CPMs

Another Super Bearish Facebook Analyst Has Changed His Mind (FB)

Source: http://www.businessinsider.com/another-super-bearish-facebook-analyst-has-changed-his-mind-2012-11

mark zuckerberg

Facebook has managed to get two bearish analysts to change their mind.

Carlos Kirjner at Bernstein Research and Rich Greenfield at BTIG have both upgraded the stock this morning. We’ve written up Greenfield’s note here, if you want to read it. (In short, he thinks Facebook’s plan to stuff ads in the mobile news feed is going help it beat Q4 estimates.)

As for Kirjner, he’s rating the stock “outperform,” and has a $33 price target.

Here’s why in a nutshell:

We think consensus is underestimating Facebook’s revenue growth potential over the next 12-24 months. We think Facebook is on path to beat consensus revenues over the next 12-24 months, delivering $6,976 million in 2013, 9% higher than consensus’ $6,388 million, and $8,650 million in 2014, or 7% higher than consensus’ $8,078 million. Further monetization of (mobile) Newsfeed inventory will be the main driver of growth, as we believe that for the next 18-24 months Facebook probably can increase the number of ad impressions per user per day with limited chance of seeing material deterioration in user experience. We also believe that at this point and for the near-to-medium term, its revenue growth trajectory will be the main driver of Facebook’s stock performance. In addition to mobile, further monetization of the PC Newsfeed and the positive impact of the Facebook Exchange on right-hand-side column CPMs will help drive growth.

Beyond this, Kirjner believes Facebook’s social advertising initiatives can work:

Social, new businesses opportunities and the platform remain options fo! r furthe r upside for the next two years and beyond. The successful monetization of Newsfeed inventory and introduction of the Facebook Exchange have given Facebook an 18-24 month runway to develop new revenue streams from new formats (e.g., gifts), to work with advertisers and third parties such as Datalogix and Nielsen to improve (online brand) advertising ROI and its measurement, which would enhance its long-term pricing, and to continue pushing adoption of social across the Web with its platform play, based on Facebook Connect and the Open Graph Protocol. In other words, we still think of Facebook as a distinctive display advertising business, but mobile and the exchange make it better and larger, and extend the time horizon Facebook has to realize the potential of new business opportunities and of social advertising.

The bottom line here is that Facebook has shown it’s willing to build a big business, something analysts didn’t think would happen. And now they’re upgrading the stock. They are still cautious about how it all plays out, but overall there is reason to be positive about the stock for the first time since it became publicly traded.

Don’t Miss: Facebook’s IPO Was One Of The Biggest Tech Flops Of The Year

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Monday, November 26th, 2012 news No Comments

Young Women Are The Most Valuable Mobile Ad Demographic

Source: http://www.businessinsider.com/young-women-are-most-valuable-mobile-ad-demographic-2012-2


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Data is starting to trickle in and shape our understanding of the nascent mobile ad market. According to data from Flurry Analytics, 25- to 34-year-old females are the most valuable demographic for advertisers and publishers (as measured by the underlying click-through and conversion rates).

This is not surprising: Young people have adopted smartphones at a much higher rate than their parents. However, mobile CPMs will eventually even out as penetration picks up amongst older age groups. Furthermore, women should be more valuable because they historically have controlled household expenses and there is some evidence that they use smartphones more than men while shopping.

Finally, the eCPMs strike us as pretty high—even as smartphone usage has exploded, demand seems to have held up.

Mobile Ads eCPM By Audience Age And Gender

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Wednesday, February 29th, 2012 news No Comments

Not 1, Not 2, Not 3, But 4 Display Ads Per Pageview – Shame on You Facebook

Updated May 12, 2012. Freddy Nager, Prof of Integrated Marketing at UCLA sent me a screen shot showing 9 display ads per page. The unscupulosity of Facebook is at an all time high – right up to their IPO.

THANKS Freddy Nager @AtomicTango, Prof of Integrated Marketing, UCLA for the screen grab of 9 and 10 ads per page.

http://atomictango.com/2012/04/20/myspace-facebook-continued/

Updated February 3, 2012.  This is how Facebook is growing ad revenues – SEVEN DISPLAY ADS PER PAGE – EVIL!

facebook ads

 

 

But despite this kind of “cheating” their revenues are decelerating. And there is the “danger” of advertisers getting smart and changing from paying on a CPM basis to paying only on a CPC basis — paying only when they get the click. That would mean Facebook’s revenue could drop off a cliff.

Source: http://www.businessinsider.com/chart-of-the-day-facebook-revenues-are-decelerating-2012-2

Facebook revenues decelerating

 

Updated:  FIVE (count ’em) 5 ads per page – SHAME on you Facebook – the highway robbery gets worse.  Advertisers, quick, go to CPC (don’t pay CPMs any more).

Multiple ads on the same page run up the impression numbers, but artificially depress click-throughs because even if they wanted to, users can only click on one ad at a time. Shame on your Facebook for overtly and systematically robbing advertisers who pay on a CPM basis.

But then again shame on you advertisers who still pay CPMs when you can easily click a radio button to select CPC — Facebook even suggests a range for you automatically (see inset below).

What is the advantage of paying by CPC (cost per click) instead of CPM (cost per thousand impressions)?  Well, remember the old ad industry joke “I know I am wasting half my ad dollars, I just don’t know which half” — well, now you know.  In fact, you now know you are wasting 99% of your ad dollars to wasted impressions that get no action/clicks from users AND you know which 99%.  See infographic below. So stop paying CPMs and start paying CPCs TODAY. Your ad budget will thank you!

Just how DISMAL are  Facebook advertising metrics and benchmarks (click to see )?

According to data from comScore, in Q3 2010, Facebook served 297 billion display ad impressions giving it 23% of the U.S. market for display ads. In digital channels, since there is no longer the physical limitation of time (airtime on TV) or space (area to put ads on dead-tree pulp) companies can create “inventory”  out of thin air and magically increase revenue on the backs of advertisers still willing to pay for impressions. I guess it really is caveat emptor.

chart of the day, share of online ad impressions, nov 2010

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Thursday, November 11th, 2010 analytics, digital, display advertising, marketing 1 Comment

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