Will Facebook Groups Hurt Publishers?

Publishers who have struggled to maintain revenues for years against the onslaught of Facebook’s command of the audience  now must face another example of how little the site truly cares about its publisher partners..

We have been saying for a long time that there something wrong with Facebook’s measurements in the light of our own experience. And now the advent of third-party metrics has revealed that some of Facebook’s video ads have as little as 20% viewability, which is only one aspect of the measurement corrections the site has had to make over the past six months.. That’s not  likely to change very soon, because Facebook does not prioritize publishers and never has. Nor, it seems does it prioritize brands, even though they pay the bills..

But Facebook has bigger problems than either publishers or brands. Now that the world has recognized it as a media company,  it has governments coming after it and users accusing it of spreading  fake news. It’s at once a publisher and a platform for publishers.  Like Google, whose motto may be “don’t be evil,” but who has recently been fined by the EU for another kind of evil,  Facebook has gotten too large to be seen favorably by everyone, and its management has to juggle a multitude of conflicting priorities.

To address what it believes is the biggest of those priorities, keeping users engaged and on the platform as much as possible, Facebook has rolled out a new strategy around groups. It is no longer enough in Mark Zuckerberg’s  eyes that the world be merely connected to friends and family, it must also be brought closer together. Taking his cue from some very large groups that formed around interests such as specific diseases or leisure activities, Zuckerberg first began  to talk about the value of groups.

Then in June Facebook held its first community summit and announced a change of mission. From USA Today

After a decade of promoting Facebook as a service that connects small groups of friends and family, Facebook is broadening its focus for the next decade to “give people the power to build community and bring the world closer together.”

The new mandate stems from Zuckerberg’s soul searching on how Facebook should evolve to help people pull together in divisive times.

Facebook was supposed to give people a sense of common humanity. Instead critics say Facebook has played a role in increasing polarization with the spread of fake news and reinforcement of filter bubbles during contentious elections in the U.S. and overseas.

This seems to further distance Facebook from its publisher partners as it seeks its own continued growth.  It also begs the question of how advertising will be served to users in groups. Making money has always been a necessary evil for Facebook, which has the attention in an economy based on attention.

Facebook, like any other company, has its own survival imperatives. Most premium publishers we know have already dedicated more resources to Instant Articles than they are getting back in revenue, and some already pulled back.

We would advise publishers to focus on their own audiences with quality content that is highly targeted and served on a well designed site that loads quickly. Depending on Facebook for driving traffic or increasing revenue is, as always, naive.

 

 

 

 

 

 

 

Outsourced Ad Ops Can Solve Publisher QA Issues

One of the reasons we have always offered ad operations to our publisher partners is because the publishers are so busy with other things. And the rise of programmatic buying and selling has made all of this more complicated and less transparent. As digital ad products get more complicated, they require more and more heavy lifting to make sure ads run as they are supposed to according to your own specs and industry standards. A new report from GeoEdge finds that some publishers’ ad ops teams are spending up to 40% of their time doing QA on creative.

In the old days, QA was only “does this ad really run.” But now, because of all the interest in brand safety,

quality assurance is really about risk management. The QA process entails getting detailed ad specs up front, clearly identifying stakeholders and responsibilities,  and effectively setting expectation for how an ad is supposed to work, whom it is meant to reach and actually meeting those expectations in order to insure a good user experience.

According to this report, part of the problem comes from conflicting priorities between the buyer (the agency) and the publisher. For the buyer, ad performance is the highest priority. But for the publisher, continued existence depends on monetization and optimization. Their goals are clearly misaligned.

Publishers ought to focus on their own needs, nor just follow whatever process the agency follows. And not spend so much time pursuing every new platform, to the detriment of QA. What good is it if you are on Snapchat if your ad doesn’t run the way it’s supposed to? Again, from GeoEdge, “the ad integrations that come with new platforms are more complex than publishers are accustomed to, making QA even more laborious.” Video and native ad executions are far more difficult than banner ads used to be. When a complex ad product changes hands among so many different teams, it’s easy for errors to slip through the cracks.

The highlight of this report for us was the experience of Forbes:

… who made a major advertising faux pas in 2016 when it released its 30 Under 30 list. Like most publishers starved for ad dollars, Forbes requested that those looking to view the list disable their ad blockers. Dutiful readers did just that only to open themselves up to malware ready to steal personal data, drain bank accounts and hold passwords hostage. With 56 million monthly unique visitors, this Forbes oversight was no small slip up.

