The rise of second screen, in three graphs
I’m a massive multi-screener, and as it turns out so is pretty much everyone else in the developed world who owns a smartphone. It’s truly incredible how quickly this shift has happened (<2yrs).
Broadcasters love second screen experiences, because they drive more media engagement. Because of this, many big players in TV are investing second screen mobile experiences for their audiences. A good example is ITV with their XFactor and Britain’s Got Talent apps.
Advertisers love second screen ads, because they boost brand recall and almost double purchase intent.
At Brainient, we’re experiencing the rise of second screen from the front line. ITV, UK’s largest commercial broadcaster has chosen Brainient for the delivery of all their second screen ads. The engagement rate on these ads is stellar, ranging from 30% to 300% in some instances.
So if you’re a brand, give second screen a chance. You may realise it’s actually the holy grail of advertising, because it helps brands generate brand awareness while enabling people to actually make a purchase (or express their intent to make one).
Dear Marissa: follow the money
Soon after learning to code in HTML around 1997–1998, I created a website to promote my “web development” services. Eager to drive some traffic to it, I went to the Yahoo! Directory and added it to a number of categories, hoping to get some views. Almost overnight, I got hundreds of hits and a few people even emailed me (on my yahoo email address, no less). Yahoo! was the centre of the internet.
15 years later, most of the company’s market cap is placed on its Asian assets. Yahoo! is currently valued at roughly $40BN. They have ~$35BN in assets (Alibaba, Yahoo Japan, cash) and ~$5BN in annual revenue. So the markets are valuing Yahoo!’s core business at 1x revenue. That’s not a great market position to be in, and there are a few reasons for it:
1. The core business, selling display ads across the Yahoo! portfolio, is shrinking, down 7% in Q2 2014 compared to the same period of 2013.
2. The search business is stagnating, with only 6% growth year on year. Even worse, most of the growth is due to an increased price per click (which isn’t sustainable in a world dominated by Google).
3. Despite all of all the acquisitions they’ve done over the past year, mobile is still not showing significant results. It’s not even big enough to become a separate revenue line item, so it’s bundled together with the $219m in revenue from “other” sources Yahoo! reported in Q2 2014.
I think Mrs. Mayer’s efforts haven’t made a bigger impact because she’s been trying to compete in the wrong markets - search & mobile. Search, she should very well know, is dominated by Google and there’s no way anyone in the space can compete with them on that. Mobile, as she’s recently discovered, is dominated by Facebook, who’ve done an impeccable job in becoming a mobile-first company. It’s hard competing with these two companies due to the sheer amounts of data they have in order to help advertisers make the most of their budgets.
What Yahoo! does have, though, is a very popular destination portfolio. Unfortunately, it doesn’t seem to be helping with the top line, as their display revenue is decreasing. That’s mostly because the display advertising markets have become very efficient (hence, advertisers are paying less to achieve their goals).
So search, mobile and display are a hard for Yahoo! to compete in. What’s left is video, so let’s look at that for a moment and pretend we’re Marissa Mayer:
1. Premium content is owned by broadcasters, the long tail by YouTube. If you look to the middle of the market (decent quality of content, lots of scale), there are a few companies doing very well (TubeMogul, BrightRoll, who don’t actually own content but have done a stellar job to bundle together good quality inventory). Yahoo! could acquire any of these companies for a decent amount of money ($1BN — $2BN).
2. Digital video advertising is growing at 30% / year, estimated to exceed $10BN globally next year. CPMs are high, and they’ll stay like that for the foreseeable future due to the scarcity in quality video inventory.
3. Over the next 10 years, linear TV budgets will start shifting into digital, so there will be tens of billions of advertising dollars that Yahoo! could pick up if they were relevant in the space. This would set the company up nicely for the future, which would make the public markets put a higher value on the company’s core business.
