When Twitter Bought MoPub, It Bought Itself an Advertising Safety Net

safety netIn early September, a few days before Twitter announced it was going public, it announced that it was buying MoPub, a mobile ad startup.

The two events aren’t unrelated. Twitter executives won’t come out and put it this way, but MoPub offers the company a safety net: If Twitter’s growth stalls out, and the company never becomes a truly mainstream product, MoPub offers Twitter a revenue stream that isn’t dependent on Twitter users.

We got a peek at this strategy last week, when Twitter/MoPub formally declared that MoPub will be selling “native” ads. Right now, MoPub isn’t using Twitter data to augment the ads it sells on other people’s apps, but it’s easy to see that happening in the future. Which means Twitter will have the ad network that everyone expected Facebook to build.

And in theory, that means that Twitter can make MoPub’s ad business more valuable, even if its own ad business on its own properties hits a ceiling.

This morning, we got a bit more insight into Twitter’s thinking, when it released MoPub’s financials prior to its acquisition. Twitter had previously disclosed some basic information about MoPub in its pre-IPO documents, but today we can see much more.

The main takeaway: When Twitter bought MoPub, the company was on a tear.

In 2012, MoPub generated $2.7 million in revenue, and that number grew to $6.5 million in the first two quarters of this year. Then things really shot up: In Q3, MoPub did another $5.6 million. That is: In three months this fall, MoPub came close to the revenue it had booked in the first six months of the year, and more than doubled the revenue it had done in the previous year.

Losses? Of course. MoPub lost $8.1 million in 2012, and another $5.5 million in the first nine months of this year.

And there’s nothing that says MoPub’s growth will stay in the same curve. But if it does, it’s a nice boost for Dick Costolo: So far this year, MoPub has accounted for nearly three percent of his revenue. That can fund a very nice Christmas party.

 

Ads on Instagram Work Great, Says Instagram

kors_ad_instagramWe try hard at AllThingsD to ignore press releases that tout numbers without real context, or flat-out bullshit metrics.  You’re welcome!

But sometimes we have to note them anyway, because in some cases even some numbers are better than no numbers.

So: Instagram says that some advertisers who have started advertising on Instagram are happy with the ads they are running on Instagram.

Among the stats Instagram is using to support that notion: “A 32-point incremental lift in ad recall per campaign” for four campaigns that have run on the service.

Which campaigns? Well, even that is fuzzy: Instagram calls out Ben & Jerry’s (whose “Scotchy Scotch Scotch” flavor does sort of sound right up my alley) and Levi’s, but for some reason won’t identify the two other campaigns it is talking about. No idea why.

In any case, the real news would have been if Instagram had concluded, less than two months after launch, that its ads weren’t working, and that it was going back to the drawing board.

Still, I would imagine we’ll see some tweaks from it down the road. Perhaps a different approach to comments on the ads, which so far have generated lots of … well, the sort of comments anonymous users post on the Internet all the time — and which brands might not be comfortable with.

instagram lexus comments

And now I have to go take a picture of my lunch. It will be revolutionary.

Facebook and Mark Zuckerberg Sell, and So Does Wall Street

zuckerberg_2013_feature

After a nice run on the Nasdaq, Facebook and its CEO are selling a big block of shares. Wall Street’s reaction: We’re selling, too.

Facebook says it is planning a secondary sale of 70 million shares, which at yesterday’s closing price would be worth about $3.9 billion. Investors are using the news as a reason to move their own shares, so Facebook’s price has dropped by as much as five percent in pre-market trading.

As I’m typing this, FB is down around 2.5 percent, which means Facebook’s market cap has dropped by something like $3 billion this morning. Facebook shares had started out 2013 below $30, but went on a huge run this summer, when Wall Street became convinced that the company had a mobile plan, after all. Now they are in the mid-$50s.

My gut is that the shares will stay there today, because once you look at the breakdown of today’s sales announcement, the news looks less dramatic.

The gist:

  • Mark Zuckerberg is selling 41.4 million shares, but the majority of that is to pay for taxes on 60 million shares he is acquiring via stock options. Separately, he is giving away 18 million shares to the Silicon Valley Community Foundation, the nonprofit he uses to handle most of his charitable giving.
  • That is: While Zuckerberg will end up pocketing $33 million, his overall stake in Facebook is barely changing, and he’s donating $1 billion to charity.
  • Facebook itself is selling almost all of the remaining shares in the offering. It will sell 27 million shares, worth about $1.5 billion. It says it doesn’t have any specific plans for the money, but allows that it might use some of it to go shopping: “We may use a portion of the proceeds to us for acquisitions of complementary businesses, technologies, or other assets.”
  • Marc Andreessen will finally have some walking around money, too. He’s selling 1.6 million shares, worth around $88 million.

