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Advertising | Perspectives

Can data transparency labels help restore the health of digital advertising?

Not too long ago — about 10 years — a CMO client of mine explained with surprising candor how his job was evolving. “Up until a couple of years ago, I set my marketing strategy in October, got it approved in December, and then executed on it over the course of the following year — without much fanfare or oversight from anyone else in the company. Now I’ve got everyone from the CEO and CFO to business until GMs stopping by every week asking about new tactics I should employ.” I sometimes think about that comment. I wonder if it portended things to come for the industry or if that was a relatively calm environment, compared to today’s landscape. 

While we’re all acutely aware of how much the marketing ecosystem has changed in recent years, it’s jarring to stop and think about how much it’s really changed. Brands spend more ad dollars on a channel that effectively did not exist in a meaningful way until the mid-2000s. They have increased online ad spending by 5x since 2010. And these same brands will spend more than $125 billion on digital this year, a channel that is widely understood to be fraught with fraudulent activity, spotty data, and gaping transparency issues. 

The FBI has investigated the sector. Respected industry outlets report that “digital ad fraud is worse than ever, a daily, hourly fight.” The online advertising supply chain is a swampy morass that includes everything we’ve come to expect from swampy morasses: bad international actors, sketchy data, grossly exaggerated or just downright false claims, opaque fee requirements, and even the peripheral involvement of Cyprus. 

But so it goes. The digital channel is more cost effective than offline options. It is wildly popular and still growing. Warts and all, it works on multiple levels, and continues to gain in influence and stature. Perhaps the digital advertising community has either been disinterested in intervening meaningfully to improve conditions or stymied by immovable roadblocks (see: duopoly). However, the industry does seem toy insert a concept like Data Nutrition Labels into the ecosystem on a semi-regular basis. Here’s what advertising and media executives need to know about the industry’s latest attempt to improve market efficiencies, reduce waste, and regain a bit of self-governance. 

Data transparency labels make sense and could bring clarity to a murky marketplace

Obviously borrowing the FDA’s approach to food nutrition labeling, DTLs provide basic, valuable information about, well, data. This includes answering who / what / how / where / questions. As in: 

  • Who provided the data?
  • What does the describe (what audience segment)?
  • How was the data collected and constructed? 
  • Where were its components sourced? 

Implications for advertisers & publishers

If widely adopted, advertisers will benefit by being able to comparison shop more easily and be afforded some peace of mind when they do shop. Large operations are already doing this kind of diligence during the buying process.

However, smaller and less experienced advertisers don’t have the resources or know-how and are at a big disadvantage as a result. On the publishing side of the house, meaningful adoption of the DTLs will should benefit entrenched competitor. This is because they have a much better understanding of their inventory than many of the platforms or ad tech companies, which are either too big to precisely understand what’s going on or are currently under too much marketplace pressure and running too lean to be able to invest the resources necessary to acquire the understanding. 

While obviously logical, these kinds of initiatives don’t typically endure

At the end of the day, however, markets resist being controlled. In categories like healthcare and transportation, where lives are at stake, it goes without saying that regulation on top of strict self-governance (if only for risk management reasons) is required and mostly welcomed by consumers. However, it is the rare situation in which advertising involves persistent life-and-death implications so motivation may be lacking.

As a result, if only because most initiatives like this fail or wither without explicit government backing, it’s best to approach DTL with a dose of caution. Most large, deep-pocketed advertisers either have their digital advertising operations under control or are trending in that direction, so their support of DTL may manifest in spirit only, which could be problematic for the effort over the long term. 

Implications for advertisers & publishers

Expect advertisers to support DTLs in principle, if not via financial support (at least not out of the gate). However, if the project’s key sponsors — the Association of National Advertisers, Interactive Advertising Bureau, Coalition for Innovative Media Measurement, and Advertising Research Foundation — can generate and sustain some momentum, things could change.

But remember this only launched in October of last year. It’s too early for publishers to build a business case around supporting DTL adoption. That said, it certainly can’t hurt the cause, and many of the building blocks for incorporation are already in place by way of marketing and sales collateral that espouses data integrity and value. There’s little downside for publishers to embrace the initiative, and do what they can to help make it successful. The current working group is not unimpressive and seems open to accepting new members. 

While unique in its form, the launch of the Data Transparency Label initiative is another well-intentioned effort by the industry to improve the marketplace via a combination of buyer education, supplier accountability, and standardization. Over the years, we’ve seen industry groups such as ANA, DCN, IAB, and others insert themselves into the online advertising ecosystem to drive change in a volatile and often uniquely inefficient marketplace. 

With its straightforward packaging and potential to address an obvious market need, the DTL initiative has the potential to eventually be a game-changer. Having multiple industry groups and a laundry list of recognizable companies involved at the outset is notable and encouraging. Advertisers and publishers alike will be well-served by keeping a close watch on the development of this project. There’s no guarantee of its success and indeed past experience suggest it faces an uphill battle, but it’s an initiative that most certainly fills a market need. 

About the author

Tim Bourgeois is a digital marketing analytics and SEM consultant that helps brands optimize ROI on advertising, technology and agency investments. 

Advertising | Perspectives | Revenue

How publishers can unlock outcome-oriented advertising models

For anyone working in ad tech for more than a few years, the publisher monetization challenge comes as no (major) surprise. Ever since the ecosystem divided itself into demand-side and supply-side with the “impression” as the primary currency traded over automated exchanges, it was only a matter of time until the side “closer to the money” would overshadow the other.

While digital-native publishers quickly embraced these models and optimized their traffic for automated buying, traditional publishers (typically in print negotiating the “digital transition”) faced a different story. Most assumed that brand and editorial quality would ensure buyer competition to lift prices. However, this intersection of traditional and digital publishing ultimately diluted the value of these brands given the surge in digital inventory and resulted in disappointing “fair market value” in a CPM world.

