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What's your 12-month price target for Groupon shares? Mine - $13.00

Groupon shares surge but concerns linger

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  • Groupon Chief Executive Andrew Mason poses with his fiancee, pop musician Jenny Gillespie, outside the Nasdaq Market following his company's IPO in New York, November 4, 2011.    REUTERS/Brendan McDermid

    Groupon Chief Executive Andrew Mason poses with his fiancee, pop musician Jenny Gillespie, outside the Nasdaq Market following his company's IPO in New York, November 4, 2011.

    Credit: Reuters/Brendan McDermid

    By Clare Baldwin and Alistair Barr

    NEW YORK/SAN FRANCISCO | Fri Nov 4, 2011 5:43pm EDT

    NEW YORK/SAN FRANCISCO

    (Reuters) - The shares of daily deals site Groupon Inc rose as much as 56 percent in their stock market debut on Friday, with at least some of the exuberance the result of the small number of shares sold.

    The shares rose as high as $31.14, or 55.7 percent above the IPO price, in early trading on the Nasdaq, at one point pushing the market value of the company to $19.9 billion. The shares later eased to close at $26.11, 31 percent above their $20 IPO price, giving the company a market value of about $16.7 billion.

    Groupon had the third-highest trading volume on the Nasdaq on Friday, with nearly 50 million trades.

    Groupon sells Internet coupons for everything from spa treatments to nose jobs and is one of this year's most closely watched IPOs.

    The offering, one of the largest in recent years, may be a barometer of investor appetite for IPOs. A strong first few trading days could help other private Internet companies -- such as Angie's List, Zynga and even Facebook -- pursue their own IPOs.

    There is a huge backlog of companies that filed to go public earlier this year. Most put their plans on hold when the stock market slumped in August. Groupon is the first major IPO since then.

    Chief Executive Andrew Mason and Chairman Eric Lefkofsky hugged in Times Square after ringing the opening bell on the Nasdaq. Employees at company headquarters in Chicago donned lime green T-shirts emblazoned with the company's ticker symbol "GRPN" printed in old, ticker-tape-style lettering.

    The company declined Reuters' requests for interviews. One employee in Chicago, who declined to give his name, said workers had been discouraged from speaking to the media. Several uniformed security guards walked the perimeter of the building, keeping an eye on Groupon workers who came outside on their cigarette breaks.

    All of the shares sold in the IPO were new, which means early equity holders may sell a portion of their stake next spring, once the 6-month lock-up period expires. It also means that, for now, Andrew Mason's newly-minted $1.2 billion remains paper wealth.

    Some analysts and investors warn that Groupon's early surge could be a short-term phenomenon and its shares could reverse course and trade down like those of Internet radio station Pandora Media Inc.

    There are still lingering questions about Groupon's business model and about competition from better-funded rivals such as Amazon.com Inc and Google Inc.

    Groupon has lost two chief operating officers in the past year and had to adjust its accounting twice under regulatory pressure.

    "They wanted to have a decent pop on the stock so they didn't take that much public," said David Berman, a consumer technology and retail specialist at hedge fund firm Durban Capital. "They created demand by limiting supply, and they got the pop."

    Michael Yoshikami head of money-management firm YCMNET Investment Committee, agreed.

    "Much of this pop is based on low float. We continue to be concerned about Groupon's model, especially given the low barrier for entry into this space. But it's a familiar name and investors tend to gravitate to familiar names at first," he said.

    On Thursday, Groupon upsized its IPO and sold 35 million shares for $20 each. But that stake amounts to only about 5 percent of the company.

    The $700 million raised was on the larger side for a U.S. IPO, but the 5.5 percent represented the second-smallest share float in the United States in the past decade, according to capital markets data provider Ipreo.

    Groupon was founded in October 2008 and has never been profitable. In the nine months ended September 30, it posted a net loss attributable to common stockholders of $308.1 million on revenue of $1.1 billion.

