Programmatic isn’t a Synonym for Low CPMs

Are small publishers having difficulty keeping their CPMs stable with programmatic? According to Brian Fitzgerald of Evolve Media they are:

The overall marketplace has been putting pressure on brands to move into indirect programmatic channels at lower CPMs. Smaller sites have really been feeling the pinch. There’s a shrinking pool of people viewing ad inventory on PCs. Audiences are moving to mobile and publishers have to deal with less real estate for ad space. It’s only going to get worse. Now we have more issues of non-human traffic and non-viewable inventory.

We believe this doesn’t have to be the case. Because Evolve Media is rolling up small publishers, offering  them economies of scale, it’s in their interest to think that CPMs will be lower with programmatic.  Actually, things are much more nuanced, and changing every day as ads become more mobile and video ads become more common. Yes, brands are moving into programmatic. Yes, customers are moving to mobile, and the screens are indeed smaller. But that doesn’t mean advances like mobile video ads and high impact formats don’t take up the slack left by the abandonment by consumers of their PCs.

For one thing, people outside the industry are still confusing programmatic with real time bidding (RTB). They’re not the same. RTB is an auction, while programmatic is simply an automated work flow process. So there’s no real reason why programmatic itself would lower CPMs, unless your only use of programmatic is assigning your remnant inventory to RTB exchanges.

Our publishers, on the other hand, receive opportunities to offer  ZEDO’s high impact formats, display and video ads that are polite, unobtrusive, and engaging — but at the same time 99% viewable with measureably  higher CTRs. Our ZINC division sells premium brands and agencies campaigns that run on a premium publisher network that is growing daily.

For another, what Evolve calls “economies of scale” is really the ability to present a brand to a single market segment at scale — in this case either men’s or women’s lifestyles, since that’s what all their aggregated sites present. So it’s  a matter of better targeting. And that can be done with combinations of large and small publishers.

More precise targeting always produces higher CPMs for a publisher, which is why niche magazines and sites are not suffering the way many general publishers are. Local publishers are also faring better under programmatic, because in many cases brands want to pinpoint customer locations on mobile.

A combination of good targeting and engaging high impact formats can help a publisher of any size command the CPMs it wants.

 

 

 

 

Mobile is Changing the Creative Process, As Well As the Product

You may have been away on vacation this summer, but advertising hasn’t stood still in your absence.  The market will increase 5.3% this year to $180 billion, one of the biggest increases in a decade. This is good news for an industry that struggled during the Great Recession.  And a great deal of that growth is in mobile.

New York-based eMarketer predicts mobile will account for 9.8 percent of the total United States ads marketplace this year, surpassing newspapers (9.3 percent), magazines (8.4 percent) and radio (8.6 percent). Brands are spending 83 percent more on ads on phones and tablets compared to 2013, allowing the larger digital category to account for 30 percent of the advertising marketplace, per the research company.

What does that mean to the creative class that makes those ads? Well, first it means that they have to get over the habit of sitting down with  pens and paper to do their jobs. According to May 2014 polling by Edelman Berland for Adobe, 74% of US creative professionals said that mobile was changing the face of creativity and design.  However,mobile is not only changing the creative product, but it is actually changing the process. Younger creatives are themselves part of the shift to mobile, and there are some things they really like about where the creative process is going.

They generally like the fact that mobile allows them to capture inspiration on the fly, and create content anywhere. They can also use their mobile devices to collaborate, and as a place to store their digital portfolios. 30% of them use mobile to present their concepts.

But they hate the fragmentation of output media (the need for responsive design), which they admit makes their jobs more challenging.

As far as product: 30% of the creatives surveyed produce mobile ads, while the other 2/3 produce mobile web sites and apps. Nearly nine in 10 respondents (87%) believed that mobile content was having a positive effect on creative, with just 8% saying it had a negative impact, suggesting that mobile usage is facing an even brighter future in the industry.

No one that we know has yet surveyed creatives on the challenges of creating for the mobile phone, which is the largest mobile segment and the most difficult because it’s the newest.

 

MMA Study: Formats That Work on Mobile

As all brands and agencies already know, consumers are not crazy about mobile ads, especially those on the mobile phone. The phone has a special place in a person’s life because it is carried on the body, and the rules for successful advertising on the phone without intrusiveness are still being written. One thing we do know, however: video ads fare better than banners in terms of CTRs. The first studies on mobile video ads are just being done, and the industry is going to be in a learning-as-we-go mode for the next year or so.

So far, in-app advertising appears to be the most promising.

A recent study by the Mobile Marketing Association based on  500 million impressions provided by six participating publishers/platforms revealed that three-quarters of all video ad impressions came from mobile apps, with Apple’s iOS platform accounting for more than 80% of ad volume.

The study looked at  three ad formats: mobile linear video, interstitial video and value exchange ads. Interstitial ads  run between non-video content and occupy a large part of the device screen. Video linear ad units are ads that run before, during or after a video and value exchange ads are ads that must be viewed to completion in return for a reward such as points or a coupon. Linear video, most often pre-roll was the pre-dominant ad format (65%) followed by interstitial video ads (17%) and value exchange ads (15%).

