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Time to Re-Examine Google’s Ad Server?

After more than two years of saying very little about its preparations for GDPR, Google has now made several changes that reveal how things will change for the rest of the ecosystem. During a call with the IAB Europe GDPR Transparency and Consent Steering Committee, Google disclosed that it has a new tool in beta with some DFP and AdSense customers called Funding Choices.  Funding Choices limits the partners a publisher can share consent with to a dozen.

This is a similar consent tool to other Consent Management Platforms like Admiral and Sourcepoint. A full list of IAB-registered CMPs is here.

The Google consent interface greets site visitors with a request to use data to tailor advertising, with equally prominent “no” and “yes” buttons. If a reader declines to be tracked, he or she sees a notice saying the ads will be less relevant and asking to “agree” or go back to the previous page. According to a source, one research study on this type of opt-out mechanism led to opt-out rates of more than 70%.

Google’s and other consent-gathering solutions are basically a series of pop-up notifications that provide a mechanism for publishers to provide clear disclosure and consent in accordance with data regulations.

As a company that began its life as an ad server, we have been struggling to find out whether we play at all in this full-employment scheme for lawyers, since we do not hold data or sell it. The situation is made more fluid because publishers do not have to accept the Google solution, and large publishers like Axel Springer have developed their own CMP technology.

Another announcement made by Google last week seems to have made  multi-touch attribution attribution much more difficult, because as of May 25 google will no longer provide DoubleClick IDs for data from its had server and DSP, or Cookie IDs and IP addresses from its exchange.

According to Martin Kihn, Research Vice President for Gartner,

Without these IDs, exported DCM log files can’t be used to determine true reach and frequency or to build MTA models, which are by definition user-level. MTA is not the only way to measure the true impact of ads but is theoretically the most accurate and provides by far the most detailed results.

Of course marketers are scrambling. But didn’t everyone in the industry expect this? This, after all, is the objective of GDPR, to preserve the consumer’s privacy.  The consumer does not care about the accuracy of Multi Touch Attribution customer campaigns, and for Google especially there is no other alternative. Google doesn’t really have to care about its ad-serving business (DFP), which it acquired over a decade ago and which is responsible for a very small part of Google’s revenue.

And it’s not as though a company the size of Google can slip under the radar of the GDPR, because it has already been fined and I’m guessing that other than Facebook, Google’s going to be under the greatest scrutiny by GDPR enforcers.

Remember, not everybody has to use Google as an ad server.

 

 

Header Bidding Wins

Just as publishers were beginning to see increased revenues from the 2016 hack called “header bidding,” Google decided to get into the game. For a while, header bidding was a way around Google’s almost total control of real time bidding auctions. But now Google has released its own solution called Exchange Bidding to all publishers who use Doubleclick for Publishers. AdExchanger writes,

Exchange Bidding relies on server-to-server connections, which are faster than the page tags some header bidding solutions rely on, and lower latency improves ad viewability, and thus yield.

It’s also faster to install, with Exchange Bidding essentially a plug-and-play product compared to heavy development and collaboration required of publishers in header-bidding integrations. 

Meredith, an Exchange Bidding beta partner, said it joined because its pages loaded faster and because it consolidated exchange reporting within Google, which reduced measurement discrepancies with advertisers, Chip Schenck, the media conglomerate’s VP of programmatic sales and strategy, told AdExchanger last year.

 

Exchange Bidding, however, can’t be used by buyers who have preferred or guaranteed rates. The new product is only available right now for display ads, although it is useful for mobile web and in-app ads. If you are a publisher who relies on video inventory, this is not for you.

We were one of the first to offer header bidding, and that was about two years ago. Before that, Google  had a near monopoly on the auction market. According to an article in last summer’s Ad Age,  header bidding really shook Google up, and it began offering its own product as a test.  But it immediately ran into resistance, because it was trying to charge a 5% cut for the service. That’s been reconsidered, but in the meantime both Amazon and Facebook have begun to offer their own form of header bidding, forcing Google to play fair.

We think this is good for the industry as a whole, because Google’s monopoly turned out to be costly for publishers. What’s also good for the industry is the convergence among all the once high-flying ad tech companies, who charged publishers for services that did not add value.

This call comes just in time, because eMarketer predicts that 83% of digital spend will transact programmatically by 2019, and by 2020 digital spend will exceed all other forms of advertising spend combined.

