Study: Apps and Content Startups Miss Out Because Affiliate Model Is Broken

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Skimlinks, the platform which gives publishers greater control over affiliate links and content monetization, releases some major research today which could well concentrate the minds of online “publishers”, and that includes apps, startups and bloggers.

It’s white paper reveals that while editorial or social websites can point a user towards a product they might go on to buy, publishers rarely receive the financial reward for doing so because of problems with the “Last Click” attribution model used in affiliate marketing. Now, while the study is clearly a ploy to get apps and content publishers to run their affiliate programs through Skimlinks rather than through traditional affiliate platforms, the research itself does bear examination.

The study found that content sites were the first place users read about a product 27% of the time, and were in the first quarter of the user’s path to purchase 36% of the time. And when a user started their journey to a purchase with a content site, she or he was a new customer 55% of the time. However, content sites were the Last Click only 6% of the time and 94% of the time, the content affiliate was NOT awarded the sale. Plus, 65% of the time when a content site is the first click in a purchase journey, sparking purchase intent, another channel is the last click, taking all the credit for the sale.

They also found that content sites drove nearly 30% more new customers to brand sites than the average of all other channels. In addition, when consumers started reading about a product on a content site their desire to purchase grew over time: in this case, 9% of the sales would occur within one hour, 16% within 24 hours and 31% happened within 3 days.

In other words, if online marketers shifted their affiliate strategy away from the Last Click attribution model towards online publishers, apps and social sites, they’d basically get faster and more robust sales.

This would be music to the ears of many social and content sites.

Alicia Navarro, CEO and co-founder of Skimlinks says: “The general view is that better attribution is required – that distributes the cost-per-acquisition across multiple parties responsible for creating and driving purchase intent. By only remunerating the last-click publisher, you create the wrong incentives, and end up with a ton of low-value deal/coupon sites, rather than rich apps and content, who have less incentive to link out to merchants because they don’t get paid for top-of-funnel activity via affiliate marketing.”

Ryan Jones of Shop Direct, where the study was based, points out that it’s a two-way street: “Retailers are probably missing out on exposure as commercially savvy content sites tend to promote the brands they earn more from.”

For the research Skimlinks analyzed data provided by Shop Direct’s ecommerce site, Very.co.uk, which spanned all orders between July and November 2012 that included a click from a Skimlinks content site.

Skimlinks clients include Conde Nast, Gawker, AOL Europe, WordPress, Hearst Digital, Haymarket Consumer Media, Telegraph Media Group, among others.

Skimlinks’ main competitors are the Google-backed VigLink and the seed-backed startup Yieldkit. This year it completed an undisclosed growth financing round led by Greycroft Partners and others.

Wunderlist Pro Gets File Sharing And Business Plan Pricing As Wunderlist Nears 5M Users

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Berlin-based 6Wunderkinder is adding more features to its new Wunderlist Pro paid tier of service today, answering the number one request of its users with the addition of file upload and sharing. Users can add files to tasks and synchronize them across devices and team members for collaboration purposes. That, along with newly introduced pricing plans for Wunderlist Pro aimed at businesses, should help growth of the revenue-driving service skyrocket, says 6Wunderkinder founder and CEO Christian Reber.

“We had large corporations contacting us the first day we launched Wunderlist pro and ask us ‘Can we use this in our business, what can I do to sign up my entire team of 250 people?,’ etc.” he said in an interview. “That was exciting for us but unfortunately we didn’t have the business accounts yet, we didn’t have the dashboard to manage those people.” This change will help them sign on these new customers who have just been waiting for an opportunity to get on the platform.

The changes today aren’t only aimed at business customers big and small, however; Reber says that file sharing is something that should appeal across its user base, and drive up the value perception even for individual Wunderlist users who have been considering the paid option. “We think that files is a feature that everyone wants, and we think that we will see a very high conversion rate of free users to premium users also, because it’s a feature that everyone just asked us to build,” Reber explained.

Reber says they “quadrupled” their own internal expectations for new user growth with the introduction of Wunderlist Pro. The entire user base of nearly 5 million Wunderlist users (including free and paid) is around 29 percent U.S.-based, he said, but 40 percent of the paid customers come from the States. Over 40 percent of paying customers are businesses, too, which is why the business plan rollout is designed to unlock more of that potential market.

