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Perspectives | Revenue

What’s next for publishers after FTC’s native ad guidelines?

Native advertising has always had the advantage over banner ads because it mimics the look and tone of editorial content. And because publishers may have confused readers with native ads that look too much like editorial, the Federal Trade Commission (FTC) announced guidelines late last month in an effort to keep readers from being misled. It also announced an 11-page guidebook for businesses on how they can comply with the FTC’s new policy.

The overarching theme behind the FTC’s new guidelines is that advertising must be absolutely clear to consumers, and the language used to describe it must be explicit. Plus, disclosure should be in proximity to the headline and should be disclosed before people click on the story – much stronger rules than is now common practice.

Impacting Innovation
So will these new regulations stymie native advertising’s potential? The Interactive Advertising Bureau (IAB), while welcoming the guidelines, took some issue with them, saying the emphasis on the clarity of meaning was “overly prescriptive, especially absent any compelling evidence to justify some term over others.”

”While guidance serves great benefit to industry, it must also be technically feasible, creatively relevant, and not stifle innovation,” Brad Weltman, IAB’s vice president of public policy, said in a statement.

However, DCN CEO Jason Kint had a more nuanced take on the rules: “Ultimately the impact of these guidelines will very much depend on what cases the FTC brings,” Kint told me via email. “We hope the FTC will use their enforcement authority to stop egregious acts of deception and not punish publishers and advertisers trying to do the right thing.”

An Ongoing Problem
According to the FTC, terms such as “Promoted” or “Promoted Stories” — which are commonly employed to label native advertising — are “at best ambiguous and potentially could mislead consumers that advertising content is endorsed by a publisher site.” Words such as “Ad” and “Sponsored Advertising Content,” according to the FTC, are much more direct and clearly understood as advertising by consumers, and should be used instead.

The FTC’s conern is meritted. A study conducted by Contently last year found that most consumers can’t distinguish native advertising from regular content on a website. “Our findings show that no matter what steps publishers have taken, there is still significant confusion on the part of readers as to what constitutes an article and what constitutes an ad,” Contently said in its report on the study. The company suggested the “devil may be in the details,” and that perhaps readers also aren’t choosing to take the time to recognize the difference between an article and an advertisement.

Jeffrey Chester, the executive director of the Center for Digital Democracy, meanwhile, likened native advertising to “product placement on digital steroids. There’s no way that saying, ‘This is an ad,’ means anything,” he told the New York Times.

Ensuring Clarity
Perhaps these reactions indicate that publishers and advertisers just haven’t yet found the right way to ensure clarity — which only substantiates the FTC’s argument that obvious and well-placed statements are necessary to describe native advertising. Indeed, digital publishers such as Mashable and the Huffington Post were relatively calm about the new policy, with the Huffington Post saying it’s the result of inconsistency in the market.

But the bigger issue for publishers, according to the IAB, is that more enforcement on native advertising is bound to come. While the FTC’s regulations are not quite the law of the land, most publishers and advertisers are going to want to comply to avoid financial sanctions or risk being held out as bad actors.

And that brings publishers and advertisers back to a predicament that once seemed far away from this new, innovative kind of advertising. So publishers will have to weigh their desire to push the envelope with innovative ad forms and being crystal clear to users about ads. The winners will be the ones who can do both, without sacrificing quality or trust.

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Perspectives

DCN’s recommended reading: week of January 7, 2016

Our recommended reads from around the web:

Perspectives

Is your data leaking?

We hear a lot about ad blocking and ad fraud, but surprisingly little about data leakage, the underlying problem that feeds both. What is data leakage, anyway?

Sophia Cope at NAA: Data leakage is the collection and monetization of an online publisher’s audience data by a third party without the publisher’s knowledge and consent.

John McDermott at Digiday: Data leakage typically occurs when a brand, agency or ad tech company collects data about a website’s audience and subsequently uses that data without the initial publisher’s permission.

Note that these definitions include nothing about user permission. That’s a separate issue. Data leakage is a publisher/third-party problem, not a publisher/user problem. Both definitions are based on publisher permission.

That’s a good start. But “permission” is hard. The reality is that publishers often don’t understand all of the third-party resources on their own sites. And to make things worse, third parties bring along other third parties … with the result being that pages can end up with 50-70 third-party pixels, scripts, and iframes. (There’s even a zone on the Lumascape devoted to services that a publisher can use to figure out what other services they’re using.)