Publishers are now in a race to (re)create value for their content, as we see two main trends emerging:

1. Creating alternatives to platforms by aggregating scale and data

To better compete with the scale and data capabilities of the Google-Facebook duopoly, premium publishers in various global markets, including the US, have formed alliances. The jury is still out on whether this model will ultimately succeed, forcing competitors to work together while balancing “infighting, lethargy ,and incompatible data and systems.”

2. Aligning business models with editorial expertise – content and experiences

Publishers have recognized that advertising revenue is not linear with content “quality” particularly with the emergence of programmatic buying as quality has given way to reach and data targeting. Therefore, publishers are diversifying their revenue and incorporating subscription models to be paid on their own definition of quality.

Beyond creating various flavors of paywalls for their readers, something deeper is happening. Publishers are rethinking their approach of the digital ecosystem to their advantage.

The next generation of publisher direct sales

Similarly, on the advertising front, publishers can now leverage technology, data, and AI to unlock new opportunities and empower their sales teams to better compete against the duopoly and challenge legacy ad transaction models.

Publishers can and should move beyond the traditional CPM model and move towards advanced outcome-centric models (i.e., CPCV, CPiV, vCPM, etc.) to compensate for intrinsic scale limitations while better meeting the true goals of their advertising clients. Combined with premium context which results in better ad performance and engagement, these new models should become part of publishers’ core strategy to reinvigorate their advertising revenue and maximize the value of their content.

How do we move towards this new model?

Moving “closer to the money” and further up the value chain requires publishers to start a deep, cooperative discussion with advertisers. They will then need to create packaged, scalable solutions to address their specific challenges. To succeed with highly qualified but limited footprints, these solutions need to leverage all possible optimization levers towards advanced, advertiser-centric KPIs (i.e. leads, completed video views, etc.).

For example, to run a successful CPCV (cost per completed view) campaign, optimization starts with the creative itself (along with the data set, user-definition and targeting) to AI that will model reader behavior to identify the most probable combinations that will lead to video completion (which ultimately limits inventory waste).

Looking beyond the supply side view

Unfortunately, most publisher ad tech stacks solely aim at optimizing the supply-side view of the world, while most of the high-value operations occur on the demand-side platforms. Publisher technology typically stop at the “CPM wall” leaving out most of the optimization levers that help drive the most conversions from a given impression.

Publishers need to adopt tech stacks that use AI to also compute demand-side data-points, similar to those used by DSPs to extract the most value from their inventories. In addition, these tech platforms also need to support outcome-centric optimized transaction models beyond CPM.

Only a limited number of ad tech companies have a comprehensive vision that spans across both demand-side and supply-side visions of the world. And even fewer have the scale to make their capabilities relevant or share them directly with publishers instead of to their own benefit. The publisher ad tech stack of the future will ensure that advertisers can deliver advanced KPIs while preserving and optimizing the publishers’ inventory.

About the author

Federico Benincasa is SVP Product for Publisher Solutions at Teads leading the Teads Publisher Suite initiative, a full-stack solution leveraging all the company’s proprietary technological assets. Former adtech entrepreneur, Federico is a recognized industry veteran and recently led the Product team for the StickyAds video SSP before becoming SVP of Product for Freewheel’s Digital Video full stack.

Advertising | Industry-Research | Perspectives

DTC brands are disrupting ecommerce—and advertising

Direct-to-Consumer (DTC) businesses are a unique class of company, and they’re changing the way we consume products of all kinds. They’re often referred to as disruptors because they use mobile and digital channels to sell directly to the buyer. By eliminating the retail “middleman,” DTCs bypass traditional sales models and re-think otherwise staid markets.

MediaRadar recently conducted an analysis of DTC companies’ ad spending across digital, TV and print, as well as their CMOs, physical stores and funding practices. The analysis offers insights for all brand marketers.

How do they advertise?

According to our study, for the past five consecutive years, DTC ad spend has increased by seven to 20% annually and has continued to grow across almost every product category.

DTC brands typically focus their ad spend on social media in their early years. Instagram is the primary channel for these companies because the platform allows for very specific targeting and a seamless purchase feature from within the app, that few other platforms offer.

The data also shows that as DTC firms scale their businesses, they begin to shift ad spending. Many come to rely more heavily on TV to create broad, top-of-funnel awareness. For example, Casper spent over $30 million per year on TV over the last couple of years. Warby Parker started TV advertising in 2016, stopped in 2017, only to return again in 2018.

Our analysis also found that DTC companies place branded content pieces three times more frequently than traditional brands, with the top beneficiaries being Yahoo! and Buzzfeed. Buzzfeed has won a large portion of the IAB’s top 250 DTC brands, as the brand pairs well with DTC advertising due to its strong Gen Z and Millennial audience.

How did they start?

Some of the most well-known DTC brands include Uber, Casper, Brooklinen, Warby Parker, and Tesla. Outside of these well-known companies, there are thousands of DTC startups across the U.S., according to the Interactive Advertising Bureau (IAB). For example, we counted 387 DTC brands advertising in the apparel and accessory category alone.

These companies are not only numerous, but well-funded. According to data gathered from Crunchbase for the top 20 DTC advertisers, the companies raised an average of $230mm in funds, through six rounds of funding, and from over 20 unique investors.

When it comes to the leadership behind these companies, the CMOs are sophisticated, experienced marketers. Looking again at the top 20 DTC brands, their CMOs bring an average of 16 years of prior work experience to their positions. 75% have past experience with at least one “household name” company. Half (50%) of the CMOs hold an advanced degree, most commonly an MBA, while other common degrees were in either economics or finance.

