Google has a new product for publishers that enables them to receive payment from readers who would rather pay for content than see ads. It’s called Contributor by Google.

    The user chooses a monthly contribution from $1 to $3. When they visit a participating site, part of the contribution goes to that site. They’ll see pixel pattern or a thank you message where they’d normally see ads on these sites.

    Initial partners include Urban Dictionary, The Onion, Science Daily, WikiHow, Mashable, and Imgur.

    Google bills it as a way to “support the people who make the web.”

    Publishers can contact Google at [email protected] about getting involved. Users can request an invite.

    Via GigaOm

    Image via Google

  • Google Releases New Shopping Campaign Features

    Google Releases New Shopping Campaign Features

    Google announced the launch of some new features for its Shopping Campaigns. These include an auction insights report, a revamped search impression share, device/time segmentation, bid simulator columns, and a flattened view of product groups.

    The auction insights report lets advertisers compare Product Listing Ad performance to other advertisers participating in the same auctions.

    “With impression share, overlap rate and outranking share, you’re able to see trends amongst your peers and strategic opportunities to improve your bidding strategies,” says product manager Dimitris Meretakis.

    Google says search impression share has been revamped to be more useful and aligned with text ads.

    “You can now analyze your share of voice at the granularity you want with Search impression share in the Dimensions tab,” said Meretakis. “You’ll know which campaigns are limited by a low budget with Lost IS (budget) and which ones need further optimization with Lost IS (rank). Note that we now calculate Search impression share at account level so you may notice a change in impression share between October and November.”

    With device and time segmentation, advertisers can see if competitors received more mobile impressions than they did over the weekend. Bid simulator columns show what results could have been like if the advertiser had set different bids.

    Finally, the flattened view of product groups presents another way to analyze performance, letting you sort product groups within an ad group based on performance data.

    More on all of this here.

    Images via Google

  • Mozilla’s New Browser Ads Make Their Debut

    Mozilla announced in February that it would sell ad space in its popular Firefox browser through “Directory Tiles,” which would replace the nine blank tiles on the tab page with “pre-packaged content” for first time users.

    “Directory Tiles will instead suggest pre-packaged content for first-time users,” explained Mozilla’s VP of Content Services, Darren Herman at the time. “Some of these tile placements will be from the Mozilla ecosystem, some will be popular websites in a given geographic location, and some will be sponsored content from hand-picked partners to help support Mozilla’s pursuit of our mission. The sponsored tiles will be clearly labeled as such, while still leading to content we think users will enjoy.”

    On Thursday, Mozilla and Mindshare North America announced a partnership, which will see the agency network provide its clients with access to these ad spot in the browser. The first client to go live is CVS Health.

    “We believe there is a huge gap in the marketplace around user participation in advertising: it’s non-existent at scale. We believe users will trust advertising if it’s transparent and they have control of their experience,” said Herman. “We built our own solution to show the world that putting the user first is possible and we will partner with different technology companies over the coming months to extend our principles beyond Firefox.”

    “We are excited for CVS Health to be one of the first launch partners with Mozilla’s new content initiative. We are always looking for ways to be innovative, break through the clutter, and bring first-to-market opportunities to our brands,” said Marisa Skolnick, Associate Director, Mindshare North America. “Mozilla has given us that opportunity and allowed us to help ideate and take a first look into future concepts.”

    GroupM, which is Mindshare’s parent company, will work with Mozilla to refine new ad products, and will provide “product advisory” through next year.

    Image via PR Newswire

  • Google DoubleClick Outage May Have Cost Publishers Big Time

    Google’s DoubleClick ad network suffered a major outage today. It reportedly began at around 9:40 AM Eastern, and lasted a little less than an hour.

    Everything should be back to normal now. Google just tweeted this:

    While everything may be back to normal, and an hour without ads may not seem like a big deal, it could actually mean a pretty substantial amount of money down the toilet.

    According to AdWeek, the potential amount lost could be as much as $2 million. Lauren Johnson writes:

    Google’s third-party ad network brought in $3.4 billion last quarter, according to the Mountain View, Calif.-based company’s third quarter report. That equates into $1.5 million per hour when applying back-of-the-napkin math, which also suggests the damage could have been as much as $2 million this morning.

    Many, many websites utilize DoubleClick ads, including AdWeek itself, as well as The Wall Street Journal, Wired, Forbes, The Guardian, and countless others. It’s not hard to see why an hour of downtime could add up quickly.

    Image via Google

  • Yahoo Is Buying BrightRoll For $640 Million

    Yahoo Is Buying BrightRoll For $640 Million

    Yahoo announced that it has agreed to acquire programmatic video advertising platform BrightRoll for $640 million in cash. The platform will be combined with Yahoo’s premium desktop and mobile video ad inventory. Yahoo also notes that related publisher relationships will bring value for advertisers on both platforms.

    BrightRoll powers video ads for 87 of the AdAge Top 100 U.S. advertisers, as well as all of the top fifteen ad agencies and ten of the leading demand-side platforms. It served more video ads and reached more people in the U.S. this year than any other platform, according to comScore.

    Yahoo CEO Marissa Mayer said in a blog post, “Video is display 2.0. It’s what brand advertisers love. It’s a format that elegantly and easily transitions from broadcast television to PC to mobile and even to wearables. This is why video is a key part of our strategy. It’s one of our four strategic pillars: search, communications, digital magazines and video. It’s also one of our growth businesses: mobile, social, native, video.”

    “We say that video is display 2.0 because we believe it can reinvent and replace the branded banner advertisement,” she added. “Video, along with mobile, social, and native, represents a new format of online advertising that has the potential to help us transform and modernize Yahoo’s display business and return it to growth.”

    BrightRoll Founder and CEO Tod Sacerdoti said, “We believe the next step for programmatic video advertising as an industry is to extend and standardize globally, make cross-device buying simple and measurable, and complement and integrate with TV. We are excited to join Yahoo to materially advance efforts in each of these areas. We’re still in the early innings as an industry, and together, BrightRoll and Yahoo are committed to the vision of helping grow the entire video advertising ecosystem.”

    BrightRoll is expected to bring in $100 million in net revenues this year. Yahoo expects the transaction to enhance its EBITDA. The deal is subject to closing conditions.

    Image via Wikimedia Commons

  • Adrian Peterson Loses Nike Sponsorship Following Plea

    Nike has ditched Minnesota Vikings running back Adrian Peterson.

    “Adrian Peterson is no longer a Nike athlete,” said a Nike spokesperson in a very brief statement.

    Peterson’s Nike deal was already suspended, following the star’s indictment. In September, a grand jury indicted Peterson on felony charges of reckless injury to a child. Police accused Peterson of injuring his four-year-old son with a switch.

    Earlier this week, Peterson pleaded no contest to one count of misdemeanor reckless assault. He’ll be fined $4,000, given 80 hours of community service to perform, and will be placed on probation. He’ll avoid jail time.

    It looks like Nike was waiting for the whole this to be resolved before coming to a definite conclusion regarding Peterson’s future with the company. But now, will the case pretty much wrapped up, Nike is dropping the high-profile athlete.

    Of course, the legal side of things is only part of Peterson’s troubles. His future in the NFL is now in the hands of commissioner Roger Goodell. Peterson, of course, wants to start playing again as soon as possible – but the NFL has already declined his request for immediate reinstatement.

    At this point, whether or not Peterson sees the field this season is completely up in the air.

    As for Nike, this is the second NFL athlete it has been forced to part ways with. Nike terminated a deal they had with former Baltimore Ravens running back Ray Rice after that video emerged showing him knocking out his then-fiancee in an elevator.

    Image via Nike, YouTube screenshot

  • AOL Earnings Released, Revenue Up 12%

    AOL just released its Q3 earnings report with total revenue growth of 12% year-over-year thanks to strong global advertising growth. This was the company’s seventh consecutive quarter of revenue growth.

    It grew its domestic multi-platform unique visitors by 14% from the same period last year, which is the fastest rate of grwoth among the top five internet properties, AOL claims.

