Tag Archives: facebook

Some big hairy questions for advertising and marketing technology

It’s an exciting time for the advertising and marketing technology world.  WPP recently acquired up to 25% of Appnexus, Millennial Media just acquired Nexage, and Mozilla recently announced it was entering the advertising landscape (self promotion, I know).

I’ve participated in this ecosystem for a while now and have some big hairy questions for us all going forward.  I think we should spend some time trying to think these questions through as an industry because we are all going to face it them.

What happens when we have five closed ecosystems?

You know, Google, Amazon, Apple, Baidu and Facebook.  These companies are large enough to become “first party” and could redefine the advertising landscape.  What happens to everyone else?  How is measurement accomplished for agencies and advertisers when 3rd party isn’t allowed?

Advertising buyers haven’t thought of the browser much, but they will play an increasingly important role

Back on the agency side, I didn’t see many line items on our media plans specifically for Safari, Internet Explorer, Chrome, Opera or Firefox but these might play a role moving forward.  Default blocking of cookies, add-ons like AdBlock Plus, and others are impacting ad delivery and targeting.

At large, users are just not in control of their advertising experiences

I spend a lot of time meeting with advertising and marketing technology companies in our sector and I just don’t see the inclusion of user permission/control within the innovation.  Imagine what the results would be if users actually were part of the process around making available the data they wanted marketers to react to.

The display category is much bigger than it was 4 years ago but are we setup to measure it?

Every couple of months a new ad unit is released and every few years, a new medium is created.  Display media has evolved across mediums and units and is at an all-time high; and tomorrow, it’ll be even higher.  Using some quick examples, we have display on Twitter, Pinterest, Firefox, Instagram, Snapchat, and Flipboard… all of which units didn’t exist 1,000 days ago.

We are entering a new wave of marketing and we’re buying the wrong metric

Reach and frequency are the wrong metrics for moving forward but they were the right metrics for yesterdays media buying.  I believe we’re entering the Intention Economy (stolen from Doc Searls) where “intention holders” will be able to make spot markets and evolve the advertising equation.  Why not?  Why not.  Technology has evolved and we’re starting to see the early infrastructure of this existing across Facebook and Uber.

Agencies will exist, they are just setup wrong for the future

One of the more popular questions that gets asked is whether or not agencies will exist in the future… and I certainly believe they will.  Relationships are super important and managed service is not going away.  However, agencies will change and morph.  If we move into the “intention economy” and we have “intention holders,” who becomes the agency for the user?  Who is the user agency?

These are just some of the questions that I’m thinking about – and are part of my industry breakfast conversations.   I hope you are thinking about them too as they are going to impact the next five to ten years of our industry.

Rethinking the 30 Second Spot

When I joined the agency world, Joseph Jaffe had just come out with Life After The 30-Second Spot but I doubt Jaffe realized that the new spot, if digital media has its way, is 6 or 15 seconds.

I came across an article recently on NPR about how Vine conceived the 6 second spot and it’s pretty much what you would expect:

“One day we did wake up and say, six seconds,” Hofmann joked. Well, one day after many days of experimentation.

He and the other co-founders tried various lengths — 10 seconds, nine, five. And five seconds wasn’t long enough.

“It was actually too short,” he says. Six seconds allowed for the aesthetic feel the creators wanted but preserved the quickness they wanted to promise users. The limit allowed the average person to easily share and make a video on his smartphone.

With 15 seconds of video on Instagram and 6 seconds of video on Vine, it’s at least 50% less length than a traditional 30 second spot.  These shorter videos are a near-perfect snack for consumer generated content.  Anyone with a smartphone can create and upload a fun clip and syndicate it out to Twitter/Vine and Facebook/Instagram with ease… and instant audience attention.

After spending time with entrepreneurs who are building everything from video servers for social media to creative directors executing multi-screen video briefs from Fortune 500 clients, one question that I have been thinking about is whether brands at scale will really start creating professionally produced shorter form content?  If an Instagram video is [at max] 15 seconds, then a pre-roll* for the platform must be no longer than 10 seconds to make sense.  Imagine a 3 second pre-roll.  Can you storytell in 3 seconds?

You might not have a choice.

