Category Archives: Startup & Venture Capital

Measuring Integrated Advertising

I have a lot of respect for Mark Suster, an entrepreneur who turned venture capitalist and now is investing out of GRP Partners.  He writes a terrific blog called Both Sides of the Table and his posts are picked up on TechCrunch and other major outlets.

He recently wrote a declarative post called The Future of Advertising Will be Integrated.  The post went up on April 29th but I’ve been noodling it ever since. Due to some personal obligations, I’ve not been able to respond, but finally, here it is.

As an entrepreneur turned ad agency guy, when I hear the word “integrated,” I immediately think media and creative under one roof, such as my firm, kirshenbaum bond senecal + partners.  I personally believe this is really the only way to go if you want to get to a big platform.  With media and creative all under one roof, under one P&L, and with a cohesive team, you can create big ideas that know no creative or media boundaries.

We have a saying internally at the agency, E=(MC)2, which is obviously repurposed, but it means a “[brand] experience” is exponentially greater when media and creative work together.

Enough agency speak for now but keep this last sentence in the back of your mind as you read the rest.  I hope you do.

Mark came at his post a bit differently and took the above tenants, whether he realized or not, and applied them to the digital media ecosystem today.  He highlighted a few companies such as my buddy Ari’s company, Solve Media, along with Adly and Kontera (amongst others).  The creative is the media in most of these, along with the media being the creative.  I’d argue Paid Search links play here as well.

The Elephant in the Room

One of the largest issues that the digital advertising ecosystem faces today is that we as an entire industry, are not setup to measure the “integrated” nature effectively. Because of this, at scale, this is not a near term reality.  There, I said it.  The elephant is in the room.

The digital advertising ecosystem by default rewards the intent harvesters, not the intent generators.  The primary reason why is that many agencies and marketers are using 3rd party ad serving systems that reward the last click or last action.  In the world of rewarding the last click or action, generally, the ad networks are the ones who win out.  There are 400 (or 700 depending on who you talk to) or so ad networks in the world who have nice businesses.  Just look at ValueClick or InterClick’s financial statements as they are public.  Not too bad.

THE Digital Opportunity

Because of the above, therein lies an opportunity.  If we believe what Mark wrote last week and I’ve been saying for years, then an opportunity lies in being able to create a measurement platform that allows us to understand intent harvesting and intent generation/creation. Piecing together a DART (3rd party ad server) report with a ComScore or Knowledge Networks study is inefficient and frankly, annoying.   There needs to be an evolution here.  This is a big opportunity.

Where We Are Today

Many readers of this blog don’t work in advertising agencies but are awesome entrepreneurs looking to figure out the next big idea to go and tackle.  Being that you are not in the walls of agencies on the daily basis, I thought I’d take the remainder of this post to outline where the industry is in terms of advanced analytics and then open this up for commenting in the thread below.

I highly request that you engage in the comments as group knowledge will benefit the community at large, you might find your next co-founder, and I love open conversations.

Ad Serving:  The Madison Avenue ecosystem basically uses one of three third party ad servers to “serve” and “track” different pieces of creative.  We use Microsoft’s Atlas, DoubleClick’s DART, and MediaMind.  In Q1 2011, we moved the majority of our clients off of Atlas and onto MediaMind because I personally have a strong viewpoint of independence of my ad-server and it’s relationship to media. (should be separate)

Data Warehousing:  This is a relatively new area and somewhat unchartered territory for many agencies.  Many agencies rely on their third party ad-server to be their main data warehouse for tracking. This is good, as you’d be surprised how many people don’t use a 3rd party ad server, but this is not great. Using a full on data warehouse such as VisualIQ, Neteeza, Artemis, or others allows for a larger capability to manipulate data and understand the relationships between touchpoints beyond “last click.”

At the agency, we’ve been using VisualIQ with some of our most progressive clients and the reports and results we’re seeing are fascinating.  One of the biggest questions we’re tackling is “optimal touchpoint analysis” and we’re seeing the relationships between display, video, search, social, and beyond.  We can now determine a value to each one.

