Video Replacing TV as the Top of the Funnel

Seldom is there an industry read with which we disagree more than Ben Thompson’s recent writing on his blog Stratechery. In it, he says that “digital advertising is becoming a rather simple proposition: Facebook, Google, or don’t bother.” We don’t agree. While display may have commoditized, video has not, and TV advertisers moving over to online video are choosing to go broader, and to buy from ZINC>

 

Thompson talks about the advertising world of the past, in which newspapers, radio and television found their niches in the advertising spend, which has always been about 1.2% of our economic activity. Each existed at a different point in what used to be called “the funnel” from suspect to prospect to customer:

photo courtesy of Ben Thompson, Stratechery

photo courtesy of Ben Thompson, Stratechery

TV and radio were particularly effective at building awareness — making customers aware that your product existed — and also at building brand affinity — the subconscious preference for your product over a competing product at the moment of purchase. Newspapers, meanwhile, were useful when it came to “consideration”: helping consumers decide to buy the product they were now aware of (coupons were very useful here). Finally, brand managers spent a lot of time and money on their relationships with retailers to help pull consumers through the funnel to conversion, with the vague hope that said consumers would prove to be loyal.

It has always been difficult to manage the top of the funnel through digital advertising, because it is less measurable than performance advertising. That’s why RTB took off first, and brand advertising was so slow to be accepted. However, we now have some very good formats for brand awareness, and some very good cross-channel campaigns. Video has made a huge difference for brand advertisers, and “out stream” advertising has made another. Native provides a third.

Because of the size of their reach, Thompson argues, platforms like Facebook’s and Google’s, which can guide an advertiser through different parts of the funnel by means of their own offerings, will capture the advertising market once and for all: “Google is promising… awareness via properties like YouTube, consideration via DoubleClick, and conversion via AdSense.” And thus it makes no sense to go anywhere else, and every smaller platform, from LinkedIn, to Yelp, to Twitter, will lose.

While Thompson uses this thesis as a way to account for the recent stock market performance of LinkedIn and Twitter, it really doesn’t account for all the publishers in our premium network, who have leveraged inView and inArticle on their own sites to achieve better returns than the bigger platforms. They know that from a cost/benefit perspective, bigger does not always mean better in terms of investment return.

Ultimately, advertisers care about the return on their advertising dollar, and if they are trying to reach special audiences, they’ll spend far more trying to do that through Facebook and Google than they will through targeting niche sites where those visitors spend most of their time.

 

 

 

 

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.

ZEDO Has the Secure, End-to-End Private Buying Platform ATDs Need


Making the ad industry supply chain safe is going to involve getting rid of some middlemen who opportunistically take advantage of speed and automation to make the industry dangerous for all of us honest players. Yahoo’s recent experience with malware raised the awareness of the advertising industry to the dangers of using too many vendors. It is now impossible to ignore how much ad fraud is still going on, and although the work of the Trustworthy Accountability Group (TAG), a cross-industry initiative, is just getting started, wary publishers are already looking for a way to guarantee a clean supply chain as advertisers ask all sorts of questions..

Fortunately, we anticipated the move to consolidate vendors, although we thought that would be more for cost and time saving, rather than for security. That’s why we developed  the platform to link  our high impact format buyers on ZINC to our private network and our publisher ad server at ZEDO.  Our platform was designed in response to requests by Agency Trading Desks for a private, direct way to buy high impact formats on premium publications with the transparency of direct buying and without the risk of an insecure supply chain.

Here’s how it works:

We have a secure buying platform that an agency trading desk can log into that includes a private exchange  only for our unique ad formats. We built the exchange especially for differentiation, and for higher performance than most digital ads, but now we realize we have an important message about security, because on the supply side, the supply comes only from the ZEDO publisher ad server. Because we’re a large publisher ad server, and have been one for so many years, we can provide our own fill — we can create all the impressions on the publisher page. We don’t buy from anyone else, so no bad stuff can be introduced, and thus we service both ends of the ecosystem.

Agency Trading Desks love this clean end to end platform. More important, our  control over the whole supply chain allows us to innovate constantly, which we have always done.  Since our founding, we have prided ourselves on being ahead of the technology curve.
Right now, we’re being told we have the best formats in the industry, and because we have a large development team, our products get better every month in response to customer requests. For the past few years,  we’ve launched 2-3 new formats every year, and this year we have a new format for apps, and one for mobile video. ATDs love the fantastic formats and clean supply chain.
We’re now seeing articles about the need for the industry to evolve to end-to-end platforms. We’re already there.

