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What: The total US ad market has grown by 10.8% in January 2018.
Why it matters: Ad market growth was driven by ad spend in national television and digital platforms, indicating possible further growth for 2018.

Advertising intelligence firm Standard Media Index has revealed national advertising revenue figures for January 2018.  The total US ad market grew by 10.8% in January 2018 compared to January 2017, driven by significant gains in national television and digital platforms.

In January 2018, year-over-year (YoY) advertising revenue in National TV grew +7.1%, with +11.1% growth in Cable and +2.7% in Broadcast.  Digital grew +16.8%, radio declined -6.1%, out-of-home (OOH) declined -2.1%, and print dropped -3%.

“January has been a stellar month for National TV. Scatter volume is up 50% on 2017 as a host of advertisers have stormed back into the market,” said James Fennessy, SMI’s CEO. “Some of this growth has been driven by the move of several big college football games and the Grammy’s into January, but even so underlying growth is still an impressive 5.3%. Based on these results, and our view into forward bookings, we predict National TV to grow 1.6% in Q1, excluding the Winter Games.”

Awards Shows Brought in Important Growth

  • The 60th Annual Grammy Awards on January 28, excluding red carpet coverage, earned US $61 million in ad revenue for CBS, a +3.8% increase from last year.  The paid unit cost for a 30-second commercial spot rose +11.8%, despite losing 24% of total viewers from last year.  That said, CBS reported a 40% increase in unique viewers of the show’s live stream from last year.
  • The 75th Annual Golden Globes, which aired on NBC on January 7, brought in more than US $32 million in ad revenue, a +7.1% increase from last year.  Despite viewership dropping 5% from last year, the average cost of a 30-second commercial spot also increased by 5%.  The 2018 Golden Globes Arrivals Special increased ad revenue by 8%.
  • The 24th Annual Screen Actors Guild (SAG) Awards, which aired on TBS and TNT on January 21, earned an ad revenue increase of nearly 25% from last year.

NFL Post Season and Cable News

  • Although the regular season NFL games saw a decline in 2017, ad revenue during the post-season increased by +5.3% year-over-year. These figures include the wild card, divisional round and conference championships – the games that took place in January.
  • Cable News continued to show strong growth in January at 25% year-over-year. MSNBC, which also reported record viewership this month, earned a whopping 62% more ad revenue than January of last year.  CNN increased +32% and FOX News increased +17%.
  • Looking at weekday primetime programming, CNN grew nearly 50% in January year-over-year.  FOX News is the most expensive Cable News network for weekday primetime, charging an average $13,600 for a 30-second spot.

Digital Platforms

In January 2018, Digital increased +16.8% year-over-year.  Digital platforms have grown ad revenue on a year-over-year basis in every month since Standard Media Index began tracking the data. Digital’s rate of growth slowed in the second half of 2017 and has been steady around 12% since October.

Social Media networks saw the largest growth in January at 42%Facebook saw the strongest growth at 55%, and Twitter increased its ad revenue 30%.  After some early losses last year, Twitter has been growing on a year-over-year basis for the last several months.  Video Sites grew 10% in January, with large gains from premium video providers.  Hulu increased 20% and Vevo nearly doubled its revenue.

Advertisers by Category

Looking at advertiser categories across National TV, the Auto industry was the largest spender in January, although that amount declined by 3% compared to last year.  Meanwhile, the Insurance industry was the second biggest advertiser, increasing spend by 22%.  Prescription Pharmaceuticals (+4%), Quick Service Restaurants (+10%), Food and Food, Produce & Dairy (-10%) had the largest spend in 2017.

Biggest National TV 
Advertiser Categories (Jan. 2018)
YoY Change in Ad Spend
Autos-3%
Insurance+22%
Prescription Pharmaceuticals+4%
Quick Service Restaurants+10%
Food, Produce & Dairy-10%

Looking at advertiser categories across all platforms, the Telecommunications industry was the largest spender in January, increasing 8.3% year-over-year.  Autos, which were the second largest category, remained flat.  Prescription Pharmaceuticals (+16.9%), Insurance (+25.9%), and QSR (+6.3%) make up the top five.  IT & Software grew the most YoY, more than doubling its spend.

