Mobile Digital Growth Worldwide

The balance of power in advertising markets is changing as consumers in developing nations begin to come online and on mobile in ever-increasing numbers.It’s not much of a surprise that the UK was the biggest advertising spender in Europe last year. “According to the AdEx Benchmark 2014 report, by IHS Technology and the Internet Advertising Bureau, €8.9 billion was spent on online advertising in the UK in the 2014 calendar year (or £7.19 billion, using average exchange rates in 2014).” But the UK will lose its position as a significant spender before the next five years are up.

In Europe, France and Germany are the next biggest spenders. But Asia-Pacific is the fastest growth market, “Digital advertising spend in Asia-Pacific is expected to rise 30.3% to total $46.59 billion this year, according to eMarketer’s latest estimates of digital ad spending worldwide.” And in fact, Asia-Pacific is, after North America, the second largest digital ad spender worldwide.

Part of this is simply the billions of Chinese coming online. China now has the largest share of spending of any single country at about 50%. But Indonesia is growing the most quickly, expected to grow by 98% this year.  Advertisers in Indonesia are still investing in print, but the arrival of users on smart phones is going to change that. Indonesia will be an example of how emerging countries leapfrog steps still being executed by their more developed neighbors. Indonesia will pass India in 2016 and pass South Korea in 2018. China, of course, will still post impressive growth.  By 2017, digital ad spend in Asia is expected to surpass that of the North American market.
Digital Growth in APAC

We Are Social and IAB collaborated on an intensive study of mobile digital growth in APAC, and the SlideShare of the report is here. To the left we list the most important growth numbers since 2014. You can see where this will take us very quickly.

To prepare for our customers’ response to this growth opportunity, we recently opened a Singapore office, and are about to open one in Australia. Since we have always been a big presence in India,  we feel we have APAC covered. We’ve got the publishers, the market, and the mobile formats.

Good-bye :30 Spots, Hello Digital Video Creative

Seriously? Digital  is now the second biggest advertising market and we’re still using 30-second spots? Has anyone really thought this through?

The research on whether people will watch video online, and for how long, is in. While we used to think two minutes was the outer limit, we now know that it’s over five for a good story, especially on a tablet. Younger people have moved from TV to digital in large numbers, and even little kids reach for the tablet before the TV. In theory, this could change the delivery of advertising, allowing for both longer and shorter ads, and unleashing new powers from creatives.

To keep up with their customers, brand advertisers are shifting their metrics from CTRs to completion rates. Completion rates are not a function of time; they’re a function of good story telling. A good story keeps people engaged and produces more brand recall than any 3o-second spot ever did. If we get away from the limitations caused by time, we’ll be a lot better off. Without the temporal limits of TV, we can tell different kinds of stories.

Mobile is a great place for video ads. Buzzfeed founder Jonah Peretti once said that his site was for the bored at work, bored in line audience, and those are the people who will watch a video that tells a good story, even if it’s conceived and even executed by a brand. In fact, IAB just did a study of video watching on mobile devices:

 many respondents said that they’re watching more video on mobile devices than they were a year ago, including 50 percent of those surveyed in the United States, and 42 percent in Canada, New Zealand and South Africa.

They’re not watching 30-second clips, either. In fact, 36 percent of respondents said they watch videos that are five minutes or longer on a daily basis. (That’s not a majority, but it’s more than just a tiny sliver of the audience.)

The IAB says that viewers in China are particularly open to watching movies and TV episodes on their phones. In addition, 37 percent of respondents in China and 35 percent in Singapore said they’re watching less TV due to watching more mobile video.

We suspect that next year publishers will be seeing many new in-app and in stream formats that don’t look like 30-second spots.

 

Will An End to Ad Fraud Mean Bigger Budgets?

As buyers begin to demand better metrics on both ad fraud and viewability from publishers, the definition of how to measure  ad fraud keeps changing. Like viewability, fraud numbers can vary depending on the third-party monitor. And if you’ve ever seen a rat on a charged grid stop moving because of operational neurosis, you know that marketers won’t unleash the biggest budgets unless they have some standards with which they can feel comfortable.

