Programmatic Driving Down Ad Prices; Google Paying For Patent Troubles

Here’s today’s AdExchanger.com news round-up… Want it by email? Sign-up here.

Programmatic And News

Programmatic takes the blame for sluggish ad sales in a Wall Street Journal piece about the potential glut of new news sites. The WSJ’s William Launder writes, “One industry executive estimated that pricing on standard banner display ads has fallen 30% to 40% over the past several years, while an ad buyer said the prices on ads sold through automated platforms have dropped by as much as 70% over the past five years.” Will online subscriptions – email or otherwise – save the day? Read more.

Patent Payout

According to Ars Technica, Google and its Adwords product have run afoul of the quixotic world of patents. Tiny Vringo has successfully won a decision for damages associated with the patents it acquired in 2011 from toothless search engine Lycos. Ars Technica’s Joe Mullin explains the financial impact for GOOG: “An extremely rough calculation suggests US AdWords revenue is somewhere in the range of $15 billion to $18 billion annually. If that’s right, it would place the Vringo royalty win somewhere in the realm of $200 million to $250 million annually.” Read more. Appeals are more than likely.

Fraud Down, But Not Out

New data from Integral Ad Science says the fight against fraud is being fought effectively, but there are still gaps to fill. Forbes looks at the data and see that almost one in eight impressions are still fraudulent – though the good news is that “suspicious activity” is down from 30% to 13%. In spite of the continued success of fraudsters, publishers and advertisers may be turning a blind eye in order to meet their respective objectives – although both would benefit from a reduction in fraud. Read more on Forbes. And read the release.

Goodbye Direct Sales

Demand Media is shuttering its [direct] display sales and focusing on programmatic exclusively, following a similar move by Federated Media. “Our audience is ideal for this type of advertising. They come to our sites when they are ready to take action, and this move will facilitate advertisers reaching them at precisely that moment,” said Shawn Colo, interim CEO of Demand Media. Read the release.

Tag, You’re It

Tag management company Ensighten raised $40 million (release) in Series B funding as advertisers realize the potential in the data collected from the tags. “A year ago, that was what the market was ready for. We’re now seeing the market evolve from tag management to data activation, with customers demanding a platform that enables them to own, collect and act on their data in real time,” CEO Josh Manion told TechCrunch via email. Read more. More in PandoDaily.

Ecommerce Boost

Yahoo’s Q4 earnings report shed some insight on the growth of Alibaba, which has contributed significantly to Yahoo’s bottom line. The New York Times is reporting that Alibaba may be worth anywhere from $100 billion to $150 billion, driven by its much-anticipated IPO. Even bigger gains are expected in the next quarter as revenue from 11/11 and 12/12, both huge shopping days in China, are reported. Read more.

AdChoice Awareness

Although the advertising industry is relying on self-regulation when it comes to privacy and data collection, the efforts don’t extend far enough to the public, according to research from Parks Associates. In 2013 only 6% of respondents reported seeing the AdChoices icon, versus 5% in 2011. Parks Associates suggests deploying opt-in options rather than opt-out options, especially ones that include incentives such as personalized content or discounts. Read more.

The Chosen One

Publicly traded Synacor has chosen BlueKai as its data-management platform (DMP) of choice, putting first- and third-party data behind its programmatic and traditional ad offerings. According to a release, Synacor owns over 40 sites and boasts a reach of 21 million consumers. The company also emphasized the fact that it has video inventory as well. “We’re excited to work with Synacor as it bolsters its digital advertising offering, particularly as data continues to play a major role in targeting and audience segmentation, escalating programmatic advertising,” said John Sedlak, BlueKai’s SVP of global sales. Read the release.

You’re Hired!