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Entering the Post Ad Tech Era

"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.

It is inevitable that we will move into a post ad-tech era. Not to say that ad buying technologies will go away, but that they will plateau as marketers discover which methods are necessary and cost-effective in achieving their goals and which are not.

Today the very segment of the industry that was created to make the advertising ecosystem more efficient has succeeded in doing just the opposite.

Billions of dollars have been invested in building the stoutest, most comprehensive advertising data and targeting technologies imaginable. Often the amount of money spent on measuring and analyzing data approaches the cost of the advertising itself – hardly an efficient model. What’s more, questions linger about the actual effectiveness of these ad-targeting technologies.  Retargeting seems to work well, in part because it is often the easiest to do. After that though the slope gets steep and very cloudy. Do behaviorally targeted campaigns against specific audiences have a better ROI than contextually targeted programs? Well, as it turns out, it depends on what you are targeting for…clicks?  Sure they do, since the behavior targeted is in fact clickers. For most everything else, not so much.

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The 'Temporary' Problem with Second Price Auctions

The Sell Sider

Today's column is in response to "Second-Guessing the Second-Price Auction Model" and written by Andrew Casale, VP of Strategy, Casale Media.

I am not an advocate of dynamic floors. Nor do I think switching RTB to first price auctions is likely to happen. Every auction that publishers have run on our platform, to date, has been a true second price auction with no dynamic floors or other algorithmic market manipulations. I am merely commenting on this debate with a different perspective formed on the basis of actual bid data.

Everyone actively participating in RTB from the sell side has generally brought most, if not all, of their unsold supply to the party. Some are now even bringing their sold (read: premium) supply to the party by activating bid requests at the time of their raw ad calls and letting RTB demand compete with direct sales. Therefore, while the supply side of the scale is full, publishers participating are still waiting for demand to catch up. The estimates I see in practice and hear about is that somewhere between 25-30% of unsold display is cleared through RTB. While we have, for arguments sake, 100% of the supply available, we have nowhere near 100% of the demand available to fill it.

How this gap manifests in the second price auction model is that many impressions get one or no bids, and therefore effectively clear at the floor. However, a (very) small number of impressions do get multiple bids.

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Response: Will We Really Grow Display By Incentivizing Low Bidding?

Today's column is in response to "Second-Guessing the Second-Price Auction Model" and written by Jonathan Wolf, Chief Buying Officer at Criteo, a buy-side, display ad tech company.

Esco Strong at Microsoft wrote an interesting piece in a personal capacity on this site this week. While I am and remain a fan of Esco, and his piece was elegantly argued, I strongly disagree with it. As I see it, there are two options in building a long-term business: by pricing transparently, or by taking unfair advantage of your customers. Only the first seems sustainable to me.

I am sure that 99% of readers' eyes glaze over as the discussion moves to auction theory, dynamic floors, and other arcana. So let's take two simple, real-world examples:

Example 1: “Dynamic Pricing”

Imagine going to the grocery store and buying what you thought were $85 worth of groceries but instead getting a bill for $133. “Why?” you might ask … “Because”, the grocery store replies, “we deduced you'd be willing to pay $140 for those groceries.” Meanwhile the same basket of groceries is a different price for someone at the next aisle, because they were only willing to pay $100. You'd rapidly stop buying from that store.

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Moving to "Viewable Impressions" Isn’t The Answer

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

Today's column is written by Tom Shields, Co-Founder and Chief Strategy Officer of Yieldex, an analytics tools provider for sell-side, yield optimization.

I am biased, I’ll admit it.  I wrote the first technical impression counting standards for the IAB in 1998.  And I think that trying to move the industry to "viewable impressions" is a bad idea, for three reasons: it won’t make any difference to marketing ROI, it doesn’t help bring dollars online, and it will be expensive and confusing to adopt.