The only thing that will change all this is greater transparency. Earlier this year, IAB in partnership with ANA and 4As started an industrywide initiative known as the Trustworthy Accountability Group to help promote transparency. The MRC is also trying to establish a certification for fraud detection. But as with viewability, it’s not so simple. In March, the group released list of first principles around fraud detection, source identification, process transparency and accountability.

The first step is to arrive at a common definition of what constitutes fraud.

There exists a set of ad-related actions generated by infrastructure designed not to deliver the right ad at the right time to the right user, but rather to extract the maximum amount of money from the digital advertising ecosystem, regardless of the presence of an audience. There also exists a set of actions generated in the normal course of internet maintenance by non-human actors – search engine spiders, brand safety bots, competitive intelligence gathering tools. These and other actions, whether they be page views, ad clicks, mouse movement, shopping cart actions and other seemingly human activities  must be expelled from the supply chain.

The supplier (ad network, exchange or publisher) must institute technology or business practices to eliminate bots, adware and malware traffic, and other sources of malicious activity.

At ZEDO we have been active in anti-malware efforts and have been selected for the Online Trust Association’s Honor Roll four years in a row. We were on the front end of this movement long before it became fashionable, and we developed our own technologies to weed out adware and malware.

Buyers should be able to identify the URLs  on which their ads appear. If the URL is masked, there must be enough trust and transparency so the buyer still feels comfortable. Suppliers must also able to supply information about what processes we employ to root out fraud. This is now becoming an industry-wide supply side requirement. There must be a rating scale, and an explanation to the buyer about how that scale works, how it is used, and what happens to the lower quality traffic.

The intent of the industry efforts is to develop a set of best practices so companies trying to achieve compliance will know what their guidelines should be. For publishers, exchanges, and networks, this should be a big opportunity, because compliance will unleash bigger marketing budgets. And since we already comply, we’d be happy to see the fraudsters chased out of the supply chain.

 

Does Video Advertising Work?

The consensus forecast in the ad industry is that video advertising has been the big opportunity for 2015. Although “cord cutting” is not increasing as quickly as some trend spotters have predicted, we have now bred a generation of adults who have never been connected by a cord . Millennials simply never order cable in the first place; they use their TVs, if they have them, as giant displays for Chromecast or Airplay.

We’ve known for a while that Millennials also watch TV on their mobile devices, and that they were willing to watch videos longer than two minutes.  In fact, this year all other market segments seemed to go mobile at once. For a while the ad dollars didn’t follow the viewer behavior, but now Adexchanger’s Data Driven Thinking columnist says, “…based on… discussions with major brands, agencies and advertisers, TV advertisers hope to shift roughly 30% of their $70 billion TV ad budgets to digital video by 2015. That would increase the US market to $21 billion, up from $6 billion in 2013.”  Based on information half way through the year, the actual numbers will be bigger.

These budgets are big enough that we must now begin to measure how well digital video advertising works. The rating system for TV, GRPs, hasn’t been a good measurement for quite a while, although we didn’t have any reason to complain about that before digital advertising unlocked the power of actual data. When TV first came on the scene, GRPs measured who was watching a show, and thus you’d know who was watching the ads. But since 1999, when Replay TV first introduced the DVR with its ability to skip ads, GRPs have become less and less an accurate measure of whether a TV ad led to a sale.

We hope that with the tsunami of ad dollars to mobile video, we won’t make the same mistake we did with digital display — turn it into a platform for performance advertising and drive publisher revenues down through the floor. It has taken us more than a decade to recognize that brand lift is a valid objective for online advertising. Now, with mobile video, we should come around much faster to realize that the best way to measure online video ROI might be against TV ROI, which is an apples to apples measurement. TV, of course, has been justified for its capacity to produce brand lift as well as just performance. Digital video, executed well through formats like our inArticle video,  will do the same.

 

 

Can Programmatic Give Us Better Targeting?

