Online Advertising Faces Big Change (Again)

After the week of handwringing and testiness that was New York Ad Week, we can at least all agree on something; digital advertising isn’t going to go away right now. Digital ad spend will continue to increase as TV dollars come online. Publishers are not going to allow themselves to go out of business, and brands are not going to find magical new ways to find customers and give information. But we have had that brush with death that should convince us our industry isn’t immortal.

Advertising must and will change. We don’t have a crystal ball any more than you do, but experience tells us these things are likely to happen in the near future:

1)The number of intermediaries in transactions will decrease. Each intermediary not only increases page load time and annoys privacy advocates, but increases the chance of fraud. This was discussed at a session on Cleaning up the Supply Chain, in which the participants talked about cleaning up bot fraud. One way to do that would be to buy direct, or to buy on a private platform that only admits premium publications and the advertiser who wants to buy them. We think this will be the wave of the future, and advertisers will feel much more secure buying this way. This, of course, does not exclude the automated work flow that came with programmatic, but it does stem the tide of fraud and solve the viewability problems.

2) Premium publishers will take another look at  how they position themselves as premium. The flight to quality started in the summer, when advertisers began to realize how much money they were throwing away on bot traffic. A recent study by Digital Content Next demonstrated that there was 89% less bot traffic in video and 75% less bot traffic in standard display ads on premium publisher sites. The key here is to define whether a site is premium. For a while, the notion of a premium publisher was almost lost in the race for sheer numbers.

3) Ad formats will change to be less interruptive and obstructionist. One enormous and welcome change is the end of support for Adobe Flash, which was a groundbreaking tool to produce rich media back in the day, but  has proven out to be more of a hassle than a help as the ecosystem matures. Yes, producing ads in HTML5 may be more costly at first, but if that ensures more security it’s a net gain.

4)Customers, as usual, will tell us what they want. As advertisers, we are going to have to take into account the data plans of our mobile customers, and design and buy ads that don’t use up 50% of a phone’s data plan. Our inArticle format never did autoplay audio, which has made it much more adaptable to mobile than other video ad formats.

5)At the end of the day, we are going to have to make it worthwhile for consumers to turn off the ad blockers and pay attention to ads. This was said many times, but we must make our ads better and more compelling. There’s no reason why the same people who used to watch the Super Bowl just for the commercials can’t learn to trust the advertising industry again. This will mean offering more choice in whether and how to track customer data.

We’ve had a brush with disaster that should have taught us something: we can no longer take the consumer for granted.

AdTech Matures As an Industry


The Wild West is over in advertising technology. We’re about to see a bloodbath, in which only the truly good guys will survive. By good guys, I mean companies that actually perform a useful function for either advertisers or publishers without subjecting site visitors to a barrage of  ad fraud, spam, malware, and unwanted ads.

ZEDO solves these problems by providing agency trading desks with an end to end platform — a direct (secure) pipe from the ATD to the publisher pages.  Our three-part ad stack admits no third parties who can introduce bad stuff. ATDs log into our buying platform, and go to our private exchange only for our unique ad formats. Our formats are built for differentiation and performance. On the supply side, the supply comes only from our ZEDO publisher ad server, and we create all the impressions on the publication’s page. We don’t buy from anyone so nothing bad can be introduced.
ATDs love this clean end to end platform. Our control over the whole supply chain allows us to innovate instantly, which we do. We have the best formats in the industry, and they get better every month. We launch 2-3 new formats every year. ATDs love the fantastic formats and clean supply chain, because it is like the days before advertising got so complicated.

When the first online ads appeared in 1994 the geeks had all the control, because neither the advertisers nor the publishers understood how online advertising  worked. They couldn’t serve make an ad appear on a digital site without an intermediary who knew how things worked. Early online banner ads were effective, so the industry to supply them grew quickly in response to marketer demand. However, in the ensuing 20 years, the industry almost intentionally tried to obfuscate its operations, introducing more and more complex technological solutions to the simple problem of trade — buying and selling — which is almost as old as human existence. And now online ads are hated, and in extreme cases blocked entirely, with 25% of the population running some kind of ad blocker.

This threatens the traditional free content ecosystem, which has existed for hundreds of years with newspapers, magazines, and TV networks producing content for which visitors are accustomed not to pay. Without advertising, there’s no business model for free content.

