One Billion Smart Subscribers

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Mark September 2016 as the date that China’s mobile subscriber rolls crossed the one billion line.  And with less than 77% of the 1.3 billion mobile subscribers using 3G/4G technology and with an average conversion rate of 21 million per month, there is still room for growth.  The numbers in China never cease to amaze.  As a reminder, the reason we watch smart mobile subscription rates is because the number defines the size of the mobile advertising audience.  Source:  China Mobile, China Telecom, China Unicom

Coming Exchange Disruption

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Lorne Brown, CEO of Operative, Inc. an ad tech workflow company, has written an article in AdExchanger that rings true.  He makes the point that publishers pay an ad tech tax when they hook up with most exchanges.  The tax reduces revenue in two ways.  First is the percentage of CPM that the exchange absorbs and the second is from the often withheld user data that translates into higher CPM rates.  He cites Facebook and Google as the chief offenders in the transparency wars.

Brown argues that the current media convergence, demonstrated by the proposed AT&T / Time Warner deal, gives publishers – owners of content – new leverage and sets the market for disruption.  That disruption is likely to come from new, efficient exchanges that are able to trim their fees and are willing to pass through relevant user data.

Lorne Brown’s view of the current ad tech terrain dovetails with mPoint’s view.  Our MarketPlace exchange is built for publishers looking for more data transparency and higher yields, in other words, it is built for publishers looking for a lower ad tech tax. Source: AdExchanger

China’s Wages Increase

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This graph from a HSBC survey of 2,000 Chinese folks demonstrates the reason for near-term confidence in the consumer economy.  The data show that 84% of respondents have seen an increase in their wages relative the 2015.  That number tells much about why China remains a place for consumer spending growth and therefore, why it is remains a place for western investment.  Source: CNBC.com

Programmatic and Real-Time Bidding are not Interchangeable

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Programmatic buying and selling is more than just the latest trend.  It is digital advertising’s adaption of Wall Street’s high-frequency trading model.  The idea is to add a level of intelligence and speed to the ad buying process that a mere human could not emulate.  “Programmatic” is often used interchangeably with “real-time bidding,” but they’re not the same.  Real-time bidding is an element of any programmatic platform, but the platform also includes a strong data aspect that informs both audience targeting and optimization decisions.  Source: ReTargeter

Return to Form

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The four month decline in China’s Consumer Price Index ended abruptly in September when it returned to the a number just above the 13-month average of 101.8.  It looks as though the steep drop in August was an anomaly.  Source: Trading Economics; National Bureau of Statistics, China

Programmatic Ad Buying is Becoming the Standard

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Last week we noted that the Internet Advertising Bureau (IAB) reported European advertisers increased their programmatic buying by 70% in 2015 over the prior year. This week we report the eMarketer growth projection for the US this year will be close to 40%.  Of course, it is a year later in the process and the US started at a higher level than Europe.  Still, the story is that programmatic is quickly becoming the standard worldwide and mobile is at the center of this growth. An article in MediaPost stated, “It’s estimated that nearly 50% of all programmatic ads worldwide are viewed through a mobile device.” Source: MediaPost

Eight Best Practices for Retargeting Campaigns

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  1. Use a frequency cap to limit the number of times an identified device is sent an ad.  The reason for applying a limitation is to avoid burning out a user.
  2. Use a burn code, a small piece of code, dropped into your post-transaction page to untag any users who have made a purchase.  The reason is to avoid aggravating a customer who has already made a purchase and to avoid wasting impressions on them.
  3. Use audience segmentation to aim advertising to users at different places along the buying continuum to avoid one-size fits all messaging.
  4. Use demographic, geographic, & contextual targeting to reach the right customer to increase ad efficiency and to save money by not wasting an impression on the wrong person.
  5. Use view-through conversions to monitor ad conversions through a pre-set time frame after the user sees an ad because immediate clicks are not the whole story.
  6. Use single-provider retargeting because it provides a clearer picture of ad effectiveness compared to multi-providers retargeting that tends to get confusing.
  7. Use A/B tests – often ignored – to assure you are serving the most effective ads possible.  In addition having several ads in rotation is better than endlessly pushing the same message. Click-through rates decrease by almost 50% after five months of running the same set of ads according to a study by ReTargeter.
  8. Use optimized creatives “by keeping copy minimal and design simple.  All of your banner ads should be well-branded and recognizable using bold colors, concise copy, and clear calls to action with big, clickable buttons.”

Source: retargeter.com

Curious Profit Picture

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This chart is curious because of its two separate and not equal time frames. Industrial profits are reported as a cumulative number.  January starts at zero and profits are added each month.  The logical comparison is the year-over-year month, in this case August 2016 over August 2015.  This year is running slightly ahead of last year at approximately $600 million.

Corporate profits include both state-owned and private industrial enterprises with annual sales above $750,000.  Source: Trading Economics; National Bureau of Statistics, China

Significant Growth Seen in European Use of Programmatic Ad Buying

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Daniel Knapp, senior director, advertising research at HIS, the company that did the survey, comments, “The research shows that programmatic is rapidly becoming the new default through which advertising is bought and sold,”   He also says that while the programmatic technology is becoming standard practice the advertising results have not yet caught up to the tech.  He suggests that’s due to the learning curve needed to best use data-driven buying.  Source: Media Post

Mobile Ad Spending Will Continue its Speedy Growth

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eMarketer says, “Mobile ad spending will grow 45% this year to reach $45.95 billion.”  The strong growth of digital advertising overall is being driven by both video and mobile and eMarketer sees the trend accelerating through 2019.

The latest projections in the above table show that by year’s end digital ad spending will edge out ad spending for TV for the first time as the total US ad spend will reach $195.8 billion.  Source: Media Post