Every one of those third parties comes with some kind of contractual “permission.” All of those permissions, though, are expressed in complex contracts. Even if a publisher can afford to comprehend the terms of one contract, the set of resources on a page can introduce unwanted data transfers working in combination. And the combinations of technology and contracts change faster than anyone can evaluate them.

Learning from security software
It’s inadvisable for security companies to call malware “malware” when the malware developer has a lawyer. The solution has been to come up with a new category name, Potentially Unwanted Programs (PUPs). The definition is based on whether the software works against the user’s interests, not on whether the user has clicked on “I agree” after not reading a complex, deceptive contract.

Labeling programs as PUPs is a small win. It is possible to define a problem in terms of interests and norms, not in terms of what someone has “agreed” to. We will be able to have a more productive discussion of the data leakage problem if we can shift the definition from one based on “permission” to one based on publisher interests and business norms. Remember: Data leakage is not a problem about user permission (which is another story). Instead, user norms and expectations can be a helpful way to establish the definition of data leakage.

So here’s a new definition:
Data leakage is collection or transfer of publisher audience data in a manner that violates the norms and expectations of the members of the audience.

Why is it important to clearly define data leakage? Because we still have trouble collecting data on it, and to do so, we need to know what to measure. We don’t know how much of the ongoing problem that newspapers have with building online ad revenue is attributable to data leakage.

In order to measure data leakage, we have to define it based on a reasonable standard, not on a mess of contracts that results in publishers unknowingly “agreeing” to practices that work against their interests.

Finding data leakage
We can look for leaks at the top of the pipe and at the bottom:

Bad bots visiting good sites: Fraudulent ad inventory gains value from associated user data, which is why even the best-run sites still get some fraudbot traffic. Bots are collecting cookies on legit sites, then showing up as valuable “users” on fraud sites. If your site has a small bot problem, then any advertiser paying to reach your users on other sites will have a big bot problem.

Good audiences available in bad places: We don’t have access to the “user data chop shops” that sit between legit publishers and sales of targeted impressions based on publisher data. But we can look at demand-side platforms to find out where valuable impressions are showing up, and measure the impact of anti-data-leakage tests.

Data leakage is an important issue that must be better understood and addressed.We can’t deal with ad blocking, ad fraud, and low ad revenue without understanding the data leakage problem. The good news is that data leakage is measurable, if we work it from the legit publisher end and the questionable inventory end.

 

Don Marti (@dmarti) is a contributor of code and documentation to the aloodo.org project, a low-friction way for sites and brands to reclaim the value of online advertising from fraud and ad blocking. He serves as a strategic advisor for Mozilla, and is the former editor of Linux Journal. Don is the subject of an out-of-date Wikipedia article which he will not edit himself, but wishes that someone would.

Jason Kint and Julie Brill
Perspectives

DCN hosts fireside chat with FTC Commissioner Brill on lessons learned from Ad Blocking (video)

Below is a summary and video from DCN’s “The Consumer Rules: Lessons From Ad Blocking” event, held December 16, 2015 at the Newseum in Washington D.C. Parts 1 & 2 can be found here.

Following a panel discussion, Jason Kint, CEO of Digital Content Next interviewed FTC Commissioner Julie Brill about lessons learned from Ad Blocking (full video at the end of this post).

The interview started off with defining “consumer harm,” with regards to online content. Brill said the definition includes financial harm, but has broadened to include access and use of information in unexpected ways. She said the FTC always tries to think of online behavior from the consumer perspective and to consider whether the way in which companies collect or use information cause real, tangible harm. She went on to cite several actual FTC cases to illustrate how the FTC interpreted the harm caused to consumers.

There is, it appears, a common thread between consumers clearing cookies to protect privacy, that moved on to the desire for a Do Not Track browser option, to what we now see: consumers opting out of advertising entirely through ad blocking. This progression offers a great encapsulation of how the notion of privacy has changed, according to Brill. While privacy is the number three issue consumers cite for blocking digital ads, she pointed out that this is still high on the list of reasons and must be taken seriously.

Brill has seen the definition of privacy change over the years: It used to be about seclusion, being able to withdraw from society. Today, privacy has become about being able to control with whom you are communicating and how you are communicating. She said that it is important to keep in mind this notion of control as we create content experiences online.

Brill and Kint dug into the myth that younger people don’t care about privacy given their willingness to share a great deal of information about their lives publically. As demonstrated by the popularity of apps like Snapchat, this openness has limitations that need to be factored in.

