Tech’s Rival Players Eating Up Larger Portions Of US Digital Ad Spend

While Google and Facebook dominate US digital ad spend, Amazon and Snapchat are slowly moving up the ladder.

Over the past two years, Google and Facebook’s share of new digital ad spend in the US has steeply declined. In 2016, the duopoly garnered nearly 73 percent of US digital ad spend, but will only account for 48 percent of it in 2018, according to eMarketer.

Meanwhile, Amazon is on track to become the number three digital ad seller by 2020. The retail giant’s ad revenues are growing at 64 percent, and are expected to exceed $2 billion this year.

Snapchat’s US ad revenue will surpass $1 billion for the first time in 2018, growing at a rate of 82 percent. The company is expected to scrape together a one-percent share of US digital ad spend this year, compared to 0.6 percent in 2017. While that doesn’t seem like much, it’s a sign that Snapchat means business.

Google and Facebook’s lack of competition for ad sales has raised numerous concerns across industries, from TV to journalism.

The duopoly and other tech giants pose a threat to TV networks’ ability to compete in the ad marketplace. Gaining leverage against these ad companies is a major reason for a proposed merger between AT&T and Time Warner, according to Daniel Petrocelli, the group’s lead attorney in an antitrust case.

With little faith in the media and a drop in advertising revenue, competition for news outlets to be seen on Google and Facebook has become a growing problem.

On Tuesday, Google introduced The Google News Initiative—a multifaceted strategy to help news outlets survive in the digital marketplace. The initiative includes Subscribe with Google, which allows users to subscribe to various outlets in one place, similar to a program Facebook launched for local news outlets last month.

Earlier this month, a bill was introduced that would allow media outlets to negotiate terms with Facebook, Google and other tech companies as a united front. The Journalism Competition and Preservation Act, introduced by Rep. David Cicilline, D-Rhode Island, is a response to concerns that access to news should not be limited to the highest bidder.

“Our papers need to be able to band together to negotiate with giants like Facebook or Google,” Susan Rowell, president of the National Newspaper Association and publisher of The Lancaster News said in a press release. “This legislation will help to ensure that we are treated fairly.”

Startup Digital Platforms Strategize To Offer Alternatives To PC Majors

The 27 billion-dollar-per-year PC gaming market has long been dominated by a handful of companies, with Steam and GOG sitting at the top of the digital download space. While that’s not likely to change anytime soon, there are new platforms giving developers and publishers an alternative.

These digital distribution platform startups are being built with gamification in mind, and have potential to create new opportunities for discovery, monetization and community engagement. Users may come to try out new tech like blockchain and cryptocurrency or stay to connect with others on a rewarded social network.

Selling games by being a game isn’t necessarily a new concept, as Steam introduced Trading Cards and achievements years ago, and their success proves how well a gamified approach can work. But even though Steam’s updates have been in step with major trends in the gaming landscape, with particular emphasis on improving its recommendations system, the overall user experience has remained relatively unchanged, leaving an opening for other platforms to present their own approaches.

Robot Cache, a decentralized digital game platform founded by inXile Entertainment CEO Brian Fargo, will use both blockchain technology and a type of cryptocurrency called Iron Tokens (based on ERC20 tokens) for its transactions, but conventional money will also be supported. Unlike open-market cryptocurrencies such as Bitcoin, Iron will have a fixed value for transactions.

According to Fargo, who spoke with AListDaily, cryptocurrency opens a number of gamification opportunities as users mine it or receive Iron as rewards. The platform will launch by airdropping millions of dollars worth of Iron Tokens into the ecosystem, seeding the market and encouraging users to come to the platform to cash them in. Iron may also be distributed through friend referrals and as a reward for users helping to maintain the network.

Another upcoming platform is Kartridge, which was announced by game publisher Kongregate in March. The community-based platform is expected to launch this summer with a mix of Kongregate-funded games and titles from third-party developers.

Kongregate CEO Emily Greer told AListDaily that the company intends to engage with its existing users through its online portal, email and its PC games, as the most important factor to attracting people will always be content.

“We have a lot of advantages, given our long-term trusted relationships with thousands of developers,” said Greer. “We’re reaching out and working with them to bring content.”

Kartridge will handle the marketing for these games on the platform, thereby incentivizing exclusivity deals with developers. Greer also said that the platform may offer a higher revenue share during the exclusivity period.

