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.

 

 

 

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. Gawker.com 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.”

DMA Calls Ad Blockers Bad Choice for Consumers

The Direct Marketing Association has called ad blockers a bad consumer choice, based on the learnings it gleaned from the beginning of email marketing. DMA has now begun to offer advice to the media industry based on those experiences. In the early days of direct marketing, mistakes were made, leading to the passage of the CAN-SPAM act of 2003, the first set of regulations for the use of commercial email. This law establishes the rules for commercial email and commercial messages, gives recipients the right to have a business stop emailing them, and outlines the penalties incurred for those who violate the law.

Consumers now feel about digital advertising the way they felt about unwanted email (CAN-SPAM stands for Controlling the Assault of Non-Solicited Pornography And Marketing), and have begun letting marketers know in such large numbers that the government might feel it has to step in.

But that doesn’t make blocking ads the best answer.Comparing ad blocking in 2016 to the email industry before 2003, Neil O’Keefe, SVP of CRM and Customer Engagement for the DMA told Bloomberg TV viewers that adblocking was a significant problem, because the only entity that really benefited from it was the maker of the ad blocking software. He went on to say that it disconnects brands from consumers, and creates problems for the entire marketplace.Marketers need two-way communication with customers in order to inform product development. And customers need their end of the conversation in order to have choice about which brands they want to hear from. With ad blocking they no longer hear about the best new products and about optimum pricing.

O’Keefe believes that ad blocking is a call to arms to deliver better ads. Like the DMA, which tightened its own self-regulation and education programs and actually created an environment where consumers today often prefer email to display ads, he says we have to fight ad blocking with quality ads that are relevant to customers. That is the best consumer choice.

Two other industry leaders came out over the past two weeks with very insightful comments regarding the state of online marketing:

GroupM announced it wouldn’t pay for ads that are re-inserted, declaring “It’s addressing the symptom, not the cause. Let’s fix the user experience first.”
And Sir Martin Sorrell of WPP points out that we haven’t adapted to the smaller screen, but still cautions that there is a price for the consumer to pay for ad blocking: the higher cost of content.

As with every move forward in our industry, the technological changes continue to come with much discussion before settling out into industry best practices.

Ad Blockers Also Block Useful Consumer Information

Here’s a new twist on the issue of ad blockers: they not only break the internet, but they break web sites as well. A study conducted by ad tech firm Oriel on how twenty-four common ad blockers, including UBlock, AdBlock, and AdBlockPlus found that the tools not only blocked popup ads, but were also accidentally corrupting useful parts of a website, such as retail order tracking pages or airline check-in screens. Many users install the ad blockers, and then forget they’ve done it, only to find out that information they really want to receive is missing from their screens.

Oriel tested 100 popular sites in the UK, including British Airways and Vodafone, Ryan Air, Land Rover and P&G.  A visitor to those sites who was running an ad blocker would not know what was wrong; she would only see an error message. This study will create greater consternation in the world of not only publishers, but also e-commerce sites.

It’s more complicated even than what we’ve just discussed, because Oriel tested only downloaded ad blockers. But they’re not the only way users can block ads. They can also use a browser like Opera or Brave, which have native ad blocking capabilities, or if they are really anxious to block ads. According to Oriel,

Mobile operator Three is even looking at blocking adverts at a network level, that is even before they reach mobile devices. It might seem convenient, but below the surface is a very shady, and serious issue – it is interfering, changing and potentially censoring web content and like a “man in the middle attack” the true nature of what the publisher intended to deliver to their website audience is therefore compromised.

British culture secretary John Whittingale likens this to a modern-day protection racket, in which the publishers who can afford it pay to have their sites whitelisted. In a speech at the Oxford Media Conference, Whittingale offered support to both publishers and people in the music industry.

Stopping short of announcing an outright ban on adblocking, he said he “shared the concern” of the newspaper industry about the impact of the technology and would “consider what role there is for government” after hearing all sides of the argument.

No, we haven’t forgotten the fact that Oriel has a dog in this hunt, since it markets a service that allows you to communicate with sites that block ads and assure that the advertiser’s message gets through. In a sense, it’s a blocker of ad blockers. But we think this is a good discussion to raise, and the fact that people like BA and P&G are involved, and that what’s affected are not just ads will cause the ad block sector to re-think how it is doing business and give the publishers and content providers stronger legs to stand on in battling ad blocking.

