Connected TVs and set-top devices enabling consumers to view video from across the Internet on TVs could ultimately drive online video ads and marketing content budgets. The online video ad segment should grow at a 39% compounded annual growth rate (CAGR) during the next five years, becoming a more than $5 billion market by 2014, estimates analyst firm Piper Jaffray, which released a series of reports Monday related to IPTV.

The slow shift of consumers spending more time with online video has already begun. The report explains some private video advertising networks admit to securing at least seven-figure budgets from major TV advertisers. Ad networks like Tremor, and those producing proprietary content like Adconion or BBE, could benefit from the transition. The bottom line, according to Piper Jaffray analysts, points to numerous Internet companies like Apple, Google and Yahoo, as well as Rovi, also capitalizing on this move.

Expect Google TV to comprise about 15% of the connected TVs by 2013, rising to 18% by 2014, according to Piper Jaffray. Intel’s CE4100 SoC and Google’s Android operating system is the technology platform that Sony and Logitech will build into products and release in the fall. Other set-top boxes, media players and TV makers have Google TV products slated for the first quarter in 2011.

Read More: MediaPost

Agencies Divided on Where to House New Mobile Units

In a matter of weeks, several new mobile units have sprouted up within adland, prompting debate in ad circles about whether the offerings should take root within creative agencies or form under media shops.

Omnicom Group recently launched a mobile-marketing consultancy called Airwave under media agency giant OMD. According to Jon Haber, U.S. director of OMD’s Ignition Factory, a media shop is the intuitive place to house a mobile unit.

“Mobile is bought in many of the same ways that digital media is bought, but it stretches across coupons, CRM, texts and out of home,” he said. “It bleeds into all other media types. An agency like OMD touches other media units, so it makes sense for mobile to be in-house so it can integrate into everything from TV to digital.”

OMD has also dabbled in mobile creative work; in 2009, it created the Dockers shakable iPhone ad with rich media provider Medialets. While paid media was a component of the Dockers campaign, it also received a lot of attention for creative.

Paid media has dominated recent buzz in mobile advertising with Apple and Google buying into the category. In January, Apple acquired mobile ad network Quattro and just recently launched its souped-up mobile ad unit, iAd, with big-budget advertisers such as Citibank and Unilever in tow. That followed Google’s $750 purchase of AdMob, which was under prolonged investigation by the Federal Trade Commission until just recently.

But for a platform that also includes brand apps, partnerships with developers and location-based services, there’s much more to mobile than display.

Read More: AdWeek

AOL’s Patch Aims To Quintuple In Size By Year-End

Patch, which has already established itself as the biggest network of neighborhood blogs in the country since being acquired by AOL last summer, plans to accelerate its growth dramatically. Patch President Warren Webster tells us the company will add a staggering 400 hyperlocal sites over the next six months, bringing its total to 500. In order to accomplish its goal, Patch will hire 500 more reporters in 20 states, making it—by far—the biggest new hirer of full-time journalists in the U.S.

AOL (NYSE: AOL) had already disclosed that it intended to invest $50 million to expand Patch this year, but the company hadn’t said exactly how it would allocate that cash. Back in April, for instance, when Patch had 46 sites in five states, Webster told us that the company expected to be “in hundreds of towns” by year-end but wouldn’t be more specific.

Webster says that Patch is selecting towns to expand to based in part on a 59-variable algorithm that takes into account factors like the average household income of a town, how often citizens vote, and how the local public high school ranks; the company is then talking to local residents to ensure that targeted areas have other less quantifiable characteristics like a “vibrant business community” and “walkable Main Street.” Patch hires one professional reporter to cover each community; each “cluster” of sites also has an ad manager who is the “feet in the street” selling ads.

The network, however, says that to date it hasn’t been focusing on generating revenue. “Our philosophy from day one was that the first priority should be to build an engaged audience through journalism,” Webster says. “The second phase is to leverage that audience for local businesses that want to target customers. We’re at the beginning of phase two now.” Right now, Patch is letting local businesses buy banner ads and also letting them set up their own business listings, which they can convert into ads.

