Ars Technica Defeats Ad Blockers

Ars Technica has some of the best tech writers in the industry. Founded seventeen years ago, it is serious in its reporting and reviews, and it has a serious audience of tech nerds who differentiate it from publications like Tech Crunch or Mashable, which focus on culture and lifestyle tech. So of course Ars also has the audience that knows the most about ad blockers, which is why it is the most experienced at dealing with people who don’t want to see ads.

Ars Technica has been dealing with ad blockers for much of its existence, But now it is owned by Conde Nast (since 2008), and as part of a large media empire, the site has had to figure out a strategy to keep its 6.3 million readers and still make money. The “suits” at Ars chose to deploy a mixed method, which is what we think most publishers are going to have to do. And according to Digiday,  the strategy cut the use of ad blockers from 40% to 25%, which the site finds acceptable (or at least realistic).

First, they concentrated on fast page load times, paying attention to which ads slowed their page loads and making alterations and adaptations accordingly. Second, they’ve cut out intrusive ads, like page takeovers. Except their own: Ars Technica shows a pop-up for people with ad blockers asking them to whitelist the site. It’s a “we’re in this together, and surely you didn’t mean to block US,” type of strategy.

Ken Fischer, who founded the site and still serves as editor-in-chief and CEO, says he has built 25% use of ad blockers among his audience into his business model.

“It won’t get any lower than 20-25 percent for us, because we have a lot of CTOs, CIOs of companies that install business script blockers, so there’s corporate-level ad blocking. It doesn’t really worry us at all,” said Fisher.

We think that’s what all publishers are going to have to expect. There are a number of people who, no matter what incentive you offer, will never turn off their ad blocking software, and rather than freaking out, it would be best if the entire digital media industry built consumer preferences into business models and balanced costs with revenue to safeguard survival.

 

How to Increase Ad Effectiveness: Start with the RFP

The most contentious part of programmatic advertising since its inception has been who controls it. As a traditional publisher ad server we had to deal with that early on. Our publishers exposed their inventory, and advertisers bid on it. Our job was to get the publishers the highest CTRs. That’s what advertisers said they wanted — clicks.

But advertisers weren’t getting the results they wanted, and at the same time publishers were fighting falling ad prices, so about a year ago advertisers took control, telling the publishers they wanted “first look,” and demanding it. Since advertisers pay the bills, this made a good deal of sense. Why shouldn’t the advertiser decide who they want to reach and ask for that inventory from the publisher, rather than buying a package determined by a publisher API?

That was the end of programmatic, and the beginning of something called header bidding, which is jargon for a “sneak peek” at the publishers’ inventory. Now header bidding seems to have taken over from programmatic direct, which can be seen as only a first step in giving brands more control over what they buy. Brands now want to buy engagement and brand equity, It’s supposedly a different world.

But the metrics still aren’t there to measure what brands say they want.  We’re moving from a world in which digital advertising focused on direct response to one in which we focus on brand recognition and awareness. That’s what all the RFPs say. Yet what is measured? Metrics and clicks.  Even viewability, the newer standard, doesn’t get close to measuring whether an ad is effective for building brand. Until the brands change what they want to measure, the publishers are stuck meeting irrelevant KPIs that are more suitable for performance advertising than building brand equity.

How can we fix this?

First, advertisers who pay the bills must decide what their brand goals truly are and make those clear in the RFP:

What audience do I want to reach?

Am I reaching it at the right time and in the right place?

Am I telling a good story?

Then they should measure according to KPIs like these:

Did my story elicit a positive response and good engagement?

Did it help the consumer make the right buying decision?

If this were what brands were truly measuring, publishers could then align their inventory and packaging to these goals and forget about impressions and CTRs. Viewability would, of course, still be critical, but other metrics, like video completion rates, time spent on a page, or even demographics might influence whether a publisher felt a campaign fulfilled the advertisers’ goals.