Ultimately, 6Wunderkind’s strategy is to become just as essential and widespread a productivity tool as a Dropbox or an Evernote, Reber tells me. Those have validated their business model, he says, though they target a completely different market. The aim is to grow from a simple to-do list to more full-featured collaboration software, while retaining focus on both individuals and business customers, instead of just one or the other.

Reber wasn’t ready to share specifics about conversion rates on Wunderlist Pro just yet, but he says that 6Wunderkinder does plan to be much more transparent about that kind of data with future releases, since it believes there’s value in showing other startups how it’s doing building a business, so expect to see more granular detail about how Wunderlist’s monetization strategy is working out in the near future.

Flea Market App Stuffle Raises Seven-Figure Cash And “Media For Equity” Funding

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Flea market-style mobile apps are both a dime a dozen and refreshingly straightforward. Upload a photo of the item for sale, write a description, set a price, and wait for nearby interested buyers to make a purchase. That level of simplicity and transparency, however, isn’t to be found in Stuffle’s latest funding round.

The German startup, which competes with a host of similar “flea market” apps, including Shpock and Depop in Europe, or Rumgr and Yardsale in the U.S., has raised a “seven-figure” founding round led by Tivola Ventures, and Leverate Media. Nothing out of the ordinary there – an undisclosed funding round is very European.

But where things deviate somewhat from business as usual is that Leverate Media’s involvement consists of what’s being called a “media for equity” deal in which it will provide Stuffle with a media plan and premium advertising worth several million euros, in return for 20 percent of the company.

And while the overall funding amount isn’t being disclosed, beyond that “seven-figure” mention, Tivola Ventures is said to be taking 25 percent equity. It has to be said that it’s unusual for what is otherwise an opaque funding round to break out equity numbers, but, with a mixture of cash and “media equity,” this deal is nothing if not convoluted.

That said, Leverate Media isn’t the only operation to be touting premium advertising reach for a stake in a consumer startup with high-growth potential. London’s Squadron Venture Media offers a similar arrangement (or, alternatively, media buying in return for a future revenue share).

Along with Stuffle’s two new “investors,” existing investors Heiko Hubertz, Tim Schumacher, Mehrdad Piroozram and High- Tech Gr nderfonds also participated in this round.

Commenting in a statement, Sebastian Erasmus, CEO of Leverate Media, said: “We are looking forward to helping Stuffle generate more reach by setting up a media plan. It will specifically address the needs of the young company while delivering long-term and sustainable growth. Together with Morten and his team, the existing investors and of course Tivola Ventures we have found a setup through which Stuffle can realize its growth strategy at an optimum rate. “

When asked, a representative for Stuffle was unable to breakout any further numbers for the app, or be more transparent in terms of the investment figures. What we do know is that prior to this latest round the Hamburg, Germany-based startup had raised 975,000 (~$1.23m). Meanwhile, as of late January this year, Stuffle had been downloaded approximately 147,000 times since it launched the previous May, seeing 75,000 items listed and 12,500 successful sales at a total value of 1.2 million. We’ll update this post if and when we receive updated metrics.

Update: And just like magic, updated stats provided by Stuffle:

Downloads so far: 400,000
Listed items: 275,000
Successful sales: 35,000 with total value of 3.6 million
[Total] Investments (cash and media combined): Over 10 million

Update 2: I’m told that in this latest funding round alone the cash and media combined is worth “more than 2 Million Euro’. So, that means, according to the update above, and including prior disclosed funding, nearly seven million Euros of investment is unaccounted for! Confused? Me too.

Reminder: The London Pitch-Off+Meetup Is Monday

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In preparation for TechCrunch Disrupt Europe I’ve been running around the Continent for more than a month, hitting the Balkans for a huge tour and Warsaw for an amazing meet-up. Now I’m back for a meet up+pitch-off with our own Mike Butcher and the rest of the UK team. Tickets are free so grab yours now.

There will be great networking opportunities, and a battle to the death to see which entrepreneurs can dazzle and excite in under 60 seconds.

PitchOff details:

LONDON INFO HERE

  • Participants interested in competing in the pitch-off will have 60 seconds to explain why their startup is awesome. These products must currently be in stealth or private beta.Application form for London is here or simply enter below.

    ONLY FILL OUT **ONE** APPLICATION.


