The New Rules for Native Advertising

As a publisher, now do you avoid sullying your brand with the “slew of sewage” most editorial writers think comes with native advertising, and yet keep some of the revenue that flows from native for yourself?  For the Times, known for over a century as “the gray lady,” the reputational damage of going native could have been disastrous, and yet the category has grown so quickly that there’s no way not to participate if it wants to survive.

So the Times jumped awkwardly into native, and now its agency had $35 million in revenue last year, and will create 100 campaigns this year. Yet, the Times does not have the feel or the reputation of Buzzfeed, whose branded content is often offensive to more sophisticated audiences. Its native content is still recognizable as being from the Times.

Here are some good tips that the New York Times has learned from experience that can be applied by other publishers.

1)First, if you establish an in-house creative unit to produce branded content that will run in your publication, give it a separate name: the Times’ unit is called T Brand Studio, and calls itself an agency.

2)Next, begin with an innovative campaign to run in the publication that showcases both the agency’s and the publication’s multimedia capabilities. In the case of the Times, a campaign for Netflix won over some of the wary Times newsroom occupants.

3)Match the quality of the branded content with the quality of the editorial content.

4)Bear in mind that advertisers don’t necessarily need publishers to get reach anymore, but if you have high levels of engagement from your readers, you can sell your advertising for higher prices.  Reach is going out of style in favor of engagement. The Times’ subscription model promotes reader engagement, and that helps the ad sales, too.

5)Do things that Facebook cannot do. Scale and data are Facebook’s purview, but narrow targeting is best at a publication.

6)Programmatic, video, and content-based ads are growth pillars, and display is not. Focus on the areas that grow. Mixed reality could come next.

7)Raise the bar on innovation in accordance with the specific KPI for the brand. What kind of NBDB (Never Been Done Before) campaign, will get the CMO on the cover of AdAge? Those are the kinds of KPIs brands come to an agency with.

8) Raise the bar on quality to match that of your publication.

9) Label it properly so if visitors choose to engage with it they know that they’re engaging with.

10) If a brand asks for creative that can be run elsewhere, you’ve hit the jackpot. You are then a fully-functioning agency, and can be an actual profit center.




TAG Releases Names of First Hundred Participants

It’s a very exciting time in the digital media business. The Trustworthy Accountability Group’s effort to clean up the supply chain has been gathering momentum all year. We’ve (ZEDO) been working on the Business Transparency Committee, and on the IQG (Internet Quality Guidelines) working group. During this first year, over 100 companies, most of them familiar names in the advertising industry, have gone through the process of registration as trustworthy partners, and have either self-attested or been audited on their business practices. All the major advertising holding companies have already been through the process, which has become more common for anyone who buys or sells advertising. In the future, the process will extent to intermediaries.

There is now an accepted transfer protocol for the transmission of registration IDs and payment IDs, and these have begun being passed back and forth during automated transactions.

“The TAG Registry is the foundation for the full range of TAG’s programs to fight fraud, reduce ad-supported piracy, block malware, and increase transparency in the digital advertising ecosystem,” said Mike Zaneis, CEO of TAG. “Through the TAG Registry and use of TAG-IDs, companies can tell which of their industry partners have taken the necessary steps to verify their business as a legitimate digital ad industry participant. When the TAG Registry is combined with the Payment ID system, a floodlight of transparency will illuminate the digital advertising ecosystem, and criminals will have no place left to hide.”

The TAG Registry is one of two parts of the interlocking “Verified by TAG” Program designed to fight digital ad-related crime and increase transparency across the digital ad ecosystem. The other core element of the program, TAG’s Payment ID Protocol, helps ensure that payments made in the digital ad ecosystem are made only to legitimate companies. The Payment ID Protocol enables intermediaries to add a unique identifier for each participant in the supply chain, allowing companies to monitor their ad campaigns and “follow the money” to see who is receiving money for each advertising impression.

Following the money will be the best way for media planners and publishers, as well as ad exchanges and ad servers, to be sure they are dealing with quality partners. The Trustworthy Accountability Group was created to spur transformational improvement at scale across the digital advertising ecosystem, focusing on four core areas: eliminating fraudulent traffic, combating malware, fighting ad-supported Internet piracy to promote brand integrity, and promoting brand safety through greater transparency.


