spending

Apple Is Suddenly Spending Billions Of Dollars On Secret Projects (AAPL)

Source: http://www.businessinsider.com/apple-is-suddenly-spending-billions-of-dollars-on-secret-projects-2012-12

In the quarter ending June 2011, Apple spent less than $1 billion on property, plants, and equipment.

By March 2012, the number had spiked beyond $2 billion, beyond $3 billion, and approached $4 billion.

Horace Dediu thinks that number will zoom past $4 billion in 2013.

Here’s a chart he made to show what the spike looks like so far:

Apple Spike

Here’s the the interesting part about all this massive spending.

No one outside of Apple knows where it’s going.

“The capital is being deployed almost silently and, though vast in scale, barely gets a mention from analysts,” writes Dediu. “Not even a single question has been raised at any earnings call about this spending.”

His theory is that Apple, which prefers an “integrated” approach in everything it does, will soon make more of the components inside its gadgets, like chips.

That would explain why Apple has been so busy hiring former Texas Instruments employees, for example.

The truth is, Apple is a very secret company and it doesn’t have to say, specifically, where it’s spending that money.

For all we know, it could be building TV set factories.

One thing one know for sure is the Apple is always working on products that would cannibalize its current lineup. 

Maybe Apple is investing billions in a product that could kill the iPhone, like computerized glasses.

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Thursday, December 13th, 2012 news No Comments

Enterprises Are Spending Wildly On ‘Big Data’ But Don’t Know If It’s Worth It Yet

Source: http://www.businessinsider.com/enterprise-big-data-spending-2012-11

Big data is already big business, with companies collectively spending billions on it.

But most of them don’t know if big data is worth it—yet. And they’re not even sure what it means, with the “big data” label applied to all kinds of data-intensive projects.

Most companies said that “big data” meant scooping up large quantities of information, often from nontraditional, server-busting sources like Web traffic logs or social media, and then using it to make business decisions in real time. These include things like watching competitors, monitoring their own brands, creating new services that they can sell, and tracking product and pricing information.

In 2012, companies worldwide spent $4.3 billion on software for big-data projects, market research firm Gartner reports. Most of that was for software running on company-owned servers.

But in a survey of over 800 business and IT professionals commissioned by big-data startup Connotate, 60% said it was too early to tell if a given project was successful and returned a decent value for its investment.

That won’t stop companies from spending even more on big-data projects next year. They’ll be buying new servers and software and hiring experts. Add it up, and big-data projects will drive $34 billion of technology spending in 2013, Gartner predicts.

 attached image

Don’t miss: Big Data Is The Hottest Thing To Hit The Web In Years: Here’s Why

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Wednesday, November 14th, 2012 news No Comments

Online Ad Spending Is Closing In On TV

Source: http://www.businessinsider.com/chart-of-the-day-online-advertising-2012-10

Online ad spending for the world’s largest media companies is closing in on TV ad spending according to this chart from BI Intelligence on the State of the Internet.

It’s important to note in this chart that TV’s share of the ad spend has actually grown, though only slightly, over the last six years. Online is taking share from print, radio, and outdoor spending.

chart of the day, us advertising revenue by platform, oct 2012

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Wednesday, October 3rd, 2012 news No Comments

How Mobile Phones Are Killing The Magazine Business

Source: http://www.businessinsider.com/chart-how-mobile-phones-are-killing-the-magazine-business-2012-9

Kantar Media

Total U.S. ad spending increased just 0.9 percent in Q2 2012, to $34.4 billion, according to Kantar Media, but that marginal increase masked the disproportionate damage suffered by the magazine sector.

Magazine ad sales declined -2.7% percent in the quarter, with across-the-board declines at consumer, business and Sunday magazines. The only magazine sectors to post growth were niche publications like local and Spanish language magazines, according to Kantar.

The report doesn’t say why the declines occurred. The ad economy has been growing in fits and starts for about three years now, and magazines ought to be benefiting from that. But the Kantar numbers offer a clue that mobile phones may be killing the magazine business.

Web display advertising also declined in the quarter, by -5.4%. Kantar only measures display, and not search or other forms of digital adspend. The one thing we know about digital adspend is that money right now is pouring into mobile ad delivery, and lowering prices as it does so. The effect of that is to reduce the total amount of dollars spent on internet display ads — which is probably why you’re seeing web sales declines in Kantar’s numbers.