But as one person said on an industry call I participated in recently, “this industry seems determined to self-destruct.  We’ve been so disrespectful of users — forcing invasive, noisy, deceptive ads in front of them without regard to their experience — and until now, they’ve had no means to have any response.”

Never mind the user. The industry as also failed to respect the entity that pays the bills, the advertiser.

Now, a number of initiatives have coalesced to force the ad tech industry to change its ways.

The first is Do Not Track, a standard web browser setting that allows users to avoid sharing their browsing behavior with advertisers. Chrome, Firefox and Safari already have Do Not Track capabilities built in, but users have to choose them; they’re not the default. Many users don’t know they exist, and industry-led initiatives to prevent the widespread use of Do Not Track have had the unintended consequence of fostering the use of ad blocking software.  For a couple of years now the industry failed to come up with a satisfactory compromise between the user and its own need to keep revenue flowing.

Now the Electronic Frontier Foundation has stepped in to propose a code of conduct for online publishers. The EFF calls this a compromise that allows consumers to avoid tracking and still allows publishers to get revenue from online advertising. We are in the process of getting a briefing to further understand how we as a company can help our publisher partners participate in this initiative without losing revenue. Like everything else in ad tech, this is complicated.

The second, the Trustworthy Accountability Group (TAG), is an industry initiative that focuses on click fraud, piracy, deceptive advertising, and malvertising. Its goal is to create a clean supply chain in the industry. In its latest press release, the TAG announced a new program to block illegitimate and non-human ad traffic originating from data centers. It will use Google’s database of data center IP addresses and enhance it based upon broader industry intelligence. Other companies joining this phase of the project include Dstillery, Facebook, MediaMath, Quantcast, Rubicon Project, The Trade Desk, TubeMogul, and Yahoo.

Next, Ad Block Plus, one of the largest distributors of ad blocking software, has issued an acceptable ads manifesto which explains its criteria for acceptable ads and how to apply for whitelisting. Since it is focused on static ads and most ads today are video, this is going to be interesting. It’s even more interesting as more and more advertising falls under the category of “native.”

And last, Yahoo’s recent malware attack has forced the industry to deprecate the use of Adobe Flash to deliver ads. Flash seems to be one of the riskiest content frameworks for delivering ads.

These and other developments are expected to fundamentally alter the landscape for people who have been making money by assuming both buyers and sellers of advertising are still ignorant. It ain’t necessarily so.







IAB Leadership Summit Reveals Industry Challenges

Digital advertising has come of age. Online advertising is now the second highest segment of advertising (at least in the US) and we in the industry no longer have to convince media buyers to send budgets online.
However, now we have to prove that those online budgets bring benefits. In a significant move, the IAB announced at its annual leadership meeting that it will now allow ad tech companies as full voting members, acknowledging the importance of data as well as inventory to the industry.
Despite the growth and wholesale acceptance of online advertising, the industry still faces some challenges: consumer consumption habits are changing faster than the industry can figure them out, brands are challenged to keep up, and marketers, agencies and publishers all find their costs increasing because of audience fragmentation and growing demands for customization. The “mass” has gone out of mass media, and with it the economies of scale. In this new environment, publishers have a hard time affording to produce the kind of journalism a free society needs.
Several critical questions remain to be answered by the industry.
1) Should viewable impressions be the new currency?
The viewable impression has technical and measurement challenges that prevent 100% viewability from being a standard in 2015. We’re in a transition period on the path for 100% viewability, but until measurement technology improves to the point where different measuring companies can come within 10% of one another, we don’t have a good metric. The industry is working toward a digital GRP, but I’m not sure GRPs are all they’re cracked up to be.
2) Will native advertising stick?
On every new platform, ads begin as an awkward accompaniment and only later begin to fit better into the new content and context. That’s where native advertising is now. Native ads represent a fundamental turning point in advertising, but they are an addition to, not a replacement for, traditional ads. If you think of ads as falling into three categories, from pure branding to the presentation of information, to the bare performance ad, native ads should come in the middle of the funnel. We sorely need some standards as to how to present native ads without alienating consumers.
3)What kind of advertising works on mobile? The simple answer is “no one knows.” Yet. Right now, mobile ia the frontier, and most brands can’t create, plan, buy, and measure mobile ads. As a result, most mobile ads tend to be performance ads, which is how all digital advertising started.  After we get our arms around the bottom of the funnel, we’ll start to move up toward the top with brand ads and informative ads. One thing we can already see; digital video will be one of the fastest growing segments of advertising and most of it will be consumed on devices.
4) Is programmatic good for everybody? Programmatic is just the automation of the selling and buying process, and right now too many different ad stacks are being used, which makes the process  seem muddled and  slower. But this year there will be an industrywide push for open RTB standards, and for a common, non technical vocabulary that we can all understand and agree on. Then programmatic will be good for everybody.
5) Who will finally address the issues of fraud?
Last year was the year in which ad fraud came to the attention of everyone, whether inside or outside our industry. The viewability issues raised the initial question of fraud, but now the prevalence of data reveals the percentage of clicks and views that come from bots as well as the incidences of malware served to unsuspecting site visitors. Neither publishers nor advertisers can afford to ignore fraud anymore. IAB has thus formed the Trustworthy Accountability Group, a monitoring body to get the bad, immature and incompetent actors out of the supply chain. All marketers who place tags on a page are under warning.
6)And finally, how can we close the skills gap in the industry as well as increase diversity?
Ad sales, operations, and media content creation are all knowledge-based and require continuously learning employees.  IAB is pushing for some sort of certification for ad industry employees, and of course for an education program to go with it.