To sum up: Mark Zuckerberg will give $1 billion to charity, Facebook will have some more cash to fund “acqhires,” or build more data centers in the Arctic Circle, or whatever, and if you bought Facebook shares in January of this year, you’re still way ahead of the game.

Mirriad, the Company That Wants to Automate Product Placement, Gets Some High-Profile Help

Roger Faxon, former CEO of EMIYou don’t want to watch ads. But if the ad is inserted directly into the thing you want to watch, you’ll put up with it. You might even like it.

That’s the premise behind product placement, which is a very old idea. Now Mirriad is trying to update the concept, by digitizing it, and creating a marketplace that lets advertisers and content owners make deals on the fly.

That means that in theory, if Coke wanted to insert some cans into reruns of “NCIS,” it could cut a deal with CBS, using a Web dashboard, and you’d never know that Mark Harmon was guzzling something else the first time around.

Mirriad isn’t the first company to layer digital images onto video — if you’ve watched sports on TV over the last decade, you’ve seen it all the time, from the first-down markers on NFL games to the rotating billboards behind home plate in baseball games. But the London-based company wants to make this a really big, automated ad business.

So far they’ve raised more than $7 million over the last few years. Now they’re trying to increase their visibility in the media world. This might help: They’ve brought on Roger Faxon, a man who used to run of the world’s biggest music labels, as chairman and an investor.

Faxon ran EMI Music Group for five years before Universal Music swallowed it up last year. Lots of people have expected Faxon to take on another big music job, but for now he is keeping his options open. At Mirriad, he’ll work with founder and CEO Mark Popkiewicz, but his formal title is “non-executive chairman,” so I get the sense that one of his chief jobs will be as ambassador/door-opener.

Here’s a promo clip that gives you a pretty good idea of what Mirriad is pitching:

Mirriad Reel 90Sec from mirriad on Vimeo.

No One Buys Music on the Web Anymore. Except When They Buy a Million Beyonce Albums in Five Days.

Beyonce iTunesSales of music downloads, which were supposed to rescue the music business from the decline of the CD, have been flattening for a few years. Then things got worse: This year, digital sales were down 4 percent through Thanksgiving.

Lots of people assume that download sales are slumping because more people are listening to streaming services like Pandora and Spotify, but it’s hard to prove that thesis out. As Billboard notes, there are a lot of reasons for sales to slump.

And then it turns out that people will still buy digital downloads, in record numbers. Sometimes.

Last week, as you may have heard, Beyonce surprised the pop culture universe by releasing a new album without warning or fanfare, exclusively on iTunes. Three days later, Apple had sold a record 828,773 copies of the eponymous album, which came paired with a set of digital videos but wasn’t available as individual tracks. And today Apple says the number has climbed above a million.

During the peak of the CD era, it was routine for acts like NSync to move more than a million albums in a week, but those days are long gone. A couple of years ago, when Lady Gaga was arguably at her peak, she was able to sell 1.15 million, but that involved a multi-outlet publicity campaign — and 400,000 of those sales were at a buck a pop, via Amazon.

So What Does It All Mean For The Future Of Music Sales?

Not a lot, I think. It means that if you are a really, really, really big star, and you do something really unconventional, people will pay attention. The first time. But as Bob Lefsetz says, you can’t repeat that stunt again.

I think you’re going to see most stars – even really big stars – continue to flood the zone when they have product to move, and in some cases, it will work.

And I think that streaming services will continue to grow, though it’s not clear at all if paid streaming services like Spotify will become truly mainstream. Regardless, the case for buying an album of songs from a single artist gets harder and harder to make.

But even in that instance, there’s an exception, which I learned years ago from Eric Garland, the wise fellow who founded music analytics startup Big Champagne and sold the company to Live Nation, where he still works.

The boiled-down version goes like this: It’s really hard to get anyone interested in any album, even if you give it away. But any album that has at least two popular songs on it will sell a lot of copies. This explains Adele, among a very few others, and if you can adhere to it you’ll do great. If not, you’re going to have to figure something else out.

The 13 Most Awesome Moments From Jonah Peretti’s Colbert Show Interview

Jonah Peretti has sat down for many interviews. But last night was the BuzzFeed CEO’s first with Stephen Colbert.

This is a pretty breezy six minutes, because, again, Peretti has done a lot of these. But it’s fun to hear him explain why he’s spending money on journalism, to argue that the listicle format dates back to the Ten Commandments, and to brush off the notion that it’s easy to copy what he’s done. (Are there 10 other cool things in the six-minute interview, as my headline suggests? Sure!)

The Colbert Report
Get More: Colbert Report Full Episodes,Video Archive

Do you have time to go deeper? Then check out this excellent interview Peretti did with Fortune magazine’s Andy Serwer in October, published this month.