Hearst-owned iCrossing has become the latest search agency to try and boost its display ad chops by partnering with a demand-side platform.

Scottsdale, AZ-based iCrossing will work with DataXu to support real-time ad optimization and bidding on ad exchanges such as Yahoo’s Right Media and Google’s DoubleClick Ad Exchange.

The move follows a slate of developments in which search agencies have made advances in the display arena. Recently, four search firms – Efficient Frontier, SearchIgnite, Kenshoo, and Marin Software – joined a Right Media pilot program involving real-time bid display ads. Back in April, SEM firm Efficient Frontier launched a DSP of its own, fusing real-time bidding functionality with search campaign management.

While not purely a search agency, iCrossing’s roots are in the search arena. Dax Hamman, the agency’s VP of display media, said in a statement that data integration is key to the company’s clients’ exchange ambitions.

“We wanted a partner…that could provide the technical framework in which we can test the effectiveness of multiple data sources for our clients,” he said.

iCrossing was not the only search firm to announce new moves into display this morning. Marin Software, a search management platform company that manages $1 billion in marketing spend annually, today released applications for managing Facebook Advertising. The new features allow clients to manage algorithmic bidding, segmentation, and ad rotation on Facebook, alongside their search campaigns on Google, Bing, and Yahoo.

Read More: ClickZ

ShortTail, TidalTV Ink Video Ad Deal

ShortTail Media, a company that helps publishers deliver video ads to text-based portions of their Web sites, has signed a deal with Web video network and technology firm TidalTV.

As part of the pact, publishers in TidalTV’s network, including 30 newspaper sites owned by McClatchy, have begun selling advertisers ShortTail’s signature D30 ad unit — a video interstitial that appears as users click between Web pages.

ShortTail touts the D30 as a way for sites to better monetize text content, which still makes up the majority of publishers’ content outside of the YouTubes and Hulus of the world. The company already works with sites such as EW.com and The Huffington Post and has run campaigns for brands like A&E, Sonic, Jim Beam and General Mills. (See also: “Web Ads Get More Intrusive.”)

That monetization concept appealed to McClatchy, which is testing the D30 on the sites for newspapers such as The Miami Herald, Sacramento Bee and Kansas City Star. “We’ve traditionally had our own video and video from the Associated Press, but that requires users to say, ‘I’m going to watch video now,’” said Chris Hendricks, vp, interactive media at McClatchy. “We’ve had very limited [video] inventory because of that. This puts video front and center on our site, and it helps us compete from a volume perspective.” McClatchy’s sites reach about 35 million unique users, per Hendricks.

Read More: AdWeek

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)

Video ad network BrightRoll has struck a deal with search data provider Magnetic to offer search retargeting as an option for targeting video ads. Search retargeting allows advertisers to run display ads based on a user’s search history. So if someone has been researching a car purchase, they might see a banner ad from an auto advertiser.  With the BrightRoll deal, Magnetic is now applying this approach to video ads as well. “By combining Magnetic’s targeting technology with our video advertising platform, we’re able to solve the needs of our advertisers by delivering targeted campaigns at scale with a high return on investment,” said BrightRoll CEO Tod Sacerdoti in a statement. The ad network already offers targeting according to demographic, behavioral, geographic and other criteria.  Magnetic has already struck partnerships earlier this year with display ad networks including interCLICK and Undertone Networks aimed at refining display ad targeting based on the 270 million anonymous profiles the company has created based on search data gleaned from mostly second-tier search engines, Web site toolbars, e-commerce sites and other sources.  The idea is to combine the high conversion rates of search advertising with the traditional brand-building role of display. “You have all the different creative options in display that you don’t have in search,” said Magnetic CEO Josh Shatkin-Margolis. “And for premium publishers the best form of online display ads are video ads.”

