It is customary to divide online advertising into two categories: direct response and brand advertising. I prefer instead to divide it according to the mindset of users: whether or not they are actively looking to purchase something (i.e. they have purchasing intent).*  When users are actively looking to purchase something, they typically go to search engines or e-commerce sites. Through advertising or direct sales, these sites harvest intent. Google and Amazon are the biggest financial beneficiaries of intent harvesting.  When the user is not actively looking to buy something, the goal of an online ad is to generate intent. The intent generation market is still fairly fragmented and will grow rapidly over the next few years as brand advertising increasingly moves online. P&G – which alone spends almost $4B/year on brand advertising – needs to convince the next generation of consumers that Crest is better than Colgate. This is why Google paid such a premium for Doubleclick, Yahoo for Right Media, and Microsoft for aQuantive (MS’s biggest acquisition ever).

Read More: BusinessInsider.com

Q&A: The Internet’s Traffic Cop

As more people go online for everything from video to social-networking updates, Internet service providers have to race to make sure the network has the capacity to deliver what customers expect. Behind the scenes, a company founded by scientists at the Massachusetts Institute of Technology, works to ensure that that network is running more efficiently.  Akamai is probably best known for storing things like videos on its servers, which are located closer to households. The closer the servers are to a user, the better the person’s experience is because the data doesn’t have to travel as far across the lines of the Internet. Akamai also uses algorithms to direct traffic on the Internet in the most efficient way — which isn’t always the way that normal Internet protocols would try to direct it. And the company has been expanding into areas such as security and “cloud computing” — where things like email and documents are handled and stored online rather than on a person’s computer.  Digits spoke with Akamai’s co-founder and chief scientist, Tom Leighton, about how information is getting delivered to consumers and what needs to be done to speed up delivery. His responses are summarized below.

Read More: Blogs.WSJ.com

Adify Licenses NetSeer Technology To Lift Ad Conversions

The ad industry continues to automate systems to squeeze every dollar from campaigns to improve return on investments. Ad network Adify will announce this week that it has licensed NetSeer’s Contextual Services and concept-based analysis technology to better predict sites where ads will attract consumers to produce best.  Knowing how to sort through the millions of Web sites to discard those with dribble and keep the ones with great content has become an art. NetSeer aims to help Adify find those sites to help clients gain the best ROI. John Mracek, chief executive officer at NetSeer, says contextual signals, when done correctly, can play an important role in increasing performance and understanding consumer intent.  NetSeer will help create the “short list” that Adify will use to trim down and present to clients. It will give Adify a sense of the sites that fit specific criteria through NetSeer’s categorization abilities and KnowledgeBank, a concept graph supported by spiders crawling the Web to determine what’s important. It opens up advertising for companies that Gropper refers to as “mid-tail” — companies that fall well below those on the comScore 500 list.

Read More: MediaPost

If you weren’t paying attention you might be confused. Or, maybe you are paying attention and you’re still confused. Or, maybe in your confusion you’ve decided to quit paying attention and watch for signs of warmer weather.  Just in case, there is an interesting juxtaposition today in Ad Age between research from Advertiser Perceptions that reports marketers are accelerating the shift back to content sites for media buys (“Marketers Shifting Online Budgets to Content Sites”), and a column from investment banker Tolman Geffs arguing instead that the momentum is with the audience networks (“Get Ready for the Coming Land War in Online Display Ads”).  Says researcher Advertiser Perceptions: A survey of agencies and marketers revealed that 52 percent of them plan to spend more on content sites this year, whereas only 35 percent said they were likely to increase budgets for ad networks.

Read More: HuffingtonPost

Hulu to Launch a Subscription Service in May?

In May, Hulu plans to start testing a subscription service for a monthly fee of $9.95, claims the L.A. Times, citing people familiar with the plans. Currently, Hulu viewers can see the five most recent episodes of popular shows such as Glee and Lost. The subscription service, called Hulu Plus, would enable users to see older episodes of these shows.  Although unconfirmed, this news is on track with a previous report that said that Hulu was planning to launch a subscription service in a matter of months. Back then, it was speculated that the monthly fee would be $4.99, but the price of access to unlimited TV shows seems to have risen in the last couple of months.  If it’s real, Hulu Plus is perfectly aligned with the launch of iPad 3G; the two could be a fantastic combination for accessing your favorite TV shows from any location. The monthly fee, however, is not negligible.  When we first wrote about Hulu’s possible subscription service, we asked you if you’d pay $4.99 for it, and many of you answered yes.

