When Sprint Nextel this month moved its $1.1 billion account from San Francisco-based Goodby, Silverstein & Partners to Digitas Chicago and Leo Burnett, it was one of the biggest wins in Chicago advertising history.

Beyond the 300 or so new jobs the account will bring to the city, with online-focused Digitas named lead agency, it also represents what may be the tipping point for digital advertising, which has rapidly transformed from a fringe buy to an integral part of the media mix.

“I think it’s a validation of the next evolution of this industry,” said Tony Weisman, president of Digitas Chicago.

Once the insular domain of direct marketers and tech-savvy programmers, online advertising accounted for just a fraction of total media spending in the U.S. at the start of the new millennium. Since then, the medium has leapfrogged every traditional advertising vehicle except television, and it is closing ground fast.

“The Internet has become as important as television to advertisers,” said David Hallerman, principal analyst at eMarketer, a New York-based research firm. “This is where people spend a large share of their time. Marketers chase the audience.”

Read More: Chicago Tribune

Akamai is acquiring Cotendo for $286M

App delivery company Akamai is acquiring app delivery network Contendo, the companies jointly announced today.

Akamai will purchase all of Cotendo’s outstanding equity for a net cash payment of $268 million.

Pending regulatory approval and other typical acquisition conditions, the deal is expected to close sometime over the next six months.

In a release today, the companies stated that they expect their combined technologies, which each have a lot to do with safely and securely delivering content and application packages in the cloud, to accelerate innovation in cloud and mobile services.

“As we look to accelerate growth across the dynamic landscapes of cloud and mobile optimization, we are excited to be joining forces with Cotendo,” said Akamai president and CEO Paul Sagan in a statement.

“Cotendo’s technology, partnerships and people are a strong complement to Akamai. Together, we believe there is tremendous opportunity for our combined technologies as enterprises embrace the move to the cloud and seek solutions for an increasingly mobile world.”

Read More: VentureBeat

Efficient Frontier, one of the larger remaining independent digital marketing firms, is getting a little bigger. The company is buying one of the largest digital agencies in Australia, Downstream Marketing, for an undisclosed sum.

The deal gives Efficient Frontier immediate scale in Australia and the opportunity to expand in Asia as the company seeks to tap faster-growing international markets. Downstream Marketing’s clients include American Express, Avis, Vodafone and Weight Watchers. The 30-employee company is run by CEO Steve Knowles, former head of marketing for eBay in Australia.

It’s the second big deal in a year for Efficient Frontier, which acquired social-agency Context Optional in May for a reported $50 million.

Like a lot of foreign markets, digital ad spending is small but growing fast. Online advertising spending in Australia reached $2.45 billion in the 12 months ending June 30, 2011, up 20% from a year ago, and is on track to surpass $3 billion in 2012, according to the Australian Interactive Advertising Bureau. “Those aren’t small numbers and it’s another extension of our business,” said CEO David Karnstedt.

Like a lot of firms born in search, Efficient Frontier is attempting to expand beyond its original purpose into all areas of marketing where automated auctions are transforming media buying. Originally that was search and then display advertising, but has since expanded to ads on social networks such as Facebook, video and mobile.

Read More: AdAge

5 Ways to Reinvent the AOR for the Digital Age
 
I had a lively conversation over lunch last week with an agency head and his largest client. We were talking about digital media, connected consumers, and how they’re shaking up the advertising business as we’ve known it. We each saw things a bit differently, but we all agreed that the traditional ad agency business model is fatally broken and needs to change.

The client chided the agency head: “We need you to do more with less, especially when it comes to execution tasks like media planning and buying. I don’t want to pay by the head for monkey work.” Ouch. More generously, she said she valued the agency’s strategic message and program development work and hoped they could make better use of analytics to connect total client investment to results.

The agency head noted that the client’s procurement department had squeezed the AOR (agency of record) fees so tightly that it made it difficult for the agency to invest in innovation efforts – like analytics – that would enable it to become more strategic. “Procurement has drained the life blood out of agency-client relationships.” The client nodded sympathetically.

I had to chime in with, “Isn’t this why programmatic buying was invented?” I qualified my question by explaining that tech geeks like me are excited about the rise of ad exchanges, demand-side platforms (DSPs), real-time bidding (RTB), etc., but the reason these things are being adopted so quickly is that they solve a fundamental business problem for both the agency and the client. Using smart software to help do “monkey work” means – at least in theory – that the agency can reallocate staff and resources to focus on more strategic messaging and communication work that moves the brand forward.

