I’m going to start by saying something that really shouldn’t shock you. Digital ad fraud is a crime. The word fraud is right there in the name. Fraudsters, whether they’re using sophisticated bot networks or deceptive spoofing tactics, are stealing money from advertisers. Yet the digital advertising industry has historically treated fraud as, at best, the cost of doing business or, at worst, a budget-sapping nuisance. But if the headlines are to be believed, that’s changing fast and publishers need to take steps to clean house if they want to be sure they’re protected.
Over the last few months, we’ve all seen signs that public officials are taking a renewed interest in the digital media ecosystem. While Congress has been busy trying to figure out Facebook, the New York district attorney’s office recently launched an inquiry into the business practices of Newsweek owner IBT media, saw the company’s offices raided and their servers seized. Though that investigation was wide-ranging, ad fraud was significant component.
The investigation may be part of a wider trend. FBI investigators recently attended the Rubicon Projects Executive Exchange conference where Special Agent Evelina Aslanyan reportedly told ad industry executives that ad fraud “represents a whole new world of crime for publishers and consumers.” The appearance suggests that the bureau is gearing up for a push on cybercrime and that ad fraud will now fall firmly in that category.
While fraud is often framed as a challenge for advertisers, it’s possible for even legitimate publishers to unwittingly become entangled with ad fraud. There are a handful of steps publishers can take avoiding being caught up in the wave.
Avoid traffic-sourcing schemes
It’s not uncommon for publishers to “buy traffic” in order to deliver on impression quotes and meet their obligations to advertising partners. There’s nothing inherently wrong with employing third-party services to extend or increase the audience for your content, especially if that additional audience is human and comes from a legitimate marketing activity like sponsored posts or content recommendation services.
However, some vendors who offer additional traffic can’t deliver human eyes. Instead, the impressions they deliver are from bots. It’s this kind of invalid traffic that can leave publishers in hot water with advertisers and the authorities. Thoroughly vetting traffic vendors is the best way to avoid paying for fake views or even inadvertently charging for them.
Employ a verification solution
Verification isn’t just for the buy-side. Advertisers employ verification solutions to identify, and in some cases block ads from serving on invalid or non-human impressions. For publishers inadvertently receiving fake traffic. this can be a headache requiring refunds or campaign extensions to meet impression goals with legitimate traffic. However, verification cuts both ways and ad fraud detection solutions can help publishers to clean up their inventory and supply chain.
Additionally, publishers can use verification technology to detect fraud on their own sites and pages. Verification technology can help publishers with vet traffic vendors and ensure that none of the traffic they’re serving to advertisers is invalid. Sell-side verification technology gives publishers greater transparency into the quality of their inventory allowing them to make more accurate projections of its value.
Sell-side verification solutions have been available to for over a decade. They allow publishers to assess their inventory and identify potential invalid traffic before exposing it to ad impressions. However, the process of cleaning up that inventory can be time-consuming and costly.
Automated optimization gives publishers a way to remove fraud from their deliverable ad inventory. Optimization solutions integrate directly into publisher ad servers which allow them to redirect fraudulent audiences to house ads. This prevents bots from collecting cookies and carrying them to other websites and provides an added layer of protection against inadvertent fraudulent traffic from unscrupulous vendors.
The focus on fraud isn’t likely to let up anytime soon. While publishers may feel some added pressure to deliver fraud-free impressions, this also represents a huge opportunity for premium publishers to capitalize on quality inventory. By taking a few simple steps to ensure that your inventory, as well as your traffic generation solutions, are safe and fraud-free publishers have the potential to score ad revenue worthy of their quality inventory.
In lieu of Facebook’s reputation struggles, as well as changes to their Newsfeed, many publishers are considering YouTube for both inventory and audience development.
However, YouTube has problems of its own – namely, brand safety. According to a brand-new study by Oath and Advertiser Perceptions, polling more than 300 advertisers, 42% say user-generated content sites like YouTube aren’t addressing their concerns over brand safety. This study comes just a month after Cisco pulled all ads from the video platform. Per Cisco’s CMO Karen Walker, in her original blog post (the piece was later edited to remove mention of YouTube), “We have pulled all online advertising from YouTube until the platform has met our standards.”
As digital video consumption rises, publishers see YouTube as an obvious opportunity. Marketers do, too – but they’re also growing increasingly weary of brand reputation across the platform. In looking at our own data at MediaRadar, the numbers bear that out. Across a sample of 70 top YouTube channel pages, advertising spend has been flat in 2018, with only an 0.2% increase YTD. Publishers and marketers alike both want to tap into YouTube’s exploding audience (nearly 1.6 billion watch YouTube content at least once a month right now). But for this to be a go-to platform, there’s work to be done.
To YouTube’s credit, they’re taking on the work. At the company’s NewFront, YouTube talked up its newly expanded Google Preferred lineup, emphasizing its top channels as premium, brand-safe environments. They also touted the increase in human reviewers auditing content. However, as the Oath study shows us, the effort to resolve brand safety and win back trust from now burned and cautious brands will be slow-burn and long-term.
As that process continues, high-quality digital publishers are in a good position either way. While YouTube addresses trust, more marketers will flock to the service. This, in turn, could boost revenue opportunities for the publishers that want to play in that sandbox.
In the interim, however, digital publishers are still the beneficiaries. The Oath report also found that 45% of advertisers are moving spend to “well-regarded premium” digital publishers — think sites like USA Today, BuzzFeed, The Huffington Post, and The New York Times — until they feel standards have improved on social platforms like YouTube. It’s a win-win for publishers, with brand safety a key theme both now and in the future.
It used to be a given that advertising was the major driving force in media business models—from TV ads to sponsored content online. But two big factors have scrambled that equation: 1) data and brand safety scandals at Facebook and YouTube as the EU pushes stronger data rules; and 2) the rise of streaming content as cable-cutters and cable-nevers soar.
