July 27, 2010 § Leave a comment
It’s been sufficiently reported this week, again by Online Media Daily, that NBC Universal will launch its own ad network, the Universal Audience Platform. NBCU has several online properties, including NBC.com, USA Network.com, Telemundo.com, BravoTV and NBC Sports.com, that make it ideally suited to the corporate packaging opportunity. Happily, waiting for them when they launch will be agency Demand Side Networks (DSNs) such as VivaKi and AdNetik that have so far relied on third-party ad networks and data providers to poach NBCU’s digital audience.
It’s a good plan for all concerned if it means NBCU gets to exert more control over its audience and inventory and if it gives advertisers greater certainty about the nature of the inventory they buy. On paper it should support value in the middle of the display ad chain, which is critical.
An especially good outcome down the road would be a desire on the part of NBCU to expand the size of its Universal Audience Platform (Network) and start packaging long tail Hispanic sites (for instance) under Telemundo.com or entertainment sites (also for instance) under USA Network.com. In this fashion, NBCU uses the network model to leverage their media brands, not just their media audiences, adding more value to the communities they serve and adding more audience opportunities to the advertisers that depend on them.
Just a thought.
June 11, 2010 § Leave a comment
I missed the Rubicon event in New York yesterday that featured a panel of experts bravely wading into the media question of our day, “Is All Inventory Created Equal?” Fortunately, a colleague was there to take notes, which she shared this morning. From her recounting, I can barely stand the fact I wasn’t there.
There was a survey in advance about DSPs: good or bad for publishers? Befitting the industry, the results were rigorously risk averse: 49% said maybe. Love that. But some credit should go to the 21% who answered DSPs are “Great” for publishers, and the 29% who said, “Great for advertisers, but not publishers.”
There was no such ambivalence with regards to transparency: 70% of respondents to the pre-event survey agreed that adequate transparency into web sites on a media plan does not exist today. That’s a shame, because 64% of respondents believed high quality content adds value to advertisers and another 24% believed context mattered to advertisers regardless of whether it’s published by a brand-media company or not.
What a pickle.
The data portion of the program behind them, panelists waded into the content. The ball appears to have gone back and forth across the net a few times between Jason Kelly, beleaguered defender of content, and the DSPers, Sean Kegleman and Marta Martinez, advocates of the Data Age. Data yes, content no. Content yes, data no. Data yes, content no. Content yes, data no.
Two themes reportedly emerged, and they are the important ones:
Theme 1: There is a lack of trust among all players in the industry;
Theme 2: Ad networks = outsourced media buying. But, today, there is a new source of media aggregation; ergo, ad network services are no longer required.
Ergo, agencies and their DSP proxies are the new ad networks.
The Rubicon panel revealed that the classic ad network model is moving through the industry value chain to its inevitable release into the atmosphere where it will be returned to the earth from which it came. As it goes (wherever it goes), it continues to breed mistrust. This is clear. But, mercifully, we should expect the pace of its escape through our system to accelerate now that it is in closer proximity to the client’s business because all customers desire transparency, including agency customers. The purge will be hastened by the forces of the macro-environment, notably IPG’s MagnaGlobal forecast this week that online ad spending will reach $100 billion, globally, by 2015. It is a dose of the supply side. Market medicine.
Of course, at $100 billion ad agencies will be utterly overwhelmed by the media economy unless we race to their rescue with new compensation models. In this space, the proposal has been made repeatedly to restore 15% ad agency compensation. Backwards as it may seem to lead us, it is unquestionably baked into the brave new world thanks to the arbitrage model agencies are confiscating from ad networks. Have the markets finally spoken as to the cost of media planning?
Until then, I’m anticipating the (inevitable) next panel in the series of media and brand value discussions titled, “Is All Soap Created Equal?” This one is to reportedly be sponsored by Google.
May 7, 2010 § Leave a comment
It was Dump on Ad Networks Day this week at Digital Hollywood, according to reports in Media Post that were picked-up in the IAB’s subscription to SmartBrief. A panel at the show on branded media marketing reportedly jumped on networks for various value infractions. Panelist Jim Heckman, CEO and Founder of 5to1.com, but formerly of Fox Interactive, said that ad networks trade in remnant inventory which “denigrates the brand.”
