Login
close
Login is restricted to DCN Publisher Members. If you are a DCN Member and don't have an account, register here.
Search

Digital Content Next logo

Menu

Tags containing: "programmatic"

Advertising | Perspectives

What will it take to wake digital advertising’s sleeping giants?

“How did you go bankrupt?” Bill asked.

“Two ways,” Mike said. “Gradually and then suddenly.”

Digital media veterans may find solace in this passage from Hemingway’s 1926 novel The Sun Also Rises.

“Gradually” could best describe the glacial change to the mobile web we witnessed from 2000 through 2007. But then Steve Jobs introduced the iPhone and “suddenly” we couldn’t move fast enough to keep up with consumers.

In every case of digital transformation, there have been “Sleeping Giants” offering premature and often prescient hints that turn into rapid change seemingly overnight. This acceleration is normally brought on by a significant tipping point whether it be a disruptive technology, competitive move, or a provocative press headline.

In digital advertising, Marc Pritchard’s January speech demanding independent accountability didn’t really cover new ground. His points were issues that the industry had discussed many times over the previous years. But it certainly mattered when Pritchard said it (and the press covered it). At that moment, in that room, in his voice, to that audience, to the IAB he said: “The days of giving digital a pass are over.” He urged the rest of the ad industry to follow P&G’s lead. “It’s time to grow up. It’s time for action.”

By virtue of the ad dollars he controls, Pritchard is a giant in the industry. While the issues he called out are far from new—particularly to a savvy industry vet like him—the very fact that he so directly addressed them shook the industry.

However, despite his call to arms, alarm bells continue to sound. Just this past Monday, Digiday reported that up to 80% of Facebook’s video advertisements weren’t viewable. We first heard this more than a year ago. Facebook tried to fend off the whispers for as long as it could —going so far as to state last year, “we have our own measurement and how we measure.” Yet these whispers have risen to a general outcry. And independent measurement coupled with industry press will carry the message far and wide.

Many have called out issues of brand safety over the years, including the more recent renegade Sleeping Giants Twitter account. However, the March headlines out of the UK that reported on extremist content on YouTube changed things overnight. Major advertisers pulled their campaigns. UK and French governments surfaced regulation discussion. Chase Bank began individually whitelisting the sites where its ads could appear. Premium publishers have long highlighted the brand halo that respected content confers on the ads that surround it. But this chorus of major advertisers decrying the effect of negative contexts triggered a precipitous escalation of the issue.

DCN has led the “Duopoly” discussion since 2016 regarding the lopsided competitive environment with Facebook and Google. But it was Margrethe Vestager’s $2.7 Billion decision out of the EU that will drive Google to change its business behavior going forward. (Side note: Read this and be highly skeptical of the motivations of anyone who argues this decision is EU “protectionism.”)

But there is a much larger sleeping giant about to rise and roar.

DCN and its counterpart organization for the marketers, ANA, have been systematically documenting the issues of building a quality advertising supply chain over the past three years. We started with the shift to viewable impressions. Both organizations have intensely studied invalid traffic and bot fraud across the web. The ANA also recently studied financial transparency and the economics of the ad tech tax. And comScore studied the value of environment and, in turn, brand safety.

But documenting the problem does not go nearly far enough. So DCN’s board bravely accepted ANA’s challenge and, in Sept 2016 began to build out a premium digital marketplace called TrustX.

We set out to answer to these demands:

  • 100% premium publisher inventory in an open RTB private marketplace. Check.
  • 100% human and viewable ad supply, or advertisers don’t pay. Check.
  • 100% priority on brand safety and campaign efficacy. Check.
  • 100% trading transparency down to the publisher URL. Check.
  • 100% financial transparency from bid to delivery, reporting and billing. Check.

If you do the math, digital advertisers are wasting away more than $10 million per day on overpaying for a murky digital advertising supply chain. I can’t imagine this sort of waste is escaping a CFO or CEO these days. And let’s not forget the ripple effect caused by their dollars and brands being associated with criminal ad fraud or extremist material on predominantly user-generated content experiences like Facebook and YouTube. It is clear that the market demands a solution to these problems—one with scale, simplicity, efficiency, and accountability.

On behalf of the premium publishers, we have stepped up and built it: TrustX. I’ve been informed by the TrustX management team that nearly every major agency and brand is leaning into TrustX as exactly what our market needs.

So, the only remaining question is who are the Sleeping Giants that will ensure that digital advertising grows up – not gradually but now, suddenly ?  Which advertisers and partner agencies will take a stand at scale making the true economic commitments necessary to drive the transparency and accountability priorities that TrustX represents and the industry needs?

Perspectives

Direct buys and non-blind programmatic need context to solve brand safety

The dust has largely settled after March’s brand safety scandal – however the problem hasn’t gone away. Although some brands are reported to have returned to Google advertising by May, others – including Pepsi, Tesco, and Marks & Spencer – were still waiting for solid guarantees from Google over and above what has already been promised.

The changes Google says it has already taken to improve brand safety haven’t been bedded in, aren’t sufficient for some brands, and still lack a vital component – third party verification. Google has promised to deliver such verification in the future, but before it’s implemented, marketers refusing to risk their brand reputation are opting for ad providers who can make promises on where their ads will appear as well as delivering third party verified monitoring and reporting on where ad creative actually did appear.