The next thing we have to do on behalf of publishers is step up the filtering of non-human traffic and traffic to fake sites, and that is increasingly becoming a priority, especially through the widespread industry adoption of ads.txt.

We’re getting increasingly skillful at weeding out the negatives in our industry and focusing on providing a clean marketplace for digital publishers and demand side players to interact.

 

 

 

 

 

Google at a Crossroads

It all started when the London Times published an investigative piece a couple of weeks ago about ads from prominent brands appearing on terrorist sites and alongside other types of objectionable content. Of course this has been going on for years, at least since the beginning of programmatic buying, but all of a sudden brand safety leapt to the front of advertisers’ consciousness and they began pulling out of Google sites like YouTube and the Google display network. And these are not minor brands; they’re WalMart, Pepsi, Starbucks, Coke and other powerhouses.

Quite often, these little volcanoes erupt in the digital advertising world and brands make noise about something they don’t like. But then the furor dies down and things go back to “normal.” The Wall Street Journal, however, says this is the beginning of something new for the Google ad business, because marketers have been here too many times before, and they really can’t fall back on the excuse that they don’t know what they’re buying. Behind every marketer who may not understand, there’s an agency that does, and the agencies should know better.

Despite Google’s apologies and promise of new tools, ads were still on hate sites, fake sites created by bots, and pornography last week, which prompted the Journal to put a couple of veteran reporters on this lingering story.  CEOs and CMOs of big companies are now involved, and perhaps because of potential implications of being linked to terrorist sites, Google is going to have to make some changes.

And not just Google alone. When you are going for  scale, it is almost impossible to perfectly police what is being bought. Or so it is said. But the research done by the Journal reporters seemed to point to willful blindness. It does seem incredible that big companies, either the advertisers or Google itself, can’t type in some search terms and find out whether their brand ads are still running on hate sites.

This led reporter Suzanne Vranica to say that no one in the industry is really incentivized to fix problems like these when they occur, because everybody gets paid. The publishers get paid, the holding companies try to push as much inventory through these platforms as possible so they’ll get paid, and the advertisers have the advantage of cheap ads. So throughout programmatic’s history, people on all sides of the supply chain have simply looked the other way at ad fraud.

Encouraging terrorism, however, is a horse of a different color, especially after being seen on fake news sites during the election got them worried. Just after fake news subsided as a concern, the fear of seeing your brand in the headlines for funding terrorism arose for these companies, many of whom are public.

Admittedly, in the back of every advertiser’s mind is the reality that they’re getting what they pay for when they buy cheap ads, but that doesn’t mean they won’t turn on Google and Facebook to save their own reputations. They are coming to realize that they helped build these platforms and they are really the people who pay the bills. The walled gardens are not giving them the data they need, and at the end of the day, that’s the main issue. The advertisers ceded their power, and now they are demanding it back.

 

 

Google Blocks Twice the Number of Bad Ads as A Year Ago

Despite the “moon shots” under development by its Alphabet decision, the Google organization still makes its living through advertising. According to its most recent earnings report, Google grew 8.3% this quarter, largely driven by search ads. However, the company is looking to mobile for new sources of ad revenue, and that’s not working quite as well (yet).  According to the Wall Street Journal, 

The search for new ad revenue comes with a downside: Users are seeing more ads, but advertisers are paying less for them. While ad clicks increased 36% in the quarter over a year ago, advertisers’ prices for those ads fell 15%. Both figures were the highest in at least three years.

The gap between the prevalence of ads and their prices was previously driven by the increasing share of mobile searches, because advertisers pay less for mobile-search ads than desktop ones. In the fourth quarter, the company attributed the gap to the growing share of YouTube ads, which generally earn less than ads shown above Google search results.

Google has also tried to preserve its reputation by culling out bad ads. Google said it blocked 1.7 billion bad ads in 2016, twice as many as in the previous year. That’s a pretty shocking comment on the state of ad fraud in our industry.

Ads that are misleading, inappropriate, promote misleading products or trick users into installing harmful software are generally deemed “bad,” Google said. The company also blacklisted ads that were once considered acceptable in 2015.

Payday loans that carry an annual interest rate higher than 36%, for example, were banned from appearing as Google search ads last year. The company was applauded for its move, as the measure was expected to cost Google millions in revenue. Yet digital loan sharks quickly adapted to Google’s newfound rule, as many loan companies now offer payday loans with an APR as high as 35.99%.