 

Will An End to Ad Fraud Mean Bigger Budgets?

As buyers begin to demand better metrics on both ad fraud and viewability from publishers, the definition of how to measure  ad fraud keeps changing. Like viewability, fraud numbers can vary depending on the third-party monitor. And if you’ve ever seen a rat on a charged grid stop moving because of operational neurosis, you know that marketers won’t unleash the biggest budgets unless they have some standards with which they can feel comfortable.

The only thing that will change all this is greater transparency. Earlier this year, IAB in partnership with ANA and 4As started an industrywide initiative known as the Trustworthy Accountability Group to help promote transparency. The MRC is also trying to establish a certification for fraud detection. But as with viewability, it’s not so simple. In March, the group released list of first principles around fraud detection, source identification, process transparency and accountability.

The first step is to arrive at a common definition of what constitutes fraud.

There exists a set of ad-related actions generated by infrastructure designed not to deliver the right ad at the right time to the right user, but rather to extract the maximum amount of money from the digital advertising ecosystem, regardless of the presence of an audience. There also exists a set of actions generated in the normal course of internet maintenance by non-human actors – search engine spiders, brand safety bots, competitive intelligence gathering tools. These and other actions, whether they be page views, ad clicks, mouse movement, shopping cart actions and other seemingly human activities  must be expelled from the supply chain.

The supplier (ad network, exchange or publisher) must institute technology or business practices to eliminate bots, adware and malware traffic, and other sources of malicious activity.

At ZEDO we have been active in anti-malware efforts and have been selected for the Online Trust Association’s Honor Roll four years in a row. We were on the front end of this movement long before it became fashionable, and we developed our own technologies to weed out adware and malware.

Buyers should be able to identify the URLs  on which their ads appear. If the URL is masked, there must be enough trust and transparency so the buyer still feels comfortable. Suppliers must also able to supply information about what processes we employ to root out fraud. This is now becoming an industry-wide supply side requirement. There must be a rating scale, and an explanation to the buyer about how that scale works, how it is used, and what happens to the lower quality traffic.

The intent of the industry efforts is to develop a set of best practices so companies trying to achieve compliance will know what their guidelines should be. For publishers, exchanges, and networks, this should be a big opportunity, because compliance will unleash bigger marketing budgets. And since we already comply, we’d be happy to see the fraudsters chased out of the supply chain.

 

Apple’s Doublespeak About Ad Blocking

The announcement that Apple was building hooks for ad blockers into Safari with the release of El Capitan and into its mobile platform with IOS9, combined with the forcefulness of Tim Cook’s big speech on how Apple respects the privacy of its users has raised the level of confusion or maybe pure hypocrisy around the use of consumer data to target ads to an astronomical level.

Who can blame the consumer for thinking large companies are “selling” their data, and with it their privacy to evil third parties.
Unpacking what Cook said: “of course Apple will not sell your customer data because we value your privacy and selling data isn’t our business model,” we look at it in juxtaposition to “come over to our iAd platform with your ad dollars because we have the best data about the most desirable users on our own platform. Of course Apple isn’t selling your data to someone else, because they’re using it themselves. And do you think the ad blockers will work for the ads served by Apple’s own iAd network? We don’t.

Facebook and Google aren’t selling your data either. They, too, are using it themselves to target ads. It would destroy their business model if they sold data at low prices instead of using it to sell advertising at high prices.

The language (data and privacy) with which the entire issue of free content, advertising and ad blockers is being presented to the consumer by the big platforms is misleading to say the least. Consumers are installing Ghostery and AdBlockerPlus not because they mind ads but because they fear surveillance and loss of privacy. But ironically, the issue isn’t privacy or surveillance. It is seeing advertising in return for free content.

We are long overdue for a broad conversation, probably best led by a collective of premium publishers, on the trade offs involved in keeping content free. We’re also long overdue for the kind of opportunity presented by native advertising and kick butt creative.

