Category Archives: marketing

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.

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?

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…

Why JetBlue Is My Favorite…

The CEO of JetBlue has gone on video and posted his speech onto YouTube.

You can watch the video here.

Why I like this? He comes out from behind the corporate firewall and apologizes to all the customers who have been affected during the past week. Not stopping there, he talks about what JetBlue will do to make things better and lays out a few tactics that he is employing companywide.

Great job!

Updated:Â JetBlue has now published the Customer’s Bill of Rights:

http://www.jetblue.com/about/ourcompany/promise/index.html?source=ap_promiseÂ

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.

Do You Trust Brands?

Brands spend billions of dollars to be top of mind when consumers make their ultimate decision: to purchase or not to purchase. Consultants, advertising agencies, media companies, and analytics organizations all come together to expose and track a consumer brand’s message out to the public.

In no more than 1 second, a consumer brand can be harmed… a brand that has millions of dollars behind it and years of existence. Recently, this has happened to two major brands. You’d expect consumers to hurt these brands, but it was the brands themselves that broke consumers trust and in effect, drew negative media attention to them and let consumers all over the globe down.

Before you can let a consumer down, you need to build up trust.  An article on BrandChannel talks about building confidence in your brands and has a good quote.

Jacques Chevron, a partner in JRC&A Consulting in LaGrange, Illinois, explains, “Brands are rooted in the trust that the consumers place in them. They are what result from consistent behavior over time: Predictability, understanding, comfort and the trust that they create. Newcomers don’t have this. Some are in the same situation as the used-car salesman who says ‘Trust me’ to generate comfort. It doesn’t work well.”

Wal-Mart and Sony have both had to reach into the medicine cabinet and rip the band aid box open and apply them rather quickly in the recent past. Wal-Mart alongside their PR agency, Edelman, tricked the world into believing a semi-false story about a couple that traveled the USA stopping at Wal-Mart locations. Sony falsified a PSP promotion and had consumers believe they were watching a site independent of Sony.

In a world where transparency is so important, why would these brand kings do this to themselves? They employ significant agencies with allegedly fantastic expertise but try and trick the world and of course, it doesn’t work.

On Wal-Mart / Edelman

It’s ironic that Edelman Worldwide helped to write the Word of Mouth Marketing Association’s code of ethics, which states: “Honesty of identity: You never obscure your identity.â€?

Ironic, of course, because the independent firm was publicly slapped—and publicly apologized—for being the force behind the Wal-Marting Across America blog that was unmasked as a fake created and paid for by Edelman. (Edelman Eats Humble Pie)

On Sony….

This one–the latest in a string of stealth marketing efforts–involves a “flog,” or fake blog, created by viral marketing firm Zipatoni to promote the Sony PSP. The blog, alliwantforxmasisapsp.com, was supposedly authored by an amateur hip-hop artist “Charlie”–whose cousin, “Pete,” craved a PSP under the tree.

Written in faux hip-hop and Internet lingo, the phony blog, which went live at the end of last month, quickly raised suspicions. Last week, some readers conducted a WHOIS search, which unmasked the site’s registrars as Zipatoni. (Sony Confesses to Creating ‘Flog,’ Shutters Comments)

Joseph Jaffe weighing in…

It boggles my mind how many mainstream marketers/agencies look at new marketing from the same one-dimensional, traditional, advertising based- and biased lens. When you think about it, it’s no wonder that the inevitable outcome every time is fakeness instead of authenticity.

And Greg Verdino sums it up nicely…

Half a step forward, full step back.

Verdino's Supersize Podcast- I Agree

While doing some work in the office today, I had the chance to listen to Greg Verdino and David Armano babble about advertising, beer, and Second Life. Both of these characters (I say that with a smile on my face as I consider Verdino a friend of mine!) recorded the podcast originally in an office, then as the cleaning woman came in, they had to move to a conference room. It’s a fairly raw podcast but nonetheless, has quite a bit of meat to it.

If you’ve ever worked with Greg, you know that he has the gift of gab. I love it. In this case, 30 minutes uncut.  He’s extremely knowledgeable in many different areas and brings the agency world a perspective on technology from having worked in startups… which is very valuable to any ad agency. In this case, it’s Digitas.

Verdino and Amano covered Second Life for the majority of the podcast and I’m pretty much in agreement with everything they touched upon. I guess the underlying thought that the three of us agree on is that there is no doubt that Second Life or any virtual world is extremely important, however, until there is a critical mass of a mainstream audience into the virtual world (or metaverse, used interchangeably), it just doesn’t have the numbers. Verdino talks about the Starwood A-Loft integration and says how it’s absolutely beautiful…. except it’s vacant. Every time he visits or shows a client, it’s a ghost town.

If you’ve got a spare 30 minutes and want to listen to two extremely well versed advertising executives, certainly check them out here. I have a dedicated area of this blog to Virtual Worlds and you can read about it here. There is a fairly relevant post here.

BTW:Â Miller Light… guys, come’on ;)