Office hours details

  • Office Hours are for companies selected for the Pitch-off, these 15 minute 1 on 1 talks will be held on the day of the event. We’ll hear about your company, give feedback, and talk about the best pitch strategy for the 60-second rapid-fire competition. More information on Office Hours will follow in a post on TechCrunch.

Pitch-off winners

  • We will have 3 judges who will decide on the winners of the PitchOff. First place will receive a table in Startup Alley at the upcoming TechCrunch Disrupt Europe in Berlin. Second Place will receive 2 tickets to the upcoming TechCrunch Disrupt. Third Place will receive 1 ticket to the upcoming TechCrunch Disrupt.

Venue in London

  • Ground Floor – CAMPUS LONDON, 4-5 Bonhill Street, London EC2A 4BX
  • Event runs from 3 p.m. – 5:30 p.m. on Monday July 29th, 2013
  • We will de-camp to a local bar afterwards, sponsors welcome to support (email sponsors@techcrunch.com)

Remember we are holding our Berlin meetup later this week so if you don’t want to wing your way North we’ll come to you. Application form for Berlin is here.

Questions about the events? Please contact: events@techcrunch.com.

How To Become A Sponsor

  • For more information on sponsorship packages and to discuss becoming a sponsor, please contact sponsors@techcrunch.com.

And whether you’re an investor, entrepreneur, dreamer or tech enthusiast, we want to see you at the event, so we can give you free beer and hear your thoughts. Come one, come all.

Publicis And Omnicom Are Merging To Form A $35.1B Advertising Leviathan

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Today Publicis and Omnicom, two of the “big five” global advertising and marketing agencies, announced a “merger of equals”, in which the two will combine to create the world’s biggest agency, with some $22.7 billion in annual revenues and a market capitalization of $35.1 billion. The pair say that the new Publicis Omnicom Group initially will be jointly run by the two existing CEOs, John Wren from Omnicom and Maurice Levy from Publicis, and headquartered both in New York and Paris, with a holding company HQ in the Netherlands.

The companies will trade publicly as ONC (currently Omnicom’s symbol) on both the NYSE and Euronext.

The confirmation – after reports of the deal swirled earlier this week – was delivered today in a press conference on a hot Sunday summer afternoon in Paris – a slightly oxymoronic setting for a megadeal.

“For many years, we have had great respect for one another as well as for the companies we each lead. This respect has grown in the past few months as we have worked to make this combination a reality. We look forward to co-leading the combined company and are excited about what our people can achieve together for our clients and our shareholders,” the co-CEOs said together.

If Google is the world’s biggest digital advertising network, the merger of these two will create an advertising megacorp that will be the world’s biggest provider of advertising to feed that machine. It will be twice the size of its nearest rival, WPP. While there are two other agencies in addition to these, Interpublic and Havas, they are significantly smaller. This will lead, inevitably, to antitrust scrutinty from regulators. Today, the companies, both already global operators, noted that they will need regulatory approval in 41-46 countries.

“We are not expecting anything that would prevent us from going forward,” Wren said at the press conference (according to Reuters). “We are confident that we will get regulatory approvals,” Levy also noted.

It may also spur more merger activities among other players.

Without a doubt, the history of the ad industry has been one of ongoing consolidation, and in that regard this seems like a logical and inevitable step. Some of the agencies that were once rivals and will now coexist under one owner will include BBDO, Saatchi & Saatchi, DDB, Leo Burnett, Razorfish, Publicis Worldwide, Fleishman-Hillard, DigitasLBi, Ketchum, StarcomMediaVest, OMD, BBH, Interbrand and ZenithOptimedia, with clients covering some of the world’s biggest buyers of advertising, including mobile carriers like Verizon and AT&T, drinks companies like Coca-Cola, financial services companies like Visa, and many more. The companies say they will have “efficiences” of $500 million as a result of the deal; whether that will lead to layoffs or closures has yet to be announced.

But while this plays to type in some regards, the world of advertising and marketing is also up against growth of other disruptive forces, for example the change in consumer habits brought about by the internet. That has taken the rug out from some of the more traditional formats for advertising, such as print media, and pushed more spend towards digital formats like the internet and mobile advertising.

