MediaMath is an important behind-the-scenes player for advertisers at a time when advertising networks, exchanges and platforms are changing the way advertising is bought and consumed. The New York-based demand-side digital media platform monitors activity on ad exchanges, where marketers bid to place ads on publishers’ Web sites, and helps them quickly buy the space and the audience they need. The system is helping turn advertising from a job for creative “Mad Men” to a numbers-based “real profession,” says MediaMath Chief Executive Joe Zawadzki.

Forbes:MediaMath allows marketers to directly buy, manage and optimize media. Tell us more.

Fifteen million impressions a day across exchanges, across different media. [We] simplify what could be a very complicated process into a series of pretty straight-forward stats, in terms of how to point all of the technology at the market’s problems.

What is the opportunity for publishers who want to sell ad inventory?

Ultimately, the more demand in an auction-based system, the higher the price. And for non-auction based systems, it’s bringing incremental advertising dollars that they’re not getting from direct sales. It’s like optimization is not zero sum. There has always been this tension between advertiser and publisher. People think that in the negotiation that someone wins and someone loses and, for the advertiser to get better performance, they need to beat up on the publisher. The reality is that, with optimization–because not everyone is looking for the same thing and because every advertiser has their own demand curve–they look for different brands, different audiences. If you do a good job with optimization, both the advertiser will see better performance and the publisher will see higher prices. It’s not an “or,” it’s an “and.”

Read More: Forbes.com

Do You Want To Succeed at Social Media or Social Media Marketing?

Do you want to succeed at social media or social media marketing? There is a huge difference. It’s the difference between using social media tools and adopting social media philosophy. The difference between sparking posts about your marketing and posts about your product or service. The difference between marketers who focus externally on how the brand is broadcast versus internally on how the brand is realized.

So do you want to succeed at social media or social media marketing? The answer is the former, but many marketers focus on the latter. I’d like to make this difference more real by sharing two examples — the first in the entertainment industry and the second my own experiences in a mall this weekend.

“Snakes on a Plane” is the entertainment industry’s greatest pre-release social media success story to date. The Guardian called it, “Perhaps the most Internet-hyped film of all time.” Fans produced their own T-shirts, posters, trailers, novelty songs and parodies. Producers organized a contest to select a fan’s music for use in the movie. The filmmakers added shooting days in order to implement changes suggested by fans on the Internet (including Samuel Jackson’s famous and unprintable line about snakes.)

But what were these people fans of? Not the product, apparently. As EW put said about the movie: “SOAP came in below even the most ridiculously cynical predictions.” Read More: MediaPost

The Fundamentals of Real-Time Bidding

When it comes to online advertising, there’s a common misconception that real-time bidding (RTB) is a whole new ball game, requiring a separate media strategy and an entirely new set of campaign goals. While it’s true that RTB is a different buying model for marketers to understand, the promise of digital display advertising remains “right message, right customer.” What RTB adds to the equation is “right price and right time.” Thanks to RTB and auction marketplaces, digital display can now be purchased in ways similar to search, and it dramatically improves a marketer’s ability to reach specific audiences at scale. It’s easy to think this might just be relevant for direct response campaigns, but in fact RTB delivers tremendous advantages for brand and branded response campaigns as well. Let’s look at how RTB enables all advertisers to more efficiently and effectively achieve four common campaign objectives.

1. Find custom audiences at scale
The fundamental concept of RTB is it enables marketers to target audiences directly, instead of using content as a proxy for audience. In auction markets, marketers bid (or not) on individual ad impressions based on the demographic and behavioral profile of a consumer, in contrast to traditional content-based buys where inventory is purchased to hopefully reach a targeted audience.

The beauty of RTB is that marketers target audiences based on their own custom definitions of which consumers are appropriate for a campaign. A classic strategy is to use remarketing data that tracks when consumers have visited the advertiser’s website. But with RTB, marketers can now take it to the next level and leverage their full customer relationship management (CRM) database for targeting. These data represent the advertiser’s full view of its customers (registration data, purchase history, loyalty tier, etc.). By using a CRM-capable demand-side platform (DSP), an advertiser can execute powerful cross-sell, up-sell, and retention campaigns.

However, these strategies, while extremely effective, tend to have limited reach. To increase scale, advertisers can use look-alike modeling to expand the size of the targetable audience. Look-alike modeling finds new consumers that closely resemble the demographic and psychographic attributes of an advertiser’s existing audience. How does this work? Imagine a dart board where the original remarketing audience is the red bull’s-eye in the center. Look-alike segments are the concentric circles that extend out from the center, with each circle increasing the scale of audience available at decreasing levels of similarity.

Read More: iMediaConnection

Scott Spencer, Group Product Manager, DoubleClick Ad Exchange and Jason Miller, Group Product Manager, Google Display Network discussed the display media space as well as DoubleClick Ad Exchange enhancements with AdExchanger.com today.

AdExchanger.com: What is Google announcing today?

SCOTT SPENCER: Basically, we’re going to be rolling out a few more tools to help DoubleClick Ad Exchange buyers buy quality inventory, and to check their campaigns.

Taking a quick step back; when we launched the exchange about a year ago, we engineered it with best-in-market buyer and publishers controls, as well as extensive crawl-and-verify inventory screening. Together with the real time bidder, these were the biggest upgrades we made.

As part of a long line of improvements in this area over the past year, we’re taking the wraps off a couple of additional features to give buyers even more control, quality and transparency.

The first is “Site Packs” – these are manually crafted collections of like sites based on DoubleClick Ad Planner and internal classifications, vetted for quality. These allow buyers to get a set of high quality sites for their particular campaigns, covering anonymous and branded inventory.