Read More: PaidContent.org

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)

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

There’s a land grab in social gaming, but at this point, it doesn’t look like there’s much room for advertisers.   On Tuesday, Disney acquired top-three developer Playdom for $563 million plus $200 million in incentives. Google, meanwhile, is reportedly in talks with Playdom, Electronic Arts and Zynga in a social-gaming push. And MTV Networks this month acquired social-game developer Social Express and plans to launch games based on its TV shows later this year.  With the draw of their established storylines and characters in social games — not to mention well-oiled marketing machines — established media companies hope they can use casual gaming to grow and interact with their already massive audiences.  “When media companies integrate their brands, it’s going to be easier for people to get into the games because they are familiar and that will expand the market,” said Justin Smith, founder of social-game research firm Inside Network.

Johnson & Johnson is Holding a Roster Review of its Estimated $3bn Media Business.

On Tuesday, Disney acquired top-three developer Playdom for $563 million plus $200 million in incentives. Google, meanwhile, is reportedly in talks with Playdom, Electronic Arts and Zynga in a social-gaming push. And MTV Networks this month acquired social-game developer Social Express and plans to launch games based on its TV shows later this year.  With the draw of their established storylines and characters in social games — not to mention well-oiled marketing machines — established media companies hope they can use casual gaming to grow and interact with their already massive audiences.  “When media companies integrate their brands, it’s going to be easier for people to get into the games because they are familiar and that will expand the market,” said Justin Smith, founder of social-game research firm Inside Network.

Read More: AdAge

Mixed Ad Message From Newspapers

Online advertising has turned into a good-news story for newspapers. Will it have legs?   Several newspaper publishers have reported solid growth in digital advertising revenue for the second quarter in recent days, helping offset continuing declines in print advertising. The New York Times, for instance, reported 21% growth in digital-ad revenue against a 6% drop in print advertising, keeping total advertising “roughly flat” with the year-earlier quarter. Digital now accounts for 26% of its total ad revenue, up from 22%.  But that is mainly because print revenue has shrunk so much, rather than because digital has got so big. At the Times Co., print-ad revenue for the news group fell $15 million, to $232 million, while its digital-ad revenue rose $8.3 million. Growth at the About.com portal also boosted digital.

Industrywide, print-ad revenue fell by nearly half between 2000 and 2009, a loss of about $24 billion. But newspapers’ online revenue totaled only $2.7 billion last year.  That includes online classifieds, a segment that has been under pressure from free alternatives. Display advertising, including video, is where newspapers have the most opportunity. The market still is relatively small, just $8 billion in U.S. revenue last year, or 35% of total Internet revenue, according to the Interactive Advertising Bureau. And newspapers are competing for display dollars with major portals like Yahoo and Google as well as lots of smaller sites.  One bright spot for newspapers is that their sites draw higher ad rates than most other categories, at least as measured by cost per thousand impressions, or CPMs, according to comScore. Precise CPM numbers are hard to come by, but these estimates offer some indication of the differences between sites.

Newspaper sites’ CPMs in April were $6.99, while the rate for portals was $2.60 and 56 cents for social-networking sites, comScore estimates. Newspapers’ traffic isn’t high enough for those rates to translate into huge dollars: Newspapers drew only 8.5 billion impressions in April, translating into a revenue estimate of $59.4 million for the month. Impressions were 69.7 billion for portals and 98 billion for social-networking sites, comScore reported, for revenue of $181 million and $54.7 million, respectively.  Professionally produced content helps make newspaper sites, at least those of major titles like the New York Times, attractive outlets for advertisers. Many marketers are reluctant to have their ads appear on heavily trafficked social-networking sites because of the uncertainty of the kind of content that appears on those sites.  Longer term, video and mobile advertising also offer hope. For now, though, investors need to be wary in assuming that newspapers’ digital potential can outweigh the challenges in their legacy business.

