Google To Buy Twitch; Advertisers Trading Desk Issues

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More Video Ad Inventory

Google is buying Twitch for $1 billion, VentureBeat first reported on Thursday. Twitch is an aggregation site for streaming video games in real time (think YouTube for serious gaming enthusiasts), where users can broadcast their desktop, Xbox One or PlayStation 4 sessions to online viewers. A quick visit to Twitch will either confuse or thrill you, depending on your interests. But the site is clearly ad-heavy already, and could be a major platform for Google’s programmatic video ad strategy. The San Francisco-based startup hosts more than 50 million monthly users, and the company has raised about $35 million to date. The terms of the deal and official purchase price were not disclosed. The acquisition further expands Google’s video ad inventory beyond YouTube.

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Evolve Media’s Evolution Into Video

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BrianFitzgeraldLifestyle content and blog network Evolve Media is evolving its ad formats along with its publishing assets.

Evolve historically competed with such vertical media and ad services hybrids as Say and Federated Media. Over the last 15 years, it has acquired 50 vertical interest and publisher assets (sites like Crowd Ignite and BabyAndBump), according to its cofounder and president Brian Fitzgerald, investing also in performance marketing and publisher technology.

Evolve will likely acquire more content providers generating between $5 to $15 million in revenue, Fitzgerald noted. And it will increase its emphasis on video. In 2011, Evolve Media rolled out an ad-supported video distribution platform and services group, SpringBoard Video. As part of that platform, Evolve is beta-testing a native video ad format, called INgage, with three advertisers. The format launched last Wednesday.

“You have such a march to market by agencies and advertisers to buy and audit on a viewability metric that many are utilizing multiple vendors and they’re asking publishers to be judged by or held accountable to methodologies, measurements and results that are completely independent or unverified,” Fitzgerald said.

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Math For Marketers: Why Attribution Is Upside-Down

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kevin-geraghty“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Kevin Geraghty, senior vice president of advanced analytics and decision sciences at 360i.

There’s an old space race story that NASA spent $2 million to develop an anti-gravity pen, while the Soviets just used pencils. The story serves as a reminder that sometimes you just need to look at a complex problem differently to find a better solution.

Marketers face a similar problem with attribution. They are consumed by too narrow a problem – attribution – when they need to rethink the whole equation. The difficulties with attribution extend beyond the commonly recognized issue of a last click getting all the credit. Companies turn away profitable business because they base their media investment strategy on upside-down math.

There is a structural mismatch between how we buy media – partner by partner – and the customer journey toward a purchase, which includes multiple partners and touch points. Determining ROI for each partner or touch point to make better budget allocation decisions is difficult, but it can be achieved through marginal contribution analysis.

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Trouble Shared Is Trouble Halved? Data Co-Op Aims To Help App Developers Stay Ahead Of The Game

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You don’t have to be good at math to know that if you only get $3 back on a $4 investment, then there’s something painfully wrong with whatever you’re doing.

No one’s more aware of that than game app developers, some of whom spend thousands of dollars on user acquisition daily — though the truly big players shell out way more than that. Take Supercell, creator of “Clash of Clans,” which sinks about $1 million a day on app marketing.

Of course, Supercell can afford it because the math works. Midia Research found that the game company makes $5 million in revenue every day. The more you test, the better your chances are of snagging the right users, and the more you make, the more you can test.

But smaller or mid-size app developers attempting to navigate the murky waters of the app-install economy are often met by a landscape populated by middlemen, unqualified audiences, and bot-infested ad networks.

It’s something Think Gaming co-founder Tim Ogilvie has thought a lot about and it’s the motivation behind the gaming company’s new mobile advertising data co-op, which he says will help game developers pool their experience and share intelligence in the ongoing quest to find the most valuable users.

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The Buy Button Buy-In

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fb twit buyWhat’s the hottest new digital toy?

If you’re Facebook and Twitter, it’s the buy button. To recap: Facebook published a blog post explaining its experimentation with a buy button – currently with select small and medium-sized businesses – with which users can purchase goods directly through the Facebook platform.

