After content, context is now king. One of the reasons Facebook and Google advertising have captured so much of the digital ad market is that they, especially Google, are able to target ads according to keywords. AdSense and Facebook use different methodologies, but they’re both known for their precise targeting. They have glaring weaknesses, however, especially as more and more digital advertising is video.
With video ads it is still a major problem is that so many ads run without context, even though they may be closely “targeted” to a demographic or a geography. They still run without context, because we don’t quite have the tools yet –nor the will– to provide video context totally programmatically. Especially on YouTube there are many instances where we’re increasingly seeing pre-roll and mid-roll that has nothing to do with what the audience is actually wanting to see. This is not a plea for the old TV practices of selling sweetened cereal to youthful audiences, but a heads up to brands who care about “delighting” rather than alienating their customers.
A golden age is coming for contextual advertising, as a result of two things: 1) the realization on the part of brands that they’re threatened by Amazon and other services, and 2) the propensity of younger audiences to require corporations to reveal their values. To encourage brand loyalty, marketers will have to do what they should have been doing all along: buying travel ads on travel sites. sports ads on sports sites.
If you throw in the effects of GDPR, as a potential third motivator, we believe it is becoming increasingly important to brands to understand where their ads are appearing, as well as who the publications’s audience is. If I’m looking to fix my truck and I’m about to watch a video about suspension problems, I might be a millennial in the midwest and white, but ads for sports, hot dogs, or video games are merely an interruption. Let me just watch how this guy replaces his front suspension so I can do the same thing to my truck.
What if I could see an ad for the right car parts, for local mechanics, or even for new trucks? This is called contextual advertising, and back in the day when more ads were sold direct, as a media buyer I could be sure I was getting that kind of context. As an advertiser, that would give me much greater potential ROI. It would also fix that feeling most consumers have that they’d just as soon skip the irrelevant ad as soon as possible.
We’re making an appeal to the digital ad industry to think before buying and selling ads programmatically without context. One of the reasons consumers no longer tolerate advertising its its lack of relevance to the moment they are in. And that doesn’t have to be the case. With all the tools we have at our disposal — artificial intelligence, mounds of first party data, and great programmatic services, there’s no reason why we can’t do better. Both publishers and consumers deserve that.
We’ve grown fond of thinking that we need data, data, and more data to have ads that work. That data bias has driven the creativity right out of the industry, and with it the consumer’s tolerance for advertising in general. And yet, many ads used to succeed and even still do, without targeting customers through data mining. These are the ads consumers didn’t mind, and they’re the ones that will survive GDPR, Facebook, and all the other horror stories about digital advertising.
“Old school” ads worked by simply raising awareness. Many pharmaceutical ads still work this way. They are usually bought in mass media, which pretty much targets everyone. And the message is something like “if you suffer from X, ask your doctor about Y.” Some of them, like one prize-winning ad for Vytorin, a cholesterol-lowering drug, gave even more detailed information to tell viewers that high cholesterol was due partly to genetics and partly to what you eat. But it was still information.
Some travel ads also simply give information. “Vacation on the beach for only $599 a week.” An ad like this makes almost anyone aware that this advertiser is offering a sale or a good value on a beach vacation. Airlines and hotels often advertise this way during slow seasons.
Yet other ads try to persuade. Occasionally, the persuasion is pretty overt. But ads can also signal things about products and services without being overtly persuasive. For example, SuperBowl ads very seldom try to persuade game-watchers of anything. However, they signal that the company that buys an ad is financially able to afford it, and thus is more trustworthy than some upstart brand. Or, if the brand is buying an ad for the first time, the signal is that there’s a new disruptive company in town, taking over from the incumbents.
Another way ads can work without targeting is by making promises. “If you buy this product, you will look like/feel like/live like the person seen in the ad.” Some of the promises are explicit, like automobile ads that promise a 100,000 warranty, and some are implicit, like the promises made by anti-aging products or skin creams.