Read More: WSJ (Entire Article Here)

It was a typically vexing week for Facebook. On the one hand, the social-networking service signed up its 500 millionth active user. On the other hand, it was found to be one of the least popular private-sector companies in the United States by the American Customer Satisfaction Index. Apparently, Americans were more satisfied filing their taxes online than they were posting updates on their Facebook page.  It is a continuing contradiction: Facebook is widely criticized for shifting its terms of service and for disclosing private information — and yet millions of people start accounts each month.  Analysts always grasp for analogies to explain Facebook’s tortured relationship with its users. Facebook has been called the sterile suburbs to the gritty urban Internet; it is a “walled garden” in the organic messiness of the Web; it is Russia under Vladimir Putin; it is (and this one stings in tech circles) today’s AOL.  But perhaps the most telling metaphor compares Facebook to the other companies lurking at the bottom of the American Customer Satisfaction Index: cable companies, wireless telephone service providers. Utilities. Here are services everyone uses, no matter how much people dislike the companies that provide them.  Danah Boyd, a social media researcher at Microsoft and a fellow at Harvard University’s Berkman Center for Internet and Society, argues that Facebook fits that mold.  On her blog in May, she posted:  “I hate all of the utilities of my life. Venomous hatred. And because they’re monopolies, they feel no need to make me appreciate them. Cuz they know that I’m not going to give up water, power, sewage, or the Internet out of spite. Nor will most people give up Facebook, regardless of how much they grow to hate them.”

Read More: NYTimes.com

An Ad Model Poised For A Comeback

It’s challenging for media buyers to differentiate among ad networks. From the network side, it’s difficult to develop a product positioning that is truly ownable within the space. In an era where anyone can start an ad network, virtually overnight, any networks getting traction with ad buyers quickly find themselves swimming in a sea of “me too” imitators.  On the publisher’s side of the equation, it’s even more difficult to tell which networks to use. It’s one of the primary challenges of the chief revenue officer to balance direct sales forces, ad networks, exchanges, and new ad platforms in such a way as to deliver a maximum return from month to month on a site’s pool of available ad inventory.  There’s a check that comes in from each network partner each month. From a CPM standpoint, the price paid is abysmally low when compared to deals struck by the publisher’s direct sales force. But it’s a check nonetheless, and most publishers choose to get a check for the incremental sales, rather than rely completely on direct sales channels and risk lower overall returns.  Simply put, two ad revenue streams are better than one, even if one undercuts the pricing of the other one, and publishers are unsure what’s being done with data collected from network and exchange campaigns. Even though many would see it as short-sighted, short-term revenue, pressure usually makes the publisher take the check rather than cut the channel to support the direct sales channel.

Read More: iMediaConnection

Closing the Tech Divide

If there was a single familiar refrain from digital shops over the past decade, it was that their older, traditional-agency brethren “didn’t get it” when it came to digital. But lately, that widely acknowledged gap has begun to narrow to the point where “older” agencies can claim more success in some areas of digital marketing.  Take the recent Old Spice “The Man Your Man Could Smell Like” digital campaign, an effort that is already a textbook example of how an advertiser can make itself a vital part of digital culture. The campaign didn’t come from any of the digital-agency stalwarts like R/GA, AKQA or Razorfish. Instead, it came from Wieden + Kennedy, a shop not long ago often labeled as wedded to TV and print.  The Old Spice success followed a strong showing for non-digital specialists in this year’s awards shows. At Cannes, for example, top honors in the Cyber category went to Wieden for Nike Livestrong’s “Chalkbot” and DDB Sweden for Volkswagen’s “Fun Theory.” The Cyber Agency of the Year Award went to Crispin Porter + Bogusky.

