Category Archives: Advertising & Marketing

Apple: Ads Coming to OSX – Get Paid to Use the Computer

I received a very timely email from my friend David Siegel pointing me (and a very small group of recipients) to Google’s Patent search database.  On October 22, 2009, Steven Jobs (et al) received patent US2009/0265214A1, Advertisement in Operating System which was originally filed of April 2008.

The abstract of the patent reads:

Among other disclosures, an operating system presents one or more advertisements to a user and disables one or more functions while the advertisements is being presented.  At the end of the advertisement, the operating system again enables the function(s).  The advertisement can be visual or audible.  The presentation of the advertisement(s) can be made part of an approach where the user obtains a good or service, such as the operating system, for free or reduced cost.

A few things to point out:

  • To re-state the obvious:  Apple is exploring ways to provide their OS or other services/products for free or a reduced cost
  • Apple is looking at both audio and visual (can probably expect video to be in here) types of ads
  • The user is forced to watch an ad per the below statement “disables one or more functions while advertisement is being presented”
  • The screenshots in the patent filing show an OSX desktop, not an iPhone screen.

Where can Apple roll this out?

  • I initially gravitated towards thinking that my next MacBook or iMac will be probably be ad-supported but now I’m thinking that it might be my next iPhone or even the increasingly popular (still not present) Apple tablet.  With increasing pressure from Google moving into the mobile space and recent acquisitions in which both parties (Apple & Google) were at the table (i.e. Admob), advertisements could help drive down the price (or subsidize) the service of a cellphone or Tablet.

Media Distribution

  • The opportunity for Apple to become a media distribution hub could be tremendous.  Think about how many Hollywood films or video game trailers they could distribute through their desktop advertising network.

Using advertisements to subsidize a service or make it completely free is not new.  This patent however is potentially important to the industry as Apple looks to future ways to monetize it’s platforms with increasing pressure from competition that has no or very low-cost.

Dell and other PC makers sell advertisements/distribution to companies to place their applications on the desktop of a new computer.  Ever wonder why those icons are there when you open up your brand new machine?  Business development deals place them there and pay-for-distribution.

AllAdvantage was a tool that users downloaded from the Internet during late ’99 in which compensated users for browsing the web.  They made popular their tagline, “Get Paid to Surf the Web.”

Will Apple make famous, “Get Paid to Use the Computer”?

Open Letter to Ms. Internet

Dear Ms. Internet,

As someone who has spent 8+ hours a day with you over the past 10 years, both for professional and personal needs, I have to say that having a long term relationship with you is challenging at best and you are starting to get a reputation for your celebrity-length relationships.

You are young and in your prime and are the hottest girl at the dance.  Your reputation precedes you wherever you go, from Sand Hill Road, CA to Varick Street, NY, and even then, we all want a piece of you.

The problem with this is that you are breaking hearts everywhere you go and businesses built on-top of you fail before they ever have the chance to breathe.  If you are here for one night stands, then let us know as many of us expect you to be marriage material.

Let me explain.

Marriage material is when ecosystems (family) can bloom and everyone expects them to last so that society can adopt them into the fabric of life.  Ms. Internet, you are making this impossible.

Consequences of your actions:
The rapid pace of innovation (which I love and made my name in) within the digital media space (including you, Ms. Internet) is going to contribute to its very demise.  How can we build sustainable businesses when the life expectancy of an online business is virtually one capital raise and the entire industry is onto the next-biggest thing?

Why this whore-ish attitude does not work:
· Advertising:  have you ever written a check for $100MM to one digital media partner?  No.  Let me explain why:  Digital media partners (i.e. Hulu,, AdMob) deliver a structured product (sometimes service) to meet the needs of a particular client. Generally, there is never enough inventory to spend significant dollars (scale issue) or by the time we have tested the particular product, the industry is onto the next best and greatest product (innovation issue).

· Venture Capital:  I’m speaking from an outsider but there is a real movement from within the industry to change up the deal mechanics as within the digital media space, it’s just not sustainable.   The speed of innovation is important here because if a company spends it’s venture money building a product for the market tomorrow, in two weeks, it may be out of fashion. I wrote a blog post about this a few years back about how social communities are like clubs – you do not want to be the hot one or you are the un-cool one next Fall.

We do not need more Friday or Saturday night flings.  We need companies and services that have the time to breathe and blossom into something sustainable.  My frustration comes from within the advertising world – we (you) are making it very hard to shift large amounts of money online with this type of attitude. Scale issues are solved when the market has time to mature and so far, we’ve had very little time because of the pace of innovation.  I’d like to write a check for hundreds of millions of dollars, similar to how my television brethren do so, and with that, think about how much value that would be created within the digital media ecosystem.

