Verizon‘s announcement today that it will buy AOL for $4.4 billion is a bid to get beyond dumb pipes and airwaves to get deeply into mobile and video. By doing so, Verizon, a $200 Billion company, hopes to play on more of a level playing field with other major telecom players combining access to content and personalization services, especially Comcast (with NBC U) and AT&T (with Direct TV.)

The all-cash deal provides a 150 percent return for shareholders in AOL from when CEO Tim Armstrong came on board in 2009. The price is 17 percent above the current stock price. And at the lower price — which may ultimately be even lower if some of the content properties are sold — a lot less is riding on it.

Have you seen this movie before in 2000, when AOL was disastrously sold to Time Warner for $165 Billion? A lot of the same synergies are being discussed: video on demand, personalized content and subscription revenue.

But this time, it is really all about mobile; video on mobile; and the prospect of converting (or selling) 2.1 million dial-up subscribers that continue to be AOL’s biggest moneymaker. Indeed, AOL has built or bought a powerful arsenal of mobile ad serving and video tech, especially LTE Multicast, which uses its cellular network to broadcast live video.

In our view, content is not likely to be an important factor here. It would have been more important if AOL had merged with Yahoo, or with Microsoft. The biggest “what if” probably involves MapQuest, which has technically lagged behind mapping leaders but retains a powerful, verb-like brand in that space. Given Uber’s $3 Billion bid to buy Nokia?s HERE, it may ultimately emerge as an important factor in the deal — much more so than Huffington Post.  AOL’s sizable effort to make Huffington Post into a super content portal, including a major local dimension, failed dramatically last year. Similarly, Armstrong’s huge, multi-hundred million dollar effort with hyperlocal site Patch amounted to very little.

To some degree, we also see Verizon’s acquisition of AOL as an acqui-hire. Verizon has stumbled around advertising for several years but not had an impact. It also has made some small investments in content and classified properties, but hasn’t been confident enough to really spend. Its biggest effort was a promotional program with the NFL to broadcast games for free.

We like the statement issued in the name of Verizon CEO Lowell McAdam, who we note, has long had his eye on geo-targeted advertising. “Verizon’s vision is to provide customers with a premium digital experience based on a global multi-screen network platform. This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience.”

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Facebook today announced the relaunch of Atlas, an ad network that connects online campaigns to offline purchases across multiple devices. Atlas isn’t a new company but instead has been rebuilt since been being acquired from Microsoft last year. This announcement follow’s Facebook’s announcement of an ambitious program to match sales related data from a variety of sources to show ROI at BIA/Kelsey’s Leading in Local: SMB Digital Marketing event in New Orleans.

The platform will utilize Facebook data to track users between devices and connect online campaigns to offline results. This is an effort Facebook has been working on with its Custom Audience Tool. A Datalogix study showed that 89 percent of people who saw a Facebook ad and then bought a product in the store did not click on the ad. This uncovers an important behavioral trend for local advertisers who are increasingly critical of ROAS (return on ad spend).

Atlas doesn’t only link consumers to their Facebook accounts but with their interactions on other websites and apps.  Facebook is already equipped with a deep social data trove with 1.32 billion MAUs. This positions it to launch Atlas across both desktop and mobile and to compete more closely with Google’s Ad Sense network. Along with the Atlas’ relaunch, Facebook announced Ommicon has signed on as the first major agency partner.

The post Facebook Launches Atlas: A People-Based Ad Network appeared first on BIA/Kelsey - Local Media Watch.

And XappMedia has announced a partnership this week with NPR to bring audio ads in native form, essentially creating a brand new form of mobile advertising.

BIA/Kelsey Senior Analysts Mike Boland and Abid Chaudhry were back again this week to talk about these two topics today on the latest in our Analyst Roundtable series.

Chaudhry started the discussion with Facebook’s $2 billion purchase of the virtual reality gaming company Oculus VR. “We’re going to be in a post mobile world in a few years from now and Facebook is putting their bets down that virtual reality will be the next big thing,” Chaudhry said.

Chaudhry said he expects Oculus VR will continue as a gaming system and more of a “laboratory purchase” by Facebook. Mike chimed in and said,” This is a platform play. They want to own the physical touch-point with the consumer.”