Read More: AdWeek

The first 15 years of online retail saw breakneck growth and little reason to focus on anything but transactional revenue. As the medium matures, the smartest retailers will recognize they are sitting on a gold mine of media impressions and consumer behaviors that can keep the bottom line growing even as transactional growth slows.  Retail Web sites boast one of the best audiences a marketer could ask for: people who are actively researching and shopping products, practically raising their hands that they are currently in-market. In fact, brick-and-mortar stores have recognized this value for years, selling their suppliers premium placement such as end-cap displays, eye-level shelf space, and store circular ads.  Yet most online retailers are barely scratching the surface of the potential. The untapped media sales opportunity in online retail becomes even clearer when you look at conversion rates. Typically less than 5% of a Web site’s shoppers actually transact — but 100% of that traffic is valuable to advertisers since many of those shoppers will go on to buy elsewhere.  So why haven’t online retailers stepped up their game for in-store advertising?

Read More: MediaPost

YuMe Adds Brand Security

Online video has the undisputed numbers to attract advertisers, now it needs to inspire the confidence to seal the deal. To that end, video advertising technology company YuMe today announced that it has added brand security capabilities to its ACE technology platform.  The new capabilities leverage YuMe’s proprietary domain detection technology, which can collect detailed information about the in-page environment of a syndicated or embeddable player when it makes an ad request, even when the player is not associated with a companion banner.  This allows YuMe to prevent ads from running in video players that have been embedded on inappropriate websites, and to work with publishers to constantly monitor and improve the list of sites where their syndicated and user-embeddable players are appearing.  “The majority of online video publishers—including some of the biggest media companies in the world—have chosen to syndicate their premium online video content and to offer user-embeddable video players, and we want to be able to reach these online video audiences while keeping our customers’ brands safe” said Jonathan Nelson, CEO of Omnicom Digital.  “We are pleased that YuMe has chosen to make an ongoing investment in brand security, combining regular monitoring and research with proactive technology to prevent inappropriate impressions before they happen.”

Read More: DigidayDaily

IPG and AOL Unveil Plan to Improve Retail Marketing

Madison Avenue officially kicks off one of its annual summer rites today – in the South of France – where agencies will compete to prove who is most innovative and creative during the 57th annual Cannes Lions advertising festival. Some of the competition will take place during the judging sessions, of which one judging insider tells OMD U.S. agencies have made the most number of entries to the “short list,” followed by Sweden. Some of the competition will take place in presentations and panel discussions. And some of the competition will take place in the obligatory press announcements that agencies use to score bragging rights amid all the industry attention. Interpublic’s Mediabrands was first to score on the latter front, announcing an innovative online retail marketing initiative with AOL.  The deal, which the companies boasted would “re-invent digital retail advertising,” combines the research and development assets of Interpublic units with the ability of AOL to mobilize and activate its massive online user base.  The end goal is to develop new technologies that benefit both online consumers and marketers in the retail marketing process.

 Read More: MediaPost

AdExchanger.com: What announcement do you have in regards to inventory partners?

CH: We’re the first holding company to be procuring inventory through AdECN. We were able to make that integration happen via Invite Media.  I was with Microsoft’s Darren Huston last week and he is quite pleased with the quality of advertisers he’s seen come through due to the integration and [the quality] of our brand marketers. We’re excited by that. It’s by no means exclusive and wouldn’t expect it to be. But, it now makes us interoperable with Google, Yahoo, and Microsoft. And we’re working hard on AOL which will hopefully happen in the near term.

AdExchanger.com:  What kind of inventory do you see through AdECN?

CH: AdECN is focused first on Hotmail. And I think as they understand how performance looks, we’ll expand from there. But, we’ve started with Hotmail.  The other good piece of news about this is the fact that it is through Invite Media, and post‑Google acquisition – [Google] has been very supportive.  Google realizes it’s for the DFA stack, away from media, and they appreciate that it works just like search bid management or serving ads. it’s a good thing for the industry that they’re taking the interoperable view.  You were asking [earlier] how we felt about the Invite Media acquisition. I think it’s great that what you’re seeing is some consistency where Omnicom (Click here for OMG CEO Matt Spiegel’s thoughts) and InterPublic Group (Click here for Cadreon CEO Brendan Moorcroft’s thoughts) – I believe through AdExchanger.com – they both have come out supportive and positive.

