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

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

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

Online advertising will continue to outpace overall ad spending, growing 14 percent next year to $51.9 billion, according to a new Borrell Associates forecast released today.

In contrast, the overall ad market is expected to increase less than 5 percent to $238.6 billion.

The fastest-growing segment of interactive advertising will be local online, anything targeted and everything involving social media. In 2011, local online is forecast to grow nearly 18 percent from $13.7 billion to $16.1 billion.

Both national and local advertisers are expected to tap targeted display, driving the segment up 60 percent to $10.9 billion. While national advertisers are expected to increase their use of targeted display by nearly 50 percent, local advertisers will double their use of local display, reaching more than $2.3 billion next year.

In stark contrast to targeted display, run-of-site display will decrease, dropping 14 percent next year to $8.2 billion for both national and local online.

Also on the decline will be national paid search, dropping 11.3 percent.

Read More: AdWeek

Why The “Black Box” Ad Network Is Going The Way of 0% Home Financing And Enron Accounting

The days where ad networks glamorized themselves as a black box of information which held deep dark “proprietary” data knowledge and secrets is officially over.  We all remember how five and ten years ago we heard outrageous claims of “a billion points of data per month”, and “we harness data from over one million domain-level URLs” in boasting about the breadth and volume of intelligence a network had.  Of course, no one could prove anything, and the networks who made the most outrageous claims were the most opaque. But there is no longer a need for any opacity.  Full transparency is now coming around, so expect to see some previously-made claims debunked, and some technologies that were previously overlooked becoming more valued.  Here’s how you can employ new transparency tools, and avoid being swooned by grandiose claims.

Read More: GoodwayBlog.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

This morning, Google released information on how publishers maximize revenues using the DoubleClick Ad Exchange as well as other Google products. The post by Neal Mohan, VP of Product Management, on the Google blog includes a one sheeter. View the post here. And, download the one-sheeter here. There’s not much that’s new here except for an explanation on dynamic allocation. Interesting that the one-sheeter sticks it in the eye of “traditional ‘yield management.’” They put ‘yield management’ in quotes. Google is clearly positioning DART For Publishers (DFP) as the yield optimization solution of the future as its “dynamic allocation” allows publishers to set minimum floors with exchange buyers when managing between direct sold inventory, ad networks or buyer relationships managed through DFP. So, if you’re a publisher, you get to test the market for your impression, compare it with your other relationships and then sell wherever you want.

Read More: AdExchanger

comScore Releases 2009 U.S. Digital Year in Review

comScore presents the 2009 U.S. Digital Year in Review, its annual report on the prevailing digital trends of the past year and their implications for the future. The report looks across the digital landscape to highlight the industry’s leading stories of the year:

• Which consumer trends dominated the digital media scene in 2009?
• How did the economic environment effect e-commerce spending throughout the year?
• What is the state of the digital advertising market?
• How has the popularity of Hulu influenced the consumption of online video?
• How are market enablers such as unlimited data plans, 3G penetration and smartphone adoption driving mobile media usage?

Read More: comScore.com

AdSafe Media on Transparency Into Display Ad Inventory and the iFrame Challenge

AdExchanger.com: Given your observation of a decrease in non-transparent inventory in Q4, what is your sense of momentum for transparency into inventory?  Is UGC becoming more or less transparent? Any other momentum stories you can discuss?

DH: We see inventory non-transparency (meaning the lack of real time, source level disclosure of the URL on which an ad is to be served) as a large and growing concern in the display markets, especially with the recent increase in “audience buying” via networks and exchanges. Lack of source level transparency is primarily an unfortunate side effect of inventory “daisy-chaining” (or inter-network reselling) that currently helps facilitate high inventory liquidity in the display marketplaces. As more advertisers begin using these platforms as a primary buying channel, it’s essential that we as an industry balance the positives of liquidity with the risks of not knowing where an ad is being placed. In short, liquidity is good because it equates to more efficient markets and greater inventory utilization; non-transparency is bad because it results in more brand safety risks to advertisers in the form of bad ad placements, and thus less dollars online.