I’m sure Mrs. Mayer has plenty of smart advisors to help her make decisions, but if I were her I would spend $2bn on buying BrightRoll, which will instantly add $500M of video revenue to the top line. I’d spend another $1bn on buying the market leaders in critical areas related to video (creation, delivery & streaming, ad formats, programmatic). And then, after becoming reasonably relevant in video through M&A (12–18 months), I’d merge with AOL or Hulu and use my financial muscle (read: Alibaba assets) to create original content and compete head to head with Netflix.
Sadly though, this strategy won’t fly with a Silicon Valley type like Marissa, because it’s a very un-Silicon Valley thing to do: follow the money, not the users.
Going for Europe
Ever since the German aristocrat Richard Nikolaus wrote the paneuropa manifesto in 1923, most capitalists have longed for a unified Europe. No borders, free markets and a unified currency has been the European entrepreneur’s dream for generations. Yet sixty years after the Treaty of Paris, winning Europe as a business is still not as straightforward as going for single-language, single-culture markets like the United States or China.
At Brainient, intrinsically a European company, we’ve been doing a push across the old continent over the past 12 months. We now have customers in 9 European markets and are expanding aggressively into Europe’s key territories - France, Germany, Spain, Italy and the Nordics. We believe we’ve become good at winning Europe, and we’re looking for people to join the team. If you’re in one of these markets and would like to be part of a fast-growing technology company, visit our careers section or drop me an email.
Also, if you happen to be in Cologne for DMEXCO next week, stop by our stand and grab some chocolate. You can find us in Hall 6 Stand F-024.
Talking about Brainient on CNBC
With the occasion of the London Tech Week, CNBC have chosen 5 of the UK’s hottest startups to pitch as part of their #PowerPitchUK. Brainient was kindly chosen as one of these 5 startups, and I was invited for a brief and fun interview on CNBC, embedded below. Mom’s pretty proud.
Mobile is eating the TV
There are three slides in Mary Meeker’s Internet Trends 2014 that tell a good story of where video is going.
The first slide shows mobile (smartphone & tablet) shipments compared to TV units. TV shipments are flatlining just under 300M whereas mobile & tablets are skyrocketing to nearly 1,5BN per year.
The second relevant slide shows the daily distribution of screen minutes. In nearly all countries, smartphone & tablets are eating up half or more than the daily screen minutes consumed.
The third, and probably most relevant, shows the distribution of total TV time for millennials vs. non-millennials. Almost half of the TV viewing for millennials is done on-demand or on-line.
Five times more devices shipped per year than TVs, taking half of the daily screen consumption minutes and half of the TV viewing minutes for millennials. Mobile is eating the TV, hindered only by the lack of mainstream LTE availability. But it’s getting there, faster than any of us expected it.
Raising money for blood cancer research
“For the world is in a bad state, but everything will become still worse unless each of us does his best.” — Viktor E. Frankl, Man’s Search for Meaning
Cancer is not one of those things healthy people think about, unless you have a close friend or relative who’s been diagnosed. I’m lucky to have healthy friends & family, but that’s not the case for the nearly 18 million people who were diagnosed with cancer last year.
Over the past few months, I’ve been training for my first ever triathlon, to raise money for Leukaemia & Lymphoma Research, a charity that offers patient support and research to blood cancer patients. Blood cancer accounts for nearly 10% of all diagnostics, and it’s the most prevalent type of cancer in kids. That’s very sad, and I’m trying to raise a little bit of money for LLR.
Please go here to donate - any support will be much appreciated. I’m doing the Blenheim triathlon and I’ll do my best to get past the finish line.
As some of you may have read, we’ve recently relaunched our platform, our studio and our identity. It’s been a labour of love, sweat and tears, but we felt it was needed after almost five years of being in business. Our platform is now used by some of the largest media companies and brands in the world and they expect us to have the best product in the industry. We think we do, but to avoid banging our own drum we asked ITV, the largest commercial broadcaster in the UK what they think about us. Here’s what they have to say:
As proud as I am of our new product, I’m even more excited about our KPIs. Here are some interesting stats, to go with our relaunch:
- 400% YoY growth since we started the company
- 600+ campaigns / year for customers
- 95% customer retention rate
- 3 out of the 4 top broadcasters in the UK are Brainient customers (ITV, Channel4, Channel5)
- the average engagement rate across all our interactive formats is 8%
Ad tech: what’s an engagement?
