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Google Takes Backseat To Facebook’s Digital Display Ad Revenue

MediaPost

Google takes the No. 2 position in digital display advertising revenue behind Facebook, with its share of the U.S. market dipping from 13.7% in 2014 to 13.0% this year — and down to 11.1% by 2017, per data released Thursday.

Facebook’s digital display U.S. advertising revenue continues to climb from $5.29 billion in 2014 to $6.82 billion and $10.03 billion in 2017, per eMarketer.

The total U.S. market is forecast to climb from $27.05 billion this year to $37.36 billion by 2017.

This year, Twitter in the U.S. will take $1.34 billion, followed by Yahoo at $1.24 billion — rising to $2.54 billion and $1.29 billion by 2017, respectively.

Mobile advertising will drive Facebook’s and Twitter’s gains in the digital display market. For the first time in 2015, mobile will surpass desktop in U.S. display ad spend, rising from $9.65 billion in 2014 to $14.67 billion this year. Meanwhile, desktop display advertising in the U.S. will decline in 2015, falling to $12.38 billion from $12.56 billion last year, per eMarketer.

Facebook will generate nearly $5 billion in U.S. mobile ad revenue from display ads, rising to $7.53 billion in 2017. Nearly 90% of Twitter’s U.S. ad revenue will come from mobile devices this year, reaching $1.19 billion. Google takes a No. 2 position in the mobile display category — rising from $1.47 billion in 2015 to $2.37 billion in 2017. Twitter follows close behind with nearly $2 billion in 2015, and $2.29 billion in 2017, eMarketer estimates.

Apple rounds out the top five for mobile ad revenue in the United States with $795 million in 2015, rising to $1.46 billion in 2017.

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Are Smartphones Taking Over?

IDC PMS4colorversion 1 Are Smartphones Taking Over?

According to a new forecast from the International Data Corporation (IDC) Worldwide Quarterly Smart Connected Device Tracker, the combined total market of smartphones, tablets plus 2-in-1s, and PCs is set to grow from 1.8 billion units in 2014 to 2.5 billion units in 2019. During that time, smartphones will grow to represent the overwhelming majority of total smart connected device (SCD) shipments, dwarfing both tablets and PCs in terms of shipment volumes.

As recently as 2010, PCs still made up the lion’s share of the total SCD device market, with the combined desktop and notebook categories accounting for about 52.5% of shipments versus 44.7% for smartphones and 2.8% for tablets. By 2014, smartphones had grown to represent 73.4% of total shipment, while PCs had slipped to 16.8% and tablets had increased to 12.5%. By 2019, IDC expects the distribution to be 77.8% smartphones, 11.6% PCs, and 10.7% tablets.

“Smartphone growth continues at an astounding pace, while growth in the PC and tablet markets is proving to be more challenging,” said Tom Mainelli, Program Vice President for Devices at IDC. “There are clearly some bright spots in both markets: Detachable 2-in-1s show strong growth potential in tablets, and convertible notebooks are beginning to gain traction in PCs. But ultimately, for more people in more places, the smartphone is the clear choice in terms of owning one connected device. Even as we expect slowing smartphone growth later in the forecast, it’s hard to overlook the dominant position smartphones play in the greater device ecosystem. And it’s not likely that anything—including wearables—will unseat it from this dominant position anytime soon.”

“Not all smartphone growth will be equal. Going forward, the future of smartphones lies in emerging markets, sub-US$100 price points, and phablets,” said Melissa Chau, Senior Research Manager for Mobile Devices. “In 2014, 73% of smartphones were shipped to emerging markets, 21% were priced below US$100, and 12% had screen sizes between 5.5 and <7 inches. By 2019, these categories will all increase – 80% of smartphones will be shipped to emerging markets, 35% will be priced below US$100, and 32% will have a 5.5–<7-inch screen size. So far the market has very much focused on premium models and brands, but emerging market consumers are looking for greater value from a single device.”