Right now, advertisers are still sending out RFPs that drive publishers in the wrong directions, and then wondering why sites are full of “clickbait” headlines and crummy content designed to attract impressions and irritate visitors.

 

 

 

The Strengths and Limitations of Programmatic

There’s a tendency lately to overrate what the garden variety of  programmatic can do. Indeed, as more and more of the market moves to programmatic trading, we sometimes forget that the highest and best use of programmatic isn’t to attract new customers; it is still for retargeting. Retargeting works.

There are now several forms of retargeting that have evolved over the years.  The first to emerge was search retargeting, which served appropriate ads to consumers who searched on certain keywords. The problem with that? We didn’t get enough scale. Too few users searched for your product.

Similarly, demographic retargeting  has its limitations, as consumers already know. It is best used to retarget existing customers or visitors, and sometimes serves an ad for a product a customer has just purchased. The severest limitation of retargeting — just like search retargeting — is for the development of new customers. Here, a different kind of data is required, and that often comes from the publisher. For customer acquisition and brand building, targeting actual websites with high quality users visiting them is still the best solution. The best targeting for expanding your customer base is still site targeting.

Thus actual site targeting, with ads served while the consumer is on a relevant website or a relevant section of a website, will work best. It works better than data to find the type of users that would visit a relevant site. As an example, if you are interested in a traveller it makes more sense to advertise on the travel section of a newspaper site than to choose the traveller category in a DSP. The DSP is using data to guess that the user is interested in travel. However targeting the travel section of the site removes the guesswork – we know the user is reading about travel. And further the user’s mind is on travel right at the point that he sees the ad. So site targeting works better – though it costs more and is difficult to find.

And that is why with our ZINC platform for media buyers we offer transparent and highly accurate  targeting of websites and sections of websites.  That really works well. Many can’t get hold of this inventory so will say that a DSP’s travel category is better and cheaper- but it isn’t better, just cheaper. ZINC’s transparent list of travel sites and travel sections will work far better – though it costs more it is worth it.

Mobile Advertising Makes Context Supremely Important

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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.

Should You Outsource Your Ad Ops?

Advertising Operations (aka Ad Ops) is critical to both the buy- and sell-side of digital media. A well-oiled Ad Ops team with technical expertise and the ability to turn  campaigns around quickly helps an organization run seamless operations and in turn achieve revenue goals.

Over the years, Ad Operations has evolved from being a highly technical task to a more process-driven activity requiring diligence and meticulousness as its most important skills. This of course has been driven by the simplified UI’s and workflows of most of the Ad Servers used today (barring a few, I should say).

Managing an Ad Ops team however, presents its  own challenges. From ever-increasing costs to employee retention, many issues grab the time and attention of upper management. Some of these challenges though can be mitigated by outsourcing your Ad Operations activities.

Although there are many advantages to outsourcing Ad Ops, there are a few important ones. The most important of these is cost effectiveness; it’s usually less expensive to outsource. Based on the Ad Monsters Salary survey for 2013, an organization can save up to 50% in salaries when it outsources a regular Ad Trafficker position. Savings can be greater if you include the “burden” — almost a third more than the salary for benefits, management costs, infrastructure and other miscellaneous expenses. In addition, a typical outsourcing partner would not charge you for resources during the training period, which means you will receive a productive resource from day one.

But in addition to cost, there’s the matter of technical expertise.   Yes, this may sound a bit odd, but in my experience of managing outsourced Ad Operations over the past seven years,  I ‘ve noticed that certain outsourcing partners can provide excellent technical resources with experience on multiple Ad servers, and in many different environments. This is especially true if you select an ad tech company rather than a business process outsourcing company as your outsourcing partner. Ad tech companies have the advantage of having both technology and services expertise in-house, and  the experience of working with multiple clients and ad servers adds to the expertise.

Next is quality assurance. With the advantages of technical expertise and optimized processes on their side, outsourcing partners are armed to provide excellent quality. Processes are well defined, documented and followed, which ensures that errors are nearly eliminated.

