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How the Blockchain Might Help Advertising

The media industry is still a long way from realizing the dream of digital advertising: the ability to target customers and know whether the targeting or the messaging worked.  Although many metrics exist for measuring the effectiveness of digital ads, we still don’t now which ones are the best.
Wrap into that some industry specific problems like fraud and viewability, and you get a somewhat disturbing picture, one that makes brands reluctant to pour large dollars into digital. And yet, the largest demographic today is millennials, and they are digital natives. We’re just not going to reach them any other way than digital, and within digital, mobile, and within mobile, video.
So print is gone as a tool, as is desktop. Display is not far behind. The most promising forms of advertising today (and we say today because things change rapidly) are in-app ads, native ads, and incentivized ads.
At the same time these changes have been happening, the industry has been plagued with an epidemic of bots and click fraud. Because there isn’t much transparency during the online auction process through which ads are now bought and sold, advertisers have had problems finding out where  or even if their ads have appeared.
This has led to a new emphasis on contextual advertising: the ability to target ads based on where target customers might already be.
Blockchain might also help here, because blockchain transactions are both transparent and encrypted. Unfortunately, not enough is known about how blockchain could be used, so we’re just in the pilot stage. One problem with current blockchain implementations, such as those used in cryptocurrency, is the inability of today’s blockchains like Ethereum to handle transactions at the speed with which ads are currently served. We’re assuming this will be solved in the future, as it is a technology problem.
More important is the issue of customer experience. Taken by the ability to reach millions of people, advertisers decided they wanted to reach audiences “at scale” all the time, regardless of the wishes of those audiences. It has taken the better part of two decades for the industry to realize that — just like with print or TV–less is more. Loading up pages or streams with advertising has led to a boycott of advertising altogether by the 25% of consumers who run ad blockers.
In surveys of people who do run ad blockers, to them the most offensive part of digital advertising isn’t the actual ad, but the tracking of information and the sale of that information to third parties (data brokers). A common statement from about five years ago, “the value is in the data” overlooks how the provider of the data, the consumer, might feel about how her data is being used. This oversight has led to what Doc Searls calls the greatest consumer boycott in history — the boycott of digital advertising.
For consumers to trust advertising again, they have to be assured that their data will not be bought and sold against their will. This is the objective of the GDPR (General Data Protection Regulation). While the GDPR nominally applies only to Europe, because of the global possibilities that come with digital advertising it has engendered compliance in companies that are not headquartered in Europe but may have European customers, like Facebook and Amazon.
Ideally, data privacy will one day be coded into a blockchain that guarantees each consumer the right and ability to control her own data and decide when to make it available. Companies like Digi.Me are already giving consumers the ability to control and share data at will, and when the blockchain matures, we will finally have a totally trustworthy advertising ecosystem again.

 

 

Advertising in the Post-Advertising Era

As usual, we’ve been thinking about advertising, and about its future.  To help us grapple with the days ahead, we’ve read two very interesting pieces this week. One  is from a book called Frenemies by longtime media journalist Ken Auletta who has written “Annals of Communication” for the New Yorker since 1992.  Auletta’s book is about the disruption of the ad business by all the new technologies that have affected it during the past two decades. His thesis is that advertising won’t go away, because it is necessary for consumers to get information about products and services, and subscriptions can’t reach all of the people who need to know. Auletta reminds us that both Clinton and Obama agree that consumers are strapped, having not gotten wage increases in over a decade.

Thus advertising, he contends, is still necessary to feed the free or nearly free content that we all want to see.

 In a non-state-dominated economy, advertising is the bridge between seller and buyer. It would seem an obvious statement, but I’ve found it bears repeating. And that bridge is teetering, jolted by consumers annoyed by intrusive ads yet dependent on them for “free” or subsidized media. In this sense, consumers are frenemies.

