Microsoft and AOL are both rumored to be looking at AppNexus, a New York City real-time bid (RTB) advertising startup, for a possible acquisition.

RTB — in which advertisers pay for ad impressions to particular consumers based on tracking data at the moment a new web page is loaded — is growing incredibly quickly right now.

As RTB appears set to take over a large portion of the display market over the next few years, major advertising players are building, acquiring, or partnering their way into the market. Most recently, Google paid a reported $70 million for Invite Media, a demand-side platform that helps advertisers trade in the RTB market.

AppNexus is run by a couple guys who sold Right Media to Yahoo, Brian O’Kelley and Mike Nolet, as well as ex-Googler Michael Rubenstein. Souces from the company dimiss all this gossip as just that – “rumors.”

Read More: BusinessInsider

Is Ad Blocking the Right Approach?

A couple of months ago I read an article by Tom Hespos called “Is our ad delivery infrastructure overtaxed?“ Besides doing a good job highlighting the growing issue of complexity and latency issues in our ad delivery infrastructure, it reminded me of a debate that we’ve had here at Adometry: is ad blocking the right approach?

A number of companies have sprung up to block ads that would appear next to objectionable content. From a brand protection point of view, we understand the appeal of ad blockers. If you could ensure that you could stop your brand appearing next to inappropriate content 100% of the time, why wouldn’t you adopt one of these services? But when you look more deeply at the reality of what these services deliver and the potential unwanted side effects, the value proposition becomes less clear.

Additional Latency

Ad blockers work by inserting themselves in the ad delivery chain.  Ad blockers need to make a decision whether to allow or reject an ad on a particular page without delaying unduly the delivery of the page.  Most of the time, they do this by matching a URL in their cache. For a new URL, they schedule the page for examination in an “offline” queue.

How much extra latency is acceptable? While opinion varies, 100-150 milliseconds would be an upper limit, and most publishers would prefer to see something in the 40-50 milliseconds range or less.

How much latency do ad blocking vendors introduce into the ad delivery path using today’s technology? Our measurement of one of the leading ad blocking vendors indicates that they add an average of almost 500 milliseconds to the ad call.  Perhaps we measured them during a bad month; I’m not claiming we have enough data to be accurate about someone else’s technology. I am saying that if you’re thinking of adopting ad-blocking technology, you should measure for yourself the delay to the ad call.

Read More: iMediaConnection

ShareThis Puts Value on Shared Content

ShareThis plans to release two analytics tools that allow advertisers and marketers to determine the value of content being shared across Web sites. Through both, Social Reach and Audience Index, brands have an opportunity to understand the value of social traffic.

Social Reach measures the true value of shared media across the Web by looking at inbound social traffic and outbound sharing, valuing the responder of a share as much as the sharer. The analysis aims to provide more data than buttons on Facebook, Twitter and Tweetmeme buttons that measure outbound sharing.

Audience Index measures and segments a publisher’s audience by influence, so it identifies who has shared, responded and viewed content from their site. It indexes the information by category and matches it against other sites across the Web.

Some early data shows that social traffic engages consumers more than search traffic, according to ShareThis CEO Tim Schigel. “It measures the social reach and allows publishers to measure it by article,” he says. “They also can index their reach from the articles on their site against the rest of the network.”

Read More: MediaPost

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

Today, during ClickZ’s Connected Marketing Week in San Francisco which brought together name-your-digital-pleasure marketers to discuss their respective marketing channel, ClickZ and the Internet Advertising Bureau (IAB) also co-sponsored an Ad Networks & Exchanges event.

Editor’s note: It would seem the name of this type of IAB event may need to evolve. Demand-side platforms don’t want to be called ad networks. And, ad networks – to a certain degree – want to be known as demand-side platforms. Looking forward to the new name!

Just prior to the day-long event, the IAB released news (see it) that 16 IAB member ad network and exchange companies had become “the first to commit to comprehensive self-certification against the IAB ‘Networks & Exchanges Quality Assurance Guidelines,’ [which aims to] increase buyer control over the placement and context of advertising on ad networks and exchanges.”

