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The PostView: The Race For “First Look” Access To Premium Publisher Inventory

Thursday, February 23rd, 2012

The PostView is a new column written by senior execs working in the European online advertising industry.

The supply chain has always been in a permanent state of disruption. From ad networks to retargeting networks to SSPs to the Trading Desks – there has always been demand for a publisher’s inventory. But now, fuelled by the growth of RTB, is it becoming even more competitive and territorial?

The battle lines are being drawn for “first look” at premium inventory, which is going to result in the major disruption of the existing publisher revenue monetisation model.

For those not in the know, the “first look” is effectively a process where publishers pass inventory to a buyer or set of buyers before the rest of the market. Retargeters have profited from this for a while now. Not necessarily in real time, but taking the first ad calls on a lot of premium publisher’s inventory. Ask yourself, when you leave a retailer’s site and continue surfing the web, how quickly do you see a personalised ad? Skip from a well-known ecom site without purchasing and there is a high chance you will see a personalised ad about a product on the first pages of a premium publisher.

The “first look” market is opening up. The SSPs have now enabled the trading desks to start getting a sniff of this first impression before anyone else.

The question of who should get the first is no doubt being heavily analysed and assessed within the big publishers. But why would a publisher even enable “first look” access? Well, it helps with automation. Publishers want to automate standard inventory selling. It makes sense for them to do so from a work flow efficiency perspective.

The question remains: are they leaving money on the table? Can RTB buyers sustain the fill rates required for these publishers? Are they able to fulfil this at the higher yields, making this supply channel more profitable for publishers than their direct sales channels? The jury is still out. Publishers want to work closer with the trading desks and agencies. And “first look” (particularly with the trading desks) facilitates and strengthens trading relationships and deals. Securing “first look” from key publishers could well be a key function of the agency side trading team going forward.

There’s an argument to be made though that looks at why a publisher wouldn’t give “first look”? The reality is if the inventory is looked at by an RTB bidder and passed back, then it can be monetised into an open exchange. No risk in that case (if the publisher already sells inventory on the exchange).

The only issues are whether a) the inventory that has been allocated on a “first look” basis could have been fulfilled at higher yield and/or revenue via a direct channel or b) whether other bidders would have helped inflate the price by stimulating more competition and demand on the auction. And this is a big point. Is “first look” limiting the yield publishers could be creating?

It’s about supply and demand and publishers need to be manipulating this in their favour. If they are reliant on one trading desk, they could be setting themselves up for failure.

Regardless of industry opinion on whether “first look” RTB access to publishers is a viable, sustainable model, there is a lot of momentum being built from the trading desks. Private Exchanges are popping everywhere up, giving trading desks with “first look” access, ahead of ad networks. With the emergence of this trend, some ad networks simply are no longer getting “first look” at premium publishers. But just because a handful of deals have been done by the trading desks doesn’t mean they have locked down the “first look” access. Retargeters armed with affiliate money and client direct relationships continue to sign some big deals with publishers.

Why are they able to do this? Retargeters are arguably in a stronger position than the trading desks to monetise inventory more effectively for a publisher. Depending on the margin they are making, they have the ability to drive eCPMs higher, purely based on the CTR performance they’re currently driving. They may also have more spend flowing through them than the trading desks. For these reasons alone, they could be a more lucrative partner for publishers looking to better monetise those first look impressions.

Publishers understand the opportunity available. But the trading desks have still to play their trump card: namely, brand spend. In addition to retargeting budget, trading desks are also in a position to leverage brand spend, which could ultimately outweigh the yields the retargeting networks can deliver and probably also top their scale too.

How important will the likes of Comscore be in this looming battle? New measurement metrics like the vCE could help demonstrate the value of a) premium publisher inventory but also b) ad calls further up the delivery chain. If these new metrics prove the value of premium inventory beyond what current click based performance metrics do, then we could see a real fight emerging. Xaxis, Audience on Demand, Accuen, Amnet, Cadreon will be looking to aggressively take on the likes Criteo, Struq, Next Performance, MyThings et al for that precious “first look” at premium publisher inventory. Things are going to get interesting.

Posted in Ad Network, Ad Trading, Agency, Agency Trading Desk, Online Advertising, Publisher, The PostView | No Comments »

Jason Bigler Discusses Google’s Bespoke Approach In Europe, The Cross-Channel Opportunity And How We Get To $200 Billion In Display

Wednesday, February 15th, 2012

Jason Bigler is Director, Product Management at Google and is the point man for all of the company’s display products in Europe. Here he discusses Google’s European display strategy, the bespoke approach that is required, the cross-channel opportunity, and how we get to that $200 billion figure.

We hear lots about Google’s display strategy in the US. Can you give some overview on the approach to Europe’s fragmented display market?

Our general approach actually isn’t very different on the core issues. Publishers look to us to help them maximise the value of every ad impression while advertisers look to us to help them achieve the best ROI on their advertising spend. If we aren’t delivering on either of those core concepts then we don’t have a business in any market.

