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Archive for the ‘Online Advertising’ Category

 

Native Advertising Won’t Save You

Tuesday, October 29th, 2013

imagesNative advertising is an advertising experience customized to the experience the consumer has interacting with the specific content they are consuming in a way that causes the advertising to feel like part of the content consumption experience. It is a form of advertising that at its best blends with the content in such a way as to be indistinguishable from the content and features an integration that could only occur in the context of that experience.

A practical example of this might be breast cancer awareness month in the NFL. The NFL has players wearing pink clothing, refs using pink flags, and similar integrations where breast cancer research’s signature color is blended into the NFL experience in such a way that it is both unique and inescapable. Facebook, Twitter and Google advertising is similar. Ads similar to tweets and search results are integrated into the search results and newsfeed in such a way that become a seamless part of the consumer experience. In any other context, these ad formats would be inappropriate: I can’t put pink warm-up towels on a billboard and putting facebook newsfeed ads into other contexts is similar in its lack of effectiveness. While people see Google Adwords all over the place, they are a fraction as effective as they are in the context of search results.

So a good native advertisement is one that is tailored to both the advertisers brand and the publishers engagement modality. The effectiveness of these advertising models cannot be denied however the challenge presented to advertisers and publishers is clear: Without massive scale, the burden of developing a truly compelling native ad is offputting. Asking an advertiser to support your wonky native ad format when your scale is not Facebook/Google/Twitter is uncompelling to most advertisers. Even given the effectiveness of a truly compelling integration, the amount of unique integrations that an advertiser can support is limited.

I have recently heard about “native ad networks”. This concept is an oxymoron. Aggregated native ad platforms have no scale attributes that allow them to be used in the context of a network.

I confess (and more would confirm) that there is a lot I don’t know about online advertising. One area that is an interesting area is creative development. To speak frankly, at every place I have worked in the industry, I have found that we did an inordinate amount of creative development on behalf of our clients. And I say that as a representative of the publisher/network. So agencies would say to us, “we don’t have creative, you build something” and we would toss it in for the buy. I think I had always assumed that this was the exception, not the rule. I mean, agencies are creative. They don’t really want me doing the creative development, do they?

For the sake of my sanity, let’s assume that agencies live in a world where they want to build the creative.

Having said that, that is a world where native advertising is impractical.

My New Personal Ad. Please Respond.

Tuesday, October 22nd, 2013

You: Attractive, venture-funded advertising technology company. Enjoy long walks on the beach, arbitrage, APIs.

Me: Writing one of the most popular blogs on online advertising, data-driven things in general and start-ups. Offering one of the most inexpensive online advertising opportunities out there.

Next steps:

  1. You send me an email at bhalliburton at gmail saying you want to spend $1,000 advertising on Cogblog for a one quarter period (3 months).
  2. You get a 300×250 ad on Cogblog!
  3. You get an “INTERVIEW” with one of your senior leadership team members on Cogblog. BEST ADVERTISING EVER.
  4. I talk about how you are sponsoring the blog CONSTANTLY.
  5. I send you a Cogmug, the exclusive, ever-coveted schwag of Cogmap. Coffee tastes better when you are Cog!

Hundreds of people (sometimes thousands!) see your ad every day.

The Mobile Advertising Market is a BIG, BIG Opportunity

Wednesday, March 13th, 2013

A lot of chicken little’s have been heard from this week proclaiming the doom of everything as “digital dollars are turned into mobile pennies”. Specifically, I saw two articles that caught my attention:

Digital Cinders in the Financial Times:

While mobile ad spending is the fastest growing among all media categories, it captures $6.5bn, or just 1.3 per cent of total advertising revenues, according to Interpublic’s ad buying firm MagnaGlobal. In five years, mobile ad revenues will inch up only slightly to 3.3 per cent of total ad revenues, the group predicts.

They act like this is terrible, but this is a CAGR of > 20%! Billions of dollars flowing in every year.

Similarly, I saw this comment on AdExchanger:

Pandora reported better than expected (but still a loss) fiscal fourth quarter earnings late Thursday as the company continues to concentrate on a mobile future. See the release (PDF).  The Wall Street Journal digs into the details, “Mobile ads still aren’t as lucrative as those on traditional computers. The latter garnered $52.82 per 1,000 listening hours, compared with $25.05 for mobile.”

Now, you read that and you say, “Man, mobile totally sucks!” But keep in mind, that the CAGR is 20%+ YoY!

Display advertising has been around for more than a decade! Mobile advertising is just starting. From a market size perspective, digital advertising was around the same size as mobile is today way back in 2005! It seems to me that if mobile is in “2005″, being at 50% of desktop’s monetization is actually pretty good. I would expect that in the next two years, that 20% CAGR could increase Pandora’s revenue on the mobile side fairly dramatically.