For Mobile App Ads, Innovative Formats Work Better

The mobile app development industry is alive and well, according to an inMobi survey from earlier in the year, and despite the roller coaster ride in advertising, it’s still the most popular way for developers to monetize their inventory. However, the average developer worldwide makes almost nothing on a single app, and only 15% have crossed the 1000 download threshhold. If this is true, why do people continue to develop apps?

We think developers can do better, but they have to use some more innovative formats.

App development is a young industry, and most of the people in it have been doing it for less than four years. Only a third of app developers have been in the industry for three years. Most of the mobile app dev firms are small, and many are making apps for other businesses, rather than trying to monetize their own apps. In fact, 47% of mobile app developers are solo-preneurs. Many of them told inMobi that they were developing apps for fun, rather than for fortune. No wonder games and entertainment constitute over 70% of the apps developed. And no wonder they are not as savvy about advertising as they need to be.

When you get up to 1-3 apps in either the Play Store or the IOS App Store, if you play your cards correctly, revenue can increase. It probably isn’t surprising to find that 42% of the respondents had 1-3 apps in the Google Play store, while only 28% had apps in IOS. In the US, we often forget that Apple is such a small piece of the global overall device market, because it has an outsized influence locally. Android is also a better place to learn how to develop an app than IOS.

Making money is the biggest issue for application developers, as it is for all web publishers. 55% of developers make $1000 per month, and monthly average mobile app revenue globally is under $6K. There’s new research that shows a decline in app downloads around the world, and the average phone user interacts daily with no more than a dozen apps.The average monthly per-app revenue is in the range of $5k to $11k depending on the platform. Windows Phone is the highest money-maker at $11.4k per month per app, although it is only used by 21% of developers. North American developers lead in both downloads and revenue over both APAC and Europe.

Advertising is the most bankable app business revenue model;  7 out of 10 app developers use mobile advertising to monetize their apps currently and 18% of them plan to use mobile advertising in future. Used correctly, it can generate good revenue, but we believe too many developers are naive about advertising and choose either the wrong ad network or the wrong ad formats.

For example, banner ads and interstitials are still preferred by app developers despite the the fact that consumers do not like them. Response to banners has gone down steadily, and interstitials are under pressure from consumers who now have the capacity to run ad blockers on mobile. Video, however, has taken off, and video advertising such as our inArticle format, works well. Our SwipeUp for mobile, an innovative new format we came up with this year, has also taken off.

If you are an app developer, it’s worth talking to a platform that knows how best to connect you with advertisers who can get you the revenue you desire.



On Being the “Tortoise”

I read another post recently about the Armageddon coming in the ad tech space. There are still 3000 companies on the Lumascape, and the author of the post refers to “obliteration rather than consolidation.”

That’s because the capital markets are drying up, and most of the companies in the space rely on outside capital. Those should go away. If you haven’t gotten to sustainability by now, and you haven’t been acquired, you are probably going to be out of luck.

ZEDO does not rely on outside capital.  That’s why we aren’t as large as some of the VC funded companies. On the other hand, we have had far fewer hiccups along the way, even as the industry changed. We were founded in 1999, and we have learned to stay nimble and responsive.

We are funding the company the old-fashioned way, with good products that bring us customers. We have the ability to look out into the future, which is what our marketing department does, rather than simply create pretty pieces and figure out how to spend more money sponsoring conferences.

When we see a customer need, we have a strong development team to respond to it, and we put it on our product road map. That’s now we came to develop SwipeUp, our mobile ad format. SwipeUp came from a meeting we had between marketing and development to talk about formats mobile consumers would tolerate and respond to. It accompanies our already successful inArticle video format.

Our goal is to create formats and innovations that are fundamentally better advertising, not to make VCs happy with exponential growth. In the advertising industry, if you grow to fast in one direction, it makes it harder to pivot to the next change. We really want to remain responsive, and use our technology leadership on behalf of customers.

We have always been known for our outstanding support as well.

Now that we are private platform for buyers and sellers with a clean supply chain, we are interested in meeting people who want to deal with a “real” company, rather than a creation of marketing and PR that’s out ahead of product and customer service.

