Scott Spencer, Group Product Manager, DoubleClick Ad Exchange and Jason Miller, Group Product Manager, Google Display Network discussed the display media space as well as DoubleClick Ad Exchange enhancements with AdExchanger.com today.

AdExchanger.com: What is Google announcing today?

SCOTT SPENCER: Basically, we’re going to be rolling out a few more tools to help DoubleClick Ad Exchange buyers buy quality inventory, and to check their campaigns.

Taking a quick step back; when we launched the exchange about a year ago, we engineered it with best-in-market buyer and publishers controls, as well as extensive crawl-and-verify inventory screening. Together with the real time bidder, these were the biggest upgrades we made.

As part of a long line of improvements in this area over the past year, we’re taking the wraps off a couple of additional features to give buyers even more control, quality and transparency.

The first is “Site Packs” – these are manually crafted collections of like sites based on DoubleClick Ad Planner and internal classifications, vetted for quality. These allow buyers to get a set of high quality sites for their particular campaigns, covering anonymous and branded inventory.

Second, we’re making some changes to our Real-time Bidder (in beta). The biggest change here is for Ad Exchange clients who work with DSPs. Historically, Ad Exchange buyers were hidden from publishers behind their DSP. By introducing a way to segment out each individual client’s ad calls, inventory can be sent exclusively to an Ad Exchange buyer even when that buyer uses a DSP. It increases transparency for publishers and potentially give buyers more access to the highest quality inventory, like “exclusive ad slots” – high quality inventory offered to only a few, select buyers as determined by the publisher.

Thirdly, we’re soon going to be rolling out a beta of what we call “Data Transfer” – this is a report of every transaction bought or sold by a client on the Ad Exchange. Effectively, it’s a daily log file of everything that happened. Clients can then review every branded URL that they purchased to ensure everything was what they expected.

Read More: AdExchanger

Seven Reasons Tech Start-Ups Are Setting Up Shop In New York

When Carter Cleveland, the CEO of the art-trading website Art.sy, moved his fledgling company from Palo Alto, Calif., to New York City he left behind arguably the best place to start a tech business in the U.S.

Home to giants like Facebook, Google, Apple, Intel and eBay, Silicon Valley is well known as the Mecca for high-tech companies – and entrepreneurs hoping to start one. One third of US-based venture capital investment happens in the Valley, according to PriceWaterhouse Coopers and the National Venture Capital Association. By Cleveland’s own admission, he “couldn’t go into a cafe without hearing pitches” in San Francisco.

So why go east? A recent Princeton grad, Cleveland said he left primarily because of his customers. Art.sy is an online trading post for fine art and, according to Cleveland, over half of his market is in New York City. But Cleveland added that location isn’t everything. New York’s tech scene is booming, and Cleveland wanted to join the party.

“Palo Alto is like Google,” he explained. “Big and established. New York City is like Foursquare. Not as big but tons of hype. It’s going through a growth period and very exciting.”

Read More: Blogs.WSJ.com

Appolicious Adds New Yahoo, Android Sites, Expands Search

After entering into a partnership with Yahoo in April, social-flavored app directory Appolicious is building on the alliance with a new property dedicated to Yahoo apps. And highlighting the rapid rise of Google Android’s platform, the startup has also revamped its site for Android apps and introduced its own Android app.

The new co-branded yap.appolicious.com and AndroidApps.com sites feature original text and videos, user-curated app lists, personalized recommendations, ratings and reviews. Links to original articles from the sites will be featured in relevant content across key Yahoo properties including news, sports and finance.

As with the main site, the words “in association with Yahoo” appear at the top of each page on the new Yahoo and Android app sites. The properties are linked to Appolicious.com via tabs that appear prominently on the home page alongside a third for iPad and iPhone apps. Yahoo users will be able to join the sites automatically using their Yahoo log-in information.

Appolicious has also taken steps to upgrade search. The search box is centered at the top of each page and functionality has been broadened to encompass the Yahoo and Android app sites. Besides returning relevant apps, the new results page now features related user app lists and staff articles as well as a list of apps generated by the site’s recommendation engine.

Read More: MediaPost

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

Connected TVs and set-top devices enabling consumers to view video from across the Internet on TVs could ultimately drive online video ads and marketing content budgets. The online video ad segment should grow at a 39% compounded annual growth rate (CAGR) during the next five years, becoming a more than $5 billion market by 2014, estimates analyst firm Piper Jaffray, which released a series of reports Monday related to IPTV.

The slow shift of consumers spending more time with online video has already begun. The report explains some private video advertising networks admit to securing at least seven-figure budgets from major TV advertisers. Ad networks like Tremor, and those producing proprietary content like Adconion or BBE, could benefit from the transition. The bottom line, according to Piper Jaffray analysts, points to numerous Internet companies like Apple, Google and Yahoo, as well as Rovi, also capitalizing on this move.