A good brand knows that when it makes a promise, it has to keep that promise, or the brand will lose its good reputation. When an airline says its flights are 99% on time, it had better be able to support that promise, or we will soon see the end of the brand’s primacy in the consumer’s mind.
The last way ads can work without data-driven targeting is through context: in other words, by being placed around content that aligns with the brand’s philosophy, the consumer’s interest, or the type of publication. The best example of this is New Yorker ads, which contain a preponderance of luxury items and items that appeal to intelligent, educated people. These are audience-based ads, and they are not designed for a specific customer, but rather for a specific audience.
We have long attempted to persuade the industry that all this data can cloud, rather than clarify, the goals of an advertising campaign, and we are happy to see the industry coming around to this. We can have a very healthy advertising industry without over-using consumer data and violating consumer privacy rights.
Gizmodo has a marvelous article on the smart home and its continuous information stream entitled “The House that Spied on Me, ” written by a woman who connected all the smart devices (including her bed) in her home to the internet and then had a colleague “spy” on her by reading the data.
There were a number of pretty astonishing revelations, including the fact that the house gave up data even when no one was home. And that the data, which was almost completely what we refer to comfortably as “metadata,” (meaning it isn’t really describable in total detail), could piece together a pretty accurate portrait of the home’s occupants. The writer, who after all writes for a gadget magazine and can’t be that much of a privacy freak still lands here :
Overall, my takeaway is that the smart home is going to create a new stream of information about our daily lives that will be used to further profile and target us. The number of devices alone that are detected chattering away will be used to determine our socioeconomic status. Our homes could become like internet browsers, with unique digital fingerprints, that will be mined for profit just like our daily Web surfing is. If you have a smart home, it’s open house on your data.
I wouldn’t call that a positive result for her experiment.
Because I own more than one connected device myself (in my home the robots talk to each other), I’m more interested in how this new datastream will be affected by the new General Data Protection Regulation soon to go into effect in Europe (and by extension in the US) in May. It seems there are two especially relevant portions of the regulation:
Consent must be clear and distinguishable from other matters and provided in an intelligible and easily accessible form, using clear and plain language. It must be as easy to withdraw consent as it is to give it.
And this paragraph, called The Right to be Forgotten
Also known as Data Erasure, the right to be forgotten entitles the data subject to have the data controller erase his/her personal data, cease further dissemination of the data, and potentially have third parties halt processing of the data. The conditions for erasure, as outlined in article 17, include the data no longer being relevant to original purposes for processing, or a data subjects withdrawing consent. It should also be noted that this right requires controllers to compare the subjects’ rights to “the public interest in the availability of the data” when considering such requests.
So this could potentially stop the data in your smart home from being used by publishers or advertisers for targeting and profiling. It also may mean that the value of many connected devices goes away. Although most of them don’t keep data more than two days, they sometimes have built into their business models the right to process and sell the data. If that goes away, along with it may go many smart devices.
We’re in the advertising/publisher support business, so we don’t handle or keep data. We don’t have a dog in this hunt. And we have long been active in data privacy and anti-fraud initiatives. But many people around us in the industry depend on data for either their success or their business models, and we see some changes ahead.
For the past six months, we’ve been writing about efforts to make the advertising industry better, which are tantamount to saving free content on the web. After all, if the industry continues to ignore consumers, they will simply turn off ads. Many efforts are focused on this direction, including several promising blockchain startups aiming and the media buying process.
But our current favorite initiative is one we’ve discussed back in September 2016, when the Coalition for Better Ads first launched. In the past year or so, the Coalition has developed a framework to “save” the industry on the format side.
In January 2018, the Coalition will begin rollout of the Better Ads Experience Program, a voluntary initiative for industry participants to improve the online ad experience for consumers and promote marketplace adoption of the Better Ad Standards. Based on a framework developed by the Coalition, the Better Ads Experience Program will certify web publishers that agree not to use the most disruptive ads identified in the Standards and will accredit browsers and advertising technology companies that will assess publishers’ compliance with the Standards and filter digital ads based on the Standards.