However in Europe, as you point out, the market is more fragmented and each country can be in a different phase of product adoption. You really have to apply a country-specific lense when examining the best approach. As an example, we are seeing tremendous growth on the DoubleClick Ad Exchange in Europe. Spend has increased more than 130% year on year and the number of buyers and sellers has increased more than twofold over last year. This is going to be a big year for programmatic buying across most of the region. But is it exactly the same in every country across Europe? Not a chance. So in some countries we’re in full commercialisation mode and in others we’re still in the evangelising phase.

Will it be more of a bespoke approach given the huge differences between markets like the UK, France and Germany?

Much of the reason I’m here is to ensure we’re taking into account all of the nuances within each country when it comes to our overall display strategy. So yes, we’re most certainly going to tailor it to individual market needs by applying that country-specific lense I was talking about a moment ago.

Why did you make the move to Europe, and what experience have you of building products for European clients?

It’s certainly a great challenge for me personally. I’ve been in the display advertising technology business for over 10 years now and for a good portion of that time I was at DoubleClick leading our buy-side platform product, DoubleClick for Advertisers. That role was inherently a global role and I spent quite a bit of time in Europe making sure we were building a relevant product for the region. Recently, I also spent time at Collective Media as their head of product and strategy. During my time there, we not only launched Collective UK but we also acquired Web TV Enterprise, a UK-based video ad network. From a strategic perspective I was very much involved in the formation of their approach to the UK market. However, I think more than anything the scope of the role is what drew me back to Google. Our display ads business just hit a $5 billion run rate and as you can probably imagine the contribution from the European region to that number is not insignificant.

You recently released a report on publisher success on AdX. Can you give some insights on how European publishers are benefiting from automated selling compared to other sales channels?

In this particular report we demonstrated that for European publishers who make their inventory available in the Ad Exchange, automated selling beat competing sales channels 1 in 4 times. The competing channels included direct sales, other networks and backfills. And where it won over those alternatives, the revenue uplift was 73% higher. It also ended up delivering a fill rate greater than 90% for inventory where there was no other demand. I think this report demonstrates the importance of having a platform that can dynamically allocate across all types of buying relationships and deliver the best possible yield to the publisher.

How is the Admeld acquisition going to help European publishers? Can you outline some tangible benefits? Does the acquisition result in more Google-powered private exchanges popping across the continent this year?

It’s still quite early in this process to get into specifics here. We expect to be able to make Admeld’s services available to our DoubleClick Ad Exchange and DFP customers over time and to add to our publisher suite the functionality and services that Admeld provides. This will give publishers more control and flexibility in the way they manage their inventory and maximise their returns. However, it’s important to note that we will continue to invest in and evolve the current Admeld offering as we finalise our integration plan.

Google owns a DSP, an ad exchange, an SSP and both a buy-side and sell-side ad server. How do you respond to this “conflict of interest” argument – and the vagaries of the “end-to-end” ad stack?

The reality is we’ve built an open platform that we feel is the best in the business. For publishers, it helps them maximise the value of every single ad impression. For advertisers, it helps deliver the best ROI on their media spend. Long before today’s “app marketplace” plays and “neutrality” rhetoric we’ve had a platform where customers can integrate their own technologies or utilise their own point solutions should they make that choice. In fact, quite a few of our customers have made that choice. It is this inherent openness that makes the “conflict of interest” argument fatally flawed.

Your role at Google covers several channels, including video, display, rich media and mobile. How does this cross-platform perspective help Google’s clients in the European market?

At Google we have plenty of folks who are laser-focused on ensuring each of these channels is a best-of-breed solution, but I think it’s critical that we also have people thinking about how these channels can impact one another, how we can build complementary cross-product offerings, and most importantly, how these combined solutions can benefit our clients. In my role I’m certainly going to be influencing how we develop and commercialize these cross-platform solutions across Europe.

Your boss, Neal Mohan, reckons display could go to $200 billion in a matter of five years. Is this really possible, and how are we as an industry going to get to that figure?

What we know for certain is that there is still a significant imbalance between the amount of time users spend in a particular form of media and its associated ad spend. We’re betting that this imbalance is going to correct itself over the next several years while consumer consumption of digital media will continue to accelerate. As the line between online and offline blur, eventually we’ll see an entire reclassification of spend where there is no more offline versus online, it will simply be digital spend. That’s how we get to $200 billion.

In terms of how we’re going to get there, I don’t think it’s rocket science. Consumer behavior is what is driving the success of the industry and will continue to do so for the next decade. Think of all the types of devices/services we use today that didn’t exist 10 years ago. Think of what will exist a decade from now. That’s what makes our industry such an exciting place to be. Our goal is to help grow the industry to that $200 billion number.

Posted in Ad Exchange, Ad Network, Ad Server, Ad Trading, Agency, Agency Trading Desk, Brand, CEE, Demand Side Platform, France, Germany, Netherlands, Online Advertising, Publisher, RTB, Scandinavia | No Comments »

Edgar Baudin Discusses The Gamned Model, Real-Time Media Buying In France. The Generalist Versus Specialist Argument And The Sapin Law

Tuesday, February 14th, 2012

Edgar Baudin is Co-Founder & Managing Director at Gamned. Here he discusses the Gamned offering, the state of the French exchange marketplace, the generalist versus specialist argument and the effect of Sapin legislation on real-time media buying in France.

Is much of the data-driven ad spend in the French market still coming from DR budgets and are brands still avoiding automated channels?

