Week of August 3, 2009

iPhone & Kindle Bigger Than YouTube

Friday, August 7, 2009

Goldman Sachs predicts that Apple's iPhone App store and Amazon's Kindle e-book store will each generate more revenue that YouTube this year, despite the fact that YouTube has millions more users. The Sachs analysis projects that by 2010 Apple will have 4 times the gross revenue of YouTube and that the Kindle store will be 50% above YouTube. The analysis also predicts that this year Apple's net revenue will surpass YouTube's gross.

This is a classic lesson in the value of premium content versus pure volume. And for Apple and Amazon, the news gets even better when you consider the fact that their respective stores are ancillary to their main products: the iPhone and the Kindle e-reader.

Online Ad Networks Weather the Storm

Thursday, August 6, 2009

Despite the global recession, which has hit advertising especially hard, ad networks continue to thrive. Publishers have not reacted, as many had expected, by cutting out ad networks. In fact, many, outside of the top tier of publishers, have come to rely more than ever on networks. The primary reasons appear to be a rapidly widening gap between rates for high end and low end inventory as well as the debate about audience size versus editorial environment.

High end inventory consists of premium sponsorships and ads on major media sites, such as ESPN, Turner and Forbes, 3 entities that have opted out of ad networks. But some larger publishers, like the New York Times, continue to embrace the networks. Outside of the big companies, publishers are finding rates much lower and the competition makes the networks crucial to their business.

The numbers versus content debate is another reason why some of the publishers have dropped or deemphasized networks. These publishers believe that they can charge a premium for their ads based on the quality of their content, not just strictly on the size of the audience.

Optimistic Forecast for Overseas Online Ad Growth

Wednesday, August 5, 2009

Despite the global recession, online ad projections around the world remain optimistic. Still, the complexion of the online ad market is expected to change, as display ads give way to search and other forms. According to PricewaterhouseCoopers, total internet ad spending in the Europe, Middle East and Africa region will increase $25.2 billion in 2013 from $19.4 billion in 2008. Yet display advertising will shrink from $5.1 billion to $4.8 billion.

Search has become the darling of the online ad market due to several of factors. First, the numbers are more verifiable than other forms. Second, the increasing sophistication of search engines has created even more possibilities for targeted advertising.

What Do Customers Give Up For An iPhone?

Tuesday, August 4, 2009

According to Silicon Alley Insider, the #1 device that customers in the US replace with an iPhone is a Motorola Razr. 29.4% of new iPhone buyers were replacing a Motorola product. Here's a list of the other brands and devices supplanted by the iPhone:

* Samsung 11%

* Blackberry 9%

* Older iPhones 9%

Online Winners for June

Monday, August 3, 2009

ComScore reports that the two biggest categories for online traffic in June were travel and gaming sites, with airlines showed the biggest increase (+ 22%). Others showing big increases were travel transactions and online travel agents. Southwest Airlines, #1 among all airline sites, grew by a spectacular 64%, heading into the busy summer vacation season.

Online gaming was the other big category, with 6% growth from May to June. Among individual sites, the big winners were GiantRealm (+ 25%) and GameStop (up 19%).