Google's Push For Adtech Transparency Could Delay A Bunch Of IPOs (GOOG) | ||
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Joe Apprendi, CEO of adtech startup Collective, is really enthusiastic about Google's new interest in transparency in the online advertising business. He thinks that the buying and selling of ads online is going to go through a "complete reassessment" in the next couple of years as clients figure out just how much of their money is wasted or taken in online fraud. And that, he told Business Insider during a break from a visit to Collective's London office, could make a bunch of companies think twice about whether they want to file IPOs or not. Some of those companies are looking at the experience of Rocket Fuel, an ad network that went public in September 2013 and months later was the subject of class action lawsuits, alleging the company's stock fell after it failed to disclose that a significant portion of its ads were being clicked on by fraudulent botnets. Earlier this week, Google disclosed that 56% of the ads appearing on its platforms aren't actually seen by anyone. While that seems bad for Google — why would you want to run ads that don't get seen? — Google is probably betting that by alerting its client base to the fact that it cares about non-functioning ads it will gain those clients' trust in the future. Those "unviewable" ads are ads that are served on a page but not seen by the user, perhaps because they were low on the page and the reader didn't scroll down that far. Currently advertisers are paying for those ads even though no one sees them. "Non-viewable ads will be worthless by this time next year," Apprendi says. "They're already technically worthless." Apprendi is betting that his company — which offers clients complete transparency about how their money is spent, the cost of the inventory bought and the results they get — is well placed to gain clients that want to know whether consumers can actually see the ads they're buying. Or whether bots are clicking on them. But the industry's switch from its current Wild West condition — Group M once offered clients pricing on a controversial "non-disclosed" basis — to one of full disclosure will be wrenching. Dirty laundry will be aired. Rocket Fuel will not likely be the last adtech company facing allegations from shareholders that it served lousy inventory. (And to be fair to Rocket Fuel, everyone is in the same boat here.) That will have a knock-on effect in terms of the larger adtech companies considering going public. (You can see a list of them here.) "Do I want to be a public company while that happens? No," Apprendi says. "A year ago [headlines about transparency] was not even top of mind. Now it's a consideration." (Another major issue: a bunch of adtech companies that did hold IPOs saw the value of their stocks sink in the months afterward.) Collective has previously been regarded as an IPO candidate. It has 400 employees and gross revenue of about $200 million. But Apprendi sounded unenthusiastic about the prospect this week. "Being well-capitalised and private is better than 'open kimono' right now." Join the conversation about this story »  | ||
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Oil Is Down | ||
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Oil prices are down this morning. The Brent was under $70 a barrel overnight, and it is currently trading at $69.17 (-0.68%). Earlier this morning, it was at $69.08.
Crude is currently trading at $66.25 (-0.84%):
Both indexes hit record lows earlier this week, with Brent oil hitting $67.72 a barrel on December. Crude oil was traded at $64.31 on the same day. Tony Nuan, a risk manager at Mitsubishi, told Reuters that on the current path, oil could go as low as $60 a barrel. "There is nothing to stop it," he said. Weaker oil prices could trigger a chain reaction that would further slow down the global economy. And while OPEC's leader Saudi Arabia seem well funded in cash reserve to survive the current crisis, other countries are not as prepared. Venezuela and Russia are the two economies most affected by the oil crisis at the moment. Join the conversation about this story »  | ||
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Google's Push For Adtech Transparency Could Delay A Bunch Of IPOs (GOOG) | ||
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Joe Apprendi, CEO of adtech startup Collective, is really enthusiastic about Google's new interest in transparency in the online advertising business. He thinks that the buying and selling of ads online is going to go through a "complete reassessment" in the next couple of years as clients figure out just how much of their money is wasted or taken in online fraud. And that, he told Business Insider during a break from a visit to Collective's London office, could make a bunch of companies think twice about whether they want to file IPOs or not. Some of those companies are looking at the experience of Rocket Fuel, an ad network that went public in September 2013 and months later was the subject of class action lawsuits, alleging the company's stock fell after it failed to disclose that a significant portion of its ads were being clicked on by fraudulent botnets. Earlier this week, Google disclosed that 56% of the ads appearing on its platforms aren't actually seen by anyone. While that seems bad for Google — why would you want to run ads that don't get seen? — Google is probably betting that by alerting its client base to the fact that it cares about non-functioning ads it will gain those clients' trust in the future. Those "unviewable" ads are ads that are served on a page but not seen by the user, perhaps because they were low on the page and the