Tag Archives: optimization

Adobe Strategy: On Point for 2013

I am a fan of Adobe ($ADBE).  You certainly know this if you’ve been reading this blog.  Here is an article I wrote in 2011 about Adobe’s strategy that has pretty much held true and something we all should re-read.

ADBE Stock

This morning I read the 2013 Investor Presentation (PDF) by Adobe and wanted to highlight a few things that I found interesting:

On slide 22 of the deck, Adobe mentions “key digital marketing growth drivers:”

  1. Shift of marketing spend to digital
  2. Re-platforming of the Web
  3. Demand for Cloud-based solutions
  4. Multi-channel campaign and social marketing solutions
  5. International growth

#2 (re-platforming) above is really, really interesting.  I had been looking for a term to capture this insight and I think they nailed it.

The 1990s ad-stack is on the way out, or at least has matured.  The new marketing stack is filled with social, mobile, local, and dynamic delivery.  Marketing tomorrow will not look like marketing yesterday.

On slide 26, Adobe talks about their stack (well, cubes):

  1. Adobe Analytics
  2. Adobe Target
  3. Adobe Social
  4. Adobe Experience Manager
  5. Adobe Media Optimizer

I’d have to say that these cubes/stack are pretty much aligned for the future.  Marketers and agencies are demanding ROI for their marketing spend and quantitative validation is key to success.

Read the investor presentation if you get a chance.  It’s a fast read.  If your organization is not aligned with this thinking, rethink where you are headed.

 

 

Reading It Later – Content Consumption

Just over a year ago, I wrote a post talking about how I was optimizing my content consumption.  I spoke about both Knowabout.it and Summify, both of which I continue to use.  Summify was just acquired by Twitter, which I think is a good move for them, however I hope Summify still exists to help users consume beyond Twitter content under their new management.

I’ve started using Read It Later which allows me to save any article on the web and read it at a later time on my iPad or iPhone, amongst other devices.  This is particularly useful when an article is sent to me and I can’t read it at that particular time (for whatever reason) but I save it to read while I’m commuting home or similar.  Read It Later been a great tool/app.

I still think the optimized content consumption world has a long way to go and it’s an area that I’ll continue to watch closely.  If there are any new “Summify’s” popping up, I’d certainly like to hear about them.  You can contact me on twitter or thru my webform.

View Thru: Undervalued Power Metric

Digital is a double edged sword, as it’s measurable.  For those who work in digital media, you understand what I’m saying.  How often have you sat there in frustration shaking your head and wondered why digital gets so much scrutiny when most other channels don’t get nearly the same precise questions from clients?  I know I have.

One of the areas that I spend a bit of time focusing on both from a media agency and investment perspective is around the valuation and understanding of the “view thru.”  For those not familiar with VT, it’s essentially a media impression that gets served (and tracked) but isn’t interacted with.  If the user visits the website (and takes action) of the advertisement within a set period of time (attribution window), the user is counted as a view-thru conversion.   This is opposite of click-thru (CT) where a user would actually click on the ad unit and go to the website.

The view thru in itself is interesting.  It’s similar to television.  You are exposed to an advertisement and over some period of time, you might make a purchasing decision in which that ad impact had some (or no) contribution.

Some marketers take 100% of VT and give it credit to a sale and others take 0%.  I’ve seen both attribution numbers and everything in the middle.  There is no “right” number, at least, right now.

While this post isn’t to argue VT vs. CT as ways to measure media, I would like to highlight how VT needs to be logged into site analytics solutions so that one can measure total effectiveness.  While Google Analytics and other tools are able to measure click based references on ad units, I’d also like to see them measure view-thru based conversions.  I can’t imagine this is easy as the site-analytics tool needs to be mapped to the ad server of record,  but this is important as generally there are 8x as many view-thru conversions for every 1x click thru.

The view thru raises questions:

  • In a world of banners and buttons, how do you create a compelling experience which doesn’t focus on the click, but rather delivers content optimized for the view-thru?
  • Do you assign equal or differentiated credit to view-thru and click-thrus?
  • How long should an attribution window be?

From an investment thesis, I’d love to look at attribution and measurement companies.  I think the view-thru is one of the most underrated measurement tools we have and with an increase in online video, VT will be a power metric to watch.