Kint then queried the FTC’s possible role in monitoring the white listing practices of ad blocking companies. Brill made it clear that she couldn’t comment on specific companies’ actions. However, she pointed to the Google Safari case in which it circumvented Apple’s cookie blocking as illustrative. It is important, she said, to look at cases like that in which one company is trying to circumvent what another company or consumer is doing. When the consumer has made a clear choice, she said, that choice should be honored and if you do circumvent that choice it needs to be communicated clearly and in a non-deceptive manner. And, at the same time, if you are an ad blocker, you do need to be clear about what you are doing. If you are charging, you need to make that clear up front.

Competition issues, she said, are more complicated: “Consumer protection is a mile wide and a foot deep. Competition is a foot wide and a mile deep.”

According to Brill, the advertising industry needs to be much more transparent with consumers, however a lot of the advertising players are non-consumer facing and many consumers don’t know what an ad network is, or an analytics firm. She said we need much better tools to enable this transparency, whether it be more immersive portals that let consumers understand what is happening with their data, or better controls or better just-in-time notices. Brill cited the Ad Choices program sponsored by IAB as a good first step, but said that the execution remains problematic. The ad industry, she emphasized, needs to be more transparent and creative in giving consumers control.

While there’s a common industry perception that the consumer owes something to the site their viewing and that their payment is to look at the ads and to understand the value exchange, Brill thinks that is completely different than the way the consumer understands this exchange. What she hopes will happen online as a result of “the ad blocking wars,” is that advertisers will say we need to engage consumers more, we need to make them want to watch ads.

It is essential, as Brill pointed out, to look at advertising from the consumer perspective: The consumer is not going to sit and look at ads that are disruptive, untrustworthy, that are gathering a lot of information about them just because publishers and advertisers think they should. Advertisers have to gain their trust; they have to gain their engagement.

She also cited the practice of pitching consumers’ web searches back to them as advertisements as disrespectful of them, which she illustrated through searches for medical information.

Kint has often advocated a Do Not Track standard as a way to put control into the hands of consumers about what data is collected and how it is used. Brill said that it is too bad that the many people who were involved in the initial W3C discussions about Do Not Track lacked a crystal ball to see what has been the result of not having a robust Do Not Track system early on. It would have led to more trust, and would not have taken us to where we are now.

In response to a question about European Union Safe Harbor laws, Brill said she spends a lot of time talking to her European counterparts because there’s a lot of misunderstanding about how robustly the U.S. engages in privacy enforcement and how robust our laws are. She also talked about the need for developing a new data transfer mechanism to replace Safe Harbor and the need to do it quickly. Brill said that a solution needs to be put into place to enable the free flow of information between continents. It needs to focus on how protective it is, not avoidance of liability. It needs to focus on the principles that underlie it. Ultimately, the FTC needs to be able to easily protect Europeans’ data, as well as that of Americans.

The discussion was then opened up to audience Q&A.

Here’s the video:

Perspectives

DCN hosts high-level discussion on lessons learned from Ad Blocking (video)

Below are summaries and video of Part 1 and 2 of DCN’s “The Consumer Rules: Lessons From Ad Blocking” event, held December 16, 2015 at the Newseum in Washington D.C. Part 3, a fireside chat with FTC Commissioner Brill can be found here. 

Jason Kint kicked off the event “The Consumer Rules: Lessons From Ad Blocking” by framing Digital Content Next’s interest in the ad blocking issue—as an organization that exclusively represents digital content companies who have direct, trust-based relationships with consumers and advertisers. While he made it clear that advertising is certainly not the sole revenue channel for DCN member companies, he pointed out that for all members—who compete on the same digital devices across the same pipes—digital ad revenue is an important piece of the future.

Given that, as Nielson reports year after year, digital advertising is one of the least-trusted forms of advertising, it is clear that there is a fundamental problem that’s leading to distrust of digital advertising. And a growing number of consumers are opting out of advertising by blocking ads wholesale, thereby removing the major revenue source for digital content. Kint pointed to Adobe / PageFair research which brought the growth of ad blocking into the spotlight as well as recent DCN research, which looks at consumer plans to adopt ad blockers.

Some of the primary reasons for consumers choosing to install ad blockers, according to the DCN Report, include: intrusive advertising, concern about behavioral tracking and data collection, speed and performance of the web (particularly on mobile). While Kint said the entire industry does need to think about performance and experience, we also need to keep a close eye on privacy concerns.

Here’s the video:

Digiday staff writer Ricardo Bilton then moderated a panel featuring Jed Hartman, CRO of the Washington Post, Heather West, senior policy manger of Mozilla, Fatemeh Khatibloo, principal analyst at Forrester Research, and Ben Barokas, CEO of Sourcepoint.