More and more, consumers are paying for premium content without advertising. This includes streaming services such as Spotify, Netflix and HBO. Even Facebook researching a new subscription-based, ad-free version as privacy concerns mount. As the upfronts take place this week, a new reality is setting in for TV networks as Magna projects a 2% decline in national TV ad sales each year through 2022.
For publishers, this means giving much more serious consideration of ways to offer consumers a user-friendly, ad-free environment. It’s also time for serious reckoning of what content will succeed with a subscription.
Incumbency and Monthly Rates
Make no mistake about it: The popularity of non-cable, commercial-free shows, and their seemingly indispensable association from today’s cultural conversation, means that TV — if we are still choosing to call this TV — no longer rots your brain. Rather, HBO, Netflix, Hulu, Amazon, and other such services are, arguably, as good for you as the best journalistic enterprise. And that means that for many people, a monthly fee is worth it. The result is a profitable business enterprise.
But these networks have their own strategies and identities behind those business models. HBO has long been established as a premium cable network, and that incumbency has given the network a leg up. Subscribers who pay for HBO are probably likely to leave it on in the background after they finish watching their favorite show because they know they’re paying for high-quality content. Netflix also has a comparable consumer base. However, the typical Netflix consumer’s watch-and-go mentality means the network has to keep churning out new content.
Still, the high growth rate for both networks means their consumer base hasn’t even peaked yet. As cable continues to decline, both HBO and Netflix will have to remain nimble. But a loyal fan base willing to continue to pay will certainly help sow the seeds for more good shows to sprout.
AMC Networks Offers Multiple Options
In comparison, with fewer younger audiences and diminishing returns on network advertising, more traditional broadcast and cable networks must balance out their options. Take AMC Networks: Two-thirds of its revenue comes from distribution fees and sales of content to streaming and pay services, while one-third of that revenue pie comes from advertising. While its first quarter earnings set records, ad revenues were down 9%, distribution revenue increased 11%, including to networks like YouTube TV and Acorn TV.
AMC Networks CEO Josh Sapan anticipates this revenue pie will continue to adjust as trends change. “We will probably see that accelerate toward the non-ad-supported pieces over time,” he told Deadline’s Dade Hayes.
Indeed, the network has already invested in non-ad-supported options like a premium subscription service. So, the same time AMC is continuing to make itself a quality destination for advertisers, it’s also planning for a future where advertising will play a diminished role. And its recent boffo first-quarter financial results suggest it may be on the right track.
Europe’s Privacy Laws Shift U.S. Ads
It’s not just that publishers are working against changing consumer preferences. The EU’s General Data Protection Regulation (GDPR), set to be enforced starting on May 25, will also shift the scales on data gathering and consent. Companies will have to be much more transparent about the data that they are collecting about users. Consumers in the European Union will also be able to access what data is stored about them and have the right to correct that data — regardless if that data is processed in or outside of the EU.
In March, Drawbridge, an ad-tech company that tracks users across devices, said it would wind down its advertising business in the EU because it’s unclear how the digital ad industry would ensure consumer consent. Acxiom, a data broker that provides information on more than 700 million people culled from voter records, purchasing behavior, vehicle registration, and other sources, is revising its online portals in the U.S. and Europe where consumers can see what information Acxiom has about them.
How Many Publishers Can Charge?
While ad-free environments are gaining steam, and more publishers are selling subscriptions in exchange for premium ad-free services to those with ad blockers, there are still only so many subscriptions that consumers can buy before getting overloaded. Om Malik argues that publishers will have to stop drinking their own Kool-Aid and eventually reckon with the fact that few among them will be able to fully capitalize on the subscription craze.
More likely, as ad-free environments proliferate, publishers will have to consider them as part of the mix, especially with the loss of advertising to the duopoly and data security. While not every publisher can simply put up a paywall and watch the money roll in, every publisher can consider just what they can charge for, and what their audience really values.
While the digital publishing world seems enamored with direct reader revenue lately, here’s a quick reminder that it is difficult to ask people to pay for something that used to be free. And there are a lot of decisions that go into setting up a successful program such as determining the threshold for a free article limit, deciding on a call-to-action, and identifying the right people at the right time.
We wanted to understand the existing subscription model landscape, so we analyzed 1,870 domains in the Parse.ly network. Just under one third (29%) use some type of paywall. The majority of those use some type of membership paywall or a metered/partial paywall. And barely 2% of our entire network deploy a full paywall.
If you’re considering moving from that 71% group into the reader revenue group, you probably have a number of questions, starting with: is this the right move? Other big things to consider include: Who should be seeing your call to action? And what’s the ideal “free article” limit?
Parse.ly’s Head of Audience Development Solutions, Kelsey Arendt, encourages clients to find the answers in data for these three questions when evaluating which paywall method makes the most sense for your site.
What subset of my audience are “super-users”?
Super-users are your most consistent and reliable audience. They appreciate your content and they trust you. That makes the valuable as a target group for a paywall call-to-action and as an exclusive audience for premium advertising partners or for VIP offers.
Selecting the right paywall method hinges on an understanding of audience loyalty distribution. To determine whether you have a sufficiently-monetizable subset of loyal superusers, ask yourself:
How often do my visitors read?
How engaged are they each time they visit?
Reader frequency and article engagement help you decide what the cut-off for your call-to-action to subscribe should be, whether it’s a paywall after five free articles or 10.
To illustrate this, we took a look at a sample of aggregated data from the Parse.ly network. Seventy percent of the audience to these sites visit a single website four times or less per month. They also read less than 10 articles per month. Said another way, those readers would not be affected at all if a site implemented a metered-paywall with a limit of 10 free articles a month.
The promising opportunity lies with the other 30%. Take one of the smallest groups, the 3% of the audience who visit a single website nine times per month or more. This loyal group can, and should, be identified if they are the ones who are most likely to convert into subscribers.