If you listen to companies on the forefront of programmatic advertising, they tout both its ubiquity (some say over 50% of the market inventory is now purchased programmatically) and its virtues for both publishers and brands. For publishers, programmatic tools have already provided an opportunity to monetize more content, although sometimes at lower CPMs than they’d wish. And for brands, programmatic promises better targeting. Even premium deals can now be done with the automated work flow tools programmatic has made possible.

But does programmatic really provide better targeting? The consumer’s jury is out on that one. Speaking anecdotally, I’ve heard many consumers simultaneously laugh and cry over poorly targeted ads. Millennials may have given up on advertising altogether, turning to ad blockers to rid themselves of “information” they don’t want in places they don’t want it. Mobile is more often than not the culprit in these instances, where unwanted advertising can eat into a user’s data plan.

But programmatic will get better, because there will be more and more data generated by each individual consumer. Wait until your watch, your thermostat, and your washing machine begin to generate data about your habits and wishes as a matter of course. Some of these objects have the capability to do that now, but most of us haven’t bought them yet. The Internet of Things, as it is called, is just beginning to take off for people who are not early adopters. That’s why ad tech companies were present in such force at the Cannes Lion Awards last month — an event that used to belong solely to the creative class.

One speaker at the awards said that marketers are going to have to learn “intent-based marketing,” which means they must shift away from trying to create demand to fulfilling the actual needs of customers. This is a huge shift, since advertising has been a big part in creating and sustaining the consumer economy. But once consumers have the power to communicate their intent so clearly in so many different places, ignoring that intent would be foolhardy on the part of the marketer. It’s better to get on the train in the direction it’s going in, rather than trying to reverse the train’s direction.

The plethora of data created and the ability to target it directly to someone who actually intends to buy a product will ensure the ubiquity of programmatic. Marketers must learn to embrace new patterns of conscious consumption and return to the idea of offering experiences rather than just products.

This shift has only just begun. Expect marketing and publishing to change rapidly over the next decade (again).

 

Apple’s Doublespeak About Ad Blocking

The announcement that Apple was building hooks for ad blockers into Safari with the release of El Capitan and into its mobile platform with IOS9, combined with the forcefulness of Tim Cook’s big speech on how Apple respects the privacy of its users has raised the level of confusion or maybe pure hypocrisy around the use of consumer data to target ads to an astronomical level.

Who can blame the consumer for thinking large companies are “selling” their data, and with it their privacy to evil third parties.
Unpacking what Cook said: “of course Apple will not sell your customer data because we value your privacy and selling data isn’t our business model,” we look at it in juxtaposition to “come over to our iAd platform with your ad dollars because we have the best data about the most desirable users on our own platform. Of course Apple isn’t selling your data to someone else, because they’re using it themselves. And do you think the ad blockers will work for the ads served by Apple’s own iAd network? We don’t.

Facebook and Google aren’t selling your data either. They, too, are using it themselves to target ads. It would destroy their business model if they sold data at low prices instead of using it to sell advertising at high prices.

The language (data and privacy) with which the entire issue of free content, advertising and ad blockers is being presented to the consumer by the big platforms is misleading to say the least. Consumers are installing Ghostery and AdBlockerPlus not because they mind ads but because they fear surveillance and loss of privacy. But ironically, the issue isn’t privacy or surveillance. It is seeing advertising in return for free content.

We are long overdue for a broad conversation, probably best led by a collective of premium publishers, on the trade offs involved in keeping content free. We’re also long overdue for the kind of opportunity presented by native advertising and kick butt creative.

Why did users tolerate the kind of mass advertising presented on TV? Because television brought us the most creative content and creative moments in advertising. There were three components of ads during the Golden Age of advertising:
1. Ads weren’t targeted, so users didn’t feel threatened that someone was referring to them specifically.
2. Ads were clever and often compelling, telling memorable stories with high production values. Creative directors like Don Draper were prized.
3. Ads were often presented as sponsorships, in the way the Milton Berle show was “brought to you by Texaco.” Thank you, Texaco for bringing us Uncle Milty. Consumers understood: if you want to see this, you watch the ad and maybe end up humming the jingle.

