Does Ad Tech Give Publishers Protection?

While the purpose of ad tech is primarily to automate the workflow of buying and selling publisher inventory, a recent event involving Gawker, GamerGate and Reddit has revealed some unintended consequences of publishers’ adoption of technology. The TL;dr is that ad tech may protect publishers from angry readers who attack them through their advertisers, although it may also expose them to accusations of violating an ad tech vendor’s Terms of Service.

Here’s what happened:

First, GamerGate: GamerGate is a vitriolic response of the online gaming community to game reviewers the gamers think are too conflicted (too close to their sources) to be proper journalists. We’re not judging whether the journalists or the gamers wear the white hats. Probably all the hats are gray. All you need to know is that the debate rages on, with gamers attacking especially women journalists over their writings on the video game industry. The publishers who hire those journalists or run their reviews are also open to fierce criticism. Gawker seems to be drawing the brunt of the criticism right now, but this is a larger issue that applies to all publishers, either with respect to GamerGate or in the future with anything else a publisher runs that an activist audience disagrees with.

Second, Reddit: Reddit is where the gamers gather to express their point of view. One of the activities suggested by gamers on the GamerGate subreddit was going after Gawker’s advertisers. However, Gawker has some pretty loyal advertisers, because it is a site where engagement is high.

Third: After going after the advertisers proved relatively futile, these angry gamers decided that the next best avenue of offense would be to go after the ad tech companies Gawker uses to make its transactions. Because digital advertising is trackable, a redditor who says he used to work for Rubicon posted the names of all the ad tech companies Gawker uses, and tried to explain where Gawker violated their TOS.

Digiday’s John McDermott opined that the new development ” is also a sign that ad tech is now playing an outsized role for publishers, possibly exposing them to these kind of novel activism campaigns.”

But we don’t think that’s the correct conclusion. We think that the inclusion of ad tech in the media ecosystem does many beneficial things, and as a side benefit it protects the entire ecosystem of advertisers, ad tech companies and publishers from the repercussions of  small groups of angry activists.

More important, it helps publishers raise their revenues and lower their cost structures in the digital environment.

 

 

 

Almost Half of Video Consumed is Advertising

An amazing new chart we discovered this morning via Statista has demonstrated that there’s a reason publishers like our native InArticle Video ads. As of March 2014, nearly 40% of all video viewed online was advertising. Even advertising-averse Millennials seem to be watching video ads online.

Percentage of video ads viewed grows

Percentage of video ads viewed grows

According to comScore, “Americans viewed more than 28.7 billion video ads in March, with LiveRail capturing the #1 position with 3.9 billion ad impressions. AOL, Inc. came in second with 3.8 billion ads, followed by BrightRoll Platform with 3.1 billion, Google Sites with 3.1 billion and TubeMogul Video Ad Platform with 3 billion. Time spent watching video ads totaled 10.9 billion minutes, with AOL, Inc. delivering the highest duration of video ads at 1.7 billion minutes.

Video ads reached 54.3 percent of the total U.S. population an average of 170 times during the month. Hulu delivered the highest frequency of video ads to its viewers with an average of 82.”

Most video ads on the sites listed above are delivered as pre-roll. Our publishers, many of whom are not predominantly video content sites, want to reap the benefits of video advertising, too. That’s where InArticle works well; it delivers a video ad experience while a visitor is reading an article or scrolling through a social stream, thus expanding the reach of advertisers who want to reach new audiences.

Online Video Advertising Continues to Grow

A new study by Woodside Capital Partners says the ad tech industry is at an inflection point, driven by four key trends: mobile, social, video, and data analytics. We agree, and as one of the most experienced players, we’ve tended to avoid the fund-raising and M&A frenzy in favor of product development and expansion through the addition of new customers on both the advertiser and the publisher sides.

However, we’re able to do this because we chose the right place to use the considerable talents of our dev team: high impact video ad formats. We’re here with industry-leading product as the industry trends converge toward us. We have no need  for M&A.

