For Digital Advertising 2016 Wasn’t That Bad

Many people are glad to see 2016 over. Not only did we lose a lot of famous people, like Prince,  through death, but we lost faith in our electoral system and perhaps in journalism as well. Since November,  democracies have been in a flurry of self examination. And in the advertising industry, we very nearly lost faith in our own business models.

But we believe the industry will pull out of this stronger than ever. Here are some reasons why we think 2016 wasn’t so bad and better days are coming.

1)When people began installing ad blockers, the marketing industry finally sat up and took notice. Several new industry groups were formed to try to sort out the reasons people have come to hate advertising. Those groups worked diligently through 2016 and came up with some pretty specific ways to clean up the industry and restore faith. Publishers revised their pages so they did not have as many ads and and the advent of  AMP pages sped up page load.

2)  part of the reason advertising became such a mess had to do with the birth of real-time bidding and the shift from direct to programmatic. In the early stages, adopters of programmatic off and didn’t know what they were buying. However media buyers have now become more educated about how to buy programmatically, and they’ve become smarter about what they buy.

3) A corollary to the last point is the emergence of many new techniques to take the blindness out of buying at auction: programmatic direct and header bidding are two of them. We are a participant in both

4)  Facebook began to show chinks in its armor as it had to report three different instances of mistaken metrics toward the end of last year. Some publishers began to question their commitment to the global platform, and to reignite ways to draw people  to their own home pages again. Brands and agencies, too,  began to question whether Facebook was really worth their investment.  Now we don’t think Facebook will disappear tomorrow, but we have our eyes on Snapchat and also on individual sites in dishes that seem to do very well,  such as travel, sports, and Lifestyle issues.

5) Digital video, especially out stream video, proved itself this year. Digital video spend  grew remarkably, and according to predictions will grow again next year

And one last word to the wise: don’t think you know what is going to happen this year. If you’ve been in the industry for any length of time you know that trends can turn on a dime.

Legacy Publishers Grapple with New Competition at CES

CES (formerly known as the Consumer Electronics Show) is a wonderland of new gadgets, technologies, and possibilities. For the past few years, its focus has been on concept cars with huge screens that can drive themselves while the passengers watch video, and connected home devices that use microprocessors and networks such as wireless, Bluetooth, and NFC (near field communications) to make themselves smart. The connectedness of all inanimate objects around you is called the Internet of Things. The ubiquitous robots seen at CES are also part of the IOT.

In the same way your automobile can inform you that it’s running low on fuel, the most advanced refrigerators can both alert you that you’re running low on milk. But unlike the car, appliances can now connect to your home digital assistant (Apple Home, Google Assistant, or Amazon’s Echo) to help you order more.  This year’s most unusual Internet of Things products included a smart breast pump for nursing mothers and a smart toothbrush with a video camera that takes pictures of the inside of your mouth that you can share with your dentist — or your mom if you’re a kid. Yes, many of these gadgets are silly, and that’s part of the fun of CES. See also “Hair Coach,” a smart hairbrush.

But others are going to evolve into platforms through which brands will be able to talk to consumers. The most obvious platform so far has been the connected car, because now that all cars have display screens built into their dashboards there’s an opportunity to think of the car as “publishing” content to its passengers, whether it be diagnostics or entertainment. And where there is publishing, there is also a marketing opportunity. To that end, Ford has partnered with Amazon to use the Alexa voice technology in its cars next year. Other automakers have chosen to partner with Apple for its Siri technology, or Android for Google Assistant.

The car as a platform is forced to use voice technology because of safety concerns. However, household appliances are not limited that way, and in the next few years they will also become publishers of a sort, delivering information about themselves to consumers and collecting consumer data in return.

In 2017, there will be many other new platforms we can consider as publishers, and those publishers will hope to monetize through advertising — but not in the old way. It’s been twenty years since publishing began to become digital, and it is almost shameful that we’re still for the most part serving up digital versions of the same formats we used in print and TV: 15 and 30 second spots, and display ads on pages. We’ve begun to evolve with native advertising, but that’s just in its most rudimentary phase.