    A spokeswoman for Deutsche Boerse AG's International Securities Exchange said it expects to list options on Groupon on November 14, with other major exchanges expected to follow suit. Options can be used to bet on the direction of stocks, including a decline. They are often used by traders to hedge stock positions.

    Underwriters on the IPO were led by Morgan Stanley, Goldman Sachs and Credit Suisse.

    (Reporting by Clare Baldwin, Brendan McDermid, Rodrigo Campos, Edward Krudy and Phil Wahba in New York, Alistair Barr in San Francisco and James Kelleher and Doris Frankel in Chicago; editing by Derek Caney, Gerald E. McCormick, Steve Orlofsky and Andre Grenon)

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    Comments (17)
    truthtorpedo wrote:

    I refused their offer at my restaurant, its nothing but a scam.

    they never bothered to vist my restaurant, just went by online reviews, and asked me outright what was the average meal ticket, offered to sell a 1000 of those meals, and split the profit in half and pay us back in 3 equal installments over a period of a year….haha!

    Any restaurant that desperate to take their offer is either on its way down and has nothing to lose, or they have no business sense.

    I said sorry, not interested and the lady on the other end could not believe I turned her down.

    I told her, not only will i lose thousands which I can use for direct advertising in my neighbourhood, but that only dealseekers will take advantage of this and will not convert into regular buyers. People who are this thrifty will never be loyal to any brand. Why dont I give deals out on our website and keep the change? Why do I need groupon?

    Nov 03, 2011 11:51pm EDT  --  Report as abuse
    Darr247 wrote:

    Grope one turning down Google’s $6 billion offer a few months ago, and now getting less than $1 billion from the IPO, has to rank higher on the ‘buy a clue’ scale than H. Ross Perot not cashing GM’s $750 million buyout check for a month because he kept thinking they would change their minds and give him his seat on the board again.

    Back then (circa 1989), interest rates from banks were around 9%. So for the money he lost keeping that check in his pocket, he could have smoked ten $2000 cigars per day that month, lighting each one with a $100,000 bill.

    Nov 03, 2011 12:33am EDT  --  Report as abuse

    Posted via email from Randy's Stuff

    The Ad Pie Contiues Splintering

    NEW YORK (AP) — Rapper Snoop Dogg gave props on Twitter to an ad for the Toyota Sienna minivan. Actress Tori Spelling linked to a website for rental cars. And reality TV star Khloe Kardashian soliloquized about the brand of jeans that accentuates the famous Kardashian derriere.

    "Want to know how Old Navy makes your butt look scary good? Ask a Kardashian," the reality TV star wrote, or tweeted, on the social media website. Of course, she capped off the reflection with a smiley face.

    These celebs aren't just writing about family cars and fashion choices for the heck of it. Stars can get paid big bucks — sometimes $10,000 or more per post — to pontificate about clothes, cars and movies in the 140 characters or less allowed per tweet. That adds up to about $71 per character.

    Twitter, which in its five-year existence has reshaped how people shop, vote and start revolutions, is now changing the business of celebrity endorsements. Just as Match.com and eHarmony pair up singles for dates, a growing number of startup firms are hooking up companies with stars who get paid to praise products to their thousands — sometimes millions — of Twitter followers.

    The list of celebs and the things they hawk is long and getting longer all the time. The endorsements range from subtle to blatant; the celeb pairings from sensible to downright odd.

    Singer Ray J urged his 600,000-plus Twitter followers to see the horror movie "Saw 3D." Football star Terrell Owens gave a shout-out in front of his more than 1 million followers to a hotel chain giving away sports tickets: "Comfort Inn is hooking up 3 days of it!" Lamar Odom, the L.A. Lakers forward, tweeted to his nearly 2 million followers about hip-hop artist and entrepreneur Jay-Z's book "Decoded": "My man Jay-Z ... only rapper to rewrite history without a pen. Until now."