Read More: Mashable

The Marketplace Appreciates Obfuscation in Pricing

Pricing is defined as the property of having material worth. Pricing though does not dictate individual value, but rather the value of a good for the average.  Let me illustrate by an example:

Sherri walks into CVS to purchase some shampoo for the Herman household.  She sees Pantene for $6.45/bottle or Sunsilk for $9.99/bottle (totally made up numbers).  Sherri has a specific price in mind she wants to pay for Shampoo based on her proprietary valuation system (special needs, bottle shape, accessibility, etc) and based on this specific value, she is able to decide between Pantene and Sunsilk.  Pantene and Sunsilk are offering (pricing) their products at these price levels because they have done a comprehensive supply/demand curve and have optimized where they should price their product for the optimal (not always most) amount of buyers.  This is done through market and competitive research as well, as, historical sales scenario planning data.  In this scenario, the marketplace appreciates pricing obfuscation:  it’s simple for the consumer and it’s simple for the business.  The consumer never sees the profit margins (unless they are purchasing from a public company and even then, how many consumers read financial reports) and the business never knows how much the consumer was really willing to pay (potentially more).  There is not really a tension here – if a product’s price is not adequate for a consumer, they will move onto the next product on their list.

Read More: DarrenHerman.com

After his keynote speech at the IAB’s Annual Leadership Meeting last week, IAB Chairman Dave Moore took the time to speak with CPX COO & President, Rob Rasko.  Moore talked about the event, his first as chairman, and the great opportunity to network, exchange ideas, compare problems and seek solutions together.  He discussed the issue of self-regulation and the importance of educating legislators about how the Internet works, stressing that, especially in an economy that is still recovering, the last thing the industry needs is legislation that hurts business. In addition to serving as Chairman for the IAB, Moore is also Chairman and Founder of 24/7 Real Media.  When asked how 24/7 plans to affect the market in 2010, Moore referred back to a prediction he made in his keynote: that demand side platforms would become a service to every major agency. He discussed 24/7’s position as the inventors of the first demand side platform, known as B3, before the term was even coined, and the growth that platform has already experienced. This year, they plan on continuing to play a major role in driving the WPP digital strategy.

Read More: CPXAdNetworkBlog

Adconion Unveils New Joost Video Ad Network, Positioning For Video Platform Future

Adconion announced the Joost Video Network today – “a complete suite of online video  advertising products and services… with global in-banner and in- stream video advertising capabilities, including pre-, mid- and post- roll video advertisements.” (Read the release.) The announcement comes a little over three months since Adconion acquired Joost.

AdExchanger.com: What were the challenges involved in converting Joost into a video ad network?  What parts of Joost provided infrastructure – and what didn’t?

NH: The main technical challenge was integrating the Adconion ad server in to the Joost player, which was key in order to provide our advertisers both the ability to re-target users across pre-roll and display ads as well as provide them with integrated reporting.  Other than that, launching the Joost Video Network was pretty seamless, because we could leverage our existing network capabilities – after all, we are the world’s largest independent audience network.

Read More: AdExchanger.com

New Tool For Brand Advertisers On The Google Content Network

Two types of advertisers run campaigns across the Google Content Network. The first group, direct response advertisers, measures the success of their campaigns by looking for clicks, traffic to their sites, and sales. In contrast, brand advertisers typically use display ads to raise awareness and purchase consideration for a product or service a person might buy down the road. Other advertisers are looking to achieve a combination of these goals. On the Google Content Network, we’ve been focused on building new capabilities that make it a great place for brand advertising of all kinds. For example, last year we introduced frequency capping to enable advertisers to manage how often their campaign reaches the right users. We’ve also developed new innovative tools to measure the impact of brand campaigns. Today, in response to feedback from brand advertisers, we’re announcing a new feature that allows these advertisers to reach their advertising goals more easily. This feature, which filters out “below the fold” inventory, enables brand advertisers to be more selective about where ads appear. The new filter gives you the ability to show ads only in places that appear on the user’s screen when the page loads, without requiring them to scroll down.

