The Documented Evolution of Tech in NYC

Leave a reply

Back in 2007, I wrote a post titled, An Early Stage Entrepreneurs Guide to New York City. At that point in my career, I was a founder of a venture backed (Intel Capital, NBC Universal, Morgenthaler, etc) in-game advertising company called IGA Worldwide and was part of the nascent NYC tech ecosystem. I used to hold darrenSalon‘s (remember those?), brunches, and other gatherings of likeminded entrepreneurs. Heck, the NY Tech Meetup was still 12 of us sitting around a table.

Across my feed this morning came a tweet by Steve Schlafman, a principal at venture firm RRE about a new presentation he created called The Guide to NYC Tech. I’ve seen many presentations over the years about who/what/when/where/why is happening in NYC but this is one of the most comprehensive presentations. If you have a spare 15 minutes, you should certainly check it out.

Having been part of the different waves of entrepreneurship in NYC, I can honestly say that while other waves have been just as innovative and exciting, this wave feels like there is the most substance and staying power. There are ad dollars to support the publishers, there is bandwidth to make video + streaming a reality, there is comfort in purchasing online, and organizations are opening up to digital disruption. I am super excited to be part of the ecosystem and will continue to do what I can to support #nyctech.

Why I’m Bullish on Programmatic Media

Leave a reply

I’ve been immersed in programmatic media for pretty much my professional career. Whether in advertising, in-game ads, search, or other areas, I’ve spent a lot of time automating and implementing [technological] pipes into the advertising industry.

I am becoming more bullish than ever on the overall idea of programmatic media. Let me test out a few proof statements with you and comment below with your thoughts.

1. When technological progress is not about the technology, it gets adopted by the masses. From 2008-2012, so much of the conversation was about the features of every DSP, DMP, Exchange, Workflow and other solutions within the programmatic media industry. One day we’d hear that one DSP was better than another because of a feature but 30 days later, it would change. I feel like today, we’re not focused on those respective features any longer… we’re focused on the overall business and vision of the companies because we know that the features already exist within them. I feel like the “Cold War” of DSP’s is over and now we’re into the “business building” phase.

2. Innovation is happening further from the center.
Again, from 2008-2012, almost every company in the programmatic space was centered around building bidders and pipes… for good reason. Now that we’ve saturated that specific part of the programmatic stack, we’re now seeing innovation occur further away from the bidder. Companies like Bionic, Centro, and others are helping marketers purchase programmatically but not necessarily highlighting the programmatic execution. The execution of programmatic does not matter to most, even though it’s occurring in the background.

Also of note here are the programmatic-DNA companies popping up. Pre-programmatic-DNA companies were technology organizations that had to pivot and add programmatic technologies to their offering or risk being disrupted (i.e. ValueClick). Now we’re seeing pure programmatic-DNA companies who are operating from the ground up, completely programmatically and recognizing efficiency and effectiveness gains.

3. Open Innovation in Programmatic
More often than not, the first industry constituents to solve a problem are private companies with closed ecosystems. We’ve seen at least one example of the evolution of this into an open ecosystem now with the emergence of RTBKit, a github based project that allows anyone to download the infrastructure of a bidder, the central tool to purchasing impressions in a world of real-time media.

4. 5-20% of Paid [Digital] Media
Agencies and their respective holding companies are talking about how they expect to see their programmatic spend grow to 5-20% of their overall paid digital media. I believe that this number is low, especially on the lower-side of this number. I believe that vendors are using programmatic ways of procuring media and most agencies are not aware of this… so realistically, the number will be higher. It will be telling if/when AppNexus goes public, to see the amount of gross dollars moving thru their exchange as it’ll help us understand the total dollar volume of this industry.

5. Programmatic Media is Designed for Accountability
Gone are the days of Wannamaker’s famous quote. If you are still using the above quote to defend your media plan, then you might as well start packing up your agency or CMO-job. Programmatic media is designed to be accountable from the ground up, fully measured and every opportunity to be attributed. With Chief Marketing Officer’s having to justify every $1 they invest in media in the market, they need to purchase accountable media. Note, I am not saying in any way that creativity is going away, I’m purely saying that the container for programmatic media is completely accountable so this is a win-win for the ecosystem.

