MediaMath is an important behind-the-scenes player for advertisers at a time when advertising networks, exchanges and platforms are changing the way advertising is bought and consumed. The New York-based demand-side digital media platform monitors activity on ad exchanges, where marketers bid to place ads on publishers’ Web sites, and helps them quickly buy the space and the audience they need. The system is helping turn advertising from a job for creative “Mad Men” to a numbers-based “real profession,” says MediaMath Chief Executive Joe Zawadzki.

Forbes:MediaMath allows marketers to directly buy, manage and optimize media. Tell us more.

Fifteen million impressions a day across exchanges, across different media. [We] simplify what could be a very complicated process into a series of pretty straight-forward stats, in terms of how to point all of the technology at the market’s problems.

What is the opportunity for publishers who want to sell ad inventory?

Ultimately, the more demand in an auction-based system, the higher the price. And for non-auction based systems, it’s bringing incremental advertising dollars that they’re not getting from direct sales. It’s like optimization is not zero sum. There has always been this tension between advertiser and publisher. People think that in the negotiation that someone wins and someone loses and, for the advertiser to get better performance, they need to beat up on the publisher. The reality is that, with optimization–because not everyone is looking for the same thing and because every advertiser has their own demand curve–they look for different brands, different audiences. If you do a good job with optimization, both the advertiser will see better performance and the publisher will see higher prices. It’s not an “or,” it’s an “and.”

Read More: Forbes.com

Do You Want To Succeed at Social Media or Social Media Marketing?

Do you want to succeed at social media or social media marketing? There is a huge difference. It’s the difference between using social media tools and adopting social media philosophy. The difference between sparking posts about your marketing and posts about your product or service. The difference between marketers who focus externally on how the brand is broadcast versus internally on how the brand is realized.

So do you want to succeed at social media or social media marketing? The answer is the former, but many marketers focus on the latter. I’d like to make this difference more real by sharing two examples — the first in the entertainment industry and the second my own experiences in a mall this weekend.

“Snakes on a Plane” is the entertainment industry’s greatest pre-release social media success story to date. The Guardian called it, “Perhaps the most Internet-hyped film of all time.” Fans produced their own T-shirts, posters, trailers, novelty songs and parodies. Producers organized a contest to select a fan’s music for use in the movie. The filmmakers added shooting days in order to implement changes suggested by fans on the Internet (including Samuel Jackson’s famous and unprintable line about snakes.)

But what were these people fans of? Not the product, apparently. As EW put said about the movie: “SOAP came in below even the most ridiculously cynical predictions.” Read More: MediaPost

The Fundamentals of Real-Time Bidding

When it comes to online advertising, there’s a common misconception that real-time bidding (RTB) is a whole new ball game, requiring a separate media strategy and an entirely new set of campaign goals. While it’s true that RTB is a different buying model for marketers to understand, the promise of digital display advertising remains “right message, right customer.” What RTB adds to the equation is “right price and right time.” Thanks to RTB and auction marketplaces, digital display can now be purchased in ways similar to search, and it dramatically improves a marketer’s ability to reach specific audiences at scale. It’s easy to think this might just be relevant for direct response campaigns, but in fact RTB delivers tremendous advantages for brand and branded response campaigns as well. Let’s look at how RTB enables all advertisers to more efficiently and effectively achieve four common campaign objectives.

1. Find custom audiences at scale
The fundamental concept of RTB is it enables marketers to target audiences directly, instead of using content as a proxy for audience. In auction markets, marketers bid (or not) on individual ad impressions based on the demographic and behavioral profile of a consumer, in contrast to traditional content-based buys where inventory is purchased to hopefully reach a targeted audience.

The beauty of RTB is that marketers target audiences based on their own custom definitions of which consumers are appropriate for a campaign. A classic strategy is to use remarketing data that tracks when consumers have visited the advertiser’s website. But with RTB, marketers can now take it to the next level and leverage their full customer relationship management (CRM) database for targeting. These data represent the advertiser’s full view of its customers (registration data, purchase history, loyalty tier, etc.). By using a CRM-capable demand-side platform (DSP), an advertiser can execute powerful cross-sell, up-sell, and retention campaigns.