But on our private platform, we can also do the ad operations, and with them, the QA. There is no danger, if you buy our ad formats and run them on our network, that malware can enter our closed system.

Admittedly GeoEdge is selling its automated verification solutions in this report, but the problems it identifies are real ones, and we’ve all been dealing with them in one way or another since advertising became digital.

 

Facebook Offers Publishers Another Chance at a Haircut

One thing is for sure: Facebook’s domination of both audience and of digital advertising spend has caused one set of problems after the other for publishers. Essentially Facebook, which does not like to identify itself as a media company, is trying to find ways for visitors to stay in its app rather than clicking through to a publisher site. This has frightened publishers, for obvious reasons. In fact, it has frightened them so much that they have begun to see Facebook as a true competitor rather than just a distribution channel. Every time Facebook makes a change, which is often, publishers stand to lose more advertising dollars.

To this end, many premium publishers have already gone to a subscription model to increase revenue. The New York Times allows ten free articles a month. The Economist allows three free articles a week, and the Wall Street Journal has a hard paywall. This in addition to advertising.

Now Facebook has jumped on that bandwagon as well. Facebook is going to allow people to subscribe to publications through its app. The feature will roll out by year’s end.

Although publishers have asked for this since the advent of Instant Articles, the details of how it will work and how publishers will be paid are not clear:

There are a lot of details to be worked out, including what the model would look like, what subscriber data publishers would get and how the revenue would be distributed. Facebook has moved toward a metered model, and while nothing is final, the latest proposal involves a metered model where users could read up to 10 articles for free a month before being required to subscribe. Publishers would be able to decide if each article is subject to that meter, free or behind a hard paywall, according to people familiar with the discussions.

There’s another big question: how will readers subscribe? If it’s through Instant Articles, Facebook will have to convince publishers who have already bailed on it. The move comes after many publishers, seeing no value from Instant Articles, moved toward Google’s Amp pages. The New York Times bailed early in the year, and even smaller publishers do not push all their content through IA.

Of course subscriptions could be sold through the App Store and the Google Play store, although Apple takes a 30% cut of whatever is sold through its store. And you’d expect Facebook to want a cut as well, so…

One thing is certain. Publishers who aren’t on the ball and using every technique at their disposal to maximize revenue will once again take some sort of haircut. And they’ll be spending the summer figuring out how short that haircut will be.

Let Us Help You With Video Header Bidding

Two years ago, header bidding was a hack. Because we like to be a technology innovator, we started offering it as soon as we understood the way to make it work. We were asked for it by our customers, albeit only by a few at first.

Here’s why header bidding works. In the ad serving world, most advertisers want guaranteed impressions and most publishers want decent prices for their inventory. But DFP, by conducting real time auctions with cascading prices,  simply drove prices down, which meant that advertisers might have paid less, but were not guaranteed their impressions either.

When a consumer visits a site, she’s a valuable commodity to an advertiser. So she’s served the best ads first: the ones that are bought direct.  That’s because the ad server brings those up first, because they’re the ads the brand has paid the highest price for in exchange for a guarantee they’ll be seen.

If the consumer stays long enough on the site, she exhausts the “frequency cap” (the number of times the advertiser wants her to see the same ad), and then she starts to see ads bought at auction (RTB) where many more advertisers bid to serve an ad. That produces a cascade of dropping prices for the publisher’s inventory, commonly known as a waterfall.

After a while, people learned that this system really benefitted neither the advertiser nor the publisher. So the hack was to devise an auction outside the ad server in the header of the page. It loads before anything else on the page. The publisher now has control of how much he can charge for your visit. That first impression can be the most expensive for the advertiser, but it is guaranteed.

Publishers who use it have reported 30-60% increased revenue.  For the advertiser, it means the ability to get first look at every single impression, which wasn’t possible otherwise. Advertisers were, in essence, buying blind. Now, whether they win the impression depends on how much they are willing to pay.

This has been a boon for prices in digital advertising altogether. Advertisers who buy through RTB are now on an equal footing with those who buy direct.