    Programmatic revenue grew to 37% of non-search ad revenue from just 12% the same time last year. Global ad revenue grew 18% thanks to strong pricing growth in display and third-party platform driven. AOL credits premium formats including video.

    CEO Tim Armstrong said, “In Q3, AOL continued its strong growth in consumer traffic, revenue and profitability across its portfolio of assets. AOL is a leader in global content, video, mobile, and programmatic advertising and is positioned directly at the center of the most disruptive changes happening online and offline in culture and code.”

    The company also announced a stock repurchase of a million shares.

    Here’s the release in its entirety:

    NEW YORK–(BUSINESS WIRE)–Nov. 6, 2014–

    AOL Inc. (NYSE:AOL) released third quarter 2014 results today.

    “In Q3, AOL continued its strong growth in consumer traffic, revenue and profitability across its portfolio of assets,” said Tim Armstrong, AOL Chairman and CEO. “AOL is a leader in global content, video, mobile, and programmatic advertising and is positioned directly at the center of the most disruptive changes happening online and offline in culture and code.”

    Summary Results
    In millions (except per share amounts)
    Q3 2014 Q3 2013 Change
    Revenues
    Global advertising and other $ 473.4 $ 399.7 18%
    AOL Properties Display 141.5 141.9 0%
    AOL Properties Search 97.9 95.0 3%
    Third Party Platform 215.1 149.1 44%
    Other 18.9 13.7 38%
    Subscription 153.4 161.6 -5%
    Total revenues $ 626.8 $ 561.3 12%
    Adjusted operating income before depreciation and amortization (Adjusted OIBDA) (1) $ 121.8 $ 119.8 2%
    Operating income $ 48.0 $ 16.7 187%
    Net income attributable to AOL Inc. $ 28.5 $ 2.0 1325%
    Diluted EPS $ 0.35 $ 0.02 1650%
    Adjusted Diluted EPS (1) $ 0.52 $ 0.56 -7%
    Cash provided by operating activities $ 137.8 $ 98.9 39%
    Free Cash Flow (1) $ 101.2 $ 64.6 57%
    (1) See Page 8 for a reconciliation of Adjusted OIBDA, Adjusted Diluted EPS and Free Cash Flow to the GAAP financial measures we consider most comparable.

    Q3 Consolidated AOL Revenue Trends:

    • Total revenue grew 12% year-over-year on strong growth in global advertising and other revenue.
    • Global advertising and other revenue grew 18% year-over-year reflecting:
      • 44% growth in Third Party Platform revenue, driven by growth in the sale of premium formats and by the inclusion of revenue from Adap.tv for a full quarter in 2014 versus approximately one month in 2013. Third Party Platform revenue grew approximately 22% excluding Adap.tv.
      • Flat AOL Properties display revenue due to the absence in Q3’14 of approximately $10 million in revenue from disposed or shuttered brands, including Patch. Excluding these impacts, display revenue grew 7% driven by improved pricing on AOL Properties.
      • 3% growth in AOL Properties search revenue, driven by increased queries from search marketing-related efforts.
      • 38% growth in other revenue, related to increased platform access and licensing fees.
    • Subscription revenue declined 5% year-over-year as 6% growth in average monthly subscription revenue per AOLsubscriber (ARPU) partially offset a 9% decline in subscribers. Domestic AOL subscriber monthly average churn improved sequentially to 1.4% in Q3 2014 and was flat to Q3 2013.

    Q3 Consolidated AOL Profitability Trends:

    • Cost of revenues increased $61 million year-over-year, driven by a $65 million increase in TAC, partially offset by expense savings resulting from reduced headcount. TAC increases reflect the inclusion of Adap.tv, search marketing-related efforts and growth in Third Party Platform revenue.
    • General and administrative expenses grew $3 million year-over-year, due primarily to increased operating expenses associated with acquisitions made late 2013 and early 2014.
    • Adjusted OIBDA grew 2% year-over-year, driven primarily by total revenue growth. Year-over-year comparisons were negatively impacted by $5 million received in the prior year period related to the disposition of a legal claim. Excluding this impact, Adjusted OIBDA grew 6% year-over-year.
    • Diluted and Adjusted Diluted EPS were negatively impacted by increased amortization associated with acquisitions made late 2013 and early 2014 and increased interest expenses associated with our credit facility and convertible senior note offering during the quarter, which more than offset the benefit of a lower effective tax rate.

    AOL Asset, Cash & Cash Flow Trends:

    • AOL had $458 million of cash and equivalents at September 30. During the quarter, AOL repaid $105 million of borrowings under its $250 million senior secured revolving credit facility. AOL had no outstanding borrowings at September 30 and has none to date. Additionally, on July 30, AOL completed the sale of its Dulles Technology Center (DTC) for approximately $33 million in cash.
    • On August 14, AOL issued $379.5 million aggregate principal amount of 0.75% convertible senior notes maturingSeptember 1, 2019. Net proceeds after expenses were approximately $369 million. AOL used a net $37 million of the net proceeds to pay the cost of the convertible note hedge and warrant transactions designed primarily to offset potential shareholder dilution.
    • Q3 cash provided by operating activities was $138 million and Free Cash Flow was $101 million, an increase of 39% and 57% year-over-year, respectively, reflecting the timing of working capital.
    • On July 28, AOL’s Board of Directors authorized a $150 million share repurchase program. On August 6, 2014 in connection with the convertible senior note offering, AOL repurchased approximately 1 million shares of common stock at an average price of $42.46, or approximately $40 million in aggregate, leaving $110 million available on AOL’s current authorization.
    DISCUSSION OF SEGMENT RESULTS
    Q3’14 Q3’13 Change
    (In millions)
    Revenues
    Brand Group $ 187.3 $ 192.5 -3%
    Membership Group 196.7 204.5 -4%
    AOL Platforms 271.9 188.7 44%
    Intersegment eliminations (29.1) (24.4) -19%
    Total Revenues $ 626.8 $ 561.3 12%
    Adjusted OIBDA
    Brand Group $ 17.0 $ 10.9 56%
    Membership Group 139.2 149.8 -7%
    AOL Platforms (0.6) (7.1) 92%
    Corporate & Other (33.8) (33.8) 0%
    Total Adjusted OIBDA $ 121.8 $ 119.8 2%

    Brand Group

    Brand Group revenue declined year-over-year, impacted by the absence of display revenue from disposed or shuttered brands, including Patch. Excluding this impact, Brand Group display revenue grew 1%, driven by continued growth in inventory pricing.Brand Group search revenue grew 8% year-over-year, driven by increased queries from search marketing-related efforts.

    Brand Group Adjusted OIBDA improved significantly year-over-year, due to general cost savings initiatives, including the savings associated with the disposal and shuttering of certain brands, including Patch, partially offset by increased TAC associated with search marketing-related efforts.

    Membership Group

    Membership Group revenue declines reflects a 5% year-over-year decline in subscription revenue and a decline in search revenue, offset in part by growth in display revenue on improved inventory pricing at AOL Mail. Subscription and search revenue declines reflect 9% fewer domestic AOL subscribers on 1.4% monthly average churn. Subscription revenue declines were partially offset by 6% growth in ARPU year-over-year, reflecting price increases associated with adding increased features, services and value to our subscribers’ packages.

    Membership Group Adjusted OIBDA declines primarily reflect subscription revenue declines discussed above, partially offset by a decrease in costs related to fewer domestic AOL subscribers. Year-over-year comparisons were negatively impacted by $5 millionreceived in Q3 2013 related to the disposition of a legal claim. Excluding this impact, Membership Adjusted OIBDA declined 4% year-over-year.

    AOL Platforms

    AOL Platforms revenue increased 44% year-over-year, driven by significant growth in Third Party Platform revenue, and revenue from Adap.tv for a full quarter in 2014 as compared to approximately one month in 2013. Excluding Adap.tv, Third Party Platform revenue grew approximately 23% year-over-year, driven by growth in the sale of premium formats.