Biggest Advertiser Categories 
Across All Platforms (Jan. 2018)
YoY Change in Ad Spend
Telecommunications+8.3%
Autos+0.7%
Prescription Pharmaceuticals+16.9%
Insurance+25.9%
Quick Service Restaurants+6.3%

 

What: Netflix has announced its quarterly results, and they plan to increase their ad spend from US $1.3 billion to $2 billion in 2018.
Why it matters: Netflix is a  major global advertiser, particularly in the digital category. The ad spend is producing a positive  ROI: “We’re taking marketing spend up a little faster than revenue for this year (from about US $1.3 billion to approximately US $2 billion) because our testing results indicate this is wise, ” Netflix Q4 earnings release says.

After a successful 2017, or as Netflix itself announced in its latest earnings release, after a “beautiful Q4”, the OTT giant is boosting ad spend in 2018 to hit US $2 billion. “We believe our big investments in content are paying off,” Netflix informed to its stakeholders. “Big hits result from a combination of great content and great marketing. We’re taking marketing spend up a little faster than revenue for this year (from about US $1.3 billion to approximately US $2 billion) because our testing results indicate this is wise.” Approximately US $8 billion will be spent on original content alone this year.

House of Cards (2013) was the first-ever Netflix original.

Once upon a time, Netflix was virtually the only video streaming provider. Now that new competitors seem to appear every day and formerly partner firms such as Disney and Televisa have decided to move their content to their own platforms, Netflix has decided to stay on top no matter what. With about new 80 original films and 30 anime series, Netflix originals could amount to 50% of their content this year. Even though they have not disclosed their marketing strategy, Netflix is expected to devote most of its budget to digital and especially programmatic. Netflix recommends content to users based on what they watch, a functionality that it sees as built-in marketing for shows.

For the case of slightly older demographic segments, or people who still prefer traditional TV, Netflix has not taken its sight away from them. Most TVs today are “Smart”, meaning they have built-in access to Netflix. “[We are] making it super easy for them to sign up by just actually adding Netflix to their bill,” said Chief Product Officer Greg Peters, “or even more what we’re looking at now is packaging Netflix into one of those operator offerings so they just get it as part of a bundle that they’re purchasing for the operator.” However, Netflix knows those Smart TVs often also include access to their competitors’ platforms (like Hulu, HBOgo, and Amazon), another reason to do their best to stay on top.

Netflix is an Acquired Taste for Latin Americans

In terms of what this means for Latin America, Netflix does not disclose regional numbers. However, we know that they have delivered international content from Mexico, such as Club de Cuervos and The Day I Met El Chapo, or even stand-up comedy shows like the one of successful comedian Sofía Niño de Rivera. They have also produced an Argentinian thriller, Edha, and a Brazilian sci-fi series titled 3%. For 2018, they plan to add more Latin American subscribers than ever with 50 original productions from this region. “A good story told well is a global product”, said Ted Sarandos, Chief Content Officer at Netflix.

A good story told well is a global product.

But Netflix was not always well received. When they introduced the website in Latin America in 2011, online streaming was pretty new and they had to compete heavily with traditional pay TV. In 2013, Netflix was the biggest digital advertiser in Latin America. In March that year, they surpassed Procter & Gamble in Mexico with over 463 million ad impressions, and they had about double the amount in Brazil. This number went way up by 2016: According to Portada’s 2017 video marketing guide, Netflix had 322 billion Youtube ad impressions in Mexico and  642 billion in Brazil.

