Brand safety has suddenly become a hot topic. Because America, the world’s largest advertising market, has been divided into two camps by the 2016 election, the news industry and the nature of its content have taken center stage. Suddenly brands are concerned again about where their ads appear — a concern that had seemed to […]
Like every other industry conference we’ve attended in the past few years, SXSW 2017 featured a bunch of agency executives and former agency people desperate for the good old days when agencies actually led their clients through the process of creating and buying advertising.
This will never happen, as long as the agency model retains its old expense structure, because clients find the old agency-of-record model too pricey for what they receive in exchange: inexperienced media buyers who may allow their brands to appear in inappropriate places, demoralized creative teams, and account executives focused on the wrong metrics.
While agencies would like to return to the days of “winning” an account for a year or more, which allows them to predict staffing needs, clients are more ready to work with them only on a project by project basis, preferring to take the coordination into account and use an a-la-carte methodology to choose the right agency for a specific task. All this began when agencies didn’t get on board quickly enough with digital, and brands had to have both an agency of record and a digital agency. And then also a social media agency. And a search marketing partner. And a few freelancers for things like illustration, animation, or copywriting.
Thus the agency has been dismembered in the past twenty years, and agency veterans believe the result is poor campaign coordination.
But agencies are not the only industry affected by this change in work styles. Led by the technology industry, where startups may be composed of remote teams contracted for non-core functions, brands now believe that marketing, too, can be improved by using freelancers who are experts in small niches necessary for a specific campaign. This is a change in staffing models and hiring practices not unique to the media industry. In health care, the hospital no longer hires a staff of nurses or even doctors; rather, it uses staffing agencies who provide nurses on demand. At Starbucks, most of the employees are not on the payroll.
Agencies can lead again if they are willing to come into the 21st century by getting rid of legacy business models that raise costs and do not improve quality:
1)Close all those overseas offices they don’t really need and rely on contractors and freelancers who are familiar with the territory;
2)Give up those prestigious mid-town Manhattan locations and make better use of shared workspaces — or turn their own office leases into shared workspaces for outside freelancers
3)Flatten their management structures to be leaner and meaner.
4)Give up expensive sponsorships at Cannes and other events that don’t generate business or showcase agency talents.
5)Outsource non-core functions like data management and mining to people who are already experts.
In short, agencies should give up the full service idea as “so last century” and embrace the idea of selling only their strong points.
Henry Blodget, chairman and founder of Business Insider, is an acknowledged expert on the media business. And he says advertising is here to stay — with a few caveats.
A former journalist, he became a financial analyst during the dot-com boom, taking home millions. However, after the dot com bubble burst, he was barred from Wall Street forever for publicly touting stocks he referred to internally as dogs.
Not knowing what to do after his public disgrace, Blodget put together a small online publication called Silicon Alley Insider. Eight years later, he sold its expanded successor, Business Insider, to German publisher Axel Springer for $343 million. Axel Springer is a company that was built on journalism, really cares about it, and was making its entry into the American market with its acquisition of Business Insider.
That could have been a story with a totally happy ending, except that Blodget’s deal included staying around and running Business Insider, which after its sale in 2015 endured some of the toughest conditions in online media — the shift to programmatic by premium American publishers. The American digital advertising business shifted almost completely to programmatic during 2016, while Germany stayed about two years behind. Yet Axel Springer is a public company for which quarters count.
On a recent episode of Recode Media, Blodget was interviewed by host Peter Kafka, his former employee, and talked about the recent challenges in the industry and how he thinks things will come out. Blodget said 2016 was the year in which premium direct was replaced by “robots selling advertising to robots,” a change that also affected companies like Yahoo.
While he admitted that programmatic is efficient for both the advertiser and the publisher, Blodget said there was a huge difference in revenue for publishers, where $1 in revenue is now about 25 cents, cutting the top line faster than expected.
This was a shock to Axel Springer, which had to sit back and watch Business Insider miss its numbers in two quarters while changing its business model to accommodate these market changes.
