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Facebook shares rise on strong Q3, users up 2% to 2.45B
Despite ongoing public relations crises, Facebook kept growing in Q3 2019, demonstrating that media backlash does not necessarily equate to poor business performance.
Facebook reached 2.45 billion monthly users, up 1.65%, from 2.41 billion in Q2 2019 when it grew 1.6%, and it now has 1.62 billion daily active users, up 2% from 1.587 billion last quarter when it grew 1.6%. Facebook scored $17.652 billion of revenue, up 29% year-over-year, with $2.12 in earnings per share.
Facebook’s earnings beat expectations compared to Refinitiv’s consensus estimates of $17.37 billion in revenue and $1.91 earnings per share. Facebook’s quarter was mixed compared to Bloomberg’s consensus estimate of $2.28 EPS. Facebook earned $6 billion in profit after only racking up $2.6 billion last quarter due to its SEC settlement.
Facebook shares rose 5.18% in after-hours trading, to $198.01 after earnings were announced, following a day where it closed down 0.56% at $188.25.
Notably, Facebook gained 2 million users in each of its core U.S. & Canada and Europe markets that drive its business, after quarters of shrinkage, no growth or weak growth there in the past two years. Average revenue per user grew healthily across all markets, boding well for Facebook’s ability to monetize the developing world where the bulk of user growth currently comes from.
Facebook says 2.2 billion users access Facebook, Instagram, WhatsApp or Messenger every day, and 2.8 billion use one of this family of apps each month. That’s up from 2.1 billion and 2.7 billion last quarter. Facebook has managed to stay sticky even as it faces increased competition from a revived Snapchat, and more recently TikTok. However, those rivals might more heavily weigh on Instagram, for which Facebook doesn’t routinely disclose user stats.
Zuckerberg defends political ads policy
Facebook’s earnings announcement was somewhat overshadowed by Twitter CEO Jack Dorsey announcing it would ban all political ads — something TechCrunch previously recommended social networks do. That move flies in the face of Facebook CEO Mark Zuckerberg’s staunch support for allowing politicians to spread misinformation without fact-checks via Facebook ads. This should put additional pressure on Facebook to rethink its policy.
Zuckerberg doubled-down on the policy, saying “I believe that the better approach is to work to increase transparency. Ads on Facebook are already more transparent than anywhere else,” he said. Attempting to dispel that the policy is driven by greed, he noted Facebook expects political ads to make up “less than 0.5% of our revenue next year.” Because people will disagree and the issue will keep coming up, Zuckerberg admitted it’s going to be “a very tough year.”
Facebook also announced that lead independent board member Susan D. Desmond-Hellmann has resigned to focus on health issues.
Earnings call highlights
Facebook expects revenue deceleration to be pronounced in Q4. But CFO David Wehner provided some hope, saying “we would expect our revenue growth deceleration in 2020 versus the Q4 rate to be much less pronounced.” That led Facebook’s share price to spike from around $191 to around $198.
However, Facebook will maintain its aggressive hiring to moderate content. While the company has touted how artificial intelligence would increasingly help, Zuckerberg said that hiring would continue because “There’s just so much content. We do need a lot of people.”
Regarding Libra’s regulatory pushback, Zuckerberg explained that Facebook was already diversified in commerce if that doesn’t work out, citing WhatsApp Payments, Facebook Marketplace and Instagram shopping.
On anti-trust concerns, Zuckerberg reminded analysts that Instagram’s success wasn’t assured when Facebook acquired it, and it has survived a lot of competition thanks to Facebook’s contributions. In a new talking point we’re likely to hear more of, Zuckerberg noted that other competitors had used their success in one vertical to push others, saying “Apple and Google built cameras and private photo sharing and photo management directly into their operating systems.”
Scandals continue, but so does growth
Overall, it was another rough quarter for Facebook’s public perception as it dealt with outages and struggled to get buy-in from regulators for its Libra cryptocurrency project. Former co-founder Chris Hughes (who I’ll be leading a talk with at SXSW) campaigned for the social network to be broken up — a position echoed by Elizabeth Warren and other presidential candidates.