Because of the revenue benefits publishers are realizing from header bidding and the premium inventory now available to advertisers even through automated buys, programmatic advertising is finally coming into its own as a potential route to build a brand, and is able to shake off the reputation of being a low-quality, direct-response channel.  Many premium publishers, who only wanted to sell direct before as a way of preserving the value of their inventory are now feeling comfortable moving to programmatic buying. It didn’t take long to see the benefits of better prices combined with more streamlined workflow.

Now, header bidding is almost a standard in the industry.  We thought it might be, and that’s why we developed the methodology for doing it before everyone else.  We even know how to do video header bidding, which most people are still dreaming about!

 

ZEDO Makes Online Trust Alliance Honor Roll for 5th Consecutive Year

For the fifth year in a row, ZEDO and its subsidiary ZINC have made the Online Trust Alliance Honor Roll. The Online Trust Alliance (OTA), is an Internet Society initiative with the mission to promote best practices for online trust.  The 2017 Online Trust Audit & Honor Roll –  is the de facto standard for recognizing excellence in online consumer protection, data security and responsible privacy practices.

“Data is the ‘oil’ of the Internet economy. It is fueling innovation, growth and revenue. At the same time, if abused there is a risk of data spills, negatively impacting user expectations and ultimately the Internet at-large,” said OTA Founder and Chairman Emeritus, Craig Spiezle. “The OTA Trust Audit & Honor Roll underscores the urgency to embrace responsible security and privacy practices. Failure risks a long-term impact to the Internet.”

OTA observed the emergence of an alarming three-year trend:  sites either qualify for the Honor Roll or fail the Audit. In other words, sites increasingly either take privacy and security seriously and do well in the Audit, or lag the industry significantly in one or more critical areas.

Although ZEDO is not a consumer-facing site, we participate in the Audit to be sure we’re doing the best we can do for our customers and partners. If you read the press release notes, you will find that if ZEDO were an actual consumer-facing site, it would be among the top 50 in security and privacy protection. Ironically, the banking community scores lowest in best security practices.

 

“Despite ratcheting up the criteria needed to qualify for the 2017 Honor Roll, it was encouraging to see the highest percentage of recipients since OTA began the Trust Audit nine years ago,” said Spiezle. “While OTA congratulates all Honor Roll recipients, many others have a long way to go to ensuring and embracing acceptable security and privacy practices.”

Industry Highlights
From best to worst performing industries:

  • Consumer Services: This industry was again the best performing with 76 percent making the Honor Roll this year. This segment accounted for 26 of the top 50 consumer-facing sites (52 percent).
  • Internet Retailers: Fifty-one percent of the top 500 Internet retailers made the Honor Roll, a significant improvement over last year’s score of 44 percent. This segment accounted for 10 of the top 50 consumer-facing sites (20 percent).
  • News & Media: Forty-eight percent of news and media sites made the Honor Roll this year, the most significant improvement over the previous year across all industries. In 2016, media and news sites were the worst performing sector with only 23 percent making the Honor Roll. This segment accounted for three of the top consumer-facing 50 sites (6 percent).
  • ISPs, Carriers, Hosters & Email Providers: Forty-six percent of companies in this new 2017 category made the Honor Roll. This segment accounted for seven of the top 50 consumer-facing sites (14 percent).
  • Government: Thirty-nine percent of audited U.S. federal government sites made the Honor Roll. This was a significant decrease from 46 percent in 2016. 60 percent received failing grades
  • FDIC 100 Banks: The percent of FDIC 100 banks making the Honor Roll saw the biggest drop in 2017, going from 55 percent in 2016 to 27 percent. This sector had shown consistent, significant improvement in their Honor Roll score up to 2016 before plummeting this year predominantly due to increased breaches, low privacy scores and low levels of email authentication. 65 percent received failing grades.

“OTA’s Audit continues to drive awareness and recognition about the importance of responsible data security and ethical privacy practices,” said Internet Society Chief Internet Technology Officer, Olaf Kolkman. “The increase in sites embracing end-to-end encryption shows it is becoming the norm for site traffic.”
To qualify for Honor Roll status, a website must receive a composite score of 80 percent or better and a score of at least 60 percent in three categories: 1) domain, brand and consumer protection, 2) site security and resiliency and 3) data protection, privacy and transparency. Failing any one category automatically caused a site to fail overall. OTA expanded the 2017 methodology with additional criteria, telemetry and data fidelity addressing today’s security threat and privacy landscape. OTA analyzed websites between mid-April and the end of May 2017. It estimates that it analyzed more than 500 million email headers and approximately 100,000 web pages.