How do they sell?

DTC companies are usually mission-driven, rather than solely focused on the product itself, and they often start by targeting the Millennial and Gen Z customer segments. DTC brands are typically available for sale exclusively online and usually specialize in one specific product category. About one-fourth have a subscription revenue model. For consumers, the brand’s authenticity and quality matter much more than price—and the brands know this.

As these firms mature, many begin to explore other selling routes outside of just online. Of the top 20 DTC companies, 30% had their own stores, 25% sold products in other retailers, and another 15% used both their own stores and other retailers. Interestingly, many DTC firms have partnered with only one retailer on an exclusive basis. For example, Quip is only available at Target and Leesa mattresses are only available at West Elm.

Growth plan

DTC firms have emerged as disruptors across multiple industries. These companies exhibit young digital-first personas, that sell their products directly to customers via social media. However, as these companies grow larger, they begin to take on characteristics of older brands; whether it’s opening retail stores of their own, employing leadership with years of experience, or pouring ad budgets into national TV.

Advertising | Perspectives

Video advertising in on the rise. But it isn’t for everyone

It’s no secret that web-enabled video is booming. Driven by the combination of an increasingly sturdy infrastructure to support its delivery and the growing popularity of online streaming services like Netflix, Amazon Prime, and Hulu, consumers of all stripes are spending more time watching video on personal devices. So, advertising budgets are being adjusted accordingly, as brands seeks to take advantage of the shift in behavior and make online video a larger piece of their media mix strategy.

New research from Brightcove – Video Advertising Trends and Preferences – demonstrates many positive developments for online video promotions: solid through rates (~60%), modest error rates (~25%), and manageable blocking rates (~20%). Yet, for all of the positive momentum surrounding online video, I frequently find myself advising clients to tread carefully when it comes to embracing the tactic.

Here are the three key issues that are top-of-mind with marketers when it comes to video advertising, and how publishers can respond.

1. It’s Easy to Do Video Advertising Badly. To be sure, it’s never been easier to create videos. However, while the means of production is readily accessible for just the cost of an iPhone, the other requisite – and costly – inputs haven’t changed. Sophisticated videos still require a multifaceted team comprised of a copywriter, art director, talent (performer), editor, and post-production expert to create a quality asset. Any attempt at cutting corners typically results in a shoddy asset that has the potential to hurt a brand’s marketing efforts more than it helps. That’s not to say there are exceptions – there are, and they get a lot of attention. But they are just that: exceptions.

Implication for publishers: Due mainly to its price tag, but also because of the relative complexity required to do video well, the domain remains the purview of large companies with deep pockets and the means to create quality assets, either using internal resources or with the help of agencies. And that’s where publisher sales efforts should be focused. Otherwise, sales groups can find themselves spinning their wheels for months trying to woo small companies with tight budgets to pull the trigger on a video campaign, only then to have it stall or perhaps worse, and push something out to the marketplace that winds up being problematic. For publishers focused on building out their video advertising offerings, providing video production resources to brands can be a meaningful – and potentially game-changing – tactic.

2. Video Is The Champagne of Online Marketing Channels, But Most Companies Can Do Just Fine With The House Table Wine.
Video is a major attraction to both senior marketing managers and also non-marketing executives, and for good reason. Only over the past decade or two has video become a viable advertising option for the mainstream. For most of the second half of the 20th century, video advertising (with all of its barriers to entry) was almost exclusively the purview of household consumer brands like Coca-Cola, General Motors, and Nike.

The development of reliable wireless broadband and the emergence of platforms like YouTube and Instagram have changed all that, of course. And this has democratized video advertising. However, just because it’s available doesn’t necessarily make it a good fit. Indeed, for most small and mid-sized companies, alternative digital channels such as search and display offer more options by way of speed-to-market, testing, and optimization.

Implication for publishers: Though video can be used as a direct response tactic – think of all the late night infomercials and class-action-lawsuit-recruiting pitches – it’s most effective as a component of a multichannel, sustained campaign. In other words, it’s part of a solution, not the solution. In this kind of a use case, video reinforces messages and offers being delivered via complementary channels, both online and off. For years, I worked on acquisition campaigns for a big telecom company. We used video as an upper funnel tactic to establish awareness, and reaped the benefits later on in the lower funnel area of the customer journey. Publishers that can offer these multi-touch point solutions know how and when to add video to the media mix, and do so in a way that effectively sets expectations and creates a roadmap to success.

3. Many Brands Want to Jump Into Video Advertising With Both Feet, But Markets Need Education. Even experienced and savvy marketers are prone to miscalculating what’s required to manage campaigns that rely on video to be successful. First and foremost, budgets get out-of-whack right out of the gate, as ‘workable media’ metrics get wonky simply due to what’s required to create the video asset. That’s not the case with brands that have been running TV spots for decades, of course, but rather for companies trying to move upstream in the online advertising value chain.

Accustomed to an environment where advertising units can be churned out easily in hundreds or even thousands of variations – as is the case with search, display and even content marketing – the usual rules go out the window with video advertising. So the entire digital marketing methodology that most active online promoters have adopted, which is based on a plan-design-launch-analyze-repeat methodology, doesn’t really work with video advertising, nor does that last-touch attribution metric which we’re all, however sheepishly, still embracing.

Implication for publishers: Media companies are in a unique position to genuinely educate customers and prospects on how to do video advertising successfully. Taking a measured approach to pitching video ad solutions requires some discipline and might also result in leaving short term money on the table, but given all of the potential pitfalls, it’s preferable to the damage that could be done with either existing, long-term (and profitable) customer relationships or potential new ones. Given the relative newness of video advertising.

