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Archive for May, 2009


The Internet Is Taking Over, But Many Fear It Has Left The Ads Behind

Tuesday, May 19th, 2009

A wave of articles are coming out marketing the value of more intrusive web advertising.  To wit:

tvadsweb-067x067Here Come TV Commercials Between Web Pages (TRI)

“…ShortTail Media is testing a new ad unit that allows publishers to insert 15- and 30-second video ads between pages on their sites. Reuters has already signed up for a beta test this summer. and The Weather Channel are close to joining in, reports AdWeek.…”


“If all this sounds like it will hamper the user exeperience, then too bad, says ShortTail Media CEO David Payne.

In a speech at the Advertising Bureu’s(sic – Cogmap editor) annual meeting, writes AdWeek, Payne told publishers they needed ‘ to adopt bigger, bolder creative and to be less sensitive to user experience.'”

Pretty enlightened, huh?

MediaPost releases an editorial from the creative director of PointRoll the next day and his message is:

“We’ve got this great new medium. Let’s start using it to its full advantage. Little rectangles and squares, many of which appear on the same page at the same time all vying for audience attention, are never going to compete on value with television commercials and large, splashy print and outdoor advertisements.”

Martin is a little better balanced.

There was a recent article in the New York Times about how Wired, the print magazine, is crashing and burning.  One of the points they make is that Wired, the print magazine, has less than a million readers, while the on-line version has more than 11 million readers and makes less money.

Is the answer a worse user experience, as implied by David Payne?  Or is it something else, as implied by Martin Betoni of Pointroll?  Looking at this tiny set of data, the answer could be both:

  • One solution could be more intrusive ads.  If ads that truly wrecked the user experience were introduced, maybe they only have 1 million web site users a month, but the web site is now a going concern.
  • Another solution could be smaller changes that avoid significantly impacting the user experience.  Looking at these numbers, you only have to deliver 1/10th the value per user to generate the same revenue.  (Of course, Wired is losing gobs of money, so maybe that doesn’t get you there.

I will say this:  The “remnant business” fits in here somewhere.  Not sure where, but somewhere.  Here are a few facts:

  • There are more web pages being viewed every day (supply is increasing)
  • Of those web pages, 20-40% are sold for premium prices (~$20 cpms), and 60-80% are sold as “remnant” (~$1.00 cpms)

More intrusive ads may have the twin benefit of decreasing supply (making people hate the web) and increasing premium sales, resulting in far higher sell through rates, but that doesn’t seem like the optimal use of the internet as a resource.

An analysis more in-line with the current evolution of Internet demand would imply that pricing needs to be more elastic, implying the use of exchanges.  The challenge with exchanges is that they work best when inventory is commoditized.  Custom advertising experiences are difficult to sell in an on-demand exchange context.

Where am I going with this?  Not sure.  But I am pretty sure that no one wins when people start saying “we should make the user experience worse.”  I am excited to watch the Internet evolve, but if I have to watch a 30-second interstitial to see it, I am going to unplug.

Facebook Licenses Data To Lotame According To MediaPost: FAIL

Thursday, May 7th, 2009

welcome-to-facebook-facebook_1241699047330Today’s MediaPost covers anannouncement by Lotame with an article titled: “Lotame Mines Social Data From Facebook To Target Ads“.  In the article, they lead with:

Imagine the insight that ad agencies and publishers could gain to target consumers if they knew the exact type of person who signed into Facebook at 8 a.m. each day to update his profile and then went to The New York Times to read the news.


Lotame has released a feature in Crowd Control, dubbed Stadium, that it believes will give advertisers and publishers insight into human behavior through social media data from sites like Facebook and others to help target ads. The application has been under development for two years.

The article even ends with an analysis of how fast Facebook is growing.

But the actual Lotame sound bites don’t mention Facebook.  This sounds very different and I suspect that the reporter somehow ran with an example and turned it into an angle that doesn’t even exist.

If Lotame was licensing Facebook behaviors, that is HUGE.  Enormous pool of granular, valuable, US interest data.

Who cares about their new product, they just announced a relationship with Facebook!

