Get Ready for the Coming Land War in Online Display Ads

Online display advertising — an $8.7 billion market in 2010 — is undergoing change at a pace not seen since Google transformed search and invented PPC advertising. The change is welcome, as display catches up to the market for search advertising in terms of efficiency and targetability. But, the transformation will bring a sharp struggle for margin in the online ad delivery chain, leading to a new wave of digital M&A. Online display, primarily a brand advertising medium (as measured by revenue), has traditionally been sold on the basis of sites and specific media placements, or via ad networks that aggregate sites into vertical channels. Now, with the evolution of online ad targeting techniques and the rapid growth of a market for consumer targeting data, it is increasingly common to sell advertising on the basis of audience, reaching individual web users based on specific data about that user. The data — behavioral, demographic, geographic and contextual — is generally persistent and useable across ad campaigns via a tracking cookie.

Read More: AdAge

Yahoo’s Interest In Foursquare Is Real

Yahoo is most definitely looking to buy a location-based startup like Foursquare, a CEO at one of Foursquare’s many rivals tells us. He knows, because Yahoo (YHOO) approached his startup for acquisition too.  A source close to Yahoo confirms — kind of — telling us: “We talk to everybody.” Our startup source says Yahoo has made it clear that acquiring a company in this space was a top strategic priority. He says that he’s reached out to other executives in the space, and learned that Yahoo has been talking to everyone in the space for the past few months. If Yahoo can’t get Foursquare, he expects them to pay ~$25 million for a smaller player. But startups aren’t biting because Yahoo has a reputation for killing small companies it acquires. He says that startups in discussions with Yahoo learn that they’ll be slotted into Yahoo! Local, but still walk away confused about how their business would fit into the organization. In talks, he said “seven different people claimed” he would report to them.

Read More: BusinessInsider

An Open Invitation to Customize Ads

I’ll be the first to say that last week’s column painted a fairly rosy picture of the current state of online advertising: advertisers work hard to deliver relevant messaging and consumers respond positively, appreciative as they are for the more meaningful ads. Any digital marketer will tell you, however, that many consumers don’t feel advertisers are doing them any favors. If you can believe it, they’d just as soon not get advertising that’s relevant at all.  If that sounds crazy, you may be forgetting how strongly many Internet users feel about their privacy, and how they’re increasingly aware that relevant advertising generally can’t be achieved without following their online behavior. Late last year, researchers released the results of a study on consumers’ opinions about behavioral targeting. An overwhelming 66 percent of respondents said that they “do not want marketers to tailor advertisements to their interests.” That number climbs to between 73 and 86 percent when those surveyed are provided with further detail about how their data is collected for this purpose.

Read More: ClickZ

Taming Online Chaos

For years, Web media planners have lived in fear of The Screenshot. That’s the e-mailed evidence from a client that shows its ads running where they shouldn’t, such as a pornographic Web site. More brand advertisers than ever are turning to the Web and they are now seeking to solve this problem by engaging verification tools and services to alert them when their ads run on sites they deem unacceptable. Misplaced ads aren’t a problem unique to the Internet, but the digital medium makes the problem even more acute. A client and agency can easily pick up a magazine and see their ad ran as agreed to on the insertion order. Yet the Web is incredibly fragmented, with attention spread across millions of sites. That’s led to an automated system of ad placement that is far from transparent, with many ad networks not even showing clients where their ads ran.  “There’s more opacity in the system than there’s ever been before,” said Joe Mele, managing director of media and marketing at Razorfish. “There’s less visibility into what’s going on. For some clients, that’s just not OK.”  Service providers in the ad-verification space, including DoubleVerify, AdSafe and AdXpose, use tracking pixels and human analysis to identify misplaced ads and give advertisers the ability to get them taken down — not to mention refunds from publishers and networks.

Read More:  AdWeek

Attribution or Media Mix Models for Search Marketing?