Second, we’re making some changes to our Real-time Bidder (in beta). The biggest change here is for Ad Exchange clients who work with DSPs. Historically, Ad Exchange buyers were hidden from publishers behind their DSP. By introducing a way to segment out each individual client’s ad calls, inventory can be sent exclusively to an Ad Exchange buyer even when that buyer uses a DSP. It increases transparency for publishers and potentially give buyers more access to the highest quality inventory, like “exclusive ad slots” – high quality inventory offered to only a few, select buyers as determined by the publisher.

Thirdly, we’re soon going to be rolling out a beta of what we call “Data Transfer” – this is a report of every transaction bought or sold by a client on the Ad Exchange. Effectively, it’s a daily log file of everything that happened. Clients can then review every branded URL that they purchased to ensure everything was what they expected.

Read More: AdExchanger

Seven Reasons Tech Start-Ups Are Setting Up Shop In New York

When Carter Cleveland, the CEO of the art-trading website Art.sy, moved his fledgling company from Palo Alto, Calif., to New York City he left behind arguably the best place to start a tech business in the U.S.

Home to giants like Facebook, Google, Apple, Intel and eBay, Silicon Valley is well known as the Mecca for high-tech companies – and entrepreneurs hoping to start one. One third of US-based venture capital investment happens in the Valley, according to PriceWaterhouse Coopers and the National Venture Capital Association. By Cleveland’s own admission, he “couldn’t go into a cafe without hearing pitches” in San Francisco.

So why go east? A recent Princeton grad, Cleveland said he left primarily because of his customers. Art.sy is an online trading post for fine art and, according to Cleveland, over half of his market is in New York City. But Cleveland added that location isn’t everything. New York’s tech scene is booming, and Cleveland wanted to join the party.

“Palo Alto is like Google,” he explained. “Big and established. New York City is like Foursquare. Not as big but tons of hype. It’s going through a growth period and very exciting.”

Read More: Blogs.WSJ.com

Appolicious Adds New Yahoo, Android Sites, Expands Search

After entering into a partnership with Yahoo in April, social-flavored app directory Appolicious is building on the alliance with a new property dedicated to Yahoo apps. And highlighting the rapid rise of Google Android’s platform, the startup has also revamped its site for Android apps and introduced its own Android app.

The new co-branded yap.appolicious.com and AndroidApps.com sites feature original text and videos, user-curated app lists, personalized recommendations, ratings and reviews. Links to original articles from the sites will be featured in relevant content across key Yahoo properties including news, sports and finance.

As with the main site, the words “in association with Yahoo” appear at the top of each page on the new Yahoo and Android app sites. The properties are linked to Appolicious.com via tabs that appear prominently on the home page alongside a third for iPad and iPhone apps. Yahoo users will be able to join the sites automatically using their Yahoo log-in information.

Appolicious has also taken steps to upgrade search. The search box is centered at the top of each page and functionality has been broadened to encompass the Yahoo and Android app sites. Besides returning relevant apps, the new results page now features related user app lists and staff articles as well as a list of apps generated by the site’s recommendation engine.

Read More: MediaPost

Investment analysts, agency media buyers, and executives speaking here this week all agree on one thing: The resurgence of online display ads is real, and will proceed apace for the next several years. But they disagreed about nearly everything else. For instance: What’s the future of CPM pricing? To what extent will media agencies be disintermediated in coming years? And just how important is Google in this space?

On a Connected Marketing Week panel featuring investment analysts, all four participants said they were bullish on display – predicting overall demand and pricing will rise. However the specific outcomes they described were very distinct.

Doug Anmuth of Barclays Capital said discussions with advertisers have convinced him large consumer goods sellers will make it rain this year and next.

Researchers and agencies anticipated such an influx of brand ad budgets way back in 2007, but that was before the bottom fell out of the economy. Now Anmuth believes the time is ripe again. “At CPG companies, [we're seeing] reinvestment in their brands,” he said.

But not all will benefit. For instance, it’s unclear whether the rise of exchange-traded display ads on Yahoo’s Right Media and Google’s DoubleClick Ad Exchange will suit large brands. Two of four analysts lauded Google’s strategy of automating display ads, while the other two offered weak or qualified support.

One of those was Robert Coolbrith, an analyst with ThinkEquity. He said, “We’re positive on Google’s display ad strategy, assuming that automation of display will serve the interest of brand advertisers. The jury’s still out on that.”

Read More: ClickZ

Apple Shuts Down Quattro Wireless To Focus On iAd

Starting in September, Apple will focus its mobile advertising efforts entirely on the iAd, which runs ads in applications on the iPhone and iPod. As a result of that decision, the company is shutting down the Quattro Wireless mobile ad network it acquired in January for $275 million.

In a statement posted on the former Quattro home page, Apple said it will no longer accept new campaigns for the ad network and will wind down existing campaigns across different devices and platforms. “As of September 30, we will support ads exclusively for the iAd Network,” read the notice.

That Apple has eschewed running a horizontal ad network to concentrate solely on ramping up the iAd platform launched in April isn’t terribly surprising. With the company’s high ambitions for the new interactive format and commanding position in mobile apps, it’s become clear Apple is betting everything on the iAd to succeed in mobile advertising.

And after enticing a roster of blue-chip brands to sign on as charter iAd advertisers at least $1 apiece, Apple likely needs to turn all its Quattro resources toward preparing and running campaigns for its new batch of clients. A recent Wall Street Journal report indicated that the service has been hampered by campaign delays, with at least one announced partner, Chanel, shelving its iAd effort.

Read More: MediaPost

RIM Reportedly Shopping For Mobile Ad Network For BlackBerry

Since Google (NSDQ: GOOG) bought AdMob and Apple (NSDQ: AAPL) bought Quattro, RIM (NSDQ: RIMM) must be shopping for a mobile ad network, right? That’s what’s happening, according to people familiar with the matter, reports the WSJ.