Brand Lift Studies:  While I’ve argued time and time again, that “brand” advertising for the sake of brand advertising online is dead, many marketers continue just spending on “brand.”  Agencies use 3rd party brand study vendors such as ComScore, Knowledge Networks, Vizu, and others that help measure the “lift” (or change) associated in any one of many categories including but not limited to awareness, intent, and consideration.


·     The basic ideas behind today’s ad serving systems were conceptualized in the mid to late 1990s.  Online video, social, search, etc were not around then.

·     Product placement and integration into online video and social are hard to quantitatively measure with a 3rd party ad serving system as the only metrics you can pull back to your ad server are by using a click-tag.

·     The Display ecosystem is being fractured into traditional display (i.e. banners on ESPN) and social display (i.e. creative/textual units on Facebook, LinkedIn, etc).

·     I see Paid Search and Display converging on each other within the next 12 months. In some cases, they already are: Google Content Network.

·     I challenge you to ask your 3rd party ad-serving vendor to recommend an attribution model – report back what they tell you.  Not much – there is no standard yet.  It’s unchartered territory.

Next Steps

I would obviously love to hear your feedback.  Please post it in the comments section below or shoot me a note.  I believe that we won’t see large integrated opportunities that get their portion of the measurement/attribution credit until there is a way to measure these.  While we might try one or two of these integrated opportunities on each media plan, if you ask the agency how they really performed, the agency won’t have much to tell you because the tools for measurement are ancient.  With the data warehouses mentioned above, we get much better, but not perfect.

While we don’t need perfect to make the industry move forward, we do need better tools.  If you are building them, I’d like to speak to you.

The Uber Experience

I used Uber, the brand new on-demand upscale car service 2 times this past weekend in New York City.  I downloaded the iPhone app, installed it and had a car picking me up at my apartment within 10 minutes.   All in all, I loved the whole experience and would certainly use it again.

What I’d change:

  • The app lacks any information around support.  I thought I had made a few mistakes and there wasn’t an email address or phone number to call to discuss it.
  • Trying to find the driver can be difficult.  The client should be at least given the license plate of the driver or the car should have an uber sticker on it.   I had trouble trying to figure out which driver was mine as I was waiting outside of a venue that had many town cars picking up people.
  • I tried requesting the Uber cars at 7:30 on Sunday morning – there were no Ubers available but the app didn’t explicitly come out and say that.  It used cute wording but actually didn’t tell me that there were no cabs available that early.

I spoke with both of my NYC Uber drivers and they mentioned that it’s been going well for them over the past 2 weeks.  Saul, my late night driver on Saturday had said he did 10-12 different Uber trips that day.  Not bad…

NYC has tons of car services, yellow taxis and a decent mass transit system so I’m curious to see how well Uber does.  As a consumer, I enjoyed it, and would use it again, but for work, I already have a car service that our organization uses, so this would have to be a consumer transportation choice for me.

Controling Your Image

All too often, Startups get compared to other startups.  Spacely Sprockets is Foursquare meets Yelp.  Widgetsly is Appnexus meets Legolas.  Usually, startups don’t pick who they are compared to as it’s up to the writers or editors of whoever is writing the press piece.

I was recently chatting with Chris Dixon, the CEO/founder of Hunch and angel investor in over 70+ companies, and he said something that really stuck with me.  I’m going to paraphrase here but he said something along the lines of, “when you are designing a product and crafting the positioning and messaging strategy, you need to keep the above in mind so that you, as the startup, controls who you get compared to.  If that means making your interface more like one company so you can be compared to them, that’s what you should do.”

Remember, once you contact the media to talk about your startup, the story is out of your hands and in someone else’s.

Of Acceleration, Inspiration Spaces, and Funds: 2011 TMK Digital Media VC Conference

One of the areas that I focus on is bridging Madison Avenue with Silicon Alley/Valley.  I think it’s unbelievably important for the future growth of both ecosystems.

At The Media Kitchen, in 2008, we launched our first Digital Media Venture Capital Conference.  We haven’t looked back since and we’re going on our 4th year of doing this.  We’ve had venture firms such as Union Square Ventures, First Round Capital, DFJ Gotham, Spark Capital, Betaworks (not a full VC firm), and IA Ventures present in the past with a wealth of CEOs and founders from amazing startups including but not limited to Meetup, 33 Across, AppNexus, Pinch Media, Izea, ContextWeb, DoubleVerify, Boxee, 5Min, TargetSpot, ChartBeat,, Zenetics, Metamarkets, FourSquare, GetGlue, Tumblr, and Twitter.  Here’s a link to my post from our 2008 conference.

