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Advertising | Perspectives | Research | Revenue

Bad Ads: Research Shows They May Cost More Than They’re Worth

No one likes to click a link on a tantalizing bit of content only to be assaulted by a barrage of intrusive and annoying advertising. That fact is as in your face as a blinking pop-up ad prompting you to punch a monkey to win an iPad. And unless it’s the result of fat fingers, you aren’t clicking these annoying ads; you are hitting the back button as fast as you can to find a more pleasant place to consume content. And here’s the part that should send a chill down the spine of premium content publishers: Microsoft research has found that they’re not just bad in customers’ eyes; there’s also a high cost to be paid by the publishers that run them.

The research, The Economic and Cognitive Costs of Annoying Display Advertisements, set out to better understand the cognitive impact of annoying ads on users, and also to quantify the economic cost of annoying ads for publishers. Let’s just say their findings are more than a little jarring. The research shows the economic cost of “annoying” ads is about .153 cents each (for the revenue wonks, this works out to a $1.53CPM). Given that Turn reports that more than 53% of all online ads sell for between $.10 and $.80CPM and we know premium publishers typically earn around $1.35CPM from open exchanges, a little math paints a disturbing picture. We’ve always known digital ads can impact users and the bottom-line but not in the wrong direction.

If you believe the research—undertaken by an impressive team of researchers whose experience includes work for Yahoo, Google and Microsoft—then publishers need to know that running ads which site visitors find to be irritating, annoying, inappropriate or offensive has a significant net cost, both to brand value and the bottom line.  Private marketplaces reinforce this need for brand safety for all.  Chasing page-views and impressions at scale has diminishing returns and makes a sites more vulnerable to bad ads. What this means is that by running these ads, often to maximize sell-thru rate of your inventory, you’re actually chasing short-term revenue rabbits without understanding where that rabbit hole leads.

The Microsoft researchers conclude that “the practice of running annoying ads can cost more money than it earns.” That’s right: a site might be better off not running ads at all because of the net loss they will incur if some or all of their ads are perceived as bad by their users. A site or app actually needs more quality content and premium ads to make up for the economic loss from bad ads.

As is the case with bad advertising, we all know great ads when we see them. And research shows that there is a “halo effect” to advertising that is positioned within the context of a strong media brand with quality content, so it only stands to reason that the reverse would be true: that there would be a negative effect to a media brand associated with bad advertising. Microsoft’s research confirms this, finding not only that people notice annoying ads and complain about them, they are more likely to abandon sites on which they were present. Interestingly, in the presence of annoying ads, people had to work harder to understand content that contains annoying ads. In other words, they’re distracting and a general nuisance to user experience.

 

Again, it’s very important to note this isn’t simply about low-quality dating ads, yellow-teeth and belly-fat ads. Media companies need to consider the subtle and long-term effects that any ad running on their sites may have on user retention and revenue. The alarming rise of Adblocking software adoption makes clear that customers are fed up with poor advertising experiences. And once customers are driven to this extreme, they are taken out of the ecosystem for everyone, good and bad advertisers alike. Already 41% of 18-29 year-olds in America have opted-out of digital advertising altogether by installing an adblocker.

But we can’t simply take the lazy position that “people just hate ads.” It simply isn’t true. And the Microsoft research backs that up. We can also clearly see examples of superior advertising and content experiences on Vox and Conde Nast sites, among many others. Premium publishers like the members of DCN who focus on high-quality content, premium, well-lit experiences and brand-safe environments should be well-served as this all shakes out because they are laser focused on creating great customer experiences that are only enhanced by the relevant, quality advertising experiences that support all of the terrific content that they enjoy.

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Perspectives

DCN’s Recommended Reading: Week of May 14, 2015

Perspectives | Revenue

Accounting for Attention Minutes as a Currency

Time-based metrics are of considerable interest to online publishers. There seems little doubt that “attention minutes,” in one form or another, will be a tool used by both marketers and media. DCN has identified many of these possibilities. But it’s far from clear whether these metrics will, or should, displace more conventional measures of audience size. To consider the strengths and weaknesses of time-based metrics as currencies, we explored the relationship between the time people spend with websites and the popularity of those sites.