Imagine a moment when you walk into your favorite store, the one you go to all the time and where they know you. If someone tells you that they have something special for you, you tend to trust them and consider their offer. Audiences that have made it to that “circle of trust” for your site, might be more receptive to the idea of a paid membership model, thus increasing your chance of converting them.
What content belongs behind a paywall?
Another way of asking this question is: What content resonates with your super-users? To find out, consider the sections or topics your most loyal audience already loves. Figure out what your most loyal audiences pay the most attention to and consider making one of your premium offerings.
Measuring total engaged time reveals the content that resonates the most with readers. Total engaged minutes encompasses both breadth and depth. The team at Slate focuses on engaged time for exactly this reason.
Am I adding value for my readers?
While you have to examine the data behind the potential audience and what they’re most interested in, you should also ask yourself what else you can offer them.
The reason why readers subscribe will always come down to your unique voice and your brand. But as much as people like your content, they also value their time. So, any moment with them must either add value to their life or come at the right time.
There are so many ways to add value to a membership or subscription model. A few that have been explored: exclusive benefits, an ad-free experience, discounted events, direct input into editorial, or VIP access. But don’t limit yourself to what you’ve seen. Maybe your audience would sign up in exchange for a book of coupons to local stores or for an exclusive app download that made them more efficient with their time.
Ask not what your readers can do for you—ask what you can do for your readers.
Paywalls: Not always the perfect solution
At the end of the day, if you want your readers to pay attention to your work, you need to pay attention to their needs and interests. Data can help you understand whether a subscription model might work, and how to get your subscription offer in front of the right people at the right time.
And what if the data shows that paywalls don’t make sense? Paywalls, meters, and memberships are just a few methods of monetization. Even if you can successfully monetize that 3% of super-users, you’ll still need to explore other revenue options.
The other 97% of your audience can still help you generate other types of revenue, like native advertising, merchandise, or advertising. And of course, data can help you find opportunities for those options too.
To many, it would seem that Jarrod Dicker had a dream job runningtheinnovationteam at The Washington Post. He led one of the most experimental journalism shops in the country with the backing of Amazon founder and CEO Jeff Bezos. While Dicker recognized his good fortune, he also saw room for something more – something you might not even find at one of the most progressive publications around. He saw a hole that needed to be filled and that maybe the blockchain would be the right fit.
That’s why last February, Dicker quit his job at the Post tobecometheCEOofPo.et, a publishing blockchain startup. It was a company offering a publishing model so fresh and compelling, Dicker simply couldn’t resist.
The attraction? A chance to create a way out of the revenue box the publishing industry is in.
Dicker had been working on building a new ad model at the Washington Post, but he recognized that approach would only get him so far. “What we were doing at Post was first step toward building new vision of the media industry,” he said. However, he knew it was going to be very hard for one publisher to change the revenue model for an entire industry.
Like many, he questioned whether it was possible to survive long-term with the current advertising model, particularly in a world of poor advertising experiences, where consumers increasingly opted to use ad blockers. Dicker thought that there had to be a better way – and that might just be the blockchain.
The blockchain may seem like a strange savior, but Dicker suggests we consider the full utility of an immutable, irrefutable record. If you could prove ownership and perhaps even truthfulness beyond a shadow of a doubt, maybe you could shift from the ad model to one where revenue comes directly from content consumers.
He says that Po.et is working today as a technology layer where creators can place ideas and, using programming hooks, build licensing and revenue models on the platform. “If someone created content, they can create proof of work and attribution and manage permissions all on the platform. Then they can share a public key and anyone can use it, or if it has value they can charge to unlock it,” he said.
The company started with a set of open source tools that publishers and individuals can tap into to build applications that take advantage of the platform. “If you are a publisher and your content goes through Po.et., you can define when and how to share your content based on rules and permissions. If the permissions rules are broken, there are indicators to warn you, and that brings smarter and more efficient ownership to this space,” he said. It also frees the content owner from using ads because the value is based on the content itself, rather than on an ad model.
The promise of this approach is a sophisticated licensing mechanism that takes something like CreativeCommons and allows content owners not just the ability to apply their license/sharing method of choice, but also a mechanism to enforce it. This enables Po.et to act as a marketplace where you can attach a license to your content that requires people to pay a fee to use it. Then the platform will handle the transaction for you based on the rules and permissions you have applied.
The whole idea is egalitarian in a sense. It puts the revenue power in the hands of the content owner or publishers. However, as we have seen in the last couple of years, that which is open and free is also subject to gross manipulation by people or nation states with an agenda. What’s to stop people from gaming the market?
Dicker sees the marketplace itself as the defense against such abuse. As such, he wants to avoid having some sort of formalized policing method. “Policing the platform is going against what’s happening with a decentralized [system] and blockchain. If people have to stake tokens, dollars and reputation, there is more value with this incentive,” he said. He believes this buy-in and the nature of the blockchain itself will help prevent any abuse of the platform. “That’s the beauty of the blockchain. Everything is on the ledger and everyone can see whatever is happening,” he said.
He still plans to find ways to keep the marketplace from getting polluted. “There will be ways to sift out content if marketplace isn’t sifting it out. But what we are working towards is something that can be leveraged by all and used by all, and that’s the core ethos of what we are trying to do.”
Poets on the blockchain
In fact, Po.et was so invested in the blockchain multi-owner vision they did a $10 millionInitialCoinOffering or ICO to sell tokens and raise money for their project. The idea behind the ICO was to get buy-in from a group of investors committed to the idea of building a decentralized marketplace for content owners and a more discoverable network not beholden to larger networks like Facebook or ad models.
Dicker says that people bought these tokens, not as an investment vehicle as you might think, but because they believe in the company. “Even though there is a token, it can’t be bought and sold. They hold that token because they believe in the mission,” he said. Dicker believes that kind of buy-in will help reinforce the underlying structure of the platform and make it more difficult for people to try and find ways to work around it.