Last, but certainly not least, is coverage. Websites run 24×7,  and so do users who come to the websites, so advertising also needs to be monitored 24×7. If your operations are large enough and requirements justified, outsourcing partners usually have the ability to provide 24×7 operations. They also provide coverage during national holidays or backups for leaves and vacations, which ensures seamless coverage.

The Economist: a Case Study

The Economist: A Case Study for a Hybrid Ad Operations Model
Outsourcing your ad operations is not a new concept, but even companies that want to use it are still trying to figure it out so that it works for them. A hybrid model may work best.
“ZEDO has delivered much better quality of service as well as improved turnaround time in comparison with the previous vendor.”

The problem:

How to outsource your ad operations for optimum revenue. In a global market, slow processing of requests and faulty implementation (blank pages or broken pages served), cost The Economist an estimated $250,000 in revenue annually — an unacceptable situation.

The solution:

The Economist has always outsourced its ad operations. But after three unsuccessful tries at total outsourcing, the well-respected financial news and analysis site has finally settled on a hybrid model as the one they are most comfortable with. Before settling on that model, the magazine used  total outsourcing, but found that to be flawed because all transactions flowed up to a single manager in the outsourcing vendor. In a global operation, where transactions are done on a 24/7 basis in many time zones, if that manager was unavailable (let’s say asleep), the result as an expensive single point of failure.

In the case of The Economist,  slow processing of requests and faulty implementation (blank pages or broken pages served), cost them an estimated $250,000 in revenue annually — an unacceptable situation.

Thus, the magazine chose a hybrid model with ZEDO. This choice keeps the strategic work in house and outsources the tactical implementation with SLAs and reporting requirements to show effectiveness. The expectations were laid out in advance, the SLAs agreed on, and implementation has gone flawlessly. Since ZEDO, The Economist hasn’t lost any money and trafficking errors have been caught internally because of a proactive relationship and good communication.

Details of the model include traffickers in all important time zones. It includes a combination of in-house onshore and outsourced offshore resources. Of the 8 member global ad operations team, five are internal and three external

  • A Director of Ad Operations is based in London – The Economist
  • Two Ad Operations managers –  (one in NYC and one in London) The Economist
  • Two Onshore trafficker – 2 Nos. (one in NYC and one in London) The Economist
  • Three Offshore traffickers from ZEDO –  (work as per time zones in their respective markets – BST (UK and Continental Europe), EST (North America) and HK (for APAC) time.

Operations began in October of last year, and so far  the feedback from their Sales teams across all markets has been extremely positive. Their view:  “ZEDO has delivered much better quality of service as well as improved turnaround time in comparison with the previous vendor.”

Summary:

  • ZEDO’s accuracy percentage over a nine month period has been 99.3%. This is a significant improvement in comparison to the previous vendor. By our estimate, our improved accuracy is likely to have saved The Economist more than a quarter million dollars in revenue  compared to the previous year.
  • ZEDO has processed 100% of P1 requests (P1 are high priority requests) have within 3 hours through 2013.
  • Significant process improvements have been made in terms of delivery of screenshots and advanced performance / delivery reports
  • Quarterly review meetings have been held in order to seek constant feedback and process improvement opportunities.
  • The Economist and ZEDO work as partners and not in a typical client – vendor relationship.
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How RTB Fits in a Brand Strategy