In advertising, dollars flow to where eyeballs go.  There’s a bit more to that but if eyeballs are heading to Twitter and Facebook at scale, which they are, then brands and their respective agencies need to understand how to leverage these platforms for communicating and interacting with their audiences.

Retooling the creative brief, process and craft to deliver more punch in less time is going to be completely necessary.  It’s going to be interesting to watch how Twitter interacts with brands and how much of the creative process they bring in-house versus relying on their ecosystem partners.

Anytime you are on the cutting edge of innovation, you need to offer services and support to your clients to onramp them to execute on the edge.  Twitter did this in the very beginning with celebrities, basically offering a VIP management team to help increase the Tweets coming from celebrity influencers.  Think of this as a form of managed services.

This next evolution of video in digital media is going to be really fascinating to participate in.  Will Costolo and Zuckerberg force the redefinition of the 30-second spot?

 

* Preroll:  I used preroll video as an example of how advertisers are surrounding video content online.  Very similar to a commercial on television.  I am not arguing that preroll is the most effective way of doing video advertising, but rather, using it because it’s the most scaled way of doing video advertising.

Constantly Changing Ad Products Does Not Help Adoption

For good or for bad, Madison Avenue takes a little bit of time to adopt new features and services en-mass.  Dollars flow into ad units and products once there is a comfort level with them.  Yes, sure we’ll buy the one-off sponsorship or launch that costs a couple million bucks, but beyond that, we probably won’t be back for repeat business.

But your investors and the street want and expect repeat business.  Recurring revenue.  Having a new ad product launch each month and getting a launch advertising sponsor each time dilutes over time.

Constantly changing your ad strategy actually hurts, IMHO.  It takes time for creative and media folks to ramp up knowledge of ad unit specifications and availability – and if they are ever changing, then we do not have enough time to do each unit justice.

I agree consumers like new things.  And brands like being fresh.  And in this whole world of digitally delivered content, being new and fresh is the whole point.

But for a publisher or platform, please be consistent with your offerings.  Don’t keep sunsetting what we’ve gotten good at buying and executing against.  Introducing new ad products every 6 weeks and wondering why others are not getting adoption isn’t rocket science.

This post was in reaction to this piece re: Facebook.

These 6 Companies Controlled 55% of Worldwide Digital Ad Spend in 2012

When I have spare time, I like reading public companies financial reports.  They are very telling not just for the micro trends, but for macro trends as well.  55% of worldwide digital ad spending was consolidated to Google, Yahoo!, Microsoft, Facebook, Amazon, and AOL which according to Comscore, are the 6 top Internet sites by traffic volume.

I am working off the GroupM $113.5B worldwide digital ad spending number from a recent AdExchanger article.  All other numbers come from Lara’s research of these companies Form-10k‘s.

Ad Spend Chart

I ran a similar report in 2011 which is located here.  Read it so you can compare.

Google’s growth is terrific and Yahoo! took a step back in 2013.  I’m always amazed to see Google dominating digital ad spend with 41% share whereas the next closest competitor is around 4%.  That’s 10x.  10x!

Nice to see Amazon and Facebook building out their ad businesses and showing y/y growth but the larger question is of where is it coming from?  Who is losing (or is the whole advertising pie getting larger)?

 

 

 

Facebook, Ad Servers, and $344B in Media

There is $344B in media* market cap that own and operate ad serving systems now.  

Google acquired DoubleClick ($274B mkt cap), AOL acquired AdTech ($2.86B mkt cap), and Facebook acquired Atlas ($65.4B mkt cap).  ValueClick owns MOJO and retained Mediaplex ad-server ($2.05B mkt cap).

When we think about ad servers for Madison Avenue, our guts tell us DART and Atlas**.   Both of these two ad serving solutions are now owned by larger-than-life media platforms.  MediaMind, the challenger of ad serving solutions is making inroads across Madison Avenue and believe it or not, has surpassed Atlas as the number two platform.***

Having heard the speculation turned news recently about Facebook acquiring Atlas and reading Gokul’s post on AdExchanger, I still do not understand why they did this acquisition unless Facebook thinks they can convince Madison Avenue to use them as their 3rd party ad serving tool of record.

My question to Madison Avenue:  Wouldn’t you want an impartial 3rd party to be your ad serving tool?  Why would you rely on a media property who is going to make more money off media than ad serving to deliver you your attribution models?