The 2017 report was funded in part by grants from Symantec and Verisign. Data providers included Agari, DigiCert, Disconnect, Distil Networks, Ensighten, High-Tech Bridge, Infoblox, Malwarebytes, Microsoft, Risk Based Security, SecurityScorecard, SiteLock, Qualys SSL Labs, Symantec, ValiMail and Verisign.

 

About OTA:

The Online Trust Alliance (OTA) is a non-profit with the mission to enhance online trust and user empowerment while promoting innovation and the vitality of the Internet. Its goal is to help educate businesses, policy makers and stakeholders while developing and advancing best practices and tools to enhance the protection of users’ security, privacy and identity. OTA supports collaborative public-private partnerships, benchmark reporting, and meaningful self-regulation and data stewardship. Its members and supporters include leaders spanning the public policy, technology, ecommerce, social networking, mobile, email and interactive marketing, financial, service provider, government agency and industry organization sectors.

Context: The Most Important Mobile Ad Attribute

Publishers have had to have a mobile strategy for quite a while now, but in the past year many have realized they have to be mobile first, or even mobile only to meet their customers. This has required a new understanding of context — how to reach those customers, understand them, and offer them services that do not offend.

This requires an understanding of context: what devices and screens their users are on, the patterns of usage, which networks they’re on, what plans they’re on, and more. In human history no other devices has presented such challenges.

For most users, mobile means apps, especially for digital media consumption.

A study by cross-device identity and advertising platform provider Drawbridge found that in just six months, from August to December of 2016, the top 15 ad-supported iOS apps grew 32.5% in monthly unique users to nearly 137 million, while the top 15 ad-supported Android apps grew five percent to 606 million monthly uniques.

In 2016, for the first time, mobile surpassed desktop as a means of consuming digital media, and equally important was the growth in mobile advertising, which also surpassed desktop.

In mobile, context takes many forms. Creators have come to realize that mobile is a new surface, and that they can’t just re-package their old content, TV ads, or display ads. Mobile can tolerate special sized vertical video, swiping in multiple directions, and geolocation. It is far more interactive than the desktop, and therefore open to bigger challenges as well as opportunities.

Publishers must be able to know whether a visitor is viewing their content on the subway, standing in a store, walking, or just waiting to know what kind of ad that person would be willing to see. As Grapeshot points out,

In the mobile sphere, the content being consumed in the moment sends powerful signals as to the context of the person consuming and interacting with it.

Contextual understanding adds a layer beyond what audience data can provide. Knowing what media are being consumed signals a person’s current state of mind, their current preferences, even their level of engagement and degree of attention.

Correctly executed, contextual advertising puts brand messages where consumers will accept and even welcome them. It also protects brands from dreadful adjacencies, such as hate speech, porn, and terrorist propaganda.

A few years ago, a startup then named Proximic tried to sell the idea of brand safety to both advertisers and publishers. It had the capacity to scan over a hundred languages in real time to find brand safe locations for ads. No one seemed to care. The company was sold to ComScore, and is now called Activation, but now Grapeshot has come along,  and using similar machine learning algorithms to target suitable ad placements.  And on mobile, the suitability of placements has become far more important.

For example, since most of consumption activity takes place in apps, it is imperative to understand the context of apps into which messaging can appear safely without either compromising brand safety or interrupting a consumer intent on an experience. Page-level understanding of what’s inside apps is still in its infancy and the industry is still using workarounds developed by verification services like MOAT.

But these are tools for the post-bid environment, and the problem won’t be solved until we find a pre-bid solution.

 

 

Publishers Survive Multiple Challenges

We’re always looking at ways publishers have found to monetize their content in this brave new world. This week, with summer already under way and advertising models still under scrutiny, we’ve looked at a number of different “solutions,” none of which could be called a category killer.

For example, Medium founder Ev Williams, who also co-founded Twitter and Blogger, has been funding the company on investor money (his own and that of friends), but had begun an effort to sell ads when he abruptly pivoted and began to sell “memberships.”

