Link: Deconstructing Balenciaga’s Wacky Instagram

Whereas most brand accounts in this sector, like Dior, share behind-the-scenes images along with “shoppable” posts, featuring branded hashtags to showcase their new line, Balenciaga lacks that campaign-oriented branding. Instead, they only share their collections in their story highlights, a different strategy than its competitors.

Despite the unconventionality, Balenciaga’s Instagram has seen dramatic success, garnering a higher engagement rate than its contemporaries at almost 1%. In comparison, Gucci, Prada, and Louis Vuitton receive an average of 0.3%, a measly third of Balenciaga’s engagement

Source: Deconstructing Balenciaga’s Wacky Instagram

Link: What if Instagram Got Rid of Likes?

Instagram without quantified likes might have been nicer, in some way. But it would not have produced the Instagram we know today, and certainly not the Instagram purchased by Facebook for a billion dollars, which became the Instagram of influencers, which is the Instagram of status anxiety, which is the Instagram of more than a billion users.

Source: What if Instagram Got Rid of Likes?

Link: Facebook’s facing limits

“By most estimates, the entire global ad market (digital and offline) sits at roughly $550-600bn and by that measure Facebook, whose sales come almost entirely from ads, commands nearly 10% of it.” But, compared to Google: “If Facebook plans to regain the value it lost with its latest earnings announcement, it’s going to have to ink some riskier acquisitions that increase its addressable market, or at least take it into new corners of advertising.”
Original source: Facebook’s facing limits

Link: This is the Amazon everyone should have feared — and it has nothing to do with its retail business

“the massive online retailer once again posted its largest quarterly profit in history — $2.5 billion for the quarter — on the back of two businesses that were afterthoughts just a few years ago: Amazon Web Services, its cloud computing unit, as well as its fast-growing advertising business.”

Good charts, too.
Original source: This is the Amazon everyone should have feared — and it has nothing to do with its retail business

Link: Authenticity Wins

Put user generated content in your Web 2.0 hustling mix:

“The study also highlights other social media nuances that might be easy to overlook. While posts featuring user-generated content deliver a higher lift than traditional brand posts, the research makes clear that filling your feed with UGC images isn’t always the way to go. Luxury beauty brands see a 23% engagement lift from UGC, yet auto brands see a more modest 3% increase. This could be a matter of frequency, as luxury brands feature user-generated content in only 2% of posts, while auto companies include it in a fifth of content.”
Original source: Authenticity Wins

Link: European privacy regulations predicted to damage digital advertising revenue

“Citi cites forecasts that ePrivacy could trigger a 70% reduction in European display ad revenue, and a 33% cut in digital ad budgets, either of which could eviscerate Facebook and Google, at least under their current business model.”

The narrative that these are “tech companies,” at at least that these are the only tech companies, still drives me crazy. For example, are IBM, Microsoft, and Oracle in that bucket. Aside from advertising at Bing, clearly not. So called “tech companies” in this discussion should be called “advertising companies.”
Original source: European privacy regulations predicted to damage digital advertising revenue

Link: How Does Advertising Work?

‘It is also SELECTIVE … because, apparently, we have always been overwhelmed by sensory data and can’t begin to notice it all. Even before Snap and the iPhone X, our brains said: “Too much! Give me the bullets!”… For advertising, the implications are obvious. To rise from our sensory swamp, an ad must be EMOTIONALLY INTENSE. We assume the binary default is positive, but there is evidence that negative works as well. This study (from a consultancy now called System 1) showed that ads we hate are more likely to get us to buy a product than ads we don’t notice’
Original source: How Does Advertising Work?

Link: Media vs. Facebook: This time it’s personal

“Facebook and Google execs privately complain about the barrage of critical coverage they face, charging that media companies have a financial incentive to attack them and that media execs are settling scores. They’re right.”
Original source: Media vs. Facebook: This time it’s personal

Link: ‘Big Tech’ isn’t one big monopoly – it’s 5 companies all in different businesses

‘But despite simple perception of them all as “tech” companies, their core revenue sources are clearly different. And those distinctions suggest ways people can understand and respond to anxieties about their growing economic and cultural influence.’
Original source: ‘Big Tech’ isn’t one big monopoly – it’s 5 companies all in different businesses

Link: How dating sites spy on you

“Dating app users provide sensitive information like drug usage habits and sexual preferences in hopes of finding a romantic match…. everything you put on your profile, including drug use and health status. Web trackers can examine your behavior on a page and how you answer key personal questions.”
Original source: How dating sites spy on you

Link: Podcast Listeners Really Are the Holy Grail Advertisers Hoped They’d Be – WIRED

Early excitement around what Apple’s podcast analytics is saying about podcast listeners: “At Panoply, home to podcasts like Slate’s Political Gabfest and Malcolm Gladwell’s Revisionist History, CTO Jason Cox says that listeners are typically getting through 80-90 percent of content”
Original source: Podcast Listeners Really Are the Holy Grail Advertisers Hoped They’d Be – WIRED

Link: On the Rise of Digital Addiction Activism – Study Hacks – Cal Newport

“At the core of almost everything negative about the smartphone era is the attention economy business model, which depends on getting a massive number of people to use free products for as many minutes as possible. This model, of course, dates back to the beginning of mass media, but the combination of big data and machine learning techniques, along with careful attention engineering, has made many modern apps too good at their objective of hijacking your mind — leaving users feeling exhausted and unnerved at their perceived loss of autonomy.”
Original source: On the Rise of Digital Addiction Activism – Study Hacks – Cal Newport

Podcast market estimated at over $220m

As covered by Axios, in a report from IAM/PwC. As noted in the notes below the chart, these figures are based on a sub-set of the market, 20 advertising outfits. No doubt, they represent a huge part of revenue however. It’s hard to imagine that there’s many more millions in podcast advertising.