Having said all of this, I love innovation.  Innovation is important to any ecosystem and allows the ecosystem to keep evolving.  As a person, I tend to be just ahead of the innovation curve but as a marketer, I can see that we’re moving a little too fast for the online advertising community to evolve.

All the best,

Darren Herman
(t):  @dherman76

Black November – Holiday Shopping Has Officially Begun

Holiday shopping mayhem used to begin on Black Friday.  Many of us all have our own crazy shopping stories and there are even some YouTube videos of people filming their Black Friday shopping experiences.  For retailers, this marked the official date to begin holiday displays and holiday discounts and for American consumers, it was the “unofficial but official” nod to take out the plastic and start purchasing gifts for friends and loved ones.  If you go into a retail store during this time of the season, you can almost be guaranteed that there will be a musical bell in the song playing over the sound system.

But something different is happening this holiday shopping season:  it’s happening earlier than ever before.

  • Stereotypical holiday season television commercials are appearing on television already (saw some back in October)
  • Fun loving holiday season music is already playing in malls and department stores
  • Holiday look & feels are starting to appear on websites earlier than ever (look at, Radioshack, Dell, Brooks Brothers)
  • Serious retail discounting already both offline and online

All of the above was deduced from a 1-person focus group of myself.  I’m allowed to do that because it’s my blog.

But to make this larger than just a 1-person focus group, I did some digging around online for some holiday season research and one of the top studies that retailers and periodicals are referencing is an October study done by Accenture which states clearly in it’s title:  Holiday Shopping Season to Start Early But Discounts May Disappoint, Accenture Study Finds.

“Holiday shopping in 2008 was defined by the huge discounts that were available – and available very early in the holiday season. In 2009, however, retailers will be reticent to offer such generous incentives in the face of rising commodity prices,” said Janet Hoffman, managing director of Accenture’s Retail practice.
The survey of 526 U.S. consumers found that 69 percent of shoppers expect to do the bulk of their holiday shopping by December 7 (vs. 60 percent in 2008) and more shoppers will shop on “Black Friday” – the day after Thanksgiving – this year (52 percent vs. 42 percent in 2008). However, the vast majority of consumers (86 percent) will not be moved to buy without a discount of at least 20 percent, and a quarter of shoppers will be looking for an aggressive 50 percent discount before they open their wallets.
If you are an entrepreneur, how do you take advantage of the holiday season?
Putting my idea-hat on, I can think of a few areas where entrepreneurs could impact the holiday season:
  • An AdobeAir app built for shopping discounts
  • Promo code online exchange
  • Holiday deal of day website (maybe on Twitter?)
  • Outsourced wrapping
  • Online gift giving concierge
If you are a brand, how do you take advantage of this time?
What specifically interests me about holiday shopping season is how, when, and where retailers create a dialogue with current clients and potential clients.   CRM programs built around direct mail, display advertising, email, and mobile,  are extremely important during this time as brands should be sending different copy/offers to different client segments.  While this sounds simple, it’s not simple to do at scale without the right infrastructure.  Brands who spend time investing in the infrastructure (either internal or through a 3rd party) will be the winners during this holiday season.
If you are a consumer, how do you take advantage of this time?
Start collecting discount coupons and use as necessary.  The assumption is that the discounts are going to be greater as the holidays draw closer however the selection will be less as retailers have put less into production due to the financial environment.

Advertising Industry Presentation – Need Your Help

I’m taking a cue from Fred Wilson on how he crowdsourced his Web 2.0 Keynote presentation.  The wisdom of all of you are much smarter than myself, so why not work together on this upcoming presentation.  What presentation you might ask?

Announced today, I am the keynote speaker at the Admonsters Ad Ops Forum on December 3 here in New York City.  I am excited about this forum because the people who will be actually going to it are the people who actually pull the “levers” in the industry.  Not that I ever “BS,” but this audience is a very wise one and I’m excited to speak to a very intelligent audience.

The goal of the keynote address:

Where once traditional publishers and portals were able to command the CPMs they wanted for all their inventory, they now struggle to provide differentiated, premium inventory that they can sell directly. Agencies have gone from thinking of online as an afterthought to seeing significant investment in systems to help them drive performance for their clients. Networks continue to evolve in every way possible as they attempt to develop their own secret sauce that will make them a top player among hundreds of others.

Following the shift of power is complicated by the fact that all the players are continually redefining their roles:  publishers and agencies are creating their own networks and ad exchanges. Publishers and networks are offering services akin to digital agencies.

This redefinition of roles not only applies to the companies themselves, but internally as well. The importance of Ad Operations for all the players has grown tremendously in the last couple of years. Ad Operations ability to help connect technology and process to the business side of online advertising makes it a focal point for our further evolution.

This focus is of particular interest to Networks who sit at the center of many of these changes and must remain nimble to survive. This creates unique challenges for Ad Operations leaders.