Netflix ad impressions and spending in November 2017

CountryDisplay Ad Impressions (000)Display Ad Estimated Spending (000)
Mexico12,465MX $865.04
Argentina8,454AR $506
Brazil3,102R $31

Source: ComScore Ad Metrix

María Mercedes used to be one of the telenovelas available on Netflix

Now, Mexico and Brazil are among Netflix’s biggest markets, right behind UK and Canada. Though we don’t know how many subscribers out of the 6.3 million international users they acquired last year are Latin Americans, analysts believe there are around 5 million subscribers in Brazil alone. And this number might soar if Netflix keeps its promise to include telenovelas in its original content, filling a hole left by Televisa when they moved all their soap operas to Blim (Televisa’s OTT platform) in 2016.

 

 

 

 

What: Mobile Fraud: Marketers’ Massive Hidden Threat, a Forrester Consulting “thought leadership paper” commissioned by AppsFlyer, looked at how CMOs are tackling the ever-evolving challenge of ad fraud, and the cost that ineffective prevention has for businesses.
Why It Matters: The study found that while investment in mobile ads is increasing, only one in five advertisers said they’re able to systematically combat fraud with the right tools and expertise. Why aren’t marketers taking this growing risk head-on?

For the study Mobile Fraud: Marketers’ Massive Hidden Threat, Forrester and AppsFlyer conducted an online survey with 250 marketers whose companies spend at least $1 million dollars a month on digital advertising and found that mobile is attracting more and more ad spend: 70% of the enterprise marketers surveyed for this report are increasing their budgets for mobile advertising over the next 12 months.

But with ad fraud eating up a bigger chunk of many organizations’ budgets, a more focused and deliberate approach to prevention is needed. Why aren’t organizations doing more to better equip themselves to fight this growing threat?

Despite Risk of Fraud, Marketers Increasing Investment in Mobile Ads

The data from Forrester reveals that resistance to ad fraud is sub-par across the board, as 69% of marketers cite that at least 20% of their budgets are exposed to fraud on mobile web ads. But this doesn’t correspond with lower investment in mobile ads.

According to the report, over the next 12 months, 70% of firms that spent over $1 million per month in digital advertising in 2017 said mobile ad spend budgets will increase in the coming year, and 39% of companies that spent over $5 million per month on digital advertising plan on increasing their budgets by more than 30%.

In the meantime, too many organizations are left completely vulnerable: the study found that only 19% of enterprise marketers claim to have systematic fraud prevention in place. The reasons for this are quite simple: a lack of access to transparent data and a lack of knowledge about programmatic buying.

Almost half (45%) said they lack the understanding of mobile ad frauds that exist and then lack the types of solutions that exist to combat those mobile fraud types, and 51% of marketers cite a lack of data transparency. Marketers also seem to believe that many distort data in this complex ecosystem for their own benefit, with 46% of marketers reporting that “players in the media buying ecosystem benefit from artificially inflated KPIs.”

As a result, a huge slice of the market is left accepting fraud’s impact as a given, unable to keep up with the way approaches to fraud evolve and become more difficult to shut down. But the study suggests that marketers know they must change their ways if they are to stay afloat: 92% of advertisers and agencies cited fraud prevention as a critical or high priority over the next 12 months.

CMOs Don’t Think They Can Keep Up with Ad Fraud

The research from Forrester seems to suggest that many CMOs simply don’t believe there is a way to keep up. Ari Rosenstein, Senior Marketing Director at AppsFlyer asserted that often, organizations “accept fraud as ‘the cost of doing business’ because they don’t believe they can effectively protect themselves against all types of ad fraud.” The data supported this assumption, as 40% of those surveyed agree that “those who try to combat fraud are faced with a fast-evolving problem which makes it hard to identify and often even just understand.”

And since these CMOs are often ill-equipped in the data analytics department, they have a hard time even estimating how much of their budgets they are really losing to fraud, often estimating around 1-2% when the average, Rosenstein suggested, is more like 10%.

Mobile Enables Novel Approaches to Ad Fraud Prevention

The benefits of investing in a solid ad fraud prevention plan are varied: the study asserted that benefits include improved ROI, better campaign insights, easier optimization, and increased user engagement.