Do attention and popularity measure different things?
There is a long-standing law of consumer behavior called “Double Jeopardy”  (DJ). It stipulates that popular offerings enjoy more consumer loyalty than unpopular offerings. DJ in television has meant that channels with high ratings have higher levels of time spent and repeat viewing. The only meaningful exception has been the “small-but-loyal” audiences of foreign language channels. So on the web, it’s possible that the most popular sites (as measured by UVs) also rack up the most attention minutes. If popularity and time spent are highly correlated, either metric would produce the same winners and losers.

To see if that’s true, we used comScore data to test the correlations among several metrics. We looked at three-month aggregates from October to December 2014 across 1,067 news sites. The time-spent measures, which included “average minutes per visit,” “average minutes per page,” and “average minutes per visitor,” were highly correlated.

However, there were only weak correlations between time spent and audience size. You can get a sense of this in the chart below. Most outlets with small-but-loyal audiences were, like TV, non-English sites. So there were no DJ effects. More importantly, it seems that time-based metrics are tapping into something quite different from popularity. So which is better suited to be a currency?

What do attention minutes tell us about content?
DCN and several others have suggested that attention minutes might be a good measure of audience engagement and quality. As such, attention minutes could be useful for developing content – which, in turn, could build audience loyalty. But currencies typically reflect the needs of advertisers. Do time-based metrics offer advertisers something of value that they can’t get from measures of popularity?

Source: comScore Media Metrix Key Measures Report, October – December 2014
Source: comScore Media Metrix Key Measures Report, October – December 2014

At a minimum, attention minutes can help authenticate exposure to an ad, serving as an extension of viewability standards. Beyond that, it’s harder to see why an advertiser would put a premium on the audiences’ engagement with a publisher’s content. One possibility is that an ad becomes more effective when it’s surrounded by content that has truly engaged readers. But here, the evidence is mixed. There’s some indication that the benefits of engagement in content bleed over to advertising. For example, a 2012 comScore report concluded that content engagement is more strongly correlated with advertising effectiveness than clicks or total impressions. Additionally, a 2009 experiment found that user engagement and advertising effectiveness are positively associated. On the other hand, consistent definitions of engagement are elusive. What’s more, a 2013 Nielsen report suggests that it’s the medium, rather than the content, that most greatly affects advertising efficacy.

If advertisers are convinced that engaging content benefits their ads, premium publishers might be able to profit from that association. But programmatic buying is gaining ground in online advertising, and that potentially divorces ad placement from its surrounding content (though the number of private marketplaces is growing). Some advertisers don’t care about content apart from its ability to deliver the attention of prospective customers. It’s the characteristics of the people being delivered that are likely to matter most for any currency.

What do attention minutes tell us about visitors?
Advertisers typically use metrics to describe and target audiences. Historically that’s been age and gender, but with all the digital exhaust users leave behind, it now seems the sky’s the limit. You could identify those users who are engaged by time spent measures, then add them to the targeting mix. But it could backfire. Our findings indicated that individuals who spent large amounts of time on news sites tended to be heavy web users. In other words, they spend a lot of time online. In a world that’s driven by programmatic buying, the heaviest users are the easiest for advertisers to reach. The laws of supply demand suggest they’ll be of less value to advertisers. And this just might turn the A in attention minutes into a scarlet letter.

James G. Webster is a professor of Communication Studies at Northwestern University. He’s the author of The Marketplace of Attention and Ratings Analysis: Audience Measurement and Analytics.

Jacob L. Nelson  is a doctoral student in Northwestern University’s Media, Technology, and Society program. A former journalist, his research looks at news consumption and media metrics.

IAB NewFronts Header
Advertising | Perspectives | Revenue

NewFronts 2015: It’s All About the Video – and Tech

There was a time when the NewFronts were considered a side show to the Upfronts, almost a joke. What’s the point of buying digital ads “ahead of time” when there is infinite inventory online and no real schedule?

But things have shifted considerably in the past few years. The NewFronts, now in their fourth year, were a serious blow-out party, with 33 presenters – up more than 50 percent since last year – threatening to outshine the Upfronts. And what has been the catalyst? Video, of course. Because now everyone from Yahoo to WSJ to Vox has their own video shows. So that makes the NewFronts much more like Upfronts, with seasons for shows – even if those shows can be binged instantly, in some cases.