Anyone expecting a vigorous defense of ad networks in this space will be disappointed. Burst Media has led an uncomfortable existence as a member of the ad network community working substantially in the Long Tail of the Internet where it can act as a primary, not secondary seller of advertising inventory and keep a promise to offer complete, site-by-site, transparent reporting. This requirement – post-campaign, site-by-site reporting – has kept us largely out of the branded publisher space where lack of site-by-site disclosure is the fail-safe device in the uneasy relationship between ad networks and publishers with a salesforce. Disclosure is as much a rule for publishers as it is for advertisers that wish to work with our legacy Burst Network. Publishers must allow us to disclose our business on their site, pre and post- campaign, which means most of the top 100 comScore web sites, the ones that Adify research has documented account for 84% of the inventory of the 10 biggest ad networks, say no thanks.
So, we don’t get too defensive about the mean things that get said about ad networks on panels and in the receptions areas of ad agencies. To the contrary, as far as we’re concerned, it’s all true.
But don’t blame the ad networks. I don’t believe most of the claims of major publishers that have said they don’t work with networks anymore, but if publishers want to fix their value problems that will be the answer. Stop working with all the networks. Stop dumping off the inventory in every direction. Of course, publishers will still need a remnant solution – all businesses have remnant solutions – and it strikes me that exchanges have a capable answer for that combined with the DSPs that are white-labeling most of the in-house networks for ad agencies. Remnant inventory that finds its way into those pipelines is subject to controls that ought to at least make the sales channel conflicts apparent to the publishers. Alternatively, pick an exclusive remnant ad network provider and make it a partnership. Frankly, the audience duplication that currently exists in the market as a result of ad networks (and DSPs be warned) all piling-on the top 100 comScore sites is scandalous. Brands are being deprived of differentiated media strategies. Which means it’s all up to the creative online.
Great…whither media as the “new creative?”
The ad network business – such as we choose to complain about it – evolved in response to market needs. Markets are perfect that way. Let’s get over it. Markets are constantly changing and today’s market has decided it’s weary of certain ad networks for probably all the right reasons, beginning with the presence of more advertising dollars, which makes both publishers and ad agencies more confident about their prospects. Supply and demand. Presto, change-O. Let’s get over that too.
Be happy, like Jim Heckman who sees the enduring, value-driven outcome that results from people in the media business at work, “on Madison Ave. With cocktails.”
May 4, 2010 § Leave a comment
Good comments from Russ Fradin, CEO of Adify, in Ad Age re: the latest study from the OPA trying to bite off the (ad network) hand that feeds it. Per research from Adify that has been mentioned in this space before, 85% of the inventory in the top 20 ad networks comes from the top 100 comScore web sites, which includes many of the OPA’s principal members. The OPA could save a bundle on research if its members would stop selling discounted space to anonymous third-party vendors with whom they then have to compete.
We align with the thoughts of Russ Fradin and Adify in this case, and are happy to reprint his Ad Age piece as an industry service:
Last week’s study from the Online Publishers Association said ad networks have no positive impact on branding metrics and suggested that ads on premium content sites are better buys for brands. While picking on ad networks isn’t a new practice, what makes this study misleading is that there is no clear and accepted definition for what constitutes “premium” inventory. To take it a step further, is choosing between premium (as the OPA defines it) and ad networks even the right debate to have?
First, the premium distinction in this industry is inconsistent. To us, premium ad inventory is about the quality of the inventory available for a particular brand, not about the top 100 branded site content. In the OPA study, ad networks are defined as “aggregators and sellers of non-premium ad inventory, typically across small- to medium-size third-party sites.” However, there seems to be something hypocritical about that definition. OPA sites — premium content sites — are the largest contributors of inventory to the ad networks. Like we’ve said before, almost 85% of the inventory in the top 20 ad networks comes from the ComScore top 100 (source: Adify Market Maps).