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Tablet Adoption in Commercial Segment to Drive Growth in Western Europe

IDC PMS4colorversion  Tablet Adoption in Commercial Segment to Drive Growth in Western Europe

According to figures published by International Data Corporation (IDC), the commercial tablet market will reach more than 11 million units by 2019 in Western Europe, achieving more than 130% growth (2014–2019) (IDC EMEA Tablet Tracker Forecast, 4Q14, February 2015). Tablets continue to represent a significant opportunity for device makers in the coming years.

Since their launch in 2010, tablets have been strong in the consumer segment and have benefited from early adopters in enterprises. The introduction of tablets contributed to an ever-growing number of computing devices increasingly differentiated in terms of screen size and product features as demand is influenced by end users’ differing mobility needs. Among other things, innovation has brought new product designs, with devices becoming lighter and better connected, and with greater input options, including keyboards. With traditional PC vendors expanding their offerings to include tablets, devices are increasingly coming with the features requested by IT departments (security, for example), while Apple and Samsung have been promoting some of their features for enterprise use.

Based on IDC’s latest survey of tablets in enterprises, their adoption rate is expected to double between 2014 and 2015 and to grow significantly until the end of the forecast period. “Tablets are used in companies of all sizes,” said Chrystelle Labesque, research manager, IDC EMEA Personal Computing. “While the first perception might have been that tablets were entering enterprises mostly as employees were bringing in their own devices, the reality is that more than two-thirds of the enterprises surveyed in France, Germany, and U.K. have already deployed tablets.” (For more information, see IDC’s Western European multiclient study Tablets in Enterprise: The Big Opportunity.)

While the volume of sales remained limited in 2014, IDC expects the market to thrive in 2015, benefiting from continuous price erosion and innovation. In addition, with 2-in-1s meeting productivity needs similar to notebook and providing longer battery life, their penetration in the corporate and SMB areas is expected to increase. The launch of Windows 10 will also facilitate the integration of the device as a notebook replacement, additional mobile device, or computing device in the new era of digital processing. Interestingly, Apple announced in 2014 a partnership with IBM to meet demand from the commercial sector, and earlier this year Google introduced Android for Work, which is expected to increase the relevance and integration of Android in the enterprise area.

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Hands On With a Working Apple Watch

PCMag

This is the second time PCMag has had some hands-on time with the Apple Watch. The first time was in September, when Cupertino’s smartwatch was first announced. We were not allowed to put it on, and although we could tap a few buttons, it was pretty clear the watch was in demo mode and only capable of a limited number of tasks.

As a result, most of the story involved how it looked, which admittedly is pretty important for a smartwatch. Looks are the biggest reason people don’t want to wear watches. The other reason is that no one seems really clear on why they need a smartwatch.

 Hands On With a Working Apple Watch

Yesterday, I got the chance to try on a fully operational Apple Watch for the first time. It is no slam dunk, but this watch does a lot more than people realize.

Before we get into the details, it is important to understand where the smartwatch market is today. Smartwatches kind of suck. Big companies like Samsung, LG, and Sony have released multiple models, and none of them have been very successful. The only real success in the space has been the Pebble, a small Kickstarter-backed firm whose modest product has found a number of fans, but is hardly a household name. Despite the best efforts of the consumer electronics industry, there is little sign that consumers really want a smartwatch.

But Apple, of course, is different. And so is its smartwatch. For the purposes of this story I want to look at the Apple Watch from three perspectives: The Watch, the Smarts, and the Apps.

To succeed, Apple needs to do something every other smartwatch vendor has never done before in all three categories: succeed, across the board. It won’t be easy. When Piper Jaffray recently polled 968 iPhones owners, only 7 percent said they would buy an Apple Watch. Then again, they have never tried one on. And they certainly don’t know what it does. Those users will get the chance to see the Apple Watch in Apple Stores on April 10. It will be available for sale on April 24.

The Watch
The first hurdle Apple needs to clear is to simply build a great watch. In an age when most of us rely on our phones to tell the time, that is no small feat. Ironically, this may be where Apple is strongest. The Apple Watch face is a solid piece of metal, either aluminum, steel, or a preposterously priced solid gold version (starting price: $10,000.)