Read More: MediaPost

The Future of Free Media

Monday’s Wall Street Journal article on cookie tracking was a bit underwhelming. So although (a) we’ve been having the same conversation over and over again since 1996 without getting anywhere*, (b) the article was a bit misleading and maddeningly vague, and (c) industry rumor has it that the church/state divide at the Journal does not quite live up to the J-school ideal, I am siding with Jeff Jarvis in believing that News Corp is not well enough organized to stage a conspiracy: the article was just poorly done.  These arguments are nominally about privacy. And providing privacy is a worthy but complicated** goal. But given the general level of philosophical confusion about privacy, I believe much of the commentary (and the comments to the commentary) is motivated by a hostility to advertising in general.  If you hate advertising, you hate advertising. Arguing that not paying for music means a diminished supply of quality music does not sway the downloader. Not paying for media–in whatever sense of pay–means a diminished supply of quality media. This argument does not sway the hater of advertising, but I’m not trying to convince them. Advertising provides something important: free (as in beer) media. This may not mean much to Rupert Murdoch–who can afford to pay cash for his media–but it means something to society. And it should mean something to those of us who are trying to find a way to make quality ad-supported online media a viable proposition.  Paying cash for media is regressive. High cover prices exclude those with less disposable income. (This strategy is used purposefully by mixed-model high-end media outlets to produce a demographic appealling to better-paying advertisers.) Advertising democratizes media***. And media allows a democracy.

Read More: ReactionWheel.Blogspot.com

The Google-Verizon Net Neutrality Pact

Google CEO Eric Schmidt and Verizon CEO Ivan Seidenberg hosted a conference call Monday to discuss an open Internet just days after the Federal Communications Commission abandoned efforts to reach a compromise. The proposal aims to derail unlawful discriminatory practices and gives regulators the authority to stop offenders.  While the two companies published the terms of the Google-Verizon “A Joint Policy for an Open Internet” agreement in a blog post, the plan does not treat wireless and wireline network access equally.  Both Schmidt and Seidenberg emphasized that there is no formal agreement based on the proposal. It simply represents suggestions to “the public policy arena to see how we can move our industry forward,” says Seidenberg, emphasizing that the agreement stands for innovation.

Read More: MediaPost

IAB Ad Network Guidelines: Providing Greater Brand Safety

We have all witnessed the ad network space and the overall non-reserved inventory landscape become increasingly complex. During the past 18 months, changes to our industry have come from the continued proliferation of ad networks, growth in data usage, the emergence of exchange models, as well as increased technology offerings including demand-side and supply-side solutions.  While these innovations are designed to benefit the end client, it has led to confusion – particularly during a time when advertisers and agencies are seeking transparency, brand safety, quality, and control.  As a result, clients have had growing concerns when it comes to buying inventory through networks and exchanges. They often wonder: “How will my brand be protected? Where will my campaign really run? How do I make sense of the various targeting capabilities and data sources?”  In light of these concerns, the IAB has released the “Networks & Exchanges Quality Assurance Guidelines.” The guidelines are intended to provide increased simplicity, transparency, and control for the buying community (i.e., marketers, agencies, and publishers). Based on feedback from members of this community, I’m confident that the implementation of these guidelines will result in providing confidence and clarity that buyers seek and an overall stronger marketplace for all parties alike.

Read More: ClickZ

NBC Universal is getting into the ad network business, first selling inventory across a handful of its own properties, then possibly expanding into others.  The network, called Universal Audience Platform, launched today with 21 NBCU properties, including Bravotv.com, NBC.com, Oxygen.com and Syfy.com. While advertisers have previously had the ability to buy packages that spanned NBCU properties, this is the first time they can buy display inventory based on audience segment rather than brand.  Asked why NBCU had chosen now to launch an ad network, Peter Naylor, VP of digital sales, said the company “has the impressions and uniques” to form “a credible entrance to the market.” But that doesn’t mean it will limit itself to NBCU properties.  “This is phase one,” he said. “Phase two is going to be when we welcome in some other sites we don’t wholly own and operate.”  Just when – or if – that will come to pass isn’t yet clear, said Naylor. But he did confirm that discussions were under way to find other suitable properties to add to the network.  For now, the formation of UAP means that NBCU will be “dialing down” its dependence on third-party ad networks, said Naylor. The company has made deals with BlueKai, Nielsen and Quantcast to supply the demographic data that it will use to sell audience segments to advertisers.