“We have a lot of experience doing marketing and outreach, mostly on the free-to-play side, but also on the PC browser side over the years,” explained Greer. “We’re taking advantage of our built-up knowledge to do shows, [create] ads and [work with] marketing influencers.”

Blockchain-Backed Trust

Robot Cache applies blockchain cryptology to the sale and development of digital games and their related items and services, meaning that the ownership of games and digital goods can be accurately tracked and ensuring that they cannot be copied. This makes it possible for both players and publishers to profit from their resale—something that has benefited physical retailers such as GameStop for years but until now has been almost impossible for digital stores.

SuperData senior analyst Elena Fedina said that having digital trade-ins may sound lucrative at first, given how developers and publishers are left out of the loop with trade-ins while GameStop profits greatly from them. But her concern is that the feature may be less attractive to large developers, who may not want to partner with a platform that can potentially make more money from resales than they will. A platform lacking the wider reach and higher-quality content of major developers may have trouble establishing a foothold.

Fargo responded to these concerns by stating that users will receive 25 percent of resale revenues, and developers will have full control over adjusting that amount. Publishers may even choose to increase the percentage users receive to encourage more resales.

“It is my belief that they will discover that giving much more than 25 percent will not affect their sales,” said Fargo, pointing to Humble Bundle, where users name their own prices for games. “If that model destroyed your back-catalog business, it would end tomorrow. But each publisher goes back to it knowing that it doesn’t. As those numbers start going up, it’s going to become an even bigger game changer.”

Robot Cache proposes that publishers and developers take in 95 percent of proceeds from new game sales, instead of the standard 70 percent most other platforms use. It also intends to complement its blockchain and cryptocurrency systems by being open source—meaning that developers can create custom APIs for a variety of different functions that all creators would be able to take advantage of. Not only could this create Robot Cache–exclusive applications, but would also have the potential for new monetization opportunities.

“With open source, I believe that developers will come up with functions that have not been done before,” said Fargo. “On top of it, there will be functions that are very blockchain specific. For example, users can trade items and always know that they’ll be one of a kind on the blockchain.”

Fargo referred to CryptoKitties, a blockchain-based game that lets users purchase, collect, breed and sell virtual cats. The technology ensures that each cat is completely unique and cannot be copied, and other games can adopt similar types of scarcity principles to monetize their own digital items.

Foundational features such as game discovery and community engagement are still in development, so it’s unclear how well publishers will take to it at launch. However, there are other uses for blockchain technology in the gaming space. Potential applications include crowdfunding, where smart contracts will enable backers to receive a portion of the game’s proceeds without the risk of fraudulent developers failing to make good on their promises.

Gamified Community Engagement

Kartridge will launch with a focus on premium games, but it will also support free-to-play, pay-what-you-want and ad-supported games, as well as rewarded video monetization. Developers can decide on their own pricing and which revenue systems work best for them.

Greer describes the shopping experience as a cross between being part of a social network and playing a game. Users will be able to connect with each other and developers via chat and other social features—collecting achievements, earning rewards and “leveling up” their accounts by doing so.

“We’re building a platform that’s focused on indie developers and moderated social connection between players and developers,” said Greer, “something that makes a rich and meaningful experience.”

Although Kartridge intends to leverage the community and features built on Kongregate.com, the company decided to create a new brand to avoid upsetting its users by introducing too many changes. Kartridge will deal primarily with premium games while Kongregate remains focused on browser-based games, which grew by 50 percent in revenue last year, according to Greer.

Through Kartridge, communities can be built around specific game brands, genres or titles, giving developers and marketers an opportunity to engage with audiences more directly. Rewards such as personalization items offer incentives for users to discuss games and engage with their creators.

The gamified platform will also help with discovery, with a personalized recommendation system that will surface titles to relevant audiences. Additionally, store pages will feature continuous video loops of gameplay, coupled with animated icons that can be moused over to reveal more information.

“We’re taking pages from what we’ve learned on Kongregate.com in terms making sure every game gets exposed to a reasonable number of players so that we can help identify what’s rising,” said Greer. “We use a lot of features to not only put things on charts and editorial banners, but using systems like achievements and other types of player featuring.”

