Category Archives: Advertising & Marketing

Stores in an Information Society

I live in the suburbs of Manhattan and within an 8 minute drive from my home, I’m surrounded with retail stores… and there are a lot of them:  standalone, strip malls, and large malls.  Many of these stores were built when we lived in the industrial revolution society as that’s when urban planning was done for this area.

The industrial revolution is over.  Long ago.

We’re now in the information revolution.  Many things should change in this new chapter of life but the one area I’d like to highlight is the retail experience.

I’ve had many poor experiences lately in retail locations, even from stores which are supposed to have excellent in-store staff.  The more and more I go about my daily life and see how my kids are living theirs, retail stores need to adapt because consumers are now less than 3 clicks away from buying almost any item sold in any store at any time on any day.  Do retail stores really need to be tens of thousands of square feet and sell/stock everything in their catalog which is redundant to their e-commerce store?

Why can’t retail stores be discovery-and-customer-service engines staffed by salaried product specialists?  The actual goods that I might want to buy, maybe outside the top 10, would be ordered online and be delivered to my home or a central pickup area.  Stores would have a lot less overhead, smaller, wouldn’t be competing with their e-commerce P&L, attribution of marketing would be easier (shopping in one place), and product distribution would be easier for brands.  This doesn’t sound half bad…

Retail needs to change.  Just look at Best Buy.

Marketing Wednesdays: Display Impressions

One sentence exec summary:  New measurement of advertising impressions are helping drive performance for marketers.

When we purchase media, one of the major components of the buy is around how many impressions we will achieve with a campaign.  The common thought here is that the optimal amount of impressions against a target audience will yield positive advertising results.  This is fairly common thinking around Madison Avenue and has led us to using the Nielsen metrics as currency for TV, circulation metrics for print, and unique visitors as being important for digital media.  The higher the rating, the larger the circulation and the more unique visitors a media property has, the higher the amount of impressions, theoretically* and thus, the more media spend that they can handle.

I personally and professionally believe that it’s not about the impressions, but about the engagements.  Engagements can be quantified many different ways (thru sales to interactions) but just impressions alone is not a basis for marketing working or not.

In digital, there is a never ending supply of advertising inventory especially when publishers like this put stories across 5 or 30 pages.  Creating more ad impressions is not the problem with digital.  3rd party ad serving systems such as DART, Atlas, MediaMind, MediaPlex, AdZerk, adk2, OpenX, and others were created to help manage advertising inventory for pubs and advertisers.  Not only do ad servers help us serve media but they also help us track the performance which allows us to understand which media partners are doing well.

Historically, this was always about the amount of impressions served and the respective clicks or engagements on a unit.  This post is not about clicks or click thru rates, as that’s an entire topic in itself, and you can read about it hereWhat we will discuss through the rest of this post is how we as marketers should be tracking an impression.

As you have viewed on many websites during your normal course of web surfing, banners and ad units are all over a respective page and sometimes, you cannot even see the units as they might be below the fold.  Generally** as long as the web page and assets load (tags fire), then the advertising units on the page log impressions, regardless if the user scrolls over them or engages.

Sounds weird, right?  An advertiser pays for impressions without confirmation that the user has at least had the ability to see the advertisement.

Since 2008, we’ve seen startups like DoubleVerify, AdXpose, and AdSafe (amongst others) help marketers understand what how many of their impressions are in-view along with many other non-standard ad server metrics.  The in-view metric is important because that’s the number that should count for impressions (in my theoretical perfect world).  Lately, ad serving solutions such as MediaMind have incorporated this metric into reporting but it’s not historically standard across 3rd party ad servers (which is shocking).

Today marks a big day for the digital media community because comScore released the vCE, which is what they are touting as “campaign essentials” and it’s built on a product they created and merged with AdXpose called the vGRP to validate the impressions served and displayed by publishers.  The vGRP is very interesting because it goes beyond traditional measurement of 3rd party ad serving solutions to include things like time on screen and in-view/out of view.  While admittedly I’ve not run a campaign yet with the vCE/vGRP, I hypothesize based on historical campaign performance we’ve run, that a paid media campaign will yield better performance when a higher composition of impressions are in-view and for no less than a minimum amount of time.  Not rocket science.

Additionally, other companies are building advanced measurement solutions to help understand display impressions better.  The Goodharts over at MOAT are building a brand analytics dashboard which help marketers understand how many people are hovering over their display advertisements.  The theory here is that the more that a user hovers over an impression, the higher the engagement, and thus, the better a campaign will perform.

