Tag Archives: display

Stuck In A Rut of Incremental Innovation

I have been in the digital media marketing ecosystem since its inception.  The first documented digital advertising was born as banners and buttons (1996) that lived on webpages.

Ad servers were built to deliver these banners.  Incrementally better ad servers were built to better serve these banners, video, and buttons.

Sites federated together to create ad networks.  Incrementally better ad networks were built around technologies such as contextual, behavioral, semantic, etc.

Boxes on websites were created to house advertisers’ creative.  These lead to banners.  Incrementally better banners were created that yielded rich media units.

Search engine marketing solutions were built to manage and optimize voluminous keyword lists.  Incrementally better SEM platforms now include Facebook buying

Lots of incremental-ism.  Being incrementally better sounds like a rat race.  Or the cold war.  I’m better today.  You’re better tomorrow.  Its a no-win game and becomes all about marketing and salesmanship where it should be about the product and performance.

So where is the 0-1 going to happen in this industry?

Maybe we focus so much on going from 1 to n because that’s easier to do. There’s little doubt that going from 0 to 1 is qualitatively different, and almost always harder, than copying something n times. And even trying to achieve vertical, 0 to 1 progress presents the challenge of exceptionalism; any founder or inventor doing something new must wonder: am I sane? Or am I crazy? (Blake Masters class notes of Peter Thiel CS183)

Its happening.   But it’s not overly obvious to all.

The social marketing space inclusive of content creation is unbelievably sloppy and inefficient right now, but I propose we will see tomorrows DoubleClick-like, Advertising.com-like and Google-like come out of the social landscape.

Why?  Because it’s fundamentally different.

There are no banners or buttons.  The way we’ve acted in the past is not the way we act in the future of this space.

Communication does not scale.  We need to re-think the way we communicate and participate in this space.  The role for earned and owned media becomes just as important as paid media.

The 0-1 innovation is going to come from the social places in ways we cannot imagine today (or some people already are).

 

* Note, I’m not down on paid media buying.  I’m all for it.  I work in it. It’s evolving quickly and there are some fantastic companies participating in the space.  But when looking out across the marketplace, and looking for disruption, this (s0cial) area is ripe.

 

 

 

 

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

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?

Display Ads Aren't Going Anywhere…

Mike Shields, a colleague of mine penned an article for Mediaweek entitled, Is the End Near for Display .  In this article, a few digital media directors and executives from advertising organizations talk about the death of display.

IMHO (these are my thoughts, not my employer), there are a few reasons why display ads aren’t going anywhere:

  • There is absolutely no replacement.  Engagement Mapping ?  We’re in stage 0.5 of a 10 stage game.  Not even close.  There is a lot of money being comitted here by major industry players, but we are far away from anything really substantial.  Additionally, engagement mapping will have to be adapted by the entire media planning and strategy team (and clients), similar to econometric/media mix modeling.
  • Publishers scale with IAB standard display ads.  Publishers need to make money today.  Not tomorrow.  IAB standard ad-units have dollars committed to them today and they have allowed digital media companies to grow and scale over the past dozen or so years.  Publishers both large and small have spent a lot of money designing their website to fit in the 300X250s and 728X90s (etc) and will continue to serve these ad impressions.  There are large networks created to back fill display inventory.  How many publishers are going to turn a blind eye?  I’ve been in talks with multiple large affluent publishers who say they do not participate on exchanges or networks… only to run my media and find out otherwise.  Dollars talk.
  • Client side :  How long did it take to understand the quantitative measures of today’s digital marketing?  CTR.  CPM.  CPC.   eCPM.  An agency can be as advanced as they want, but unless their clients understand, no headway will be made and the media plan will be based on what people understand.  How many people want to go out on a limb and lose their job?  Especially during these economic times.
  • Display ads :  To the contrary, when used correctly, they work.  In every industry, there needs to be a black swan and unfortunately, display ads play this roll.  Why?  Because it’s easy to blame the billions of ads that are served everyday – a scapegoat.  When creatives and marketers harness the interactive nature of what you can do with a display ad, then they will understand the power of them.  Creatives may feel constrained when limited to a 300X250 canvas, but once understood and harnessed, the world is their oyster.

I’ve sat in too many meetings where someone senior pontificates about how display ads are clicked only by mid-western housewives.  The entire room agrees and then they create a complex media plan only to get shot down by the client(s).  When the creatives, media, CRM, and everyone work together to make a display ad campaign work well and play with all of the other media channels, it could work extremely well.

I think the future of online advertising includes display.  It won’t be replaced.  Are new metrics and analytics being born each day?  Yes.  I love them.  The issue is until they are adopted by all industry constituents, they will remain in their own niche.

Online Ad Spending

Online Ad Spending

Here is what is interesting to me in the latest eMarketer report.

  • Search is declining after 2008.  Why?
  • Rich media/video is not one and the same.  Video is part of rich media but rich media is not solely video.  Display can also be rich media in my books…
  • Why does classified decrease?  Isn’t local all the rage?
  • If brand dollars are moving online, why are sponsorships declining?

Just some food for thought.