Expect Google TV to comprise about 15% of the connected TVs by 2013, rising to 18% by 2014, according to Piper Jaffray. Intel’s CE4100 SoC and Google’s Android operating system is the technology platform that Sony and Logitech will build into products and release in the fall. Other set-top boxes, media players and TV makers have Google TV products slated for the first quarter in 2011.

Read More: MediaPost

Agencies Divided on Where to House New Mobile Units

In a matter of weeks, several new mobile units have sprouted up within adland, prompting debate in ad circles about whether the offerings should take root within creative agencies or form under media shops.

Omnicom Group recently launched a mobile-marketing consultancy called Airwave under media agency giant OMD. According to Jon Haber, U.S. director of OMD’s Ignition Factory, a media shop is the intuitive place to house a mobile unit.

“Mobile is bought in many of the same ways that digital media is bought, but it stretches across coupons, CRM, texts and out of home,” he said. “It bleeds into all other media types. An agency like OMD touches other media units, so it makes sense for mobile to be in-house so it can integrate into everything from TV to digital.”

OMD has also dabbled in mobile creative work; in 2009, it created the Dockers shakable iPhone ad with rich media provider Medialets. While paid media was a component of the Dockers campaign, it also received a lot of attention for creative.

Paid media has dominated recent buzz in mobile advertising with Apple and Google buying into the category. In January, Apple acquired mobile ad network Quattro and just recently launched its souped-up mobile ad unit, iAd, with big-budget advertisers such as Citibank and Unilever in tow. That followed Google’s $750 purchase of AdMob, which was under prolonged investigation by the Federal Trade Commission until just recently.

But for a platform that also includes brand apps, partnerships with developers and location-based services, there’s much more to mobile than display.

Read More: AdWeek

AOL’s Patch Aims To Quintuple In Size By Year-End

Patch, which has already established itself as the biggest network of neighborhood blogs in the country since being acquired by AOL last summer, plans to accelerate its growth dramatically. Patch President Warren Webster tells us the company will add a staggering 400 hyperlocal sites over the next six months, bringing its total to 500. In order to accomplish its goal, Patch will hire 500 more reporters in 20 states, making it—by far—the biggest new hirer of full-time journalists in the U.S.

AOL (NYSE: AOL) had already disclosed that it intended to invest $50 million to expand Patch this year, but the company hadn’t said exactly how it would allocate that cash. Back in April, for instance, when Patch had 46 sites in five states, Webster told us that the company expected to be “in hundreds of towns” by year-end but wouldn’t be more specific.

Webster says that Patch is selecting towns to expand to based in part on a 59-variable algorithm that takes into account factors like the average household income of a town, how often citizens vote, and how the local public high school ranks; the company is then talking to local residents to ensure that targeted areas have other less quantifiable characteristics like a “vibrant business community” and “walkable Main Street.” Patch hires one professional reporter to cover each community; each “cluster” of sites also has an ad manager who is the “feet in the street” selling ads.

The network, however, says that to date it hasn’t been focusing on generating revenue. “Our philosophy from day one was that the first priority should be to build an engaged audience through journalism,” Webster says. “The second phase is to leverage that audience for local businesses that want to target customers. We’re at the beginning of phase two now.” Right now, Patch is letting local businesses buy banner ads and also letting them set up their own business listings, which they can convert into ads.

Read More: PaidContent.org

When marketers buy television spots, they can turn on the tube and watch them run. Magazines and newspapers? Marketers can flip to their ads. But when it comes to online inventory, the questions still linger: Are my ads truly running where and when I want them to? Am I wasting impressions and ad dollars serving ads in front of the wrong audience, or are they subject to impression fraud? Are they running next to content that might be offensive to my audience or on the same page as one of my major competitors? Most of us may have chuckled over humorous examples of the wrong ad in the wrong place, but it isn’t that funny if it’s happened to you.

Most advertisers are already sold on the value of good online marketing and understand how leveraging the digital world for their end goals is an important part of their marketing mix. So why are we seeing consumer media time online rise to almost 40 percent but online budgets still only represent a portion of that ratio?

When asked why the big dollars aren’t yet flowing like they could into the channel, most decision makers seem to have an issue with trust — whether it be in brand safety concerns, unproven measurement, etc. Ultimately, the currency of choice is trust, and for some marketers, especially ones rooted in deep, traditional advertising familiarity, the online world is still a bit of a mystery. In the same vein, can you imagine if you went to buy a thousand shares of Apple and instead were given a thousand shares of a worthless penny stock? Would you continue to patronize a restaurant where you weren’t guaranteed to get the meal you ordered? Even hardcore digital advocates admit that there are still questions — and a few bugs left to exterminate –within virtual inventory.