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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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Optimizing My Content Consumption

Image representing Summify as depicted in Crun...
Image via CrunchBase

It’s very rare that I have time to web surf and pop onto random websites and consume whatever is there.  24 hours just is not enough for me at this point in my life and so I need the best possible filtering agents to help me consume/optimize my time online.

What I expect from a filtering solution today:

  1. Takes inputs from me and understands what I want from them
  2. Look-a-like model against my input list and expand it
  3. Understand what my social graph is consuming

What I expect from a filtering solution tomorrow:

All of the above, but with use cases built in:

  1. Business needs (be able to filter results based on what I need for business – maybe understanding this by time of day and day of week consumption habits?)
  2. Personal needs (be able to filter results per above)

Currently, I’m using Summify and Knowabout.it.  Both are early in their existence and are making good strides but would love to understand what else is out there?

What I like about Summify:

  • Simple email is sent to me at a specific time (usually in the early AM) with up to 6 items that should be relevant to me based on my RSS + social graph.  I like the simplicity of this.

What I like about Knowabout.it

  • I like the web interface to expand my collection into what other people similar to me are consuming/creating

Media optimization is a big space that I’m tracking for 2011 and expect to make an investment or two.  If you are in the space and want to reach out, I’d welcome it.

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2010 Post Highlights

I’ve written a bunch of posts on this blog in 2010.   Not all are my favorites but below, I’ve highlighted the ones that are.  You can find a list of all-time favorite posts here ranging back to 2006.

Organizational Behavior

Data, Marketing Technology

Twitter & Social

Investing

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The Great CTR Debate

I often have conversations with clients about what their key performance indicators should be for their campaigns.  Quite a few times, clients want to use the CTR as the main proxy for performance and I squirm.  While I can talk for hours about why this is not a good idea 99% of the time, I wanted to hear the voice of the industry talk about it.

I asked a few friends to write a a few sentences about the famous “click thru rate” and if it should die or not.

While this is August 2010, the debate has been around for the past ten years.  I uncovered an article on CNET from 2001 entitled “Is the click-through history?

The Click Thru Rate Debate

I’m sure you have opinions and would love to hear them.  Please leave a comment on the blog or use the hashtag #deathofctr on twitter and tweet me at @dherman76

SEO for Television

A short and sweet thought inspired by Mark Cuban‘s latest posting on Google TV.

If we are finally in the early days of television/digital convergence, then Google is going to want to leverage their PageRank (probably needs a new name) algorithm to help TV viewers find content.

If you are thinking of getting into SEO, figuring out how TV will play a role will be extremely important; after all, there are $70 billion dollars in the US alone of TV advertising.

This is certainly an interesting area for entrepreneurial opportunity, investment, and understanding.

Social Media & Optimized Display in the Same Post? Recapping 2009

Unless you live under a rock, the economic environment impacted brands and agencies this year and the whole publisher ecosystem that goes with it (media cos, ad networks, etc).  Full-year 2009 will mark only the fifth spending drop since Ad Age began ranking the 100 Leading National Advertisers in 1956.

Holding Co. Stock Chart As you can see from this chart, holding company stocks (MDCA, IPG, OMC, HAVSF, PUBGY, WPPGY) all tanked along with everyone else during late 2008 but have started to bounce back in 2009.

In the digital trenches, I witnessed an interesting divide really start to occur:  this “social media” phenomenon and hyper targeted and optimized display advertising.  If you put a social media “guru” in a room with a data and targeting company, the conversation would probably be as bad as one of my dates when I first moved to Manhattan.

Social Media
I put “social media” in quotes as I fundamentally do not believe that this exists in itself.  I believe that all media can be social and it’s not new.  Anyway – this year saw a continuation of thousands (over 15,700) of social media experts pop up on Twitter and even carve out little businesses for themselves as consultants/agencies to a few brands.  The common question in 2009 that came across my desk was “what should be my social media strategy?”    Twitter’s constant presence in the news in early 2009 and Facebook’s dominance in the social networking/graphing space has contributed to this “social media” trend.

Recently, Pepsi announced it was going to forgo its advertisement in the Super Bowl which we’ve grown accustomed to each year and put those dollars to work in a rather large social media campaign.  I applaud their efforts to generate PR, but is this sustainable for them?  Meaning, they are essentially putting the money to work in a cause marketing campaign… will this have impact?

2009 saw Dell racked up over $6.5 worth of sales directly attributable to Twitter and the almost-too-hyper/passionate Gary Vaynerchuk climb to 848k followers.