While we don’t believe mobile video ads should be judged only by CTRs, it is notable that

the click-through rate (CTR) for mobile video ads ranged from 1.4% to 2.7% depending on the ad format. Combined smartphone/tablet click-through rates for 15-to-30-second video ads averaged 1.8%, while ads with an ad length of 15-seconds-or-less achieved a 1.4% CTR. Click-through rates for ads longer than 30 seconds tend to be lower than shorter-length units (0.8%). The latter is true for both skippable and non-skippable ads. Value exchange ads recorded the highest CTR, while skippable interstitial ads had the lowest CTR.

Surprisingly, many advertisers are using skippable ads: fully a third of the ads in the study were skippable. Engagement for those ads held up well, despite the option for viewers to bypass them; unfortunately, the study didn’t take into account the quality of creative in these ads, and that’s probably the key reason viewers stick with a video — it’s interesting or useful.  Moreover, ads longer than 30 seconds are not tolerated well; if skippable, they’re skipped, and if not, the CTRs reflect lack of interest.

The average completion rate for non-skippable ads in this study was about 90%, which points to a growing consumer tolerance for mobile video ads. However, if the ad was skippable, the average completion rate fell to 23%.

What else don’t consumers like? They don’t like frequency. Unlike most forms of advertising, mobile CTRs decline with increasing frequency, possibly because any mobile ad is so interruptive that it’s noticed the first time and remembered only as annoying if repeated too often.

Over the past year, we’ve run many campaigns with high completion rates, and we’re suspecting it’s a combination of our publisher network, our formats, and strong creative from our agency partners.

Help Advertisers Find Audiences with Viewable Impressions

English: John Wanamaker

English: John Wanamaker (Photo credit: Wikipedia)

Advertising has always been a cyclical and tenuous business. The venerable department store magnate John Wanamaker, whom no one even remembers any longer, once said “I know half my advertising is wasted; I just don’t know which half.”  If there’s a blip in the market, advertising is always the first thing to go, and that’s why Madison Avenue is so competitive and littered with Type-A corpses.

What is different now from in Wanamaker’s time is the number of businesses  based on advertising as a business model, as though it can support an infinite number of publishers. Even Google had to diversify. They can’t ALL continue to exist. Before  the internet, we had far fewer publishers than we have now. Some just had to go. Like job opportunities in a downturn, advertising never goes away entirely, but it does shrink.

Advertisers are now choosing among a larger group of publishers, some of whom represent completely new concepts of content and new demographics. So what happens? If you’re a legacy publisher with advertising as a business model, one thing you can do is lower your rates, cut your burn.  Even the New York Times has had to do all this and more.   But there’s something else you can do: you can help advertisers find their audiences by providing high quality content and viewable ad impressions.

You have to get on the train in the direction it is traveling, and this year it is traveling in the direction of viewable impressions. We’ve been going in this direction for almost two years, and with our high impact video formats for publishers, we’ve got what advertisers want.

You can talk all you want about how news is shifting online, how young people don’t read, how bureaus are shutting down, how great reporting is dying. The fact of the matter is, it has never been about news. It has always been about advertising.

If you are an advertiser, you spend your  dollars where you think they will give you the best return. Where will people tolerate advertising? Where will they hear it or look at it? It’s a constant battle between the consumer’s distaste for interruption and the need to sell products. As urban areas grew and literacy grew with them, advertisers figured out that there was an aggregation of people here that they could use to announce and sell products.

Now  there’s a new kind of aggregation and a new kind of digital literacy, taking place online.  The social streams are the town squares of today. Good reporting will eventually happen

online, because people are aggregating there. The first newspapers weren’t very good either–they were sensationalist– and shrill, like Gawker or Buzzfeed. They evolved. Digital media will evolve as well — into what readers want to see.  And good advertising will attract the new digital customer.

It’s useless to bemoan the death of the old publishing model. Instead, the good reporters are going where the people are, and that’s why we have The Verge, Vox and Recode. Even Yahoo has been attracting top talent lately. The advertisers will follow.

We’re all fond of calling new ventures “disruptive,” and it’s usually a compliment. But what happens when something really IS disruptive? This. The death of the old school newspaper publisher.  A whole lot of layoffs. It is not always fun and not always “cool.”  But it doesn’t mean the death of publishing, nor of advertising — just a reset.

After all, we don’t have gas lamps or horse-and-buggies anymore either, but we still read and travel.

ZEDO Advertising Technology Updates – June 2014

Bug fixes and Performance improvements:

This month our main focus was to release some back-end projects that would help improve performance of our system. We also fixed and released some of the issues as below:

  • Upgrades to Transcoding of video files in the VAST compatible template
  • Allow bulk cloning of ads from an ad network linked advertiser to a direct advertiser who is not linked to any ad network

Internationalization:

We are building support for multiple languages (currently Japanese) in ZEDO and we updated a few pages like, Home, Advertiser dashboard, Profit per Publisher dashboard and few reports.

Ad formats updates:

Container Ad with One Leaf – You can now create a Container Ad with only one leaf instead of the previous two leaf restriction.

 

container ad.png

Adhesion

The full page expanded unit has been made Optional so that users can use it like a stay-on ad format on their desktop and mobile devices. We have also added Close Button Properties in the Adhesion Format ad template.

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