The efficient growth of mobile value for publishers promises a bright future in the mobile advertising space. There is a lot of headroom!

Ad Network studies continually represent network as modeling the space!

Monday, February 18th, 2013

The Onion recently released an article entitled “Cogmap, dismayed over poor data quality of other vendors, releases one man’s opinion in data sampling errors”. Link below!

Flurry recently released a delightful set of Mobile 2013 data, but they did not caveat it enough for my taste. (I will soon be guilty of doing the same thing, FWIW.)

So I thought I would complain because, in short, when I see an ad network release data my perspective on every single slide is “How is this skewed by network composition”. And usually the answer is: “I bet it is skewed a lot.”

A couple of examples:

Screen Shot 2013-02-18 at 9.35.28 AM

 

This is kind of set-up as “the growth of mobile”, but really it is the growth of Flurry. What we need to add to this is a retail storefront data point: How much of this is “same store sales” versus “new sales”? I will say, Flurry is big. This data is probably pretty good, but it is probably not unfair to say that many of their biggest customers are probably tracking a lot more data than they were. This could cause in-application events to skyrocket even as application usage remained static. Those big jumps could be a change to the way Angry Birds tracks apps, or it could be the installation of a new app, or it could be some broad market growth descriptor. It would be nice to know which.

Much later, we saw this slide which has similar issues:

 

Screen Shot 2013-02-18 at 9.36.48 AM

 

They disclose that this data comes from Flurry. So this is really more about their network composition. This means that one of two facts is true: They either have Facebook or they don’t. If they have Facebook, then their data sample over-indexes the Social Networking (i.e. they capture most of the Social Networking activity happening in phones, but they don’t capture all of the other activity.) If they do not have Facebook (as seems likely from this graph), they are missing most of the social networking activity people perform on their phones. Instagram? If they disclosed the sites they track, we could better understand the relevance of this data.

Last slide:

Screen Shot 2013-02-18 at 9.36.08 AM

There is a more interesting problem here: They are comparing apples to oranges. They pull the television time from the Bureau of Labor Statistics, then they pull the web browsing time from comScore and Alexa, and then they pull the Mobile App numbers from their own data. I assume that the Bureau of Labor Statistics does a good job controlling for people that don’t consume any TV – and I assume that pulls the average down substantially. I assume comScore does an OK job controlling for this – once again, pulling the average down substantially. I assume Flurry does a terrible job controlling for this – they are not really that kind of company, why would they? So I suspect that this data is quite wrong.

I know people in glass houses shouldn’t throw stones, I just can’t help it. If you are still looking for the Onion article about me, go buy a book from the Onion using my affiliate link. You owe me a nickel for falling for that.

 

 

What is the next big trend in mobile advertising?

Tuesday, February 5th, 2013

Go read my answer to this question (and vote it up!) on Quora:

http://qr.ae/1cIit

People Hate Advertising – And That is Why You Should Love It

Tuesday, January 8th, 2013

images

The current meme sweeping the entrepreneurosphere is “A product has to be 10x to 20x better than current solutions to win” because the market is stacked against a start-up.

I buy into this, generally. A product can’t be a little better to overcome switching costs. It has to be a lot better.

Good news: It seems that everyone thinks advertising sucks. All you need to do is make a product people don’t hate and it will 12098205820458420x better than the status quo.

My personal feeling: This is a tricky subject because it probably has to do with the creative experience. Agencies hate digital advertising because it lacks the story arc and interruptive attention-grabbing qualities of TV. Consumers hate TV ads also. You don’t want the solution to be one-off brilliant creatives a la subservient chicken. It needs to scale. But it probably isn’t 100% algorithmic. It probably has to do with better creatives, but it also has to do with better targeting.

Good luck!

When Advertising Goes Wrong

Wednesday, November 21st, 2012

I am on the record as being a fan of viewable impressions. Similarly, I am a fan of fewer units to make more money. I am also on the record as recognizing that there is an element of prisoners dilemma in the programmatic sale of ad space in that if you constrain supply and someone else doesn’t, your creation of value may inadvertently create value for them in a way that hurts you at some level.

But I went to the Philly.com web site for the first time in forever and what I found offended me:

Yow, that is uncomfortable. I count 4 300×250′s and another ad unit across the bottom. Every one of these is Google remnant. So Philly.com is basically becoming a bad actor here. Furthermore, you will notice that the article I was reading they paginated. That’s right, this was one of two pages. So for 500 words, I saw 10 ads. I think that is worse than a regular newspaper. I am virtually ready to get on-board with the ad blocker guys after seeing this. The user experience here is absolutely terrible.

I would love someone at Philly.com to comment on what CPMs are like for these different units and how they justify this user experience. It is hard to imagine that anyone likes visiting their site. Frankly, this is an example, in my mind, of the worst kind of web site. A wave of sharing links, a wave of related articles, the formatting at the end of the article reflects a lack of attention to detail. Bleh.

