jump to navigation

WSJ: Web Sites Debate Best Values for Advertising Dollars August 16, 2009

Posted by Bill in Behaviorial Marketing, Digital, Online Advertising, ad networks, online marketing, traditional advertising.
Tags:
add a comment

Interesting read, especially with the study coming from the OPA… hardly an independent voice. However, it brings up a more holistic strategic question: How can we as an industry be doing a better job influencing share shift from broadcast and/or direct mail? Our competitors are not OPA sites versus portals versus ad networks; our competition needs to be anyone selling TV and traditional direct….

__________________________________________________________________________________________________________
Study Produced for Online Publishers Says Proprietary Content Is Better Channel Than Portals or ‘Ad Network
by Emily Steel

For a time, Internet advertising was a rising tide lifting all boats. But as ad spending ebbs, there are more arguments about where on the Web advertising is the most fruitful.

The fight over shrinking Internet ad dollars pits online publishers that offer premium content against major Web portals such as AOL, MSN and Yahoo. Portals and publishers, meanwhile, also have to compete with the ad brokers that sell often cut-rate leftover ad space on Web pages with less visibility.

Web publishers this week are pointing to a study — ordered up by their trade group — that they say presents evidence that ads on their prime pages offer more bang for the buck.

Online Publishers Association’s report
The Online Publishers Association — which represents creators of Web content such as New York Times Co., ESPN.com, MSNBC.com and The Wall Street Journal — on Thursday is releasing a study that finds that ads appearing on the portals and bought through ad brokers are significantly less effective than the premium ads they sell on their own sites.

“A brand marketer might be tempted in a recessionary economy to look for the lower-cost option. What this study shows is that the lower-cost option is not a productive solution,” says Martin Nisenholtz, senior vice president of digital operations for New York Times Co.

The study, based on research from the WPP PLC research firm Dynamic Logic, taps three years of data that include more than 4,800 marketing campaigns. Dynamic Logic offers a syndicated tool that big advertisers use to measure the impact of their digital campaigns.

The study shows, for instance, that online ad awareness metrics — where consumers remember seeing a brand or product advertised on the Web in the past 30 days — was 21% greater for ads on content sites than portals and 50% greater than ads placed in bulk by ad brokers.

Rates have begun falling for display ads, the graphical ads that border a Web page and make up the bread and butter of most Web publishers’ revenues. U.S. spending on display ads will drop 17% this year, to $4 billion, according to projections from PricewaterhouseCoopers. These declines come after years of rapid growth. It’s bad news for media companies trying to make up for even steeper declines in their traditional businesses.

Overall, U.S. spending on online advertising is expected to drop 3.2 % to $24.1 billion this year, according to PwC.

Big digital publishers long have charged high rates for the ads that appear on high-traffic areas of their sites, such as the home page. The argument is that their professional, proprietary journalistic content should reflect well on an advertiser, says Ed Erhardt, who oversees ad sales at ESPN, which is a unit of Walt Disney Co.

The Web portals and ad brokers, for their part, say that while big banner ads on a premium Web site often garner more attention than small ads, advertisers are paying high prices for relatively small audiences. The portals say they provide an easy way for marketers to make a big splash with consumers with a single ad on their homepages, which attract big audiences.

As the economy has deteriorated, many marketers have sought out cheaper options, like “ad networks” that sometimes sell ad space for less than $1 per thousand times the ads appear. In comparison, Web publishers try to sell ads for upwards of $10 per thousand appearances.

Some media buyers say the study oversimplifies the planning work that advertisers do, as ad space purchases on premium content sites, portals and through ad networks each serve a different purpose.

“You go to media conferences, and there is a portal contingent, there is an [ad network] contingent. Sometimes I feel like saying to all of them, can’t we just get along? You all have a place at the table, says Steve Kerho, senior vice president of analytics, media and marketing optimization at Organic, a digital ad agency owned by Omnicom Group that works with marketers such as Chrysler, Bank of America and Kimberly Clark.

Portals like AOL and Yahoo are trying to position themselves as a one-stop shop for digital advertising. “We see value for advertising in all three,” says Jeff Levick, AOL’s president of global advertising and strategy for Time Warner’s AOL division.

Some ad and Internet industry executives worry that comparative research about any part of the online ad business could hurt the whole industry, by confusing advertisers who are still new to the ins and outs of the Web — a small but promising part of the slumping ad business.