It’s no surprise that content sites selling their own premium ad inventory garner higher awareness, association, favorability and purchase intent for advertisers. After all, the content sites have the first selection of the ad inventory to sell. It’s only after the primary sales teams’ contextually targeted campaigns have reserved the highest quality inventory that the remaining unsold inventory becomes available for portals and ad networks to sell.
Premium sites sell inventory to ad networks every day. Whether or not publishers and advertisers define that inventory as “premium” is up to them. Moreover, that definition almost doesn’t matter. What’s premium to one advertiser might be insignificant to another.
The smartest ad buys marketers can make are when they find the best possible inventory that matches their campaign objectives. It’s about finding them where they’re engaged and the context is relevant. It’s not about whether it can be labeled “premium,” and it’s not even about ad networks. It’s about finding your niche and making it easy for potential customers to find you.
We don’t disagree with everything the OPA study says. For instance, it does prove one important aspect of this debate — site environment matters. Publishers recognize that contextual ad targeting is king, even above audience metrics (demographic, geography, etc.). It’s for this reason that publishers often sell their highly relevant content advertising through a direct sales team at a higher CPM and with better impact and performance.
Pitting content sites and ad networks against one another is not the right fight to pick. What matters is what’s the best inventory for your brand — where your advertising will reach the desired audience when they are passionately engaged with the content — not who sells it to you.
April 28, 2010 § Leave a comment
I have had my first look at some of the output of the verification companies (e.g. Double Verify, AdSafe, etc.) and the results confirm what can happen living in a world dominated by Machines. The Internet, we must concede, may not be for every brand under the sun. New media, generally, is not for the faint of heart. For those brands that choose to follow consumers deeper into the woods of online, its clear from the first pass of the Machines that there will be no substitute for the hard work of media planning.
Here’s a partial list of the offensive categories that showed-up on the list of one of the providers (which will remain nameless evaluating Burst Network inventory:
Weapons – Journals and blogs
UGC – Forums, Gossip, Journals and blogs
Adult Content – Nudity/Partial Nudity, UGC
Violence – Sports
Religion – Kids
Adult Content – Nudity/Partial nudity, Profanity
UGC – Forums, Games, Journals and Blogs
UGC – Images, Humor
Adult Content – Nudity, Partial Nudity, Journals
Religion – Arts & Culture, General News, Sports
This is just the first 10 offending categories on a list of about 140. It’s pretty repetitive. These 10 basically set the tone and serve as generic labels assigned to most web site infractions. There are thematic variations: adult content can apply to nudity or alternative lifestyle, partial nudity or sex education or gossip. No category of UGC appears safe. It applies to everything: images, blogs, journals, entertainment, forums, games, humor, sports, technology, arts & culture, travel, chat, General news, etc., etc (basically, the World Wide Web). Religion has harmful sub-categories. On the list in front of me Religion attaches to Kids (see above), plus Arts & Culture and Sports & News. Once or twice Sex Education shows-up as a category apart from Adult Content. I don’t know why.
Without argument, the list and its permutations corresponds to all the scary things under the bed when it comes to thinking about safe advertising environments. But this is why some clinicians will tell you not to make any important decisions at night. At night, in the dark (that’s a good metaphor here) we are not always rational.
Let’s look at the top 10 again and plug in the offending sites as they were picked-up by this particular verification sweep of Burst Network:
Web Site Infraction
www.bossip.com Adult Content
www.videocure.com Adult Content
www.dltk-bible.com Religion – Kids
www.keenspot.com Adult content
www.runehq.com UGC – Forums
www.icanhascheezburger.com UGC – Images
www.villagevoice.com Adult content
Taking a closer look at the “offenders”:
Blade Magazine (www.blademag.com) is about knives – big, ugly-looking, mostly hunting knives. They are Weapons, for sure. Blademag.com is the online home of Blade Magazine, owned by FW Media, one of the largest specialty magazine publishers in the country. FW also publishes Gun Digest, plus magazines on Fine Arts, Crafts, Design, Automotive and more. Blademag.com is one of our “traditional” media publishers.
