Category Archives: advertising

The Apprenticeship I Would Want

I received an email from an industry friend and fellow Silicon Alley Golf Invitational player who alerted me of the TubeMogul/IPG Apprenticeship program.  I’ve been living under a rock lately so I totally missed this when it first came out in early March but here is one of the pieces written up about the program.

I don’t have any more information than anyone else reading the websites but looks like you spend 6 months learning the ins/outs of TubeMogul and then the next 6 months learning the ins/outs of IPG, a very large and respected agency holding company with a nod towards advertising and media technologies.  I wonder if it’s paid?

This apprenticeship is fantastic.  Forget TubeMogul or IPG for a second.  Just think of spending 6 months at a leading video publisher and then 6 months on the agency side.  You will learn a lot.  This is the opportunity to get your footing in the right place, learn what you like/don’t like, and start to form an opinion in the ad tech industry.

So, if you’re not gainfully employed, graduating University or are looking to jump ship, you should check out this apprenticeship.  More here.

… and absolutely love the initial question re: LumaScape – place TubeMogul + IPG on the landscape.

Why I’m Bullish on Programmatic Media

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.

 

Intent Marketing

If you have been a regular reader of this blog then you know that I fairly frequently write about the use of “intent’ in marketing and advertising (see this post).  Google has shown us that harnessing intent will lead to good outcomes for advertisers.  When we initially started kbs+ Ventures, one of the investment thesis that we invested along was around finding additional intent online that could be used for marketers to drive measurable outcomes.  Taylor has a good post about intent here.

We continue to spend a lot of time thinking about intent at the agency.  While intent is generally harnessed at the lowest part of a purchase journey, there are plenty of pre-intent signals that pop up prior.  We frame the journey as follows:

Exploration -> Interest -> Intent -> Purchase

MediaPost was extremely kind to us by writing a piece this morning about a chart we put together to frame our thinking.  We use this chart internally at the agency to help people understand the current partners in the landscape and to present a framework for putting together media plans.   I welcome you to check it out and if you’re an entrepreneur who is focused on harvesting/creating intent, we’d love to chat with you.

Some Thoughts on SocialFlow, Our Latest Partnership

It was announced yesterday that SocialFlow raised $10MM in Series B funding and our kbs+ Ventures participated along with Fairhaven Capital (lead), Softbank, RRE, AOL Ventures, Betaworks, and Rand Capital.  We blogged about our perspective on why we participated on our corporate blog but I wanted to add a few notes here.

I have been tracking SocialFlow ever since I was introduced to Frank Speiser at an event at Nihal Mehta‘s apartment in January 2010.  After learning about what he was building and why, I quickly saw the opportunity to leverage the technology for marketers.  Later that year, Frank give a talk at The Media Kitchen‘s Digital Media Venture Capital Conference and I’ve stayed in touch since.

When we found out that SocialFlow was raising money and was looking for a strategic or two to participate, it was a no brainer for us because of the trends that we are seeing in the space.  I will explain those below.

1.  Evolution of Communications Architecture:  Way back when, the communications architecture generally consisted of Public Relations, Investor Relations and Paid Media.  While those three still exist today and are still going strong, we’ve now re-arranged the construct to be Paid/Owned/Earned media.  What you [as a brand] do and say in paid media can be made exponentially greater when you leverage owned and earned.

2.  Communications Velocity:  The speed in which communications hits the marketplace has increased rapidly.  I don’t know of a “law” such as what we have with transistors (Moore’s Law), but I have to imagine that the speed in which we communicate has increased so significantly that old media cannot keep up.  Within 15 seconds, I can put out 140 characters to my entire follower-base on Twitter, Facebook, Pinterest, Instagram, Vine, or whatever other communications tool.  When it was just print ads, television ads, or even radio, it took months… sometimes a year (inclusive of production)!

3.  Big Big Data:  Almost every digital platform we use exhausts some form of data trail.  This data trail can be collected, mined, and optimized into an opportunity or insight for a marketer (or any company for that matter).  With the explosion of digital communications, there is a ton of data that’s available to optimize from.  Making sense of this data thru frameworks, architectures, and algorithms, will allow marketers a leg up in the communication “wars” for customers.  Note: It’s not about the size of the data set, it’s about the insight that’s gleaned.

4.  The Shift of Dollars:  We have all seen the charts that show time spent with a media channel vs. advertising dollars and the gap that exists in digital is still large.  But it’s getting smaller, which means that ad dollars continue to flow into the digital landscape.

SocialFlow capitalizes on the four points above.  They are smack in the middle of all of this.  Many of the kbs+ Ventures portfolio companies also exhibit these traits (and others).