Among the panelists, only one said that they do not run an ad blocker: Hartman. West said that she installed one out of pure frustration based upon a poor experience at a single site, a type of behavior she described as “the nuclear option.” Not surprisingly, Khatibloo gave her reason as a desire to block data collection whereas Barokas’ cited the need for a comprehensive understanding of ad blockers as essential to his business. He also said that there’s only upside for consumers who install ad blockers today.

However, Hartman—the lone holdout among the panelists—pointed out that if these panelists represent a growing and ongoing trend, many “household name publishers will close their doors.” And that, he said, is not ultimately good for the consumer. To forestall this trend, the Washington Post has invested in research on consumer ad experiences that will continue to support the creation of content they rely on.

The ad blocker ‘solution’ is sort of a Trump-like solution:
‘No ads come in!’ —Jed Hartman, CRO, Washington Post

(Watch here)

Barokas noted that the implied contract by which the consumer tacitly agrees to view advertising in exchange for content is seeing the end of days. He believes that we need to move to a model in which this agreement becomes explicit through “a transparent value exchange.”

The implied contract is that a publisher will provide content to the user in exchange,
the user will consume the advertising to subsidize that experience.
We’ve gotten to the point from an industry perspective where that needs to move from
being implicit to explicit.  —Ben Barokas, CEO of Sourcepoint

(Watch here)

 Media companies, according to Khatibloo, have been poor communicators with consumers, particularly about the data collection that is going on, but she also admitted that it is very difficult to do.

Mozilla’s perspective, said West, is not about ad blocking. Instead, it is about content neutrality that is based upon openness and transparency about how Mozilla makes the distinction about bad content, whatever the source. She also agreed with Khatibloo’s point that there’s a need for better communication between consumers and publishers and believes that Mozilla is in a good position to help enable this process.

Things are going to change radically over the next few years, according to Hartman who is hopeful there will be a more “surgical approach” to ad blocking in the near future. And he believes that if many publishers work hard to improve ad experiences and mobile load times, adoption can be slowed on mobile.  Khatibloo countered that even premium publishers are doing an “atrocious job” on mobile advertising and that it eats up consumers’ data.

We have this opportunity in mobile to prevent [ad blocking] from happening…
the trouble is that even premium publishers are doing an atrocious job with mobile advertising.
–Fatemeh Khatibloo, principal analyst at Forrester Research
There aren’t really good mobile formats that will compensate the publishers to the degree
that they need in order to be able to create quality content profitably.
—Ben Barokas, CEO of Sourcepoint

(Watch here)

While several panelists touched upon the dubious “white listing” practices of ad blocking software companies, Khatibloo mentioned the constructive approach of the EFF’s proposal to white list sites that adhere to what it deems to be appropriate consumer protection guidelines. She also believes that the time is right for micropayments, which give consumers the clear option to compensate publishers while pointing out that the level of revenue is not likely to make up for the loss of advertising.

Hartman raised the question of whether advertiser desire for data may be driving ad blocker adoption. Big Data, he pointed out, has been one of the big innovations in advertising, yet it is a challenge in the ad blocker community and makes conversations with marketers very difficult.

We haven’t talked about advertisers yet, but they wield enormous power… Big data has been the trend.
Probably the biggest innovation in advertising has been the use of data… but it is [an issue] with the ad blocking community. —Jed Hartman, CRO, Washington Post

(Watch here)

Looking to the future, Hartman expressed the opinion that we’ll see a change in advertisers’ perspective once there aren’t enough eyeballs available via digital advertising because of ad blocking. Meanwhile, he said publishers will start to “clean up their act” and focus on creating better digital advertising experiences.

The discussion was then opened up to audience Q&A.

Here’s the video:

Perspectives

Breaking down Google’s AMP rollout for publishers

Google’s dominant hold over mobile (and desktop) search means that anytime it makes an announcement that can potentially influence how often and the format in which consumers see your content, it’s best to pay attention. Of course, the immediate impact isn’t always clear.

Most recently, Google unveiled its Accelerated Mobile Pages (AMP) project, and there are a few key things publishers should know about it.

What is Google AMP?
Google AMP permits faster mobile websites by loading the text and images first, leaving JavaScript to load last. It aims to improve the individual’s mobile browsing experience but also that of the publisher, relying on critical ad dollars.

The search behemoth wrote: “Publishers around the world use the mobile web to reach these readers, but the experience can often leave a lot to be desired. Every time a webpage takes too long to load, they lose a reader—and the opportunity to earn revenue through advertising or subscriptions.”