Read More: iMediaConnection

Pushing Boundaries: Exploring the Evolving World of Display Media 

Digital media agency, FRWD, hosted digital event Pushing Boundaries: Exploring the Evolving World of Display Media yesterday at the Fine Line Music Café in Minneapolis. Industry leading publishers, demand side platforms, data aggregators, verification and survey tool providers gathered to help each other prepare for, and profit from, the fast-changing world of online advertising.  MediaMath, Simpli.fi, BlueKai, DataXu, Lucid Media, ADSDAQ Exchange, [x+1], and Rocket Fuel; among others exchanged ideas on the direction of the industry during 4 panels and 2 keynote presentations.

The transfer of data integration into ad exchanges and DSPs coupled with technology and real-time bidding (RTB) capabilities are increasing at a rapid rate, almost as rapidly as the industry is changing. Joe Zawadzki of MediaMath predicted that the industry transformation from “Mad Men to Math Men” will occur by 2012 at which point “Don Draper will be replaced by your high school Dungeon Master.” 

Panel speakers throughout the afternoon explained the details of successful ad exchanges and DSPs, specifically the capabilities of combining data and audience research targeting with the need to assure brand protection, transparency, and the unique market dynamics of RTB.  

Read More: FRWDCO.com

Google and the Search for the Future

To some, Google has been looking a bit sallow lately. The stock is down. Where once everything seemed to go the company’s way, along came Apple’s iPhone, launching a new wave of Web growth on a platform that largely bypassed the browser and Google’s search box. The “app” revolution was going to spell an end to Google’s dominance of Web advertising.

But that’s all so six-months-ago. When a group of Journal editors sat down with Eric Schmidt on a recent Friday, Google’s CEO sounded nothing like a man whose company was facing a midlife crisis, let alone intimations of mortality.

For one thing, just a couple days earlier, Google had publicly estimated that 200,000 Android smartphones were being activated daily by cell carriers on behalf of customers. That’s a doubling in just three months. Since the beginning of the year, Android phones have been outselling iPhones by an increasing clip and seem destined soon to outstrip Apple in global market share.

True, Apple sells its phones for luscious margins, while Google gives away Android to handset makers for free. But not to worry, says Mr. Schmidt: “You get a billion people doing something, there’s lots of ways to make money. Absolutely, trust me. We’ll get lots of money for it.”

“In general in technology,” he says, “if you own a platform that’s valuable, you can monetize it.” Example: Google is obliged to share with Apple search revenue generated by iPhone users. On Android, Google gets to keep 100%. That difference alone, says Mr. Schmidt, is more than enough to foot the bill for Android’s continued development.

And coming soon is Chrome OS, which Google hopes will do in tablets and netbooks what Android is doing in smartphones, i.e., give Google a commanding share of the future and leave, in this case, Microsoft in the dust.

Can it all be so easy? Google’s stock price has fallen nearly $150 since the beginning of the year. Financial pundits have started to ask skeptical questions, wondering why it doesn’t give more of its ample cash back to shareholders in the form of buybacks and dividends. Some suspect that all that temptation merely encourages Mr. Schmidt, along with founders Sergey Brin and Larry Page—the triumvirate running the company—to splurge on gimmicky ideas that never pay off. Fortune magazine recently called Google a “cash cow” and suggested more attention be paid to milking it rather than running off in search of the next big thing.

But to hear Mr. Schmidt tell it, the real challenge is one not yet on most investors’ minds: how to preserve Google’s franchise in Web advertising, the source of almost all its profits, when “search” is outmoded.

The day is coming when the Google search box—and the activity known as Googling—no longer will be at the center of our online lives. Then what? “We’re trying to figure out what the future of search is,” Mr. Schmidt acknowledges. “I mean that in a positive way. We’re still happy to be in search, believe me. But one idea is that more and more searches are done on your behalf without you needing to type.”

“I actually think most people don’t want Google to answer their questions,” he elaborates. “They want Google to tell them what they should be doing next.”

Let’s say you’re walking down the street. Because of the info Google has collected about you, “we know roughly who you are, roughly what you care about, roughly who your friends are.” Google also knows, to within a foot, where you are. Mr. Schmidt leaves it to a listener to imagine the possibilities: If you need milk and there’s a place nearby to get milk, Google will remind you to get milk. It will tell you a store ahead has a collection of horse-racing posters, that a 19th-century murder you’ve been reading about took place on the next block.