“The reality is that consumers are spending more and more of their time online. We as an industry have not made the bridge to large marketers as to why the dollars should shift as well,” says Bill Wise, vice president of business development at Yahoo. “It is all part of us getting more market share for digital.”

Silicon Alley 100 List October 31, 2008

Posted by Bill in Online Advertising, online marketing, traditional advertising.
add a comment

From Silicon Alley Insider:

“As we approach the end of another year, we’re once again pleased to present the Silicon Alley 100, our annual list of the entrepreneurs, investors, executives, and technologists who are making waves in the New York digital business community.

Last year’s No. 1, Mayor Mike Bloomberg, has had his jersey retired (but we commend him for once again blazing entrepreneurial trails by doing away with annoying two-term rules). Union Square Ventures’ partner Fred Wilson, who hates lists like this, has deservedly taken his place.

Congratulations to this year’s winners and a hat tip to the impressive cadre of other folks we didn’t have room to recognize. As always, a huge thanks to our readers, whose votes and voices helped shape our second annual SA 100, and to our advertisers and sponsors, without whom we wouldn’t exist.”

Going Tech Green: Google Files Patent for Floating Data Centers September 12, 2008

Posted by Bill in Ad Serving, Google, Green, Online Advertising, Technology.
add a comment

I have to admit, this is truly interesting. Thanks to Joe Tedd for sending to me…

Article from Red Herring

Search giant Google has filed a patent application for a “water-based data center” that would use seawater for cooling and rely on ocean tides, currents, and waves for power generation.

The application, filed last year with the U.S. Patent and Trademark Office, became public knowledge on August 28. Google envisions “floating platform-mounted” data centers 3 to 7 miles from shore, in 50 to 70 meters (164 to 230 feet) of water.

As the global use of the Internet grows, more large computing facilities, or data centers, are needed to support the demand. But these data centers, many as large as 100,000 square feet, require large amounts of costly real estate and electricity.

Google’s plan strikes at both expenses. Data centers would be housed offshore, presumably where land prices are cheaper, and would generate their own electricity, said Data Center Knowledge Editor Rich Miller.

Miller said annual operating costs for data centers in the U.S. can run as high as $28 million per year in regions with relatively expensive electricity.

Google has been searching for ways to use more renewable energy sources, investing in solar companies and other startups through its foundation.

But schemes for harvesting ocean power from the natural motion of the water are still largely untested in commercial applications. Numerous pilot plants are under development around the world.

Google doesn’t intend to build its own wave energy machines, however. The patent application mentions the use of Pelamis P-750 Wave Energy Converter systems for generating electricity from waves.

The P-750 systems are made by the Scottish company Pelamis Wave Power. The company has built what it claims is the first commercial wave farm off the coast of Portugal. It has a 2.25 megawatt capacity, but the machines are still in commissioning phase.

Google isn’t the only company looking at placing data centers offshore. San Francisco Bay Area startup IDS would like to place them on decommissioned cargo ships, according to some reports. And Google might encounter resistance to its idea from businesses that don’t want important information residing on data centers that are less resistant to man-made or natural hazards, such as hurricanes.

Patent filings typically take 32 months for approval, according to the U.S. patent office. That means Google might not receive its patent on the floating data centers until October 2009.

The system envisioned by Google would be modular, meaning it could easily be scaled up or down depending on the need.

In one example, the patent application describes 40 Pelamis systems spread over a square kilometer to produce 30 megawatts of electricity.

The platform system would also use wind turbines to provide pumping power for the seawater cooling units.

Traditional Publishers Need to Become Ad Networks Themselves… March 24, 2008

Posted by Bill in Ad Serving, Online Advertising, Press Mentions, Right Media, ad networks, exchanges, traditional advertising.
add a comment

A lot is being written about online media not being sold like “pork bellies”, or as a commodity. Those people are missing the point of the importance of syndication in today’s market. Publishers may not opt to send remnant inventory to ad networks, but rather BECOME ad networks themselves. Martha is doing it. Forbes is doing it. Viacom already does it.

Mike Shields of MediaWeek wrote a decent article summarizing this. While I think he missed my main point, the article is a good read….

ESPN Turns Off Ad Nets to Protect Brand, Content

The site recently cut ties with Specific Media and several other unnamed ad networks, and is taking the bold stand that ad selling that relies heavily on arbitrage and algorithms is not for them.

