ExchangeWire rounds up some of the biggest stories in the European digital advertising space.
This week the potential implications for Yahoo in the Alibaba IPO, Facebook's potential 'friend conflicts' and declining popularity, plus consolidation in the ad tech sector with IgnitionOne and Ensighten purchases are all discussed.
1. The potential implications for Yahoo over Alibaba’s IPO
Chinese tech giant Alibaba this week announced it was to float in the US in what is expected to be the largest technology company IPO in history, which is expected to have far-reaching implications for its major shareholder Yahoo. The prospect has even led financial analysts to tout 2014 as a ‘make or break year’ for the leadership of the once all-conquering online advertising giant.
Embattled Yahoo – which holds a 24% share in Alibaba – has seen its stock price rally in the days since the announcement, with financial analysts forecasting the flotation might swell the Sunnyvale-based company’s coffers by as much as $10bn.
Given Yahoo’s recent form of acquiring smaller tech companies, immediate speculation has veered towards potential future purchases by the company.
Some have noted that it will up the scale of the deals Yahoo can negotiate, with speculation mounting that after the IPO, Yahoo may cut a deal similar to the scale of the billion dollar Tumblr deal. The much sought after Snapchat has even been mooted as a potential target.
Away from the negotiating table, and into the Yahoo boardroom, financial analysts have also said the deal will place pressure on Yahoo CEO Marissa Mayer to finally increase the company’s advertising revenues in order to shore up its stock prices.
Despite ailing advertising revenues, Yahoo’s stock prices have fared comparatively well since Mayer took over, principally because of its stake in Alibaba according to market experts.
However, once this ace up Yahoo’s sleeve is played, the pressure will be on Yahoo to drum up its traditional revenue source of revenue: advertising.
In the year the company unveiled its rebranded Yahoo Ad Exchange – which led to the decline of the RMX brand – experts are calling 2014 a ‘make or break year’ for Mayer and her assembled leadership team.
Closer to European shores, Yahoo has already seen several high-profile switches in leadership in 2014 already, as it rolls out its renewed ad exchange here, with Nick Hugh, Yahoo head of ad operations, Europe, shortly to appear on ExchangeWire’s TraderTalk TV to explain the offering in detail.
2. Facebook to lose friends and influences (less-and-less) people?
Still in Silicon Valley, and it emerged this week that Facebook was rolling out a new Business Manager portal which is good news for advertisers, but not its long-time friends on its Preferred Marketing Developer (PMD) programme. This comes the same week as the social network came under renewed criticism for forcing brands down paid-for channels by influential industry analysts.
Facebook this week unveiled its Business Manager portal which effectively lets advertisers manage their earned and owned Facebook media from one portal, in a move that is widely expected to compete with the long-standing PMD programme.
This scheme has seen the likes of Adobe and Kenshoo assist brands in engaging with the social network’s one billion-plus audience, where each of the 12 PMDs effectively received a rubber stamp approval by the company, and helped fuel a plethora of big exits. Just think of Buddy Media’s $745m acquisition by SalesForce, and Efficient Frontier’s sale to Adobe.
But this scheme, which was rolled out in pilot-mode in the US a little over a week ago, appears to offer agencies similar-style services in-house, and crucially for free. This is a move that will undoubtedly hurt the bottom line of ad tech firms that have helped amass a small fortune on the platform.
However, if Forrester analyst Nate Elliot is to be believed, this matters little as only a tiny amount of brand content – earned or owned - is noticed by actual audiences on Facebook, and those advertisers looking to ‘get social’ should focus their energies elsewhere.
In a blog post entitled ‘Facebook is still failing marketers’ published earlier this week, Eliott alleged that research from advertising goliath Ogilvy revealed that Facebook only delivered posts to 6% of companies’ fans organically, and that many brands are concerned that their ‘Facebook fans’ are actually fake.
The post reads: “Every day I talk to brands that are disillusioned with Facebook and are now placing their bets on other social sites — but few of them want to go on the record. Lately, though, more brands and agencies have started speaking openly to the media about how Facebook is failing them.”
This comes the same week as the publication of a separate article citing ad agency execs as sources, openly discussed further dissatisfaction with Facebook’s policies, especially with its inclination to force them down paid-for channels.
3. Further consolidation in the ad tech sector
Elsewhere this week, it emerged that Ignition One has completed the acquisition of data management platform (DMP) Knotice, to shore up its data consolidation and multi-channel targeting capabilities. And on a similar note, this comes the same week as Ensighten agreed to acquire London-based TagMan. Financial details for both transactions were not revealed openly.
