Every week the Opus team picks a news story or topic or idea that is relevant to the entrepreneurs and businesses we partner with.

RSS Feed

Archives

Targeting vs Retargeting on Facebook

Ajit Deshpande - - 0 Comments

Last week, web retargeting firm AdRoll released an infographic comparing traditional web retargeting to retargeting on Facebook Exchange (FBX). AdRoll was one of a handful of Demand Side Platforms (DSPs) that were allowed access to FBX during its Beta testing that started in August’12. Using information from 468 out of a total of 1,300 advertisers currently on FBX, AdRoll estimates that FBX has to-date significantly underperformed traditional web targeting in CTR and in cost-per-unique. As such, AdRoll suggests it is too soon to get on the FBX retargeting bandwagon, something that another DSP, Triggit, has vocally encouraged in recent times.

So is Facebook generally not such a good platform for advertisers? Let’s think about it in the context of ad targeting and ad retargeting:

–          Ad targeting on Facebook is done through their Ads API, which allows the advertiser to target the right users based on their social profiles. Currently only some large advertisers, ad tech vendors and agencies have access to this Ads API (everyone else needs to use these approved vendors as channels). This API is *not* what AdRoll is referring to. The value here for the advertiser is clear: understand and optimize upon the nuances of advertising on Facebook, and drive increased traffic towards your site.

–          For retargeting on Facebook, i.e. for remarketing to users who have already visited your site (identified through dropped cookies etc.), the platform to use is FBX. This is where AdRoll indicates Facebook currently lags traditional web retargeting.

Clearly ad targeting on FB is great at driving traffic to your website, because the Ads API provides access to user demographics and interests. But once your site visitor’s browser gets tagged with a cookie, the FB association is lost, and the cookie is now just an anonymous visitor tracker. With the FB association lost, when you retarget this anonymous site visitor using FBX, Facebook becomes just another webpage for your retargeting ad inventory. And in fact, given that the aim of retargeting is to drive towards a purchase decision and given that the typical user accessing his/her Facebook page is more interested in socialization than in a purchase, it might actually be tougher to get him/her to complete the transaction via a FBX retargeted ad. FBX in itself might thus underperform the rest of the web, which is what AdRoll’s data also indicates.

However, if we could do targeting and retargeting in sequence on FB, and if we could have the ability to track the user’s profile through this targeting + retargeting sequence (essentially using an anonymous user tracking mechanism at the advertiser’s website), then the Facebook platform could become super effective, since the user’s profile is now also an input for your retargeting algorithms. Extend this situation to non-cookie-friendly screens like smartphones and tablets, and we can realize the need for mobile audience targeting platforms such as Opus portfolio company Admobius. Clearly there are avenues for enhancements still, and therein lies the opportunity for entrepreneurs!

Continue Reading ...


Dropbox, the killer app!

Ajit Deshpande - - 0 Comments

Dropbox, one of today’s leaders in cloud-based file storage, syncing and backup, last week announced an update to its iOS app to provide easier PDF viewing capabilities, push notifications for changes to shared folders, and enhanced file-sorting features. While not the most path-breaking, these features represent another milestone in Dropbox’s continued journey from a simple cloud-based syncing and storage site to an intelligent, application-aware, content access platform.

Dropbox is just a very logical ‘killer app’ on top of the cloud; consumers have a core need to store and sync data, and Dropbox’s simple interface with a freemium offering has latched on to this need to create a viral product. Having said that, Dropbox is part of an intensely competitive industry segment – the other key players in consumer storage and syncing are Google Drive, Microsoft Skydrive and Apple iCloud – and it is a credit to Dropbox that it has been the continued perception leader in this space. Dropbox currently has more than 200 million users and more than a billion files stored per day. Probably the one thing that has helped the company get to such scale is its emphasis on simplicity. Over time, Dropbox has added features making it simpler to do such things as uploading photographs and videos, sharing files on Facebook, and enabling developers to create add-ons. Last week’s news continues this journey towards a better user experience.