Mike Shields

Top Web publishers are planning a revolt. Even as more prominent sites experiment with selling remnant inventory through online ad networks, and in some cases ad exchanges, ESPN.com is saying thanks, but no thanks.

The site recently cut ties with Specific Media and several other unnamed ad networks, and is taking the bold stand that ad selling that relies heavily on arbitrage and algorithms is not for them.

“We’re heading down a path where it no longer suits our business needs to work with ad networks,” said Eric Johnson executive vp, multimedia sales, ESPN Customer Marketing and Sales. Sources say that ESPN would like to rally support from other publishers behind this move, and ultimately tamp down ad networks’ growth. Turner’s digital ad sales wing is rumored to be considering a similar move, though officials said no decisions are imminent.

“Turner, like a lot of media companies, is currently reviewing all of its media practices, and ad networks are certainly a part of that process,” said Walker Jacobs, senior vp of Turner Entertainment New Media Ad Sales.

ESPN’s decision crystallizes a philosophical debate in the online ad sales industry that has intensified since the Interactive Advertising Bureau’s annual meeting last month, when during a keynote address Martha Stewart Living Omnimedia media president Wenda Harris Millard gave her now famous warning against selling Web inventory like “pork bellies.”

Two sides have formed—those who want to protect traditional, direct selling of premium content brands, and the math-loving crowd which favors automation and data. The math lovers make the traditional sellers nervous.

“There is a genuine concern about commoditization of brand inventory by some of the networks,” said Millard in an interview. She’s concerned that such a debate is happening so early in the Web’s development as a business. “We haven’t even established the value of our medium, and all of a sudden it’s about price. That is very bothersome to people who are brand stewards.”

Of course, there’s a reason that online ad networks, which rose to prominence in the late ’90s by aggregating inventory across thousands of smaller Web sites, are playing a bigger role in Web publishing. Most large sites are swimming in avails they can’t sell. Insiders estimate that 20 percent to as much as 70 percent of inventory can go unsold at a given time. Thus, ad networks offer a monetization alternative.

And in recent years, to differentiate themselves, more of these companies have been touting themselves as ‘premium” ad networks, talking up their associations with the ESPNs of the world when they meet with ad agencies. “Nobody comes into a meeting and says, ‘I’ve got a bunch of lousy sites,’” said Mike Cassidy, CEO of Undertone Networks.

That doesn’t sit well with some publishers, like ESPN, who see networks as profiting on their brand investments and their user data, while also threatening their own marketer relationships. Many just think using networks devalues the power of content.

Several publishers, in conversations with Mediaweek, privately applauded ESPN, and hoped that others would follow suit. But applause doesn’t necessarily translate to action.

“I don’t see it happening,” said John Battelle founder/chairman/CEO Federated Media, a company that represents numerous blogs. “I suppose certain premium brands could say, ‘I’m above the fray. Our inventory is all very valuable.’ With that there are some problems.”

Central among those problems is that in this accountability-driven quarter-by-quarter business climate, it’s hard for any publisher to walk away from revenue, even if it’s not huge.

“Not all inventory is created equal,” said, Peter Naylor, senior vp, digital media sales, NBC Universal. For example, Naylor said iVillage’s Horoscope section generates a lot of traffic, but doesn’t attract many endemic advertisers. Thus, he turns to networks.

According to Pam Horan, president of the Online Publishers Association, most publishers do just that.

For example, MTV Networks recently inked a deal with Microsoft to let the software giant sell its remnant inventory. Nada Stirratt, executive vp, MTV Networks Digital Media (herself a former top sales exec at ad net giant Advertising.com) said that ad networks “absolutely have a place for high frequency, low value impressions.” Plus, she likes tapping into Microsoft’s tech expertise, and is comfortable with the numerous safeguards the deal offers.

Even Tina Sharkey, chairman, BabyCenter.com (and a former AOL exec) who gave a well-received presentation of the value of branded sites relationships with their readers at the IAB meeting, defended the network model. “Ad networks play a vital role in the online advertising ecosystem.”

So can ESPN change the model? “It won’t have the desired impact,” said Adam Kasper, senior vp, director of digital media Media Contacts—unless the top ten or so Web sites followed suit.

