A look at how last week’s news affects mobile publishers…
Unskippable Six Second Video Ads Coming to Snapchat
Snapchat is going to start testing non-skippable ads in its TV-like shows, according to Snap, parent of the messaging app. A Snap spokesperson confirmed that the company will test a new ad format which will be six-second ads that run in select Snapchat Shows and not in Snapchat’s magazine-style Discover editions or users’ personal stories. The test is supposed to start around May 15, sources said. The experience would be new for Snapchat and run counter to its past practice, but the app has been struggling to grow users and while also missing growth expectations, and advertising is its only source of revenue.
Apple News Ramps up its Video Push while Publishers Wait on Revenue
Apple wants publishers to distribute higher-quality videos on Apple News. But publishers want to see higher revenue from those videos. Apple has told publishers it knows the money isn’t yet there, and it has begun to show them how the company hopes to raise their videos’ profiles and revenue prospects. Last month, Apple added a Top Videos section to the app’s main For You tab to make the 60 million people in the U.S. that use Apple News every month more aware of publishers’ videos. And it has begun inserting skippable interstitial video ads between these videos, which publishers hope will generate money they’re not getting from the videos they distribute on Apple News. Apple is keeping 50 percent of the revenue from those ads and divvying up the remaining 50 percent among the publishers whose videos appear in the feed when an ad runs, according to three publishers Digiday interviewed.
Digital Ad Spend Rises in the UK
According to the latest report from the Internet Advertising Bureau (IAB) UK and PwC. digital ad spend in the UK managed to grow by 14.3 to £11.55bn in 2017. The fastest-growing online ad format in 2017 was video advertising on smartphones, which clocked up £1.17bn, a 69 per cent increase on the previous year. Video advertising across smartphones, tablets and PCs came in at £5.2bn. Outstream video (up 94 per cent to £900m) overtook pre/post-roll (up 11 per cent to £671m) as the largest video format. Paid search rose 16 per cent to £5.82bn, while advertisers spent £3.84bn on display advertising. 80 per cent of this was traded programmatically, 63 per cent through direct systems, such as private marketplaces, with only 17 per cent on open exchanges.
Mobile Advertising Represents 91% of Facebook’s Ad Revenue
Facebook recent earnings release shows revenue has continued to stay strong. The social media giant revealed that in Asia Pacific, advertising revenue was at US$2.1 billion in Q1 2018, up from US$1.3 billion the year before in Q1 2017. Total ad revenue across all markets was at US$11.7 billion, up from US$7.8 billion the year before. Globally, mobile advertising revenue also represented around 91% of advertising revenue for the first quarter of 2018. This was up from approximately 85% of advertising revenue in the first quarter of 2017. Daily active user (DAU) count is currently at 529 million in APAC, up from 427 million last year. Meanwhile, MAU is up to 873 million, from 716 million the year before. Overall, Facebook’s DAU saw an increase of 13% year-over-year, this amounted to an average of 1.45 billion for March 2018. In terms of monthly active users, the social media giant also saw an increase of 13% YOY, amounting to 2.2 billion as of 31 March 2018.
Twitter Sees Profit Again but, This Time, its Adding Users
Twitter announced back-to-back profitable quarters, posting a $61m profit in Q1 2018, after turning over its first-ever profit in the last quarter of 2017. The microblogging site saw a 21 per cent year-over-year (YoY) increase in revenue to $665m in the quarter, helping it achieve this second quarter of profit. Adjusted EBITDA for quarter was $244m or 37 per cent of total revenue. This second highly-successful quarter for Twitter also saw its monthly active users grow to 336m – a YoY increase of three per and an increase of 6m compared to the 330m users recorded in both of the two previous quarters. Meanwhile, average daily users grew by 10 per cent from Q1 2017. Looking ahead, Twitter expects to achieve an adjusted EBITDA of between $245m and $265m at a margin between 37 and 38 per cent for Q2 2018.