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What Candy Can Teach Us About Digital Advertising

Tuesday, May 14th, 2013

“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Michael Lowenstern, Managing Director of Digital Advertising for R/GA.

Around last Christmastime, I was listening to one of my favorite podcasts, NPR’s Planet Money. The topic was – and I paraphrase – “Why Economists Hate Christmas.”

The economist being interviewed explained his argument: When buying something for yourself, you know what you want, you go out and find it, and you exchange money for it. The amount you exchange is generally equal to your perceived value of that item; presumably, you wouldn’t have bought it otherwise. But when buying a gift for someone else, you could exchange $50 for something that has no value to the person receiving the gift – like a toaster or a Power Ranger. That inherent value disequilibrium actually has an economic term: deadweight loss.

Like everyone else probably listening to that podcast, I started thinking about display advertising. It’s a natural leap.

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Programmatic 'Tipping Point'; A 'Second Path' To Funding

Tuesday, May 14th, 2013

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Programmatic ‘Tipping Point’

Even the most optimistic acknowledge that TV dollars are beginning to make a more pronounced shift to digital. As the FT’s Emily Steel notes, a wider adoption of programmatic ad sales methods is taking place, impacting the traditional face-to-face negotiations between sellers and buyers. “This year may be the tipping point where programmatic buying, which has been historically online, will make the transition to offline,” said MediaLink CEO Michael Kassan. “The nature is to resist change, but I don’t think they can stop it. Momentum is building. Broadcasters will have no alternative.” Read more.

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The Key To Web Traffic? It’s The Content, Stupid!

Monday, May 13th, 2013

“The Sell-Sider” is a column written by the sell-side of the digital media community.

Today’s column is written by Jim Spanfeller, CEO, Spanfeller Media Group, a new age media company.

There have been some recent musings on BuzzFeed about what would happen to publisher traffic if Facebook went the way of MySpace. Unlikely as this is in the near term (a fact that the folks at BuzzFeed readily admit), the question does prompt some basic but important answers.

To give the fine people at BuzzFeed their proper due, their primary argument is that Google’s position as the dominant traffic driver on the Internet has slowly but surely given way to Facebook (although some would say these trends have been overstated due to “dark” Google). But now Facebook is seeing some declining numbers in both users and time spent, begging the question “What happens if Facebook becomes less of a traffic engine for content sites?”

Well, in the aggregate...nothing. These sites facilitate for what people want to do in the first place. One might even argue that, on balance, their efforts to help with content discovery are at the core of their value to end-users. In the case of Google, of course, this is without question.

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Ecommerce Hits $50 Billion, Says comScore; Walker Jacobs Leaves Turner

Monday, May 13th, 2013

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Ecommerce Hits $50 Billion

Measurement and analytics firm comScore says that digital commerce transactions crossed the $50 billion threshold in Q1. The company adds in the press release that its “new m-commerce spending estimates revealed that Apparel & Accessories was the highest grossing mobile (i.e. smartphone & tablet) product category with nearly $1 billion in Q1 sales.” Read more. Mobile targeters take note.

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Don’t Overlook The Potential Of Connected TV Advertising

Friday, May 10th, 2013

“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Bill Schild, SVP of US Marketing at Specific Media.

The smart TV market is on the cusp of explosive growth. In 2012 the number of US homes with connected TVs grew more than 25% to nearly a quarter of all US households, according to an eMarketer study.

With the rise of smart TVs, customers can choose how and when they want to enjoy digital video content, making them more engaged and aware than traditional TV viewers. Changing purchase trends and consumption behavior in the TV space offers brands unique ways to engage with captive audiences through a variety of connected TV advertising opportunities. Despite this, many advertisers have yet to harness the full power and reach of smart TVs. The slow adoption of connected TV advertising is driven by two main issues: the lack of industry standardization for advertisements and limited content available on smart TVs.

But before I delve further into those challenges, let me talk a bit more about the potential of connected TV advertising and why marketers should care about this missed opportunity. Smart TVs are being embraced by a savvy and diverse group of consumers. The growth of US homes with Internet-connected TV, rather than cable or satellite TV, is evidence that consumers’ approach to digital viewing parallels their Internet attitudes; consumers expect to find and access everything where and when they want it. Meanwhile, the popularity of subscription video streaming apps such as Hulu and Netflix has given rise to new ad-supported services ideal for consumers who don’t mind watching ads in exchange for free and good digital content.

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Google Adds Subscription Income; Certifying Sales

Friday, May 10th, 2013

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Google Begins Paywall Strategy

Google’s YouTube made it official yesterday: subscriptions are on the way for select channels. YouTube’s “Team” writes on the company blog, “Starting today, we’re launching a pilot program for a small group of partners that will offer paid channels on YouTube with subscription fees starting at $0.99 per month. Every channel has a 14-day free trial, and many offer discounted yearly rates.” Read more, including who the content providers are. More on The FT (subscription).