“Everyone who has an idea should be able to control that idea. How do we make it simple to store that content and assign a set of permissions that define who can see it and who can’t.” Whether such at vision can thrive, even with the best of intentions remains to be seen. But Dicker sees a better way for the publishing industry on an open platform where the owner controls how the content gets shared and monetized – and where advertising no longer forms the primary basis of the revenue model.
Mobile is as personal as it gets. That’s why people feel annoyed when mobile ads delivered to their devices and apps are a mismatch with their desires and expectations. To cut out unwanted noise and shut out ads that deliver a poor user experience, consumers are reaching in record numbers to mobile ad-blocking technology. Unfortunately, bad ad experiences don’t only alienate and frustrate consumers; they also deprive publishers of an important chance to monetize their assets and audiences.
So, what is a bad ad experience? Unsurprisingly, ads that disrupt or distort content people are trying to read or enjoy lead the list of most “hated” annoyances, according to research from Nieman Norman Group. Pop-up ads, auto-playing video with sound, interstitial ads that must be viewed before content can be viewed, and postitial ads that obscure the content or just breaking the browsing flow are ad approaches and formats that people want to avoid.
Naturally, in the Age of Personalization—marked by milestone studies that reveal 78% of consumers said they would be happy to receive mobile advertising that is relevant to their interests—mobile ads that are out of sync with people’s interests and context are also a “fail.” However, this doesn’t appear to deter publishers and brand marketers from plowing huge amounts of money into mobile ads that people ignore.
It’s a dynamic that threatens to bankrupt the entire digital ecosystem. At one level, mobile ad spend is rising into the stratosphere. Research firm eMarketer reckons ad spend in the U.S. alone, which accounted for 66% of all digital ad spend in 2017, will increase to 72% (or $65.8 billion) in 2019. At the other end of the spectrum, the vast majority of brands and publishers are wasting budget ads that fail to inspire or influence consumer behavior.
New research based on internal data from Verve, a location-based mobile marketing platform that connects advertisers with consumers, puts this dangerous disconnect into perspective. Over half (56%) of respondents surveyed in the U.K. think most ads they see on their mobile phones are “boring or dull.” As a result, the average person in the U.K. ignores 7 mobile ads each day. When looking at the national population, this figure translates to a massive 20 million. “In their current state,” Verve reports, “mobile ads are not making the cut.”
Only one in ten respondents (11%) believed their mobile ads were genuinely helpful. This figure increased significantly with the quality of the mobile ad experience. While just 17% said they were “likely” or “very likely” to interact with a generic ad on their phones, over twice that number (38%) said they would do so it the ad was related to their interests or hobbie. And 34% said they would engage if the ad was related to where they were at that particular time.
Lack of relevancy is part of the problem, lack of imagination is the other. A 2017 survey of 100 advertisers and 1,000 consumers regarding their recent experiences and preferences toward mobile ads conducted by Forrester Consulting and commissioned by digital advertising creative management platform Celtra found that poor creatives may be at the core of bad ad experiences.
The study revealed that more than two-thirds of advertisers believe at least half of their mobile advertising budget is wasted, sunk into the development and deployment of mobile ads that can even harm their brand image. In fact, a whopping 73% of all mobile ads seen in a typical day fail to create a positive user experience. “The overall digital content experience is littered with creatively uninspired ads, irrelevant ads, and intrusive ads with slow load times,” the report states. “The consumer experience has gone terribly wrong.”
The solution is more engaging ad creatives. Companies that crack the code, using creatives that are more relevant and less disruptive are sure to see improved customer response rates and higher brand recognition, the report concludes. As Mihael Mikek, Celtra founder and CEO, put it in a press release at the time: “Smart advertisers have a significant market opportunity to drive high levels of customer engagement and sustained competitive advantage by leveraging strong creative in their mobile ad campaigns.”
Vendor spin aside, the data suggests positive mobile ad experiences promote positive consumer perceptions and influence actions. The findings also support my personal view that the ability to craft and evaluate effective mobile ad and in-app creatives is at the core of what marketers must learn and master to ensure their campaigns move the needle, not miss the mark.
Inspirational and Relatable
Effective marketers follow the data to determine what works. “But it’s not just about amassing Big Data,” Haydon Young, Director of User Acquisition at Dots, writes in an insightful post. “It’s about creating a Big Picture view of your users by blending what you know about them in the digital world of mobile and apps with what you observe about them in the “real world”.
He recalls how a re-think of ad creatives rocketed conversion rates for Covet Fashion – an app for fashionistas and the shopping obsessed. Observing shoppers in real-life, at malls and shops, helped his team architect an ad experience catered to its unique audience demographics (“moms, daughters, sisters, aunts, grandmothers, and everything in-between”). It allowed them to align with their aspirations (“a vast and diverse group of races and body types united by the singular desire to be a part of the fashion and beauty world”). Rather than use ad creatives that depicted super-models, he removed the faces altogether. This encouraged users to picture themselves in the clothes and look they wanted most. The creatives worked because they spoke to the audience ambition to be and look amazing.
The takeaway: Ad creatives succeed when they address audience demographics and desires and encourage people to unlock their real potential. It’s no coincidence that brand creatives “rooted in real life” are crushing it, according to the Global Marketing 2018 Trends study from Freedman International. From fashion brand ASO that refused to photoshop models in its ads to Fitbit that has switched from using professional athletes to showcasing average people working out, companies are winning audiences with imagery that portrays the real world as it really is.
Test for Success
Authenticity is a must across the entire ad experience. Be upfront about what your app offers and choose mobile ad creatives that are descriptive, not deceptive.
“The most important thing to do creatively [in the ad] is to show users what the experience is within the app,” observes Helene Trompeter, Media Manager at The Weather Company and a Mobile Hero recognized for her app marketing accomplishments. “Being straightforward and visualizing the benefit of your app capabilities [in the ad creative] almost always outperforms lifestyle imagery.”