The networks themselves don’t seem worried. Tim Vanderhook, co-founder of Specific Media, said he hopes that his company would end up working with ESPN again in the future, and doesn’t believe that big name publishers can afford to ignore networks. down the road.
“Specific Media’s publishing partners come and go in the network throughout the year as we constantly assess the cost and performance of their ad inventory for our advertisers,” he said.
“If several, or even all, big name publishers stopped working with us, it would hurt the publishers themselves more than us…The online advertising business is all about targeting and publishers can’t do it on their own because they don’t have enough data.”

Kasper, and many others, believe that data will be essential to online advertising’s future.
“They’re [ESPN] essentially fighting technology. That’s a hard thing to do.”

But ESPN and other publishers may opt to invest in their own ad targeting technology. In the meantime, they’ve got the option of trying ad exchanges, which promise more control.
“We think of the exchange as a solution to all of these discussions,” said Bill Wise, general manger, global exchange, Yahoo – which acquired the exchange company Right Media last year.

Wise emphasized that since exchange companies don’t purport to be ad sellers, but rather provide a selling platform, they are safer than ad networks. “You take a big risk in letting other people represent your brand,” he said.

As for commodization fears, Wise quipped, “Well, gold is a commodity.”

Web 3.0– Predictions for 2008 (Part I) January 4, 2008

Posted by Bill in Behaviorial Marketing, Online Advertising, Right Media, ad networks, exchanges, mobile marketing, online marketing, social network, traditional advertising, video.
1 comment so far

1. Ad Networks need to go deep to strive. Ad Networks need to offer true differentiation and add unique value. I predict the untargeted or performance-based ad networks lose ground to the portals who are building their own ad networks, and to vertical ad networks and data/ behavioral ad networks who are building a defensible deep expertise.

2. Local & SMB market get to critical mass for a handful of players and the search engines pay attention to them. Its about time…

3. Video continues to not have a standard ad unit, but continues to take huge mindshare within brand departments, ad agencies, brand publishers and portals… and amongst the press, who loves to talk about the broadcast dollars shifting.

4. Mobile explodes. Similar to the social networks in 2007, huge amounts of venture capital will pour into this market without a material focus on established revenue streams.

5. Ad Exchanges go mainstream…!!!

More to come in Part II…

Yahoo Acquires Right Media April 30, 2007

Posted by Bill in Auction-based media, Google, Online Advertising, Right Media, Yahoo Search Marketing, exchanges, online marketing.
2 comments

Fun days here at Right Media… I have been incredibly impressed with Yahoo!s strategic vision and commitment to the exchange model through the process. I think this will be a great marriage. More importantly, it makes the competition with GoogleClick that much more exciting!

Official Press Release: Yahoo! Announces Agreement to Acquire Right Media, Largest Emerging Online Advertising Exchange

New York Times: Yahoo to Buy Ad Company in Bid to Compete With Google

Some excerpts from the above New York Times article, by MIGUEL HELFT:

- “The acquisition, to us, is a key step toward executing our long-term vision to build the leading advertising and publisher ecosystem both on and off the Yahoo network,” Terry S. Semel, Yahoo’s chief executive, said in an interview. The deal is to be announced today and is expected to close in three months.

- Right Media, a four-year-old company, runs an exchange in which advertisers and publishers buy and sell online ad placements in real time through an auction system. DoubleClick, which specializes in serving ads on Web sites, announced recently that it would develop a similar type of exchange. Online publishers are increasingly turning to exchanges like these to sell ad space on their sites.

- “What we look forward to do as an owner is put more inventory into that pot to help create a more vibrant exchange and create better pricing for everyone,” Mr. Semel said.

- Yahoo said that after the acquisition it would increase its participation in the exchange as both a buyer and seller of ads. The company said it planned eventually to sell all the nonpremium ad space on Yahoo through the exchange, a move executives said would enhance revenue.

- Google and Yahoo each dominate one segment of the online advertising market. Google is best at selling text ads that appear alongside search results and on other Web sites. Yahoo, which has lagged Google in search, is a leader in selling graphical ads, mostly on its own sites.

- By buying Right Media, analysts have said, Yahoo would accelerate its own efforts to sell and broker ads on other sites. Those efforts began taking shape recently, after Yahoo reached agreements to sell ads on eBay and on some 264 newspaper Web sites.