Now the ad and the content are often quite removed from each other, leaving the consumer unenlightened about her role in the bargain.

It’s time to remind the consumer that there is no Uncle Milty without Texaco. We did it for TV and we can do it again for digital publishing.

Ad Blockers: Who Loses the Right to Survive?

The rapid growth of ad blocking software in Europe has rattled publishers. The figures say that up to 35% of online users, especially younger ones, block ads. With the shift to mobile, this may get worse. Some carriers have given thought to stripping mobile ads on behalf of their users. And a new Israeli company, Shine, launched a mobile ad blocker that allows users to strip mobile ads themselves.  When asked why users have a right to do this, Shine argues that mobile ads cost users 10% to 15% of data plans, deplete battery life and decrease l page load times, so users should have the option to block them.

Shine’s entire marketing program is based on the users’ “rights” not to be charged data charges to see ads. The company even refers to ad tech as “malware,” although the percentage of malware masquerading as malware is growing increasingly smaller. ZEDO has been active in  industrywide anti-malware efforts for years and they are working. We have built the technology to spot it and get it off our network.

Unfortunately, the courts have so far  still tended to side with the ad blockers. Ad blocking has  been deemed a legal business, and mobile device owners (unsurprisingly), also have the right to control what is on their screens.

Really? What about the publisher’s right to stay in business? If the user won’t pay for content (and a major percentage of users will not), and advertisers cannot have their ads seen, who exactly will pay the cost of free content?  The best selling apps, according to App Annie, which surfaces and rates all apps, are free, indicating users are no more willing to pay for apps or app content than they are to pay for news on the web.

Traditionally, the advertiser has also had rights — the right of free speech to market products to the audience in return for paying the cost of ads. And the publisher certainly has rights: the right to be in business and sell his inventory to an advertiser for a fair price.

Compounding this messy situation is that, when you look into the business models of most ad blockers they make their money from sites that pay them to be “whitelisted.” This is a form of blackmail, but publishers must pay so their advertisers can be seen.

If the use of ad blockers keeps growing, it will force the institution at long last of paid content on the internet. After all, one way publishers can retaliate might be to block access to their sites by anyone who is running an ad blocker, unless they are willing to pay for admission to the site or pay the cost to read a specific piece of content. The internet’s 20-year “summer of love” might finally be over. Publishers have to eat, too, you know.

 

 

 

The Strengths and Limitations of Programmatic

There’s a tendency lately to overrate what the garden variety of  programmatic can do. Indeed, as more and more of the market moves to programmatic trading, we sometimes forget that the highest and best use of programmatic isn’t to attract new customers; it is still for retargeting. Retargeting works.

There are now several forms of retargeting that have evolved over the years.  The first to emerge was search retargeting, which served appropriate ads to consumers who searched on certain keywords. The problem with that? We didn’t get enough scale. Too few users searched for your product.

Similarly, demographic retargeting  has its limitations, as consumers already know. It is best used to retarget existing customers or visitors, and sometimes serves an ad for a product a customer has just purchased. The severest limitation of retargeting — just like search retargeting — is for the development of new customers. Here, a different kind of data is required, and that often comes from the publisher. For customer acquisition and brand building, targeting actual websites with high quality users visiting them is still the best solution. The best targeting for expanding your customer base is still site targeting.

Thus actual site targeting, with ads served while the consumer is on a relevant website or a relevant section of a website, will work best. It works better than data to find the type of users that would visit a relevant site. As an example, if you are interested in a traveller it makes more sense to advertise on the travel section of a newspaper site than to choose the traveller category in a DSP. The DSP is using data to guess that the user is interested in travel. However targeting the travel section of the site removes the guesswork – we know the user is reading about travel. And further the user’s mind is on travel right at the point that he sees the ad. So site targeting works better – though it costs more and is difficult to find.

And that is why with our ZINC platform for media buyers we offer transparent and highly accurate  targeting of websites and sections of websites.  That really works well. Many can’t get hold of this inventory so will say that a DSP’s travel category is better and cheaper- but it isn’t better, just cheaper. ZINC’s transparent list of travel sites and travel sections will work far better – though it costs more it is worth it.

