Facebook’s F8 Reveals Future Plans

Facebook has been taking a lot of heat from both publishers and advertisers lately. Advertisers are angry when their ads appear next to “fake news,” or even real, but offensive news like the live streaming of violent crimes. Publishers are not seeing much monetization from their AMP pages, and have become reluctant to give away their audiences. Several big ones have already returned to directing readers back to their own sites, which they are now optimizing for faster page load times. And user-generated content is down.

At last week’s F8 Developer Conference, the company laid out plans for its future, and none of them really had advertisers or publishers in mind.  Of course this was a developer conference, but there was a notable lack of representation from media companies.

The company wants advertisers to run midroll ads on longer form video content, but brands are reluctant to do that, because they know people who watch videos on Facebook — and there are precious few of them anyway — do not want to watch long form content on their phones while they’re on the way to work. In addition, no one knows if mid-roll ads will ever convert to sales.

Facebook’s head of product, Chris Cox,  spoke about the fake news issue in his presentation about Facebook and the media.

“We know that people don’t want to be lied to or deceived on our platform, and that is a role we take 100 percent responsibility for, We’ve put a lot of our teams up against this problem: How do we make sure people can’t spread false news and disinformation on our platform?”

As the company looks to lean more heavily on video, which will be augmented with animated tools, enhanced by artificial intelligence and made more immersive using 360-degree cameras and virtual-reality techniques, the risk of abuse only grows, critics said. Yet so does the danger of shutting down the expression it hopes to foster.

Although brands can imagine ways in which they would use virtual reality,  the audience for VR anywhere in the world is small yet, and there’s not much evidence Facebook, with an older audience, is any different. It will take a while for Facebook to begin monetizing virtual reality content.

 Mark Zuckerberg wasn’t kidding when he said he didn’t build the company to make money, but rather to connect the world. He has succeeded in creating a site where consumers are empowered to ignore brand messages and to respond poorly to publishers’ news posts. We sat in on a conference call with Corey Weinberg, who covers Facebook for The Information, and this is what he had to say about Facebook’s other bet, augmented reality:

Facebook gave a pretty soft sell on augmented reality. They launched with Nike as a partner, but there don’t seem to be many incentives for developers to develop for AR. For now, it’s a closed beta to find out how users respond to it. On the other hand, games and commerce are definitely on the roadmap for the future. There will be more social interactions, and more ability to leave sticky notes for your friends.

But this doesn’t seem to be a business platform — more something for its users. The softness of the sell for this somewhat futuristic platform tells us that they are having a problem getting users to share, which is their existential dilemma. Facebook has seen a real decline in user-generated content. (Facebook’s Spaces was the company’s bet on social VR. You, as an avatar, can hang out with your friends in VR. This is not new, as we did that fifteen years ago in Second Life.)

There didn’t seem to be any big media brands present at F8, except for the Wall Street Journal and CNN bots, who both use bots on Messenger.

Quite frankly, we think Facebook is flailing as it seeks to cut off all its competitors at the pass, without knowing which is a significant threat.

 

 

 

 

Mobile Acceptable Ads Standards, Part One

The ad experience on mobile is very different from desktop, and advertisers are learning that, even as they delay ad spend on mobile until they figure it out. It is much easier to annoy a visitor to a mobile site who is scrolling through a feed, and advertisers know that. Last year, Facebook, Google, and IAB, along with many other industry players, formed the Coalition for Acceptable Ads. Like all industry committees, the Coalition took a while to release its standards, but here are a few of the worst offenders. The conclusions are based on consumer studies about what would make a viewer likely to install an ad blocker.

The worst offender, full screen scrollover ads. These are very similar to takeover ads from the past.

Full-Screen Scrollover ads force a user to scroll through an ad that appears on top of content. These ads take up more than 30% of the page and float on top of the page’s main content, obstructing it from view. The result can be disorienting for users, as it obscures the content a consumer is attempting to browse. These are different from similar ads that scroll in-line with the content and more smoothly scroll out of sight.

Autoplay video with sound. We don’t know why Facebook is again experimenting with these, but we bet they will go away again.

Auto-playing video ads with sound automatically play with sound, without any user interaction.

