Living in the real world

The Wall Street Journal ran a story yesterday about a certain kind of advertising fraud online wherein rogue publishers will fabricate impressions by launching numerous, invisible web pages in the background of a browser session that consumers will never see but that can translate into inflated costs to advertisers. Burst was mentioned in the story as being one of the ad representative firms giving shelter to one such rogue publisher, MyToursInfo.com. Obviously, we hate it when that happens, on every level. As small consolation we booted the offending publisher back in January about the time, it would appear, that Ben Edelman, the source for the Journal story, tied into them. [Not a coincidence, I was reminded since making this post, as it was Ben, in fact, who brought the MyToursInfo fraud to our attention.]

iMedia Connection picked up the Wall Street Journal story today with the headline “Publishers Duping advertisers with invisible ads”. Not far away was another story titled, “World’s largest click fraud ring shut down,” which met its end thanks to the efforts of the people at Anchor Intelligence, a traffic analytics firm used by companies, including Burst, to combat fraud.

We are reminded every day that the world can be a dangerous place. The advertising world is no exception. As reporter, Emily Steel, points out in the Wall Street Journal story, verification has been a problem for advertisers forever. Online, she notes, the universe of web publishers is so enormous it can be hard to keep track of every ad position in order to authenticate the number of impressions served. Offline, authenticating the size of an audience - print or broadcast - relies on third-party measurement services such as the Audit Bureau of Circulation (ABC) or Neilsen or Arbitron.

I used to explain to people when arguing in support of the increased accountability of the Internet versus traditional media how advertisers must take it on faith that so many trucks left the loading docks of so many printing plants to deliver so many copies of, say, the Wall Street Journal to so many hundreds of thousands of distribution outlets across an entire country by 6:00 a.m. Online, we just count impressions. I’ve made those earlier morning newspaper runs in the past while working at USA Today. It’s an immense proposition, I can tell you, with a mind-boggling number of moving parts. But, the world has lived with it long-enough to know that, on balance, it works. I’d say the same is true about counting impressions.

Except when fraud happens, as it did several years ago when executives at various newspaper companies were caught inflating circulation numbers, with severe consequences for many. Or, as it happened with a dorm-room full of Chinese college students perpetrating $3 million of click fraud. All bad, unhelpful stuff.

I could, perhaps, end this post now with a message to always be cautious and look both ways before crossing the street because the world can be a dangerous place.

But, I can’t. Sorry. The news that Chinese students have “wasted” $3 million, or that other unscrupulous types have launched  up to 40 invisible pages impressions, while a sad reminder of the corruption in the world, leaves me feeling that more needs to get reported. The truth is not entirely out.

The problems in our world do not come down to a room full of Chinese students, and/or others with a talent for writing nefarious Internet code. The problems in the newspaper world do not come down to circulation fraud.

Always there are conditions that lead to the crime. Frankly, verifying what gets delivered has only been a part of our problem, and perhaps the small part. Of greater importance has always been that media - old and new - has never been good at being able to verify who, exactly, is viewing or listening or reading or seeing an ad. Likewise, advertisers have never been especially good at explaining to each other what happened as a result of the advertising.

From this were conditions made ripe over the years for the Internet to lead the entire marketing industry astray with false promises of one-to-one, risk-free advertising – a bit of fiction that won’t go away and that continues to lead advertising, on and offline, in directions that consumers have been told to fear, now, jeopardizes their rights to privacy.

We should despair over every act of corruption and drum-out the perpetrators. In a side-by-side comparison with a dorm-room full of Chinese college students perpetrating click fraud, however, the notion that the advertising business can be one-to-one and risk-free is the greater treachery. The fakes, the common criminals, the joy-riders, the conscientious advertising banner-blocking objectors, are small potatoes to the mantle of denial that drapes over the broader marketing business today. It drives media buying agencies into the very ad network business they are suppose to fear as a way to make a decent buck. It drives CMOs out of office on average every 18 months. It reasons that consumers should “accept” advertising as a necessary evil (as if that will ever be a bargain worth accepting). It wastes billions of dollars in missed opportunities. And it places a premium on counting clicks and actions and other measures that are so easily pilfered.

Advertising must live in the real world. Occasionally, that means dealing with the abuses of the unscrupulous. At some point, it also has to mean dealing with reality.

Hanging Tough

I admit I didn’t know the New Yorker had a Financial Page, but good entry from the April 20th edition, which begins as follows:

“The Financial Page

by James Surowiecki April 20, 2009

In the late nineteen-twenties, two companies—Kellogg and Post—dominated the market for packaged cereal. It was still a relatively new market: ready-to-eat cereal had been around for decades, but Americans didn’t see it as a real alternative to oatmeal or cream of wheat until the twenties. So, when the Depression hit, no one knew what would happen to consumer demand. Post did the predictable thing: it reined in expenses and cut back on advertising. But Kellogg doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies. (Snap, Crackle, and Pop first appeared in the thirties.) By 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty per cent and it had become what it remains today: the industry’s dominant player.”

Getting behind the wheel to drive

The IAB Annual Meeting that concluded yesterday in Orlando, FL., was an event with a broader agenda than just the Internet. The IAB meeting was a beginning referendum on the future of advertising. This is appropriate. After years as a smug, wise-cracking youth that was dismissive of traditional advertising and media, the Internet has it all on its shoulders now. A passing generation of media giants – magazine, newspapers and TV - is desperate for an heir. Along with everyone else, the old media guard has stood by waiting to see if the cocky self-assurance of the Internet would manifest itself in a new and improved advertising model - a one-to-one, risk free advertising model. Not yet, and despite the the bravado – or because of it – no has been quite ready to trust the Internet with the keys so that it can drive.

