Instream, Outstream We All Like Video Stream

A little more than four years ago, ZEDO had a global product development meeting to come up with ideas for mobile video. At the time, things were just shifting to mobile, and the ad dollars weren’t quite there yet. The customers, however, were spending more and more time on mobile devices, and the future could be clearly predicted by publishers, who were seeing more and more or their traffic come from smart phones and tablets. Our partner, The Economist, had asked us for a way to run video ads on text pages.

The conversation in the room at that meeting quickly moved around to the differences between phones and tablets, and what consumers would “tolerate” on a device they wore on their person all day. Somehow, the phone seemed a radical departure from any other online device because of this intimate connection with its user.

Our product team showed some of us in marketing an ad unit they were calling “In Article video” because it was a large video ad format that could be shown on a text-based site, and it was a complete departure from the only available video ad format at the time, which was pre-roll. There was a shortage of available pre-roll, and marketers were searching for other places to use their existing TV creative.We thought the format was very effective, and would drive user engagement, because at the time users were just beginning their love affair with video on the phone.Mobile video was still something of a novelty.

We decided at that meeting to call our offering “In Article Video,” because it ran in the article, appearing only when the user scrolled down to see it. When we tested it, the viewability of the unit was over 70%.  We knew we had found the answer to filling advertisers’ need for something beyond pre-roll.

In the first year, we sold this format as In Article, but then the industry began to call it outstream, and soon we had at least one copycat who popularized the name “Outstream.” While this made no sense to us as a name, we had no choice but to adopt it.

One of the claims we have always made about Instream/Outstream video formats is that they are a form of “native,” meaning they don’t take the viewer away from the mobile stream of news or articles she is already reading. However, the industry decided to make it difficult for us with that definition as well: native can now also mean branded or sponsored content. Native has come to mean advertorial, and nothing to do with format or feed.

I’ll take a minute to argue here that every time the industry chooses a confusing term for an ad format, it makes that format more difficult to gain adoption. We have had to deal with the confusion around Outstream and then the confusion around the meaning of native, and we believe that has held back the adoption of both ideas.

The good news is that 77% of marketers have not hear of either Outstream or Instream video, so we’ve got a large addressable market to go after next year with our publisher partners.

 

 

Native and Mobile Ads Draw High CPMs

The advertising landscape continues to shift. This time the news appears to be good for the publishers. MediaRadar’s newest study on advertising trends in 2016 and Q1 2017, which came out at the beginning of the summer, revealed that high CPM ad placements are on the rise (whew!), especially if they’re mobile or native; niche and enthusiast sites still flourish in print (along with regional titles,) and native ad placements have grown 74% in Q1 year over year.

Native ad formats have grown the most and command the highest CPMs. While many forms of native advertising are still frowned on,  the demand for native has nearly tripled since 2015. That’s partly because native ad formats typically escape ad blockers, but also because consumers don’t mind reading or viewing something that’s truly informational and isn’t interruptive. Native ads are predominantly  brand ads, and the further good news is that digital advertising has finally arrived at a point where it’s not all remnant inventory, performance ads, and low CPMs. This will allow digital advertising to be effective at points nearer the top of the funnel.(If there is still a funnel at all). For now, native seems to outperform more traditional ad units.

As for print advertising, it still hasn’t gone away, although spend did decline 8% year over year. While general interest titles are languishing, niche and regional publications appear to be on the rise. And many advertisers have begun to target smaller volumes of engaged users over sheer reach.

This seems counterintuitive to us, but we’ve observed it ourselves: programmatic buying has declined. In fact it’s down 12%, and we think it’s because media planners are tired of not knowing where their ads are going to be seen. Brand safety is one of the problems, and the other is viewability.  Viewability is the new currency for advertisers and it’s tough to track viewability accurately with programmatic buying. Brands really need to buy programmatically, however, because it’s far less effortful, especially for large buys. We think the market will settle somewhere around programmatic direct, which allows far more control than simple programmatic.

If the current market trends continue, publishers should see increases in revenues, brands should see growing effectiveness of ad spend, and consumers should be less annoyed by formats that offer little else than interruption.

 

 

 

 

 

How to Make User Experience Better on Digital Sites

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.

 

 

 

 

If You Care About Security, Come to ZEDO

We have taken security very seriously lately on the ZEDO ad server. In fact, we have three major concerns for our customers and partners:

  1. resisting all the fraud, malware, and piracy problems that have plagued the industry since it began, and offering our customers a clean supply chain.
  2. Making sure our technologies load quickly and do not slow page load times for publisher partners
  3. Ascertaining the brand safety of the sites where our ZINC ads appear.

Every month we roll out technical updates that contribute to these goals.

This month:  for page load times, we are migrating to Gecko ad tags, to allow our publishers to run two of our innovative formats simultaneously .  Gecko is an ad serving tag that is designed to have seamless capability to serve different formats and innovations.  It can be configured to serve one or more ad formats per page view, such as a standard 300×250, a 728×90 InView panorama and an InArticle video for one tag call.