Lastly, I’m bullish on programmatic media because we’re going outside of media for the programmatic conversation. Uber, airbnb, eBay, Zurvu, and many other platforms are programmatic. In some of the investment circles that I’m in, we’re discussing the businesses outside of advertising that are being transformed programmatically. This, at least to me, is very exciting.

I’m Thankful For the Past 6 Years… and Looking Ahead

12 Replies

Next week is Thanksgiving here in the USA and we’re about to get a ton of blog posts about how everyone is thankful about something. All of the blog posts are important (and I’ve written them in the past) but they all come out at the exact same time (they dilute themselves) so I thought I’d jump the crowd and release mine this week… just ahead of the Thanksgiving holiday.

This time of year is special to me as it’s my anniversary of working at The Media Kitchen and kbs+. I celebrated my 6th anniversary of being on the agency side of the fence… a side of the fence that I never-ever-in-a-million-years thought I would have joined back in 2007. It’s been just over half a decade here and it’s been absolutely amazing.

In the past 6 years, we’ve witnessed the birth of iOS App Store, WhatsApp, iPad, Instagram, Vine, Kik, Bitcoin, FourSquare, Buzzfeed, Nike Fuel Band, Makerbot, Tesla, and many other companies and technologies. It’s amazing to think that the “app” culture for phones really did not exist before…. A lot can change in 6 years. Now 40+ billion apps have been downloaded from Apple’s AppStore.

Here at The Media Kitchen and kbs+, a lot has changed too. New clients, new faces on the leadership team, lots of amazing chefs (staff) around the office and our ever evolving end product… our thinking and output. Agencies can talk about technologies all they want, but at the end of the day, they are in a service business and the staff is what delivers the product and builds and maintains relationships.

I am thankful for all of this. I am thankful for Barry taking a chance and hiring me with having no previous agency experience. I am thankful for being given the latitude by Miles and David of MDC Partners to co-create Varick Media Management (agency trading desk), Lori’s vision for greenlighting kbs+ Ventures (corporate investment arm for marketing + advertising technologies), the Digital Media Venture Capital Conference (featuring Union Square Ventures, Spark Capital, First Round Capital, Greycroft, DFJ Gotham, IA Ventures, and many others), book Creative Entrepreneurship along with colleague Taylor Davidson, the Ventures Fellows curriculum and class, and countless other initiatives.

For those who have read up on MDC Partners, and know their tagline, “Where Great Talent Lives,” I can say firsthand that it’s completely true. The talent that MDC employs isn’t about pushing paper or making operations move faster but rather having a vision for the future. It’s a vision that I added my two cents into and helped mold for the organization. The stock is up 15x it’s low and is trading at an all-time high today. I’m happy for them and to participate in this ride.

The past 6 years have been absolutely wonderful and have challenged me in a million ways.

But going into December, that is all going to change for me.

I am officially leaving The Media Kitchen and kbs+ to pursue a whole new world. This was one of the hardest decisions I have ever made and one that I’ve been working with my leadership team for a bit of time now to ensure a smooth transition. November 27, 2013 will be my last day here at TMK’s 160 Varick Street location and I want to thank you, my teams, my partners, and my clients for an absolutely amazing 6 years. I also want to thank my family, namely my wife Sherri for helping me with this extremely hard decision.

I can still be reached at dherman at mediakitchen dot tv until the 27th. I will continue to blog, tweet, and partner. One of the only differences is that I’ll be checking in at a new location.

Observations from 2 Weeks in South Africa

Leave a reply

I just came back from spending the past 2 weeks in South Africa as my father has not been back in roughly 35 years. For those unfamiliar, my father and his entire family are from Johannesburg (or Jo-Burg as they call it). He is the youngest of his family and has a twin brother, an older brother, and two twin sisters; it’s a large family to say the least. I’ve got 20 first cousins and out of all of them, I am the first American born and Kenny, my brother, is the second. As my dad likes to say, I’m the first Yankee in the family.

After 35 years of not being back, things changed. We noticed this first when showing my children the street my father grew up on a few years back using Google Earth. His once childhood home is now an entire apartment complex. The down-the-street gas station is now a sprawling strip mall. All of this is expected as the country has grown tremendously and only recently (within 20 years) freed itself of Apartheid.

We traveled thru Johannesburg, a safari in Manyeleti (southeast corner of Kruger National Park), Cape Town and Stellenbosch. My folks stayed a few extra days and did the Garden Route drive. I noticed a few things re: technology + marketing and thought I’d share.