And there’s a new genre of “bad” ad called “tabloid cloakers.” Tabloid cloakers are misleading ads that feature “news” on their surface, but when clicked lead the reader to an unrelated selling message:

One example the company shared was about an ad showing Ellen DeGeneres and aliens. However, consumers who click on ads like this are taken to a site selling weight loss products, for example.

Google said it suspended 1,300 accounts for tabloid cloaking last year. In one sweep, the company took down 22 accounts that were responsible for displaying 20 million cloaker ads over a one-week period.

Can you imagine being Google and having to keep up with all these insidious trends?  And that’s before the company gets to dealing with fake news sites. We’re still a long way from a clean supply chain.

Top Mobile News Apps

Trying to figure out which news apps are the most popular with mobile users is a daunting task. Like all measurements, these change according to who is measuring and how the measurements are being taken. If one measures just unique visitors, dedicated news sites don’t fare very well.For example, below is a list of top mobile apps in the US. This is year-old data, but the most reputable we have until Comscore counts again. Unsurprisingly, there’s not a traditional news app in the top 25. And if you ask consumers where they are getting news, they’ll tell you Facebook , YouTube and Twitter, except for specific news that comes from Yahoo Stocks, the Yahoo Weather Widget, and the Weather Channel. The news sites are posting their content to these top sites to capture their traffic.

ZEDO Top Sites 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

But now look down at this list of the top  US news apps from the Google Play store. These are “real,” or pure new sites, and the typical news sites, are there — Yahoo, CNN, Fox, Buzzfeed, NBC, BBC, and the Guardian. Notice the absence of the New York Times here. Because Android controls the mobile market in sheer numbers, and because these apps are free, we can guesstimate that these apps have some popularity outside the US as well. It would be safe to extrapolate the IOS picture from these apps, with the possible exception of the Google sites.

Screen Shot 2015-07-12 at 11.39.36 AM

 

 

 

 

 

 

 

 

 

 

 

A third count shows the top smartphone apps at the beginning of 2015. Once again, not a traditional news app in the bunch. We again draw the conclusion that people are getting their news from Facebook, YouTube, Instagram and Twitter, with a bit of Google +, which is very popular outside the US, thrown in.

Our determination is that traditional news publishers are behind the power curve, and that publishing articles to Facebook and links to Twitter, Instagram and YouTube is catching on. Nevertheless, it’s not time for publishers to throw in the towel on their own sites just yet. What they must do is place the emphasis on shareable content that can live on and off the social streams. It’s important that Facebook’s walled garden not be the only news source on the internet, especially in countries where it is either banned or not widely used.

ZEDO Top news apps 2015

 

When Brand Advertising Comes Back, Google Gets Eclipsed

The well-respected blogger Ben Thompson wrote quite a controversial post titled Peak Google after seeing Google’s Q3 earnings. While Google’s ad business obviously isn’t in serious trouble, the numbers led Ben to contemplate the fact that while Google has totally captured the search advertising business, search represents a scant 10% ($50 billion), of the $545 billion total online ad spend this year. And in the future, it might represent far less.

Where is the rest of that big spend going?  It’s going to brand advertising (through various media like TV and social), the kind of advertising Google taught us to disdain. Google has told us for a decade that we should value only direct response or performance ads. The result is the ridiculous metric of CTRs, which in no way represent the consumer’s entire response to an ad.

Especially on a mobile device.

On mobile, brand advertising is making a comeback.

…over the last few years a new type of advertising has emerged: native advertising. I’ve already made my defense of native advertising here, but just to be clear, I classify any sort of “in-stream” advertising as native advertising. Thus, for a news site, native advertising is advertising in article format; for Twitter, native advertising is a promoted tweet; for Facebook, native advertising is ads in your news feed; for Pinterest (a future giant) a promoted pin. These sorts of ads are proving to be massively more effective and engaging than banner advertisements – as they should be! In every medium (except, arguably, newspapers, which had geographic monopolies) native advertising is the norm simply because it’s more effective for advertisers and a better experience for users.

Thompson goes on to argue that TV commercials are mostly for brand advertising, as are jingles and magazine ads.

And all those are coming to mobile, in large part as digital video. All those brand advertising dollars from TV, flowing to mobile, has already caused the industry to examine potential new metrics for measuring an ad’s effectiveness, such as engagement (time spent with the ad) and video completion rates.