(Note: For the math impaired, $680 million for the remaining 80% that Yahoo! didn’t yet own is equal to an $850 million in total valuation…)

Google Max Bid For DoubleClick… or Insurance Policy? April 28, 2007

Posted by Bill in Ad Serving, Auction-based media, Google, MSN Search, Microsoft, Online Advertising, online marketing.
2 comments

It has been rumored that Microsoft bid right around the rumored $2 billion for DoubleClick. So the question remains, “Why did Google pay $3.1 billion?”. I have some thoughts; some serious, some just for giggles:

1. With AdWords, “max bid” represents the most an advertiser is willing to pay for a click for a particular keyword or group of keywords. The ACTUAL price the marketer pays is one penny more than the next highest bidder (on an effective CPM basis, which takes into account CTR/ quality score). Meaning, a marketer can bid $50 a click, but may only end up paying $0.50 for the click if that’s what it takes to win the auction. My theory is that Google thought the $3.1 billion was its MAX BID, and insiders say the Google executives were astonished when they didn’t win the auction for $2,000,000.01!!!!!!!!!!!!!!!!

2. This one is serious… PATENTS! While DoubleClick may claim to be the “central nervous system” to online advertising in their new marketing campaign, they really were the pioneers of online advertising the 90’s, and have really, really, really valuable patents that Google just couldn’t afford Microsoft to get their hands on. After all, they need to protect their 149 BILLION MARKET CAP… an extra billion to ensure it is seemingly a decent insurance policy. Thanks to an awesome write-up at SEO by the Sea below are a list of the patents DoubleClick has.

3. Last, the ability for Google to publicly beat Microsoft yet again was worth a little premium. Dr. Eric Schmidt spent decades at Novell and Sun getting beat up by Microsoft… Time for some pay-back from the Google CEO, who now also sits on the Apple board of directors.

WIPO Patents Assigned to Doubleclick

1. Method and System for Sharing Anonymous User Information
(WO 2002/035314)

Published May 2, 2002
Doubleclick, Inc.

A method and system for sharing online user information in an anonymous manner. The system associates an identifier (100) with anonymized information of the user, and sends the anonymized user information to a receiving party (130). In one embodiment, the system receives a temporary id with personally identifiable information from a Web site, uses the personally identifiable information as a key to obtain the anonymized information from a data source, and sends the temporary id with the anonymized information to the receiving party. the receiving party uses the temporary id, previously received by the Web site, as a key to obtain the anonymized information of the user. In another embodiment, the system receives a temporary id from a Web sit…

2. Automated Online Sweepstakes System and Method
(WO 2001/059656)

Published August 16, 2001
Doubleclick, Inc.

An automated process of conducting an online sweepstakes and marketing to sweepstakes entrants. The software system enables a non-technical individual (e.g., sweepstakes manager, marketer, etc.) to create a sweepstakes entry form that is integrated with back-end data processing systems (figure 2, item 210). The entry form and entry form processing system are kept consistent with sweepstakes rules chosen by the non-technical individual and automatically generated by the system. The system enforces compliance with applicable laws with integrated tools to pick winners, to determine eligibility and to collect winner affidavits. A back-end database is integrated directly with a sweepstakes entry form. Online tools permit a marketer to view entra…

3. Network for Distribution of Re-targeted Advertising
(WO 2000/008802)

Published February 17, 2000
Doubleclick, Inc.

A computer system for automatic replacement of advertisements includes an advertising server for selecting an advertisement based on criteria related to the individual viewer. In particular, advertisements are selected for a given user, based on the past behavior of that specific given user. Advertiser web sites on the network are configured to anonymously report back user activity such as visit dates, purchases, specific product pages visited and the like. Alternative reporting embodiments include email, file transfer protocol and spotlight tags. User activity lists are processed to select candidates for re-targeting. Candidates for re-targeted advertisements are identified based on their own individual past activity, and stored in a list …

4. Method and Apparatus for Automatic Placement of Advertising
(WO 1998/058334)

Published December 23, 1998
Doubleclick, Inc.