Read More: ClickZ

Media6Degrees Becomes Ad Matchmaker Via RTB, Data

Media6Degrees will officially roll out a tool dubbed Planner next week that gives advertisers and publishers access to targeting data.

For advertisers, the report provides a list of the best publisher sites. For publishers, the report provides the same for advertisers. The tool relies on technology that creates matches based on data collected from Web page tags, or code, placed on advertisers’ and publishers’ Web sites. The data represents clusters of consumers with similar likes.

Calling the data that creates this “fingerprint” unique to a specific customer base, Andrew Pancer, COO at Media6Degrees, describes the code as a targeting pixel that gathers information. He believes the data can help publishers generate premium sales from real-time bidding insights, along with revenue generated from putting remnant into exchanges.

Publishers have been looking for ways to take advantage of RTB, but most don’t like the idea that inventory gets sold without the support of their direct sales force. These days it’s about adding “value” and “efficiencies” to inventory, which RTB allies suggest will bring to the process.

Read More: MediaPost

Creative types used to be the top dogs at ad agencies. No more. Now they have to share the spotlight with the quants, the people who can massage massive amounts of data to help make on-the-fly decisions that will deliver the right ad to the right consumer at the most opportune moment.

Every big agency now has a trading desk for buying online space or is doing deals with ad networks and platforms. The goal: to parse online behavior, within milliseconds, into finer and finer slices that allow for more precise targeting.

“The transformation of the business is more subtle and substantial than the flavor-of-the-month technology,” said Larry Chiagouris, professor of marketing at Pace University’s Lubin School of Business and a former ad agency executive. “Technology is changing the way [agencies] do business.”

Some of the latest hot tickets are companies that can add targeting to video, mobile and social media advertising.

Read More: Crains New York

BuzzLogic Rolls Out Real-Time Ad Platform

Social advertising firm BuzzLogic has launched an updated ad platform that targets advertising by analyzing the content of individual Web pages — rather than site or domain level data — then executes real-time bids and ad placements based on the most relevant inventory for a given campaign.

Dubbed Spectrum, the system indexes and ranks more than 1.5 billion pages and targets display ads based on topic, audience and social activity. Instead of cookies, the platform relies on cognitive analysis of relationships between certain keywords within a topic area.

For example, a CPG marketer seeking people who want healthy snacks might target online content where terms like “calories” and “snacks” “whole grain” or “healthy trail mix” appear. Conversely, an advertiser could use the dashboard to list terms to be avoided, such as “coupon,” if it wants to bypass audiences looking for deals and discounts.

Once ads are running, the Spectrum platform can be used to optimize campaigns on the fly and track results. Through the new offering, BuzzLogic boasts that it can help brands forge an “emotional connection” with consumers by seeding ads within the pages of the Web’s most influential blogs and sites. Whether placement determines an ad’s emotional resonance, or lack thereof, is debatable. The main idea is that the company’s technology is designed to deliver contextually relevant ads, now in real-time.

“We put the right ad in the right place at the right time,” said BuzzMetrics CEO Dave Hills, reciting the holy grail of brand advertising. The new platform scores the content on thousands of pages on thousands of times in fractions of a second and then dynamically bids on the most relevant URLs. It also builds ad units customized for the page and audience while incorporating a brand’s ad creative.

Read More: MediaPost

Leading Real-Time Ad Targeting Company Names Peter Bardwick as CFO and Hits $50M Run Rate Milestone

REDWOOD SHORES, CA, Sep 30, 2011 (MARKETWIRE via COMTEX) — Rocket Fuel Inc., the leading real-time ad targeting company, today announced that it has named media and technology industry veteran Peter Bardwick as CFO. The company also announced that Dinny Devitre, former CFO of Altria and current member of the Board of Directors of Altria, SABMiller, and Western Union, has become a strategic investor in the company. For the first half of 2011, Rocket Fuel tripled six-month revenues, quadrupled gross profit compared to a year earlier, launched a UK operation, and is on a $50M annual run rate based on August revenue.

News Facts:

• Rocket Fuel is announcing these key additions at a time of rapid growth and expansion. The company grew its headcount by 2.5 times in the last six months, adding nearly 40 employees. According to LinkedIn, Rocket Fuel is the fastest-growing digital advertising
  technology company in the U.S. — and the company continues to sign new leading brands and agencies each month.
• Bardwick is an IPO-ready CFO with a proven track record directing the financial strategies of high-growth technology and media companies. He was instrumental in taking CBS Marketwatch public and has supported over $10B in transactions. He joins Rocket Fuel from online brokerage Zecco, where he served as CFO. A former investment banker, he also has a wealth of hands-on operational experience, having served as CEO, CFO, COO and board member of a number of leading Internet, media, and data companies.