The Internet is in catharsis. The title of the IAB conference said it – “Brands battle back” – as did the conversations of everyone who attended and debated the art and science of persuasion. The Internet is trying to define itself in a world that needs it and that is weary of plugging holes in media buckets that have been leaking audience for 20 years. “Grow up” is all that’s left to say on the matter after 15 years of cheeky hair-dos and body art. DO something. Clean up your act.

One thing was clear from the Annual Meeting in Florida, the IAB is doing something. It has emerged as an advocate for the industry, and not just as its administrative assistant. It is leading, offering a panoramic view of the Internet landscape that shows unique form and function. It put some of that form on display with a video presentation, “I am the Long Tail“ that documented the passion of a few of the Internet’s legion of independent web publishers. It showed that it was willing to put the key issues on the table for discussion and invited provocation.

Which it got. Terance Kawaja, Managing Director of GCA Savvian Advisors, gave what may have been the most entertaining presentation during the two days, but one that was not, in the end, loaded with mirth. Terry speculated that the downward slope of prices online, brought about in part by the efficiencies of ad networks may, in fact, represent the true value of Internet advertising. Indeed, he said, it may even expose the true value of all advertising. Offering up the sins of the irrationally exuberant and sometimes fraudulent financial services industry to let us know he has walked in our footsteps and seen the way, Terry asked, what if Madison Avenue had been a giant deception for the last 100 years? What if it had perpetrated a fraud bigger than Enron, Worldcom, Stanford, Madoff and the sub-prime crisis put together by what it had charged customers to advertise over the years?

Not mirthful. Editors from the New York Times spoke after Terry and likely erased the thought that people may have been giving to what he suggested about media value over the years. They demonstrated the truly unique capabilities that only a digital medium can provide, such as their rock star graphics. But, people should pay attention because Terry’s comments, while offered tongue-in-cheek, express a true sentiment that lurks below the surface of the people sitting in judgment of our industry today, who are all members of the accounting classes. John Wanamaker was only half right, they think. In truth, it’s all wasted.

The IAB conference, therefore, was a beginning referendum on the future of advertising. In a pattern that has repeated itself since time began the next generation will have to answer for the sins and promises of its forebears and show the way forward. Just as surely this generation will stand on the shoulders of the past, and with mounting irony be called upon to rescue brand. 

It is a lot of responsibility for a 15 year old, but are we happier to have the Internet behind the wheel or television, which announced this week that it was feeling more effective than ever?

The answer is easy. Give me the keys, Dad. I’ll take us home.

In a Troubled Economy, Online Media will thrive

Jarvis Coffin, CEO of Burst Media

As we embark on the second half of 2008, the online advertising industry in the U.S. continues to advance despite the challenge of a stagnant overall economy. The last time the industry faced such tough times in 2001-2, it was mowed down. But today it seems we are stouter and of surer foot, having matured our business and client base considerably over the last seven or eight years. Last time the Internet got battered by the real world it fell down. Back then, no one sought refuge online. Today it is television and newspapers that are feeling the pain as buyers and seller look to the Internet as high ground.

Much of the gains in online ad spending over the past year can be attributed to the flood of performance driven advertisers taking advantage of the deluge of low cost inventory coming from social networks and portals. However, brand advertisers are not sitting back and just watching. They are as eager as ever to fish where the fish are, which is clearly online, and the industry is responding to this demand with a number of solutions that address their needs. The one getting the most press attention is the rise of Vertical Ad Network.

Vertical Ad Networks introduce brand marketers to the targeted audiences and interest-based destination web sites that users depend on in their daily lives. Burst Network, with its history of strong publisher relationships, brings these sites together and can craft a network that is highly content focused and highly relevant to a particular demographic that a marketer seeks to reach. Currently Burst Network operates several Vertical Ad Networks including Burst Moms Network, Burst Green Network, CDKitchen Cooking Network and RealGM Sports Network among others. Since the beginning of the year these networks have enhanced our relationship with brand advertisers, and they resonate well with brand-focused media planners. These networks are transparent, perform well, and provide the kind of brand lift that marketers dream of.

Why do vertical networks matter in a down economy? Let’s compare them to traditional ad networks like Advertising.com and large vertical sites like iVillage. Burst’s vertical networks offer a hand selected set of engaging, well-designed, audience-focused sites. Large ad networks do not provide the level of transparency required by brand owners, and single sites do not offer the diversity of interests that a target audience may have. For example, a Mom may be on a parenting site, a career site, and a news site within one session. Burst’s Moms Network captures all of those “sides” of Mom through sites like Coolmath.com, BlueSuitmom.com, and MomsWhoThink.com. The reach that an advertiser gets from the Burst Moms Network is 9%, nearly identical to the reach of the iVillage Women’s Network. Furthermore, the Burst Moms Network has a greater saturation of women 25-54 with children in their household (composition index 8 points higher) than iVillage, and a greater diversity of content to reach Moms in a more contextually relevant ways. What this means for an advertiser is minimal media waste, and for the publisher it means better CPMs from their ad network partner.

While I don’t believe the Internet will emerge unscathed from the rising tide of uncertainty, it will emerge more confident and, ultimately, dominant. Leadership emerges in trying times. Expect the Internet to lead the way forward from these.