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drag2share: A single math equation explains all you need to know about Facebook revenue growth, according to Citi
While it has ambitions in virtual reality, artificial intelligence, and internet connectivity for people all over the world, its more immediate money-maker is still advertising.
With that in mind, researches at Citi have come up with a single math equation that they believe explains everything you need to know about Facebook’s revenue growth. It calls that equation The MACE Analysis.
It’s not pretty, but here’s the equation (click to enlarge):
So, what does “MACE” mean?
Citi broke down Facebook’s ad revenue growth into its four main drivers: Monthly active user growth, change in ad load, change in ad pricing or cost per thousand ad clicks, and the change in engagement per user (meaning, how much people look at their Newsfeeds). Citi adds one to the estimated value for each of those, multiplies them together, and subtracts one.
drag2share: Strong Performance And Soaring Prices Explain The Explosion In Spending On Social Media Ads
source: http://feedproxy.google.com/~r/businessinsider/~3/3s-O-IZN8Rg/social-media-advertising-spending-explodes-2014-10
The social media ad industry is having a record year, with spending on social ads that appear on mobile devices exploding over 70% in annual terms, according to BI Intelligence estimates.
What’s behind this surge? The story comes down to two factors, prices (which are tripling) and performance.
Consider:
- Advertising performance is improving. During the second quarter, click-through rates (CTRs) on Facebook averaged 0.36% globally during the second quarter of 2014, rising from 0.14% one year earlier, based on a selection of advertisers studied by Nanigans.
- Mobile-social ad formats are proving to be particularly effective, particularly mobile app-install ad units, which analysts suggest could account for anywhere from one-quarter to more than one-half of Facebook’s mobile ad revenues.
- Prices are rising to reflect that performance boost, according to data gathered by BI Intelligence. Just as an example, Facebook’s mobile app-install ads sell for as much as $20 per ad on Facebook, according to The Wall Street Journal.
- Average price per thousand impressions (CPM) on Facebook has tripled from the same quarter last year, according to Nanigans.
- Brands and businesses are realizing that paid promotion works best on content that’s already popular. For instance, Facebook posts with more than 5,000 interactions (likes, shares, comments) saw an average of 86.6-times higher number of impressions when promoted using paid ads, a much higher “multiplier” than posts with poor organic performance.
Our new data finds that US social-media ad spend will top $8.5 billion this year and reach nearly $14 billion in 2018, up from just $6.1 billion in 2013. The report gives a five-year CAGR for the industry.
E-Commerce Companies Have A Big Opportunity To Go After The Specialty Food Business
Source: http://www.businessinsider.com/e-commerce-companies-compete-against-legacy-grocers-on-specialty-food-2014-7
E-commerce has yet to prove that it can make a serious dent in the $600 billion a year grocery industry in the U.S., but one promising opportunity is in selling specialty, hard-to-find food and beverage items online.
Only 15% of U.S. adults have purchased general food items online, according to a new survey from Harris Interactive, compiled in the charts below from BI Intelligence. However, 25% said they have gone online to buy specialty food and beverages that are typically hard to find, such as exotic seasonings or ingredients.
This suggests that e-commerce companies can compete against legacy grocers on selection of products.
There is additional evidence in the Harris survey which suggests that consumers feel relatively indifferent to whether they buy specialty food and beverage items in-store or online — a stark contrast to general groceries.
BI Intelligence is a subscription tech research service, covering the e-commerce, payments, and digital media industries. For full access to all our downloadable charts and reports, sign up for a free trial.
SEE ALSO: The Surprising Demographics Of Who Shops Online And On Mobile
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drag2share: Mobile, Video, and Real-Time Bidding Will Catapult Programmatic Ad Spend
source: http://feedproxy.google.com/~r/businessinsider/~3/PNSQLAsR_iI/the-programmatic-ad-report-2014-7
Programmatic platforms are on pace to fundamentally reshape the entire digital advertising landscape.
These platforms are automating much of the ad buying and selling process and increasing the accuracy of execution. Programmatic technologies are helping ad buyers find the right audience at the right price at the right time.
A new report from BI Intelligence finds that real-time bidding (RTB), a key piece of the programmatic ecosystem, will account for over $18.2 billion in U.S. digital ad revenues in 2018, up from just $3.1 billion in 2013.
Access The Full Report By Signing Up For A Free Trial
Here are some of the key takeaways from the report:
- Programmatic and real-time bidding (RTB) ad spend is growing fast. RTB will account for over $18.2 billion of U.S. digital ad sales in 2018, up from just $3.1 billion in 2013, growing at a compound annual growth rate of 42%.