Most of the spending in France is still related to DR campaigns, i.e. acquisition and retargeting. The first group to adopt this technology was composed of merchants who focused on ROI, and that explains why they drive the biggest parts of the investments.

Now that brands have access to transparency and ad verification, they’ve started to switch part of their budget over to RTB campaigns. There’s still a lot of work to be done, informing and educating marketers, for them to increase their budgets and go from the test campaign phase to long-term RTB integration in their media plans. Branding campaigns will need a strong increase in data offering which is a must-have for audience and targeting setups.

Today, trading desks have a key role to play explaining the new paradigm which allows marketers to consider Display Advertising as a much more powerful channel. By enabling total control of frequency and reach, brands can now consider GRP’s in their ad campaigns.

What’s Gamned’s position in the current ecosystem? How do you help advertisers?

Gamned has been a Real-Time Media Desk since 2009 and our clients are advertisers and agencies. One of our strengths is R&D, with six of our 20 employees devoted to developing in-house technology and tools which are at the service of our customers.

Our belief is that real-time trading is not enough: in order to properly benefit from real time advertising, we’ve worked on improving real-time messaging and segmentation. To that effect we have, for example, developed our own dynamic banner technology which enables us to deliver a personalized message to each unique impression which we purchase on exchanges.

Our approach helps advertisers to better understand the benefits offered by real-time advertising, and of course to generate better results.

These results should of course be measured using ROI-related KPI’s on DR campaigns, but also in terms of the teachings of segmentation, data usage and creatives. We work closely with all our customers to define the targets together before launching any campaign.

How are French marketers taking to data-driven media buying? Is there still a knowledge gap among French CMOs?

Some CMO’s consider data-driven buying to be one of the main advantages of RTB buying. “Don’t buy ad space, buy targeted audience”, is the magic motto.

It is, however, very complex to implement data-driven buying as there is no “one size fits all” method.

Most CMO’s will need to define in more detail their tactical and strategic needs concerning data, and to learn how to distinguish more precisely between transactional data, social data, intent data, behavioral data, occupational data and so forth. Gamned has chosen to work very closely with its customers in that department, as we know very well that automated buying by itself is not enough.

We have seen some excellent results when combining first and third party data, with impressive improvements in performance. The volumes are, however, often limited. Ultra-segmentation does work and can teach us priceless lessons, but the scalability of this technique remains difficult.

In your opinion, what are the trends going to be in the French data-driven display market?

In early 2011, the number of unique segmented cookies available was much too limited, but things are finally starting to evolve in a good way. Thanks to the great work done by data suppliers such as Exelate, Weborama or DataVantage, more and more publishers are realising the potential revenue which can be generated by monetizing their data.

Another very effective way to increase volume and relevancy is by leveraging Facebook data from ad campaigns and fan pages, like we have been doing for the past months.

What about the argument of specialists versus generalists in the new exchange eco-system? Do you think there is a need for ad traders with deep domain knowledge in the French market?

This is a recurring question which we discussed at the ATS in Paris last year! From our (pure player) point of view, the RTB ecosystem definitely requires specialists. The environment is changing so rapidly that the only way to efficiently address advertisers’ needs is to offer a proper setup. It’s not just a question of choosing a DSP, buying a bit of third party data and managing campaigns. Our entire trading desk has been developed with the aim of delivering real-time advertising and this is our one and only focus. With one third of our team dedicated to R&D this is the key to our success and efficiency.

How is the Sapin legislation affecting the new exchange eco-system? Is it an issue for new ad traders?

The aim of the Sapin legislation is to fight corruption by giving advertisers total transparency in regards to their ad investments. The entire Sapin process is however technically impossible to implement on RTB buying. As we already guarantee our advertisers full transparency on their media costs and margins, we consider ourselves to be Sapin-compliant. This legislation has however always been considered a complex issue in regards to internet advertising.

Posted in Ad Exchange, Ad Network, Ad Server, Ad Trading, Ad Verification, Agency, Agency Trading Desk, Behavioral Targeting, Brand, Data Exchange, Data Management Platform, Data Strategy, France, Online Advertising, Private Exchange, Publisher, Publisher Trading Desk, RTB | No Comments »

Euro Round Up: Criteo To Hit $400 Million In Revenue This Year; StrikeAd Informs On Mobile Ad Tracking; Hi-Media UK Inks New Deal With Thomas Cook

Tuesday, February 14th, 2012

Criteo To Hit $400 Million In Revenue This Year

Criteo has become a colossus in the European ad tech space. The French company, founded by Jean-Baptiste Rudelle in 2005, has a client list which includes some of the biggest names in e-commerce (Office.co.uk, Zoopla, Glasses Direct, Boden, among others).

Last year the company generated $200m in turnover, compared with $60m in 2010 and $9m in 2009. If the trend continues, Criteo could double its revenues in 2012. There are already plans to hire 250 people this year, bringing the workforce to 750 employees. At this rate, Criteo could possibly become the largest Internet company in France.

Criteo is committed to continuing its big innovation push. Gazagne Gregory, General Manager for France, Southern Europe and Latin America explains: “We have been profitable since July 2009 and reinvest all our profits in R&D. Our offices in Paris are the second largest algorithmic research centre on advertising in Europe behind Google in Zurich.” R&D doubled last year and engineers represent 40% of the total workforce. Criteo now has over 2,000 customers in 30 countries and has 15 offices around the world. More on the Criteo growth story here.

