Archive for the ‘display ads’ Category

More data from periphery: Traditional ad units under pressure

A report found on Clickz today by Web research firm Borrell Associatessuggests that, “display and search advertising are losing ground to spending on online promotions and sponsorships.”

Of course, we agree, and cited just that in our post last week.

I am hearkened back to a few comments by reading the Clickz post today.

First, this posta that discusses scaling advertising in social media. I am still bearish on whether a standard ad unit is the lone roadblock to increased media spending. To this writer, the main challenges comes in terms of controlling my brand on content that I don’t control. Though I believe the lack of an ad unit contributes as well.

Second, the notion I’ve discussed a multitude of times when speaking about the power of widget companies. That is, if major brand advertisers are shunning traditional spots (in favor of promotions or immersive products), then the agencies that represent them need to move in this direction as well.
This will involve a herculean stretch for them in terms of production acumen and technology assets.
Clients will want to know who saw the ad, what engagement level they had, and what success metric the agency was striving for, not merely what the reach and frequency of the ad was.

It would seem to me that the first agency that gets there will reap the benefits.

Though that may take more than 3 or 4 years.

More commentary:

Why reach metrics are terribly antiquated

Advertisements

Adify: Selling at the apex before the flight to quality

News today that ad platform company Adify will be bought by Cox Enterprises in an all cash deal.

Congrats to the Adify team on the deal. They assembled quite a bit of value in a short period of time.

It also seems that there sales comes at the right moment. Vertical network plays work by allowing a blend of brand and performance-based advertising; having the brand though is the key.

For example, “Sustain Lane is a green community/network/marketer, however you see it. They need to sell a certain amount of green advertisers to have their effective CPM be, well, effective.

If an ad recession hits, and the first tell tale signs are “WebMD’s numbers last week, then smaller and newer networks (with less volume and history) will have a tougher time earning brand dollars and continually justifying a platform.

This is not say there is doom at for Adify’s program. By bundling an Adify solution with TV inventory or at least the verticalized cable advertisers, it creates an integrated campaign where Cox can create more value.

So a nice win both ways.

This brings a solid base hit back on Adify’s $27M in funding. There should be an indirect corroloaries reviewed to the Rubicon Project and Pubmatic and other ad service-type companies.

Goodbye steak dinner, hello accountability…and a blurb about Nike?

Is the recession or forth coming recession having a big impact in online advertising?

It sure looks that way. It started last week with Google’s announcement and NBC’s shortfall.

Now this week, we see further evidence that there is a flight to accountability happening right in front of our eyes.

Two more pieces of information for you:

Tuesday: Yahoo’s earnings
Yahoo stating, “We are seeing significant growth in class 2 (remnant), very strong growth in revenues and CPMs, with revenues close to doubling in that category.”

Wednesday: WebMD’s warnings
WebMd revised forecasts stating, “Based on current visibility into the second half of 2008, WebMD is updating its financial guidance to reflect a recent shift toward shorter term buying commitments in certain of its customers’ consumer advertising purchases which the Company believes is driven by increased caution in the current business climate.”

Update: Thursday: Scripps Numbers, online up 23% in Q1, cable up 15%, newspapers online flat
Offline newspapers down 8.3% to $156M, online flat at $10M. Seems like some worrisome exposure here going forward on the offline side.
Key stat maybe: Interactive Media revenue was $77.5 million for the first quarter compared with $62.9 million in the first quarter 2007. (Up a shade under 20%)

The difference between WebMD and Yahoo in this case. Yahoo Tier 2 is almost exclusively reliant on performance marketers. WebMD’s inventory is almost exclusively reliant on brand advertising.

This all brought me back to an article in the New York Times written in October of last year on Nike marketing.

It’s a good piece if you have not read it, lots of good stats.
The key takeaways and conclusions:

1) According to NYT, through Advertising Age, only 33% of Nike near $700M budget was spent on traditional media in 2006.
This writer’s take: Display advertising is largely archaic at this point, having existed online for over 10 years. I believe it is fair to lump in traditional Web ad units into “traditional” media. Nike classifies it as advertising that is about “interruption.” Banner advertisements are largely about interruption.