Third party monitoring, reporting and verification is imperative, of course, but it can really only help brands, publishers and ad tech companies to react to any concerning ad placement. Many brands would prefer a zero tolerance for any ad misplacement rather than an acceptance that misplacement will happen from time to time. Those marketers are likely to be the ones who focus their ad buying and planning on ad campaigns bought directly from ad inventory providers or, at very least, non-blind programmatic ad campaigns.

An incredibly insightful analysis by MediaPost’s Sean Hargrave identified this very issue. He suggested a correlation between the mere one in four media buyers who feel informed of their ad suppliers’ brand safety measures and the 28% who say they know where all their ads are going. He recognized quite reasonably that these buyers most likely focus on direct, non-blind programmatic buys. That means that they receive assurances of the quality of the ads. However, lumping blame on the blind buys alone fails to consider how some of the most sophisticated targeting technologies are the contemporary causes of even more catastrophically compromised ad placement.

Consider the Context

In fact, a Financial Times’ report on the aftermath of the scandal serves as a perfect case study. Their journalists’ research identified ads for Huawei, wix and even the Advertising Week Europe event displayed before a YouTube video from a UK-banned preacher. My strong hunch is that the European technology correspondent was researching those brands online for that article, other articles or other valid reasons, and the ads were behaviourally or re-targeted.

This one instance shows how dangerous it is for ad campaigns to rely on behaviourally and retargeting technology in isolation. They can be great at targeting brands’ biggest and established fans, but if those very consumers are presented with targeted ads for their favorite brands whilst browsing shocking content – which they are more likely to do because they fear it than agreement with it – then the damage is huge. Yes, that consumer might well be the right fit for the brand’s latest product. But that won’t matter if they are connecting within the most brand-damaging environment and state-of-mind. Here, the fundamental failure is one of context. Ad campaigns that do not include analysis and targeting of ad campaigns to the context of the content will always be at far higher risk of damaging their brand.

Need to Know

Being transparent about the publications which display campaigns’ ad creative, and backing that up with brand safety technology as well as independent third-party monitoring are essential qualities of any decent ad supplier. Yet even the most premium, brand safe media titles can carry compromising content. They have to. There are bad things in the world that people have a right to know. That’s why assessment of context – both its safety and relevance to campaigns – must be at a granular level, assessing not just the articles, but the keywords and phrases used within those articles.

Let’s be clear: categorization of content into buckets for advertisers to choose where to advertise is not contextual targeting. Content categorization alone is wildly insufficient, especially when users categorize their own content. Extremists don’t consider themselves “extremists”, so they might categorize revolting content as “current affairs”, “culture”, or “sex and relationships”. True contextual targeting understands the actual words used to identify content as both relevant and brand safe for advertisers.

Get the Signals Straight

Incorporating contextual does not mean abandoning other forms of targeting, such as behaviorally, demographic, or re-targeting, even when purchasing ads programmatically. There’s great ad tech available programmatically that can combine contextual signals with audience data to target campaigns to relevant consumers in brand safe environments. That said, pure reliance on computers to assess both audience and contextual appropriateness for ads will always be more risky than involving humans, even with the introduction of artificial intelligence. Ad buyers and planners know this, as nearly three-quarters of them (74.2%) say it’s more difficult to ensure brand safe environments when buying programmatically on open exchanges.

Hence managing brand safety must involve human beings. Computers just cannot match our abilities to identify the contextual appropriateness and relevance of content for advertisers. People are needed to vet publishers’ operations and content to ensure they meet advertisers’ stated quality standards. They’re needed to monitor and react to the news agenda which may introduce brand damaging content into campaigns. People are needed to operate the targeting and brand safety tech and to make sure things are going right for advertisers, publishers and consumers. Of course some ad providers rely on consumers rather than professionals to perform such functions. Not only is that an abdication of responsibility, but the horse has bolted by that point.

Doug Stevenson is the Co-CEO of contextual advertising platform Vibrant Media, and based in San Francisco. As the co-founder of Vibrant, Doug has co-led the company’s expansion with Craig Gooding from when the company began operations in 2000. Doug was awarded ‘Entrepreneur of the Year’ from Ernst and Young and was a Distinguished Honoree for the International Business Awards, Executive of the Year in North America. Prior to founding Vibrant, Doug worked at AOL Europe as Head of E-commerce and has 25 years of publishing, media and Internet experience with AOL, CompuServe, Netscape, Haymarket Publishing, and BBC Magazines/Redwood Publishing.

Advertising | Perspectives

Will humans make a comeback in the wake of the YouTube boycott?

Programmatic advertising, with its cheap and easy targeting of individuals based on their online browsing habits, has appealed to brands since its onset. Yet the risks, while always known, have never really come to the fore, until now. Advertisers have been up in arms over the realization that their ads were showing up alongside racist and extremist videos on YouTube and other sites, and essentially underwriting hate.

While automation has its upsides, this is a time for human intervention. That means brands making more efforts to find safe spaces curated by humans, and YouTube using more human engineering to help match brands to better content. Not to mention users making judgments on what it means when big brands support objectionable content (even if they don’t realize it).

An Unfolding Disaster

A ticktock of events, including a damning Times of London investigation and decisions by the Guardian, AT&T and Verizon to pull their advertising from YouTube’s “hate” videos, shows just how big this problem has become for Google and the industry. The advertiser boycotts have continued with Johnson & Johnson, PepsiCo, McDonalds and even Havas Media Group following suit.

Adweek commissioned the market research company Survata to survey daily YouTube video viewers in a weekend online poll about whether they deemed ads as endorsements of the content; the results were both worrisome and relieving, depending on how you viewed them. Thirty-six percent of the 502 respondents said yes, they do interpret ads as endorsements. But about half of respondents also said that this didn’t make them change their opinions about these brands.