Even the coolest creatives won’t appeal to everyone in your customer base. So, use data to develop effective segmentation and targeting strategies. “Ad copy and images may perform differently depending on user demographics, operating systems, and interests,” Trompeter explains. Choosing the right creative for the right audience is an ongoing task that requires the discipline to test and the courage to innovate. It can be a daunting task, but Trompeter tells me there are some shortcuts. Dynamic ads and creative templates can remove a lot of the heavy-lifting, making it easy for marketers to mix and match hundreds of creative variations to ensure mobile ads are fresh, relevant and engaging.
Trompeter achieves this by applying what she calls the “80/20 rule.” In practice, she runs “about 80% of budget toward historical performers and 20% toward testing.” It’s a smart approach that recognizes the hard truth about effective advertising. Marketers have to focus ad spend on what is proven to work. However, they also need to experiment with ideas and ad elements that take them outside their comfort zone.
Push the Boundaries
Meaningful and effective mobile ads follow the data and demographics to appeal to the target audience. But using the right ad format can also make a huge difference. Walter T. Geer III, VP and Creative Director at Verve, tells me new ad formats that build on existing ways people interact with the mobile Web and apps on their devices are boosting audience engagement. “Scroll, pinch, swipe—it’s all about delivering the best possible ad experience with ad formats that let consumers use their fingers and put them in control.”
The days of using the consumer’s mobile device as a “launching pad” for ads that disrupt and annoy are over, Geer says. “The future is about creating an opportunity that is cohesive to the device and using the data to ensure mobile ads deliver the right opportunity and one that is relevant to the individual.” This is also where ad formats that “augment and enhance user activities” play a major role, enabling a positive brand experience and driving closer customer connection.
A prime example is Canopy Onscroll, a new ad format developed by Verve that combines two engaging experiences into one without interrupting the consumer’s core app experience. Animation beyond the banner activates when scrolling. “It’s one of our highest engaging ad units and a great example of how giving users choices. In this case, showing subtle animation completely activated by scrolling—is capturing people’s attention with advertising that is effective, not intrusive.”
Effective and emotive mobile ad creatives are a huge departure from the annoying screen-takeovers and one-size-fits-all ad experiences that characterized the early days of digital marketing. Stronger creatives, real-life imagery, and innovative formats that push the envelope point the way to positive ad experiences that will engage, motivate, and activate consumers.
Particularly, people debated his proposition that marketers should “do their part to support” quality journalism. Ben Thompson called Rutenberg’s piece a “rather fanciful suggestion” because advertisers “are (rightly) motivated by what is best for their business.” Meanwhile, an anonymous ad buyer told Shareen Pathak at Digiday that it’s particularly difficult to “hold up products that people don’t want. I don’t see corporations getting into that business. And I don’t see my agency recommending they do.”
I’m sympathetic to the point that agencies and brands shouldn’t be responsible for providing philanthropic support of companies running for-profit news organizations. After all, there’s always the option to provide underwriting for non-profit news organizations if we’re talking about patronage. However, Rutenberg’s piece, and the discussion around it, moves us into potentially productive ground for the contemporary debate about a crisis of trust in news organizations.
Advertisers should care about the plight of for-profit journalism, but not for the sake of altruism. Instead, advertisers should be motivated by their own self-interest to push back against what they’re being sold—the clickbait headlines, incendiary pieces, and partisan chest-thumping that are perpetuated by business models not optimized for long-term vision, and the difficulty publishers have changing what they’re offering as long as they’re still finding ways to recalibrate the machine to bring decent profits in the door.
For-profit newsrooms have continued down these paths in the past few years because advertisers have been buying it, and many advertisers have continued buying it in part because it’s what publishers are hawking. Thus, it is indeed imperative for marketers to be at the table in this conversation about the current state of journalism, if we’re going to break such cycles.
In fact, I’d argue advertisers are currently in the business of frequently propping up broken media business models that aren’t operating in their brands’ self-interest. Changing contemporary advertising practices would be in the service of getting out of supporting bad for-profit journalism practices.
Marketers shouldn’t automatically trust that publishers are acting in the best interest of their own audiences or the long-term viability of their advertising products, since for-profit newsrooms are heavily driven by monthly and quarterly profit goals, and the tactics that can reliably can reach them.
It’s up to brands and their agencies to think carefully about whether the ad units available to them might negatively impact trust in their brands over time, or else how engaging in advertising offerings only hastily strategized by their publishers might diminish the effectiveness of those products over the long term.
Wrestling with Metrics
And that gets us to the need for marketers to recognize the digital publishing industry’s brand of “kayfabe.” In pro wrestling circles, kayfabe refers to all efforts meant to preserve the fiction of the industry—a collective con over the “marks” they sell their performance to. For digital publishers living off venture capital, this is the sort of “investor storytime” Ethan Zuckerman writes about—creating the best story for getting continued investment.
The kayfabe aimed at marketers comes in the form of creating the best possible amalgamation of numbers to emphasize their reach and sell the ad units easiest to monetize. It might include uniques or clicks without getting into specifics about bounce rates. It might include emphasizing video views on social channels while steering clear of video completion rates. It might include packaged traffic numbers that includes ad inventory the brand sells for a network of otherwise unaffiliated publications.
Of course, marketing and communications departments are sometimes complicit in the lies the metrics tell, too. Like the professional wrestling fans who are actually not marks but are instead “in on the con,” ad buyers, agencies, and brand managers are sometimes playing their part to maintain kayfabe as well. It’s easy to accept numbers which—internally—will impress the rest of corporate leadership, shareholders, and others, ensuring that marketing is considered as certain a bet for investment as other corporate functions—no matter how connected to reality they might be.
Responses to Rutenberg’s piece last year pointed out that the ethical duty of marketing professionals lie with making the best investment possible for the organizations whose budgets they oversee. That should involve a healthier skepticism than ever in what’s being sold, and it should also account for a negative calculation in the ROI: the risk that certain ad products/buys might have the effect of slightly eroding the reputation and trust accrued by the brand over time. The efficacy and economy of advertising opportunities on offer sometimes appear appealing only because no room is given in the model for the negative effects they might have.