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Search and Display: A Lesson In What Works

Thursday, May 9th, 2013

frostprioleau “Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Frost Prioleau, CEO of Simpli.fi.

Search advertising is widely considered to be the gold standard of online advertising. One measure of success is that search has achieved recurring line-item status in the advertising budgets of almost all major advertisers. Another measure is that despite consuming only 4% of consumers’ time online, search accounts for 46% of internet ad revenues, according to the IAB Internet Advertising Report. Display, on the other hand, generates only 33% of Internet ad revenues, despite consuming almost all of the remaining 96% of time that users spend online.

While highly successful, search does have some significant limitations. Limited frequency is one issue, in that advertisers only have the opportunity to communicate with prospects at the time of their search. Another issue is search’s limited effectiveness as a branding tool, as search ads consist of several lines of text, mostly without graphics or animation.

This is where display advertising enters with its broad reach, high frequency and wide-ranging graphical capabilities. Exchange-traded display, real-time bidding , demand-side platforms and the like have the potential to combine the effectiveness of search with the reach and brand impact of display. But display still has a long way to catch up with search in terms of advertiser spend.

So what lessons can display advertisers learn from search to become effective and attract more budget? Here’s a look at a few of the most important lessons.

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Buy It Now: Changes Needed To Improve RTB Valuations

Thursday, May 9th, 2013

“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is by Andrew Casale, VP Strategy, Casale Media.

What’s an ad impression worth? That question remains surprisingly difficult to answer when it comes to real-time bidding. On our exchange with connected demand-side platforms, we’ve seen bids within the same auction for the same impression range from one penny to $999.99. The perceived value of these impressions is all over the map. And would-be buyers who are outbid never find out which price ultimately won the impression they attempted to buy, thus raising a huge barrier before the alignment of bid prices with market demand.

Improving today’s system of price discovery is imperative if we want to continue enjoying torrid growth rates in the RTB marketplace.

To dive a little deeper, less than 5% of the auctions we run have a second bid within a penny of the winning bid price (e.g. $2.50 vs. $2.51). That would be a sign of a positive valuation curve in which those in the market mutually agree upon the approximate value of an impression. By contrast, in our auctions the winning bid price is quadruple that of the second highest bid (e.g. $1.00 vs $4.00) an eyebrow-raising 40% of the time, underlining the lack of agreement on appropriate valuation.

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Marin Says Europe Grows; Millennial Media Gets Programmatic

Thursday, May 9th, 2013

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Marin Reports

Marin Software reported its first, public-company quarterly financials yesterday. On the earnings call, Marin said it is seeing “acceleration” in biz in Europe. Spend under management is also showing “double-digit growth,” meaning at the very least that digital continues to grow. Read the transcript. From the release, the profit and loss showed “net revenues of $17.2 million, up 32% year-over-year” in Q1 of 2013 for the SEM platform company; the company had a net loss of $10.5 million in the quarter, too. Read more. Also: “During the first quarter, 542 active advertisers utilized the Marin platform, compared to 436 during the first quarter of 2012. The Company defines active advertisers as an advertiser from whom the Company recognized revenues in excess of $2,000 in at least one month during the quarter.” Marin’s market cap is $438 million as of yesterday.

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Leveling The Playing Field In The Rigged Ad Exchange Game

Wednesday, May 8th, 2013

“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Daniel Davies, Vice President of US Operations at Digilant.

The exchange space is absurd.

Disagree? Okay, open another browser and visit beyondjane.com. Now wait for about 60 pixels and cookies to load onto your computer. Why on earth would a site, ostensibly about women’s lifestyle, need to drop 60 cookies onto your browser just for visiting its homepage? As someone who’s been in this space a while, I could perhaps explain the existence of 25 to 30 of those, which doesn’t make it any more acceptable. But the point is to show how far astray we’ve gone during the first five years of the ad exchange business.

Now look up at the top left corner of your current browser, at the URL you’re on now: AdExchanger.com. We get so involved in all of the data, tech and great ideas that have sprung up in this space, we sometimes forget about the concept that started it all: Exchange. That word – or the spirit of that word – is what got me so genuinely excited about this space all those years ago. I’d come from the contractually encumbered agency world rife with subjectivity, schmooze and vendor advantage. Like many, I found the advent of a truly open market exchange refreshing. I could get information about every single impression I bought and, even better, I could name my price. The Exchange isn’t just a marketplace; it’s the fundamental ideas predicating most of the great tech, data, analytics, and strategy behind that marketplace. It’s all based on the concept of a free, open, data-rich exchange that’s mutually beneficial to buyers and sellers. That foundation has become cracked.

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