More on OpenX and Microsoft

“Under this partnership OpenX and Microsoft will cross-market and promote products to our respective publisher bases. Specifically, Microsoft will refer publishers for enterprise ad serving solutions to OpenX and OpenX will promote Microsoft’s Content Ads service (which is a contextual advertising product) to OpenX publishers.”

OpenX Blog » Partnering with Microsoft to bring more choices to publishers

This just in: Microsoft will refer publishers for enterprise ad serving to OpenX.  To rephrase the meme — at first I was like and now I’m like :-O

Is data ever going to change the way TV inventory is handled?

“Data is going to begin changing the way some television advertising is purchased or managed — finally — and “tune-in” is quite likely to be first in line. It certainly won’t happen overnight, but the multiples involved are clearly too great to be ignored. 2% improvements won’t move markets, but 20% or 2X improvements will. This is going to have a lot of impact in TV measurements, metrics, processes and, very likely, business models. It will certainly be disruptive to many of the incumbents — and will also present many of them with extraordinary new opportunities — but it will certainly be crazy getting there.”

MediaPost Publications Analyzing TV ‘On-Air’ Promos With Online Ad Metrics 10/08/2009

Dave Morgan of Tacoda fame is getting his hands dirty with TV data (with this new startup) and explains why he’s onto it.

NYT: a vision for agency demand platforms

“Demand side-networks move beyond the realm of performance marketing and begin to focus on delivering reach and frequency against a designated target, measured in GRPs (gross rating points). Clicks diminish in importance. The media plan matters a lot, because the affinity of audiences for specific websites deepens the impact of brand advertising. Marketers meaningfully shift their TV dollars online with greater confidence because online delivers something they understand and need to achieve their brand objectives. At long last, audience truly becomes the basis for both planning and buying online. This is the best outcome for publishers.”

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What The Rise Of Demand-Side Ad Networks Means For Publishers | paidContent

Very sensible post by NYT’s VP of R&D operations. The essence of agency demand platforms is extracting efficiency out of online by focusing on audiences, data and automation. It’s a good thing and this direction he imagines is where I would like to see it go. This is incredibly exciting as various ad serving systems finally get interconnected.  What is doubly interesting is that I predict publishers bypassing ad exchanges and plugging into agency demand platforms directly. Shameless plug: our platform for publishers, AdGear, is slowly but surely becoming more and more relevant as the market matures.

Ad week panel on agency demand platforms

ContextWeb Agency Demand Platforms Panel | Darren Herman

Video of a panel from advertising week. Probably the most exciting thing happening in media today — the new discipline of data-driven display advertising. Real-time bidding, ad exchanges, arbitrage. Right up our alley.

Is the DoubleClick Exchange a game-changer?

Yesterday Google announced the launch of DoubleClick exchange, sending ripples down the blogosphere and beyond. A good list of discussions is available at TechMeme, one of the best ones being Andrew Goodman’s at Traffick.

Reading the blog post alone can be confusing. The platform is positioned as DoubleClick Exchange, specifically, and not Google Exchange. DoubleClick is the enterprise brand that completely dominates the ad serving market and has reach over 80% of large publishers and probably just as much, if not more, large brand advertisers. Why, then, does Google talk about integrating this platform in Google AdWords, the openly accessible ad platform where you can open an account with 10$, and not DoubleClick for Advertisers which agencies use? All while maintaining that this initiative “helps large online publishers on one side; and ad networks and agency networks on the other”?

Large publishers, after having flirted with ad networks and ad exchanges such as Yahoo’s Right Media, are notoriously cautious of anything that can commoditize their inventory. The big concern, of course, is the notorious pork bellies problem which occurs when advertisers cherry-pick inventory and throw away impressions that don’t interest them. By far, that is the publishers’ highest priority given the rise in popularity of real-time bidding mechanics and the loss of ad budget commitments that comes with it. It just happens that this is also the exact value proposition of ad exchanges to advertisers and agencies.

There are two ways to make this viable for an exchange: 1) Try to fill all the inventory holes created by real-time bidding; and 2) Deal mostly with remnant inventory, creating little value compared to competitors.

The market is not nearly mature enough to make the first option happen anytime soon which will reduce the DoubleClick Exchange to a glorified AdSense for display, focusing mostly on the long tail and not making much of a splash in the brand advertising world.

There are some moves which may make this more interesting for advertisers, such as deep integration of the exchange in DoubleClick for Advertisers,  but Google may have to risk some of the handsome revenue they make on ad serving from the DoubleClick products somewhere along the line. Imagine a scenario where the publisher uses DFP, the advertiser uses DFA, and a third party network uses the exchange. That just seems like too much dipping.

Generally speaking, ad exchanges will become an important component in the creation of a global ad ecosystem where hyper-targeting is universally possible across multiple properties. A big part of this problem remains the legacy ad serving infrastructure used by large publishers and for which DoubleClick is largely responsible.  It really feels like it’s finally time for the next generation of ad serving platforms — a generation that plugs into exchanges and data sources alike in order to create actual competitive advantages for publishers and for advertisers.  From the technology standpoint, publishers don’t have to be part of marketplaces or put their inventory on the block to enable third-party targeting and truly leverage data.

