The Mystery Of Dark Social Deepens

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Dark social — corners of the social Internet like SMS and peer-to-peer services that are significantly harder to track than sites like Twitter by virtue of their relatively private nature — is presenting itself as a complicated problem for marketers eager to target branded advertisements to diverse audiences. A recent RadiumOne report suggested that dark social accounted for nearly seventy percent of all content sharing, meaning websites likely have no idea where the vast majority of their visitors are coming from.

A study compiled from several sources including venture capital analyst Benedict Evans and published on Fusion enables us to discern two surprising takeaways about the present state of dark social and its consequences for marketers:

Facebook Controls Web Media

Amidst all of dark social’s confusing problems, one thing is for certain: In the kingdom of web media distribution, Facebook wears the crown.

Mobile’s explosion, powered in large part by the mass availability of powerful smartphones, means Facebook is a more indispensable component of a consumer’s everyday life than ever before. The consequence for marketers and their brands lies with Facebook’s willingness to generate revenue by forcing brands to pay to “boost” their content to wider audiences, creating a situation in which marketers must spend money to generate traffic on mobile’s busiest highway.

 

New Software Makes Greater Sense of the Situation

Chartbeat, a popular web app used by media entities and their brands to monitor traffic in real time, launched an enhanced analysis of Facebook mobile users yesterday, December 8. As it turns out, somewhere between 10 and 50 percent of heretofore mysterious dark social traffic (depending on the link) originates from mobile Facebook users, explaining oft-reported discrepancies between dark mobile and desktop traffic rates while making Facebook’s giant scope in the mobile world that much more obvious.

Chart beat’s new reporting techniques allow the service’s analysts and marketers an unprecedented window into where web traffic — namely, referrals — originates. “These days, dark social accounts for about a third of external traffic to sites across our network,” Chartbeat’s Josh Schwartz said of traffic to their own network in an email to Fusion’s Alexis Madrigal. “That number is dramatically higher on mobile, with upwards of 50 percent of mobile external traffic lacking a referrer.”

Schwartz and Chartbeat did their own research into dark social traffic origins and found three possible sources: Facebook mobile app traffic, Facebook desktop traffic when a new tab opens, and Reddit apps. Further sleuthing uncovered a suspicious spike in Facebook traffic every time dark social reported a spike.

 

The problem with Facebook, according to Schwartz, rested with apps like Chartbeat’s inability to record referrals from Facebook mobile apps as actually coming from Facebook until yesterday. Now that an enhanced Chartbeat is able to more accurately estimate Facebook app traffic, however, it is expected that their role as de facto gatekeeper of mobile social will appear stronger than ever as they snap up a large chunk of traffic once reported as dark social.

The Massive Impact Of eSports

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There’s nothing that signals widespread cultural impact of something than when major advertisers and brands start taking notice — and spending money. That’s where eSports is now, rising from an obscure sliver of the gaming market to a commanding presence that’s on every major publisher’s radar. Several recent studies have provided significant data to illustrate just how important a force eSports have become in the game industry and beyond. The fact is that eSports are not just something that game marketers should be aware of – eSports are something that every marketer should be aware of and taking into account when planning marketing campaigns.

The latest figures on eSports from research firm SuperData show that viewership of eSports has grown from 72 million in 2013 to 101 million in 2014, with 134 million viewers predicted for 2015. The growing popularity of eSports is illustrated clearly by Amazon’s purchase of Twitch for $970 million earlier this year, with Twitch boasting of more than 55 million monthly viewers.

Market research and consulting firm Newzoo has been compiling information on eSports from 25 individual countries, and a recent Newzoo report looked at the growth and popularity of eSports as a global phenomenon. The company estimates that eSports Enthusiasts, which it defines as “frequent viewers and active participants, will reach 145 million by 2017. That’s not even counting the very large group of consumers that watch occasionally (once a month or less), which Newzoo feels illustrates “the immediate potential for explosive growth.” Newzoo estimates the current global eSports audience at 205 million, counting both the 88 million enthusiasts and the 117 million casual eSports fans.

Newzoo sees a compound annual growth rate of more than 20 percent between 2014 and 2017 for eSports enthusiasts globally. “Following the recent boom of eSports in the West, North America is amongst the fastest growing regions with 14 million Enthusiasts and another 18 million Occasional Viewers this year,” said Newzoo’s report. Newzoo also looked at a measure that’s extremely important to marketers: Awareness. “Global awareness of eSports will grow by a CAGR of +21.6 percent over the next three years, resulting in 1.2 billion people that are aware of eSports by 2017,” said the report.