The unsettling truth is that for-profit digital newsrooms, in many cases, have the same basic business model as partisan commentary sites and fake news publications. And, in that case, journalistic ethics and process just become “cost centers,” because the ad units they sell and the way that they sell them don’t make any use of the premium the publisher’s reputation should afford. In the process, it means they are focusing on business models that are further damaging the trust between publisher and audience.
Marketers who haven’t revisited their approach shouldn’t change their ad-buying practices because of altruism. They should change their practices because what they’re currently doing isn’t sound business.
Sam Ford is a media consultant and research affiliate with MIT Comparative Media Studies/Writing, based in Bowling Green, Ky. He is also a Knight News Innovation Fellow with Columbia University’s Tow Center for Digital Journalism and an instructor in the Popular Culture Studies Program at Western Kentucky University. Follow him on Twitter @Sam_Ford.
“More than $1m lost in revenue due to domain spoofing,” “FT warns advertisers after discovering high levels of domain spoofing,” “Domain spoofing remains a huge threat to programmatic.” These are just a handful of the dire headlines you’ve probably seen scrolling through your feed in the past year blaring warnings about the rising threat of an insidious form of ad fraud called domain spoofing. If, after reading a few of these, you’re tempted to hide under your desk, we won’t blame you. After all, most outlets focus on the massive costs and increasingly common occurrence of domain spoofing without really unpacking what it is, how it’s accomplished, and how it can be addressed.
The simple definition of domain spoofing, “a practice through which fraudsters pass off low quality inventory as a high-quality or premium site” is a useful crutch for explaining the basic concept, but it doesn’t really explain the method. Domain spoofing isn’t monolithic. This type of fraud actually falls into four main categories, two of which are fairly simple and two of which that are more sophisticated. Let’s break it down:
Simple Domain Spoofing
1. URL Substitution
How it works: The simplest form of domain spoofing is also the easiest to detect. Fraudsters deceive the advertisers at bid time by substituting a fake URL through the exchange or ad network that’s hosting the auction. In this instance, fraudsters aren’t actually doing much to cover their tracks. The ad is going to serve on a different site than the one you bid on.
How to stop it: Fraudsters engaged in this form of domain spoofing are relying on advertisers not to check their work. Reconciling bids with reported impressions will quickly reveal discrepancies. However, for high volume advertisers, that kind of manual reconciliation can’t always happen efficiently. By sharing data with a third-party verification service such as IAS it is possible to detect ads running on any unapproved URLs which will reliably detect and report this type of spoofing.
2. Cross-domain embedding
How it works: Fraudsters pair together two sites, one with high traffic and low quality content and another with low traffic and totally safe content. Using a custom IFrame they are able to open an ad-sized version of the safe site within the unsafe site, exposing the ad to that site’s higher traffic volume. This tactic is favored by publishers who own sites containing unfavorable material like pornography, fake news, or hate speech communities, all of which can attract large amounts of traffic but are difficult to monetize with traditional brands. Operators either partner with low-traffic sites in a profit sharing arrangement or simply operate the low-traffic site themselves as a front.
How to stop it: Unfortunately, manual reconciliation isn’t likely to catch this type of spoofing since the ad is actually being served to a safe site which is then being opened within an unsafe environment. However, a third-party verification partner can tell where the user’s browser actually is and compare that URL to the URL to which the ad was served, thus identifying this type of spoofing.
Complex Domain Spoofing
1. Custom Browsers
How it works: Using a custom browser, bots can visit any site on the internet, including sites that aren’t reachable using commercial browsers. These bots can make the URL of the site that a user is visiting appear to be a different, seemingly premium site. So when an ad reads the URL from the browser it will be served on, it reports back the spoofed URL.
How to stop it: The flexibility of these bot driven custom browsers provides the foundation for their undoing. For example, IAS verification and measurement solutions can single out and block this type of activity with our browser and device matching technology which helps us to identify non-human browsers.
2. Human browsers
How it works: This type of domain spoofing is similar to common forms of adware. When a human browser visits a premium site on an infected machine, malware will inject an ad inside the page. Operators of premium sites aren’t paid for these injected ads. Instead, fraudsters collect the revenue.
How to stop it: This type of fraud is difficult to detect on the page. Currently, solutions like ads.txt can provide some relief by offering greater control over the way ads are transacted upon and exchanged. However, because these browsers are able to visit normally non-dibrowsable sites it’s possible to detect this type of activity by looking for reported URLs that match sites that a human browser could not visit.
Domain spoofing presents a unique challenge for the buy and sell-side alike. Whether it’s committed through simple dishonesty at the bid level or through more complex means involving malware, the cost in both industry trust and advertising dollars – equal to nearly $16.4 billion in 2017 – is significant. Verification technology can help to eliminate or mitigate these executions of domain spoofing, but the underlying cause also needs to be addressed.
The fundamental challenge of domain spoofing is that individuals are able to offer inventory to which they have no right. The practice of reselling vastly expands the lists of individuals approved to trade the impressions of premium brands making it easier to obscure this type of fraud. As we continue to mitigate this type of fraud at the technical level there is also a need for greater controls at the market level to put a stop to these transactions on a more permanent basis.
People ask me why I think the “duopoly” conversation resonated so profoundly when DCN began to use the term in 2015. I think it’s because publishers had long-sensed something was wrong with the widely proliferated and utterly misleading growth stats of digital advertising. They were ready for someone to call b.s. and start open conversations about it because many weren’t seeing the purported “growth.”