The company did spin up some new revenue sources, including taking a 30% cut of fan patronage subscriptions to content creators. It’s also trying to sell video subscriptions for publishers, and it upped the price of its Workplace collaboration suite. But gains were likely offset as the company continued to rapidly hire to address abusive content on its platform, which saw headcount grow 28% year-over-year, to 43,000. There are still problems with how it treats content moderators, and Facebook has had to repeatedly remove coordinated misinformation campaigns from abroad. Appearing concerned about its waning brand, Facebook moved to add “from Facebook” to the names of Instagram and WhatsApp.
It escaped with just a $5 billion fine as part of its FTC settlement that some consider a slap on the wrist, especially since it won’t have to significantly alter its business model. But the company will have to continue to invest and divert product resources to meet its new privacy, security and transparency requirements. These could slow its response to a growing threat: Chinese tech giant ByteDance’s TikTok.
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Facebook staff demand Zuckerberg limit lies in political ads
Submit campaign ads to fact checking, limit microtargeting, cap spending, observe silence periods or at least warn users. These are the solutions Facebook employees put forward in an open letter pleading with CEO Mark Zuckerberg and company leadership to address misinformation in political ads.
The letter, obtained by The New York Times’ Mike Isaac, insists that “Free speech and paid speech are not the same thing . . . Our current policies on fact checking people in political office, or those running for office, are a threat to what FB stands for.” The letter was posted to Facebook’s internal collaboration forum a few weeks ago.
The sentiments echo what I called for in a TechCrunch opinion piece on October 13th calling on Facebook to ban political ads. Unfettered misinformation in political ads on Facebook lets politicians and their supporters spread inflammatory and inaccurate claims about their views and their rivals while racking up donations to buy more of these ads.
The social network can still offer freedom of expression to political campaigns on their own Facebook Pages while limiting the ability of the richest and most dishonest to pay to make their lies the loudest. We suggested that if Facebook won’t drop political ads, they should be fact checked and/or use an array of generic “vote for me” or “donate here” ad units that don’t allow accusations. We also criticized how microtargeting of communities vulnerable to misinformation and instant donation links make Facebook ads more dangerous than equivalent TV or radio spots.
The Facebook CEO, Mark Zuckerberg, testified before the House Financial Services Committee on Wednesday October 23, 2019 in Washington, D.C. (Photo by Aurora Samperio/NurPhoto via Getty Images)
More than 250 employees of Facebook’s 35,000 staffers have signed the letter, which declares, “We strongly object to this policy as it stands. It doesn’t protect voices, but instead allows politicians to weaponize our platform by targeting people who believe that content posted by political figures is trustworthy.” It suggests the current policy undermines Facebook’s election integrity work, confuses users about where misinformation is allowed, and signals Facebook is happy to profit from lies.
The solutions suggested include:
- Don’t accept political ads unless they’re subject to third-party fact checks
- Use visual design to more strongly differentiate between political ads and organic non-ad posts
- Restrict microtargeting for political ads including the use of Custom Audiences since microtargeted hides ads from as much public scrutiny that Facebook claims keeps politicians honest
- Observe pre-election silence periods for political ads to limit the impact and scale of misinformation
- Limit ad spending per politician or candidate, with spending by them and their supporting political action committees combined
- Make it more visually clear to users that political ads aren’t fact-checked
A combination of these approaches could let Facebook stop short of banning political ads without allowing rampant misinformation or having to police individual claims.
Facebook’s response to the letter was “We remain committed to not censoring political speech, and will continue exploring additional steps we can take to bring increased transparency to political ads.” But that straw-man’s the letter’s request. Employees aren’t asking politicians to be kicked off Facebook or have their posts/ads deleted. They’re asking for warning labels and limits on paid reach. That’s not censorship.
Zuckerberg had stood resolute on the policy despite backlash from the press and lawmakers, including Representative Alexandria Ocasio-Cortez (D-NY). She left him tongue-tied during a congressional testimony when she asked exactly what kinds of misinfo were allowed in ads.