I’ve never been a big fan of attribution models and have always preferred econometric models that do their best to generate a practical media mix model.  I’ve explained my reasons in different ways to clients, prospects, and show attendees, but I doubt I’ve communicated them as clearly as Avinash Kaushik did recently in his SES NY keynote. Kaushik pointed out the lunacy of some of the attribution models being used by search marketers who think of themselves as fairly advanced. Also, I’ve always been a fan of monitoring bounce rates of landing pages as closely as one monitors eventual conversion to leads or sales.  One of Kaushik’s now-famous pearls of wisdom regarding bounce rates is fully self-explanatory and never grows old: “I came, I puked, I left.” Clearly, for most of us looking at any analytics program, it’s boggling how high bounce rates can be, even for our most relevant and best-performing pages. Getting the bounce rate below 50 percent is doable, but it takes a lot of landing page tuning, copy testing, and layout adjustment.  If you take one thing from Kaushik’s crusade for better user experiences, it should be “watch your bounce rate.” While not everyone is capable of designing media mix and marginal attribution models, everyone has the ability to start improving bounce rates now.

Read More: ClickZ

The Display Market in 2010 – Revolution or Anarchy?

In the eleven years I have worked in and covered the display advertising market, I have never seen such a frenzy as I do today. In the past week, I  learned of three more DSP’s, two data companies and an attribution vendor.  Agencies are also in the game this time around. So what is causing this pile-on of new ad technologies to the market? There are a few things:

- Leveled playing field on the exchanges: The ad exchanges allow for innovation in ad optimization and bidding. Additionally, small companies can suddently compete for inventory that used to be locked up by ad network contracts.

- Better technologies: Cookieless tracking, container tags, real time bidding, data targeting and dynamic ad generation are all innovations that are hitting the hocky stick curve right about…now.

- Opening purse strings: We know that display advertising spending was essentially flat from 2008 to 2009. It appears that 2010 will show improvement. Marketers are getting budgets back and are ready to spend them.

- Desperate publishers: Publishers are grasping to find ways to make more money on their sites, so they are handing over the reigns to sell side platforms to help them optimize.

Read More: Blogs.Forrester.com

Mediamath Acquires Adroit, Combines DSP with Dynamic Ads

As data-driven efficiencies in online advertising advance, demand side platform Mediamath may have marked another stage in that evolution. The firm acquired dynamic ad creation company Adroit Interactive last week, combining Adroit’s tools for creative customization and segmentation of ads with its own audience targeting and buying platform. The companies have worked together since Q4 of last year, integrated their technologies, and tested that initial integration. One advertiser that matches consumers to relevant local deals used the system to target specific messages to consumers in most DMAs across the country. “Our buying platform was able to buy media across all these areas, and then the creative took over to assemble the right geographic message,” said Mediamath CEO Joe Zawadzki. Mediamath integrates with third-party data providers such as Blue Kai, and media suppliers including Yahoo’s Right Media, Microsoft’s AdECN, and Google’s DoubleClick exchanges.

Read More: ClickZ

Joost Video Network Stuns With Big Reach: 67 Million Viewers Per Month

Straight out of left field, the Joost Video Network has assumed the number 2 spot in comScore’s Video Metrix “Top 100 Properties”, second only to Google. The Joost network, which is now operated by Adconion after the company’s acquisition of the ill-fated European startup’s assets back in November 2009, claims a reach of 67 million unique viewers per month. To put that in perspective: that’s approximately 38 percent of the total US Internet population who are consuming videos each month. According to Adconion’s press release, the Joost Video Network, which consists of hundreds of major video destination sites, showed an aggregate of over 100 million videos to consumers in February. Perusing through the current selection of channels on Joost.com, I’m fairly surprised that the network is drawing so many views, as it consists mainly of niche video destinations that I would estimate only a small number of people would be interested in.