Boland began his discussion of XappMedia’s new mobile ad unit with a video demonstration of how the new ad format will interface with consumers. The unit is expected to debut this week on the NPR platform. “I think this is going to represent a lot of the innovation we’re going to see just not audio ads but just in the general thinking of native advertising that’s more resident to the use case of mobile advertising.” Boland believes this should give advertisers a clearer picture on the ROI. For a more in-depth analysis, take a look at Mike’s recent blog post here.

Check out today’s analyst roundtable below:

The post Analyst Roundtable: XappMedia Introduces New Ad Format and Facebook's Buy into a Virtual Future appeared first on BIA/Kelsey - Local Media Watch.

And XappMedia has announced a partnership this week with NPR to bring audio ads in native form, essentially creating a brand new form of mobile advertising.

BIA/Kelsey Senior Analysts Mike Boland and Abid Chaudhry were back again this week to talk about these two topics today on the latest in our Analyst Roundtable series.

Chaudhry started the discussion with Facebook’s $2 billion purchase of the virtual reality gaming company Oculus VR. “We’re going to be in a post mobile world in a few years from now and Facebook is putting their bets down that virtual reality will be the next big thing,” Chaudhry said.

Chaudhry said he expects Oculus VR will continue as a gaming system and more of a “laboratory purchase” by Facebook. Mike chimed in and said,” This is a platform play. They want to own the physical touch-point with the consumer.”

Boland began his discussion of XappMedia’s new mobile ad unit with a video demonstration of how the new ad format will interface with consumers. The unit is expected to debut this week on the NPR platform. “I think this is going to represent a lot of the innovation we’re going to see just not audio ads but just in the general thinking of native advertising that’s more resident to the use case of mobile advertising.” Boland believes this should give advertisers a clearer picture on the ROI. For a more in-depth analysis, take a look at Mike’s recent blog post here.

Check out today’s analyst roundtable below:

The post Analyst Roundtable: XappMedia Introduces New Ad Format and Facebook’s Buy into a Virtual Future appeared first on BIA/Kelsey - Local Media Watch.

The entrance into a new digital age has brought endless changes to the world. Current media is in a state of transformation, undergoing great modification in its traditional medium form – from print to digital. The century old Radio industry is not excluded from this transition. It is facing ever increasing competition from new and innovative digital media outlets that are available to local advertisers, but within this competition lies opportunity.

Publisher Eric Rhodes, a leading voice for progressive radio, gave his take on “the new digital stuff” and introduces new areas for the radio industry, such as “the connected car” in the first session of Day 3 at Leading in Local conference.

BIA/Kelsey’s advertising revenue forecasts illustrate that national advertisers play a significant role in the purchasing of advertising opportunities across many different local media outlets. In 2012, our estimates are that national brands spent $45.2 billion dollars in local media advertising such as direct mail, television, print yellow pages, radio, out-of-home and more. This amount accounts for more than a third (33.6 percent) of all spending in local media. “The Radio industry is caught between two worlds” said Rhodes. Current radio owners are invested heavily in transmission costs and they see no compelling reason to back out of it now. They have seen little decline on listening time in the last years – only between 1-2 percent. Compounded with the difficulty to monetize digital radio when consumed out of market areas, makes the idea of transition far more difficult. The radio industry is waiting for things to get further developed, but entities such as Clear channel and iHeartRadio are investing heavy and it may be too late for the traditional players in the space to transition. As we know, digital moves fast, so although Radio maybe okay now, it may not be with continuation of newer developing technologies in the digital space.

The “connected car” emerged as one of the most important touch-points on the horizon for radio, given that the car is where audiences continue to report that a good deal of radio listening continues to happen.   Tech savvy consumers are already listening to streamed audio in their cars via blue-tooth through their smart phones, or connecting through plug-ins, and the configuration of the dash board could make a real difference to Radio’s future. People are no longer carrying radios on them. However, Rhodes said “It’ll take 8 years for 50 percent of the U.S. cars to have connected dashboards and 16 years for 100% of them to be connected.”

The question remains: Where and when does the transition need to happen?

The post At Leading in Local: ILM 2013: Radio Living in Two Different Worlds appeared first on BIA/Kelsey - Local Media Watch.

