Multi-Platform Measurement, Social Referrals, Frothy Times, and Too Much Supply

Back when I was blogging more often, I used to write posts that provided perspective on other industry conversations around the web.  I did this fairly frequently in the 2000s but have stepped back a bit over the past couple of years mostly because Ive been balancing the family and work  and blogging has been the one activity that I’ve forgotten.  I do miss it.  And I will try to be better at it but Ive said that for the past few years.

Anyway, there are a couple of posts that I’d like to react to or at least point you in the direction of.

Multi-Platform Measurement:  comScore announced a new product in which allows us to measure the audience of desktop and mobile (right now, only in the US).  It’s called Media Metrix Multi Platform.  Fred Wilson, a venture capitalist over at Union Square Ventures points out some insights:

There’s a bunch of interesting stuff in there. Take Google. They have 189mm users in the US on desktop/web. They also have 109mm users in the US on iOS and Android. But the unduplicated total audience is 211mm, meaning only 22mm of Google’s users are mobile only in the US.  Pandora and Twitter stand out as highly mobile user bases. Pandora’s mobile user base is >2x their desktop/web user base. Twitter’s mobile user base is almost equal to their desktop/web user base.

I’m not shocked at all about the Pandora and Twitter data.  As a user of both services, I notice my usage is higher via mobile.

It’s Basic Math That’s Killing Display@jhlava over at Varick Media Management (I co-founded in 2008) posted a piece on AdWeek that looks at a top down approach of supply and demand of display inventory, specifically that of RTB.  He puts together an argument that shows how much money there is in RTB/display and how much supply there is and makes that case that there is not enough dollars today to increase the overall CPM’s of inventory.  The imbalance of supply/demand is hurting the industry overall.

He’s pointing out a 101-issue that is the big elephant in the room.  It’s a big issue.  We’ve never witnessed a medium such as the web which has provided us with infinite supply.  You cannot do that on TV, radio, print, etc without significantly hurting both the user experience and business margins.  But on the web, another banner or video play has marginal cost so creating supply is not an issue.

The creation of supply has led to problems for a few constituents.  The entire Lumascape is affected.  The investors on the Lumascape are affected (me too).  Marketers are affected (so many decisions).  Pretty much all sides of the table are affected.

I have no doubt that over time, more money is going to flow into RTB.  It’s growing.  Adweek posted that over the holiday weekend, RTB prices jumped.  Dollars will come into the space but we need to figure out what we’re doing with inventory.  We just cannot keep creating infinite supply as it’s going to hurt the entire web.

RIP Frothy Times:  There’s a meme going around now about the shakeout of early stage companies and the Series A crunch.  Well known folks have argued both sides of the table on this.  I might as well add my two cents.  The next 24 months are going to shake out many of the companies in the ad & marketing technology space.  I’ve predicted this before and I’ll say it again, getting from $1-10MM in revenue is the easy part but we just don’t see many $10MM+ companies.  Note I said revenue and not billings.  The ad tech space likes to inflate their numbers and talk about revenue but realistically, most of the time is media billings.  The companies with out core differentiated tech will fizzle out and we just don’t need fifty mobile DSP’s or undifferentiated DMP’s (who are now selling media, too).

Social Referrals:  I was reading Jason Goldberg’s blog, founder of Fab.com and he has a post up that talks about the referrals to Fab.com.  For the record, I absolutely love how open he is about their business.  Black Friday to Cyber Monday traffic on Fab.com was 25% social driven.  65% of the social traffic came from Facebook, 20% Pinterest, 5% Twitter and 1% Coolhunting (there are more, click to the post to read it).  That’s pretty powerful.  Jason also states that about 20% of Fab’s revenue from this period came from users who originally joined Fab via Facebook.

Lots of good stuff happening in the industry.  I’m excited to be part of it.  Happy Holidays!

  • http://eastagile.com kenberger

    revenue vs media billings: I’d like to understand the difference better. Why the discrepancy, is it a collection problem?

    • http://www.darrenherman.com dherman76

      I find that many digital media startups who have sold $25MM worth of media are reporting $25MM as revenue. That’s not really their revenue. It’s their total billings, similar to how a media agency would state billings. Most digital media companies have costs associated with the revenue (rev-share, cost of media, etc). It’s relatively easy to build a $100MM business in billings. Might only have $1M in revenue. Not sexy. I’d like to see companies who have real revenue that supports them.

      • http://eastagile.com kenberger

        fascinating. seems like a very distinct place from most of the rest of the startup world.