Don't Mind Us, We're Joost Watching You!

The Mediapost article Joost's Volpi Touts 'Targetability' (free registration required) states:

"Our biggest asset is targetability, and our belief is that TV advertisers want a high degree of targetability," he said. "From an advertiser perspective, we know exactly who's watching what content."

This is the kind of statement that anyone hardly bats an eye at anymore. Twenty years ago there would have been a privacy uproar at such a statement, even if it were made in a trade publication. Now, in the age where we've come to expect ubiquitous government surveillance, and in which we're raising a generation of children who grow up taking for granted that they're constantly being surveilled, we just shrug our shoulders and say, "meh..."

I don't know whether to laugh or cry. After all, I work in this industry, too. But from a marketer's perspective, this is good news, indeed.

Widgets: Advertising Will Never Be The Same

So says this article that ran originally in Billboard.

Widgets are those handy little apps you can place on a PC (or Mac) desktop that transmits information to you from a website, such as news headlines, weather forecasts, sports scores, etc., without you having to endure the pain and agony of opening a web browser and visit the website itself. The Vista operating system has embraced the widget concept (calling them "gadgets").

Remember the old application PointCast? It was essentially the same thing in that it used what was called "push technology", i.e., it pushed information to you through this application, without your having to manually request it. Same deal here, essentially, except each widget is standalone, with its unique stream of streamlined information, as opposed to the omnibus that PointCast was intended to be.

So who benefits from widgets, from a marketing point of view? Seems to me that those who can deliver information in a branded environment would obviously benefit (Weather.com, CNN.com, etc.), although their ability to directly monetize it might be hampered in this format. After all, a widget is almost by definition of very small app, as opposed to large desktop apps like Weatherbug, so the ability to carry advertising on a widget might be difficult.

Perhaps widget content providers would like people to click headlines and come to the site for more information, but isn't the point of the widget that you receive the information in the widget without having to come to the site? Seems to defeat the purpose, n'est-ce pas? Used in that way, the widget is not more than an RSS conduit.

From my standpoint, of course, I am most interested in how direct marketers can use the widget for customer acquisition purposes. I'm a bit doubtful that you can successfully engage widget users to sign up through a complex registration form on the widget itself, and using it to drive traffic might be a testable proposition, but I wouldn't bet on its success as a high volume generation marketing vehicle. I'll keep my eye on it, though, in case an acquisition usage tactic becomes clear to me.

Video, Schmideo -- D1SPLAY RULEZZZ!!!

There's no doubt about it -- video might be on the cutting edge, along with other 2.0 buzzworthy strategies like RSS, podcasts, blogs and the like -- but after house list email marketing and the low-hanging fruit of search, display advertising is still planned to be larger than any of the others, even in 2007. This in eMarketer:



And even though rich media spending is growing incredibly and display spending is topping out, it won't be until 2011 when rich outstrips display:



People just like to stick with what's familiar and easier to manage. When rich becomes as easy to manage as display, that's when the tipping point will really occur.

Social Networking Goes Niche

As titled in this Business Week article.

The gist is that more people are getting turned off at the overt openness of MySpace, where basically anyone can reach out to you (except if you're a teen, in which case you can put up a wall), so social networks that allow you to control exposure of your profiles to others are gaining traction. The article names Vox as an example of just such a niche network.

I see MySpace as filling a fundamentally different need than Vox. MySpace is all about widening your circle. It's a place where kids can connect with other kids from far-flung places, to help mitigate the isolation they feel as their parents place ever more restrictions on their mobility in response to our increasing media and news culture built on fear of strangers and of The Other. Young people, therefore, would like as many contacts as possible. It also makes them feel popular if they have 100,000 "friends" in their network.

People like the protagonist in this story, who fled MySpace for Vox, want to use social networks in a different way: to strengthen ties with the contacts they already have, and to broker, and have brokered, contacts with only those new people with whom they share common interests or purpose.

But there's another thing not being addressed by this article: is another reason people are fleeing MySpace that there's just too much advertising and storefonts being put up there? I can easily envision such backlash against this marketing tactic causing the sun to set on it in the next year or two. And if that happens, what would justify continued investment in broad network platforms like MySpace?

Another Ad Network Gets Busted

This time it's TMP (TrafficMarketPlace), as a user alleges that Travelocity and Cingular are still serving ads through malware. As I mentioned in this post, that's how it happens to major advertisers, and surely they know by now that it happens this way.

