What I’m Reading

The year 2013 heralds a new world: a world where brands and agencies turn to social rich media advertising as a core way for connecting with the increasingly social and mobile consumer.

Famo.us, the JavaScript framework designed for building crazy rich (yet super fast) interfaces in pure HTML5, is making two announcements out of the HTML5 Developer Conference in San Francisco this morning: the framework will be free to developers thanks to a few “huge hardware vendors” taking interest, and it’s getting a physics engine.

We’ve written about Famo.us a time or two before, but for those who missed it: Famo.us was started in 2011 by Steve Newcomb, just three years after his language processing company Powerset was snapped up by Microsoft for $100 million and rolled into Bing. While it confused a few of the judges when it debuted at TechCrunch Disrupt SF 2012, Famo.us went on to raise a $4 million dollar Series A just six months later.

In a way over-simplified nutshell: Famo.us pulls off a whole lot of clever trickery to allow web developers to tap the GPU of a device (be it that of a computer, smart TV, tablet, or a phone) for calculations, no plug-in required. To the developer, that means being able to build interfaces that are simultaneously richer and faster. To the end user, that means super-snazzy user interfaces without having to install any plug-ins.

Check out a demo of a Famo.us-powered UI below (or check out http://www.famo.us yourself.):

So with a few million dollars raised, how will Famo.us start bringin’ the money in?

They could charge developers. For-pay frameworks aren’t unheard of, though they tend to be the exception. That’s not Famo.us’ plan, though. As of this morning, Famo.us has confirmed that their framework will be free to developers for “as many … apps as you’d like, for as many users as you’d like.”

Instead, Famo.us is relying on the interest of a few huge hardware vendors who are looking to Famo.us to power their UI on future devices. They’ll build (or help build) the UIs, then charge the vendors for licensing. Additionally, Famo.us will offer optional enterprise add-ons (think analytics, or the ability to record/replay user sessions to see how they navigate your design).

Exactly which hardware vendors have taken an interest here is currently under strict lock and key, but we can certainly narrow it down a bit. There are only so many “huge” hardware companies with the financial swagger to make something like this worthwhile. Apple is focusing mainly on native code right now (though they’ve done more than their fair share of contributions to HTML5 by way of WebKit), so it’s presumably not them. Meanwhile, both Samsung and LG have been dumping cash into HTML5-focused operating systems (Tizen and webOS, respectively) for their upcoming hardware.

Finally, Famo.us is also announcing that their framework, which has thus far been focused solely on rendering, has picked up a physics engine along the way. Steve says they set out to find a physics engine that fit three criteria: it had to be fast, it had to work on mobile, and all of the data had to render to the Document Object Model in a way that left it Google-friendly. When they couldn’t find one that matched all of the above, they decided to build their own.

It may seem strange for a framework that’s meant primarily to be used with interfaces to offer up physics functionality — it’s not a game engine, after all — but it makes sense: when you’re working with objects being thrown around in space (be it 2D or 3D space) it’s hugely advantageous to be able to work with forces that parallel the real world, like mass, gravity, and drag.

Plus, it fits hand-in-hand with the way Steve explained Famo.us to Anthony Ha just last month:

“We built a shitty game engine which is basically the best app engine ever built.”

Famo.us is currently in beta sign-up mode, and Steve says they have around 27,000 developers waiting to start building. Interested developers can find the sign-up page here.

Disclosure: We like to note when there are potential conflicts, so it’s worth noting that TC Founder Mike Arrington is one of the investors in Famo.us’ Series A.

We are in the post-PC era, and soon billions of consumers will be carrying around Internet-connected mobile devices for up to 16 hours a day. Mobile audiences have exploded as a result.

Mobile advertising should be a bonanza, similar to online advertising a decade ago. However, it has been a bit slow off the ground, and its growth trajectory is not clear cut.

In a recent report from BI Intelligence on the mobile advertising ecosystem, we explain the complexities and fractures, and examine the central and dynamic roles played by mobile ad networks, demand side platforms, mobile ad exchanges, real-time bidding, agencies, brands, and new companies hoping to upend the traditional banner ad.