Evolution is occuring in the digital space.  From the days of offline media based on circulation and rating points to a now “validated” actualized number of impressions being seen digitally.  Over the next decade or so, we’ll see our online measurement systems (tools/technology/process) brought to traditionally offline channels.  Then, we’ll be able to really understand our media performance.

* Why I said theoretically is because advertising dollars don’t always follow the amount of impressions.  Some impressions are worth more, and potentially, you can spend more for fewer qualified impressions.  Think webmd or other niche publishers.

**  I say generally here because it’s more often than not

*** I lifted the above image from the website of MOAT.

One Buying Platform for All Media

Back in June 2011, I wrote a post titled, The 87.5% Category According to Luma – Lots of Acquisitions.  The purpose of the article was to highlight that ad serving systems for online/digital media had a high propensity to be acquired or realize a significant exit.  87.5% of all ad servers on the chart had gone through an exit.  Not bad.

Over the last week of December, I spent some time at home and caught up on my favorite blogs and online content in between playing with my two kids.  In doing this, I spent time reading a December 20th post on AdExchanger by Google’s VP of Display, Neal Mohan.  While I’ve personally never met Neal, I have a lot of respect for what he’s doing at Google.  He has a great quote that I couldn’t agree with more:

We also know that advertisers and agencies ideally don’t want a separate buying platform for each type of media — they want a way to buy across all formats, and in 2012 I think they’ll get it. Real-time bidding (and by extension audience buying) has proven to be a transformative technology for buying desktop display — on our exchange, it currently accounts for 60 percent of all transactions. In 2012, we’ll start getting into that ballpark for mobile and video as well.

If you recall, when I wrote the 87.5% article, I highlighted an area in particular stands out to me as a killer opportunity:

If I personally was to start a company tomorrow, I’d probably create the next 3rd party ad serving system built for the future of all media (able to serve site-direct placements, social media and RTB) and include the opportunity for biddable, rich media, video, and full reporting & analytics.  I believe no ad serving system delivers superior reporting and analytics so this is an area that I’d specifically make sure I’d nail.

I think this is an area for massive innovation because the vision that the industry hasn’t recognized the full vision for the future… I believe that all media will be served, tracked, and optimized across all channels.  Television, print, radio, and out of home will all in some way or another be served, tracked and optimized.  This obviously cannot happen overnight as there are quite a few barriers and obstacles to go thru, but the opportunity is huge.  There is a reason why 87.5% of the companies in the ad serving segment have been acquired.

It looks like Neal and I are thinking the same thing and if any of you entrepreneurs are as well, I’d love to meet you.  This is an area that we are searching to invest in at kbs+ Ventures.  You can contact me here.

The Connected14 Strategy

One of my friends runs an engagement agency in Irvine, CA called The Buddy Group.  One of the services he sells clients is a “Connected14” strategy which intrigued me since the day he mentioned it.  Essentially, the Connected14 is an engagement strategy (and execution) across your 1 foot experience (tablet, mobile phone), 3 foot (desktop/laptop), and 10 foot (Smart TV).  There is a nice video that explains it here.

CES has had no groundbreaking product announcements this year, but the common thread that linked the whole show together for me was connectivity (I was there).  Consumers are purchasing an increasing amount of devices that are connected to the web and this is going to open up opportunities where marketers can deliver a well thought out and planned experience across the Connected14.  It is not good enough anymore to deliver the same experience and creative across all three devices at the same time for a brand.  We should be taking advantages of the intricacies of the devices and building engagements that are tailored to each, but connected thru a strategy so they can be used at the same time to amplify their impact.

I really like the Connected14 idea and would like to see the industry really start embracing and thinking about.  The one fact that we can all basically agree on is that we are becoming more connected and not less.  Time to continue/start planning for it.

Google Controls 5.85% of Worldwide Advertising

According to some simple excel calculations (see below), Google controls about 5.85% of the worldwide advertising billings.  According to a recent article I was reading, ZenithOptimedia has 2012 advertising expenditures pegged around $485 billion.  Google derives 97% of its revenue from advertising so they are around $28.4bln.  Do the math and it comes out to 5.85%.

The majority of this is derived from their search engine marketing practice, which is otherwise known as AdWords.  If Google nails display, can get TV seriously off the ground, participate in organic search (take a look at our, kbs+ Ventures,  portfolio company Yieldbot), and dominate the tablet/mobile market, then they could realistically get up to 10-20%.

Pretty amazing for a company that was founded in 1998.

Calculations

2012 Advertising & Media Technology Predictions

Over the years, instead of writing my own forecasts and predictions, I’ve aggregated them on this blog as a source for everyone to turn to for marketing, technology and media.  Here are the lists for 2008, 2009, and 2010.  This year, instead of aggregating them, I wrote 5 predictions that I think will come true for Advertising and Marketing Technology in 2012.