    Of course, anything on Twitter is short-lived and reaches only a small, self-selecting audience: Research firm eMarketer estimates that only 11 percent of U.S. adult Internet users are on the micro-blogging site. And even though some celebs have faithful groups of followers, it can be hard to measure whether their tweets lead people to spend.

    Still, celeb tweets can be a way to grab an audience at a time when many people skip TV commercials using their digital video recorders. And paying a celeb to tweet is much cheaper than a traditional advertising campaign. Want a tweet from Khloe Kardashian? That will cost about $8,000, according to prices listed by social media marketer Izea. Looking for a cheaper option? Ray J is about $2,300.

    Companies like Izea, Ad.ly and twtMob usually pair products with celebs through a combination of software algorithms and Hollywood instinct. The companies say they use many metrics to gauge the effectiveness of a paid tweet, such as the number of times it gets reposted by others.

    When Ad.ly got Charlie Sheen to tweet for Interships.com in March, the actor was in the midst of getting fired from his sitcom "Two and a Half Men" over accusations of hard partying and drug use. Within an hour of Sheen's first post, Internships.com got more than 95,000 clicks.

    "I'm looking to hire a (hash)winning INTERN with (hash)TigerBlood," tweeted Sheen, who had just recently signed up for Twitter and now has more than 5 million followers.

    Dan Smith, vice president of marketing for the website CampusLIVE, which helps advertisers connect with college students, hired Izea to help him get a celebrity to tweet about his company. Izea gave him a short list, which included names like "Jersey Shore" reality TV star JWOWW, comedian Michael Ian Black and rapper Bow Wow.

    Smith polled his interns and they picked Lindsay Lohan, the actress most famous for her run-ins with the law. According to Smith, CampusLIVE paid Lohan about $3,500 for one tweet: "These challenges for college kids on (hash)CampusLIVE are SO addicting!"

    The post to Lohan's 2.6 million fans drove about 4,500 clicks to the website, Smith said. But he also said he wasn't sure if he'd use her again — not because of her troubles, but because he's already tapped her fan base. His interns wanted to know if comedian Will Ferrell is available. Said Smith: "That would be a cool one to get."

    For the record, Ferrell isn't on Twitter, says his spokesman, Matt Labov, who adds that the Twitter handles sporting his name are "imposters."

    For her part, Lohan on her own time tweets about topics like fulfilling her community service sentence. But she has also posted comments for Izea on a few occasions, the company says. Her tweets about wind energy ("While saving the world ... save money! I love it!") and about a gold mining company ("R ur savings safe? Think again!") were paid endorsements, according to Izea's website.

    Those posts, along with the CampusLIVE tweet, included the characters "(hash)ad" at the end, which indicates that a post is a paid endorsement. But Lohan's publicist, Steve Honig, says that Lohan does not "sell" her tweets: "She uses Twitter to communicate with her fans and let them know what she's up to."

    Like any endorsement, celeb tweets come with the risk that a star's behavior will not coincide with the company's image. And of course, there's a science to picking the right one: Will consumers buy that their favorite rapper drives a minivan?

    Twitter generally allows the paid tweets, as long as they're posted manually and not automated by a computer program. The Federal Trade Commission suggests endorsers end their tweets with the (hash) symbol, called a hash tag, and the letters "ad" or "spon," short for "sponsored by," to clarify that they're ads.

    "The more transparent you are with your audience on Twitter, the more powerful that connection is," said Rachael Horwitz, a company spokeswoman.

    Ed Aranda, a 27-year-old graphic designer and copy writer in Erie, Pa., doesn't like celebs mining their fans' trust to sell a product. Still, he thinks those reading the tweets should take responsibility.

    "If you can't tell snake oil when it's being sold to you," Aranda said, "then you probably deserve what you're buying."

    ___

    AP Business Writer Michelle Chapman contributed.

    Quick question....do you think Twitter dollars are coming from an increase in ad budgets or diverting from another medium?