The Program will maintain a register of certified companies that will not have ads on their sites filtered based on the Standards by browsers and advertising technology companies that participate in the Program. If compliance issues arise, certified companies will be notified and have an opportunity to address violations or to pursue review by an independent dispute resolution mechanism available through the Program. Additional details about the program, including the registration process, fees, and other details, will be released in January for review by companies that are interested in participating.
The Better Ads Standards currently have been developed for the desktop and mobile web environments in Europe and North America. The Coalition’s extensive consumer research identified the following types of desktop ad experiences beneath the Better Ads Standard: pop-up ads, auto-play video ads with sound, prestitial ads with countdown and large sticky ads. For the mobile web environment, the following types of ad experiences fell beneath the Better Ads Standard: pop-up ads, prestitial ads, ads with density greater than 30%, flashing animated ads, auto-play video ads with sound, poststitial ads with countdown, full-screen scrollover ads, and large sticky ads.
We support every industry initiative we can that is focused on improving and professionalizing our industry. Ask us anything you need to know about our formats and their compliance, and we’ll be able to help you.
Ad blocking is not the end of the world for ad-supported digital content. In fact, it’s just forcing all of us to do better. It’s as if we received an industry-wide wakeup call while there was smoke but not yet an outright fire.
A combination of better ad formats and different KPIs for advertisers can save the current situation from getting worse, and can even repair the damage already done. ZEDO is always working on behalf of publisher partners to find ways to monetize and protect the viability of free digital content. We have representatives at the major industry groups, and a constant stream of input into industry developments.
For example, a recent Digiday webinar we attended on publishers and ad blockers shared the emerging best practices of premium publishers, which are really all over the place as they struggle to keep ahead of industry changes. These publishers make frequent changes and perform lots of A/B testing to find out how to respond to consumer demand.
There is general agreement that asking consumers to turn off ad blockers only works a small percentage of the time. And charging for content only works in the case of very high value financial information.
But here is the good news: several publishers have simply used a technology to turn ads on for consumers who have installed ad blockers, and their page views have not gone down. They only turn on a small number of ads, and they’re careful how the place the ads and they try to serve ads that are truly engaging. This has told them that consumers often install ad blockers and forget they’ve done it, and don’t mind when the ads return. As long as the ads are not overwhelming. Further research has demonstrated that when people install ad blockers they do it to avoid tracking and slow page load times rather than to avoid ads per se.
We think that programmatic came in too quickly, making it too easy for publishers to stuff their sites with ads that cheapened the user experience. And users, who couldn’t get through a slow-loading site loaded with ads, bailed in droves, either by not visiting the site again or by installing ad blockers or both.
This is easy to fix. Don’t measure the old outdated stuff: how many ads served, how many ads seen. Measure engagement, which may be more difficult, but will ultimately produce the right rewards. We know we’ve ruined display advertising, so let’s not overuse video either. And let’s not think that all digital advertising is for direct sales; let’s make sure our sites are places where advertisers can place a brand ad and receive value. A smaller number of ads in engaging formats, strategically placed and served to the right customers, can co-exist quite nicely with ad blockers.
For ZEDO, 2016 was the year the ZINCbyZEDO Innovations Suite of video formats pulled out to lead the market in both completion rates and viewability. It was also the year we became known for our ability to outperform much bigger competitors, even those who offered customer incentives we didn’t match. At the end of the day, results count, and in head-to-head trials, we almost always emerged the winner. You can imagine how excited we are about 2017.
While ZEDO has long been known as one of the largest independent ad servers, ZINC is a relative newcomer to the scene. ZINC is a division of ZEDO that we launched three years ago for the express purpose of providing a secure, end-to-end platform for both advertisers and publishers to combat the obvious problems associated with programmatic buying: lack of viewability, downright fraud, and malware.