Mobile advertising is beginning to break records as more and more companies ride this digital wave that shows no signs of losing speed. Advertisers placed a dramatic total of 10,137 mobile ads alone in the third quarter, according to MediaRadar’s findings. Advertisers, of course, are following the consumer whose preference more and more is to pick up that phone or other mobile device to rapidly consume the immense amount of diverse content available at all hours.

What are the benefits?
Google is nudging us toward faster load times. There’s no doubt that consumers will appreciate the quickened, less frustrating mobile experience, which will potentially keep them more engaged with you or your advertiser’s content.

It’s also a clear victory for mobile users who today tolerate slow loading times. And what about for publishers who choose to adopt Google AMP? Your websites will be prioritized in Google search results, leading to an increase in traffic and higher consumption on site.

What are the concerns?
Publishers should consider a few details before jumping in:

  • Your existing technology to deliver ads may not be compatible with AMP’s construction. Google has stated that adopting other vendor technology is possible, but its plan for doing so has not yet been released.
  • There is a general increased dependency on Google and all of its related ad tech if publishers adopt AMP. It’s important to deliberate over whether this is the right path for your organization.
  • Google noted that it wants AMP to “support a comprehensive range of ad formats, ad networks and technologies. Any sites using AMP HTML will retain their choice of ad networks, as well as any formats that don’t detract from the user experience.” That last portion, as well as Google’s point that it wants to deliver “compelling” ads provides the technology company with significant discretionary freedom to demerit ads not deemed worthy.

Google admits that AMP, like most of its “projects,” is still in its early stages and is not a final line in the sand by any means. It has marked this initiative as an open-source project, seeking widespread adoption rather than a limited run. So, publishers should not feel troubled by the arrival of AMP. Google is clearly welcoming publisher participation. By staying involved, publishers and media companies can play a hand in the result of this product.

Todd Krizelman is Co-Founder and CEO of MediaRadar (@MediaRadar). Growing up near the epicenter of technological innovation in Palo Alto, California encouraged him to become an entrepreneur and co-found of one of the world’s first social media sites, theGlobe.com. Krizelman also held leadership positions at Bertelsmann’s Gruner + Jahr and Random House. With his expertise in ad sales and innovation, Krizelman joined veteran web architect, Jesse Keller, to found MediaRadar in 2007.

Perspectives

Facebook plays nice with updates to Instant Articles

Publishers complained, and Facebook listened. While the launch of Facebook’s Instant Articles brought some fear and loathing that the social media giant would grab control of content distribution, the reality is that participating publishers have been pretty happy with early results, though they have asked for more control.

Publishers wanted to be able to serve more ads into Instant Articles. Facebook raised the limit from one ad per 500 words in a story to one ad per 350 words. Publishers wanted to serve ads specifically for Instant Articles, and Facebook now allows that. Publishers wanted to include links back to their sites or sponsored content, and Facebook accepted that.

Could this be the start of a beautiful relationship? Time will tell.

Instant Articles growing
Instant Articles emerged earlier this year to allow a select group publishers, including the New York Times, Washington Post and Bustle, to publish directly onto Facebook rather than posting links that would redirect audiences back to their websites. By cutting the load time for users by 10 times, Instant Articles ultimately offers users a better experience. And as Washington Post CRO Jed Hartman told the Wall Street Journal, better user experience should ultimately benefit publishers.

However launch publishers soon found the restrictions placed by the social network made Instant Articles less of a boon than expected, in large part because they were better able to monetize pageviews on their site than content views on Facebook. In an effort to remedy this issue, Facebook has announced a new tool that automatically pushes an ad out for every 350 words. However, there are still restrictions on the type of ads, with rich media ads still forbidden. That would increase, running counter to against the idea of ”instant.”

“If Facebook allows publishers to just add all of the same kinds of things that made their own sites less appealing in the first place, then Instant Articles will quickly become useless,” wrote Fortune’s Mathew Ingram.

Facebook, for one, never doubted the potential of Instant Articles, despite criticism. It’s since released Instant Articles across Asia, including Facebook’s second biggest market, India, and Latin America. Now, there are 100 publishers using Instant Articles, with 300 enrolled to start eventually, according to WSJ’s Marshall.

Facebook’s power in mobile
The Washington Post’s Jeff Bezos reportedly wanted to participate in Instant Articles as soon as he heard about it, with the sheer scale of Facebook being an enticement of its own. However the influence of Facebook in this mobile sphere is a significant factor for early movers, who jumped on board with Instant Articles even before much time had passed to offer a fair assessment on its efficacy.