Will Margiloff, CEO of IgnitionOne, highlights how the acquisition was made to help put his firm at the centre of the marketing plan, and help advertisers use the company’s renewed offering for more efficient prospecting. A move that will help raise IgnitionOne’s channel up the ‘purchase funnel’ of marketing.
“The acquisition of Knotice is consistent with our vision of bringing speed and simplicity to marketers through centralized data that automates the process of delivering the right message to the right user at the right moment at the most efficient cost – on the site, off the site, and through mobile and email,” he says.
Meanwhile, Ensighten’s purchase of London-based TagMan appears a like-for-like play, with the terms of the agreement granting Ensighten ownership of TagMan’s Tag Management, Marketing Data and Attribution platforms.
Josh Manion, Ensighten founder and CEO, says: “The acquisition of TagMan accelerates Ensighten’s growth on a global scale and represents our collective vision to redefine the marketing cloud.”
Ensighten claims the deal differentiates itself from rival cloud marketing platforms by not restricting the choice of third-party vendors, unlike its competitors.
“Ensighten leverages an open, patented hybrid-tagging architecture for its Agile Marketing Platform,” according to a company statement. “Unlike other major cloud marketing platforms, such as Adobe, Oracle and Salesforce have closed platforms, which limit marketers’ choices.”
4. Programmatic jumped 80% in 2013, while brand spend jumps to mobile
The UK programmatic market increased by 80% year-on-year in 2013, while brands increasingly channel their marketing budgets via mobile, with Facebook and Google as the chief benefactors, according to separate reports published this week.
The real-time advertising market increased 80% in the UK last year according to an eConsultancy report published earlier this week, which also asserts programmatic now accounts for 14% of the display market.
The total UK market value reached €204m - compared to €82m in France and €113m in Germany – fuelled by the increased amount of premium real-time display and video inventory on offer, as well as the variety of brand formats available, says the study.
Meanwhile, a report by mobile ad network Millennial Media found that mobile advertisers’ campaign goals shifted in 2013, with the goal of driving to site/mobile traffic nearly doubling year-over-year, whilst brand awareness increased by eight percentage points from 2012.
Similarly, research firm eMarketer this week produced a study which found that global mobile ad spending increased 105.0% to total $17.96bn, up from $8.76bn in 2012, in 2013.
The company further forecast that mobile advertising is set to rise another 75.1% to $31.45bn, when the industry sector will account for nearly one-quarter of total digital ad spending across the globe, with Facebook and Google accounting for nearly two-thirds of the mobile market in 2013.
And eMarketer expects this trend to only continue in 2014. “Facebook and Google represented the majority of mobile ad market growth worldwide last year. Combined, the two companies saw an increase of $6.92bn in net mobile ad revenues in 2013. These internet giants are consolidating their places at the top of the market. Facebook and Google represented the majority of mobile ad market growth worldwide last year. Combined, the two companies saw an increase of $6.92bn in net mobile ad revenues in 2013.
These internet giants are consolidating their places at the top of the market, a trend eMarketer expects to continue in 2014, however it also makes note of the emergence of Twitter.
“Facebook in particular is gaining significant market share. In 2012, the social network accounted for just 5.4% of the global mobile ad market. In 2013, that share increased to 17.5%, and eMarketer predicts it will rise again this year to 21.7%,” according to the company.
“Google still owns a plurality of the mobile advertising market worldwide, taking a portion of nearly 50% in 2013, but the rapid growth of Facebook will cause the search giant's share to drop to 46.8% in 2014,” eMarketer estimates.
Twitter is one of the few companies expected to increase share of the mobile ad market this year. Last year Twitter’s share of the worldwide mobile advertising market increased to 2.4%, up from 1.5% in 2012, with eMarkerter further estimating the social network will see its share rise to 2.6% in 2014.
5. Ad tech firms shore up Euro operations
AdScale, BrightRoll and ValueClick have all beefed up their European operations recently with a series of new hires and facility openings, as the programmatic ad tech sector is tipped for further growth.
Earlier this week, German digital advertising marketplace AdScale announced it has appointed Oliver Zehn as head of operations and member of its executive board to capitalise on the hotly tipped market. Zehn will report to AdScale managing director Sebastian Romanus, and will oversee Product development and account management departments. AdScale will be present at the Ad Trader Berlin conference held on April 8.
Meanwhile, earlier in the month, ValueClick-owner Conversant announced it was to import Oded Benyo as president of ValueClick Europe. The move represents yet another example of a US firm opting to send an existing member of its US team to head-up operations on this side of the Atlantic.
Elsewhere, Brightroll announced the European expansion of its partnership with infrastructure firm Equinix, with the opening of a global inter-connection and data centre at its AM3 Science Park in Amsterdam. This deployment “reflects the dynamic growth of programmatic video in Europe,” according to Brightroll.