Viewability: In the Eye of the Beholder

As the media industry gets ready to shift from paying for impressions to paying for viewability, knowledgeable observers on both sides have already figured out that it’s difficult for advertisers and publishers to come to an agreement on whether an ad was indeed viewable.  Each side measures viewability from its own perspective. The current situation sorely needs to be resolved by someone who can see things from both perspectives. That’s us here at ZINC.

ZEDO’s geneology is as a publisher ad server, but on its ZINC side it sells high impact formats to ATDs and agencies. As a result, we always know when our publisher partners’ ads are viewable because we serve them. We can always tell whether the actual location of the ad unit is in view. And – as you know – we create ad units for high viewability and are consistently measured as number one in viewability nationwide.  However, because we serve both sides of the ecosystem, we have no troublesome third parties in the middle.  This allows us to get better results for our advertisers’ ad verification  technologies – it gives them better and cleaner data.

Here is what Ad Exchanger says is the weakness in measuring viewability solely from the buy side:

When viewability is measured on the buy side, the viewability solution sits with the advertiser’s ad server. Since the ad server is responsible for serving each and every creative, it’s very easy to know exactly when to start the viewability clock and determine when the creative is rendered for at least one full second.

But due to ad environment challenges, like unfriendly, cross-domain iFrames, advertisers can’t measure every ad unit in every environment, which means some percentage of ad impressions is simply unmeasurable. If a vendor reports that 60% of the ads were in view, with a 70% measured rate, what value do the remaining 30% have? 

The  problem is that the advertiser doesn’t ALWAYS know if the creative was viewable – they can’t always measure. The advertiser’s ad server misses some viewable impressions because it can’t figure out the iframes, read the urls, decipher several stacked ad calls or understand certain browser-device-combinations.

So one side is counting only what they are 100% sure of, and ignoring the rest. The other is counting everything – but why should anyone pay for its (higher) numbers?

Since publishers are measuring fully owned inventory and not dealing with foreign ad environments, they have no difficulty determining whether the location of an ad unit is in view. Put another way, publishers can reliably determine the location of all ad units throughout their web properties virtually 100% of the time.  …

I’ve seen discrepancies … reach up to 20%. 

This is nuts. While one side measures only what they are 100% sure of and the other side with better information measures more, how will we ever achieve a consensus set of measurements?

The only way to achieve better measurement to have your creative  served by a vendor who is also the publisher’s ad server.  That is the advantage of buying from ZINC: one                                           platform from the advertiser end to the publisher end. ZINC provides better viewability – as every agency and ATD finally seems to know.  ZINC allows quality  third parties (e.g. Moat, DV, IAS, Comscore) to better  measure viewability for the advertiser.
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Effective Ad Placement

Where an ad appears on a site can often be a determiner of how well the ad performs. Traditionally ads at the top of a page were assumed to have the best performance. However, advances in both site development and ad formats mean that what was true in the past may no longer be true.

The graph below illustrates the performance of ads on a single site. We’re the ad server, and they have  bought our inArticle ads. We often conduct tests on our own formats to make sure we’ve told the truth about how they perform.

time-spent-grapgIn this case, the axis on the left represents the amount of time spent on the page, and each bar represents a part of the page measured in pixel height. The bars proceed from left to right, with the left most bar indicating the performance of ads at the top of the page and the right most bar representing the performance of ads at the bottom of the page. We’ve conducted this analysis on many of the sites on our premium publisher network.

Our analysis has shown that across a wide range of sites, users spend more than double the time with an ad located around an article than they do at  the top of the page. This demonstrates that formats like our inArticle, which runs a video within an article, can be much more effective than banners on the top of the page, which traditionally have been thought to be the most effective places to advertise.

One caveat to all this : all formats lose engagement as the viewer moves down the page. Even the inArticle format’s viewability will drop tremendously if it is placed below the 2000 px or 50% of the page.