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With Turmoil In Its DNA, Yahoo Promotes Its ‘Big Data’ Play Genome

The $270 million purchase of data management platform interclick last November was considered one of Yahoo’s sharpest moves during the period between the ouster of Carol Bartz as CEO and the replacement with Scott Thompson, whose reign was ended after less than six months this weekend.

Given the turmoil that has surrounded Yahoo’s executive ranks the last few years, it was no surprise that members of the advertising team opened Internet Week New York with a collective “business as usual” mien to herald the completion of the integration of Yahoo’s data stack into the interclick system, which collects data from third party sites, into a tool called Genome.

Aside from the CEO debacles, the introduction of Genome is reminder that although Yahoo fell from its perch as the leader in display ad sales to the space’s new hegemons, Google and Facebook, according to an eMarketer report in February, it isn't out of options. On the other hand, that doesn't mean it can just keep going as its been doing either. Yahoo is expected see its share of the U.S. display market fall to 9.1 percent in 2012, from 10.8 percent in 2011, eMarketer noted in that same report.

Yahoo’s dominant position is ever-more distant from 2008, when the portal’s share of U.S. display revenues peaked at 18.4 percent. But Yahoo, through all the company and shareholder mishegas of the past few years, has continued to generate revenue growth, and it is still way ahead of Microsoft, which will experience a decline of its share of display dollars to 4.4 percent this year from 4.5 percent in 2011, eMarketer estimates; bringing up the rear, AOL’s share will fall to 4 percent in 2012, from 4.3 percent last year.

With the landscape continuing to shift under all marketers, media brands and tech companies, the big question is not whether Genome will be able to at least help Yahoo maintain a healthy number three position, but whether the continuing shifts within the company will make it difficult to figure out how a product like Genome can fit into a larger strategy, which could evolve once yet another leadership regime is put in place.

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What Next For Yahoo? – Industry Reaction

With the departure of Scott Thompson as CEO and appointment of Ross Levinsohn as interim CEO, Yahoo! plunges ahead with - still - plenty of assets including 700 million monthly unique users worldwide (175 million in March in the U.S.), a healthy, but illiquid chunk of Asian Internet properties, and the company remains a display powerhouse in spite of heavy employee turnover and aging ad tech save the recent acquisition of interclick and best efforts by Yahoo!'s internal dev team.

A third change in leadership in the past 9 months can't be a good thing. But, oh well. Here Yahoo! is. What to do next?

AdExchanger reached out to several executives in the online ad ecosystem and asked them exactly that - what should come next for Yahoo!?

Click below or scroll for more:

• Tim Cadogan, CEO, OpenX
• Bill Wise, CEO, MediaOcean
• Greg Coleman, President, Criteo
• Ramsey McGrory, CEO, AddThis
• Megan Pagliuca, VP & GM of Digital Media, Merkle
• Kurt Unkel, President, VivaKi Nerve Center

Tim Cadogan, CEO, OpenX - formerly Yahoo's SVP of Global Advertising Marketplaces

"Whoever runs Yahoo – now Ross Levinsohn - has a truly herculean task. They have to get a large, relatively inert, battle-scarred mass moving fast again. The laws of business physics make that very, very hard.

However, the core two elements are relatively clear. First, select and articulate a focused strategic, consumer direction: one or two bets that have a shot at rejuvenating audience growth. Hire (and/or buy) a fresh, new cadre of fantastic product and tech talent that can innovate on top of Yahoo’s assets to create that audience growth. Overpay them gratuitously as that is probably the only way to get them in right now. Second, invest in the underlying technologies that monetize that audience. Advertising is at the heart of how Yahoo makes money and the ad tech space still has the capacity to deliver disruptive upside. By investing in the technologies, partnerships and/or companies that can accelerate innovation, Yahoo can drive and harvest an inflection point in ad revenue growth.

Then clear the internal organizational path for this twin effort: strip out the old assumptions, creaky operating models and management layers that have calcified Yahoo’s dynamism. Buy Yahoo time externally by sharing a clear, crisp and believable turnaround story.

Stick to it – it will take years of raw persistence. A surprising number of people still root for Yahoo and whoever reignites Yahoo will secure a rare spot in business history."

Bill Wise, CEO, MediaOcean - formerly SVP/GM, Global Exchange at Yahoo!