The unnamed sources said the BlackBerry-device maker has been in talks with Millennial Media, an independent mobile ad network based in Baltimore, but that the talks have stalled over disagreements regarding the value of the deal. Millennial is reportedly asking for $400 to $500 million based on the recent prices that AdMob and Quattro were able to score ($750 million and an estimated $270 million, respectively). Both companies declined to comment, WSJ says.

Of course, there are other free agents in the space that RIM could investigate buying, including JumpTap and Greystripe, which have been very vocal about how much their networks are growing in lieu of the recent purchases by Google and Apple, which have successfully drawn attention and more advertising dollars to mobile.

RIM’s user base can be looked at as a valuable demographic for advertisers, given that a majority of its install base are business users. However, those users can be already targeted today by using existing mobile ad networks, so presumably, RIM would be able to bring something additional to the table if it owned its own network. Likewise, RIM would be able to skim some of the profits off for itself, which both Apple and Google are doing through its ad networks.

Read More: MocoNews.com

Today, during ClickZ’s Connected Marketing Week in San Francisco which brought together name-your-digital-pleasure marketers to discuss their respective marketing channel, ClickZ and the Internet Advertising Bureau (IAB) also co-sponsored an Ad Networks & Exchanges event.

Editor’s note: It would seem the name of this type of IAB event may need to evolve. Demand-side platforms don’t want to be called ad networks. And, ad networks – to a certain degree – want to be known as demand-side platforms. Looking forward to the new name!

Just prior to the day-long event, the IAB released news (see it) that 16 IAB member ad network and exchange companies had become “the first to commit to comprehensive self-certification against the IAB ‘Networks & Exchanges Quality Assurance Guidelines,’ [which aims to] increase buyer control over the placement and context of advertising on ad networks and exchanges.”

In the third panel of the day, San Francisco-area media agencies provided their take on the fast-moving ad ecosystem and ad verification technologies, in particular.

Moderated by ValueClick Media’s Matthew Boyd, panelists included associate media director Kim Small of Universal McCann, senior media manager Pablito Padua of Signal to Noise (formerly Agency.com), associate media director Lindsay Wong of Razorfish and vp, digital strategy director Chris Unno of PHD.

Noting the new guidelines and their adoption by 16 member companies, panel members agreed they were heartened to see the step forward in adopting the brand safety measures. But Signal to Noise’s Padua added that he was disappointed that there weren’t additional networks on the initial list.

Read More: AdExchanger

Excess Ad Inventory Pushing Value-Added Services

The movement into value-added services by companies throughout the online advertising space continues to get more interesting. First we saw Google provide free tools and services to support online ad sales. Now search engine marketing companies have begun to provide free tools and platforms to small-and-medium size businesses in hopes of eventually locking them in to subscription services for life. Take that one step further, to find demand side platforms (DSP) building networks of tech offerings on top of real-time bidding platforms.

Xa.net built its platform as an integration hub to bring in data from BlueKai, eXelate and TargusInfo, as well as the media from ad exchanges and publishers. Add to that creative services and it gives advertisers a way to pull in targeting data, purchase ads, and design creative pieces.

The xa.net built technology that allows companies to access inventory from ad networks and exchanges through a real-time bidding system will also offer value-added services that assist companies with copywriting and creating ads. The company’s CEO, Rob Leathern, tells me xa.net began to build the platform earlier this year and will sign on five companies to augments its services. Think of it this way, Leathern wants xa.net to provide the underlying technology that connects complementary services to make everything work together. That includes ad creation for social media platforms, too.

One of those companies will become BoostCTR, a network of copywriters for text ads that will help xa.net clients improve the quality of copy written for Facebook ads. Others include 4Delit, a self-service system that lets small advertisers create Flash and rich media ads; Interpolls, which creates rich-media formats and widgets; OneScreen; and OggiFinogi.

Read More: MediaPost

Google TV plan is causing jitters in Hollywood

Google revolutionized the way people access information. Now it wants to transform how people get entertainment.

The search giant is touting an ambitious new technology, called Google TV, that would marry the Internet with traditional television, enabling viewers to watch TV shows and movies unshackled from the broadcast networks or cable channels on which they air. Users would need to buy a TV or set-top box with Google software that could connect to the Internet, along with a keyboard to type commands. Users could also use their iPhone or Android phone to operate Google TV.

The prospect of Google getting into television frightens many in Hollywood, who worry that Silicon Valley will upend the entertainment industry just like the Internet ravaged the music and newspaper industries.

Read More: LATimes.com

When marketers buy television spots, they can turn on the tube and watch them run. Magazines and newspapers? Marketers can flip to their ads. But when it comes to online inventory, the questions still linger: Are my ads truly running where and when I want them to? Am I wasting impressions and ad dollars serving ads in front of the wrong audience, or are they subject to impression fraud? Are they running next to content that might be offensive to my audience or on the same page as one of my major competitors? Most of us may have chuckled over humorous examples of the wrong ad in the wrong place, but it isn’t that funny if it’s happened to you.

Most advertisers are already sold on the value of good online marketing and understand how leveraging the digital world for their end goals is an important part of their marketing mix. So why are we seeing consumer media time online rise to almost 40 percent but online budgets still only represent a portion of that ratio?

When asked why the big dollars aren’t yet flowing like they could into the channel, most decision makers seem to have an issue with trust — whether it be in brand safety concerns, unproven measurement, etc. Ultimately, the currency of choice is trust, and for some marketers, especially ones rooted in deep, traditional advertising familiarity, the online world is still a bit of a mystery. In the same vein, can you imagine if you went to buy a thousand shares of Apple and instead were given a thousand shares of a worthless penny stock? Would you continue to patronize a restaurant where you weren’t guaranteed to get the meal you ordered? Even hardcore digital advocates admit that there are still questions — and a few bugs left to exterminate –within virtual inventory.