By coincidence, another one, the venerable Village Voice, was caught in the trap for “Adult Content”. Frankly, I’m sure they could be guilty, but I couldn’t find evidence on the web site – which was never a problem with the print property, where a quick turn to the back of the newspaper was a merry romp through the seedy under-belly of New York nightlife.
Yappi.com was nabbed for Religion. I’m sure they’re not guilty. Yappi is an online community for high school sports in Ohio. There is no adult content. There are, however, a couple of Catholic Schools in Ohio, the religious sounding names of which, I suspect, may have contributed to the Religious infraction detected by the Machines.
Dltk-bible.com was also caught-up in the Religion dragnet. They are clearly guilty. There is a lot on the DLTK site about bible crafts for kids, bible poems, bible coloring books, and the like. Overall, “DLKT Crafts for Kids” is a site for kids (and their mothers) that is full of creative things to do in a variety of categories, religion included. There are so many things to do, in fact, that the site attracts nearly 350,000 unique users per day (that’s right, per day), though it is highly doubtful they are religious fanatics.
Keenspot.com is one of those sites that I just can’t get my head around: Web comics. My 15-year old son seems to love them. In all, Burst served over 300 million impressions to Keenspot last year. I don’t get it. No Adult Content in sight, however.
Bossip.com on the other hand is pretty steamy, but not enough, it appears, to get caught in the Adult Content nets of the Machines; instead, Bossip is guilty of gossip. And, boy, is it ever: lot’s of gossip. Bossip is all about African American pop culture and it is a busy, busy, happening place – about 1.5 million unique users per month.
East Side Boxing is about boxing. My grandfather use to lament the extent to which boxing had dissolved as a sport in this country. As a young boy he used to go with his father, a doctor, to the fights on Friday nights. I don’t know much about boxing, but East Side Boxing seems to be very deep on the subject, which probably has something to do with the over 100,000 unique users they reach every month. Boxing is violent, however, which someone has taught the Machines. Jolly good. Unfortunately, that hasn’t make them smart.
Videocure strikes me is a poor man’s YouTube. Same inane stuff. Different parents. Mostly music content that – yes – bumps and grinds to today’s beat and (sometimes explicit) lyrics. Unbelievably, Videocure has delivered 60,000,000 impressions to Burst so far this year. It’s a video thing. What can I say? Everybody seems to want it, including consumers.
Back to my 15-year old son. The good news is that I don’t shell out $5 a month anymore for Runescape, an immense online gaming environment to which I sometimes felt he was – shall we say – overly committed. Instead, it’s $15 a month to Blizzard Entertainment for the also immense World of Warcraft, to which he is definitely overly committed. RuneHQ reaches the overly committed users of Runescape, at the rate of roughly 1/2 million unique users per month. It’s UGC for sure and big – big – business. Advertisers trying to reach the ‘Tweens marketplace can do so on Runescape (and they should), but we know from experience that it’s tough to interact with them there given their deep engagement with the game. Places such as RuneHQ are a better option to try and cultivate awareness with this brand conscious, hard to reach segment. Ironically, the Machines aren’t much for virtual gaming environments.
My absolute favorite on this list is Icanhascheezburger.com. Nothing makes sense about this site, including the name. It is an Internet caricature: pictures of Cats. Thousands of them, updated almost every second it seems. Though it’s only evening, Icanhascheezburger.com has fetched over 1.5 million unique impressions today. It would be impolite to talk about the money, of course. Suffice to say, that if you are reading this post the owners of Icanhascheezburger make more than you do, whoever you are. Iams Premium Protection for Adult Cats (a P&G company) is running a campaign on the site, I notice. Maybe they would rather I didn’t point that out, but, clearly, Iams is not afraid of the Machines. It helps to be P&G.
(Pause…I know, it’s a long post…but it’s important to have some idea of the role these, and other web sites can play in people’s lives before getting on to the main points, which are as follows:)
Every media planning decision needs to be deliberate in order to take the fullest possible advantage of the media choices made by consumers. If media planning does not succeed at getting inside the head of consumers it leaves advertising value on the table. Nothing contributes more to making those connections than context – i.e., matching advertising with media content.