“The market is bifurcating into what we call the barbell,” he added, meaning that Business Insider has two kinds of business now: programmatic advertising and high end custom work, or sponsored content. The part of the business that is growing fastest is the latter.
Blodget spoke about further changes to come: he plans a fully dual revenue stream split between advertising and subscription. Business Insider now offers what it refers to as “an ad-lite version,” which is very much faster and can take care of people who download ad blockers. That costs $9.99/mo and is still in the testing stages.
Facebook’s mobile ad numbers grew last year, but in the company’s most recent earnings call management warned that they will probably flatten out in the future. Why? Because Mark Zuckerberg knows that he’s maxed out on the number of ads he can insert in visitors’ feeds without ruining the user experience. Other platforms, like Snapchat, face the same problem with what used to be called “performance ads,” or ads whose responses can be tabulated. As the industry seeks to establish “attribution,” the number and type of ads changes. For the remainder of publishers, struggling against Facebook’s dominance, it’s simply worse. The harder you try to use data and metrics, the more users complain.
Doc Searls, a well-known advocate for consumer control of advertising and the author of “The Cluetrain Manifesto,” recently said on an episode of The Gillmor Gang podcast that the days of what he refers to as “surveillance advertising” are numbered. By surveillance advertising, he meant the kind of ads that track a consumer from place to place on the internet, using cross-channel campaign tactics and retargeting.
Survey after survey has shown that consumers don’t mind ads as much as they mind being stalked on the web. But while consumers are moving in one direction, some brands are moving in the other: connecting content to commerce, going after reach even to uninterested consumers, and using retargeting for the “ones that got away.”
Put yourself in the shoes of the consumer for a moment. 68% of online shopping carts are abandoned. From the marketer’s perspective, that is way too high, and there must be a way to bring that number down. But from the consumer’s perspective, there may be information that the marketer doesn’t know: perhaps the article didn’t fit into the budget, wasn’t really necessary, had been added to the cart by mistake, or was more expensive than a similar product.
Trying to track down a consumer who has already made that decision using retargeting can be seen as rude, in this case, and won’t be fixed with more aggressive retargeting.
On the other hand, running clever brand ads with helpful creative that isn’t so heavy it mars the user experience, and at the same time presents valuable information that may make the future purchaser choose a brand, is a form of advertising that’s been acceptable for hundreds of years.
Searls, who is considered an expert on the future of marketing, believes that in the mobile environment, good brand advertising will always be welcome while performance advertising will not.
Just ahead of last month’s IAB Annual Leadership Summit, IAB released its third quarter numbers for digital advertising.The TL;DR is that Q3 2016 marked the highest third quarter for digital advertising spending on record, and represented a 20 percent increase over the same time period in 2015. It also accounted for a 4.3 percent increase over Q2 2016. So digital advertising is still rising like a hockey stick.
But if you are a marketer about to spend some of the $17.6 billion that was spent in Q3, you would probably want some assurance that you are not wasting your money. After all, there are ad blockers, there’s ad fraud, there’s fake news, and there are all manner of other distractions that might prevent you from getting ROI. And at least on TV you knew where your dollars were going. Nielsen could always tell you, right?
Now it seems as if Nielsen, too, is having trouble figuring out how to tell marketers to spend their money. A new syndicated product from Nielsen, Total Content Ratings, was expected out on March 1, in time for the upfronts and the newfronts. According to Ad Age, that release date was scrapped by the parties to the data. “The syndicated product, which would show the public the results of cross-platform measurement for every network that implemented the technology, will have to wait. No new target date to syndicate the data was established.”
In other words, cross platform measurement isn’t ready for prime time, according to the people who participated in its development. We translate that as some networks not being as happy with their results as others. Those that aren’t happy are telling Nielsen they’re not happy with the Total Content Ratings methodology or the amount of labor it takes to deploy it. However, some networks actually are happy, so Nielsen is saving face by allowing those networks to share data.