“We’re trying to do two things,” Cory Haik, the Post’s executive director of emerging news products (who recently took at job at Mic), told Nieman Lab. “Grow our digital subscriptions — and those are highly engaged users that come back directly to us, create that daily habit that’s important — and the other piece of it is growing new audiences in these really dramatic ways, which is mostly on mobile. And when I say that, there’s a direct correlation to social and these emerging platforms.”

It may seem that Facebook is helping to accommodate the demands of publishers, but don’t forget it’s also benefiting from loosening restrictions. More ads means more revenue across the board (Facebook takes a 30 percent cut from the publishers it sells ads for). And given that not all publishers sell ads, there’s a definite upside for some. For larger publishers, it is a positive sign that Facebook has been quick to address some issues. However to keep this content relationship strong for the long term, Facebook will need to continue to listen and respond to what publishers are saying.

Industry-Research | Perspectives | Revenue | Video

Explosive digital video growth in 2015 spawned unprecedented opportunities

Consumer demand for sight, sound, and motion ignited mobile and
programmatic video advertising growth; new challenges emerged

Digital ad spend in the U.S. is projected to top $58 billion this year and $93 billion by 2019, according to eMarketer. Much of that growth is coming from digital video, with the category poised to absorb significant television ad spend.

Digital video is on an explosive growth track, showing no signs of slowing – more dollars continue to pile into video and new opportunities are emerging. Yet, with unprecedented growth comes unprecedented challenges, and many are beginning to realize just how truly disruptive digital video will be.

What’s fueling digital video’s tremendous growth?

“Sight, sound, and motion” advertising dollars are moving across screens. Viewers are fragmenting across video distributors and programmers as advertising technology races to evolve, and marketers are realizing just how powerfully digital video can tell their stories. Under pressure from marketers wanting to find their consumers across devices, media buyers are pulling from TV budgets to fund digital video growth.

For our sixth annual State of the Video 2015 Report, we surveyed 300 brands, agencies, and publishers to examine these dynamics and learn how key players are adjusting to newly emerging challenges.

Here are our key findings from this year’s State of the Video Report.

Marketers are reprioritizing traditional ad budgets, adding dollars to digital video.  TV budget growth is stagnating, with a sizable portion of dollars being moved to video advertising. Nine in 10 buyers are shifting dollars from linear TV to digital channels, reallocating on average 10% of television budgets. Of marketers moving TV dollars towards digital channels, 88% are shifting that television spend to video, including desktop, mobile, or over-the-top (OTT).

Mobile and video are converging, posing new opportunities and challenges.  Bolstered by faster network speeds and more screens, the growth of mobile video content consumption has been meteoric. This year, more than 191.5 million Americans watched more than 50.5 billion videos via mobile, according to comScore.

Marketers and publishers are attempting to keep up. According to industry estimates, desktop video spend grew 27% from 2014 to 2015, while mobile video grew 75%, eMarketer data shows – trends that align with buyer optimism. Our survey showed overall mobile video advertising spend increased 18% since 2014.

But marketers say measurement and attribution remain key pain points with mobile video. Mobile performance is more difficult to track than desktop due to reliance on deterministic or probabilistic identifiers. Both have benefits and flaws, but neither method can replicate the accuracy of desktop analytics – yet.

Programmatic is ubiquitous – and the sell side is rising to meet buy side demand. Over 90% of brands and agencies report buying some portion of video programmatically. Eighty-eight percent of publishers report selling video inventory programmatically, up 37% from 2014.

Not surprisingly, buyers remain concerned with premium/quality inventory and scale, noting that there still isn’t enough premium video inventory accessible at scale. Addressing these concerns, two-thirds of sellers are establishing standards for video content and ad quality, and are adding in-house support for inventory quality control.

Brands are also building momentum around in-house video strategy and programmatic buying. Twice as many brands have already brought programmatic buying capabilities in-house, compared to last year – a move that can be easier said than done.

Programmatic TV is gaining popularity as audience fragmentation hits an inflection point. This coming year, 41% of television buyers – a three-fold increase since 2014 – plan to rely on programmatic to make TV investments – a threefold increase since 2014, signifying that change is coming to linear buying practices as well.

Marketers moving television spend to digital video cite the ability to target consumers more granularly and superior measuring capabilities as reasons. Similarly, programmatic TV brings the benefits of digital advertising to linear television.

But this is still a nascent space. Buyers express concern with premium, quality inventory and scale. Brands are concerned with issues like integration and qualified personnel.

