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Counterpoint: In Review, The Business Models And Objectives Are Quite Different

Networking"Networking" is written by members of the online advertising network community.

Today's counterpoint column is written by Jacob Ross is Senior Director, Advertising Platforms, Demand Media

Big news on both eBay and Microsoft today, and Eric Franchi did a great job of surfacing the importance of the news. However, it's misleading to compare these two announcements side-by-side as the business models and objectives of each company are quite different.

Microsoft is using Appnexus in a much similar way to how Yahoo uses Right Media - to monetize all their display ad space in the most effective possible way. You'll note that they're starting with the longest of tails, Hotmail. In terms of monetization opportunities, there are no other real opportunities on the Hotmail pages - most of Microsoft's pages are monetized purely through advertising. In this case, an Exchange relationship with a player like Appnexus makes sense, and allows Microsoft to start building some powerful relationships with the DSPs and agency trading well as leverage data-progressive agreements which will result in outsized CPM and spend levels.

eBay, on the other hand, is primarily focused (rightly) on their core auction business for revenue. Having a display business driven by 3rd party monetization (ad networks) was never a great idea, as every time a user clicked on an ad, eBay generally lost the opportunity to make a sale for 1000 times the value of that ad view. The partnership with Triad will likely usher in a new kind of advertising for them where you'll start to see advertising experiences that drive traffic to eBay carts more often than 3rd party sites.

The direct, in-house strategy in this case is appropriate for eBay given their business, just as the AppNexus remnant partnership is a good move for Microsoft. Display advertising represents a huge opportunity for each company, but each one absolutely must approach it in a different way.

Representation Vs. Automation

Networking"Networking" is written by members of the online advertising network community.

Today's column is written by Eric Franchi, Co-Founder and SVP, Business Development, Undertone.

Two interesting and significant pieces of news in the display advertising space came out on Monday morning, January 31st.  Ecommerce giant eBay announced a change in strategy from its current monetization model, announcing that  boutique rep firm Triad will now help the internet giant manage display ad sales for and eBay Motors.  On the same day, Microsoft announced that it would be moving all its non-premium inventory to the Appnexus platform.

If you follow the display space, then you know that this is a big deal.  Microsoft and EBay were the 3rd and 11th largest display advertising providers in October 2010, according to comScore. And display is certainly a strategic focus for both.  Seeing them make their bet on completely opposite approaches, at the exact same time, makes this all the more interesting.


Counterpoint: Data and Media Work Well Together - Separately

Networking"Networking" is written by members of the online advertising network community.

Today's column is written by Mark Zagorski is CRO, eXelate

I applaud John Garber for taking this subject on in his very well written and interesting piece (read it) yesterday.  Although I think many of the concepts are right on, including the nascent nature of data valuation models and the added value of context+audience in determining campaign success, I have to take issue with a few of the points, which I feel undermine the general premise of maximizing the value of audience data for publishers, and which ultimately may confuse media buyers.

First, the idea that “the risk is all on the buyer in a straight data buy” is true only in models in which data is purchased on a “per user” basis and it is then up to the buyer to find these users either via their own direct media sources or media aggregators. The pay-per-user model may work for buyers in some cases, but for the increasingly real time, DSP-console driven nature of media buying it doesn’t make sense. That is why eXelate (and other data companies) also built data models on a “pay per use basis”, in which data costs are only incurred when a user is “found” and successfully targeted. In these cases, there is no buyer risk, and the publisher (data provider) shares in the upside on every impression when its data is successfully used. In this manner, publishers are not the guinea pigs in a “data buyer arbitrage” game, but active participants in the sale whose value rises as based on the ultimate worth and incremental use of their data.


Publishers: The Best Way To Monetize Data Is By Selling Inventory And Becoming Part Of A Co-op

Networking"Networking" is written by members of the online advertising network community.

Today's column is written by John Garber is VP, Business Intelligence, Lotame Solutions, Inc.

Much has been said recently about new and as yet unrealized data opportunities for publishers.  Many companies are knocking on the doors of publishers and peddling our DMPs, SSPs, and DSPs, all as a way to “maximize revenue, yield, and ARPU.”