This announcement followed Twitter’s own dalliance with ecommerce. In July it released – likely by mistake – a semifunctional buy button designed to enable purchases directly from an online retailer called Fancy. It also performed tests with Amazon in which customers could respond to tweets featuring products with #AmazonCart in order to add those products directly to a shopping cart.

This isn’t the first time advertising and ecommerce have come together. Google has its  product listing ads (PLAs), though, as many sources point out, these ads differ in that they feed off search data and the consumers clicking on them are typically looking for the products they advertise.
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Do Digital Media Agencies Have a Plan?

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Chris-O-HaraData-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Chris O’Hara, co-founder and chief revenue officer at Bionic Advertising Systems.

Digital agencies used to get paid for unpacking an incredibly complicated digital landscape for marketers. Faced with all kinds of new marketing opportunities, advertisers turned to savvy digital agencies to figure out where to spend their money, and how much of it to dedicate to display, mobile and social channels.

The dingy little secret was that the agencies didn’t really plan much of anything. The way it worked was that agency planners would make an Excel template, create an RFP document, instruct the media owners to send back all kinds of creative ideas and fill out the media plan template. RFPs sent publisher teams spinning into action, churning out exciting-looking PowerPoints with screenshots and suggested spending levels.

Not much of this was scientific. Publishers often promised more inventory than could be delivered, knowing they would never get the full budget allocation. Agencies asked for various “budget levels,” knowing they would allocate only $50,000 per publisher – but asking to see $200,000 plans to get a better sense of where CPMs might be negotiated.

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LinkedIn Endorses Native; Yahoo Vocabulary Lesson

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LinkedIn Endorses Native

LinkedIn is growing its native ad strategy, with a new option for brands to personalize and test news feed content. LinkedIn's calling it "Direct Sponsored Content," and the offering aims to help brands improve the relevancy of their content. Brands can now bypass posting promotional content to company pages, and can publish the ads directly to the LinkedIn news feed. Also noteworthy, brands specify audience segments in order to send personalized in-feed messages. Read the post.

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Pandora’s Mobile Revenue Hits All-Time High, Listener Growth Not So Much

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PandoraQ22014Mobile ad revenue was up significantly for Pandora during Q2 2014, jumping 59% from last quarter to $167.5 million, a 51% year-over-year increase.

Total revenue for the Internet radio streaming company came in at $218.9 million, 76% of which was made up by mobile ad revenue. While it represented a 38% year-over-year growth for the company, the total came in just shy of estimates. Local ad revenue was $35.3 million, up 144% since last year.

On the revenue per mille front, ad revenue per thousand ad-supported listener hours was on the rise, reaching $34.15 million this year, up 7% from last year.

A big issue for Pandora last quarter was its less-than-robust growth of active listener hours. Investors on the Q2 2014 earnings call pounded Pandora President and CEO Brian McAndrews on the point.

Between Q4 2013 and Q1 2014, the 12% increase in listener hours wasn’t all that much considering the Q1 increase was only 16%. It’s not a static number, but it’s also not impressive, considering the 250 million radio listeners currently in the US. In Q2 2014, radio listening among Pandora users went up just 7.04%.

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Amazon Q2: Ecom Giant To Invest $100M In Original Video Content

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Amazonq2Ecommerce giant Amazon on Thursday reported Q2 revenue of $19.3 billion, up 24% from $15.7 billion last year.

Amazon buckets ad revenues in an "other" category ($1.2 billion for Q2, a YoY 38% increase from $844 million), which includes Amazon Web Services (AWS) and branded credit cards.

One of the biggest focuses for Amazon in the coming months will be the development of original content. The company plans to invest $100 million in original video content in Q3.

"In terms of content, we’ve seen more and more Prime customers streaming free content through our pipeline," said company CFO Tom Szkutak during the earnings call. " We have more and more customers taking free trials … and they are converting to paid digital video and then cross-shopping, [so it’s encouraging positive purchase habits]. The service we have today has improved dramatically over the last 12-24 months."

A number of companies like AOL and Yahoo have paid lip service to monetizing original content. In the case of Amazon, which has been rumored over the past year to be developing its own original series for Amazon Prime Instant Video users, this appears to be a continuing priority.

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