I have known my fair share of cat lovers and I have listened to their cat stories. I involuntarily move away from them, though I had a cat for 17 years and buried it under the rose arbor in my garden after it died, and I still talk to it while pulling weeds and pruning shrubs nearby. Iams Premium Protection for Adult Cats is absolutely right to be present as a partner in the lives of cat lovers at icanhascheezeburger.com and I defy any general interest pet portal magazine or animal TV situation to provide a more immersive media opportunity to the national, $14 billion pet food category. It’s all thanks to UGC.
But Internet advertising isn’t for everyone. In which case, with respect to the verification “obfuscation” services, stay away. Don’t walk around on egg shells, wincing and peeking-out from behind a Machine. The angst isn’t credible, anyway – not in a world that features reality TV like “Addicted”, or the soft-porn of day-time soaps, or gossip TV morning news programs, or the hand guns and semi-automatic guns and hunting knives that fill each programming day – all 24 Hours of it.
If that sounds harsh, really, it’s a working partnership gesture to the planners and buyers acting – as we say – deliberately with regards to their media choices. They are trying. And many companies are trying back. Burst Media, for one, can help with evaluating web site opportunities, site by site, from a catalogue of over 4,000 vertical niche properties in the Long Tail of the Internet in order to build custom, transparent, what-you-see-is-what-you-wanted programs, complete with all manner of creative reinforcements. But we recognize that for some the authentic, UGC-driven texture of our media offering – or any similar online offering – may not be Machine-ready compared to the softer production tones of the rampant sex and violence offline. In which case, buyers have the right to stay behind with those offline opportunities. It is perhaps a better choice for them to do so until the sensibilities of advertising decision-makers change, like the sensibilities of every generation of decision-maker have changed before. Once upon a time, after all, Elvis could only be filmed from the waist-up.
As for the non-deliberative set of buyers – the blind purchasers, if you will – we assume, along with everyone else, that they don’t really want to know – which is another way of saying we assume they don’t want to pay for the value of knowing. I don’t know where they think they’ve been getting all the traffic to fuel results at $1.00 per thousand, but I’m confident we’ve cared more about it than they have over the years, and have spared them a great deal of too violent, sexy, UGC gossip.
As a final note, looking at the list in front of me, let me point out to the listening Machine audience that the CSMonitor.com is not a Religious web site even though it’s short for Christian Science Monitor. It is a very secular property. We are proud to represent it when we can and to support it with our ad management technology.
Machines, are you listening?
The story of The Monitor, by the way, which has won seven Pulitzer Prizes over the years that I can count, goes something like this (from the web site):
“It is 1907. An elderly New England woman finds herself being targeted by Joseph Pulitzer’s New York World. She is 86 years old and holds some unconventional religious beliefs that she expounds in a book, Science and Health with Key to the Scriptures. The book becomes a bestseller, making her wealthy and a well-known public figure.
The New York World decides she is incapable of managing her own affairs and persuades some of her friends and her two sons to sue for control of her estate. Although Boston and New Hampshire newspapers and major wire services interview this woman and find her competent, the New York World is unrelenting. The lady in question finally is taken to court where the case against her is dropped.
And the next year this woman, Mary Baker Eddy, founds The Christian Science Monitor.
Given her experience with the press, it is not all that surprising that she sets as the Monitor’s goal ‘to injure no man, but to bless all mankind.’ In one of life’s little ironies, Joseph Pulitzer went on to endow the Pulitzer prizes for journalistic excellence.”
Doesn’t that make you smile? It’s a great new media story.
April 22, 2010 § Leave a comment
If you weren’t paying attention you might be confused. Or, maybe you are paying attention and you’re still confused. Or, maybe in your confusion you’ve decided to quit paying attention and watch for signs of warmer weather.