    AOL Platforms Adjusted OIBDA improved significantly year-over-year, reflecting strong growth in revenue in the segment, partially offset by increased TAC and investments in our programmatic platforms and premium formats.

    Tax

    AOL had Q3 2014 pre-tax income of $42 million and income tax expense of $14 million, resulting in an effective tax rate of 34%. This compares to an effective tax rate of 90% for Q3 2013. The effective tax rate for Q3 2014 did not materially differ from the statutory U.S. federal income tax rate of 35% primarily due to additional deductions that produced a tax benefit in the quarter, which offset foreign losses that did not produce a tax benefit. The effective tax rate for Q3 2013 differed from the statutory U.S. federal income tax rate of 35% primarily due to the tax impact of the non-deductible goodwill impairment charge and the foreign losses that did not produce a tax benefit.

    Cash Flow

    Q3 cash provided by operating activities was $138 million and Free Cash Flow was $101 million, an increase of 39% and 57%, respectively, primarily reflecting the timing of working capital.

    OPERATING METRICS
     
    Q3 2014 Q3 2013 Y/Y Change Q2 2014 Q/Q Change
    Subscriber Information
    Domestic AOL subscribers (in thousands) (1) 2,274 2,508 -9% 2,338 -3%
    ARPU (1) $ 21.35 $ 20.15 6% $ 20.86 2%
    Domestic AOL subscriber monthly average churn (2) 1.4% 1.4% 0% 1.6% -13%
    Unique Visitors (in millions) (3)
    Domestic average monthly AOL multi-platform unique visitors 179 156 14% 171 5%
    Domestic average monthly desktop unique visitors to AOL Properties 108 115 -7% 108 0%
    (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 9 of this press release.
    FINANCIAL STATEMENTS
    AOL Inc.
    Condensed Consolidated Statements of Operations
    (In millions, except per share amounts)
    Three Months Ended September 30, Nine Months Ended September 30,
    2014 2013 2014 2013
    (unaudited) (unaudited)
    Revenues:
    Advertising and other $ 473.4 $ 399.7 $ 1,358.5 $ 1,147.5
    Subscription 153.4 161.6 458.4 493.4
    Total revenues 626.8 561.3 1,816.9 1,640.9
    Costs of revenues 479.4 418.6 1,394.3 1,211.6
    General and administrative 81.5 78.2 236.3 237.6
    Amortization of intangible assets 16.9 11.1 48.6 29.7
    Restructuring costs 1.2 19.0 15.7 28.1
    Goodwill impairment charge – 17.5 – 17.5
    (Gain) loss on disposal of assets, net (0.2) 0.2 (4.2) (2.1)
    Operating income 48.0 16.7 126.2 118.5
    Interest and other income (expense), net (5.7) (2.1) (7.0) (5.6)
    Income before income taxes 42.3 14.6 119.2 112.9
    Income tax provision 14.4 13.1 55.2 57.8
    Net income $ 27.9 $ 1.5 $ 64.0 $ 55.1
    Net (income) loss attributable to noncontrolling interests 0.6 0.5 2.0 1.3
    Net income attributable to AOL Inc. $ 28.5 $ 2.0 $ 66.0 $ 56.4
    Per share information attributable to AOL Inc. common stockholders:
    Basic net income per common share $ 0.36 $ 0.03 $ 0.83 $ 0.73
    Diluted net income per common share $ 0.35 $ 0.02 $ 0.79 $ 0.69
    Shares used in computing basic income per common share 78.3 77.3 79.2 77.1
    Shares used in computing diluted income per common share 82.2 81.2 83.3 81.4
    Depreciation expense by function:
    Costs of revenues $ 31.1 $ 29.8 $ 92.2 $ 90.1
    General and administrative 2.4 2.2 8.4 7.3
    Total depreciation expense $ 33.5 $ 32.0 $ 100.6 $ 97.4
    Equity-based compensation by function:
    Costs of revenues $ 15.1 $ 7.6 $ 34.8 $ 18.8
    General and administrative 6.2 4.2 16.6 12.6
    Total equity-based compensation $ 21.3 $ 11.8 $ 51.4 $ 31.4
    Traffic Acquisition Costs (included in costs of revenues) $ 178.9 $ 114.0 $ 488.2 $ 307.9
    Third Party Platform Traffic Acquisition Costs $ 143.5 $ 93.8 $ 386.7 $ 248.9
    AOL Inc.
    Condensed Consolidated Balance Sheets
    (In millions, except per share amounts)
    September 30, December 31,
    2014 2013
                                        Assets (unaudited)
    Current assets:
    Cash and equivalents $ 457.5 $ 207.3
    Accounts receivable, net of allowances of $9.2 and $8.3, respectively 457.3 491.0
    Prepaid expenses and other current assets 38.9 34.1
    Deferred income taxes, net 24.2 30.7
    Total current assets 977.9 763.1
    Property and equipment, net 454.3 467.9
    Goodwill 1,486.3 1,361.7
    Intangible assets, net 228.0 208.4
    Long-term deferred income taxes, net 76.6 110.6
    Other long-term assets 95.4 71.7
    Total assets $ 3,318.5 $ 2,983.4
    Liabilities, Redeemable Noncontrolling Interest and Equity
    Current liabilities:
    Accounts payable $ 77.0 $ 101.0
    Accrued compensation and benefits 96.5 127.0
    Accrued expenses and other current liabilities 201.8 197.3
    Deferred revenue 70.4 67.2
    Current portion of obligations under capital leases 53.6 55.5
    Total current liabilities 499.3 548.0
    Convertible senior notes 303.1 –
    Long-term portion of obligations under capital leases 82.3 56.2
    Long-term deferred income taxes 3.7 4.4
    Other long-term liabilities 104.5 97.6
    Total liabilities 992.9 706.2
    Redeemable noncontrolling interest 9.0 9.7
    Equity:
    Common stock, $0.01 par value, 115.2 million shares issued and 77.8 million
    shares outstanding as of September 30, 2014 and 114.1 million shares issued
    and 79.2 million shares outstanding as of December 31, 20130 1.2 1.1
    Additional paid-in capital 3,676.8 3,592.7
    Accumulated other comprehensive income (loss), net (293.8) (290.4)
    Accumulated deficit (27.4) (93.6)
    Treasury stock, at cost, 37.4 million shares as of September 30, 2014 and 34.9
    million shares as of December 31, 2013 (1,041.5) (942.9)
    Total stockholders’ equity 2,315.3 2,266.9
    Noncontrolling interest 1.3 0.6
    Total equity 2,316.6 2,267.5
    Total liabilities, redeemable noncontrolling interest and equity $ 3,318.5 $ 2,983.4
    AOL Inc.
    Condensed Consolidated Statements of Cash Flows
    (In millions)
    Nine Months Ended September 30,
    2014 2013
    (unaudited)
    Operating Activities
    Net income $ 64.0 $ 55.1
    Adjustments for non-cash and non-operating items:
    Depreciation and amortization 149.2 127.1
    Asset impairments and write-offs 12.3 30.4
    (Gain) loss on disposal of assets, net (4.2) (1.1)
    Accretion of convertible notes discount 1.6 –
    Amortization of debt issuance costs 0.7 0.2
    Equity-based compensation 51.4 31.4
    Deferred income taxes 4.7 31.5
    Other non-cash adjustments 2.8 4.5
    Changes in operating assets and liabilities, net of acquisitions 4.7 (50.2)
    Cash provided by operating activities 287.2 228.9
    Investing Activities
    Investments and acquisitions, net of cash acquired (192.6) (336.9)
    Proceeds from disposal of assets, net 38.2 1.1
    Capital expenditures and product development costs (55.7) (52.7)
    Cash used by investing activities (210.1) (388.5)
    Financing Activities
    Borrowings under the credit facility agreement 105.0 –
    Repayments under the credit facility agreement (105.0) –
    Repurchase of common stock (98.6) (102.2)
    Proceeds from issuance of convertible notes 379.5 –
    Payment of issuance costs (10.4) (3.1)
    Payments for note hedges (70.1) –
    Proceeds from issuance of warrants 33.5 –
    Principal payments on capital leases (53.3) (44.5)
    Tax withholdings related to net share settlements of restricted stock units (22.5) (13.3)
    Proceeds from exercise of stock options 10.2 22.7
    Other financing activities 5.9 3.9
    Cash provided (used) by financing activities 174.2 (136.5)
    Effect of exchange rate changes on cash and equivalents (1.1) (2.3)
    Increase (decrease) in cash and equivalents 250.2 (298.4)
    Cash and equivalents at beginning of period 207.3 466.6
    Cash and equivalents at end of period $ 457.5 $ 168.2
    SUPPLEMENTAL INFORMATION – UNAUDITED
    AOL Inc.
    Reconciliation of Adjusted Diluted EPS to Net Income Attributable to AOL Inc.
    (In millions, except per share amounts)
    Three Months Ended
    September 30,    		 Nine Months Ended
    September 30,
    2014 2013 2014 2013
    Net income attributable to AOL Inc. $ 28.5 $ 2.0 $ 66.0 $ 56.4
    Add (less) items impacting comparability of net income:
    Restructuring costs 1.2 19.0 15.7 28.1
    Equity-based compensation 21.3 11.8 51.4 31.4
    Asset impairments and write-offs 1.1 29.0 12.3 30.4
    (Gain) loss on disposal of assets, net (0.2) 0.2 (4.2) (2.1)
    Income tax impact of items above (1) (9.3) (16.7) (32.2) (26.9)
    Adjusted net income attributable to AOL Inc. $ 42.6 $ 45.3 $ 109.0 $ 117.3
    Shares used in computing diluted EPS 82.2 81.2 83.3 81.4
    Adjusted Diluted EPS $ 0.52 $ 0.56 $ 1.31 $ 1.44
    Marginal tax rate (2) 39.8% 39.5% 39.8% 39.5%
    (1) Income tax impact of restructuring charges, equity-based compensation and asset impairments and write-offs are calculated by applying the marginal tax rate to deductible items. The income tax impact of gain (loss) on disposal of assets is 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.
    (2) For the three and nine months ended September 30, 2014, the marginal tax rate used was AOL’s 2014 projected marginal annual effective tax rate. For the three and nine months ended September 30, 2013, the marginal tax rate used was AOL’s 2013 projected marginal annual effective tax rate as of September 30, 2013.
    AOL Inc.
    Reconciliation of Adjusted OIBDA to Operating Income and Free Cash Flow to Cash Provided by Operating Activities
    (In millions)
    Three Months Ended September 30, Nine Months Ended September 30,
    2014 2013 2014 2013
    Operating income $ 48.0 $ 16.7 $ 126.2 $ 118.5
    Add: Depreciation 33.5 32.0 100.6 97.4
    Add: Amortization of intangible assets 16.9 11.1 48.6 29.7
    Add: Restructuring costs 1.2 19.0 15.7 28.1
    Add: Equity-based compensation 21.3 11.8 51.4 31.4
    Add: Asset impairments and write-offs 1.1 29.0 12.3 30.4
    Add: Losses/(gains) on disposal of assets, net (0.2) 0.2 (4.2) (2.1)
    Adjusted OIBDA $ 121.8 $ 119.8 $ 350.6 $ 333.4
    Cash provided by operating activities $ 137.8 $ 98.9 $ 287.2 $ 228.9
    Less: Capital expenditures and product development costs 19.4 19.7 55.7 52.7
    Less: Principal payments on capital leases 17.2 14.6 53.3 44.5
    Free Cash Flow $ 101.2 $ 64.6 $ 178.2 $ 131.7