There’s no doubt about where video advertising is headed. Along with the voice/speech category, video is on an upward trajectory that will last for years. Everyone loves video: consumers, executives, B2C, B2B, domestic, and international audiences alike. There’s no better package for message delivery. And it’s why the entertainment industry (using TV and movies as its backbone) remains just about as relevant today as it’s ever been, even in the wake of the internet revolution that was supposed to decimate the category. However, just as it’s difficult to make a quality, differentiated TV show or movie, so is the case with online video advertising. It’s part art and part science, and requires a ‘secret sauce’ to be effective. Brands will be well-deserved by wading carefully and deliberately into this space, and savvy publishers that serve as their guides will be rewarded as well.

About the Author

Tim Bourgeois is a digital media consultant that helps brands optimize ROI on advertising, technology and agency investments. Connect with him on LinkedIn.

Advertising | Industry-Research | Perspectives

Marketers keep spending on problematic platforms

Despite a steady stream of negative news about social media platforms, eMarketer predicts that marketers will continue to invest ad dollars there. eMarketer’s US Social Trends for 2019 foresees continued fallout from 2018’s social media scandals and revelations, particularly for Facebook. It appears that marketers will continue to advertise on the problematic platform, despite declines in usage and engagement along with increased regulatory scrutiny.

For Facebook-owned Instagram, the report points to the likelihood of “growing pains” and investigations into data practices and privacy, in part stemming from the actions of its parent company. Overall, eMarketer says that 2019 will be a year to watch in terms of changing user behavior and engagement across social media platforms.

For Facebook and Instagram, eMarketer predicts that:

  • They will bring in a combined $67.25 billion in worldwide ad revenue, up 23.5% from 2018.
  • They will see US expenditures increase 20.6%, to $27.57 billion this year.
  • Time spent on Facebook among US users will remain flat this year, at 40 minutes per day.
  • Time spent on Instagram will inch up only slightly, to 27 minutes from 26 minutes in 2018.

However, the report points out that, much as marketers have had trouble shifting ad dollars away from linear TV despite declining audiences, they won’t be inclined to quit Facebook either, even in light of its mounting problems. In fact, Next year, eMarketers predicts that marketers will put $32.18 billion into social ads, with the vast majority—$27.57 billion—spent on Facebook. That will bring social ad spending to 47% of TV ad spending ($69.17 billion) this year.

For Snapchat, eMarketer predicts that usage will slow. However, the company will have better luck garnering revenues from its existing users. eMarketer estimates that Snapchat’s US average ad revenue per user (AARPU) will top $10 this year ($10.18 to be exact), up 30.4% over 2018 (when AARPU grew just 10.9%).

Other eMarketer 2019 productions include:

  • An explosion of the stories format (followed by a backlash)
  • The spread of vertical video
  • The newsfeed will maintain its dominance as social media’s primary UI
  • Social shopping will gain traction

Given the turbulence in the social media landscape, we’ll all need to keep an eye on Facebook’s place and popularity in the marketing landscape as well as the ripple effect that increased scrutiny on platforms data usage will have on all players. It will also be interesting to see if the stories format remains relevant in the long haul, as well as continued shifts in the perception of, and tactics around, influencer marketing.

Advertising | Perspectives | Revenue

To maximize OTT performance, should we think lean back or lean forward?

Given that OTT is the new TV, how should audience interaction be considered? TV is conventionally viewed on a large screen ten or so feet away and described as a “lean back” viewing experience. However, the new capabilities that come with OTT are associated with “leaning forward” – similar to browsing the Internet. In the digital age, people navigate content by swipes on mobile touch screens or clicks on portable laptops and desktops. In other words: They lean forward.

From a media perspective, it has proved optimal to follow traditional TV practices in order to maximize viewer time with OTT video content. This starts with playing video the moment the app opens just like tuning into a TV channel. These days, the practice is becoming standard particularly across OTT apps for broadcasters with linear establishments. (AKA, leaning back.)

By the numbers

The metrics behind the lean-back practice are particularly compelling when comparing average view time for media companies that have transitioned from on-demand menu starts to starting with video streams. Average viewer times have increased between 80-120%— more than doubling from less than a half hour to over an hour per session.

Moreover, Pluto TV, the leading free streaming service with more than 15 million monthly users, takes it a step further with 24 hours of programming on OTT channels. Pluto recently announced a view time of two hours per session, which already represents half the average daily view time of TV in the U.S. of nearly four hours. And consider Hulu (with 28 million customers), which recently announced binge watching on the service as a new ad targeting metric. So, length of viewing time is now a metric of significance in OTT viewership and even advertising.

Ad engagement

From an advertising perspective, lean-forward ad engagement can be far more impactful. This means capturing consumer attention with interaction of any kind, whether a game of sort for brand recall or data capture for direct response. In digital, user interaction is the driving force behind premium and higher value ad opportunities. 

However, when we consider OTT as the new TV — where leaning back is the status quo on a connected TV versus the underwhelming amount of time spent watching OTT on mobile phones — a new balance must be struck with the level of interactivity and added value that is possible. Compare this to the lean-back paradigm of TV in OTT, where the remote is purely a means of turning the stream on or off or tuning the volume up or down.

With lean-back, media companies and marketers will need to capture the most meaningful signals from viewers through their viewing behaviors and activity along their content journey. They will also need to break the mold with interactivity in simple and beneficial ways to the viewer, such as skip or continue to watch a certain commercial like done with simplicity in digital.

For OTT, we’ll need to take a hybrid view to maximize consumer understanding and ad performance. As a medium, OTT must be evaluated in the context of “lean back” in terms of programming presentation, and a “lean forward” opportunity in the presentation of commercials through viewership behavior.