ZEDO Releases VAST 3.0 and VPAID 2.0 Compliant Player

If you’re looking for a reason to choose ZEDO over all the other companies in the ad tech space, you might want to consider our ability to keep continually ahead of where the market is going. We have an engaged and inspired development team that scans the horizon of the quickly changing ad tech field and makes product tweaks almost in real time.
This week  ZEDO, introduced a new video player compliant with both the  VAST 3.0 and the VPAID 2.0 IAB standards. In the future, this player will be used for all ZINC’s new video formats, including  the popular inArticle video. The team was also  able to make few changes to the  InArticle technology using the new player that made it even better.
The changes to inArticle include faster and better running  for desktop browsers in version 3.1. Although this new product won’t be launched formally until later, the preview version is VAST 3.0 compliant and supports passbacks.
ZINC video formats now also support passbacks for VPAID tags. We all know that video ad networks don’t fill every impression that is sent to them,  and many of our customers also do client side RTB, through which they bring down a file that runs on the browser and send a request to a few more ad networks asking if they have further inventory.
Many of the requests sent to these ad networks just return an ad error message because they also don’t have a video ad to serve.We used to lose those opportunities for our clients, but now ZINC video formats can catch the AdError event thrown by  the VPAID tags and pass it back to  the next ad network in line and hence try to  monetize that opportunity instead of wasting it. This will also be part of the formal launch of the product.
One of the most impressive features of the inArticle format, is its leave-behind. In this new version of the format, we’ve increased the leave behind from 130×75 to 160×120 pixels, which is a 505- pixel increase in surface area.
And we’ve done some bug fixes as well.
Although the formal launch of this technology won’t come until later in spring, we’d encourage you to talk to

Advertising Keeps Content Free

Every once in a while, when balking at new formats that might put off visitors, it is useful to remember that digital advertising is what keeps content on the internet free. It’s been a scant two decades since the first digital ads, and in the intervening twenty years digital advertising has been on a rocketing growth trajectory as more and more people have come online. PriceWaterhouseCoopers predicts that by 2017 the worldwide market for digital advertising will reach $186 billion. Online ad spend long ago outstripped print budgets, and now it has also gone past TV spending. Every year seems to bring another shattered record,  but it seems as if every dollar increase is accompanied by louder complaints by consumers that they don’t want to be targeted by advertisers.

We could understand this attitude better at the beginning of the internet, when the World Wide Web was the Wild Wild West and everyone involved was crying that “information wants to be free.” But that was when digital publishing was a miniscule part of publishing in general, and publishers thought that eyeballs alone would somehow bring revenue.