    Note Regarding Non-GAAP Financial Measures

    This press release and its attachments include the financial measures Adjusted OIBDA, Adjusted Diluted EPS and Free Cash Flow, all 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, non-cash 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 non-cash 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 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.

    Adjusted Diluted EPS. We define Adjusted Diluted EPS as diluted net income per common share excluding the net-of-tax impact of restructuring costs, non-cash equity-based compensation, gains and losses on all disposals of assets, non-cash asset impairments and write-offs and special items. We consider Adjusted Diluted EPS to be useful to management and investors as a profitability measure to allow comparison of our results to historical periods and forecasting of our results for future periods. A limitation of Adjusted Diluted EPS is that it does not include all items that impact our net income and diluted net income per common share for the period. We compensate for this limitation by also relying on diluted net income per common share as a comparable GAAP financial measure.

    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 our performance, as 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. AOL multi-platform unique visitor metrics represent a measure of AOL’s unduplicated audience across multiple digital platforms (desktop computers, smartphones and tablets). AOL multi-platform unique visitors represent the estimated number of individuals who visited any content of a website or application owned by AOL or for which the traffic has been assigned to AOL by the owner during the applicable measurement period. Additionally, AOL multi-platform unique visitor metrics also include visitors to AOL’s syndicated video content distributed on third party sites. Desktop unique visitors to AOL Properties represent the estimated number of individuals who visited any content of a website or application owned by AOL or for which the traffic has been assigned to AOL by the owner during the applicable measurement period via a desktop computer. The source for our unique visitor information is a third party (comScore 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, 2013 (the “Annual Report”) and our Quarterly Report on Form 10-Q for the three months ended September 30, 2014 (“Quarterly Report”), filed with theSecurities 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 revolving credit facility; 4) the impact of the convertible senior notes and the related hedge and warrant transactions; 5) the impact of significant acquisitions, dispositions and other similar transactions; 6) our ability to attract and retain key employees; 7) any negative unintended consequences of cost reductions, restructuring actions or similar efforts, including with respect to any associated savings, charges or other amounts; 8) adoption of new products and services; 9) our ability to attract and retain unique visitors to our properties; 10) asset impairments; and 11) the impact of “cyber-attacks.”

    About AOL

    AOL Inc. (NYSE:AOL) is a brand company, committed to continuously innovating, growing, and investing in brands and experiences that inform, entertain, and connect the world. The home of a world-class collection of premium brands, AOL creates original content that engages audiences on a local and global scale. We help marketers connect with these audiences through effective and engaging digital advertising solutions.

    From time to time, we post information about AOL on our investor relations website (http://ir.aol.com) and our official corporate blog (http://blog.aol.com). Follow us on Twitter @AOL_Inc.

    Webcast and Conference Call Information

    AOL Inc. will host a conference call to discuss third quarter 2014 financial results on Thursday, November 6, 2014, at 8:00 am ET. To access the call, parties in the United States and Canada should call toll-free (877) 415.3181 and other international parties should call (857) 244.7324. Participants should reference ‘AOL Call’ when dialing into the live call. 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 53719765.

     

    Source: AOL Inc.

    Image via Wikimedia Commons

  • CNN Talking Heads Use Product-Placed Surface Tablets As iPad Stands

    Once again, Microsoft is having a hard time controlling the variables of its product placement.

    You may have been watching CNN’s election coverage last night. If so, you may have seen a bunch of shiny, new Microsoft Surface Pro 3 tablets resting upright in front of the various commentators.

    What you may not have seen were the iPads, which the talking heads ‘hid’ behind the Surface tablets.

    Sneaking around your personal iPad by using the product-placed tablet as a shield is one thing. But using it as a stand? That’s some cold-ass shit right there.

    This sort of thing is becoming a trend. As they do with CNN, Microsoft also has a deal in place with the NFL to exclusively use the new Surface tablets on the sidelines during games and on the commentators’ table during, well, commentating. Unfortunately, things haven’t gone 100 percent according to plan, as Microsoft has had a hard time getting announcers to stop calling them iPads.

    Image via @adamUCF, Twitter

  • Is Instagram the Next Big Advertising Space?

    In November of 2013, Instagram debuted its first-ever ad. Featuring a gold watch and the caption “Pampered in Paris”, the photo from Michael Kors marked Instagram’s entrance into the big game. Instagram had held out for a while, maintaining its status as an ad-free zone for years – but that was until Facebook gobbled it up for a billion dollars. Facebook wasn’t going to sit around and let Instagram not make any money for too long.

