Borrowing Against Receivables: A Solid Financing Option

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jerryneumannddtData-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 Jerry Neumann, a venture capitalist with Neu Venture Capital.

We're used to using equity for startup financing – or things that are actually equity even though they're not called that, like convertible debt. Who would lend money to a startup in exchange for nothing but interest? An interest rate high enough to compensate for startup risk would mean interest payments so big they would drive the startup under.

But lenders do lend to startups. They have figured out they can make money and manage risk by taking forms of payment other than interest and by lending against specific collateral. This is great for startups because these loans are far less dear than venture capital.

The three main types of loans to startups are venture debt, receivables financing and equipment financing. I'm only going to talk about receivables financing because in many media buying models, working capital can be a significant use of cash, so financing receivables can greatly ease the pains of growth and seasonal spikes in demand.

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Programmatic Can Dial Up Radio’s Digital Revenues

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frostprioleaurevised“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 and co-founder of Simpli.fi.

From programmatic’s perch on the bleeding edge of advertising technology, it could be easy to dismiss radio as an advertising medium of a bygone era.

But despite the tectonic shifts in the radio industry and listening habits of Americans, radio reaches 92% of all Americans age 12 or older every week, estimates Nielsen Audio. Combined with an emotional connection driven by music, on-air personalities and community spirit, it’s easy to understand why radio remains an important part of the local advertising media mix.

The radio advertising industry was worth nearly $5 billion industry in 2013, according to Borrell Associates. Digital advertising sold by radio reps accounted for $500 million, a 22% increase from the previous year. For the most part, these digital revenues are from digital services such as search engine optimization and social media management, which leverage radio’s strong referral patterns for online search and social media engagement.

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Facebook Ad Delivery; Trading Desk Defense

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Facebook Mechanics

A BuzzFeed story looks at the thinking behind Facebook’s ad delivery. The company uses targeting data, including its own interest data, “to quickly whittle away the number of ads that are relevant to a specific user to between 5,000 and 7,000 ads. At this point, the job is only around halfway done.” The ultimate decision rests on a combination of factors, including ad quality and, of course, bid price. “Higher quality ads — whether that’s good video, high-fidelity photos, or ads that attract a lot of likes and comments — cost less to be ranked higher in News Feed.” More.

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For Old-School Epsilon, Conversant ​Buy Will Bring Tech And New Channels

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alliance convertroAlliance Data Systems’ (ADS) intent to acquire Conversant (formerly ValueClick) for its Epsilon subsidiary might seem like a change in direction. R Ray Wang, principal analyst and founder at Constellation Research, described the intent to acquire as “the right move” to make Epsilon “a legit…tech company.”

On a first gloss that seems like a pivot. Epsilon has until now considered itself a marketing services company with a strong partner ecosystem. Does integrating Conversant’s tech push Epsilon from services to tech provider, like what rival Acxiom is trying to do with its Audience Operating System (AOS) platform?

To Pivot, Or Not To Pivot

Not so fast, said Epsilon CEO Bryan Kennedy. “That might be a little bit of a mis-representation,” he told AdExchanger. Epsilon’s heritage, he said, is around managing data and databases and building multichannel marketing campaigns; Conversant’s tech will strengthen the company’s ability to execute. “This is less about getting into the ad tech sector and more about having scale and rich capabilities in display and mobile channels,” he said.

$2.3 billion might seem a lot to pay for enhancements, but for Dan Salmon, equity research analyst at BMO Capital Markets,  it’s money well spent.
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WPP Agency Maxus Names Jonathan Adams Chief Digital Officer

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maxusOn Thursday, WPP-owned media agency Maxus named former iCrossing executive Jonathan Adams as its chief digital officer. After previous stints at OgilvyOne and The Media Edge (since rebranded MEC), Adams is returning to WPP.

The appointment is Maxus North America CEO Steve Williams' first hire since he began in June. Williams spoke to AdExchanger about Adams’ new role, the state of digital and the agency’s strategic horizons.

ADEXCHANGER: What will Adams’ key responsibilities be at Maxus?

STEVE WILLIAMS: The key responsibility for Jonathan will be about working very closely with me and a couple other critical team members to ensure that the quality of our work is the best it can be. More specifically, given his role as digital officer, he’ll ensure that Maxus in North America is as fluent and agile around digital channels as we possibly can be.

What’s your vision for digital at Maxus?

I have a vision for the industry not having the conversation about digital. The reason agencies, and media agencies in particular, need deep expertise with first-class practitioners like Jonathan is because the world is changing so quickly. It’s important to keep up to speed. I am hopeful that with the team we’re pulling together now, and Jonathan being a key part of that, we can introduce a horizontal approach to media, platforms and technologies, and how data flows between them.

That means that the word digital becomes redundant. Because, at the end of the day, what isn’t digital? I’m looking for us to become as competent as possible working horizontally, because that’s how ideas travel. We’ve got to be experts at working vertically as well, because flawless execution is crucial.

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LG, Smartclip And Starcom Debate Future Of Programmatic TV

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FutureTVMarketers are under enormous pressure to target users from tablets to connected TVs, but the supply side needs to feel incented in order for programmatic TV to take hold.

This was a theme emerging from the DMEXCO show Thursday where a mashup of marketers, agencies and tech companies mixed for two days in Cologne, Germany.