However, these strategies, while extremely effective, tend to have limited reach. To increase scale, advertisers can use look-alike modeling to expand the size of the targetable audience. Look-alike modeling finds new consumers that closely resemble the demographic and psychographic attributes of an advertiser’s existing audience. How does this work? Imagine a dart board where the original remarketing audience is the red bull’s-eye in the center. Look-alike segments are the concentric circles that extend out from the center, with each circle increasing the scale of audience available at decreasing levels of similarity.

Read More: iMediaConnection

Investment analysts, agency media buyers, and executives speaking here this week all agree on one thing: The resurgence of online display ads is real, and will proceed apace for the next several years. But they disagreed about nearly everything else. For instance: What’s the future of CPM pricing? To what extent will media agencies be disintermediated in coming years? And just how important is Google in this space?

On a Connected Marketing Week panel featuring investment analysts, all four participants said they were bullish on display – predicting overall demand and pricing will rise. However the specific outcomes they described were very distinct.

Doug Anmuth of Barclays Capital said discussions with advertisers have convinced him large consumer goods sellers will make it rain this year and next.

Researchers and agencies anticipated such an influx of brand ad budgets way back in 2007, but that was before the bottom fell out of the economy. Now Anmuth believes the time is ripe again. “At CPG companies, [we're seeing] reinvestment in their brands,” he said.

But not all will benefit. For instance, it’s unclear whether the rise of exchange-traded display ads on Yahoo’s Right Media and Google’s DoubleClick Ad Exchange will suit large brands. Two of four analysts lauded Google’s strategy of automating display ads, while the other two offered weak or qualified support.

One of those was Robert Coolbrith, an analyst with ThinkEquity. He said, “We’re positive on Google’s display ad strategy, assuming that automation of display will serve the interest of brand advertisers. The jury’s still out on that.”

Read More: ClickZ

Apple Shuts Down Quattro Wireless To Focus On iAd

Starting in September, Apple will focus its mobile advertising efforts entirely on the iAd, which runs ads in applications on the iPhone and iPod. As a result of that decision, the company is shutting down the Quattro Wireless mobile ad network it acquired in January for $275 million.

In a statement posted on the former Quattro home page, Apple said it will no longer accept new campaigns for the ad network and will wind down existing campaigns across different devices and platforms. “As of September 30, we will support ads exclusively for the iAd Network,” read the notice.

That Apple has eschewed running a horizontal ad network to concentrate solely on ramping up the iAd platform launched in April isn’t terribly surprising. With the company’s high ambitions for the new interactive format and commanding position in mobile apps, it’s become clear Apple is betting everything on the iAd to succeed in mobile advertising.

And after enticing a roster of blue-chip brands to sign on as charter iAd advertisers at least $1 apiece, Apple likely needs to turn all its Quattro resources toward preparing and running campaigns for its new batch of clients. A recent Wall Street Journal report indicated that the service has been hampered by campaign delays, with at least one announced partner, Chanel, shelving its iAd effort.

Read More: MediaPost

RIM Reportedly Shopping For Mobile Ad Network For BlackBerry

Since Google (NSDQ: GOOG) bought AdMob and Apple (NSDQ: AAPL) bought Quattro, RIM (NSDQ: RIMM) must be shopping for a mobile ad network, right? That’s what’s happening, according to people familiar with the matter, reports the WSJ.

The unnamed sources said the BlackBerry-device maker has been in talks with Millennial Media, an independent mobile ad network based in Baltimore, but that the talks have stalled over disagreements regarding the value of the deal. Millennial is reportedly asking for $400 to $500 million based on the recent prices that AdMob and Quattro were able to score ($750 million and an estimated $270 million, respectively). Both companies declined to comment, WSJ says.

Of course, there are other free agents in the space that RIM could investigate buying, including JumpTap and Greystripe, which have been very vocal about how much their networks are growing in lieu of the recent purchases by Google and Apple, which have successfully drawn attention and more advertising dollars to mobile.

RIM’s user base can be looked at as a valuable demographic for advertisers, given that a majority of its install base are business users. However, those users can be already targeted today by using existing mobile ad networks, so presumably, RIM would be able to bring something additional to the table if it owned its own network. Likewise, RIM would be able to skim some of the profits off for itself, which both Apple and Google are doing through its ad networks.