It’s great to see at least some development in the market that is, as Andrew Goodman says, “in a frustrating state.” Too many are talking way too much science fiction and not doing enough problem solving.  We don’t need to do easier display advertising (as Google positions the exchange). We need to derive and show more value, which today means more integration on data and formats, and that definitely does not mean equating it to direct response.

Let’s concentrate on that, shall we?

AdSense, DoubleClick Exchange coming together

This is a big deal.

A good recap is at AdExchanger. Anxiously awaiting comments by ad networks, but yeah, reach is a commodity, isn’t it.

Edit: just to be clear — it’s a big deal because it helps Google commoditize ad network services. Since Google needs to certify ad networks, and since participating ad networks will have very little leeway as far as data/behaviour are concerned, they will be reduced to creating very little value at much lower margins.

What is to be seen is whether large publishers will actually go for it in remnant inventory.

Q: When are people most likely to pay attention to online ads?

A: When they’re relevant and include freebies.

This is the result of IAB UK’s study conducted recently (PDF of the summary). The problem here is that only an alarmingly low percentage of users in any given age group claims not to notice ads. My theory has always been that people hate admitting to being influenced, but here 70% of people don’t have a problem with it at all. Which begs the question — are they really telling the truth, or is this completely theoretical?

If this was based on actual behavior data, I bet the first winning category would be “when ads are big enough to be noticed”, closely followed by the second — “when they’re relevant”.

(link via  @jonathanmendez)

An Inconvenient Truth: Sales Jump 11% After Asics Gives TV a Try

The running-shoe brand dabbled in TV for the first time last year, spending about $5 million of its $27.6 million U.S. media budget on TV advertising, primarily on Olympics broadcasts. That spending came primarily at the expense of magazines, which have traditionally dominated Asics’ budget. Magazine spending fell $2 million, to $21.7 million, despite a $3 million spending increase overall, according to TNS Media Intelligence.

The tinkering paid off, as Asics’ sales rose 11% last year, according to SportsOneSource. 

Advertising Age: Sales Jump 11% After Asics Gives TV Advertising a Try

Is the ad market moving to a CPA model?

RWW publishes an interview with Highland Capital’s Richard De Silva.

Richard essentially makes the point that everytime there is an economic downturn, advertisers want better performance for their their ad spend. The first move was from CPM to CPC, the second, he claims, will be to CPA. Some

Then he goes on to say that to actually track acquisitions you need to put implants into humans, invalidating the first point. There are, of course, other ways. aQuantive, before getting gobbled up by Microsoft, did a lot of work correlating actual offline sales with online ad campaigns, compensating for the last click syndrome, and weighing in the value of various consumer interactions in the end result. At Cossette we’ve done that as well over the years, but many other opportunities exist.

One of the things that fascinates me is that in 2009, pick-up-in-store still hasn’t taken off. To me it seems like a killer app for all things retail, yet (especially in Canada) this is still almost non-existant. How often did it happen to you to stumble upon a brand/product online, check out the price on retailer’s site — and then go to store and buy it? Imagine if there was a coupon thrown in too, making it that much tempting. Coupons by themselves, of course, are another way of tracking offline sales. Granted, the overwhelming majority of conversions from brand advertising are more latent and my examples are borderline DR, but I’d still be interested to analyse pick-up-in-store transactions with respect to their users’ previous interactions with ads and the brand online.

This sort of initiative would help brand advertisers make forays into CPA-based advertising, but without it the economic incentive for publishers is simply not there. The new crop of behavioural and data exchanges (bk et al) will be of great help to facilitate the CPA model.

Let’s not forget that, if brand advertisers could measure their CPA themselves, they could already convert their CPM rates to their CPA metrics. And they could already negotiate down their CPM rates to match an acceptable cost per acquisition.

The problem is thus not with the compensation model, but strictly with the (im)possibility of measurement. And as long as that’s not resolved, publishers wouldn’t be able to readily accept CPA.

What we’ll see in this recession is not a move from CPC to CPA, but a drop in CPM rates and maybe a drop in CPC rates if things get really bad.

King Kong formats are here to stay

27 large publishers, including NYT, Forbes, and ESPN have announced that they’re replacing the traditional IAB ad formats by bigger, shinier ones.

This doesn’t seem to be an IAB initiative in the least, rather more of an OPA thing. Considering that this comes right after Vivaki spearheaded the video formats makeover as recently as this past January, this is worrysome. IAB has its place but needs to be agile enough to allow for innovation.

The fact that, collectively, these 27 publishers represent over 100mm uniques is important because top agencies will be more likely to develop creative only in these new formats. Which will let other publishers feel left out unless they also own up to the new king kong formats. In other words, there is a very strong possibility that many more publishers will have to update their layouts if they want a piece of big advertisers’ campaigns.

Given the recession and advertisers’ tightening their purses, we’re seeing two massive trends in display advertising, both working concurrently to justify premiums publishers have gotten used to over the past years. The first one, as it’s getting clear now, is king kong formats. The second is data portability, with companies like Bluekai and Lookery specializing in data collection and allowing ad networks and publishers to target and report on a much deeper level. But no matter how clever you are with your targeting, if ads are ignored or barely visible, it’s a waste.

That is why the rapidity of adoption of new formats will likely be very similar to Bluekai’s growth curve.

Edit: reactions from Thane Calder on cloudraker’s blog and Yannick Manuri on espresso