Also as highlighted by Sara Fischer:

Edison Research and Triton Digital estimates 98 million U.S. adults listen to podcasts.

Link

Programming the human mind to operate in the market, or just buy shit

More from The Attention Merchants

First, on advertising as a decision making lubricant:

Information cannot be acted upon without attention and thus attention capture and information are essential to a functioning market economy, or indeed any competitive process, like an election (unknown candidates do not win). So as a technology for gaining access to the human mind, advertising can therefore serve a vital function, making markets, elections, and everything that depends on informed choice operate better, by telling us what we need to know about our choices, ideally in an objective fashion.

And then an example of that principal in place to sell ads at CBS, early on:

“Here you have the advertiser’s ideal—the family group in its moments of relaxation [listening to the radio] awaiting your message,” said CBS. “Nothing equal to this has ever been dreamed of by the advertising man.” It is, as we shall see, one thing to sell access to the minds, quite another to predict reliably the audience’s frame of mind; and by dictating the moment of infiltration, radio claimed to do just that. At the time and place of CBS’s choosing, the audience would be “at leisure and their minds receptive.”

Overall, The Attention Merchants is good stuff so far.

Verizon + Yahoo = #3 online advertiser, though distant

Assuming the company still wants to buy Yahoo after a massive hack of 500 million of its email users, Verizon will own properties generating about $4.6 billion a year in digital ad dollars, according to eMarketer research. That’s still just a fraction of Facebook’s $12.1 billion and Google’s $53.1 billion.

And unlike its forecasts for Facebook and Google, eMarketer projects no growth for Verizon’s piece of the pie even while the overall pie is growing—by as much as 20% a year, based on an estimate from Pew Research…. What’s worse for Armstrong, and everyone else competing for ad dollars, is Morgan Stanley’s assertion (paywall) that 85% of every new digital ad dollar in the first quarter of 2016 went to Facebook and Google.

Source: The biggest job in media is at the phone company 

Verizon buying Yahoo!’s core businesses for $4.83bn, a third place .com contender?

Verizon is acquiring most of Yahoo! $4.83bn in cash, to be combined with their AOL purchase. As a wet finger in the wind reckoning, this feels like it’ll put Verizon as a distant third place in eyeballs and ad revenue: that’s probably what the business case is targeting.

  • Yahoo! was at ~$4bn runrate (based on $1.09bn in revenue last reported quarter). Revenue has been declining steeply, down 11% q/q.
  • Valuation here is tricky, since Verizon is only buying “core assets.” One back of the envelop analysis put the “core assets” at $1.7bn, suggesting a valuation of ~2.8x.
  • Combined with AOL and other Verizon properties, the company says this will result in “global audience of more than 1 billion monthly active users — including 600 million monthly active mobile users.”
  • There’s fierce competition from Facebook and Google: “According to data from e-marketer in March, Yahoo’s worldwide net digital ad revenues will fall nearly 14% this year to $2.83 billion, from $3.28 billion in 2015. In contrast, Google will see a 9% increase while Facebook will be up by nearly a third year-on-year (31%).”
  • Despite this small pot of marketshare-by-revenue, at least in the US, the combined company will be in the top three of marketshare-by-eyeballs. If you were an i-banker looking at that in your spreadsheet, you’d think: we just need to increase eyeball-to-cash conversion productivity and – POW! – synergies!
  • As a reminder, AOL includes “The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com.” Yahoo! Mail has 225m monthly active users.
  • It keeps getting described as an “assets sale,” because Yahoo’s stake in Yahoo! Japan and Alibaba will stay with Yahol! As the NY Times puts it: “a 15 percent stake, worth about $32 billion based on its recent share price, in the Chinese internet company Alibaba and a 35.5 percent stake, worth about $8.7 billion, in Yahoo Japan.”
  • This will create some interesting post-deal structure for the numbers. The entire Yahoo! company is much bigger than that 1.1x valuation: “Yahoo! stock, which is up 18% this year, had a total market value of $37.4 billion at its close on Friday of $39.38.”
  • It’s pretty clear that the company wants to sell the remaining assets.
  • Rival bidders: “Suitors included Quicken Loans founder Dan Gilbert, communications giant AT&T and private equity firms Vector Capital Management and TPG.” AT&T seems to have been the main competitor. More from Kat Hall: “The telco was one of 40 suitors rumoured earlier this year to be interested, including Google parent Alphabet, Time and even Daily Mail parent DMG.”
  • It increases Verizon/AOL’s advertising marketing share, but Facebook and Google still dominate: “Verizon with AOL currently holds 1.8 per cent of the $69bn US digital ad market, according to The Wall Street Journal. Yahoo controls about 3.4 per cent, while Google and Facebook combined make up half of the total.”
  • Timing the sale of a declining asset is everything: “back in 2008, it turned down a $44 billion offer from Microsoft”
  • See some in-depth history and analysis from Timothy Lee over at Vox. The thesis seems to be: the company could adapt beyond it’s initial success in the 90s and never found a new identity beyond being a “media company.”