And the numbers can back them up. Numbers always help. For instance, more than 68 percent of marketers and agency executives expect their digital video ad budgets to increase in the next year. And guess where that money is coming from? That’s right, from the Upfronts, with money moving away from traditional cable and broadcast television. But IAB honcho Randall Rothenberg argues that it’s our understanding of and relationship with television that’s changing — not “television” itself.

“The princeling that’s replacing television … is television,” he wrote in a piece for Adweek.

“Linear TV” and “Internet TV” may be two sides of the same coin, but a definite theme coming out of this year’s NewFronts is that digital is a “better ad buy” than ordinary television, especially among the coveted millennial audience. Research firm eMarketer expects digital video-ad spending to grow by 30 percent and hit $7.8 billion in 2015.

Original Shows and Tech

So just like at the Upfronts, many NewFronts presenters announced new series – a whole lot of them. Time Inc., for example, announced four new streaming-video series. And Yahoo announced 18 new series, in part to help attract interest to its digital magazines, which have lots of native advertising. Conde Nast also announced plans to release more than 2,500 new original videos in the coming year. Even Vox Media announced several new digital video series, as well as a few renewals for current popular ones.

It seems the key to monetizing digital video is to first have enough of it before you can really reap the benefits. But Vox went further, licensing its content management system — already well known in media circles — for outside use. That’s a huge incentive for an agency like DigitasLBi, which announced both a production partnership with Vice and a deal with Vox that will allow it first dibs on Vox’s native ad platform, Chorus for Advertisers.

Native Ad Ideas

But it’s not enough to just to sell shows. Many publishers also pushed their native ad tech solutions. Yahoo talked about its native-video ad program that can help it “integrate sponsored-video segments into its homepage, digital magazine and apps.” Yahoo also announced video-app install ads through which marketers and developers can promote apps — both on Yahoo and thousands of other apps.

Meanwhile, BuzzFeed announced its new technology, Pound, aimed at demystifying social sharing habits and how content goes viral. As BuzzFeed wrote in a blog post about Pound, “traditional web analytics are fundamentally unable to capture what actually happens on the social web today.” Not only would Pound help BuzzFeed better figure out stories you’d share with your friends and families, and the stories they’d be most likely to share, but it’s also a chance to see how the data collected from Pound could help produce more shareable sponsored content.

And maybe that’s the approach that will really set apart the NewFront digital folk from the Upfronts – offering not just some original web shows, but also the technology to help advertisers reach and engage those audiences. TV isn’t dead by any means, but the digital upstarts are making serious inroads.

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Perspectives

DCN’s Recommended Reading: Week of May 7, 2015

 

Collision Las Vegas 2015
Perspectives

3 Marketing Takeaways from Day 1 of Collision

This week nearly 7,500 people from 89 countries made their way to two airplane hangars in downtown Las Vegas for Collision, a “new kind of tech event,” in which tech is approached as an intrinsic part of every aspect of business. In addition to sessions on four main stages—Center, Enterprise, Builders and Marketing—the event attracts speakers and attendees from Fortune 500 companies to nascent startups, along with no small number of VC and Angel investors. What they all have in common is a focus on what’s next and driving the innovation that will take us there.

While tech was undoubtedly the underpinning of the vast majority of sessions and conversations, marketing was also central to many discussions—given that few of the “big ideas” brewing at Collision will go far without it.

Here are my three marketing takeaways from Day 1 of Collision:

  1. eMarketer
    eMarketer founder and CEO Geoff Ramsey

    Programmatic with polish: Without a doubt, speaker after speaker confirmed the growing dominance of programmatic. In fact, eMarketer founder and CEO Geoff Ramsey kicked off the day with a slew of stats, including that we can expect to see $15 billion worth of advertising bought programmatically this year, comprising 55% of all display. And while Digiday’s Ricardo Bilton pointed out that “The promise of programmatic is that it is intensely efficient,” a number of people throughout the day made clear that they were looking forward to the continued evolution of programmatic to be more creative and contextualized. Howard Pyle, VP of Marketing at IBM, said that while programmatic is “a convenient way to make marketing function more like a machine” he remains focused on creating customized experiences that best suit his different customer segments. Thus, he is exploring how he can create “unique experiences at scale.” And Anthony Mazzarella, SVP, Agency Sales, at Celtra says that this creates an opportunity to “bring marketers and the media closer together,” which can only make the experience better.