The trouble with the internet, Mr. Williams says, is that it rewards extremes. Say you’re driving down the road and see a car crash. Of course you look. Everyone looks. The internet interprets behavior like this to mean everyone is asking for car crashes, so it tries to supply them. His goal is to break this pattern. “If I learn that every time I drive down this road I’m going to see more and more car crashes,” he says, “I’m going to take a different road.”

Williams decided that the different road for Medium would be premium content for people who pay $5.00 per month. This effort has been characterized as “underwhelming” in a recent NY Times article.

Jessica Lessin, the former Wall Street Journal reporter who founded The Information, borrowed her business model from the Wall Street Journal and went even further: Lessin sells subscriptions and allows no advertising. While she has grown rather nicely,  her model involves a high enough annual subscription price that she cannot scale. Also, she’s in a vertical that people will pay for: financial information.

The only scalable new media models for big brand buyers who want scale seem to be Buzzfeed and Vox, two very different publishers. Vox does aim to compete with Google and Facebook, with a slightly different philosophy: It has 8 different vertical sites, including SBNation, Vox.com, The Verge, Recode.net, and Eater. The company is trying to build big audiences in all of those big verticals, and remains committed to distributed platforms.  To accomplish this, Vox relies on advertising, but the conversation about advertising always starts with content supplemented by native ads or branded content, rather than the “ads first, news hole with what’s left” methods of the past.

Vox is shifting to programmatic, which it views as a means to an end, a mechanism through which brands can execute at scale — not just as a remnant, low CPM business. Although many VC-backed media companies, including Buzzfeed, don’t do programmatic (yet), Vox simply views the automation platform as a way brands can buy what they want.

“Our media becomes no less valuable because it’s sold programmatically, ” says Vox VP for Revenue Operations Ryan Pauley. “In fact, it becomes more valuable; that’s how we’ve approached it.” To increase distribution for marketers, Pauley and his team created Concert, a partnership among NBCU, Conde Nast, and Vox, which leverages the ad tech Vox has created across a premium set of inventory. All three sales forces are then selling the same custom ad products. That’s how marketers can get to scale without driving the CPMs into the basement.

Advertising remains the only way to achieve scale for now, but tomorrow’s advertising industry is evolving to look very different from that of the past.

Mary Meeker Sets the Agenda

Mary Meeker’s annual Internet Trends Report has been published. The long and short of it is that half the world is now connected to the internet by mobile phone, and while mobile phone sales may be saturated and therefore slowing, mobile phone use online is still growing. Most users still have Android devices, although Apple is growing a bit. In the US, mobile phone users spend an average of three hours a day on their phones.

And with this growth in mobile device use finally comes more advertising dollars, Last year, mobile passed desktop in ad spend. But there’s still a discrepancy between the time spent on mobile devices and the number of ad dollars there — a $16 billion opportunity, says Meeker.

Unfortunately for other publishers, Google and Facebook now have 85% of the global online ad spend, up somewhat from last year.

And so is ad blocking, especially in Asia, where 58% of Indonesians and 28% of Indians (as well as 9% of Chinese) opt out of having data collected on them through advertising. The European GDPR (new privacy regulations) may also cause changes, although ad blocking in Germany is mainly on desktop.

But the biggest change from last year is in the presence of better measurement tools from the big players (Google, Facebook, and Snap), who have been pressured to ad better reporting to their offerings. For Google, product listing ads drive traffic to product pages, while contextual ads drive purchases on Facebook,  and goal-based bidding ads work best on Snap.

In addition, geo-targeted local ads drive foot traffic to retail stores.

Here are the types of ads consumers appear to like most:


Meeker says inefficient ads are rapidly being exposed by data. She says it is now possible to get the right ad to the right consumer at the right time. This may be a little futuristic, but it’s certainly what is coming.

The presentation goes on for a long time (355 slides) through gaming, and through changing user interfaces (mostly voice). She also talks about image recognition and how that will become the most important part of search.

Perhaps most important for publishers, she says on slide 50 that the line between ad, content, store, and transaction is blurring, and that the most successful publishers in the future will also be targeted stores.

We are ready with these new formats, in which you swipe up to buy or tap to book right from the ad on the site. And we know that targeted well, consumers like these ads because they’re useful.  Now is a good time to get in touch with us.