In the third panel of the day, San Francisco-area media agencies provided their take on the fast-moving ad ecosystem and ad verification technologies, in particular.

Moderated by ValueClick Media’s Matthew Boyd, panelists included associate media director Kim Small of Universal McCann, senior media manager Pablito Padua of Signal to Noise (formerly Agency.com), associate media director Lindsay Wong of Razorfish and vp, digital strategy director Chris Unno of PHD.

Noting the new guidelines and their adoption by 16 member companies, panel members agreed they were heartened to see the step forward in adopting the brand safety measures. But Signal to Noise’s Padua added that he was disappointed that there weren’t additional networks on the initial list.

Read More: AdExchanger

Excess Ad Inventory Pushing Value-Added Services

The movement into value-added services by companies throughout the online advertising space continues to get more interesting. First we saw Google provide free tools and services to support online ad sales. Now search engine marketing companies have begun to provide free tools and platforms to small-and-medium size businesses in hopes of eventually locking them in to subscription services for life. Take that one step further, to find demand side platforms (DSP) building networks of tech offerings on top of real-time bidding platforms.

Xa.net built its platform as an integration hub to bring in data from BlueKai, eXelate and TargusInfo, as well as the media from ad exchanges and publishers. Add to that creative services and it gives advertisers a way to pull in targeting data, purchase ads, and design creative pieces.

The xa.net built technology that allows companies to access inventory from ad networks and exchanges through a real-time bidding system will also offer value-added services that assist companies with copywriting and creating ads. The company’s CEO, Rob Leathern, tells me xa.net began to build the platform earlier this year and will sign on five companies to augments its services. Think of it this way, Leathern wants xa.net to provide the underlying technology that connects complementary services to make everything work together. That includes ad creation for social media platforms, too.

One of those companies will become BoostCTR, a network of copywriters for text ads that will help xa.net clients improve the quality of copy written for Facebook ads. Others include 4Delit, a self-service system that lets small advertisers create Flash and rich media ads; Interpolls, which creates rich-media formats and widgets; OneScreen; and OggiFinogi.

Read More: MediaPost

Google TV plan is causing jitters in Hollywood

Google revolutionized the way people access information. Now it wants to transform how people get entertainment.

The search giant is touting an ambitious new technology, called Google TV, that would marry the Internet with traditional television, enabling viewers to watch TV shows and movies unshackled from the broadcast networks or cable channels on which they air. Users would need to buy a TV or set-top box with Google software that could connect to the Internet, along with a keyboard to type commands. Users could also use their iPhone or Android phone to operate Google TV.

The prospect of Google getting into television frightens many in Hollywood, who worry that Silicon Valley will upend the entertainment industry just like the Internet ravaged the music and newspaper industries.

Read More: LATimes.com

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)

Online advertising network InterCLICK announced its second quarter 2010 earnings on Wednesday. According to the release, “Revenue was $21.7 million in Q2 2010, a 103% year-over-year increase. (…) Gross profit was $9.6 million in Q2 2010, up 102% year-over-year.” Read more.

AdExchanger.com: Looking at InterCLICK’s 100% year-over-year Q2 growth and projected 2010 revenues of $90 million + , are there any observations you can share about how clients are spending?

MK: Delivering the most effective audience-centric campaigns is dependent on our ability to properly value targeting data and solving the operational challenges associated with running data enabled campaigns. We won a record amount of new business this past quarter and client retention reached a new high watermark. This is a hyper competitive space and I believe that our investment in our technology and our team has paid off tremendously, as evident in our results.

What about data? Has using data exchanges and other third-party providers been a key part of your offering? How do you see this playing out for InterCLICK?

The challenges in display advertising require effective supply chain management. The goal is to find the optimal alignment among data, inventory, and creative. Quality inventory has been accessible for quite some time, and through data exchanges like BlueKai, rich targeting data has been made quite accessible. So data exchanges allow for easy access and implementation. The real challenge is in the execution, which is what we have invested significant capital and resources in addressing.