    Posted via email from Randy's Stuff

    Tuesday, November 1, 2011

    TV & Mobile Working Together

    In the old days, you’d hear a song on TV, scramble to remember a few lyrics, Google them and then download the song on iTunes — if you’re lucky enough to find it. But the music-identification app Shazam is driving iTunes downloads on its own, and as they’ve provided us the chart below, TV can play a big role.

    HBO is known for their musically significant series finales that bring songs back from the dead. When the final moments of Entourage concluded on September 11th and Led Zeppelin’s “Going to California” played, viewers punched up their Shazam apps and tagged it (identified it) nearly 25,000 times:

    With 150 million users, 1.3 million downloads per week, 2.5 billion songs tagged (8% buy the song according to Shazam) is the company ready to become the most powerful social TV app, now that they’ve raised money specifically to do so? David Jones, Executive Vice President of Marketing for the company says they already are. “We’re making television ads interactive,” he explains. “We know the precise time” a user Shazam’s during a TV ad, which he says, “can help the media buyers or agency” spend more effectively.

    “We know interest level, and we can get that data back so they can shift spend around and get more out of television advertising,” Jones describes. Shazam recognizes the billion dollar business that makes the TV business what it has become and for now feels the solution is improving the engagement with the ad spots that we all know still run strong during our favorite programming.

    Jones described that when they work with brands to make Shazamble ads, there’s “a setup fee and cost per impression or fixed price, similar to rich media ad campaigns.” He says the initial setup is between, “$50k-$100k,” and that “some are spending hundreds and hundreds of thousands because it’s effective.”

    Their first advertiser, Old Navy, came together in six weeks when the company asked if they could do something for them with their commercials. “27% went deeper with the Old Navy commercial,” Jones said, enabling Shazamers to unlock exclusive content since the spot had been infused with Shazam’s audio recognition technology. eBay, Geico, Capital One and Old Navy are now some of the company’s biggest advertisers.

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    Wednesday, October 5, 2011

    Web overtakes TV as most popular UK ad medium

    Web overtakes TV as most popular UK ad medium: IAB

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    By Kate Holton

    LONDON | Tue Oct 4, 2011 1:39pm EDT

    LONDON

    (Reuters) - Brands spent more money advertising on the Internet in Britain than they did on TV for the first time in the first half of 2011, as companies moved online to reach the millions of Britons using social networks and watching videos.

    The bi-annual report by the Internet Advertising Bureau, PwC and marketing group WARC said advertising online in Britain rose 13.5 percent in the first six months to 2.26 billion pounds ($3.48 billion), giving it a record high market share of 27 percent.

    TV had a market share of 26 percent, the report said.

    The medium was boosted by 100 percent growth in online video ads, strong spending by companies in the fast moving consumer goods sector (FMCG), and campaigns designed for social media.

    Within the Internet category, 58 percent of revenues came from search advertising, with 23 percent on display ads and 17 percent on classified ads.

    Search advertising grew 12.6 percent, while display advertising grew by 18.5 percent, boosted by new formats and demand for online video adverts.

    "The spectacular growth of video and social media powering brand display is key to online achieving a record share of 27 percent," IAB Chief Executive Guy Phillipson said.

    "FMCG advertisers were relatively late to the party, but now firmly established as the second highest-spending category, they clearly have all the proof they need to invest in line with the medium's share, and enjoy healthy returns from cross-media campaigns."

    The IAB said spending online was led by financial clients in display ads but that ad spend from consumer goods groups was now growing the fastest.

    The strong growth for online advertising fitted with a revised global advertising forecast released by ZenithOptimedia on Monday, which put Internet ad growth at a faster rate than any other medium, at an average of 14.6 percent a year between 2010 and 2013.

    "Overall, we predict Internet advertising will increase its share of the ad market from 14.4 percent in 2010 to 18.9 percent in 2013, when it will overtake newspapers to become the world's second-largest medium," Zenith said.