This ad experience is especially disruptive because it catches the reader off guard and often compels them to quickly close the window or tab in order to stop the sound — especially if they are on their mobile device and in a public place, where such noise can be a public nuisance and personal embarrassment.

Ads that require a click to activate sound did not fall beneath the initial Better Ads Standard.

The Better Ads Methodology has not yet tested video ads that appear before (“pre-roll”) or during (“mid-roll”) video content that is relevant to the content of the page itself.

Included ad experiences tested: Auto-playing in-line video with sound

Postitial ads with countdown.

Postitial ads with countdown timers appear after the user follows a link. These ads force the user to wait a number of seconds before they can dismiss the ad, or for the ad to close or redirect them to another page.

These ads frustrate users by breaking the flow of content in a manner that can prove distracting — if a user is trying to navigate from one page to another, only to be delayed by this ad, they might abandon the page entirely.

Postitial ads with countdowns that can be dismissed immediately did not fall beneath the initial Better Ads Standard.

Large sticky ads:

Large Sticky Ads stick to a side of a mobile page, regardless of a user’s efforts to scroll. As the user browses the page, this static, immobile sticky ad takes up more than 30% of the screen’s real estate.

A Large Sticky Ad has an impeding effect by continuing to obstruct a portion of the mobile page view regardless of where the user moves on the page. A Large Sticky Ad’s positioning disrupts and obscures a page’s main content — unavoidably leading to a negative user experience.

Included ad experiences tested: Large sticky ad on the bottom

There are more, and we will discuss those next week. Ad Age greeted these standards with a big, “duh,” but we see them on mobile sites all the time, which means marketers still buy them. We, however, do not sell them in our mobile suite — for obvious reasons. Why make a visitor angry if you are trying to close a sale?

 

Consumers Take Power From Brands, Publishers

Consumer empowerment has been a huge topic in both Europe and the United States this week. In London there was a big brouhaha about YouTube showing ads against racist sites and large advertisers pulling their ads. As it turns out, this was a massive exaggeration.

Following a Times of London report that YouTube was showing ads against racist videos, headlines would have you believe ad spend was about to fall dramatically on the Google-owned platform. But the bark seems to be more an attempt by brands and publishers to gain leverage of any kind against the ad giant, as advertisers suddenly began demanding discounts from Google, despite the fact that ads have run next to extreme content on YouTube for years.

So perhaps the brand safety aspects of advertising have been somewhat exaggerated in the EU and UK,  used mainly as bargaining points. But in the US things took a more serious turn when most national advertisers pulled out of the Bill O’Reilly show after allegations of sexual harassment payoffs surfaced last week.

Indeed,  so many advertisers pulled out that the show was 15 minutes shorter, and O’Reilly was unceremoniously cut off the air. This was the doing of the consumer  empowerment organization Sleeping Giants, which has already caused ads to be removed from other sites with content that is not brand safe for women.

While none of this means there will be an immediate end to the problems in the advertising industry supply chain, it is at least an indication that advertisers, who after all pay the bills, have come to realize that they have power over blind buying technologies. They can simply declare the preferences for their brands and platforms and publishers will have to accede. It has long been said that no one was incentivized to clean the advertismg supply chain, but that is no longer true. Consumers have voted.

Some 25 years after the original Cluetrain Manifesto declared that markets were conversations and consumers were in charge, the consumers seem to be rising to the occasion and bringing the brands along with them. The platforms and data suppliers will have to fall in line.

On the ZiNC proprietary platform we honor your specific white lists and confine your ads to our premium publisher network, which was cleaned last year of fraudulent and toxic sites that are not safe for any reputable brand. Because we are a private platform, you will always know what you have bought when you buy from us.

 

 

Google Changes its Last Look Policy

In the past year, as publishers have fought to preserve their advantage in a world controlled by big platforms such as Facebook, Google, and perhaps Snapchat, more and more of them have gone to header bidding, or “first look.”  According to AdProfs excellent Beginners’ Guide to Header Bidding,

Header bidding is an additional auction that takes place outside of the ad server, in the header of a web page, which loads before anything else on the page. The header typically contains metadata about the page and calls scripts used for formatting the style of the page, tracking, and so on. Because of this, it’s an ideal area to conduct a new auction.”

