The ‘Online Advertising’ Category
AdExchanger.com recently asked several members of the advertising ecosystem about "Middlemen" and, specifically:
- "Are there too many parties trying to insert themselves into the online advertising value chain? How do you see this playing out?"
The following contribution is an agency perspective from Scott Symonds, General Manager of AKQA Media, Search & Analytics.
Answer: Too many from a capitalist perspective? No. Too many from a usability perspective? Yes.
What do I mean? Working in such proximity to Silicon Valley, I have great opportunity to be impressed with all the technology and entrepreneurialism evolving around the digital marketing ecosystem. First, there were networks and search, and now there are social, mobile, application, exchange, data, location, and verification providers all looking to insert themselves in the online advertising value chain. If there wasn't a market for it, call it leakage or call it room for improvement, they would not exist. I have come to see it as yet another inevitable cycle of capitalism, creativity, technology, chaos, and eventual resolution within this still young medium.
From a broader market perspective, I welcome it because there is still great need to sort out the opportunities for maximized relevancy and effectiveness in digital marketing. Better user experience, higher supportable ad rates, and net more dollars moving to digital from other media or being earned by digital media as a precedent.
The challenge in the meantime, as a marketer or agency, is to identify and separate among all the players and new thinking what is worth adding to a plan and investing in. Additionally, because many of these technologies and approaches are so new, and potentially more grounded in technology or investment culture than marketing, they may not yet necessarily be compliant in word or spirit with the industry best practices as set forth by good groups like the IAB and the AAAA's.
How does it play out? The best of the new ideas eventually get distilled out, survive and flourish as key elements of digital marketing- whether independently or as part of a larger asset. Search did, networks did, social and mobile are and will. So, too, will the best of the application and behavioral data providers, exchanges and verification technologies.
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AdExchanger.com recently asked several members of the advertising ecosystem about "Middlemen" and, specifically:
- "Are there too many parties trying to insert themselves into the online advertising value chain? How do you see this playing out?"
The following contribution is an agency perspective from Sean Kegelman, SVP, Partnerships & Ventures, Publicis Groupe's VivaKi.
The question of - if there are too many parties in the value chain - is about who is adding value (and who isn't) and how interests are aligned (or not aligned).
Advertisers and media companies each have a specific goal: the former to use online advertising to achieve a goal specific to their marketing objectives; and the latter to monetize their media assets.
Today, outside of direct media buys, a bunch of players get in the middle to help assist in transactions between the two (agencies, ad networks, tech platforms, data providers, etc.). When these players are adding value by providing a more efficient or more effective way to operate, then their presence can be justified.
Before "exchanges" (and I extend this label to other inventory aggregation points that allow ad transactions at the moment of delivery), intermediaries like ad networks were a necessary link to help aggregate scale in media and data for cookie level targeting. Today's environment creates a more common "media / advertising operating system" allowing the end points of the value chain to interact more directly. Third-parties still add value:
- Data providers supply information not directly available to either advertisers or publishers
- Agencies provide strategic counsel, execution, and (more holistically) integration across tactics and channels for an advertiser
- Yield optimizers and aggregators can provide valuable mechanisms for publishers (large and small) to manage complexity and make their inventory available
- Technology platforms provide the critical infrastructure for integrating with these media and data sources and to assist with decisioning
Others that are involved in the value chain today that don't fall into one of these areas will either evolve to more directly align with these points or find themselves struggling to justify their role. There is a broad range of both size and type of advertisers and media companies that need to be addressed.
One area of the advertising value chain that is not as crowded today that needs more players focusing on it is performance analysis. Today the definition of performance is much too confined. It includes a remedial and narrow set of directly observable behaviors and almost no view into attitudinal impact. Companies that want to insert themselves into the value chain of online advertising will find this to be a much less crowded space, but ultimately, whoever helps solve these problems will benefit greatly by allowing the overall market to grow significantly.
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AdExchanger.com recently asked several members of the advertising ecosystem about "Middlemen" and, specifically:
- "Are there too many parties trying to insert themselves into the online advertising value chain? How do you see this playing out?"
The following contribution is an agency perspective from MDC Partners' Darren Herman, founder Varick Media Management & Chief Digital Media Officer of The Media Kitchen, and Greg Hills, Platform Analyst, Varick Media Management.