Why would publishers put ads all over a page? Why? Why! Why?

Tuesday, August 7th, 2012

Hilarious excerpt from Kirby Winfield Q&A:

Kari Bretschger Presz and CEO IMW Communications: Why would there be a market for a non-viewable ad? It would be a tough sell…Why would publishers offer it?

LOL.

LOL LOL LOL LOL LOL LOL LOL LOL. Why would publishers offer it, indeed! The combination of the race to the bottom and the prisoners dilemma puts publishers squarely at odds with the desire to introduce viewable impressions standards.

This makes me laugh. It implies such incredible ignorance of how display advertising works today.

Because I was chewing through my feeds, it reminded me of a quote highlighted in the eCPM blog from Dalton Caldwell’s Digiday interview:

There’s two ad businesses. There’s the brand ad business and then the dark underbelly of ad networks

This shows how tough it is for a CEO of a general marketing business to understand what is really going on in digital marketing. Kari, call me if you want me to explain how screwed up your media buying practices are.

Agencies are getting exploited on a daily basis by bad actors. Even your performance buys are not working because attribution is a train wreck!

The good news is we are approximately the same screwed up as your TV buys, so just jump right in, the water is warm.

Call Your Stuff a Platform, See If I Care

Thursday, August 2nd, 2012

Dalton Caldwell is getting a lot of press these days. In some of this press, he said things I disagree with. Like this:

What’s the fundamental flaw of ad-supported platforms like Facebook and Twitter?
“Platform” implies providing a service that others are building on top of. Amazon Web Services provides a platform you can build services on top of. The platform doesn’t reach up and do weird things. In the Amazon example, you can build a competitor to Amazon on top of the platform. You can build anything. They’ll never charge you a percentage of business or threaten to get into your business. That’s a true platform because they’re getting paid to provide a service. There’s not this notion of retribution and reaching through the stack.

Err, so AWS will never get into the business of people that build on their platform? What if I built “management tools for people running AWS” that runs on AWS. They got into that business. What if I got into the “no-SQL database on AWS business”. They started offering data stores also.

Was Windows a platform? They consumed tons of companies. Every platform is constantly negotiating boundaries. To imply otherwise flies in the face of appreciating that customers like to buy complete stacks from single vendors. No one wants to have to cobble together solutions to meet needs, and certainly no company wants to feel dependent on the ecosystem to generate revenue. If you need functionality to create value, build it. That is capitalism.

To imply that Facebook has a “fundamental flaw” is to imply that it is a failure. I think $4 billion in revenue and $1 billion in profit have already proven that statement wrong. This is not some pyramid scheme. This is one of the biggest, most valuable, fastest growing companies in technology history. There are probably only a handful of technology businesses, that if you had to pick one to own, you would choose over Facebook. It is one of the two or three most widely used technologies in the world, fast growing, and wildly profitable.

It wasn’t all bad. The comment he made that I most liked was this:

You need to rely on your U.S., U.K. and European user bases to make enough margin to carry all your worthless foreign traffic. It’s a Faustian bargain. The people you need to keep the most you have to show the most ads.

That is interesting, isn’t it? If you build a global site, you have to be prepared to pay the tax.

How To Make $250,000 In Two Hours With One Good Email

Thursday, May 31st, 2012

Caveat: I have never worked at an agency. I have worked as a consultant, so I know how clients are crazy, etc.

For me, the craziest, craziest, craziest part of working in the digital media space is that you get these emails from agencies saying that they need a response in 2 hours and they are spending $250,000 based on who responds with what.

Newsflash: $250,000 is a lot of money.

Newsflash: 2 hours to pull together a response does not result in “the optimal product offering”.

The best planner/publisher interactions that I have seen have been driven by a positive back-and-forth interaction where the publishers unique ability to bring value to the advertiser is leveraged – no surprise, it is a consultative process.

How does this happen? And I have to tell you, it happens all the time. All the time. Sometime it is half-an-hour to make $50,000. I am pretty sure that if the advertiser knew how cavalierly their profits were sometimes spent, they would go into cardiac arrest. Is this simply the planning aspect of the campaign being devalued? Weeks were spent on “the strategy”, but an hour for tactics? All the money was spent on the creative so the inventory gets short shrift for internal budgeting for the agency? Is this a symptom of poor personal planning by young media planners?

It makes me incredibly sad every time I am involved in one of these because I wonder if the day will come when I am an advertiser and I am treated so terribly. This is the kind of thing that has left me wary of agencies for life. (I recognize the hypocrisy that I have probably done things that made agencies wary of networks.)

Is there a target “%of budget” theoretically allocated by an agency for the actual media planning of the buy that I should know about?

Regardless, it is amazing. Don’t we, as an industry, owe it to advertisers to do a better job planning their media buys for maximum impact?