StrikeAd Releases White Paper On Conversion Tracking In Mobile Advertising

London and New York-based mobile advertising DSP, StrikeAd, released its new white paper on ad tracking in mobile. The white paper looks to provide a guide for agencies seeking to understand how to track mobile ads and conversions in a transparent and safe way.

The report examines in detail the problems surrounding device identifiers (UDIDs) when it comes to tracking mobile app downloads. It goes on to explain how cookies can be the key to tying an ad impression to a particular download and consequently yielding better results for agencies in mobile ad campaigns. Although it is necessary for the process to be adopted by the triumvirate of advertiser, agency and media in order to utilise them to best effect.

Alex Rahaman, CEO of StrikeAd, explains why they are releasing this report now: “Since StrikeAd launched we’ve had many agencies ask for help with their tracking across phone and tablet ad campaigns. In direct response to this, we wrote this white paper based on our tools to try to clear up any confusion and clarify for agencies how to track mobile ads and conversions in a privacy-safe way.”

You can download the white paper in full here.

Thomas Cook Joins Hi-Media’s Premium Network In The UK

Thomas Cook, one of the best-known names in travel, has partnered with Hi-Media in the UK to increase its online advertising revenues from the market, it announced in a press release last week. Hi-Media, a European leader in monetising Internet audiences, will work with leading advertisers and their agencies to develop bespoke advertising solutions to reach Thomas Cook’s audience of travel intenders.

ThomasCook.com has millions of unique visitors per month. Stuart Adamson, Head of Media Solutions, Europe at Thomas Cook Online, explains their value: “We have a large and loyal customer base across Europe visiting our sites to research and book their travel options. We know this is a highly valuable audience, so partnering with Hi-Media helps us gain traction with major brands looking to reach purchase decision-makers. We selected Hi-Media as a partner because of their understanding of quality brands and online consumer behavior.”

Mathieu Roche, Managing Director of Hi-Media UK, is equally happy with the partnership: “Thomas Cook is a brand with an incredible heritage, delivering a highly engaged audience who visit the site with purchase intent. We will work with advertisers and their agencies to offer them a wide variety of branding and performance advertising solutions to reach this premium audience.”

Posted in Ad Exchange, Ad Network, Ad Trading, Agency, Agency Trading Desk, Behavioral Targeting, Mobile Display, Mobile RTB, Online Advertising, Private Exchange, Publisher, RTB | No Comments »

Sorosh Tavakoli Discusses The Videoplaza Solution, The Recent Series B Fund Raise, And Trends In The Video Ad Market

Monday, February 13th, 2012

Sorosh Tavakoli is the founder and CEO of Videoplaza. Here he discusses the recent the Videoplaza solution, the recent series B fund raise, and trends in the video ad market.

For those unaware of the Videoplaza proposition, can you give an overview of your solution?

We position Videoplaza as a sell side ad management platform for the New IP-delivered TV. This means that we empower broadcasters and publishers to maximise their advertising revenues from their IP-delivered videos, regardless of where and how that content has been consumed.

To do this, we’ve built our offering on three main pillars:

1. Expertise – with 4 yrs in the market, 60+ clients across 17 markets, delivering ads on 15+ devices and integrated with some 50+ partners – we often hear that the experience of our team is what does the trick for our clients.

2. Technology – the heart of our offering is our sell side ad management platform built from the ground to solve the challenges around monetising IP-delivered video, regardless of device or platform.

3. Service – we have a local team in six markets today, our team covers some 15 languages or so and we’re not afraid to get on a plane to meet clients. In the end, technology has no value without support from the right people.

And just to be clear, we are not trading media in any way: we are a technology platform 100% on the sell side.

You’ve just done series B round and raised $12 million. Will you look to move into new markets? Or build out your existing ad management solution?

We are doing both. Part of the new money will be used to accelerate our aggressive international expansion. While our key focus remains the key European markets, we know we have a strong proposition and have during the last years we’ve found a model to bring that to new geographies. We just signed a significant deal in Turkey for example and we’re seeing traction in South East Asia where we currently operate from Singapore.

Another area we’re investing significantly in is our technology. Consumer behaviour is changing rapidly not only on the PC, but also increasingly on non-PC devices. In Q4 2011 8% of our traffic was delivered on non-PC devices and in 2013, we believe that number will be more than 50%. This presents huge challenges for publishers who need to evolve their skill sets and business models to be effective in a multidevice reality. We believe technology will be key for successful monetisation and differentiation.

As a European ad tech vendor, has it been difficult to raise capital for development and expansion? Does there remain a knowledge gap between European investors and the native ad tech space here?

Ad tech is easily one of the fastest changing markets right now, marry it with video and your homework grows exponentially! So yes, there’s clearly a knowledge gap out there and it’s larger in Europe than in the US. This knowledge gap means we put more focus on actual client signings and revenue rather than hypothetical slides about how everything eventually will change.

With our leading position and the $160bn TV advertising market opportunity, we attracted significant interest from investors.

The online video market looks incredibly congested with middle-men tech solutions. How are you differentiating your proposition?