- Mobile and video ads will be a major driver of this growth, with RTB sales for these formats topping $6.8 billion and $3.9 billion in 2018, respectively.
-
A number of companies are already cashing in on the growing programmatic market. Top programmatic ad companies include Criteo, Rocket Fuel, the Rubicon Project, and AOL. These four companies pulled in more than $1.5 billion in combined global ad revenue in 2013, accounting for more than one-tenth of global programmatic ad dollars.
- Prices for programmatic ads are increasing for almost all ad types, as demand outpaces supply. The effective cost per thousand impressions (eCPM) for social ads was up by 64% between January through April 2014, compared to the same time period one year earlier, according to Turn.
- There are still a number of barriers to adoption. Top barriers include brand worries that they will lose control over where their ads will appear, internal resistance at ad agencies, and lack of transparency in the industry over methods and results.
drag2share: THE PROGRAMMATIC ADVERTISING REPORT: Mobile, Video, and Real-Time Bidding Will Catapult Programmatic Ad Spend
source: http://feedproxy.google.com/~r/businessinsider/~3/PNSQLAsR_iI/the-programmatic-ad-report-2014-7
Programmatic platforms are on pace to fundamentally reshape the entire digital advertising landscape.
These platforms are automating much of the ad buying and selling process and increasing the accuracy of execution. Programmatic technologies are helping ad buyers find the right audience at the right price at the right time.
A new report from BI Intelligence finds that real-time bidding (RTB), a key piece of the programmatic ecosystem, will account for over $18.2 billion in U.S. digital ad revenues in 2018, up from just $3.1 billion in 2013.
Access The Full Report By Signing Up For A Free Trial
Here are some of the key takeaways from the report:
- Programmatic and real-time bidding (RTB) ad spend is growing fast. RTB will account for over $18.2 billion of U.S. digital ad sales in 2018, up from just $3.1 billion in 2013, growing at a compound annual growth rate of 42%.
- Mobile and video ads will be a major driver of this growth, with RTB sales for these formats topping $6.8 billion and $3.9 billion in 2018, respectively.
-
A number of companies are already cashing in on the growing programmatic market. Top programmatic ad companies include Criteo, Rocket Fuel, the Rubicon Project, and AOL. These four companies pulled in more than $1.5 billion in combined global ad revenue in 2013, accounting for more than one-tenth of global programmatic ad dollars.
- Prices for programmatic ads are increasing for almost all ad types, as demand outpaces supply. The effective cost per thousand impressions (eCPM) for social ads was up by 64% between January through April 2014, compared to the same time period one year earlier, according to Turn.
- There are still a number of barriers to adoption. Top barriers include brand worries that they will lose control over where their ads will appear, internal resistance at ad agencies, and lack of transparency in the industry over methods and results.
drag2share: A Lot Of Men Would Rather Do All Their Shopping Online
source: http://feedproxy.google.com/~r/businessinsider/~3/M3D4oQOeR5w/many-men-prefer-to-do-all-their-shopping-online-2014-6
The conventional wisdom is that women drive shopping trends because they control up to 80% of household spending. However, men drive nearly as much e-commerce spending in the U.S. as women, a new report from BI Intelligence finds.
- In 2010, comScore estimated that men account for $4 out of every $10 spent online. In 2012, a Greenfield survey found that men account for 42% of online spending in the U.S.
- Men are actually more likely to make purchases on mobile devices than women.
- Twenty-two percent of men made a purchase on their smartphones last year, compared to just 18% of women.
- And 20% of men bought something on a tablet, while the percentage for women was 17%.
- More importantly, many men say they would like to shift all their spending online.
- 40% of American men aged 18 to 34 said they would “ideally buy everything online,” compared to only 33% of women.
These findings suggest that men represent a huge opportunity for online retailers and e-commerce companies. Bricks-and-mortar stores that sell merchandise primarily for men are at particularly high risk of losing customers to online shopping alternatives.
In a new report, BI Intelligence breaks down the demographics of U.S. online and mobile shoppers by gender, age, income, and education and takes a look at what they’re shopping for, and how their behaviors differ.
drag2share: Inside Narrative Science, The Artificial Intelligence Company That Could Put Journalists Out Of Work
source: http://feedproxy.google.com/~r/businessinsider/~3/KjKq2n5GE28/narrative-science-2014-7
Kris Hammond is chief scientist and co-founder of Narrative Science, a company that uses an artificial intelligence product called Quill to turn boring data and statistics into highly readable stories with a beginning, middle, and end.
The software can write stories with no bias, confusion, or cherry picking, accurately representing the truth based on the data you give it.
Hammond calls it “the most powerful AI system [he’s] ever built.”