But then Friday, Facebook blocked an ad designed to test its limits by claiming Republican Lindsey Graham had voted for Ocasio-Cortez’s Green Deal he actually opposes. Facebook told Reuters it will fact-check PAC ads.
One sensible approach for politicians’ ads would be for Facebook to ramp up fact-checking, starting with presidential candidates until it has the resources to scan more. Those fact-checked as false should receive an interstitial warning blocking their content rather than just a “false” label. That could be paired with giving political ads a bigger disclaimer without making them too prominent-looking in general and only allowing targeting by state.
Deciding on potential spending limits and silent periods would be more messy. Low limits could even the playing field and broad silent periods, especially during voting periods, and could prevent voter suppression. Perhaps these specifics should be left to Facebook’s upcoming independent Oversight Board that acts as a supreme court for moderation decisions and policies.
Zuckerberg’s core argument for the policy is that over time, history bends toward more speech, not censorship. But that succumbs to utopic fallacy that assumes technology evenly advantages the honest and dishonest. In reality, sensational misinformation spreads much further and faster than level-headed truth. Microtargeted ads with thousands of variants undercut and overwhelm the democratic apparatus designed to punish liars, while partisan news outlets counter attempts to call them out.
Zuckerberg wants to avoid Facebook becoming the truth police. But as we and employees have put forward, there is a progressive approach to limiting misinformation if he’s willing to step back from his philosophical orthodoxy.
The full text of the letter from Facebook employees to leadership about political ads can be found below, via The New York Times:
We are proud to work here.
Facebook stands for people expressing their voice. Creating a place where we can debate, share different opinions, and express our views is what makes our app and technologies meaningful for people all over the world.
We are proud to work for a place that enables that expression, and we believe it is imperative to evolve as societies change. As Chris Cox said, “We know the effects of social media are not neutral, and its history has not yet been written.”
This is our company.
We’re reaching out to you, the leaders of this company, because we’re worried we’re on track to undo the great strides our product teams have made in integrity over the last two years. We work here because we care, because we know that even our smallest choices impact communities at an astounding scale. We want to raise our concerns before it’s too late.
Free speech and paid speech are not the same thing.
Misinformation affects us all. Our current policies on fact checking people in political office, or those running for office, are a threat to what FB stands for. We strongly object to this policy as it stands. It doesn’t protect voices, but instead allows politicians to weaponize our platform by targeting people who believe that content posted by political figures is trustworthy.
Allowing paid civic misinformation to run on the platform in its current state has the potential to:
— Increase distrust in our platform by allowing similar paid and organic content to sit side-by-side — some with third-party fact-checking and some without. Additionally, it communicates that we are OK profiting from deliberate misinformation campaigns by those in or seeking positions of power.
— Undo integrity product work. Currently, integrity teams are working hard to give users more context on the content they see, demote violating content, and more. For the Election 2020 Lockdown, these teams made hard choices on what to support and what not to support, and this policy will undo much of that work by undermining trust in the platform. And after the 2020 Lockdown, this policy has the potential to continue to cause harm in coming elections around the world.
Proposals for improvement
Our goal is to bring awareness to our leadership that a large part of the employee body does not agree with this policy. We want to work with our leadership to develop better solutions that both protect our business and the people who use our products. We know this work is nuanced, but there are many things we can do short of eliminating political ads altogether.
These suggestions are all focused on ad-related content, not organic.
1. Hold political ads to the same standard as other ads.
a. Misinformation shared by political advertisers has an outsized detrimental impact on our community. We should not accept money for political ads without applying the standards that our other ads have to follow.
2. Stronger visual design treatment for political ads.
a. People have trouble distinguishing political ads from organic posts. We should apply a stronger design treatment to political ads that makes it easier for people to establish context.
3. Restrict targeting for political ads.
a. Currently, politicians and political campaigns can use our advanced targeting tools, such as Custom Audiences. It is common for political advertisers to upload voter rolls (which are publicly available in order to reach voters) and then use behavioral tracking tools (such as the FB pixel) and ad engagement to refine ads further. The risk with allowing this is that it’s hard for people in the electorate to participate in the “public scrutiny” that we’re saying comes along with political speech. These ads are often so micro-targeted that the conversations on our platforms are much more siloed than on other platforms. Currently we restrict targeting for housing and education and credit verticals due to a history of discrimination. We should extend similar restrictions to political advertising.