Why did users tolerate the kind of mass advertising presented on TV? Because television brought us the most creative content and creative moments in advertising. There were three components of ads during the Golden Age of advertising:
1. Ads weren’t targeted, so users didn’t feel threatened that someone was referring to them specifically.
2. Ads were clever and often compelling, telling memorable stories with high production values. Creative directors like Don Draper were prized.
3. Ads were often presented as sponsorships, in the way the Milton Berle show was “brought to you by Texaco.” Thank you, Texaco for bringing us Uncle Milty. Consumers understood: if you want to see this, you watch the ad and maybe end up humming the jingle.

Now the ad and the content are often quite removed from each other, leaving the consumer unenlightened about her role in the bargain.

It’s time to remind the consumer that there is no Uncle Milty without Texaco. We did it for TV and we can do it again for digital publishing.

Mobile Advertising Makes Context Supremely Important

141103.programmatic1

Programmatic media buying has done many things well, but it has done one thing very poorly: it has not kept good track of one of advertising’s most important media buying tenets –context.  Context used to be the watchword of print media buyers, who chose audiences by buying certain magazines, like the New Yorker for elite readers or the Pasadena Press for local readers. This sort of buying assumed that if an audience was reading the New Yorker, it would be in the market for jewelry, good Scotch, or luxury cars. They could tell by the context. And it works.

Now we have more data, many DSP users and ATDs are targeting audience without thinking about the context in which the ads appears. They forget to choose the right sites for quality and for their brand.

But on which site the ad appears is still very important. The marketoonist cartoon explains this with clarity.

John Battelle said it best:

Wouldn’t it be better if the ads matched the content? ….

That’s how it used to be, back when ads were bought and sold in a bespoke fashion by publishers’ ad sales forces competing on the quality of their content and the audience it attracted. And it’s how it could be again, given the wealth of contextual information available to marketers today. It’s not an either/or choice: It should be both. It’s well within the programmatic ecosystem’s reach to surface contextual information.

To help programmatic buyers, ZINC offers only top tier high quality sites. This allows ATDs and other buyers on DSPs to know that they are advertising on the very best sites that match their brand. Yes, the price is higher, but the increased performance (just look at the ZINC CTRs to start with) more than justifies this. Many advertisers who buy ZINC programatically are amazed at the performance. To be fair, ZINC performance is derived from great, unique ad units that ZEDO builds and tests specifically. But we have seen clearly that performance is still further enhanced by serving these ads on great, clean high quality sites.

DFP Failure Gives Glimpse of the Future

One morning quite recently, this happened.

Google’s ad server for publishers (DFP) went down on Wednesday costing publishers across the world millions of dollars in lost advertising revenue. Google scrambled to fix their technology. It also brought some of the web to a  standstill as their ad server prevented pages from loading on some sites.

As a side effect this left the web free of their small banner ads , much as it had been at its beginning. On many tier one sites the only ads you saw were the sophisticated and attractive ZINC formats. Not many of them per page but good ads and well presented.

It was a great opportunity to think about how to redefine the way we present ads online. As banner ads are in decline the future is fewer but higher quality advertising – often with video ads on the web. These are ad formats that work for the publisher revenue goals, user experience and for the advertisers. That is what ZINC believes in.

We thank Google for turning off all their ad clutter so that we could get a glimpse of the future.

Will Facebook Beat Google for Mobile Ad Dollars?

Once Facebook realized that it was a large publisher of user-generated content rather than merely a directory for college students, it set about figuring out how to win on all sides of the advertising business rather than be content merely to sell ads on its own  site. In the past several months, with the release of both Audience Network, its mobile ad network, and Atlas, it’s targeting platform, Facebook is demonstrating how serious it is about winning at the advertising game. Facebook ads, which used to be quite affordable, have risen 123% in price this year.

While few will remember the short-lived Beacon ads that infuriated users in the early days, no one can escape the current presence of ads in the newsfeed (although astute users are able to tell the social network which ads they don’t want to see). But the company is well aware that too many ads in a user’s feed will make the service less valuable users rather than more. So how to maximize advertising revenues without angering your users?  One way is to raise your ad prices, as the site has already done. But another way is to roll out a mobile ad network, targeting app downloads and installs.

And that’s just what Facebook did about six months ago when Facebook launched Audience Network, testing the hypothesis that a mobile network could increase ad revenues without losing users.

We assume that experiment was successful, because the mobile ad network has been expanded and is now open to the public.