“What we’re seeing from the numbers is people are watching more TV,” said Jim Clayton, EVP of the new business division at LG, during a discussion on addressable TV with Jean-Pierre Fumagalli, CEO of Smartclip; Michael Shehan, CEO of SpotXchange; and Iain Jacob, president of dynamic markets at Starcom MediaVest.

With reports of rampant cord-cutting among the Millennial crowd, it’s easy to make the assumption that TV is losing clout, but Clayton argued there has been a “reaggregation” of viewers on new OTT devices, whether they be Roku or Apple TV.

“We as marketers and advertisers have to follow the consumer,” Fumagalli said. “The tablet is the television screen. ... Samsung and LG are leading the way, but there’s also Apple, the platforms like Google who want to get into this and then big broadcasters with big brands and audiences.”

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Deep Eddy Vodka Takes A Shot At Digital

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Deep EddyOne of the best things about Deep Eddy Vodka is the taste. At least that’s what Brandon Cason, VP of marketing, has to say about the 4-year-old spirits brand that’s based in Austin, Texas.

But prospects aren't going to seek out a product they've never heard of. That’s one reason the brand, whose efforts are focused on “awareness and trial,” added digital to its marketing plan, Cason said.

Deep Eddy Vodka is in a competitive market and aims to extract as much as it can from every marketing dollar. “With any new CPG, you don’t have a lot of money on the front end,” said Cason.

Initially, the spirits manufacturer’s marketing strategy focused on out-of-home advertising, including billboards and sponsoring music festivals, but Cason wanted to branch into digital. “Any smart marketer is aware of the need to have a digital presence," he said. "It’s more important than ever.”

With The Daily Dot, Cason created a native advertising campaign  with stories built around Deep Eddy’s Ruby Red Vodka, which was available in 22 states at the time.

“They were instrumental in helping us understand it’s not just about digital display ads," he said, "but content is king, and serving up fun content that’s interesting, relevant and shareable.” The two companies used to share a working space and already had a rapport and a degree of trust.

The Deep Eddy brand is “nostalgic and throwback-based,” so the teams collaborated on native content that would expand on that theme, a “longing for the nostalgic life, and looking back at the way things were,” Cason said. Read the rest of this entry »


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Fraud-day With Dstillery: Everyone Is Responsible For Fighting Fraud

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fraudThis is the seventh in a series of interviews with vendors combating the problem of ad fraud. Other companies participating in this series include Moat, Telemetry, Sizmek, comScore and Asia RTB. Read previous interviews with DoubleVerify, Forensiq, Integral Ad Science, PubChecker, Videology and White Ops.

The battle against botnets is ongoing. Ad tech firm Dstillery knows that firsthand.

Back in 2012, Dstillery, which then went by the name Media6Degrees, noticed something decidedly odd about the clients of its marketing partners – they were all acting the exact same way.

It’s like this: There’s always going to be a certain amount of audience crossover between traffic on related sites. It makes sense that the kind of person who visits nytimes.com is also likely to visit cnn.com. If you visit ebay.com, it’s not statistically unlikely you’d also hit up ebaymotors.com.

But what if the customers for Verizon, Allstate and Williams-Sonoma all suddenly started hitting up the same websites in droves – websites you’ve probably never even heard of. The situation was certainly fishy.

“One of the sites was a Chinese news site, another was a women’s health site, another was a DIY website – it made no sense,” said Dstillery COO Andrew Pancer. “It was really screwing up our models. We knew something was up, but we couldn’t figure out what it was.”

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eBay Catches The Cross-Device Bug, Plans Mobile Ad Network For Q4

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eBaymobileadsShopping titan eBay is betting its bottom dollar on mobile.

The company, whose various shopping apps have been downloaded more than 260 million times, announced Thursday the upcoming launch of a new mobile advertising program slated to open for general business next quarter.

eBay will now offer what Stephen Howard-Sarin, eBay’s head of North America display advertising, refers to as “native ads on eBay mobile apps.” According to Howard-Sarin, eBay did about $20 billion in mobile transactions last year, and 40% of the company’s total business “involved a mobile device at some point.”

“The nut of this is that we’ve got complete cross-device fidelity,” he said.

Howard-Sarin put eBay in the same class as “a handful of other companies,” like Facebook, that “have knowledge of user identity on devices at scale.”

“We have known registered user IDs and they’re logged in with the same ID across devices,” Howard-Sarin said. “Marketers want ads targeted to the right person at the right time and we can do that because we know who the person is, and we don’t need a cookie to figure that out.”

That’s certainly a core competitive advantage in a world where walled gardens are becoming the norm. Facebook, Verizon and, ostensibly, Google are all going for the same thing.

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How Will We Find Consumers Without The Cookie?

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colettedillernerddtData-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 Colette Dill-Lerner, executive vice president at the DuMont Project.

While observing the debate on whether the third-party ad server is dead or very much alive, I realized that though a few players are working on cross-device tracking and measurement, the industry as a whole seems to be dancing around the core issue of cookies as a tracking device.

The standard cookie, upon which we have built much of the work we collectively do, is crumbling. And it’s crumbling quickly, thanks to the very folks for whom we are trying to leverage tracking: our target consumers and how they behave not just across devices, but on the web as a whole.

The linchpin of programmatic media is tracking consumer behavior beyond the single session in a single ecosystem. The power of programmatic is its ability to formulate a fundamental understanding of a user so we can market the right product to the right person at the right time for the right price. In order to do this we need to understand the user in relativistic terms and not in absolutes. This means we need to gain a complete picture of them across the web.

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