Just in case, there is an interesting juxtaposition today in Ad Age between research from Advertiser Perceptions that reports marketers are accelerating the shift back to content sites for media buys (“Marketers Shifting Online Budgets to Content Sites”), and a column from investment banker Tolman Geffs arguing instead that the momentum is with the audience networks (“Get Ready for the Coming Land War in Online Display Ads”).
Says researcher Advertiser Perceptions:
A survey of agencies and marketers revealed that 52% of them plan to spend more on content sites this year, whereas only 35% said they were likely to increase budgets for ad networks.
Says banker Tolman Geffs:
Online display, primarily a brand advertising medium (as measured by revenue), has traditionally been sold on the basis of sites and specific media placements, or via ad networks that aggregate sites into vertical channels. Now, with the evolution of online ad targeting techniques and the rapid growth of a market for consumer targeting data, it is increasingly common to sell advertising on the basis of audience, reaching individual web users based on specific data about that user.
It might help to read the comments that followed each post.
In response to the Advertiser Perceptions piece the commentor wrote:
“I would hope that we don’t actually have to explain to marketers why it’s a better opportunity to surround yourself with good content rather than just a cheap spray and pray methodology… But… The reality is, I don’t believe that most of the agencies who have recently incorporated “digital” into their titles or their top-level pitches are actually staffed to be able to support content direct buys. This is why the networks will continue to thrive, is b/c it’s “easier” on the agencies and their wallets. If I owned a content site or portal, I’d do the same thing as ESPN and the others, and I’d ban all network based ads and force agencies to do a better job or at least properly staff up. That being said – content sites better be prepared to show ROI – whether it be brand or actual sales, or they will lose out faster than before… “
And in response to Tolman Geffs:
“You are right, it is a crowded space. (It does not take a genius to figure that out.) This game of musical chairs is not going to result in a wave of consolidation, it will result in a return to the fundamentals of media – content, audience and advertiser. The agencies have the revenue, the publisher has the content and the consumer is in control. When everyone decides to take their bat and ball home with them, these middlemen are going to be left with aging IP that does not generate revenue.”
April 13, 2010 § Leave a comment
In a comprehensive piece in AdWeek (“Too Many Moving Parts”) reported by Brian Morrissey and Mike Shields probing the online advertising success (or not) that Google has had apart from search, there is this little quote from Barry Salzman, who is currently working as Google’s Head of Media and Platforms for the Americas (on the same problem he was working while Head of Global Media at DoubleClick). Barry says:
“The really exciting opportunity was to come to Google…to execute on the very early DoubleClick vision. That was about recognizing that the Internet was a medium that would deliver unprecedented media value only by integrating technology with that media offering.”
Others may swallow this sort of commentary effortlessly. I choke and gag.
What does it mean, “…a medium that would deliver unprecedented media value only by integrating technology with that media offering”?
“Only by integrating technology”?
What does that mean, “only by integrating technology”?
Does it mean the Internet’s media value remains dormant pending some further integration with technology above and beyond the technology that gave life to it among audiences in the first place (setting fire to millions of acres of valuable traditional media property in the process)?
Does it mean there are integration codes necessary to awaken Internet media value that will make it unprecedented compared to other media, but otherwise it’s not unprecedented and we should be surprised that audiences seem so fascinated by it 15 years later?
What “media value” are we talking about here?
That’s mostly a rhetorical question, of course. The value Barry Salzman has been trying to isolate for years is in the audience data. He is joined by countless others that insist on looking past the obvious for something unprecedented, such as advertising that comes with our name on it (which I still get in the mailbox and throw away every day at home). Elsewhere, for instance, Michael Katz, President of interClick, was responding to the stone-throwing between ad networks and publishers in Mediaweek by observing “…that the promise of digital advertising is very bright. It will be driven by the efficiency and accountability afforded by technical innovation;” which in his world means “…that data will bring about higher ad rates for more valuable audiences, which ultimately benefits the publishers.”
Evidently, the publishers aren’t buying it, at least judging from comments in the same Mediaweek article meant to clarify the position of some of them (TheStreet.com for instance) regarding the bright future offered by the innovation of ad networks:
“We have run into these issues with other networks as well. Moreover, we believe that many other publishers have faced these issues. We believe there may be widespread unethical behavior in this segment of the industry, which a public airing may help to remedy.”
