The online advertising sector has proved resilient - and it’s only going to get stronger

Facebook has used advertising to turn its fortunes around - the question, now, is how the industry can keep pace and keep growing.

This month saw Twitter hit the headlines for its hugely impressive debut on the New York Stock Exchange. After its first day of trading, shares in the site closed at $44.30, up more than 73 per cent from their initial price of $23. Last May, there was a huge frenzy around Facebook’s gargantuan floatation. Share prices initially dropped and many naysayers proclaimed that Facebook had overshot its mark, entering at $38 a share. However, from July to September 2013, its share price doubled and is currently trading around the $50 mark.

It’s not just brands going public. Acquisitions for huge sums of money are taking place regularly. Instagram had only 12 employees when it was acquired for a cool billion dollars last year. Just last week, the founder of Snapchat turned down a $3 billion offer from Facebook. Such moves have led to plenty of not-so-hushed murmurs of a tech bubble forming, especially around digital brands.

But how are brands able to command such large valuations, or, in Snapchat’s case, turn such substantial offers down. Put simply, it’s down to a transformation of business models and the potential it offers for monetisation. Snapchat, for example, is hugely popular among teenagers – a bracket it is notoriously difficult to reach. This means, if it can get its platform strategy right, it is going to be in a very strong position to command significant revenue for advertising and marketing on its platform.

Facebook has used advertising effectively to turn its fortunes around. Its most recent results revealed it had broken through the $2billion revenue barrier and exceeded forecasts from Thomsons Reuters. A major contributor to these better-than-expected results was mobile advertising. It stated that 49 percent of its ad revenue – or $882 million – came from mobile devices, up from 14 percent a year earlier. Analysts have also stated that there has been a real rush to advertise with Facebook thanks to the new ad format it rolled out earlier this year. The ability to integrate in-stream ads into the user experience has worked, thanks to it being new, cheap and able to bring better response rates.

Shortly before Twitter declared its intentions to go public clear, it made a shrewd investment, shelling out $350m for MoPub, a mobile advertising exchange. This will enable Twitter to expand its influence as well as serve different formats, such as native advertising – which aims to deliver less intrusive ads to its user base.

In short, advertising is at the heart of online’s success and, increasingly, we will start to see more interesting and useful content delivered to users. The sector is booming and the question that is being levelled at the industry is “how is it going to maintain this pace and keep growing?”.

Firstly, Facebook and Twitter are undoubtedly doing well, thanks to their advertising strategies. But it should be pointed out that, despite being vast, they are closed networks. Brands certainly need to harness the opportunity social networks present, but in order to capture optimal audience engagement, they need to ensure they are not restricting themselves solely to these walled gardens. The term “social” should not be restricted to these behemoths. The whole web is based on social communication (the emergence of sharing buttons, the resilience of email etc.) and herein lies the real opportunity.

A swathe of data is being produced and shared across the entire web every second. It’s for this reason that I believe we are actually on the verge of an incredibly significant landmark in advertising’s history – and one that we can draw parallels with the financial industry.

In 1986, the financial industry experienced its “Big Bang”, where everything changed. Almost overnight, the bowler hats and handshakes for completing a deal disappeared and were replaced with electronic, screen-based trading. It completely shook up the industry and saw London’s position as a financial capital considerably enhanced.

We are, without doubt, approaching a similar moment in the advertising industry, albeit less abrupt.

The volume of the conversation online continues to get louder, but realising this is only the first step, the elixir is not only to be present, but also prepared to intelligently and safely use the huge amount of data available from this digital behaviour. Humans don’t have the speed to extract the key nuggets of information from it all, in a timely way. As such, it’s all about understanding and reaching audiences “programmatically”.

Customers have evolved - meaning marketers must evolve with them. They expect a different approach, and have adopted a form of “banner blindness”: an ability to blank out and ignore ads for products that are either not relevant or have already been purchased, rendering the advertising useless. Marketers must move in real time with their target audience, and understand the value of big data in order to identify where potential consumers are on their journey; business intelligence is of critical importance.

This is why a programmatic approach is going to be the key to the evolution of both advertising and content online. Unlocking these insights will give organisations a “Single Customer View” and valuable understanding of consumer behaviour, allowing them to engage with customers, helping create more targeted marketing campaigns, which results in increased return on investment and business growth. The Big Bang for advertising is undoubtedly coming and it’s the brands that adapt to this change that will reap the benefits.