One example is “Kongredate,” which is currently on Kongregate.com. Players take a quiz to be matched up with less exposed games. Greer said that it is one of the most popular features on the site and that it is the kind of personalized content matching users can expect from Kartridge.

Fedina claims that Kartridge has a significant advantage due to Kongregate’s dedicated community. She added that the upcoming platform could be financially profitable, but it’s difficult to predict how successful it will become since there is no clear selling point at the moment. However, both she and Fargo stated that Kartridge has a very good chance of competing with Itch.io, the current third-place platform in the digital PC gaming marketplace.

With major publishers such as EA, Ubisoft and Zenimax creating their own digital storefronts, Fedina said that there’s plenty of room in the PC gaming space for new platforms to rise.

“It comes down to having the dedication of their player base,” she explained.

Concerned About Fraud, Web Giants Ban Cryptocurrency Ads

The Bitcoin craze is petering out: to protect users from the unregulated, dangerous cryptocurrency markets currently exploding, Twitter has reportedly joined Facebook and Google in banning all cryptocurrency ads on its platform, according to a report by Sky News.

Facebook has disallowed all ads related to cryptocurrency since late January. “Misleading or deceptive ads have no place on Facebook,” Rob Leathern, the company’s product management director, claimed in the announcement.

Announcing a policy update just last week, Google took a softer approach for several other financial products in addition to cryptocurrency ads. Beginning in June, advertisers must be licensed and certified by AdWords to purchase any advertisements related to cryptocurrencies.

Google’s announcement did not declare its reasoning for harsher restrictions, but given the other types of financial products it clamps down on, it is treating cryptocurrencies in the same manner as other commonly fraudulent illicit betting institutions.

According to SkyNews, Twitter will implement its own prohibition in the next two weeks, unilaterally banning any and all ads related to initial coin offerings, sales or cryptocurrency wallets—essentially, any and all services related to Bitcoin and others like it.

It’s no surprise that digital platforms are starting to take action on unsafe alt-coins. Morgan Stanley has described the current cryptocurrency market as like the dot-com bubble, but “15 times faster,” and The Outline reported on “pump and dump” groups that exist exclusively to scam of cryptocurrency neophytes. In the UK, cryptocurrency scammers have driven a 400,000 percent increase in “binary option” fraud in just six years.

Chinese web companies like Alibaba, Baidu and Tencent have prohibited cryptocurrency ads for much longer, as have smaller American companies like Amazon and Oath. Interested advertisers will be limited to Microsoft and Snapchat, though according to Recode the latter is “currently evaluating [its] position on cryptocurrency advertising.”

SXSW Attendees React To Experiential Marketing Activations

SXSW is known for its experiential marketing activations and this year was no different. For over a week, Austin became a hub for brands to connect with guests with immersion and FOMO.

Austin’s bustling downtown city streets may have been the epicenter of brand interaction, but one of the most-talked-about activations was about 20 miles outside of town. To promote the second season of Westworld, HBO built a town from the ground up and filled it with actors to entertain its guests.

“I don’t think I’ve been a part of any conversation over 20 minutes that didn’t eventually talk about Westworld,” one SXSW attendee told AListDaily.

Attendees were seen walking around SXSW wearing either a white or black hat and carrying souvenirs from the Westworld experience, which helped fuel conversation and social media sharing ahead of the show’s April 22 premiere.

Dell returned to the festival with “The Experience,” a display of technology, discussions and how artists use technology in creative ways, such as building a portal out of circuit boards.

Pinterest House took over Austin’s Container Bar to teach guests how the social network helps its users discover new ideas.

“It was just a great way to expose us to how data and images could be used potentially from Pinterest in the future,” one attendee said.

Steven Spielberg held a screening for Ready Player One at SXSW, and Warner Bros. made sure everyone knew it. A parade of troopers dubbed the IOI Sixers stormed up and down downtown Austin calling for the capture of Wade Watts—the main character of Ready Player One—and offered people passing by a $1 million reward.

In Brazos Hall, HTC Vive set up eight pieces of VR content across separate demo bays. The idea was to emulate technology and a sense of wonder from both the film and the book it was based on.

One SXSW who visited the activation told AListDaily that Ready Player One pretty much “nailed it.”

‘Ready Player One’ Will Help, But Not Change The VR Industry

Ready Player One will help drive awareness for VR when it hits theaters May 29, but don’t expect it to solve the industry’s problems overnight, one analyst said.