Read More: ClickZ

Insights from OMMA Behavioral Conference on Display Marketing

Several members of the EF team attended the OMMA Behavioral Conference in San Francisco last week. The focus of the conference was to explore how behavioral targeting has changed from simply targeting audiences by the Web pages they have recently viewed to utilizing targeting data from multiple sources such as social networks, site and search re-targeting, and various third party data providers. Because there are so many targeting channels, attributing conversion to the appropriate source has become very difficult for advertisers. The difficulty of attribution modeling quickly became a hot topic at the conference.  Abhishek Pani, our Director of Research & Quantitative Marketing, discussed a new attribution framework in his presentation titled “Evaluating the Marginal Value of Display”.  Optimal budget allocation across channels is the fundamental problem that advertisers want to solve but given the lack of proper attribution models, they are forced to rely on simple heuristics to allocate revenues. Current attribution offerings in the industry ignore important variables such as the effect of time and cross channel demand elasticity (change in demand in channel A that results from a small change in spend in channel B). Incorrect attribution will result in sub-optimal budget allocation and lower the return on advertising investment. Because our platform manages across all channels of advertising (search, display, and soon social), we are able to measure, experiment, and build very accurate allocation models based on marginal contributions of each channel.  Abhishek discussed our modeling strategy in greater detail during his presentation.

Read More: blog.eFrontier.com

BuzzLogic to Announce New Social Media Ad Units

By combining ads with content BuzzLogic believes it can give consumers using social media a better ad experience and better integrate advertising with the content against which it is presented.   “We’ve been running all kinds of IAB sanctioned rich media for a while, but the BuzzRoll product is much more customized and gives marketers more options,” said Peter O’Sullivan, BuzzLogic’s VP of sales, in an interview with paidContent.  “BuzzRoll, as a social media ad unit, will drive greater engagement among blog readers, since it encourages them to share everything from a company’s blog content or a white paper, and Twitter feeds, to video and Facebook apps. This is just a simpler way for marketers to do it.  For example, if a product wanted to associate itself with a green image it could place an ad on a blog about green issues and, by careful keyword selection, program it to pull in content about the topic from around the Internet. That information is then scrolled along the bottom of the rich media ads.  According to ClickZ, the units can also host video and Facebook applications via Facebook’s APIs.

Read More: BizReport

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

Apple Inc., with a storehouse of billions of music, movie and software downloads, is studying the buying habits of many of its 150 million iTunes users to show more appealing mobile ads and fuel competition with Google Inc.  Through the iAd program that began last week, Apple started placing ads in iPhone applications for the first time. Early iAd clients include Nissan Motor Co., Unilever NV, JC Penney Co., Best Buy Co. and AT&T Inc.  At stake is leadership in mobile ads, forecast by EMarketer Inc. to almost triple to $1.56 billion in 2013. Google, which gained the biggest share of online advertising by placing ads based on PC-Web surfing habits, may use that tack to widen a lead on handheld devices. Examining consumers’ entertainment and software purchases may give Apple an advantage, says Rachel Pasqua, director of mobile at marketing firm ICrossing.  “Apple knows what you’ve downloaded, how much time you spend interacting with applications and knows even what you’ve downloaded, don’t like and deleted,” said Pasqua, whose clients include Toyota Motor Corp. and Mazda Motor Corp. She isn’t currently working with Apple on iAd campaigns.