1. Ubiquitous Connectivity: No matter where we were traveling, we pretty much had Vodacom or similar service to our mobile devices. While I did not use the service (my iPhone is not unlocked), I theoretically had access. The infrastructure in South Africa for mobile service is pretty solid and even in the safari, I had access. I remember my phone ringing while being on a game drive in the middle of the Manyeleti. I barely get cell signal in the basement of our home in Westchester County! Go figure.

2. Where Were All the Phones?? We walked around a few shopping malls and saw no less than 3-4 cellphone stores per mall. That’s a lot. But, unlike NYC, most cellphones were in people’s pockets while they were walking rather than in their fingers and in front of their noses. The culture wasn’t about being on the cellphone at all times, but rather having the phone purely as a utility to compliment whatever someone was doing. Maybe this is because of the rate plan structures but it was certainly noticeable. The Samsung phones seemed to have large share of market (when we got to see people holding their phones).

3. Safety with Credit Cards I actually felt safer using my credit card in SA than I do in NYC. When you want to pay with your credit card, the waiter brings over a small device that scans your card at the table in front of you and your card never, ever, ever leaves your sight. Contrast this to the USA where your credit card might be out of your sight for 3-5 minutes while the waiter charges your card and does whatever else with it (scans it, copies it, etc). I know there are some edge technologies that are being tested where you don’t need to even take out your credit card but this has not hit South Africa yet, at least based on what I saw there.

4. Coca Cola signs Seemed like Coca-Cola was the universal sign for business/commerce. While walking thru District 6 in the townships, if a shanty had a Coca Cola sign, it didn’t necessarily sell coke but rather sold *something.* You knew walking by that the shanty was selling some good/service/product, not necessarily coke. Some interesting branding for Coke!

Over the next week or so, I’ll be posting our official pictures but they are still sitting on our SD Card. A few simple pics can be found on my Instagram feed.

It’s good to be back! Oh, and I didn’t tweet once the entire time and strangely didn’t miss it. Though I did scan the twitter headlines whenever I had access to wifi.

Random tidbit from trip: 50 Cent (and his entourage) was on our flight down to Johannesburg and Busta Rhymes (entourage as well) was on our flight back. I didn’t feel it was appropriate to bring up my Dave Matthews Band music with them.

Cross Country Flight Q&A: Digital Media & Advertising Conversations

Leave a reply

I posted a tweet asking the Interwebs/Twitter Stream to ask any questions they’d like. Sorta like a reddit AMA. This page will be continually updated with the tweets and the answers. I am using my blog because some answers will require more than 140 characters. Follow along, the hashtag is #dhqa.

4 hour flight. 4 hour Q&A. Go right ahead and ask away if you want. Open for all questions. #qa cc: @garyvee would approve

— Darren Herman (@dherman76) November 1, 2013

First Q: @bridgetwi: How does a new site break through for one of our clients?
My Answer: One of two ways, though not mutually exclusive. One is idea led. The other is relationship led. Lets start with idea led. At The Media Kitchen, we love innovative ideas that push the boundaries between creativity and media. If you have an opportunity that matches that with the relevance for our clients (which is a must!), then we want to hear about it. Relevance is key. Do not pitch an entertainment site for a financial services client without some really, really, really good justification. The second way is relationship based. Just like in any other case, having a relationship with us is key. You should work hard to establish yourself with rapport with our media team and they should know who you are. I tend to want to answer emails faster to people I know and trust over people I don’t yet know. But I do get back to everyone.

Second Q: @bridgetwi: What’s the best media idea I’ve seen?
My Answer: I’ve seen a ton. We’ve executed a ton. The “best” is purely subjective and is relevant to a moment in time. Rather than giving a very specific example, I’ll talk about why it was the best I’ve seen. The best ideas presented to the agency generally are the ones that actually come-to-life in the presentation. Since much of what we’re working on is new, we like to see how things “feel” – so mockups and wireframes certainly help. In addition to mockups, we want to make sure that the audience and context is right for the marketer. Any research that shows this is extremely helpful. Companies who do this well are Buzzfeed, The Atlantic, Quartz, and The BBC amongst many others.