Read More: MocoNews.com

AOL (NYSE: AOL) CEO Tim Armstrong knew he would have to do a lot of investor soothing given that it posted another tough earnings report for Q2. He described the mission before him as very simple: making a sick company a healthy one. Invoking Warren Buffett’s “snowball” metaphor for the growth of his portfolio depending on finding a wet snowball and a steep hill to roll it down. “We’ve got a tightly packed snowball” at AOL, Armstrong said. He also described a “platform war” currently going on in Silicon Valley and how “content is the ammunition” and AOL will be a central supplier of that firepower. In explaining the dismal ad prospects, despite the recovery, Armstrong said advertisers continue to lag consumers in adopting online media.  Video is going to be a focus for AOL and Armstrong noted that there will be some branded entertainment partnerships announced shortly. StudioNow, which it bought last winter, grew 25 percent in terms of video output from the last quarter. “You will see a new home page that is targeted heavily around video this quarter,” Armstrong said.  On the local front, AOL’s hyperlocal play Patch added 39 new towns for a total of 83 localities in its network.  “Nobody likes to show up to these calls and report down numbers,” but Armstrong wanted investors to known that he has his own money tied up in AOL as well and asked for continued patience as he attempts to turn it around.  Meanwhile, Q3’s results is looking “choppy.” In terms of products he is happy about, Armstrong again focused on the homepage—which attracts about 15 million uniques—and Patch and Mapquest.

Read More: PaidContent.org

Google CEO Schmidt: “People Aren’t Ready for the Technology Revolution”

Eric Schmidt spoke at the Techonomy conference in Lake Tahoe today and dropped some serious rhetorical bombs. “There was 5 exabytes of information created between the dawn of civilization through 2003,” Schmidt said, “but that much information is now created every 2 days, and the pace is increasing…People aren’t ready for the technology revolution that’s going to happen to them.”   The Techonomy conference is a gathering of people from around the globe seeking to use technology to solve the world’s big problems. Schmidt spoke there today and said that people need to get ready for major technology disruption, fast.  The bulk of what’s contributing to this explosion of data, Schmidt says, is user generated content. From that content, far more prediction than we’ve seen today is possible and will be a factor in the future.  “If I look at enough of your messaging and your location, and use Artificial Intelligence,” Schmidt said, “we can predict where you are going to go.”   “Show us 14 photos of yourself and we can identify who you are. You think you don’t have 14 photos of yourself on the internet? You’ve got Facebook photos! People will find it’s very useful to have devices that remember what you want to do, because you forgot…But society isn’t ready for questions that will be raised as result of user-generated content.”

Read More: ReadWriteWeb.com

Demand Media Extends Content Model To Other Publishers, Hearst And Gannett First To Sign Up

Demand Media on Thursday debuted a new service for publishers to pad their online offerings with the work of independent freelancers. Two of the first properties to employ Content Channels, so-called, include Hearst Corp.’s SFGate.com and Chron.com.  “Hearst is the second major publisher to select our product for their sites,” said Steve Semelsberger, SVP and general manager of the Business Solutions Group for Demand Media. (The first major publisher was Gannett’s USA Today, which recently employed Demand to power its “TravelTips” section.) Semelsberger said Demand Media’s studio team worked closely with the editorial teams of both SFGate.com and Chron.com to make sure the Content Channels met their editorial standards.  In the case of the Houston Chronicle’s Chron.com, the team worked with Demand Media to create a “Small Business Resource Center” to complement its existing business news coverage by incorporating thousands of business-related articles and videos. Content Channels also went live this week on San Francisco Chronicle’s SFGate.com for its “Home Guides” section.

Read More: MediaPost

IAB Report Slams Most Online Research Methods

Watch out, research firms! The Interactive Advertising Bureau has embarked on a broad initiative to improve online brand effectiveness research, and its initial findings aren’t pretty.  What’s wrong with most research that attempts to measure ad effectiveness? Small respondent size and low response rates for starters, according to an initial report from the IAB.  Above all else, the validity of such research is threatened “by the extremely low response rates achieved in most IAE studies,” according to Paul Lavrakas, Ph.D., the report’s author, and former chief research methodologist for the Nielsen Company.  Average research is also “threatened by the near-exclusive use of quasi-experimental research designs rather than classic experimental designs,” in the words of Lavrakas, author of “Telephone Survey Methods: Sampling, Selection, and Supervision.”  Worse still, industry research is often compromised by “a lack of valid empirical evidence that the statistical weighting adjustments … adequately correct for the biasing effects,” Lavrakas attests.  “In instances where the sample size is at the lower end of this range [less than 800 participants] and the clients want subsample analyses to be conducted … these subsamples may not have enough members in them to provide precise analyses,” Lavrakas concludes. “Thus, subsample analyses based on small sized subsamples [fewer than 100 participants in the subsample] will have relative large sampling errors.”