For brand safety, we have partnered with AmplifyReach.  We have started the process of categorizing Page URLs of various sites from our inventory pool into first level IAB categories. We also store brand safety score for each URL as identified by AmplifyReach.  We are learning every day how to make our inventory safer for advertisers.

We have added the capability to monetize secure sites. We saw that a number of publishers from our inventory pool going secure had increased lately, and if we get a request from a secure site, we send a secure flag in the BID request to all the DSPs. Because non-secure scripts cannot run on secure sites (the browser returns an error) this flag is important. By passing this flag DSPs know that they have to send down secure Ad Code if they bid and win.

We continue fighting the good fight to protect advertisers while increasing revenue for publishers. This has become a very complex endeavor, but advertisers are cutting the number of sites they will appear on and publishers have begun enforcing greater security as well. Vendors who cannot bring adequate security and brand safety to the table will be cut from both premium inventory and ads from quality brands.

For years we have been predicting that things in the digital advertising industry will improve so everybody gets better results, and we think this year it is finally happening. This will be good to everybody. The premium publishers will make more money, and the advertisers will get better results.

 

 

 

 

Let Us Help You With Video Header Bidding

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

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

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

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

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

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

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

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

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

 

Publishers Survive Multiple Challenges

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

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

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

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

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

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

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

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

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

Ad Fraud Ruins Analytics

Ad fraud. The gift that keeps on giving.

Marketers are beginning to understand that ad fraud affects their actual spend (they get less for their ad dollar), but they haven’t yet caught on to the fact that it affects their metrics as well.  Fake traffic and clicks generated by bots throw off analytics and can cause a marketer to optimize a campaign for the wrong things and waste even bigger dollars.

One way to make ad fraud less lucrative for the fraudsters is for marketers to stop paying for “each,” or volume, and start paying only for quality. That would mean coming to terms with the fact that low quality traffic is even worse than no traffic at all. At the recent IAB Annual Leadership Summit, P&G Chief Brand Officer Mark Pritchard announced that his company, one of the largest advertisers in the world, will only pay for traffic if they can see where it is coming from and whether humans actually viewed ads. Since P&G spent $7.2 billion last year, his announcement caused more than just a slight ripple in the industry.

A casualty of the big wave that rolled over the media supply chain happened to be Facebook, which has always provided its own metrics, and has announced this week that it will allow its ad platform to be verified by the Media Rating Council’s standards.

This will be fun.

And you can’t blame this all on the rise of programmatic. It’s not how the ads are sold or bought, but the kinds of sites selling inventory on the exchanges. Most of the bots happen to be in programmatic ad exchanges, because, as fraud researcher Augustine Fou says, “when those bots cause an ad impression to load on a “long tail” website, they earn ad revenue for that site. Bots don’t make money by causing ad impressions on mainstream publisher sites.”

This is the drum we have been  banging for what seems like forever: buy smaller, higher quality audiences. Again, from Dr. Fou,

one key thing for [marketers] to realize is that there are only a finite number of real human beings. So when they target real human identities, the volumes of ad impressions will probably be far less than they are buying now—but that is a good thing, because they want their ads to be shown to real humans, not bots.

Marketers know who has purchased from them before, who has signed up for email newsletters, or who has visited their website.

By onboarding their own data, they can more easily achieve the identity targeting we just talked about—and thus make their media much more effective because they are actually getting their ads in front of real humans.

We are not sure why this is such a difficult lesson for marketers to learn.

 

 

 

 

 

 

 

 

 

Brand Ads Work

It is not necessary to stalk a tiny audience to get results. Brand advertising, with good creative and a high degree of creative works even better, without offending viewers. We believe publishers should encourage their advertisers to offer better creative, which will then pull people to their sites as less comfortable techniques never will. Publishers need to get in a partnership with their ad partners, agencies need to stress creative, and the ad industry as an entirety ought to move back to brand advertising.

Although this year’s SuperBowl game was indeed worth watching in its own right, several people have commented in our social media feeds that they “teared up” during SuperBowl ads, specifically the Coca Cola ad. When was the last time you heard somebody mention an emotional reaction to an ad?

The NYT summary of the ads revealed how powerful they can be:

• Coca-Cola and Airbnb were seen as making political statements on Sunday with ads that touched on immigration and diversity.

• People were searching Google for ads from Budweiser and 84 Lumber and those starring Justin Timberlake and Justin Bieber.

• Fox and the N.F.L. have been trying to avoid overtly political ads, with Fox deeming one commercial “too controversial” last month for featuring a border wall — but that’s tough to do in today’s environment.

We cannot repeat this often enough. It isn’t advertising per se that people try to block. It’s ads that have no relevance to their lives.