Regardless of what audiences may actually think, investment firm Nomura Instinet estimated the advertiser boycott could have damaging effects on parent company Google, and cost the search giant as much as $750 million in revenue. Google and other firms, meanwhile, have countered back. Google is tip-toeing around whether the problem is as big as everyone says and feels, and RBC Capital Markets said in a research update that the part of Google’s business affected by the YouTube fiasco is technically only about 10 percent of the company’s revenues. And the $750 million is also less than one percent of Google’s projected sales for this year, which means Google might not take a huge hit if it reacts fast enough.

Meanwhile, Google has altered its rules for what videos can carry advertising, and invested research efforts into improved AI to better understand the context and sentiment of YouTube videos. Increased scrutiny on its public performance likely means it’ll invest in this even more.

The JPMorgan Chase Experiment

With Google being one of the world’s biggest platforms, it’s difficult for most brands to simply opt out and boycott completely. But larger firms are experimenting with ways to bypass total automation and use human judgment to find the coveted safe brand spaces.

Take JPMorgan Chase. The company told the New York Times that it has started whitelisting websites that run its ads via Google. Prompted by the realization that an ad for Chase’s private client services had appeared on a site called “Hillary 4 Prison,” it ran a 30-day test period in which an intern manually clicked through 12,000 websites where JPMorgan ads were appearing, to see whether they were being featured alongside objectionable content. The intern flagged about 7,000 ads that were appearing where the company would prefer them not to be.

Now, JPMorgan has arranged a “human-checked” list of 1,000 YouTube channels it has deemed safe for its ads to appear. And it has dropped the number of websites showing its ads from 400,000 to 5,000. So what did it learn from the test? Performance appeared to the be same, even though the ads were displayed on far fewer sites. Chase’s CMO Kristin Lemkau told the Times that whitelisting was becoming de rigeur now at the bank, and that “at some point, a human is going to take a look.”

New Skepticism About Automation

JPMorgan’s move into whitelisting, the YouTube controversy and advertiser boycotts are stirring larger conversations on the necessary evolution of the digital advertising industry. It’s not just that the technology is failing or not yet up to the standard of human editors, but that relying on programmatic advertising allows networks to “grade their own homework.” And this kind of blind advertising is bad for business.

Outsourcing monitoring to third-party auditors and in-house ad networks, which I previously wrote about, is a potential solution. But the issue is that programmatic has become a growing default that’s hard to slow down. Forrester Research said in a report that only 29 percent of marketers in 2016 took steps to whitelist websites for their ads. And some smaller brands simply can’t manage the resources to do that.

Hany Farid, a professor at Dartmouth and senior adviser to the Counter Extremism Project, has also said that Google, Facebook and other major companies ought to deploy more human editors to filter content — because the hype around AI is just that: hype.

But the bottom line is that human intervention is costly, and would be a paradigm shift for the way the advertising industry has evolved in recent years. It may be the way to go, but it’ll take some time for it to become just as automatic as programmatic.

Advertising | Perspectives

We need to solve digital advertising’s quality control problem now

An explosive investigation in The Times of London found advertising from reputable brands like Mercedes-Benz, Jaguar and the NGO Marie Curie running on YouTube videos promoting extremism and pornographic content. So, by extension, those companies were helping to fund pro-Nazi, ISIS and other terrorist propaganda.

Despite YouTube’s investment in software to weed out such content, its continued existence — coupled with the advertising that appears on it — shines a harsh light on advertising’s poor quality control. And News Corp.’s CEO Robert Thomson released an incisive statement in reaction, saying that the industry’s actions are undermining its stated priorities, and vouching to bring its advertising under its own authority.

It’s clear that attaining actual solutions to this problem requires much more soul-searching within the entire industry, and a change in current operations.

A Looming Problem

In many ways, the recent report in The Times is not that surprising. Publishers and advertisers have found themselves in unwanted territory on the internet before, as we previously wrote in DCN. The attention fake news garnered at the end of last year was a game-changer in that regard, as it spotlighted the money to be made from hyper-partisan sites with misinformation. Google, Facebook, Twitter and Microsoft’s pledge last December to share information, to better eliminate extremist content, was therefore a lauded effort.

But even though Google says it has a “zero tolerance policy for content that incites violence or hatred,” blacklisting is apparently not enough. And ad quality has long been an issue before “fake news” became the term du jour in media and marketing circles. The pervasiveness of fraud and viewability issues has demanded better standards for metrics, and better advertising so that consumers don’t just reach for the ad blocker. Google doubled-down by removing 1.7 billion ads last year that defied its policies — which was more than twice the number of ads it took down in 2015.

But with Facebook and Google together controlling well over half of the digital ad market, that leaves smaller players in a desperate scramble for the scraps, undermining concerns about integrity.

Who’s to Blame?

Which brings us to the question: Is programmatic advertising to blame, or is it a scapegoat for other problems the industry can’t yet address? Marie Curie, for instance, claims it was absolutely unaware its ads were appearing alongside the content of a pro-Nazi group. Sandals Resorts, which had its advertising appear next to an Al-Shabaab video, meanwhile, blamed Google’s mishandling, stating the video hadn’t been categorized as “sensitive.”