The stage is clearly set for major brands and advertisers to take advantage of this large and rapidly growing market. That’s what a New York-based agency, Sparks & Honey, concluded in a recently released report on eSports. The company’s research found about 300 million epsorts fans in 152 countries “who watch games such as League of Legends, Dota 2, Call of Duty and StarCraft 2 online through streaming platforms like Twitch.tv and MLG.tv.,” reported Forbes. “An average viewing session lasts 2.2 hours with more than 2.4 billion hours watched in 2013.”

This massive, dedicated audience has already captured attention from major players interested in this young, highly engaged demographic. Some major brands are sponsoring events and players, including Coca-Cola, Intel, Red Bull, American Express and Nissan. “They’re starting to pay attention and the great thing about it is it’s not just one game. An advertiser can get involved with just one game like Intel has with StarCraft 2 or try a variety of games,” said Imari Oliver, Sparks & Honey’s director of creative strategy.

As an example, the recent Intel Extreme Masters tournament in San Jose, California welcomed over 6,000 people on Saturday and 6,500 on Sunday to watch top League of Legends and StarCraft II players compete at the SAP Center, where the San Jose Sharks play. The event marked the ESL’s (eSports League) biggest eSports event ever held in the US. “The event can only be labeled as historic,” said Michal Blicharz, Director Pro Gaming at ESL. “We had never done anything like it in the U.S. — in terms of magnitude, number of fans or streaming results on Twitch. It’s a stepping stone towards doing even more impressive things.”

When eSports events are gathering purses as high as $11 million for DotA 2‘s The International, or an audience of 27 million viewers like the League of Legends World Championships in October, it’s clear that eSports is on a par with many longtime sports like pro golf or hockey. When you have brands like Coca-Cola and American Express spending serious money to support eSports, that’s a signal to marketers that this segment of gaming has arrived as a force to be reckoned with.

Game publishers are certainly taking note of this as well, as every major publisher is re-examining its game portfolio to see what might have strong eSports potential. It’s pretty clear that Microsoft’s game design for Halo 5 (due out in 2015) is heavily slanted towards making the game a compelling eSport. This is only fitting, as the original Halo was one of the major drivers behind the creation of eSports. Along the multiple versions of Halo since then, though, the game lost its ability to provide a balanced arena for competitive play, and fell out of eSports competitions just as eSports were beginning to be significant. Now Microsoft hopes to reclaim a spot at the eSports table, seeing that grabbing the attention of over 100 million eSports fans would be a useful way to generate more sales of the Xbox One console.

The rise of eSports isn’t just restricted to consoles and PCs, though that’s where almost all the action is now. Mobile game developers are trying to grab a share of that market, as the recent release of Vainglory for iPads and iPhones shows — and the game has been featured in Apple’s iPhone ads, giving it a strong boost. It seems inevitable that Vainglory or some other mobile game will eventually become an eSport capable of drawing millions of fans to watch competitors battle for millions of dollars.

Meanwhile, savvy marketers should be thinking of ways to utilize this eSports phenomenon to their advantage, through sponsorships, partnerships, promotions, endorsements, or advertising. That competition is already under way, and the marketers who win at eSports stand to reap millions.

Nintendo Headed For Holiday Haul

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Around this time last year, Nintendo was looking for answers when it came to game sales, after reporting a loss of $193 million with disappointing sales of its Wii U console. This year, however, things are quite a bit different, according to Bloomberg.

Thanks to the release of interactive Amiibo toys that work with the console, as well as hit games like Super Smash Bros. and Bayonetta 2, the company is headed towards its highest quarterly profit in years, with some analysts expecting triple the profit of last quarter at ¥36.8 billion, or nearly $300 million.

This is a good success story for the company, following the pressure from its competition (namely Sony’s PlayStation 4 and Microsoft’s Xbox One). And even though the Wii U hasn’t seen similar sales numbers just yet, it has seen a large increase in units sold, with nearly 3.6 million units flying off shelves this year as it doubles its installed base. SuperData expects the Wii U to end 2014 with 7.3 million units installed, compared to 10 million Xbox One consoles and 13.5 million PS4 consoles.

As for the Amiibo toys, based around popular and obscure Nintendo characters, they’re off to a strong start with an estimated $1 billion being made from their sales alone.