4. Broader observance of the election silence periods
a. Observe election silence in compliance with local laws and regulations. Explore a self-imposed election silence for all elections around the world to act in good faith and as good citizens.
5. Spend caps for individual politicians, regardless of source
a. FB has stated that one of the benefits of running political ads is to help more voices get heard. However, high-profile politicians can out-spend new voices and drown out the competition. To solve for this, if you have a PAC and a politician both running ads, there would be a limit that would apply to both together, rather than to each advertiser individually.
6. Clearer policies for political ads
a. If FB does not change the policies for political ads, we need to update the way they are displayed. For consumers and advertisers, it’s not immediately clear that political ads are exempt from the fact-checking that other ads go through. It should be easily understood by anyone that our advertising policies about misinformation don’t apply to original political content or ads, especially since political misinformation is more destructive than other types of misinformation.
Therefore, the section of the policies should be moved from “prohibited content” (which is not allowed at all) to “restricted content” (which is allowed with restrictions).
We want to have this conversation in an open dialog because we want to see actual change.
We are proud of the work that the integrity teams have done, and we don’t want to see that undermined by policy. Over the coming months, we’ll continue this conversation, and we look forward to working towards solutions together.
This is still our company.
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Lotame unveils Cartographer, its new approach to tracking user identity
Lotame, a company offering data management tools for publishers and marketers, today unveiled a new product called Cartographer — described by CMO Adam Solomon as “our new people-based ID solution.”
In other words, it’s Lotame’s offering to help businesses connect their visitor and customer data across platforms and devices.
We’ve written about plenty of other cross-device targeting technologies — and in fact, Lotame acquired one of them, AdMobius, in 2014. But Solomon said the landscape has become more challenging given privacy regulations and especially updated browsers that place new limits on the types of cookies that can be used to track users.
“There’s been an explosion of first-party cookies,” Solomon said, referring to cookies that are stored on the domain you’re actually visiting (as opposed to third-party cookies, which are increasingly blocked).
He argued that these “short-lived” cookies then create problems for publishers: “If you’re in Safari visiting the same site every day, a new ID could be generated” each day. So Cartographer deals with this by using data science and machine learning to attempt to “cluster” different IDs together that likely belong to the same user.
“Every day when we see an ID, we’ll capture it,” Solomon said. “We’re graphing those cookies together, these dozens or hundreds of cookies that we believe, based on our technology, that these cookies belong to the same individual.”
He also said that connecting IDs in this way is crucial to the whole “Russian nesting doll” of how a publisher or advertiser understands identity on the internet: “Cookies ladder up to devices, devices ladder up to people, people ladder up to households.” So by connecting cookies to people, Lotame can also offer better household-level data.
And far from being an attempt to circumvent privacy restrictions, Solomon argued that Cartographer actually makes it easier for publishers to stay compliant with Europe’s GDPR and California’s CCPA rules, because they can do a better job of storing a customer’s privacy preferences.
Grant Whitmore, chief digital officer at Lotame customer Tribune Publications, made a similar point: “One of the things that I think all publishers are wrestling with right now is really the disconnect that is occurring in the adtech landscape and the legislative landscape and really managing the persistence of that consent.”
Whitmore continued, “One of the unintended consequences of that legislation and some of what is happening in the browser space is that we could be forced into a position where we are having to ask you every single time you visit a site whether it’s okay to sell your data, whether it’s okay to track.”
And he said that’s one of the big reasons Tribune is deploying Cartographer across all its properties, including its nine core newspaper sites. Though he acknowledged that it’s more broadly useful too.
“From the standpoint of our core business, getting a more complete picture of who a user is across these device types … That is of ongoing importance to us,” Whitmore said. “As we fight in this very competitive landscape, our ability to bring our understanding of who a user is, what their interests are … and providing good solutions — whether on the advertising front or whether that’s handling digital subscription offers — is just table stakes at this point.”