I rarely write one of these posts about our virtues, but as I look around at the landscape and read the industry trades I can’t help but feel fortunate that we chose to be the tortoise.

Coalition for Better Ads Launches

The biggest news coming out of Dmexco was the formation of a new effort to mute the influence of ad blockers, which are now used in 25% of browsers, according to recent statistics. A coalition consisting of industry leaders like Google, Facebook, Unilever, Procter and Gamble, Group M, the World Federation of Advertisers and the IAB, calling itself The Coalition for Better Ads, launched at the conference.

IAB had already launched its own initiative, L.E.A.N. (Light, Encrypted, Ad Choice Supported, Non-interruptive) last year, and began to develop standards. At the same time, AdBLock Plus, the largest downloadable ad blocker distributor, launched its idea of “Acceptable Ads.” AdBlock Plus spent the year trying to acquire partners for its efforts, but with little success. Finally, in its own Dmexco announcement, the company launched its own SSP to sell what it considers acceptable ads. This may or may not be successful.

The industry effort, however, probably will be, because ad blocking is the one issue that unites publishers, advertisers, and ad tech companies, all of whose business models are threatened by the unwillingness of consumers to tolerate ads after a decade of taking abuse in the form of popups, interstitials, auto-playing video ads, and even malware. The most offensive sites are so loaded with ads that the content on them cannot be read without interruptions. To make matters worse, the shift to mobile has revealed the slowness of page loads and the cost of additional data borne by now-angry consumers.

The group will focus on the following initiatives:

  • Create consumer-based, data-driven standards that companies in the online advertising industry can use to improve the consumer ad experience
  • In conjunction with the IAB Tech Lab, develop and deploy technology to implement these standards
  • Encourage awareness of the standards among consumers and businesses in order to ensure wide uptake and elicit feedback

Here’s an alphabetical list of the founding members. Notice that the Washington Post is the only traditional publisher to belong outside of an industry group: The American Association of Advertising Agencies (4A’s), Association of National Advertisers (AA), BVDW Germany, Digital Content Next, DMA, European Publishers Council, Facebook, Google, GroupM, IAB, IAB Europe, IAB Tech Lab, as well as additional national and regional IABs, Network Advertising Initiative (NAI), News Media Alliance, Procter & Gamble, Unilever, The Washington Post, and World Federation of Advertisers (WFA). Companies and trade associations that wish to join the Coalition can learn more at

Consumer research will be used to develop the standards.

“The foundation for any premium publisher is consumer and advertiser trust. Consumers are clearly frustrated with the current dynamic of digital advertising across the wider web. No industry has ever survived by ignoring consumer needs,” said Jason Kint, CEO, Digital Content Next.

As we always do, we hope to lead in this initiative with our “polite” formats within the ZINC Innovation Suite. However, we also think it will take much consumer education about what industry is trying to accomplish and why –the need to keep digital content free for consumers–before the industry will once again be trusted  to comply with consumer sentiment and people will turn off their ad blockers.



IAB: Independent Publishers Can Compete Against Facebook

Randall Rothenberg, CEO of IAB, is getting more and more outspoken in his comments about the state of digital advertising, especially since the ANA’s second report and guidelines were issued. Rothenberg blames most of the industry’s problems on brand marketers who value price over performance.  He says marketers still don’t have the in-house expertise to understand the new landscape, and urges them to get tech savvy right away. His theory is that marketers who are out of step with the new advertising environment have bought or subscribed  to ad tech software that has denigrated the user experience to the point where visitors are using available tools to deal with unwelcome intrusions. The marketing is no longer correctly targeted, and the buys are made for price rather than for true relevance to the consumer.

He also thinks that non-savvy marketers need to quit subscribing to the meme that Facebook and Google have most of the audience and that they are the only “safe” buy.

“One of the reasons you’re seeing a reliance on a handful of players is they’re seeking safe havens. Back in the old days nobody got fired for buying IBM. Now nobody got fired for buying Google and Facebook.”

He also says that marketers are also to blame for ad fraud and lack of ROI because for years they have looked the other way.

“It’s either a willful shirking of their responsibility to understand the work of their vendors and their vendors’ vendors, or it’s a wink-wink, nudge-nudge to offload responsibility in their quest for ever-lower prices.”

