> But mobile monetizes better which is rare….a key question here is why does mobile monetize better?
I can answer this -> people don't realize ads on mobile are actually ads. FB's recent change of reducing FB Pages exposure on the News Feed affects this big time. For example, if I like Nike and I receive an ad for new shoes, I probably (1) didn't remember I actually "liked" Nike and/or (2) think this is just Nike updating a post on their Page. Regardless, because I like Nike, I don't care since the ad is relevant. FB actually does a fantastic job of providing relevant ads that most people would assume are simply their favorite brands giving them an update. Furthermore, when it comes to conversions for mobile apps install from FB ads, the friction is so low (click "Install Now" on FB, Click "Get" on the iTunes store), that the conversions (and cost per conversion) are impressively high.
A bit of background - I've been running a bunch of campaigns on FB recently for an e-commerce site which is not mobile optimized. Our conversion (both clicks and purchases) from mobile massively trumps the desktop.
I run a ton of ads on Facebook (full-time), and if you target both desktop and mobile newsfeed users, I find that for the same bid I get 90% coming from mobile vs. 10% desktop.
I could bid higher for desktop, but that would increase my cost per conversion. It obviously varies from campaign to campaign and client to client, but it's safe to say that I've moved almost entirely to mobile. It was even better when mobile was newer and CPCs were far lower.. but that's another story. The gold rush is over for marketers.
I don't have much experience in e-commerce, app installs. Our clients tend to be in home security, trade schools/education, and other high cost per lead areas. There were definitely fads in the past like daily deals and user acquisition for startups (fashion/chain restaurants). I'm sure some people are priced out as Facebook has gotten more expensive -- I think that happens with any platform (e.g. Google, display).
That only works when you actually like brands on facebook. Which is a bizarre behaviour that I've never understood. In fact I don't think I've liked a single marketed thing. Alas this doesn't result in no ads - just easily identified ones.
I'm stuck in a mentality where facebook was where I chatted to friends, suggested things to do, occasionally told people what I was up to, and joined such luminary groups as "I want to punch slow walking people in the back of the head".
" Specifically if ads on mobile are more engaging for consumer and more relevant than desk top ads than the addressable ad market for mobile will be bigger than desktop ad market and the valuations of mobile companies will be greater than desktop all else equal on audience size etc etc. Ie this would be a very positive factor for Snapchat
If Facebook knows this to be true it would result in them being willing to pay higher valuation for mobile companies than other acquirers because google won't know nor will yahoo msft etc because none of them have scale in mobile to understand these powerful secular trends and in essence they under value mobile vs FB and thus under invest and fall farther and farther behind."
Am I the only one who thinks it's a bit naive to assume that Google, Yahoo, and Microsoft..etc don't understand that mobile is dominating desktop because they don't have the mobile scale of FB? It seems like an obvious insight in today's world.
In fact one could argue that Yahoo REALLY understands it considering the shopping spree for mobile first companies these past 2 years.
Also it seems a bit odd to suggest Google wouldn't understand mobile advertising value vs desktop.
Google controls the #1 smartphone OS by marketshare and serves mobile ads over Google search products (& GMail now) to a large number of users.
Unless there is an inherently different value for mobile-social ads than just normal mobile/mobile-productivity ads I'm not sure how this would make sense.
I think the point was native mobile advertising (inside the "feed") vs. just mobile advertising (e.g. banners). Facebook doesn't really have a "banners" equivalent, hence, if Facebook is framing mobile as native advertising, and Google is framing mobile as banner advertising, and the growth rates/click through/ROI on each are different, then he's right that they might value mobile materially differently.
> naive to assume that Google, Yahoo, and Microsoft..etc don't understand that mobile is dominating desktop...
That's not the guys point. He's considering whether the mobile ads are more engaging than the desktop ones which is not clear cut. I use my mobile a lot but I can't even recall reading an ad. I'm sure I've scrolled past some. It's possible Facebook has figured how to get people to read the things and have people buy stuff while the other companies have not yet.
Do you use Facebook at all? Whenever I check my feed on my phone I consistently get a block of advertised apps somewhere in there. They tend to be the typical high grossing IAP ridden games with a summary/call to action install button you can tell is being A/B tested to hell.
> I use my mobile a lot but I can't even recall reading an ad.
This is the same logical fallacy that people try to use to say search ads don't work. CTRs on search are 2-5% so it doesn't matter if you click on it or not - they only need 5 people out of 100 to do so.
