Online Video: The Media Industry’s New Frontier
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
$250B Lost? Brands Are Still Getting Online Ads Wrong
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
Media Contacts Partners with AudienceScience® to Enhance its Audience Buying Strategy
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