Third Q: @rjjacobson: Where do I see the strongest defensibility for ad tech companies?
My Answer: Really good question… I’ll add my two cents. I’d like ad tech companies to play offense, rather than defense. I believe the majority of the Lumascape is allowing companies to compete against Google. Why? Google controls 50%+ of digital advertising dollars. That means .40 on the dollar is for everyone else. So rather than playing defense against Google, lets play offense and look for areas to out innovate. Hot areas that I’d focus on: solving cross device recognition & attribution, another search engine, location services, and redefining another gold-mine of an ad unit (what’s the new AdSense?).

Fourth Q: @chrisohara: Bloody Mary or Not?
My Answer: I’m not really a big drinker to begin with and I don’t think I’ve ever had a drink on an airplane. That will change soon on an upcoming trip to South Africa where I’ll be in the air for some crazy amount of time like 16 hours. Might have a scotch or glass of wine on that trip. Or two.

Fifth Q: @aexm: How do you approach defining & evaluating success metrics for newer types of advertising formats like native?
My Answer: Ana, it’s a really good question. To be honest, I don’t think native is really anything different. All the native stuff that’s landed on our plates recently are just new creative interpretations. We can measure their effectiveness for marketers one of two ways: if the campaign is about moving the needle of some “brand” isolated metric, then we use tracking studies and surveys. We can also look at correlated or uncorrelated increases in other things like sales or searches based on those results. The second way is if it’s more “direct response” focused – we can measure directly the affect it has on sales or whatever the conversion metric is. At the end of the day, we need to define KPI’s (key performance indicators) for an entire campaign. If “native” units don’t match up to the KPI’s, we’ll probably not deploy them. Simple as that.

Sixth Q: @dandotlewis: Favorite place to watch a DMB show?
My Answer: I was waiting for a Dave Matthews Band related question. For those that don’t know, I’ve been to many, many, many of their shows. 100+. Some of my more magical shows have been at SPAC Night 2. That’s code for Saratoga Performing Arts Center, 2nd night of show. For whatever reason, they play a much more laid back and “older” set for night #2 of their SPAC performances. It’s also set back in the “woods” and it’s amphitheater style seating (although I like to stand in the pit). And truth be told… I’ve never seen them at the Gorge, which is on my bucket list. That will change in 2014, hopefully.

Seventh Q: @mhill1066: Which side is winning, data-tech or operational efficiency tech?
My Answer: Good question and it could be interpreted in many different ways. I’ll define data-tech as folks who help capture, segment, and operationalize data for the use in analytics or media targeting. Operational efficiency tech are folks who are more enterprise players trying to streamline the whole process. I’ll attack this question from the filter of an agency. So that’s my public bias. Up to today, I believe that data-tech has captured much of the mindshare. Folks like BlueKai, Exelate, VisualIQ, Adometry, Lotame, Cross Pixel, and others have nailed the data-side of all of this. I don’t know how they play out, but at least have captured the initial intent of the industry. For operational efficiency tech, I have seen a ton of solutions over the years but only now is the time becoming more ripe, though I still think there is a ways to go. WIthout a doubt, agencies need to shift their process from siloed excel sheets to a full suite of workflow tools. It’ll make them more efficient which will drop dollars down to their bottom line. But the issue has always been around payment for these technologies as agencies already run on razor thin margins. With the shift to programmatic, it’s putting pressure on agencies to adopt technologies and I think the rate of adoption will be higher in the next 1-3 years than it has in previous years. Folks like Bionic are trying to capture this and just might be part of this new ecosystem.

Eighth Q: @ericfranchi: Twitter IPO, are you buying or waiting it out?
My Answer: Let me begin by prefacing that I’ve only recently gotten into speculating in the stock market. Thanks in part to @howardlindzon and @stocktwits. Some background: my wife and I have allocated a certain portion of capital for pure speculation (though isn’t everything speculation?) and I actively manage that in partnership with a financial institution. Since I do not have unlimited access to funds unlike some super wealthy individuals, I have to really prioritize where I am placing bets. Over the past few weeks, I have sold off some holdings in order to make room for $twtr. I expect that this will be a long holding for me and know that in the first month or so, it’ll be fairly volatile in terms of going up/down. I believe in Twitter as a long term utility and will speculate as such. I’m in.