For display & mobile, the CTRs are even lower so there should be even more people who say "i never click on an ad." Advertisers will keep spending money anyway.
Yes. This analysis was amateurish and naive, given the guy's credentials. A 1st year undergrad in business and finance could do a better job with half an hour to spare.
This was never meant to be public and was sent as a reply to a personal email, not like the guy is trying to win a Nobel prize in economics with this analysis.
It's notable that Evan sent it to Lynton. Perhaps the board was leaning on Evan about something and forwarding this piece was a quick way for Evan to quiet them. I'd have a hard time imaging Evan wasn't any less critical of Noto's rigor than the readers here ...
This wasn't some formal document from the office of the CFO. It was a quick, brief analysis between individuals that normally would have never been made public. And we don't know the circumstances that day. He could have been writing this in a car on the way to the airport or a million other scenarios.
It's hilarious people commenting on spelling, grammar and the light detail as though every email they've ever sent is Shakespearan in its quality.
Sure, I'm speculating, but I think we both agree the email is pretty low quality. I guess it's also possible Evan sent this to Lynton so they could both gag at it ... :)
In case you wondered, as I did, how an e-mail from Goldman Sachs to Snapchat got to Sony; the author forwarded it to Sony Pictures Entertainment chairman/CEO Michael Lynton.
- Facebook makes money on desktop ads and mobile ads
- They are making less money on desktop
- They are making more money on mobile
- They may be seeing trends before anybody else that mobile is where they will make money
- So they might value engaging mobile apps more than competitors
Thus, as Snapchat, you realize that FB is willing to pay a lot of $$, but also that what you have (the active users on mobile) is valuable and will continue to grow in value. It's interesting because it sheds light on what went into Snapchat's decision to reject the acquisition.
Sounds like speech recognition, actually - I frequently get emails from a doctor who dictates most of his emails (on mobile), and they have a very similar cadence of grammatical mistakes...
YMMV of course, but iOS/Android (and Dragon/et. al.) are pretty good at recognizing words, less so entire sentences - and remember, this is 5 years ago, so adjust accordingly (unsurprisingly, consumer-grade speech recognition has improved dramatically in the past half-decade).
Ugh, I knew somebody would be in the comments saying this. Who cares about the ideas on offer, let's evaluate it according to the rules we all learned in third grade.
I'm going to risk moving completely off-topic, because this is fascinating. Could you elaborate further (perhaps in a new topic or blog post)?
I often visit threads and see the top-most comments being somewhat incredulous reactions to a (percieved) large number of sentiments to their contrary, so it would certainly be interesting to see at what point threads begin to evolve a critical mass in terms of which 'side' of a discussion a reply is likely to take.
I wasn't thinking of opinions for or against a position so much as the quality of the discussion. Shallowly provocative comments produce flamewars, nitpicking produces counter-nitpicking, and so on. Threads that begin with a substantive on-topic comment or two do best.
It was so painful to read that I had to give up, but from experience this isn't particularly rare; these dudes are typically so busy that they're hammering out missives like this as quickly as possible, no time to proof read or grammar check. Speed of response and communicating the core concepts is paramount.
> That said, all of this business cat stuff is way over my head. I have no idea whether it's interesting or not.
Same here, someone please annotate this Sony Wikileaks leak on Genius.com or something! I'd really like to understand it. Genius.com would be perfect for such a thing.
I don't see a you're/your error in the original source, but its/it's is a pain to handle on a mobile keyboard. A lot of other apostrophes are handled by autocorrect but that particular one isn't.
All caps I don't get, I find it impossible to read. I suspect that people who write all caps must be desensitized to it somehow.
The real question proposed in this email remains. Has FB somehow discovered a way to make ads on mobile way more relevant and valuable than desktop? Because that's what props up their stock price. I would bet it's a lot more accidental clicks by users...
How do the mobile apps that bought install ads make money? I understand FB is a good distribution channel, but how do the app developers make money when most of the apps are free and the rest sell for .99?
Have you seriously never actually used one of those apps e.g. Candy Crush or Clash of Clans ?
Yes they are free. But they gamified in app purchases extremely well. I know of CEOs and accountants who have dropped $50-100 on games like this who have never touched a computer game before. It's pretty amazing to see.
It is a "fad" in the same way that Nintendo, Blizzard, Valve etc are fads.