With our relationship with Frank, the evolved management team, and the market traction the company has, we were super excited to green light this investment.

 

 

The Rise of the Independent Agency

I spoke a few weeks ago at the Digiday Agency Summit.  My talk was in response to Jack Marshall’s original post on the End of the Indies, a post about how independent agencies were decreasing.  I wrote a post in response to Jack’s in July of this year and Digiday asked me to come and speak at their conference about it.

Here is the practice run of my speech.  The quality of image is terrible as this was my first time using screen capture but the voice over is fine.  Enjoy it.

Click here to watch the video on Vimeo:  Rise of the Independent Agency

If you are into agencies, advertising, career opportunities, and future of service and technologies, you might like this video.

Y Combinator Advertising Startups

Paul Graham clues all entrepreneurs in regarding different investment areas that they’d like to fund; thus, making his deal flow much more efficient. For entrepreneurs, this is a golden opportunity and for folks who are thinking about jumping into the startup world, these 30 ideas should get you thinking.

One of the ideas that I’d like to talk about is “Fix Advertising” as Paul calls it.

12. Fix advertising. Advertising could be made much better if it tried to please its audience, instead of treating them like victims who deserve x amount of abuse in return for whatever free site they’re getting. It doesn’t work anyway; audiences learn to tune out boring ads, no matter how loud they shout.

What we have now is basically print and TV advertising translated to the web. The right answer will probably look very different. It might not even seem like advertising, by current standards. So the way to approach this problem is probably to start over from scratch: to think what the goal of advertising is, and ask how to do that using the new ingredients technology gives us. Probably the new answers exist already, in some early form that will only later be recognized as the replacement for traditional advertising.

Is advertising broken? In order to fix something, that means it’s broken. Last time I checked, consumers are buying more products than ever. Advertising is certainly not broken. In my eyes, advertising needs to evolve and that’s what “fix advertising” should focus on. I believe that the next iteration of advertising is going to involve a wealth of data. I talk about it here. And here. Moving from assumptions to precise targeting is going to be very fruitful for all involved: the consumer and the advertiser.

Is it time to bring back Seth Goldstein’s startup, Root Markets? Consumer attention has value and should consumers control that?

Can an ad agency be the tipping point in a competitive battle?

CP+B

Good question… Crispin Porter + Bogusky, a cousin of the agency I work for (owned by the same holding company) certainly thinks so. In a recent Fast Company article entitled, “Can Alex Bogusky help Microsoft Beat Apple,” the author, Danielle Sacks, debates and discusses this topic.

“Crispin probably has one chance to do something big with Microsoft, and if it fails, I think all bets are off for the agency,” says Gartner analyst Frank. Crispin certainly knows the stakes are high. “From the outside, this looks like a strange marriage,” says Crispin partner Steinhour. Particularly since Crispin has been the Apple of ad agencies. Add up its knack for creating cultural phenomena instead of piggybacking on them, breaking industry rules only to have others follow, orchestrating mass PR stunts, and even turning brands into bullies without customers realizing they’re being bullied — you could equally be talking about Apple. The folks at Crispin like to give the impression that the Microsoft assignment is less about the money than about the thrill. “I think we’ve learned,” says Steinhour, “that when you take on these kinds of odd relationships with big companies that need a kick start, the motivation to overcome those suspicions is a lot of the fun.” But Crispin knows better than anyone that “fun” isn’t the metric for its clients. Noting that Burger King has had 16 straight quarters of growth since Crispin took on the account, Hicks says, “Your work is only as good as the performance of the brand and the business.”

I’m interested to see what CP+B does with Microsoft. I’m a huge Apple fan and hope that CP+B doesn’t do a good job (I’m biased), but I’m sure they are going to have some killer spots. Remember though, people love Apple for it’s emotion… I have no emotion for Microsoft. If this competition was like ice cream, Microsoft is like Haagen Das Vanilla, whereas, Apple is like Ben & Jerry’s Fish Food.

Last I checked though, Microsoft (mkt cap $268.32bln) was still beating Apple (mkt cap $164.07bln).  Apple had an extremely strong second quarter

Advertising Network Rates Declining

I subscribe to the MarketingCharts email newsletter and they reported that online advertising network rates are declining.  Below are some key statistics from the story but to read all the details, click here.

  • Across all websites, the range of eCPMs was $0.002 to $18.45.
  • Among verticals…
    • Social networking led the plunge with monetization dropping 47%, from 37 cents in March to 19 cents in April, below January lows of 22 cents.
    • Entertainment monetization dropped 17%, from 40 cents in March to 33 cents in April.
    • Gaming and Sports were down marginally (4% and 5%, respectively).
    • Technology remained relatively flat at 83 cents in April vs. 82 cents in March – but is still off January highs of 92 cents.
  • In April 2008, 77% of small websites garnered net publisher eCPMs from ad networks of under $1.00, compared with 95% of medium websites and 100% of large websites.