And with this, I’m not saying Google is any better.  It’s a big reason why the majority of our clients are not on the DART ad server.

In the finance world, there is significant rules around proprietary trading (prop desk) and analyst/research work.  The two basically do not intermingle and in the recent laws, the two might have to split.   This is FINRA rule 5280.

(a) No member shall establish, increase, decrease or liquidate an inventory position in a security or a derivative of such security based on non-public advance knowledge of the content or timing of a research report in that security.
(b) A member must establish, maintain and enforce policies and procedures reasonably designed to restrict or limit the information flow between research department personnel, or other persons with knowledge of the content or timing of a research report, and trading department personnel, so as to prevent trading department personnel from utilizing non-public advance knowledge of the issuance or content of a research report for the benefit of the member or any other person.

I understand that advertising is not finance, but wouldn’t we take clues from a more robust industry?

If you are a marketer or agency and put all your media plan data in a company who is selling you millions of dollars of advertising media, don’t you think that the data will be used against you?

Here is an example, purely from illustrious purposes:
Property A – $6/cpm $3/cpa
Property B – $8/cpm $3.50/cpa
Property C – $7.75/cpm $3.40/cpa

Imagine the three properties above have their data in an ad server controlled by Google, AOL, ValueClick, and now, Facebook.

When you go to purchase media from any of these four properties, they can see what you are currently paying and what the actual performance is.

This gives these media platforms a significant leg up on pricing & performance as they know where they need maintain or beat.

Is it just me that’s skeptical?

On a completely other note, I do not run M&A for Facebook but I would have suspected they would have built their own Ad Server and maybe acquired an attribution company such as Adometry, C3 or VisualIQ (or the many others in that space).

* Companies who own significant media properties.  Google, AOL, Facebook, ValueClick.
** There used to be a trade magazine that showed ads served each month by ad server, but I haven’t seen it in a while.  Purely based by my conversations with other agency heads, Atlas and DART are the primary ad servers that come up in conversation.  MediaMind is coming up more and more.
*** Updated after an email conversation with MediaMind.

Facebook, Attribution and Cookies

I thought I’d put this out to the community since I would love to engage in conversation around this.

At the agency, we have recently seen significant positive performance on a FBX campaign; performance as measured by an online sale (lets keep it vague).

I have been thinking about this and emailing with a few folks about why we might see such stellar performance.

I think I know the answer but want to run it by all of you, to help me think it through.

Facebook is used by over one billion people.  Many of the users of Facebook keep it open in a browser tab all day but it might not be “in view” most of the time.  However, there are consistently six ads in the right rail, all of which consistently update (and theoretically, drop cookies).   Using Ghostery, I see that DoubleClick has a tag on my Facebook newsfeed as I write this.

Is Facebook the new AOL Instant Messenger or Pop Under where it persistently is refreshing cookies all day long and taking credit for conversions?

Triggit recently ran a study where they converted 36% more re-targeted users than Google Display Network, Rubicon, Admeld or Pubmatic.  Is this because they have 36% more reach (I’m not sure if they do, I’m not logged into comScore at the moment).

In a world that is using last view/click attribution, then this could be a real issue for measurement.  If you are using a more advanced attribution method thru VisualIQ, Adometry or Encore Metrics (amongst others), hopefully it get teased out.

Just thinking out loud- lets discuss.  Leave a comment or email me thru the contact form.

 

Alto Email, The Open Graph, MBA Mondays, and Las Vegas CES

Happy Wednesday.  I thought I’d write another post that points to discussions or products that I’ve been part of recently.   Leave some comments below or reach out directly if you’d like to talk further about any of these.

It’s amazing how much an interface can make or break a product, go Alto!.   In early October, I heard AOL was launching Alto, it’s upgraded mail platform.  I signed up for the limited release and was granted access to the system late last night.  I am impressed so far.  I like the interface a lot.  It’s amazing to see how much of a difference the interface can make.  Font selection, user flow and the overall idea of classifying emails is fairly smart and spot on.   I do not use Sparrow so do not have a point of comparison, but it seems to me like accessing Alto over Gmail (even though Alto is a layer on top of Gmail for me) is the way to go.  What do you think?