A computer system for automatic replacement of direct advertisements in scarce media includes an advertising server for selecting a direct advertisement based on certain criteria. Transaction results of the direct advertisement placement are reported back to the advertising server, and an associated accounting system. In one embodiment, the direct advertiser’s server reports transactions back to the advertising server by email. In a second embodiment, a direct proxy server brokers the user’s session (or interaction) with the direct advertiser’s server, including transaction processing and the direct proxy server reports the results of transactions back to the advertising server and its associated accounting system. A direct proxy provides a…

5. System and method for analyzing website activity
Invented by Jonathan Marc Heller, James Christopher Kim, Dwight Allen Merriman, Andrew Joel Erlichson, Benjamin Chien-wen Lee
Assigned to Doubleclick, Inc.
United States Patent 7,085,682
Granted August 1, 2006
Filed: September 18, 2002

Abstract

A method and system for analyzing website activity. According to an example embodiment, the system receives event-level data representing visitor session activity on a client website; attributes characteristic information of the event-level data associated with each visitor’s session to at least one of a plurality of visitor segments, stores results of the attributed information aggregated according to visitor segment prior to a client-requested analysis of the event-level data, and provides online reports based on the resultant data in response to a client-requested analysis of the event-level data.

6. Method and apparatus for automatic placement of advertising
Invented by Dwight A. Merriman and Kevin O’Connor
Assigned to Doubleclick, Inc.
United States Patent 7,039,599
Granted May 2, 2006
Filed: June 15, 1998

Abstract

A computer system for automatic replacement of direct advertisements in scarce media includes an advertising server for selecting a direct advertisement based on certain criteria. Transaction results of the direct advertisement placement are reported back to the advertising server, and an associated accounting system. In one embodiment, the direct advertiser’s server reports transactions back to the advertising server by email. In a second embodiment, a direct proxy server brokers the user’s session (or interaction) with the direct advertiser’s server, including transaction processing and the direct proxy server reports the results of transactions back to the advertising server and its associated accounting system. A direct proxy provides an independent audit of transactions at a remote direct advertiser’s web site. The feedback of the results of direct advertisement transactions provides an efficient utilization of direct advertising space by way of an automated computer system with a predictive model for selection and distribution of direct advertising.

7. Method of delivery, targeting, and measuring advertising over networks
Invented by Dwight Allen Merriman and Kevin Joseph O’Connor
US Patent Application 20050038702
Published February 17, 2005
Filed: September 10, 2004

(There are 5 versions of this patent application on file at the USPTO)

Abstract

Methods and apparatuses for targeting the delivery of advertisements over a network such as the Internet are disclosed. Statistics are compiled on individual users and networks and the use of the advertisements is tracked to permit targeting of the advertisements of individual users. In response to requests from affiliated sites, an advertising server transmits to people accessing the page of a site an appropriate one of the advertisement based upon profiling of users and networks.

8. Network for distribution of re-targeted advertising
Invented by Dwight A. Merriman and Kevin J. O’Connor
US Patent Application 20020082923
Published June 27, 2002
Filed: February 26, 2002

Abstract

A computer system for automatic replacement of advertisements includes an advertising server for selecting an advertisement based on criteria related to the individual viewer. In particular, advertisements are selected for a given user, based on the past behavior of that specific given user. Advertiser web sites on the network are configured to anonymously report back user activity such as visit dates, purchases, specific product pages visited and the like. Alternative reporting embodiments include email, file transfer protocol and spotlight tags. User activity lists are processed to select candidates for re-targeting. Candidates for re-targeted advertisements are identified based on their own individual past activity, and stored in a list of candidate user ID’s. When a candidate on the re-targeted list is identified at any network affiliate web site, a re-targeted advertisement is delivered to the candidate user.

Are Ad Exchanges Solely for Spot-Market/ Remnant Inventory? April 6, 2007

Posted by Bill in Auction-based media, Google, Microsoft, Online Advertising, Online Auction Tips, exchanges, traditional advertising.
1 comment so far

The eBay Media Marketplace (“EMM”) has received much hype the past bunch of months. According to a MediaPost article, this past Thursday that hype came to a screeching halt when the Cable television Advertising Bureau–which holds the keys to launching the broadcast auction system–said the EMM was a permanent no-go. The trade group’s opposition was based on two points:
1. The eBay functionality was flawed, and
2. The system wasn’t in step with the new age of media buying, where the focus is on complex multi-touch point deals, not peddling and purchasing spots.

CAB head Sean Cunningham said his members reviewed a pilot of the system for some weeks. They found that its infrastructure fell short in making the intricacies of end-to-end buying and selling better. Cunningham said it was “evidence of someone developing a system in eBay that, despite the best counsel of top buyers in the business, was just not getting the scope of this business in terms of both current and future practice.”