Even in its more affordable aluminum and steel construction, it looks and feels like a $349 watch—that is no small feat. A lot will be made of the bands; there are six different styles and multiple colors. All of them feel well-made, although the Sport line is the most plasticky. Even so, the bands will be interchangeable so one watch face can have multiple looks.

Battery life is 18 hours, so more than enough for one day, but not enough for two. As a watch, this is a downside, but unless you are using an e-ink display like the Pebble, it is to be expected.

The watch face itself seems nearly infinitely customizable. You can scroll between digital, analog, hybrid, and even animated watch faces with a few clicks. There is even an animated Mickey Mouse face that will point out the hour and minutes, although it was a little too animated for my taste.

 Hands On With a Working Apple Watch

But that is the thing, it allows you to customize the face to your individual tastes. The Pebble also does a great job with this, but Apple’s options seem just as robust.

Learning how to navigate the tiny touch screen, however, will take some time. There is a home button, a rotating smart crown, and the touch screen itself. All of them initiate actions. The Smart Crown is pretty sweet, and has the advantage of keeping the screen clear while you navigate. I have more trouble mastering the deep force click—basically pressing harder—but it is just a new UI trick, and will take time to learn. Once I started thinking of it as equivalent to a “right click” it made more sense to me. Suffice to say, it is more complicated than your average watch, but it is learnable.

To me, the first hurdle is cleared. It looks and works like a watch. And a pretty cool one that can be customized with lots of different faces and bands.

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Worldwide Tablet Shipments Experience First Year-Over-Year Decline in 4th Quarter

IDC PMS4colorversion 1 Worldwide Tablet Shipments Experience First Year Over Year Decline in 4th Quarter

FRAMINGHAM, Mass., February 2, 2015 – Worldwide tablet shipments recorded a year-over-year decline for the first time since the market’s inception in 2010. Overall shipments for tablets and 2-in-1 devices reached 76.1 million in the fourth quarter of 2014 (4Q14) for -3.2% growth, according to preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Tablet Tracker. Although the fourth quarter witnessed a decline in the global market, shipments for the full year 2014 increased 4.4%, totaling 229.6 million units.

“The tablet market is still very top heavy in the sense that it relies mostly on Apple and Samsung to carry the market forward each year,” said Jitesh Ubrani, Senior Research Analyst, Worldwide Quarterly Tablet Tracker. “Although Apple expanded its iPad lineup by keeping around older models and offering a lower entry price point of $249, it still wasn’t enough to spur iPad sales given the excitement around the launch of the new iPhones. Meanwhile, Samsung’s struggles continued as low-cost vendors are quickly proving that mid- to high-priced Android tablets simply aren’t cut out for today’s tablet market.”

Apple’s lead over other vendors has yet to be truly challenged as it shipped 21.4 million tablets, accounting for over a quarter of the market with 28.1% volume share. Despite Samsung’s woes, it managed to hold on to the second place with 11 million units shipped. Lenovo (4.8%), ASUS (4%), and Amazon (2.3%) rounded out the top 5 although only Lenovo managed to grow annually when compared to Q4 2013. Lenovo maintained its tight grip on the Asia/Pacific market thanks to its massive scale in the PC business and the success of its low-cost tablet offerings.

“Despite an apparent slow-down of the market, we maintain our forecast about tablet growth in 2015,” said Jean Philippe Bouchard, Research Director, Tablets. “Microsoft’s new OS, a general shift towards larger screen form factor and productivity focused solutions, and technology innovations such as gesture interface that could be introduced in tablets will help the market maintain positive growth in 2015.”

 

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Tablet shipments Decline For the First Time in Q4

Venturebeat

Tablets shipments have declined year over year for the first time.

In the fourth quarter of 2014, 76.1 million tablets shipped worldwide, according to the International Data Corporation’s worldwide quarterly tablet tracker. Even though tablet shipments were down this quarter, they were up 4.4 percent in all of 2014 compared to 2013. A total of 229.6 million units shipped last year.