"Yahoo does not have a CEO problem. They have a business transformation problem. All of their traffic originates from two main sources-- 1. Email, 2. Homepage. Without these two starting points, Yahoo cannot afford all the vertical premium content they produce. Facebook and smart phone apps are replacing Yahoo as the starting point for people, and the younger generation are using alternate means to communicate... Texting, messaging, comments within social media and apps are all replacing email. Even within email, an @me and an @gmail are "cooler" than an @yahoo address. Yahoo needs to focus on their COMMUNICATION strategy or else they will lose their scale and distribution of media. Ross is the perfect person to run Yahoo until a private equity firm comes in and completely reinvents the business... The only way Yahoo remains relevant is if they go private. They cannot do what's necessary as a public company."

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Second-Guessing the Second-Price Auction Model

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

Today's column is written by Esco Strong, Director, Display Marketplace Strategy at Microsoft Advertising. Opinions expressed are his own and do not necessarily represent those of his employer.

Amidst some of the more popular discussion topics of today, I'm often surprised by the lack of discussion around one of the primary factors underlying key issues such as bidding algorithms, floor pricing, and price discovery: the fact that most RTB auctions are executed as second-price auctions. While this detail is of great importance in defining some of the key dynamics and dominant strategies within those auctions, it is a topic that seems to have flown under the radar of much of the public discourse within our industry. The reality is that many of us simply accept the second-price auction as a fact of life in online display advertising, often without pondering the questions of why that is the case, how we got here, or whether better alternatives to this type of auction exist.

So how did we get here?

The pervasive mode of thinking within our space essentially attributes the second-price auction in RTB to the effectiveness and legacy of that same auction model in paid search. Dig a little deeper, and you'll find that the second-price auction has its roots in auction design and game theory, and is heavily influenced by the research of top economists such as Paul Milgrom and Preston McAfee that date back to experiences like the FCC spectrum auctions in the late nineties. Essentially, the second-price auction serves as an effective substitute for the single ascending, multi-round (SAMR) auction, which in a nutshell, works as follows:

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Posted in Data-Driven Thinking | 7 Comments »

Yahoo! CEO Thompson Pushed Out; Google Buying Meebo?; ValueClick Has A Video Ad Platform

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

Yahoo! Removes Thompson

It's official: Scott Thompson has been removed as CEO of Yahoo!. According to a release, the new interim CEO will be Ross Levinsohn. Activist investor Daniel Loeb was a winner, too, as his picks for the Yahoo! board will be installed sooner rather than later: "Under the Board’s settlement agreement with [Daniel Loeb's] Third Point, three Third Point nominees – Daniel S. Loeb, Harry J. Wilson, and Michael J. Wolf – will join the Yahoo! Board, effective May 16, 2012. " Read it. Kara Swisher at All Things D broke the news saying that Scott Thompson had been pushed out as CEO following the disclosure that his academic credentials had been partially falsified. Read more. Can you imagine another Yahoo! CEO search? What happens next?

Levinsohn Reaction

Meanwhile, the kudos pour in for Levinsohn who many hope will lose the "interim" in his new title. Yahoo! interclick CEO Michael Katz says of his new boss in a tweet, "could not be happier for @rosslevinsohn and for Yahoo as the news becomes official. Y! could not possibly be in better hands." From Steven Rosenbaum at Forbes, "And while Scott Thompson - the now ousted CEO - was famous for saying that he didn’t much understand advertising or media, Levinsohn understands both. And he’s careful not to over promise and under deliver." Read it. COO Craig Atkinson of Omnicom Group tells The Wall Street Journal that "Levinsohn was a 'known quantity' who has made progress in developing Yahoo's credibility as a next-generation media company. He cited the company's 'strong showing' at its recent 'Newfront' event in which it unveiled its new slate of Web shows for advertisers." Read more (subscription).

Google Buying Meebo?

All Things D's Liz Gannes says that her sources tell her Google will acquire Meebo for $100 million or so. Read more. As you may recall, toolbar maker Meebo acquired psychographic targeter Mindset Media for an undisclosed sum in early 2011. So why buy? I'll toss out there that this is potentially about finding more solutions for brand advertisers and speaks to a templated, branded entertainment capability that leverages the data gathered through Meebo's toolbar (which is tracking users and measuring engagement). This solution could also leverage "interest" data that is gathered across the network of AdSense publishers as well as fill/extend the AdSense inventory itself. Scale for the big brand is a big deal. See Meebo.com. Or, maybe it's an acqui-hire?

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Where Does The Agency Of The Future Draw The Line – Omnicom’s Annalect CEO Hagedorn

Our series continues as AdExchanger reached out to several executives from the agency side of the ecosystem and asked the following question:

"Given the increasing complexity of ad technology needed to service clients - particularly in digital media buying -, and ad tech companies need to build a service layer to activate its tech, where does the agency of the future draw the line for its own services? Does the agency become a 'sourcing master', if you will?"