This year, we’re changing it up a bit and not focusing 100% on Venture Capital funds, but around the ecosystem that surrounds entrepreneurship.  I think this is very important to present because the more people that we inspire about the surrounding ecosystem of entrepreneurship, the more people will feel comfortable with the possibilities of innovation.

We’re holding our TMK Digital Media Venture Capital Conference entitled, Accelerators, Inspiration Spaces, and Startups on May 17, 2011 here in New York City.  I have the ability to give 5 lucky readers of this post admission to the event which will be from 8;15am-12:30pm.  It’ll be an intimate group  of <150 awesome people.

If you are interested in attending and want to come, please reach out using this form with 1-2 sentences of why.  I’d love to give the right people the opportunity to be here to mingle with our entire agency, our clients, and our friends from the entrepreneurial world.

Day 4: Advertising Revenue for Startups

This post is part of a 5 day series where we lay the groundwork for a startup to generate advertising dollars from agencies or brands.  Note:  while this is focused on startups, it could apply to any company of any size.  The first post that sets up the series is located here, second post is located here, third post is here, and it’s based on this presentation.

If you are a publisher and you are looking to generate revenue from advertising, then read this series.

Today’s topic is on the evolution of the paid online advertising ecosystem.   Essentially, where do you (as publisher) plug in to generate revenue from myriad of sources.  Lets tackle them one by one.

On slide 11 of the presentation, it highlights 5 different areas:  Sell Side Optimizers/Platforms, Ad Networks, Google, Ad Exchanges, and DSP Integrations.

  1. Ad Networks:  As a publisher, you could contact any ad network and try and have them represent your website.  Depending on how large you are or how much publicity you have around your brand, you could potentially negotiate for better revenue spits, monthly guarantees, and potentially advance payments.   Ad Networks sometimes want exclusivity but as a publisher, make sure you get better deal terms if you agree to it.  Ad Networks are a quick way to make a few bucks with your inventory, though as an agency person, I don’t love ad networks.
  2. Google:  Technically, Google is a network and exchange, but I pull them out to their own line item because they are such a beast.  Many publishers love Google because of the simplicity around Ad Sense/Ad Words.   You could be up and running accepting Google ads within 24 hours.  Google if not already, is going to mix their search and exchange inventory to yield the highest amount to a publisher (and thus, net a high yield themselves).
  3. Ad Exchanges:  As a publisher, you can allocate all or a portion of your inventory to ad exchanges such as Ad Meld (MeldX), Right Media, Google AdX, AppNexus, ContextWeb, and a host of other platforms.  By doing so, you are opening up your inventory to be bid on by the demand side.  It’s similar to an eBay auction – where in real-time (or near real time), impressions are transacted and ads are run.  It’s rather simple to participate in this, but it’s not as simple to master it without any knowledge of the space.  Luckily, there are people like PubGears who can help you navigate it (disclosure:  I’m an advisor).
  4. Demand Side Platforms:  If you want to try and be as close as possible to the big agency dollars, then integrating with a DSP directly might be the best way to go.  While hard to get on their radar screen if you are extremely early stage and without much inventory, DSP’s are aligning themselves as close to the client dollar as possible and 2011/12 is going to be the year of direct integrations for publishers with DSP’s, bypassing intermediaries such as Exchanges.
  5. Supply Side Optimizer:  Not all above is mutually exclusive.  As a publisher, you can implement a SSO/P and plug into all of the above and have it maximize your yield.   There are a few players in this space such as Rubicon, Pubmatic, Admeld, YieldX, that all plug in and allow for yield optimization across your creative units.

All of the above opportunities are for standardized units.  These include the IAB and OPA standardizated creative.  Slide 12 & 13 talk about how you need to add data to your impressions to make them of real value to advertisers.  There are billions of impressions so how do you make them stand out… that’s by adding as much data around them as possible for advertisers to understand and buy.  This is key… otherwise, you’ll be selling your impressions for <$1.00

Stay tuned for the next Advertising Revenue for Startups post on my overall thoughts on the business and where I would start.  It’ll be the last writeup in this series.  I hope it’s been helpful.