Read More: AdWords.Blogspot.com

As companies try to improve consumer messaging around online ad targeting in anticipation of new privacy regulation, technology platform company [x+1] this week released an application giving marketers and agencies the ability to integrate customer and third-party online and offline data to target ads. The platform, Open Data Bridge, supports targeting data across multiple channels, such as display ad, Web site and email campaigns. The service, being offered as part of [x+1]’s trading desk platform, has been tapped by several undisclosed “large” clients.

Read More: MediaPost

Does Apple’s iPad Take A Bite Out Of Web Advertising

We’ve known for quite some time about the iPhone’s inability to render Flash content within the mobile Safari browser, and based upon Apple’s announcement of the iPad today, it looks like that device isn’t going to do it, either. Touted as a savior for the publishing business, this device will potentially revolutionize the delivery and commercialization of content. But most publishers are publishing their content to the web. Via websites. And for those that don’t yet have paywalls, they support their websites with advertising. Those ads are almost 100% rendered in Adobe’s Flash. So when people use the iPad’s web browser to visit their favorite newspaper (as Steve Jobs did in his keynote; see photo at right, courtesy of Engadget), they won’t see the ads at all. That either means advertisers will need to stop building ads in Flash (no chance) or publishers will need to build app versions of their publications upon the iPad SDK (software development kit), resulting in a lot more work, a lot more time, a lot more resources.

Read More: AdAge

Sick of Ad Networks? Start Your Own

Last month media giant CBS Interactive announced that it would stop using third-party ad networks to sell inventory across media properties and instead use its own internal ad serving platform, dubbed “Madison.” It’s not the first time a publisher has openly rejected the use of ad networks, which are sometimes considered a necessary evil for publishers that can’t sell all of their inventory. (After all, some revenue is better than none.) ESPN, Weather.com, Turner Networks, Forbes and Gawker have been very vocal about their refusal to do business with them, noting that they can greatly devalue inventory and create channel conflicts. But as consumers’ media consumption becomes even more fragmented, single-domain publishers are finding it more difficult to provide adequate reach to advertisers, both in quantity and quality. A website with just a few million unique visitors and no sophisticated behavioral or contextual targeting capabilities is all but invisible to big brand advertisers, who will just turn to ad networks to deliver large, targeted audiences for their campaigns.

So what’s a publisher to do?

The answer is simple: reject the ad network, not the ad network model.

Read More: Adotas

In digital media, a new solution that promises a better mousetrap will typically draw two reactions from the industry. The ones who stand to benefit try to hype the trend, hoping to ride the wave. The old guards spread fear, uncertainty and doubt because the solution may eat at their market share. Such is the case with real-time bidding, which became a very hot topic among online display advertising buyers and sellers in 2009, and is likely to dominate industry discussions in 2010. Just 1 percent of all online display ads were bought on an RTB basis in 2009. That number will rise dramatically to 3 to 5 percent this year. Most of the conversation on the topic has centered on the benefits for advertisers and demand-side platforms. These entities are able to place a value on each unique ad impression, individually and in real time, using a judgment that takes into account proprietary data and technology. The result is better performing campaigns and greater advertiser ROI on those campaigns.

Read More: MediaWeek

Vertical Ad Networks Go Local

Ad networks are not only grouping themselves into industry vertical specialties – there are also signs that they are beginning to segment themselves based on location. That is one conclusion to be drawn from the recent launch of SLOAN, the Sacramento Local Online Ad Network.  The Sacramento Press launched SLOAN last month with Adify, a vertical ad network platform. SLOAN is forging agreements with several local publishers. To date it includes The Sacramento Press, The Rancho Cordova Post, Gold River Online, Elk Grove Online, SacMix, The Sac Rag, Sacramento365.com, Myfolsom.com and The Tomato Pages Network.

Read More: MarketingVOX