Rothenberg feels that individual publishers can compete effectively against Google and Facebook by gaining absolute knowledge of their audiences from the standpoint of both data and content development. While Google and Facebook have large audiences, they have less information about niche audiences, and that’s where independent publishers have an edge. He likens this period in the advertising industry to the time when three networks had all the dollars, just before the cable industry came to power.

We have always insisted that the power of publishers with niche audiences will continue to grow, if they market their sites correctly, using Facebook only as a tool.  The growth of new sites like Thrillist or Mic, run by savvy internet marketers, who have either used Facebook to drive traffic to their own sites, or who have built communities around their audiences, is instructive. And so are the biker sites, pet sites, travel sites where communities of users make great audiences for the right brands.




Reach is More than Just a Number

Once again we find ourselves ahead of the curve. Last year, we realized that the programmatic race to the bottom had indeed hit bottom, and we sensed a flight to quality. Fortunately for ZEDO, we had already developed a private buying platform for media buyers to use when they wanted to reach more than just “eyeballs.” Our private platform starts with our high performance ZINC formats — inView and inArticle –and allows brands to use those units on our premium publisher network.

Last year we also “cleaned house” with our publishers, eliminating anyone whose traffic might be non-human or fraudulent. We now have a completely clean supply chain and privacy policies strong enough to make us members of the Online Trust Association’s Honor Roll for the fourth consecutive year.

Now we are beginning to see marketers come to the realization that they want better targeting, even if it means compromising that old metric “reach.”

Advertisers are starting to understand that context and quality of ad units matter now more than ever. They are also starting to think of the audience as the currency rather than simply counting impressions. The head of digital for a major wireless carrier recently stated, “There are only 5 million people in this country who I can get to switch mobile carriers, so why am I marketing to 275 million?”

The rising popularity of private marketplaces represents a step forward for advertisers who are now able to transact directly with publishers to secure higher-quality inventory, particularly in mobile and video.

Indeed. Why pay to reach people who will never buy your product or service and perhaps run the risk that your haphazard targeting will be the last straw that forces them to block ads?

Premium publishers who use private platforms will also have the edge over social sites like Facebook and Snapchat, who are less transparent about their users than traditional publisher sites. Facebook and Snapchat (the walled gardens) have hundreds of millions of users, but are only slowly opening themselves up to scrutiny by media planners. Up until now, they’ve operated as if what they say about their audiences cannot be challenged, because they have highly desirable audiences in very large numbers. But as brands realize they have more hope of moving merchandise by going deep with the right audiences rather than broad with global audience networks, they will turn away from Facebook and seek their niche audiences.


New Opportunities for Digital Publishers

If you sit around listening to some industry insiders whine, you’d think there’s no hope for the digital media business. However, people continue to be attracted to it as a business and as a calling, and if you look at the numbers, many publications aren’t doing badly. Even Gawker, forced into bankruptcy and out of business by Peter Thiel’s lawsuits, says its business was up 7 or 8% this year. Business, said beleaguered Nick Denton, is good. may be gone, but its 6 sister sites are doing fine under Univision. Other niche publications, like Thrillist, are also doing well.

According to Thrillist founder and VC Ben Lerer, who appeared on the Digiday podcast, there are many short term threats facing digital content companies. The keyword here is short term, which is how Lerer looks at ad blocking, the decline of effective display advertising, and the hegemony of Facebook. He swipes those common industry concerns away with a flick of the wrist, preferring to focus on what he calls “the massive change in distribution” that has happened because of online media, which he thinks is already making some people rich even as others suffer.

It’s like the 1980s when cable TV first started, he says. Cable TV allowed finer audience targeting than network TV, and provided gigantic opportunities for content creators who understood the needs of their niche audiences.

“The pipes are different,” he said. “It’s not as clean and easy a story, but it’s similar to where there was a large handful of companies that figured out how to make content for those pipes, there’s now an opportunity to make content for these new distributed pipes. The traditional TV companies, who you’d think would be are fundamentally not built to be the guys who win today because of the sheer infrastructure they’ve built to do something that’s not what they need to do in the future. It’s created an opportunity for a new breed of media company. There’s no question there’s a decline coming to television. Those companies are not built for shrinking.”

