Publishers Must Provide Premium Content to Generate Premium Dollars

What does it say about Discovery that it was willing to take an 82% loss to get rid of “How Stuff Works”?

After all, the site is 327th on Alexa, which means it is heavily trafficked. But, as Ad Age comments,  ”the right mix of traffic, ad revenue and expenses ultimately proved elusive. ”

And here’s why. When Discovery bought “How Stuff Works in 2007 (for $250 million) it was one of a number of highly popular “content farms” that hired low-paid freelance writers to generate content on subjects that were popular with search engines. Another site like that was EHow.com, Demand Media’s flagship site. Back in the day when advertisers bought on page views,  the formula content farms used for generating page views– superficial posts on common subjects — worked really well and attracted advertisers.

However, when consumers clicked on these articles and found them largely without value — and sometimes even copied from site to site — the complaints went to Google, the search engine that got them to these low quality sites. So Google had to respond for its own brand reputation, and in 2011 it released what is known as the “Panda” algorithm — a method for supposedly cutting through the low quality content on the internet:

As “pure webspam” has decreased over time, attention has shifted instead to “content farms,” which are sites with shallow or low-quality content. In 2010, we launched two major algorithmic changes focused on low-quality sites. Nonetheless, we hear the feedback from the web loud and clear: people are asking for even stronger action on content farms and sites that consist primarily of spammy or low-quality content.

This algorithm immediately “demoted” sites like “How Stuff Works” and EHow and caused them to lose readers, and then of course advertisers.So now it is 2014, and advertisers are buying much more targeted audiences, and are buying on different metrics, such as engagement and viewability. This creates even more of a strain for sites that aren’t positioned as premium.

We don’t have visibility into the specific metrics for “HowStuffWorks,” and we’re not trying to pass judgment on their content generation practices, which we believe were generally superior to the other members of the content farm genre, but the recent sale for $45 million emphasizes the need for any publisher to provide quality content at all times to justify the trust of brands and advertisers.

In the specific case of ZEDO’s network, we screen carefully to make sure we have premium publishers who publish quality content with which brands wish to be associated.

 

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IAB OK’s Trading on Viewability

For three years, we’ve been screaming that in digital advertising, there’s no such thing as “below the fold,” with its devalued impressions. We asserted that if an ad is seen by a visitor,it should be paid for. Now, IAB‘s new standard has directed that this should and will happen. Above and below the fold will no longer be the determinant. The new determinant will be viewability.

The IAB, after much sturm und drang ( 18 months of committee meetings and discussions at leadership summits)  released its standard for viewable display impressions last week. As expected, a viewable ad is one in which a minimum of 50 percent of pixels are in view for a minimum of 1 second. It doesn’t matter where that ad is placed on the site.

This shouldn’t be news to any of us; we have been following the issue of viewability and wondering when advertisers would start buying for it. Now that the Media Rating Council has lifted its November 2012 Viewable Impression Advisory for Display Advertising, the industry should start making transactions using viewable impression currency immediately.

IAB has a list of vendors certified by the MRC, and although their measurements can vary plus or minus five per cent, agencies with brand advertising campaigns will expect guarantees on viewable impressions. As for ZEDO, we’ve been working with comScore since it was AdXpose, and our high impact formats are all certified 99% viewable.

However, the bad news is all of this applies only to display advertising for now; video won’t be available for trading until June and video is the fastest growing segment of the online advertising business right now.

As IAB’s Sherrill Mane wrote,

Publishers who have been testing display viewability data know all too well that the investment in resources is substantial. You need to finance purchase of data from multiple measurement vendors, assign the right teams of people to develop test parameters, conduct enough comparisons so that you have an idea of how to forecast inventory and optimize yield. Even if all the steps are executed well, you are likely seeing variances across vendors. Some of the variances may be greater than what you’d need for confidence in the decisions you need to make.

Before you go nuts trying to decide which vendor you are going to use to measure viewability, you might want to take a look at IAB’s reconciliation study, which examines the different methodologies used by the vendors.

If you happen to like comScore, all currently used ZEDO high impact formats are certified by comScore.

 

 

The Crazy World of Ad Tech

Its a busy world in ad tech right now.  The Lumascape is littered with companies that have vanished, been acquired, had an IPO or pivoted. Some have even gone out of business. Many companies that started on the advertising side now have an offer for publishers, while many sell-side companies, including ourselves, have moved to include demand-side offerings.

We were a publishers’ ad server for the first few years of our existence. But you can’t be in the business for very long without realizing that serving one side of the ecosystem alone doesn’t offer customers a single solution that simplifies their lives. All the companies that began their lives as tools rather than complete products have been forced to develop more complete solutions to compete. That’s why we have spent the last two years focusing on ZINC.

But in the mean time, the vaporware situation hasn’t changed. Some companies still don’t have technology that works, while others have products no one knows they have, because they’re known for something else. Both the advertisers and the publishers know how fast the pace of change in this business occurs, and are trying desperately to find something that really works as promised, or truly solves a problem for more than six months. Meanwhile, stellar newsrooms like the Newark Star-Ledger and NJ.com are laying off staff in an effort to survive. Ad tech companies might be doing well, but publishers and agencies are still struggling to find their sustainable places in the relatively new world of digital.