Read More: iMediaConnection

Pushing Boundaries: Exploring the Evolving World of Display Media 

Digital media agency, FRWD, hosted digital event Pushing Boundaries: Exploring the Evolving World of Display Media yesterday at the Fine Line Music Café in Minneapolis. Industry leading publishers, demand side platforms, data aggregators, verification and survey tool providers gathered to help each other prepare for, and profit from, the fast-changing world of online advertising.  MediaMath, Simpli.fi, BlueKai, DataXu, Lucid Media, ADSDAQ Exchange, [x+1], and Rocket Fuel; among others exchanged ideas on the direction of the industry during 4 panels and 2 keynote presentations.

The transfer of data integration into ad exchanges and DSPs coupled with technology and real-time bidding (RTB) capabilities are increasing at a rapid rate, almost as rapidly as the industry is changing. Joe Zawadzki of MediaMath predicted that the industry transformation from “Mad Men to Math Men” will occur by 2012 at which point “Don Draper will be replaced by your high school Dungeon Master.” 

Panel speakers throughout the afternoon explained the details of successful ad exchanges and DSPs, specifically the capabilities of combining data and audience research targeting with the need to assure brand protection, transparency, and the unique market dynamics of RTB.  

Read More: FRWDCO.com

Google and the Search for the Future

To some, Google has been looking a bit sallow lately. The stock is down. Where once everything seemed to go the company’s way, along came Apple’s iPhone, launching a new wave of Web growth on a platform that largely bypassed the browser and Google’s search box. The “app” revolution was going to spell an end to Google’s dominance of Web advertising.

But that’s all so six-months-ago. When a group of Journal editors sat down with Eric Schmidt on a recent Friday, Google’s CEO sounded nothing like a man whose company was facing a midlife crisis, let alone intimations of mortality.

For one thing, just a couple days earlier, Google had publicly estimated that 200,000 Android smartphones were being activated daily by cell carriers on behalf of customers. That’s a doubling in just three months. Since the beginning of the year, Android phones have been outselling iPhones by an increasing clip and seem destined soon to outstrip Apple in global market share.

True, Apple sells its phones for luscious margins, while Google gives away Android to handset makers for free. But not to worry, says Mr. Schmidt: “You get a billion people doing something, there’s lots of ways to make money. Absolutely, trust me. We’ll get lots of money for it.”

“In general in technology,” he says, “if you own a platform that’s valuable, you can monetize it.” Example: Google is obliged to share with Apple search revenue generated by iPhone users. On Android, Google gets to keep 100%. That difference alone, says Mr. Schmidt, is more than enough to foot the bill for Android’s continued development.

And coming soon is Chrome OS, which Google hopes will do in tablets and netbooks what Android is doing in smartphones, i.e., give Google a commanding share of the future and leave, in this case, Microsoft in the dust.

Can it all be so easy? Google’s stock price has fallen nearly $150 since the beginning of the year. Financial pundits have started to ask skeptical questions, wondering why it doesn’t give more of its ample cash back to shareholders in the form of buybacks and dividends. Some suspect that all that temptation merely encourages Mr. Schmidt, along with founders Sergey Brin and Larry Page—the triumvirate running the company—to splurge on gimmicky ideas that never pay off. Fortune magazine recently called Google a “cash cow” and suggested more attention be paid to milking it rather than running off in search of the next big thing.

But to hear Mr. Schmidt tell it, the real challenge is one not yet on most investors’ minds: how to preserve Google’s franchise in Web advertising, the source of almost all its profits, when “search” is outmoded.

The day is coming when the Google search box—and the activity known as Googling—no longer will be at the center of our online lives. Then what? “We’re trying to figure out what the future of search is,” Mr. Schmidt acknowledges. “I mean that in a positive way. We’re still happy to be in search, believe me. But one idea is that more and more searches are done on your behalf without you needing to type.”

“I actually think most people don’t want Google to answer their questions,” he elaborates. “They want Google to tell them what they should be doing next.”

Let’s say you’re walking down the street. Because of the info Google has collected about you, “we know roughly who you are, roughly what you care about, roughly who your friends are.” Google also knows, to within a foot, where you are. Mr. Schmidt leaves it to a listener to imagine the possibilities: If you need milk and there’s a place nearby to get milk, Google will remind you to get milk. It will tell you a store ahead has a collection of horse-racing posters, that a 19th-century murder you’ve been reading about took place on the next block.

Says Mr. Schmidt, a generation of powerful handheld devices is just around the corner that will be adept at surprising you with information that you didn’t know you wanted to know. “The thing that makes newspapers so fundamentally fascinating—that serendipity—can be calculated now. We can actually produce it electronically,” Mr. Schmidt says.

Mr. Schmidt obviously has an eye to his audience, which this day consists of folks with an abiding devotion to the newspaper business. He speaks in sorrowful tones about the “economic disaster that is the American newspaper.” He assures us that in the coming deluge trusted “brands” will be more important than ever. Just as quickly, though, he adds that whether the winners will be new brands or existing brands remains to be seen. On one thing, however, Google is willing to bet: “The only way the problem [of insufficient revenue for news gathering] is going to be solved is by increasing monetization, and the only way I know of to increase monetization is through targeted ads. That’s our business.”

Mr. Schmidt is a believer in targeted advertising because, simply, he’s a believer in targeted everything: “The power of individual targeting—the technology will be so good it will be very hard for people to watch or consume something that has not in some sense been tailored for them.”