The study notes that Apple still leads the pack, holding onto more than a quarter of the global market share. The company shipped 21.4 million tablets in the fourth quarter. Meanwhile, Samsung shipped 11 million units. Although the company’s shipments were down for the quarter, Samsung’s shipments in 2014 grew one percent. Apple, on the other hand, experienced a 14.6 percent drop in shipments from 2013 to 2014.

IDC says this may be due to Apple’s recent roll out of the iPhone 6 and 6 Plus, which may be cannibalizing iPad sales.

Screen Shot 2015 02 02 at 9.35.28 AM Tablet shipments Decline For the First Time in Q4

In fact, all almost all of the top five tablet vendors lost market share, except for Lenovo, which saw a slight uptick of 0.5 percent from the same time last year. Lenovo also saw nine percent growth in shipments year over year, from 3.4 million in Q4 2013 to 3.7 million in Q4 2014.

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Media Companies Need to Wake Up to the Digital Advertising Mess

Quartz

Digital media are stuck with bad economics resulting in relentless deflation. It’s time to wake-up and make 2015 the year of radical—and concerted—solutions.

 Trends in digital advertising feel like an endless agony to me. To sum up: there is no sign of improvement on the performance side; a growing percentage of ads are sold in bulk; click-fraud and user rejection are on the rise, all resulting in ceaseless deflation. Call it the J-Curve of digital advertising, as it will get worse before it gets better (it must–and it will.).
Here is a quick summary of issues and possible solutions:
 The rise of ad blocking systems, the subject of a Dec. 8, 2014 Monday Note. That column was our most viewed and shared ever, which suggests a growing concern for the matter. Last week, AdBlockPlusproudly announced a large scale deployment solution: with a few clicks, system administrators can now install AdBlockPlus on an entire network of machines. This is yet another clue that the problem won’t go away.
 There are basically three approaches to the issue.
The most obvious one is to use the court system against Eyeo GmBH, the company operating AdBlockPlus. After all, the Acceptable Ads agreement mechanism in which publishers pay to pass unimpeded through ABP filters is a form of blackmail. I don’t see how Eyeo will avoid collective action by publishers. Lawyers—especially in Europe—are loading their guns.
The second approach is to dissuade users from installing ABP on their browsers. It’s is up to browser makers (Google, Microsoft, Apple) to disable ABP’s extensions. But they don’t have necessarily much of an incentive to do so. Browser technology is about user experience quality when surfing the web or executing transactions. Performance relies on sophisticated techniques such as developing the best “virtual machines” (for a glimpse on VM technology, this 2009 FT Magazine piece, “The Genius behind Google’s browser” is a must-read.) If the advertising community, in its shortsighted greed, ends up saturating the internet with sloppy ads that users massively reject, and such excesses lead a third party developer to create a piece of software to eliminate the annoyance, it should be no surprise to see the three browser providers tempted to allow ad-blocking technologies.

This One Number Shows How Advertisers Are Wrong About Social Media

Time

Companies like McDonalds, Apple, and Ford all have something in common: They make and sell physical stuff, be it Big Macs, computers or cars. So if you’re considering investing in one of those companies, the first thing you might look at is how much stuff it’s been selling recently — an easily-determined metric that’s a decent representation of a company’s success.

But social media companies like Facebook, Twitter or Snapchat don’t make their money by selling physical stuff. Instead, they make it by selling space to advertisers.

As with all advertisements, digital ad space is more valuable the more it gets seen. And one of the key metrics advertisers use to determine how much they’re willing to spend on a social media company’s ad space is Monthly Active Users, or MAUs.

MAUs are simple enough: Every time you log on to Facebook, Twitter, Snapchat and so on at least once a month, that platform gets one MAU.

That interest in MAUs has extended to Wall Street, where investors have come to view them as the be-all, end-all metric for judging a social media company’s potential to make money. MAUs are popular with investors and other market-watchers because they’re easy to calculate, digest and compare.