Ninth Q: @keithepetri: With the shift to mobile, what do I think is the major reason for resisting a shift in budget?
My Answer: Great question Keith. One that I’ve talked a bunch about on this blog in the past. The biggest factor in the mobile-time-spent-advertising-lack chart that Mary Meeker and others have popularized is, IMHO, time. Time to shift budgets. Time for mobile ad tech to catch up with desktop based ad-tech. Budgets shift when there is no way to measure them and validate that they are performing. Budgets generally stay when we can validate that they are driving the KPI’s we need. There are some key things needed in the mobile ad tech stack that will help us validate KPI’s for a campaign and they are currently being built out by many companies both large and small. Media buyers are tasked with hitting goals for clients, CMO’s are setting those goals, so dollars will shift when the advertising industry can measure towards those goals. And man… will those dollars shift.

Tenth Q (woo hoo!): @terryalj: Whats your take on smart watches? Does a potential google adoption mean anything? Is this, or glass, a real next step?
My Answer: Ubiquitous connectivity will exist, in some form or another. When thinking about where to place connectivity/value, companies are looking at items in which consumers use every day. Cars, watches, etc. $GOOG has a driverless car. $GOOG is in the car navigation (they were in my Audi). $GOOG and others are now going into watches. Why? People drive their cars and use watches everyday. I know there is research as to millennial not using watches as much as other generations but there are still plenty of people with watches. Now the larger question is why? Why do tech companies want to play here? Data. It’s all about the data. Having access to where people are, what they are doing, and how they are feeling (sensors in watches?) is very valuable to enrich data sets. Not all data will be used for advertising but it will be used to make our experiences [expected] better with the platforms we engage with. I think Glass right now is a bit premature. I can see watches getting adopted more, IMHO. I’d like to see a smartwatch co & Panerai partnership. I’m a buyer.

Eleventh Q: @ericfriedman: Can you post a pic of your phone home screen so we can see what apps you have on it?
My Answer: Yes, but wasn’t so easy as I’m typing this all on my Macbook Air. I took a pic of the phone home screen which is below. It doesn’t help much as it’s small but let me tell you what’s specifically on my home screen. It’s setup for speed/utility. Across bottom is Phone, Mail, Gmail, and Social (folder). In social is Fb, Tumblr, Twitter, Foursquare, LinkedIn, Hootsuite, Pinterest, and BBM (yes, really). In the homescreen there are four folders: News, Weather, Travel and Utilities. I commute everyday into the city (use Metronorth) and travel a bunch, so I need access to my train schedules, Delta App, FlightAware, GateGuru, Passbook, etc. For News, it includes a range of apps such as Stocktwits, Pulse, Circa, Prismatic, Quora, Pocket, Mashable, CNBC, and Gawk.it. Weather, well, is weather with WeatherBug, DarkSky, and Forecast(.io). My second screen (when you flip to the next screen) is filled with Folders including Sports, Shopping, Music, Finance, Utilities, Entertainment, Storage, Photography, Wine, Hotels, and Lifestyle. I specifically like the Wine folder for when I’m at a restaurant or a wine store and need a recommendation or two.

Twelfth Question: @benkartzman: Will creative and media agencies ever truly get along? Would ad tech be better for it?
My Answer: My real answer here is that anytime there is a P&L between two companies, the one company or the other is looking for the advantage. If we live in a capitalistic society (which I believe is good), then companies are going to maneuver for capital. This comes at the detriment to client service, support, and innovation sometimes. Agencies fighting for budget doesn’t help anyone and actually hurts people who are trying to help innovate, such as your example around ad tech. Unfortunately, there is no holy grail but I’d have to think that integrated agencies (such as kbs+) are better off for having 1 P&L which allows for ultimate collaboration on accounts.

I will update this post as more questions come in. Thank you for participating and help spread the word!

It’s Time for Next Generation Ad Servers

4 Replies

If you read this blog, you know I like to think about the advertising technology stack, in particular, ad servers. One of my most trafficked posts was about the 87.5% Luma category: Ad Servers. We have been having various conversations with companies who are building technologies that resemble what I like to think are next-generation ad servers.

1984 Won’t Be Like 1984: Tomorrow’s ad servers aren’t today’s ad servers.

Today’s ad servers are very similar to the original digital media ad serving systems. Many, not all, have similar attributes to the following:

They are 3rd party cookie-based ad serving solutions
They serve, track (and sometime optimize) standard IAB ad units
They are made for the traditional web browser
Two out of the top 3* ad servers are owned by media companies (Google, Facebook)
They are primarily used by ad operations teams

At Ventures, we get to meet with all different types of marketing and advertising technology companies. That’s the only sector we invest in.