Branded video is taking hold.  Advertisers and agencies devote over 30% of overall video budgets to branded video content – defined as digital video content co-created between a brand marketer and a publisher. Still a maturing marketing tactic in the digital world, advertiser interest and spend are significant.

Both buyers and sellers cite cost as the biggest obstacle for investing in branded video. Due to the nature of the form, it’s still traditionally thought of as a kind of custom brand messaging that requires a heavy investment of talent, time, and dollars. As for distribution, the majority of publishers rely on their owned and operated sites and social media, indicating that branded video distribution remains limited.

2015 has been a year of significant shifts: as consumers demand sight, sound, and motion everywhere, marketers and publishers are increasingly investing in mobile video and programmatic.

For the first time, television has shown signs of stagnation, though TV dollars are fueling video growth in other formats.

Considering how much movement we’ve seen in such a short time, there is little doubt that 2016 will bring more of the same: consumers are constantly evolving, and brands, agencies, publishers, and technology providers must evolve or risk extinction.

JoAnna Foyle has a passion for both technology and creativity, with nearly 20 years of experience in executive leadership, go-to-market strategy, client business management, TV and digital media, and advertising technology. She has worked with some of the best agencies, publishers and technology companies in the world, driving innovative and holistic technology solutions. As senior vice president of enterprise platform services for AOL, she is responsible for ONE by AOL technology engagements, driving activation, adoption, and expansion for AOL’s biggest partners.

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Perspectives

DCN’s recommended reading: week of December 17, 2015

Our recommended reads from around the web:

Perspectives

It’s time to start thinking about inventory quality data as an asset, rather than a liability

For years, viewability and ad fraud have created fear that incorporating them into the workflow would diminish inventory value and make certain impressions impossible to sell. While many have begrudgingly accepted that media quality monitoring has become table stakes for doing business with most reputable advertisers, few are using their data to its fullest potential.

After all, in virtually every other industry, inventory quality is a valuable tool for attracting customers, setting prices, and maximizing revenues. Imagine going to the jewelry store and being told that there was not only one price for every ring in the display case, but that you had just as much chance of buying a rhinestone as a diamond. Instead of the haphazard distribution model of our maturing online ecosystem, retailers optimize their yields by charging a premium for rarer diamonds and generating additional sales from people willing to accept a rhinestone at a lower price.

There’s no reason publishers can’t use similar tactics to improve the yield of their inventory using the information they have about viewability, ad fraud, and brand safety. With that in mind, here are four steps you can take to put your media quality data to work and grow your business.

1. Understand your inventory performance.

Knowledge is power, and the more you know about your inventory, the better off you’ll be when it comes to improving its quality and setting prices for your customers.

The best way to get the lay of the land is take a good, hard look at the data and start figuring out how different types of inventory perform at a granular level. For instance, you might find that ads on your women’s lifestyle content are most likely to be in view, or that an automotive section of your site has high fraud.

Instead of shrinking away from media quality data, use this analysis to tout your highest-performing impressions to prospective buyers and charge a premium to those who are interested in purchasing them.

2. Optimize your site design for high-quality media.

Once you have an idea of which parts of your inventory are performing best on your site, you can start working to increase the number of high-quality impressions you have to sell.

In our recent Q3 media quality report, we found that skyscrapers and half-page ads are the most likely to be viewable, so it might make sense to redesign your site in a way that allows you to run more of them. But that really depends on what you find when you dg into your inventory performance. Run A/B tests, experiment, test, and measure.

Of course, you’ll also want to keep a close eye on how different ad combinations affect your user experience. The easiest way to guarantee viewability is make all of your ads sticky and follow your users as they scroll. But great viewability won’t do much to help your bottom line if you’ve created a page where the ads are so intrusive that people stop coming to your site.

3. Sort your impressions into buckets based on media quality.

After maximizing the amount of viewable, fraud-free, and brand-safe inventory you have at your disposal, it’s time to start establishing price tiers based on quality. We recommend sorting all of your impressions into three buckets, one each for high-quality, medium-quality, and low-quality inventory.

While everyone will initially want to buy from your top bucket, supply and demand will kick in: You’ll be able to charge prices high enough that some buyers are willing to settle for medium- or low-quality impressions. Indeed, retailers across the country will make plenty of money selling inexpensive and moderately priced inventory of all kinds this holiday season, and publishers should do the same.

4. Use your information to automate your transaction and trafficking processes.

If you’re really advanced, you can use your inventory quality data to forecast how many viewable impressions you’ll have available at any given time. This will allow you to automate your prices based on your expected scarcity, as well as to make sure you don’t over-buffer campaigns by giving away too many impressions in order to meet a viewability quota. An accurate forecast also gives you the confidence you need to make guarantees to customers based on viewability, fraud, or brand safety.

