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Akamai Sees Seasonal Slowdown
Q1 earnings didn't disappoint but web infrastructure provider Akamai did indicate some slowing growth for Q2 2011 on Wednesday's Q1 2011 earnings call with Wall Street analysts. Little was discussed about Akamai's Advertising Decision Solutions (ADS) business which was originally fueled by the purchase of Acerno) in 2008 and leverages a customer co-op of data for retargeting e-commerce customers with ads. But, CFO J.D. Sherman did offer some numbers, "Our commerce vertical increased 25% over Q1 of last year. As expected, commerce revenue declined 8% compared to Q4, primarily due to the seasonality of our advertising division solutions." So, to read between the lines, and it's hard I'll admit, it seems there may be some accelerating growth but is it ADS? In Q4, the commerce "vertical" which execs say includes the Akamai's ads unit grew 21% year over year (see Q4 transcript).. but now, even though ADS revenue is down 8% from Q4 to Q1, the "commerce vertical" is now growing 25% year-over-year in Q1. Is ADS picking up speed or is there something else driving this unit? Really hard to say. FWIW, execs didn't make a big deal about ADS. And Wall Street could care less at this point since its a small part of Akamai business. Read the call transcript for Q1 2011 from Seeking Alpha. ThinkEquity analyst Robert Coolbrith wrote in a note to investors about the broader prospects of the company saying, "Akamai reported a mixed Q1—the company modestly outperformed consensus Q1  expectations, but Q2 guidance disappointed as AKAM faces the first full-quarter impact from recent media renewals as well as a deceleration of media volume growth. While we view the company's long-term secular growth opportunities as intact, we believe management's previously stated objective for 15%+ FY11 revenue growth could now be out of reach." "Media" in this case has to do with hosting/serving online video and website files. Read Akamai's earnings release.
Recommending Content, Driving Ads
It's not all about driving ads. It's about driving people to more content they want - and the hopefully showing them an engaging ad or three. GigaOm's Ryan Lawler writes, "Local TV conglomerate Hearst has chosen Taboola for all of its local TV station sites to provide video suggestions for viewers reading stories or watching video on their websites. Hearst owns TV stations in 29 markets, each with their own news pages and video content. Matching up the right video with the right news article isn’t always easy for a company of this size that has large caches of news and video content." Read more.
Mobile CPCs Are Cheap
Search marketing firm Performics, which is also driving the VivaKi Nerve Center (agency trading desk) business in France among other things, has released results of a new study which looks at mobile display performance. The company says that "mobile (paid search) impression share has crossed the 10% threshold for Performics' aggregate client base." So that's mobile paid search ads versus PC-based paid search ads. Let's keep going. More sample stats: "After strong click-through rates (CTRs) during holiday 2010, mobile CTRs have stabilized in Q1 2011, hovering just below desktop CTRs for 3 consecutive months." Read more. The kicker here is that mobile CPCs are almost less than half than CPCs for desktop (the PC) according to Performics. So, of course a marketer should be driving more impressions through mobile to the degree that a scalable campaign is possible!
Geez, those people in Redmond make a lot of coin. For Fiscal Q3 2011 ending March 31, 2011, for Microsoft, "Operating income, net income, and diluted earnings per share for the quarter were $5.71 billion, $5.23 billion, and $0.61 per share, which represented increases of 10%, 31%, and 36%, respectively, when compared with the prior year period." To put it in perspective, Google had $2.80 billion in operating income and $2.3 billion in net income for Q1. Read the release. Ars Technica notes that Microsoft lost the earnings race to Apple for the first time in forever. Apple earned $5.99 billion in operating income. Read more. Listen to the webcast here. The online services division grew 14% year-over-year and "online advertising revenue grew 17%, primarily driven by search and display." Earnings slides are here (PPT).
Daily Deals Ecosystem Map
Hey local ad lovers - looking for a crowd-buying biz ecosystem map to rival LUMA Partners' Terence Kawaja's display ad tech ecosystem map? The co-founder of daily deal recommender Yipit, Jim Moran, has thrown his eco-map sombrero into the ring with - See it now! In the map, Moran says he's identified four daily deal exchanges which "transfer of merchant offer contracts between sales forces and publishers." The exchange model pops up again in a market with a surplus of inventory.
Microsoft Ad Exchange man-about-town Esco Strong offers the top line on the three main considerations that publishers need to ponder when putting their inventory in a real-time bidding-enabled exchange. Number one: "Smart pricing of ad offerings to alleviate channel conflict and adverse selection." Number two: "Flexible inventory and yield controls..." And, Number three: "Brand safety controls for both buyers and sellers..." Read what all that means to Strong.
C3 Metrics and search retargeting company Magnetic said they have partnered to provide better attribution capabilities through "a combination of pre-funnel insight with full-funnel attribution." This deal may be particularly useful for Magnetic as it sells media against the search retargeting data that is core to its business model. If marketers can better track a vendor's tech or data along the funnel, the more likely they are to use the service or data. Read the release.
Display As Spam
Simulmedia CEO (and former Real Media and Tacoda founder) Dave Morgan says "Online Display Has A Spam Problem." He writes, "one would think that after 15 years, Web sites, advertisers, agencies and technology companies would have done a better job creating user experiences on Web media and information sites -- and, specifically, would have found a way to remove more of the bad, blinky, flashy ads that have irritated us since they first showed up in late 1995." Read his solutions.
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