The big question for Google, especially if users start accessing Alto as the portal to their Gmail is at what point do they disallow this?  Gmail is a revenue driver for Google in relation to AdWords (ads on the sides and above your emails) and Alto basically gets rid of these.  Will AOL roll out an ads product in Alto?

Get Your MBA On, Advertising Models.  Fred Wilson, a friend, venture capitalist and AVC blogger wrote his latest MBA Mondays post on Advertising Revenue Models.  Being that he and I both know that this is in my wheelhouse, I helped write the piece and linked it back to a presentation I gave in 2011 to the NYC TechStars class (I mentor).  The post was not specifically used to quantify or justify advertising but rather expose the different models within advertising revenue.   I think the post is fairly comprehensive and is a good primer for anyone considering taking advertising dollars.  I’m more than happy to talk more about it which is why I created the short-lived but very specific Marketing Wednesday series.

Fb Open Graph Innovation.   At kbs+ Ventures, we see lots of companies who are innovating around advertising and marketing technology.  This is our core area of the marketplace we invest in and one we’ve considerably doubled down on over time.  An area that we see companies spending lots of time thinking about is the Facebook Open Graph.  FbOG is an underutilized asset/utility for brands and there is a ton of room for brands to engage with it.  We are sniffing around this space to understand the forthcoming players in the FbOG space so if you are someone, know someone or are just genuinely excited about the FbOG, leave a comment and we’ll hook up.

2013 Consumer Electronics Show.  I’ll be heading out to Las Vegas for 2013 CES.  I’ll be there for meetings on Monday/Tuesday so if you’re heading out and want to meet up, certainly reach out and we’ll try to coordinate some time to meet up.  I’m specifically looking to meet entrepreneurs or other folks innovating in/around marketing and advertising technology which actually had solid representation at last year’s (2012) CES.

 

When A Drink Gets a Facebook Page

St. Regis Bloody MaryMy wife and I just came back from a little rest and relaxation trip in Deer Valley, Utah.  We went to the hotel bar one evening before dinner and the bartender offered up one of their signature Bloody Mary’s.  Since both of us enjoy a good spicy Bloody Mary, we ordered them and the bartender told us how they were made.  He provided some good interesting back-story and context to what he was about to serve us.

He handed us our drinks and we immediately took out our mobile devices to take a picture.  They were very unique looking, enough so to warrant an appearance in my Instagram and Facebook feed.  The bartender laughed and told us that since so many people do the exact same thing, they created a business card to hand out to join the Facebook page of this particular Bloody Mary.

A Facebook page for a drink? 

I asked the bartender, Alex (I’ll leave his last name out) about how this came to be.  He said that he witnessed so many people taking cameraphone pics of the drink that he asked his manager if he could create a FB page.  After about a week or so, he got the greenlight and made it happen.  Didn’t ask upper management nor get the permission of anyone else.  He just did it with the go-ahead from his boss.  He even printed special business cards with the hotel logo and the link to the Facebook page.

Alex talked to us that he uses the page to promote local events and other happenings in and around Deer Valley.  He said it would cost too much to promote them separately but with the Facebook page, he has an audience and he can do it for free.

What can we learn from this?

1.  Authenticity and uniqueness works well in the social world:  make sure to tell your story.  It might not be interesting to everyone but to the ones who are interested, they become part of your community.

2.  Be ready to talk about it:  when the timing is right, be ready to talk about your story.  What was genius about what Alex put together was not only a unique drink for the hotel, but a business card that helps promote it.

3.  Empower your employees:  Alex asked for very little permission to get this going.  It’s also interesting because you’d not think that this particular hotel, known for luxury and professionalism would go in this direction.  Maybe it’s because the executives at the corporate level do not know about this but if they did, I’d recommend they create Facebook pages for all of their unique drinks.

We Are Going to See Many Independent Agencies

Jack Marshall recently typed a piece about how there are very few independent agencies left after Razorfish, Digitas, Schematic, Blast Radius, AKQA, and Huge have all been acquired by Big Four ad holding companies (WPP, Publicis, IPG, and Omnicom).  The piece was titled “End of the Indies” and I wanted to respond to it with this blog post as its right in my passion wheelhouse.

For the most part, the advertising world innovates and acts similar to it did way back when.  There is not much foundational change.  Sure, there are pockets of brilliance (I’d like to think we’re doing very interesting things) but as a whole, the industry is working on a model that existed a long time ago.     Many people accuse this old model of being “bad” but then again, isn’t salt sold the same way it was bought by our ancestors thousands of years ago?