For some reason, we in the ad tech industry like to make things complex. I’ll try to give you my very simplified view on the topic of the different propositions in the market. We see three key propositions in the market. You can: help the sell side sell efficiently; help the buy side buy efficiently; and aggregate reach for the sell side (and help small publishers monetise).

As the buy side are beefing up their game, they are slowly but steadily aggregating reach themselves and thus threatening the middle-men. We are strong believers of this polarisation and have built our proposition on a sustainable sell side model.

Our proposition is 100% built for the sell side. There’s no confusion around whom we work for, therefore our incentives are completely aligned: we empower broadcasters and publishers with expertise, technology and service to maximise their advertising revenues.

Is the standardisation still a big issue in online video, such as video formats? Does this make it still incredibly difficult to buy across the channel?

Delivering ads in and around video content is a magnitude more complex than display. Publishers have different video players and delivering ads across different web sites has always been a challenge. The VAST standard has been very important for the market and adoption has taken off significantly the last 18 months. Delivering interactive ads is a different story. VPAID is the standard that promised to solve this but adoption has been low as it’s rather complex and risky to implement. If not sand boxed properly a VPAID ad can do pretty much anything with your player, opening up huge risks for a flawed user experience. As our platform has deeper integration with the publisher’s video player, our clients have always been compliant with all versions of VAST and VPAID. Managing this compliance in our platform and integrating with the video player hides a lot of complexity for our clients. Using a display platform, the responsibility is on the publisher to develop this functionality in their video players – which is complex and requires ongoing maintenance.

All of this is still about video on a PC. The question now is how to standardise across devices, technologies, apps and different screen sizes as we evolve into a device agnostic world.

CPMs remain high for video advertising. And more publishers seem to be gravitating their content businesses toward online video to take advantage of the big media buying budgets. Is this the future for the publisher business?

What is happening right now is that many (non-broadcast) publishers’ dreams are coming true – they can suddenly access the holy grail of $160bn TV advertising budgets. The video revenue of Sweden’s largest tabloid Aftonbladet is close to some of the broadcasters in the same market; Google/Youtube has already built a power house in the new TV space; and many others who historically had no access to the these budgets are trying to do the same. The rules of the game are changing and many media companies will find their next $10m opportunity here.

How will Videoplaza work with agency trading desks looking to buy inventory via RTB or the automated channel? Are there plans to roll out new solutions to address automated demand?

Videoplaza works predominantly with broadcasters and premium publishers. We are following the evolution of automated trading closely and constantly discussing it together with our clients. So far, the feedback has consistently been that it’s too early. Video is traded on brand metrics, and context plays such an important role that some of the trading methods build for display need to be evolved. Also, the lack of supply isn’t really pushing for this right now. This might change in the coming 12-24 months and we’re ready to push out the functionality when needed.

What trends are we likely to see in the European video ad market over the coming 12 months?

2012 will be one of the most important years for the new IP-delivered TV. I’ve picked out three key trends we see that are relevant for publishers.

1. The inventory gap drives CPMs and spurs innovation

We are likely to see continued lack of supply in the market and this will have numerous implications. There will be many innovative ways to create inventory. There is a huge increase in syndicators, aggregators, in-banner/in-stream hybrids, IP only productions companies etc. popping up to fill the video inventory gap. I believe we will increasingly see prerolls before casual games solve this problem. Publishers like King.com, Spillgames and Stardoll are all good examples of this. We’re also predicting rather stable, if not growing, CPM levels in the market.

2. Live content attracts big audiences and ad spends

The Super Bowl last week was the most popular live-streamed event so far with about 2 million unique users watching it live over IP. Live content is another way to fill the inventory gap for broadcasters and publishers. Advertisers love live events, concerts and sports; and the mobility of IP-delivered devices, especially mobile, is driving the audience.

Monetising live content is challenging though. There are millions of users to dynamically deliver ads to simultaneously and in real time. This has complications not only for ad decisioning but puts also massive pressure on the infrastructure to deliver this.

3. Video grows outside of the PC

2011 was the year when broadcasters and publishers realized that the future of video is not limited to the PC. 2012 will be the year they act on this insight by investing seriously in new services and apps. Figuring out the business models will be key to this development, as the investment need to be motivated by clear financial gain.

Different devices and platforms will be important in different markets. However, we see a key trend towards HTML5, iPhone, iPad, Android, and then a mix of platforms for the living room. Games consoles have a massive reach already and are usually Internet connected; Smart TVs are also coming on strong with heavy artillery, even though penetration is lower. Control and flexibility will be key for the success of these platforms as publishers will want to stay in control, especially of the monetization.

This massive opportunity comes also with a number of challenges, especially on the technology side. We are preparing for that with a major product announcement in this area in March.

Posted in Ad Server, Ad Trading, Brand, Online Advertising, Publisher, Video Display | No Comments »

The PostView: Is Cutting Supply Really The Answer To The Current Malaise In Display Advertising?

Thursday, February 9th, 2012

The PostView is a new column written by senior execs working in the European online advertising industry.

There have been a lot of pieces recently putting forward the argument that reducing the volume of ads on a page could help salvage/preserve the growth of the online display advertising industry. While it would seem the most logical strategy, the issue might actually be more deep-rooted than that.