It used to be that a click was a click. Advertisers bought banners and got clicks to their websites, end of story. Today, advertisers buy banners, video ads, native ads, second-screen ads, mobile ads, and many more. For these ads, they get clicks, roll-overs and swipes. To makes matters worse, these clicks, roll-overs and swipes are not to their websites anymore (at least not all of them). They’re interactions within the advert itself - image galleries, share buttons, likes, retweets, with only few of them going to the advertiser’s website. Because of this, it has become almost impossible to compare the impact of the different ad formats used within the same campaign.
In an attempt to standardise these results, there’s a new metric adopted by a number of companies in the advertising ecosystem, called engagement. In theory, an engagement is any click, swipe or roll-over happening within an advert, regardless of its type. This can be swiping through an image gallery, retweeting, liking, etc. But what we’re seeing as of late is that different companies in the industry are starting to have their own interpretations of what an engagement is. Some look at every interaction within an ad, some at all interactions besides the first one (for example to launch an image gallery within a rich media advert) while some include both the interactions inside the unit as well as the clicks to the advertiser’s site.
There’s a major benefit of having a widely adopted standard for engagement: by making it easy and straightforward for agencies and advertisers to understand the performance of their campaigns, they’ll spend more money on all these campaigns (provided that the results are good, but that’s a story for another post).
So at Brainient, we would like to suggest a standard definition for what an engagement is: any interaction on any element within an advert, except the click through on the ad itself (because this type of click is already known in the industry as a clickthru). Therefore, an engagement rate would be the total number of impressions divided by the total number of engagements within the ad. We’re trying to get this definition of engagement adopted by as many companies in the ecosystem as possible, so if you’re one of them and would like to contribute to creating the standard, please get in touch.
Brainient hiring spree
When talking about GE’s strategy some time ago, Lawrence Bossidy, former COO of GE said that “nothing we do is more important than hiring and developing people. At the end of the day you bet on people, not on strategies.”
I’ve always believed that a company is only as good as its people, and I’ve had the privilege to work with some amazing people over the years. Whenever I find someone amazing I try to keep them close - so much so that my first ever employee, whom I hired almost 8 years ago in my first business, still works for me.
The most successful entrepreneurs I know spend over 50% of their time on recruiting or developing people, and that’s something I’m trying to get better at this year. So without further ado, I’d like to let you know that we’re hiring quite a few people at Brainient. If you’re interested, use the links below to apply. Or, if we recommend someone that we end up hiring, we’ll give you a €1,000 referral fee.
London: European Sales Executive (FR)
London: Marketing Manager
London: Office Manager / PA to CEO
Bucharest: QA Automation Engineer
Bucharest: Junior DevOps
Bucharest: HTML5 Developer
One of my most vivid memories as a kid is sitting on a little wooden chair in the garage next to my dad as he was dismantling the entire engine of his Dacia 1310 at weekends. He’d explain what the various parts do, then clean and put them back in. Sometimes he would discover stuff that was broken, sometimes the parts wouldn’t go back in as they should but no matter how long it took, he’d finally put everything back to its place and the car’s engine would be like new.
I don’t have a garage and wouldn’t be able to dismantle a car engine, but I spent this past weekend hacking together a hardware product
made of Arduino
parts. It reminded me how much I loved electronics as a kid (although I broke more stuff than I created), how much I enjoyed coding as a teenager and how fulfilling it is to build something with your hands and see it working.
Now whether it’s dismantling car engines, creating hardware prototypes or making art - I like to call it hacking. And hacking is important because it encourages problem-solving (“shit, we don’t have a soldering iron, what do we do?” “oh, let’s just sew the parts together using conductive thread”) and it spurs creativity. These are skills you can use in your everyday life, so if you’re currently not hacking around at weekends or on holidays, maybe you should. If not for learning something new, at least for having a bit of fun.
Ah yes, and as with most other things - hacking is better with friends. Happy Hacking this Christmas break.