A better example of what is to come in the future is Weiden+Kennedy’s effort to build a virtual cellular network for Verizon within a Minecraft game. The network allows players to make phone calls.  Call that a native ad, call it a sponsorship, call it a product placement, or whatever you wish; that’s how the market is headed and we need to spend time creating new formats to take advantage of the exciting new platforms. At last week’s CES, many brands and agencies were there simply to learn about new mixed reality techniques that can be used to talk to consumers.

At ZEDO, we’ve designated 2017 as a year of innovation for ourselves, as we begin to develop tools for our publisher and agency partners to reach consumers in new ways.

The Smart Hairbrush, one of the new IOT gadgets at this year's CES

The Smart Hairbrush, one of the new IOT gadgets at this year’s CES

 

Resolved: Go Deep, Go Niche, Go Real

This has been a year of self-reflection for the media and advertising industries. And trust us, it was long overdue.

A list of fake news stories from Buzzfeed that went viral last year showed most of them were not only about politics,  but revealed a deep media illiteracy that both fake news publishers and ad tech providers took advantage of.

BuzzFeed News used BuzzSumo to identify the top-performing Facebook content from 96 fake news websites, including the network of more than 40 sites exposed in a recent investigation. This list of English-language fake sites has been built up over the past two years of covering this topic, and was compared to this chart from the creators of Hoaxy to compile a more comprehensive list of pure fake news sites. Click here to view the top 50 hoaxes, and to see the list of fake news sites.

We won’t spend too much time on fake here other than to say advertisers have finally gotten hip to the fact that having their brand seen on some of these sites is counterproductive. Look for them to take some action this year, including more careful selection of vendors.

Fake news is the tip of an iceberg. Advertising thought it could just use the same metrics on digital that it used for years with TV and print, and that things would be just fine.

Not so. The historical metrics of advertising have been reach and frequency. Those were fine when  CPMs were high enough to make sure  both had natural limits. However, once advertising went digital, CPMs dropped, and amazing reach and frequency became possible. The number of global viewers of a digital video ad can be in the millions, or even the hundreds of millions. And because of relatively low prices for digital advertising, greater frequency became affordable.

All of this was exacerbated by Facebook, which purported to aggregate audiences and make better targeting possible. But look what has been the result: greater use of ad blockers by consumers bombarded by ads that may or may not be relevant to them, cost them money to view, and hog bandwidth resources, along with loss of power exerted by individual publishers with smaller, but more engaged audiences.

For the media industry to survive, it is going to have to re-think those metrics and be willing to pay for quality audiences, rather than just large audiences. Also, frequency caps are going to have to become more common.

Some publishers have already questions their deep involvement with Facebook, and what it will bring them in the future. And Facebook itself will begin to compete with publishers as it launches a monetization scheme for its live videos, which clearly mean a great deal to their product roadmap.

As usual, we continue to offer high quality publishers and outstanding customer service, breakthrough formats and technologies, and global ad serving and ad ops.

Happy New Year!

This year, resolve to go deep rather than broad, niche rather than general, and authentic rather than fake. You’ll win that way.

 

2017: A Different Year

Because we’ve been watching the industry since before the turn of the century — yes, we were founded in 1999 –we find it amusing to see people try to predict what’s going to happen in ad tech, despite the fast moves that upend the predictions year after year. 2017 will be no different, but we’re going to throw our ideas out there anyway.

  1. Facebook will find itself in greater trouble than ever after a year of disillusioning metrics for publishers and de-prioritization of their content. Analysts have said that the rise of “fake news” sites on Facebook corresponded with when the company tweaked its newsfeed algorithms to favor user-generated content over that from professional publishers. User-generated content turned out to be hundreds of sites generated by Macedonian teens who now are empowered to think they may have influenced the American election.
  2. Advertisers will thus re-think the percentage of ad spend they allot to Facebook, and spend more dollars on sites they know are premium and are still destinations for their targeted buyers.
  3. A confluence of changing ideas and necessity brought about by the percentage of people using ad blockers will re-define reach and scale, making the definitions more about reaching the “right” customer, and not just about reaching someone who will find the ads offensive or irrelevant and turn her ad blocker on again.
  4. Digital video CPMs will continue to rise, because video is the only way to reach viewers on mobile, especially on non-video sites. Outstream video will continue to outperform the market, and ZINC’s innovation suite will continue to outperform its competitors.
  5. More venture funded ad tech companies will run out of money without having found a business model that adds value to either the advertiser or the publisher, and they will be forced to either shut down or be acquired as revenue becomes the major source of expansion funding.
  6. The ad industry in Europe will be quietly preparing to leave London as new data privacy guidelines and the Brexit create business challenges that make staying in the UK more difficult and expensive.
  7. The nascent mobile advertising industry in Africa will grow faster than almost any other reason except perhaps southeast Asia, because of the rapid deployment of inexpensive smartphones.
  8. Snapchat’s IPO will cause a flurry of interest on the part of advertisers until they realize it has pivoted to be a camera company. Brands will experiment with it and not be able to prove ROI for a long time, if ever.
  9. Digital video advertising will finally get its due as a great way to do targeted branding campaigns.