ZEDO: A Safer Way to Buy and Sell Digital Ads

I was talking to a woman on our sales team in the midwest last week, and she said “you know, in the midwest many agencies haven’t even heard of ZEDO and ZINC.” In some ways, that’s not a surprise. We’ve been around since 1999, when we were founded as an ad server for publishers, and our headquarters then was in San Francisco. We later expanded to deliver out-sourced ad operations services, yield optimization services, and pretty much anything a publisher would need to increase revenue. But we’re a solutions development company, not a marketing company.

About three years ago, we started a division called ZINC and brought to market innovative high impact ad formats as the industry changed. We were, if I remember correctly, first to market with an ad called the “Inview Slider,” an ad that only appeared when a visitor was there to see it. we followed that with an equally innovative video format designed to be displayed by publishers with sites that didn’t publish video. The “InArticle” Video was quickly picked up by the industry and re-named “outstream.”

We went on to focus on mobile, developing an entire suite of ad formats that do not anger mobile users and get better results than any of our competitors. Along the way, we moved the company to New York to signal our entry into the advertising side of the digital media ecosystem.

Once in New York, we realized we had access to a new customer: brands and agencies.

Along the way we participated in a range of industry-wide initiatives, and realized that ad fraud and brand safety were becoming paramount in the minds of industry thought leaders, so we jumped ahead once again, developing a completely private, secure, end-to-end solution  — a platform on which our customers can buy innovative formats that are served directly to our premium publisher network without the danger of supply chain corruption.

At the same time, we eliminated several former partners with whom we worked until we realized they weren’t playing the game on the up and up and their networks were fraught with bots and malware. We also severed connections with some non-quality publishers.  And last, we partnered with a company that checks all the URLs to which we serve to make sure we serve ads in a brand safe environment.

All the while, we were heads down continuing to develop new technologies, and ignoring the elaborate marketing plans other companies user to generate transactional sales. We much prefer relationship sales. We’ve just developed our first slide deck in years. We’re coming out to build additional relationships.

You will see more of us now in the media world, because we have begun reaching out in the midwest, New York, and the west coast, doing somewhat more aggressive storytelling about what we have to offer.

 

The New Fronts Felt Different This Year

The new emphasis on brand safety has done more to change the digital media landscape than anything since the rise of programmatic. It is incumbent on everyone who buys media to know where they’re buying, and on publishers to make sure a brand ad doesn’t appear in an inappropriate place, even though everything is done by algorithms. We predict that the push for brand safety will make random reach less important, and will ultimately give advertisers more knowledge of what they’ve paid for.

Already Chase has cut its buys from 400,000 sites to 5,000 (without seeing a difference in results) and Sir Martin Sorrell’s salary has been cut by a third. Not to put too fine a point on it, the days where ad exchanges could support porn, fake news, and hate sites by selling blind buys to young media buyers whose KPIs were based on numbers of impressions are over. Programmatic be damned, everyone is going to have to know their inventory on the sell side, and agencies are going to have to know what they’ve bought on behalf of a client.

This year’s digital New Fronts, according to Ad Age, were all about safety, rather than sexy. Instead of glitzy parties there was substance, and everyone will be remembering the brand revolts against YouTube and Breitbart. Ad Age’s prediction:

Even if the YouTube brand revolt isn’t explicitly mentioned, everyone from Hulu to PopSugar will take the opportunity to assure marketers that their content is high-caliber and brand-safe. Many are likely to also stress transparency, verification, third-party audits and viewability. 

Conde Nast will send a message to the industry that it needs to trade on brand safety, said Jim Norton, president of revenue and chief business officer, adding that the business has gotten away from that principle.

So many different issues plague the digital advertising industry that it’s difficult to decide what it should fix first.

There is the issue of platform control by Google and Facebook, and the struggle of smaller publishers, even the Wall Street Journal and the New York Times, to support themselves off what is left.

Then there are the issues of fraud and malvertising, and the industry’s efforts to clean up the supply chain.

And we haven’t yet talked about the unwillingness of Millennials to watch ads, or on the other hand pay for content on the web.

Follow that by the downloading of ad blockers by 25% of the population, and the rolling out of new privacy rules in the EU,

As for metrics?  The industry is still trying to decide what the best metrics are for mobile advertising, especially for mobile video.

No wonder WPP has decided to cut expenses, especially for Cannes, and to leave Sir Martin with the paltry salary of $62 million this year.