However, we are now into a generation that’s maturing without ever knowing a time without the internet, and that generation loves to watch videos, read, and play games on networked devices. In the coming generation, many household appliances and pieces of jewelry will also be networked, creating new potential advertising platforms. The public needs to be educated again about how publishing actually works and why the content it loves to consume can never be free unless it is supported by advertisers. This new generation, with its low tolerance for ads,  has already caused many newspapers to go out of business altogether and others to convert full time jobs to piece work. Digital advertising still doesn’t command the rates that print and TV did, even as it becomes a larger and larger part of the budget.  And yet, although addicted to real-time convenience, today’s consumers seem to be less and less tolerant of the industry that brings it to them.

In growing numbers they opt out of being tracked or targeted online and even employ ad blocking software, all in an effort to get away from the industry that delivers it largely free content.]

We like to think this is partly a problem of ignorance that can be overcome by education. But some publishers have begun to put up paywalls and others have gone to subscription services altogether. Neither of these solutions serves brands who are interested in drawing attention to their products in an increasingly noisy environment. And in the long run, neither of these serves a consumer who needs to know about new products and services, special offers, or service near her.

We need to spend more time defending the advertising ecosystem and reminding consumers they’re in a quid pro quo deal: free content means allow advertising.


Real Time Bidding at Scale: the Promise of 2015

2014 was the year Real Time Bidding truly took off. A subset of programmatic, RTB was met with suspicion on both sides of the ecosystem. Although at first advertisers were afraid of it, and publishers thought it would drive eCPMs through the floor, it turns out this hasn’t happened. In fact, the opposite may be happening as targeting gets better and online ROI grows along with it. Publishers who know their audiences and use their audience data can offer it to eager advertisers at higher CPMs.

RTB is probably the biggest advance in online advertising in years, because it puts power in the hands of advertisers, the people who are paying the bills. However, it also helps publishers. Handled by people who know how to buy media, RTB can finally provide brands the answer to the question John Wanamaker first asked: “which of my advertising dollars is wasted?”

That’s because, for the first time, advertisers can buy individuals rather than buying audiences in bunches like grapes, according the Mike Smith, author of the new book “Targeted,”  a primer of online advertising.

Smith points out that RTB radically changes the old audience aggregation paradigm. Advertisers can now decide which individuals suit them, and despite the fact that RTB means everything happens within split seconds, an advertiser still has the opportunity to choose individuals. In real time bidding, the advertisers make their own decisions, instead of relying on agencies or even networks. They can also choose how much to pay for each impression separately. In theory, this makes for a more transparent process.

Smith compares RTB to the music industry, in which it is no longer necessary to buy entire albums after iTunes made it possible to buy just a single cut out of an album. The aggregated audience is analogous to the advertiser’s play list. However, to create that play list takes time, and it takes the cooperation of both publishers and advertisers, who may have different data about the same customer. Most advertisers  have lots of customer data, but they don’t often mine it properly. They began by outsourcing their data management, but increasingly they are taking  data management in house and building their own DMPs, because with RTB they can use the viewing and shopping behavior of their own customers to determine their optimal audience.

Buying individual impressions rather than aggregated audiences is a massive shift.

The only remaining problem is how to buy them at scale, and that’s where a network like the ZEDO premium publisher network comes in. We can take an ad buy that comes in through our ZINCbyZEDO high impact formats division and produce scale for the advertiser through our network.  We can offer advertisers news, sports, travel, and other custom segments as we continue to grow our publisher network. And we can do this through a private exchange, which is an even more desirable way to buy.

We’re predicting a profitable year for our premium publishers as our ZINC team hits the ground running on the advertiser side.


Internet Ad Revenues Post Huge Gains

While ad tech companies themselves are still merging and their IPOS may not be doing too well, the industry they enable is doing just fine. PwC US has just released its latest half year study of Internet ad revenues, an they’ve hit yet another new high, now at $23.1 billion. That’s up 15% from last year’s first half., which was $20.1 billion.  IAB released the study at the beginning of Q4, traditionally a strong time for advertising revenues. That means Q4 will probably beat Q2’s $11.7 billion.

Realistically, there’s nowhere to go but up, because mobile revenues alone have increased 76%, and they’re just beginning to take off. They’re at $5.3 billion now, and that’s before advertisers really develop mobile strategies and figure out how to measure their results. Another promising sign is the recent shift of TV dollars to video. Right now, that shift looks like a cross-channel or cross-platform strategy, but it will change further as large networks unbundle from the cable providers and become apps, with their own strategies for attracting those elusive cord-cutters. Or in the case of Millennials, people who never even had a cord to cut.