Says Mr. Schmidt, a generation of powerful handheld devices is just around the corner that will be adept at surprising you with information that you didn’t know you wanted to know. “The thing that makes newspapers so fundamentally fascinating—that serendipity—can be calculated now. We can actually produce it electronically,” Mr. Schmidt says.

Mr. Schmidt obviously has an eye to his audience, which this day consists of folks with an abiding devotion to the newspaper business. He speaks in sorrowful tones about the “economic disaster that is the American newspaper.” He assures us that in the coming deluge trusted “brands” will be more important than ever. Just as quickly, though, he adds that whether the winners will be new brands or existing brands remains to be seen. On one thing, however, Google is willing to bet: “The only way the problem [of insufficient revenue for news gathering] is going to be solved is by increasing monetization, and the only way I know of to increase monetization is through targeted ads. That’s our business.”

Mr. Schmidt is a believer in targeted advertising because, simply, he’s a believer in targeted everything: “The power of individual targeting—the technology will be so good it will be very hard for people to watch or consume something that has not in some sense been tailored for them.”

That’s a bit scary when you think about it. But for investors and executives the big question, of course, is which companies will control these opportunities. Google may see itself as friend and helper to the media business, but it also clearly sees itself in control of the targeting information. Says Mr. Schmidt: “As you go from the search box [to the next phase of Google], you really want to go from syntax to semantics, from what you typed to what you meant. And that’s basically the role of [Artificial Intelligence]. I think we will be the world leader in that for a long time.”

Between here and there, though, the company faces ever-growing legal, political and regulatory obstacles. The net neutrality debate, which Google has led, has taken a sudden turn that has many of its former allies in the “public interest” sector shouting “treason.”

What was most striking about the set of net neut “principles” Google produced this week with former antagonist Verizon was that they didn’t apply to wireless. “The issues of wireless versus wireline gets very messy,” Mr. Schmidt told one news site. “And that’s really an FCC issue, not a Google issue.”

Wait. Isn’t the future of the Internet wireless these days? Isn’t wireless the very basis of the new partnership between Google and Verizon, built on promoting Google’s Android software? But Google has now broken ranks with its allies and dared to speak about the sheer impracticality of net neutrality on mobile networks where demand is likely to outstrip capacity for the foreseeable future.

If that weren’t about to become a sticky political wicket for the company, it also faces growing antitrust, privacy and patent scrutiny, fanned by a growing phalanx of Beltway opponents, the latest being Larry Ellison and Oracle. “There’s a set of people who are intrinsic oppositionists to everything Google does,” Mr. Schmidt acknowledges resignedly. “The first opponent will be Microsoft.”

Mr. Schmidt is familiar with the game—as chief technology officer of Sun Microsystems in the 1990s, he was a chief fomenter of the antitrust assault on Bill Gates & Co. Now that the tables are turned, he says, Google will persevere and prevail by doing what he says Microsoft failed to do—make sure its every move is “good for consumers” and “fair” to competitors.

Uh huh. Google takes a similarly generous view of its own motives on the politically vexed issue of privacy. Mr. Schmidt says regulation is unnecessary because Google faces such strong incentives to treat its users right, since they will walk away the minute Google does anything with their personal information they find “creepy.”

Really? Some might be skeptical that a user with, say, a thousand photos on Picasa would find it so easy to walk away. Or a guy with 10 years of emails on Gmail. Or a small business owner who has come to rely on Google Docs as an alternative to Microsoft Office. Isn’t stickiness—even slightly extortionate stickiness—what these Google services aim for?

Mr. Schmidt is surely right, though, that the questions go far beyond Google. “I don’t believe society understands what happens when everything is available, knowable and recorded by everyone all the time,” he says. He predicts, apparently seriously, that every young person one day will be entitled automatically to change his or her name on reaching adulthood in order to disown youthful hijinks stored on their friends’ social media sites.

“I mean we really have to think about these things as a society,” he adds. “I’m not even talking about the really terrible stuff, terrorism and access to evil things,” he says.

Not that Google is a doubter of the value of social media. Mr. Schmidt awards Facebook his highest accolade, calling it a “company of consequence.” And though “there is a lot of hot air, a lot of venture money” in the sector right now, he predicts that one or two more “companies of consequence” will be born among the horde of new players just coming to life now.

A skeptic might wonder whether, despite present glory, Google itself might yet prove a flash in the pan. The company has enormous technological confidence. Mr. Schmidt describes how YouTube, its video-serving site, almost “took down” the company in its early days, thanks to the swelling outflow of video dispatched from its servers to users around the globe. Salvation was the “proxy cache”—lots of local servers around the world holding the most popular videos. “The technology that Google invented allows us to put those things very close to you,” says Mr. Schmidt. “It was a tremendous technological achievement.”