Read More: AdExchanger.com

Inside the Numbers: How Demand Media Will Pitch a Billion Dollar IPO

Demand Media is a money-losing company. How will it convince Wall Street to value it at a billion dollars or more?   By directing investors’ attention to a set of numbers which say it’s a very profitable company.  The official term for these numbers are “non-GAAP financial measures”. In English, that translates into “accounting you can’t try at home, but which shows off our company in the best possible light.”  And it does! Depending on which set of numbers you want to look at, Demand lost either $4.3 million or $22.3 million on revenues of $114 million in the first half of this year. But Demand’s “Adjusted OIBDA” numbers show a company that made $25.6 million on revenue of $108 million. Much better!  Some investors may balk at these non-GAAP numbers, but Demand, Goldman Sachs (GS) and its other underwriters clearly think there’s a market for them. And there’s certainly a hunger in the tech world for a big, brand name IPO to break the dry spell. You can feel people willing this thing to work.  If Demand did, say, $55 million in OIBDA this year, it would need a multiple of 18 times trailing 12 months earnings to get to a $1 billion valuation. It would need 27x to get the $1.5 billion number that people are whispering to reporters.  Another way to get to $1.5 billion: Project OIBDA of $100 million for 2011, and ask for 15 x on that number. Reminder: $1.5 billion would make Demand worth more than the New York Times (NYT).

Read More: AllThingsD.com

Adapt.ly to Manage Ads Across Multiple Social Networks

As advertisers begin to run ads across an increasing number of social networks and sites, startup firm Adapt.ly has developed technology to help manage those campaigns from a single platform, and to help digest and evaluate the resulting performance data more easily.  As Adapt.ly co-founder Nikhil Sethi points out, most social networks offer self-service ad platforms, which exist in complete isolation of their competitors’. As a result, advertisers are forced to manually construct individual campaigns on each, despite the fact they’re attempting to reach essentially the same audience. “Managing all these campaigns by hand is a pain in the ass, and analyzing the data from all the different platforms becomes a nightmare,” Sethi said.  It’s that heavy lifting that Adapt.ly is attempting to relieve, providing a service that will handle campaign creation, targeting, and optimization automatically, and from a single point of entry. “We’ve built a system that allows us to take creative and to normalize it across a range of networks. We ask advertisers two simple questions: What are you advertising, and who are you trying to reach? The system will then optimize targeting across the networks,” said Sethi, adding that users are given the option to specify creative for individual platforms if they wish, or to simply let Adapt.ly take care of it.

Read More: ClickZ

Are Marketers Really Spying On You Online?

The ongoing “What They Know” series in The Wall Street Journal is drawing needed attention to some of the ways web analysts and marketers gather and track information about people online. As part of the series, they visualized the types of cookies and tracking files used by 50 top websites, including their own. However, the WSJ failed to fully explain what type of information is being collected about visitors and what marketers do with the data. Rather, they left the public to wonder if online marketers are actually spies.   I don’t deny that I use cookies and tracking pixels to gather a variety of details about you if you visit my site. However, most of the data I have is anonymous and the details exist across multiple systems, not aggregated in one tidy personal profile. Rarely do I feel like I have pieced together enough details to be considered a spy. But with all that data, what do I really know about you?

Read More: AdAge

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

Part of the magic of real-time bidding is found within machine learning. This involves using sophisticated algorithms to “learn” complex patterns based on large amounts of data in order to make optimal advertising decisions. The importance of machine learning is cost avoidance and value creation. Cost avoidance is simple to understand: data-driven optimization strategies help reduce waste by identifying the most relevant impressions while selecting the best ads (better creative message, better offer, etc.), which in turn improves performance and ROI (define). Value creation, on the other hand, happens when buyers and sellers of commoditized offerings are more efficiently brought together for a transaction.  To create machine learning magic, two ingredients are required: scale and prediction. Scale speaks to the need to make more users/impressions available through the auction marketplaces, and increase the number of advertisers bidding on these users. The bigger the scale, the more sophisticated the data-driven prediction can be. The second ingredient refers to the idea that prediction needs to be “accurate enough.” Amazon and Netflix have demonstrated that when you provide an accurate prediction of what consumers want, the business grows in two ways:

1. Better inventory control and more purchases/utilization.
2. Better targeting becomes a custom delight feature when it’s perceived to be quite accurate by average consumers.