  2. Data is a game changer: “The job of marketer is changing” according to Paul Berry, founder and CEO of RebelMouse, who believes that there used to be a lot more guesswork and intuition around which aspects of customer information would help them make good business decisions. However, giving the influx of real-time data and increased ease of use, “today’s marketers can swim deeply in all of the insights,” emerging with information that they can readily apply to their strategies. At L’Oréal Rachel Weiss, the company’s VP of Digital Innovation, says they’ve moved way past Facebook Likes and are focused on really getting to know their customers. To do so, the company recently began to hire data scientists, who help shape all aspects of customer experience and marketing.eMarketer’s Ramsey also emphasized the incredible potential that wearable data offers marketers though he noted that marketers are “struggling to manage the torrents of data pouring through all of these different devices.” But with the rise of increasingly personal data, Vivek Sharma, CEO of Movable Ink says he sees a rise in “data-inspired creativity.” And of course, there will remain the responsibility to use “data in a way that’s not creepy,” as Tariq Shaukat, EVP and chief commercial officer of Caesar’s Entertainment Corporation put it. “Data offers an amazing opportunity to do better things for customers,” he said. “You give your data in exchange for a great experience. When you explain it to customers and do it in a way that adds legitimate value for them, you will find that customers really do appreciate it.”
  3. LorealRebelMouse
    Rachel Weiss, VP of Digital Innovation, L’Oréal and Paul Berry, founder and CEO of RebelMouse

    Customer experience and marketing collide: Pyle of IBM believes that it is essential for marketing to emerge from its corporate silo and be better integrated into the entire business so that the insights marketers have about customers are better reflected in product development and so that marketers can better create customized content experiences that fuel business objectives. L’Oréal’s Weiss noted that customers believe “they are their own brand first, and that every product they use should be built around them.” At Movable Ink, Sharma finds an increased demand for “personalization on the fly” because customers expect messages tuned to things such as location and weather. He sees content marketing intersecting with context to create value for the customer. “Rather than asking someone to buy trainers, tell them about road races around them. Then, when the time is right you can offer them the right shoes.”  Berry at RebelMouse observed that “it turns out that it is very hard to capture people’s attention” and that brands must continually focus their marketing tactics on serving their needs. “Today, there’s no tolerance for a mediocre experience.”

Perspectives

The Evolution of Native Advertising: Native Lite

The popularity of native advertising is well documented, but as the practice matures, it’s also shifting its form. In other words, not all native advertising is the same any more.

MediaRadar has closely tracked the rise of native advertising over the last 12 months. By the end of last year we identified 4,600 advertisers who had jumped in to test out this new media unit. Could what Forbes, BuzzFeed and Mashable do so well become a codified, scalable business model for every media company? The answer seems to be yes, but it is a little like watching a roller coaster beginning its steep ascent. A January Association of National Advertisers’ (ANA) poll revealed a whopping two-thirds of their 640-member organization said they plan to try native advertising in 2015.

Wayfair on Yahoo NewsBut here’s where the native ad takes a twist. Being in the business of tracking native ads is like observing the expanding Mandelbrot number set: it’s a kaleidoscope. I’m amazed just how much the concept of native advertising has already shifted and stretched. It was once assumed that native advertising was always paired with editorial content either written by, for or influenced by the advertiser, but now we see an increasing number of native ads with no editorial component at all. The native ad stands alone, detached. At MediaRadar we call this “Native Lite.”

An example of this Native Lite trend can be seen in the Wayfair ads on Yahoo that look like editorial. Although the creative is placed in the editorial feed, it directly clicks through to Wayfair’s website.

To be clear: There’s nothing off script with what Wayfair is buying. The IAB’s official “Native Playbook” released in 2013 included this detached type of native ad in its definition. IAB standards say a native ad is “a linked, in-feed ad that is in a publisher’s normal content well; is a promotional ad; links off of the site to content, editorial content, or brand’s landing page.”

But while this type of ad may indeed be part of the overall native advertising definition, it is a broad interpretation. We believe this edit-less native is something materially different than native paired with editorial.