Darren’s keynote will take us through the macro level shifts in the balance of power, how that is redefining the roles of all the players involved and focus on how Ad Operations need to position themselves – especially at networks – for today and the future.

I have setup a few public and private conversation spaces for this presentation.  I will do my best to respond to each and every comment and will give attribution to the comments that I do use within the presentation.

  • Leave your comments below in typical Disqus blog format.
  • Give a call to 646-495-9271 x 44195 and leave a voicemessage with your thoughts.  This goes into a account that I’ve setup.
  • Send an email to with your thoughts.

For those of us in the industry, the Pubmatic Ad Revenue Summit guide did a very good job of showing the landscape, but I’d like to dive as deep as possible.

Thank you in advance for participating!  I will post the slides up here as they are created… (and certainly the finished deck).

Great Presentation: Evolution of Digital Communications

Saw this presentation on my friend Fred’s blog this morning and thought it was perfect for here.  Of all of the parts of the presentation (which I believe can be done in 120 slides rather than 200+), the slide that talks about data+insights hits really close to home during this part of my career and passion.  Check it out.
View more documents from David Gillespie.

Is the Market (and Tech Scene) Rebounding?

Recent headlines (within last 10 days):

I’m not going to pretend I’m a Wall Street analyst or an amateur Stocktwits guru, but where there is smoke, there is fire.  While I can’t prove that the market is rebounding overall, this is solid news and we are moving in the right direction.

If this continues, the M&A market will heat up and some startups and later stage companies that we’ve all come to know will be on the receiving end of some checks (and potentially some stock swaps).

Areas that should see some M&A activity:  location based mobile companies, buy-side advertising optimizers, mobile ad networks, mobile ad optimizers, and niche focused content sites.

Another sign of a potential recovery is the recent influx of headhunters, investors, company management all reaching out to find CMO’s and VPs of Marketing for their organizations and investments.  Company positioning and value proposition is critical during a warm/hot M&A market.

Ad Network Platforms vs. Demand Platforms

Lets define before we begin.

Ad Network Platforms:  platforms being built by current ad networks to service agencies and brands directly
Demand Platforms:  meta platforms that sit on top of multiple inventory sources

There seems to be a battle brewing between ad network platforms vs. demand platforms.  The trend I’ve spoken about on this blog for a while now and is now picking up at a faster pace are the ad networks we’ve all known to love (or hate) that are creating their own “platform” for brands and agencies to pull the levers instead of the people in their services group.

There are three types of ad network platforms that are being built out and non of them are mutually exclusive to the other:

  • Platform for buying audience segments & data
  • Platform for buying media
  • Platform for creative optimization

In theory and at first glance, these seem directionally right to where the industry needs to go.  Why wouldn’t brands or agencies adopt an ad network platform for their own use in their VMM/VivaKi/Cadreon/Adnetik/B3/ATOM group?  This is the major question and note, I can only speak for myself (VMM), but because this blog is of personal nature, I am voicing my own views, not the views of my employer (disclaimer).

The macro hypothesis that is being tested is:  agencies or specialist agency groups want to bypass the managed services part of ad networks and build the capacity for audience selection/procurement, optimization, and insights/analytics internally under the umbrella of whatever holding company they are employed at.

This post does not go into the reasons as to why this may or may not be smart but rather talks about why ad networks should not focus on building their own platform.

If you agree or can assume the hypothesis above, then continue reading.

The first iteration of ad network platforms (not to be named, but if you want a list, contact me) still are a closed loop system.  The reason why you would use a demand platform unit on the buy-side is that you want access to as much inventory as possible in order to make the smartest decisions for your clients (open).  By using one or even four different ad network powered platforms, you are making the job of inventory & data procurement and optimization harder than it needs to be.

Multiple platforms means multiple log-ins.  Apples to apples comparisons are not easy to make as each platform is slightly different.  Universal cookies are tough to pull off.  Biforcating data.  Duplication of bidding leads to artificially inflated pricing.

There needs to be a layer that plugs into the networks – i.e. a meta platform that can plug into as many inventory sources (networks, exchanges, sites direct, etc) as possible in order to aggregate as much data and media inventory.  I do not foresee a company like AudienceScience allowing X+1 to plug into it or vice versa in the near future.   That 3rd party layer is going to be crucial and that’s where the buy-side demand platforms sit.

I do not foresee agencies using multiple ad network powered platforms in the long run which means there is a forthcoming (and current) land grab to be the agency side demand platform of choice.