These are still relatively smaller players in the wider advertising ecosystem: worldwide there will be about $519 billion spent in marketing and advertising this year across all mediums. But if you break out a newer area like mobile advertising, it’s expected to be just under $9 billion this year globally, according to the IAB.

Still, the smart money sees the writing on the wall. TV advertising dominates today, Nielsen noted earlier this week, but it has grown by just 3.5% so far this year while Internet has gone up by 26.3%. The IAB estimated that mobile will go up by 83% this year.

Publicis and Omnicom’s rival WPP projects that by 2018, 40% of ad spend that it oversees will come from digital. That is driving a number of acquisitions and investments, but it is also fuelling the rise of a new kind of advertising company focused around advertising technology (ad tech) to better measure, leverage and distribute ads in these new mediums. The rise of digital media is also dovetailing with the growth of advertising and digital opportunities in emerging markets like China, South America, India and so on.

All of this plays strongly into the technology and startup ecosystem, both in terms of the companies that are growing up around these innovations, but also because such a large part of the tech world is built around the consumer internet, and much of the consumer internet is built on free, ad-based models. Consolidation of players like Omnicom and Publicis speaks to a growing desire to better scale and consolidate on the kinds of returns at can be made from newer platforms like the internet.

Mozilla, The Late-To-The-Mobile-Party Lumbering Dinosaur Of Open, Is Playing Carriers’ Pet To Make Firefox OS Fly

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The first mobile devices running Firefox OS are out in the market. It’s too early to say how well Mozilla’s fledgling open web HTML5 mobile platform is doing in its bid to steer budget buyers away from Android gateway devices. Which is, make no mistake, exactly the hope of the carriers throwing their weight and influence behind this alternative open platform.

A raft of carriers signed up to support Firefox OS at its launch announcement back in February. According to Mozilla 17 carriers are currently committed to distributing devices (namely: Am rica M vil, China Unicom, Deutsche Telekom, Etisalat, Hutchison Three Group, KDDI, KT, MegaFon, Qtel, SingTel, Smart, Sprint, Telecom Italia Group, Telef nica, Telenor, TMN and VimpelCom). So far only a handful of devices have gone on sale, including the ZTE Open and Alcatel One Touch. More are apparently due to be announced this year.

It is, to reiterate, the very beginning of the Firefox OS project. Telef nica started selling the first consumer handset running FFOS in Spain at the start of this month – the $90 ZTE Open. It says it won’t be breaking out sales for individual models but asked about early sales indications, a spokesman said: “The team is very happy with how it’s going in Spain.”

But it’s not just carriers putting FFOS phones in the market. Being an open platform there is scope for smaller players to get involved, such as hardware startup Geeksphone, which put out two Firefox developer preview devices (called Keon and Peak) back in April, selling out within hours. Geeksphone has now followed those up by announcing its first consumer-focused device, called the Peak+.

The Peak+ is $196 (excluding taxes) on pre-order, with a slightly higher price tag planned when it goes on sale in September. “Firefox developer preview is no longer where we want to be. We are evolving towards a consumer market,” Geeksphone CEO Javier Ag era tells TechCrunch. “Geeksphone has always been selling to any customers and users since its foundation four years and a half ago… [Initially] we went for the developer preview branding because we wanted to target those early adopters, those early users who were building up the ecosystem, and we felt that was a natural thing to do.

“Now we’re evolving to a more consumer-oriented perspective – back to our origins. We will keep of course a developer-friendly brand, with some unique characteristics, but target everybody.”

So far, so good – for Firefox OS and for the diversity of the mobile ecosystem. Even Android fans can probably get behind the idea that another open mobile platform offering choice is A Good Thing. Some may even concede that challenging Google’s ability to dominate and control the mobile ecosystem may be ultimately beneficial, too (assuming Firefox OS can build momentum, of course). Diversity can foster innovation, after all.

But it’s not all good. Mozilla is not universally liked in the open-source space. Quite the opposite. The organisation has a reputation for “viciously defending its brand,” as MeeGo startup Jolla’s Marc Dillon put it in thinly veiled comments earlier this year at the Mobile World Congress tradeshow – where Firefox OS was being very publicly endorsed by carrier club, the GSMA. Dillon shared the stage with Mozilla’s Mitchell Baker and Canonical’s Mark Shuttleworth in a panel discussion about open platforms, and the underlying tensions between the smaller players and the grand old dinosaur of open were palpable.