We already knew  online video advertising was just beginning to grow, because younger users will continue to shift the way they consume video content away from the desktop. While the rule of thumb used to be “no one will watch an online video that’s more than two minutes long,” users have actually trained themselves to watch feature-length films on their iPhones.

Of course that’s still not the first preference for watching video, but the cross-platform user base is growing as consumers  have graduated from owning a disconnected PC and TV to also owning smartphones, tablets, and internet-enabled television sets.   eMarketer says that TV consumption shrunk 3% in 2013 for the first time ever. from 4 hours and 38 minutes to 4 hours and 21 minutes. We think that is going to continue.

And where did all that saved time go? Well, consumers viewed a total of 233 billion online video ads in 2013, up 106% y/y (comScore).

Also according to eMarketer, spending on U.S. online video advertising will grow at a compounded annual growth rate of 21.6% from 2013 to 2017, increasing from $4.1 billion to $9.2 billion while TV advertising spend is expected to increase at a 3% CAGR from 2013 to 2017, increasing from $66 billion to $75 billion. And  MAGNA GLOBAL thinks global online video ad spending will increase from $8 billion in 2013 to $28 billion by 2018, a CAGR of 27%. These annual growth rates signify structural change in the media industry, responding to consumer choices.

Like most people in the industry, we expect stronger growth in online video consumption next year and believe that spending will be driven by the continued shift from TV to digital video, increased smartphone and tablet use, and further development of online video content. CBS has announced that some of its new shows will not ever appear on CBS TV, but will be developed to be seen online. HBO is also sending more and more content online.

In this industry, it’s the consumer, not the technologists, who call the shots. And the consumer has been calling the shift away from the TV and the PC for the past couple of years.

 

Help Advertisers Find Audiences with Viewable Impressions

English: John Wanamaker

English: John Wanamaker (Photo credit: Wikipedia)

Advertising has always been a cyclical and tenuous business. The venerable department store magnate John Wanamaker, whom no one even remembers any longer, once said “I know half my advertising is wasted; I just don’t know which half.”  If there’s a blip in the market, advertising is always the first thing to go, and that’s why Madison Avenue is so competitive and littered with Type-A corpses.

What is different now from in Wanamaker’s time is the number of businesses  based on advertising as a business model, as though it can support an infinite number of publishers. Even Google had to diversify. They can’t ALL continue to exist. Before  the internet, we had far fewer publishers than we have now. Some just had to go. Like job opportunities in a downturn, advertising never goes away entirely, but it does shrink.

Advertisers are now choosing among a larger group of publishers, some of whom represent completely new concepts of content and new demographics. So what happens? If you’re a legacy publisher with advertising as a business model, one thing you can do is lower your rates, cut your burn.  Even the New York Times has had to do all this and more.   But there’s something else you can do: you can help advertisers find their audiences by providing high quality content and viewable ad impressions.

You have to get on the train in the direction it is traveling, and this year it is traveling in the direction of viewable impressions. We’ve been going in this direction for almost two years, and with our high impact video formats for publishers, we’ve got what advertisers want.

You can talk all you want about how news is shifting online, how young people don’t read, how bureaus are shutting down, how great reporting is dying. The fact of the matter is, it has never been about news. It has always been about advertising.

If you are an advertiser, you spend your  dollars where you think they will give you the best return. Where will people tolerate advertising? Where will they hear it or look at it? It’s a constant battle between the consumer’s distaste for interruption and the need to sell products. As urban areas grew and literacy grew with them, advertisers figured out that there was an aggregation of people here that they could use to announce and sell products.

Now  there’s a new kind of aggregation and a new kind of digital literacy, taking place online.  The social streams are the town squares of today. Good reporting will eventually happen

online, because people are aggregating there. The first newspapers weren’t very good either–they were sensationalist– and shrill, like Gawker or Buzzfeed. They evolved. Digital media will evolve as well — into what readers want to see.  And good advertising will attract the new digital customer.

