The big money of online advertising

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IT’S NFL DRAFT DAY. WE’LL TAKE A LOOK AT TECHNOLOGY THAT’S HELPING PREVENT PLAYER INJURIES. TECH GIANTS AMAZON, MICROSOFT AND INTEL ALL DUE OUT AFTER THE BELL TONIGHT. FACEBOOK AND ALPHABET BEAT EXPECTATIONS THIS WEEK. THEY POSTED A SPIKE IN DIGITAL AD DOLLARS, ACCOUNTING FOR 91% OF FACEBOOK’S REVENUE AND 97% OF GOOGLE PARENT COMPANY REVENUE. THAT COULD GIVE US SOME INFORMATION ABOUT AMAZON, BECAUSE AMAZON WILL ALSO REPORT AD REVENUE WITH ITS PRIME BUSINESS TONIGHT. JOINING US RIGHT NOW IS BRIAN O’KELLY. THANK YOU FOR JOINING US.>>THANK YOU FOR HAVING ME.>>MARIA: YOU HAVE A GREAT READ ON ADVERTISING REVENUE. EXPLAIN WHAT YOU’RE SEEING IN AD REVENUE RIGHT NOW.>>APP NEXUS IS A TECHNOLOGY THAT HELPS COMPANIES THAT AREN’T FACEBOOK GET AS MUCH MONEY FOR THEIR CONTENT AS POSSIBLE. IF YOU’RE WATCHING FOX BUSINESS RIGHT NOW, YOU’RE SEEING ADS. WHO DECIDES WHAT ADS YOU SEE? WELL, FOR MANY OF THE COMPANIES NEXUS. WE’RE TRYING TO USE MACHINE LEARNING AND NONPERSONAL INFORMATION TO FIGURE OUT WHICH ADS ARE THE MOST EFFECTIVE TO SERVE TO ALL THE CONSUMERS WATCHING TV OR READING ARTICLES ON THE WEB. THAT’S WHAT WE DO. NOW, THE BIG CHALLENGE IN ADVERTISING IS IF YOU’RE FACEBOOK OR GOOGLE YOU HAVE AN IMMENSE AMOUNT OF DATA ABOUT CONSUMERS THAT THEY’VE IN MANY CASES FREELY GIVEN AND YOU CAN USE THAT TO MICRO TARGET ADS. THAT ALSO MEANS THE CONSUMER IS THE PRODUCT. YOU’RE SELLING THE CONSUMER THEIR OWN DATA AND MONDAY ADVERTISING THAT AS YOU SEE — MONETISING THAT INCREDIBLY WELL.>>MARIA: THAT’S WHAT GOT THEM IN TROUBLE.>>YOU CAN AVOID THAT. YOU’RE NOT HOLDING ANYONE’S PERSONAL DATA. YOU DON’T HAVE THE FACEBOOK PROBLEM OF HOW DO I PROTECT YOUR PRIVACY, IS THAT RIGHT?>>THAT’S CORRECT. WE HAVE THE OPPOSITE PROBLEM. WE DON’T KNOW WHO YOU ARE. WE HAVE TO USE THESE MACRO TECHNIQUES TO FIGURE OUT WHAT ADS YOU’LL PROBABLY LIKE IF YOU’RE WATCHING THIS SHOW OR IF YOU’RE READING THAT ARTICLE. WE DON’T KNOW WHO YOU ARE.>>SO WE’VE SEEN IN SOME RECENT YEARS FACEBOOK AND ALPHABET, GOOGLE’S PARENT, CAPTURING ALMOST ALL THE GROWTH OR ALL THE GROWTH IN ONLINE ADVERTISING, I BELIEVE IN MOBILE ADVERTISING. IS THAT TREND CHANGING?>>WELL, I THINK THIS LAST QUARTER WE SAW THAT DECLINE A LITTLE BIT. SO GOOGLE’S SHARE WENT DOWN A LITTLE. SO WE’RE STARTING TO SEE THAT CHANGE. I THINK THE BIGGEST CHARGE CHALLENGE IS — CHALLENGE IS IF CONSUMERS CONTINUE TO WANT TO GO TO FACEBOOK OR SEE VIDEOS ON YouTUBE, THAT’S WHERE THE ADVERTISERS WILL GO. IF YOU’RE ANY OTHER MEDIA COMPANY OR CONTENT PRODUCER HOW DO YOU GET CONSUMERS TO SPEND LESS TIME ON FACEBOOK OR YouTUBE.>>THAT’S PART OF THE CRITICISM OF FACEBOOK, THEY’RE A MONOPOLY EFFECTIVELY IN A PARTICULAR SPACE. DO YOU ANTICIPATE COMPETITORS THAT WOULD CREATE THAT OPPORTUNITY FOR OTHER ADVERTISERS?>>I’D LOVE TO SEE COMPETITORS. WHEN YOU HAVE A CONSUMER BACKLASH ABOUT FACEBOOK, PEOPLE ARE UPSET WITH FACEBOOK AND YET WHERE DO YOU GO? TWEET?