Read More: MediaPost

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

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

News Corp. is in discussions with Google Inc., Microsoft Corp. and Yahoo Inc. about replacing MySpace’s crucial search-advertising partnership with Google, which expires next month, according to people familiar with the matter.  Under the existing deal, Google agreed to make up to $900 million in guaranteed payments for the right to sell small ads as users surf and tap out searches on News Corp.’s My Space.com and on a handful of smaller News Corp. websites.  But recently, MySpace has fallen far short of Web traffic and other milestones laid out in the Google contract, which expires at the end of August.  

In recent weeks, News Corp. has been discussing new, narrower advertising deals with Google and other companies, said the people familiar with the matter.  People close to News Corp. said any new agreement will be for significantly less money. That would be a further financial challenge for MySpace, which has seen ad revenue slip.  Google and Yahoo declined to comment.  Google in 2006 beat out Microsoft and Yahoo for the ad pact, which was regarded at the time as justifying News Corp.’s purchase of MySpace’s parent company for $650 million. News Corp. also owns The Wall Street Journal.  The deal is winding down at a turbulent point. MySpace has seen turnover among several top-level executives, including Co-President Jason Hirschhorn last month.

The website also is in the midst of a remodeling to stand apart from Facebook Inc., which has surpassed MySpace as the dominant online place for people to swap stories, comments and photos with friends and acquaintances.  Reviving MySpace is a high-level project for News Corp., which dispatched Chief Digital Officer Jon Miller to oversee the effort. MySpace also is a test of whether Internet properties can rebuild buzz and revenue growth once they have ebbed. That’s also the task facing AOL Inc. and Yahoo, both of which are in the middle of turnaround efforts.  News Corp. executives say they believe privacy and other concerns about Facebook leave an opening for MySpace to attract new users and business partners, though they also say MySpace doesn’t expect or need to be as big as Facebook.  Instead, MySpace says it is focused on Web surfers younger than 35, and is offering them a place to find new music, videos, games and other diversions, and to locate new people with similar interests. 

MySpace has also touted its initiatives to allow users to easily keep secret their personal information such as photos, birth date and hobbies, a counter to recent privacy worries about Facebook.  MySpace’s new strategy in addition includes ways for musicians, comedians, authors and fashion designers to gather an audience and tools to measure who and where their fans are.  A band, for instance, could use MySpace to share music with fans and get feedback, as well as adjust their touring schedule to add concerts in Texas, for example, if the musicians see their MySpace fan base is heavily from that state. 

MySpace also plans in coming months to roll out new applications for cellphones and to overhaul its site, possibly including a new logo.  Aaron Shapiro, a partner at online-marketing firm Huge, said MySpace can carve out a niche alongside Facebook and Twitter, but he cautioned that MySpace still has a long way to go to make the website easier to use and to incorporate slicker design and technology.  “They’ve been frozen in time for four years in terms of their degree of innovation,” he said.  More than a year into its shift, MySpace attracted 109 million unique world-wide visitors in May, down nearly 13% from the same month last year, according to comScore Inc.  Facebook had more than 548 million global users, up 74%.  MySpace executives say they are focusing on increasing the percentage of the U.S. population of 13- to 34-year-olds who visit the site each month to 75% from 50%.  “My goal is to saturate that specific audience,” said MySpace President Mike Jones.  Mr. Jones became the top MySpace executive after Mr. Hirschhorn stepped down in June, which in turn came just months after Chief Executive Owen Van Natta was pushed out.  MySpace also has cut about 30% of its work force, and News Corp. took a $450 million charge last year to write down the value of MySpace and other digital businesses.