So Nielsen is letting each network choose the numbers it wants from the data, and marketers won’t be able to compare one network to another.
All sides of the TV industry are closely watching Nielsen’s effort to deliver a new ratings system that counts all viewing no matter where it takes place, including streaming platforms and mobile devices, in the hopes that they will rediscover some of the consumers that have disappeared each year from traditional TV audiences. But that goal continues to elude them.
The bottom line is that this data will not help marketers make good decisions during the upfronts season. We may talk a lot about the goodness of big data, but that’s only until we really try to use it.
As we draw closer to the day of the Super Bowl in the United States, old advertising hands can’t help but remember the glory days when Super Bowl ads went viral and memorable creative was the norm. Those were the days when people didn’t hate advertising.
Why didn’t they? Because TV ads were bought to reach a huge audience, and they were only roughly targeted. Oh sure, in the early days the brands that bought ads tended to appeal to males, but even that went away as marketers realized most Super Bowl parties were coed. What’s more, most of the ads did not expect you to act on them during the game; no one could imagine a consumer leaving the game to go to the store, much less change her insurance.
They were brand ads, and expected only that you would think favorably of a brand the next time you went into the store.
Digital advertising changed all that, because advertisers could pay only for clicks, or nowadays on CPMs.But if a customer doesn’t click on an ad, does that mean the ad was useless? Intuitively, we know that is wrong, because we remember about brand advertising. And if as an advertiser you pay the lowest CPM, are you doing your brand any good?
The traditional metrics of CTR and CPM are increasingly meaningless as mobile customers block ads and stop clicking because they are tired of being data points, targeted and retargeted when it might be as inconvenient to interrupt their activity as it is during the Super Bowl. What has happened to marketers, they ask, when all they’re concerned about is stalking me to make me buy?
Data has removed the nuances of marketing, favoring only the numbers. This has totally changed for the worse the way consumers think about brands. Almost all brands are now thought of as potentially interruptive and dedicated to gathering and using consumer information for nefarious purposes.
It’s sad, because brands have always used consumer information to influence purchase decisions, but the consumer perceptions have changed and things have backfired.
We have a suggestion; why not try a philosophy of ‘less is more” as your mobile strategy. Use banner ads that don’t slow pages down or auto-play audio, and get yourself some kickass creative. Buy only premium sites, and measure by attention or engagement, not by sheer reach or micro targeting.
This is the year to stop the mad stampede of consumers away from digital advertising. We need to win back trust.
The Outline, Joshua Topolsky’s newest venture, wants to run unusual long-form content. For example, a recent article that drew raves even from KellyAnne Conway, was titled “Diet Coke Is Not Killing You,” and another was called “Why Do We All Have Balls on Our Hats.” Today, you can read the explainer “What is Hygge.” You get the idea.
Topolsky is a well-respected tech editor, having first been editor-in-chief of Engadget, and after that a co-founder of The Verge. He left there for a stint at Bloomberg, from which he was unceremoniously fired by Michael Bloomberg himself. After a while, he was able to raise $5 million to launch The Outline. It wasn’t easy, as we in the industry know about the business model problems for digital publishers.
Topolsky proposes to fund The Outline through advertising, but a better form of advertising. He’s been quoted as saying he plans to run “better ads.” In the issues I’ve read so far, the major advertiser, who really is more of a sponsor, has been Cadillac. Cadillac ads appear in two formats: as snippets of Cadillac-related history and statistics between stories, and mi-story as a trilogy of cards that draw attention by moving from askew to in a row. The cards are odd, but you do see them, and at least one other earlyadvertiser, Method, is trying them. As for the Cadillac-related “branded content,” or “native advertising,” or whatever you’d like to call it, that occurs between stories in a large block, easy to mistake for another story.