Scott Hagedorn, CEO, Annalect, (Omnicom) answered:

'I see three things happening in the space. The first one is that - especially on my side of the business - we've had to get proactive on becoming the Consumer Reports, if you will, on all the various ad tech providers from those in data sourcing and strategic data transformation all the way through to reporting, visualization, buying, activation, planning - all of it. For some clients the concept of either having an IBM, Adobe or a Google stack starts with their web analytics product, and fuses all the way up through buying into planning and maybe some more other media oriented planning technologies. It is a very alluring proposition.

Those stacks, all don't completely work right now on an automated basis. But in the future, I've see a lot of those things starting to come together.

The way we're handling it is that, one, we publish a Consumer Reports like document in some of these different horizontal category areas on features, functionality and interoperability. Then concurrent with that, we are setting up a managed services arm that - in case a client wants to deploy and test an integrated vertical stack - we would be able to manage it on their behalf.

AdExchanger: Thoughts on 'sourcing master'?

'Sourcing master,' systems integrator, ad tech integrator... 'Sourcing master' is an interesting way to look at it. Our personal point of view is still we should take a best of breed systems integration approach and help clients to source the tech and put multiple technologies together. Our goal is to drive a set of open standards to the marketplace, so everything will be interoperable."

Read more:

• Anthony Rhind, co-CEO, Havas Digital
• John Montgomery, COO, GroupM North America (WPP)
• Scott Hagedorn, CEO, Annalect (Omnicom)

By John Ebbert

Posted in Agencies | No Comments »

Where Does The Agency Of The Future Draw The Line – GroupM COO Montgomery

Our series continues as AdExchanger reached out to several executives from the agency side of the ecosystem and asked the following question:

"Given the increasing complexity of ad technology needed to service clients - particularly in digital media buying -, and ad tech companies need to build a service layer to activate its tech, where does the agency of the future draw the line for its own services? Does the agency become a 'sourcing master', if you will?"

John Montgomery, COO, North America, GroupM Interaction (WPP) answered:

"It's a good question and in truth the line gets drawn according to the strategy of the agency in question.

An agency could decide to outsource everything. The rational might be 'why build our own technology if there are tons of experts out there able to do a great job, many of whom have greater resources than our own. This way we can cherry-pick the best in each category.' I suspect that most agencies fall into this category, where 'buy it' will be seen as the most expedient solution.

GroupM's philosophy is that digital data is turning out to be one the most important assets we can develop to make our clients advertising more effective. We believe that its critically important to develop the technology stack for data management that touches our clients advertising performance and pricing data and own the process around this. We think its simply to important and sensitive to outsource.

To this end GroupM and Xaxis (GroupM's Audience Buying Company) have developed their own technology to collect, optimize and store advertising data on a proprietary Data Management Platform which allows us to optimize cross-platform digital campaigns.

Outside of the critical areas where we believe we need to develop the technology and own the process, we partner extensively.

We have a substantial team whose specific responsibility it is to identify data and technology partners who can enhance our technology offering and this team build and nurture these relationships.

These partners are critical component of our success."

Read more:

• Anthony Rhind, co-CEO, Havas Digital
• John Montgomery, COO, GroupM North America (WPP)
• Scott Hagedorn, CEO, Annalect (Omnicom)

By John Ebbert

Posted in Agencies | No Comments »

Agencies See Dollars in Digital Products, But Managing Data Is a Trick

Building digital consumer products for clients - in contrast to marketing campaigns - is a growing discipline for agencies, but they have to get the data right. That means embracing analytics and A/B testing from the outset; tapping customer databases; and using targeted ads to spread awareness among both existing customers and prospects.

“Clients are sitting on a tremendous amount of customer data that's under leveraged,” says Todd Drake, VP technology for Organic. “There are a lot of startups in the Big Data space that are providing valuable services to users – a lot would love to have all the data some clients, especially CPGs, have. How can they bring all that detailed customer knowledge to bear to build [useful] services for clients, rather than focusing solely on conversion marketing?”

Plenty of brands are asking the question.

R/GA helped set the bar for what a data-driven digital product can be when it launched the Nike+ personal running app six years ago. That success, combined with the rise of personal health data in general (See: Strava, Fitbit), has motivated other athletic and health-oriented brands to create apps. But plenty of other sectors are also building digital products that answer users’ functional needs. Think banking apps for financial brands, POS and “showrooming” tie-ins for retail, travel utilities for hotels and airlines, and car-to-phone integrations for automakers.