Read More: TechCrunch

Marketers Watch as Friends Interact Online

Birds of a feather flock together. Or, in the Internet age, a customer’s friend is a potential customer. Embracing those truisms, some big marketers, including Sprint and eBay, are turning to small start-ups to help them tap social-networking data to find would-be clients among the friends and acquaintances of existing customers, to the dismay of some privacy advocates. EBay, for instance, used online tracking technologies to identify customers who browsed or shopped for products in the clothing, shoes and accessories section of its site. It then turned to New York-based start-up 33Across, which analyzed data from social-networking sites to map out the connections between the customers eBay had identified and other Web surfers, in order to serve up ads at the right time and place. New York-based 33Across tracks how consumers interact with one another—commenting on posts or sharing messages, for instance—across about 20 sites, online networks and third-party application companies, which build software like games and quizzes for social-networking sites. 33Across says those sites reach a total of 100 million monthly unique U.S. visitors. For example, if an eBay customer shared a movie review with an acquaintance, 33Across identified that connection and places a cookie, or anonymous string of tracking data, on the acquaintance’s browser so that they later could be targeted with a relevant ad whenever they visit certain sites.

Advertisers say the new wave of social-networking targeting is registering impressive results. Daphne Liska, senior manager of Internet marketing at eBay, said the 33Across campaign was more successful than standard online ads and that eBay plans to continue using social data to find new customers. Sprint, which also worked with 33Across, tested the approach last summer to promote the launch of the Palm Pre smart phone and quadrupled related online sales, says Joe Migliozzi, managing director of digital at Mindshare, the WPP-owned media agency that managed a campaign for Sprint. He says Sprint is considering the same approach for future campaigns. “A lot of what goes into a purchase comes from a general conversation between you and people in your group,” Mr. Migliozzi says. “We’re identifying the links between people.” 33Across is one of a handful of start-ups, such as Media6-Degrees and Lotame, that aim to make use of the reams of Internet user data behind social-networking sites for ad targeting. They all use complex algorithms to track connections between consumers. 33Across says it tracks five billion connections, then weighs them to determine the closest ties. “There are massive streams of untapped social relationship data,” says Eric Wheeler, chief executive of 33Across. Mr. Wheeler says his company collects user data from MyYearbook.com but he declined to name other specific sites, citing agreements with those Web sites. (Tracking cookies from 33Across were found by The Wall Street Journal on other sites, including popular Twitter-photo site twitpic.com, as well as music site lyricsmode.com and health site righthealth.com.) Not surprisingly, such tracking of friends and acquaintances has attracted the attention of some lawmakers and regulators.

Such ad-targeting approaches are facing increased scrutiny from federal regulators who are investigating privacy issues tied to the Internet. Some lawmakers, concerned about Internet privacy, say they are preparing to introduce legislation in the coming weeks to make more transparent Web sites’ tactics for collecting information on their users. “To the extent that ad companies are using social-media information to deliver ads in a way that is not transparent to consumers or consumers don’t understand what the source of the basis of the ads are, that could present an issue,” says Christopher Olsen, an assistant director in the privacy and identity protection division of the Federal Trade Commission. The ad-targeting companies say that they abide by industry standards and that the information they collect is anonymous and can’t be traced back to individual users. Industry trade groups are introducing standards that let consumers know when they are being targeted by an ad as a result of tracking.

Both Facebook and MySpace allow marketers to target ads on their sites to consumers based on the information users include in their profile, such as occupation, age, location and interests. (MySpace is owned by News Corp., which also owns The Wall Street Journal.) The new group of start-ups thinks that the data mapping connections between people—rather than their profile information—are more valuable. Facebook ran into a privacy debacle in 2007 with an advertising tool called Beacon that allowed Facebook to track users’ activities on certain external sites, then show updates on the site about those activities, such as retail purchases. CEO Mark Zuckerberg later apologized to users and changed the site’s privacy settings. The new targeting technique is rooted in decades of research about social behavior. A New England Journal of Medicine study from 2008, for instance, found that smoking behavior—such as quitting or not— spreads through social ties. “These companies are on to an important factor in the market that we haven’t tapped into well, which is how consumers are connected to each other and how they influence each other’s purchases,” says Emily Riley, an analyst with Forrester Research. Still, ad executives say they are seeking more transparency about where the data come from and where their ads appear. “Agencies are still trying to wrap their heads around it,” says John Nitti, senior vice president and digital director at Publicis Groupe’s Zenithmedia.

WSJ: Full Article Here