Great. Oh so valuable.
Regulators and privacy advocates aren’t any more sympathetic: there were more wasteful lawsuits last week against Google, Yahoo! and others over behavior targeting practices.
So, what greater, “unprecedented media value” is being unlocked here, and is the noise it’s making from the other side of the door convincing us it sounds like a good idea?
How about we stop fishing in our pockets for the keys and get comfortable with the media value of the Internet as it exists right now, on this side of the door, as furnished by all of the relevant content. Such value made the Internet big with audiences. Harvesting such value made Google rich. Promoting such value has been the simple desire of all web publishers. Sinking into such value offers visible comfort for all.
Accordingly, from his respected perch atop the Internet kingdom Barry Salzman might be inclined to say, “The really exciting opportunity was to come to Google recognizing that the Internet was a medium that would deliver unprecedented media value.”
Meaning, it comes integrated into the lives of audiences. Value included.
April 1, 2010 § Leave a comment
Let’s leave aside all the competitive clamoring for a moment and focus purely on the good ideas. Here’s one: super-brand ad networks as described by Cameron Hulett at Accleration Media in the U.K. in a post on the IAB U.K.’s web site. He proposes that, “publishers with strong brands – super-brands – should consider building their own ad networks.”
Russ Fradin, CEO at Adify, has written a lot about this notion since launching his company to build vertical ad networks in 2005. Collective Media, mentioned in Hulett’s article, also has a network building business; and, of course, so does Burst. We got into licensing our adConductor technology platform with the launch of the TACODA Audience Network several years ago and support several (super) brand media networks today.
There a good commercial reasons to help media brands build ad networks, a view our competitors obviously share. We make money working for companies that might not otherwise hire Burst to sell advertising through its proprietary network businesses. And, in many cases, at least here, we get to rub shoulders with the high and mighty in the media world, which we like to think helps polish our own brand.
Secretly, however, there is better reason for us, or anyone, to be staunch advocates of ad network building among media brands (call them “super-brands” if it helps differentiate them from the plethora of other third-party ad networks out there): it makes significant, positive use of online media. Branded vertical networks align perfectly with the consumer value of the Internet, which is relevant content, and with the business reality, which is the dissolution of the protective barriers to entry that exist offline.
Mr. Hulett’s proposal is really, therefore, an imperative. “Super-brands” must either find ways to build networks online or simply revert to smaller, leaner versions of their offline selves – an utterly boring prospect, for sure, within a rich, expanding new media environment; but utterly necessary within a traditional media environment, whether print or broadcast. Traditional media either gets smaller and more relevant offline, or bigger and more relevant online. Bigger and more relevant online happens only one way: through distribution.
Here’s the important part (before anyone starts chortling about misfit media brands): if the super-brands don’t get into the vertical ad network business it may mean prolonged hardship and even doom for the rest of us, both buyers and sellers. The new media economy sits in suspended animation while traditional media – the only constituency with adequate reserves of trust built-up over years among advertisers and even some consumers – figures it out. All the talk of woe and irresolution and complexity that still rattles around the Internet advertising community is a direct result of waiting while traditional media works on its problems. We wait while, first, they experiment with stickiness, then personalization, then push technology, then “anonymous” third-party networks, then widgets, now social networking and video and soon, pay walls. All the while the industry waits for the “All Clear” sound. It waits until, eventually, perhaps with the rise of interactive Cable TV, the Internet’s first mover advantage is gone and the new media train leaves the station.
It is easy to avoid being left on the platform, but it means the super-brands must get on board.
March 3, 2010 § Leave a comment
The article in Advertising Age this week reliving some of the points that were made at the IAB Leadership conference in Carlsbad, CA, about erosion in the middle of the online advertising value chain ushers to mind the old maxim, “Advertising is sold, not bought.” We’ll get to that in a minute.