2) A key comment from Stefan Olander, global director for brand connections at Nike: “How can we provide a service that the consumer goes, ‘Wow, you really made this easier for me’?”
This writer’s take: This is precisely what the Web, widgets, social media apps are about. However more importantly it points to a desire for a higher production cost and distribution through virality, not placement.

It will interesting to see further announcements and branded campaigns if or as a recession hits.

More whipping on Lending Tree, more ads on Scrabulous

Played Scrabulous today on Facebook for the first time.

Through 4pm today, I’ve been served 20 Lending Tree ads.

A few problems:

– I don’t own a home
– I don’t need to refinance a home
– I’m playing a game
– There is no frequency cap

And I traced the ad back to advertising.com’s leadback program. I visited Lending Tree earlier this week and did not take an action on their site.

How is this relevant?
How am I in market?

And Yahoo couldn’t blow away their numbers. Amazing….

Update (4:45): I am now up to 25 ads vs. my cookie…industry standard is 6 per consumer per day.

Random: They should add supporting marketing material to the Scrabulous brand logo that reads, “Where smart people go for online dating?”

Update: (5:15): I’m up to 35 Lending Tree ads with absolutely zero shot for a conversion. I wonder if they have an age filter in there. Cubix or Social Media, but be making a killing. Simplyamazing. As a note, right after that date comment I got a Trojan ad (that’s contextual, perfect)

Final Update: As of 10pm last evening, I had been served 61 LendingTree ads, at which point I became inmarket for EDU ads and UofP through advertising.com leadback. I guess there was a time-of-day ruleset.

AdRoll: Effort level vs. volatility

Those who read this blog know I am a fan of the vision of AdRoll in terms of solving for the two most important macro issues going forward: Small publishers and branded marketers. I am not affiliated with AdRoll in anyway.

From the press release and TechCrunch coverage it appears they are truly focused on bridging the pain points on both sides.

AdRoll will work because of the power of ability to manage groups. Some of the tough operational things that will face AdRoll as it scales will be: fraud, managing “group participation” rulesets and with that, volatility.

Some of the more global competititive issues facing them will be adserver integration and where they sit in the daisy chain of decisioning. I thought of this while reading the TechCrunch message board interaction between Pubmatic’s and AdRoll’s CEOs. It is interesting to note the language that the Pubmatic CEO used, specifically “we look forward to adroll as another option for publishers.”

At the end of the day, one of the companies has to come first in the daisy chain of decisioning and I would surmise, given that AdRoll wants to cater to brands, that they need to be the first option.

Both Pubmatic and AdRoll give smaller publishers a much better option than a blind network in gaining more for their inventory. The extent they can make this scale across a wide swath of brand marketer dollars will be the key to both systems.

Hopefully neither business model will come down to what VP of Sales joins or the tempermental nature of brand dollars.

Follow-up to the Dashboard post: What’s your CPM?

There was a comment on the dashboard post regarding brand marketing vs. direct response marketing, that demanded a follow-up post.

Having been working online for more than 10 years here, I can say without a doubt that performance-based marketing, and Google itself, has driven internet marketing and content production more than anything else.

I only need to look to major equity deals like NexTag’s billion dollar private equity deal, AOL-Advertising.com, heck even aQuantive-Microsoft as a few examples.

I hate to keep pointing to other people’s blog for fear that this blog lacks value, but I’ll point to expert Andrew Chen’s blog one more time here because he eloquently describes the need for brand advertising to catapult a business model.

The reality with performance-based marketing is that it’s very iterative, competitive and non-service based. I’ll use this example, I am purchasing the keyword “Las Vegas hotels” on the top spot at Google. Let’s assume for example that my creative is a mirror image to the client’s below me. How do I get that spot? Obviously by bidding higher.

The point, small increases in effective CPC or CPM, can power large gains in volume. Let’s use an EDU example, I’m NexTag bidding versus ClassesUSA for the Yahoo Marketplace position. If I bid $.05 more per impression (or even less!) I own vast amounts of volume. Assuming that placement averages 200 leads a day at $60 a lead, that $120,000 in revenue that I’ve been able to earn by bidding just a fraction of a percentage more.