The ability to deliver relevant choices in real time based on what consumers reveal about themselves creates a virtuous cycle: 

Ads/recommendations become more accurate → consumers are willing to share additional information about themselves → the machine learning algorithm for ads/recommendations becomes even smarter

In digital advertising, the machine learning prediction ultimately boils down to two parts: identifying your target audience and reaching them efficiently. The first part requires machine learning at the user level to learn the most optimal audience segments to target; the second requires machine learning to drive real-time bidding strategy with precision. For instance, demand side platform technology allows advertisers to have global control over how many times each user sees the ads (i.e., frequency capping) and how they see them. This begs the obvious question, “what is the optimal number of ad repetitions?” The answer might be an average of five times over a period of seven days. Problem solved? Not quite.

Read More: ClickZ

BrightRoll Launches Video Ad Exchange

Earlier this year, video ad company Adap.tv launched a video ad exchange in partnership with Gannett Co. and Publicis Groupe’s VivaKi digital unit. Now, its OneSource platform will have some competition from a rival video ad marketplace started by video ad network BrightRoll.  As with the online exchanges that have emerged in recent years for display and other types of advertising, the goal is to bring increased efficiency to the video sector by giving publishers a way to unload unsold inventory and media buyers an automated system for reaching particular audiences across a wide range of sites.  “What we’re essentially releasing is a video advertising business in a box for buyers of online advertising,” said BrightRoll CEO Tod Sacerdoti, who added that the new exchange dubbed BRX is an outgrowth of the company’s efforts to further automate its own ad network over the last 18 months. BrightRoll is the third-largest U.S. video ad network based on streaming video ads viewed — at 333,492 in June, according to comScore.  “We realized everything we were building was applicable to other media buyers and sellers,” said Sacerdoti. A BrightRoll study earlier this year found that half of publishers surveyed reported that at least 20% of their online video advertising inventory is never sold, suggesting the potential for an automated, auction-based marketplace for pre-roll ads.

Read More: MediaPost

Forbes Sells Investopedia To ValueClick For $42 Million

After less than two months on the block, Forbes Media has sold financial education site Investopedia to lead gen provider ValueClick (NSDQ: VCLK) for $42 million. In June, Forbes retained the Jordan, Edmiston Group, Inc. three years after it bought the Canadian-based site.  The announcement comes a few weeks after Forbes purchased freelance journalism site True/Slant, which was shut down last week and will remain live as an archive site only.  Forbes had been an investor in True/Slant and before the purchase, it had hired site’s founder, Lewis DVorkin, as consultant to help restructure its digital offerings. The quick sale of Investopedia is a the first step in the struggling publisher’s latest digital reinvention. Despite the fact that Forbes was eager to sell the Edmonton, Alberta-based Investopedia, the company claimed that the site’s profits and users have grown in the past three years since it was acquired.  In a release, ValueClick CEO Jim Zarley said that Investopedia gives the company “great content, organic traffic and established advertiser relationships in the important financial services advertising vertical.” He also believes that the addition of Investopedia will be able to help build up its ValueClick Brands and ValueClick Media offerings.

Read More: PaidContent.org

Real-time bidding (RTB) is the fastest-growing form of display advertising delivery and will significantly impact publisher CPMs and the amount of ad inventory we see from advertisers. The technology has been described as revolutionary and, in a nutshell, it gives advertisers the ability to target messages to the right user, in the right place, at the right time. The goal of RTB is to achieve the highest possible value of a single ad impression by dynamically delivering reach to targeted users on an impression-by-impression basis.  This is a competitive bidding environment in which advertisers attempt to reach individuals based on specific demographics and psychographics, assigning a value to each impression used to reach specific users in real time. This is a brave new world for the publisher, where networks and exchanges will look to take ownership of our users and our data, segmenting our audience in an attempt to deliver the most highly targeted eyeballs for advertisers. We need to take ownership of our users and our data, earning premium CPMs through targeted ad delivery and the use of RTB technology.   To that end, let’s take a closer look at real-time bidding and the ecosystem in which it operates. There are burgeoning industries and players within them that you may have never heard of, so we’ll take a deep dive on this subject and spend time looking at RTB enablers, agency buying desks, DSPs and sell-side platforms, ad networks and exchanges and the data providers that make this all possible.  Sell-side platforms have become real-time bidding technology providers. You can see this in the offerings of two of the major online advertising yield optimizers, Pubmatic and AdMeld. Working with them comes in a couple of flavors. One, layer their product onto your existing ad serving platform and have them deliver RTB ads—over your site or network of sites—that they have sourced; or two, and better yet, take the product to advertisers yourself, using the sell side platform’s technology to target demographically using dynamic bidding. 