Online media is growing up. Once thought only appropriate for performance advertising, it has now entered many media plans much earlier in the marketing funnel—at the stage of building the brand.
This has made media planning more complex, especially as real time bidding now constitutes almost 40% of ad sales. How does a media planner buy both brand advertising and performance advertising in a real time environment?
You can only do it by viewing the marketing process through the eyes of the CMO, who sees her desired outcome as a somewhat linear progression from the creation of awareness to the creation of demand, and finally to the actual sales. CMOs are on a journey to measurability, and not just in terms of direct sales. They’re getting clearer on their objectives and thus clearer about what works and what doesn’t at every stage.
the relationship between advertising meant to produce brand lift and direct response advertising, which produces immediate conversions, is sometimes difficult to see. RTB allows measurement, course correction and elimination of wastage, but one brand’s wastage may be another brand’s long term vision (as in the example of advertising car brands to children, which is known to create future customers). Every media planner has a unique need–what’s right for an individual brand.
It takes a lot longer to build a brand than to make a sale, and thus advertising budgets should be 60% branding and 40% harvesting the demand created by the branding. Creating demand may be less efficient than direct response but paves the way for it. If you want to think in terms of efficiency, think of branding as creating efficient ways to harvest demand,
In the RTB world, it is too easy to give the entire marketing strategy over to real time bidding and big data and then wonder what happened when we don’t get  conversions. Many things can happen: the targeting can be off, the message wrong, or the data faulty. Big data is not a substitute for the essentials of good advertising, it’s a check and a balance. And real time bidding isn’t a panacea, it’s a way of automating a process that was becoming more and more arduous as sites proliferated and brands went global.
We believe data from RTB should be used to inform brand strategy, which can then be executed either through programmatic channels or direct buys. There isn’t yet an algorithm for the relationship between a buyer and seller who understand each other’s needs.
That’s why we tell our publisher partners to reserve special inventory for our private exchange platform, ZINC, or to sell our high impact formats through direct sales channels. It’s also necessary for publishers in this environment to gather and interpret their own data in order to support their value proposition.
At some point in the near future, we believe big data will be recognized as a support and RTB as a workflow tool, instead of the misunderstood  buzzwords they are today. When that happens, brand and performance advertising will converge in the RTB process

Programmatic and Real Time Bidding Are Not the Same

If the recent IAB Leadership Meeting is any indication, online publishers appear to be moving full speed ahead into Real Time Bidding. The problem  is that they sometimes can’t predict how much they will get for their ads, and they are fearful that display advertising is falling victim to the negative side of economies of scale. They don’t seem to understand that there can be a difference between programmatic buying and Real Time Bidding (RTM). You don’t have to create a race to the bottom when you automate your buying and selling.

Programmatic buying is a work flow solution that automates the process involved in buying ads. It’s like computerized trading on Wall Street; an algorithm can look for available inventory against a set of specific parameters, and it can buy many ads quickly on a global scale. Programmatic buying in and of itself does not drive CPMs down. If publishers declare their inventory as premium, and have the chops to prove it, such as high impact formats or viewable impressions, programmatic buying can even boost CPMs because it enables buyers to find the right sellers.

So far so good. But then Real Time Bidding (RTB) enters the room. RTB adds an auction marketplace to the programmatic buying. If you deliver all your inventory to RTB, you can expect to see your CPMs go down, because advertisers still see RTB markets as a bucket for remnant. Thus, it’s to a publisher’s advantage to withhold part of the inventory — the best part — and sell it directly.

Which does not mean you can’t sell it programmatically. You can — through a direct pipe between ad agency and publisher. A direct pipe is like a private exchange between a single agency or media buyer and several premium publishers. As a publisher, you are better off keeping your premium inventory off the RTB marketplace and thereby creating a scarcity. That drives up your prices.

SO as a publisher, your goal shifts from getting rid of all your inventory by dumping it on the RTB market to delineating percentage of that inventory as premium and selling it as high impact, non-traditional display, using the new viewability metrics as a rationale.

How to Ease Your Ad Operations Pain

As we travel around the world launching the new InView ad formats at conferences from Washington DC to San Francisco and Sydney to Singapore, we hear many of the same complaints from our publisher customers and prospects: it’s really difficult to handle ad operations.

First, most of them have staffing headaches. It’s difficult for them to find qualified resources, to train them internally, and then to retain the best performers for a sustained time period.  Because the industry is young, many of the people they already had on staff aren’t really comfortable or familiar with new ad tech offerings.