We exist in a digital world now where the overwhelming volume of ads are directly proportional to the overwhelming volume of content being created. In 2010, Eric Schmidt stated that we create as much information in two days as we have done since the dawn of man through to 2003. Schmidt might have been throwing another baseless fact out to the digieratti, but he was making an interesting point about the current content overload.

We Are Becoming Overwhelmed By Content, Not Ads

The stats coming from the web’s biggest publisher are pointing to a serious content glut. Huffington Post is now publishing over 1,000 stories per day, and Tumblr creates 15 billion impressions per month (source: gigaom).

Not all of these impression-generating machines are monetised with standard advertising, but that’s not the point. They are creating an incredible amount of content that users feel compelled to consume. Like most ExchangeWire readers, I would not consider myself the average consumer or user of the internet. My line of work means I have to be immersed in every new piece of information that is produced from the Ad Tech information channel.

Due to the amount of information we are trying to consume on a daily basis, we are now getting into a habit of just scanning content. And not even scanning pages anymore but literally squarely focused on scanning the actual content. Consumption habits have changed to the extent that we now need sophisticated news aggregators and algo-powered content curation. Feed readers apps, like Pulse, now enable us to literally get snippets of information all day every day.

Advertising Created This Problem

The ad-funded model has meant that publishers were remunerated on the basis of how many impressions and eyeballs they could sell. More eyeballs meant more cash. More content meant more eyeballs and so it continued. All the while, across certain content owners, eCPMs are falling. So we feel inclined to create even more content in the hope it will create another page view, perhaps even adding another ad format for good measure.

As consumers, the problem we have now is an addiction to digital news and information presented by the web (across different devices and screens). This proliferation of content means advertising becomes less effective. We become less receptive to it – to the point where our engagement with individual pieces of content is declining.

Kill The CPM

What would happen if we killed the CPM model and didn’t trade impressions anymore – but traded user sessions?

What if we start placing more emphasis on creating deeper user engagement? Publishers would then focus less on the volume of eyeballs being created or the link-bait worthy content headlines that seems to infect the social media channels. Creating deeper user engagement would place more strategic focus on user understanding and user acquisition – and ultimately place less importance on the one hit wonders from social referrals.

The cost of a user sessions would depend on session length, but would enable marketers to start telling stories, using creative sequencing more intelligently. We might even get advertising back to what it should be about.

This doesn’t mean we have to take a departure from leveraging the innovations within data and technology that are available to all of us. We can still ensure we are engaging with our desired audience. Content overload is not healthy and perhaps even damaging to display advertising’s long-term future.

So to answer the recent question posed by senior industry observers: will cutting supply solve the inherent problems with display? The answer is no. We need to cut content, and look at the fundamentals of how we price display. Only then will publishers and advertisers be able to reap the true benefits.

Posted in Ad Exchange, Ad Network, Ad Trading, Agency, Marketer, Online Advertising, Publisher, RTB, The PostView | No Comments »

Moving On From Retargeting: Why Prospecting In Display Is Good For The Industry

Wednesday, February 8th, 2012

Lee Puri is Co-Founder at Media iQ Digital. Here he discusses the centralisation of re-targeting and why prospecting in display will be good for the industry.

Many advertising agencies and clients made moves in 2011 to take direct control of display buying, probably the most notable of which saw the move to centralise retargeting in-house. Many networks and media owners are seeing their budgets shrink as the agencies look to secure increasingly larger share of media budgets for internal trading; for many third parties their clients could ultimately prove to be their nemesis.

The ad network’s ability to continually re-invent itself has essentially guaranteed its survival over the years with ever constant demand side pressures at play. However, the challenge centralising retargeting poses to third-party trading companies is a far greater threat than ever before – and far more dangerous for those players that are not on top of their game. A good elevator pitch and an expensive media lunch will no longer ensure continued presence on a plan. It’s more and more about delivering those incremental results, and let’s be honest, this is what it needs to be.

The gulf between agencies/clients when it comes to display trading tactics is no longer insurmountable. The accessibility factor combined with RTB has seen to that. The reliance on retargeting for many ‘black box solutions’ or ‘killer data platforms’ appears to be uncomfortably apparent for all to see on a campaign basis. The simple fact is retargeting has papered over the cracks for many display trading businesses for years now and the client has found out.

So why is centralisation of retargeting a good thing for the market?

Centralisation of retargeting brings huge efficiencies on an advertiser level, the rationale of which speaks for itself. Reduced risk of bid inflation, reduced duplication, lower frequencies to users, higher conversion rates, tighter control of data, etc. Whatever way you look at it, centralisation is the natural and most efficient next step for the market. This doesn’t necessarily mean the end of display trading outside of the agency trading desk. Far from it. To co-exist on a media plan alongside the ATDs, third parties – ad networks or publishers direct – need to be able to prove their ability in delivering incremental value. In other words, focus on prospecting.

The agency move to centralise retargeting could actually be the making of digital display – as it might allow, for the first time, third-party buyers to collectively focus on growing advertisers’ businesses through innovation in trading/optimisation, attribution and measurement. We now find ourselves in a market that is in transition: value propositions that have defined this space for years are becoming redundant, with new innovative means of trading gradually gaining resonance within the space.