Advertising | Industry-Research

Better machine decision-making, rethinking digital ads, and smart cities will improve the health of the internet

Mozilla’s newly released 2019 Internet Health Report offers insights from more than 200 experts examining what’s key to a healthier internet. The report is an open source compilation of research that tracks the internet and general technological progress. The findings center on three key areas: the need for better machine decision-making, rethinking digital ads, and the rise of smart cities.

Better machine learning

Machine learning and artificial intelligence (AI) are the next generation of computing. They enable more powerful automation, prediction, and personalization. As AI intelligence works its way into our daily lives, we need to question the ethical decisions and potential risks associated with it.

Industry experts are concerned that the large tech companies that control social media and e-commerce, are also shaping the AI agenda. Given Facebook’s, Amazon’s and Google’s ability to gather large quantities of training data, they are developing powerful AI technologies. An ethical assessment of their algorithms is important to ensure the consumer’s fundamental rights are protected.

Rethinking digital ads

Digital ads monetize online content and services and are the key driver of the advertising economy. Many researchers contributing to this report are alarmed by Google and Facebook’s combined control of approximately 84% of the global digital ad market outside of China. Their access to user data as a source of global market power in business negotiations is a major concern. Targeted ads used by these companies exploit their users. A scandal uncovered a few months ago included ads on Facebook demographically targeted to exclude people of a certain race from housing ads. Another example, also on Facebook, allowed advertisers to use available data on the service to create an affinity group to target ads to “Jew Haters.” 

Some brands and marketers are stepping away from YouTube and Facebook but many still purchase their inventory for targeting campaigns. As a result of these scandals and others, users want to take control of their data. New software initiatives are being explored to offer a decentralized solution, giving consumers control over who has access to their personal data.

Rise of smart cities

Smart cities exist when the internet and connected devices are applied to solving problems from energy efficiency, transportation to government services. Similar to rethinking digital ads, collecting neighborhood data must be thought about carefully. Smart cities face challenges with regards to establishing policies and processes to guide the usage of local data with regards to privacy and transparency.

Steps to a healthier internet future

Many of today’s biggest internet companies still access users’ clicks, likes, friends, emails and downloads to fuel their business models. However, some companies are thinking about alternative business models and new technologies to give users control of their data. One such initiative is Purpose Foundation. It promotes “steward-ownership,” a legal structure to prioritize a mission over profit revenue model. It involves users in the ownership of the company to ensure consumers benefit in the economic growth. Importantly, involving consumers in internet innovation and safeguarding personal data are key steps to a healthier internet.

Advertising | Innovation | Perspectives

Mobile apps are making a comeback and publishers better be ready

The mobile app ecosystem will turn 11 years old this summer, and it has evolved into one of the largest industries globally with forecasted revenues of almost $190 billion. There are now millions of apps in both the Apple App Store and Google Play. And they account for over half of digital media usage and time spent in the US. We are obviously in a mobile-first world – at Teads, mobile traffic represents over 70% of our publishers’ traffic worldwide.

However, we find that many publishers continue to focus investment on web while either treating their existing apps as side projects or not developing an app presence at all. Given the rapid shift in consumer media consumption and shift in the publisher landscape, combined with digital dominance by the “duopoly” (and soon triopoly), the time is now for publishers to prioritize their mobile app presence.

Increasing consumption and engagement

Consumers not only spend the majority of their time on mobile in apps, but the average number of apps used continues to increase (by 15% in 2018) to ~35 apps per US smartphone user. Mobile app users are also more attractive audiences given their high engagement rates in app as opposed to mobile web.

The Daily Beast recently confirmed this trend, noting that their app users average 3x more pages per session than their mobile web users. Bleacher Report is a prime example of a publisher whose audience is primarily in-app vs. mobile web – with its users averaging 5 minutes per day in the app. More and more editorial publishers are now appearing among top apps, as names such as The New York Times, CNN, Bleacher Report, The Washington Post, BBC News, and USA Today, among others, continually rank in the top 500 apps in the US (per comScore, July 2018).

Mobile apps > mobile web

The mobile app user experience (and native apps in particular) is superior to mobile web for both content and advertising, which is probably a core driver of consumer engagement in-app. Native apps are typically faster, lighter, more interactive, and can often allow offline content browsing. They’re also easier to access for consumers, especially if apps are loaded on to the home screen of a smartphone.

These benefits extend to ad experiences in-app as well, where advertising growth continues to explode and expected to reach $77 billion in the US this year. Mobile app ads have evolved beyond just traditional display and rewarded videos, which are typically fueled by app-install spending.

The market has evolved to include video, outstream, and native formats, many of which provide more innovative and interactive experiences then web since these ads can tap into the native features of smartphones (i.e., Bluetooth, GPS, gyroscope, camera, compass, etc.).

Measurement is also greatly improved with the IAB’s Open Measurement SDK, which facilitates 3rd-party viewability and verification measurement in-app, and this is poised to further accelerate mobile app ad spending. In addition, mobile apps are relatively immune to ad blocking which is pervasive in web environments.

Better personalized ads

Mobile app inventory for publishers could become an even more critical component of a wholistic digital ad strategy as industry concerns around data privacy escalate and tech giants clamp down on tracking and personalization in browser environments. Apple’s ITP (Intelligent Tracking Prevention) in Safari and Mozilla’s Firefox browsers have placed significant limitations on cookie usage and hence programmatic ads on mobile web. And Google is rumored to be evaluating similar restrictions in Chrome, which would then effect the majority share of mobile web browsers.

Mobile apps represent both a hedge against these limitations and a superior environment for personalized advertising. In-app ad targeting can leverage Device IDs, which are tied to specific users rather than browsers, as well as more accurate location (GPS) and detailed demographic/behavioral data (particularly if the app requires registration).