I’ve been told that executives at Google and Facebook dismiss the term duopoly as a marketing gimmick invented by publishers to go after the two companies. They are dead wrong. This discussion didn’t surface in some public relations brainstorming meeting. Sure, it’s useful if you can describe an entire marketplace in one word. But at the end of the day, the duopoly label resulted from simple number crunching, the results of which challenged conventional wisdom on who was actually benefiting from the growth in digital advertising. Perhaps now is a good time to dig deeper and take a closer look at some Google math.
Google’s battle with transparency
A whopping 50% of the US Digital Advertising Market is recorded as a single line in Google’s financials, deftly titled “Google Properties Revenues.” This single line includes advertising on Google Search, YouTube, Gmail, Google Shopping and more and will surpass $100 billion this year – a number larger than the entire US digital advertising market. Let that sink in for a moment and then consider the fact that we hardly know anything else about it.
While fledging and century-old publishers live and die in the millions of revenues, Google doesn’t even specifically disclose revenues for its flagship growth site, YouTube. Their video business, which seeks to compete with broadcast television, is widely estimated to have revenues approaching $10 billion — a number larger than more than half of the companies in the S&P 500. Last week Bloomberg reported that the SEC had taken issue with Google’s lack of transparency but was sent packing after Google made the astounding claim that YouTube revenues aren’t important enough to hit their CEO’s desk. Say what now?
There is also near zero transparency in how this revenue is shared with the ecosystem. In the case of major cable companies, we know very clearly how much they pay each year, measured in the tens of billions, to the programmers who create valued news and entertainment for their services. This is helpful information, and revenue. Transparency is a hallmark of a healthy ecosystem. On the other hand, we have no idea how much Google spends on news and entertainment because they bury this programming expense in multiple places. In terms of YouTube, we’re left to run our own analysis and we only know the members of DCN see less than $100 million of the billions that YouTube is raking in.
Where have all the billions gone?
We also know that Google is using billions in cash to shore up its monopolies. Google invests heavily to secure the default position over any browser that competes with its “free” web browser, Chrome, including Apple Safari and Mozilla Firefox. It subsidizes its lock on a majority of mobile devices through its “free” operating system, Android. We also know that billions go toward populating the long-tail of the web with Google’s AdSense text links. Once again, all of this undisclosed money is lumped together and buried in a few lines of Google’s financials. This leaves everyone in the dark while making it easy for Google to spin its way around those who question it – in Washington and in the press.
Heck, we even learned that Google pays off ad blockers to whitelist its own ads. But once again: We don’t know how much. This is a distasteful situation considering the leadership position Google has chosen in the future of solutions for ad blocking. Google is literally blocking publishers’ ads while paying an undisclosed amount to have its own ads whitelisted. Say what now?
Numbers don’t lie. The simple, irrefutable (and unacceptable) fact is that the digital advertising landscape is more lopsided in favor of two companies than we’ve seen in any previous media market. This is especially striking when you recognize that neither of these companies contributes directly to the creation of the news and entertainment they so richly capitalize upon. They profit solely by directing and mining attention across the valuable assets others create. Please note I haven’t used the term Alphabet once here. To publishers, their layered corporate structure isn’t anything more than Google fighting tooth and nail to avoid disclosures. If Google and Facebook want to be seen as benefactors to the media world — or better yet, become honest, trustworthy partners in it — they’re going to need to provide a level of transparency that they’ve quite clearly avoided.
Recent research from DCN shows that major tech platforms have brought very little in the way of revenues to publishers. Distributed content from Google and Facebook only amounts to five percent of the total average digital revenue for publishers. So how can the platforms turn that around and improve on those numbers? By helping drive subscriptions and conversions for paid products.
Last June, I called out Facebook and Google on this very point. Driving subscriptions would be a win for publishers who need more revenues, and for the tech platforms which need a way to build trust, support the news ecosystem and generate positive press in these times of bots, misinformation and election meddling.
The good news is that both Facebook and Google are now taking clear steps to help drive subscriptions for publishers. Facebook will take a 0% cut on subscriptions they drive through their app on Android and Apple devices, while launching a new Local News Subscription Accelerator. And Google has upped the ante with plans to help publishers identify potential subscribers by sharing more data. The bad news is that there is a long road ahead to making these initiatives work.
Facebook Makes Peace with Apple, Launches Accelerator
Facebook’s News Feed tweaks — most recently, to downgrade publishers’ posts in favor of content from friends and family — have long influenced the kinds of stories Facebook users see. Because people are used to the free-flowing nature of news in the Facebook News Feed, the social giant had been loath to introduce friction.
But after mounting criticism, Facebook has been developing ways to drive subscriptions from its app. And best of all, its support for paywalls will not include taking a cut of revenues from publishers. Instead, Facebook will show users five free articles and then direct them to the paywall on the publishers’ site. That means 100% of subscription revenue goes to publishers – and they get to keep all the data about users as well.
It wasn’t an easy task to pull off on iOS, because Apple is notoriously stubborn about waiving the 30% “Apple tax” it takes from any monetary transactions in apps. But after some tough-knuckled negotiation, Facebook’s Campbell Brown announced at the Code Media confab that Apple caved in and would waive the fee.
Not only that, but Facebook also recently announced a Local News Subscription Accelerator with 12 metro dailies getting training support for a three-month trial. It’s nice that the social giant is putting $3 million into the effort, and partnering with the Lenfest Institute. The big question is whether that work will scale to help more publishers.
Google Leading the Way So Far
While Facebook has made a lot of progress lately, Google, in comparison, has been more consistently friendly to publishers: At the recent Digital News Initiative summit in Amsterdam, for example, Google announced it would help identify which kinds of users would be attracted to which publications. The company also said it would ease the process of subscribing within Google. It also plans offer users a tailored search experience based on their subscriptions. This push to support subscriptions is one that Google has been working on for over a year. At the International Paid Content Summit in Berlin, publishers also touted Google’s efforts in distributing digital subscriptions. A survey among summit participants revealed Google shows much more “cooperative behavior” than Facebook.