Today, the best way for publishers to monetize their data is to become part of a media coop and sell their inventory too. To repeat: the best way to monetize data is by selling inventory and becoming part of a coop.

Here's why.  When a buyer buys data separated from the media, they take on the responsibility of monetizing what they just bought. They make zero money if they learn that a person is a male, interested in sports, but then never get a chance to put an ad in front of that person. The media is still the monetization vehicle at this point in the development of the data market. The risk is all on the buyer in a straight data buy.  Because of that, buyers of data (today) can't afford to pay high prices for straight data and they have trouble understanding how much to spend because they don’t know if they'll get to use their new purchase once, a hundred times, or never. Ultimately, this means small checks to the publisher.

When a publisher both sells their media inventory and joins a data selling coop, they then remove the buyer from the responsibilities of finding the audience. 100% of the people who generated the data in the first place also generate media opportunities from the same site. They naturally go together. To maximize what you can make from the data you need to sell them both: straight data and data targeted media.


Time To Drive New Metrics-Based Valuation

Networking"Networking" is written by members of the online advertising network community.

Today's column is written by Kirby Winfield is President and CRO of Mpire's AdXpose.

On a recent conference dais, Scott Knoll from Aperture shared a deceptively simple insight in regards to the topic of audience buying.  He pointed out that simply buying an audience without attending to the other variables is foolhardy.  Specifically, he mentioned creative, verified data, and placement as ‘must-address’ items on every impression purchased.

I agree but I think I’d be a bit more forward: placement trumps targeting, data, creative, content, and every other variable being solved for, by each of us in this space.  Without premium placement, or at the very least, placement that is guaranteed to be visible to each user on each impression, there is an exponential waste factor in every online campaign.

In plain English:  Multivariate creative testing, real time bidding, retargeting, brand safety and in-market audience data don’t add much value if your ad is unable to be seen by a human.


It's Time For Publishers To Develop Strategies Around Their Audiences

Networking - Jeff Hirsch"Networking" is written by members of the online advertising network community.

Today's column is written by Jeff Hirsch, President and CEO, AudienceScience.

A publisher that invests heavily in developing quality, valuable content correspondingly creates two primary assets that advertisers demand.  The one we have grown most familiar with is space, or inventory.  The one that is growing in value exponentially is their audience, expressed as data.

For years, publishers have spent countless hours and resources developing strategies around maximizing yield on their inventory.  Sales programs are developed, third party technologies are deployed, sales channels are developed... all in the hopes of hitting the elusive 100% sold out bar.  There are untold stories of publishers leveraging third parties, such as ad networks, to help fill their unsold space, and all the success stories and time bombs that have gone along with that strategy.

It is now time for publishers to thoughtfully develop strategies around their audiences.  Publishers need to ask themselves: How will I leverage my own audience?  Should I make my data/audience available to third parties?  If I do make my audience available, how do I do so in a manner to maximize ROI including minimizing channel conflict? What third party model will work best for me?  What technology with enable me to execute my plan?


One-Size-Fits-All Solutions Not Acceptable for Advertising

Adconion"Networking" is a column focused on the evolving roles of networks in online advertising.

Today's column is written by Tyler Moebius, CEO of Adconion, an online advertising network.

Traditionally, ad networks have been perceived as enablers, as tools advertisers and agencies can use to increase campaign efficiency, extend their reach and add scale. An agency or brand marketer would present goals for a performance campaign, and the ad network would deliver a solution that exceeded these goals. While perhaps not a science, the numbers are precise and easily measured.

However, ad networks have invested time and money in building out technology and products that not only enable successful performance campaigns, but also enable successful branding campaigns such as those in video.

Video is perhaps the most effective brand-building arrow in an advertisers’ quiver, combining sight, sound and motion in a manner that, when done well, elicits an emotional connection between the audience and the brand.