Header bidding shifted control from Google’s adserver, DoubleClick for Publishers (DFP) back to the publisher, and many publishers in our network have embraced it. We support it with all our technical resources and were influential in making it work early in the game to create an advantage for our publisher partners.

But no one in the industry thought that Google would sit back and take the loss of its hegemony lightly, and a few weeks ago Google decided to contest the advantages of header bidding by changing its own exchange rules. From AdExchanger:

“We are collecting the price each exchange would pay, including AdX, and then putting it in a unified auction where the highest price wins,” Bellack said.

Here’s how the programmatic auction will work: All EBDA exchange participants – including Index Exchange, Rubicon Project, PubMatic, Sovrn, Smaato and Gamut – submit their final bids. The DoubleClick AdExchange (AdX) also submits its final bid. And the best price wins.

Previously, AdX would wait for all those other exchanges to submit their bids, and then give itself a chance to outbid the winner. So if Google’s exchange had two bids of $1 and $5, it would be able to beat a $4 bid from an outside exchange. Under the new auction rules, it would submit a bid of $1 (the second price) and lose the auction.

While at a glance this might seem bad for the publisher, since Google is restrained from submitting a higher bid, in fact the outcome should be the same given the rules of second-price auctions. In the above example, the impression clears at $4 regardless of which exchange takes it.

There’s a real possibility that Google is leading the way here to a more transparent and responsible way of bidding on publisher inventory that will not only make things fair for the publisher, but also for the exchanges. However, Google is larger than all the other exchanges and can still submit more bids. In response, other bidders, like Amazon, have instituted server-side wrappers in response, which makes the process a bit less transparent.

We are a transparent platform, and that’s why our partners like us. We’re waiting for the remainder of the industry to catch up with us.

 

Are Media Dollars Being Sacrificed for Impression Quality?

Answer: No. because in a recent report, Forrester Research said quality concerns might be leading marketers to scale back on programmatic, but still be willing to pay higher prices for verified inventory.

On epsiode 16 of the AdExchanger podcast,  Forrester VP Melissa Parrish says Forrester is talking an awful lot with its customers about the quality of customer experience. Her take: whether your are a brand or an agency, you must realize that the customer is all powerful and you have to serve that customer. That’s first and foremost.

The other part of quality is about the ad experience — the quality of the ad product. That’s been pushed forward by fraud and viewability concerns, and recently by fake news.. Now that programmatic is maturing — two thirds of advertisers buy programmatically, it is time to look at that ecosystem more critically. Advertisers were hearing from customers that their ads were appearing on sites they didn’t want to be on, and that was because their partners were not using the tools at their disposal, such as white lists and black lists. No one was looking at the publishers where those ads ran.

Forrester is saying take advantage of the tools at your disposal to weed out fraud and fake news. That creates an environment where the inventory becomes more premium, better targeted.  (On our platform, we did that weeding last year.)  You might be talking about a smaller number of impressions, but you will be getting in front of the right people in the right context.

Advertisers should be willing to pay a little bit more for that. Ad investment will not go down, but the spend will be done differently. Advertisers will be more strategic, and end up reaching the people they want to reach. They will, however, pay more per CPM and companies like ours will be paid on the basis of our technology and our skills rather than how cheaply advertisers can buy media, which led to the race to the bottom we have today.

What’s time timeline for this Utopia of advertising? We have already leveled up a notch or two in digital media, but it will take a while for marketers to take control in ways they have not previously felt comfortable doing. Parrish says her optimistic scenario is that more emphasis on fraud and fake news will accelerate the timeline, but she realizes how slowly companies move, and how long it took them even to shift to data-driven at all, and then to programmatic.

However, since the tools and technologies exist (we have them), it’s only a question of how long it takes for an advertiser to be willing to say “the way I’ve been doing this is not quite working” — which companies like Coke and P&G have already done. This is not a five-year horizon, because the technology is already there. So it’s a strategic and cultural change.

We are seeing more and more of these advertisers,

 

 

 

 

Do You Know Where Your Brand is Today?

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 […]

Agencies Mourn Lost Status

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.

 

Business Insider Navigates New Ad Environment

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.

 

 

 

 

 

 

 

 

 

 

 

Brand Ads are the Future of Advertising

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.

Helpful Metrics Still Elude Marketers

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.