    Overall, ZenithOptimedia cut its forecasts for global ad expenditure growth in 2011 to 3.6 percent, a 0.5 percentage points cut, as companies trimmed budgets in the face of growing concerns about the strength of the global economy. ($1 = 0.649 British Pounds)

    (Editing by Jane Merriman)

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    And Forrester says this will happen in the US within 3 years.

    Posted via email from Randy's Stuff

    Monday, October 3, 2011

    The Power of Choice in Advertising - Smart, IMO

    The Power of Choice in Advertising

    October 3rd, 2011 by JP Colaco SVP of Advertising

    Management guru Peter Drucker once famously said, “Efficiency is doing things right; effectiveness is doing the right things.”

    Drucker’s observation was spot-on. We share his belief that effectiveness is doing the right things — especially in advertising. This belief has driven our relentless focus on building the world’s most effective video advertising service.

    Carefully balancing the needs of all our customers (users, advertisers and content partners) is a core part of achieving our mission. We believe that by offering users a premium viewing environment and relevant, targeted ads, we will reduce budget waste for advertisers and drive higher engagement, brand and message recall, likeability, and purchase intent among consumers. These improvements facilitate higher ad prices, which gives us the ability to better monetize content on behalf of content owners.

    We conducted a significant research project with 1,500 people to help us better understand what users really want from an advertising service. We were told by users that they’d like us to innovate on two dimensions: more choice and greater control.  Users are tired of seeing ads that are not relevant to them, and are eager for more control over their ad experience. Below is some of the actual user feedback from the study:

    • “I would let the viewer pick the ads he wants to watch.”
    • “I would replace the commercials I watched with ones that were relevant and interesting to me.”
    • “Maybe the Hulu website could offer a choice of what kinds of commercials consumers could watch.”
    • “A choice of commercials to watch – a lot of the ads weren’t relevant to me and it would be great if I could skip them.”
    • “Allow for a choice of ads we see during or before the show.”

    We’ve always believed that choice and control were instrumental to building the world’s most effective video advertising service. The unique interactive nature of our online streaming service enables users to actively participate in their ad experience. Our first approach to provide more choice and control was introduced with the Hulu Ad Selector, an ad innovation that came to market when Hulu launched publicly in 2008. The Hulu Ad Selector allows users to choose to watch one of three ads from the same brand (e.g. Coca-cola, Diet Coke or Sprite) or one ad from a selection of three different brands. Since 2008, we’ve seen that approximately two-thirds of users choose to participate when presented with the Hulu Ad Selector option. We’ve also found that the power of choice drives nearly 2x higher effectiveness metrics when compared to a standard pre-roll.

    The strong performance history of Hulu Ad Selector coupled with the consumer input from our latest research project helped drive the development of our latest ad innovation, Hulu Ad Swap.

    Hulu Ad Swap is the next evolution in user choice and control — an ad innovation designed to dramatically improve the advertising experience for users and results for brands. Hulu Ad Swap puts complete control in the hands of the user by enabling them to instantly swap out of an ad they are watching for one that is more relevant.

    Here’s how it works…When an ad begins to play, a user can click on the Hulu Ad Swap icon in the top left corner of the player and bring up a number of ad choices, customized to that user’s profile and previous ad viewing preferences.

    At this point, the user can select a more relevant ad from the available choices.

    The advertiser whose ad initially began to play is not charged for that impression. This is a win-win scenario for both the user, and for the advertiser. The user now has ultimate control over their ad experience and the advertiser does not have to pay for an impression that would have been wasted.

    In an online environment, advertisers have many more tools they can use to engage with key audiences, and in ways that are proven to improve brand recall, message recall, likeability, and purchase intent. With Hulu Ad Swap in particular, advertisers now have the ability to connect in meaningful ways with the consumers who are specifically interested in their brands.

    We’ve been testing Hulu Ad Swap over the past several months, asking consumers for their feedback in shaping the product. Since testing began, we’ve found that this feature has a significant impact on effectiveness metrics, improving unaided brand recall by 93%, brand favorability by 27%, purchase intent by 35%, and stated relevancy by 46%.