Because he begins from this premise, Auletta can spend most of his book talking about what’s happening to the agency business. He calls frenemies the brands who are taking their work in house, the consulting firms like Deloitte that now run their own digital agencies, tech firms that buy and sell media, and the usual competitors who now have to deal with each other because few brands have a single “agency of record” anymore. He can also focus on some of the colorful characters in today’s agency world like Martin Sorrell and Gary Vaynerchuk.

On the other hand, media marketing guy Andre Redelinghuys takes a far more pessimistic view of the future of advertising, because he believes the need for advertising is dependent on a need for distribution that can be met in ways not possible previously.

Terms like ‘Disneyflix’ and ‘Apple Prime’ essentially describe how the most powerful global brand owners are coming to terms with the new rules of engagement. This is not just another story of new versus old, it’s a fundamental shift in the natural order of consumerism. Brands have traditionally been prized, while distribution has been more commoditized. The ‘must have’ things held the power. But if the pipes into people’s lives have become more powerful than the products that go through them, then we’re in the beginning of a new era. and the change is just beginning.

In his view, “pipes” into the home, car or phone now have all the power, and consumers no longer value brands — they value convenience. Ordering household goods from Alexa is one of his big examples. as is using a Nespresso machine and ordering whatever pods fit the machine rather than choosing a coffee brand.

Brands have always fought for a place in consumers’ hearts, and then relied on their loyalty for repeat business. Pipes are structural relationships that don’t rely on such fickle factors. They are built on more vertically integrated distribution channels and behave more like utilities — a way into people’s homes and lives attached to an account.

Amazon is the ultimate pipe. Their entire value is that they bring things to you — the things can change as necessary: movies, pickles, sneakers. They own the interface, the invisible moving parts, and the household. They understand your preferences intimately and have become arbiters of choice in many homes.

I’d argue here that Amazon is also a brand, in the same way Facebook is a pipe, and that the “convenience” of pipes is constantly being weighed against the sacrifice of privacy we make for the convenience. Thus, Facebook lost some brand equity through Cambridge Analytica, and who knows what inevitable mishap can befall Amazon, whose personal assistant already send private conversations to one family’s contacts.

I’d also argue that while things have changed, we are still feeling our way around the post-advertising world.

Building a Brand: For Publishers

All publishers will not survive the latest onslaught of Facebook changes and GDPR compliance. At least not with an advertising model. But should they? The combination of an almost limitless content  supply of sometimes questionable quality, the “Amazon effect” on brands, and the intolerance of consumers for slow-loading pages and interruptive ads will cause a Darwinian contraction among publishers.

The internet saw the rise of almost countless niche publications, each one fighting for ad dollars. That led to a proliferation of targeted ads, which in turn led to the need to collect personally identifiable information. The fact that 65% of companies weren’t ready to comply with GDPR shows how complicated the ecosystem has become.

That number includes brands and publishers. The brands have already taken steps. P&G cut its ad spend last year by $200 million, and said its reach was 10% greater. It will take more steps this year. In related news, WPP lost 15% since last year.

What will happen? Only the fittest will survive.

We think a combination of things will move the ecosystem forward, including the decline of publications who bet the farm on Facebook to get traffic, as Little Things did, the introduction of more transparency in the media buying system, and a diversified revenue stream will keep the best publications in business.

Mixed revenue streams have already begun to keep the largest publications, such as the New York Times and the Washington Post afloat. Some sites (The Information and Stratechery) do well by subscription alone, although the subscription model won’t scale across the entire industry because there are a limited number of sites to which any one human can subscribe.

That’s why after all is said and done, advertising will remain the best way for keeping content free, and those sites who design for the new ad formats recommended by the Coalition for Better Ads and IAB will see less competition for ad dollars and probably higher CPMS. The new site designs will be cleaner, pages will be faster loading, and desired content will be easier to read — all of which should have already happened.

The internet presented a temptation to put too many ads on too many sites, resulting in the digital equivalent of a swap meet and what we are seeing is a natural fallback of the market from excess to normalization. A market with too much merchandise is just as difficult to shop in as one with too little.