Mozilla has a reputation for being slow, lumbering and having teeth. Much like its dinosaur logo. You could describe it as the Microsoft of the open-source movement. Which doesn’t sound like the kind of Android-challenging champion the mobile world needs right now. And yet Mozilla’s corporate attitude and approach have clearly made a lot of (equally conservative) carriers comfortable about working with it – which is perhaps the only way Android can be challenged at this point, being as it owns circa 70 percent of the global smartphone market.

Here’s the latest example of Mozilla’s corporate ethos in action. Last week the organisation contacted publications (including TechCrunch) that had reported on Geeksphone’s new “Firefox OS” Peak+ device to request a “correction.” Mozilla’s email said the Peak+ is not “Firefox OS certified” so cannot be described as a Firefox OS phone. Rather it should be described as being “based on Boot to Gecko” technology – the initial moniker of Mozilla’s Firefox OS project.

Here’s the full statement Mozilla requested accompany the Peak+ news:

Today, Geeksphone announced the pre-sale of a new device based on Boot to Gecko technology. We want to clarify that this new phone that was announced is based on Boot to Gecko technology with pre-release software, but is not a certified or supported Firefox OS device.

As I noted in an update to the TechCrunch story, this is an issue of brand control. Technically speaking, Geeksphone has not yet jumped through the certification hoops to achieve FFOS certification. But it’s highly likely that that’s because it’s not possible for Geeksphone to do that yet. The startup declined to comment about the certification issue when contacted by TechCrunch, noting that they are partners with Mozilla and have been working closely with the organisation to build the Peak+.

From the outside looking in, it’s hard not to conclude that, despite this apparent partnership, Geeksphone is being treated as a second-class citizen vs. the carriers backing FFOS. After all, Telef nica’s first FFOS device (the ZTE Open) does carry the Firefox OS brand. So it is possible to gain certification at this early stage – at least, if you are involved with one of the carriers backing Mozilla’s open-platform play.

It’s possible that Geeksphone, with its more limited and therefore targeted resources, hasn’t been able to divert the required effort to gaining certification yet. But Mozilla’s response, when I asked for clarification about its Firefox certification guidelines, suggests otherwise – since they revealed they are still finalising their processes. Which in turn suggests the Peak+ branding bottleneck is being caused by the lumbering dinosaur, not the nimble startup. (Case in point: it took Mozilla’s PR one whole day to obtain these very partial answers to my certification questions.)

Q. What do device makers have to do to achieve certification as a Firefox OS device?
A. Because each device maker is a separate entity, the details of Firefox OS certification vary slightly from one to another. We will be publishing more details about how future partners can become Firefox OS certified soon.

Q. Do Firefox OS certified devices have access to specific apps that non-certified devices don’t? Such as the Firefox Marketplace?
A. As conversations with interested parties continue, we are finalizing our guidelines for device makers.

Tl;dr

  • Mozilla (apparently) hasn’t decided what FFOS certification entails – therefore it’s being slow
  • But Mozilla is also being inconsistent because carrier supported devices have been able to obtain the Firefox OS brand stamp
  • Ergo, Mozilla is playing favourites – specifically favouring its carrier supporters

Really, those conclusions should not surprise, given Mozilla’s late-to-the-mobile-market position and reputation for cumbersome development. It’s trying to turn those weaknesses into strengths by cosying up to the only folk likely to laud them. No wonder so many carriers are so keen to work with this open-source alternative. Mozilla’s branding strictures and usage enforcement are corporate modus operandi that will reassure the conservative telcos they are treading familiar ground with Firefox OS; that this open ecosystem is nonetheless policed to order, not encouraged towards anything-goes chaos.

Mozilla is demonstrating its willingness to back carriers’ desire to control and to own in order to differentiate itself from Android’s free-for-all which has ended up undermining telcos’ control of users and accelerating the decline of their traditional revenue streams. Fast-tracking carrier-backed devices to the front of the FFOS branding certification queue is just symptomatic of that underlying pro-telco strategy.

Mozilla has made something of a Faustian pact to try to establish an alternative open mobile ecosystem. And with Android so rampantly dominant, that may have been a necessary trade-off to give FFOS a fleeting chance. But it still leaves something of a bitter taste to anyone who roots for David over Goliath.