Revenue diversification

Ultimately, mobile apps provide a new path for publishers to diversify their revenue streams. Not only do apps provide more opportunities for advertising, but also a channel for subscriptions, in-app purchases, e-commerce, etc. In-app subscriptions actually fueled growth in consumer spending in non-gaming apps by 120% since 2016. App stores also provide an easy way for engaged audiences (which are generally more prevalent in-app than web) to subscribe and make payments for transactions.

It’s time for publishers to start investing in mobile apps, which should no longer be an after-thought. While mobile app development and maintenance is not an easy task for many publishers, it should be considered an integral part of long-term digital strategy and a major growth driver. A successful transition of web users to app users can result in significant increases in loyalty and engagement, leading to new revenue opportunities while defending publishers against threats in a rapidly changing digital landscape. Mobile apps are no longer just a game (pun intended).

Advertising | Featured Post | Perspectives

Publishers have their mojo back

I’m calling it. 2019 is the year publishers get their mojo back. While there’s still work to be done – and the rewards for many are further down the road – the signs are pointing in the right direction. 

More than ever, digital media companies understand that their most precious assets are their audiences and advertisers. They understand that they must foster this relationship over time through their programming, advertising opportunities and the overall experience they create wherever they touch their customers. And, they understand that their brands are proxies for this trust. Without a doubt, the companies that publishers choose as business partners — whether distributing their content or advertising — can, and do, have a lasting impact on this trust.

Those of you who have been in the digital media business for a while are probably thinking: “Haven’t we been here before?” and perhaps you’re wondering what’s really changed in the past two years. Here’s the way I see it:

Facebook: pivots around publisher content

Initially, publishers believed the promise of a fire hose of traffic to their sites but eventually grew tired of the hoops they were jumping through to address Facebook’s changing priorities. From organic content to paid promotion, external traffic evolving into Instant Articles, embedded video becoming Facebook Watch, and everything-must-be-free to efforts to support paid subscriptions – it’s mind boggling. But all of this has resulted in publishers wanting to control their own destinies more than ever before.

Apple: push for consumer privacy

While Apple’s push for consumer privacy in its Safari browser is a laudable approach, it has hamstrung publishers’ ability to monetize their web inventory. At the same time, it pushes publishers towards Apple’s closed app platform where they cough up 30% of their revenues from selling subscriptions to their own apps. In an odd way, this 30% take-rate by Apple has made its reported 50% take on its new Apple News+ product seem more acceptable. In any case, growing consumer trust through a higher privacy bar while building in real support for publisher ad and subscription revenues are steps in the right direction.

Google: control of advertising supply chain

Google has demanded that publishers allow it to track their customers and collect their behavioral data across the web. At least if they want to get the full benefit of what has evolved into a Google-influenced, if not controlled, advertising supply chain. Google has also essentially made it a requirement for publishers to participate in AMP if they want to avoid being lumped into a news black hole on mobile. The relationship with Google can easily be one of the more sensitive issues inside any media shop and rocking the boat will almost certainly have consequences. However, consumers aren’t happy with unrestricted tracking, and that bodes well for trustworthy publishers who are transparent and handle consumer data with care.

Emerging platforms: a chance to get it right

There are new platforms growing quickly, which will succeed or fail based on their ability to fully appreciate the value of high-quality programming. Each one surfaces new negotiations and concerns. Roku is one to keep an eye on as they have the chance to reinvest in high-quality, brand-differentiated programming by truly partnering with their publishing partners. Or, they may be the next Blackberry — steamrolled as their market advantage is lost to other larger platforms that can beat them on technology alone. However, the path to success for emerging platforms will be true partnerships with trusted content brands.

What’s next? 

While we may never know exactly what has caused this shift, it is a positive sign that digital media companies here and in Europe are also asking for the same things, which I’ve seen first-hand. Publishers now speak of Facebook, Google, and even Apple not simply in terms of opportunity but with skepticism. They see the positives of each in driving new audiences, innovations, and experiences – and to be a part of what is “next.” However, they’ve turned a critical eye to each platform’s motivations and are pressing for better terms, including:

  • Protecting and preserving the relationship with their audience. They know that trust and value reside in the relationship: The data, the brand and two-way dialogue with the customer. 
  • Ability to drive subscription or membership revenue. For too long, this was antithetical to the interests of platforms, which wanted to touch as many users as possible for the purpose of mining their data for targeted advertising. The global discussion around this issue has shifted, starting in Europe. Now, the rest of the industry is trying to catch up. 
  • True partnerships. They’re not looking for another quick fling, featuring a spotlight appearance at Facebook’s or Apple’s soiree. Hopefully that no longer carries the glamour it once did as the hangovers are real. Instead, publishers are looking for fair value and a long-term commitment by the platforms to work together, solve issues, and build success for all parties.

Publishers everywhere are looking at these opportunities with a shrewd business eye. They recognize that these opportunities are being designed and offered by an intermediary to their customers. And, as the stock market clearly demonstrates, these intermediaries are focused on maximizing their own profits.

Whatever the reason, or confluence of events that caused it: The non-negotiable, take-it or leave-it discussions from platforms are in the rear-view mirror. Change is here and publishers have rediscovered their mojo.

Now it’s time to put it to work.

Advertising | Perspectives

Are YouTube video ads getting longer?

When YouTube first introduced the six-second video ad in 2016, it seemed like the future of the industry would be all about shorter ad content. At the time, Google linked the launch to the rise in mobile viewing, saying that “many people prefer to watch on their smartphone – for the control, personalization and ease it offers.” Everyone expected to see more snackable inventory and ad formats.

Among advertisers, these six-second “bumpers” quickly became a commonly used format. A number of marketers claim to love them, and for good reason. The six-second video seemed to address the problem of some viewers ignoring ads outright or complaining about an extended intrusion on their viewing experience.