Why does this matter? Media companies are trying to position native advertising as the high-CPM, high-engagement alternative to programmatic purchase of display ads. For example, native is supposed to be at the high CPM end of AOL’s so-called barbell strategy. Yet, if sellers dilute the value of native, the CPM will fall. Already we know some clients who now call their version of native advertising “Premium Native” in order to separate it from native ads lacking editorial. More than one publisher has said that native is in risk of becoming the advertising industry’s form of “click-bait,” a faux editorial simply linking to an advertiser’s website.

I recently read Fast Company’s behind-the-scenes look into Yahoo’s rapid ascent in native advertising. The company started with $100 million in native sales in 2013 and catapulted to $300 million by the following year, according to the article. Some of this revenue comes from Native Lite, demonstrating this type of ad does perform well and has its place. Yahoo!’s success was large enough that it was prominently discussed in their latest 10K filed in February.  They wrote that “Native ad units represented approximately 37 percent of total Ads Sold for the year ended December 31, 2014.”  Native Lite is not yet widespread, however. Out of 203 DCN member websites, just 15 were selling Native Lite in March, or 7%. In contrast, 45% of DCN members were selling natives ads in April 2015.

Moving forward, we as an industry should differentiate between “premium” native advertising, which is part of editorial, and “lite” native, which is not. This transparent distinction will benefit the industry and help maintain the health of native advertising as a whole.

Todd Krizelman is Co-Founder and CEO of 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. After years of thorough research, development, and data collection, MediaRadar is now the most comprehensive data company focused on the ad sales market. Krizelman is a graduate of Cornell University and Harvard Business School.

 

Perspectives

Q&A with Josh Sternberg, Content Strategist, Washington Post Brand Studio, on Content Marketing

Q: What do you think is the effective use case for content marketing?

A: Content Marketing is great for brand awareness and offers a way for a brand to align themselves with high-quality content around a particular brand attribute that they are interested in, want to be associated with or want to own.

WaPoAudiWHTechFor example, every brand wants to be known for innovation, but there’s nuance to that. The good news is that many brands actually are innovative, but you have to figure out from where and tell those stories. Right now we’re running pieces for Audi about how the White House Press Corp uses technology to cover the President. The content includes information about how the use of technology has evolved over the past three presidencies including the rise of social media and its correlation to the increase of popularity of the White House correspondents’ dinner. The content doesn’t mention Audi, but they get the association of technological progress. The campaign works particularly well because of the way it combines content and display advertising. The branded content works for brand awareness and the display ads work as direct response so Audi hits people throughout the funnel.

Q: What metrics do you think most effective to use to evaluate the effectiveness of content marketing? 

A: Ok, so I am going to use the two worst words in the media industry: It depends. It depends on the brand, what they are looking for, target audience, publication, goals… there are so many variables, so you have to talk with the client to figure out what is going to work best to accomplish their goals.

Above all else, we are focused on creating content that is good, informative or entertaining and gets people to read and to share. We look at all sorts of metrics as well, including page views, social shares, completion rates with video, time on page, etc.

Often branded content is not done in a vacuum. Typically it’s a piece of an overall campaign which could include TV ads, print ads, radio ads, billboards. =It is important to understand what the goal is for a particular campaign, which is something people often forget.

Q: What is the biggest hurdle for content marketing today and do you have any thoughts on how to address it?

A: The biggest hurdles are around process. Brands and agencies are not designed to create content. They are designed to create products and services and then get them to people who need or want them. Creating content is not in their nature. But for publishers is that’s where the fun is, that’s what our business is: creating content. One of the hardest things is explaining to brands and agencies that great content isn’t easy. There needs to be more trust in the relationship, more transparency, and there needs to be better understanding of those processes.

It is incumbent on publishers to communicate these processes. There’s a theory in academia called the Uncertainty Reduction Theory, which discusses how the more two people communicate, the more the uncertainty between the two people goes down. And, as uncertainty is reduced, the more comfortable you feel and the more you talk about what really matters. The same is true in business; that’s why relationships matter. The more we all communicate about the process of creating quality content, the more we will build trust. This applies to brand studios like mine talking to clients. Content is a form of communication and it all just comes down to understanding one another.

Josh Sternberg joined The Washington Post to lead its Brand Studio in July 2014. He previously worked at the digital advertising industry website Digiday where he served as a reporter covering the publishing industry and most recently as a senior editor for the Digiday Content Studio. 