SuperBowl ads are not finely targeted. They are simply targeted to the audience watching the SuperBowl, or even to an audience that doesn’t care much about the game, but cares about the sheer creativity invested in the ads, and will go find them online. The best example of that was the 84 Lumber ad. Who had heard of 84 Lumber before yesterday? And who would run a performance ad for a construction company?

But that’s not what 84 Lumber did. The company had three goals for the ad: One was to generate awareness, the second was to position 84 Lumber as an employer of choice, and the third  was to attract talent  to fill the number of positions 84 Lumber has open over the course of the year, its chairman and CEO said. The ad turned out to be more political after President Trump passed the immigration ban, and its ending had to be altered because Fox wouldn’t run the original, but the altered ad functioned as intended.

Let’s call this a cross-channel promotion, since SuperBowl ads can now be viewed outside the game itself. The ad was viewed 4,000,000 times on YouTube before the game, and the company’s site received 6,000,000 requests in the hour after the ad ran. The site was swamped. The ad accomplished its objectives, because now everybody knows who 84 Lumber is and what it stands for.

Resolved: Go Deep, Go Niche, Go Real

This has been a year of self-reflection for the media and advertising industries. And trust us, it was long overdue.

A list of fake news stories from Buzzfeed that went viral last year showed most of them were not only about politics,  but revealed a deep media illiteracy that both fake news publishers and ad tech providers took advantage of.

BuzzFeed News used BuzzSumo to identify the top-performing Facebook content from 96 fake news websites, including the network of more than 40 sites exposed in a recent investigation. This list of English-language fake sites has been built up over the past two years of covering this topic, and was compared to this chart from the creators of Hoaxy to compile a more comprehensive list of pure fake news sites. Click here to view the top 50 hoaxes, and to see the list of fake news sites.

We won’t spend too much time on fake here other than to say advertisers have finally gotten hip to the fact that having their brand seen on some of these sites is counterproductive. Look for them to take some action this year, including more careful selection of vendors.

Fake news is the tip of an iceberg. Advertising thought it could just use the same metrics on digital that it used for years with TV and print, and that things would be just fine.

Not so. The historical metrics of advertising have been reach and frequency. Those were fine when  CPMs were high enough to make sure  both had natural limits. However, once advertising went digital, CPMs dropped, and amazing reach and frequency became possible. The number of global viewers of a digital video ad can be in the millions, or even the hundreds of millions. And because of relatively low prices for digital advertising, greater frequency became affordable.

All of this was exacerbated by Facebook, which purported to aggregate audiences and make better targeting possible. But look what has been the result: greater use of ad blockers by consumers bombarded by ads that may or may not be relevant to them, cost them money to view, and hog bandwidth resources, along with loss of power exerted by individual publishers with smaller, but more engaged audiences.

For the media industry to survive, it is going to have to re-think those metrics and be willing to pay for quality audiences, rather than just large audiences. Also, frequency caps are going to have to become more common.

Some publishers have already questions their deep involvement with Facebook, and what it will bring them in the future. And Facebook itself will begin to compete with publishers as it launches a monetization scheme for its live videos, which clearly mean a great deal to their product roadmap.

As usual, we continue to offer high quality publishers and outstanding customer service, breakthrough formats and technologies, and global ad serving and ad ops.

Happy New Year!

This year, resolve to go deep rather than broad, niche rather than general, and authentic rather than fake. You’ll win that way.

 

We Lead in Outstream for a Reason

S1The biggest complaint in the advertising industry as we drop further into Q4, its busiest season, is the lack of video inventory. Everybody wants to run video ads, because video completion rates are higher than the CTRs on banner ads. Especially on mobile, consumers seem to have more patience with video ads than display ads. However, when they speak about video inventory many brands still mean content on high-trafficked video sites like YouTube on which they can run pre-roll. There is indeed a scarcity of that.

However, pre-roll is not the best way to achieve results with video ads, as many other companies have already discovered. The unfortunately- named “outstream,” video ads on text sites are the best performers.

In this department, ZINC is the market leader, having been the first to market with this format.  We launched what we called inArticle video almost three years ago, before the term outstream even existed, and we also initiated the term “polite” for these ads, because they only came into view only when a reader scrolled down to them, and they were also easy to close or scroll past. As  a result of the precautions we take, our ads are not intrusive.

Not only that, we never have used auto-play sound, another reason we feel comfortable calling these ad formats “polite.”

We constantly win buys away from our competitors (and there aren’t many), because we get higher viewability scores with resulting higher rates for publishers. Even the competitors are asking us how we win so many good buys.

Here’s how: we have a better format, better technology, and a better premium publisher network. We have tested our viewability with third parties, and we’re at 93%. To be a market leader, you not only have to be a technology leader, you also have to be cognizant of consumer attitudes, and you have to run on only premium publishers. That’s us.

Yes, this is a self-serving post. Every once in a while we have to sneak one in, because not enough people know what we do.