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Advertising For Startups: Does Size Matter for an Online Publisher?

This post is part of a 5 day series where we lay the groundwork for a startup to generate advertising dollars from agencies or brands.  Note:  while this is focused on startups, it could apply to any company of any size.  The first post that sets up the series is located here, second post is located here, and it’s based on this presentation.

Today’s topic is Does Size Matter?

If you are a startup or a publisher, you generally often wonder at what point can you go out selling advertising against your userbase.  Does the size of your userbase matter?

Historically, size mattered.  You needed significant size because you generally couldn’t target specific audiences so you had to sell the entire media vehicle and account for wastage.   With digital targeting, specifically audience driven media, you can now target with serious granularity.  While significant targeting delivers your audience segment, the numbers are typically much smaller than a large site-direct or ad network buy, because you are just reaching a specific user base.  For publishers who are still early in development but have a vertical or niche site, then you can begin selling ASAP because even 50,000 people who are into Ferrari’s and have $5,000,000 disposable net worth are seriously worth something to someone.  If you have a way to package your audience segments, then start selling.  You don’t need to wait until you reach 100,000,000 users to generate advertising dollars.  Implement an Audience Management Platform and you’ll be on your way.

If you have a general site (i.e. portal, aggregator, etc) and can’t really segment your users, then it might be hard to sell against until you have substantial visits.

The question comes up often about what types of creative units you should accept…   Start with the IAB Standard units because they are the most common.  Any major agency is going to create using the IAB standard package and then add custom units on top of it.  If you start here with implementing the 300X250, 160X600, etc – then you can fill those units.  Just last week, the IAB released some Rising Star units which are pretty interesting as well.

If you have unique/custom units, then these are harder to sell because agencies have to create custom creative for it (production fee implications).  Unless you have substantial size and buzz, it’s hard to sell custom units (not impossible).

On Monday, we’ll discuss the evolution of the pad online ecosystem consisting of Ad Networks, Exchanges, Site Direct, Private Exchanges, etc.  It’s a topic I love and am excited to write about it.

Advertising for Startups: Day 2

This post is part of a 5 day series where we lay the groundwork for a startup to generate advertising dollars from agencies or brands.  Note:  while this is focused on startups, it could apply to any company of any size.  The first post that sets up the series is located here and it’s based on this presentationDay 1 post is here.

Today’s topic:  Where do I start?

As a startup looking to generate advertising revenue, you have a few options on how to ramp up your initial revenue.  Keeping it simple, you can hire your own internal sales staff, outsource to a rep firm, or integrate with ad networks and exchanges.  Depending on which you choose, you will end up keeping a larger percentage of the dollars (your own sales team being the ultimate).

Based on slide 5 of the presentation, hiring your own sales staff generally proves to allow the start-up to keep the highest amount of gross revenue but isn’t the simplest to setup.  Hiring your initial sales person is one of the most important jobs you can fill at your organization.  All too often, I see startups using their first “sales” hire as a Chief Revenue Officer or SVP, Sales.  I generally am against those initial hires and would rather put someone inside of the startup who isn’t afraid to roll up their sleeves and has 3-5 years of experience within a competitive or tangentially related organization.  This way, you leave open a very senior role to fill after you’ve gotten your feet wet with your initial sales… which should impact what your senior sales job descriptions are.

Outsourcing your sales to a rep firm is an interesting option as well.  I’m generally not for this as no one knows your product better than you do, but this has worked for certain companies.  I’ve heard that Living Social is working with AppSavvy in this type of setup.  As agency person, I’m not a big fan of this because an outsourced sales rep or firm is generally working with a few different companies and when they come in and meet us, they are basically trying to sell us on everything and not everything is relevant.  It can work however.  Depending on how you structure your deal, you might pay an outsourced representative a monthly fee + commission or straight commission only.  What’s worked well for me in the past is to hire an outsourced rep in an area of the country that I didn’t have a direct sales force in.  There are quite a few reps in Detroit – as much of the automotive budgets are siloed up there because of the auto industry and these reps have great relationships.