Quick Success Story

Google was quick to tout the success of six-second campaigns as well. A blog post from April 2017 titled “Say It in Six: Why marketers and creatives are embracing the newest video ad length,” reports that they analyzed 122 six-second US campaigns and “found that 70% drove a significant lift in brand awareness, with an average lift of 9%. On ad recall, they perform even better – over 9 in 10 drove ad recall globally, with an average lift of over 30%.”

To keep up with the industry leader, YouTube’s competitors focused on shorter video advertisements, too. Facebook, for example, rolled out six-second ads almost two years after YouTube’s initial launch of the format. Per this Facebook blog post, “in a mobile-first world, shorter video ads drive results” as consumption patterns have shifted, with people not “watching ads for as long as they used to, on any medium.” However, there is some evidence that the market is recalibrating – at least on YouTube.

Room for Growth

Here at MediaRadar, we analyzed all online video ads that ran in January and February of 2018 and 2019. In doing so, we were able to compare the ads that ran on YouTube to ads appearing on other video and streaming platforms year-over-year (YoY).

Surprisingly, the data shows that, for 2019, longer video ads are becoming more common again. Only 16.5% of YouTube ads at the start of 2019 were six-second ads (down from 20% in 2018) and 30-second videos made up 24% of YouTube ads in 2019 — up from 19% in 2018. This is a statistically significant shift for the site and could even signal a category-wide change

Additional data about video length mined in the study supports the longer-ad trend:

  • 15-second ads were the most commonly used format, accounting for approximately 40% of all video ads running during the study and 47% of ads on YouTube; this was consistent YoY. There is some nuance involved here, however. Fifteen-second ads were previously not available for auction to all advertisers. Only recently has YouTube opened up the supply from a reserved model.
  • There are almost no 0-5 second ads. The format made up only 3% of all online video ads and 1% of YouTube ads.

So What Time is It?

Is this signaling the death of the short six-second advertisement?

I’m not so sure.

However, it does show that long-form digital video content still has a role to play, as it allows for more information to be conveyed and has proven more effective than videos six seconds or shorter. According to analysis by Teads, “six-second ads have an average view-through rate (VTR) of 55% on mobile devices but have an EmotionAll score of 3.6 compared to 5.1 for 30-second ads.” They are viewable, but not always resonant.

However, I wouldn’t count out the six-second video altogether. It has a place in the attention economy, especially when a younger demographic is targeted. Research time and time again finds that Gen Z, for example, which watches YouTube the most – and does so primarily on mobile devices – is more receptive to shorter ad formats. This might be why we’re seeing the 15-second video ad as the house majority. It just may be the video advertising sweet spot, balancing the desire to keep things short but long enough to drive an emotional impact.

Advertising | Industry-Research | Perspectives

Changing consumer behavior drives new advertising priorities

Cord-cutters are having a transformative effect on the entire video advertising ecosystem. As viewers enthusiastically embrace connected television (CTV) advertisers are following suit. They have accelerated their CTV investments in order to engage consumers at every digital touchpoint in a video everywhere world.

In addition, the impact of CTV growth is reverberating across destinations and devices, with premium publishers benefiting from its growth, and mobile moving into second place in terms of percentage of overall impressions by device. These are some of the biggest takeaways from our  Q4 and Full-year 2018 Video Benchmark Report from Extreme Reach, which provides a cloud-based creative asset management platform, AdBridgeTM, tailored to the needs of the ad industry.

Based on the latest aggregate performance data from ER’s proprietary video ad server, the latest benchmarks report reveals emerging ad performance trends as indicated by such metrics as viewer click-through, video ad completion and viewability rates, as well as invalid traffic and time spent.

The report also provides breakdowns related to these numbers based on media destination (i.e., premium publisher vs. media aggregator) and device (i.e., desktop, mobile, tablet and connected television [CTV]). Here’s what we found in 2018 that’s likely to gain force in the years ahead.

CTV Overtakes Mobile as Video Advertising’s Growth Engine

According to market research firm eMarketer, CTV use has soared to about 190 million users as consumers seek out new or additional ways to view TV content on their terms and timelines. That means more than half (57%) of the population has migrated from linear TV to devices like Roku and Apple TV, as well as ad-supported streaming services. Advertiser uptake has not been as robust as that of consumers. eMarketer says CTV represents only a small piece of overall digital ad spending today. However, the spend is enough to shake up the share of impressions being earned across devices and destinations.

For example, mobile dominated video ad impressions in 2017, peaking with a 39% share in Q4 vs CTV’s 16%. But in a year’s time, that number had grown to 44% of impressions. That represents a stunning 193% increase.

On the other side of the coin, the share of impressions served to desktops and tablets has continued to shrink every quarter since Q1 2016.  More specifically, we saw declines from Q4 2017 to Q4 2018 of 36% and 54%, respectively, for desktop and tablets.

CTV Impacts Multiple Metrics for Premium Publishers

As viewers gravitate to CTV, premium publishers are moving there too. In Q4 2018, more than half the impressions served by Extreme Reach to premium publishers ran on CTV platforms, an increase of 154% from the 21% that ran on CTV in Q4 2017.  CTV is having a halo effect on other metrics important to advertisers including ad length, levels of invalid traffic and video completion rates on premium sites.

Regarding ad length, 6-second ads seemed to be positioned to be the next wave, given their performance in the first two quarters of 2018 and all the media coverage they earned at that time. But the declines in mobile and desktop consumption drove a 78% decrease in impressions for 6-second spots from Q4 2017 to Q4 2018. Instead, as first noted in Q3, the rise in CTV seems to be causing a resurgence of longer ads, with 30-second spots increasing their proportion of impressions and more than doubling from Q4 2017 (28%) to Q4 2018 (58%). However, 15-second spots, which held the majority of impressions throughout 2017, declined by 43% from Q4 2017 to Q4 2018.