Let’s start with the argument that using “viewable impressions” improves marketing ROI.  Measurement vendors trumpet “CTRs are higher!” for the marketer, while “CPMs will rise!” for the publisher.  Let’s do a little math.  C3 Metrics claims that CTRs are understated by 179% because so many ads aren’t in view.  Wow – CTRs will double!  Except, publishers will charge double the CPM for “viewable impressions”, so the CPC (and ROI) is actually the same.  On the publisher side, Magid Abraham presented to the IAB (PDF) an example of 35m premium impressions selling at $5 CPM netting $175k to the publisher.  However, only 75% of those are “viewable” according to ComScore, so the eCPM is “actually” $6.67.  Wow – CPMs will rise!  Except that the publisher can only charge that higher CPM (CPV, actually) for “viewable impressions”, so their revenue stays the same.   And somebody has to pay the measurement vendor.  This is progress?

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Don't Dump Inventory In An Exchange, Leverage It First

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

Today's column is written by Al Silverstein is CEO of AudienceFuel, a publisher-to-publisher, house inventory trading platform.

Everyone knows that online publishers rely on ad sales to turn a profit, but very few understand how difficult it is to actually manage those sales — let alone how often publishers have to scramble to deliver on the guaranteed buys that bring in the most revenue.

Picture a publisher's in-house sales team signing a deal with an advertiser, promising that a certain number of visitors will come to the site over the course of one month. About three-quarters of the way through the month, the sales team notices that the site has only attracted half of the traffic they expected.

Publishers can't risk an unhappy client, because such a client may never make another direct buy on their site. Underdelivering often forces a publisher to run a makegood, under which the publisher gives away valuable inventory for free.

What's a publisher to do?

The most common practice is to spend money to drive traffic back to the site. Sales sees the anemic site traffic, and tells the marketing department it needs to drive up interest in order to attract visitors. Marketing then buys ads on other sites, or ups its bid price on Google AdWords to create more audience. Publishers have been known to spend hundreds of thousands of dollars in an effort to save a $1 million ad sale.

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The Future is Happening: Real-Time Ad Buying

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

Today's column is written by Frank Addante is founder and CEO of The Rubicon Project, a digital advertising infrastructure company.

The hot topic in digital advertising today is real-time ad buying. Even for a fast-evolving industry, it felt like real-time ad sales swept through the industry quickly last year, with lots of companies activating real-time exchanges that enabled advertisers to plug in, find their desired audiences, and buy ads within fractions of a second.

Even with all the attention, today’s real-time market remains inefficient and disproportionate, because of the exclusion of two major role players in digital advertising: ad networks and self-serve advertisers. For automation to take hold – and deliver a market with greater liquidity and lower costs – real-time advertising needs to be open to everyone. It needs to be about real-time trading, not just real-time bidding.

The majority of display advertising spend goes to Google, Facebook, and the other top five sites in the comScore 500. The rest of the 500 divvies up a small sliver of what's left.

For all the innovation they have brought to the display marketing segment, ad networks still rely on manually executed buys. Self-serve advertisers, the small- and medium-sized businesses that do a huge chunk of the buying on Google and Facebook, are largely shut out of real-time ad buying, because they don’t spend enough to earn a seat with the demand side-platforms (DSPs), agency trading desks, or private publisher exchanges.

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Private Exchanges from a Premium Publisher Perspective - What Does It All Mean?

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

Today's column is the second of a two-part series and written by Esco Strong, Director, Exchange Marketplace Management at Microsoft. You can read Part I here.

In the first part of this series, I highlighted the common industry definitions of "Private Exchange". Today, I'll offer some analysis of these different options, as well as discuss some of the key considerations of each for premium publishers.

One point in common between the three key options we discussed in part I (the siloed marketplace, the tiered auction, and exclusive-access ad slots) is that each model allows a degree of additional control for publishers that may help them overcome their concerns about indirect sales through RTB. Maintaining the viability of direct sales channels while introducing an RTB exchange offering is a complex, challenging, and downright scary proposition for many publishers. If managed incorrectly, this new channel can potentially undercut upstream efforts and eat into a publisher’s largest revenue streams, thus alienating their direct sales force. But when managed appropriately, RTB sales can be a powerful stream of demand to tap into that drives complementary revenue and ad offerings to round out the publisher’s portfolio. However, as we’ll see, each of the “Private Exchange” implementations offers a unique path to doing so – sometime with unintended consequences that may actually negatively impact the publisher’s overall yield or the health of their sales channels.