That’s a bit scary when you think about it. But for investors and executives the big question, of course, is which companies will control these opportunities. Google may see itself as friend and helper to the media business, but it also clearly sees itself in control of the targeting information. Says Mr. Schmidt: “As you go from the search box [to the next phase of Google], you really want to go from syntax to semantics, from what you typed to what you meant. And that’s basically the role of [Artificial Intelligence]. I think we will be the world leader in that for a long time.”

Between here and there, though, the company faces ever-growing legal, political and regulatory obstacles. The net neutrality debate, which Google has led, has taken a sudden turn that has many of its former allies in the “public interest” sector shouting “treason.”

What was most striking about the set of net neut “principles” Google produced this week with former antagonist Verizon was that they didn’t apply to wireless. “The issues of wireless versus wireline gets very messy,” Mr. Schmidt told one news site. “And that’s really an FCC issue, not a Google issue.”

Wait. Isn’t the future of the Internet wireless these days? Isn’t wireless the very basis of the new partnership between Google and Verizon, built on promoting Google’s Android software? But Google has now broken ranks with its allies and dared to speak about the sheer impracticality of net neutrality on mobile networks where demand is likely to outstrip capacity for the foreseeable future.

If that weren’t about to become a sticky political wicket for the company, it also faces growing antitrust, privacy and patent scrutiny, fanned by a growing phalanx of Beltway opponents, the latest being Larry Ellison and Oracle. “There’s a set of people who are intrinsic oppositionists to everything Google does,” Mr. Schmidt acknowledges resignedly. “The first opponent will be Microsoft.”

Mr. Schmidt is familiar with the game—as chief technology officer of Sun Microsystems in the 1990s, he was a chief fomenter of the antitrust assault on Bill Gates & Co. Now that the tables are turned, he says, Google will persevere and prevail by doing what he says Microsoft failed to do—make sure its every move is “good for consumers” and “fair” to competitors.

Uh huh. Google takes a similarly generous view of its own motives on the politically vexed issue of privacy. Mr. Schmidt says regulation is unnecessary because Google faces such strong incentives to treat its users right, since they will walk away the minute Google does anything with their personal information they find “creepy.”

Really? Some might be skeptical that a user with, say, a thousand photos on Picasa would find it so easy to walk away. Or a guy with 10 years of emails on Gmail. Or a small business owner who has come to rely on Google Docs as an alternative to Microsoft Office. Isn’t stickiness—even slightly extortionate stickiness—what these Google services aim for?

Mr. Schmidt is surely right, though, that the questions go far beyond Google. “I don’t believe society understands what happens when everything is available, knowable and recorded by everyone all the time,” he says. He predicts, apparently seriously, that every young person one day will be entitled automatically to change his or her name on reaching adulthood in order to disown youthful hijinks stored on their friends’ social media sites.

“I mean we really have to think about these things as a society,” he adds. “I’m not even talking about the really terrible stuff, terrorism and access to evil things,” he says.

Not that Google is a doubter of the value of social media. Mr. Schmidt awards Facebook his highest accolade, calling it a “company of consequence.” And though “there is a lot of hot air, a lot of venture money” in the sector right now, he predicts that one or two more “companies of consequence” will be born among the horde of new players just coming to life now.

A skeptic might wonder whether, despite present glory, Google itself might yet prove a flash in the pan. The company has enormous technological confidence. Mr. Schmidt describes how YouTube, its video-serving site, almost “took down” the company in its early days, thanks to the swelling outflow of video dispatched from its servers to users around the globe. Salvation was the “proxy cache”—lots of local servers around the world holding the most popular videos. “The technology that Google invented allows us to put those things very close to you,” says Mr. Schmidt. “It was a tremendous technological achievement.”

But with YouTube, as with lots of Google projects, there remains the question of how to make money. Google captured the search wave and shows every sign of positioning itself successfully for the mobile wave. As for the waves after that, your guess may be as good as Mr. Schmidt’s.

Read More: WSJ.com (entire article here)

During the second quarter of the year, the highest-risk inventory was served via ad exchanges. That’s according to a report to be released Wednesday by AdSafe Media, a company that markets proof-of-performance and content safety solutions.

A full 16.9% of inventory served by ad exchanges was high risk for advertising, while 6.3% of inventory served via ad networks was high risk, and 3.8% directly via publishers was considered high-risk.

What’s more, inventory transparency is the lowest on ad exchanges, which served 64.4% IAB Category I inventory — with full transparency regarding referring URL — while ad networks served 82.6%, and publishers directly served 97.4%.

Publishers, the study found, tend to follow geotargeting requirements more than any other buying channel. The study revealed that 1.9% of publisher inventory fell outside of geotargeting requirements, while 3.9% of ad exchange inventory and 4.3% of ad network inventory fell outside of geotargeting requirements.

Read More: MediaPost

P&G Execs And VCs Want Startups With Branding Potential

The Internet turns branding and marketing dreams into reality. For Procter & Gamble executive Dave Knox that means transforming Cincinnati, Ohio into the Silicon Valley of consumer marketing. Knox, who works at P&G with venture capitalists and startups by day, sees moonlighting as an opportunity to take the business model built by TechStars or Capital Factory and apply it to startups focusing on branding and consumer marketing.

So, Knox and fellow co-founders J.B. Kropp, Dave Knox, Bryan J. Radtke, and Robert W. McDonald launched The Brandery three weeks ago. On Wednesday they close submissions that give five startups a 12-week launch program, earn $20,000 in seed funding, and provide access to partners, mentors and resources typically reserved for major corporations. The lucky winners will pitch to a group of angel investors, VCs and strategic partners.

In exchange for the seed funding, each company will give up 6% equity that goes to The Brandery, a non-profit, 5013C organization. When these startups emerge through successful exits, the equity will fund operating capital for The Brandery.