Read More: AdExchanger

Five Ways Foursquare Advertising is Getting Less Interesting

Foursquare, the geolocation social tool, has been a media darling as of late. Not only is it growing, but people innately understand the monetization model, which is not something you can say about every social site and tool. As people “check in,” or report where they are to their network, Foursquare serves them offers from nearby businesses. It’s a win-win-win situation: Businesses can market to people who are able to immediately take action; Foursquare earns revenue; and users get valuable offers they can use.  But Starbucks’ current program on Foursquare may kill the goose that lays the golden eggs (or at least demonstrate how that goose may die a slow, lingering death of neglect). I believe (and I’m curious if you agree) that Starbucks’ ubiquity combined with the offer’s difficult redemption is decreasing attention for Foursquare’s other offers. If other large chains follow suit with similar promotions, those “Special Nearby” tabs within Foursquare’s mobile apps won’t get as much notice, and that means problems for advertisers on the Foursquare platform.  If you’re a Foursquare user, you’ve undoubtedly seen Foursquare offers, but for those who are not yet acquainted with the joys of mayorships, here is how it works: When you check in at a location, Foursquare will alert you when an offer is available in close proximity. With a click, you can view that offer. The first couple of times I saw this, the offers were interesting and immediately relevant. For example, I checked in at SFMOMA and was alerted I could get free entry to an art museum across the street.

Read More: MediaPost

The Global CMO Interview: Lorraine Twohill, Google

Google is not known for its marketing; the product markets itself. But as Google attempts to translate its one mega-success — search advertising — into other lines of business, marketing is becoming a more important part of what the search giant is all about.  Lorraine Twohill heads marketing for Google on a global basis as VP-global marketing, which means a lot more than most people think. It encompasses everything from TV and billboard ads in Japan — one market that Google doesn’t dominate — to videos for products such as Chrome or Docs and Google’s first TV ad, a Super Bowl spot called “Parisian Love.”  Google’s marketing takes different shapes all over the globe and must be relevant to countries with high broadband penetration rates, such as the U.S. or Korea, as well as places where people predominantly access the web using mobile phones or in internet cafés. It has no agency of record, but rather works with several agencies, including Wieden & Kennedy Japan and Bartle Bogle Hegarty in the U.S. and Europe.  Ms. Twohill joined Google from European travel site Opodo seven years ago, and assumed the global marketing role two years ago. She currently manages marketing teams in more than 30 countries.

Read More: AdAge

Aiming to work around Apple’s Flash ban, Adobe Tuesday unveiled new digital viewer technology to help publishers adapt magazines to an interactive format tailored to the iPad and other mobile devices.  Adobe’s new publishing software debuted last week with the launch of Wired’s digital edition for the iPad, featuring a variety of interactive and multimedia elements in support of traditional editorial content.  Adobe says its digital publishing platform built on its InDesign software and Omniture technologies will soon be available to other publishers, allowing them to deliver different versions of magazines across multiple hardware systems.  Plans to release the new Wired application in Adobe’s Flash were abandoned after Apple imposed a ban on third-party tools that would allow programs to be ported from other formats to the iPhone operating system. Instead, the Wired e-edition was coded in Objective-C, the main programming language for software running on Apple devices.

Read More: MediaPost

GSI Commerce Acquires Retargeting Company Fetchback

Back in April, when e-commerce and marketing company GSI Commerce hired Gannett’s Chris Saridakis as CEO of its marketing services division, some speculated GSI would soon acquire a company or two. The reason: While chief digital officer at Gannett, Saridakis focused on expanding the publishing conglomerate’s digital business through buyouts of several companies, including ShopLocal, CareerBuilder, and Ripple6, a social media service firm.  Saridakis lived up to the speculation. GSI, based in King of Prussia, PA, announced this morning it has snagged retargeting ad technology company Fetchback, for an undisclosed sum.  Tempe, AZ-based Fetchback allows online marketers to deliver ads to people who previously visited their websites. Its technology can integrate with ad exchanges, ad networks, and demand side platforms, which Fetchback says allows its customers to reach the majority of their prior site visitors.