Read More: AdExchanger

If you believe the forecasters, 2010 will be the year of the long-awaited inflection point when TV budgets begin to shift to online video in a meaningful way.  In 2009, advertisers are projected to spend $699 million on online video ads, an increase of 32% from last year, “outpacing growth rates for most other emerging media platforms,” according to a forecast from Brian Wieser, Global Director of Forecasting for Magna. Jack Myers says that online video advertising will increase by 115% to $968 million in 2009 and is forecasting it to be the fastest growing segment of the media industry through 2012, when it is expected to hit nearly $5 billion.

Read More: MediaPost 

In A Year When Online Ads Slumped, Video Egg Doubled Revenues

Last year was the first time the online advertising industry saw a slump in revenues (JP Morgan is estimating a 5.2 percent decline, although things looked like they started to stabilize in the third quarter). But for online advertising network VideoEgg, 2009 was a great year. According to CEO Matt Sanchez, the company “more than doubled” revenues to $25 million last year and reached profitability seven months ago.

Read More: Washington Post

Social Science Meets Computer Science at Yahoo!

Shortly after Carol Bartz took over as chief executive of Yahoo Inc. early last year, she met with Prabhakar Raghavan for an overview of the Sunnyvale Web giant’s research division. As the head of Yahoo Labs ran through the catalog of computer scientists on staff, Bartz turned to him and asked: “Where are your psychologists?” Raghavan was stunned the newly installed CEO had so quickly gotten to a question he’d been asking for years. His answer was they didn’t have enough. That’s changing. In the last year, Yahoo Labs has bolstered its ranks of social scientists, adding highly credentialed cognitive psychologists, economists and ethnographers from top universities around the world. At approximately 25 people, it’s still the smallest group within the research division, but one of the fastest growing.

Read More: SF Gate

The supposed decline and fall of display advertising notwithstanding, brand (and a bit of reach) still matters to premium advertisers. According to a revealing look at some of the most valuable real estate online from AdAge’s Michael Learmonth, familiar offline brands still can rival the big Internet portals.  That Wall Street Journal “News Hub” of short video updates that was launched several months ago is part of a winning strategy at the Dow Jones site, garnering CPM rates of $75 to $100. Learmonth polled agencies and media buyers about where their money is going, and apparently WSJ hasn’t made a video that advertisers don’t like.

Read More: Minonline

Social Network Spending Shifts

2009 will end with major shifts in social network advertising spending. Facebook, at 350 million users worldwide, is the premier destination for marketers in the US and many worldwide markets. It will surpass its former rival, MySpace, in ad revenues in 2010, when marketers worldwide will spend $605 million on Facebook versus $385 million on MySpace.

Read More: eMarketer

comScore Announces New Measurement Tool for CPG Brands

comScore (Nasdaq: SCOR), a leader in measuring the digital world, today announced a new solution, in conjunction with Information Resources, Inc. (IRI), that measures the effectiveness of online advertising campaigns in building sales of CPG brands in supermarkets, drug stores, mass merchants, convenience stores and other retail channels that are important to the CPG industry. The solution uses IRI’s Consumer Network(TM) household purchase panel to measure retail sales in all channels along with comScore’s ability to understand which panelists were exposed to online advertising. The solution will be integrated into comScore’s AdEffx(TM) suite of products that provides media planners with all the tools they need to maximize the ROI from their online ad campaigns, ranging from data for improved planning through to tools for smarter buying and finally the channel-wide measurement of campaign ROI that are the focus of this new service.

Read More: PR Newswire

Microsoft has been working hard to raise its share of the Internet search market, aggressively promoting its Bing search engine and striking a ten-year deal with Yahoo to have Bing power Yahoo searches. And the latest search engine share numbers from media analysis firm Comscore suggest some of that effort is paying off, with Microsoft sites showing the greatest month-to-month increase in the industry. However, the growth doesn’t seem to be slowing Google; in fact, it seems to mostly be coming at the expense of new-partner Yahoo.

Comscore’s latest rankings cover U.S. Internet users for November 2009; according to the figures, Microsoft sites (including Bing) saw a 0.4 percent increase compared to October 2009, jumping to a 10.3 percent share of the U.S. search market. However, Yahoo sites saw a 0.5 decline during the same period, dropping from an even 18 percent of the market in October to 17.5 percent in November.

Read More: Digital Trends