 

 

Agencies Forced by Trends to Seek New Models

June was not  the most fortuitous month for advertising agencies. Not only did the Association of National Advertisers’ report on business transparency issues in our media buying ecosystem come out, tagging most of the big players with  borderline unethical if not illegal practices like kickbacks, but Kevin Kelly’s new book “The Inevitable,”  published on June 9, talks about getting rid of advertising agencies altogether and having marketers just pay influencers to promote their products, cutting out both agencies and publishers.

You will need to know the reasoning behind that position.

First, who is Kevin Kelly? Kelly is a very well-known and respected tech thinker, one of the founders of Wired magazine.  In this latest book he talks about a dozen trends  that we should embrace rather then resist, because they are going to be very important in the next couple of decades. Of course there are the usual suspects like artificial intelligence and robots, But Kelly also talks about changes in intellectual property rights since the dawn of the Internet. He characterizes the Internet as a gigantic copying machine capable  and laughs at our thinking we could impose digital rights management on intellectual property  online.

He also talks about the incredible proliferation of content spawned by the Internet, and the fact that the most valuable commodity today isn’t content  — it’s attention from consumers who are confronted by an almost overwhelming variety of it. So why should we have to pay for it ?

Kelly suggests that in a future of limitless content the advertising model may well be flipped on its head, and consumers would be paid directly to watch ads and try products without agencies as intermediaries. Or, in another variation, publishers would choose the ads on their pages and could even craft a publication just by stringing together really cool ads:

The simple idea is that you can craft a publication, or a reading/viewing experience, primarily by choosing and sequencing ads. Selecting the right cool ads — not merely cool content — is the attraction. Not just tiny adsense text ad boxes, but full page ads, or even commercials inside widgets. When I was part of the team making Wired magazine a decade ago, half the battle at launch was landing the right cool ads. We had to convince the advertisers to join (and pay) us. But what if we could just choose the cool ads we wanted, without having to ask permission? What if we could simply harvest the the best ads (measured by any metric we choose) and were paid for the ones we ran according to the traffic we brought to them?

In either of these new models, advertisers would not control where their ads appeared and thus the role of the traditional agency would be over.

Mobile Video Ads Play Without Sound

At first, publishers were excited about auto-play video, and video ads also played with the volume turned up.  But we quickly found out the audiences did not want volume on in their offices, so we developed our inArticle (a.k.a. outstream) format to run without sound. As usual, everyone is now following our lead. A new study has revealed that 85% of video content runs without sound, especially if it is on Facebook. Even the ads. Facebook hosts up to 8 billion video views daily, and most of them are without sound. It’s as if we were returning to the era of silent, captiond movies.

We’re curious about the future of mobile video ads in this environment. At present, they command high CPMs from advertisers, but the ROI hasn’t bee determined yet. According to an eMarketer study, the pace of mobile video advertising will double by 2019. However, publishers and platforms are making what eMarketer calls “egregious errors” that turn off watchers.

Advertisers are guilty of the most obvious video errors, but publishers and platform providers sometimes share the blame. Among the more egregious offenses are serving the same video pre-roll multiple times during a content series, forcing long-form ads ahead of short-form videos, reusing video spots without regard to screen aspect ratios, and autoplaying—with audio!—without the user’s permission.

Almost any advertiser worth their salt knows that these lackluster experiences won’t deliver the desired results. And yet bad user experience is, if not the rule, certainly more than mere exception.

This is exceptionally true with Facebook, which now shares with Google as much as 80% of mobile ad spend.

Tailoring content to the whims of the Facebook news feed has helped publishers scale on the platform. It’s also turned news feeds stale as publishers put up countless videos that have the same look and feel. Take, for instance, this NowThis video about a Tylenol ingredient that makes people less empathetic and this Tech Insider video about a futuristic bike. While they focus on completely different topics, the key ingredients are the same: a striking visual or message up front followed by a text-heavy explanation of the content.

One thing that does work well on Facebook is branded content, even if it is silent. So at the moment, brands are flocking to that way to get their messages out. Another word for branded content, although often abused, is “native” advertising. And our Innovative Formats work well for that. We  just hope advertisers stick to a high quality standard for their branded content, so that it, too, doesn’t alientate customers.