This is not very different from what happened to the cryptocurrency space lately as Bitcoin’s price fell from $19,000 to $11,000.

Bitcoin is a good analogy here, both because the regulators are coming both for digital media and for cryptocurrency, and because its price did not fall to nothing, just like advertising won’t go away. What we are seeing in advertising, as in blockchain, is the adoption of new technology inducing a hype cycle, and the market coming off the hype cycle into something more normal.

The quality publishers will still succeed, most supported by advertising. Publishers, just try to keep the flight to quality in mind. We’re here to help.

New Consumer-Driven Ad Standards Proposed

Will changes to the advertising industry come from within, or from outside? Doc Searls, one of the authors of the Cluetrain Manifesto (markets are conversations) and the founder of the VRM (vendor relations management) movement) and a well-known privacy and security expert, Mary Hodder, are about to release what they call a “term,” which amounts to a set of choices consumers can make about what ads they want to see.

They have convened a group of high quality publishers and ad tech companies, including the ad blocker software developers, and are rolling out a set of choices consumers will be able to make about what ads they see. Once the consumer says “I want only ads that don’t track me,” or “I want only brand ads,” the publisher will serve ads according to the individual consumers’ choice.

This puts the responsibility on the publisher to comply, and on the ad blocking software maker to implement correctly. It’s for people who have already said they want to block certain ads, in an effort to make sure they don’t block ALL ads and force the escalation of the ad blocking/anti-ad blocking war that threatens to cause more turbulence in the industry.

As for advertisers, who want more and more data, and are the ones who encourage tracking (and the ones who pay the bills), they will be asked to accept these limitations on how far they can stalk consumers who have already chosen to download ad blockers.

This same “term” will also be presented at the United Nations this week, in an effort to bring it in line with what the EU and other global entities have already enacted with regard to data privacy.

The TL;DR here is that programmatic and RTB will not vanish, but retargeting will cease, for everyone, just as popups did ten years ago. And most advertising will be brand advertising, for which ultra-tracking is not necessary.

In a way, this is just “back to the future,” for advertisers, who got carried away with metrics and forgot they were dealing with human beings.

Can Programmatic Give Us Better Targeting?

If you listen to companies on the forefront of programmatic advertising, they tout both its ubiquity (some say over 50% of the market inventory is now purchased programmatically) and its virtues for both publishers and brands. For publishers, programmatic tools have already provided an opportunity to monetize more content, although sometimes at lower CPMs than they’d wish. And for brands, programmatic promises better targeting. Even premium deals can now be done with the automated work flow tools programmatic has made possible.

But does programmatic really provide better targeting? The consumer’s jury is out on that one. Speaking anecdotally, I’ve heard many consumers simultaneously laugh and cry over poorly targeted ads. Millennials may have given up on advertising altogether, turning to ad blockers to rid themselves of “information” they don’t want in places they don’t want it. Mobile is more often than not the culprit in these instances, where unwanted advertising can eat into a user’s data plan.

But programmatic will get better, because there will be more and more data generated by each individual consumer. Wait until your watch, your thermostat, and your washing machine begin to generate data about your habits and wishes as a matter of course. Some of these objects have the capability to do that now, but most of us haven’t bought them yet. The Internet of Things, as it is called, is just beginning to take off for people who are not early adopters. That’s why ad tech companies were present in such force at the Cannes Lion Awards last month — an event that used to belong solely to the creative class.

One speaker at the awards said that marketers are going to have to learn “intent-based marketing,” which means they must shift away from trying to create demand to fulfilling the actual needs of customers. This is a huge shift, since advertising has been a big part in creating and sustaining the consumer economy. But once consumers have the power to communicate their intent so clearly in so many different places, ignoring that intent would be foolhardy on the part of the marketer. It’s better to get on the train in the direction it’s going in, rather than trying to reverse the train’s direction.