>>DAGEN: THAT GOES TO WHAT SHERYL SANDBERG SAID ON THE CALL YESTERDAY, THAT THEY HAVEN’T SEEN A MEANINGFUL TREND OF ADVERTISERS LEAVING THE PLATFORM. IT WAS A TILL IT WAS A LILL IT WAS A LITL IT WAS A LITTLE STRANGE. THERE WAS SO MUCH ADVERTISER OUTRAGE ON YouTUBE WHEN ADVERTISERS FOUND OUT THEIR COMMERCIALS ARE APPEARING IN VIDEOS OF QUESTIONABLE CONTENT. FOR THIS, IT’S LIKE THE ADVERTISERS FEEL LIKE AS LONG AS THIS BENEFITS US, WE DON’T CARE.>>MARIA: AS A P.R. MOVE THEY HAVE THE LATEST APOLOGY PROMISING TO KEEP DATA SAFE. WATCH THIS.>>THEN SOMETHING HAPPENED. WE HAD TO DEAL WITH SPAM, CLICK BAIT, FAKE NEWS AND DATA MISUSE. THAT’S GOING TO CHANGE. FROM NOW ON, FACEBOOK WILL DO MORE TO KEEP YOU SAFE AND PROTECT YOUR PRIVACY SO WE CAN ALL GET BACK TO WHAT MADE FACEBOOK GREAT IN THE FIRST PLACE. FRIENDS.>>MARIA: IS THAT ENOUGH? THE STOCK IS UP TODAY AFTER THE STRONG QUARTERLY RESULTS BECAUSE PEOPLE ARE SAYING WELL, MAYBE THIS DIDN’T MATTER TO INVESTORS AND ADVERTISERS.>>I THINK IT MATTERS A TON. WHEN I TALK TO THE LARGEST ADVERTISERS IN THE WORLD, THEY SAY CONSISTENTLY I WANT AN ALTERNATIVE TO YouTUBE AND FACEBOOK. I DON’T WANT TO SPEND MY MONEY THERE BUT THAT’S WHERE PEOPLE ARE SPENDING ALL THEIR TIME. I THINK THE BIGGEST CHALLENGE IS REALLY THAT YOU CAN DELETE FACEBOOK AND I WISH YOU WOULD, BECAUSE –>>MARIA: I DON’T KNOW IF YOU CAN DELETE IT. I HEARD PEOPLE TRIED TO DELETE THE APP AND THEY COULDN’T. IT’S IMPOSSIBLE TO GET RID OF FACEBOOK.>>THAT’S A MONOPOLY. WHAT ARE WE GOING TO DO?>>THIS IS OBVIOUSLY A PRODUCT THAT A LOT OF CONSUMERS HAVE FREELY CHOSEN TO THIS POINT. BUT THIS IS INTERESTING THAT YOU’RE HEARING FROM ADVERTISERS THAT THEY WOULD LIKE NEW OPTIONS BECAUSE YOU LOOK AT THESE EARNINGS REPORTS, 50% GROWTH IN AD REVENUE AT FACEBOOK, THEY’RE STILL WRITING INCREASINGLY WRITING CHECKS, EVEN IF THEY SEEM TO WANT MORE OPTIONS.>>ONE THING TO THINK ABOUT IS THAT AS TELEVISION BECOMES MORE AND MORE DIGITAL, SO PEOPLE CUT THE CORD AND WE CAN ACTUALLY DO MORE INTELLIGENT AD INSERTION INTO TV, BROADCAST, WE SHOW EVERYONE THE SAME AD BUT INCREASINGLY WE CAN CHOOSE DIFFERENT ADS FOR DIFFERENT PEOPLE. THAT MEANS WE CAN GET MUCH BETTER RESULTS FOR TELEVISION ADVERTISING. I THINK THAT GIVES PEOPLE A REAL ALTERNATIVE WHERE ON DIGITAL ADVERTISING RIGHT NOW YouTUBE HAS A HUGE MONOPOLY OF DIGITAL. DON’T FORGET, THAT’S A SMALL SUBSET OF ALL OF THE ADVERTISING THAT THESE BIG MARKETERS ARE SPENDING. IT LOOKS LIKE A LOT OF DIGITAL BUT AS WE SEE TV COME TOWARDS THIS, WE’RE GOING TO SEE A VERY, VERY DIFFERENT LANDSCAPE.>>DAGEN: YOU NEED TO FIGURE OUT A BETTER WAY TO CONNECT THE VIEWER AND THE CUSTOMER WITH THE ACTUAL BUYING OPPORTUNITY WHICH IS WHAT INSTAGRAM, WHICH IS OWNED BY FACEBOOK, DOES SO BRILLIANTLY. THEY SHOW YOU SOMETHING AND IT’S LIKE CLICK ON THIS AD AND YOU CAN PURCHASE IT IMMEDIATELY, LITERALLY WITH YOUR FINGER, YOUR THUMB PRINT ON YOUR iPHONE. THAT’S THE CHALLENGE FOR TRADITIONAL ADVERTISING, EVEN IF THE VIDEO IS DELIVERED ON THIS DEVICE.>>MARIA: THEN THEY CAN MEASURE A ALL OF THAT. THEY MEASURE IT ALL. THAT’S WHAT THE ADVERTISERS WANT.>>EXACTLY.>>MARIA: REALLY IMPORTANT

1 COMMENT

  1. We're not going to give youtube ideas for how to get us to watch ads instead of skipping them,because youtube demonetizes our favorite youtubers and there's no ads to skip.

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