I pulled my company's advertising out of TMP because we suspected some funny business from one of their affiliates. We experienced a sudden spike in impressions, no increase in clicks, CPAs going from about $5 to hundreds of dollars in a single day. We suspected impressions fraud. We went round and round with TMP to try to get a resolution in place, then all of a sudden, my rep left, her spot was not backfilled, and the VP of Sales became suddenly unavailable. We ended up simply not paying for it, and ultimately not working with them anymore.

And now this.

Show Me The Metrics! (What, is it 1996 already?)

IAB: Better metrics would increase online ad revenue

A survey co-sponsored by the Audit Bureau of Circulation and NSON Opinion Research confirms that advertisers would spend more money online if only the metrics came from an independent third party auditor. My self-interest detector is going off, but as an advertiser, I can vouch for the validity of this.

I think this is a good news/bad news situation for online publishers. Better metrics by third parties will lead to more spend, so the investment will for the most part be well worth it. The bad news part is two-fold: (1) Third party metrics and auditing cost a boatload of money, and (2) not a few publishers would go belly up as their sham self-reported visitor numbers are exposed for all to see.

Walled Garden Down, Ad Revenue Up

AOL has profited handsomely by moving from a subscription-based revenue model to an ad-based revenue model, and the proof is in this Mediapost article (free subscription required).

I don't think anyone is too surprised that this might occur, but the article might lead one to believe that all the growth comes from AOL.com, specifically. I was questioning that, and the article is silent on it, leading me to wonder: how much of this revenue growth comes from network cash cow Advertising.com?

One amusing part of the article is toward the top where they say:

"The Time Warner unit's decision last year to replace its ailing subscription model with a free service supported by advertising resulted in a 454% surge in billings from 2005 to 2006, compared to a 142% increase in portals overall."

Gee, this makes 142% sound so paltry. But seriously, it is good to be a portal, as Jeff Lanctot at Avenue A confirms in this ClickZ article.

"How Radio Is Becoming RadiADo"

The brilliant Al Ries, author of the marketing classic "22 Immutable Laws of Marketing", validates in this Ad Age article my main beef with terrestrial radio that I mentioned in my post here.

Are Ad Networks Safe for Brands?

Of course they are, according to this iMediaConnection article in which the author interviews Joseph Apprendi. And who is Joseph Apprendi? He's the CEO of Collective Media, a "leading online advertising network specializing in audience targeting and optimization". And if you can't trust the CEO of an ad network, who can you trust?

To be fair, Apprendi does recognize the need of brand marketers for transparency, which is the number one point of contention between ad networks and advertisers. But he does suggest that the desires for 100% campaign (not just list) transparency and complete control over carve-outs are unreasonable, and does slightly mischaracterize the issue as one only of quality assurance. That's part of the issue, to be sure, but the one issue he would never bring up is that of bait-and-switch. We've seen this before -- ad network touts ESPN and CNN and iVillage as part of their networks, and you run with them, and within a week you're getting emails from your CEO with links to www.popcap.com, wondering what the hell the media buyer is doing advertising a product clearly intended for adults on a site for little children. (Of course, you could reply asking your CEO what he's doing on such a site himself, but you wouldn't have to love your job too much to do that.)

Ad networks want nothing to do with the bait-and-switch discussion because for some of them, it's a core business strategy, and the others who might be sympathetic to a client's wishes don't want to pigeonhole themselves into a guarantee that's too hard to keep. Until the networks can figure out a way to give brand advertisers what they need (not just want), they're never going to become a must-have part of the plan.

A Downside of Blind Networks

Looks like AnnCoulter.com is starting to appear on advertiser hit lists, even as they get top-flight advertisers, thanks to their relationships with ad networks. Their being hitlisted may not be because of her politics per se, but because of that age-old #1 enemy of advertisers: controversy.

This post in Daily Kos reveals the names and contact information of various advertisers who've appeared on Coulter's site. The mission of the poster is to"out" advertisers who support what they term as "hate speech".

We in marketing know that this kind of thing -- running on controversial, divisive, or otherwise wacky and irrelevant sites -- is de riguer when casting your lot with a blind network. It's bad enough when this kind of thing happens when you have a CPA buy running -- but to trust any blind network with a CPM buy with zero transparency, and I don't care how "reputable" the network is, is something like dumping your money into the middle of the street and setting on fire the portion of it that's not blown away by the wind.

On the one hand, serves them right. It's 2007, and if you don't know that this kind of thing can happen on a blind network by now, you're either ignorant, cynical, in cahoots with blind network sale people, or stupid. Any agency that allows this to happen should be put on the hot seat by their clients, pronto.

On the other hand, this is one more data point in the discussion of transparency in ad network buys to start with. If this can move the discussion toward a resolution that provides a broad level of insight into where your ads run on ad networks, then it's totally worth it for some advertisers to die from the poison berries on your behalf.

