DG Break-Up May Be Imminent; Yahoo Display Trends

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DG Down, Flat And Up

DG, acquirer of MediaMind, Peer39, Eyewonder and Unicast among others, announced its third quarter 2012 results last Thursday. The company’s TV unit reported flat results (with continued competition from Extreme Reach) as did online on an “organic” basis ($33.7 million in revs).  Later on the earnings call, CEO Neil Nguyen cited price compression. Even though the online group sold 40% more impressions of standard display and rich media, it didn’t make up for pricing decrease (hence the flat results). Also, DG raised a white flag of sorts with the dreaded “writedown.” From the release: “DG's third quarter operating results include a $208.2 million non-cash charge before income taxes related to the write-down of our online reporting unit's goodwill.” Also, the company has a new CFO and the strategic review of the company remains ongoing meaning that the company could be sold or perhaps parts spun off. The online group is a juicy apple for some company out there -- or maybe as a standalone.

More earnings call highlights... CEO Neil Nguyen noted a big $57 million, 3-year customer contract for MediaMind from an “EMEA agency.”  Outgoing CFO Omar Chouir said that the online group has about 675 employees (1,675-ish total for the company).  Also, Nguyen complemented former Peer39 CEO Andy Ellenthal for the turnaround on the sales side from previous quarters for the online group.  Read the earnings transcript on Seeking Alpha.  Oh, it’s great being public, isn’t it? In spite of it all, the acquisition rumors helped buoy the stock price by nearly 20% on Friday.

Refreshing Trends

Piper Jaffray analyst Gene Munster has his team busy refreshing the Yahoo home page every day as they collect data on Yahoo display trends. Barron’s quotes the outcome of Munster’s lastest “refresh”: “On a daily basis, we check the display ads on Yahoo!’s home page to determine if ads are higher CPM guaranteed placements (sold by Yahoo!’s sales team) or performance ads supplied by an ad network or another third party. For the month of October, 74% of the ads we observed were guaranteed compared to 58% last October and 89% in September.. (...)” He remains neutral on Yahoo prospects. Read a bit more.

Federated Goes Programmatic

The Next Web, a Federated Media partner, reports that the direct sold, display ad business that was once the mainstay of Federated’s site rep empire is being mothballed in 2013. The Next Web’s Brad McCarty writes, “In fact, FM has reduced its staff by 24 people who were on the direct sales side, and hopes to add at least 40 more programmatic positions in 2013.” Read more.

The Facebook Circular

New research on Facebook’s impact on voting behavior has clear potential for retail, writes Blinq Media CEO Dave Williams in an AdAge column. “Physical stores still account for 93 percent of total sales, and circular ads have historically been retail's biggest tool for bringing consumers into stores. Retailers have been looking for a digital way to drive foot traffic.” Read it.

Location Smarts

Hyperlocal pub StreetFight peeks under the hood of some new location analytics tech from mobile ad net xAd. “SmartLocation uses an algorithm to analyze a slew of consumer location signals, such as latitude and longitude...IP address, zip code and city/state address. Once obtained, the data is scored for accuracy — to ensure that LL coordinates, if available, are real and not converted from a zip code, via geocoding software, which can lead to imprecise data — and performance.”  Read more.

Daily Deal Struggles

Groupon’s difficulties have been mounting since it filed its IPO a year ago and Q3 earnings results provided further ammunition to detractors. As a sign of the bad tidings setting in before the big holiday shopping season, the company said it would lay off 80 staffers. While it would look like the daily deals craze is over, as the action shifts to niche e-commerce players, CEO Andrew Mason tried to put a brave face on the poor performance, telling analysts, “What I can tell you is we have about 40 million active customers, and that is a very small percentage of the Internet population. So the opportunity to grow by reaching new customers is still tremendous.” Read the Seeking Alpha transcript for more. And, this summary on The Next Web.

Internet Radio On!

People may not be buying music like they used to, but they’re listening more than ever. And part of the reason is the growth of ad-supported streaming sites like Pandora, compared to “on-demand” digital music services like Spotify and Rhapsody. For the quarter ending in June, the audience for Internet radio services in the U.S. rose 27 percent from the same period the year before, CNet’s Greg Sandoval, citing research from NPD, reported. On-demand services saw just 18 percent growth. “Listening to digital music files on portable music players also dropped 21 points,” NPD said in its survey. “Are you seeing this Apple?” Read more.

Embracing Ads

In MediaPost, Simulmedia CEO Dave Morgan taps the venture capital world when discussing his recent on-stage interview at ad:tech about ad "hate."  Morgan begins, "'People don’t hate ads. People hate bad, interruptive ads.’" That was the response of noted venture capitalist Fred Wilson when I asked him why Twitter and Tumblr have eschewed the online ad industry’s standard display ads in favor of their own, native ad formats.” Morgan outlines Wilson’s six key issues for web-based advertising services. Read them.

But Wait. There’s More!

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