Read More: minonline.com

Ad Networks & Demand-Side Platforms

The interactive ad industry is widespread with buzzwords, catchphrases and acronyms. Which new, abbreviated, “next gen” solution will unleash its “game changing” power on the digital marketing landscape? Will Demand Side Platforms (DSP) rule this brave new world? At Epic Media Group, we don’t believe so. With information moving so quickly, it is no surprise that there are so many opinions and a great deal of confusion. Hot topics like data, transparency, real-time bidding (RTB), trading desks, and search re-targeting further complicate the industry landscape for most industry onlookers rather than simplify it – fueling circular conversations that last for months.  Demand Side Platforms are making noise, sure, but just like a trendy new band, the sound may be different to your ear. Simply put, a new genre does not make all previous genres irrelevant. In fact, if you deconstruct the name Demand Side Platform it becomes far less complex than it seems. As our CMO, Mike Sprouse, recently pointed out on this blog, advertisers want online advertising to be simpler and we think that will begin happening in the near future. Simplification begins with our industry’s acronyms.  The term “platform” – a word we use a lot at Epic Media Group – means a plan of action, scheme or design. Platform is also defined as a raised, level surface – like a train platform or a stage. Technically speaking, it is a hardware architecture and framework that allows software to run.  Strong platforms should be designed to support all of a company’s business channels, allow for cross-channel functionality, and leverage massive amounts of data and data analytics to deliver advertiser campaigns across all channels. The “P” in DSP references the capability to place bids, in real time, for impressions available on inventory exchanges with a user interface that provides some degree of reporting. A strong technology platform must encompass a lot of things and is an integral part of any ad intermediary’s business.

Read More: EpicMediaGroup.com

Dead Metrics Walking

I was recently asked about the relative ROI of different advertising channels – from TV, print, and radio, to direct mail, e-mail, and banners, to search ads, social media marketing, and location-based and mobile marketing. In comparing these diverse channels, it became clear that they really couldn’t be compared easily because the types of metrics were all different and measuring different things.  Let’s take a closer look at these metrics, grouped into three buckets: 1) push advertising – approximations of reach and frequency, 2) direct response, and 3) pull marketing – user-initiated ads.

Read More: ClickZ

When AOL CEO Tim Armstrong joined the company in spring 2009, he announced he’d take just 100 days to figure out what to do to turn around the one-time tech industry leader.  In about a week, it will be a year since AOL celebrated the end of those 100 days with a big party in Dulles, Virginia on July 24, 2009.  It’s been a huge 12 months for AOL since. There were layoffs, a massive voluntary-buyout program, a re-branding, major product-rollouts, and of course, AOL’s December 2009 spin-off from Time Warner.  Also during that time: just about every corporate-level executive left the company – usually to be replaced with an ex-Googler.  Recently, we spoke with one of these former AOL executives to find out what it was really like when Tim Armstrong came to save AOL.  Here’s that inside story.

SAI: How did word break in February 2009 that CEO Randy Falco and president Ron Grant were out?

Former AOL exec: As soon as it happened Ron started calling his team. Word obviously spread incredibly quickly. Rumors started to break that afternoon because [Time Warner CEO] Jeff Bewkes made a surprise visit actually to the AOL headquarters downtown. For Jeff Bewkes to come out of the Time Warner building on the Upper West Side was highly unusual. So I think people were extremely sensitive to what was going on when he was spotted in the building — it’s a very open layout, the office space, so everything’s pretty visible.   Upon Jeff leaving people started twittering and everything else and I think that’s why Ron started picked up the phone so quickly and just started dialing.