Rupert Staines is European Managing Director at RadiumOne

Twitter CEO Dick Costolo is interviewed after Twitter's IPO on 7 November, 2013. Photograph: Andrew Burton/Getty Images.

Rupert Staines is European Managing Director at RadiumOne

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The dog at the end of the lead may be small, but in fact what I’m walking is a hound of love

There is a new, hairy face in the Hovel.

There is a new, hairy face in the Hovel. I seem to have become a temporary co-owner of an enthusiastic Chorkie. A Chorkie, in case you’re not quite up to speed with your canine crossbreeds, is a mixture of a chihuahua and a Yorkshire Terrier, and while my friend K— busies herself elsewhere I am looking after this hound.

This falls squarely into the category of Things I Never Thought I’d Do. I’m a cat person, taking my cue from their idleness, cruelty and beauty. Dogs, with their loyalty, their enthusiasm and their barking, are all a little too much for me, even after the first drink of the day. But the dog is here, and I am in loco parentis, and it is up to me to make sure that she is looked after and entertained, and that there is no repetition of the unfortunate accident that occurred outside my housemate’s room, and which needed several tissues and a little poo baggie to make good.

As it is, the dog thinks I am the bee’s knees. To give you an idea of how beeskneesian it finds me, it is licking my feet as I write. “All right,” I feel like saying to her, “you don’t have to go that far.”

But it’s quite nice to be worshipped like this, I have decided. She has also fallen in love with the Hovel, and literally writhes with delight at the stinky cushions on the sofa. Named after Trude Fleischmann, the lesbian erotic photographer of the Twenties, Thirties and Forties, she has decided, with admirable open-mindedness, that I am the Leader of the Pack. When I take the lead, K— gets a little vexed.

“She’s walking on a loose lead, with you,” K— says. “She never does that when I’m walking her.” I don’t even know what that means, until I have a think and work it out.

“She’s also walking to heel with you,” K— adds, and once again I have to join a couple of mental dots before the mists part. It would appear that when it comes to dogs, I have a natural competence and authority, qualities I had never, not even in my most deranged flights of self-love, considered myself to possess in any measurable quantity at all.

And golly, does having a dog change the relationship the British urban flâneur has with the rest of society. The British, especially those living south of Watford, and above all those in London, do not recognise other people’s existence unless they want to buy something off them or stop them standing on the left of the sodding escalator, you idiot. This all changes when you have a dog with you. You are now fair game for any dog-fancier to come up to you and ask the most personal questions about the dog’s history and genealogy. They don’t even have to have a dog of their own; but if you do, you are obliged by law to stop and exchange dog facts.

My knowledge of dog facts is scant, extending not much further beyond them having a leg at each corner and chasing squirrels, so I leave the talking to K—, who, being a friendly sort who could probably talk dog all day long if pressed, is quite happy to do that. I look meanwhile in a kind of blank wonder at whichever brand of dog we’ve just encountered, and marvel not only at the incredible diversity of dog that abounds in the world, but at a realisation that had hitherto escaped me: almost half of London seems to have one.

And here’s the really interesting thing. When I have the leash, the city looks at me another way. And, specifically, the young women of the city. Having reached the age when one ceases to be visible to any member of the opposite sex under 30, I find, all of a sudden, that I exist again. Women of improbable beauty look at Trude, who looks far more Yorkie than chihuahua, apart from when she does that thing with the ears, and then look at me, and smile unguardedly and unironically, signalling to me that they have decided I am a Good Thing and would, were their schedules not preventing them, like to chat and get to know me and the dog a bit better.

I wonder at first if I am imagining this. I mention it to K—.

“Oh yes,” she says, “it’s a thing. My friend P-J regularly borrows her when he wants to get laid. He reckons he’s had about 12 shags thanks to her in the last six months. The problems only arise when they come back again and notice the dog isn’t there.”

I do the maths. Twelve in six months! That’s one a fortnight. An idea begins to form in my mind. I suppose you don’t have to be a rocket scientist to work out what it is. But no. I couldn’t. Could I?

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 28 April 2016 issue of the New Statesman, The new fascism