Additionally, check out PubMatic’s AdPrice Index.

Are You An 'Ad Avoider'?

Microsoft, Starcom, and Millward Brown just released the results to a study they did behind closed doors about people who deliberately avoid advertisements. Profiled by Mike Shields in today’s MediaWeek, he reveals the following:

The report, Lifestyles of the Ad Averse, found that between 10 percent and 15 percent of adults 17-35 fall into the category of “ad avoidersâ€? i.e. folks that don’t like advertising, and generally find it “annoying.â€?

The two companies, after conducting a series of intense interview and observation sessions with dozens of self-proclaimed avoiders in Denver and New York, discovered two types: passive avoiders who simply can’t be bothered with ads, and active avoiders, whose message to advertisers is “be good or be gone.â€?

The active group is more likely to be young, tech-savvy men who deliberately consume media that has no ads, like DVDs and satellite radio. The passive group is comprised of women, often parents, who gravitate to leisure activities that are untouched by ads, such as books or board games.

Both groups’ habits make them hard to reach by conventional means. Twelve percent of avoiders surveyed said they watch less than one hour of TV per week versus just 3 percent among non-avoiders. Both index low for listening to the radio and reading magazines. And technology like DVRs and the iPod is only making it easier for these avoiders to shun ads.

So the outcome of the study talks about what a brand should do to not be avoided…. and it’s to be more relevant, interactive, and custom to the environment. Microsoft spent money to find that out? hmmmm…

Information in the Digital Age

While laying in bed last night, I watched Fred Wilson‘s 18 minute keynote presentation at the Software and Information Industry Association 2007 Summit in New York City. The presentation covered topics ranging from whether there’s such a thing as proprietary data anymore, syndication and business models and the ever popular, how copy protection has largely failed.

This presentation made me think quite a bit about the many startups who are emerging that are looking to leverage content. We like to say that content is king but creating good sustainable content can be expensive and prohibitive (without the right tools). We have millions of prosumers (producers + consumers) who are contributing to sites like YouTube, MySpace, Flickr, and others that have created some form of content and are looking to distribute it. These produced videos are content and appeal to someone (or many folks) on the Internet. There are plenty of examples of this including Rocket Boom, WallStrip, LonelyGirl15, and others.

Back in 1998 I was spearheading a fairly large dot com and we had to watch our bandwidth and storage costs. We had to make sure that our pages didn’t just load fast, but they couldn’t be larger than a certain size so that we could control our costs. Most websites do not have to think about this but when you’re in the top 100, you certainly do, as the bandwidth bill may ring up higher than expected.

The marginal cost of distributing content online is almost $0. Bandwidth and storage are now commodities due to their falling prices. How can a company create a model around content where it’s essentially free? If you can get content from multiple sources (freely), how do you pick which source delivers it to you?

Services around the presentation and access to content are more important than ever. The winners in tomorrow’s gold rush understand this and are working hard to create a model around this. Look at Flickr, a site that doesn’t create content, but rather, leverages content created elsewhere and builds upon it. Another fantastic example is Haystack.com, a site that starts at the core with music, but then adds layers on top of it including tour photos, videos, user created content, and many other sticky options for users.

Since content essentially is becoming free, Wilson argues that the money is in attention. How do you leverage attention? If you are involved in marketing strategy, your job is going to become much more important. The maximum mindshare that a person has is 100%. How can you vie for mindshare of that person for your content? Time to get creative. It’s not so much about the product/service itself anymore, but about what it offers you at a particular moment in time. I believe that if the money is in attention and content is essentially free, our marketplace will become much more efficient.

Why will it become more efficient? We can only consume so much content per day, so eventually, the content that we do choose to consume must grab our attention quicker and more transparently. Once this happens, we are able to consume more content because of the efficiencies.

As example of this is Kayak.com. If I’m searching for a flight to Las Vegas, I do not want to have to check the websites of JetBlue, Delta, American, United, etc – but I’d rather check all of the sites at one time. In less time, I can check Kayak.com, get price quotes and book my tickets potentially cheaper than if I went and searched through each one of the above sites. I can cut my time down dramatically, essentially creating an efficiency. Does this mean that all meta-search engines will be the next hot area? Possibly – but anything that will become the next hot area will have a fantastically designed user interface and will be transparent.

To view Fred Wilson’s speech, check out the link here.