And luckily, Rosenstein argued, mobile is offering CMOs some of the most user-friendly, flexible fraud prevention tools ever: “As mobile fraud has continued to evolve — with the emergence of install hijacking, click flooding, device farms, DeviceID Reset Fraud, etc. — so have the technologies and processes to identify fraud.” But CMOs must make fraud a significant priority through investing in data transparency and education for their teams.

Marketers ‘Must Become More Educated’ and ‘Demand Increased Transparency’

 A common practice is for marketers to turn to legacy technology tools and platforms for help instead of seeking experts: 48% of those surveyed reported using enterprise marketing software vendors for help with measuring and combatting fraud, and 38% reported relying on ad verification vendors. The suggestion is that CMOs should recognize that fraud prevention merits its own investment, and that specific expertise in fraud is necessary for fighting such a serious threat.

For 53% of marketers, a basic strategy is to assign fraud-related KPI’s to their agency or ad networks. But the study reminds us of the importance of following up and ensuring that those KPIs are met. While 60% of advertisers and agencies cite better campaign insights from improving mobile ad fraud prevention, the study provides evidence that “prevention” must mean educating internal teams about the latest strategies in fraud prevention and asking for more information and collaboration from vendors. It is also essential that organizations add “independent, mobile-first tools” to their arsenals, the report suggests.

Those who are serious about lessening the impact that fraud is having on their business should be deliberate in pursuing a fraud prevention plan that works for their organizations. For AppFlyers’ Rosenstein, education and transparency must take on central roles in all marketing departments. “Marketers must become more educated on the topic and demand increased transparency and data visibility from their vendors and partners,” he said. “Through these mobile insights, marketers can become more informed and make better decisions for their businesses.”

A summary of the most exciting recent research in brand marketing in the U.S., U.S.-Hispanic and Latin American markets. If you’re trying to keep up, consider this your one-stop shop.

US/US-HISPANIC MARKET

According to research from Accenture cited by eMarketer, 41% of consumers have switched the brands they buy from because of poor personalization, and 50% say that they did so because of “poor customer experience” in general. This mistake represents a total of $756 billion in lost retail and brand sales.

A new study from RetailNext found that 2017’s Black Friday event saw less foot traffic, but still experienced a combined 4.8% increase in sales compared to 2016.

A new study released today by Engagement Labs found that an estimated 19 percent of consumer sales are driven by offline and online social conversations. 

Content marketing platform Linqia‘s new study, “The State of Influencer Marketing 2018,” found that 86% of marketers reported using influencer marketing in 2017 — and, of those, 92% said it is an effective strategy.

A recent study by Shutterstock found that 88 percent of U.S. marketers surveyed agreed with the statement “Using more diverse images helps a brand’s reputation.”

StreamOn, a new study by Market Strategies International, has found that only 11% of all streamers pay for live streaming television.

Tiffany & Co. is the favorite luxury jewelry brand among wealthy millennials, followed by Cartier, Pandora, and Chanel, according to a recent survey by consumer-research group MVI Marketing. Rolex was the top brand for watches, followed by Apple, Omega and Cartier.

Research from search intelligence platform Adthena found that Amazon took 49.65% of the consumer electronics category’s click share during October and November of 2017. Director of Product Marketing at Adthena Ashley Fletcher credits this to their preference for pure brand terms, versus generic terms.

LATAM MARKET

Latin American media owners’ net advertising revenues (NAR) are set to grow by +9.3% in 2018, to US$26.3 billion, following a +7.3% growth in 2017;  thanks to a more robust economic recovery in the region, according to MAGNA.  Television remains the top media category in the region with 54% of total advertising sales while Digital advertising in Latin America remains lower than the global average.

According to a new report by research firm Counterpoint, 99 percent of Smartphone Sold in Argentina are LTE Enabled.

A summary of the most exciting recent news in online video in the U.S., U.S.-Hispanic and Latin American markets. If you’re trying to keep up, consider this your one-stop shop.

US/US-HISPANIC MARKET

This article explores how Amazon is pivoting towards video. 