“We’ve been hearing everybody put the future of the VR industry on the shoulders of this movie,” Debby Ruth, senior vice president of global media and entertainment at Magid told AListDaily. “One movie isn’t going to change the fortunes of an entire industry.”

Ruth cites two major frictions that VR must solve before humanity finally embraces its VR destiny—lack of content and complicated setups.

“Even if people are excited by what they see in the movie and the concept of VR in general, those two things still exist as issues for the industry,” said Ruth. “Hopefully headsets coming this year will help reduce that friction and making it easier for people to use it.”

One VR headset manufacturer that may already be benefiting from Ready Player One—at least in terms of brand awarenessis HTC Vive, which has been instrumental in promoting the film. Ruth says that “tying itself to the movie promotion juggernaut” could be a benefit for the VR headset manufacturer.

Together with Warner Bros., HTC Vive promoted Ready Player One at SXSW with eight pieces of VR content in an experiential event that culminated in a screening with Steven Spielberg.

Brand awareness is a plus, but Ruth predicts a more immediate benefit for movie theaters themselves.

“I think it will have an impact especially for location-based experiences that are in theaters,” Ruth stated. “I think it’s a really great opportunity for theater owners to see a little bump in their business.”

Last year, movie theater attendance in the US and Canada hit its lowest point since 1992. In response, many theaters are changing their business models to include gourmet food, alcohol and audio technology not found at home. That includes VR experiences, like the ones IMAX debuted in AMC theaters last year.

Analyst firm Jefferies, meanwhile, is more confident in Ready Player One‘s ability to boost the VR industry, especially for companies that manufacture headset components.

“We believe that the movie will drive sales of VR headsets that require high-performance GPUs [graphics processing units],” Jefferies analyst Mark Lipacis said Monday in a statement.

Dunkin’ Donuts Adds Google Assistant For Mobile Ordering

Dunkin’ Donuts has integrated Google Assistant into mobile ordering, introducing zero UI to its DD Perks customer experience.

DD Perks Rewards members can now link the Dunkin’ Donuts mobile app to their Google account. Users can say, “Hey, Google, talk to Dunkin’ Donuts,” and the Google Assistant will get help linking their DD Perks Rewards account, select a restaurant location and place orders.

Once an order has been placed with the help of Google Assistant, the distance and estimated time to reach the selected Dunkin’ Donuts restaurant will be identified by Google Maps.

Dunkin’ Donuts is embracing the age of mobile payments by placing a strong emphasis on its mobile ordering service over the last year. The company reported that On-the-Go Mobile Ordering (OTG) had a retrial rate of 80 percent in 2017.

In January, Dunkin’ Donuts opened a concept store in Massachusetts that features a dedicated drive-thru lane for mobile orders. The company expects that more than 75 percent of its new locations going forward will have a drive-thru lane of some sort to boost overall sales volume.

In February, the chain announced it plans to make mobile ordering a key part of its three-year growth plan, including the addition of up to 50 “NextGen restaurants” by the end of 2019. These new locations will cater to on-the-go customers and faster service.

The integration of Google into Dunkin’ Donuts’ mobile strategy is one of several attempts to remain on the cutting edge of technology impacting its young consumers. In December, for example, the company partnered with GM to offer Dunkin’ Donuts ordering right from the touchscreen of a user’s car.

Worldwide mobile payment revenue is expected to reach $930 billion this year and surpass 1 trillion US dollars in 2019.

To include underbanked customers and offer additional convenience, Dunkin’ Donuts announced plans to test “tender agnostic” participation in its DD Perks Loyalty program later this year. The program will allow members to earn points using all forms of tender, including their DD Card, credit, debit or cash.

Google Details Plans To Protect The Ad Ecosystem

Google said it blocked more than 100 bad ads per second last year, releasing a blog post on Wednesday to assure marketers of its efforts to protect the ad ecosystem from ad fraud, malware and content scammers.

“Digital advertising plays an important role in making the web what it is today,” wrote Scott Spencer, Google’s director of sustainable ads. “In order for this ad-supported, free web to work, it needs to be a safe and effective place to learn, create and advertise.”

In his blog post, Spencer stressed the importance of user experience when policing Google ads, maintaining a balance between monetization and honesty. News sites and those posing as news sites were the biggest offenders last year.