The advertisers were quick to express their deep concern and withdraw their advertisements, but the “hands off, we didn’t realize it” response is not the kind of reaction that engenders trust. And that is the bigger concern here. News Corp’s Chief Executive Robert Thomson called this out in a statement. Some of his choice lines deserve highlighting:

“We are in an era in which integrity is priceless, yet digital distributors have long been a platform for the fake, the faux and the fallacious, highlighting an issue which we have long stressed – that they have eroded the integrity of content by undermining its provenance.”

“Ad agencies and their programmatic networks are also at fault because they have sometimes artificially aggregated audiences, and these are then plied with content of dubious provenance – the agencies win, the fabricators of the fake win, and advertisers and society both lose. Affinity and integrity are core elements of a sustainable relationship between advertiser and consumer, and yet affinity and integrity are far too often missing in the modern marketplace.”

If the demand for money and efficiency is eroding the integrity of content — not to mention that of brands and platforms — everyone involved must collaborate to gain that trust back. And that means investing the time, energy and resources in some not so quick-and-easy moves.

Identifying Solutions

One potential solution that puts the advertising industry back into the hands of advertisers is to rely less on programmatic and more on in-house ad networks. News Corp, for instance, is testing its own digital ad network to ensure a “high quality audience for advertisers.” The Scandinavian publisher Schibsted also has its own in-house ad network, and focusing on that has helped decrease ad-page load times while doubling viewability from 40 to 80 percent. Vox too has its own in-house ad platform. And alongside BuzzFeed, Mic and other publishers, it’s expressed an aversion to programmatic. Digital Content Next recently announced the formation of TrustX, a cooperative digital advertising marketplace made up of many DCN member companies, including NewsCorp and Vox.

The reality is that individual ad networks are not yet mainstream by any means. Most advertisers are not big enough or rich enough to opt out of automated advertising, and smaller publishers don’t have the size to build their own network.

What is possible, though, is a more consistent, industry-wide approach to addressing these issues and testing solutions. That means worrying less about the bottom line — at least for now — and taking collective responsibility for this problem. And more human oversight over the entire industry — even over programmatic advertising — is the first big step. Just as Facebook has acknowledged it can’t just rely on an algorithm to stamp out fake news on its platform, marketers know that it can’t rely on automation alone. Doing so only stands to create more problems for an industry already on the edges of consumer trust.

Advertising | Industry-Research | Perspectives

Programmatic native: a nascent and growing category

For many advertisers, programmatic native feels like the holy grail. It brings the transactional efficiency, audience targeting and scale of programmatic to in-feed native units that match the look and feel of a publisher’s content. Additionally, publishers benefit by simplifying native ad sales, with instant access to demand sources through programmatic exchanges. Programmatic native offers real benefits to both sides – buyers and sellers.

However, with so much promise, what does the market look like today?

To find out, we at MediaRadar, took an in-depth look at what programmatic native advertising spend looked like in 2016. For the report, we analyzed programmatic native adoption over the last 12 months, identifying the number of brands buying programmatic native ads through popular exchanges, like Nativo, TripleLift, Sharethrough, Unruly, and Bidtellect.

Here’s what we found.

  • More Than 4,000 Advertisers: Last year, almost 4,200 unique advertisers placed programmatic native campaigns across the native exchanges we analyzed.
  • Adoption Grew 86% by Year’s End: Programmatic native surged throughout the year. In fact, the total monthly brands buying campaigns increased by 86% – from 593 in January to 1,133, by November. In Q1 2016 an average of 726 brands placed campaigns each month and by Q4 2016 the per month average leapt to 1,094 brands. This is meaningful growth over just a 12-month period.
  • Still, Penetration Remains Low: In 2016, 50,605 advertisers placed online ads on just the top-200 largest publisher websites alone. As percent of that 50,605, fewer than 10% ran on native exchanges. This means that for all the significant growth last year, there is significant headroom for expansion in 2017.

Takeaways:

There has been a lot of attention given to sponsored editorial and programmatic native in the press in the past year. While the programmatic native market is still small, relative to the overall spend in the digital market, it is expanding and at an accelerated pace. Renewal rates and advertiser feedback are positive, mostly.

That’s not to say that challenges don’t exist (The Wall Street Journal tackled these issues recently), but we observe that the market continues to be a legitimately bright spot for publishers. We forecast a positive outlook for it in 2017.

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

Advertising | Perspectives

The banner ad won’t die – and three other predictions for 2017

The sell-side of the advertising industry is always evolving – and 2016 saw major changes for publishers that will influence their business in the New Year, as well as years to come. But what are the key trends that will shape strategy in 2017?

As the SVP of Publisher Platforms at AOL, these are the types of conversations I have every single day. From those, I’ve come up with four trends in particular that will likely be focus areas next year.

1. The banner ad won’t die.
Traditional display and banners ads aren’t dead. But they have been challenged this year more than ever. For example, ad blocking grew by 41% globally in 2015. And digital-first millennials in particular are more likely to ignore traditional banner ads. Because of these challenges, spend in areas like native, video, and social ads has ballooned.

But banner ads, given their inherent scale and ability to measure performance unlike alternative approaches, still possess enormous potential. The true roadblock, however, has always been about creative. Tune-out can occur because of poor targeting, and creative that may not always resonate with the end-user.

New programmatic-oriented platforms have emerged enabling creative and media agencies, advertisers and publishers to create, optimize and execute dynamically targeted ad experiences across all formats, screens and media types. They’re providing creative development and management tools tied with automation and data that allow for more personal connections with end-users. This will help audiences ‘tune-in’ and put traditional display and banners in a much better position to succeed – which is great news for publishers.