YouTube has updated its recommendation feature to use a measure of satisfaction derived from a massive and ongoing user survey to predict and promote videos that people would rank as among the best they have watched recently. It also unveiled a new video format called ‘Reels’ that lets users create 30-second videos.

A recent study by  S&P Global Market Intelligence reveals that around 70% of Internet households in the United States watch online video via a TV set. In 2017, US Internet households were equally likely to be using a smart TV, Blu-ray player, SMP or a pay-TV STB to watch online video on the TV. The use of smart TVs, Blu-ray players and SMPs has also increased.

Online advertising spend grew by 11.5% in the first half of 2017, driven by mobile and video formats, according to a study from IAB Europe and IHS Markit.

The  “Where are Brand Marketers Taking Their Video Strategy in 2018?” study revealed that only 6% of marketers would currently characterize themselves as “innovators” when it comes to their use of online video, and that 80% of correspondents reporting that they will increase their video advertising efforts in 2018.

LATAM MARKET

Audio.ad launched a DSP in Latin America and the US-Hispanic market for digital audio ads.

New research from IMS and comScore reveals that around 60% of advertisers were willing to pay 50% extra on top of what they currently invest to secure safer media, which guarantees more visibility.

The city of Sao Paolo, Brazil recently approved a law to tax streaming services at a rate of 2.9% of its local revenues.

What: In Q1 2017, the number of programmatic advertisers dropped substantially, falling 12% year-over-year, according to MediaRadar latest results of its “2016 Consumer Advertising Report”.
Why it matters: After years of growth, the decline in programmatic buyers is likely attributed to concerns around brand safety – especially given recent problems for companies like YouTube. The number of print ad pages decreased 8% year-over-year to 107,698 pages, while native ad buyers stood the biggest growth in buyers for any ad format.

MediaRadar, a intelligence platform for ad sales teams, has just announced the results of its “2016 Consumer Advertising Report,” examining ad spend, ad formats, top advertisers, and more for both print and digital channels in 2016, as well as Q1 2017.

Programmatic buyers down 12%

According to MediaRadar data, 45,008 advertisers purchased ads programmatically in Q1 2016. In Q1 2017, however, the number of programmatic advertisers dropped substantially, falling 12% year-over-year. On the quarter, more than 5,000 fewer advertisers (39,415) bought programmatically.

“After years of growth, the decline in programmatic buyers is likely attributed to concerns around brand safety – especially given recent problems for companies like YouTube. This form of advertising is continuing to evolve as brands seek more control over where their ads are running. We expect to see programmatic rise as more brands move to programmatic direct models,” said Todd Krizelman, CEO & Co-Founder of MediaRadar.

The number of native ad buyers rose 74% from Q1 2016 to Q1 2017, representing the biggest growth in buyers for any ad format

Print ad spend declined 6%

The number of print ad pages in Q1 2016 was 117,551. Compared to Q1 2017, the number of print ad pages has decreased 8% year-over-year to 107,698 pages. Similarly, estimated print ad spend has declined 6% from Q1 2016 to Q1 2017.

“There has been a noticeable drop in ad pages and spend from the start of 2016 to now,” said Krizelman. “That being said, there are still a considerable amount of pages being bought. Niche and enthusiast titles are on the rise, with some regional titles flourishing.”

Native Advertising

Media Radar found the number of high-CPM ad formats increasing, especially in mobile and native.  The number of native ad buyers rose 74% from Q1 2016 to Q1 2017, representing the biggest growth in buyers for any ad format. In addition, demand for native has nearly tripled since January 2015, which logged fewer than 1,000 buyers (981). In January 2017, there were almost 3,000 (2,882).

The top 10 categories in 2016 for native advertising were media and entertaining, professional services, financial and real estate, technology, wholesale, home, travel, apparel and accessories, food, and toiletries and cosmetics.

The top five native advertisers by ad placements in 2016 were Secco Squared, Answers Corp., NextAdvisor, Potential Investments, and JPMorgan Chase.