Lastly, you can work with ad networks and ad exchanges if you have standardized units.  This is probably the easiest way to turn on the revenue spigot since it’s passive selling and there are other companies out there purchasing your inventory without any work on your part.  You can get fancy with how you optimize your networks and exchanges with SSP’s (or supply side platforms such as Rubicon, Admeld, Pubmatic, and PubGears, amongst others).  Sometimes, ad networks will guarantee you a floor in which they will sell against and potentially provide you a guarantee payment depending on how popular your startup is.  As a startup, you can use this to your benefit by shopping around to multiple ad networks or SSP’s and seeing which want your business the most by the amount of guarantee they give.  Overall, I’m not bullish on ad networks, but as a startup, they can generate some dollars for publishers generally off of the bat.

Note:  the easiest ad units to sell that have scale behind them are IAB standardized units.  While not the most unique or custom, billions of dollars are transacted in them each year and their performance is going up based on all the targeting data.  More on the data side later in the week.


Anytime there is a middleman in the middle of the advertising dollar and ultimate publisher, there is friction in the ecosystem.  The friction represents a rep, network, exchange, or some other intermediary.  To most, friction is bad, but to startups, I think most can put up with some in the short to medium term.  The rationale for this is because friction allows startups to focus… having someone else handle non-core work allows the core team to focus on what they do best:  build a product, vision, etc.  When the revenue becomes significant or it’s time in the startups life to build a larger team (Series A funding, etc), then one can remove friction.

To recap, friction is a tradeoff to focus.

To recap, we covered slides 5-8 of the presentation.

I hope you found this insightful.  We’ll focus on on “size” tomorrow.

Advertising For Startups: Day 1

This post is part of a 5 day series where we lay the groundwork for a startup to generate advertising dollars from agencies or brands.  Note:  while this is focused on startups, it could apply to any company of any size.  The first post that sets up the series is located here and it’s based on this presentation.

Day 1:  Understanding the ecosystem of ad technologies and the two ways to approach agencies for ad dollars

The advertising technology ecosystem is very complex.  If you’ve never seen the Luma Partners (Terry Kawaja) slide, then I highly recommend you print it out and study it as it’s used pretty much by all the bankers, vcs, and industry folks as it’s one of the most comprehensive.  But how do you navigate this?  How do you understand the differences between demand side platforms, trading desks, sell side platforms, data management platforms, audience extension partners, search re-targeting partners, etc?

Luckily, you do not have to… at least for now.

If you are a startup who is looking to generate advertising dollars, you basically have to make a choice around what types of units to offer.  If they are IAB/OPA standard units, then recognizing revenue immediately shouldn’t be too much of an issue as the industry is built to scale quickly there.  If you are building unique units that are proprietary to yourselves, then this is OK too, but you’ll have a harder time finding your first couple of advertisers because you’ll need to educate the industry based on these units.  More on this in forthcoming days.

Whether or not you use ad technologies now, you need to at least understand that you will need to know it in the future.  You can staff up around it or outsource it eventually.  Again, it’ll be covered in a day or two’s post.

2 Ways to Approach an Agency

Historically, there was really one way to approach an agency.  It was by picking up the phone and calling and arranging a meeting.  You’d meet in person, present your wares, and if lucky, you’d be brought back and become RFI/RFP’d.  From there, you’d potentially make the media plan and all would be rosey.

Now, there’s a whole other way to make it into the agency and that’s thru the agency trading desk/demand side platform.  By doing this, you now have access to a smaller amount of money that you can get from calling the agency, but it’s growing significantly and will become the advanced media buying way for standardized units.  In just 3 years, over $200MM is spent via trading desks of major agencies and it’s probably increasing at a significant rate.  Instead of a typical sales rep calling on the trading desk, it’s much more of a business development conversation with technical integration.  Varick Media, Cadreon, VivaKi, Dataxu, Accuen and others are the major respective trading desks.

Remember though, an unhappy client can’t call a server or algorithm and have it apologize.  It will always take people to manage and oversee these campaigns.

Tomorrow, we’ll discuss where to start:  do you hire a rep firm, outsource to an ad network, or sell media directly.    Very timely as Mashable just separated from Federated Media.