But with YouTube, as with lots of Google projects, there remains the question of how to make money. Google captured the search wave and shows every sign of positioning itself successfully for the mobile wave. As for the waves after that, your guess may be as good as Mr. Schmidt’s.

Read More: WSJ.com (entire article here)

The following is an excerpted interview with Ramsey McGrory, Yahoo! VP and Head of Right Media Exchange.  McGrory discusses recently announced plans for Yahoo!’s display advertising exchange – Right Media Exchange.  Topics covered include:

The results of the Demand-Side Platform (DSP) Pilot Program…
A new Search Engine Marketing pilot on Right Media Exchange…
Demand Media, a publisher for RTB participants on Right Media Exchange…
On Right Media Open, an event produced this week by Yahoo! for its Right Media partners…

On the results of the Demand-Side Platform (DSP) Pilot Program…

RM: The specifics on DSPs are actually pretty good. We expected to see improvements in targeting. We expected to see, conversely, that would mean higher bidding, which is valuable to the publishers. And so I think we generally got what we bargained for. Which is the targeting efficiency, the control of frequency, the control of cost. The DSPs are, by and large, moving directionally on executing on that vision. That’s a good thing.

Read More: AdExchanger

The Career-Relevant Timeframe

I’m attending the Right Media Open in Chicago and, no surprise, change is in the air. Although there is a general consensus on where the industry is headed, I am seeing a healthy debate around the timeline for that change.  While discussing the importance of indirect, bid-based sales to publishers, Dave Zinnman from Yahoo pumped on the brakes, saying that if you believe exchange-based inventory will become dominant in a “career-relevant timeframe”, you need to “step back from the punch bowl.” For me, “career-relevant timeframe” is the most important phrase I’ve heard today.  No matter what your business, its important to have a realistic understanding of how fast your market is changing. Just today, VMM founder Darren Herman retweeted his 2008 post comparing the rate of innovation with the rate of adoption, and reminding entrepreneurs to build for today’s market. That’s the relevant timeframe for a venture backed startup between rounds.  Here in Chicago, the question of the day is: what is the relevant timeframe for advertising-related companies evaluating the momentous shift toward automation?  Up until now, I think media decisionmakers have been very confident in their ability to influence the rate and direction of change. At the 2009 24/7 Real Media Summit, I was struck by GroupM CEO Irwin Gotlieb’s remark that he felt it was, in some part, his responsibility to manage change in this new media landscape on behalf of various stakeholders. Consolidated media buying firms exist for the sake of exerting this type of influence and the comment made me think a lot about how and when the industry would change.

 Read More: GregHills.com

RockYou Strikes Virtual Currency Deal With Facebook

RockYou has entered into a five-year agreement to make Facebook Credits the exclusive payment option in its social games and applications on the social network. The deal, unveiled Thursday, is a boon for Facebook, as RockYou is one of the largest developers on the site, with about 34.6 million monthly active users and 2.7 million daily active users, according to Inside Network’s AppData.  The move helps ensure that Facebook’s virtual currency will gain wider distribution across the site. Until recently, Facebook Credits, which cost 10 cents each and allow users to buy virtual goods in games and apps, had only been available in a limited number of apps for testing.  But Facebook has lately been trying to build the user base for Credits through deals with significant developers, who get a 70% cut of revenue from sales suing the virtual currency. Some developers, principally game maker Zynga, have resisted offering Credits because of the 30% cut Facebook takes.  In a five-year deal announced in May, however, Zynga broadly pledged to expand the use of Credits in its games, which include wildly popular titles like “FarmVille” and “Mafia Wars.” Separately, smaller developers including CrowdStar and Lolapps have also signed exclusive five-year deals to use Facebook Credits exclusively.

Read More: MediaPost

iPad As A Business Tool? Probably Not Yet

AT&T’s activation of 3.2 million iPhones in the second quarter got the attention of the tech media Thursday, highlighting the Apple device’s continued importance to the company’s wireless business.  But during its earnings conference call, AT&T also shed some light on that hot-selling Apple product, the iPad. The carrier said it activated 400,000 to 500,000 iPad 3Gs in the quarter, with usage about as expected — higher than a typical iPhone user, but less than someone using a laptop. Apple said last week that 3 million of the Apple tablets had been sold since its April 3 launch.  Tim Cook, Apple’s chief operating officer, said during the company’s conference call this week that it is selling iPads and iPhone 4s as fast as it can make them. And apparently the iPad doesn’t appeal only to consumers. AT&T’s Chief Financial Officer Rick Lindner said Thursday the company has been surprised by the level of interest among business users.  When the iPhone was first launched, he noted that businesses, and especially chief information officers, were reluctant to adopt the phone as a business tool. “Over time that’s changed dramatically,” he said. But “right from the beginning with the iPad, we’ve had a number of business customers express interest.” Lindner also suggested some companies might even use iPads to replace laptops.