Now put that together with the way people use their phones and tablets. The iPad and the Samsung Galaxy S III are used by consumers in an almost identical way to how they use magazines: Portable delivery of entertainment and news.

The Kantar numbers also show a continued decline in the newspaper business, where ad revenue sank another -3.1%. The web, famously, killed the newspaper business.

It looks like mobile will do the same for magazines.

Related:

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Monday, September 10th, 2012 Uncategorized No Comments

WPP Says Growth In America Is Now WORSE Than Europe (WPPGY)

Source: http://www.businessinsider.com/wpp-says-growth-in-america-has-completely-collapsed-2012-8

WPP Group, the world’s largest ad agency holding company, reported its Q2 2012 results and the revenue breakdown shows a complete reversal of fortunes for North America: When previously growth was strong in the U.S. and Canada, now it is contracting; and where growth in Europe was anemic, now it is robust.

Here’s WPP’s chart:

WPP

The key metric is “LFL,” or like-for-like” revenues. Note that North America declined 0.6% in Q2 while Europe grew between 0.8% – 3.5%.

The U.S. ad economy is now doing worse than Belgium, Italy and Japan:

WPP

As usual, ad agency revenue growth has continued its strong correlation with U.S. GDP as a whole. As the U.S. economic growth slowed, ad revenues matched the retraction, step for step:

GDP ad agency revenues

Ad agency revenues hinted at the retraction back in Q1, also. Ad agency revenues are—arguably—a good proxy for economic growth as a whole because they come from a wide variety of consumer-facing companies who often adjust their spending as a percentage of total sales.

Related:

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Thursday, August 30th, 2012 news No Comments

The Stealth Stimulus That Could Tip Consumer Spending

Source: http://www.businessinsider.com/citi-tax-refunds-2012-6

Bulls on the economy are constantly looking for any reason to be optimistic on the U.S. economy.

Personal consumption accounts for around 70 percent of GDP, so any help to the consumer would be welcome.

“There are many reasons to be skeptical of forecasts for a significant overall reacceleration in consumer spending in 2H,” writes Citi economist Steve Wieting.  “But there are some bright spots.”

Wieting dug up a nugget that could provide a little stimulus: tax refunds.  From his note to clients:

As Figure 12 shows, gross tax refunds have increased relative to disposable income in recent years. Tax refunds are a seasonal phenomenon, and ordinarily don’t deserve much attention. But as they have increased in amplitude, their impact may be more notable. Payments within the first quarter were particularly large and early. For the consumers relying on such payments, savings rates are low, and consumption is closely and immediately tied to cash flows.

tax refund chart

SEE ALSO: The Most Unemployed City In Every State >

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Friday, June 29th, 2012 news No Comments

Here’s How Much Online Ad Spending Will Increase This Year

Source: http://www.businessinsider.com/online-ad-spending-will-increase-18-in-2012-2012-6

It’s not just mobile ad spending that’s increasing, online advertising is increasing at a fairly impressive rate. According to internet research firm ComScore, online ad spending increased to just over $30 billion in the U.S. last year, a 20.2% increase.

For 2012, domestic ad spending is expected to surpass $35 billion, a 17.6% increase.

U.S. Online Ad Spending 2012 comScore

See More:

ComScore: Mobile Will Force Desktop Into Its Twilight In 2014

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Thursday, June 14th, 2012 Uncategorized No Comments

Here Are The Films With The Most Number 1 Weeks At The Box Office

Source: http://www.businessinsider.com/movies-with-the-most-number-1-weeks-at-the-box-office-2012-4

“The Hunger Games” finally lost its winning streak atop the box office this weekend. After spending four weeks at number one, the film lands 30th on the all-time chart for most consecutive weekends at the top spot.

However, four weeks is nothing compared to other titles who have claimed victorious at the box office for five, six and seven weeks in a row. One film blows all the others out of the water with a total of 15 consecutive weekends as the box office number one. Only one film has ever had 16 weeks at number one … and it’s not a James Cameron or Ridley Scott flick.

Compare the films with the most overall number one weeks to those with the most consecutive weeks at theaters below. 