On the internet, video advertising has even more potential – targeting technology makes reaching relevant audiences more efficient, while interactivity allows the audience to react to the brand and learn more about it. In addition, the rise of online video advertising marks the first really effective branding tool, other than their own websites, that brand marketers have on the internet. (Of course, one major difference here is that video advertising is pushed out to prospective customers, while brand marketers have to wait for their websites to pull in customers.)


It's Time For The Futures Exchange

Networking"Networking" is written by members of the online advertising network community.

Today's column is written by Andy Atherton, COO and co-Founder,

My former boss, Wenda Harris Millard, had one of the most quotable, and quoted, lines in the online media industry in 2008 when she said, "We must not trade our advertising inventory like pork bellies", referring to frenzied interest in online media exchanges – interest which for good reason shows no signs of abating.  Her remark was intended as a warning to publishers to maintain differentiation and manage indirect sales channels carefully.  But consciously or unconsciously, Wenda also surfaced a fundamental distinction that, oddly enough, doesn’t get talked about in the context of online media:  the difference between a Spot market and a Futures market (media contracts are not yet exchange traded, so technically this would be a  “Forward” market, but I will ignore this subtlety in the interest of simplicity).

Since Futures market buying (e.g., the TV “upfronts”) is the standard practice offline for Brand advertisers, and Brand advertising is (rightly) seen as a huge growth opportunity for online, it behooves those of us interested in catalyzing that growth to identify where current market capabilities and technology infrastructure are lacking.  To do that, let’s take a deep dive into a specific example, moving  beyond the fashionable, but vague, notion of “Madison Avenue meets Wall Street” to the technical and operational details required to make this actually happen.  So let’s (1) walk through an example of a Spot media transaction, (2) replay the same example in the context of a Futures transaction, and (3) evaluate the key capabilities required to enable Futures transactions for online media.


Reinventing the Wheel (To Run Yourself Over)

Networking"Networking" is a column focused on the evolving roles of networks in online advertising.

Today's column is written by Michael Katz, President, InterCLICK.

Ok, I admit I didn't come up with the phrase and I hate to be the bearer of bad news but (the top 25) networks aren't going away anytime soon. Recently there has been a tremendous amount of hype surrounding demand-side platforms (DSP) and real time bidding (RTB). DSP's are wildly popular among agency executives (and the media) while RTB is very popular among exchanges and yield optimizers (and the media). Seems like everyone still wants to displace the ad network, this time it's a group of companies that are basically ad networks but not calling themselves such, at least not yet. While there are some things the DSP's are doing right in terms of increased transparency, everyone needs to keep in mind these are primarily just ad networks operating without any real domain expertise. People are basically calling for the replacement of something proven to be effective with something that has really no proof.

While I hate predictions because nobody really cares who is right or wrong, I'm going to throw a couple of predictions out there. First, I predict that one of the agency trading desks calls it quits by mid-year. Second, some DSP's will start calling themselves ad networks (again) by the end of the year. The reason: the general approach is flawed and they don't know that they're wrong because everyone is telling them that they are right including investors, the media, and some agencies.

The Concept of a DSP


2010: Audience-Centric Buying

Networking"Networking" is a column focused on the evolving roles of networks in online advertising.

Today's column is written by Alan Schanzer, Chief Strategy Officer of Undertone Networks.

The media landscape continues to evolve as advertisers move away from impression-based demographic buying to audience-centric strategies. This shift recognizes that audiences more accurately reflect potential customers and provide a way to promote more targeted promotions and messages.

This trend is exciting for an industry that continues to demonstrate incremental value in an increasingly complex ecosystem. For ad networks, this is particularly exciting given the potential audience scale available across their aggregated Web properties and the technology deployed to find and target these audiences.

Over the years, targeting has taken many forms. One of the most widely used targeting techniques, demographic targeting, allows marketers to focus online ads on consumers with their desired demographics (i.e. age group, gender, household income, et cetera). Demographic targeting certainly serves a purpose and serves it well for broad messages and relatively simplistic buying models.

This type of targeting segmentation is borrowed from traditional media (TV) buying models and is, quite frankly, a result of limited insight into actual viewers and viewer behavior. While reach and frequency is gained, it comes with substantial waste and limitations on the relevancy of the message.