Demand-side Platform Myth Busters
In just a few short months, the term demand-side platform (DSP) has become ubiquitous in the online advertising industry. It has become synonymous with all things real-time bid, exchange-sourced, display advertising — in many cases replacing the mainstay term “network” as the model of choice for advertisers. All kinds of media brokers are now scrambling to offer a DSP solution, relegating words like “network” and “optimizer” to the dustbin of display terminology. But as more platforms wade into the opportunity waters, it seems like an equal amount of fog is being injected into industry discussions. So I thought it would be an opportune time to lift some of that fog and expose several of the bigger DSP myths being perpetuated today.
Myth 1: DSPs are really just networks in disguise False. There are some real differences between DSPs and networks, but recent trends have blurred those lines and given birth to this popular myth. At a fundamental level, traditional networks rely on a large stable of direct publisher relationships to deliver premium placements, easy reach, and ample scale, while owning the media risk and performance responsibilities. Many of these traditional networks live on today amid the DSP wave, successfully delivering campaigns along the way. But networks have begun to rely on exchanges as easy aggregation points for quick scale, and that is what started the move to DSPs. Then when the networks began to layer on automated optimization and advertiser-facing controls alongside their exchange-sourced media — either managed or self-service — they started to look like a lot like DSPs. This is how the whole DSP phenomenon began to accelerate. As networks began to rely heavily on exchange-sourced media while automating the trafficking process and exposing levers and knobs to the advertiser, some essentially became demand-side platforms. With the scale of the real-time bid exchanges and external facing controls, yesterday’s traditional ad network becomes today’s “hot” DSP. But there aren’t going to be as many DSPs as ad networks — read on for why.
Read More: iMediaConnection
McGrory’s and Right Media’s Evolution: Part I
“It wasn’t like I sat down and said, ‘I’m going to go into advertising!” admits Ramsey McGrory, head of Yahoo Right Media Exchange and North American Marketplaces. “I feel like I lucked into advertising. It has quirky people, technology, psychology, creative people, technical people… It’s a nutty space, it’s a different space.” Fresh from getting his master’s at Georgia Tech, McGrory was hired by Citigroup and completed its two-year derivatives program. Though he wasn’t a fan of the culture, he’s always kept a soft spot for the actual concept. “Advertising is often about risk reduction or risk enhancement,” he says. “It’s not exactly the same as the derivatives market; the whole world isn’t going to collapse because I sold a CPM campaign.” McGrory was in Citi’s highly regarded management training program on what looked like a fast track to a cozy financial executive spot when Citigroup merged with Travelers Group and Salomon Brothers. The higher-ups offered him a desk job or a year’s salary to walk away. Considering he wasn’t thrilled with the world of derivatives products, the latter appeared to be an opportunity.
Read More: Adotas
First Apple iAds Hit the iPhone
Following the official launch of Apple’s iAd mobile advertising platform on July 1st, ad units for Unilver’s Dove brand and Nissan’s Leaf model have now begun appearing in some ad-supported iPhone applications running on the new iPhone OS 4.0. Dove’s Men+Care ads showcase branded content featuring pro-baseball players Albert Pujols and Andy Pettitte. In addition, they allow users to browse Dove’s range of Men+Care products and offer them the chance to win signed baseballs.
Read More: ClickZ
Why Facebook Killed A $100M Baby
This evening Facebook announced that they will officially kill the company’s gift shop on August 1st of this year. Currently generating tens of millions of dollars for the company a year, one has to wonder why the company would take such dramatic steps. Facebook regularly touts how few developers run each segment of their business, but even if the company was generating tens of millions on a couple of developers, apparently more can be generated with the small gifts team working on other projects. So what does this really mean? We are to assume that Facebook’s gift shop has been growing since they were projected to have a $35 million annual run rate back in 2008, there’s no doubt that the company could easily be selling tens of millions of dollars in gifts each year, at a minimum. However the rise of FarmVille and the social gaming ecosystem on Facebook has driven virtual goods transactions away from Facebook’s core gift shop. The result is that Facebook’s virtual goods business may have been somewhat damaged. If you had been offered to purchase all the revenue of Facebook’s gift shop going forward in 2008, you may have been willing to pay a pretty penny, if the company was really generating $35 million a year from the shop. While $100 million may be pushing the limits on the value of future virtual goods cash flows, it’s not an unreasonable number. However now the gift shop has become filled with damaged goods that no longer stand out from the numerous other gifts.
Read More: AllFacebook.com
Apple Studies iTunes User Downloads to Hone Mobile Ads
Apple Inc., with a storehouse of billions of music, movie and software downloads, is studying the buying habits of many of its 150 million iTunes users to show more appealing mobile ads and fuel competition with Google Inc. Through the iAd program that began last week, Apple started placing ads in iPhone applications for the first time. Early iAd clients include Nissan Motor Co., Unilever NV, JC Penney Co., Best Buy Co. and AT&T Inc. At stake is leadership in mobile ads, forecast by EMarketer Inc. to almost triple to $1.56 billion in 2013. Google, which gained the biggest share of online advertising by placing ads based on PC-Web surfing habits, may use that tack to widen a lead on handheld devices. Examining consumers’ entertainment and software purchases may give Apple an advantage, says Rachel Pasqua, director of mobile at marketing firm ICrossing. “Apple knows what you’ve downloaded, how much time you spend interacting with applications and knows even what you’ve downloaded, don’t like and deleted,” said Pasqua, whose clients include Toyota Motor Corp. and Mazda Motor Corp. She isn’t currently working with Apple on iAd campaigns.