    As one user said, “It was pretty fun when the commercial would start and you knew you could change it if you wanted to. I kinda looked forward to it.” I couldn’t have said it better myself.

    We consider ourselves fortunate that we have the opportunity to be engaged in a meaningful feedback loop with users, advertisers, and content owners on a daily basis.  We are also fortunate to find ourselves in the thick of such an exciting time for the video advertising industry. It is this feedback loop that drives us to become the world’s most effective video advertising service.

    We hope you enjoy using Hulu Ad Swap as much as we enjoyed building it. Let us know what you think!


    This entry was posted on Monday, October 3rd, 2011. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

    Posted via email from Randy's Stuff

    Friday, September 23, 2011

    Pew: 77% Think News Orgs Are Biased -does this surprise anyone....anyone?

    Most Americans have a rather negative view of the press, according to a new study from the Pew Research Center for the People & the Press.

    The study found that more than three-quarters (77%) of Americans believe that when it comes to reporting on political and social issues, news organizations tend to favor one side -- a 3% rise from 2009, the last time the survey was conducted, and a 10% increase from 2001. Some 80% of respondents felt that news organizations were often influenced by powerful people and organizations -- a 6% jump from 2009.

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    Respondents also questioned the accuracy of news reporting. Only 25% felt that news organizations in general got their facts straight, while 66% felt that stories were inaccurate. Opinions were reversed when it came to the news sources respondents relied on: 62% felt the news organizations they used most got their stories right, while 30% found reporting often inaccurate.

    The outlook was a little brighter for local news organizations. Sixty-nine percent said they have a lot or some trust in local news sources, compared to only 59% for national news organizations. In general, the press was more trusted than government or business.

    The report also found that television is still the top source for national and international news, with 66% turning to the set for news. The Internet, though, has narrowed the gap. Some 43% of respondents said they get their news online -- nearly double the amount from four years ago. Still, 63% volunteered the name of a cable news network when asked to identify a news organization.

    The complete report can be found here.

