Facebook's massive user growth in combination with the fact that its advertising sales teams have been in the market for another year or two, has led to a massive increase in spend by advertisers, according to Facebook's COO Sheryl Sandberg.
This is a central aspect when trying to understand the growth of an advertising-driven startup: it takes time to build an advertising sales businesses.
First the company needs to have a site with a fair number of visitors. The absolute number required depends on country, vertical and other factors.
Then the company needs to hire good salespeople, have them meet with advertisers (at the right time in the advertisers' planning/buying cycles), get some initial test orders, prove that the specific online media performs and get the first repeat orders. At the same time, the company needs to hire more salespeople to increase the number of agencies and clients it meets to get more test orders and start more customer relationships.
While the sales team is really getting up to speed, the site is hopefully growing and is still being considered hot among media buyers. When everything fall into place, massive growth a'la Facebook is possible.
Showing posts with label advertising. Show all posts
Showing posts with label advertising. Show all posts
August 10, 2010
December 23, 2007
GoogleClick approved in the US
Google's acquisition of DoubleClick has been approved by the U.S. Federal Trade Commission. The deal is not yet cleared by the EU.
If the merger is approved in the EU and goes ahead, it will likely affect the market for "remnant" banner advertising more than premium branded banner advertising market. The reason being that Google can better utilize different kinds of intention and behavioral data to improve DART's "remnant" banner ad targeting, but the merger doesn't change the way media buyers buy premium branded advertising.
If the merger is approved in the EU and goes ahead, it will likely affect the market for "remnant" banner advertising more than premium branded banner advertising market. The reason being that Google can better utilize different kinds of intention and behavioral data to improve DART's "remnant" banner ad targeting, but the merger doesn't change the way media buyers buy premium branded advertising.
November 21, 2007
Facebook's Beacon is evil
Facebook's Beacon program, where Facebook's partner sites automatically report your activity on their sites to your Facebook account, doesn't pass my smell test. What Facebook has built in Beacon is spyware. If Facebook doesn't redesign Beacon and makes it opt-in and far more transparent than today, I will be very surprised if this leads to neither a member backlash nor regulation by lawmakers.
An example of how Beacon works: Click on Play Now and Joost will report your action to Facebook and unless you actively say no, your activity will end up in your newsfeed.
An example of how Beacon works: Click on Play Now and Joost will report your action to Facebook and unless you actively say no, your activity will end up in your newsfeed.
November 8, 2007
Facebook Applications as organic search results
Niki Scevak on the newsfeed (of Facebook and others) and marketing. I like the way of comparing applications to organic search results and Facebook's ad system to paid search.
October 21, 2007
YASENR
Time for yet another Sunday evening news roundup (or in short YASENR).
Inside Facebook on Facebook standardizing application invites. Comments from Andrew Chen.
Chris "Long Tail" Anderson: Everything in the music industry is up! (except those plastic discs) And he doesn't take into account the money going to artists because they are brands (endorsements etc).
History might not repeat itself, but it definitely rhymes. The old privacy discussions surrounding online-offline advertising targeting integration (DoubleClick + Abacus back in the dot.com days) will likely resurface as Acxiom is doing the same thing today.
Martin Jönsson comments on the interesting acquisition made by the cash rich and highly profitable Herenco in the Swedish local newspaper market. Previously Herenco-owned Jönköpings-Posten was the only local newspaper without a news web site. Instead of launching one, they acquired the startup competitor Jnytt
Inside Facebook on Facebook standardizing application invites. Comments from Andrew Chen.
Chris "Long Tail" Anderson: Everything in the music industry is up! (except those plastic discs) And he doesn't take into account the money going to artists because they are brands (endorsements etc).
History might not repeat itself, but it definitely rhymes. The old privacy discussions surrounding online-offline advertising targeting integration (DoubleClick + Abacus back in the dot.com days) will likely resurface as Acxiom is doing the same thing today.
Martin Jönsson comments on the interesting acquisition made by the cash rich and highly profitable Herenco in the Swedish local newspaper market. Previously Herenco-owned Jönköpings-Posten was the only local newspaper without a news web site. Instead of launching one, they acquired the startup competitor Jnytt
October 14, 2007
Will there be an advertisement to answer every question?
Beth Comstock at NBC Universal on online business development and business models: "I'm getting to the point where I feel like every answer to every business development pitch is 'We're going to be advertiser supported.' ... There are not going to be enough advertising dollars in the marketplace. No matter how clever we are, no matter what the format is."
October 7, 2007
Bilddagboken Acquisition Makes Sense For Lunar Group
Lunar Group's/LunarWorks' acquisition of the remaining 60 % of Bilddagboken makes a lot of sense strategically. Acquiring additional sites let Lunar Group use its established sales force to sell premium priced brand advertising to advertisers, even if the number of vistors to LunarStorm declines.
The reason I think it makes strategic sense, especially compared with launching LunarStorm in other countries, is the following:
Before a site/publisher has grown large it is very difficult to sell premium priced brand advertising to, primarily, media agencies. Once entrepreneurs have built a popular a site, they will have to build a sales force that can sell to the media agencies etc. Building the sales fore takes time and often requires additional capital. Selling to an industrial buyer, like Lunar Group, will often make sense.
Lunar Group, and other media companies, can by snapping up sites like Bilddagboken (not that such sites come along that often) add value to an acquisition by accelerating the move from response-based advertising to higher priced branded advertising. It is not a pure financial acquisition, as there are very real synergies. The strategy also lets the media company partly mitigate the risk of a specific site losing popularity by building an organization where advertising sales for a bouquet of sites and smart acquisitions are the core competencies.
The reason I think it makes strategic sense, especially compared with launching LunarStorm in other countries, is the following:
Before a site/publisher has grown large it is very difficult to sell premium priced brand advertising to, primarily, media agencies. Once entrepreneurs have built a popular a site, they will have to build a sales force that can sell to the media agencies etc. Building the sales fore takes time and often requires additional capital. Selling to an industrial buyer, like Lunar Group, will often make sense.
Lunar Group, and other media companies, can by snapping up sites like Bilddagboken (not that such sites come along that often) add value to an acquisition by accelerating the move from response-based advertising to higher priced branded advertising. It is not a pure financial acquisition, as there are very real synergies. The strategy also lets the media company partly mitigate the risk of a specific site losing popularity by building an organization where advertising sales for a bouquet of sites and smart acquisitions are the core competencies.
Subscribe to:
Posts (Atom)