I took a cursory look at Facebook and unlike Bebo, a known Lotame partner, there appears to be no Lotame tag.  As a guy who has licensed a fair amount of behavioral data in my time, I would be shocked if Lotame were able to license Facebook data.

Two lessons here:

  • Lotame PR management must have blown it.  Even to mention Facebook as an example here implies something unfairly to reporters.  Someone has to catch that.
  • The reporter was in a hurry and not too experienced in covering this particular nuance of the online advertising market.  Lotame was trying to push a product line extension and it turned into a Facebook data licensing deal headline.  If that were really the case, trust me, Lotame would have been pushing that.

I could be wrong here, but it would be a huge story.  Frankly, I would be pleased as punch for Andy, who is a great guy and deserves to exit for $1 billion.  Go Andy!

Most Ad Networks Hate Advertisers

Sunday, May 3rd, 2009

hkg_hong_kong_advertisingThat is a nice, provacative title, isn’t it?

Anyway, I had an idea yesterday that made me say, “Is it really as simple as that?”

And ever since then, I have thought, “Yeah, it is.”

In managing a marketplace, your average advertising network, in many different ways, has to “choose sides”.  Are they aligned with publishers or are they aligned with advertisers when it comes to how they deal with certain issues.  One issue seems like it might be more important than any other in answering this question: Publisher payment models.

Many (most?) advertising networks pay a revenue share to publishers.  To that end, they are incented to extract the maximum revenue they can from advertisers and efficiency of the buy and optimization of the buy for advertisers is only important to the extent that they can use it to justify extracting more revenue from advertisers.  Some networks are poster boys for this model, like a Federated Media.  Some are less transparent about it, but I think it works out just the same.  Right Media is probably an example.

A few networks pay flat CPMs.  When you pay a flat CPM to a publisher, that aligns you with squeezing value out of the inventory.  That is advertiser alignment.  Figuring out how to help advertisers get more bang for their buck on that inventory suddenly is really, really important.  If you are paying $0.10 CPMs and generating $0.12 RPMs, the ability to optimize and drive that to $0.20 is much more valuable to you (creating a much bigger incentive to you) and when you do that, some advertiser is reaping the benefits of that improvement.

What networks pay flat CPMs?

A New Architecture For Facebook Feed Templates

Friday, May 1st, 2009

facebook-developers-tools_1241192609257I know that usually I focus this whiney blog on maligning things other people say, but I want to actually be constructive for a change.  Let’s start with maligning things: Facebook and their newsfeed interface for application developers.

They offer two ways to create newsfeeds: A template wizard or an API.  Both are only somewhat useful because templates cannot be edited.  They can only be deleted.

Facebook strongly pushes developers to use the wizard because the wizard allows them to validate templates more effectively.  Unfortunately, using the wizard is fine for template creation, but if you want to recreate a template with a small change, it requires navigating the entire wizard process again and is cumbersome – using the wizard requires creating dummy data for every field and JSON formatting it.

The API works better, but if you need to rewrite a newsfeed template, you must delete that template, create a new template using API calls, and then put that API template reference in all of the points in your code that invoke that template.

Interestingly, I would like to propose a third solution: A generalized solution that could easily be layered on top of the existing template architecture, leverage loop holes in the current architecture model, and allow easy edits to template models.

The specific loop-hole that this would exploit is that Facebook allows applications currently to invoke other applications templates.  This type-checking is probably a good idea because it allows test versions of applications and production versions of applications to share templates without requiring recreation of templates, managing template IDs between applications, and associated testing risks.

My proposal is to create a set of generalized feed templates.  For example, one template for short stories might be:


Obviously you would need the reverse as well:


You would need versions of these templates without associated short stories and full stories, and all the various n-cases.  With and without action links.  Pretty straightforward.  Publish those template IDs and all of the sudden there is a flexible, editable architecture for crafting newsfeed stories on Facebook.

I am currently using a reference implementation of this architecture and it is working dandy.  Unfortunately, I hard-coded the action links and am far too lazy to redo it.  If I get around to it, I will do that and republish this.

Am I missing anything?