The plethora of data created and the ability to target it directly to someone who actually intends to buy a product will ensure the ubiquity of programmatic. Marketers must learn to embrace new patterns of conscious consumption and return to the idea of offering experiences rather than just products.

This shift has only just begun. Expect marketing and publishing to change rapidly over the next decade (again).

 

Viewability: In the Eye of the Beholder

As the media industry gets ready to shift from paying for impressions to paying for viewability, knowledgeable observers on both sides have already figured out that it’s difficult for advertisers and publishers to come to an agreement on whether an ad was indeed viewable.  Each side measures viewability from its own perspective. The current situation sorely needs to be resolved by someone who can see things from both perspectives. That’s us here at ZINC.

ZEDO’s geneology is as a publisher ad server, but on its ZINC side it sells high impact formats to ATDs and agencies. As a result, we always know when our publisher partners’ ads are viewable because we serve them. We can always tell whether the actual location of the ad unit is in view. And – as you know – we create ad units for high viewability and are consistently measured as number one in viewability nationwide.  However, because we serve both sides of the ecosystem, we have no troublesome third parties in the middle.  This allows us to get better results for our advertisers’ ad verification  technologies – it gives them better and cleaner data.

Here is what Ad Exchanger says is the weakness in measuring viewability solely from the buy side:

When viewability is measured on the buy side, the viewability solution sits with the advertiser’s ad server. Since the ad server is responsible for serving each and every creative, it’s very easy to know exactly when to start the viewability clock and determine when the creative is rendered for at least one full second.

But due to ad environment challenges, like unfriendly, cross-domain iFrames, advertisers can’t measure every ad unit in every environment, which means some percentage of ad impressions is simply unmeasurable. If a vendor reports that 60% of the ads were in view, with a 70% measured rate, what value do the remaining 30% have? 

The  problem is that the advertiser doesn’t ALWAYS know if the creative was viewable – they can’t always measure. The advertiser’s ad server misses some viewable impressions because it can’t figure out the iframes, read the urls, decipher several stacked ad calls or understand certain browser-device-combinations.

So one side is counting only what they are 100% sure of, and ignoring the rest. The other is counting everything – but why should anyone pay for its (higher) numbers?

Since publishers are measuring fully owned inventory and not dealing with foreign ad environments, they have no difficulty determining whether the location of an ad unit is in view. Put another way, publishers can reliably determine the location of all ad units throughout their web properties virtually 100% of the time.  …

I’ve seen discrepancies … reach up to 20%. 

This is nuts. While one side measures only what they are 100% sure of and the other side with better information measures more, how will we ever achieve a consensus set of measurements?

The only way to achieve better measurement to have your creative  served by a vendor who is also the publisher’s ad server.  That is the advantage of buying from ZINC: one                                           platform from the advertiser end to the publisher end. ZINC provides better viewability – as every agency and ATD finally seems to know.  ZINC allows quality  third parties (e.g. Moat, DV, IAS, Comscore) to better  measure viewability for the advertiser.
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Effective Ad Placement

Where an ad appears on a site can often be a determiner of how well the ad performs. Traditionally ads at the top of a page were assumed to have the best performance. However, advances in both site development and ad formats mean that what was true in the past may no longer be true.

The graph below illustrates the performance of ads on a single site. We’re the ad server, and they have  bought our inArticle ads. We often conduct tests on our own formats to make sure we’ve told the truth about how they perform.

time-spent-grapgIn this case, the axis on the left represents the amount of time spent on the page, and each bar represents a part of the page measured in pixel height. The bars proceed from left to right, with the left most bar indicating the performance of ads at the top of the page and the right most bar representing the performance of ads at the bottom of the page. We’ve conducted this analysis on many of the sites on our premium publisher network.

Our analysis has shown that across a wide range of sites, users spend more than double the time with an ad located around an article than they do at  the top of the page. This demonstrates that formats like our inArticle, which runs a video within an article, can be much more effective than banners on the top of the page, which traditionally have been thought to be the most effective places to advertise.