Lerer thinks the greatest changes in digital media aren’t coming on the publisher side, but on the agency side, where traditional agencies have built a cost structure based on shooting expensive 30-second spots for TV that will now be replaced by native ads on mobile. Those ads will be made by the publishers themselves, perhaps using their existing editorial staffs or through in-house agencies operating with a Chinese wall.

Lerer is not the only publisher who thinks good content will win the new distribution game, whether on Facebook, Snapchat or a publishers’ own site. Brian Lam, founder of tech review site “The Wirecutter” and former writer for Wired says that media companies without a mission will crash and burn.

Of his proposed expansion into the fashion vertical, Lam says “we’re not going to do it because it’s a business opportunity. We’re going to do it because we think we can be helpful, and there’s also a business opportunity. The business serves what we’re trying to build.”

Brexit Won’t Change Treatment of Data

The Brexit caught many people unaware and forced them to think through some digital media issues in rather a hurry. The UK has just released new privacy and security guidelines– based on the UK’s understanding of the General Data Protection Regulation (GDPR)– that will take effect in 2018, the year the Brexit is actually supposed to occur. The UK and EU have already diverged from the US by requiring all sites that use cookies to announce the policy on first visit.

British data security experts have told us privately that most visitors just click right through and accept the use of cookies, however. The practice of announcing that a site uses cookies is becoming more widespread in the US as well, and does not seem to be the reason the US is seeing the spread of ad blocking.

So cookies are not the major issue: then what are the important components? For the US, the most important issue seems to be on the security side, as US and state regulators try to prevent hacking and release of potentially personal information.  One of the problems with the US is that security is handled by the states. And the US first amendment freedoms create issues with the EU’s laws.

The EU comes at privacy and security by emphasizing the privacy side — the right of individuals to control their own data, and a prohibition against collecting data without a “legitimate purpose.” It also provides no threshold for the right to be forgotten, which is in direct conflict with the freedom of speech guarantees in the US.

If you then throw in the Brexit, the UK, which is the center of digital publishing and advertising in the EU, would have much to do complying on the one hand with US regulations and on the other with EU laws, especially when dealing with so many other potentially difficult issues.

Thus, the UK is expected to ignore the Brexit for purposes of data privacy and security, and throw its lot in permanently with the EU. It makes little sense to do otherwise, as for the next two years the UK will have to go along with everything the EU is doing to get ready for the new regulation anyway.

Moreover, companies that offer cloud-based services, no matter where they are based, will have to comply with the most stringent regulations or face fines.

What do these new regulations mean for publishers and marketers? Well, for starters the new regulations are predicted to create 28,000 new Chief Privacy Officer jobs over the next two years. Both publishers and marketers will have this window of opportunity to figure out how to serve their own ends and still operate within the EU’s GDPR.



Publishers: Don’t Abandon London Just Yet

In Europe, unlike in America, most of the scary talk isn’t about Facebook eating into the revenues of publishers, but rather of the Brexit and what it means for London as an advertising and media capital in the future.  Common wisdom and many publications have it that media companies will seek to leave London so that they can do business with the rest of the European Union after England leaves. However that involves seeing into the future in a way none of us can. Even if England does leave the EU, things won’t change over night.

We would like to suggest here that the biggest barrier to moving media companies and ad agencies is inertia. It just simply isn’t that easy for a company to change its European base,  especially with European employment laws. Nor is creative talent willing to pick up their families and move. Moreover.  people seem to have forgotten that the Brexit will not take place immediately and may simply not take place at all. It does, after all, take a vote of Parliament. No one here thinks that will happen very soon.

Politically it is very complicated in London right now, with power in both parties changing hands. To an outsider, it seems as if no one want to take the consequences of the referendum.

It will take a while for the new leadership to figure out what to do about what was voted on, and the prevailing opinion is that the politicians will drag their feet as no one wants to trigger the clock on leaving the EU just yet.

Thus our best advice both to publishers and to  agencies is not to do anything too quickly, but to see how all this settles out before causing more disruption than there already is in the industry. There is enough to think about with Facebook constantly tuning the algorithm for its newsfeed, this time in a direction away from publisher revenues, and with Snapchat emerging as a competitor for the attention of Millennials. We in the media industry should stick to our knitting until the politics sorts out.