 

Depth Replaces Reach for Small Publishers

With the coming of  2017, expect native advertising to take a sharp turn to e-commerce. Buzzfeed rolled out its gift guide newsletter in late September, but now we expect all new product reviews to include ways to buy the product that’s reviewed. And actually, this kind of native advertising makes a lot of sense, because it doesn’t annoy the consumer. Presumably, if someone is reading a product review, they’re considering whether to buy the product, and if they decide to buy it, an affiliate link or a shopping cart might just simplify things. And both publishers and advertisers are looking for ways to stop consumers from blocking ads.

This Christmas is going to be the big “tell” for both mobile advertising and e-commerce. Not only will Buzzfeed, whose readership is primarily young women, use native ads to sell products on its site, it will go further into tailored newsletters, moving into verticals like medical, grammar, and even people whose vocabularies include curse words.

And Buzzfeed is not alone. Before Gawker Media was sold, Nick Denton admitted that he got about 25% of his revenue last year from e-commerce.

What does this mean for traditional advertising? Not much, because the percentage of ads that are amenable to e-commerce is limited. Most large advertising spends are focused on branding. However, what it means for publishing is another story.

It means every publisher doesn’t need to go to Facebook to find an audience. Small publishers who go deep into verticals with affinity groups can do very well with small audiences that are very faithful. Take Brian Lam, a former journalist who now publishes The Wirecutter and Sweet Home. The Wirecutter uses product reviews to drive sales. Here’s what Lam, who used to work for Wired and Gizmodo, says:

Everything we choose is an award-winner, and we don’t focus on presenting you with anything but the things we love.

Consider them billboards for electronics and everyday things. The point is to make it easier for you to buy some great gear quickly and get on with your life.

Lam is transparent about the fact that he gets an affiliate commission for every product he sells. While his business model wouldn’t support a large organization, it does fine for his small team, and it earns him a loyal following among gadget geeks.

And what’s at the top of his site? A single banner ad for an HP laptop. And on Sweet Home, a single ad for an air purifier. Nothing to turn readers off, and something the readers might also want. Everything else on both sites is a product review.

We think this represents the future of advertising. Fewer ads, well-targeted, not looking for gigantic reach, but for depth of targeting.

 

 

ZEDO Launches ZINC Self Service Ad Buying Platform

This week ZINC by ZEDO announced its new ZINC Self Service platform, which allows advertisers and agencies to buy ZINC’s unique advertising. For the advertiser or media buyer who buys on Facebook or Google but who wants to also try something that will stand out more, with the same creative, this self-serve offering will be a real help. Because there is no lengthy process and no contract, the advertisers can even be a small restaurant or a micro-enterprise. This is the first time that the many advertisers that buy on Google and Facebook can also run their existing video or display ads on unique formats that are 100% viewable and really will be seen by users.

ZINC is a better and cost efficient way to build brand on digital because it is 100% viewable and 100% fraud free and only needs existing creative and ZINC innovation in the delivery of the ads.
The new self-service platform makes it easy to buy advertising and pay using a credit card – without wasting time. Once a campaign is set, the buyer receives regular reports of performance. The reports are updated in real time – every fifteen minutes.

The ZINC platform allows buyers to target ads to the IAB contextual categories of publishers. Targeting is determined by the text content of the page on which the user is seeing the ad. The buyer can set a daily budget, or a lifetime budget, and target a specific geography. She can also add a title and description to the ads to give users more context, which attracts the right users to see or click on the ad.  Further precision targeting is offered through choices that include banner or video formats running on mobile or desktop, delivered like native ads to improve the campaign’s performance and provide a higher ROI.