It’s useless to bemoan the death of the old publishing model. Instead, the good reporters are going where the people are, and that’s why we have The Verge, Vox and Recode. Even Yahoo has been attracting top talent lately. The advertisers will follow.

We’re all fond of calling new ventures “disruptive,” and it’s usually a compliment. But what happens when something really IS disruptive? This. The death of the old school newspaper publisher.  A whole lot of layoffs. It is not always fun and not always “cool.”  But it doesn’t mean the death of publishing, nor of advertising — just a reset.

After all, we don’t have gas lamps or horse-and-buggies anymore either, but we still read and travel.

What is the ZEDO Exchange?

While  publisher-side ad serving was our core business  since our founding in 1999, the part of our business that has been growing most quickly for the past year has been the ZEDO Ad Exchange, our simple, scalable way to  manage both advertisers and publishers conducting business in display banners, videos, mobile, high impact formats and smart programmatic integrations. ZEDO Exchange allows Demand Side Platforms access to the premium high-quality display and video inventory of our premium publisher network.

For advertisers, the ZEDO Ad Exchange offers the best click-through rate in the industry, along with the best of all worlds — instant pricing and availability of ad inventory on newspaper web sites. We’re different from other exchanges and ad networks, because the only ad inventory we offer is avails from our high quality publisher network, which consists of premium brands you already know and trust who are integral parts of local communities and national conversations.

We’re both innovative and smart about the way we run this network: we not only offer high impact formats, but also make sure that the advertiser gets viewable impression where they count — on premium sites.

On the publisher side, ZEDO Exchange is designed to make sure that all  publishers that use ZEDO for ad serving get a fair price for their inventory. This is one of the reasons we do not work on the RevShare or CPC model. We only work on a flat CPM model with our publishers. ZEDO Exchange will pick up inventory only if we meet the agreed CPM. We can also sell impressions to multiple RTB buyers and get maximum CPM from the highest bidder. (ZEDO’s Supply Side Platform (SSP) is Open RTB 2.0 compliant.)

Our Demand Side Platform (DSP) is a single, unified platform from which to manage all aspects of a campaign using a single account (Display Banners, Videos, HIFs, RTB & Mobile). Since all the publishers are linked in one master account, this provides media buyers with maximum efficiency.

Publishers may opt in simply by clicking the “Join ZEDO Exchange” link on their reporting and trafficking UI, or they can give us a heads up via email. After opting in, integration with ZEDO Exchange is very simple. ZEDO has built a smart back-end linking process that makes sure  publishers do not have to spend time trafficking tags or tracking campaigns. Everything is done automatically, and ZEDO Exchange reports will be displayed directly under the Reports section of the Publisher’s ZEDO account.

 

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.

Publishers Don’t See Big Benefit from Tracking Data

A very provocative article in Digiday last week suggested that although ad budgets and ad revenues are up, publishers are not reaping the benefits. Nor are consumers. The writer, Jason Kint, asserts that user tracking is having a negative effect on the quality of content that is being consumed, and an even more negative effect on publishers’ revenues because all the extra  money generated by rising ad revenues is going to the services that track and retarget users.

The much-hyped automation of advertising is incredibly promising, but right now, it’s being used almost entirely to collect and bid on data to re-target audience using tracking cookies. This data is driving immaterial growth in ad revenue to publishers small and large. It is also feeding a frothy and endless market for ad tech companies.

The digital pie is rapidly shifting away from sites and services being consumed to the companies that track consumption. As digital continues to gobble up advertising share from its offline ancestors, it does so at the direct expense of brand advertising. The industry touts record ad revenues but ignores that more than 65 cents out of every online ad dollar is being spent on performance media fueled by data tracking.