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Where Does The Agency Of The Future Draw The Line – Havas Digital Co-CEO Rhind

In spite of the automation that technology continues to bring to media, the services layer remains as valuable as ever - maybe more so - as talented people put the technology over the proverbial finish line. For some ad tech companies with complex offerings, a robust service layer has been the natural outcome of selling its core product. What could this mean for agencies down the road?

AdExchanger reached out to several executives from the agency side of the ecosystem and asked the following question:

"Given the increasing complexity of ad technology needed to service clients - particularly in digital media buying -, and ad tech companies need to build a service layer to activate its tech, where does the agency of the future draw the line for its own services? Does the agency become a 'sourcing master', if you will?"

"Sourcing masters" references the ability to know which technologies are best and how much to prescribe for each client especially as it relates to driving on a client's "big idea."

Anthony Rhind, co-CEO, Havas Digital (Havas) answered:

"I think it's absolutely the case as there are a number of complications and where the contract fits is buried. Some clients will have direct contracts with broader platform technology providers and will want us to work with their providers accordingly.

If the client has gone through a process of selecting a preferred partner, it's essential that we can operate with that provider. Sometimes, as part of the credentials process of either winning a new assignment or simply extending the remit from one traditional area of responsibility that agencies have - let's say immediate planning and buying - into some of the other service areas across owned infrastructure and data management infrastructures, to prove that we are the right partner to help in that task.

Ultimately, we need to show that we have an expertise with the provider the client might already have selected. Sometimes, the onus is on the agency to prove that they know how to operate with the provider that the client has already selected.

Clearly, there will be times where the client wants the agency's recommendation. In that instance, if we the agency have a relationship with the provider that is deeply embedded - which means that we have either a unique level of expertise or even potentially some proprietary feature sets that mean that we can work in an enhanced fashion - we'll obviously make the case for companies that we are comfortable working closely with.

But, again, sometimes even if we're working closely with the provider, the client may want the contract to sit with them or they may be uncomfortable if it sits with the agency. They may feel that there is an agency revenue that they're not aware of in association with that partner.

It's essential that the agency masters the extended infrastructure. And, it's impossible, and I think it's not good for the credibility of the agency, to insist that that a preferred provider is the one that the client works with."

Read more:

• Anthony Rhind, co-CEO, Havas Digital
• John Montgomery, COO, GroupM North America (WPP)
• Scott Hagedorn, CEO, Annalect (Omnicom)

 
By John Ebbert

Posted in Agencies | No Comments »

AdExchanger: Creative Week New York

A weekly comic strip from AdExchanger.com that highlights the digital advertising ecosystem...

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DG Sees Flat-ish Q1 Growth For MediaMind; Clearspring Is AddThis; Drawbridge Looks Cross-Device

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

DG, And MediaMind, Report

DG said its "segment" (MediaMind, Unicast, Eyewonder) generated $31 million in revenue in the first quarter of 2012. Relatively flat. By the way, that's three display-centric companies reporting varying degrees of flatness - or less than expected growth in their business: Aol (U.S. display), DG and ValueClick (less than expected future growth). Megatrend? Facebook grabbing share? Read the DG earnings release. ThinkEquity analyst Robert Coolbrith provides his Wall Street view: "[DG] reported Q1 results in line with the company's preannouncement and higher than our forecast; the company also maintained FY12 guidance (adjusted for the Peer39 acquisition). However, management reported that the online business is experiencing near-term headwinds related to merger integration and that pro forma online revenue was flat Y/Y. Despite these issues (which we expect will be temporary), we continue to view [DG] as a value-oriented play on display advertising automation (which we continue to view as among the most attractive growth segments in interactive advertising)."

Rebrand Alert

Chairman Hooman Radfar tells The Business Insider that his company is changing its name to its core product - AddThis, which he says now reaches 1.3 billion uniques per month. That's a lotta cookies. Read it. And, in an effort to get even tighter with publishers who help generate AddThis' sharing data, CEO Ramsey McGrory tells AdExchanger that the company is adding more tools and widgets for publishers. Read the release. From here, syncing the product name with the company names is a move toward greater transparency with its publisher community, too. In part, AddThis leverages the datasets collected from publishers in order to sell to advertisers who use it for targeting, after all.

Bridge Goes Down For Mobile

In Adweek, Tim Peterson covers a new startup called Drawbridge started by former AdMob exec Kamakshi Sivaramakrishnan. Once again, a mobile ad tech company is looking to solve the mobile Holy Grail - effective targeting. Another twist is that Drawbridge is looking to work across devices and around mobile cookie/privacy concerns. Peterson says Drawbridge claims "it can sidestep that [privacy] issue by algorithmically correlating data to make essentially highly educated guesses as to whether a desktop user and mobile user are one and the same." Read more.

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