This Is How Ad Technology Needs To Tackle The Industry’s Data Explosion

Over the last five years, we’ve seen a growth in companies that generate audience data, like BlueKai, Exelate and 33Across, and those that capture transactional and conversion data, like Datalogix, Compete and Criteo.  These companies have created new layers of business intelligence reporting aimed at helping advertisers to better monetize and analyze their media spend.  Consequently, there has been an explosion in data, now widely referred to as “big data”. 

The goal of “big data” is to bring an increased level of transparency and control to both buyer and seller, enabling more accurate evaluation of audiences, the ability to customize and blend behavioral segments and deliver optimal performance for marketers.  This exercise has helped to educate the market about the potential of clustering and targeting and the resulting momentum has led to the creation of new businesses along the way.  However, the industry’s thirst for data seems to be insatiable and the sheer volume now available to us has become overwhelming.  This data explosion now requires automation in the simplest and most streamlined form via the application of predictive modeling. 

Ad technology should dynamically build audience segment recommendations for buyers based on known (or observed) performance objectives, and the cheapest and most effective attributes for delivering that performance.  For the seller, the technology should monitor market pricing for specific attributes and automatically package audiences that meet those needs.  Additionally, it should also provide the opportunity for sellers to align those audiences with the highest quality content and environment to maximize value and performance.

Read More: Business Insider

Frenemies With Benefits: comScore, Nielsen Deal Seen As Positive For Online Ad Market

Wednesday’s surprise patent litigation settlement between online audience measurement giants comScore and Nielsen is expected to accelerate innovation, creativity, improvements, and possibly even better standards for the Internet advertising marketplace. That was the initial takeaway from observers who were trying to figure out the ramifications of the settlement, which one influential Wall Street group said made the two previous arch rivals, “frenemies.”

The settlement has the power, Deutsche Bank securities analyst Matt Chesler wrote, “to change the scope of the relationship between the two fierce competitors, which is the potentially more interest long-term implication.”

What the long-term will ultimately will bring will depend on a number of market developments, but in the short-term a few things are very clear, Chesler noted, including removing an unnecessary distraction for both companies that ran up significant time and legal costs that could’ve been better spent developing systems and services and improving methodologies for online advertisers, agencies and publishers.

In particular, Chesler said the deal is likely to help accelerate the deployment and acceptance of Nielsen’s new Online Campaign Ratings service, which Nielsen has been pushing hard to make for the online advertising industry, what its TV ratings are for the television industry, a “currency.”

Another clear near-term result is that comScore’s stock value will dilute by about 3%, due to the $19 million in shares it is giving to Nielsen as a form of payment to license its patents for online audience measurement

Read More: MediaPost

Where Does M&A Opportunity Lie in 2011?

The global economy continues to face uncertainty, but despite this, many technology companies have cash on hand in the tens of billions of dollars and are opting to spend it on mergers and acquisitions. In a new GigaOM Pro report, I examine the tech M&A landscape in 2011, using data provided by TheStreet.

Five large-cap, tech-rich companies are particularly likely to engage in M&A this year: IBM, Oracle, Microsoft, Cisco and Hewlett-Packard. Here are a few thoughts on how each of these companies’ M&A strategies might play out:

IBM
IBM has completed 17 acquisitions since the start of 2010, including its purchase of Netezza for nearly $1.7 billion, a 33 percent premium to the market price.

IBM’s ambitions to expand into mobile software and services could require the company to improve its storage and delivery solutions. Publicly traded storage and data management companies like NetApp and EMC could be interesting targets, although NetApp’s recent market cap of $20 billion would be easier to integrate than the larger EMC, whose market cap is above $57 billion.

Read More: Gigaom

Internet Advertising Revenues Hit $7.3 Billion in Q1 ’11
Highest First-Quarter Revenue Level on Record According to IAB and PwC

23% Year-Over-Year Increase Demonstrates Growing Importance of Digital Marketing & Advertising

NEW YORK, NY (May 26, 2011) — Internet advertising revenues in the U.S. hit $7.3 billion for the first quarter of 2011, representing a 23 percent increase over the same period in 2010, according to figures released today by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC). This marks the highest first-quarter revenue level ever for the industry and a significant increase over last year’s first-quarter revenue level, which had been the highest on record to date.

“The consistent and considerable year-over-year growth we’re seeing demonstrates that digital media is an increasingly popular destination for ad dollars, and for good reason,” said Randall Rothenberg, President and CEO of the IAB. “As Americans spend more time online for information and entertainment purposes, digital advertising and marketing has emerged as one of the most effective tools businesses have to attract and retain customers.”

“The year-on-year 23 percent increase in first quarter revenues is not just impressive in its own right, but especially so when you take into account the fact that 2010 was a record-breaking year itself for Internet advertising revenue,” said David Silverman, a partner at PricewaterhouseCoopers LLP. “These numbers indicate that the interactive advertising field hasn’t simply bounced back since the recession; it’s growing with dynamic energy.”

Read More: IAB

The Fate of Ad Networks in a Post-Exchange World

Upset with the Hollywood monopoly on the film business, director Francis Ford Coppola bucked the system in the late 1970s and raised his own money to produce the brilliant independent film “Apocalypse Now.” Twenty years later, commenting on the rise of low-cost video cameras, Coppola said, “Well, of course filmmaking is changing because of these little cameras that are out there that cost very little money that everyone has. There’s equality of opportunity in filmmaking that didn’t exist when I was making films. And right now there’s some fat little girl in Idaho who’s the new Mozart of cinema using her mother’s camcorder to create a new grammar and language of film.”

The core issue he was talking about was access. A revolution occurs in any industry when the flood doors open and access is granted to many and not just to a few. The same thing is happening in our business. With the rise of the exchanges, any advertiser or agency with a demand-side platform (DSP) can instantly access billions of display impressions from thousands of sites with the cost efficiency and reach to rival even some of our industry’s most well-known publishers. Premium publishers will take a hit, but it seems likely that it is the ad networks that will feel the most negative impact as the landscape changes.

Read More: IMediaConnection

The Power Of Converging Social Media With Display Advertising

Brands spent a lot of time and money in 2010 acquiring a social following. By building up Facebook Likes and Twitter followers, big brands like The New York Times and Mountain Dew now have a social audience pool that they can engage with.

The problem is that while some big brands have put a substantial effort into the social wave, other big brands, as well as smaller brands, are limited in their high volume approach to social media.

Additionally, the bigger brands that have already made efforts toward social follower acquisition have a tough time tracking the ROI from theirefforts.  However, converging social media with display advertising can fix these social media problems, as well as the everlasting problem of banner ad blindness.

Read More: Business Insider

Kantar Media Reports U.S. Advertising Expenditures Increased 6.4% In The First Nine Months Of 2010

New York, NY, January 4, 2011 – Total advertising expenditures in the first nine months of 2010 grew 6.4 percent from a year ago and finished the period at $94.06 billion, according to data released today by Kantar Media, the leading provider of strategic advertising and marketing information. Ad spending during the third quarter of 2010 was up 8.7 percent versus last year, the largest quarterly gain since the end of 2004.

“The advertising recovery expanded during the third quarter to include stronger participation by the long-tail of marketers beyond the Top 1000,” said Jon Swallen SVP Research at Kantar Media. “Having fewer resources, this segment was previously cautious about raising budgets and it lagged behind the early year rebound in ad spending. Smaller advertisers are now as fully vested as their large counterparts and in that sense, the advertising recovery has reached a significant milestone.”

Read More: Kantar Media