“We looked at the world of media and data as it’s growing today,” he told us over the phone. “We saw the beginnings of dissatisfaction with big data and we saw ourselves as the solution. You don’t want spreadsheets, you want to be told.”
Narrative Science is spun out of technology coming out of Northwestern University, merging engineering and journalism. It’s all about content generation from raw data, using narrative structure as the driver.
The company’s AI product, Quill, can essentially turn numbers into stories: The box score from a baseball game becomes a written report of that game, for example, detailing player performance as if you were reading a sportswriter’s coverage in the newspaper.
Hammond said Quill works so well that it exceeded his team’s expectations.
“That’s rare,” Hammond told Business Insider. “We had a moment of pause and looked at it — what is the scope here?”
In the early days, Hammond said they used their software to “write” about any sport that could be expressed with numbers: baseball, basketball, soccer, and the like. It wasn’t long before they branched out from there.
drag2share: THE SNAPCHAT REPORT: Audience Numbers, Demographics, And Brands’ Early Marketing Efforts
source: http://feedproxy.google.com/~r/businessinsider/~3/b7ryNiXqxzc/a-primer-on-snapchat-and-its-demographics-2014-6
Snapchat has cultivated a unique identity as a smartphone-only social network and messaging platform focused around images and videos. The app has emerged as an everyday communication tool for millions of teens and young adults, particularly in the U.S. and Western Europe.
Snapchat launched in September 2011, so it is not even three years old. But as BI Intelligence explained in a recent report, brands stand to gain a lasting advantage from adopting emerging social media early.
In a new report from BI Intelligence, we provide an exclusive estimate of Snapchat’s monthly active users, and break down the app’s demographics to help brands and businesses decide whether they need to be on Snapchat. The app is definitely emerging as a key medium for targeted marketing and messaging aimed at teens and millennials. The report also spotlights the opportunities ahead, as users embrace new features like “Stories,” which are collections of videos and photos that don’t self-destruct.
drag2share: BricksMortar Retailers Will Use Beacons To Combat The Showrooming Threat
source: http://feedproxy.google.com/~r/businessinsider/~3/QmWTXzRN_9c/bricks-and-mortar-retailers-will-use-beacons-to-combat-the-showrooming-threat-2014-6
Beacon deployment has begun in earnest.
LevelUp, one of the top mobile in-store proximity payments companies, recently installed beacons at select retail locations. London’s Regent Street, a top shopping destination, is being outfitted with beacons. And recently a new product emerged from beacon-maker Radius that can turn businesses’ Macs running OS X into iBeacon technology.
At BI Intelligence, we’ve been closely tracking beacon development.
Beacons are extremely important to bricks-and-mortar retailers because they provide a way to deliver offers and notifications to consumers’ smartphones via a Bluetooth low energy (BLE) signal while they’re in-store. The devices provide a unique advantage for bricks-and-mortar businesses as they continue to try to deflect the threat from e-commerce-only retailers. Beacons won’t keep people from using their smartphones to price compare — something Amazon’s Fire phone just made even easier — but they could send people the kind of incentives that will entice them to convert in-store.
In a recent report, BI Intelligence looks at what beacons are, how they work, and how the technology is revolutionizing the way devices can connect and interact with each other, and physical spaces. We also examine those industries poised to see the biggest investments in beacons, and why Apple’s debut of iBeacon has given beacon technology a huge boost.
Of course, it’s not as simple as a consumer simply having BLE-compatible smartphones. Consumers also need to opt-in to receive offers from merchants and have their location tracking turned on on the phone. But all the recent investment in beacons suggests that retail businesses see a huge upside in beacons.
drag2share: Venmo Is The ‘Killer App’ That The Mobile Payments Industry Has Been Waiting For
source: http://feedproxy.google.com/~r/businessinsider/~3/woFxtWpIYkk/venmo-is-the-killer-app-that-the-mobile-payments-industry-has-been-waiting-for-2014-6
Venmo, owned by eBay’s PayPal unit, already channels as much volume in total dollar value of transactions as Starbucks’ successful mobile payment app, according to BI Intelligence’s estimates. It has taken Venmo less than two years to achieve the same volume as Starbucks.
At BI Intelligence, we are regular users of Venmo. Here’s a look at how it works and why it’s seeing such a fast rise in adoption.
VENMO IS A MORE MOBILE-FRIENDLY VERSION OF PAYPAL: Venmo allows users to easily send money back-and-forth to one another for expenses like rent, restaurant and bar checks, and event tickets. Venmo is free to use and appears to be gaining the most traction with U.S. smartphone users in their late teens and twenties. It’s very popular on college campuses.
Digital Consigliere
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
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