Read More: Marketwire

DoubleVerify Report Shows That Media Verification Improves Compliance for Online Advertising Industry

Trust Index Recognizes Best Performing Ad Companies — Ad Networks Are Proving to Be Brand Safe, and Advertisers Are Finding Value in Top Platforms

NEW YORK, NY–(Marketwire – Sep 30, 2011) – DoubleVerify, the pioneer and worldwide leader in online media verification and compliance, today published its 1H 2011 Trust Index. The report found a significant reduction of non-compliance among the industry’s best-performing ad networks and platforms. The findings illustrate that advertisers and networks are continuing to standardize their brand protection and compliance practices, ensuring their online media spend brings the highest return on investment. The worst-performing online advertising companies continued to demonstrate inconsistency in their ability to comply with advertisers’ preferences. According to the report, the most compliant ad networks from January to June 2011 were (alphabetically): AudienceScience, Casale Media, Dedicated Media, Epic Marketplace, interclick, Microsoft Media Network, Specific Media, Spectrum, a Centro product, Undertone, and Yahoo! Network Plus. Advertising platforms that were most compliant include (alphabetically): DataXu, Invite Media, The MIG’s Zeus Advertising Platform.

As advertisers have increasingly demanded verification to be included with third-party buys from ad networks, exchanges, DSPs and agency trading desks, the Trust Index has provided advertisers with in-depth data about partner compliance and brand safety trends in online advertising. Other key findings from the report showed:

• In the first half of 2011, the non-compliance rates for ad networks were at their lowest ever, since 18 months ago. The best-performing networks had an average non-compliance rate of 0.6 percent, but the bottom tier’s rate was 26 percent (compared to 2 percent and 35 percent respectively in 2H 2010).
• The most compliant ad platforms (DSPs and agency trading desks) maintained an average non-compliance incident rate of 4 percent, and the lower tier platforms decreased their average non-compliance rate to 20 percent — showing that ad exchanges can provide great value when verification is applied.

Read More: Marketwire

Ad Execs: More Than Half Our Display Ads Now Bought Via Nets, DSPs, Exchanges

More than half of all online display advertising is now bought via an ad network, exchange or DSP (demand-side platform), according to findings of an Econsultancy survey of advertisers, agencies, publishers and their reps released Friday by Rubicon Project.

By platform, the study found that ad networks still account for the majority of online display advertising buys, representing 55% of the inventory, according to the respondents, followed by DSPs (32%) and exchanges (30%). Those numbers add up to more than 100, because the purchasing platforms are not mutually exclusive and are frequently used together.

The study found that the role of DSPs is much greater in North America than in Europe. Half of all online display ad buys placed by American companies are now made through a DSP vs. only 27% in Europe.

The study also found that almost half (46%) of online display advertising media plans now include ad networks, up from 32% in 2009.

Read More: MediaPost

The following interview was conducted with Ken Allen, a Vice President in Blackstone’s Advisory Practice, who leads Blackstone’s coverage of the Digital Media sector.

What are some of the macro trends you are seeing in the advertising industry today?

The advertising landscape is undergoing a dramatic transformation that began over a decade ago and that continues today.  We have gone from a world in which advertising was once broadcast to large, homogeneous audiences to one where highly tailored messages are targeted to specific individuals through multiple digital channels, often simultaneously.

The chart below shows the broad transformation that has taken place in the U.S. market.  As the online marketing channel has become more prevalent, increasing from only 5% of the total market in 2000 to 16% today, print has similarly experienced a dramatic decline, decreasing from a 38% share in 2000 to 22% today.  Underpinning these share shifts is the rise of online advertising technologies, in particular, Paid Search and Display advertising.

Read More: Blackstone

HomeAway Looks for Reset After Last Year’s Super Bowl Gaffe
Vacation Rental Firm Looking for a New Agency

Smarting from its Super Bowl controversy earlier this year, HomeAway, the online vacation rental marketplace, is looking for a new creative agency.

The search for a new shop comes months after HomeAway attracted criticism for a 30-second Super Bowl spot, which was officially called “Test Baby” but earned the nickname “Smush” for depicting a baby doll thrown up against a window, with its face being smushed. The ad, created by Austin-based agency Vendor, was yanked shortly after its big debut after consumers accused HomeAway of trivializing child abuse and in showing a likeness of an infant being injured. Consumers also took issue with an online component of the campaign, where website visitors were told they could customize the ad by uploading pictures, and if they so chose, decapitating the baby.