Clams, Benjamins, Beans, Dollars. Your Startup Sells Ad Space, Read On…

I created a presentation about 6 months ago for a talk at the Founders Institute.  The talk was about 5 things to do/know when looking at generating advertising revenue from your startup.  I’ve personally been in a unique position to talk about this as I’ve run startups that take ad dollars from brands and I’m now on the agency side divvying up ad dollars to all different partners, including startups.  I can talk credibly from both sides of the table.

I was asked to give a presentation to the New York class of Techstars entrepreneurs and revisited the presentation I gave to Founders Institute and made some tweaks.  The presentation is divided up into 5 sections, each of which I will spend the next 5 days discussing each section in depth.  Hopefully you all find this interesting and if there are additional questions, do not hesitate to follow up with me or leave comments.

The presentation is linked to here and this will be what I’ll be going off of as I go deep into each section.  Please view it before continuing as my posts will make a lot more sense.  Note:  the presentation is a “speaking” presentation in the sense that I do much of it justice with voice overs… but you’ll get the idea as you go thru it.

Ad Revenue for Startups

Tomorrow morning’s topic:  advertising ecosystem overview & the two ways to talk to agencies (slides 1-4 including title slide)

If there is anything you specifically want to hear about, please do not hesitate to ask.

Experience Platforms Powered by Technology

Read my previous post for a good preface to this one as it’ll help with the understanding.

The 80/20 rule for products are that 20% of the product users will be vocal and you won’t here from the other 80%.  Sometimes, this is more like 95/5.

I’m going to liberally stretch this to be 80% of the owners of products don’t really care how they are built but want the product benefits.  20% of the product owners are the passionistas and want to know everything about them.

Example:  Porsche just launched the Panamera 4S Hybrid.  The Porsche forums (on line) are having serious chatter around this car – both the good and bad, but the majority of people will never see this chatter nor really care about it.  80% of Porsche buyers (maybe more) don’t care how the engine works or which hybrid system it employs, they want to drive the car from point A to B and have a great experience doing it.

This is very important for the world of digital media and technology, especially if you are building consumer applications.  Let me explain.

As more and more people come access the Internet across the world, the digital passionistas who care about every technological nuance become less and less (diluted by the growth of the Internet).  As this happens, the experience of the application of the technology needs to be more powerful than the actual technology itself.  Again, please reference yesterday’s post for more on this.

Clay Shirky says it very well:  Once the technology have sunk deep enough in the culture, the social effects built upon the technology require the technology but aren’t about the technology

One of the questions I ponder which is relevant to this is that IF the web is less and less about the technology and more about experiences, then how sustainable is any one experience when humans are naturally curious and are always on the lookout for additional experiences.  Should companies on the web craft multiple experiences for consumers under different brands and connect them together?  Think of the assets AOL has, this could be interesting.  It’s not just about any one brand any more.

Another example:  I like to vacation with my family.  While we were in Aruba a year or two ago, we had an amazing time.  Have we been back?  Nope.  We’ve picked other countries and states to visit because the world is so vast and we want to experience so much of it.

Back in December 2010, I wrote a post entitled, I Don’t Want to be Monogomous.  The post talked about how I’d like to experience other phones and access devices but I’m locked into one mobile contract for one particular phone (iPhone 4).  These types of experiences are extremely limited and might do more harm than good to consumers in the long run.

To get back to the general thesis of this post, we’re seeing big bets made recently in what I like to call “experience platforms powered by technology.”  It’s not the technology itself that’s special, but rather the experiences that are built on top of the technology.  I explain the Twitter ecosystem here and why it’s special.  Facebook is fascinating too.  Quora – unless it opens up to be a platform that provides value creation for more than one business entity, it’s not that fascinating as a platform.

In a world where digital is going to penetrate most of our media vehicles, crafting the user interface and experience (overall presentation layer) is going to be of utmost importance.  Differentiating on features isn’t going to win, but differentiating on the experience that these features deliver is going to create lasting power with consumers.  At kbs+p Ventures, this is one of our major thesis and we are on the look out of awesome innovators in this area.

This post is all over the place, apologies for the rambling!