Read More: WSJ.com

At Yahoo, Using Searches to Steer News Coverage

Welcome to the era of the algorithm as editor.  For as long as hot lead has been used to make metal type, the model for generating news has been top-down: editors determined what information was important and then shared it with the masses.  But with the advent of technology that allows media companies to identify what kind of content readers want, that model is becoming inverted.  The latest and perhaps broadest effort yet in democratizing the news is under way at Yahoo, which on Tuesday will introduce a news blog that will rely on search queries to help guide its reporting and writing on national affairs, politics and the media.  Search-generated content has been growing on the Internet, linked to the success of companies like Associated Content, which Yahoo recently bought, and Demand Media, which has used freelance writers to create an online library of more than a million instructional articles.

Read More: NYTimes.com

Google’s Display Advertising Plans Include Gmail and YouTube

For a company that has made a big business of indexing third-party websites, a substantial part of Google’s display success hinges on its ability to milk YouTube and its other owned and operated properties such as Gmail and Google Finance.  In fact, those areas were two of the three big priorities outlined by VP Neal Mohan at a press briefing last week where a parade of Google executives described the company’s plans to expand its ad business beyond search keywords.  “Display is truly at a tipping point,” Mr. Mohan said. “We think it can be substantially larger than the $20 billion it is today, whether [it's] $40 billion, $60 billion, or $80 billion, but there are a lot of challenges that remain.”  Mr. Mohan said there were gross inefficiencies to the display ad buying process. As an example, he said it takes 30 days or more to get a creative advertising unit up and running. “That process should be much more streamlined,” he said.

Read More: AdAge

Last month, the idea that Foursquare could exit to Yahoo! for $120+ million had everyone abuzz.  “This means NY tech has come to its own!” people exclaimed. Finally, we had a major player in the social web space. It was a company born here and grown here. Now it was on the brink of being sold for big money. It was a proof point that NYC could breed a serious batch of startups post-Web 1.0.  But if anything, the “Fourhoo episode” was also a scary wake-up call for those of us invested in the future of the NY tech ecosystem. If Foursquare sold — to Yahoo!, to Facebook, or to anyone else in the space — they’d undoubtedly end up in the hands of a Silicon Valley company, and its IP and (probably) leadership would be shipped out of town, taking any future value creation with it. (Sure, they may keep the jobs here, but the profit and reinvestment? Future product integrations?)  As it turns out, this whole exit scenario is a sham for the local environment, and here I thought exits were a good thing. What’s the matter with New York?! Here we are producing a fleet of World Class startups, and an exit for our startup scene means depleting its resources?  This sounds bad. And it is.

Read More: BusinessInsider.com

Futures, Forwards, Contracts Part 2

I was recently talking to someone in the industry I admire and we both started discussing the options, forwards and contracts of dispensable media. Ironically both of us have oil/gas history. He mentioned to me the context of the spot market and how in oil and gas – almost the majority of deals are done in advance and commodities trade in this manner and hedge where needed. The spot market is a residual market where it’s a lot less of the commodities that trade. Take the 80/20 rule – 20% is the spot market in oil/gas and 80% is the futures, forwards contracts market.  Let’s look at the premium and remnant market in digital – is it not the exact opposite? 20% of the market is secured guaranteed premium inventory and the other 80% is the spot market! Incredible – this means that the upside is greater and that digital is only at the start of its bell curve. While 20% has the bulk of the monetisation –we have an 80% pool of potential upside waiting in the wind. Technically, the spot market becoming competitive and working by market forces should only increase the guaranteed market.

Read More: AdSolver

Pay To Play: Is Hulu Plus A Step Away From An Ad-Supported Model Or The New Freemium Norm?

Beginning what some analysts see as the beginning of a slippery slide away from wholly ad-supported models, Hulu on Tuesday debuted Hulu Plus — its premium service that will charge consumers $9.99 a month for carte blanche content access over multiple platforms.  When Hulu debuted in mid-2007, it was viewed as a potential threat to cable and satellite providers that charge a premium for content — and in some cases ad-supported content.  Hulu Plus, which will include some advertising, could therefore be seen as an admission that advertising alone is not enough to support premium content online.  Not so, says senior eMarketer analyst David Hallerman. “It’s an expansion of Hulu’s business rather than a failure,” he says. “What they’re offering here is a deep catalog of content, and studies I’ve seen show that about a quarter of [consumer] respondents are willing to pay for that.”  Meanwhile, Hulu is positioning its subscription service as the perfect vehicle for marketers to target advertising across four screens. Initially, Hulu Plus is partnering with Nissan and Bud Light, and said it expects to include additional advertisers shortly.