The predictions are below, but you can read more about them here on Advertising Age.

1.  The vGRP metric gets adopted once released and AdXpose/Comscore finally makes sense to most people

2.  Trading Desks are no longer the bright shiny object for Madison Avenue as they begin to mature and become growth businesses for holding companies.  Holding companies need to make a strategic decision whether or not they are going to continue to support them and if so, they must acknowledge and realize they are building technology organizations.  If not, we’ll start to see some trading desks spinning down (or out) of holding companies in 2012.

3.  Agencies who are not agencies will challenge the agencies.  I like the title on this one:  tomorrow’s madison avenue will look different than todays.  Read more about it in-depth over at Ad Age.

4.  Attribution drives dollars to currently undervalued assets.  By using engagement mapping, TrueCPA, or other fun names for understanding conversion attribution, media buyers will actually be able to purchase sites that aren’t part of the lower purchase funnel.

5.  And of course, what marketing technology trend and prediction list would not include Consolidation and Investment as a headline?  Mine certainly will.

I’m super excited about the above 5.  There are quite a few more but these are my starting five going into 2012.

Marketing Technology behind $35 billion in holiday 2011 ecommerce sales

Ever wonder who is the marketing technology behind the $35 billion dollars in e-commerce sales this holiday season? If you are an agency, wall street analyst, marketer, optimizer or any other player in the digital media ecosystem, you probably want to read below.

I always tell my team at The Media Kitchen that you can learn a lot from what other companies are doing; the good, the bad, and the ugly… so study them.  On the web, it’s relatively easy to study companies and their respective infrastructure as the source code of competitors is only 1 click away.

I teamed up with my friends over at Evidon who own the Ghostery product and had them send me a data dump of 3rd party tags that were placed on 20 e-commerce sites (list below).  Note, the data I have is fairly reliable but not perfect, so I may have missed a partner here or there.  However, I do have over 150+ partners who had tags down on these 20 e-commerce destinations, so I feel I have a directionally accurate view of who was part of the marketing technology ecosystem for Holiday 2011.

Sites I tracked were Best Buy, CouponCabin, Sports Authority, LL Bean, Gap, Dicks Sporting Goods, Bed Bath & Beyond, SVPPLY, DSW.com, Modells, Zappos, Old Navy, Disney, Target, Walmart, Gilt, Sears, Amazon, NewEgg, and Piperlime.

I counted a total of 413 partner tags/pixels placed across these 20 sites (note, I only went to 1-2 pages per site and assumed tags would be similar across most pages).

Executive Summary (full report can be downloaded here)

  • Best Buy, CouponCabin, and Sports Authority properties contained 43% of all tags placed.  The top 10 of the 20 sites accounted for 85% of all tags placed.  I am actually surprised that Amazon didn’t fall into the top 3, but again, Ghostery told me they only had 3 tags down on their pages (Turn, DoubleClick, Google Analytics).
  • The top 3 tags placed across all 20 sites were Google Analytics, Omniture, and DoubleClick.  No real surprise here.
  • The biggest surprise IMHO is that Google+1 outranks Facebook and Twitter as social plug-ins that are embedded across these ecommerce publishers.
  • The DSPs are in-line with the recent Forrestor report so I didn’t find anything crazy in those numbers.
  • Google Analytics has 70% coverage across these 20 e-commerce sites.  Imagine the data that Google could/is collecting.  Just saying.

In order to digest this 1000+ cell data dump, I created a schematic whereas I broke down the product (such as Tag Management) and took the top companies and their % composition the 20 e-commerce destinations.  The link to the excel sheet is at the bottom of this post.

Web Analytics software:  Google Analytics (70%), Omniture (60%), Foresee (40%), Webtrends (15%), Yahoo Analytics (15%), Coremetrics (10%)

3rd Party Ad Serving:  DoubleClick (55%), Microsoft Atlas (25%), ValueClick MediaPlex (35%), MediaMind (5%)

Tag Management:  BrightTag (20%), TagMan (5%)

DSP:  AppNexus AdNexus (30%), Turn (25%), MediaMath (20%), Invite Media (20%),  AdNetik (10%), X+1 (10%), Lucid (5%), DataXu (5%), Rocket Fuel (5%)

Exchange:  Right Media (35%), AdBrite (15%), OpenX (10%)

SSP:  PubMatic (50%), Rubicon (25%), Admeld (10%)

Social Plug-Ins:  Google +1 (45%), Facebook (40%), Twitter (15%), AddThis (15%)

Site Optimization:  Omniture (60%), Monetate (20%), RichRelevance (20%), Visual Website Optimizer (15%)

I believe the Omniture & DoubleClick tag data above is a bit misleading because those are grandiose tags that can do many different things and without the right context, they could be categorized incorrectly.  I tried my best.