Facebook had to have a way to capitalize on the growth of mobile and its mobile ad network became a way for Facebook to grow its share of mobile ad dollars, which are projected by eMarketer to reach one quarter of all digital ad spending in 2014. While Facebook already has a respectable percentage of mobile dollars, Google still has the lion’s share — 47% of all mobile ad dollars go to Google. And Google, too, has its own mobile network –AdMob.

We suspect that Facebook and Google will be battling it out over digital ad dollars for the next several years. It won’t be easy to dislodge Google from its catbird seat, but as search advertising slowly shifts to mobile, Facebook has a pretty reasonable chance.

 

Mobile Crosses Desktop in the UK, MEA

As far back as 2010, Morgan Stanley predicted that the mobile web would rule by 2015. Well, we beat that prediction in the US back in February 2014,   CNN Money wrote the story, which turned up a more important fact: that most of mobile traffic occurs through apps, and only 8% through browsers.

“Mobile devices accounted for 55% of Internet usage in the United States in January. Apps made up 47% of Internet traffic and 8% of traffic came from mobile browsers, according to data from comScore, cited Thursday by research firm Enders Analysis. PCs clocked in at 45%.”

Globally, the latest study we can find was released by Cisco in early 2014. Just look at the growth in Asia, notably in Korea and Japan, which have long had faster, cheaper mobile networks than the U.S.

 

Screen Shot 2014-08-19 at 8.44.44 AM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

But there’s a much more important number on the horizon now: for the first time this month, mobile web traffic has exceeded that of desktop in the UK.  On Digiday we read that “with 61 percent of U.K. adults now claiming to own a smartphone and 44 percent of households owning a tablet, according to Ofcom’s Communications Market Report, mobile is becoming the preferred mode of access for British Web users.” The Guardian,  thought leader in UK digital news, overhauled its mobile app this spring, because over 40% of its readers access the site on mobile during the week, and on weekends that increases to 60%. These numbers are in a state of flux, increasing almost monthly.And while only a small number of Guardian readers use the Guardian’s app to access its stories, those people are the most engaged, generating 20% of the page views.

And, from the same Cisco study predicting mobile traffic 2013-2018, we learn that the fasted growth going forward will, predictably, be in the Middle East and Africa, where millions of new internet users will get online for the first time through smartphones in the next few years.

So what’s YOUR mobile ad strategy? How will you reach a global audience? As the largest independent ad server in the world, we think we can help.

 

Programmatic Spend Reveals Greater Planning

Programmatic advertising has outgrown its original reputation as a place to pick up cheap remnant inventory at the last minute. As brands and agencies try to meet consumers where they are, they are finding the need to look across the media landscape for the same customer on a number of different devices and on a variety of platforms.The consumer has become, quite literally, a moving target, and there is simply no other way to build scalable campaigns without the automation and reach programmatic can offer . Although the retail and CPG industries have been in the forefront of this movement, they’re followed closely by travel, telecom, and financial services — all fields in which competition is fierce.

As a concomitant, the RTB environment has grown to include much more than simple display advertising. You can buy pretty much any kind of advertising in real time now, even video. From January through April 2014, display advertising remained fairly constant, but all other data-driven marketing channels grew, according to Turn’s Advertising Intelligence Index. Across all the channels, the competitive advertisers are beginning to plan in advance and stabilize at higher levels of spend.

Turns study reported a decrease in the volatility of spend, as well as growth in the number of dollars spent. This information reveals that marketers are planning in advance for cross-platform campaigns, rather than operating through trial and error and merely reacting. Once marketers recognize that they have to  leverage data and approach planning with a new appreciation for cross-channel impact, smoother spend is a natural consequence.

Compared to the same period in 20o13, Turn saw far less budget allocated at the end of traditional marketing quarters this year—advertisers are planning programmatic strategies in advance and are preparing better for seasonal patterns and variations in the marketplace.

It’s about time marketers approached their media buys more strategically, and thought more about how to execute programmatic campaigns for maximum audience effect across channels. More marketers are entering every channel, in every industry, leading to stiffer competition for available inventory. They are getting smarter about harnessing data and targeting spending to find customers across the media landscape. The degree of volatility still varies across channels, but Turn says mobile, social, and video are all converging toward the stable, consistently high level of competition that we’ve seen in the display market for some time now.

If you’re not already running a cross-channel integrated marketing campaign, leveraging audience data and your own customer data, you’ve lost your advantage in the programmatic market.