There's an undying belief in the mobile app community that once you have a spot on user's screen, you can cross-promote other products, so the customer lifetime value is higher than 99c. That didn't work for Rovio (with Amazing Alex), but so far "a growing ecosystem of apps" is a business plan for a lot of those startups.
They make money by selling ads to other mobile startups, which in turn are funded by venture capital because of the revenue they can make selling ads to mobile startups... uh oh.
No, the ads are to install other mobile apps. The advertiser of the mobile app (say, for instance, Clash of Clans) only pays FB after the app is actually installed on the device. For instance, on iOS, those FB mobile ads open up the Apple App Store. From there, the uesr still has to click "Install".
I think it's safe to say that 99.99%+ of app installs are on purpose. No one really "accidentally" installs an app on his or her phone.
Reading (rather, skimming) this sort of analysis makes me wish that advertising had its own internet -- an anti-matter, separate universe sort of place. Depressing to see technology as a pack horse for advertising.
An internet without Google and apps, Bing, Youtube, Facebook and Instagram, Snapchat, almost all big content publishers, Tumblr (as of recently), Twitter... what would be left?
of my usage: Apple-owned apps, Spotify (premium only), Vimeo, SoundCloud, WhatsApp, Dropbox, Trello, Reddit.
So at its core (a rather large core), the internet is advertising -- curated, paid spam? Granted, some of it is actually helpful in providing a pointer to a product I didn't know about, but it's interesting how all of these companies are proxies for a salesman.
I'm flagging this because the title says "privately", and I agree that it's a private email. It has no place on HN, and we aren't its intended recipient.
you can't blame the NSA for having agents reading your private email and looking through your private Internet traffic, if you are going to turn around and do the same thing at the first opportunity.
I don't blame NSA just for reading private stuff. I blame the NSA because they abuse their position that allows them to read that, much like I blame whoever leaked this email for having done so.
To me, your position is like, as we say in my country, "covering the sun with a sieve". The act is done, trying to oppose it now is futile.
I meant that the source is still the leak. Honestly, this is Paparazzi-level stuff here. Plus, these are run-of-the-mill private emails, there is no public-interest angle here at all.
Ok, Business Insider was using the leak, fair enough. However, Business Insider did so in a derivative work and an article that praises Evan Spiegel. They demonstrated non-zero integrity by trying to positively steer the conversation over the leaked data.
I don't think there's a strong enough consensus on the leaked data to warrant flagging. Certainly legitimate to downvote the link, but a flagging should require communal consensus on a position, no?
It read to me more like he was whipping out something casually in short time, instead of taking the time to impress with grammar.
The context is missing here. They could've been chatting online or in person and he sent a quick 15 minute followup. Maybe they're friends who have this kind of casual grammar established. I've written things like this before when I knew the person and conveying information quickly was all I really cared about.
i don't think most people use grammar to impress, but rather to accurately convey their thoughts.
if a sentence is confusing to read, then the reader can be distracted from the concept and pushed into trying to decipher what they are trying to say.
i'd say certain mistakes are worse than others, if the two words are pronounced the same, then the reader can easily read over the error.
I think more distracting mistakes like "than" instead of "then" where, not only are they pronounced different, but can be used in the same place in a sentence, but with drastically different effect:
> this is great news for Snapchat as you are mobile first and mobile only and if the user base on mobile is bigger than desktop (which I think it is by a magnitude or more) than you will be valued more favorably than before in absolute terms and long term at scale you will be more value than desktop companies at scale
he uses than 3 times, one of which (the middle "than") should be a "then", just makes this harder to parse.
TL;DR: if your job is communicating, then grammar is not for impressing, it's for doing your job.
I can answer this -> people don't realize ads on mobile are actually ads. FB's recent change of reducing FB Pages exposure on the News Feed affects this big time. For example, if I like Nike and I receive an ad for new shoes, I probably (1) didn't remember I actually "liked" Nike and/or (2) think this is just Nike updating a post on their Page. Regardless, because I like Nike, I don't care since the ad is relevant. FB actually does a fantastic job of providing relevant ads that most people would assume are simply their favorite brands giving them an update. Furthermore, when it comes to conversions for mobile apps install from FB ads, the friction is so low (click "Install Now" on FB, Click "Get" on the iTunes store), that the conversions (and cost per conversion) are impressively high.
A bit of background - I've been running a bunch of campaigns on FB recently for an e-commerce site which is not mobile optimized. Our conversion (both clicks and purchases) from mobile massively trumps the desktop.