Maybe Panama Doesn't Rock For Clients?

Following up on my breathless musically-lyrical treatment of early results from Yahoo's Panama launch, this story in Mediapost (free registration required) suggests that clients may not be as thrilled about early performance as are paid search providers.

Avenue A reports that, across their 33 clients, click-through rate is definitely up, by +10%, but conversions are down an average of -5%. The story contradicts itself on cost-per-click, claiming it dropped early in the story but then referring to a CPC rise in the next paragraph.

CPA, the third most important individual metric to clients (after margin and then revenue), is up +6%.

This might mean something -- or it might not. A key question I have here is about the integrity of the study. Testing best practices state that you hold all ancillary variables in control while you test one or just a few key variables at a time, with everything else running exactly the same on a simultaneous basis (in this case, same bids, same keywords, same keyword rotation, same offer, same copy, same copy rotation, same site split within the content distribution network, etc.) If you can't manage that, then you need to apply some sophisticated regression analysis to tease out the noise in order to bring everything onto the same playing field.

In this case, the thing that exacerbates the analysis even more is that they are comparing on a before-and-after basis, in which changing competitive conditions over time can also create a challenge in determining the validity of the results.

I'm not saying that Avenue A hasn't applied all the statistical filters required to the study in order to eliminate the noise, and their conclusions may be totally valid on an objective basis. But that's the question that I as a second-hand observer have.

FOLLOW UP: I just ran across this story on BizReport, which confirms my earlier post regarding Yahoo's happiness about performance, and also cites the Mediapost story above. But this is interesting -- the BizReport story notes Avenue A's clients seeing a click increase and CPC decrease -- BUT no mention on CPA increase and conversion drops! I guess including that sort of information would have put an unwelcome and unhappy spin on the story, huh?

Banner Advertising 2.0

This is ultimately a CNN Money story about how display advertising is evolving into a algorithmically-oriented exercise in exactitude in general, but the most compelling part to me is the first part that discusses how agencies are using such algorithms to make creative adjustments to banners on the fly, meaning elements like colors and copy. The article doesn't talk about the format of the banners that can be changed in this manner -- I assume it's a rich Flash-based format -- but it sure is a lot different from the days of begging and negotiating for creative and IT resources to set aside a few hours here and there and make simple changes to your banners for testing purposes.

Many senior management types believe that online marketing success boils down to negotiating ever lower rates for the media purchased as the path to lower CPAs and higher revenue margins. But until you get to a certain spend level -- at least two commas of spend per month -- online media is generally a transparent marketplace where you know whether you negotiated a rate that's too low -- in such case, your ads simply won't run. Yahoo might write Class 2 IOs for 10¢ CPMs -- the inventory simply won't clear unless no other advertiser is purchasing the allotted salable inventory for higher rates.

One thing that leaped out at me in this story: Yahoo digests about 12 terabytes of data from user interaction every day. That adds up to almost 4.4 petabytes a year.

Did you even know what a petabyte was before today? Neither did I.

Young People Believe

Here's something that media salesfolk should be mighty interested in. The Audit Bureau of Circulations have just released a news item, the main point of which is that as spending in digital media increases, advertisers will demand more accountability, in which they don't currently have much confidence (fewer than less than half of ad-agency respondents and only one-third of advertiser respondents being so).

But here's a data point that jumped out and grabbed me:

"Younger ad professionals appear to be less skeptical: 75 percent of respondents under age 25 said they trust the metrics provided by online publishers, compared to 22 percent of those in the 55-64 age category."

That's a huge disparity, and it tells me less about how confident different age groups are in Internet advertising metrics than it does about the general level of skepticism among age groups.

So you salespeople can probably use this kind of insight to tailor your presentations based on the age of your audience.

How Major Advertisers Get Sucked Into Adware

FTC Fines Adware Company $1.5 Million

No major advertiser who values its brand wants to associate it with dark-gray-hat adware companies. Certainly Travelocity, Cingular and Priceline didn't want to. So how does it happen?

One common way it happens is through affiliate marketing. When an advertiser wants to spend a lot of money to acquire a lot of customers under very tight CPA goals, they tend to spread their dollars around to more sources, and the deeper into sources they get, the less diligent they are vetting the sources. When an advertiser signs a CPA media deal with ad networks, even big-name networks owned by major media companies, they are charging the network with the responsibility to drive high volume within that cost goal, and historically they do not ask very pointed questions about the networks' tactics or affiliates. It's a sort of "don't ask/don't tell" tactic that they hope doesn't blow up on them.