Read More: Bloomberg.com
Display Advertising Acting More Like Search
While online display advertising has grown tremendously in the last decade, its growth rate and ultimate size have been outstripped by the growth and size of search. And during a downturn search tends to hold or grow its relative position even more. As a result, many players in the display world are looking to search to see what aspects of search can be better leveraged in display. I think there are three key areas where display is working to become more like search. First, in the area of data. A tremendous amount of the power of search comes from the fact that the consumer’s intent is largely declared by their act of searching. Clearly that is of great value to an advertiser. By gathering data that better approximates current intent – for example, by incorporating an anonymous user’s recent queries from an e-commerce site – display advertisers can come closer to search in this respect. The rise of data exchanges like BlueKai and Exelate is intended to help address this need. The second area of historical “search advantage” is creative. Search “creative” has historically been text, which is easy for even the smallest advertiser to create and change. This means a broader number of potential advertisers. Companies like AdReady and Tumri make the real-time assembly of display creative much easier and lower cost. If companies can generate display creative on the fly inexpensively, the ability to better target display ads is significantly enhanced. Finally, display advertisers are becoming more like search in the area of real-time bidding. Search has allowed advertisers to bid for keywords and calculate their return on investment relatively easily. With the rise of Demand Side Platforms (DSPs) such as MediaMath and Invite to help advertisers interface with ad exchanges, the display advertising world is similarly helping advertisers efficiently access quality inventory at a competitive price.
Read More: Blog.Searchandise.com
For Online Advertising, Media Consolidation Is a Good Thing
Much has been written about the “long-tail” concept since Wired’s Chris Anderson popularized the idea in 2004. But for all the discussion about how effective long-tail strategies are for search-engine optimization, viral marketing, web retailing and social-media marketing, it seems that many online advertisers — especially display advertisers — are missing the boat. Media continues to consolidate, and increasingly the vast majority of online ad dollars go to just a handful of web publishers. By ignoring the rest of the web publishing world, online advertisers are avoiding a perfect opportunity to reach much larger audiences at a reduced cost. From an advertiser’s perspective, the universe of websites can be divided into four groups.
Read More: AdAge
A Look at Who’s Getting What on Apple’s iAds
The first of Apple’s iAds are expected to start popping up on iPhones later this week, but don’t expect all the marketers that have committed to the platform to be there. A check-in with declared iAd advertisers found that many are still in the early stages of flushing out concepts and creative. Some are weeks — perhaps months — away from having an iAd in the system. ”Most advertisers won’t be there on July 1; there just isn’t enough time,” said one agency exec with several iAds in the works. Part of the issue is with Apple itself: The company is handling all the technical production of iAds, and telling agencies it will take six to eight weeks to produce an ad after the creative is produced. The July 1 rollout announced by Apple doesn’t necessarily coincide with the objectives of the marketers themselves, and many are staggering launches on the platform through the fall. Apple is telling marketers that the device considered most promising for advertisers — the iPad — won’t be on the iAd platform until November.
Read More: AdAge
The 7 Newest Interactive Trends: How Will They Affect You?
What a difference a year makes. Twelve months ago was a wholly different kettle of fish for most of us — a kettle that had been left out to fester in the sun. But the optimism is back, baby! We saw it in the packed conference and expo aisles at ad:tech San Francisco in April, and in the double-digit growth figures for ad revenue in the first quarter of the year. The can-do mood has returned. Memories of 2009 have been thrown into the ash heap of history. The digibiz again smells as sweet as gardenias in springtime. But let’s leave odor to the side for a bit. There’s been more to the first half of 2010 than just better business results. Here are some of the most important happenings this year:
Read More: iMediaConnection
Unilever CMO: We’ll Double Digital Budgets This Year
CMO Keith Weed told the audience here today that Unilever aims to double its digital budgets this year. In some countries, the shift could mean interactive channels will command 25 to 30 percent of spending. In an on-stage interview with WPP Group CEO Martin Sorrell, Weed argued the transition to digital is even more important than the buzz warrants. And the company is backing up that view with actions. Earlier this spring, numerous top executives from the company toured the West Coast, meeting with leaders at Yahoo, MSN, Amazon, Google, Facebook, and Apple, among others. Asked by Sorrell what role data and insights play in his marketing approach, Weed couldn’t emphasize their role enough. “Consumer insight is everything,” he said. “The only way I can get a differentiated product to the consumer is understanding the market better. Consumer insight is the starting point. Then an agency can get the creativity, build the brands.” Unilever is among the more visible clients at this year’s festival. In addition to being awarded Advertiser of the Year, its agencies have won numerous Lions for work on Unilever’s brands. Campaigns for Axe and Hellman’s Ketchup were among those honored.
Read More: ClickZ