As we move to mobile devices, more specifically to smart phones, tracking  becomes more abhorrent to consumers; they’ve said so in many ways, including installing ad blockers in their browsers, taking advantage of do not track options, and complaining to vendors.

But tracking doesn’t help brands, either. When they buy ads using tracking data, they’re buying performance metrics, not brand lift. And the performance end of the market doesn’t work anymore, because the same users who don’t like being tracked have ceased to click on display ads. We keep looking for the performance metric, and it may shift from CTRs to viewability to something else, but we’re always talking about measuring the individual consumer’s actions and buying on that data.

We’ve got a way to go before we arrive at the “right” way to use data to help the ecosystem. Right now, tracking data may be as harmful as it is useful.

The answer to this is for publishers to focus on ad formats that brands want. These almost always include video, and  should include ZINC’s InArticle and InView formats. If publishers ran those, they would get more brand dollars rather than performance dollars online and would therefore  increase their revenues.

 

 

 

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Mobile Video Formats That Support Publishers and Advertisers

ZEDO started its days as a partner for newspapers, a way to help the newspaper business make the transition to digital.  We were one of the first ad servers to serve the newspaper market, which was in disarray as first classified ads and then hard news became digital, and free. How could we help our publishers acquire the ads they needed to support their digital operations? That was the first problem we solved for.

Fast forward fifteen years. Now everyone is a publisher, even sites that don’t deal in news at all — sites like Weather.com, or Daily Motion, or Facebook and Twitter are all considered publishers. Many of our customers aren’t news sites in any conventional sense. The result? There’s a much bigger competition for advertising dollars than just hard news or even sports, business, and fashion, the traditional sections of the newspaper. So what happens to news?

Well, no one wants it to go away. As a result, there has been much written this year about the entrance of wealthy individuals like Pierre Omidyar (founder of Ebay) and Jeff Bezos (founder of Amazon) into the news market. Both have financed journalists to produce news. But here’s what these people either don’t know or have forgotten:

News, save for its most exclusive and specialized form, has always been an advertising-led business. That is, before there were news outlets, there were advertisers looking for venues to publicize their commercial messages. Newspapers were made for advertising more than for news; radio was an advertising medium before there was news on the hour; television was a Niagara of jingles before it had to make some public service accommodation to news; CNN’s satellite model was an advertising idea before it was a journalism concept. The advertising existed first.

Now this process has been turned on its ear. Brand name journalists like Walt Mossberg and Kara Swisher, Glenn Greenwald, Ezra Klein, Jessica Lessin, and Andrew Sullivan have all bolted from the traditional newsrooms they “grew up” in and are heading out to form news startups. Will they all succeed?

Well, perhaps. With the introduction of programmatic ad buys and RTB (real time bidding), any site that belongs to an ad network stands a chance of drawing advertising — if its target market fits an advertiser’s. They no longer need large internal staffs to sell advertising.  That’s the good part.

The bad part? The proliferation of inventory drives prices down, especially for niche sites that have small, loyal readerships. Advertisers, who generally go for reach and scale, prefer sites with tens of millions of visitors. Only if your site has a very targeted audience that suits a highly targeted advertiser ( luxury brands, tech brands), will you be able to sustain yourself on advertising.

That’s why Andrew Sullivan and Jessica Lessin, journalists with great brands, have chosen to go with subscription models.

As Michael Wolff points out in USA Today,

Journalists don’t like advertising. It is both the corrupting influence and the hard taskmaster, to which they always dream of being free. But save for a few rare instances where information is so valuable or beloved that customers will pay for it, advertising is the only thing that has ever paid the news bill.

We don’t need journalists solving the problem of news. We need people with far more cunning and inventive commercial minds. But there are few of those.

We’re doubtful that the digital media conundrum will be solved soon, so we will continue to innovate and produce engaging mobile video formats that can support the news everyone wants to read, for which advertisers are willing to pay more.