Day 2 of Leading in Local: Interactive Local Media conference opened with BIA/Kelsey’s VP and Chief Economist, Mark Fratrik, who shared some exciting pieces of information from BIA/Kelsey’s Media Ad view. Media Ad View is BIA/Kelsey’s research product that offers a market by market view of the local media pie.

Fratrik stated, “Local media advertising revenues will climb to $151.5 billion in 2017.” He also communicated that BIA/Kelsey’s goal is to help clients leverage the real business opportunities inherent in this growth to solidify their leadership position.

“Our research-driven data, strategic analysis and competitive intelligence can help clients make the right decisions,” said Fratrik. Fratrik went out further to outline 7 steps that BIA/Kelsey does to help clients:

Step 1: Acquire reliable view of the local media landscape
Step 2: Size the current and future local market
Step 3: Profile the competition
Step 4: Track advertiser trends
Step 5: Understand the changing consumer
Step 6: Operate with reliable, actionable market insights
Step 7: Create a concise strategic roadmap

As the leading experts in cross-platform local advertising, BIA/Kelsey can help design a business strategy that drives new levels of success for media companies. BIA/Kelsey’s local media & advertising expertise helps clients understand the dynamics of their local marketplace, and identify, analyze and manage the competition. Media Ad View Plus delivers the media industry’s most reliable, comprehensive data and insights, Media Ad View is used by many of the largest media companies in the U.S. to evaluate market opportunities across multiple dimensions: market, media and business category.

The post At Leading in Local: ILM 2013: Playing to Win: Building a Leading Interactive Local Sales Strategy appeared first on BIA/Kelsey - Local Media Watch.

With the exception of efforts like AOL’s Patch and New England’s GoLocal24, “Hyperlocal” has really moved away from its initial focus on neighborhood journalism to more of a focus on geo-targeted advertising and commerce.

Redefined this way, there’s a lot going on in hyperlocal. Today, Stamford,CT-based Local Yokel Media, a hyperlocal ad service started by Yahoo/AOL/Doubleclick vet Dick O’Hare, announced that it had raised $2.15 Million in its first institutional round. Backers include Connecticut Innovations, the Connecticut Department of Economic and Community Development and Gold Ridge Asset Management.

Local Yokel says it is distinguished by its network of local blogs and websites, including newspapers; ability to map ads to a very specific location; and the ability to develop unique and scaleable creative copy. The site is now working with publishers such as Hersam Acorn Newspapers serving Fairfield County, Connecticut and DNA Info, a local news site covering the neighborhoods of New York City and Chicago. Advertisers include Meineke Muffler, LL Bean, and 7-Eleven.

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The Long Tail in advertising may be SMB-centric. The Short Tail may be ad agency centered media buying, which only go to the Top 100 sites on the Web. If that’s the case, the “Mid-Tail” comes from local publishers, suggests Centro Media CEO Shawn Riegsecker. But these publishers, which rely on high value journalist-based content and integrated advertising, have lately been “losing their shirts.” They can’t scale on the Web.

For Riegsecker, whose company operates an 80 newspaper affiliate reseller program, the answer lies in automation that places media across the board — a reliance on automation he’s been touting for years but that we’re increasingly hearing for local advertisers in search (The Search Agency) and display advertisers (Balihoo).

Centro has been growing quickly, and now sports a 300 person team. Half are based in Chicago and the other half are in 28 regional offices around the U.S. Lately, the company has been especially focused on rolling out a range of automation solutions for 575 mid-tier, independent agencies that represent 2,600 advertisers.

Two weeks ago, the company rolled out Centro Planner, a planning and buying module formerly known as Transis. Additional solutions will include a campaign planning operations tool and next year, a finance app that will feature invoice and billing reconciliation.

“They all link together and automate an ad agency’s entire lifestyle,” adds Riegsecker. “They support very healthy ad agencies for a very healthy ecosystem.” By reducing the emphasis on remnant/inventory that only account for 20 percent of overall agency business, Centro helps to release resources for agencies to do data analysis, hire statisticians, and move into social, native and content marketing, he says.

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Verve Mobile’s CEO Tom MacIsaac is bullish on local publishers’ ability to drive this revenue growth by selling local audiences not just to local advertisers but also to national brands seeking access to local audiences in a trusted context, through partners like Verve.