You may be surprised what tops the charts.

chart-number-one-box-office

box-office-consecutive-weeks-number-one

Now, check out the most popular “James Bond” actor>

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Monday, April 23rd, 2012 Uncategorized No Comments

Hate To Be Rude, But Facebook Is Not The Next Google. It’s Not Even Close (GOOG)

Source: http://www.businessinsider.com/chart-of-the-day-hate-to-be-rude-but-facebook-is-not-the-next-google-its-not-even-close-2012-1

Information about Facebook’s 2011 revenues and operating profits leaked last week, just ahead of this week’s expected IPO filing.

If CNBC’s reporting is accurate, the numbers are disappointing for a company that’s supposed to be valued at $75 billion to $100 billion when its shares start trading.

Revenues came in at $3.8 billion, less than an expected $4+ billion. Operating profits were $1.5 billion, less than an expected $2 billion.

Facebook’s results look particularly disappointing in comparison to Google’s first seven years of business. We’ve drawn out that comparison below. 

The comparison is actually worse than it looks. Remember, Google was born at time when Internet usage, and online ad spending, wasn’t even half of what it is today. 

The fact is, Facebook is a huge consumer hit – 850 million people us the site each month – but it’s ad products are not, really. 

Google’s ad products are business magic. Consumers see ads for products that they literally want to see. 

So far, Facebook hasn’t found that kind of magic. Investors looking at Facebook’s S1 filing this week will have to wonder if it ever will.

chart of the day, revenue after launch for tech companies, 01/31/12

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Wednesday, February 1st, 2012 news No Comments

Mobile Advertising Comes Of Age

Source: http://www.businessinsider.com/millennial-media-ipo-2012-1

 

millennial media ad impressionsMillennial Media, a mobile advertising network, filed for an IPO last week. We were waiting for this, as we’d predicted this would happen this year (though we didn’t think it would happen so soon).

How is Millennial Media’s business?

Pretty good, actually.

Here are the highlights:

  • The company generated $70 million in revenue in the first nine months of 2011, from just $6.2 million in 2008;
  • The company has never had a profitable quarter and is still losing money, $4 million for the first nine months of 2011.
  • It’s pretty big and growing pretty fast: it processed 40 billion ad impressions in December 2011, and impressions are growing fast (see chart); Millennial Media has 16.7% marketshare according to IDC.

The Business

millennial media revenues and lossesYou’ll almost certainly see plenty of headlines about Millennial “never turning in a profit” throughout its road show. That’s correct. It’s also irrelevant.

Millennial is growing fast and into an enormous market opportunity–mobile advertising. It should not be profitable. Gartner thinks mobile advertising will be a $20.6 billion market by 2015, which may be conservative. That’s the opportunity Millennial is going after.

What’s more, Millennial Media seems to be gaining both market and operating leverage.

millennial media advertisersMillennial Media’s gross margin, which is roughly the amount it keeps after payments to publishers, improved from 34% to 39% in the first nine months of 2011 compared to the same period in 2010. This is happening as Millennial is growing both advertisers and spending per advertisers, as you can see in the chart at right.

What’s more, Millennial’s losses are narrowing, as you can see in the chart above.

All of this suggests that Millennial is gaining both market leverage–as it gets more established it can keep more of the revenue it generates for publishers–and operating leverage–gaining operational efficiencies as it scales up.

The Market

Mobile Advertising RevenueOne thing people might be worried about is competition from Apple and Google. We’re not. Here’s why:

  • Even though Google is much bigger than Millennial (see chart at right, using data aggregated and estimated by Business Insider Intelligence), most of that is on owned-and-operated properties. Google’s AdMob network is bigger than Millennial’s but it is not dominant.
  • Apple’s online advertising format/network, iAds, has struggled in the marketplace.
  • Ad networks are not a winner take all market. On the web, there are a few giants, and many profitable smaller players. There’s no reason why it couldn’t be the same on mobile, and Millennial, as the biggest independent player, is well positioned.

THE BOTTOM LINE: Millennial Media looks like a strong business scaling up nicely in an exciting, fast-growing market. It’s kind of a boring business–an ad network, but it seems to be executing well. More importantly, don’t trust the media reports that will inevitably bang on about how Millennial has never been profitable. Yes, that’s true, but it doesn’t matter.

 

 

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Tuesday, January 10th, 2012 news No Comments

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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