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.

 

 

For Mobile App Ads, Innovative Formats Work Better

The mobile app development industry is alive and well, according to an inMobi survey from earlier in the year, and despite the roller coaster ride in advertising, it’s still the most popular way for developers to monetize their inventory. However, the average developer worldwide makes almost nothing on a single app, and only 15% have crossed the 1000 download threshhold. If this is true, why do people continue to develop apps?

We think developers can do better, but they have to use some more innovative formats.

App development is a young industry, and most of the people in it have been doing it for less than four years. Only a third of app developers have been in the industry for three years. Most of the mobile app dev firms are small, and many are making apps for other businesses, rather than trying to monetize their own apps. In fact, 47% of mobile app developers are solo-preneurs. Many of them told inMobi that they were developing apps for fun, rather than for fortune. No wonder games and entertainment constitute over 70% of the apps developed. And no wonder they are not as savvy about advertising as they need to be.

When you get up to 1-3 apps in either the Play Store or the IOS App Store, if you play your cards correctly, revenue can increase. It probably isn’t surprising to find that 42% of the respondents had 1-3 apps in the Google Play store, while only 28% had apps in IOS. In the US, we often forget that Apple is such a small piece of the global overall device market, because it has an outsized influence locally. Android is also a better place to learn how to develop an app than IOS.

Making money is the biggest issue for application developers, as it is for all web publishers. 55% of developers make $1000 per month, and monthly average mobile app revenue globally is under $6K. There’s new research that shows a decline in app downloads around the world, and the average phone user interacts daily with no more than a dozen apps.The average monthly per-app revenue is in the range of $5k to $11k depending on the platform. Windows Phone is the highest money-maker at $11.4k per month per app, although it is only used by 21% of developers. North American developers lead in both downloads and revenue over both APAC and Europe.

Advertising is the most bankable app business revenue model;  7 out of 10 app developers use mobile advertising to monetize their apps currently and 18% of them plan to use mobile advertising in future. Used correctly, it can generate good revenue, but we believe too many developers are naive about advertising and choose either the wrong ad network or the wrong ad formats.

For example, banner ads and interstitials are still preferred by app developers despite the the fact that consumers do not like them. Response to banners has gone down steadily, and interstitials are under pressure from consumers who now have the capacity to run ad blockers on mobile. Video, however, has taken off, and video advertising such as our inArticle format, works well. Our SwipeUp for mobile, an innovative new format we came up with this year, has also taken off.

If you are an app developer, it’s worth talking to a platform that knows how best to connect you with advertisers who can get you the revenue you desire.

 

 

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.

 

 

 

Formats Become Important in Native Advertising

As an industry, we’re still having trouble figuring out how to define native advertising, although we all know that it is trending and we all want to grab the most revenue we can from this trend. However, hopping on this trend requires almost an about face on the part of publishers. At first, publishers thought native was the same thing as “advertorial,” — advertising formatted and dressed up to look like editorial. They hated it and looked down on it, and fought for the Chinese wall between the advertising side and the publishing side. But ads you cannot tell apart from editorial is only part of native.

It’s the most familiar part, however, so let’s dispense with it first.  In this context, native can  be sponsored content, which is usually written by the editorial staff of the publication and paid for by a brand, or branded content, which is actually produced by the brand itself or its agency.   Many publications, including the New York Times, Forbes, and Vice, have developed or acquired in-house agencies to produce branded or sponsored content.

This is a huge opportunity for publishers. Now they can be more than creators of content, they can be the creators of ads that support their other content. Which gives them more editorial control than if they simply accepted ads submitted by brands or their outside agencies. It can raise the quality of the creative that appears on their sites, and be more acceptable to their visitors. In June, AOL opened Partner Studio, an in-house creative shop, and Huffpo, owned my AOL, has had one of its own for a while. Rather than being dismissed, native ads created by the in-house agencies of publishers are now being seen as desirable.

Thus a market shifts under our very noses. And here’s why:

Advertisers in the U.S. are expected to spend $4.3 billion this year on so-called “native” ads that emphasize an ad’s editorial-like content and, in some cases, disguise the spots to look like unpaid placements, according to eMarketer. That’s a 34% increase from what brands are projected to have spent on native ads last year.

But there’s another part of native, and it one that applies mostly to mobile. In this definition, “native” is a non-interruptive ad that follows the same format as the site whose feed the visitor is reading. In the future, this will become the most important element of native, because it has to be acceptable to a user on a mobile device. These native ads will appear not only on publisher sites, but on platforms like Facebook, SnapChat and Twitter — platforms where users are accustomed to seeing a certain kind of content, for example photos, videos, or disappearing content and don’t want to be interrupted by an ad in a non-native format.

We think the definition of native as a matter of format as well as content will become more and more important as advertising shifts primarily to mobile devices. We’re developing and experimenting with mobile native formats on an almost weekly basis to test what’s acceptable to visitors and get the best response for advertisers and rising CPMs for publishers.

ZEDO Rolls Out Quick Innovation Platform Strategy

Over the past year, we’ve launched a new platform strategy, largely in response to customer requests for a trustworthy supply chain, timely innovation, and higher ROI for their online ad spend. We are finding that our strategy of an end-to-end platform is working well, and we plan to dramatically expand development of new formats and expand sales to many new countries next year.

This will be exciting and provide new opportunities to all  our team members, especially in mobile, because many emerging markets will leapfrog the desktop altogether.

As a reminder, ZEDO’s strategy is to build three technologies: Publisher Ad Server – ZEDO Exchange and ZINC Platform for Agency Trading Desks to buy from. These three platforms are connected end-to-end. So if the ATD trafficks an ad into the ZINC Platform it goes into the ZEDO Exchange account (formerly ZAN), then into many publisher ad server accounts and then onto the webpage.

Thus, the creative goes through ZEDO technology from end to end.There are many advantages to this strategy.First, it makes the supply chain clean and trustworthy for the buyer, because malware cannot get in. Another advantage, both to buyers and sellers, of this strategy is that ZEDO is uniquely placed in the industry to innovate.

As we continually come up with new formats, which we may start calling Innovations instead of formats to better explain our strategy, we have to add them to all three technologies – and since all three are in our control we can add them quickly. This gives us a huge advantage over our competitors.

For example, a DSP  can only bid on whatever AdX or Pubmatic sends them bid requests for. If they have an idea of a new format, they would have to convince AdX and Pubmatic and then various publisher ad servers to support it.

It is  often slow and difficult to find new ideas for Innovations and then to build them: convincing several third party companies to agree and then build would be a huge multi-year exercise for our competitors like Turn, in this example. So the ZEDO end to end strategy uniquely allows ZEDO to win in advertising innovation. And the innovoation we focus on is to create “fundamentally better advertising.”

It has always been our mission to create fundamentally better advertising.

As this is a winning strategy in a changing online advertising landscape, we will roll it out very quickly over the next two years, launching  ZINC across the world.