ZINC Self Serve provides the same safeguards to the advertiser’s brand, ensuring ads are always served on 100% bot-free brand safe environments, that we provide to our large clients. We are the first choice of advertisers who are already buying on Facebook, because with little effort they get advertising that really makes them stand out from their competitors.

Are We at Peak Facebook? (Part 2)

In last week’s post, we talked about how Facebook exists in a moment in time, and how its existence is ephemeral just like any other digital asset. This week, we will talk a little about whether Facebook is indeed the villain that publishers think it is. Many publishers bemoan the fact that Facebook has aggregated all their traffic and that their websites are lonely and unvisited, and their advertising revenues down. But we believe that publishers would be in just as much trouble without Facebook.

If you think about the last two decades of publishing, you will see that pointing the finger at Facebook is misguided. What changed the game for publishers wasn’t Facebook, it was the internet itself. Think about it: before the internet, people got their news from a newspaper, and that newspaper was local, drawing a local audience. Although USA Today purported to be a national newspaper, its circulation consisted mainly of tourists and business travelers who received it gratis in their hotels. The average American wasn’t even interested in national news, let alone international news.

Although TV opened up the audience for national and international news during the 70s, it did so with local affiliates of national networks. In short, much of advertising was still local, except for the major brand ads. Competition for audience was among the three affiliates in your city of the three big networks.

However, once the internet came along, every newspaper and TV station was immediately thrust into competition with every other newspaper and TV station in the world for both “eyeballs” and ad dollars. News became a true competitive business, because consumers could now get news from anywhere, and advertisers no longer had to buy only local audiences. They could buy international audiences, or niche audiences, or any audiences they wanted.

None — repeat none — of the formerly local publishers of news and information were structured for international competition. Even the big TV networks were slow to realize that they were not competing against two other networks each, but rather every source of news on the planet. And they spent the first five years of the internet’s existence pushing back at it, hoping it would go away. They never rethought their print strategy; they merely copied the newspaper on to the web.

But the advertisers figured it out before the publishers. The advertising dollars were slowly lost well before Facebook ever existed, first to Craigslist and then to online shopping. Newspapers were folding before Mark Zuckerberg got to Harvard. Legacy media infrastructures weren’t set up for the speed, diversity, and low-cost alternatives on the internet. And that’s where the ad wars were lost.

Facebook is just the latest in a series of hints to publishers that they can’t run their businesses as they formerly ran them, that they can’t blame an outside force for their failure to adapt quickly enough, and that they have to re-think their value propositions constantly to see if their visitors still find them worth the time. Because the new resources in short supply are audience and attention, not news sources. The internet flipped the publishing business on its head, and Facebook is only the most recent messenger.

Are we at Peak Facebook? (Part 1)

Last spring we wrote about Facebook’s plans to develop Messenger into a platform on which it will sell ads. This naturally raises questions about the future for other publishers.  Not to be too much of a Pollyanna about this, we think “this too shall pass.”

Why? Because Facebook exists in a moment in time, just like any other medium. As of now, it appears to have aggregated not only the content of 1.5 billion global individual users, but that of many of the major publishers through its Instant Articles initiative. According to received economic theory, this places all the profits in the hands of the aggregator.

However, look back a scant fifty years ago, and people thought the same about newspapers. All the “news that’s fit to print” was aggregated in the newspaper, so that’s where the ads went, and  with them the profits.

We believe Facebook faces two problems going forward — problems that should give niche publishers some hope.

First, Facebook ads are truly useful in only a small percentage of cases. For performance advertising, it does not work well at all. Advertisers can spend large amounts of money accumulating “likes” without have those convert into sales. Yet Facebook ads, because of their reach, are becoming more expensive. They’re no longer an experiment; they require just the right kind of integrated, cross-channel campaign.

And for business to business, Facebook doesn’t work at all. It’s a platform that begins and ends as a consumer brand and intends to remain that way.

Second, advertising on Facebook is by nature interruptive. When people come to Facebook, they aren’t coming to shop; that’s for Amazon and EBay. They’re coming to catch up with their friends. That makes it very simple for a brand to alienate their customers by reaching out to them at inopportune times, which is why companies like Everlane plan only to use Messenger for customer service. We do not seek advertising on  Facebook, and it is very difficult to make Facebook ads contextual. In the kind of data-driven environment we live in now, where ROI can be measured, small publishers with niche markets will perform better.