Read More: BusinessInsider.com

DoubleClick White Paper: The Value of Dynamic Pricing & Auction Pricing

We’re often asked to quantify the incremental value DoubleClick Ad Exchange can provide compared with publishers’ existing yield management techniques. According to proprietary research conducted in the first half of 2010, the combined effects of auction pressure and Dynamic Allocation in DoubleClick Ad Exchange resulted in an average CPM lift of 136% compared with fixed, upfront, pre-negotiated sales of non-guaranteed inventory.   In a new white paper, we take a step back to explain how publishers are managing yield across their pool of non-guaranteed inventory today, and what steps they can take to create efficiencies and boost overall revenue. Key elements of the white paper include:

• How publishers segment and sell ad inventory. How manual optimization processes often fail to capture all available revenue opportunities
• Dynamic Allocation explained. What it is, how it works, and what it means for publishers’ bottom lines.
• Auction pricing mechanics. Real-time pricing’s core advantages over the use of historical CPMs for non-guaranteed ad space.
• A brief look forward. The potential for DoubleClick Ad Exchange and its ecosystem of publishers, technology providers, advertisers and agencies.

Read More: DoubleClickPublishers.blogspot.com

The real dream of any advertiser is to grab the attention of the right person at the right time. A new approach to online advertising, known as real-time bidding, could help make that vision easier to achieve.  Real-time bidding involves auctioning off the opportunity to show an online display advertisement to a specific type of user at a precise moment. A San Francisco-based startup called Triggit recently scored $4.2 million in funding from two venture capital firms, Foundry Group and Spark Capital, based on the promise of its real-time bidding platform.  “Every person has a different value to different advertisers,” says Zach Coelius, Triggit’s CEO. He points to the advertising auction system used by Google for search keyword. People searching for particular keywords are bracketed together as likely having similar intentions. With display advertising, he says, the interests of the person visiting a page is less clear, and it’s more difficult to match an ad to the ideal user. It is increasingly possible to gather information about a user by looking at her browser’s cookies–tiny files that show which sites she has visited. But matching this information to advertising is a still relatively crude process.

Read More: TechnologyReview.com

Google Working On Secret New Ad Format: “Interactive Video Ads”

Google is still casting around trying to find another revenue stream that will carry the company now that search is maturing.  The latest idea?  Interactive video ads.”  Eric Schmidt pitched the idea at Allen & Co.’s Sun Valley conference, Jessica Vascellaro reports:  Google Chief Executive Eric Schmidt championed “interactive video ads,” which he said are on the way. Such ads, which could appear anywhere on a Web page, not just inside a video, would be like mini-Web pages. That means they could allow Web users to watch a video, leave a comment and see real-time updates within the ads that are more customized to their interests.  Mr. Schmidt said in an interview Thursday that he has pushed Google’s ad teams to think about the potential for such ads, which he suggested would eventually become prevalent. But he didn’t comment on any specific plans for them.  Sounds like a stretch. 

Read More: BusinessInsider.com

Tech Companies Work To Come Up With Ad Ideas That Click

As media companies voice doubts about whether they can build their digital businesses on advertising alone, technology companies gathered in Sun Valley this week are trying hard to convince them to think more creatively.  In a range of interviews on the sidelines of the conference, Internet companies from ad juggernaut Google Inc. to small upstarts have pumped the promise of new formats that are more effective than banner and search ads, the staples of the digital ad industry to date.  Google Chief Executive Eric Schmidt said in an interview late Thursday that a new killer ad format—which he dubbed “interactive video ads”—is coming. Such ads, which could appear anywhere on a Web page not just inside a video, would allow users to interact with the ads in new and more engaging ways, such as asking users to click on a video to learn more about a product. He said he has encouraged Google’s ad teams to think along those lines, but didn’t comment on any specific plans.  Andrew Mason, chief executive and founder of Groupon Inc., said in an interview that his company—a fast-growing startup that distributes daily deal newsletters—is here talking to media companies about reinventing local advertising.

Read More: WSJ.com