As for the data platforms that support advertisers and publishers? Even more complex. There’s a lot of disagreement about just what data is actually helpful. Time has shown that more is not necessarily better.  Is it viewability? And if so, is it comScore‘s metric or Nielsen’s,  or perhaps even Moat’s? Does mere viewability convert to sales?

Is it mobile targeting? Last year,  four online ad companies — retargeting firm Criteo, ad targeter Media6Degrees, ad buying company X+1 and Yahoo – each acquired a mobile ad tech startup over the course of three days. This year, Rubicon’s successful IPO has prepared the Street for potential public offerings from Pubmatic, AppNexus, Turn and MediaMath. It’s only rumor right now, but those rumors have all four of them, and perhaps a few more waiting in the wings.

For the companies, this is great, if distracting, news. For the customers, it may not be so great as the choices narrow and the innovation slows as newly public companies focus on revenue rather than on new product lines.

Publishing Has Changed Profoundly. Now Advertising Must

I read an interesting piece by Om Malik, legendary tech journalist and founder of GigaOm today. Om says that while the future of news may be bright, the business of news is still in the dark ages. He goes on to say that Madison Avenue really needs an intellectual rebirth so it can quit just adapting old forms of  print advertising to the web

Om says, ” the intellectual makeover of Madison Avenue hasn’t even started yet. We are still trying to retrofit old ideas of advertising on to today’s media models.”

And then, a bit further on in the piece: “The heroin of web media is CPM-based advertising.”

CPM based advertising without tracking performance is an issue. That is why most media buyers always monitor click through rates on CPM buys. CTR is an important performance measurement for the industry. Since our founding, we at ZINC have done nothing that isn’t an effort to drive up performance for advertisers. We’ve invented new ad formats, and iterated and iterated non stop to improve performance: especially CTR.

None of this technology from either ourselves or others on the Lumascape has yet helped the advertising business arrive any real change on its side. Basically, advertising is based on reaching masses using scalable platforms, and it isn’t ready to address the niches of a public with attention that is being sliced and diced so many ways. But a change in advertising is long overdue.

On the other hand, on the publisher side of the ecosystem, there have  already been profound changes: the closing of newspapers, the rise of curation, the arrival of the “less is more” mentality, the birth of the branded journalist, headlines that scream to be shared, pages that scroll infinitely, paywalls, listicles, multimedia features — the list of adaptations publishers have made in order to survive and/or thrive in the digital world is almost endless, and new adaptations are constantly being made.

Remember though in the advertising agency, the media planner is still buying on a CPM for reach and frequency, and then monitoring CTR.

It may be time for the (ironically) more adaptable publishing business to help the hide-bound advertising business be more creative. Agencies, now unleash your creative teams again. Let them make something memorable, something that will be welcomed by viewers. And your creative will drive users to view the ads and then that will drive up CTR and all your other performance metrics.

We Play it Straight: Our Stance on Fraudulent Traffic

We’re not fans of overgeneralization, nor of oversimplification. Alex Kantrowitz’s post on ad fraud contains both. In addition, it is incredibly cynical and tars the entire industry with the same brush. Here’s a sample:

Purging fraudulent impressions from the system would mean higher media prices and lower performance (though more accurate). Fraud pumps up publishers’ traffic, exchanges get paid a percentage for trading it, buying platforms’ performance looks better because of it, and agencies can bring those great results to clients. Everyone wins!

We’re not denying that ad fraud exists in the industry. But we’ve been in business since 1999, primarily as an ad server for publishers and a partner to help them adjust to the realities of the digital world. We were there when ad fraud first began, and because our positioning depended on helping our publishers, we got busy on combatting it almost immediately.

Because, you see, fraud doesn’t pump up publishers’ traffic if advertisers won’t pay for the ads. Once again, we were early to notice that our publishers weren’t getting paid for ads that weren’t clicked on. And now they’re not getting paid for ads that aren’t viewable.

We partnered with DoubleVerify and AdXPose (now comScore), and worked with every industry group to fight spam, fraud, and malware. In fact, we had, and still have, an employee dedicated to industry efforts to professionalize ad tech and weed out the scammers. But if you take the trouble to run Ghostery on any of our publisher sites, you will still find a myriad of trackers and ad networks besides ours.

For example, the site shown below has 110 trackers of various kinds, some of which could be fraudulent. But how can you weed them out if you are honest? The answer is, you can’t. Between the marketer and the publisher are 110 entities dropping cookies, selling data, and potentially committing ad fraud.  These are all the entities in the famous Lumascape. Much traffic that hits a publisher site does not even go through our ad server, so there’s nothing we can do individually.

110 Trackers on one News Site

On our own network, we do weed out fraudulent traffic. For us, refunds for fraud traffic are a contractual obligation, as Kantrowitz suggests they should be.

“Harvard professor and ad-fraud researcher Ben Edelman suggests making refunds for fraud traffic a contractual obligation. “In practice right now, you promise to deliver it, you don’t quite deliver it, people shrug, the world moves on,” he said.”

We’re not trying to say that ad fraud doesn’t exist, or that it is not important. But we are saying that condemning the entire industry doesn’t fix the problem and just makes the people who play it straight mad.

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