Read More: ClickZ

BlueKai Offers BT Opt-Out And Management Tool

Data auction marketplace BlueKai is offering a new tool that enables Web publishers to let consumers access and edit the marketing buckets they have been placed into, the company announced on Tuesday. The tool, available to publishers for free, also allows consumers to opt out of behavioral targeting, or being served ads based on sites visited or content accessed in the past.  BlueKai has offered its own version of the tool since last September, but the new “white label” registry for publishers will differ from the company’s in one key respect: BlueKai’s “global” registry allows users to view and access the marketing categories they have been placed into based on data collected by a host of publishers. But the new publisher-specific version will reveal categories based on data collected by just that one publisher.  BlueKai CEO Omar Tawakol says the publisher-specific tool is narrower because many publishers don’t want it to appear as if they are collecting more data than is the case.

Read More: MediaPost

Google said it plans later this year to launch the Chrome Web Store, the online equivalent of Apple’s App Store. Sports Illustrated has signed on as one of Google’s charter partners, and at present the only publisher, involved in the new venture.  According to Google executives, who presented details of the project during the company’s developer conference yesterday, the Chrome Web Store will provide a central hub for users looking to discover applications and for developers to distribute them. The thinking is that until now, unlike mobile apps, Web-based apps (such as desktop applications) have been been scattered and disorganized.  During Wednesday’s presentation, Terry McDonell, editor of the Sports Illustrated Group, presented SI’s entree in the Chrome Web Store — a new digital version of the company’s core magazine product which attempts to combine the strengths of Web and print. It is designed specifically for laptops, notebooks and tablets.  For example, SI’s new Chrome-version, which employs HTML5, navigates in a left-to-right, flip-through-the-pages fashion. But it also enables customization and search while offering live content, such as the latest sports scores, as well as video. SI plans to charge an unspecified fee for the app.

Read More: AdWeek

The Exponential Growth of Advertising

This past weekend, I had the pleasure of attending the DC Summit Series, an amazing gathering of some of the youngest and brightest entrepreneurs to ever grace this world.  While there, I had the pleasure of hearing a futurist named Ray Kurzweil speak about the evolution of technology and where it will go in the future.  He explained the phenomenon of how technology generally starts off linear, and moves into an exponential phase, where it grows at a rate faster than people can generally keep up with.  I thought about this concept long and hard, and decided that it could be related to advertising in general. So, I did a little research and here is what I’ve come up with (this is in no way a complete history of advertising, just a few key points to explain my rationale):

Read More: CPXadnetworkblog.com

Traditional Ads Yield Social Traction

In March, Kimberly-Clark brand Poise ran a 30-second spot during the lead-up to the Academy Awards on ABC. In it, Whoopi Goldberg portrayed famous women in history who may have suffered from incontinence. Its goal was to get people talking about the widespread problem — and how Poise can help with it.  What the advertiser and its agency, Mindshare Entertainment, discovered was the spot was most effective not while it aired, but in the ripples created through social media afterwards as people discussed the issue and Goldberg’s decision to be the face of it. Soon, blogs, including Gawker Media’s Jezebel and Perez Hilton, were writing about it. The online conversation then returned to traditional media when Saturday Night Live aired a spoof of the spot during Weekend Update, with Kenan Thompson playing Goldberg.  The explosion of online interest culminating in the SNL skit yielded 200 million PR impressions, per Mindshare — all for the media cost of a single spot.  “Earned media for traditional campaigns is a key component of every conversation with every client,” said Brian Stoller, leader of digital strategy for Mindshare North America. “I can’t stress [enough] how huge this area has become for us.”  “[The] new saying is: ‘An idea that doesn’t generate more content isn’t a very good idea,’” added Edward Boches, CCO and chief social media officer at Mullen.