Matt Cohen, senior director of global brand marketing at HomeAway, in an email told Ad Age that the company expects to select a new shop in the next month, and noted that the new agency will not be working on a Super Bowl commercial. “Our approach starting in 2012 will be to build our brand over the long term. A key component of our review process is to learn how different agency partners might attack this marketing challenge.”

Read More: AdAge

In the 1990s tech bubble, one entrepreneur was famous for making incredible statements such as, “literally, people will die this year because they didn’t buy my software.” His name was Michael Saylor and he was CEO of MicroStrategy, a company that sold – let’s be honest – boring enterprise software.

I always thought that was a nutty thing to say, but recently in an animated discussion with some colleagues about the sorry state of online advertising, I found myself arguing that if half of the annual $500 billion in advertising spend is wasted, then something is massively wrong. Then I heard myself say “literally, people have died because of bad advertising.”

Why is online advertising failing to live up to its potential in the hands of brands and their agencies? Because they have not kept pace with the evolution of technology and consumer behavior. Here are three things main problems holding back the online advertising industry:

Online ad spend lags consumer behavior by five years.

You can’t swing a stick at an ad:tech conference without hitting someone familiar with the Mary Meeker chart showing that online ad spending is way below where it should be given the time people spend online. Considering people are shifting their entire lives online, advertisers are overspending on TV and print, and drastically underspending on Internet ads. Brands need to up their spend on online now, but do so with measureable metrics in mind. (In other words, just throwing more money at badly targeted and underperforming online ads won’t fix the problem.)

Read More: Forbes

Jumptap Delivers a Mobile First, Deploying Off-line Data at Scale to Create Audience Insights and Targeting for Mobile Advertisers

Partnerships with Acxiom, Datalogix, Polk, and TARGUSinfo’s AdAdvisor Deliver Improved Campaign Results for Advertisers

 CAMBRIDGE, MA. August 17, 2011 – Jumptap, the leader in targeted mobile advertising, today announced partnerships with four leading providers of primary off-line data, helping mobile advertisers deliver highly-targeted and effective campaigns. These partnerships are the first in the industry to combine off-line audience insights and true network scale.

 Jumptap’s advertisers have already seen great results from this deeper level of data. Jumptap recently helped a major auto advertiser target ads to ZIP codes including customers that show a high inclination toward its brand. Ads targeted to these ZIP codes showed lift over broadly targeted ads in virtually every campaign. One campaign showed an 85 percent lift over the control campaigns not using data targeting. For more information on this campaign and other data, download Jumptap’s June 2011 MobileSTAT report.

 As part of these strategic partnerships, Acxiom, a leader in marketing services and technology that provides consumer segmentation and targeted direct mail solutions, supplies Jumptap with anonymous information to assist advertisers in reaching audiences in a specific demographic or life stage.

Datalogix, the leader at integrating database marketing and digital media, provides Jumptap with the ability to use anonymous purchase-based data in key verticals such as retail, consumer packaged goods, loyalty and more. Past purchases are the strongest predictor of future purchase behavior and the Datalogix database includes almost every U.S. household and contains over $1 trillion in consumer purchase behavior.

Read More: Jumptap

LONDON, UNITED KINGDOM–(Marketwire – Aug. 16, 2011) – AudienceScience®, a global online advertising technology company, today announced that, Media Contacts, the digital communications arm of Havas, has selected the AudienceScience Gateway data management platform (DMP) to further enhance its audience buying strategy.

Following a comprehensive review of DMPs available, Media Contacts has selected the AudienceScience Gateway to help build more precise audience segments and add to the agency’s audience buying capabilities.

The AudienceScience Gateway will be used to identify and create specific audience segments relevant to the online advertising objectives of Media Contacts’ clients. It will also be integrated into Havas’ existing solutions, including Artemis™, its proprietary, cross-channel data reporting and analytics tool, and Adnetik, the leading data-driven Audience Investment Management (AIM™) company.

This move is part of Media Contacts’ continual investment in the area of data which it sees as fundamental to the future of media. This has seen Media Contacts establish a dedicated data and analytics team headed by Ciaran McGonaghy from Microsoft and Rogan Gilhespie who recently joined from data & digital specialist agency TMW.

Read More: Marketwire

The Next Network

It’s time for the ad network to move up the value chain.

The exchange-driven marketplace makes “inventory procurement”—the traditional role of ad nets—a thin value proposition. Ad networks need to bring technology and media services together to create higher-value connections with the people who matter most to an advertiser.

To do this, networks must do three things:

1) Invest in technology that creates tangible value, such as data-harvesting and ad-targeting engines.

2) Get in the mix with publishers to bring innovative, custom advertising solutions at scale to market.