So we predict that 2015 will be the year of  “Mobile. Digital. Video.”

And a recent AOL Platforms study seems to agree with us, citing the following trends:

    Advertising spending on online video increased for the 5th consecutive year, and buyers claim spending will grow across the board in 2015. Publishers are reaping the benefits of diversified selling channels, inclusive of programmatic.
    Agencies and brands are increasingly tapping into broadcast and cable TV budgets to fund their digital video ad spending.
    Brands and agencies are moving away from buying direct from publishers and ad networks, in favor of buying through exchanges and DSPs. With 60 percent of their budgets going to programmatic channels, brand advertisers are most aggressive with their spend reallocation.
    Video buyers are already running data-driven TV campaigns, evidenced by the 40 percent of brands adopting the practice. Brand budgets for programmatic TV buying are predominantly coming from traditional TV spending, not from digital or incremental spending.
    Brand buyers and sellers cited ad viewability as the most problematic issue for them, compared to verification/placement and bot fraud, which ranked lower. Only 25 percent said they are up to speed on these issues, indicating a need for additional education.

A key driver of the mobile video revolution is social media revenues, which includes advertising delivered on social platforms, including social networking  and social gaming websites and apps. Advertising on social media sites and within gaming apps and platforms increased 58% over last year, and will continue to rise.

Interestingly, search advertising is underperforming growth in the rest of the Internet advertising business, perhaps because it is the most mature category of online advertising and also the least interactive. Still, it’s a pretty encouraging set of reports to take us through Q4.


TV Execs Minimize Video Threat, but…

Big numbers have been released by comScore about the growing number of online videos served by both Facebook and YouTube. Between the two sites, they delivered more than 24 billion views in August alone. To get down to the specifics. comScore’s executive chairman said that Facebook had delivered a billion, yes that’s billion, more video views than YouTube, and Facebook itself announced in September that it was delivering a billion views a day. Welcome to Q4 and the potential for massive advertising spend.

What do those big numbers mean for the advertising industry? Well, if you listen to the networks, not much.

In a June 2014 report, RBC Capital Markets analyst David Bank stated “the online video market poses little threat to the traditional network TV ecosystem.”  To highlight the drastic contrast between the two markets, Banks asserted the advertising value of an entire week of YouTube viewership is equivalent to that of a single, first-run episode of CBS sitcom “The Big Bang Theory.”

“Is ‘The Big Bang Theory’ a big show? Yes,” said Bank. “Does its scale threaten the fabric of the rest of the TV advertising ecosystem? We do not think so.”

A “Big Bang” viewer sits through around eight minutes of advertising, while a YouTube viewer is exposed to far shorter, less frequent pre-roll ads, some of which can be skipped. Moreover, Bank noted, only around 16 percent of ad minutes in online video run against premium content, and roughly half of that inventory is available on properties owned by major media companies like CBS or ABC.

So more and longer ads make TV superior, even when run against mediocre content? But how engaged is the TV viewer vs. the video viewer?  Video viewers may be exposed to fewer ads, but they can’t fast forward through as much advertising as TV viewers can since the advent of time-shifted viewing. Morevoer, Facebook serves autoplay video ads, although some users dislike that because they almost HAVE to view them. Does that produce positive engagement with a brand? We’d say it depends on the brand. The jury’s still out on the overall effect.

But here are better ways to serve video advertising than just pre-roll on two sites. For one thing, we believe video ads can be cut loose from pre-roll and served on non-video sites where they can run in the middle of content a visitor is already reading. Our inArticle format does not run auto-play sound, so we’re  courteous to a reading visitor. But we don’t let the visitor forget either, because we leave a 1×1 copy of the ad at the bottom of the page, so if a visitor wants to read all the way through the content and return to the ad, she can.

We’ve also got a Tier 1 network at your disposal, so if you want to buy video ads and you can’t find enough pre-roll to scale your campaign, our ZINC high impact formats could be perfect for you.