While key competitors all have cross-selling interests (Google Apps, Microsoft Office etc.), Dropbox represents a pure-play, OS agnostic, data-centric solution. At scale, with additional home-grown and third party apps (entrepreneurs anyone?), Dropbox can legitimately become your music or video player, your photo-sharing site, your enterprise collaboration suite, your business intelligence engine and so on. So, will Dropbox become the behemoth of the next decade, or will it be taken out sometime soon? For the consumer’s sake, hope the former comes true…

Continue Reading ...


A billion dollar acquisition for Oracle

Ajit Deshpande - - 0 Comments

Acme Packet, a pioneer in and a leading manufacturer of Session Border Controllers (SBC) for VoIP (as well as for broader Unified Communications applications), was acquired last week by Oracle for approximately $1.7 billion in enterprise value. As of 2011, Acme Packet was the dominant player in the SBC segment, with ~57 % share of the carrier SBC segment and ~34% share of the enterprise SBC segment. 88 of the top 100 service providers count Acme Packet as a supplier at this time. The company had ~$44 million in net income on ~$307 million in revenue over 2011, although over the past year, the company seems to have lost market share to Cisco, especially in the enterprise segment.

As the public domain has noted, this is probably a good acquisition, for multiple reasons: First, this is a fast-growing market – about 96% of all phone lines were still circuit-switched as of 2010 , suggesting that there is immense room for growth in VoIP. By some accounts, the VoIP market is estimated to more than double between 2011 and 2015. Additionally, the continued evolution of LTE and the emergence of WebRTC and Unified Communications provide more momentum towards voice-data-convergence, benefitting SBC vendors significantly. Second, a virtual SBC appliance can be another component of a Sun server bundle for carriers and enterprises, improving Oracle’s hardware margins. And finally, SBCs, as important components in unified communications, will help Oracle fill out its Unified Communications suite.

Going forward, Oracle has a couple of avenues to build on this acquisition: they could further fill out their UC portfolio through other offerings such as telepresence and video conferencing, or they could go after more gateway services such as firewalls, IPS, etc. The former might be a better fit than the latter, but considering Oracle’s recent forays into the datacenter stack, no option can be discounted out. As for startups in this broad sector, this acquisition probably sets up a spending spree from UC competitors such as Cisco, HP and Microsoft across hardware and software, so here’s to many more billion dollar exits in the near future in this sector!

Continue Reading ...


Video subscriptions on YouTube

Ajit Deshpande - - 0 Comments

Last week, Google’s YouTube announced that it was in talks to let video creators charge viewers. With more than 800 million monthly unique visitors and more than 4 billion hours of monthly viewing, YouTube is up there with the major content sharing networks. Pre-roll and banner advertising on videos has been YouTube’s main source of revenues, and as it turns out, YouTube faces significant competition especially in the online video ad segment. In this context, a subscription based approach would amount to a new revenue channel for YouTube.

Advertising (both for its own sites as well as for its partners’) is something Google does really well, and YouTube does too. But as Google itself admits, it is not the most appropriate monetization approach for everything. Pay-per-view or pay-per-channel type subscriptions are interesting alternative monetization approaches, and in fact these have been in the company’s mind for more than three years now. Three key trends have developed over this time frame which make a subscription approach more relevant for YouTube today – smart TVs are gradually gaining adoption, smartphones and tablets are becoming pervasive, and Google Play has been launched, consolidating music, movie and book offerings into the Android Market platform. Smart TVs offer YouTube the opportunity to deliver alternative rich broadcast content through subscription channels without affecting the end-consumer’s payment psyche. For smartphones, the challenge in itself that mobile ads are considered more interrupting and disruptive. Additionally, obtaining truly relevant metadata for video ads is not a simple task, making video ad targeting challenging in general. In that context a subscription approach offers a non-obtrusive way to monetize, with Google Play aiding with the back-office aspects of mobile content subscriptions.

Challenges clearly remain, in understanding opportunity costs from potentially lower video virality rates due to subscriptions, while at the same time keeping competition in online video advertising at bay. As for the consumer, all-in-all, what used to be mostly a free service from YouTube will now cost some money. Will YouTube subscriptions receive mainstream adoption against these challenges? We will see!

Continue Reading ...