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Perspectives

Member Spotlight: AccuWeather’s Marie Svet

Q: Tell us a bit about your role.

A: I lead the monetization strategy for the web, mobile, and connected media platforms of AccuWeather. That means I direct everything from sales to intelligent ad strategies to trafficking and optimization on the site.

I have a deep background in revenue generation for television and media, and working with the world leader in digital and weather data is a great opportunity to take advantage of our meteoric growth and offer advertisers levels of granularity and control in 1-to-1 marketing campaigns that you just can’t find elsewhere. We have the flexibility, worldwide audience, trusted brand, and massive raw data to make uniquely targeted advertising a reality across multiple platforms.

Q: What is the biggest challenge for you in your role?

A: Programmatic advertising can mean many different things, but some believe it has come to mean a completely back-end-driven ad serving system with very little human involvement. This attitude from agencies and brands has publishers worried about the commoditization of their ad inventories.

We are an advertising partner – not a vendor – that understands that human creativity cannot be replaced by a computer, so while we sell a lot of our inventory programmatically, we also have a team dedicated to meeting the needs of our partners, who need to deliver their message beyond the banner – through unique and custom executions that combine all our data with our best in class content for seamless advertising experiences. Our start-up mentality allows us to be early adopters of new technologies so we’ll always be on the forefront, trying and testing new things. The goal is to provide the easiest, most seamless way possible for advertisers to meet their marketing objectives across our platforms, however they choose to transact.

Q: What do you think is the most important aspect of your job?

A: Building the right team in sales and ad ops is essential to our overall success.AccuWeather Big Data Map

We look for new team members who are natively digital with a strategic ad ops focus. The way digital advertising is bought and sold is very different than traditional media and requires a technical and almost entrepreneurial mindset due to the ever-changing landscape and infinite ad product possibilities when platform, audience, behavior, and weather data are all in the mix.

We have a large global audience, and selling programmatically through both private marketplaces and open exchanges has given us the ability to maximize yield across our non-U.S. inventory while keeping costs to a minimum.

Q: Describe one of the most unusual or most memorable experiences in your career.

A: I’m fortunate to have been on the ground floor of many interesting media ventures, including the early days of the FeedRoom.com, Nickelodeon, Nick @ Nite, and World Wrestling Entertainment (WWE). But some of the most personally satisfying work I do is with the New York Chapter of Women in Cable Telecommunications (WICTNY). I believe strongly in its mission to develop women leaders who will transform the media industry. I served three terms as chapter president and continue to serve on the New York board of directors.

Q:  What are you most excited about for the future of AccuWeather?

A: Big Data is opening up whole new ways of defining campaigns and reaching your audience with a personalized message that can follow them throughout their day on multiple touch points.

AccuWeather has continued to grow enormously, and as we launch on exciting new platforms like smartwatches and wearables and of course the new 24/7 AccuWeather Network, my team can offer more value to advertisers across multiple platforms.

In my time with AccuWeather, we’ve achieved 40% growth in digital media revenue generation and established a new record and standard for success for a 53-year-old company. I’m excited to see where advancements in the industry and AccuWeather’s diverse customer data points take us in terms of what we can offer. As new platforms grow, we can offer more value than ever before.

Marie Svet is the Chief Revenue Officer of AccuWeather.

Perspectives

Live Social Streaming: The New Front for Media Piracy Battles

In case you were wondering if the pace of digital media was about to slow down, the answer is a resounding no. A mere six weeks after the introduction of social media streaming platforms Periscope and Meerkat entered the market, the legal battles have begun. According to a National Journal article No, You May Not Periscope Mayweather-Pacquiao, HBO has already sent takedown notices to Periscope when it found users streaming episodes of Game of Thrones.

While there have been many streaming piracy suits to date–from Napster to YouTube—the potential for anyone with a phone to stream live, super-premium media events creates a fresh level of hell for media executives who invest in these must-see, highly exclusive events. According the National Journal piece, both HBO and Showtime have preemptively filed suit against two websites that they accuse of intending to stream the feed of the Pay-Per-View (PPV) Mayweather-Pacquiao fight for free. And it’s just good business that these two have been quick to take action, given that PPV providers are selling Saturday night’s fight for between $89-$100. In fact, this fight is expected to set new revenue records for PPV.