Over the past few years there has been lots of innovation around upcoming “ad servers” and I want to highlight what we might see adopted by the industry over the short to mid-term. Note, my bias is from the buy-side (agency, marketer) but we have investments ‘in’ and appreciate the sell-side (publishers, technology companies).

Ad Servers Are Content Servers
As the media agency model adopts owned/earned (they traditionally handle “paid”), the need for serving and tracking content emerges. The format of choice for traditional ad servers are banners but this will change and we see ad servers serving almost any sized unit. From this paragraph forward in the post, I use the word Content Servers as the new ad server.

Content Servers Are Platform Agnostic
As we innovate across more technological platforms (tablets, mobile phones, desktop, wearable devices, etc), we need content servers that can serve regardless of the platform. The server will understand which platform it has seen the user and will react accordingly with appropriate frequency and optimization.

Content Servers Go Beyond Basic Optimization
Many of today’s basic ad servers are rudimentary optimization. We’re seeing the next generation content servers including dynamic creative optimization as well. And beyond. If we believe that “big data” drives performance (which we do), then the Content Server should be equipped for this.

Content Servers Plug into Trading Desk/DSP/Programmatic Direct
As agency trading desks become even more central to their businesses, we see the Content Server connecting thru API’s to become even more tightly integrated. In some cases, we’ve seen some entrepreneurs creating a trading desk “serving system” which all of the agencies would use, regardless of programmatic or not, so that all the data resides in one central database. This creates less friction around data transportation and potentially a better/larger dataset for optimization.

Cookies to Brownies
While there is no legislation at this point in the USA, we do anticipate that something is coming. I don’t know anything more than the next person but we have to plan for a world where 3rd party cookies are legislated against. We’re seeing different types of technologies being used but all are basically the creation of the Brownie (my evolution of the cookie). If we are going to measure effectiveness for a marketer, we need a system that knows who the user is across devices.

Planning & Buying
In one system, you can plan and buy. This is not new. DART and MediaMind have basic tools. But we’re seeing the emergence of companies who are building workflow tools to create efficiencies for the agency and/or marketer. This is beneficial in managing FTE’s and helping structure a planning process which exists in Excel today.

Beyond Last Click
The default setting for traditional ad servers is “last click” but we know where that got us… it got us to 60%+ of every dollar being digitally dominated by Google. We need to go beyond the last click and look at total attribution of the campaign. We are seeing the emergence of full stack attribution making their way into Content Servers. And of course, better dashboards/visualizations that showcase performance of the campaign.

If you are interested in any of the above, you should check out companies such as: AdZerk, TrueEffect, Yieldmo, NextMark, OneSpot, GoldSpot and BrandAds. There are many more interesting companies but I picked these as a smattering of different spots in the ad stack.

I have not invested in any of these companies both personally or professionally at the time of writing this piece.

None of these companies have all of the above characteristics of the ultimate “content server” but are creating pieces of the value chain that could then go up or down the stack, depending on where they sit.

I still have open questions.

I don’t know how cross-platform authentication/log-in will benefit/hurt the ecosystem? I hypothesize that the bigger players in this ecosystem will have a better chance at winning as they will understand who their users are across devices…and they naturally have more users.
In order for the next generation Content Servers to really take-hold based on this post, it’s more of a full-stack play than point solution. Will agencies adopt a full tech stack versus a point solution?

* By top 3, I use the typical DART, MediaMind, Atlas. They are top 3 in my mind. Not by any specific list. If you have data to show me the top ad servers, I’d love to see it.

Old School Computing Lessons: SimCity and Processing Power

1 Reply

My son has pretty much grown up on the iPad and iPhone. Weird [or not] to say, but that’s been his exposure to computing devices. Come to think of it now, he’s only ever been exposed to touch screen devices as he was born the year after the iPhone was introduced.

Over the summer, I had the idea to expose him to “old school” computing thru my wife’s iMac by learning to play SimCity, one of my all-time favorite games. My brother and I used to play the original game for hours when we were kids and when TSO (The Sims Online) came out, I had one of the larger online fan networks.

Unfortunately, the game was delayed but finally came out in August. My son had built up anticipation from earlier in the summer and was super excited to try the new SimCity out. We purchased the game, downloaded it, and tried to start it up. Unfortunately, the game could not be played due to not meeting minimum system requirements.