Solomon, meanwhile, said that Cartographer’s benefits go beyond “just figuring which IDs cluster together to represent an individual,” because it’s also ensuring that there’s proper ID synchronization with other data and ad-buying platforms.
“We make sure there’s maximum connectivity, maximum dial tone, with all the ecosystem participants,” he said.
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Snapchat beats in Q3, adding 7M users & revenue up 50%
The Snap-back continues. Snapchat blew past earnings expectations for a big beat in Q3, as it added 7 million daily active users this quarter to hit 210 million, up 13% year-over-year. Snap also beat on revenue, notching $446 million, which is up a whopping 50% year-over-year, at a loss of $0.04 EPS. That flew past Bloomberg’s consensus of Wall Street estimates that expected $437.9 million in revenue and a $0.05 EPS loss.
Snap has managed to continue cutting losses as it edges toward profitability. Net loss improved to $227 million from $255 million last quarter, with the loss decreasing $98 million versus Q3 2018.
CEO Evan Spiegel made his case in his prepared remarks for why Snapchat’s share price should be higher: “We are a high-growth business, with strong operating leverage, a clear path to profitability, a distinct vision for the future and the ability to invest over the long term.”
Snapchat’s share price had closed down 4% at $14, and had fallen roughly 4.6% in after-hours trading as of 1:50 pm Pacific, to $13.35, despite the earnings beat. It remains below its $17 IPO price but has performed exceedingly well this year, rising from a low of $4.99 in December.
That’s partially because of the high cost of Snapchat’s growth relative average revenue per user. While it notes that it saw user growth in all regions, 5 million of the 7 million new users came from the Rest of World, with just 1 million coming from the North America and Europe regions. That’s in part thanks to better than expected growth and retention on its re-engineered Android app that’s been a hit in India. But since Snapchat serves so much high-definition video content but it earns just $1.01 average revenue in the Rest of World, it has to hope it can keep growing ARPU so it becomes profitable globally.
Some other top-line stats from Snapchat’s earnings:
- Operating cash flow improved by $56 million to a loss of $76 million in Q3 2019, compared to the prior year.
- Free Cash Flow improved by $75 million to $84 million in Q3 2019, compared to the prior year.
- Cash and marketable securities on hand reached $2.3 billion.
Interestingly, Spiegel noted that “We benefited from year-over-year growth in user activity in Q3 including growth in Snapchatters posting and viewing Stories.” Snapchat hadn’t indicated Stories was growing in at least the past two years, as it was attacked by clones, including Instagram Stories that led Snapchat to start shrinking in user count a year ago before it recovered.
Since Stories viewership is critical to total ad view on Snapchat, we may see analysts insisting to hear more about that metric in the future. Snap also said users opened the app 30 times per day, up from 25 times per day as of July 2018, showing it’s still highly sticky and being used for rapid-fire visual communication.
The other major piece of Snapchat’s ad properties is Discover, where total time spent watching grew 40% year-over-year. And rather than being driving by just a few hits, more than 100 Discover channels saw over 10 million viewers per month in Q3. With Instagram’s IGTV a flop, Discover remains Snapchat’s best differentiated revenue driver, and one it needs to keep investing in and promoting. With Instagram trying to compete more heavily on chat with its new close friends-only Threads app, Snapchat can’t rely on ephemeral messaging to keep it special.
TikTok buys ads on Snapchat that could steal its users
Surprisingly, Spiegel said that “We definitely see TikTok as a friend” when asked about why it allowed the competitor to continue buying ads on Snapchat. The two apps are different, with Snapchat focused on messaging and biographical social media while TikTok is about storyboarded, premeditated social entertainment. But this could be a dangerous friendship for Snapchat, as TikTok may be taking time away that users might spend watching Snapchat Discover, and its growth could box Snapchat out of the social entertainment space.
Looking forward, in Q4 Snap is estimating 214 to 215 million daily active users and $540 million to $560 million in revenue. It’s expecting between break even and positive $20 million for adjusted EBITDA. That revenue guidance was below estimates for the holiday Q4, contributing to the share price fall.