So this raises a few questions…
1. With all the hype over DoubleClick’s entry into the “Ad Nasdaq” world, will anybody be able to move this marketplace concept up market?
2. Was broadcast simply not ready for their ecosystem to be turned upside down and embrace auction-based media?
3. Is premium inventory, regardless of channel, simply too personal and relationships and media buying too complex to make the evolutionary switch away from upfronts and personal negotiations?
4. Is an auction platform built simply for spot-market, remnant, or turn-key/ non-creative ad inventory?

For the eBay Media Marketplace to make it, I believe the market first needs to figure out a solution for a Premium Online Ad Exchange. For that to happen, it has to be driven by a Media company with a huge online presence, powered by a technology which embraces auctions but respects the old-school inventory forecasting and expectations on campaign delivery. All eyes have to be on Microsoft, Google, and Yahoo! before they go onto eBay…

Welcome The Pubvertisers January 15, 2007

Posted by Bill in Online Advertising, Online Auction Tips, Search Marketing, online marketing, traditional advertising.
add a comment

Last Wednesday, megapublisher Meredith Corporation (publisher of Better Homes and Gardens, Family Circle, and Parents, to name a few holdings) purchased interactive agencies Genex and New Media Strategies. It was an incredible deal for Meredith, as it brings advertising accounts like Honda, Unilever, Citigroup, ABC, Coca Cola, Ford, Sony, and AT&T under Meredith’s roof, and most likely onto Meredith’s magazine pages. It’s also a move that would have been utterly unthinkable ten years ago.

The Wall Street Journal’s Emily Steel puts it this way: “There used to be a clear division between media outlets… which sold ad time or space and ad agencies, which designed and placed the ads on behalf of marketers. One reason [for the division]: the potential for conflicts of interest if an ad agency owned by a media company was seen to be unfairly directing ads to its sibling media outfits.” But times are changing. Steel goes on to cite other examples of the new pubvertisers, including Conde Nast and Wenner Media, both of which have created in-house ad divisions; Gannett Media, which now owns interactive shop PointRoll; and Google, which has “expanded aggressively into ad sales.”

I think it’s Steel’s last example–Google, or, more broadly, the whole world of search–that’s the key catalyst in the pubvertising trend. That’s because search has placed a whole new level of analytics and transparency into the publishing world; and it’s this analytics-based transparency that makes pubvertising possible.

Why? Because advertisers would mistrust pubvertising in environments in which there’s little recourse for evaluating the agency’s suggestions. It’s only when good analytics can show advertisers when they’re being lied to, when they’re being led astray–and when they’re being offered sound advice–that makes it safe to take advice from a source that may have a conflicting interest. Analytics create transparency, which creates trust, which is the crucial element for pubvertising to get off the ground.

And it’s the search engines that are leading the way in both providing and leveraging this kind of transparency. From free keyword tools to human sales reps, search engines are kings in advising advertisers how to manage keyword spend. But while they’re pushing keywords, the engines also provide clear data on how those keywords actually perform. That transparency makes customers feel secure both listening to the engines’ advice on buying keywords, while purchasing those keywords directly from the engines themselves.

Of course, it’s obviously in publishers’ interest to have ad agencies in-house, because having an in-house ad agency places advertisers within immediate reach. Publishers know this, which is why pubvertising is a trend that will only grow. And to allow that trend to grow, publishers of all kinds will look to offer better analytics and transparency to make that pubvertising possible. I’m not just talking about the MSNs, Yahoos, and Googles of the world entering into an arms race to create better targeting and analytics. I’m talking about even the lowest-tech of ad formats getting into the game, as was the case when print classifieds joined forces with Google late last year.

This has serious ramifications for the future of the ad agency. As publishers look to beef up their analytics and transparency so they can get into advertising, ad agencies will have to beef up their analytics capabilities to get closer to the publishers they’ll need to work with–or be purchased by–to survive. That’s exactly what happened in the world of search, in which a transparent, analytics-heavy publisher model (the engine) gave rise to a new kind of transparent, analytics-heavy ad agency (the SEM firm).

And so as pubvertising shifts from yesterday’s impossibility to tomorrow’s new standard, look to a huge surge in the analytics-based publisher, the analytics-based ad firm, and clients who expect analytics-based transparency from both. Meanwhile, Madison Avenue firms who can’t keep up–because they can’t get up to speed with their data–will face a real uphill battle in the new ad world that looks more like the search world every day.