More problematic is the inefficient team structure that comes from the unpredictable nature of  the ad operations workload.  Most companies find themselves either over-staffed or under-staffed, and we hear this from the largest and the smallest publishers we service. And even from those we don’t service yet.

Once again, because of the nascency of the industry, most publishers lack specialized ad ops workflow and processes. Sales people are constantly looking for execution status, inventory availability or someone with the ability to troubleshoot if something goes wrong; often, they can’t get that in a timely manner.

And ad operations is predominantly a facilitator, not a net revenue generator for the business, so, management usually categorizes it as a cost center rather than value addition, and is reluctant to spend scarce resources on improving it, and that leads to the lack of extended coverage and service : what do you do when you need your ad ops team at 6pm on a Friday evening?

At worst, there’s a lack of accountability, even though errors made in the Ad Operations execution cost the company actual dollars that no one wants to lose. Ad Operations need to to be accountable for the quality and efficiency of its work, and that’s difficult to achieve if you are short-staffed or experiencing constant churn. The nightmare of every ad ops director is the launch of a new product, which is only slightly more painful than the vagaries of increased workload during the holiday season, unexpected turnover, or someone on staff who gets married or takes a long vacation.

We started to see this a long time ago, and developed a suite of outsourced ad ops services that can take all this off the backs of our customers. Some of the benefits they see include

– Decreased cost structure

– Increased coverage and service

– Increased accountability

– Decreased staff headaches (no retention problems)

– Increased Scalability and efficiency

As online advertising becomes a larger and larger portion of a publisher’s revenue, and as it moves to more sophisticated formats on multiple platforms, outsourcing ad ops to someone like us who is staffed to handle it sounds better and better to the people we know.

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New Ad Technologies Work Connect Readers to Advertisers

Every once in a while, it’s good to be reminded that the goal of a newspaper, although it may seem to be just delivering news to readers, is also to deliver readers to advertisers. Traditionally, content in newspapers has been subsidized by ad revenue, and for the past decade the way advertisers connect to their readers has been shifting — first from print to online, and now from search to display, and from “one price fits all” to real time auctions.

One of the newest trends, the rise of Real Time Bidding (RTB) in which inventory from publishers is sold by auction in real time, has begun to change how readers are delivered.

A user heads to a page on a publisher’s website, causing it to start loading. In the same instant the publisher sends out a ‘bid request’ to thousands of potential advertisers saying, “We’ve got this user who is 30, male and based in New Jersey, US, and in the past has searched for return air tickets to London, visiting a page on our site. How much are you willing to bid for being the only ad on this page?”

Within about 100 milliseconds the publisher ad server (like ZEDO) gets bids from different advertisers, which it then analyses to figure out the highest bidder. The winner is alerted by the publisher and allowed to place its ad on the page.

The remarkable thing about this entire process is how fast and how often it takes place. The entire series of to-and-fro communication between publisher and advertisers takes place in 300-500 milliseconds, causing no visible delay to the user.

The process is repeated for every ad on the page, and it connects the “right” reader with the “right” (targeted) ad.

In the US, IDC estimates that real time advertising will grow at a compounded rate of 71 per cent in the US until 2015 and end up being 27 per cent of the overall online ad spending. In Europe, growth is expected to be even faster — above 100% annually.

The prices that publishers receive from these auctions are not yet very exciting. But they will grow. The gating factor is how willing publishers are to spend on new technology. We think the publishers will realize that there’s more to online advertising than the old standard 3 ad sizes, and will begin to monetize their sites with innovative formats like our InView Formats, TVAds OnPage, and other eye-catchers. That inventory is more effective and in short supply. Therefore the auction will generate higher prices for publishers.

Related articles:
ZEDO’s New InView Slider Runs on Any Ad Server (zedo.com)
Internet Ads Can (and Will) be As Effective as TV (zedo.com)
Publishers: Now You Can Monetize Below the Fold (zedo.com)