Hyper Targeting & Optimized Display
There has been a trend in the display space towards audience driven media.  If you can identify an audience based on different characteristics stored in computer cookies, why not advertise to a handful of extremely targeted users? Data facilitators/providers like BlueKai, Exelate, Domdex, TargusInfo, Media6, Lookery, Rapleaf, Peer39, LucidMedia, Quantcast, and many others became front and center this year.  Demand Side Platforms (DSP), or technologies that allow the dollar holders (typically agencies) get closer to the media (through exchanges and other sources) also became popular and a few closed significant funding rounds.  AdExchanger popped onto the scene and started covering this entire space rather comprehensively.  If you have not read their 2009 year end report, download it now.

2010 should be interesting for this industry as the government is looking into online privacy.   Because much of the targeting is done through accessing anonymous cookies, this whole industry could be hampered or shut-down depending on legislation that is passed around ad targeting.  There are a few startups, particularly the Better Advertising Project focusing on helping congress solve these issues.  Personally, this would be a big bummer as I believe that if we can offer a much more targeted advertisement to users, then their overall experience could be much better.

Recap
Any media planner or buyer on Madison Ave has put a few social elements and optimized display on a media plan in 2009.  I’m sure that this will still occur in 2010 but I’m going to hypothesize that the gap between optimized display and social media may widen and you might start to see shops specialize in one or the other (i.e. CPMAdvisors vs. Crayon).

The one thing that’s consistent is that the audience is in the center of all planning AND buying both in social and optimized display – the more we can learn about our audiences and serve highly relevant messaging to each audience segment will allow us to create better relationships.  Better relationships between users and brands, means a mutually beneficial relationship for the agency and advertiser.

If you are interested in the Optimized Display & Hyper Targeting area, I’ve put together a Twitter list of thought-leaders in this space.  You can subscribe to it here.

Agency Demand Platforms

My friend Jay Sears (@jaysears) sent me an invite to the AdClub/ContextWeb event on Agency Demand Platforms a few weeks ago and was impressed to see the high caliber speakers but was bummed out that MDC/VMM was not asked to participate as well, as, my friends at Havas.

The event was packed – almost every seat taken in the beautiful NY Times Center and quickly got underway by a speech by Carl Fremont about the Digital Action program of the AdClub.  Digital Action is actually really cool – publishers donate inventory and the AdClub gets to sell it and keep the money to provide scholarships for their students.  We’re working on a deal which should hopefully provide some dollars to the AdClub so I was excited to see Carl speak about it.

Bant Breen (Initiative), Sloan Broderick (Mediacom Interaction), Greg Green (VivaKi), Matt Spiegel (Omnicom), Ross Sandler (RBC), and Wenda Harris Millard (MediaLink) all participated on the panel and had a healthy discussion that to industry outsiders may have been fascinating, but to industry insiders, was much of the same fodder we hear each day.  For those interested in reading the play by play of the event, AdExchanger has a fantastic writeup and I recommend checking it out.

I want to use this blog post to talk about a few of the issues/hurdles that affect Agency Demand Platforms and their roll-out to advertising agency holding companies such as IPG, WPP, Omnicom, Publicis, Havas, and MDC Partners.  Many of these thoughts come out at lunches or dinners I have with my peers at other demand platforms but I thought that publishing them online may spark a larger conversation with all industry constituents:  investors, agency execs, media folks, technologists, startups, PR, etc.

What is a Demand Platform?   This term is thrown around with increasing frequency but I’ve not seen a solid definition around it.  AdAge wrote a piece on all of our agency platforms that we are building and this comes closest to what I define as a Demand Platform:  a technology solution with a front-end interface where agencies (media, creative) have access to procurement, optimization, warehousing, and analytics.  All of us are building something within this vein but each of us has our own cupcake with different sprinkles.

I do not think that Demand Platforms have to be limited to single supply sources such as advertising exchanges.  It seemed as if the majority of the AdClub/ContextWeb event was based around exchanges, but supply sources can be various.  Currently, we are seeing typical ad networks, publisher exchanges (i.e. FimServe), reservation systems such as Apt, broad exchanges (e.g. RMX, AdX) and sites direct are able to plug into Demand Platforms.  Personally, I look forward to the day when inventory goes beyond OLA into search, mobile, print, radio, television, and OOH.