3) Provide quality assurance in the niche, or long-tail of the web, sites that attract a disproportionate number of people with money and influence.

Why do I say this? Despite buy-side advances in targeting and efficiency, advertisers still aren’t meaningfully accessing some of the most interesting, powerful websites. What’s more, the financial equation is upside down. CPMs and ad-responsiveness are stagnant at best, and advertiser spend still severely lags behind time-spent with the medium.

Advertisers have built the engines to analyze campaigns and develop best practices for who, what, where and when. Now they need publishers to respond with what I call “smart” impressions. That’s shorthand for site-specific intelligence combined with custom content and creative capabilities. That combination is the key to advertiser satisfaction and higher CPMs.

Read More: MediaBizBloggers

Brand Safety is a top priority for our brand advertisers and their agencies, and at Rocket Fuel we treat it as a matter of the utmost importance.  So we’re proud to announce the details on how our Real-Time Brand Safety Shield provides the highest levels of brand assurance to our clients.

At Rocket Fuel we take a proactive approach, with three layers of defense that block bad sites and pages before we ever serve a single ad on them. By building additional levels of safety and security right into our platform and processes, we ensure our technology delivers both ROI and peace of mind for brands.  We’ll have even more news in the coming weeks about the upcoming ad verification guidelines that we are helping to drive as part of a working group established to create brand safety verification guidelines. The working group is a joint effort between the IAB and the MRC (Media Rating Council).

Read More: Rocket Fuel

Casale Media Offers Advertisers Real-Time Bidding on Premium Online Media Inventory

casaleX Offers Premium Exchange for Publishers to Control and Choose Ad Campaigns; Grants Select DSPs and Agency Trading Desks Exclusive Access to Brand-Safe Inventory

NEW YORK, NY–(Marketwire – Aug 10, 2011) – Casale Media Inc., a leading premium online media company, today announced casaleX, an offering that gives select demand side platforms (DSPs) and agency trading desks exclusive access to premium inventory from leading online publishers. casaleX, the industry’s first true premium exchange with real-time bidding (RTB), expands quality advertiser demand available to its publisher partners by integrating real-time bids from select agency trading desks and demand side platforms (DSPs) while still leaving its publishers with maximum control over ad campaigns.

Casale Media is the first premium online media technology company to transform the ad exchange model into a high quality, brand-safe media marketplace. Demand partners are carefully vetted and hand-selected before integration with casaleX to ensure advertisers most appropriate for its publishers. In turn, marketers access the highest quality above-the-fold inventory from Casale Media’s premium publisher roster. Casale Media’s publishing customers utilize RTB for a head-to-head comparison between agency trading desks, DSPs and Casale Media-sourced advertisers to see who can best monetize inventory. Publishers have unprecedented control of campaigns, choosing which advertisers and campaigns can bid for inventory.

Read More: marketwire

In Part One of “How To Monetize Your Content Online,” I discussed the supply side of online publisher monetization, focusing on cultivating fans and working the “reader funnel” to drive audience engagement with four key steps:

1.Attract new audiences
2.Improve site recirculation
3.Move visitors upstream
4.Create loyal readers
But this is only half the battle. Quality content does not come cheap, and it is imperative for publishers to add new revenue streams as a multiplier to audience growth.

New Revenue Streams
While one half of the publisher puzzle is to increase audience engagement and move visitors into valuable pockets of your site, the other half is finding new ways to make money without subverting the user experience.

The last few years have seen advances in optimizing remnant display advertising but this approach really nibbles around the edge of the problem, with most of the revenue growth from these advances flowing to third-party intermediaries rather than to publishers directly. True revenue catalysts for publishers need to come from breaking the banner mold entirely and looking for more fertile ground.

Read More: BusinessInsider

Forecast Downgrades Global Ad Spend

With increasing jitters about the debt crises here and in Europe, and their impact on the world economy, another ad industry group has downgraded its prediction for global ad spending growth in 2011.

London-based WARC now says global spending will climb just 3.2% versus the more optimistic 4.6% it had predicted just a few months ago. If the new estimate proves correct, it would amount to less than half the average annual worldwide spending growth that occurred between 1981 and 2009 (6.8%), per the organization.

WARC did not provide a total dollar figure, but the revision follows similar downgrades from agencies that did offer dollar estimates as well as percentage downgrades.

Last month, Publicis Groupe’s ZenithOptimedia reduced its spending growth outlook by one-tenth of a point, to 4.1% or $471 billion. Also in July, WPP’s GroupM downgraded its forecast, knocking a full percentage point off its estimate — from 5.8% to 4.8% — to $506 billion.

Read More: MediaPost