ZINC’s first attempt to penetrate the market came with the Inview Slider, a tasteful display ad that only appeared when a viewed scrolled down the page. It was very well received, but we knew we had to keep innovating, and last year, we were first to market with the inArticle video format, which we developed before out-stream was a “thing.” In fact, we called it “InArticle” because we felt that best described where it appeared and there was no other category. We think we actually invented this category.
And then a Nielsen Study found that when ads are viewed in an outstream format rather than as pre-roll, even skippable pre-roll, purchase intent is increased by 50% for the advertised product. Most important, outstream increases purchase intent by 74% among those critical millennials. Outstream also produces 60% brand recommendation on the part of millennials. This format overtook most other attempts to provide video advertising, because 44% of millennials felt it fit naturally with other content and made ads more likable.
Our own experience proved that outstream could be good for both brands and publishers, and it quickly caught on. Soon we were in a very competitive landscape, in which other companies also sold outstream. But ZINC’s outstream ads showed their advantage over competitors. We saw 70% completion rates, very high for the industry, and certainly higher than the 8-12% for skippable pre-roll.
We also delivered scale, because we have 18,000 publishers in our network. We delivered 109 million monthly uniques and 80 billion monthly impressions, even after we spent most of the year purging our network of publishers we felt were not brand safe or appropriately premium. Our CTRS were among the highest in the industry, between 1.25 and 1.3%.
Half way through the year, we launched a mobile FLIP ad unit, and three variations of a SWIPE up format. And we introduced a self-service platform.
However, one of the things we are most proud of is that we made the Online Trust Alliance’s Honor Roll for the fifth year in a row, having demonstrated that our policies with respect to privacy, data security, and native ad serving were aligned with the highest standards in our industry.
Bring on 2017!
In Europe, Germany is known as the country with the strictest privacy concerns. So it is no surprise that a Dusseldorf-based industry association has come up with a code of conduct for marketers, publishers, DSPs, SSPs, and data providers that will bring some transparency to the programmatic market..
The Bundesverband Digitale Wirtschaft (BVDW) eV is a leading German advocacy group for companies with digital business models, or who are part of the digital value chain. Anchored by member companies from various segments of the Internet industry, it can provide a holistic view of the German digital economy and act as a spokesperson for the market. It’s a source of important information, facts and data for both those in the industry and those wishing to learn about it.
BVDW is committed to making the efficiency and benefits of digital services – content, services and technologies – transparent and thus promoting their use in the overall economy, society and administration. Using the pillars of market development, market intelligence and market regulation, BVDW bundles leading digital know-how to help shape a positive development of what is now considered a leading growth sector in the German economy. However, as a central body of the digital economy, the organization also provides standards and binding guidelines for industry players for market transparency.
Over forty companies, including Adform, Appnexus, DataXu, Mediamath and Teads have signed the new agreement. Companies that are not members of the organization can also sign, and signing companies are required to adhere to the code of conduct.
Companies that call themselves full stack providers will also be required to adhere to the standards, which stress transparency, safety and quality.
The aim of BVDW’s standards effort is to make programmatic more efficient and useful to German marketers and publishers by creating a controlled system. Germany is probably hoping to avoid the problems that surfaced in the US, which deployed programmatic advertising without sufficient transparency, and caused many marketers problems, such as discovering their brands displayed in non brand-safe environments. Other issues like scanty metrics for determining ROI caused online advertising prices for programmatic to remain low years after they should have risen consistent with the number of consumers moving online.
We suspect that the focus group that created the code of conduct will have to continue studying the more complicated issues involved in programmatic, such as header bidding and programmatic TV:
The code of conduct is a first step to provide new impetus for the development of programmatic in Germany, says Julian Simons, deputy chairman of the BVDW’s focus group on programmatic advertising: “In a highly dynamic area such as programmatic, we cannot just establish rules within the market and then sit back. This continues to be a process of development, which will take current developments into account.”
One large looming problem is the absence of both Facebook and Google, said to control 75% of global ad spend, as signatories to the compact.
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.
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.