2. New vehicles for app discovery will emerge.
The app marketplace is more cluttered than ever. Worldwide mobile app store downloads are projected to grow 33% from 111 billion last year to 147 billion in 2016, eventually reaching 284 billion in 2020. For publishers and advertisers, finding attention in an increasingly chaotic mobile category is hard. Pokémon Go and Musical.ly managed to find large audiences in a hurry with their viral success.

But, not every app finds success virally. Fortunately, the number of relevant digital advertising and marketing channels has exploded, offering new and unique vehicles for app discovery. Programmatic mobile growth, chatbots, paid social, SMS, paid search, video, and the app stores themselves have all expanded to enable brands and publishers to run more app discovery campaigns and drive downloads via paid media. Simply put – more channels mean more opportunities. This will dramatically boost discovery in 2017. The challenge, then, becomes how publishers and advertisers can drive sustained app usage post-adoption, and increase customer lifetime value through the same marketing mix.

3. Header bidding will continue to drive change.
Header bidding adoption has increased considerably among publishers this year. According to our own survey of 300 premium publishers, 50% have already implemented header bidding. There is no denying the massive revenue increases publishers have experienced since adopting header bidding solutions. In fact, many of our publisher customers see five figures worth of incremental revenue every day since signing on with the AOL header bidding solution.

The next frontier here is mobile – and not just mobile web but in-app. As publishers have seen success across their desktop inventory, they want to see that play out similarly across mobile. But the technology is still evolving to meet the opportunity. Expect platforms, like our own, to evolve in 2017 to deliver there.

4. Header bidding containers will see more adoption.
The real challenge in header bidding is that as adoption has exploded – and though each new header bidding partner can increase yield – adding multiple header bidding partner code to a website introduces a lot complexity across the site. This can slow the load time and impact the end-user experience. And 75% of publishers use at least 5 header bidding partners.

In 2017, with adoption surging, expect publishers to shift thinking towards header bidding optimization. That means a greater focus on header bidding containers that can organize the programmatic process to prevent slow load times and latency. Containers help publishers add, manage and organize potential buyers as they enter an ad server. They basically build in a set of rules and guidelines for programmatic auctions.

Containers can significantly simplify your bidder relationships, give you flexible controls to maximize demand opportunities while preventing latency, and provide transparency into performance across all partners.

As 2016 winds down, digital publishers need to keep these trends in mind when considering next year’s advertising strategies. Banner ads, app discovery and header bidding will all prove directional next year.

matt-gillisAs Senior Vice President, Publisher Platforms of AOL, Matt Gillis (@gillisusa) leads the company’s publisher and third-party sales through its programmatic and monetization tools and services. Previously, he served as Senior Vice President, Mobile Publisher Platforms and oversaw that company’s mobile publisher development and growth.

Industry-Research

Three key advertising trends for 2017

The ad ecosystem continues to evolve at a breakneck pace. This velocity can be challenging for publishers who are trying to keep-up with the latest innovations. So, what will 2017 look like? What are the key developments publishers will face?

At MediaRadar, we spoke with our clients and pulled data from our platform to help make sense of it all. With that in mind, here are three critical trends publishers need to consider as we head into the New Year.

1. Native Renewal Rates Are Going Up, and Down
With more than 1,000 sites selling native advertising, the market is maturing. But while native is ubiquitous, this does mean campaign performance is so equally widespread. We see and forecast renewal rates on native to polarize. Some publishers are much better implementing and measuring their impact. Strong performance will lift renewal rates for publishers who are consistently showing their advertisers results.

According to MediaRadar data, average renewal rates for 2016 were 33%, with 20% of advertisers at a less than 20% renewal. However, some publishers, like The Atlantic and QZ, have consistently strong performance that outstrips so many. The top native sellers win renewal rates between 60-80%.

2. Significant Programmatic Expansion in B2B
Last year was the year of programmatic for national consumer publishers. But there was also substantial penetration in programmatic in B2B publishing. Per MediaRadar data, year-over-year, the number of B2B websites selling programmatic more than doubles, from 39% to 82%.

Today, programmatic has created a paradigm shift. Traditional B2B publishers now compete with companies like Demandbase, Madison Logic, LiveIntent and others who sell online ads targeted to B2B audiences. We predict that programmatic will continue to see dramatic growth in B2B with more sophisticated offerings including PMPs, tiered pricing, and fixed time periods to maintain inventory value. B2B publishers will master programmatic in 2017 and be able to sell inventory at a high rate due to super targeted, niche audiences.

3. Ad Blocking, A Diluted Threat
Despite industry fears, ad blocking didn’t take off as expected, nor has it affected ad sales. Yes, many consumers do use ad blocking software. An IAB study found 26% of desktop users as having installed blockers. But we’re not seeing the decline in the number of ads served or total volume of ads purchased.

Ad blocking will continue be more hype (and threat) than it will actually create a ceiling on ad spend. Why? Publishers are making ads more palatable, they are speeding up pages (think Google AMP), and demand from marketers for digital solutions remains robust.

As publishers try to make sense of the year and finalize strategies for the first quarter, these are areas to plan around.

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

Advertising | Perspectives

How out-of-home is evolving to join the digital paid media mix

Out-of-home (OOH) advertising has been around for generations in the form of billboards, posters, public transport hub walls, bus benches and more. While these paid media placement opportunities are still around, they’ve been quietly undergoing some significant digitally-enhanced upgrades, including programmatic bidding, viewability tracking and intent-oriented targeting.