Snap has a ways to go before reaching profitability. That milestone would let it more freely invest in long-term projects, specifically its Spectacles camera-glasses. Spiegel has said he doesn’t expect augmented reality glasses to be a mainstream consumer product for 10 years. That means Snap will have to survive and spend for a long time if it wants a chance to battle Apple, Facebook, Magic Leap and more for that market.
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Laurel Bowden of VC firm 83North on the European deep tech and startup ecosystems
London and Tel Aviv based VC firm 83North has closed out its fifth fund at $300 million, as we reported earlier. It last raised a $250 million fund in 2017 and expects to continue the same investment mix, while tracking developments in emerging areas like healthcare AI and autonomous vehicles.
In a conversation with general partner Laurel Bowden, the veteran investor shared a few further thoughts with Extra Crunch — talking about the tech scene in Europe vs Israel, what the firm looks for in a team and tips on scaling globally.
The interview has been lightly edited for clarity.
TechCrunch: Is Europe starting to catch up to Israel when it comes to deep tech startups?
Laurel Bowden: We clearly think we have in our portfolio some deep tech. And in other VC portfolios too — there’s clearly some deep tech [coming out of Europe]. And then on the reverse side you’ve seen more consumer-related stuff coming out of Israel. But still if you take a blanket look, we see more data infrastructure, security, storage coming out of Israel than we see in Europe — that’s for sure.
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Mutiny creates personalized plans for B2B marketing
Mutiny, a personalized marketing startup for businesses that sell to other businesses, is taking the stage today at TechCrunch’s Startup Battlefield, where it’s announcing new funding and new features.
CEO Jaleh Rezaei told me that she and co-founder Nikhil Mathew created Mutiny to solve a problem they saw as early employees at HR services company Gusto — trying to personalize their messages to different sales prospects.
With Mutiny, they’ve built easy-to-use tools allowing marketers to show different landing pages to different customers. To do this, the product draws on pre-built data integrations to identify customer segments, then allows customers to use a visual editor to build different versions of landing pages for those segments.
“When we think about the B2B journey, it has changed quite a bit,” Rezaei said. “Today, 67% of that B2B buyer’s journey is online. Without engineering, it’s really hard to change that journey and have an impact. What’s exciting about Mutiny is we empower these great marketers to improve their customer experience without that constant dependence on technical teams.”
Mutiny was part of the Summer 2018 class at accelerator Y Combinator. Rezaei said that shortly after demo day, the startup raised $3 million in funding from Cowboy Ventures, Uncork Capital and various angel investors.
It’s since added features to support targeted, account-based marketing. Rezaei said Mutiny pulls account data from Salesforce, cleaning it up and surfacing it, so that when a prospective customer responds to your marketing, they could end up on a landing page showing their own name, title and company.
For example, Brex is creating landing pages for its email marketing campaigns, where each page shows the recipient’s name and company; Gusto is tailoring landing pages based on the AdWords search terms that brought a prospective customer to that page; and Amplitude is customizing landing pages based on company size and other attributes.
As a result, Mutiny says Brex has seen a 200% lift in outbound leads, while Amplitude has increased all inbound leads by more than 40%. (Other customers include Segment, Carta, TripActions and Elastic.)
Today, Mutiny is also announcing that it will offer personalized recommendations to marketers. So if all these ideas are new to you, the product can recommend specific customer segments that you should consider personalizing for based on things like your traffic data and conversion data.
Mutiny can also create entire “playbooks,” recommending not just the segment to personalize, but what that personalized experience should look like for that segment.
“The goal of Mutiny is always to make personalization really easy and really guided,” Rezaei said.
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MediaRadar’s new product helps event organizers maximize sales
MediaRadar CEO Todd Krizelman describes his company as having “a very specific objective, which is to help media salespeople sell more advertising” by providing them with crucial data. And with today’s launch of MediaRadar Events, Krizelman hopes to do something similar for event organizers.