There’s no guarantee that Google will be able to win at this new game. Native advertising, and brand advertising in general, requires immersive content, and the social streams and Tier 1 publishers have most of that. As do some startups like Buzzfeed.

On the other hand, that’s not to say that Google will not continue to be profitable. Thompson compares it to IBM and Microsoft, each of which is still alive and profitable, although not the industry leader it was in the past. He says Google will not get “disrupted,” so much as it will get “eclipsed.”

 

New Advertising Formats Rescue Publishers

Nobody wants the publishing industry to go away, but current conditions sure make it difficult for it to survive. It used to be that advertisers had to come to publishers to reach potential customers. Now, however, all kinds of tech companies sell customer data, and the publisher’s audience appears to have become less critical to the targeting process. Thus, there has been an almost constant erosion of the power of the publisher to impact ad buys, even as his reach increases. The New York Times has 31 million online subscribers, a number unheard of in the print era. But to an advertiser, that could be nothing compared to a Google or a Facebook, who reach billions.

To survive in the programmatic environment, publishers have had to drop their CPMs. from double to single digits. The survivors have already made the shift, and the new startups are unburdened by legacy cost structures (you may remember printing presses).

Yet there are still ways for legacy publishers to survive the commoditization of  what appears to be an infinite supply of  inventory.

One way is through video ads.  There is a relatively small supply of pre-roll to run against video content, and it is so limited that advertisers who want to run on video sites can’t get the reach they need without resorting to other forms of publication to get enough scale. On the other hand, video is increasingly popular with consumers, who watch it on mobile devices in ever-increasing numbers.

Advertisers who want to run video to reach large audiences must find other sites.

On these sites, smart publishers can either create content specific to advertisers , which we think of as content marketing, or   allow advertisers to develop their own content to fit the existing content of the publisher, which  is called native advertising. With either native advertising or content marketing, the simplest thing for an advertiser is to be able to repurpose existing  TV ad content into a standard IAB space.

However, there’s still no guarantee that the ad will be seen, as the statistics say that 50% of video ads go unwatched.

We have the answer to this problem with ZINC’s InArticle video format, which runs on your site in a standard IAB unit, but gets 25% higher CTRs than a typical video ad because it can expand to full screen and leaves a 1×1 reminder at the bottom of the page.

Our InArticle format,  sold directly or programmatically, allows advertisers to reach new audiences across new channels at scale. Our publisher partners have been very satisfied with the high CPMS this format is able to command, and advertisers are thrilled with our viewability metrics. We’ve got first rate video ad viewability partners who help our publisher partners provide the metrics they need to sell successfully.

 

 

NY Times: Newsrooms and Publishers Must Form Strategy Together

If you  haven’t already read the New York Times‘ leaked digital strategy, here it is for you. If you’re a publisher, and you are not digital native, I’m sure you will want to have a look if you haven’t devoured this document already. It’s a pretty truthful picture of where the newspaper we can’t imagine a world without has to be heading if it wants to survive.

The Full New York Times Innovation Report

Here’s the truth: you may think your home page is important, but it isn’t. You may think you have control about what news your readers read, but you don’t. Even Google, whose algorithm updates are like a roller coaster on which you have ridden for more than a decade, does not. In most cases, especially those of news, social media does.

Only a third of the New York Times’ readers ever visit the home page. The rest go directly to what they want to read by way of Twitter and Facebook links from their friends or their news feeds. No newsroom can tell us anymore what we should read. So it’s up to the business side of the house to find out what we DO read.  To find out what its readers are doing, the Times keeps analytics. And analytics, in the case of digital news sites, will dictate what’s being published if the newspaper wants to survive.

For reporters and editors who are used to being the determinants of what news people will see, this is a shocking shift. 

News used to be a destination, and you would go find it on your driveway and in your browser. Now you’re the destination, and “information—status updates, photos of your friends, videos of Solange, and sometimes even news articles—come at you; they find you,” Quartz‘s Zach Seward writes.

If the clicks aren’t coming from home pages,  where are they coming from? Facebook, Twitter, social media, and the mix of email and chat services summed up as “dark social” (dark, because it’s hard for publishers to trace). Here’s the incoming traffic data from the BuzzFeed network (a bundle of popular sites including BuzzFeed, Huffington Post, the TimesNew York magazine, and The Atlantic) in the first three months of  2014.