Mentors include Get Satisfaction’s Wendy Lea, P&G’s Lucas Watson, Third Screen Marketplace’s Suzanne Tosolini, Venture Investments at the Kraft Group’s Steve Schlafman, and E.W. Scripps’s Adam Symson, among many other industry executives.

Read More: MediaPost

The People’s Web

At Kara Swisher and Walt Mossberg’s D8 conference a couple of months back, the founder of Facebook, Mark Zuckerberg, stated that one of Facebook’s objectives was to “rethink the web stack around people.” This statement echoed the thoughts I shared in a recent post concerning the way social networks are poised to change all types of digital experiences over the next few years. In this posting, I will expand a bit on the implications of this transformation from a “site-centric” Web to a “people-centric” Web in the area of content.

Today, content experiences are built around a link-based architecture, in that links are aggregated to create static channels. Relevancy of a specific link is determined by how it relates to other links or analyzing the metadata used to describe that link. Generally, sites are designed to act as a holistic product rather than a modular one, although sites have certainly become more modular as they optimize themselves for search engines.

However, the overall product is designed to be controlled by the publisher rather than the users. Users’ ability to impact the way most sites package content has been primarily through click-through activity. User comments to a certain extent introduce user participation but that is probably where users’ involvement stops.

So, what would a content site designed with people as its primary focus offer?

Read More: SpectatorBytes.com

Video ad network BrightRoll has struck a deal with search data provider Magnetic to offer search retargeting as an option for targeting video ads. Search retargeting allows advertisers to run display ads based on a user’s search history. So if someone has been researching a car purchase, they might see a banner ad from an auto advertiser.  With the BrightRoll deal, Magnetic is now applying this approach to video ads as well. “By combining Magnetic’s targeting technology with our video advertising platform, we’re able to solve the needs of our advertisers by delivering targeted campaigns at scale with a high return on investment,” said BrightRoll CEO Tod Sacerdoti in a statement. The ad network already offers targeting according to demographic, behavioral, geographic and other criteria.  Magnetic has already struck partnerships earlier this year with display ad networks including interCLICK and Undertone Networks aimed at refining display ad targeting based on the 270 million anonymous profiles the company has created based on search data gleaned from mostly second-tier search engines, Web site toolbars, e-commerce sites and other sources.  The idea is to combine the high conversion rates of search advertising with the traditional brand-building role of display. “You have all the different creative options in display that you don’t have in search,” said Magnetic CEO Josh Shatkin-Margolis. “And for premium publishers the best form of online display ads are video ads.”

Read More: MediaPost

The Future of Free Media

Monday’s Wall Street Journal article on cookie tracking was a bit underwhelming. So although (a) we’ve been having the same conversation over and over again since 1996 without getting anywhere*, (b) the article was a bit misleading and maddeningly vague, and (c) industry rumor has it that the church/state divide at the Journal does not quite live up to the J-school ideal, I am siding with Jeff Jarvis in believing that News Corp is not well enough organized to stage a conspiracy: the article was just poorly done.  These arguments are nominally about privacy. And providing privacy is a worthy but complicated** goal. But given the general level of philosophical confusion about privacy, I believe much of the commentary (and the comments to the commentary) is motivated by a hostility to advertising in general.  If you hate advertising, you hate advertising. Arguing that not paying for music means a diminished supply of quality music does not sway the downloader. Not paying for media–in whatever sense of pay–means a diminished supply of quality media. This argument does not sway the hater of advertising, but I’m not trying to convince them. Advertising provides something important: free (as in beer) media. This may not mean much to Rupert Murdoch–who can afford to pay cash for his media–but it means something to society. And it should mean something to those of us who are trying to find a way to make quality ad-supported online media a viable proposition.  Paying cash for media is regressive. High cover prices exclude those with less disposable income. (This strategy is used purposefully by mixed-model high-end media outlets to produce a demographic appealling to better-paying advertisers.) Advertising democratizes media***. And media allows a democracy.

Read More: ReactionWheel.Blogspot.com

The Google-Verizon Net Neutrality Pact

Google CEO Eric Schmidt and Verizon CEO Ivan Seidenberg hosted a conference call Monday to discuss an open Internet just days after the Federal Communications Commission abandoned efforts to reach a compromise. The proposal aims to derail unlawful discriminatory practices and gives regulators the authority to stop offenders.  While the two companies published the terms of the Google-Verizon “A Joint Policy for an Open Internet” agreement in a blog post, the plan does not treat wireless and wireline network access equally.  Both Schmidt and Seidenberg emphasized that there is no formal agreement based on the proposal. It simply represents suggestions to “the public policy arena to see how we can move our industry forward,” says Seidenberg, emphasizing that the agreement stands for innovation.

Read More: MediaPost

IAB Ad Network Guidelines: Providing Greater Brand Safety

We have all witnessed the ad network space and the overall non-reserved inventory landscape become increasingly complex. During the past 18 months, changes to our industry have come from the continued proliferation of ad networks, growth in data usage, the emergence of exchange models, as well as increased technology offerings including demand-side and supply-side solutions.  While these innovations are designed to benefit the end client, it has led to confusion – particularly during a time when advertisers and agencies are seeking transparency, brand safety, quality, and control.  As a result, clients have had growing concerns when it comes to buying inventory through networks and exchanges. They often wonder: “How will my brand be protected? Where will my campaign really run? How do I make sense of the various targeting capabilities and data sources?”  In light of these concerns, the IAB has released the “Networks & Exchanges Quality Assurance Guidelines.” The guidelines are intended to provide increased simplicity, transparency, and control for the buying community (i.e., marketers, agencies, and publishers). Based on feedback from members of this community, I’m confident that the implementation of these guidelines will result in providing confidence and clarity that buyers seek and an overall stronger marketplace for all parties alike.