How annoying. He was completely bummed out and could not understand that our computer was not fast enough to process the game even though we had downloaded it.

Thinking about this brings me to Andy’s recent reminiscing about the past. Borrowing Andy’s term, “training wheels,” I was hoping to use SimCity as the wheels to teach my son about the mouse, keyboard, and a traditional computer.

Instead, I used it as wheels to teach my son about the insides of a computer, mainly around processing power.

Guess we’ll have to pick out another game. Maybe Oregon Trail will come out soon. Or Number Munchers. Carmen San Diego?

AngelList Syndicates

Leave a reply

A couple of months ago, Taylor (kbs+ Ventures) asked my opinion about AngelList Syndicates. We had a pretty brief conversation and I basically dismissed the idea. I forgot my exact reasoning but I did not pay too much attention.

I love the idea of AngelList though have not invested in a company that I’ve solely met through AngelList but I have contacted a few that I thought were interesting.

I got interested in the Syndicates offering once I read about them in more detail. There have been some good posts outlining the opportunities and benefits of Syndicates written by folks I admire.

As a potential Syndicate investor, I see a potential issue. If I join the Syndicate of someone, say Jason Calacannis, I make the commitment to invest in the rounds he does up until I opt-out of his Syndicate. This means I, as an angel investor, might be committing quite a bit of capital and quickly, depending on the speed at which Jason invests. While I understand my own bank account, my asset mix, and the risks associated, I might have to withdraw out of Syndicates at some point as I don’t have unlimited funds. I imagine the majority of investors on AngelList are doing a few deals, not volumes of deals, such at the pace at which Syndicates could theoretically operate.

So today, on AngelList, the Syndicates look pretty darn powerful because it’s easy to pledge that you’ll invest alongside someone. But a few deals later, will those Syndicates be as powerful with the same amount of investors pledging? (assuming AngelList keeps growing I suspect the answer is yes, but I can see investors pulling out due to constraints).

Just a thought.

#ADX Advertising Week’s 10th Anniversary

1 Reply

Each year, thousands of panels, keynotes, interviews, and talks are held in celebration of the advertising industry. Thought leaders come together to discuss the future of the industry, the current state, the good, the bad and ugly. The territories we cover have more or less stayed the same over the past ten years: storytelling, the growth of digital, “the big idea” and talent.

There is a real fact to the territories now: digital can disrupt and change everything. And within advertising, digital is at $40B+ in 2013.

The conversations we used to have about the promises and vision for digital were great, but we never really had any dollars to substantiate with.

But it’s become real, fast.

A couple of bullets to keep in mind coming out of #ADX

Digital is going to make formerly unmeasurable channels… measurable. Lean back channels will become lean forward channels. Passive channels will become interactive channels.
Programmatic buying (and programmatic insights) will be at least 20% of agencies business within the next 5 years. At The Media Kitchen, we’re close to 21% already.
Digital has created fragmentation and with that fragmentation, new channels and properties have emerged. Those are forcing us to think in new ways and become much crisper storytellers.
There will be some form of monetization for the 6 and 15 second spot. Get ready.
One of the biggest opportunities I see is being able to create content at the speed of social. Traditional agencies are not built for this, neither is their P&L. The industry needs to rethink their go-to-market here and learn from companies like Relevant24.
Could Google be the penultimate winner?
Ad tech is increasingly becoming a closed ecosystem, with the larger data repositories having the greatest potential for winning.
It’s time to retool the ad stack.

It was a fun week and gave us lots to think about for the next 365 days.

Cookies Will Become Brownies

1 Reply

Cookies seem to be dominating the conversation lately. While I’d prefer talking about black + whites, chocolate chip, Mallomars, or Milano’s, our attention for the past year has been around the ecosystem surrounding first, second and third party cookies. This post will not go into the technicalities around cookies but rather the idea of cookies in existence.

Cookies (of the computer context) were created for website session management. They [cookies] were not originally constructed nor conceived as an advertising tool. Once the initial 3rd party ad servers were built in the mid 1990s, they relied on these cookies to help track and measure a digital media campaign via leveraging data written to and contained in a cookie.

The majority of the $117.60 billion dollar* worldwide digital media ecosystem is beholden to the cookie. It’s why the IAB has fought so hard to protect the third-party cookie, as every company who pays the IAB its annual dues are impacted by the potential threat to remove third-party cookies. You cannot fault Randall for protecting his fiefdom and the organization that he has successfully grown.