reader didn't scroll down that far. Currently advertisers are paying for those ads even though no one sees them. "Non-viewable ads will be worthless by this time next year," Apprendi says. "They're already technically worthless." Apprendi is betting that his company — which offers clients complete transparency about how their money is spent, the cost of the inventory bought and the results they get — is well placed to gain clients that want to know whether consumers can actually see the ads they're buying. Or whether bots are clicking on them. But the industry's switch from its current Wild West condition — Group M once offered clients pricing on a controversial "non-disclosed" basis — to one of full disclosure will be wrenching. Dirty laundry will be aired. Rocket Fuel will not likely be the last adtech company facing allegations from shareholders that it served lousy inventory. (And to be fair to Rocket Fuel, everyone is in the same boat here.) That will have a knock-on effect in terms of the larger adtech companies considering going public. (You can see a list of them here.) "Do I want to be a public company while that happens? No," Apprendi says. "A year ago [headlines about transparency] was not even top of mind. Now it's a consideration." (Another major issue: a bunch of adtech companies that did hold IPOs saw the value of their stocks sink in the months afterward.) Collective has previously been regarded as an IPO candidate. It has 400 employees and gross revenue of about $200 million. But Apprendi sounded unenthusiastic about the prospect this week. "Being well-capitalised and private is better than 'open kimono' right now." Join the conversation about this story »  | ||
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Germany Just Slashed Its Growth Forecasts In Half | ||
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Despite some positive numbers on factory orders this morning, Europe's biggest economy looks to be slowing down at a pretty fast pace. The Bundesbank, Germany's central bank, just slashed its growth forecasts for the economy. Growth in 2015 is expected to be just 1%, half of the 2% that was expected previously.
The run-through is pretty grim. Underlying industrial output is described as "stagnant" and the bank notes that business investment hasn't really materialised, after getting a boost at the end of 2013. In the last quarter, German GDP grew by only 0.1%, but the powerhouse economy's politicians and monetary policymakers are still pretty much staunchly against any extra stimulus. Join the conversation about this story »  | ||
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MORGAN STANLEY ANALYST: A Landslide Victory For Abe Could Send Japanese Stocks Through The Roof | ||
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Japan's Prime Minister Shinzo Abe is likely to storm to another victory in the Japanese general election on Dec. 14. According to polls out Thursday and Friday, Abe is set to take about 300 of the 475 seats in Japan's Diet, the name for the lower house of the parliament. That would be more than the 294 seats he won in 2012, and would give his party and its coalition partners the super-majority it needs to override the upper house of parliament. Morgan Stanley's Robert Alan Feldman said in a note dated Nov. 21 that a "solid victory" for Abe could send TOPIX, a major index of Japanese stocks, up 28% by fall 2015. Feldman raised his estimated probability of a same-sized or larger coalition for Abe to 60%, from a previous estimate of 25%. He's revised the chance of a major loss for the coalition down to 10%, from 20% before. Abe called the election in November after shockingly bad GDP figures. Japan brought in a sales tax hike in April, raising the level from 5% to 8%, which had a much bigger impact than economists had expected. Abe ran on a platform of pushing back the second part of the sales tax hike, scheduled for October, for at least 18 months. That less hawkish stance on Japan's government deficit is paired with the Bank of Japan's massive QE programme, both with the intention of boosting the economy and raising inflation to 2%. This is all pretty good news for other reforms too, according to Feldman. He says the polling "implies a much higher probability of accelerated reform, post-election... Such an outcome would increase the likelihood of Japan exiting deflation permanently." He explains:
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German industrial orders gain momentum in October | ||
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Frankfurt (AFP) - German industrial orders, a key measure of demand for German-made goods both at home and abroad, rose strongly in October, suggesting Germany's period of economic weakness could be over, data showed Friday. Industrial orders rose by 2.5 percent in October compared with the previous month, the economy ministry said in a statement. In September, German factory orders had already risen by 1.1 percent. "This was a good start to the fourth quarter. Alongside a brightening of sentiment indicators, the signals are looking increasingly positive," the ministry said. "Even if the economic risks continue to exist, this suggests that the German economy could be gradually beginning to recover from its period of weakness." Domestic orders jumped by 5.3 percent and export orders edged up by 0.6 percent compared with the previous month. Orders from the eurozone rose by 0.3 percent and orders from outside the eurozone were up by 0.8 percent. By sector, orders for semi-finished goods climbed by 2.5 percent and orders for capital goods rose by 3.0 percent, while orders for consumer goods slipped by 0.1 percent.
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