It’s not surprising then that with 30-second ads taking the lion’s share of impressions last year, the average time spent with video ads increased by 35.3%, from a low of 17-seconds in Q4 2017 to 23-seconds in Q4 2018.

For advertisers, directly-bought CTV remains relatively insulated from non-human traffic. This provides marketers with the brand-safe environment they are increasingly demanding. Video completion rates are also very high on CTV, likely a reflection of the level of commitment consumers bring to content on the channel, as well as the inability to skip the ads.

While video completion rates are up for all devices, CTV is the winner in the category with 95% of ads playing all the way through. Premium vendors, who charge premium prices, are investing in CTV and providing the performance advertisers expect.

Win-Win for Advertisers and Audiences

So what do the 2018 metrics mean for the future? Given how quickly and dramatically video advertising has moved from a mobile to a CTV focus it’s difficult to predict how much more change CTV will bring in the year ahead. But with audiences so focused on CTV, it’s reasonable to assume that more major media companies will enter the CTV market via new launches, partnerships and acquisitions, making the market even more competitive. But overall, these developments seem to bode well for both viewers and advertisers alike. 

Visit Extreme Reach’s interactive video benchmarks report to review complete findings for Q4 and the full year.
Advertising | Perspectives | Revenue

Spring is in the air for advertisers and premium publishers. But we need to cultivate the opportunity for revenue growth.

Maybe this is true everywhere. But in the northeast, we’ve reached the time of the year when nearly everyone has had just about enough of winter and is eager for warmer days. And, with OTT buds starting to bloom and brand safety and other concerns driving brands to invest with trusted partners, premium digital publishers may also be wondering if their long cold winter of online advertising could see signs of warming.

A recent report from MediaRadar, indicated that programmatic ad spend from a number of advertisers shrunk year-over-year from 2017 to 2018. While some brands may have become more reluctant to spend money in programmatic, directing funds out of the programmatic ecosystem is typically a temporary measure. Advertisers are building their internal expertise and seeking ways to get the benefits of programmatic (such as automation and the ability to leverage their increasing store of customer data) without the downside of low or unknown media quality. Emarketer has predicted increasing momentum towards private marketplace or programmatic direct deals through 2020. This reflects advertiser expectations that trusted publisher partnerships will best meet the demand for quality inventory.

Market Pressure

In addition to the growing sophistication of buyers, other trends in the marketplace are also conspiring to shift advertiser spend to premium publishers. Increasing consumer interest in privacy and data governance, kicked off by initiatives like GDPR and the California Consumer Privacy Act, will make it harder for lesser-known inventory providers to use targeting and consumer data to win brand dollars.

The rise of OTT gives premium publishers a unique carrot for digital ad buyers. This makes it difficult for lesser-known publishers to access inventory at scale across this new channel, unless there are significant changes to the ecosystem that empower smaller players. Given that publishers see the nascent OTT market as the first major bulkhead in winning the dollars currently devoted to linear TV, it’s unlikely that we’ll see the market open up to anywhere near the degree we have seen with mobile or desktop advertising. The winning platforms – companies like Apple, Amazon, and Roku – and the winning publishers – the major broadcasters and other household names for video content – are likely to keep the market under tight rein.

Value Matters & Values Matter

However, the wild card in this whole equation is the degree to which advertisers can feel confident that they are getting what they pay for. This applies not only to audience reach, but also a quality playback experience, meaning a viewable, brand-safe, and non-fraudulent impression. Without transparency on inventory quality, advertisers will continue to seesaw between investing in digital and pulling back spend to put it into other channels, as we have seen over the course of the last few years.

Transparency lays the foundation for trust between buyer and seller, and it is difficult for buyers and sellers to work together to establish this trust if they are relying on numbers from two different sources. All too often, publishers measure using one set of numbers while advertisers are using another. This inevitably results in discrepancies. It is difficult for publishers and advertisers to work together to support a transparent marketplace when they are measuring using two different methodologies. Standardizing on a single set of numbers on the buy and sell-side could also reduce the number of calls to supporting vendors’ ad code. It also makes it easier for buyers and sellers to work together to streamline the technology, reducing latency and other issues.

Standards and Issues

The good news is that the industry has never been in a better position to solve the problem of transparent cross-screen measurement. We as an industry have for the first time introduced measurement-specific ad standards. Most notably, these include the Open Measurement initiative, including the Open Measurement SDK, and Open Measurement for web. Prior measurement efforts piggybacked on technical standards like VPAID and MRAID, which were introduced to support rich media, not to provide accurate reporting on inventory quality. Having a standard designed expressly to support measurement that works across all devices is a great development.

We need to move the industry towards a single technical standard for measurement. We must get publishers and advertisers on board to utilize a common methodology to measure inventory quality. And we need to tackle measurement issues head on when they arise. This proactive approach is surely preferable to finger pointing and fighting over makegoods.

Now we are at the point where it’s either springtime or more cold lean years for publishers whose content deserves better. We can let dozens of competing proprietary approaches fragment the nascent digital TV ad industry. Or we can agree not to let that happen and work together to align the buy-side, sell-side, and the standards used for measurement. The outcome of that decision could mean the difference between five years to a fully digital ecosystem – or 15.

About the Author

Michael Tuminello is VP of Publisher Products at Integral Ad Science. He works to ensure premium publishers inventory achieves its full value potential. He plays an active role in helping to develop and improve industry standards. Michael is a two-time winner of the IAB Service Excellence award (2015 and 2019), as well as the MMA Smarties award for individual contribution to the mobile advertising industry. He was previously a Product Leader at Innovid, Sizmek, and Unicast. 

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