New Advertising Formats Rescue Publishers

Nobody wants the publishing industry to go away, but current conditions sure make it difficult for it to survive. It used to be that advertisers had to come to publishers to reach potential customers. Now, however, all kinds of tech companies sell customer data, and the publisher’s audience appears to have become less critical to the targeting process. Thus, there has been an almost constant erosion of the power of the publisher to impact ad buys, even as his reach increases. The New York Times has 31 million online subscribers, a number unheard of in the print era. But to an advertiser, that could be nothing compared to a Google or a Facebook, who reach billions.

To survive in the programmatic environment, publishers have had to drop their CPMs. from double to single digits. The survivors have already made the shift, and the new startups are unburdened by legacy cost structures (you may remember printing presses).

Yet there are still ways for legacy publishers to survive the commoditization of  what appears to be an infinite supply of  inventory.

One way is through video ads.  There is a relatively small supply of pre-roll to run against video content, and it is so limited that advertisers who want to run on video sites can’t get the reach they need without resorting to other forms of publication to get enough scale. On the other hand, video is increasingly popular with consumers, who watch it on mobile devices in ever-increasing numbers.

Advertisers who want to run video to reach large audiences must find other sites.

On these sites, smart publishers can either create content specific to advertisers , which we think of as content marketing, or   allow advertisers to develop their own content to fit the existing content of the publisher, which  is called native advertising. With either native advertising or content marketing, the simplest thing for an advertiser is to be able to repurpose existing  TV ad content into a standard IAB space.

However, there’s still no guarantee that the ad will be seen, as the statistics say that 50% of video ads go unwatched.

We have the answer to this problem with ZINC’s InArticle video format, which runs on your site in a standard IAB unit, but gets 25% higher CTRs than a typical video ad because it can expand to full screen and leaves a 1×1 reminder at the bottom of the page.

Our InArticle format,  sold directly or programmatically, allows advertisers to reach new audiences across new channels at scale. Our publisher partners have been very satisfied with the high CPMS this format is able to command, and advertisers are thrilled with our viewability metrics. We’ve got first rate video ad viewability partners who help our publisher partners provide the metrics they need to sell successfully.



Will Infinite Scrolling and Lazy Loading Help Publishers?

If there’s anything that can convince you that times are changing –again–in the online advertising business, it’s the relatively new practice of “lazy loading” pages. Unless you’re deep in the weeds of the business, you may not even know what this term means, but it is a new way to make pages load faster, and ironically may also be a way to make ads more visible.

In the old days of web design, the job of a good browser was to load an entire web page at one time, no matter how many outside calls and redirects the server has to make, as quickly as possible. Even if the user isn’t on that part of the page, the browser would load it anyway. That’s why everyone demanded to be above the fold.

But web design has changed. Now there’s just in time loading, or “lazy loading,”  a relatively new method of web design that renders the page on an as-needed basis,  only when a user is scrolling down to that piece of content.

Lazy loading pages are perfect for our InView Slider formats, which work especially well on web pages that are designed for infinite scrolling (which most new high traffic sites favor.)The content available to the user isn’t all loaded at once, because it would take forever; rather, the page renders as the user scrolls to it, and if you don’t scroll down, the content isn’t rendered.  So lazy loading any web content, ads included, means the web server only provides the necessary source code to the browser as the user needs it.That’s what makes our InView Slider so “polite.”

The New York Times switched to lazy loading and achieved a 50% improvement in the performance of its pages. In its blog, the Times said it switched to stop its pages from being slowed down by advertising.

Why is this good for viewability?

From the publisher standpoint,

aside from the performance benefits of lazy loading ad content … is the happy consequence that every ad view is also visible to the user, since the content is only rendered when the user is scrolling the content into view.  While it’s true there’s still a lingering debate over how viewability is measured – this Digiday postgives a good overview on the complexities of each viewability vendor using different methodologies to measure the same MRC standard (50% of the ad content in-view for at least one second) – there’s no question that a lazy loading strategy is far superior to traditional content rendering in terms of ensuring your ad requests are viewable.

Although viewability metrics probably won’t be the gold standard for billing in the near term, eventually they probably will be. The downside of this is the potential loss of inventory to the publisher. However, lazy loading their pages could let publishers  keep user-friendly page layouts and not worry as much about 3rd party viewability measurement. And, of course, the viewability would improve even further if the site published high quality content that encouraged engagement.

It’s funny how everything boils down to high quality at the end of the day.