There has been a staggering rate of innovation in the digital media space, with many new companies helping advertisers to reach their goals. We're not just seeing new companies pop up. We've seeing fully-fledged new categories of digital ad companies. Some categories, like ad verification and pub optimizers, are responding to old problems. Other categories, like data exchanges and and behavioral data banks, are meeting needs that have only surfaced in the past year.
If you're a company in the ad tech space that has a proven successful revenue model, you're probably not happy to see new companies providing new types of value. In the short-term, there is a limited amount of digital advertising dollars, and these new companies are shaving pennies off the dollar that used to be yours.
Varick Media represents the true demand side and from this perspective, we view this disruption as a huge opportunity for ourselves and our clients. Admittedly, there is probably some short term inefficiency in the way that an advertising dollar must pass through so many firms to take advantage of all these worthy technologies. And its going to take time to perform the rigorous testing that differentiates marketing hype from true enduring value. Companies with products that don't provide actual uplift for advertisers will go the way of the dinosaur. But many of these products will endure the inevitable flattening of the value chain. Those products which do provide actual value will likely be rolled up through acquisitions, becoming features in the much richer tools that will emerge in the year to come.
In the same way that agencies have dealt with media fragmentation, we're now dealing with technology fragmentation. But, the fact technology innovation is dispersed among numerous firms does not diminish the value of these technologies. The new technologies that solve important marketer problems are here to stay, even if the firms themselves aren't.
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AdExchanger.com recently asked several members of the advertising ecosystem about "Middlemen" and, specifically:
- "Are there too many parties trying to insert themselves into the online advertising value chain? How do you see this playing out?"
Over the next several days, we will post their answers.
The following contributions are from Google and Yahoo! which provide not only key parts of the value chain, but also represent companies which may be catalysts for consolidation of the industry in the future.
Google
Neal Mohan
VP of Product Management
There's lots of innovation and competition taking place on both the buy-side and the sell-side, to help advertisers take advantage of tools like real-time bidding, and to help publishers maximize the value of their inventory. Ultimately, in a competitive marketplace, only those businesses that provide excellent, reliable technology and that add real value will succeed. We view our job as developing technology that can bring advertisers and publishers closer together, to help deliver that value.
On the sell-side, major online publishers are sophisticated businesses. They tell us they're looking for a customizable, extensible technology solution that encompasses - and maximizes value across - both their direct sales and their indirect sales. That's what's driving our product strategy and the close integration of DFP and the Ad Exchange. |
Yahoo!
Ramsey McGrory
VP North American Marketplaces
The digital advertising ecosystem is increasingly complex as the demands of buyers and sellers evolve, and as the creative forces of start-ups look to penetrate the market. The conversations happen every day to shape how the industry evolves.
At the core of the ecosystem, advertisers and publishers of all sizes look to product/service providers to enable the interactions between them. If these intermediary companies are providing long term value, they will remain. In the meantime, new business models are born every day, and everyone is trying to figure out the costs and benefits of each company. Whether it's in market mix modeling, order process, targeting, auditing, measurement or the near infinite other areas, many of the businesses cannot survive as standalone businesses and may be folded into larger company offerings.
Online advertising has continued to grow, innovate and thrive under a strong self regulatory environment led by organizations such as the IAB, 4As, and NAI. The long term rationality of the marketplace will figure out whether the many players in the market have a place. Yahoo! is working closely with the industry to find the right balance, and in fact, [launched] a pilot DSP (demand-side platform) Partner program
[yesterday] and will continue to look for innovations that are in sync with our efforts to deliver a unique combination of science, art and scale to our advertisers.
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Jim Ewel is CEO of Adometry, which provides verification and effectiveness metrics products for display advertising.
AdExchanger.com: What gave the team the idea for Adometry? And, what problem is Adometry solving?
JE: Our founders, John Dietz and Rob Perrier, had built a large-scale ad server for a major publisher. They understood that the kind of information that they could gather would be very useful to advertisers, both for verification purposes and to help them understand where best to spend their advertising dollars. This led them to found Adometry back in 2008.