Conclusion

Google dominates pretty much up and down the marketing technology stack. I still think they should buy Adobe to become the monopolistic dominant player (to get Omniture), but I don’t believe the government will ever allow that.

I was actually surprised that Omniture didn’t have even higher composition of the 20 ecommerce players.

I couldn’t tease out DoubleClick AdX from their other tags so that’s why they weren’t included in the Exchange part.

And of course, since I work, play, and invest in the marketing technology ecosystem, I’m conflicted up the wazoo with many of the companies mentioned in this post as well, as, the data in the chart linked below.  I have done my best to tease out bias.  Please proceed with caution but honestly, I don’t think you need to.  Contact me if you are interested in discussing.

Thought you might find all of this data interesting.  I have included my chart here in case you want to download it and play with it.  The full report I put together is located herePlease remember to give proper attribution if you use it.

I’m curious to look at this data in 2012 and compare it to 2011 (I don’t have historicals).  I’m sure we’ll see some interesting changes.

Happy holidays.

Darren Herman is the Chief Digital Media Officer of The Media Kitchen (part of kbs+) and is President of kbs+ Ventures which is an early stage marketing technology institutional investment arm of the agency.  His tweets can be found at @dherman76 and blogging here at http://www.darrenherman.com

Digital Media & Advertising Articles of Note

I’ll be traveling over the next 24 hours or so, but wanted to post a few articles that I’ve found interesting over the last couple of days:

Online Merchants Hone In on A New Demographic:  My friend Stephanie writes an article about a new audience for merchants… the imbibing consumer.  A glass of wine or beer after dinner while online shopping?  Sounds like merchants can have a lot of fun with this including potential wine pairings with individual online items.

SocialGuide unveiled their year-end look at SocialTV.  FOX is in the leadership position because of their sports & youth oriented programming.  Note however, there are 36,700 projected total socialTV related comments in December 2011, which still seems small, but can really only go up from here.

ComScore released their holidays sales numbers and showed a 16% lift last week from the same week in 2010.  Total online spending amounted to $2.83bn for the week or $36bn for the entire holiday season.

AdExchanger has their holiday reason list up on their site.  It includes industry reaction posts of major topics such as Adobe Acquiring Efficient Frontier, Mediabank-DDS Merger, and many others.  Certainly check it out if you have time to digest a lot of right (and wrong) opinions.

And lastly, a great interview with Antony Young, the new Chief Executive of Mindshare.  Why I specifically call out this interview is because he gives some good insight into his vision and needs within the media world, where many agencies seem to be undifferentiated.  As you can see after reading this, he’s striving for change and will invest and build in it.

Marketing Wednesdays: Recapping 2011

I launched Marketing Wednesdays in October in order to cover a marketing related topic each Wednesday.  For me, this was bullish due to my schedule, but I took it on and pretty much failed about 50% of the time.  Not good and not fair, since I committed to handling the topic.  So looking back at the reasons I failed at this, I will optimize for 2012.

Here is what to (or not to) look forward to:

  1. Much more specific topics such as Cost Per Point, vGRP, and ad optimization tools
  2. Guest posts from industry thought leaders and not-so-well-known-but-amazing industry participants (reach out if you are interested)
  3. Sometimes short and sometimes lengthy posts but will certainly vary at length

I’m looking forward to this.  I have a bunch of posts already coming together in my head.  I’d love your feedback so feel free to reach out.

Content Creation

Over the summer, I wrote a post on kids & content consumption.  The post came about because I realized that many of the user generated videos that my 3-year old son was watching on YouTube (via his iPad) had over 6MM views on them. I was shocked that these videos accumulated so many views as it was simply kids and their parents playing with Thomas the Tank Engine trains.

Over the past month, when my son was asked what he wanted for the holidays, he mentioned a few toys that we’d not heard before.  After going thru his YouTube history, we realized that he had viewed short pieces of content put online by both big and small toy stores and manufacturers as marketing content.  He watched some of these videos many times and could now tell us all about them.

We are now in the middle of toilet training.  He’s good with his #1s, but is a bit shy about his #2s.  We promised him that we’d buy him any toy he wanted if he started going #2 on the potty (TMI, I know).  He asked for a very specific truck, one of which I said we can get from Toys R Us, but he quickly corrected me and told me it’s only available at Walmart.  He’s 3 years old.  He’s never been to Walmart (none in the area).

It’s a marketer’s dream.  Walmart had unaided recall from a 3 year old.  I’m long content creation over the next few years.