    Posted via email from Randy's Stuff

    Wednesday, September 7, 2011

    YouTube Becomes Entertainment Destination

    Just for laughs, San Jose's Dylan Hart and a college friend posted a video on YouTube in 2007 about charging an iPod using an onion and a bottle of Gatorade. More than 9 million views later, that video -- uploaded at 5 a.m. after an all-night editing session -- marks the start of YouTube becoming Hart's meal ticket, the home of his popular "Household Hacker" videos that are often a cross between "Mr. Wizard" and "Jackass: The Movie." It's a winning formula: Household Hacker has more than 1.1 million subscribers to its channel on YouTube. It's also a winning formula for YouTube. Household Hacker is one of more than 20,000 YouTube "partners" -- the number doubled over the past year -- whose videos attract an audience large enough to generate significant advertising dollars. Although Household Hacker may sound like a more polished version of the amateur videos that made YouTube a cultural phenomenon, it and other YouTube stalwarts are also a key piece of Google's (GOOG) plans to transform the video platform it bought for $1.65 billion in 2006 from a money pit into a cash cow, making it into more of an entertainment destination like a TV network. "We're very excited in terms of the growth and the talent that's emerging," said Tom Pickett, director of content operations at YouTube. "In the Advertisement U.S., in the last year or two, we started hitting thresholds where people started making serious money, and that has caused a lot more attention to be paid to a lot of our top partners." Fans of Household Hacker connect each week to see everything from magnets made from neodymium -- a rare earth element -- that defy gravity, to game reviews by Hart's co-founder, to hidden-camera pranks like the shampoo-bottle ketchup bomb, powered by the chemical reaction between vinegar and baking soda, Hart planted in his unsuspecting brother's shower stall. "We have a very high level production-wise, but we're not trying to be the Discovery Channel," said Hart, 28, who took the plunge into becoming a full-time YouTube producer after he got laid off from a job as a graphic designer for a large Silicon Valley company in 2009. Household Hacker is among hundreds of YouTube partners that receive more than $100,000 a year in ad revenue from YouTube, with the most popular personalities now cashing checks of more than $1 million a year, according to YouTube. Popular channels Fans can subscribe to their favorite YouTube channels, where they can exchange comments and watch the latest video. Channels like 2 million-subscriber Mystery Guitar Man, a musical performance artist whose identity is hidden by wraparound sunglasses, and fast-growing Canadian newcomer Epic Meal Time, which turns huge quantities of red meat into a comedy prop for 1.4 million subscribers, now feature ads for everything from Miracle Whip to iTunes to Nordstrom. Mystery Guitar Man, whose off-screen identity is Joe Penna, has even done commercials for Coke and McDonald's. YouTube's popularity leader is Ray William Johnson, who has 4.4 million subscribers and is among the top 10 most-followed people on the new Google+ social network. He produces a raunchy review of the week's top YouTube videos that couldn't run on TV, but his YouTube sponsors include oil giant ConocoPhillips and 5-hour Energy drinks. YouTube says top partners such as Mystery Guitar Man attract audiences of 250,000 to 500,000 individual viewers a day. That compares with 2010 Nielsen data that shows MTV with 979,000 daily prime time viewers, or the NFL Network's 258,000 viewers. By sharing ad revenue with independent partners -- many have evolved into small professional production companies of a dozen people or more -- YouTube helps boost content quality, which attracts more viewers, which in turn produces more ad revenue, said Jon Gibs, senior vice president of media analytics for the Nielsen Co. For most big advertising brands, YouTube remains a relatively small "experimental" part of their ad budget, he said. "The real advantage to YouTube is, by having this kind of content, they wash away a little of the image of consumer-generated content as being a low-quality video experience," Gibs said. YouTube's video viewers averaged 2 hours, 37 minutes per month on YouTube during June, according to Nielsen. That is a tiny fraction of the time people spend watching TV, but Gibs said the partner program reflects YouTube's efforts to transform itself into a TV-like entertainment destination. Equal to TV Nate Houghteling, of San Francisco-based Portal A Interactive, which works as a consultant to help companies get their videos to go viral on YouTube, as well as producing content for its own YouTube channel, believes audiences, particularly younger people, increasingly see YouTube as an entertainment option equal to TV. "Especially with the younger generation, this is their portal, this is their platform," Houghteling said. "We're only going to see more of that as people come of age." YouTube does not disclose its revenue split but says partners get more than half of gross ad revenue. The Google subsidiary does not release detailed partner numbers, but it says there are "thousands" who make more than $1,000 a month. "That's a point where you can make a living at this," Pickett said. "Clearly there are people out there that are making more than $1 million a year, and once you get to be a certain size on YouTube, you start to become a very powerful distribution point" for advertisers. Partners also can negotiate deals directly with sponsors, in which a personality might wear a T-shirt showing a brand or endorse a product within his or her video. Household Hacker's "Scientific Tuesday" video typically ends with Hart making an endorsement -- recent clients included Netflix (NFLX) and Carbonite, an online data backup service. Hart, whose videos typically pull in 300,000 to 500,000 views each week, is keenly aware of the intense competition for audience. YouTube features a thumbs-down button as well as a "Like" button, which provides instant audience feedback. When the weekly version of "Scientific Tuesdays" comes out, Hart and his 31-year-old brother Justin, who was recently hired to do everything from operate the camera to organize meetings with sponsors, are glued to the view count. They spend up to 100 hours a week brainstorming, researching, shooting and editing video, as well as working on sponsorships and responding to viewers. But to succeed on YouTube, they say it's critical to stay true to the site's do-it-yourself, rebel roots. Like many YouTube personalities, they won't share their full names -- insisting that they be identified by their first and middle names only. "We're just a couple of guys making videos. I think at some point, you can look too professional," Dylan Hart said. "We want to teach you something, but we don't want to bore you." Contact Mike Swift at 408-271-3648. Follow him at Twitter.com/swiftstories. NEW MEDIA CHAMPS Top partners on YouTube have millions of subscribers and draw audiences of up to 500,000 individual viewers per day. Ray William Johnson Subscribers: 4,593,905 Total views: 1,281,601,912 Household Hacker Subscribers: 1,162,222 Total Views: 141,468,002 via mercurynews.com