Google has cracked down on those who use AdWords to promote clickbait, suspending more than 7,000 accounts last year. The company also blocked over 12,000 websites for “scraping,” the act of duplicating and copying content from other sites.

In 2017, Google removed 320,000 publishers from its ad network for violating publisher policies, the company said, adding that it blacklisted nearly 90,000 websites and 700,000 mobile apps. Ads were removed from 8,700 web pages that violated Google’s terms regarding discrimination and intolerance, as well.

Google is also working to combat trends like gambling, cryptocurrency and scam artists posing as rehabilitation centers online.

“We’re constantly updating our policies as we see new threats emerge,” wrote Spencer.

Earning $27.7 billion in ad revenue for the fourth quarter of 2017 alone, Google has a lot to lose over brand safety concerns and fake news. Along with Twitter and Facebook, Google testified before US Congress in November about possible abuses by Russian agents on their platforms to interfere with State elections.

Google denied any knowledge of such abuses on its platform, but the advertising giant has other, more local problems to deal with. During the company’s fourth-quarter earnings call, chief executive Sundar Pichai assured investors they were working to stop the monetization of offending content on YouTube to include extremist groups and hate speech.

Facebook Tests Marker-Based AR Experiences For Facebook Camera

Facebook is testing marker-based AR experiences, beginning with films Ready Player One and A Wrinkle In Time. The feature will be added to Facebook’s AR studio and made available to all developers next month.

As reported by TechCrunch, these two films serve as a closed beta for the new marker-based AR feature coming to Facebook Camera. Facebook Camera users can point their phones at movie posters, either in the real world or on a computer screen, to trigger an AR experience based on either Ready Player One or A Wrinkle In Time.

Pointing Facebook Camera at a poster for Ready Player One overlays a window that peers into the OASIS—a VR world central to the movie’s plot. Ready Player One premiered at SXSW on Monday and will open in theaters March 29.

For A Wrinkle In Time, the effect creates flowers that float into the user’s world and creates a ripple effect around the user when taking selfies. The Facebook Camera effect was announced on March 9 through the film’s official account.

Facebook launched its Camera Effects Studio beta less than a year ago and to all developers in December. The addition of marker-based AR will allow marketers to integrate Facebook Camera effects into their print or digital campaigns. Unlike marker-less AR filters that can misinterpret the world around a user, marker-based AR is more accurate and invites users to interact with real-world objects or images.

Some retailers, like Ikea and American Girl, already use marker-based AR together with print catalogs to provide additional information or preview an item in a 3D environment. Disney released an AR experience for Pete’s Dragon that would make the dragon appear when pointed at objects as instructed, such as a couch.

AR books are also becoming more popular, and the music industry has adopted the technology, as well. Last year, Sony Music Entertainment and Michael Jackson’s estate partnered with Shazam to create an AR experience for Scream. Pointing the Shazam app at the album’s insert would cause the artwork to animate in AR.

IDC predicts that global AR/VR spending will rise 95 percent in 2018 to $17.8 billion. Consumer spending is expected to exceed $20 billion by the year 2021.

Sony’s SXSW Exhibit Invites Attendees To Interact And Experiment

SXSW is smitten with start-ups, so for a multinational marque like Sony, it’s strategy at the conference this year is to show that it’s not the legacy brand most consumers likely grew up with.

The company took over a cavernous space in downtown Austin at SXSW to show its latest prototypes with playful and interactive experiences.

The “Wow Studio” is designed to be the brand’s innovation and experimentation lab. It’s centered around delivering on kando, a philosophy that the company bills as building experiences that resonate on an emotional level by combining their line of products and technologies with interactive content.

Some of the activations from the exhibit included: a tabletop projector; an AR air hockey game that displays how Sony is shaping the space of high-speed vision sensors and haptics technology; an interactive VR soccer experience with sensors that reproduce the ball’s direction and speed; and a hero generator that creates avatars for guests to star as a protagonist for their own short film and renders a file that can be viewed later on a smartphone.

The company is pairing their experiential marketing efforts during the Music portion of the festival this year with “Lost In Music” to showcase its spatial audio technology and roster of artists with a PlayStation VR music video from star singer Khalid.