“Nintendo has picked up good momentum heading into the Christmas season,” said Tomoaki Kawasaki, analyst for Tokyo-based Iwai Cosmo Securities Co. “This time they have a hit lineup. Amiibo represents a new revenue source, and we are watching it very closely.”

The toys are selling remarkably well, despite only being compatible with a handful of games, such as Mario Kart 8 and Smash. However, Nintendo is promising to expand their use into the new year, making them compatible with the 3DS system and introducing retailer-exclusive models, such as Best Buy’s deal for the Meta Knight character. Nintendo’s still has a ways to go to equal the success of Skylanders and Disney Infinity, though, which are available on a wide range of platforms, including mobile.

Nintendo’s console challenges are big ones still, as the Wii U attempts to see if it can get anywhere near the Wii’s 101 million lifetime sales, with many analysts predicting lifetime Wii U sales at anywhere from 20 million to 30 million. The 3DS is at about 45 million units, a long way still from the 154 million units of the Nintendo DS. Right now, the company only has 53 games available for the Wii U, compared to the 410 that came out for Wii.

“To get hits like the previous Wii and DS, they will have to introduce new machines,” said Hideki Yasuda, an analyst at Ace Research. “In the game business, it’s difficult to change market share except in the periods of generational change. The proliferation curve is decided early on and it’s difficult to alter it mid-flight.”

That said, Nintendo is moving full steam ahead into the New Year, thanks to a line-up of new Amiibo figures, as well as new entries in storied franchises, including The Legend of Zelda and StarFox.

Nintendo could weather this storm yet.

YouTube’s Most Popular Ads For 2014

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YouTube has become a great source for advertising, outside of the usual television and radio circles. It allows advertisers to be a little more creative with their presentations, rather than just being limited to a certain window and/or audience.

AdAge has put together a list of the top YouTube ads for the year, indicating some interesting numbers behind them. Half of the most popular web-made commercials for the year weren’t even made with television as an outlet, while three of the ads managed to gain popularity based on popular events, such as the Super Bowl or the World Cup.

Advertisers are seeing a better opportunity with online, being able to be a little bit riskier – and in some ways, even more creative – than with a television commercial.

The ads are about three minutes in length, which is a 47 percent increase from ads in the previous year. Meanwhile, 54 percent more time is spent watching these ads compared to last year’s numbers as well, with higher viewership leading the charge.

All of these ads managed to combine for a whopping 425 million views, which is a 112 percent increase from 2012’s top ten.

A number of factors went into gauging the list, including likes, share and total watch time, as well as paid and non-paid views.

So, without further ado, the top ten…

Nike – Winner Stays

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Another popular soccer ad features Ronaldo and company playing soccer in a digitally animated short, featuring plenty of antics to go around. This one has over 73 million views and risning.

Budweiser – Puppy Love

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Budweiser’s Super Bowl ad turned a lot of heads earlier this year, based around a puppy and a horse that showed a true friendship. The video has gathered 53 million views over the year, impressive numbers for a one minute ad.

Always – Like a Girl

 

Featuring a campaign that bolsters self-confidence, Always’ “Like a Girl” mini-ad has a whopping 53 million viewers, and spreads a positive message about women and young girls alike.

Devil’s Due – Baby Attack

 

One of the more bizarre marketing videos out there, Devil’s Due’s “Baby Attack” pranks people with a rather ugly – and demonic – child. The campaign has paid off, with an impressive count of nearly 49 million views.

Duracell – Trust Your Power

 


The inspirational “Trust Your Power” commercial from Duracell tells the story of overcoming diversity, while featuring Seattle Seahawk player Derrick Coleman in a central role. The video has 22 million views since its release earlier this year.

Galaxy Note 4 – Then and Now

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Samsung’s Galaxy Note 4 ad looked at the history of the device, compared to its larger size from previous years – and its more condensed version. This video has garnered over 22 million views as well.

Procter & Gamble: Pick Them Back Up

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Paying tributes to mothers who take care of children as they grow up, this ad from Procter & Gamble knows how to tear at the heartstrings. No wonder it’s gathered over 19 million views.

Budweiser – Friends Are Waiting

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The importance of avoiding drunk driving continues to be a topic featured in certain commercials, including the latest from Budweiser. This short but sweet ad has achieved nearly 20 million views since it debuted back in September.

Heineken – The Payphone

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The Payphone, Heineken’s latest commercial, features Portlandia‘s Fred Armisen making random phone calls to strangers, inviting them to a special comedy event. The commercial definitely opened a few eyes, with nearly 14 million views.