Some affiliates of brand-name networks might be networks themselves with their own set of affiliates, and some of those affiliates might be affiliate networks, too. So sometimes, by the time your advertising actually appears on a site or in a desktop app or bundled with a software download, it might be several times removed from the original deal the that you the advertiser did with the big-name ad network. Unless you have the right kind of tracking software -- and not many low- or mid-budget CPA advertisers do -- you have little idea where your ad actually ends up.

Exacerbating this is the common tactic of networks to cloak their affiliates from the client, ostensibly to keep the advertiser from doing business directly with the affiliate and thus cutting out the ad network middleman. But another unacknowledged reason is that if you as an advertiser knew who some of the affiliates really were, you might well demand your money back. I have before -- I recently had some $170,000 in CPA advertising credited by one network when I discovered a certain affiliate that was carrying my advertising in a manner that blatantly and brazenly violated the insertion order terms and conditions.

This incident should probably wake up large customer acquisition-oriented advertisers to vet their ad sources more carefully, at least in the short-term. What they should try to do is insist that their ad network vendors be fully transparent and report where their CPA advertising runs, or else either take their business elsewhere or build their own affiliate networks.

Yahoo's Rich Media SNAFU

According to this story (registration required to view), PointRoll has written to its clients stating that Yahoo is going to make an effort to enforce their policy of charging fees for third-party rich media placements.

Yahoo have apparently pulled the PointRoll rich media ads of some clients and replaced them with standard ads. It appears the real reason behind the move is to try to migrate advertisers to use of rich media solutions from AdInterax, a company Yahoo acquired in the fall, and for use of which Yahoo would waive the fees (since AdInterax is not a third-party to Yahoo). PointRoll, who claim to have 70% of the rich media market, is a direct competitor of AdInterax.

If I'm a Yahoo media rep, I can't be too happy with having to field numerous phone calls and emails this morning from media-buying clients asking for makegoods on what's been switched out, and a bonus to salve hurt feelings. Yahoo might be an 800-pound gorilla, but it's a huge jungle out there, and Yahoo is already seen as a stumbling giant anyway. There are too many other online media vehicles out there for significant advertisers to cave to Yahoo on this.

On the other hand, there's no word in the story on whom the affected clients were, and that is a very large question. I have trouble envisioning Yahoo putting their foot down with their biggest advertisers (such as automotives, financials and the biggest direct advertisers) or their most coveted advertisers (such as CPGs) very hard. Would Yahoo risk ticking off an eight-figure spender just to try to strong-arm them into migrating their rich media technology to AdInterax? I doubt that.

I don't see Yahoo's strategy here succeeding for very long. Online media is a fluid commodity that is highly subject to the vagaries of supply and demand. If Yahoo loses business over this, the strategy will go bye-bye.

Web Video: The Spirit Is Willing, the Model Is Weak

Credit cutting-edge advertisers: when they see a significant new media model, they work to get in on the ground floor and establish early leadership however possible. In an increasingly digital world, it makes good business sense to be recognized as leading-edge, and moving first into nascent technologies helps that cause nicely. But doing so has to be a "near-future" rather than "right now" consideration, and sometimes moving first also means recognizing that conditions may not be quite right quite yet to make an immediate move-the-needle splash.

That's where online video appears to be at the moment, as this Ad Age article will attest. With digital ad spend expected to exceed $20B in 2007, according to eMarketer, less than 4% (some $775MM) of that will come from video.

According to the Ad Age article, the key inhibitors to make an immediate consumer impact in online video are:

• Fragmented audiences (therefore, hard to generate reach quickly).
• Limited ad inventory availability.
• Lack of web-specific video content to sponsor.
• Ad buying model still evolving.

Industry pundits believe online video viewership must at least partially migrate from traditional TV viewership -- not all online video viewership can be incremental, after all. And the dollars must follow too, says pundit wisdom, as much as 10% of the current $65B by 2010. How can an effective system of categorizing the viewing options and congregating the viewers and ad inventory be created, in such a way that it will be easy for online sellers and buyers to deal with?

But that's only half of the problem. The other half is, where are online viewers going to be watching their videos, even in the next few months? The market is so young and in such flux, that's a major issue. Can viewers be conditioned to accept advertising? What's the proper ad length? Where does it belong during the program? Is the traditional content-plus-ad spot even going to end up being the dominant format long-term?

Some major players are going to have to make some very large bets to try to mold the market to their liking, and many of these players are going to have conflicting agendas with others, and winners and losers will be declared. But that's the way new business models evolve, and video advertising will be no different.