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A summary of the most exciting recent news in online video in the U.S., U.S.-Hispanic and Latin American markets. If you’re trying to keep up, consider this your one-stop shop.

US/US-HISPANIC MARKET

Early next year, a new version of Google Chrome will include an ad filter that takes out sites with poor ad experiences. Chrome will then block all ads on offending sites.

YouTube has updated its advertising guidelines for its creator community. Among content that is deemed ineligible for advertising are controversial issues and sensitive events; drugs and dangerous products or substances; harmful or dangerous acts; sexually suggestive content; and violence.

According to AdColony’s Spring 2017 App Install Marketing Survey, 50 percent of all app install spending now goes to video advertising. Half of that is for full-screen video ads, while the rest is for in-feed, social, and television video ads.

According to Mary Meeker’s Internet Trends Report, Internet ad spending is projected to top TV ad spending within six months

Verizon has completed its $4.48 billion acquisition of Yahoo. Assets will be combined with AOL brands such as the Huffington Post under a new subsidiary called Oath.

Kantar‘s survey of advertising media preferences found that 68 percent of connected adults either like or tolerate advertising. 36 percent say advertising is changing for the better, while 20 percent say it’s getting worse.

The Interactive Advertising Bureau announced Q1 U.S. digital advertising revenue hit $19.6 billion, the highest ever for a first quarter and representing a 23% year-over-year increase.

According to a recent report from Reuters, Facebook is signing deals with companies like BuzzFeed, Vox, and Group Nine for TV-style video with both short clips of about 10 minutes in length and longer shows of 20 minutes or more.

The US’s linear TV ad market will likely suffer a recession in 2017, according to Us finance analysts who follow the media sector. Michael Nathanson, analyst for MoffetNathanson, this week lowered his projections for TV ad revenue growth in 2017, saying that the 2017 TV upfronts lacked the urgency of last year’s market.

A formidable group of media companies including AMC, Amazon, BBC, Twentieth Century Fox, Netflix, NBC Universal, Telemundo, Televisa and Univision have formed the Alliance for Creativity and Entertainment (ACE) to fight online video piracy.

A study by Neustar commissioned by Turner Broadcasting and Horizon Media found that for a $1M investment, television’s lift is consistently seven times better than paid search and five times better than online display advertising across a broad list of advertising categories.

Apple confirmed rumors that its set-top box will be getting an Amazon Prime app for the tvOS platform later this year.

Ooyala has released its Q1 2017 Global Video Index, revealing, for the first time, long-form content represents the majority of time spent watching video on every screen.

NBC News unit has launched a digital video service that targets viewers who get their news on social media. The service, called “NBC Left Field,” is producing short documentaries and features for Alphabet’s YouTube, Facebook, and Instagram.

LATAM MARKET

According to Ooyala’s Q1 2017 Global Video Index, in LATAM, mobile video plays topped 56 per cent—up from 46 per cent last year, with tablets representing 5 per cent, the least of any region.

Research conducted by Dataxis predicts that LTE penetration will grow in Latin America from today’s 21% to 90% by 2022. While 4G penetration varies in the region, Uruguay by far being the most advanced country with a 50% penetration.

VidaPrimo, the premier Latin Music video network, will distribute its vast library of music-related video content onto branded channels on both Roku and Amazon Fire, two of the world’s largest digital streaming platforms.

According to the Advertising Bureau‘s “Always On – A Global Perspective of Mobile Consumer Experience,” smartphone users in South America noted the most progress in their mobile ad experiences, but smartphone users in Brazil saw moderate advancement with mobile advertising relevance.

 According to The Competitive Intelligence Unit (CIU), average mobile data consumption has doubled in Mexico over the past two years, driven by online video viewing.

What: Data company 4C Insights has released a study analyzing data from various TV and social media networks over the course of the NCAA Division I basketball tournament, revealing that less was more when it came to ad spend.
Why It Matters: Some of the most successful brands ran few ad spots, but saw significant increases in social engagement. Sponsors saw increased lifts on social media as the tournament rounds progressed, revealing the correlation between effective tv advertising and brand lift on social.