While live social streaming adds a new—and daunting—twist to the risk posed to media exclusivity that social media poses, media companies have not yet come to terms with social media tools like Twitter. On April 30th, The N.F.L. secured agreements from CBS, Fox, ESPN and NBC that reporters wouldn’t share draft picks on their social media accounts.

The N.F.L. statement notes:

“We believe that keeping this information embargoed to the extent possible clearly enhances the viewer experience for the Draft.  The result is a better presentation for the 32 million viewers who watched Round 1 in 2014 and the 45.7 million who watched across all three days.”

Spoilers aside, those millions of viewers account for commensurate revenue. There is also the issue that DMCA takedown requests are fine for archived videos (such as the Game of Thrones example), but it remains to be seen how this will affect transient live streamed content and real-time mentions of events whose primary value is in the live broadcast (such as sporting events). Pre-emptive legal action, or gentlemen’s agreements may offset some of the risk; the reality is that any audience member can simply raise their phone and tatter the velvet-rope exclusivity of live events.

Advertising | Innovation | Perspectives | Revenue

Programmatic: Both the Villain and the Hero

Nothing makes a narrative more compelling than a villain: evil that must be overcome so the hero can prevail. Maybe that’s why every few years a new nefarious buzzword arises that both energizes the digital media industry and rattles the cages of the establishment. But the business of digital media is just not as tidy as a formulaic series. The real problems are complex. And the bad actors aren’t parading their final 15 minutes of fame on Dancing with the Stars, they are lurking in the shadows, profiting from marketers’ best intentions and the great content created by others. While the story of programmatic is barely a few years old, the plot lines are deep and we’re clearly still early in the first season.

It wasn’t too long ago that programmatic was referred to as the latest chapter in digital media’s “race to the bottom.” The word was associated with everything bad in the digital advertising supply chain because it started off as a murky pool of third parties offering marketers an easy way to reach massive (if dubious) audiences and for publishers to offload “remnant” inventory at bargain basement prices. Unsold inventory from great brands mixed with a whole lot of garbage—the old ad network model. This (thankfully brief) period in the story of programmatic did little for anyone besides intermediaries—though it did help draw attention to the fact that digital advertising processes were ripe for change.

The reality is that programmatic emerged as a response to the complexity of the digital ad buy and has evolved into a way to automate as much as possible, making digital media easier for marketers to buy and potentially more profitable for publishers. Our research shows that forward thinking media companies have wisely jumped into the programmatic fray in order to address marketers’ desire for efficiency while also leveraging their first party audience data to deliver highly targeted, efficient and impactful campaigns.

Yes,  a whole lot of programmatic inventory is still remnant but that is starting to change as more premium inventory becomes available for programmatic buys. In fact, a growing number of our members are starting to see programmatic guaranteed and preferred deals that rival direct deals in terms of CPMs. The big difference is that the programmatic deals—those that have pre-agreed prices and guaranteed high-quality inventory—offer automation of the back-end processes.

As representatives for the digital content brands that marketers trust, it is our responsibility to shine a light on any “trust parasites” in programmatic and to work with advertising and agency partners to maximize their confidence in the value they will receive when they put money into programmatic. The rise of programmatic direct and private marketplaces offer an example of how this is taking shape. And right now, buying direct from a trusted premium publisher is the best way to execute a programmatic campaign without risk.

Villain’s and heroes aren’t what we need to focus on in the story of digital media. However we do need to recognize that there’s a lot at stake here if all of the players don’t work together to educate the market, given the predictions that programmatic will dominate digital advertising within a few years. If you are one of the few still debating whether or not to embrace programmatic: Stop now. Automating the bidding, buying, securing and execution of an ad campaign in real-time using machines rather than paper and humans is a no-brainer.

If you put on your marketer cap, it’s fairly obvious.  Do you want your ads to be viewable meaning actually show up in the active window? Absolutely.  Do you want your ads to be in front of humans rather than bots? Um, of course. Do you want your ads to run in a clean, well-lit brand-safe environment? Yes, please. Do you want all of the above as easily as possible? Bring it on.

With every change, every challenge comes an opportunity to step up and “save the day.” And there are few better examples of the opportunity for digital innovation than programmatic. Get on board and let’s drive this narrative forward.

 

Image credit: kosmolaut.

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DCN’s Recommended Reading: Week of April 30, 2015

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