The problem we’re solving is essentially one of transparency and trust. Much has been made of the fact that fewer advertising dollars go to online than you would expect, given the amount of time that people spend online. We believe, as do many others, that it will take greater levels of transparency and trust for advertisers to move more advertising dollars into online.
We’ve all seen what transparency, trust and clear effectiveness measures have done for search; we believe that display advertising can also benefit from similar kinds of tools and measurement.
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DoubleVerify, an online advertising verification company, announced today that it has raised $10 million in Series B financing from Institutional Venture Partners. Read the release.
Oren Netzer, CEO of DoubleVerify, discussed the raise and the company's plans.
AdExchanger.com: What were the key characteristics you were searching for in a funding partner?
ON: We wanted an investor that really understands the space well and shares our passion for it, as well as having deep pockets and was comfortable making significant bets. We found all that in IVP. In the past year, we’ve created the verification category and took a clear leadership position of the category. Both us and our investors believe that this category will be dominated by one significant player, much like Nielsen in Television.
Where are the opportunities for growth for DoubleVerify? And, how have these opportunities changed in the past year?
Verification clearly became an essential part of our clients’ media buys in the past year. We believe that verification will become ubiquitous in the next couple of years and an essential part of every campaign. And as the online advertising landscape continues to grow in complexity so will the requirements for verification. For example, with the planned government or industry regulation around behavioral targeting, regulatory compliance will add an additional layer of complexity to online advertising. Verification for regulatory compliance will then become of significant importance. As the leader in the space, these will all be great opportunities for us.
Any thoughts about tackling attribution modeling? It would seem to be a natural extension to validation and verification by helping advertisers discover ROI across campaigns.
Our clients see us as the “auditors” of the online advertising space. As such, we hold ourselves to the highest standards of integrity and are extremely cautious in how we use data that we may have access to and are always fully transparent about its use. We’d stay away from any use of data or any opportunity to expand our business that does not coincide with our core values and our clients expectations.
By John Ebbert
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Netezza recently announced its Netezza TwinFin(i) Appliance which extends data warehousing capabilities and supports the company's i-Class data analytics platform. (Read the release about i-Class.) The company's products are gaining traction with digital advertising tech companies as requisite computational power rockets.
Netezza’s Brad Terrell, VP and general manager of digital media, and
Michele Chambers, director of advanced analytics product management,
looked how Netezza products apply in digital advertising with AdExchanger.com.
AdExchanger.com: What is the application here for digital advertising? For example, would a demand side platform find this system useful - and why?
Netezza: A wide range of analytic applications for digital advertising apply, including but not limited to ad targeting, Web site optimization, ad inventory and pricing, ad sales forecasting, attribution analysis, network usage, click fraud detection and keyword portfolio optimization.
Can you define what is meant by "big data" and "big math"?
Big data is petabytes of data. Big math refers to the complex computational processing that’s required for advanced analytics.
How does pricing work for Netezza's TwinFin(i) Appliance?
List pricing starts at $125K for a system that analyzes up to 10TB of data and goes up from there.
By John Ebbert
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Mpire announced a new API which provides "advanced reporting capabilities" from AdXpose, Mpire's campaign verification and optimization technology, on such data points as domain verification, location on the page, geographic location of the user, user demographic and page or site context. Read the release.
Mpire President and CRO Kirby Winfield shared his thoughts with AdExchanger.com about the evolution of the AdXpose product and the API.
AdExchanger.com: What's the pricing like for the API? And, are you moving away from offering a services layer for the AdXpose product at Mpire?
KW: Pricing will be an incremental CPM fee on top of the base service fee. We will basically offer API access at or near "cost" - it is meant to be a value-add to our ad server, network, and DSP clients. We are in no way moving away from the services layer, however. On the contrary, we are currently hiring technical account managers to help service our clients and prospects: because we provide so much more than just simple verification reports, it's crucial that we make it easy for our clients to understand the implications of the data and make human decisions in addition to any algorithmic decisions made leveraging the API.
What about API integration? Is this difficult for groups that may be less technically skilled such as some agencies, for example?
We are finding that most agencies now have the ability and desire to integrate data from multiple sources into their dashboards, reports, and decisioning engines. As Google VP of Product Management Susan Wojcicki said today at the IAB Leadership Meeting, "if you're using spreadsheets to manage campaigns, you're leaving dollars on the table." The holding company agency DSP's are especially well positioned to integrate the API, and we work with the majority of these entities today.