Read More: MediaPost

At Internet Week in New York, the current state of display advertising is a popular topic. A common refrain is that display advertising has yet to reach its potential. But at IAB Innovation Days, Robert Bowman took at shot at an initiative that his host has played a large part in achieving: ad standardization.

According to MLB.com’s CEO, standardization is a big reason display advertising is flailing.

Bowman didn’t pull any punches during his keynote on the future of digital and where Major League Baseball is looking to grow. As he put it:

“The notion that on a website the ad size has to be standardized is absurd.”

Meanwhile, The Interactive Advertising Bureau — the event host — has played a big role in advocating for standardization online. The trade organization has fought hard to implement standards online, in video and in mobile. For instance, the IAB is currently working on a standard for tablet advertising. But Bowman argues that standardization hasn’t done what it set out to. He says:

“Interactive media is a fraction of where it should be.”

IAB CEO Randall Rothenberg pointed out that it is actually the IAB’s members who decide on their standardized ad formats. But Bowman wasn’t buying it:

“Who are your members? Nice Try.”

Rothenberg noted that he did not see the need for standardization in the early days of the IAB. He asked the IAB’s founding chairman Rich Lefurgy what purpose his trade association would serve. The answer he got is exactly Bowman’s current problem with internet advertising:

Read More: eConsultancy.com

Yahoo Ready To Fix Advertising: What Will it Take?

Ramsey McGrory, Yahoo’s vice president of North American Marketplaces and newly appointed head of Right Media, says fixing advertising requires the industry to focus on the “simple stuff.” That means spending time on figuring out the standards for content classification, ad verification and data use. It’s critical that the industry also addresses standards issues for order processing.  Bringing standards into digital advertising will bring down the cost of executing campaigns. Citing industry stats, McGrory says on average, digital campaigns cost about 25% to 30% to run, compared with 2% to 4% for TV. “We can’t sustain that when the relative cost is much more, compared with other mediums,” he says. “We also need better understanding at federal and state levels, as well as finding the appropriate use of data to give consumers what they expect.”  They may not be the sexiest things, but they are the most important in the industry to address, McGrory says. Especially if agencies want to convince the largest brands that spend the majority of their dollars in television to have a reason to invest more in online campaigns.

Read More: MediaPost

Say Hello to the ‘Apple Broadcast Network?’

“NBC head Jerry Zucker’s oft-repeated quote about trading analog dollars for digital pennies reflects the collapse of sponsor trust towards Internet advertising more than anything else. Publications that pulled $35.00 per thousand page views in 1998 were lucky to get $0.35 cents after the dot-com crash thanks to rampant abuse (click fraud, oppressive pop-ups, spam etc.),” Richard Menta writes for MP3newswire.net. “Nearly a decade later, Apple will attempt to elevate sponsor trust – and with it ad rates – with it’s new iAd concept. They will support it through no less than a model that TV execs like Zucker are familiar and comfortable with.”  “In 1959 5,749,000 television sets were sold in the US, bringing the cumulative total of sets sold since 1950 to 63,542,128 units. This number supported, through advertising, three national television networks, ABC, NBC, and CBS (a fourth, Dumont, folded in 1956) and numerous local independent stations. Television was big business by the start of the 1960’s,” Menta writes. “Now here are another set of numbers. As of April this year Apple sold 75 million iPhone and iPod touch units, devices capable of delivering video via Wi-Fi and 3G connectivity. Add to that figure 2 million iPads and counting. By the end of the year Apple should have about 90 million smart mobile devices in the wild.”

Read More: MacDailyNews.com

Apple unveiled its take on mobile advertising — the iAd — which looks a lot like the kind of rich media units we’ve begun to see on many mobile ad networks. The biggest difference: iAds are built for HTML5, another blow for Adobe’s Flash, which is the standard for rich media ads elsewhere on the web and on mobile devices. A version of the OS and the ad unit for the iPad will be available next fall. Apple showed off the new units at its developer’s conference in Cupertino, Calif., where Mr. Jobs also rolled out the latest operating system for the iPhone, which will allow the use of multiple applications simultaneously, a feature that will, ironically, allow users to dive into an advertising experience without leaving the application they are using.