Read More: MediaPost

Many pundits have criticized Google as a one-trick pony that makes money from one thing – search on the desktop. There’s certainly some truth to that, but Google’s moves over the last few years foreshadow an audacious three screen advertising strategy that, if properly executed, would represent a ground-breaking second act for the company. By aggressively pursuing platforms on mobile and TV in addition to their traditional perch on the desktop, Google is positioning itself to deliver ads across all three screens and trump the capabilities of both Apple and Microsoft, who have made far less inspiring moves in the advertising world.

Read More: JackMyers.com

John Mayer’s LeBron Spoof Satisfies Fans’ Growing Content Cravings

Since Monday a new video featuring musician John Mayer’s spoof of LeBron James’s ubiquitous “decision” TV special has collected an additional 30,000 views. That brings views of the parody video – which doubles as a summer tour promo – to over 192,000 as of noon today.  “After giving it a lot of thought and careful consideration I have decided that I’m going to play for Cleveland,” says Mayer in the video in a deadpan monotone. “So as not to offend my fans in South Beach, I’d also like to announce that I’ll be playing for Miami,” he continues, adding, “I’m also going to be playing for New York City.”  Those three cities, as anyone who’s glanced at sports coverage recently knows, were among the likely locations for former Cleveland Cavaliers offensive powerhouse LeBron James to choose as his new home as he made his much-hyped decision as a free agent. James chose to play for The Miami Heat starting next season, though the New York Knicks were also reportedly in consideration.  “The John Mayer bit works because it’s timely, clever, and reflects his personality,” said Edith Bellinghausen, SVP digital business at entertainment firm Razor & Tie, which puts out bands and artists including Day of Fire, Matisyahu, and Natalie Grant.

Read More: ClickZ

Online Video Ad Segment Poised to Explode

The online video advertising market is poised for rapid growth over the next few years, according to eMarketer.  The research firm estimates online video advertising spending will grow more than 48 percent this year, reaching $1.5 billion. By 2014, it expects the video ad market will top $5.5 billion.  ”Video fulfills branding objectives better than any other current online ad Format — with the sound, motion and emotion of TV, but with better measurability and targeting,” said David Hallerman, a senior analyst at eMarketer. “The continued development of more professional-quality video on the Web makes the target audience more receptive to advertiser messages and thereby encourages advertisers to spend more for video ads.”  Still, spending growth does not necessarily correlate with current market importance. While video ad spending growth will far outpace that of any other online ad format from 2009 to 2014, it will still represent only 6 percent of all Internet advertising expenditures in 2010.

Read More: AdWeek

Social networks and their endlessly growing page views have dominated every sphere of the web — from audiences to ad impressions. But there’s one area where they still can’t seem to catch up: ad prices.  A recent analysis by ComScore shows social networks, primarily Facebook and MySpace, have over the last year drawn an average CPM of only 56 cents, compared to the $2.43 average for the internet at large. Looking more closely, the ComScore data show that the average pricing for online ads exclusive of social-networking sites, namely Facebook and MySpace, would be much higher, about $2.99 for every 1,000 views; social sites dragged down the average online CPM by as much as 18% over the last year.   Some industry executives are concerned that Facebook and its ilk may in fact be reducing the overall pricing of CPMs, or the cost-per-thousand impressions, that are the basis for online ad pricing.  “Social networks are going to be a challenge for everybody, as the sheer dominance of the impressions they’re making flood the marketplace with inventory,” said Keith Lorizio, Microsoft’s newly installed head of U.S. sales. “And it’s especially a challenge for every publisher, as they drive down CPMs.”  The low-cost rates on social sites don’t necessarily mean they’re driving down the pricing for other publishers. In fact, much of the collective downward pressure on ad prices could be attributed to the mass of inventory altogether — it’s supply simply outstripping demand.

Read More: AdAge

TwitVid Launches Video Ad Network

Twitter video hosting service TwitVid today launched SocialAds, a standalone video advertising network designed to help businesses connect directly with their audience by collecting followers and retweets for their advertising campaigns.  “Traditional means of monetizing video has heavily relied on pre-roll ads, which work great for premium content but can be quite suffocating for an end user who may only be trying to watch a short video,” said Mo Al Adham, co-founder of TwitVid, in a statement. “SocialAds offers an alternative advertising solution, which provides measurable value to both advertisers and viewers. Through SocialAds’ proprietary technology, media viewers are exposed to social media accounts targeted to be of high interest to them. In turn, advertisers are exposed to and gain engaged customers whom, once acquired, can be communicated with as a trusted brand.”   Advertisers and agencies are shifting some of their spending to online from TV, according to an April 2010 study of digital media and marketing pros by DM2PRO and Tremor Media. In fact, 94% of those polled expect to increase online ad spending this year, with almost 45% shifting those dollars from TV, the study reported.   In a private beta test, participating brands generated more than 400 new followers in less than one hour, TwitVid said. As a result of seeing the commercials, 2% of viewers began following a brand, according to the video hosting service.