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    Monday, September 5, 2011

    Online Video Eats Away At Broadcast TV

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    Viewers are spending more time streaming TV programming online and slightly less time watching scheduled broadcast TV, according to a new study from Ericsson ConsumerLab.

    Some 38% of respondents to Ericsson’s “TV & Video Consumer Trend Report 2011” reported watching Internet-based on-demand TV more than once per week, while about 80% watch broadcast TV more than once per week.

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    The study also shows that social media usage has impacted the way we watch TV. More than 40% of the respondents reported using social media on various devices such as smartphones and tablets while watching TV.

    “On-demand viewing is increasingly popular, while broadcast viewing has remained as the most common way for people to watch TV,” Ericsson ConsumerLab senior advisor Anders Erlandsson said in a statement. “People want both broadcast and on-demand viewing to be available. TV and video have not been negatively affected by the internet in the same way that print has; we just watch TV in many more ways than we did before.”

    Data was collected in the United States, Australia, Austria, Brazil, China, Germany, the Netherlands, Russia, Spain, Sweden, Taiwan, the United Kingdom and South Korea. In all, 22 qualitative and 13,000 quantitative interviews were conducted representing almost 400 million consumers.

    Canary...meet coal mine.

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    www.invest2innovate.com

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    I love it when capitalism has some true value and meaning.

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    2000 Feet Above Hoover Dam

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    Yes, this is our pilot

    I wonder if she's old enough for a driver's license?

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    Chopper Joni

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    Saturday, September 3, 2011

    Thursday, September 1, 2011

    Is there really that big of change coming?

    When you read where Forrester and BIA/Kelsey both predict by 2015-2016 there will be shift in the majority of ad spending from traditional to digital media, then you see this below, it's difficult to reconcile to two. Are we really going to see such a dramatic change in spending over the next 3-4 years? 

     

    Cable Experiences Little 'Breakage,' Advertisers Not Cutting Cords
    by David Goetzl, Yesterday, 5:29 PM

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    A Wall Street report Wednesday says that even with a bumpy economy, advertisers aren't pulling back on spending commitments made in the TV upfront market, while the scatter business remains robust. Also, national cable ad spending for 2011 is estimated to increase by 12%.

    With upfront agreements being wrapped now, there is "little apparent breakage so far," according to Credit Suisse analyst Spencer Wang. Also, the scatter market for national TV has broadcast networks commanding between 10% and 25% hikes over upfront levels, with cable networks between 5% and 12%.

    More broadly, Wang noted that the economy appears to be weathering the turmoil enough to prevent a change in a forecast of 2% growth for the U.S. ad market this year. That's largely fueled by the search (up 15%), online display (14%) and national cable (12%) sectors.

    He did, however, suggest that a further economic decline might cause a downgrade in growth projections for 2012 -- from a 3% uptick to 2% -- even in a year with an Olympics and presidential campaign. One reason for the prediction is a belief that the ratio between ad spend and GDP will remain about the same next year as this.

    As Wang touted the cable ad market, he projected the cable upfront pulled in a combined $9.3 billion in commitments versus $9.1 billion for the broadcasters.

    A year ago, broadcasters continued to land more ($8.6 billion) compared to cable's $8.2 billion.

    Still, as a 12% growth for cable in 2011 is projected, the rate of growth could be slowed next year if the economy ushers in a slowdown in scatter pricing, since cable networks can leave about 50% of inventory to be sold in the walk-up market.

     

     

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