Read More: ClickZ

Online advertising network InterCLICK announced its second quarter 2010 earnings on Wednesday. According to the release, “Revenue was $21.7 million in Q2 2010, a 103% year-over-year increase. (…) Gross profit was $9.6 million in Q2 2010, up 102% year-over-year.” Read more.

AdExchanger.com: Looking at InterCLICK’s 100% year-over-year Q2 growth and projected 2010 revenues of $90 million + , are there any observations you can share about how clients are spending?

MK: Delivering the most effective audience-centric campaigns is dependent on our ability to properly value targeting data and solving the operational challenges associated with running data enabled campaigns. We won a record amount of new business this past quarter and client retention reached a new high watermark. This is a hyper competitive space and I believe that our investment in our technology and our team has paid off tremendously, as evident in our results.

What about data? Has using data exchanges and other third-party providers been a key part of your offering? How do you see this playing out for InterCLICK?

The challenges in display advertising require effective supply chain management. The goal is to find the optimal alignment among data, inventory, and creative. Quality inventory has been accessible for quite some time, and through data exchanges like BlueKai, rich targeting data has been made quite accessible. So data exchanges allow for easy access and implementation. The real challenge is in the execution, which is what we have invested significant capital and resources in addressing.

Read More: AdExchanger.com

Inside the Numbers: How Demand Media Will Pitch a Billion Dollar IPO

Demand Media is a money-losing company. How will it convince Wall Street to value it at a billion dollars or more?   By directing investors’ attention to a set of numbers which say it’s a very profitable company.  The official term for these numbers are “non-GAAP financial measures”. In English, that translates into “accounting you can’t try at home, but which shows off our company in the best possible light.”  And it does! Depending on which set of numbers you want to look at, Demand lost either $4.3 million or $22.3 million on revenues of $114 million in the first half of this year. But Demand’s “Adjusted OIBDA” numbers show a company that made $25.6 million on revenue of $108 million. Much better!  Some investors may balk at these non-GAAP numbers, but Demand, Goldman Sachs (GS) and its other underwriters clearly think there’s a market for them. And there’s certainly a hunger in the tech world for a big, brand name IPO to break the dry spell. You can feel people willing this thing to work.  If Demand did, say, $55 million in OIBDA this year, it would need a multiple of 18 times trailing 12 months earnings to get to a $1 billion valuation. It would need 27x to get the $1.5 billion number that people are whispering to reporters.  Another way to get to $1.5 billion: Project OIBDA of $100 million for 2011, and ask for 15 x on that number. Reminder: $1.5 billion would make Demand worth more than the New York Times (NYT).

Read More: AllThingsD.com

Adapt.ly to Manage Ads Across Multiple Social Networks

As advertisers begin to run ads across an increasing number of social networks and sites, startup firm Adapt.ly has developed technology to help manage those campaigns from a single platform, and to help digest and evaluate the resulting performance data more easily.  As Adapt.ly co-founder Nikhil Sethi points out, most social networks offer self-service ad platforms, which exist in complete isolation of their competitors’. As a result, advertisers are forced to manually construct individual campaigns on each, despite the fact they’re attempting to reach essentially the same audience. “Managing all these campaigns by hand is a pain in the ass, and analyzing the data from all the different platforms becomes a nightmare,” Sethi said.  It’s that heavy lifting that Adapt.ly is attempting to relieve, providing a service that will handle campaign creation, targeting, and optimization automatically, and from a single point of entry. “We’ve built a system that allows us to take creative and to normalize it across a range of networks. We ask advertisers two simple questions: What are you advertising, and who are you trying to reach? The system will then optimize targeting across the networks,” said Sethi, adding that users are given the option to specify creative for individual platforms if they wish, or to simply let Adapt.ly take care of it.

Read More: ClickZ

Are Marketers Really Spying On You Online?

The ongoing “What They Know” series in The Wall Street Journal is drawing needed attention to some of the ways web analysts and marketers gather and track information about people online. As part of the series, they visualized the types of cookies and tracking files used by 50 top websites, including their own. However, the WSJ failed to fully explain what type of information is being collected about visitors and what marketers do with the data. Rather, they left the public to wonder if online marketers are actually spies.   I don’t deny that I use cookies and tracking pixels to gather a variety of details about you if you visit my site. However, most of the data I have is anonymous and the details exist across multiple systems, not aggregated in one tidy personal profile. Rarely do I feel like I have pieced together enough details to be considered a spy. But with all that data, what do I really know about you?

Read More: AdAge

Part of the magic of real-time bidding is found within machine learning. This involves using sophisticated algorithms to “learn” complex patterns based on large amounts of data in order to make optimal advertising decisions. The importance of machine learning is cost avoidance and value creation. Cost avoidance is simple to understand: data-driven optimization strategies help reduce waste by identifying the most relevant impressions while selecting the best ads (better creative message, better offer, etc.), which in turn improves performance and ROI (define). Value creation, on the other hand, happens when buyers and sellers of commoditized offerings are more efficiently brought together for a transaction.  To create machine learning magic, two ingredients are required: scale and prediction. Scale speaks to the need to make more users/impressions available through the auction marketplaces, and increase the number of advertisers bidding on these users. The bigger the scale, the more sophisticated the data-driven prediction can be. The second ingredient refers to the idea that prediction needs to be “accurate enough.” Amazon and Netflix have demonstrated that when you provide an accurate prediction of what consumers want, the business grows in two ways:

1. Better inventory control and more purchases/utilization.
2. Better targeting becomes a custom delight feature when it’s perceived to be quite accurate by average consumers.