The secret sauce is Verve’s ability to deliver quality location-based audiences into a system in a way that creates premium mobile CPM values for both local and national mobile inventory by linking to high quality, local branded content. MacIsaac recently shared his views with BIA/Kelsey on where he sees the future of mobile and where he sees drivers and challenges.

MacIsaac concurs with BIA/Kelsey’s forecast of a flip from 60 percent/40 percent national/local mobile spending over the next few years. BIA/Kelsey’s mobile forecast predicts that from 2012-2016 the national/local split in mobile spending will reach 58 percent local for a total local spend of $5.8 billion as national brands continue to find more sales lift in their local initiatives.

Verve Mobile works with over 3,500 publishers and has achieved a level of dominance in the local mobile industry. MacIsaac revealed that the company is targeting $45 million in revenue in 2013, up 80 percent from $25 million this year. Generally, mobile display inventory pricing has lagged both PC display inventory in terms of CPM and CPC even as audience usage has increased dramatically. But, according to MacIsaac, premium pricing for mobile is available today through creating a quality context for advertisers through a combination of trusted, local content and accurate location data for audiences consuming that content.

Verve’s CMO, Greg Hallinan, also spoke to this at BIA/Kelsey’s ILM West 2012 conference held last week in Los Angeles. Verve’s Location Service combines location data with location context to customize the ad execution and creative to maximize relevance to audiences and advertisers.

MacIsaac offered a success formula for local publishers that is simple in concept but difficult in execution. Premium pricing in local mobile inventory will come through local sales forces that are focused on digital products; are driven by incentive compensation to close mobile sales; and by high quality content consumed by audiences that can be geo-located and served in a way that delivers local audiences not only to local advertisers but also sold to national brands seeking access to those local audiences.

“This is a win-win proposition that allows us to write bigger checks to our partners than the ones they write to us. For local publishers who use the Verve mobile publishing platform, we aren’t just a vendor on the cost side of the equation, we’re a partner building incremental revenue,” MacIsaac said. “We have some intellectual property in the works that will further improve our ability to offer even more accurate location targeting of our mobile audiences and maintain the high CPM’s we’ve generated from national advertisers seeking local audiences.”

BIA/Kelsey’s viewpoint is that local mobile ad inventory has such high potential value to national and local advertisers because it is the only medium that increasing is “always on and always there.” Mobile delivers audiences to advertisers that have a “time and place” context that offers a premium utility value to advertisers that will continue to be unlocked in inventory pricing as mobile location sensing and ad network technology continues to improve.

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The “Making Sense of Mobile Advertising for SMBs” panel at SMB Digital Marketing 2012 was aptly named, as the mobile needs of small businesses vary widely by category and level of sophistication, among other dynamics. Dick Larkin (VP, American Marketing & Publishing), Mary Beth Brendza (CEO, App Express) and Henry Tam (VP Self-Serve Advertising, Millenial Media) each showcased distinct products that may appeal to different SMBs depending on their position on the adoption curve.

For Larkin, whose American Marketing & Publishing still prints directories in 500 small communities, simplicity is the imperative. His mobile solution is a dead-simple text service that’s as easy as “customer subscribes to a merchant, receives texts from that merchant.” Too rudimentary? Not in rural markets, where mobile adoption is slower and SMBs demand clear technology. The product is sold by print reps at $995 annually, with ample “coaching” built in. The results over the past 14 months: 4100 customers, $3.9 million revenue.

Brendza also believes in simplicity and guidance for SMBs, but with a focus on the app market. App Express is DIFM (not DIY), and at $75-$100 per month, builds out Apple and Android apps, as well as a single-page, HTML-5 mobile websites for resellers’ clients. The obvious question is, “do SMBs really need apps?” Brendza’s answer: the majority of user time on mobile is spent in-app. Moreover, apps provide a deeper level of feature functionality for SMBs, from scheduling to deals and invoicing.

At the far end of the continuum is Millenial Media, the independent mobile ad network colossus that launched a self-serve local ad service to capture SMBs. The platform includes hyper-local geo-targeting that Tam says “can cut across actual neighborhoods.” He showed a map that plotted ad placements for a recent local campaign to prove that precision targeting was indeed precise. The service began with CPC pricing, but will soon add CPM buys for greater simplicity.

While each product falls at a different point on the mobile sophistication curve, a common thread tying all three together is pricing simplicity: flat rates, easy-to-understand bundles and CPMs.

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