My friend Fred Wilson who blogs over at AVC likes to post entries on his blog that have his “wants” and hopes that people take note and action them.  I’m going to borrow that idea from him and try this here.  This is what I want within the demand platform and ad network platform space:

  • Ad networks to scrub their data and make it available for purchase without the media attached
  • Ad networks to plug into as many demand side platforms as possible (i.e. Invite Media, Media Math, Turn, etc)
  • Figure out the issues around appending cookies visa vi multiple vendors (universal cookie?)
  • Data should not have ‘minimums,’ if it works, we’ll buy more, if not, we’ll be back again to test another data set
  • Let the market price media and data as the real value will rise to the right buyer
  • Regulation/restriction/firewalls between the same company who sells/licenses/rents data and whom sells media

Anything else I’m missing?

ContextWeb Agency Demand Platforms Panel

Key parts of our talk on Agency Demand Platforms

  • What and why are agency demand platforms being created
  • Business models emerging
  • Impression level valuation

If you are interested in any of the above topics, take 20 minutes and watch the video.  Top agency holding company (and agency) execs chatting during Advertising Week.  Participants include Razorfish, Cadreon (IPG), VivaKi (Publicis), Adnetik (Havas), and me over at Varick Media Management (MDC Partners).

Check out the blog post over on ContextWeb.

Rational Expectations

When I was a doctoral student in economics at the Massachusetts Institute of Technology, a powerful theory known as rational expectations suggested that it was difficult to profit from widely anticipated, or predictable, events, since rational actors would already have taken the action necessary to arbitrage any such opportunities.  When I become a student of management, I assumed that an extension of rational expectations would apply in business; that is, any straightforward profit-enhancing opportunity in competitive markets would already be exploited and hence unavailable at the margin.

Well, thank goodness for me and the shareholders of Harrah’s Entertainment, Inc. that rational expectations is far from complete characterization of management behavior.  In short, opportunities abound to employ simple analytic methods to marginally or substantially increase profitability, especially in large businesses such as mine where a single insight can ring the cash register literally thousands or millions of times. - Gary Loveman, Chairman of the Board, President and Chief Executive Officer, Harrah’s Entertainment

I just wanted to share this passage as it’s written well and taken from the book, Competing on Analytics, The New Science of Winning by Harvard Business School Press (Thomas H. Davenport & Jeanne G. Harris).

Expect more quotes from this book in the coming days/weeks as I finish it.

Digital Marketing Tidbits: Social Media, CPM, Ad Serving, and RTB

I have not been updating the blog as much as I’d like and have a few long-form posts I’d like to write, but based on my schedule right now, that’s a long-shot.  I’m going to condense the posts into a paragraph each and if people want me to expand on them, please comment or reach out to me and I’ll spend more time writing.

Social Media Strategy – your social media strategy should be part of your marketing and communications strategy.  I do not believe that social media should live in it’s own silo.  A solid marketing department or agency will understand social media at its  core and will work to involve the benefits into the overall strategy.  It’s only a matter of time until the many opportunistic social media shops will either be weeded-out or acquired into larger entities.

Let’s Not Kill the CPMOver on TechCrunch, Shelby Bonnie, former CEO of CNET, talks about wanting to kill the CPM.  His usage of CPM is incorrect and is misinformed.  Additionally, since many people think that CPM is a digital media term, there was additional pickup across other blogs and the tech industry started to drink their own juice.   First off, CPM is a planning metric in which marketers are able to put a cost to 1 thousand impressions.  While CPM is a metric that can be used for cost-basis, it is NOT a metric for performance.  Marketers who are optimizing to the CPM without overlaying other engagement stats as KPIs are the ones who should re-work their strategy.   CPM also is used in offline mediums such as Print.  This allows for an apples-apples comparison for rate basis.  To Shelby’s credit, I do believe he was trying to illustrate something different (and valid) but “killing the CPM” is something that’s a hyperbolic title.

Ad Serving Systems – Current ad serving systems such as Google DART or Msft Atlas must change their positioning or they may be toast as the industry evolves.  The current ad serving systems must provide real-time bidding engines within the next few years or they will be defunct as new players (i.e. Invite Media, Dataxu) start to eat their cake.  How much success will Goog/MSFT have with re-engineering their legacy systems?  Time will tell.

Real-Time Bidding – Today, this does not impact the majority of agencies, advertisers, and publishers, but within the next 3 years, the media landscape will be at a tipping point.  I do not know why I picked 3 years, but it seems reasonable.  Imagine a world where you can value every single impression in real-time based on the amount of data you have and the models that you put together… starts to sound like Wall Street… and yes, that’s the insight I am trying to illustrate.  Quantitative analysis is coming to advertising beyond where it is today (it’s already here in most major media shops) and the technologies needed to service RTB will start to emerge.  I’m fascinated with this space from the agency side, client side, and tech side.  If you are building something here and we’ve not spoken, I’d love to hear from you.  Additional:  My comments on the Google Advertising Exchange.