The point, gains made in online marketing are iterative and need to be well coordinated.

In the simplest terms, I need to own the highest RPL or RPA (Revenue per lead or acquisition), own the highest conversion rate, and own the highest Cost per Acquisition vs. Volume metric — or I at least need the aggregate of these to be slightly better than my competitors. That takes technical sophistication (products and integrations), expertise, and competitive strategy. It’s a lot of heavy lifting….daily.

Which brings me back to my point? Say I’m buying inventory on Yahoo Autos! and arbitraging that traffic an effective lead price or cpm arb price, I can bid $2.00 CPM for that traffic and I’m constantly fighting off my competitors at $1.96 and maybe $2.01.

However, I have absolutely no answer for Lexus who comes in there and buys that exact same inventory at $7 – $14CPM (at that’s probably ROS, non-roadblock). How do I possibly manufacture a competitive $7CPM on member value or lead price. I can’t.

90% of marketing dollars–I’ll check that fact–are spent on brand advertising. It’s the reason that Google decided to bite the bullet and partner with Publicis. Their thinking, “Well I can’t come up with a great product yet for all brand advertisers, in fact most of them fear me, at least I can move the needle by partnering with one of them and getting some spend.”

The biggest opportunity online is in successfully scaling a brand marketing solution. A solution that brings those double digit CPM online in earnest and with consistency.

Any “solution” directed at performance marketer needs to provide such a consistent and measureable ROI impact immediately upon integration that increases conversion exponentially and I just don’t see that happening.

Thought I’m not sure if I see someone able to short-circuit the brand/agency sales cycle either, but if the product’s there, then there has to be a good salesman somewhere.

A quick note here: A thanks here for everyone who has taken to reading this blog and providing feedback. Getting thoughts on paper, or screens rather, is great in terms of hearing other people’s opinions on Internet marketing.

Brand Advertisers, Your Move! What’s valuable inventory?

There have been many stories lately focusing on how to evaluate your inventory if you are an online publisher. Major publishers dropping adnetworks, social media CPM compromising Google’s numbers, announcments by publisher service firms on pricing, etc. etc.

What all these get to is defining what is valuable inventory. Again, ask a performance marketer and they point specifically to “gross profit dollars” in evaluating a placement. Performance marketers are only as good as their latest collection of creative or offers and how is performing versus a segmentation of their inventory (by publisher, by placement, by creative, etc.)

Ask a brand marketer, who is paying 10 – 20x the rate for the same inventory and usually you get things like unduplicated reach and frequency and a soft review of a metric.

Andrew Chen, an expert in the field, has suggested that equation for evaluating your revenue is the following:  (p.s., I encourage you to read and subscribe to Andrew’s blog)

Brand revenue = # campaigns sold * average campaign size * brand CPM
Direct response revenue = (total impressions – brand impressions) * remnant CPM
Total revenue = Brand + remnant revenue

Here’s the post: http://andrewchen.typepad.com/andrew_chens_blog/2008/04/how-not-to-calc.html

I, of course, agree with him, but it also begs the next question:

How are those impressions displayed?

Case 1: A brand advertiser might purchase a 7-day buy on the front page of Edmunds.com for example, however there may be 10 other “advertising” placements by on this page, either brand or performance based.

Case B: The same brand advertiser may buy on the “New Cars” section and there may be zero placements from brand or performance marketers on these pages.

Which inventory for a brand advertiser is more valuable? Does it matter?

If there are no standards, what I am doing if I am a publisher focused on ROI is coming up with a way to optimize inventory that:

– creates many many impressions

– optimizes performance marketing on pages that *have* brand advertisers

Does this sound like inventory that a brand advertiser wants?

It’s time for brand advertisers to take accountability and describe either through standards or IO the type of inventory they want and what it means for their brand. The onus is on them. Further, the onus is actually on advertising agencies specficially who control a vast amount of spend for brand-based advertisers.

This should be part of the service that they are peddling to their clients.