Data company 4C Insights tracked the relationship between ad spending and brand lift on social over the course of the NCAA Division I basketball tournament, revealing interesting insight on the correlation between ad spend on TV and social lift.

Over the tournament, Twitter was the most popular social network for fans, as there were over more tha040417_MarchMadnessIII_TIMELINE_DRAFT4 (1)n a million engagements compared to Facebook’s 718,435. 

Over the course of March Madness, 4C Insights analyzed the likelihood a consumer is to engage with a brand on social within two minutes after their March Madness ad aired, known as TV social lift. Looking at the top 20 brands that aired at least 10 spots, Capital One and Geico spent the most ad dollars on more than 160 spots each, but only saw moderate lifts in social engagements and TV social engagement. Acura saw the highest TV social lift, with 1491% lift as a result of
just 37 ad spots. Pizza Hut saw 100k social engagements with only 50 ad spots.

“Throughout March Madness sponsors have been seeing their initiatives pay off with increasing lifts on social media as the rounds progressed. Capital One achieved a 70% lift in social engagement or more from its March Madness TV ads in every round of the tournament,” Bradley Harkrader, 4C’s Senior Manager of Marketing said.

The study also gathered highlights from the championship game, looking at how social engagement on Twitter and Facebook changed during the two minutes after an ad ran on TV. Bud Light had the most successful ad that night even though they spent the least, seeing 24,782% more engagements on social over those two minutes. Coca-Cola, however, spent more on ads to see the least social engagement: 12 ads with more than five minutes of ad time resulted in the least amount of social engagement lift. Volkswagen, Buick, DirecTV and Hardees also saw significant social engagement lift.

Harkrader observed that “a couple brands used the NCAA Championship stage to make big statements,” citing the example of Hardee’s, which announced a new marketing direction focused on its food, and as a result, “the championship spot drove a 1,079% social media brand engagement lift.”

Looking at some of the most popular ads over the tournament, Bud Light’s “Happy Hour with Coworkers” achieved an impressive 24,782% lift in social engagements for the brand.

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 What: Facebook, the world’s No. 1 social network, just reported its first quarter earnings  with revenue of US$3.54 billion on non-GAAP earnings per share (EPS) of $0.42, missing analyst expectations of US$3.56 billion in revenue but beat expectations of US$0.40 EPS.
Why it matters: Facebook’s financial performance on mobile was very strong. Actually, Mobile ad sales were key to the final result as mobile sales accounted for 73% of its total revenue, up from 59% a year earlier.

descarga (3)Facebook, Inc. has reported financial results for the quarter ended March 31, 2015, with revenue of US$3.54 billion on non-GAAP earnings per share (EPS) of $0.42, missing analyst expectations of US$3.56 billion in revenue but beating expectations of US$0.40 EPS. Mobile ad sales were key to Facebook’s 2015 performance. For the quarter, mobile sales accounted for 73% of its total revenue, up from 59% a year earlier. In the fourth quarter, mobile ads had accounted for 69% of revenues.

The social net attributes missed revenues to fluctuating foreign exchange figures, including the weakening euro versus the dollar, saying Facebook would have made US $188 million more in revenue this quarter and and beat estimates if it weren´t for this.

First Quarter 2015 Financial Summary

Three Months Ended March 31
In millions, except percentages and per share amounts20152014
Revenue$ 3,543$ 2,502
Income from Operations
GAAP$933$1,075
Non-GAAP*$ 1,840$ 1,415
Operating Margin
GAAP26 %43 %
Non-GAAP*52 %57 %
Net Income
GAAP$512$642
Non-GAAP*$ 1,189$ 926
Diluted Earnings per Share (EPS)
GAAP$ 0.18$ 0.25
Non-GAAP*$ 0.42$ 0.35
* Non-GAAP financial measures exclude amortization of intangible assets, share-based compensation and related payroll tax expenses. Non-GAAP net income and EPS also exclude the income tax effects of these non-GAAP adjustments. Non-GAAP information for the three months ended March 31, 2014 has been updated to exclude amortization of intangible assets to conform to our current period presentation. See the table below titled “Reconciliation of Non-GAAP Results to Nearest GAAP Measures.”