    Instagram is starting slow with advertising. That’s what the company is saying, literally. “We’re starting slow with advertising to make sure we take time to get the experience right for our ad partners and the Instagram community,” says Instagram in response to the question How do I advertise? Considering the history the company has when it comes to ad products and public freakouts, this is probably a wise decision.

    What do you think about ads on Instagram? Let us know in the comments.

    How slow? Well, Instagram started out with only a handful of big-name partners like Ben & Jerry’s, Burberry, Levi’s, Macy’s, PayPal, and Lexus. Since then, they’ve taken on a handful of others like Taco Bell and Hollister – but for the most part Instagram’s ad product is a gated community. It’ll let everyone else in on the fun at some point – but as of now there’s no timetable for that.

    Whenever that happens, however, Instagram’s ad product will likely explode. It’s not out of the realm of possibility that when ramped up to full scale, Facebook could have a $100 million-per-quarter monster on its hands with Instagram.

    All signs point to Instagram getting incredibly serious about ads. This week, the company unveiled its first-ever video ads – which have been in the works for months. These 15-second video ads will autoplay in users’ feeds and will begin popping up immediately. Like the original photo ads, Instagram’s video ads are being handled with kid gloves. The company has only five partners so far – Disney, Activision, Lancome, Banana Republic and CW.

    While the debut of video ads is clearly the biggest step forward for their total ad product, Instagram has been making smaller steps over the past few months. Last month, we learned that the company is preparing to jump across the pond with its ad product, and before that it debuted a shiny new analytics suite for brands.

    And on the personnel front, Instagram recently made a big hire – or more aptly put, a resource shift. In August, Instagram created a new position – the Global Head of Business and Brand Development – and filled it with Facebook Regional Director James Quarles.

    Nobody knows when Instagram is going to pull the trigger and open this ad product wide – but you have to imagine that with these moves, it’s at least on the horizon. That is unless Facebook is waiting for “a rainy day, when growth on the Facebook platform has slowed and the company isn’t raking in the revenue as easily as it has recently,” as suggested by GigaOm’s Carmel DeAmicis.

    Either way, that time is going to come. And when it comes, will marketers bottleneck?

    If you look at some of the early engagement figures – they sure as hell should.

    Check out these figures from Q2, which AdWeek obtained from social media shop Shareablee:

    – Facebook garnered 2.5 million brand posts, a year-over-growth of 22 percent.
    – Instagram had 493,000 of such posts, a 49 percent year-over-year jump.
    – Facebook accrued 6 billion actions (likes, comments or shares).
    – Instagram totaled 3.4 billion actions (likes, comments).
    – Facebook had 2,396 actions per post.
    – Instagram racked up 6,932 actions per post.

    The growth rate of brand posts is obviously swayed toward Instagram, considering it’s a newer platform. But look at those average actions per post. In terms of engagement, brands are getting much more bang for their buck on the visually-dominated Instagram landscape.

    And evidence for individual brands seem to mimic this trend. Taco Bell, for instance, recently garnered 400 percent more fan engagement on promoted posts as opposed to organic posts. The company ran a month-long ad campaign on Instagram as saw its follower count increase by 45 percent.

    Then there’s the Forrester study of over three million users interactions that found Instagram engagement blew other social networks’ engagement out of the water. From MarketWatch:

    But one social network “blew the others away” when it comes to engagement, the report said. Brand ads posted on Instagram delivered 58 times more engagement per follower than Facebook, and 120 times more engagement per follower than Twitter.

    Of course, there’s this to consider:

    “While Instagram has more than 200 million monthly active users, it attracts fewer people than Facebook and Twitter do,” the report said. “Plus fewer marketers use Instagram, and those that do post less frequently. The result? Brands’ Instagram posts don’t have to fight through as much clutter to reach their followers.

    “As users and marketers flock to Instagram, clutter will increase and Instagram will likely begin filtering out brands’ posts in the name of relevance. Marketers must use Instagram now, before it changes the rules – and they must be ready to move on to another social site when Instagram’s phenomenal engagement rates disappear.”

    It seems that Instagram’s primary job when its ad product goes wide will be to make sure it’s careful not to clutter.

    At least for now, Instagram’s pretty careful. Instagram CEO Kevin Systrom has said that he’s “looking at every ad” to make sure it will be a good fit in the Instagram universe.

    Of course, you can’t expect that to continue when the promoted posts start pouring in at a fast clip – but Instagram would be wise to keep at least some element of that attention to detail.

    From personal experience, I can say that Instagram’s ads are some of the least intrusive and artfully constructed around. Much of that has to do with the visual nature of the medium. What do you think? Is Instagram the next frontier for big ad money? Let us know in the comments.

  • Apple Expands iAd Into 70 New Countries

    Apple Expands iAd Into 70 New Countries

    Apple announced that it has launched its advertising product iAd into as many as 70 new countries after only offering it in 25 before.

    In fact, before this month iAd was only available in 16 countries. On October 3, the company announced its expansion into Austria, Belgium, Denmark, Finland, Luxembourg, Netherlands, Norway, Poland, and Sweden.

    Apple doesn’t spend a whole lot of breath on the new announcement, simply saying:

    iAd is now available in 70 additional countries across the Americas, Europe, Asia, the Middle East, Africa, and Australia, expanding global reach to 95 countries. Ad campaigns can be created in minutes using iAd Workbench.

    Last month, Apple announced the availability of iAd Producer 5, which manages HTML5, CSS3, and JavaScript behind iAds. It also offers JavaScript editing and debugging.

    “And once you’ve created your ad, iAd Producer helps you optimize the performance of your iAd, and with a few clicks helps you to submit it for certification to launch on the iAd App Network,” the company explains.

    In August, Apple launched some new ad formats including pre-roll video and full-screen interstitial banner ads.

    Image via Apple

  • Would You Pay for an Ad-Free YouTube?

    Would You Pay for an Ad-Free YouTube?

    The sky is blue, grass is green, water is wet, and YouTube is free. For many, many years we’ve all lived in a world where one can just go to a website and watch billions of hours of video – for free. I don’t think it’s Google fawning to say that YouTube, and its open, unrestricted video database, is one of the most important and influential entities of the internet age.

    The free, ad-supported model that YouTube has employed for years has worked – in that YouTube is the biggest video site in the world. Most internet users have simply accepted that, in order to watch videos on YouTube, you’re going to have to sit through an ad. It might be 30 seconds, it might be 15. YouTube might even let you skip it after five seconds. But chances are, you’re going to have to sit through some advertising before your free content plays (and possibly during said content).

    Maybe that doesn’t have to be the only way. In the near future, you might have the option to pay for YouTube. Why would you pay for an already-free service? To join an ad-free wonderland, of course.

    Are YouTube ads annoying enough to justify paying to get rid of them? Do you think a subscription-based model is a good idea? Let us know in the comments.

    Speaking at Re/code’s Code/Mobile conference, YouTube CEO Susan Wojcicki said that YouTube is thinking about offering an ad-free subscription service.

    From Re/code:

    “YouTube right now is ad-supported, which is great because it has enabled us to scale to a billion users; but there’s going to be a point where people don’t want to see the ads,” Wojcicki said in an onstage interview. Consumers generally “will either choose ads, or pay a fee, which is an interesting model. … We’re thinking about how to give users options.”

    “We’ve been thinking about other ways it might make sense for us [at YouTube]. We’re early in that process, but if you look at media over time, most of them have both ads and subscription services,” she added.

    She’s right, of course. Take Spotify for instance. The popular streaming music service offers “tiers” – the lowest of which is an ad-supported free tier. Spotify then allows users to pay to, among other things, get rid of the ads. As it stands, about one-quarter of all Spotify users choose a paid tier.

    Providing the YouTube viewer with an option is great and all, and that surely factors into YouTube’s considerations, but make no mistake – offering a paid subscription model is mostly about keeping the creators happy.