These customer groups might actually be one and the same, as plenty of companies (including TechCrunch) see both advertising and events as part of their business. In fact, Krizelman said customer demand “basically pushed us into this business.
He also suggested that after years of seeing traditional ad dollars shifting into digital, “the money is now moving out of digital into events.”
If you’re organizing a trade show, you can use MediaRadar Events to learn about the overall size of the market, and then see who’s been purchasing sponsorships and exhibitor booths at similar events.
The product doesn’t just tell you who to reach out to, but how much these companies have paid for booths and sponsorships in the past, whether there are seasonal patterns in their conference spending and how that spending fits into their overall marketing budget — after all, Krizelman said, “In 2019, very few companies are siloed by media format as a buyer or a seller. Anyone doing that is putting their business at risk.”
He also described collecting the data needed to power MediaRadar Events as “much more complicated than we expected,” which is why it took the team two years to build the product. He said that data comes from three sources — some of it is posted publicly by event organizers, some is shared directly by the event organizers with MediaRadar and, in some cases, members of the MediaRadar team will attend the events themselves.
MediaRadar Events support a wide range of events, although Krizelman acknowledged that it doesn’t have data for every industry. For example, he suggested that a convention for coin-operated laundromat owners might be “too niche” (though he hastened to add that he meant no offense to the laundromat business).
In a statement, James Ogle — chief financial officer at Access Intelligence (which owns the LeadsCon conference and publications like AdExchanger) — said:
Hosting events and the resulting revenue that comes from them is a big part of our business. However, the event space is getting more and more crowded and also more niche. Relevancy equals value, so we want to make sure our attendees are within the right target market for our exhibitors. MediaRadar provides critical transparency into the marketplace.
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App Annie acquires analytics firm Libring, bringing adtech-related insights to its platform
App Annie, a go-to source for mobile app market data and analytics, is expanding its platform with the acquisition of mobile analytics provider Libring. The deal will allow App Annie to present its mobile app market data side by side with advertising analytics data in order to paint a more complete picture of an app’s performance and revenue.
Already, App Annie customers leverage its platform to track key metrics related to their app’s growth and usage, like downloads, active users, retention numbers, demographics, rankings, reviews, competitive analysis and more. But the company said it heard from publishers and brands how it’s still difficult to analyze their user acquisition efforts, including their ad spend and related costs.
With the addition of Libring, App Annie is integrating adtech insights into its platform.
This includes the ability to combine the ad spend and monetization insights from more than 325 data sources, including Supply Side Platforms (SSPs), Demand Side Platforms (DSPs), app stores and analytics platforms.
This data is then presented in a single dashboard so it’s easier to understand critical metrics — like the customer acquisition cost, the lifetime value, the return on ad spend and the return on investment.
It’s ideal for larger organizations that have outgrown the spreadsheet, as it’s been sort of the App Annie of revenue aggregation, so to speak.
“The most successful companies find a way to capitalize on mobile, yet they have been struggling to maximize its value to their business,” explained App Annie CEO Ted Krantz, in a statement about the acquisition. “Today, this requires custom work to stitch together multiple point solutions, spreadsheets, business intelligence teams, agencies and consultants. We are committed to solving this by applying data science and machine learning to automate these composite metrics for brands and publishers,” he said.
The deal comes at a time when mobile ad spend is continuing to grow rapidly — it’s expected to double to $375 billion globally by 2022, the company noted. It’s now a massive part of the overall app industry, at triple the amount of consumer spending on the app stores.
As a result of the deal, Libring’s 30-plus employees are joining App Annie.
In the near-term, Libring’s current customers will continue to use its product as they do today.
But App Annie tells us there’s only some overlap between the two companies’ respective customer bases. For now, App Annie will work with its customers who want to purchase the new analytics service and find out what sort of enhancements they are looking for in an analytics solution. Libring’s customers can also purchase App Annie’s analytics, if they choose.
Later, App Annie will migrate the Libring backend to the same infrastructure provider the rest of App Annie uses, and will then integrate the front-end so customers can log in and visualize the new analytics and other market data together. More information about how this will all work will be shared when those tools are closer to being available, which is still several months from now.