As a result, OOH is the first “offline” media realm to join the ranks of connected digital media platforms. Let’s look at how this trend is taking shape.

Why Media Buyers are Looking for Better Digital Options
In the early days of the internet, display ads were all marketers needed for their messages to be seen. Now, however, the vast majority of display ads, both on desktop and mobile, don’t command much attention at all.

This is largely because audience members have become desensitized, developing “banner blindness. However, there are plenty more issues in play: ad blockers, viewability measurement challenges, bot traffic and rampant fraud, all of which are making alternative digital ad media types increasingly attractive to buyers. One study from Integral Ad Science found that just 43% of online display ads are “human-viewable.”

Naturally, as a result of these challenges, advertisers and media brokers are hunting for new ways to reach eyeballs. If no one pays attention to your ads, then you’re simply wasting your money.

Why Media Buyers Struggle to Justify Unmeasurable Placements
In the age of granular conversion tracking and sophisticated attribution modeling, media buyers need to have the ability to demonstrate a return on investment (ROI) on their placements. This type of measurement is relatively straightforward when buying ads on Facebook, for example, but most offline media simply can’t compete in this regard.

If they can’t prove how many people saw or remembered the ad, and then gather data suggesting the extent to which the ads impacted sales, they can’t determine whether the buy was any good. It’s easy to run an ad continuously – knowing how many people saw and paid attention to it is the challenge.

Online media has, to a large extent, spoiled the viability of buying offline media. We have access to all this big data – nearly anything done in the digital world can be traced with ease – which makes it easier for marketers and other professionals to see what’s happening as a result of advertising. That’s why there’s rising demand today for similar tracking in offline media too.

The day may come when print publications use internet of things-enabled nano-chips to track ad views and attention biometrics to collect data that will later be used for audience segmentation, automated nurturing and strategy refinement. In the meantime, only outdoor advertising has the one-to-many reach to justify investing in better transparency and reporting for advertisers and media buyers. That said, smart industry players are evolving cautiously, as “big brother” privacy concerns come into play whenever behavioral tracking comes up.

Digital out-of-home media is therefore steering clear of keeping records associated with individual audience members, with several initiatives now in play that can provide performance metrics based on attention-correlated eye movements. Trade groups like Route and TAB now offer media measurement and audience estimates for OOH advertising in the UK and the US respectively.

How Digital OOH Is Addressing Offline Media Accountability 
OOH sellers are investing in development as well. Clear Channel Outdoor Americas is partnering with mobile carriers like AT&T to track whether people who see billboard ads eventually buy the products promoted. “In aggregate, that data can then tell you information about what the average viewer of that billboard looks like,” Andy Stevens, senior VP of research and insights at Clear Channel recently told the New York Times. “Obviously that’s very valuable to an advertiser.”

Following a successful pilot last year, with 1000 screens placed in 20 supermarkets across Canada, Montreal-based Impax Media recently hired Dominick Porco and Bill Ketcham, both alumni of the Adspace Digital Mall Network executive team, to oversee the relatively new company’s push to take over the US.

The Impax platform offers digital advertising on screens mounted at the checkout line at grocery stores and other retail outlets. Impax’s screens can be seen whether the lane is closed and locked or open and in use. Each screen provides advertisers with the information they need to track ROI on media spends, while protecting viewer privacy. The screens are set to display brand-sponsored content and store announcements, running in a loop.

“Our plan is to install an average of eight screens per month in each of 167 supermarkets, starting in August of this year,” says Porco. “At that rate, Impax will be active in 10,000 supermarkets within five years, reaching over 130 million shoppers every four weeks, on a network that will consist of 80,000 screens – by far the largest digital network in the US.”

The Internet of Things Makes Programmatic Booking Possible
For those interested in enabling it on their smartphones, beacon technology allows people to receive notifications about sales at stores as they pass by them. With beacons and near-field communication (NFC), advertisers can more accurately target people based on their location away from home, when they are 41% more receptive to advertising. So advertisers can already target people based on where they are, whether serving up messages via mobile push notifications or via video clips on big, wall-mounted screens.

With programmatic bidding currently under development for the OOH industry, buyers may soon be able to more accurately target their appropriate audiences, and sellers will benefit from being able to offer a fully optimized media asset.

Imagine the power of being able to serve up messages to individuals, no matter where they go in the real world. Creepiness aside, this is personalization at its most extreme. pers

Programmatic DOOH will allow marketers to reach audience members in high proximity to points of purchase, across multiple touchpoints, and on a budget that works for the client while also meeting business objectives. With the Internet of Things (IoT) infrastructure on the rise and back end targeting processes ready to take place in real-time, this type of contextual relevance is around the corner.

The Benefits of Today’s OOH Placements
In the age of complex, individualized customer journeys, media buying success hinges on omni-channel exposure, and digital OOH is proven to be a major performer in this regard. A study from the Outdoor Advertising Association of America found that when people see OOH ads and eventually interact with advertisers online, nearly a quarter of these interactions take place within 30 minutes of viewing.

DOOH is proven to be cost-effective, too, with CPMs (cost per thousand impressions) starting at $1.50 and maxing out at about $35, according to one recent industry-wide inventory assessment. The only media channels that are less expensive – radio, magazines and static billboards – feature zero viewability reporting capabilities.

OOH advertising’s joining of the digital paid media mix means people are exposed to promotional content that they actually want to see. This increases the chance they’ll respond to the ads positively, boosting conversion rates and profits for the advertisers, while earning money for venues as well.