There is no question these ads are visible. And I suspect there’s no question consumers recognize — at least after a while — that they’re advertising. But in the industry, there’s quite an uproar about how openly branded content is labeled, and although the mid-story ads are labeled “advertisement,” that label is in very small type and in light gray. Easy to miss. Not only that, but there’s no way to close out a piece of native advertising; you just have to scroll past it.
From the advertiser’s perspective, it’s perhaps more troubling that the landing page has no ads at all, and ads only appear when you click on the Read More. The site is very design heavy, and the stories are presented in an infinite scroll. Cadillac has clearly paid the most for its sponsorship, because it’s content is baked into the design of the site.
Obviously the jury’s out on whether this will work. On a recent Recode Media podcast, Jessica Lessin said it’s pretty easy to get the initial four advertisers to commit to trying a new digital media site. The trick is whether any publisher, including Topolsky, can get them to come back repeatedly. If Cadillac were to continually commit, and the traffic grows on the site beyond the initial readers curious about what Topolsky is doing next, perhaps they and he can build an effective brand partnership.
That, however, would depend on how much Cadillac knows about its customers and Topolsky knows about his traffic.
It looks as if the phone company formerly known as Verizon is taking some steps to bring itself into the digital world in more than name only.
Verizon is the fifth largest ad spender in the US, and controls about a quarter of the wireless industry’s total spend. Most of its spending is on traditional TV, however, over on the ZEDO blog we discussed its use of augmented reality in ads for its phone service. The carrier commissioned the building of a cellular network within the game of Minecraft, which allowed players to make phone calls from within the game. And now Verizon’s AOL media platform is experimenting with new video ad formats for 2017.
On Thursday at CES AOL rolled out several non-intrusive formats in line with the IAB’s L.E.A.N. standards for combatting the rash of ad blocker downloads that have characterized the past few years. One of them is an alternative to pre-roll, which is simultaneously one of the most coveted ad buys in digital video, and one of the most hated formats by consumers. Traditional pre-roll holds the viewer back from the video for 15, 30, or 60 seconds and measures in terms of completions. But AOL’s new PlayerUp
is a suite of consumer friendly ad experiences that provide an alternative to preroll and consists of 3 primary ad experiences: 1. Bumper – Short 3-7 second, non-disruptive preroll video that sets the stage before quickly transitioning to the publisher video content 2. Watermark – Consumer-friendly experience offering advertisers the opportunity to extend their brand’s exposure beyond preroll by displaying an interactive overlay during playback of publisher video content. The Watermark unit can also be interactive and may expand upon click/tap to reveal a suite of interactive content while pausing the underlying publisher content. Upon closing the expanded Watermark, publisher content resumes playback 3. Pause – Advertisers have the option to incorporate subtle brand messaging each time the publisher video content is paused by the consumer.
In addition, Verizon has not said it will withdraw from its deal to buy Yahoo, although it has commented that it will try to get a better price on the deal. Yahoo still has a billion monthly users, and in is effort to become a digital media player, both Yahoo’s technology and Yahoo’s customers could be instrumental. And last summer, Verizon bought Complex Media in partnership with Hearst. Complex Media owns properties that can deliver millennial men to Verizon’s other businesses.
So Verizon is positioning itself for the shift to digital advertising, the commoditization of data pipes, and the slowing growth in cell phones by becoming a platform that can produce a large audience and some interesting ad formats to serve that audience.
The bigger problem is brand safety in general. Several years ago, we partnered with a company whose major selling proposition was the ability to determine whether a potential site was brand-safe by machine reading its content — in 60 languages. That company could not find enough advertisers who were willing to pay to have that determination made, and it was sold to a larger company and probably shut down. Years later, the problem of brand safety not only still exists, but got exponentially bigger last fall with the emergence of a new category of publishers: fake news.
Advertisers should have learned by now, but they haven’t. Many media buyers are still buying audience, that is, numbers, rather than content. The grossest evidence for this is how large a percentage Facebook and Google control of the ad spend. Buyers would rather put their faith in the targeting of Facebook and Google to get big numbers than buy against the right content for their targeted consumers.