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Here’s an overview of some major players in the mobile advertising ecosystem:

Mobile ad networks: Mobile ad networks aggregate advertising inventory and match it with advertisers, much as online ad networks do. Networks soak up ad inventory, analyze its potential, and sell it by matching it to advertisers’ needs. Where networks differentiate is in value-added services, such as aggregating buying power to strike better deals, or improve targeting. The largest ad networks have their own sales forces reaching out to advertisers, as well as their own campaign optimization technology. 
Demand side platforms (DSPs): These function similarly to ad networks, in the sense that they help match advertisers with inventory, but tend to work hand-in-glove with brands. DSPs are complementary to the ad network business because they more richly describe mobile audiences. But once DSPs start hiring their own staff to sell ad inventory, the complementarity could end, and DSPs would compete more head-on with ad networks.

Mobile ad exchanges:  Exchanges automate many parts of the mobile ad process, and can connect publishers with multiple ad networks. Ad exchanges are primarily supply-facing at the moment, and have relatively few interactions with mobile ad agencies (even less so with brands). Agencies are disincentivized from using exchanges because they threaten their lucrative role as the brands’ media buyers.
Mobile Ad Agencies and Mobile Marketing:  One of the gripes you often hear around the mobile ad industry is that agencies don’t get it. According to the U.K.’s Association of Online Publishers, 55 percent of publishers blamed “agencies’ attitude” for low mobile ad revenues. That may be changing. Several people we talked to said agencies are doubling down on mobile, and competency is improving.
Natives: Other companies are emerging that don’t neatly fit the established categories. They resemble ad networks in that they connect advertisers with publishers’ inventory, but they express disdain for the traditional mobile advertising model. These companies are trying to find a native approach to mobile advertising that will break through consumers’ apparent disdain for mobile ads. We call them “the natives.”

In full, the report:

Explains how the mobile ad ecosystem is fractured and complex Analyzes how mobile ad networks play a central role that is coming under threat Examines how demand side platforms and mobile ad exchanges are streamlining the market Breaks down how real-time bidding will play a growing role Details how agencies are coming around to mobile and are trying to bring big brands along Explains how new companies are emerging with native ad formats that are hoping to upend the traditional banner ad

To access BI Intelligence’s full reports on The Mobile Advertising Ecosystem, sign up for a free trial subscription here.

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Aereo, the streaming TV startup based out of NYC, has just scored a significant win in its ongoing court battles thanks to a decision by the U.S. Court of Appeals for the Second Circuit today (via Verge). The Court rejected an appeal from a group of TV networks against an earlier decision claiming that Aereo did not in fact infringe upon broadcaster copyrights.

The appeals decision, rendered today, means that defendants including ABC, Disney, CBS, NBC, Universal, Telemundo and WJNU-TV will have to pursue an appeal with the Supreme Court if it wants the original decision overturned. The previous court’s decision to deny the plaintiffs a preliminary injunction means that Aereo will still be able to operate its services and transmit programs that are still airing on their parent networks. The decision in part hinges on the District Court’s finding that Aereo’s antennas operate independent of one another, like any HDTV over-the-air antenna, rather than as a single unit.

The decision is good news for Aereo’s plans to work with TV providers and ISPs to continue expanding its subscriber base. It would be much more difficult for the startup to curry favor with companies that count Aereo’s legal opponents as close partners. And the decision sets a precedent that helps more firmly establish its technology on solid legal ground, which is another bonus for negotiating with content and network partners capable of getting it in front of more users.

Update: Aereo has issued an official press release about the ruling. The release includes a statement from Aereo CEO Chet Kanojia celebrating the court’s decision:

Today’s decision from the Second Circuit Court of Appeals again validates that Aereo’s technology falls squarely within the law and that’s a great thing for consumers who want more choice and flexibility in how, when and where they can watch television,” said Chet Kanojia, Aereo CEO and Founder. “Today’s ruling to uphold Judge Nathan’s decision sends a powerful message that consumer access to free-to-air broadcast television is still meaningful in this country and that the promise and commitment made by the broadcasters to program in the public interest in exchange for the public’s spectrum, remains an important part of our American fabric.

We may be a small start-up, but we’ve always believed in standing up and fighting for our consumers.  We are grateful for the court’s thoughtful analysis and decision and we look forward to continuing to build a successful business that puts consumers first

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