How Microhoo Could Beat Google November 7, 2006

Posted by Bill in Google, MSN Search, Online Advertising, Search Marketing, Yahoo Search Marketing.
add a comment

LAST WEEK, MERRILL LYNCH ANALYST Justin Post revived a suggestion that he had first brought up in June: Microsoft, Post argued, ought to buy Yahoo. Post pointed to reasons why Yahoo might be worth more than its current so-so earnings suggest; he also observed that a Yahoo purchase would let Microsoft gain serious search revenue, even before MSN AdCenter gets up to speed in growing its advertiser base. Obviously, the proposed Microhoo would be a threat to Google. Part of the reason is the major share of search that the new entity would gobble up. According to comScore numbers released in May, MSN and Yahoo hold a combined 41% of all search traffic, which is just shy of Google’s 43%. But the threat from Microhoo would only partially come from search. The real threat to Google would be in Microhoo’s ability to adapt to a continuously-converging media world–a world that MSN and Yahoo are ready for, but that Google still might not be as ready for as it needs to be. All of this goes back to each business’s core focus. For Google, everything is search; Yahoo and MSN, by contrast, work in many channels at once and look to integrate them. And because MSN and Yahoo are already thinking about integration now, they’ll be far better prepared when integration really get underway.

You can see that philosophical divergence in the way each entity picks up search traffic. Google’s name is synonymous with search, and it’s the search engine itself that drives the bulk of Google’s search traffic base. Yahoo also gets plenty of direct-to-search visitors; but an awful lot of Yahoo search traffic arrives off of search bars on Yahoo’s enormous publisher network. The same is true for MSN and its publisher network-and MSN searchers even arrive via help buttons on Microsoft software. Google is popular for search in its own right; Yahoo and MSN Search owe much of their popularity to the way each business draws users from its enormous, diverse universe of user interfaces.

The different philosophies also come out in how each business applies search thinking to non-search channels. To take one example, consider search-influenced solutions for content/publisher sites. Google’s big accomplishment here is AdSense, which syndicates actual search ads onto content pages. Yahoo’s Publisher Network isn’t so different from AdSense; but Yahoo has also bought into the Right Media Exchange–which will let the Yahoo publisher network sell display ads by auction, just as Yahoo already does for search ads. Meanwhile, MSN’s publisher network is beginning to offer targeting on a level that’s clearly inspired by the thinking behind AdCenter, MSN’s super-targeted search platform.

These are very different approaches to how search might help publishers and content sites. Google’s AdSense effectively recreates the world in the image of search. MSN and Yahoo, by contrast, truly integrate very different models, combining elements of text-based search advertising with image-based publisher advertising to make something new.

Which approach–Google’s search-centric approach or MSN/Yahoo’s integrative one–is better? A snapshot of today’s online market would give a resounding win to Google, which pulls in roughly 25% of all online ad revenue, the vast majority of which comes from search. Google’s win is strengthened by Yahoo’s poor Q3 performance, especially given the fact that analysts agree that it’s Yahoo publisher network, not its search network, that’s giving Yahoo trouble.

But a present-day snapshot is misleading. That’s because the information world of today is siloed in a way that tomorrow’s world won’t be. Full-length TV content that lives online, and iTunes for your cell phone, are just the beginning of the new convergence–and as channels continue to converge, the ability to work in many universes at once will be increasingly critical. Which is why the multichannel model, and not the search-only model, might just be the long-term winner.

There’s even some indication that the tide’s already turning. That indication comes from online video, which is effectively the merger of the Internet and TV. Just two days after the YouTube acquisition, an Oct. 11 Businessweek article ranked Google Video as the fifth-most popular video destination on the Web–with MSN Video as No. 4, and Yahoo Video at No. 1. Online video is the merger of different media models, and it’s the integrators, not the dominators in search, who took the lead.

Of course, Google may have solved its video problems by purchasing YouTube. But if Google’s video problems come from too narrow a focus on search, then one needs to wonder how many billion-dollar fixes Google can buy just to stay on top as the landscape shifts. Which is why if Google can’t develop a more convergence-minded view of the world, it could face real trouble from a new Microhoo that’s convergence-minded enough, and large enough, to win in Web 3.0.