Read More: Bloomberg.com

Display Advertising Acting More Like Search

While online display advertising has grown tremendously in the last decade, its growth rate and ultimate size have been outstripped by the growth and size of search.  And during a downturn search tends to hold or grow its relative position even more.  As a result, many players in the display world are looking to search to see what aspects of search can be better leveraged in display.  I think there are three key areas where display is working to become more like search.  First, in the area of data.  A tremendous amount of the power of search comes from the fact that the consumer’s intent is largely declared by their act of searching.  Clearly that is of great value to an advertiser.  By gathering data that better approximates current intent – for example, by incorporating an anonymous user’s recent queries from an e-commerce site – display advertisers can come closer to search in this respect.  The rise of data exchanges like BlueKai and Exelate is intended to help address this need.  The second area of historical “search advantage” is creative.  Search “creative” has historically been text, which is easy for even the smallest advertiser to create and change.  This means a broader number of potential advertisers.  Companies like AdReady and Tumri make the real-time assembly of display creative much easier and lower cost.  If companies can generate display creative on the fly inexpensively, the ability to better target display ads is significantly enhanced.  Finally, display advertisers are becoming more like search in the area of real-time bidding.  Search has allowed advertisers to bid for keywords and calculate their return on investment relatively easily.  With the rise of Demand Side Platforms (DSPs) such as MediaMath and Invite to help advertisers interface with ad exchanges, the display advertising world is similarly helping advertisers efficiently access quality inventory at a competitive price.  

Read More: Blog.Searchandise.com

For Online Advertising, Media Consolidation Is a Good Thing

Much has been written about the “long-tail” concept since Wired’s Chris Anderson popularized the idea in 2004. But for all the discussion about how effective long-tail strategies are for search-engine optimization, viral marketing, web retailing and social-media marketing, it seems that many online advertisers — especially display advertisers — are missing the boat.  Media continues to consolidate, and increasingly the vast majority of online ad dollars go to just a handful of web publishers. By ignoring the rest of the web publishing world, online advertisers are avoiding a perfect opportunity to reach much larger audiences at a reduced cost. From an advertiser’s perspective, the universe of websites can be divided into four groups.

Read More: AdAge

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

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

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

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

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

Read More: WSJ.com

At Yahoo, Using Searches to Steer News Coverage

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

Read More: NYTimes.com

Google’s Display Advertising Plans Include Gmail and YouTube

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

Read More: AdAge

Six months into 2010 and things are looking downright sunny, unless you’re BP, or want to swim in the ocean anytime in the next five years. So far the economic outlook is good and recent reports suggest that the digital world is poised for growth. Agencies are hiring again, staffing up new roles, and expanding teams. Clients are cautiously coming back to the digital world. Life is good in the kingdom…or so it seems.  A small storm is brewing. It’s not a client or budget problem; it’s an integration problem. Every agency is facing the problem of matching their user engagement strategy with their data-driven search efforts. How we approach this problem is key to organizing our agency resources to work with emerging trends and avoid the pending storm.  Search has always fallen into the category of algorithm-driven strategy, but with the rise of ad exchanges, demand-side platforms, and trading desks – the water has gotten murkier. With this “new” way to buy, agencies aren’t only educating clients on this new format, but also aligning an organization to deliver against it.