Time to Think Context, Not Reach

The digital advertising business is in a state of chaos and turmoil. Twenty years ago, the first display ads produced high click through rates (CTRs) and plenty of subsequent conversions–enough for them to be called performance ads. But over the decades, consumers have developed “banner blindness,” and publishers have seen a race of revenues to the bottom.

Advertisers, who pay the bills, have seen a lower ROI on campaigns, which has forced them to buy more ads, and has forced publishers to load their sites with boxes, banners and takeovers. Page load times slowed, and a dash of fraud and malware completed a disturbing picture.

And then came mobile.  With mobile, consumers had the opportunity to turn off ads in large numbers, because the ad blocking software early adopters had already downloaded was automatically included  for the average Joe in Apple’s latest mobile operating system.

Angry consumers who had been targeted and re-targeted turned off ads altogether.

The industry badly needs a savior. That savior will have to offer narrower targeting and more context for consumers, so they only see ads they want. It will change the way media planners buy media. They should no longer buy for “reach,” but for relevance.

The stakeholders in the current ecosystem are the agencies, retailers, and brands on the demand side (the advertisers), publishers, social networks, and apps where those consumers are already spending time, and the coveted object, the purchaser.  With mobile, locating consumers is easy: there are a small number of apps that consumers use for search, including Amazon, Facebook, Google, Yelp and they’ve largely aggregated the buyers.  Companies like RetailMeNot and PocketMath, which deliver mobile coupons, need to find those consumers only while they are shopping. Context is everything.

It would be helpful if every product in every store in the community were geotagged, and if you wanted to buy a Diet Coke you’d only see an ad for the places near you offering Diet Coke. You wouldn’t get ads for stores not in your geography, nor for products that were not Diet Coke. This would enable Real Time Bidding (RTB) platforms to deliver a truly contextual experience. This has been what’s been wrong with RTB platforms  up to now; they’re delivering without context.

Most research says people don’t consider ads for products they’re actually shopping for bad. Rather, they are perceived as information or content. How many times have YOU typed “gas station near me” or “Chinese food near me” into your phone? The ads and listings that come up are perceived as information. All too often, advertisers impatient for reach have made media buys too broad in their targeting. The advertisers need better data. And so do the publishers.

Mobile advertising is a rapidly growing data thirsty industry, and consumers are dissatisfied because the targeting is too broad and without context. In mobile, reaching a large number of people is less important than reaching the single right person at the right time — which is when they’re actually looking for something.

 

 

Verified by TAG Gains Momentum

If you’ve been in the ad tech industry, you know that until a couple of years ago, although many people knew the industry contained fraud, nobody was really incentivized to do anything about it. And then, suddenly, the lights came on for the advertisers, who realized they were footing the bill for some of these fraudulent ads, and for the consumers, who realized that they were paying for ad fraud in malware and data costs. Now, with the new Verified by Tag initiative, ad fraud is at the top of everyone’s list of things to erase.

A survey conducted by E&Y for IAB revealed that in the $52b ad industry, $8.2 billion can be saved each year if the digital advertising industry worked together to eradicate corruption across the supply chain. Invalid and fraudulent traffic takes $4.6 billion out, internet piracy takes $2.5 billion, and malvertising takes $1.1 billion. Thus, every responsible company has a role to play in combatting fraud.

Last year, IAB created the Trustworthy Accountability Group (TAG). TAG is creating a meaningful seal of approval system for the digital ad ecosystem; it wants to be the leading organization promoting transparency. Because it was formed at precisely the right time, TAG has a fancy board composed of all the big players, from the Association of National Advertisers to  Mondelez to Facebook.

We’ve been working on the business transparency committee, which is developing the registration and payment ID procedures. We have also been working on incorporating the new Inventory Quality Guidelines. At present, companies can still self-attest about their inventory quality, but that’s going to change in the future, with independent audits replacing self-attestation. We want to be ready.

The TAG registry is a closed system of supply chain participants that demonstrate a commitment to higher standards of transparency. It’s called “Verified by TAG.”   “Verified by TAG” is the gateway to all of TAG’s other certifications, tools, and working groups.

We sent our Compliance Officer through a training program at which she was shown how to create a “Description of Methodology” for what processes, procedures, and controls we have in place to assure that our inventory is clean when it enters our platform, and the transaction between buyer, seller, and any intermediary who might be involved, is completely transparent.

We’re excited that the industry has finally come to recognize the importance of good business practices, even though this will entail a lot of work for our team as we increase the sophistication of our detection and reporting tools.