But a number emerged this week that should make us all question the MAU as the holy grail of social media metrics: 50 million. That’s the number of MAUs racked up last year by MySpace, a social media network you probably haven’t used since you signed up for Facebook. While MySpace used to be a reliable presence in ComScore’s annual list of the 50 most popular sites on the web, it hasn’t made an appearance there since 2012, when it ranked 46th.

Sure, MySpace’s 50 million figure doesn’t touch the numbers boasted by its onetime rivals: Facebook has 1.27 billion MAUs, Instagram 300 million, Twitter 284 million. But it’s still doubtful that figure is truly representative of MySpace’s shrunken userbase, even if the site still has a small but thriving community thanks to its efforts in music and video.

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2015 begins with publishers hoping for big improvements in digital subscription sales

Talking New Media

New Year starts, as always, with CES – but Macworld has been put on ‘hiatus’ and the value of big trade shows is being questioned by tech firms

Welcome to 2015! Here in Chicago it is -6F (-21C), here is hoping it is much more pleasant where you are!

CES2015 icon 2015 begins with publishers hoping for big improvements in digital subscription salesThe New Year means iTunes Connect is open and new and updated apps are being released into the App Store. It also means that CES is about to begin in Las Vegas. CES used to be an important event (it is still a big one) but many tech companies have long since learned that these early year trade shows may not be the best time to launch new products. Apple, for instance, pulled out of Macworld long ago and realized that if they are going to have a blow out fourth quarter of the year (their first quarter) they need to introduce new products in September.

CES isn’t the only big early year trade show, of course. Mobile World Congress is in early March (in Barcelona, of course).

But 2015 will be a year without Macworld as IDG announced last year that the show would go on ‘hiatus’.

“The show saw a remarkable 30 year run that changed the technology industry, provided an important forum for Apple developers to bring new companies and products to market, delivered world class professional development to Apple product enthusiasts, and fostered the development of one of the most dynamic professional communities in the tech marketplace,” the IDG World Expo wrote.

Macworld was hurt not only be Apple’s decision to pull out, but also by the decline overall of the personal computing business. IDG tried to adapt, of course, but the excitement of the PC business has gone, not to return.

The problem for these shows remains that trade shows often are scheduled for the early part of the year, no matter what industry you are talking about. As the publisher of a transportation construction magazine, January through March was the busy time for trade shows, generally held in Las Vegas, New Orleans or Orlando. There were (and are) trade shows later in the year, but they often feel more like conferences (such as Adobe MAX).

For those who write about digital publishing, there is really no trade show or event that can’t be missed. The year remains filled with breakfasts, lunches, and award events created by the trade publications in lieu of making a profit on their trade magazines. Publishing pros like to network, eat and drink, and so there is no stopping these things, I guess.

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The Mobile Web Isn’t Dead, IAB Says

Wall Street Journal

Recent reports have suggested the Web is dying. That’s largely because data from analytics firms including comScore and Flurry say mobile device users now spend more than 85% of their time in apps instead of Web browsers.

But according to the Interactive Advertising Bureau, a trade group for Web publishers, the relationship between mobile apps and the mobile Web isn’t that straightforward. It’s easy to look at comScore data and to reach the assumption the mobile Web is in decline, but what looks like app time may actually be mobile Web use in disguise, the online ad trade body said.

Many apps, including news aggregation and social media apps, include browser capabilities within them. If a user opens the Facebook FB -2.46% application and taps on a link, for example, they are technically operating within an application, but are actually consuming content from the mobile Web, too.

To understand users’ mobile Web habits better, the IAB commissioned Harris Poll to survey 2,030 adults in the U.S. in December, and found 52% of smartphone owners in that group said they click links within apps that take them to content on mobile websites. The research also found users actually value apps in part because they enable the discovery of webpages.

The IAB said it believes this type of mobile Web browsing inside non-browser applications represents a significant volume of traffic. In other words, mobile app use isn’t replacing mobile Web usage, it’s driving it.

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