More on the value of inventory later this week, including a follow-up to this piece:

https://overpricedad.wordpress.com/2008/04/02/media-buyers-unite-a-product-for-agencies-and-microhoo/

Focusing on the supply: Good move Pubmatic

Very nice press release by Pubmatic this morning. The company is focusing it’s business on helping publishers manage their business.

http://www.marketwire.com/mw/release.do?id=840717

An expression I am fond of using nearly every day, is that the online media display world is one where “demand is large and supply is constrained specifically by qualititative factors.”

As we all know the definition of quality is a very vague one. Sell a brand advertiser and it’s reach and uniques. Test out a direct marketer and it’s all about optimization and direct ROI. The juxtaposition of these metrics creates a very volatile marketplace.

That’s why I like Pubmatic’s announcement this morning. They are essentially serving their clientele (niche publisers) and showing the value of inventory directly through pricing by stating, matter-of-factly through their data review, that the ecpm on small publishers is higher than large publishers.

Pubmatic is further excluding brand advertisers from the review so as to not introduce volatility and noise into their data.

The result? A benchmarking service where a publisher can evaluate their inventory and see if they are performing better, on par or worse than others in their space in terms of performance-based spend.

This helps with a few things:

– understanding if there is more room in their remnant or dr-based inventory

– determining the confidence factor of expecting a similar eCPM the following month

– understanding trends to improve content on their site or migrating directionally towards a certain CPM

– evaluating whether they should go out and hire an expensive sales staff (for brand focus)

At the very least, it shows to publishers that: a) Pubmatic is their advocate and b) there is value for being part of the Pubmatic “network.”

Sounds like a forthcoming convergence here between players like Rubicon Project (mostly remnant-remnant to date), AdRoll, Pubmatic, OpenX and an assortment of others.

Will be interesting….

More on TechCrunch: http://www.techcrunch.com/2008/04/07/pubmatic-data-suggests-small-sites-command-higher-rates-for-remnant-ads-than-large-sites/#comments 

And the race is on: Microsoft ramping up

220 Containers! 

Some might find the article below a little bit boring, but the magnitude of it cannot be ignored.

http://www.datacenterknowledge.com/archives/2008/Apr/01/microsoft_embraces_data_center_containers.html

Microsoft–Yahoo purchase to come, aQuantcast puchase already digested–is gearing up for Google-Doubleclick.

What will happen with Platform A as the power struggle for ownership has slowed their momentum. That’s what happens when you throw three sales teams together quickly on one platform, politics trumps business.

More on lead gen: Where’s the distribution?

Earlier this month, I commented on incentive marketing practices driving lead generation for Yahoo Autos!

With some of today’s comments, it begs the question: Where does the distribution come from for a burgeoning lead generation firm.

To be fair performance marketing is very Darwinistic, where the fit survive by adapting and mastering their domains. However, consider some of the major news surrounding performance-based media in the last six quarters:

– Q3/Q4 2006 – Google changes their quality ranking which has a profound impact on lead gen landing pages. Search traffic declines for lead gen companies.

– Q1 2007 – The mortgage shakeout. Well that actually collapses a vertical not a distribution point? Well, sort of. It was the high economic monetization of mortgage ads that got many companies into display marketing. This allowed companies to sprinkle in other offers to generate traffic when mortgage marketing was not working. A comment adage heard in lead gen, “Nothing monetizes like mortage.” Take this away, and now you have companies like LMB trying desperately to optimize around auto insurance. The numbers just don’t compute.

– 2007 – The meteoric rise to economy of scale of Facebook (in parallel with MySpace) along with applications that contribute to more social media usage. Why does this matter? Less time in email (or for many potential lead gen customers, less exposure to spam and questionable subject lines). Combine that with better spam filter and declining open rates, circle “email distribution” as a tougher acquisition channel

– Q4 2007/Q1 2008 –  Potential FTC legislation around behavorial marketing. Inmarket indicators in display, poof, maybe.

To be sure many companies will adapt to these changes and continue to aggressively grow their businesses.

LowerMyBills upsells credit report customers. Quinstreet has moved into new verticals.

It will be interesting to see the new marketing vehicles that take hold if some of the tried and true lead generation distribution points stumble a bit.