How is Mpire's AdXpose media business progressing? And how does this API release affect it or say about the company's media business?
The media business is largely a sandbox for continued development of our AdXpose Analytics technology. Sitting on a consistent volume of directly purchased impressions (we do not buy from or compete in any way with ad networks - in fact, some buy from us) allows us to test new features in real time without using clients as guinea pigs. That stated, it's the technology and our technology clients that drive the enterprise value for our business, and that's the side of the business that gets the lion's share of our investment. To that end, the API release is simply further confirmation of our commitment to creating the leading brand safety and display ad analytics company online.
By John Ebbert
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Jeff Zwelling is CEO and Co-Founder of Convertro, a marketing metrics attribution company.
AdExchanger.com: What problem is Convertro trying to solve?
JZ: Marketers today are in large part "flying blind" when it comes to properly allocating their marketing dollars among their various marketing channels. I say this because most advertisers are relying upon outdated tracking technology that is cookie-based, relies upon sampled data, and attributes credit only to the last click preceding purchase. The last click fallacy results in overspending on navigational ad terms while under-spending or eliminating marketing spend on the so-called "top of the funnel" terms that actually introduce customers to the website. We have solved this problem for marketers by overcoming these hurdles and giving them unprecedented transparency into their marketing channels.
In your company's description, you note that Convertro is self-funded. Does this mean you've been profitable from nearly the beginning? Are their any special challenges to being self-funded?
Convertro’s technology was built over several years prior to establishing Convertro as a standalone concern with live clients. We are supported by client-based revenue from our existing clients, and we’ve had investment from the founders and others. So no, funding has not been a challenge for us.
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OpenAmplify recently announced research which showed that by using the company's semantic technology, it was able to discover engagement levels for certain brand ads - such as Audi ads after the Super Bowl, in this case. Read the release.
Mark Redgrave, CEO of OpenAmplify, discussed the findings with AdExchanger.com.
AdExchanger.com: Are brands such as Audi requesting this information from OpenAmplify, yet? How is your semantic technology critical here?
MR: No. We ran the research out of general interest. Semantic technology is able to tell us how engaged people are, and what topics they are engaging in. We understand the conversation that is occurring - what people like and dislike, and their actionable and emotional engagement to the ads and how it compares to the brand.
It's interesting that your data speaks to attribution modeling and ROI for brands. Can you see OpenAmplify's data used for this purpose? Any plans to productize?
We are proving that the OpenAmplify semantic platform can power the next generation of intelligent applications that deliver unique and valuable insights. We are running projects for agencies and brands in both U.S. and U.K., which we hope to announce soon.
How do you translate engagement given the context of the site? For example, people might be more prone to talk about a car ad on a car buyer site.. but if they talk about it on Facebook - that could be more or less valuable depending on any number of factors.
True, although in the current state of the industry, brands want a big picture first to get a better sense if they are resonating with consumers overall. In this example, we wanted to establish a benchmark for comparison. We decided to track reactions and engagement across the major social media platforms because that is where most brands and clients are focused. We track how the reactions spread in various channels and also how the brand is being talked about. "What's happening to my brand on Twitter? Or Digg? Or YouTube?" By concentrating on these, we are satisfying the focus of the brand majority.
By John Ebbert
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AdExchanger.com discussed TagMan's new funding announcement (See release.) and recent momentum with Jonathan Baron, co-founder and general manager of Tagman.
AdExchanger.com: What attributes did you look for in a funding partner? How have you found the funding climate?
JB: We sought partners that had an understanding of the online ad marketplace such that they could see the strategic and practical importance of TagMan. This meant, ordinarily, previous experience in founding and/or directing ventures that had shaken the online marketplace. We’re delighted that we were able to find the likes of John Taysom and Andy Phillipps, people who have done just that and that they were immediately convinced enough of TagMan’s ability to deliver on its promise to become involved.
There’s no question there are investment funds available for those businesses that can demonstrate a revenue model that’s already succeeding and something different enough to suggest additional, strategic value. We found plenty of willing potential partners and were able to be discerning about the size and type of money we took.
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