I think we are in the early days of the rise of the independent agency.   In fact, a whole wave of these indies.  In a couple of years, it will be the perfect time to start an agency.  There are a few reasons for this and I’d like to explain them:

People:  One can argue that the world is not becoming any more creative, but creativity now has a democratized platform to be distributed.  The new entrants in to the workforce never knew a world without a keyboard and mouse, ever-present connectivity, and digital cameras.  The DNA of this new breed has technological understanding as part of creativity.

This is very different than when I grew up; fewer rather than larger numbers of kids gravitated towards computers and it was typically known as a specialty.  I was known as a nerd, even while I was just playing games on my Mac IIe or LC (remember Stunt Copter?)

With this newly trained workforce, creativity is now at everyone’s fingertips which will unfold itself not just in better client strategies, media planning & buying, creative execution, but in organizational re-engineering, organizational behavior, and talent management.  The whole way we think about the advertising and marketing business is going to be impacted by this currently young group of people and they will be ready to start running businesses in the next few years.

Economy:  While I do not pretend to be an economist, it’s hard to debate that our economy is not overly stable right now.  Hearing stories of recent college graduates trying to find jobs to no avail is a commonplace.  Expect to see many of the recent graduates either create their own companies (made easier thanks to the Jobs Act) or go and work for a friends startup.  Just by the laws of large numbers, we should expect to see many new agencies created by people who have no other opportunity than to start their own company.

Technology:  While the workforce certainly understands technology such as how to use a mobile device  or download apps to tablets, technology is going to move to the center of the new independent agency.  And this will happen from Day 1, not retrofitted like many currently large (non) independent agencies.  Because it will be there from Day 1, we’ll see increased efficiencies and effectiveness, plus an open armed approach to welcoming new ways to leverage this technology.  Data will be part of all decisions including those in creative and the art of advertising will emerge in leveraging many of the sciences to derive insights that inform strategies.  The independent agency should be able to deliver on this vision.

Insurgents Become Incumbents:  I gave a pre-read of this post to a colleague of mine who reminded me of Clay Shirkey’s quote in a Wired article.    There are plenty of insurgents today who have become the incumbents, many named above and with the notion of the incumbents being much slower than an insurgent, plenty of talent is probably ready to jump ship and start all over again.  We see this happen all too much and expect it to happen again here.

I think there are significant opportunities for that emerging independent agency.  Plenty of them.  I’m curious to see if Adobe, Oracle, SAS, SalesForce, Facebook, Twitter, Apple, Microsoft, Google, and Yahoo! start to fund some of these agencies with both capital and technology.  I think that could be a really interesting model or eventually, where the insurgent goes to become an incumbent.

 

 

Ghostery, Google, and Privacy

A couple of months ago, I wrote up a report that talked about the marketing technology behind $35 billion in 2011 holiday e-commerce sales.  I pulled the data from Ghostery, a browser plug-in that allows users to understand what trackers and beacons are on individual websites.  After I released the report and got some initial traction, Evidon, the owners of Ghostery reached out and asked me to be a guest editor for their Global Tracker Report.  Fast forward to today, their first report is out and you should download it.  Also, the New Media Age wrote a solid piece on the report.

Why?

Not only is it a good read about the current state of privacy, advertising technology, and data, it’s a piece that both the novice and advanced marketer can understand.

Based on the data, the top 5 most prolific trackers are owned by both Google and Facebook.  Google has 3 of the top 5 including Google Analytics, Google Adsense, and Google +1.  Facebook includes both Facebook Social Plug-ins and Facebook Connect.  It’s amazing to see the dominance of Google on this list, as their Google Analytics tags are down on a disproportionate amount of websites scanned by Ghostery.

I’ve recently stated on this blog that Google is both the house & the card player (in relation to a casino).  They know the odds, the cards in the deck, in the current hand, and are playing the game.  The more and more data that Google has access to, the more they can optimize for a Google beneficial outcome.  Note however, this argument falls a bit when you realize that Google can do this short term, but will lose advertisers long-term if (Google) only optimize outcomes for themselves.

If you have a second, download the report to learn more.