JoeLiebkindJoe Liebkind is a Berlin-based writer. He has worked with startups in sales and marketing roles in Berlin and New York. Find him on Twitter.

Advertising | Innovation | Perspectives | Revenue

Three key takeaways from the media leaders at Folio’s C-Summit

As part of its annual show October 31-November 2, Folio hosted a one day C-Summit. The invitation-only event focused on top strategic imperatives for magazine media organizations. Led by Hanley Wood CEO Peter Goldstone, the day provided an intimate conversation between panelists and attendees.

Here are three key takeaways from the discussion:

1. People matter (a lot): Many of the day’s speakers expressed that competitive recruiting and managing millennials to their fullest potential are significant challenges. Across the board, it was apparent that these leaders feel that having the right people to drive the organization from both strategic and tactical levels is a top priority.

“We need to teach all employees to think about the end game and how they can contribute Give them a voice, an opportunity to express ideas and concerns… We need to give them pride of ownership in solutions.”

—Bonnie Kintzer, CEO TMBI

“It used to be that the people in charge knew everything…Well, we’re in a learn-together mode now, particularly as we try to build new lines of business. Of the 46 people we have hired at AIM since January, 32 have job descriptions that didn’t exist before they were hired.”

—Andrew W. Clurman, President & CEO, Active Interest Media (AIM)

“The scariest thing is to have an opportunity but not have the capacity to deliver. For example, we find that companies want to connect with customers by feeding them, but staffing the event side has been a challenge… Creating the right culture is absolutely critical.”

—Catherine Neville, Publisher & Founder, Feast Magazine

“Running a media related company over the past 10 years has been a tough job. There are a lot of dead men walking. Employees are key to transforming business. You need to attract, retain, and develop people who will change your business or you will be one of those dead men walking.”

—Tom Kemp, Chairman CEO of Northstar Travel Group

2. Advertising is data and context driven: Digital advertising is increasingly driven by data—particularly in the B2B space, which is focused on lead-generation. However, context matters as does bigger-picture understanding of what the advertiser’s objectives are and how to creatively accomplish those goals.

“Advertisers are asking: What is the value you are going to give us, how are you going to bundle stuff? That said, they don’t always really know what they are asking. They want, and need you to know more about their biz than they do.”

—Jim Elliot, President James C. Elliot Co. Inc.

“We have to be sure we are producing products our customers want to buy, not just what we want to sell, so that we continue to have the relationship with them that supports the business. And yes, we need to be able to provide as much audience data as possible. We’re thinking less about selling advertising than selling all the assets we have.”

—Tom Kemp, Chairman CEO of Northstar Travel Group

“Programmatic is inevitable because it is a far more efficient for sellers and buyers. At Hanley Wood, we love programmatic because we have the data. What we’re seeing is a bifurcation in the value proposition between what publishers brought to the table—the value of our insight around the data and the audience—versus the value of the content and placing ads in context.”

—Peter Goldstone, CEO, Hanley Wood

“Thinking about some of the new players…yes, they are taking dollars away and disrupting things because they play by their own rules. But we must continue to behave in a way that is extremely responsible because of our brands’ reputations. We’ve been successful with our ad-sales guarantee. We’ve partnered with Nelsen to measure return on ad spend. We spend a lot of time on measurement and in our strategic partnerships. It is an area of emphasis and focus to demonstrate efficacy.”

—Mark Rothschild, SVP, Meredith Digital.

3. You’ve got to put your money where your progress is. Despite a seemingly endless desire to innovate, the reality is that resources are finite and making smart decisions about what to fuel and what to fold is critical.

“We have to focus on how to grow the business despite managing a mature print portfolio. There’s always a lot to do, but what do you choose not to do is just as important. As you think about your portfolio, resource allocation decisions are imperative.”

 —Peter Goldstone, CEO, Hanley Wood

“We looked at a lot of areas with underperforming assets, many outside the US, which we are in the process of selling. We are focused on being a strong US and Canadian content producer. The hardest parts are the print versus the digital pieces of the game.”

—Bonnie Kintzer, CEO TMBI

“There are lots of new shiny ideas that pop up in this industry. Yes, some are good…but others aren’t, and you have to be able to tell the difference, or figure it out fast.”

 —Jim Elliot, President James C. Elliot Co. Inc.

“As an industry, there’s a drag of products that need to close, that have served their purpose, but closing them creates an opportunity to start something new. And there’s always a new opportunity.”

—David Carey, President, Hearst Magazines

Advertising | Industry-Research

Programmatic versus publisher-direct online ad buying: What do the data say?

Anyone who’s been buying digital advertising for more than a minute has been faced with the daunting question from marketing and non-marketing executives alike: “So, how much of this advertising is actually legit, anyhow?”

The industry has been hounded by issues relating to viewability, engagement, and outright fraud for the past couple of years, and the general business press regularly covers the subject matter. So the very same executives who authorized TV, print and radio advertising budgets without raising question one only a few years ago – when the “half of my marketing budget is well-spent, but I’m not sure which half” maxim was fully embraced – now regularly engage in forensic assessments of ad buys. Such is the life of the digital marketer.

So it is helpful that companies like Integral Ad Science (though not an entirely objective player in the digital marketing ecosystem) working to keep track of developments via its bi-annual Media Quality Reports.

However, depending on one’s point-of-view, the data can be considered a sign of improving conditions, or confirmation that we marketers knowingly *throw away* 10% or more of our budgets to fraud, deception, and advertising malpractice.