As technology develops, we expect that publishers will ultimately be able to traffic campaigns toward their highest or lowest viewability inventory directly on the ad server. Those that take steps today to establish best practices for leveraging these kinds of data will enjoy huge advantages over their less advanced rivals as buyers continue to demand better and better digital advertising experiences for their clients.

Indeed, if we’ve learned one thing watching the rise of viewability these past few years, it’s that media quality metrics are here to stay. Now, it’s up to you to make the most of them.

Dave Marquard is currently Director of Product Management, Publisher Solutions at Integral Ad Science. For the past 15 years he has held leadership roles in product management, engineering, and marketing at internet technology and enterprise software firms such as Google, IBM, and Lombardi Software.

Perspectives | Policy

Ad blocking: It might be time for an FTC assist

This week, we released our 2015 DCN Ad Blocking Report  which shows that 33% of U.S. consumers are very likely or somewhat likely to try ad blocking software in the next three months. Coupled with research by Adobe and PageFair that showed a 41% increase in the use of ad blocking from 2014 Q2 to 2015 Q2 it’s clear we’re seeing a steady, significant rise in consumers using ad blocking software.

Interestingly, Doc Searls notes that ad blocking (which he calls “the biggest boycott in human history”) started spiking right around the time that Do Not Track (DNT) signals began to be ignored. As we’ve written before, we think consumers have been actively searching for ways to control their online experience and better protect their privacy. They started with clearing cookies, then enabling DNT and now they’re blocking ads altogether.

As our research and that by others has noted, ad blocking software meets a number of consumer needs, a major one being poor online experiences due to advertising. Some ads can be intrusive and annoying and pages load much faster without ads (much less endless third party calls).

Consumers are also concerned about their privacy and are looking for better ways to opt out of having their data collected with little transparency. Consumers are concerned about their security and the various unknown entities having access to and potentially compromising their devices.

While meeting consumer experience needs is laudable and an important wake up call for industry, the other side of the coin may be fraught with harmful and shady business practices.

As I wrote in September, ad blockers shouldn’t block conversations between a publisher and a consumer – this kind of back and forth dialogue helps the publisher better understand and meet consumer needs while it also helps educate consumers. After all, let’s keep in mind that most early adopters of ad blocking software tend to be young males (hint: I was once one of them – we didn’t always appreciate the big picture).

Also, as has been reported, ad blocking companies will accept payments to whitelist ads from companies. Of course, those ads need to meet a set of acceptable ads criteria. But those criteria tend to be nebulous and interpreted behind closed doors while the payment is being negotiated, which doesn’t make for a healthy marketplace. Indeed, it is often the case that the ads that are whitelisted are text-only ads that add absolutely nothing to the overall experience for the consumer. I would argue that, rather than read any conceivable text ad, most consumers would rather laugh at a new Geico ad or mock one of Matthew McConaughey’s ethereal, self-indulgent car commercials, especially if that ad was stripped down to a minimum of 3rd party tags and did not track me across the web.

Regardless of what ads should be shown or whether they should be shown at all, I think we can all agree that disrupting an important dialogue between consumers and publishers and shaking down publishers to whitelist ads are not the hallmarks of a healthy ecosystem. It would be helpful for the Federal Trade Commission (FTC) to examine whether these business practices and agreements are undermining the ability of content creators and consumers to find a value exchange that works for both. The FTC plays an important role in keeping our industry healthy by working with good faith actors to establish best practices, shining a light on new, emerging technologies and bringing enforcement cases to end shady business practices.

Needless to say, these issues are top of mind for DCN and the premium publishers we represent. We’re looking forward to an opportunity to explore this topic, among others, at our December 16th event The Consumer Rules: Lessons from Ad Blocking. It will be held at the Newseum in Washington, DC from 8:30 to 11:00 AM on Wednesday, December 16. Because solving the issues causing and caused by ad blocking requires wide ranging participation, we’re hosting an interactive discussion featuring Jed Hartman, Chief Revenue Officer of the Washington Post; Heather West, Senior Policy Manager, at Mozilla; Ben Barokas, CEO of Sourcepoint; and Fatemeh Khatibloo, Principal Analyst at Forrester Research. Following the panel, we will have a fireside chat with FTC Commissioner Julie Brill.

It should be a lively discussion; it is certainly an important one.

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DCN’s recommended reading: week of December 10, 2015

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