First Quarter 2015 Financial Highlights

  • Revenue 

Revenue for the first quarter of 2015 totaled US$3.54 billion. That means a year over year increase of 42%, compared with US$2.50 billion in the first quarter of 2014. Excluding the impact of year-over-year changes in foreign exchange rates, revenue would have increased by 49%.

  • Revenue from advertising was US$3.32 billion, a 46% increase from the same quarter last year. Excluding the impact of year-over-year changes in foreign exchange rates, revenue from advertising would have increased by 55%.
  • Mobile advertising revenue represented approximately 73% of advertising revenue for the first quarter of 2015, up from approximately 59% of advertising revenue in the first quarter of 2014.
  • Payments and other fees revenue was US$226 million, a 5% decrease from the same quarter last year.
  • Daily active users (DAUs) were 936 million on average for March 2015, an increase of 17% year-over-year.
  • Mobile DAUs were 798 million on average for March 2015, an increase of 31% year-over-year.
  • Monthly active users (MAUs) were 1.44 billion as of March 31, 2015, an increase of 13% year-over-year.
  • Mobile MAUs were 1.25 billion as of March 31, 2015, an increase of 24% year-over-year.

revenue

  • Mobile

Facebook reached 1.25 billion mobile monthly users (up 5%), and 798 million daily mobile users (up 7.1%). Eventhough mobile monthly growth rate fall from last quarter 6.2%, daily mobile user growth rate grew from 5.97% last quarter.

Facebook also reported 1.44 billion monthly active users, up 13% year over year, and 1.25 billion monthly mobile active users, up 24% from a year earlier. It also reported 936 million daily active users, up 17 percent from this time in 2014, and 798 million mobile daily active users. That was an increase of 31 percent from the first quarter of 2014.

581 million users now only access Facebook from mobile, up more than 10% QOQ, showing Facebook’s continued growth in developing nations where desktop and laptop computers are less common.

monthlydaily

  • Ad revenue

Ad revenue was of  US$3.32 billion in the first quarter . Out of that total, Mobile accounts for 73% , up from 69% last quarter. The social net’s daily video views grew to 4 billion, up from 3 billion in January. Facebook has a great potential to grow ad revenue through video as the more organic video views Facebook gets, the more paid video ads it can slide into News Feed. Europe and Rest Of World regions were in general terms responsible for the ad revenue decline by 11%.

  • Revenue Per User Decline

Facebook showed a significantly decline on average revenue per user (ARPU), particularly in the Rest Of World region (this includes developing countries). Ad ARPU in the Rest Of World declined by 15.2% this quarter from US$0.92 to US$0.78, falling even lower than in Q3 2014.

Facebook spent 29.9% of its revenue, tht is US $1.06 billion, on research and development, and of that, US$566 million, or 53.3% on share-based compensation expenses. This means the company spent a lot on acquiring and hiring during 2015 first quarter. During the first quarter of 2014, it spent just US$181 million on similar expenses.GAAP costs and expenses for the first quarter of 2015 were us$2.61 billion, an increase of 83% from the first quarter of 2014. Non-GAAP costs and expenses were us$1.70 billion in the first quarter of 2015, up 57% compared to us$1.09 billion for the first quarter of 2014.GAAP income from operations for the first quarter of 2015 was us$933 million, a 13% decrease compared to US$1.08 billionfor the first quarter of 2014. Non-GAAP income from operations for the first quarter of 2015 was US$1.84 billion, up 30% compared to US$1.42 billion for the first quarter of 2014.

With a 42% year over year revenue increase on 17% daily user growth, overall, Facebook’s earnings were successful in general terms.”This was a strong start to the year.We continue to focus on serving our community and connecting the world,” said Mark Zuckerberg, Facebook founder and CEO.

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