Read More: ClickZ

Apple’s Next Disruption: Advertising

If anything is clear from the punches being thrown by Google at Apple over mobile advertising, it is that the search giant understands what is at stake.  As mobile advertising comes into its own, Google should be well-positioned to grab a big piece of it. Prospects for other large media companies, online or traditional, are less sure.  It is easy to underestimate the importance of mobile Internet and advertising. ComScore estimates 48 million people had smartphones in the U.S. in the three months to April, of whom only 5.4 million searched the Web on the devices on a near-daily basis. In contrast, the firm counted 214 million people searching the Web generally in April.  Estimates from eMarketer put mobile advertising at $593 million this year, compared with about $25 billion for total online advertising.  But eMarketer’s numbers were issued last September, before the release of the iPad. The Apple tablet’s strong sales so far confirm consumer demand for tablet computers and suggest consumers’ online behavior is likely to become a lot more mobile. That is likely already the case for owners of smartphones with robust Web browsers like iPhones or Android-powered devices.  Android and iPhone devices commanded 37% of the smartphone market in the first quarter between them, according to Nielsen, against 35% for Research in Motion’s BlackBerry. Nielsen’s data also show that close to 90% of iPhone and Android owners used the mobile Internet in the previous 30 days, compared with 73% for all smartphones. Browsing the Web on a BlackBerry can be a frustrating experience. So as RIM’s market share declines and iPhone, iPad and Android devices become more common, mobile Web use will take off.  Data are scarce on how mobile browsing affects online behavior at a PC. But the ability to do Web searches anywhere likely reduces those done at a desk. Searching could become less important as people rely on apps for certain functions.  All this should spark an ad shift to mobile, particularly to apps. Admittedly, advertisers can take years to respond to changes in consumer behavior. But Apple’s plunge into the ad market with iAds, which serves advertising inside apps, is likely to accelerate the change. That it drew $60 million in second-half 2010 commitments from such marketers as General Electric, Unilever and Nissan Motor indicates mobile-ad estimates are too low.  Who will suffer from the advance of mobile advertising? TV networks, potentially, if the caliber of big-brand advertisers snagged by Apple continues. As the mobile audience is likely to fragment among applications, big Internet portals also may be at risk. Regardless, mobile likely will cause a bigger, faster disruption to the ad world than is generally appreciated.

Read More: WSJ

AdExchanger.com: What announcement do you have in regards to inventory partners?

CH: We’re the first holding company to be procuring inventory through AdECN. We were able to make that integration happen via Invite Media.  I was with Microsoft’s Darren Huston last week and he is quite pleased with the quality of advertisers he’s seen come through due to the integration and [the quality] of our brand marketers. We’re excited by that. It’s by no means exclusive and wouldn’t expect it to be. But, it now makes us interoperable with Google, Yahoo, and Microsoft. And we’re working hard on AOL which will hopefully happen in the near term.

AdExchanger.com:  What kind of inventory do you see through AdECN?

CH: AdECN is focused first on Hotmail. And I think as they understand how performance looks, we’ll expand from there. But, we’ve started with Hotmail.  The other good piece of news about this is the fact that it is through Invite Media, and post‑Google acquisition – [Google] has been very supportive.  Google realizes it’s for the DFA stack, away from media, and they appreciate that it works just like search bid management or serving ads. it’s a good thing for the industry that they’re taking the interoperable view.  You were asking [earlier] how we felt about the Invite Media acquisition. I think it’s great that what you’re seeing is some consistency where Omnicom (Click here for OMG CEO Matt Spiegel’s thoughts) and InterPublic Group (Click here for Cadreon CEO Brendan Moorcroft’s thoughts) – I believe through AdExchanger.com – they both have come out supportive and positive.

Read More: AdExchanger

Five Ways Foursquare Advertising is Getting Less Interesting

Foursquare, the geolocation social tool, has been a media darling as of late. Not only is it growing, but people innately understand the monetization model, which is not something you can say about every social site and tool. As people “check in,” or report where they are to their network, Foursquare serves them offers from nearby businesses. It’s a win-win-win situation: Businesses can market to people who are able to immediately take action; Foursquare earns revenue; and users get valuable offers they can use.  But Starbucks’ current program on Foursquare may kill the goose that lays the golden eggs (or at least demonstrate how that goose may die a slow, lingering death of neglect). I believe (and I’m curious if you agree) that Starbucks’ ubiquity combined with the offer’s difficult redemption is decreasing attention for Foursquare’s other offers. If other large chains follow suit with similar promotions, those “Special Nearby” tabs within Foursquare’s mobile apps won’t get as much notice, and that means problems for advertisers on the Foursquare platform.  If you’re a Foursquare user, you’ve undoubtedly seen Foursquare offers, but for those who are not yet acquainted with the joys of mayorships, here is how it works: When you check in at a location, Foursquare will alert you when an offer is available in close proximity. With a click, you can view that offer. The first couple of times I saw this, the offers were interesting and immediately relevant. For example, I checked in at SFMOMA and was alerted I could get free entry to an art museum across the street.