Hurdles

Agencies vs. Technology Companies: Agencies have always adopted technologies tactically, but if they are to roll-out a Demand Platform, to be successful, it must be strategic.  Most agencies are not staffed up with technologists (broad term for many different types of technology people) and most management in agencies are not trained in running technology companies.   Technology companies also invest in R&D and top talent, as what they build has scaling capabilities and they can recoup these dollars.  Agencies are a staffed differently and generally never hire beyond revenue.  Depending on the agency, holding company, and timing of the financial markets, agencies wanting to become a technology company may be a far dream (if building their own tech).

I predict most agency holding companies are going to work with strategic partners to roll-out their Demand Platforms as for the aforementioned reasons.  There are a few partners in the market today that are getting some nice publicity and traction such as MediaMath, Invite Media, Triggit, AdChemy, X+1, DataXu, Brilig, and others.  The question is whether to go exclusive or remain independent and this is a major question for many of us.   The partners above service the ad-serving & algorithmic optimization space but there is also data warehousing, data aggregation, and creative optimization that plays within here too and there is a whole host of other partners to deal with there.

Changing Media Culture:  Media planners and buyers have applied the human element to optimization for the past 15 years or so and are used to buying sites as a proxy for audience.  Most of our Demand Platforms focus on buying “audiences,” which is fundamentally different than purchasing sites in themselves, so re-educating the entire media planning and buying world about this new paradigm will have to occur.  Technology is going to strategically penetrate agencies if this happens and the education process is going to take a while and not only are we going to have to educate internally to our agency staff, but also, to our clients.  As always, there are going to be conservative clients/agencies and progressive which means that most people will fall in the middle.  I can’t stress enough how much of a barrier this is for the industry.  Changing culture is not easy and the visionaries will have to be in place in the agencies and clients must remain open minded, as the way they have purchased digital media in the past will change.

I am not stressing that media planners and buyers are going to be out of a job, as one can read the above paragraph and deduce that.  I hypothesize that we are going to have a something like a performance display group and an integrated team.  All IAB/OPA standard units will run through the performance group through a Demand Platform while the media/creative staff’s time will be freed up to create big brand experiences.   For publishers, read my “Goodbye Media Sales Execs” post.

Business Terms/Pricing:  I’m going to attack this dead-on as all too often, this question gets avoided.  In the USA, agencies typically do not take posession of media (unlike Europe) and sell back to their clients, but rather make a scaling commission on all of the media that is purchased on behalf of clients.   With Demand Platforms and the ability to purchase on Advertising Exchanges, there are similar models to SEM (search engine marketing) emerging:

  • Cost Plus – this model takes into account of the cost of the media plus a standard consistent markup for the “secret sauce” (optimization, data, research, analytics, etc)
  • Blended/Arb – this model is where the agency takes posession of the media and prices it back to the client at their discretion
  • Pass Through – media agencies will just take their typical media buying or success comission/compensation for OLA planning

Most of the players including VivaKi, Cadreon, B3, Adnetik, VMM do not publicly disclose their business models and that’s valid and fair.  I’d assume however that most models are based on one or multiples of the three scenarios above.  If there is another scenario that I’ve missed, I’d love to know about it.

Note:  as explained above, agencies in the USA cannot take positions on media and sell back to clients.  This is why seperate companies have been set up to provide church/state seperation.

Real vs. Near-Real vs. Non-Real-Time:  I don’t know how this is a hurdle, but I want to point out that saying “real-time” is the “cool” thing to say right now but there is almost no substance behind it to the trained eye.  There are less than a half dozen exchanges who can support real-time, and of those real-time exchanges, they are dwarfed in scale from the big guys.  There is no doubt that real-time is going to be interesting in the future, but as of July 14, 2009, this is purely an ego play.

The Agency Demand Platform Ecosystem

While working on the Agency Demand Platform project, an entire ecosystem is impacted and innovated upon.  The following business areas are affected by these new Platforms (depending on the particular platform of course):

  • Dynamic creative
  • Analytics (insight)
  • Data warehousing
  • Decisioning and processing
  • Visualization
  • Algorithmic development
  • Yield management
  • Ad operations (trafficking, pixel implementation)
  • Data privacy
  • Media planning & buying (communications planning)

Want to share your viewpoint?   Did I miss something?  Feel free to leave a comment or tweet me at @dherman76