Read More: InformationWeek.com

Foursquare Frenzy

Dennis Crowley, co-founder of hot location-based social service Foursquare, addressed a roomful of marketers in June. He asked for a show of hands of how many had tried to work with the company but didn’t hear back. A lot of hands went up. The simple message: the still-small company is struggling to further develop its service while responding to the avalanche of requests.  Now, with $20 million in new funding, agencies are hopeful the digital world’s new belle of the ball will build tools to help them use the service in deeper ways.  Adweek spoke with several agencies that report frustrating experiences with Foursquare. Some have found it both hard to contact and unwilling to come up with marketing ideas. One agency representing a major package-goods client said the company put the onus on the brand and agency to find the best way to use the service.  “They’re not responsive and extremely hard to work with,” said a digital agency exec who asked not to be named. “It’s hard to bring campaigns to life. Nobody knows how to create a badge or ask [Foursquare how] to enable behavior. It’s black magic.” In general, he said, “it’s pretty much unworkable.”   One sticking point is Foursquare’s strategy of initially limiting advertiser participation. Pepsi, for instance, has an exclusive lock on the soft drinks category. Additionally, Foursquare has identified one “charter advertiser” for some major categories, which it then works with to better understand what works before taking on other advertisers. While less formal than exclusive contracts, it nonetheless leaves some competitors out in the cold, if only temporarily.

Read More: AdAge

In just a few short months, the term demand-side platform (DSP) has become ubiquitous in the online advertising industry. It has become synonymous with all things real-time bid, exchange-sourced, display advertising — in many cases replacing the mainstay term “network” as the model of choice for advertisers. All kinds of media brokers are now scrambling to offer a DSP solution, relegating words like “network” and “optimizer” to the dustbin of display terminology. But as more platforms wade into the opportunity waters, it seems like an equal amount of fog is being injected into industry discussions. So I thought it would be an opportune time to lift some of that fog and expose several of the bigger DSP myths being perpetuated today.

Myth 1: DSPs are really just networks in disguise False. There are some real differences between DSPs and networks, but recent trends have blurred those lines and given birth to this popular myth. At a fundamental level, traditional networks rely on a large stable of direct publisher relationships to deliver premium placements, easy reach, and ample scale, while owning the media risk and performance responsibilities. Many of these traditional networks live on today amid the DSP wave, successfully delivering campaigns along the way. But networks have begun to rely on exchanges as easy aggregation points for quick scale, and that is what started the move to DSPs. Then when the networks began to layer on automated optimization and advertiser-facing controls alongside their exchange-sourced media — either managed or self-service — they started to look like a lot like DSPs. This is how the whole DSP phenomenon began to accelerate. As networks began to rely heavily on exchange-sourced media while automating the trafficking process and exposing levers and knobs to the advertiser, some essentially became demand-side platforms. With the scale of the real-time bid exchanges and external facing controls, yesterday’s traditional ad network becomes today’s “hot” DSP. But there aren’t going to be as many DSPs as ad networks — read on for why.

Read More: iMediaConnection

McGrory’s and Right Media’s Evolution: Part I

“It wasn’t like I sat down and said, ‘I’m going to go into advertising!” admits Ramsey McGrory, head of Yahoo Right Media Exchange and North American Marketplaces. “I feel like I lucked into advertising. It has quirky people, technology, psychology, creative people, technical people… It’s a nutty space, it’s a different space.”   Fresh from getting his master’s at Georgia Tech, McGrory was hired by Citigroup and completed its two-year derivatives program. Though he wasn’t a fan of the culture, he’s always kept a soft spot for the actual concept.  “Advertising is often about risk reduction or risk enhancement,” he says. “It’s not exactly the same as the derivatives market; the whole world isn’t going to collapse because I sold a CPM campaign.”  McGrory was in Citi’s highly regarded management training program on what looked like a fast track to a cozy financial executive spot when Citigroup merged with Travelers Group and Salomon Brothers. The higher-ups offered him a desk job or a year’s salary to walk away. Considering he wasn’t thrilled with the world of derivatives products, the latter appeared to be an opportunity.