And here’s a bonus reason not to go “all in” on Facebook: it is already ten years old. The speed with which technology and consumer tastes change nowadays means we are probably at Peak Facebook, and the next latest and greatest thing, perhaps Medium, perhaps Snapchat, — who really knows? — may gradually siphon off the Facebook audience in the way Facebook has siphoned off audience from Yahoo.

It’s best not to put all your eggs in one basket.

DigiTrust Universal Identity for Consumers is Here

All morning we’ve been listening to a webinar on  TAG, Ad-IDD, Time-based Metrics, and DigiTrust presented by IAB. By far the most interesting new development in the industry to us, is DigiTrust  a new 501c6 that is trying to fix identity and tracking problems for digital ads.

Many publishers have been concerned about the number of third party requests to their sites. They know those requests make the consumer experience poor.

So DigiTrust has come along to standardize the identifiers for consumers. Digitrust is a cloud service that  will offer a DigiTrust ID, and a DigiTrust consent stored in a 1st party cookie accessible by third parties. As a standardized ID for all, with DigiTrust, everybody uses the same ID for the consumer.  It’s just a common language they use with their partners, giving every party proof of consent, which is already necessary in Canada and Europe and may become essential in the US soon.

It eliminates the need for pixel syncs, makes pages load faster, levels the playing field between open web and walled gardens. Publishers need to start with putting a script that sets the identifier, establishes ID and consent, and can be passed through to all their suppliers. This standardized ID makes it possible to eliminate all the other Javascript calls and provides a level of control for the publisher. If you close down Javascript access, you benefit the entire ecosystem.

How it works: the consumer views a site with DigiTrust Javascript on any browser, JS then checks if a token and consent exist, and if not a consent notice is shown to the consumer via a window shade. Any subsequent page navigation is then directed through Digitrust ID. Digitrust stores no data, and empowers NO party with incremental data. It’s just a way to identify consumers once.

DigiTrust is aiming for for 100% consumer notice and consent and all Digitrust platforms and publishers must be part of a self-regulatory program (like TAG).

Publishers pay nothing. Platforms pay. Membership fees are one-time non recurring, with monthly API subscription fees for a decryption key. The more people involved, the more cost is spread among members.

So far, 60+ ad tech platforms have indicated interest,  with 20 already paying the fees. There are also 50+ premium publishers involved. But because of the holidays, deployments are not expected to happen until Q1. For information, contact Jordan @digitru.st Digitrust

A Moment of Gratitude

Every year at Thanksgiving, I become reflective about the year that is coming to a close. It has been a tumultuous one for our industry, and for the world as a whole, but as the year draws to a close there is still much to be thankful for at ZEDO.

First, ZEDO’s incredible product development team.  Not only do our products  stay abreast of and even ahead of the industry, but they perform so well that when a customer gives us a chance to test against a competitor, we always outperform. This while taking the high road in an industry still fraught with malware, fraud, and misrepresentation.

Second, our sales teams, who never sell vaporware, but get us in front of the right customers so we can help people achieve their financial objectives on both the publisher and the advertiser side.

Third, our highly regarded support and implementation teams, for which we always receive compliments. We have always been known for our support, and this will never change because our customer relationships are not transactional — they’re personal.

Next, our customers, whom we prefer to think of as our partners. Indeed, some of our customers have been on a very long journey with us from ad serving at the turn of the century to serving advertisers with high impact formats on a secure platform today.

Fourth, our thirty party partners, the technologies that externally verify our ads to make certain we keep our promises.

And next, the industry associations we support, like IAB and the Online Trust Association, who keep on working to bring our industry greater professionalism, better research, and higher standards.

Last, but certainly not least, everyone on the ZEDO team who keeps the lights on and makes us who we are. When my friends ask me why I went into the ad tech business, I answer that it’s because of the great people I’m able to work with all the time — bright minds in a fast-moving business.

I hope you all out there in the audience remember to feel grateful for your families, your teams, your health, and your continued presence on this great planet whether it is Thanksgiving in your country or not.