Working outside of retargeting is probably one of the biggest challenges to face the ad network model since its inception in the late 1990’s. Campaign-based pressures to identify performing user bases and domains outside of retargeting means trading models need to be air tight. The need for trading expertise and/or campaign analytics is paramount in delivering out incremental value.

Agencies and clients find themselves at an interesting place at this point in time. Campaign efficiencies can be hugely stimulated through internal centralisation of retargeting – but delivering performance at scale often means there needs to be fresh, new activity at the top of the purchase funnel to ensure continual growth of sales. Hence the rise of demand for the prospecting network.

So what exactly is prospecting? What part can ad networks play alongside ATDs who can also prospect? How does this enhance the publisher direct position? How do centralisation of retargeting, attribution, measurement and policing practices come together to aid online display in growing advertisers businesses? These issues and more are fully deserving of further discussion – and will doubtless be addressed by the industry in the coming weeks and months.

Posted in Ad Network, Ad Server, Ad Trading, Agency, Agency Trading Desk, Online Advertising, Prospecting, Publisher, RTB | No Comments »

Euro Round-Up: Glow Digital Added to AppNexus Market; DoubleClick Sees European Publisher Uplift in AdX; Weborama Experiences 48% Growth in Q4

Monday, February 6th, 2012

This is the first post in our new column Euro Round-up. Please forward all Euro market stories and press releases to press@exchangewire.com.

Glow Machine Now Available In The AppNexus App Marketplace, Adding Facebook Ad Buying In The Ad Stack

If you were to believe the hype machine, Facebook is set to take over the ad world. Glow Digital Media, a European based ad tech vendor, is clearly responding to the market with its new Glow Machine® app for the AppNexus marketplace, announced this week. Glow Machine® integrates Facebook media buys into the AppNexus Console user interface. The new app gives advertisers the ability to access and control FB campaigns alongside display inventory. The goal is to make Facebook Ads more effective through advanced campaign management, automation and optimisation for AppNexus Console users. The app allows existing AppNexus users to buy across the Facebook channel. BannerConnect also launched its first app on the AppNexus marketplace, as the a la carte ad stack grows. The BannerConect app was built for Dutch-based Mark and Mini, who maintain 5 million Dutch online user profiles. It enables buyers in the AppNexus eco-system to enhance their campaigns with this data.

The DoubleClick Ad Exchange Delivers Revenue Uplift to EMEA Publishers

Google’s Ad Exchange, DoubleClick, released a whitepaper this week analysing their positive impact on publisher revenue in Europe. According to their internal report, 88% of display advertisers are planning to buy in real-time going forward. However, content remains critical and 74% of real-time bidding buyers will pay a premium for quality environments. In the survey, buyers also revealed that programmatic channels would see the biggest increase in investment over the next year.

For inventory that would have gone unsold, according to their study, the DoubleClick Ad Exchange demonstrated signiﬁcant success in monetising unsold inventory. For inventory for which there was no other demand, it delivered a ﬁll rate of greater than 90%.

One in every four times inventory goes on sale, the DoubleClick Ad Exchange claims to ﬁnd the best price against all other competing sales channels, both direct and indirect. And in these cases where the Ad Exchange wins, it delivers a price that’s 73% higher than other channels would have delivered.

Weborama: 46% Organic Growth in Q4, As Announced In Their Annual Report

The Weborama grew its business significant in Q4, adding more profiles (200Mn in Europe), more advertisers (adserving, branding and performance) and more publisher partners.

The full year revenue was 22,430 K€, a 46% rise over 2010. This strong growth can be compared to a 14% growth of the French display market (source SRI-Cap Gemini).

French business has been very good, with strong growth on the targeted media side and on the technology side. Rich Media sales have peaked, performance business was strong, as was targeted branding. Adserved volumes have grown substantially: 35 of top 100 advertisers in France are running on Weborama’s Adperf.

Behavioural targeting and the progression of automated ad trading were noted two two major trends of 2011 – and it continues to develop in these growth areas.

During the last quarter, Weborama interfaced its technology with Google’s DSP: Invite Media. Weborama is planning similar partnerships so that other European players (advertisers, agencies and publishers) can easily access and buy Weborama data.

It continues to grow in other markets too – with the Netherlands and Southern Europe highlighted as key markets. In the UK, the acquisition by Weborama of a 50% stake in Hi-Media UK is expected to accelerate the development of operations in targeted media, technology (Rich Media) and data.

Posted in Ad Exchange, Ad Server, Ad Trading, Behavioral Targeting, Facebook Display, France, Germany, Netherlands, Online Advertising, Private Exchange, Publisher, Spain | No Comments »

The PostView: The Last Hurrah For The Horizontal DR Ad Network

Thursday, February 2nd, 2012

The PostView is a new coulmn written by senior execs working in the European online advertising industry.

They used to be the kings and queens of media arbitrage. The ad tech watering holes of Goodge street and Dusseldorf would only mention their names in hushed tones. Nobody could beat them on margins. Nobody. Not even Google. But times have changed. The business model of the typical horizontal DR ad network is in real trouble – and it is going to have to battle hard for survival in a landscape that’s been radically altered by the emergence of automated ad trading and the arrival of buy-side/sell-side technology.