Read More: AdAge

Examining Transparency and Ad Exchanges

AdExchanger.com reached out to members of the digital advertising ecosystem to explore transparency and the role of exchanges, buyers and sellers of online media and their intermediaries. The question is as follows:

Regarding the recent dust-up between an ad network and several publishers as highlighted in Mediaweek, is more transparency needed from exchanges, for example? Or should this be managed better by ad networks, demand-side platforms… and/or publishers for that matter?

Read More: AdExchanger

Online Ads Show Signs of Picking Up (WSJ Paid Article)

Signs of life are returning to the Internet-ad business after the harshest year since 2002, with a new report on Wednesday showing that U.S. online-ad spending started to pick up again during the second half of 2009. U.S. online-ad spending reached $6.3 billion during the fourth quarter of 2009—the largest quarter on record for Internet advertising, according to a report released by PricewaterhouseCoopers and the Interactive Advertising Bureau, a trade group of media and technology companies. Spending during the fourth quarter increased 2.6% from the same period in 2008. “The worst of the economic impact on Internet advertising is over and the seeds of growth have been planted,” said David Silverman, partner at PricewaterhouseCoopers. Fourth-quarter growth in 2009 capped a bleak year in the digital-media business, where total online-ad spending dropped 3.4% to $22.7 billion, according to the report. That yearly decline marked the first drop in the online-ad market since 2002, when online-ad spending fell 16% following the burst of the dot-com bubble. Some online-ad formats fared better than others. Search remains the largest online-ad format and continues to take share of the U.S. online-ad market, making up 47 % of 2009 ad revenue, up from 45% in 2008. Search-ad spending increased 1% in 2009 to $10.7 billion compared with 2008. Spending on display ads, the graphical ads that border Web sites, increased 4% to $8 billion in 2009. Spending on online video grew 38% in 2009 to $1 billion. But some ad formats experienced sharp declines. Ad spending on classifieds dropped 29% in 2009 to $2.3 billion. Ad spending on lead generation dropped 14% to $1.5 billion, and email-ad revenue dropped 28% to $292 million. Compared with the broader media business, the Internet escaped the economic downturn relatively unscathed. Total ad spending declined 12.3% in 2009 to $125.3 billion compared to 2008,, according to WPP’s ad-tracker Kantar Media. Several forecasters predict that online ad spending will experience double-digit growth this year and continue to take share from traditional media, like print and TV. Online ad spending will grow 5.5% this year to $23.6 billion, according to research firm eMarketer. While online advertising is a growing piece of the total advertising business, several impediments remain before the amount of dollars marketers spend online matches the amount of time consumers spend on the Internet, industry experts say. Internet advertising lacks strong measurement standards and remains too complicated to buy, says Terence Kawaja, managing director of investment bank GCA Savvian Advisors. “What is needed in the interactive industry is some revolutionary thinking,” Mr. Kawaja says.

AOL disclosed in a 10-K filing today with the SEC that display advertising revenue in the first quarter will be down from a year ago. Contributing to the drop, the company said, is an ad sales reorg that reassigned most of its accounts, among other factors. AOL also said ad revenue in 2010 from both AOL-owned properties and on third-party sites will be down “significantly in 2010″ from 2009. Ad revenue on AOL’s own sites for the year will be hurt by a decline in AOL access subscribers, as well as the planned shutdown of operations in some countries, according to the filing.

Read More: Barrons

Web Publishers Left With Little After Middlemen Split Ad Spoils

NEW YORK (AdAge.com) — Publishers fighting hard to squeeze every last dollar out of their online-ad inventories have turned to a variety of players to help them make the most of that space. But in doing so, they’ve let a lot of hands into the cookie jar and may find that the increasing complexity — and the crumbs they’re left with — aren’t worth the effort. It’s not just publishers turning to middlemen but advertisers, too, hoping to boost targeting and effectiveness of their buys. The space between advertiser and publisher has become jam-packed over the last decade, with literally hundreds of ad networks, data companies, yield managers, ad servers and exchanges all purporting to serve advertisers or publishers in some unique way; but all have their own business models that may or may not be adding value to either. And they’re all dipping into the display-ad revenue stream.

Read More: AdAge