Read More: AdWeek

Recently on the Internet Oldtimers List, someone posted a link to a video mashup where someone had taken a clip from the movie “A Few Good Men” and replaced the famous “You can’t handle the truth!” dialogue between Nicholson and Cruise with a farcical semi-humorous debate about demand-side platforms (DSPs). What was interesting about this clip was that its central argument was that DSPs lower the CPM of premium publishers’ impressions (with Cruise arguing for the premium publisher and Nicholson arguing for the DSP).  The video is cute — pretty well done, and worth a view if you’re someone on the inside of this particular space online. But what really surprised me about it was that very few people seem to really understand what’s happening with DSPs in general — and there’s obviously misinformation going around. This particular debate about DSPs lowering the yield of publisher impressions was one I hadn’t heard articulated before.  So let’s get started digging into this by discussing what a demand-side platform really is. These advertiser/agency facing systems let buyers do self-service media buying from publishers; publisher aggregators (sometimes now being called sell-side platforms, or SSPs) like PubMatic, AdMeld, Rubicon, and others; and ad exchanges. The most important part of these mechanisms is that they enable real-time bidding against inventory on these sites. This is really important because in real-time bidding, the DSP can let the buyer specify business rules describing the value of impressions based on their audience attributes. That means the buyer can assign monetary value against specific audiences, and the DSP can bid on every impression in real time based on its actual value to the advertiser.

Read More: iMediaConnection

Skepticism Regarding Investment in Ad Technology

AdExchanger.com: Battery Ventures has been around since the ’80s as a venture and private equity firm. Looking at a high level, can you take us through some of the strategy pivots the firm has made in regards to digital media and why?

SP: While Battery has a long history in digital media, online advertising specifically has become more of a focus in the past several years. Coming to Battery three years ago, after many years at both DoubleClick and Google, it was clear to me that the display advertising market was going to go through a significant period of incredible innovation. Battery shared that view and has always focused its online advertising investments in companies that we believe have differentiated technology, network effects or switching costs and incredible teams. We’ve avoided investing in many parts of the online advertising ecosystem that we believe will be commoditized over time or difficult to scale and differentiate in the long term.

As an investor in BlueKai, Lotame, FreeWheel, TrialPay and many more – the company appears to be committed to digital media. Can you discuss some of the bullet points you are using when evaluating a company for investment? And, where does the analysis start?

The answer probably isn’t that surprising but it basically comes down to three major items. First and foremost is the team, their character and their understanding of the market. We don’t believe that you can be successful in this market without understanding both the media and technology sides of the business so we looks for teams who have skills in both areas. Second is the product and whether it can have long-term differentiation. How easy would it be replicate or switch out? Last is the business model. How does it scale, what kind of margin profile does it have and how much change in behavior does it require in the market. We are pretty agnostic about stage and geography.

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iAd Is Expensive, But Will It Be Worth It

Apple’s plunge into mobile advertising with the launch of its iAd platform last month was a hot topic of discussion throughout the day at the OMMA Mobile 2010 conference Wednesday in New York.  While media buyers and marketers voiced enthusiasm for the forthcoming in-app ad format that Apple CEO Steve Jobs promises will shake up mobile advertising, others were not so sure it’s that different from existing options and were skeptical about the $1 million minimum buy that Apple is reportedly seeking from brands.  But there seemed to be consensus that if nothing else, iAd will raise awareness of mobile advertising because of Jobs’ stature and Apple’s commanding position in the industry built on the iPhone, iTunes and the App Store.  Jeremy Lockhorn, head of emerging media at Razorfish, acknowledged that iAd and the cachet of Apple “will bring focus and a lot of new dollars and new players and that’s going to be a good thing.” But he questioned whether the rich media units Jobs previewed at the iAd launch in April were as revolutionary as the famously charismatic Apple CEO proposed. After all, they are based on ad formats developed by Quattro Wireless, which Apple acquired in January to gain a foothold in mobile advertising.

Read More: MediaPost