For now, if you believe in the virtues of audience-based media over the virtues of place-based media, then you believe that publishers probably don’t matter anymore – or matter less – to the outcome of media planning decisions because media value today, to you, is in the data, not the position. You are among many, therefore, that may have read the Ad Age piece and thought, “So what” when it came to publishers.
If that sounds like you, and if you belong to the value chain at all, you probably belong to one of the provider-types in the crowded middle of the value chain (ad networks, ad exchanges, data providers and ad servers, etc) where the expectation is certainly that the online market will continue to grow, maybe even to $80 – $100 billion worldwide or more by 2015, but that value considerations will evolve along their present lines: that is, from advertiser – to second party – to third party – to fourth party – and, finally, publisher. Or, from high – to lower – to lower – to lower – and, finally, to bottom; Or, in the event of consolidation, from high – to lower – to lowest.
In this value environment, it matters a great deal that prices stay low because so much of what gets exchanged is dependent on cheap access to premium web inventory. Providers in the middle of the chain have proved ruthlessly efficient in this regard, going so far as to position audience-based targeting as a “new science” and an improvement on old-fashioned media planning (which would be according to place and time in addition to who). So far, however, the “improvement” has failed to extract a better price for itself or others downstream, and it is hard to see how it will given the stress it would put on provider-types in the middle.
But, again, if you believe publishers don’t matter any more – or matter less – to the outcome of media planning, so what? It is certainly worth thinking about the fact that place-based media has simply become too expensive to plan for in a fragmented media world.
Fine. What happens if the market grows to $80 – $100 billion as some predict? How will the current value chain absorb the increase if not through price? Here are all the options:
Option 1 – Volume, which means more advertising pours into the Long Tail of the Internet unless comScore’s list of the top 100 web sites that account for 84% of ad network purchases (per research from Adify) grow in audience size dramatically;
Option 2 – There is no option 2, except price.
Now, the fact that (according to Adify’s research) 84% of ad network impressions currently run across the top web sites means that the likelihood of every incremental dollar between here and $80 – $100 billion going to the Long Tail is very slim. Media buyers have a built-in bias for branded media. It’s easier to sell to clients; it aligns with their client’s own brand sensibilities.
Pretend, though, that every incremental dollar from here to $80 billion, or so, does, in fact, flow to all new media inventory besides what is represented in comScore’s top site index. Prices can stay low under the circumstances. But, there will be many, many more publishers with significantly higher earnings that suddenly have the means and inclination to compete for a bigger share. Think of it as the G.I. Bill that introduced the possibility of higher education to a generation of Americans that never thought of it before. It will be game-changing, ushering in a potent “middle class” with decisive powers.
Or not. Maybe only half the next $40 – $50 billion seeks out new inventory and the other half must find a home within the premium inventory sector at the top. It becomes a closer race for space and opportunity, prices go up and the rich get richer.
Either way, more influence over the outcome of media planning and buying accrues to publishers, which is why the maxim “advertising is sold, not bought” elbows its way to the front. Even now, despite arguments about infinite supplies of inventory, there’s an argument afoot about supplier value. Publishers are whining because they feel pain. They will want advocates going forward.
This is an ominous thing facing provider-types in the middle of the chain for when the day comes to atone for value. The difference to them between now and $40 billion from now will be the difference that results from selling versus buying advertising. It will be about advocacy.
It is a sad fact that advocates for the poor have always had very little leverage in the world except moral leverage. Advocates for the rich, on the other hand, have always had commercial leverage, and a $80 billion market will undoubtedly create more leverage for the citizenry of the new media economy – the ones accountable for its upkeep and maintainance - which are its publishers.
Or not. The market could fail to grow. We could be done and dusted at $50 – $60 billion worldwide some day, in which case advertising explorers, acting on behalf of their brand customers, with nothing to report from the new media frontier but ad model chaos, may sail on to potentially more favorable places, such as easy-to-recognize interactive TV.
That’s a disappointing prospect given all the potential online, and it says that one way or another, advocacy matters. Value must get sold, advertising value included. And, ultimately, the value of the supply matters most – if not to everyone, at least to the suppliers.