    Look at what Wojcicki went on to say:

    “There are going to be cases where people are going to say, ‘I don’t want to see the ads, or I want to have a different experience,’” she said. “We’re always watching, always trying to innovate. It’s similar to the ad market in a lot of ways: There are always new ad platforms coming out, but at the end of the day people say, I’m going to go to the one that generates the most revenue for me.”

    Right now, and for the foreseeable future, YouTube is in no danger of losing its online video crown. With 100 hours of video uploaded to the site every minute and over a billion unique visitors a month, YouTube is by far the biggest video site on the planet. But even so, YouTube knows it has to keep the content flowing. If content creators aren’t happy with the amount of money they’re making on YouTube, there could be a minor to major problem – depending on the specific talent and the scope.

    Well, are they happy?

    Though you’ve no doubt heard many a success story – teens in their dorm rooms making thousands of dollars a month on YouTube – the reality is that things aren’t quite what they used to be. Some reports indicate that advertising rates have fallen, which isn’t great for a system where monetization is entirely dependent on an ad-based revenue share.

    Sure, YouTube has made it easier than ever to make money by opening the gates and letting more and more channels qualify for monetization. The company has also automated the process and to be fair, it’s super easy to get started.

    But it’s clear that YouTube knows it needs another option – another way for content creators to earn. Paid subscriptions could be that option.

    The question then becomes … who would pay for YouTube?

    You may or may now know that YouTube has already been experimenting with paid subscriptions on a smaller scale. Since May of last year, YouTube has offered paid channels. YouTube lets the channel creator set their own price (which could be anywhere from $0.99 a month to a few dollars a month), and then takes a cut of the profit. Paid channels started with a few dozen partners and soon expanded, but the initiative hasn’t really taken off – at least not as much as YouTube would’ve hoped.

    Nearly a year and a half later, there are only 224 paid channels on YouTube.

    And the problem that befalls paid channels could also affect YouTube’s move into offering a site-wide paid subscription service.

    Is the content really worth paying for?

    It’s one thing to pay a monthly or yearly fee to watch Game of Thrones or to listen to Led Zeppelin. It’s a whole different thing to pay money to watch babies laugh, cats chase laser pointers, and drunk people falling down stairs.

    I know there’s much better content on YouTube than that – but you get the point.

    YouTube caricature aside, a lot of people would likely have a problem justifying a monthly payment for YouTube. We’re all so used to YouTube being free. You know what we’re also pretty used to? Ads. It’s just a part of the experience now. Are you really that annoyed by ads to warrant paying for YouTube?

    Maybe getting rids of ads isn’t enough. To get people on board with paying for YouTube, maybe the company would have to offer some other perks. Who knows, maybe some sort of music service?

    How do you feel about this? Would you even consider paying for YouTube? Let us know in the comments.

  • Bing Ads Get Universal Event Tracking

    Bing Ads Get Universal Event Tracking

    Microsoft announced the general availability of Universal Event Tracking for Bing Ads to advertisers worldwide. This lets advertisers create and track various performance metrics associated with conversions with one tag.

    A spokesperson for the company tells WebProNews it “lays the groundwork for audience based remarketing scenarios,” which are coming sometime soon.

    “UET simplifies campaign goal tracking by placing a small snippet of code (often referred to as a tracking code or tag) on the pages of a website,” the spokesperson says. “Data is then collected when the web page is loaded and sent to Bing Ads. Bing Ads analyses and aggregates this data to provide insights and determines if/when a goal is met. By enabling the use of only one tag, UET is saving advertisers time and effort while providing enhanced data insights.”

    “UET provides a simple yet powerful way to define and track goals (performance/conversion) that are important for your business,” says Microsoft’s Nishant Gupta in a blog post. “With UET you can associate the success of these goals with your advertising campaigns across accounts, ad campaigns and devices.”

    It lets you see which campaigns are most effective based on goals, which keywords are leading to conversions and lower bounce rates, ROI, which customer segments are converting best, and what type of engagement keywords have.

    Universal Event Tracking replaces the current Campaign Analytics conversion tracking offering in Bing Ads. More here.

    Image via YouTube

  • Google In-App Ads Let You Target Those Who Have Made In-App Purchases Before

    Google announced a new targeting capability for its in-app display ads, enabling advertisers to target users who have actually made in-app purchases in the past. If they’ve done it before, it stands to reason that they’d do it again, so this could help the results of these ads tremendously.

    Specifically, it looks at in-app purchases from the Google Play Store, and the feature is an addition to the Google Display Network. It also enables advertisers to reach people who have purchases paid apps.

    “These new settings can help you identify and create a campaign strategy around your most valuable customers,” Google says in a Google+ update. “You can use this new offering in individual ad groups by using the checkbox labeled ‘Only show ads to people who purchased an app or made an in-app purchase.’ You’ll find this under Interests & Remarketing when adding new targeting categories to your campaign.”

    “It’s best to use this option in ad groups specifically designed to reach your highest value customers,” Google adds. “While narrowed targeting can help focus your bidding strategy, it can also limit ad impressions. While the volume of customers gained may be lower than you see in other campaigns, you may find the lifetime value (LTV) of these customers to be higher.”

    The new targeting option is available via the AdWords API.

    Image via Google+

  • Yahoo Is Doing Better In Search Than Display

    Yahoo Is Doing Better In Search Than Display

    Yahoo came out swinging with its third quarter earnings report and conference call on Tuesday, posting solid results ahead of analysts’ estimates. One particularly noteworthy takeaway was that the company’s search advertising business brought in more money than its display business. This is the first time this has happened since Marissa Mayer took over as CEO.

    Search revenue excluding traffic acquisition costs was $450 million, up 6%. Paid clicks were flat year-over-year, but price per click increased about 17%.

    “This quarter represents our 11th quarter of search revenue growth year-over-year on a revenue ex-TAC basis,” Mayer said during the company’s earnings call. “Our price-per-click is up in almost all regions as we continue to find ways to enhance the performance of our search ads through better user interfaces and higher quality traffic and as advertisers ultimately find our search ads more valuable.”

    Display revenue excluding traffic acquisition costs was $396 million, down 6%. The number of ads sold did increase about 24%, but price-per-ad decreased about 24% at the same time.

    Meanwhile, Yahoo’s native ads have experienced triple-digit year-over-year growth.

    During the Q&A portion of the call, Yahoo was asked how search compares to display specifically on mobile.

    CFO Kenneth Goldman responded, “The search is somewhat higher than display. We don’t give the exact breakout, maybe we’ll in the future. But in search it’s also growing a little bit faster as well than display year-over-year.”

    Mayer said, “When we think about what will search look like, on a phone, on a smaller device 10 years from now, we think it looks pretty different then it looks today. We really like the Aviate technology that we acquired we’ve been looking at how can really enrich the experience such that its not a lot of different answers perfectly ranked but actually the one answer you need when you’re on the go, or you’re working in a more constrained display, real constrained screening environment.”

    More on the Aviate acquisition here.

    Mayer was also asked about its relationship with MIicrosoft in terms of whether it’s wrong to think of Yahoo as a distributor of Microsoft search. She basically sidestepped that one. It’s no secret that she’d not a fan of the arrangement.

    The subject came up again later in the call, and she offered, “I think on a whole we’re very bullish on search. It’s always been part of the Yahoo! We like where it’s going in future of mobile. We think it’s a right area for innovation and is an area that we have been investing in. We are coming to the mid-point of the ten-year agreement and we may want to contemplate changes on both sides. So Microsoft has some right to that point so do we. And we are working through this with Microsoft.”

    Image via Tumblr

  • Yahoo Earnings Released, Revenue $1.09 Billion

    Yahoo Earnings Released, Revenue $1.09 Billion

    Yahoo just released its earnings report for the third quarter. Revenue was $1.09 billion with earnings per share at $0.52. The company’s results were well above Wall Street expectations.