 

 

 

 

SSPs, AdNet RevMax or Yield Optimization: A Rose by Any Other Name…

Whether they’ve been ad supported or subscriber-based or both, publishers have always needed to know who their readers are. The data is used to determine everything from editorial calendars to advertising rates. Remember the old Audit Bureau of Circulations? While it’s still called that in many countries of the world, in the US it’s been rebranded as the Alliance for Audited Media. The Alliance covers mainly newspapers, and used to have to conduct arduous audits for its members, but of course since everything has gone online, “circulation” numbers, aka “visitors,” can be readily counted by publishers themselves.

Digital publishers knew from the beginning that their strength lay in their ability to tell advertisers what audience they attracted, and in what numbers. From page views to unique visitors, measurement has always been part of a digital publisher’s toolkit. However, it took traditional publishers several years to understand that they had some power over their own ad rates because they owned the data about their users. When RTB first came into vogue, they were afraid their ECPMs would sink through the floor.

Not so.

Many publishers are doing what they should have done years ago: embraced programmatic and created their own platforms (SSPs) governed by their own estimation of their inventory’s value.  As Josh Marshall pointed out in Digiday,

“… SSPs allow publishers to connect their inventory to multiple ad exchanges, DSPs, and networks at once. This in turn allows a huge range of potential buyers to purchase ad space — and for publishers to get the highest possible rates. When an SSP throws impressions into ad exchanges, DSPs analyze and purchase them on behalf of marketers depending on certain attributes such as where they’re served, and which specific users they’re being served to.”

ZEDO has had such a yield optimization program for the publishers in our network for years. While we never called it an SSP, and referred to it as our RevMax program, it it is always there.

We’re not much for extending the use of jargon so popular in our industry; rather, we just try to produce results. Our partnership culture and our long track record of success and growth separates us from latecomers to the industry who are embarked on a program that’s more about their own growth than about the growth of their publisher customers. We’re  here for the long haul, and we’ve been been innovating in the ad tech industry since the last century.

Mobile Video Advertising Takes Off in 2014

It has taken a long time for advertisers to accept that video could be bought like television rather than on the basis of click-throughs, the antiquated metric they were accustomed to in display advertising (and which doesn’t work anymore anyway).

What does this mean? For the industry, it means that digital video advertising has finally come of age. For ZEDO, among other things it means we’ve developed an SDK for our ZINC clients that will allow a video ad to play when a user closes or minimizes an app. It’s an entirely new format that won’t interrupt the use of the app itself, but will be a new form of in-app, or perhaps better called “after-app” advertising, and it will be acceptable to new privacy standards because when a user chooses the free version of an app he or she  implicitly consents to view advertising.

ZEDO’s new SDK can also layer on location-based information to make the targeting more precise, and further layer on contextual data. including negative keyword exclusions. The format delivered is a highly targeted, non-interruptive mobile video ad for our ZINC buyers, who are letting us know that they want something beyond pre-roll — something that will let them contact an audience that isn’t viewing video sites. They’re blown away when they see these new formats.

For the past year on both the ZEDO and the ZINC sides we’ve focussed all of our R&D on video and mobile video, because there are many problems left to solve in the mobile video advertising arena before video advertising becomes as exciting and effective as TV advertising has been for the past fifty years. I’ve often reiterated that I thought online advertising could be as good an experience for the viewer as TV, and 2014 is the year in which this will come to fruition.

However, I’m not sure I predicted the speed of the shift to mobile. The Consumer Electronics Association’s December survey revealed that 80% of new buyers opt for a smart phone.

In the mean time, on the ZINC side, we have launched an “automated buying” platform, through which agencies can buy automatically without buying “programmatically.” There’s a real difference between those two ways of buying, and while programmatic buying often means a loss of control, automating the buying process can be a time-saver for media planners and still let them keep control of where and how they buy.

It is going to be a super 2014, and we’re ready to get back at it.