Google also recently surpassed Facebook as the internet’s top referral source for publishers, a status that takes on significance for both Google and publishers given Facebook’s decision to de-emphasize news. A friendlier Google in the midst of News Feed shifts can help offset what publishers might lose with Facebook’s algorithmic changes. Coupled with access to Google’s coveted data insights — which publishers want and Google controls — working the publisher-Google relationship is indeed enticing for both parties. If Google wants to win favor with publishers, now is as good a time as ever.
Sharing the Wealth
Ultimately, though, whether Google or Facebook will do better in driving subscriptions is not as important for publishers as whether the two will really commit to the process. Because Facebook and Google together account for such a huge chunk of the attention for internet users, publishers must stay focused on working with both of them, along with other players like Twitter, Snapchat and LinkedIn.
It’s surely a positive that both Facebook and Google are taking big steps in driving subscriptions, and perhaps their rivalry could help push them even more. And while they surely dominate in online advertising, it’s incumbent upon them to make sure the news ecosystem is healthy and thriving. If digital ads are getting sucked up by the duopoly and subscriptions are becoming an important source of revenues for publishers (both for-profit and non-profit), then publishers will need to insist on better data, better leads, and a transparent funnel that helps them survive and thrive.
Publishers are rethinking their editorial practices and diversifying revenue streams to become less dependent on advertising or foundation funding. They (especially digitally native publishers) are implementing mixed revenue approaches, which include advertising, corporate underwriting, foundation funding, article syndication, events, affiliate programs, merchandise, and book sales revenue. The newly released report, Guide to Audience Revenue and Engagement from the Tow Center for Digital Journalism, provides insights on strategies for building audience revenue and engagement.
To win a share of consumers’ valuable attention and money, paid news products (whether supported thorough subscriptions or member donations) must be vital to the subscriber. They must also clearly represent an editorial mandate they support.
The Tow Center identifies key strategies to support the develop of direct audience revenue:
Offer a unique perspective as a publisher. Readers become members when they want to be part of a unique community and access a valued news brand.
Clearly express your mission to accurately reflect the values you provide the world and your member community.
Identify activities and programs that are interesting, valuable and useful to retain members
Develop a strong editorial engagement with readers.
Build and monitor the steps in the audience revenue program conversion approach: research, expose and attract, engage and deepen, convert, and sustain.
Research (to learn about prospective member needs)
User experience research
Segmentation: reach different audience groups strategically
Expose and attract:
Increasing reach through social media
Increasing reach through in-person community events and conferences
Engage and deepen:
Article pages and site structure
Using events to engage readers
Managing data infrastructure
User data effectiveness
Giving and asking frequency
Recognizing and thanking members
Engaging and sustaining members
Engage your audience through your journalism, face-to-face interactions, product design and email newsletters. Each is a great way to build a loyal and engaged audience.
Importantly, when developing editorial products, it’s important to ask what do people want (desirability), can we make what they want (feasibility), and can we make what they want successfully (viability).
Further, developing audience segments based on user research and site analytics is important in understanding the different reader experiences. It’s critical to maximize the individual user segment experiences to ensure each is fully engaged.
Overall, online news consumers aren’t used to paying to support publishers. However, this transition is evolving. That’s why it’s important to establish a series of interactions to engage individuals to help shift the occasional reader into a paying supporter.
Digital Content Next (DCN) recently released findings from its second annual DCN Distributed Content Revenue Benchmark Report. The research, written about here and here, provides marketplace intelligence on distributed content strategies and the challenges confronting publishers when working with third-party platforms like Facebook, Twitter, Snapchat, YouTube, and others. The report confirms that despite the constant changes in distributed content policies and business practices, little has changed for publishers in the last 12 months.
Facebook and Google generate the most distributed-content revenue for publishers outside of Over-the-Top (OTT). However, together they account for less than 30% of the total distributed content revenue and represent only 5% of the total average digital revenue for publishers. Overall revenues from distributed content grew from 14% in last year’s report and now represent 16% of the surveyed publishers’ digital revenues.
Additional Key Findings
Monetization of distributed content for H2 2016 and H1 2017 represented an estimated $10.1 million and $10 million average revenue. For companies providing data for both H1 2016 (last year’s report) and H1 2017 for this report, distributed content revenue grew by an estimated 37% year-over-year.
Video, consistent with last year, represents 85% of the total, $8.3 million in 1H 2017, driven by TV/cable companies’ OTT monetization. The remaining 15% cuts across social media, Google AMP and syndication.
Facebook generated the most revenue for publishers, capturing $1.3 million (50% of social platform revenue) in H2 2016 and $1.5 million (59% of social platform revenue) in H1 2017.
Out of the specific third-party platforms tracked, publishers are active on Facebook, Twitter, YouTube and Instagram. However, for monetization purposes, publishers are still most active on Facebook and YouTube.
Despite the challenges, DCN found that publishers remain active across a range of channels distributing and monetizing content off their sites at levels relatively consistent with last year’s findings. Still, publishers remain cautious about increasing staffing for distributed content monetization.
1. Concentrate negotiation at the executive level of your company management; do not leave negotiations to lower-level management and/or individual brands or businesses.
2. Focus on products that leverage your core business, are replicable, get new money, and have the potential to scale.
3. Negotiate for business requirements that support scaling in partnership agreements:
ad server integration;
third-party measurement integration;
management reports (e.g. roll-ups by publisher and/or marketer);
and-data for advertising and subscription monetization.
4. Test and measure content consumption and monetization through both advertising and subscription on third-party platforms and compare results to on-site metrics to inform monetization strategies.
5. Centralize responsibilities or use active cross-functional teams for managing third-party partnerships.
Advertising is the most common form of monetization of content distributed on third-party platforms, with more than 85% of total average revenue sold directly by publishers. While distributed content remains an essential part of publishers’ strategic plans, the revenues earned do not match publishers’ investment. Importantly, publishers will continue to participate and test to find the best value and revenue model for their premium content.