Read More: Adotas

First Apple iAds Hit the iPhone

Following the official launch of Apple’s iAd mobile advertising platform on July 1st, ad units for Unilver’s Dove brand and Nissan’s Leaf model have now begun appearing in some ad-supported iPhone applications running on the new iPhone OS 4.0.  Dove’s Men+Care ads showcase branded content featuring pro-baseball players Albert Pujols and Andy Pettitte. In addition, they allow users to browse Dove’s range of Men+Care products and offer them the chance to win signed baseballs.

Read More: ClickZ

Why Facebook Killed A $100M Baby

This evening Facebook announced that they will officially kill the company’s gift shop on August 1st of this year. Currently generating tens of millions of dollars for the company a year, one has to wonder why the company would take such dramatic steps. Facebook regularly touts how few developers run each segment of their business, but even if the company was generating tens of millions on a couple of developers, apparently more can be generated with the small gifts team working on other projects. So what does this really mean?  We are to assume that Facebook’s gift shop has been growing since they were projected to have a $35 million annual run rate back in 2008, there’s no doubt that the company could easily be selling tens of millions of dollars in gifts each year, at a minimum. However the rise of FarmVille and the social gaming ecosystem on Facebook has driven virtual goods transactions away from Facebook’s core gift shop. The result is that Facebook’s virtual goods business may have been somewhat damaged.  If you had been offered to purchase all the revenue of Facebook’s gift shop going forward in 2008, you may have been willing to pay a pretty penny, if the company was really generating $35 million a year from the shop. While $100 million may be pushing the limits on the value of future virtual goods cash flows, it’s not an unreasonable number. However now the gift shop has become filled with damaged goods that no longer stand out from the numerous other gifts.

 Read More: AllFacebook.com

Apple 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

AppNexus, the real-time advertising platform tapped by many of the leading ad networks, and Collective, a leading media and technology solutions company for display advertising, today announced that they are working together to expand real-time advertising opportunities on the Web for Collective’s brand advertisers and agencies.  Collective will now leverage AppNexus’ advanced ad platform, data management, and proprietary inventory monitoring tools for executing and optimizing real-time media buys using Collective’s industry-leading audience targeting and robust inventory protection.  In addition, Collective’s commitment to detect and target audiences across a premium ecosystem will be significantly enhanced by the single-point integration offered by AppNexus with the largest sources of inventory including the major ad exchanges like Google’s DoubleClick and Microsoft’s AdECN.  “At Collective, we have always had a laser-focus on audience; delivering the perfect ad, to the right person, in the best environment which is why the partnership with AppNexus, the most sophisticated real-time ad platform available today, is a natural fit for us,” said Jerome FitzGibbons, EVP, Collective.

Read More: CentreDaily.com

Foursquare’s New $20 Million Means More Hiring, New Offices and Much Investor Confidence

The $20 million of second-round financing secured by the mobile networking service Foursquare will go toward staffing up on engineers, getting offices that can accommodate expanding staff and supporting its rapidly expanding audience of users. Oh yeah, and it’s got a revenue model to work out too.  The New York company, which was only founded in March 2009, allows its users to “check in” to locations, such as the local Starbucks, via their mobile phones and see other members who have checked into the same location. Virtual rewards, such as badges and mayorships, are awarded for frequent visits. Foursquare currently has 1.8 million registered members and draws in 10,000 new members daily, according to the company.  Companies such as PepsiCo and Starbucks have enthusiastically engaged the service. “From a broad strategy point of view, there’s a huge potential with the ability to connect people to promotional experiences,” Bonin Bough, PepsiCo’s global director of digital and social media, told Ad Age in February. “We know where people are and can talk to them from a geo-located perspective — that’s a huge opportunity.”

Read More: AdAge

Report: M&A Market Hits $21B, Deal Values Up 291% 

Led by digital and tech-driven businesses, the M&A market for media, information, marketing services, education and related technologies rebounded strongly in the first half of the year, according to a new analysis from Jordan, Edmiston Group.  During the period, 445 transactions — with a total value of $21 billion — were announced, reflecting a 52% increase in deal volume over the same period last year, and a 291% surge in deal value.  The sharp rise in market deal value was driven by several multibillion-dollar transactions, including Madison Dearborn Partners’ acquisition of credit and information management company TransUnion for an estimated $2.5 billion, and the acquisition by Silver Lake Partners and Warburg Pincus of financial information provider Interactive Data Corporation for $3.2 billion.  Overall, six market sectors saw strong growth in M&A in the first half, including B2B online media; B2C online media, which was up 64%; B2B Media; database and information services; marketing and interactive services, which was up 96%; and mobile media and technology, which was up 188%.

Read More: MediaPost