One caveat to all this : all formats lose engagement as the viewer moves down the page. Even the inArticle format’s viewability will drop tremendously if it is placed below the 2000 px or 50% of the page.

A Short History of Targeted Advertising

There’s a reason “Mad Men” ended this spring. The show runners recognize that the early 70’s were about the end of the sexy, interesting period of advertising — the period where creative ruled and audiences was pretty much everybody.  It was assumed that advertising’s function was to influence, or perhaps to persuade the masses, and that mass media reached everybody.But in the 70’s,

the use of computer technology grew, reflecting a rediscovery of and growing emphasis on “empirical advertising” research and fact-based marketing during the decade. This practice was a reaction to the “creative revolution” of the 1960s and indicated a marked shift to a preference for discipline and accountability.

Targeted advertising didn’t really exist before the 70s, except perhaps by age and sex. and markets were segmented by demographics, if at all. But a new concept had already arisen from social scientists: psychographics. Psychographics changed everything by providing new ways to look at consumers and while at first ad agencies didn’t understand it, they quickly adopted it to keep their industry alive. It was something they could sell to brands.

Psychographics segmented consumers by more than just age, sex, and income. It began to take into account “lifestyle,” and to segment consumers into attitudes, beliefs, opinions and personality traits. Once the audience was segmented this way, media buys began to change as well. That led to the importance of media buyers, who could target the “right” audience rather than just the mass audience. Although the Audit Bureau of Circulations had existed since 1914, the information it provided consisted of little more than numbers of subscribers to print magazines.  The rise of radio and television meant that print magazines were’t the only way to reach audiences, and buyers began what has been a 50+ year quest for better data.  The media buyer had access to the data.

For publishers, this meant knowing much more about their readers or viewers or listeners than just how many there were. It meant segmenting themselves and their appeal to different “lifestyles.” In the 70s, new magazines were founded that didn’t even pretend to reach the masses: Cosmopolitan, a niche magazine for sexually free, economically independent women, was founded in 1965 but became big news in the 70s with the advent of “feminism,” which further segmented the female consumer, and the decade saw the proliferation of magazines aimed a young adults (“Teen”) or even people who liked gossip “People.”

Each new publication further fragmented the audience. For advertisers, this meant positioning a product in the marketplace to attract the psychographic to which the brand appealed:

In contrast to the “product era” of the 1950s and the “image/impression era” of the 1960s, “positioning” emerged as a primary ad strategy of the 1970s. In a media-oriented culture, marketers found it necessary to position a product in the consumer’s mind, both within the context of its own merits and strengths and in relation to its competitors.

And that’s how we got to the place we are now: the big data era, in which publishers must know everything about their visitors and make that information readily available to media buyers confronted by a dazzling array of opportunities. Those who don’t know will get swallowed up in the continued fragmentation of the advertising buy.

 

 

 

Consolidate Your Vendors for Peak Effectiveness

You know things have become difficult for marketers when the President and CEO of the Interactive Advertising Bureau (IAB) admits that all the money  flooding into ad tech has merely caused more chaos. As a marketer  you certainly already know this as you attempt to deal with the tangle of new partners who come between you and the consumer. As a publisher you rail at the way every new middleman takes a small piece of the pie that represents your inventory.

It’s time for everyone to consider consolidating from the current melange of startups to a single larger vendor who can do it all.

Here, for your viewing pleasure, is the display Lumascape.  Notice the sheer number of possible partners, and then take a look at the number of acquired and shuttered companies.

Display Lumascape

Display Lumascape

All this has got to stop. Marketers, the ones who pay the bills, must think about consolidating to a few larger trustworthy vendors and stop experimenting with startups that promise the Holy Grail and sell you stuff that doesn’t work as promised and doesn’t measure what you need measured.

Video Lumascape

The Video Lumascape

But you’re not relying on display anymore, are you? You are also using video, and you’re moving to mobile.

You will need fewer, bigger, better partners that can take you across desktop, tablet, and mobile.