The ability to deliver relevant choices in real time based on what consumers reveal about themselves creates a virtuous cycle: 

Ads/recommendations become more accurate → consumers are willing to share additional information about themselves → the machine learning algorithm for ads/recommendations becomes even smarter

In digital advertising, the machine learning prediction ultimately boils down to two parts: identifying your target audience and reaching them efficiently. The first part requires machine learning at the user level to learn the most optimal audience segments to target; the second requires machine learning to drive real-time bidding strategy with precision. For instance, demand side platform technology allows advertisers to have global control over how many times each user sees the ads (i.e., frequency capping) and how they see them. This begs the obvious question, “what is the optimal number of ad repetitions?” The answer might be an average of five times over a period of seven days. Problem solved? Not quite.

Read More: ClickZ

BrightRoll Launches Video Ad Exchange

Earlier this year, video ad company Adap.tv launched a video ad exchange in partnership with Gannett Co. and Publicis Groupe’s VivaKi digital unit. Now, its OneSource platform will have some competition from a rival video ad marketplace started by video ad network BrightRoll.  As with the online exchanges that have emerged in recent years for display and other types of advertising, the goal is to bring increased efficiency to the video sector by giving publishers a way to unload unsold inventory and media buyers an automated system for reaching particular audiences across a wide range of sites.  “What we’re essentially releasing is a video advertising business in a box for buyers of online advertising,” said BrightRoll CEO Tod Sacerdoti, who added that the new exchange dubbed BRX is an outgrowth of the company’s efforts to further automate its own ad network over the last 18 months. BrightRoll is the third-largest U.S. video ad network based on streaming video ads viewed — at 333,492 in June, according to comScore.  “We realized everything we were building was applicable to other media buyers and sellers,” said Sacerdoti. A BrightRoll study earlier this year found that half of publishers surveyed reported that at least 20% of their online video advertising inventory is never sold, suggesting the potential for an automated, auction-based marketplace for pre-roll ads.

Read More: MediaPost

Forbes Sells Investopedia To ValueClick For $42 Million

After less than two months on the block, Forbes Media has sold financial education site Investopedia to lead gen provider ValueClick (NSDQ: VCLK) for $42 million. In June, Forbes retained the Jordan, Edmiston Group, Inc. three years after it bought the Canadian-based site.  The announcement comes a few weeks after Forbes purchased freelance journalism site True/Slant, which was shut down last week and will remain live as an archive site only.  Forbes had been an investor in True/Slant and before the purchase, it had hired site’s founder, Lewis DVorkin, as consultant to help restructure its digital offerings. The quick sale of Investopedia is a the first step in the struggling publisher’s latest digital reinvention. Despite the fact that Forbes was eager to sell the Edmonton, Alberta-based Investopedia, the company claimed that the site’s profits and users have grown in the past three years since it was acquired.  In a release, ValueClick CEO Jim Zarley said that Investopedia gives the company “great content, organic traffic and established advertiser relationships in the important financial services advertising vertical.” He also believes that the addition of Investopedia will be able to help build up its ValueClick Brands and ValueClick Media offerings.

Read More: PaidContent.org

AdMeld, a New York City based ad inventory optimizer, just closed on a $15 million round of venture funding, in the latest sign that the real-time bidding (RTB) market for display advertising is on fire.  Last month, Google paid a reported $70 million for demand-side platform Invite Media. And just a few weeks ago, brand safety startup AdSafe, which will increasingly work with RTB platforms, raised $7.5 million.  The rise of RTB is the biggest story of 2010 in online advertising, and has been written about extensively in ad industry publications. But people outside of advertising don’t seem to know anything about it.

Read More: BusinessInsider

A Peek Inside the M&A Playbooks of Technology’s Top Acquirers

Last night a group of M&A gurus from the corporate development teams at top tech acquirers Google, Microsoft, Yahoo, Cisco, Facebook and Twitter gathered to share insights into their business with a group of startups at a fancy-pants Los Altos Hills, Calif. mansion. Though Facebook and Google might have been the most notable active acquirers lately, everyone on the panel said they are out shopping. They each have a bit of a different style, and a bit of a different target startup. Below are the most notable bits from each participant:

Google‘s Amin Zoufonoun said that he looks at three types of acquisitions: a proven product and team, an uncertain big bet, or market and tech leadership (like YouTube and DoubleClick). He said recent acquisitions by Google and other companies like Apple point to the fact that mobile is not a core part of the DNA of many tech giants. As for advice, he warned startups that they always underestimate how long it takes to close an acquisition; for Google, deals usually take three to four months. As for areas he’s interested in, Zoufonoun said he thinks music is overhyped (an interesting comment given Google is reportedly looking to make a play in this space), and mobile user interfaces are underhyped.

Cisco‘s Derek Idemoto talked up the value of post-acquisition integration. His company has been incredibly acquisitive, with 140 deals in the last 20-odd years. Idemoto bragged that 75 percent of acquired employees are still at Cisco after four years. He said he thinks video is underhyped, and that he’s particularly interested in data. “The most, and most relevant data might win,” he explained.

Read More: Gigaom.com

Why Agencies Must Lead The Technology Charge

Countless articles have been written in recent years putting agencies in the hot seat to adapt their business models or die. Why? Never-ending budget cuts and the digitization of the marketing landscape have produced two key trends currently threatening the livelihood of the traditional agency:

• Media has become digital, multi-channel, multi-platform, and decentralized. These elements are forcing media publishers to be more creative in how inventory is packaged and sold (e.g., bundling offers cross channels from print, online, to mobile). Furthermore, media companies are tired of losing revenue to agencies for the production of creative assets and are thus building and buying their own capabilities in house.
• Innovations in technologies, from brand monitoring, audience targeting, and media planning and buying technologies, to social media and mobile content solutions, drive when and how brands connect with consumers. Many of these technologies are being developed outside of the agency ecosystem.

Read More: iMediaConnection