IAB OK’s Trading on Viewability

For three years, we’ve been screaming that in digital advertising, there’s no such thing as “below the fold,” with its devalued impressions. We asserted that if an ad is seen by a visitor,it should be paid for. Now, IAB‘s new standard has directed that this should and will happen. Above and below the fold will no longer be the determinant. The new determinant will be viewability.

The IAB, after much sturm und drang ( 18 months of committee meetings and discussions at leadership summits)  released its standard for viewable display impressions last week. As expected, a viewable ad is one in which a minimum of 50 percent of pixels are in view for a minimum of 1 second. It doesn’t matter where that ad is placed on the site.

This shouldn’t be news to any of us; we have been following the issue of viewability and wondering when advertisers would start buying for it. Now that the Media Rating Council has lifted its November 2012 Viewable Impression Advisory for Display Advertising, the industry should start making transactions using viewable impression currency immediately.

IAB has a list of vendors certified by the MRC, and although their measurements can vary plus or minus five per cent, agencies with brand advertising campaigns will expect guarantees on viewable impressions. As for ZEDO, we’ve been working with comScore since it was AdXpose, and our high impact formats are all certified 99% viewable.

However, the bad news is all of this applies only to display advertising for now; video won’t be available for trading until June and video is the fastest growing segment of the online advertising business right now.

As IAB’s Sherrill Mane wrote,

Publishers who have been testing display viewability data know all too well that the investment in resources is substantial. You need to finance purchase of data from multiple measurement vendors, assign the right teams of people to develop test parameters, conduct enough comparisons so that you have an idea of how to forecast inventory and optimize yield. Even if all the steps are executed well, you are likely seeing variances across vendors. Some of the variances may be greater than what you’d need for confidence in the decisions you need to make.

Before you go nuts trying to decide which vendor you are going to use to measure viewability, you might want to take a look at IAB’s reconciliation study, which examines the different methodologies used by the vendors.

If you happen to like comScore, all currently used ZEDO high impact formats are certified by comScore.

 

 

What Are ZINC’s High Impact Formats?

We’ve been talking about high impact formats for over a year now, long enough to occupy most of the first page results on Google. However, the term probably needs a more specific definition, especially the way we use it at ZINC.
Our high impact formats emerged from a challenge I issued to our team over a year ago to develop some formats that could help readers engage more with ads, since standard display ads were clearly not working as well as they used to. Out of that challenge came a suite of eight truly different unique formats, which we’ve offered through the ZINC site to agencies for campaigns that really demand high visibility, and can be used for both brand building and performance. These ads, sold either by us or by our premium publishers, consistently outperform traditional display ads, although they come in standard units. We’ve tested some of them with comScore and they’ve been found to be consistently 99% viewable.
The highlights:
ZINC InView Display: Our InView Display ads provide a customized user experience in standard formats, and require very little work on the part of the buyer to implement. In ads like these, the user may be accustomed to ad units in certain locations on web pages,  but ZINC ads create a customized experience by reacting to the consumer’s behavior. As the visitor scrolls down a page, the ad is triggered to appear in the right rail in a subtle sliding motion. The motion of the unit gets the consumers attention, resulting in increased brand recognition and higher  CTRs. The InView slider, the most popular of these, has been tested 99% viewable.
These ad formats can run video as well. We have perfected techniques for getting these campaigns live very quickly, as they can accept all standard existing creative. These are not like traditional rich media ads that demand special creative before they can run. They get a great reception from viewers, because they’re unusual, and they only appear when someone is there to see them. Our patented scroll technology allows for subtle effects that don’t cause editorial departments to wince.
ZINC InArticle Video: Engaging an Engaged Viewer
In the past year, video has taken the ad world by storm, probably because consumers will watch video ads in greater numbers than will watch standard banners. As a result of the consumer shift to video consumption online, especially on mobile devices, the best sites quickly run out of pre-roll inventory. Our answer to that is InArticle, a video format that runs on an uncluttered premium web page that is already being read by an engaged visitor.
As the user slowly scrolls down the lines of text, a large canvas opens up and  a high quality video ad begins. The  curious user clicks on the ad, and the brand’s message expands to fill the entire device screen, creating the closest experience to TV on digital at the highest point of engagement. It’s a fresh way to reach a desirable audience, and at a scale that is compelling because of our premium sites.
Almost every time we demo these formats, an agency gives us an insertion order. You can learn more about these exciting advances in online advertising at ZINC’s special showcase site.
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