Good morning, Quartz readers!
The internet passed a small but important milestone this week. Analysts have long wondered whether internet companies that rely on selling ads can still make money off the tiny mobile screens we’re all increasingly using. Facebook answered with a resounding “yes.” It reported that last quarter it made more than half its ad revenue on mobile devices, and quadrupled that increasing total revenue 63% year-on-year, it quadrupled mobile revenue.
That news buoyed not only Facebook’s shares, but also those of Twitter, which likewise relies on ads. Twitter’s earnings next week—the first since its IPO—will attract intense interest. Further good news on mobile ads could mean that this year we see more hype (and ever wilder valuations) for other firms that rely heavily on mobile, like Pinterest and Snapchat.
But it’s worth keeping some perspective. This week, Nielsen’s latest study on global ad spending revealed that the web still commands a mere 4.5% of the spending on display ads (as opposed to “direct-response” ads, like the text ads that pop up in your search results). Magazines have 10% of that market, and newspapers have 19%.
One reason is that an ad for, say, luxury handbags is more memorable in a magazine spread, TV spot or billboard than in a corner of a computer screen. Clever new online ad formats are constantly being invented (we have some on Quartz), but many are hard to adapt for small mobile screens.
So Facebook’s strong showing only underlines how far there is for mobile ads to go—and why there’s still big money to be made for whoever can create really good ones.—Gideon Lichfield
Five things on Quartz we especially liked
This is what 21st-century globalization looks like. It’s when a small African messaging-app company decides to challenge US, Japanese and Chinese competitors for a slice of the market in India. Leo Mirani explains the business strategy of Mxit.
Twitter is making money off your compulsiveness. Every time you stab at the top of your Twitter feed to pull down fresh tweets (a gesture that Twitter itself patented, by the way), the company makes $0.001, writes Zach Seward. Multiply that by 158 billion and… you do the math.
The woes of being an emerging-market central banker. As currencies tumble, central bankers are caught in a terrible bind between propping them up and preserving long-term growth, writes Matt Phillips. And this week’s drastic rate hike from Turkey’s central bank probably did more for the bank than for the currency, says Jason Karaian.
Two new ways to think about venture capital. Tim Fernholz argues that it makes as much sense for a VC to invest in a coffee shop as in a tech startup, and venture capitalist Jalak Jobanputra explains that yes, we’re in a valuation bubble, but it’s not like the ones of the past.
Plan your Colorado “weedcation” like a responsible adult. If you’re past the age of driving across the country with six friends in a beat-up van that you also use as a hotbox, check out Heather Timmons’ guide to enjoying Colorado’s culture, cuisine and cannabis with a bit of style.
Five things elsewhere that made us smarter
Understanding Apple’s long game. When Apple reported that it had sold “only” 51 million iPhones in the latest quarter, pundits began talking of “peak iPhone.” Tech analyst Benedict Evans sketches out the next five years of the mobile ecosystem and argues that its sheer size changes assumptions about what “winning” means for Apple.
Can Abdel Fattah el-Sisi control Egypt? The army chief who ousted president Mohamed Morsi last year has drawn comparisons with the powerful and popular Gamal Abdel Nasser. But he takes over a very different and much more divided country, writes David Kirkpatrick in the New York Times.
Why modern life may not be too fast, but just right. Tom Vanderbilt in Nautilus explores the intriguing argument that, rather than being too much to cope with, the frenetic pace at which modern technology delivers information to us is actually just catching up to our natural speed of thought.
The Amazon paradox. When the online retailer reported healthy profit this week, markets punished it, because they’d gotten used to its strategy of preferring growth to profit. How it even got them to accept that as a legitimate strategy is a fascinating story, which Matthew Yglesias charts in Slate.
What’s really in your olive oil. In a fun graphic slideshow, Nicholas Blechman in the New York Times explains how a mix of corruption and sharp practices mean that large batches of Italian “extra virgin olive oil” are anything but. (The piece inspired howls from the olive oil industry, and had to incorporate several corrections.)
Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, Apple theories and suspicious olive-oil samples to hi@qz.com. You can follow us on Twitter here for updates throughout the day.
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Quartz Weekend Brief—Ads evolve, monetizing compulsiveness, central-banker woes, plan your “weedcation”
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