On the face of it, this seems ridiculous. Why wouldn’t a buyer want to buy “deep” — on a niche site data has already told you is a site your customers visit –rather than buy “wide” on a bigger array of sites in the hope you will catch her on one of them.
Why? Because buying deep requires more work. It requires making a white list and enforcing it, or choosing a vendor who has already cleaned its network of fraudulent sites. It requires knowing what you are buying, and from whom. And it also includes buying and enforcing frequency caps.
A recent article in AdExchanger described the problem for media buyers;
The second change we must make is that brands must remember that there is a finite number of people on Earth. Media buyers would much rather get high volume at low prices than limit their media buy to an accurate number of real people at higher CPM. Rather than accept the normal rules of an economy with scarcity, media buyers have fooled themselves into buying audiences at high frequencies on low-quality media. Context and frequency caps go out the window as soon as a media buyer sees that a campaign might not deliver in time. This encourages media spending on click-bait content that is forwarded and viewed at high volume, but of very low value. If brands were to stick to frequency caps with their advertising, they would be less likely to fund low-quality content that simply exists to game the system.
There are many industry initiatives under way to make this possible, including the certification systems of the Trustworthy Accountability Group, and the code of conduct just released by the German industry group BVDW for people who buy and sell programmatically. Central to all of them is knowing who your vendors are and knowing what you are buying.
We spent the past year cleaning our private platform of publishers who were not premium and delivered us useless or fraudulent traffic. At least there’s ONE place we know you can buy safely for your brand.
It’s been a pleasure for us finally to see the rise of programmatic direct in 2016. It means media planners are more certain of what they want to buy and they want to be sure they’re able to buy it at the right price and the right time. They’re not leaving as much to chance (or rather automation) as they did when they were first buying programmatically. We think programmatic direct will be the future of video ad buys.
Why? Because this form of buying takes advantage of automated work flow, but allows the targeting of specific premium audiences — for example, New York Times readers, or Car and Driver visitors.
Historically (and it’s difficult to believe this has already become part of history) if you bought programmatically, it was from an open exchange, and it was done through RTB (real time bidding), an auction system that drove digital ad prices through the floor and convinced many premium publishers not to participate, except with their remnant inventory. In addition, RTB meant that buyers didn’t really know what they were buying, and were often victims of fraudsters.
Now we’re trying to take the best of the programmatic environment — its ability to target carefully, to scale, and to digitize media buying work flow — and extend it to more careful buying. In the past, we were more of an open exchange, while now we’re more into header bidding, Deal ID, and programmatic direct.
You will want to buy programmatic direct when:
1)you want to eliminate the possibility of fraud and malware
2)You want to guarantee the inventory you receive
3)you want to ensure brand safety
4)you still want the efficiencies of buying through an exchange.
Michael Kuntz, Senior VP of Digital Revenue at USA Today captures this change:
I think lots of clients have woken up and they’re saying, ‘We understand there are efficiencies in buying through an open exchange, but I’m not so confident my ads are showing up in the right environment,” Mr. Kuntz said. “I think the pendulum is starting to move away from just buying the right eyeballs in real time to, ‘Yeah, we want to do that, but we also want to make sure our ads are showing up on the right content and in an environment we’re comfortable with.'”
One of the problems slowing the acceptance of programmatic direct is uncertainty about semantics. Digital advertising is full of terms that have been invented to describe small changes in supply or demand side technologies that are supposed to make things easier for the buyer.
For example, at ZEDO we use a private platform to serve our ZINC ads. This makes it secure end-to-end, and allows us to do programmatic direct deals as well as header bidding with our premium supply. On the publisher side, we carefully choose the publishers that are on the white lists of major brands. We may refer to our deals sometimes as programmatic direct, or we may just say we’re a secure private end-to-end platform.
At the end of the day, all the vendors who are trying to clean up the industry are going to be doing somewhat the same thing, despite the often confused nomenclature.
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