    “We had a good, solid third quarter. We delivered $1.094 billion in revenue ex-TAC and $1.148 billion in GAAP revenue,” said CEO Marissa Mayer. “This represents 1% growth in revenue ex-TAC and 1% growth in GAAP revenue. We achieved this revenue growth through strong growth in our new areas of investment – mobile, social, native and video – despite industry headwinds in some of our large, legacy businesses.”

    “I am also pleased to report today that our revenue in mobile is now material,” she added. “In Q3, we saw mobile revenues in excess of $200 million on a GAAP basis. Further, we estimate that our gross revenues in mobile will exceed $1.2 billion in revenue this year. We have invested deeply in mobile and we are seeing those investments pay off. Not only are our mobile products attracting praise and engagement from users and industry awards, they are generating meaningful revenue for Yahoo.”

    On the search front, GAAP revenue was $452 million, up 4% year-over-year. Search revenue excluding traffic acquisition costs was $450 million, up 6%. Paid clicks were flat year-over-year, but price per click increased about 17%.

    Display revenue (GAAP) dropped 5% to $477 million. Display revenue ex-TAC was $396 million, down 6%. Still the number of ads sold increased about 24%. Price-per-ad decreased about 24%.

    Some Tumblr numbers:

    Here’s the release in its entirety:

    SUNNYVALE, Calif.–(BUSINESS WIRE)– Yahoo! Inc. (NASDAQ: YHOO) today reported results for the quarter ended September 30, 2014.

    Q3 2013 Q3 2014 Percent
    Change
    GAAP revenue $1,139 million $1,148 million 1%
    Revenue ex-TAC $1,081 million $1,094 million 1%
    GAAP income from operations $93 million $42 million (55)%
    Non-GAAP income from operations $173 million $156 million (10)%
    GAAP net earnings per diluted share $0.28 $6.70 N/M
    Non-GAAP net earnings per diluted share $0.34 $0.52 52%

    N/M – Not meaningful

    “We had a good, solid third quarter. We delivered $1.094 billion in revenue ex-TAC and$1.148 billion in GAAP revenue. This represents 1% growth in revenue ex-TAC and 1% growth in GAAP revenue. We achieved this revenue growth through strong growth in our new areas of investment – mobile, social, native and video – despite industry headwinds in some of our large, legacy businesses,” said Marissa Mayer, CEO of Yahoo. “I am also pleased to report today that our revenue in mobile is now material. In Q3, we saw mobile revenues in excess of $200 million on a GAAP basis. Further, we estimate that our gross revenues in mobile will exceed $1.2 billion in revenue this year. We have invested deeply in mobile and we are seeing those investments pay off. Not only are our mobile products attracting praise and engagement from users and industry awards, they are generating meaningful revenue for Yahoo.”

    GAAP revenue was $1,148 million for the third quarter of 2014, a 1 percent increase from the third quarter of 2013. Revenue excluding traffic acquisition costs (“revenue ex-TAC”) was $1,094 million for the third quarter of 2014, a 1 percent increase compared to the third quarter of 2013.

    GAAP income from operations was $42 million for the third quarter of 2014, a 55 percent decrease from the third quarter of 2013. Non-GAAP income from operations was $156 million for the third quarter of 2014, a 10 percent decrease from the third quarter of 2013.

    Adjusted EBITDA for the third quarter of 2014 was $306 million, an 8 percent decrease compared to the third quarter of 2013.

    GAAP net earnings for the third quarter of 2014 was $6.8 billion (which included a gain from sale of Alibaba Group Holding Limited (“Alibaba Group”) shares of $6.3 billion, net of tax), compared to $297 million in the third quarter of 2013. Non-GAAP net earnings for the third quarter of 2014 was $543 million, compared to $358 million in the third quarter of 2013.

    GAAP net earnings per diluted share was $6.70 in the third quarter of 2014 (which included the gain from sale of Alibaba Group shares of $6.27 per diluted share), compared to $0.28 in the third quarter of 2013. Non-GAAP net earnings per diluted share was $0.52 for the third quarter of 2014, compared to $0.34 in the third quarter of 2013.

    Business Highlights

    • Yahoo completed the acquisition of Flurry, a mobile data analytics company that optimizes mobile experiences for developers, marketers, and consumers. Yahoo and Flurry’s combined scale is expected to create more personalized and inspiring app experiences for users, and enable more effective mobile advertising solutions for brands seeking to reach audiences and gain unique cross-device insights.
    • Yahoo continued to launch new products and improve on existing ones in the third quarter, innovating for the daily habits of users around the world. The Company launched the new Yahoo Finance app, Yahoo News Digest app and Yahoo Mail app for iPad, support for Digital Magazines for Android and iOS, and new navigation for Yahoo Answers, and also made Aviate available in eight languages on Android devices.
    • As football season kicked off this quarter, Yahoo announced a partnership with Samsung Smart TV to provide viewers with the Yahoo Fantasy Football TV experience, and launched NFL Now on Yahoo across devices including desktop, iPhone and iPad.
    • Top names in music, fashion, entertainment and finance continued to partner withYahoo in the third quarter of 2014. Taylor Swift and Prince both provided exclusive content to Yahoo in advance of their album releases. Yahoo Digital Magazines launched Yahoo Style with editor-in-chief Joe Zee, previously from ELLE Magazine. The Company also announced four additional new well-known editors-in-chief:Michelle Promaulayko for Yahoo Health, Kerry Diamond for Yahoo Food, Kristen Baldwin for Yahoo TV and Katie Brown for the recently launched Yahoo DIY. Yahoo Finance also launched Yahoo Finance Contributors with a roster of new high-profile industry experts including the Najarian brothers.
    • Yahoo launched new ways for the Company to work with publishing partners. Yahooannounced Yahoo Recommends which brings Yahoo’s content personalization technology and native ads to publishers across the web, launching on high-quality publisher sites CBSi, VOX Media and Hearst.
    • Yahoo added important technical talent to the team with Mike Kail joining as CIO and SVP, Infrastructure to lead IT and data center operations for the Company.

    Third Quarter 2014 Financial Highlights

    Display:

    • GAAP display revenue was $447 million for the third quarter of 2014, a 5 percent decrease compared to $470 million for the third quarter of 2013.
    • Display revenue ex-TAC was $396 million for the third quarter of 2014, a 6 percent decrease compared to $421 million for the third quarter of 2013.
    • The number of Ads Sold increased approximately 24 percent compared to the third quarter of 2013.
    • Price-per-Ad decreased approximately 24 percent compared to the third quarter of 2013.

    Search:

    • GAAP search revenue was $452 million for the third quarter of 2014, a 4 percent increase compared to $435 million for the third quarter of 2013.
    • Search revenue ex-TAC was $450 million for the third quarter of 2014, a 6 percent increase compared to $426 million for the third quarter of 2013.
    • The number of Paid Clicks was flat compared to the third quarter of 2013.
    • Price-per-Click increased approximately 17 percent compared to the third quarter of 2013.

    Cash, Cash Equivalents, and Marketable Securities:

    • Cash, cash equivalents, and marketable securities (excluding Investment in Alibaba Group equity securities) were $12 billion as of September 30, 2014 compared to $5 billion as of December 31, 2013, an increase of $7 billion. Yahoo estimates that it will pay approximately $3.3 billion in cash taxes in the first quarter of 2015 related to the sale of Alibaba Group shares.
    • During the third quarter of 2014, Yahoo repurchased approximately 8 million shares of its common stock for $282 million.
    • In September 2014, the Company also entered into an accelerated share repurchase agreement with a financial institution to repurchase shares of its common stock. Under the agreement, the Company prepaid $1.1 billion and approximately 15 million shares were initially delivered to the Company on September 30, 2014 and are included in treasury stock. Final settlement occurred on October 17, 2014 resulting in a total of approximately 23.5 million shares repurchased for $933 million. The Company received a return of cash for the remaining amount not settled in shares of$167 million. The accelerated share repurchase agreement was entered into pursuant to the Company’s existing share repurchase program.
    • As of September 30, 2014, the Company had 979 million shares outstanding.