The brand also partnered with DJ Skee and built an enormous see-through speaker with a DJ booth in the middle and lyric projections matching the music.

As the Japanese conglomerate continues to reinvent its image, SXSW served as a worthwhile destination for the brand to reestablish consumer affection.

3 Emerging Trends From SXSW 2018 That Marketers Should Know

SXSW only gets bigger every year. Here are the biggest trends impacting this year’s festival of interactive, music, film and gaming.

Experiential Is King

With literally hundreds of things to do and hundreds of thousands of people to do them with, marketers use experiential marketing activations to break through the SXSW noise.

Last year, TV networks went all out to gain the attention of those nearby and inspire photo ops for social media.

To promote its show Stripped, Bravo sent a flash mob of 60 models in nude fabric to walk from the Austin Convention Center to sixth street. Hulu’s ghostly handmaids from A Handmaid’s Tale mulled about. A pop-up Los Pollos Hermanos restaurant served curly fries and talent appearances to hype Better Call Saul.

This year, expect more experiential pop-ups, especially around TV and film. Warner Bros. is hosting a Ready Player One event, for example, that lets users explore the film’s VR world of OASIS and dystopian society in the year 2045.

HBO is bringing the town of Sweetwater to SXSW to those who can grab a ticket before they disappear. The interactive Westworld experience drops attendees into two acres of elaborate sets and actors. Various easter eggs will be scattered throughout, offering clues about the new season.

Panels on experiential storytelling hope to empower marketers with tools and ideas on how to capture customer imaginations. The Henry Ford Museum, Jameson Distillery and BRC Imagine Arts will host a panel on this topic March 12. Another panel on Monday discusses the applications of immersive theater, story rooms, mixed reality and other experiential activations, hosted by Two Bit Circus, Meow Wolf and Soda Borg Corporation.

Social Justice Is The New Business Model

It’s no secret that brands are taking a stand on social and political issues at unprecedented rates. This trend continues into SXSW, where everyone from start-ups to tech giants try to make the world a better place, whether it be through inclusive hiring, groundbreaking tech or sustainable farming.

Philanthropists, entertainers and entrepreneurs will be on-hand to talk about they are enacting, or hope to enact, social change around the globe. One look at the list of panels and it becomes obvious that SXSW will tackle gender, equality, politics, global warming and building a better community, just to name a few. Self-empowerment is also a common theme this year, whether it be through religious faith, meditation or learning new skills.

A panel on March 13 called “Social Media and Social Good: Creators to the Rescue” discusses the positive impact social media creators can have and creating relationships between marketers, non-profits and online celebrities. The panel is hosted by Google, Ad Council and social creators Hannah Hart and Tyler Oakley.

International Women’s Day on March 8 will prompt discussions about equality and gender identity this week, alongside celebrations of female leaders and talent. John Hardy is hosting a party to celebrate the holiday on March 11.

Trending Tech: AI, Blockchain And VR

Technology is ever-present at SXSW, and AI is a hot topic at this year’s festival, with nearly 50 panels on the topic alone. Ethics, regulation, development and marketing are just some of the discussions around AI this year, but using the technology to solve problems is a running theme.

On March 12, Quantcast is hosting a panel on how AI will transform every aspect of the customer journey and how marketers can develop their own AI strategies.

Blockchain, including cryptocurrency, has become a disruptive force in the marketing industry, a subject explored by SXSW’s Intelligent Future track. There are nearly 30 panels on blockchain and its implications at SXSW this year—a testament to how the technology is impacting our world.

Linux and JP Morgan are hosting a panel on March 11 about ecommerce on the blockchain and the opportunities therein. On March 13, a panel hosted by Lampix will outline the opportunities presented when augmented reality (AR) and blockchain meet.

Virtual reality has matured in the last year, leaving marketers and creatives wondering how the technology fits into their business models. This year, professionals will discuss the implications of AR/VR/MR across filmmaking, medical science, journalism and more. For creatives, Microsoft, Valis Entertainment and others are hosting a panel March 15 that talks about using human performances in AR/VR and the impact on narrative.

Data privacy is a common thread that runs through just about all technology panels at the festival. Tim Bell of DPR Group is offering GDPR insights and steps for compliance during his panel on March 12. For brands using AR/VR, law firm Kelley Drye & Warren are hosting a panel on March 14 about how to avoid privacy and security problems.