Here’s a look at IAS’s most recent report, which offers an analysis of “hundreds of billions” online display and video ad impressions during the first half of this year:

  • IASfigureConditions Are Improving. Though there continues to be a good deal of waste in the system, the overall state of online advertising is showing signs of improvement. For example, the U.S. market saw a significant drop in “objectionable content” impressions during the first half of 2016 versus the previous period (9.5% versus 14.0%). Most industry experts agree this is due to more sophisticated tools and digital ad buying practices, as one would expect in a growing and evolving industry sector.
  • Buying Direct Has Its Benefits. The incidence of ad fraud when buying advertising direct from publishers is dramatically lower than when buying programmatically (2.2% versus 8.3% in the U.S.), though it’s also typically more expensive, making the equation palatable for most marketers.
  • Viewability & Clutter Are Continuing Concerns. Fewer than half of all display ads – regardless of how purchased – get viewed for more than five seconds, and more than 10% of ad impressions are jammed onto pages with more than four ads on the page. These issues are compounded via mobile devices, which we cited in a recent article on the pros and cons of programmatic as “just a messy consumer experience”.
  • Bigger & Vertical Are Better. Large format, vertically-oriented display ad formats (300×600, 300×1050, 160×600) all tend to have better viewability than their smaller, rectangular and square counterparts – being viewed for more than five seconds about half the time.
  • Global Video Ads Are Best Purchased Direct. Viewability of video via programmatic means are only viewable at a 3-in-10 ratio, versus nearly 7-in-10 via publisher direct. This metric constitutes the biggest relative weakness of programmatic in the study.

While IAS’s analysis of the first half of 2016 has many encouraging findings, it’s also clear that the programmatic marketing industry has plenty of opportunities for improvements in the coming months and years.

BourgeoisTim Bourgeois (@ChiefDigOfficer) is a partner at East Coast Catalyst, a Boston-based digital consulting company specializing in strategic roadmaps, digital marketing audits, and online marketing optimization programs.

Advertising | Industry-Research

Marketers weigh the pros and cons of programmatic

The programmatic display advertising marketplace in the U.S. will total $22 billion this year, up nearly 40% compared to 2015, According to eMarketer. Perhaps more importantly, these kinds of media buys will account for more than two thirds of the entire U.S. display marketplace.

Programmatic media buying—broadly defined as the use of technology and algorithms to effect the sale, purchase, and delivery of advertising, and specifically digital ads in this case (think: the Google Display Network, RTBs, and PMPs)—has grown dramatically in recent years. Indeed, eMarketer has gone so far as to claim that “Programmatic is extremely efficient and unparalleled in its ability to pair rich audience data with ad inventory and targeting.” As such, marketers are rushing to incorporate it into their marketing plans.

Given its meteoric rise in the digital marketing scene over the past 36 months, though, it should come as no surprise that there’s a good deal of misunderstanding surrounding what the tactic can and cannot do, and where marketers need to tread carefully. In its second year examining the issues, ExchangeWire and OpenX combined to publish “The evolving perception of online marketing quality in programmatic advertising” last month.

Here are some of the key takeaways:

Marketers have a love-hate relationship with programmatic. While advertisers are spending more than ever on programmatic, they also report having less confidence in the tactic than they did last year, and believe fraud rates are 5X what they deem acceptable. This kind of volatility is common across most digital tactics—and makes sense, given the newness of the category, its relatively low cost (compared to TV, radio, and high-end print), and complexity. Even when it’s working, it’s still going to cause a bit of angst.

Marketers are concerned about viewability and fraud. Among the most experienced users of programmatic—U.S. advertisers—only 3-in-10 survey respondents say that marketplace quality is a ‘very serious’ issue, while more than 90% of respondents in EMEA and APAC believe that’s the case. These are two high-profile issues that the industry needs to get under control—fast. But even with major media outlets keeping the issues in the news, experienced marketers know that a tactic like programmatic (warts and all) is going to continue to generate favorable ROI for the foreseeable future.

Programmatic offers value. While in 2015, 95% of survey respondents believed that programmatic advertising offered good value for the money, that percentage dipped slightly to 86% in 2016. But one interviewee explained: “Programmatic has become a victim of tall poppy syndrome where everyone is trying to knock it off the perch; people have increased their knowledge of the tactic, and more aware of its pros and cons – so as it becomes much more mainstream, I think the satisfaction number has only one way to go, and that’s down”.

The programmatic silver bullet train is nearing the end of the line. Just as is the case with any hot, new tactic or channel, there are lots of easy wins to be had in the early days. But as programmatic becomes increasingly popular and pervasive, it will become more difficult—not less—to implement successful programs. Vendors are rushing to invest in their programmatic offerings, making it more difficult for advertisers to determine the best fit for their organizations (RTB? PMP?), and publishers—the providers of inventory—are scrambling to find their way in this new world, too. Not to mention the onslaught of mobile into the mix, which will account for about 70% of U.S. activity this year and which one expert describes as “just a messy consumer experience”.

To say that programmatic advertising is wreaking havoc in the digital marketing sector would be an understatement. But marketers that maintain a steady hand on the wheel as they roll out programmatic strategies and resist panicking or over-correcting in the face of inevitable bumps-in-the-road and sharp turns will be amply rewarded.

ProgrammaticFigure

BourgeoisTim Bourgeois is the executive editor at ChiefDigitalOfficer.net, a global community of senior digital and marketing professionals. Follow him @ChiefDigOfficer and connect with him on LinkedIn.

©2024 Digital Content Next. All Rights Reserved.