    “We are pleased with our performance this quarter, demonstrating results that met or exceeded guidance on key metrics. We ended the quarter with over $12 billion in cash and marketable securities following the sale of 140 million shares of Alibaba stock in the IPO, which resulted in $9.4 billion in pre-tax proceeds,” said Ken Goldman, CFO ofYahoo. “In Q3 and Q4 to date, we have bought back approximately $1.6 billion of our stock. Of this amount, we have returned $1.4 billion to shareholders as a part of our commitment to return at least half of the after-tax IPO proceeds. We are hopeful that we will finish the year strong, and we believe that the Company is well positioned for improved performance in 2015.”

    Live Stream

    Yahoo will live stream a video broadcast of the Company’s third quarter 2014 financial results at 2 p.m. Pacific Time/5 p.m. Eastern Time today. The live stream will be broadcast from Yahoo’s Sunnyvale studio and will be available exclusively on Yahoo Finance at finance.yahoo.com. The Company will provide its business outlook for the fourth quarter during the presentation. Supplemental financial information can be accessed through the Company’s Investor Relations website at investor.yahoo.net. The video will be archived after the event at investor.yahoo.net and will be available for 90 days following the broadcast.

    Non-GAAP Financial Measures

    This press release and its attachments include the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission (“SEC”): revenue ex-TAC; adjusted EBITDA; non-GAAP income from operations; non-GAAP net earnings; non-GAAP net earnings per share – diluted; and free cash flow.

    Revenue ex-TAC is GAAP revenue less traffic acquisition costs. Adjusted EBITDA, non-GAAP income from operations, non-GAAP net earnings and non-GAAP net earnings per share – diluted, exclude from the most comparable GAAP financial measures certain gains, losses, and expenses that we do not believe are indicative of ongoing results, and exclude stock-based compensation expense. Adjusted EBITDA also excludes taxes, depreciation, amortization of intangible assets, other income, net (which includes interest), earnings in equity interests, and net income attributable to noncontrolling interests. Free cash flow is GAAP net cash provided by operating activities (adjusted to include excess tax benefits from stock-based awards), less acquisition of property and equipment, net and dividends received from equity investees.

    These measures may be different than 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 the Company’s non-GAAP financial measures and reconciliations of these financial measures to the GAAP financial measures the Company considers most comparable are included in the accompanying “Note to Unaudited Condensed Consolidated Financial Statements,” “Supplemental Financial Data and GAAP to Non-GAAP Reconciliations,” and “GAAP to Non-GAAP Reconciliations.”

    About Yahoo

    Yahoo is focused on making the world’s daily habits inspiring and entertaining. By creating highly personalized experiences for our users, we keep people connected to what matters most to them, across devices and around the world. In turn, we create value for advertisers by connecting them with the audiences that build their businesses.Yahoo is headquartered in Sunnyvale, California, and has offices located throughout theAmericas, Asia Pacific (APAC) and the Europe, Middle East and Africa (EMEA) regions. For more information, visit the pressroom (pressroom.yahoo.net) or the Company’s blog (yahoo.tumblr.com).

    “Affiliates” refers to the third-party entities that have integrated Yahoo’s advertising offerings into their Websites or other offerings (those Websites and other offerings, “Affiliate sites”).

    “Net earnings” means net income attributable to Yahoo! Inc., and “net earnings per diluted share” means net income attributable to Yahoo! Inc. common stockholders per share – diluted.

    “Ads Sold” consist of display ad impressions for paying advertisers on Yahoo Properties.

    “Paid Clicks” are clicks by end-users on sponsored search listings (excluding native ads) on Yahoo Properties and Affiliate sites.

    “Price-per-Ad” is defined as display revenue from Yahoo Properties divided by our total number of Ads Sold.

    “Price-per-Click” is defined as Search click-driven revenue divided by our total number of Paid Clicks.

    We periodically review, refine and update our methodologies for monitoring, gathering, and counting numbers of Ads Sold and Paid Clicks, and for calculating Price-per-Ad and Price-per-Click.

    Additional information about how “Ads Sold,” “Paid Clicks,” “Price-per-Ad,” and “Price-per-Click” are defined and calculated is included under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, which is on file with the SEC and available on the SEC’s website at www.sec.gov.

    “Search Agreement” refers to the Search and Advertising Services and Sales Agreement between Yahoo and Microsoft Corporation, as amended.

    “Search click-driven revenue” is gross search revenue (before TAC) excluding the Microsoft RPS guarantee.

    “TAC” refers to traffic acquisition costs. TAC consists of payments to Affiliates and payments made to companies that direct consumer and business traffic to Yahoo Properties.

    “Yahoo Properties” refers to the online properties and services that Yahoo provides to users.

    This press release contains forward-looking statements concerning Yahoo’s expected financial performance and Yahoo’s strategic and operational plans (including, without limitation, the quotations from management). Risks and uncertainties may cause actual results to differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, acceptance by users of new products and services (including, without limitation, products and services for mobile devices and alternative platforms);Yahoo’s ability to compete with new or existing competitors; reduction in spending by, or loss of, advertising customers; risks associated with the Search Agreement with Microsoft Corporation; risks related to acquiring or developing compelling content; risks related to joint ventures and the integration of acquisitions; risks relating to possible impairment of goodwill or other assets; risks related to fluctuations in foreign currency exchange rates; risks related to Yahoo’s regulatory environment; Yahoo’s ability to protect its intellectual property and the value of its brands; adverse results in litigation; security breaches; interruptions or delays in the provision of Yahoo’s services; risks related to Yahoo’sinternational operations; risks related to the calculation of our key operational metrics; dependence on third parties for technology, services, content, and distribution; and general economic conditions. All information set forth in this press release and its attachments is as of October 21, 2014. Yahoo does not intend, and undertakes no duty, to update this information to reflect subsequent events or circumstances. More information about potential factors that could affect the Company’s business and financial results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, as amended, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, which are on file with the SECand available on the SEC’s website at www.sec.gov. Additional information will also be set forth in those sections in Yahoo’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, which will be filed with the SEC in the fourth quarter of 2014.

    Yahoo!, Flurry, Yahoo Finance, Yahoo News Digest, Yahoo Mail, Yahoo Answers, Aviate,Yahoo Sports, Yahoo Fantasy, Yahoo Style, Yahoo Health, Yahoo TV, Yahoo Food, Yahoo DIY, Yahoo Recommends and the Yahoo logos are trademarks and/or registered trademarks of Yahoo! Inc. Tumblr is a registered trademark of Tumblr, Inc. All other marks are trademarks and/or registered trademarks of their respective owners.

    Image via Wikimedia Commons

  • Digital Ad Revenues Reached $23.1 Billion In First Half Of The Year

    The Interactive Advertising Bureau (IAB) announced some findings from its latest ad revenue report, including that digital ad revenues hit a record high in the first half of the year at $23.1 billion.

    That’s up 15% from the same period last year, which saw revenues of $20.1 billion. Second quarter ad revenues were up 14% year-over-year at $11.7 billion, compared to $10.3 billion in Q2 of last year.

    “This report confirms the fact that brands are deepening their commitment to interactive advertising, and that mobile is seen as a crucial part of the marketing mix,” said Randall Rothenberg, President and CEO of the IAB. “Moreover, with second half revenues traditionally surpassing those in the first half of the year, this milestone achievement is potentially a harbinger of even stronger digital ad revenues to come.”

    Mobile revenues were up 76% to $5.3 billion for the first half of the year, according to the report. That’s compared to $3 billion from the same period last year. $2.7 billion came from mobile search, while $2.5 billion came from mobile display and $103 million came from other mobile formats.

    Digital video hit $1.5 billion (up 13%year-over-year). Search was at $9.1 billion, up 4% year-over-year. Display-related revenues totaled $6.5 billion (up 6%). This accounted for 28% of digital ad revenues overall. Social media revenues reached $2.9 billion, up 58%.

    The top three ad verticals – retail, financial services, and automotive – accounted for 46% of all ad revenues.

    Image via IAB