Going forward, App Annie says its data science team will also offer predictive and prescriptive insights based on the new data.
According to Libring’s website, its customers included SEGA, Slickdeals, Reddit, Jam City, Wooga, EA, Zynga, Next Games, Meet Me, GameInsight, Deviant Art, Webedia, Ubisoft, theChive, saambaa, badoo, textnow and others.
App Annie declined to disclose the deal terms.
Related to the changes and expansion, App Annie also today introduced a new brand that features a gem logomark. The gem is meant to be a tribute to mobile gaming and the idea of “leveling up” while also a reflection of the value of actionable data, the company says.
The acquisition comes on the heels of several notable milestones for App Annie, including the launch of a product development testing ground, App Annie Labs; plus the addition of mobile web analytics in March — the same time when App Annie passed $100 million in annual recurring revenue.
The company is soliciting feedback about its plans for Libring and will post updates about the project on App Annie Labs, it says.
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Engage:BDR raises $26.25M to fund its NetZero publisher payments
Engage:BDR announced today that it has raised $23.25 million in new funding.
CEO Ted Dhanik told me that this includes both debt and equity funding, and will be used to grow the company’s NetZero payments program.
NetZero is designed to address the ongoing issue of long delays faced by publishers before they get paid by advertisers. Dhanik said “the terms are getting worse and worse,” with publishers being asked to wait 30, 60, 90 or even 120 days after they invoice their advertising partners before payment.
Other companies like FastPay have tried to fill in the gap, but Dhanik said these loans can have interest rates as high as 25%. So the team at Engage:BDR (which is publicly traded on the Australian Securities Exchange) asked itself: “Hey, what if we could just pay publishers the exact same day that they invoice us?”
Rather than making money by charging interest, Dhanik said his company is trying to drive more publishers to its programmatic advertising platform.
“We just want the business — the incremental revenue,” he said.
Engage:BDR says web, mobile and connected TV publishers in North America, Australia and Europe are eligible to participate in the NetZero program, though they’ll need to be approved by the company first.
“If you think about NetZero, you might think: Hey, if there’s fraud, it’s pretty dangerous you don’t have the ability to clawback [the payment],” Dhanik said. But apparently Engage:BDR has “a lot of technology in place to qualify them pretty quickly, within the first few days.”
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Facebook expands its playable and AR ad formats
Ahead of Advertising Week, Facebook is announcing the expansion of three interactive ad formats.
First, it says that poll ads (which you may already have seen in Instagram Stories) are moving to the main feed of the Facebook mobile app. Second, the augmented reality ads that Facebook has already been testing are moving into open beta this fall. Third, Facebook is making playable ads available to all advertisers, not just gaming companies.
The company showed off each format at a press event yesterday in New York City.
E!, for example, says it ran ads with interactive polls to promote one of its TV shows, leading to a 1.6x increase in brand awareness. Meanwhile, Vans created a playable ad where players could guide skateboarder Steve Van Doren down a mountain, resulting in a 4.4% lift in ad recall. And WeMakeUp ran an AR ad campaign allowing users to virtually try on new shades of makeup, leading to a 27.6% lift in purchases.
Mark D’Arcy, Facebook’s chief creative officer and vice president of global business marketing, said that while the initial playable ad examples had “very literal gaming mechanics, doing brands in a game,” there could be “a whole range” of different interactions over time.
D’Arcy also acknowledged that including polls, games and AR in ads aren’t exactly new ideas, but he suggested that in the past, they’ve generally been “heavy” experiences, requiring things like a separate microsite. By bringing them front-and-center on Facebook, the company is making them “super lightweight, fun and super scalable.”
As result, he suggested that each of these formats will evolve as more advertisers get to experiment with them: “In 12 months, even six months, we’re going to look at these examples and they’ll be fundamentally different.”
And if you’re wondering how these new formats will handle user data, the Facebook team said that only the aggregate results of polls — not individual user data — will be shared with advertisers. Similarly, any images created by users through an AR ad can be saved to their camera roll, but won’t be shared with advertisers.
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