About twelve months ago, ExchangeWire published a piece on the future of the ad net model, entitled “The Life And Death Of The Ad Network”. It still remains to this day one of the more controversial posts on ExchangeWire. The post detailed why existing ad net models were doomed, and why they would have to pivot in order to survive. It would seem much of what was predicated has already come to pass. But how did we get here, and what now for the DR ad net market?

Those Pesky DSPs/ATDs Stole My Business

It was inevitable that some bright spark in New York would come up with a way of disintermediating the ad networks. For years the ad nets acted as the go-to aggregation and optimisation layer for all of the top agencies. They delivered on that CPA target but made sure it was optimised at the lowest CPM possible. The ad network became very big. Large amounts of VC money was thrown at the new ad “middle man”. Some were acquired. Some IPO’d. And most built very healthy businesses. ExchangeWire estimated that around £260 million of display spend in the UK was going through the ad net channel. There was a slight flaw in their lucrative model though: it was almost totally reliant on the agencies. Getting on the agency media plan was the nexus of their business. So when the agencies starting using DSPs to aggregate and optimise, it was always going to be difficult for ad nets to hold on to that kind of margin in the market.

No… The Automated Channel Is Killing My Business

For DSPs to work they needed dynamic supply. The Yield Optimizers (later to pivot to SSPs) – who were essentially managing the yield of unsold inventory on behalf of publishers – were about to offer the agencies the supply they needed to compete with the ad networks. It was at the time that the concept of RTB appeared. Buying at the impression-level, offered the agencies the type of transparency their clients craved – kicking traditional media-buying on its proverbial arse. While RTB has had its teething problems, its growth in the market has been phenomenal.

Despite the obvious protestations form current incumbents, it’s hard to deny we are now in the automated age. Automated trading – whether at the impression level or at a pre-agreed price with agency trading desk/ marketers – is the way publishers are going to trade their unsold – and possibly premium – inventory. That is a fact. Where this leaves the traditional DR ad net is open to debate. But anybody can see that its traditional brokering role in the market is no longer required by publisher or agency. Ad nets have been forced to buy inventory from same dynamic sources. All well and good. But where’s the differentiator from the agency trading desks.

The Inevitable Ad Tech Pivot

Ad nets are not clueless. They saw this coming and the pivots have been coming thick and fast. The most notable has been Specific Media. Cursed by countless agency execs over the years for the eye-watering margins they were making in the European display market, Specific was clearly going to be the biggest casualty of the move to automated buying – especially when you consider they have no prop inventory and data as well as an ageing ad server stack.

While Specific has been ridiculed for its celebrity hookup with Justin Timberlake on the MySpace acquisition, I think it could end up being quite an astute move. MySpace has 30-40 million uniques globally. If Specific succeeds in turning this into a a proper distribution channel, and can execute on its plan to produce ad-funded video content, it could move the company away from DR and into the lucrative brand budget. I have to admit I like it. It doesn’t seem as flimsy as its under-threat DR model. With brands looking to produce their own content and requiring go-to distribution platforms, Specific could easily leapfrog agencies to service advertisers direct.

The same logic could be applied to the thinking behind AOL’s recent GoViral acquisition, and why its abandoning Ad.com. Is abandoning a tad extreme in the case of AOL? Arguably. But then if you let all your talented people move to competitors then I think you are entitled to be accused of neglect.

Pivot Number Two… Moving Closer To Publisher And Agency

It’s interesting to see how many middle men DR networks have moved either closer to the agency or publisher. On the publisher side you now have some ad nets claiming to have SSP capabilities. While white-labelling the AppNexus platform for the purpose of managing publisher inventory in the real-time channel would seem like a smart move, it is a tough market. Lots of well-funded players play in the space and given the small margins you have to have serious scale to make this work. And on the demand-side you have ad nets working closer with just the advertiser. Smart. Until you realise you are competing directly with the agency trading desk. Incidentally, whatever happened to going direct to the client? The agency relationship could work of course if all re-targeting was in-housed and the ad nets on the plan were left to prospect…

Enter The Direct Response Prospectors (DRP)

While it’s probably the last bloody thing we need in this industry, this TLA will be popping up with some regularity over the coming twelve months. It is fact that re-targeting will be internalised by the agency. Anybody moaning about the situation needs to go and get their own clients. If you don’t like it, then you need to go client direct. If you don’t want play the agency’s game, go client direct. It’s that simple. As long as the agency controls the relationship you must play by their rules. And most DR networks will be forced into a new prospecting rule. Now it will be interesting to see how these ad nets survive without the re-targeting pixel. Is prospecting really for them? I can only count two or three pure prospecting networks doing this at the minute, MediaIQ and CPX spring to mind. But then bigger players, like Tribal and Unanimis, could also pivot. There might even be a big opportunity for some pure play CPA affiliates to capture DR budget too.

Whatever happens next, the DR landscape in Europe has utterly changed. Things will never be the same. So lets bid a last hurrah to the traditional DR network. Long live the arb!

Posted in Ad Exchange, Ad Network, Ad Server, Ad Trading, Demand Side Platform, Marketer, Online Advertising, Publisher, RTB, The PostView, Yield Optimisation | No Comments »