  • ZEDO, a company that has been in the ad tech business since 1999, has a buy side offering in its ZINC division, and a sell side offering in our more familiar publisher ad server and operations services.
  • Over the years, watching the market evolve, we too have evolved, into a platform for easy and automated buying of our high impact, highly viewable premium inventory. We get consistent high marks for viewability from MRC-certified  vendors, and we are active in the Online Trust Alliance fighting against the distribution of malware and the commission of ad fraud.

And now we are developing new mobile formats for use both in a web browser and alongside applications. Here is the mobile Lumascape, with hundreds of additional companies to contend with. Don’t put up with it. Choose one partner you can rely on.

Mobile Lumascape

Mobile Lumascape

 

 

 

 

IAB Leadership Summit Reveals Industry Challenges

Digital advertising has come of age. Online advertising is now the second highest segment of advertising (at least in the US) and we in the industry no longer have to convince media buyers to send budgets online.
However, now we have to prove that those online budgets bring benefits. In a significant move, the IAB announced at its annual leadership meeting that it will now allow ad tech companies as full voting members, acknowledging the importance of data as well as inventory to the industry.
Despite the growth and wholesale acceptance of online advertising, the industry still faces some challenges: consumer consumption habits are changing faster than the industry can figure them out, brands are challenged to keep up, and marketers, agencies and publishers all find their costs increasing because of audience fragmentation and growing demands for customization. The “mass” has gone out of mass media, and with it the economies of scale. In this new environment, publishers have a hard time affording to produce the kind of journalism a free society needs.
Several critical questions remain to be answered by the industry.
1) Should viewable impressions be the new currency?
The viewable impression has technical and measurement challenges that prevent 100% viewability from being a standard in 2015. We’re in a transition period on the path for 100% viewability, but until measurement technology improves to the point where different measuring companies can come within 10% of one another, we don’t have a good metric. The industry is working toward a digital GRP, but I’m not sure GRPs are all they’re cracked up to be.
2) Will native advertising stick?
On every new platform, ads begin as an awkward accompaniment and only later begin to fit better into the new content and context. That’s where native advertising is now. Native ads represent a fundamental turning point in advertising, but they are an addition to, not a replacement for, traditional ads. If you think of ads as falling into three categories, from pure branding to the presentation of information, to the bare performance ad, native ads should come in the middle of the funnel. We sorely need some standards as to how to present native ads without alienating consumers.
3)What kind of advertising works on mobile? The simple answer is “no one knows.” Yet. Right now, mobile ia the frontier, and most brands can’t create, plan, buy, and measure mobile ads. As a result, most mobile ads tend to be performance ads, which is how all digital advertising started.  After we get our arms around the bottom of the funnel, we’ll start to move up toward the top with brand ads and informative ads. One thing we can already see; digital video will be one of the fastest growing segments of advertising and most of it will be consumed on devices.
4) Is programmatic good for everybody? Programmatic is just the automation of the selling and buying process, and right now too many different ad stacks are being used, which makes the process  seem muddled and  slower. But this year there will be an industrywide push for open RTB standards, and for a common, non technical vocabulary that we can all understand and agree on. Then programmatic will be good for everybody.
5) Who will finally address the issues of fraud?
Last year was the year in which ad fraud came to the attention of everyone, whether inside or outside our industry. The viewability issues raised the initial question of fraud, but now the prevalence of data reveals the percentage of clicks and views that come from bots as well as the incidences of malware served to unsuspecting site visitors. Neither publishers nor advertisers can afford to ignore fraud anymore. IAB has thus formed the Trustworthy Accountability Group, a monitoring body to get the bad, immature and incompetent actors out of the supply chain. All marketers who place tags on a page are under warning.
6)And finally, how can we close the skills gap in the industry as well as increase diversity?
Ad sales, operations, and media content creation are all knowledge-based and require continuously learning employees.  IAB is pushing for some sort of certification for ad industry employees, and of course for an education program to go with it.