In the above paragraph, you will notice I reference the specific type of cookie: third-party. All too often in our conversations, we do not reference the specific types of cookies we are talking about. Much of the spotlight in today’s conversations is around third-party cookies. These are cookies that are set by neither the consumer nor the website they are visiting but rather a third party in the equation. Sometimes this third party cookie is set by a third party ad server such as DoubleClick DART, a data company such as CrossPixel, a re-targeting company such as Criteo, ad exchange such as AppNexus, supply side platform/private ad slot such as Rubicon, ad networks/DSPs like RocketFuel + MediaMath, social plug-ins like Facebook Beacon/Connect, and many other examples. Reference the Lumascape for Display for many other companies who utilize 3rd party cookies. As you can see, I drew this out on purpose because the impact of the threat to remove third party cookies has far reaching consequences.

I was sitting with an investor yesterday and she asked me straight out, “what happens if third party cookies go away?” I get this question often and I half jokingly say, “we’ll have cupcakes and brownies.” I’m actually serious here. She looked confused and laughed with me… but I provided some backup.

Digital advertising dollars are invested, traded, measured, and optimized on the idea of “quantification” of spend. Validation of spend. Measurement of spend. Whatever other word you’d like to use. This quantification, while not 100% accurate, is better than any other media channel we have… and is pretty much all based around a third party cookie.

My view: If the third party cookie goes away, the industry will create something to take its place so it can continue to measure. A brownie or cupcake if you will. Or Milano or Mallomar (if it were up to me).

This is validated through many of the conversations that I’m having with young startups and larger technology/media companies. Hearing terms like UDID, ADID, safehouse, clearinghouse, serverside, and others are being thrown out as ways to help identify, target, segment, scrub, or track display/mobile/tablet devices. I’m sure there are dozens of ways in addition to the ones listed that are being built by different firms.

The impact of the removal of the third party cookie will have consequences to IPO candidates and currently public companies such as ValueClick, RocketFuel, Criteo, YuMe, Tremor, Marin, Facebook, Google, Yahoo!, AOL, Microsoft, Acxiom, and others. Criteo and RocketFuel are probably most vulnerable as they are going thru their investor roadshow and this should be one of the first questions that investors ask.

Some cookie based thoughts:

I never really understood the Facebook acquisition of Atlas Solutions. It dawned on me a month or two ago why it was special and unique: If Atlas has the ability to deliver an ad server solution in the client domain space, then it can feed the Facebook audience segmentation data through and deliver voluminous audiences through their ad server without having to sync third party cookies. This gives a leg-up to folks using the Atlas Solutions ad server.

There are companies such as TrueEffect that have popped up that are delivering first party ad serving and media measurement. This is important similarly to Facebook/Atlas example above. Other third party ad servers have the ability to serve in the first party but a special agreement has to be formed.

Google and Mozilla are going to be players in this ecosystem beyond what we can imagine today. Chrome and [Mozilla] Firefox see the majority of the Internet’s traffic and have quite a bit of data that is very valuable to many different stakeholders, inclusive of the consumer themselves. Recognizing value in that data is something that has not been fully done yet for the consumer and it’s an opportunity for the marketplace.

Companies in the content marketing space have side skirted the conversation around third party cookies but they too are directly affected. If agencies and/or brands are measuring their content marketing campaigns thru folks like Buzzfeed, Outbrain, Nativo, etc by placing a 1×1 pixel or click tracker, they are essentially measuring the same as a display campaign. Understanding the impact of third party cookies to the content marketing space is important because measurement directly affects the growth of the space.

First party cookies are not going away, at least in the short term.

That is all, thank you for reading. You should react in the comments (below) or via twitter. You can tweet me at @dherman76 and I look forward to responding/chatting. The cookie conversation is serious and important to this whole industry and I probably missed 50% of all the conversations happening. The above is not meant to be all encompassing but an addition to the already started conversation that is taking place on sites like AdExchanger or MediaPost or list-serv’s like Harvard’s Project VRM list.

* eMarketer August 2013

** Note, I used many examples of companies in this post. The only company to my knowledge that I have privately invested in is CrossPixel though might be a shareholder of other publicly traded companies in this post. There are many companies in the entire industry and I cannot fit each company into each post I write. If I left your company out, I apologize. If I miscategorized your company, I apologize as well and get in touch so we can chat about it.