Use case #1 revisited: “Private Exchange” = a siloed marketplace with controls managed individually by publisher

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Private Exchanges from a Premium Publisher Perspective - Cutting Through the Confusion

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

Today's column is the first of a two-part series and written by Esco Strong, Director, Exchange Marketplace Management at Microsoft

Even if you’re but a casual follower of the digital display advertising space, one such option and term you’ve no doubt heard in kind over the past twelve months is "Private Exchange." From panels to blogs to product pitches, I have seen the term bandied about by a variety of players and in different contexts, to the great confusion of our industry. It is sometimes even used to describe fundamentally divergent concepts and products. I would like to end that confusion.

In this blog series, I will attempt to clarify the key concepts, verbiage and use cases of what a "Private Exchange " is, and is not. Part one will focus on explaining some of the different use cases and ways this terminology is used. In part two, I’ll dive deeper into what "Private Exchanges" can offer and analyze the various use cases and implications of using the different types of exchanges.

I won’t cover all of the possible permutations here, as the term has been used quite extensively within the industry to mean all sorts of different things. I will instead focus on the most common scenarios that touch the core functionalities involved in this area:

Use case #1: "Private Exchange" = a siloed marketplace with controls managed individually by publisher

This scenario describes the most common use of this term. It has been created as, and has come about as publishers seek to leverage the brand equity of their own inventory as well as exert control over the management of their yield and channel strategy. In this example, a publisher typically piggybacks off of an existing RTB platform, but sells within a separate instance of that platform. Their inventory is therefore "siloed off" from other suppliers and sold separately. , and the technology and marketplace are white-labeled with their branding.

In this model, some level of sell-side controls are typically granted to the publisher, such as transparency, pricing, creative auditing, and demand exclusion or biasing. In this model, the publisher has greater control of their destiny and is better able to control the quality of demand and ad experiences that appear on their inventory. This model also provides a publisher greater ability to manage and prevent conflict amongst their indirect and direct sales channels.

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Mad Channels for Mad Men

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

Today's column is written by Tom Shields, Co-Founder and Chief Strategy Officer of Yieldex, an analytics tools provider for sell-side, yield optimization.

Selling digital used to be easy: how big is the budget, and do they want the News section, or the Sports section?  Anything you couldn’t sell this way became “remnant” and went to an ad network.  Today we can point to nearly a dozen different ways to sell digital.  Have you taken a look at all of these, and figured out how they can increase your revenue – or decrease it?

Many different options have emerged for unsold inventory, from networks to SSPs to public and private exchanges.  Growth in different media types, including video, mobile, apps, and tablets, have created different sales challenges.  And the rise of audience targeting has created conflict with those who have traditionally sold content and context.  Finally, some folks are looking outside their walls for more inventory to sell.  Let’s take a quick look at these different dimensions:

Unsold inventory.  Lots has been written about secondary channels like networks, exchanges, and SSPs.  The interesting question for many publishers is when these are combined with different media types – unsold video and mobile may be higher yield on specific networks or video- and mobile-only exchanges.  The answer seems to depend on whether the somewhat increased CPM makes up for the additional operational costs.

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What The Year Of The Dragon Has In Store For Marketers

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

Today's column is written by Pam Horan, President of the Online Publishers Association, a not-for-profit trade organization that represents online publishers

In the Chinese zodiac, 2012 is the Year of the Dragon, a fitting animal characterized by being driven, unafraid of challenges and willing to take risks. This year, akin to the ancient tradition, will offer many opportunities for marketers to make a strong brand impact online, based on strategically capitalizing on industry advancements that will enhance their ability to tell a brand's story and make meaningful connections while more effectively measuring their results.

For some marketers, 2011 was the year of racing to gather the most Facebook Fans or "Likes." However, as the year came to a close, the savvy marketer is realizing that the value of the "Like" is illusive and unless they can measure the true value, investing in these activities may not be the best way to drive their branding goals in 2012.

For the marketer focused on making a meaningful brand impact this year, there are a few critical advertising elements that should be top of mind as they work to finalize their campaigns.

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