Read More: MediaPost

The Global CMO Interview: Lorraine Twohill, Google

Google is not known for its marketing; the product markets itself. But as Google attempts to translate its one mega-success — search advertising — into other lines of business, marketing is becoming a more important part of what the search giant is all about.  Lorraine Twohill heads marketing for Google on a global basis as VP-global marketing, which means a lot more than most people think. It encompasses everything from TV and billboard ads in Japan — one market that Google doesn’t dominate — to videos for products such as Chrome or Docs and Google’s first TV ad, a Super Bowl spot called “Parisian Love.”  Google’s marketing takes different shapes all over the globe and must be relevant to countries with high broadband penetration rates, such as the U.S. or Korea, as well as places where people predominantly access the web using mobile phones or in internet cafés. It has no agency of record, but rather works with several agencies, including Wieden & Kennedy Japan and Bartle Bogle Hegarty in the U.S. and Europe.  Ms. Twohill joined Google from European travel site Opodo seven years ago, and assumed the global marketing role two years ago. She currently manages marketing teams in more than 30 countries.

Read More: AdAge

TidalTV, which looks to help advertisers serve addressable ads in real-time, has inked a deal with Adap.tv to acquire inventory sold via that company’s marketplace for online video.  TidalTV, in turn, can then use its technology on behalf of clients to deliver pre-roll ads, looking to offer advertisers greater targeting. Adap.tv said its “real-time bidding (RTB) interface” will serve as a platform for TidalTV to acquire online video real estate.  Scott Ferber, TidalTV CEO, said in a statement that Adap.tv offers “quality inventory that can be leveraged on behalf” of marketers to “deliver optimal campaign performance.”  Adap.tv President Toby Gabriner stated that RTB is aimed at creating an online video exchange that is “transparent, efficient and profitable.”

Read More: MediaPost

DSPs Open Up a New World For Search

The emergence of demand-side platforms has heralded a new era for media by enabling advertisers to buy display space in a very similar fashion to how the search market currently works, writes Mark Fagan.  The entrance of this technology into mainstream media thinking offers a great opportunity for agencies that have search as a central part of their media buy. DSPs won’t exactly mean the death of media as we know it, but will create another channel and an improved way of generating even better ROI for our clients.  You’ll be able to decide how much you want to pay for each impression via a real-time auction, based on your overall strategy and current market conditions. The principles are quite similar to search with regards to media optimisation, analysis of the data, creative testing and having the right call to action. The key differentiator search agencies will have to offer is their considerable experience of dynamic, real-time bidding strategies like portfolio optimisation and how to maximise return for clients.

 Read More: NMA.co.uk

Questions for Foursquare’s Head of Business Development

Tristan Walker, Foursquare’s 25-year-old head of business development, graduated from Stanford Business School over the weekend. If you’re among the many companies waiting for a call back from the geo-social start-up, Walker’s commencement is partly to blame. Or so founder Dennis Crowley told the crowd at CM Summit during Internet Week in New York.  “For everyone that’s tried to get in touch with Tristan, you know what a bottle neck it is,” Crowley said. He added, “It’s not that we don’t think your ideas are good, it’s just that we don’t have time to answer all of them.”  To be fair, Walker would have a hard time responding to all marketer requests even if he wasn’t balancing his job with school commitments. A spokesperson for New York City-based Foursquare said inbound requests from businesses are coming in at the rate of hundreds a day. For a company with fewer than 30 employees, that’s tough to handle. (See today’s accompanying story: “Foursquare Checks In With Marketers“).  Late last week, between having his gown fitted and adjusting his tassle, Walker paused to answer a few questions for ClickZ readers.

Read More: ClickZ