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Do viewable impressions actually present a bigger opportunity than threat?

Forest FireViewability, probably second the ‘native’, has been the hot topic in ad tech for at least a year. The issue, on its face, is a simple one: Advertisers want to only pay for online ads that at least have a chance, that is to say are in the viewable area of a device or browser, of being seen by the user. Once again we are hoisted (held accountable to) our petard (crowing about how we are the most measurable media). Obviously magazine advertisers are charged whether someone looks at the page or not — or even half the page for less than a second.

However, in the US alone this year ComScore predicts over 4 trillion online display ads will be served. Xaxis stated that it last year it paid more than $750M for more than 3 trillion ads. Woah. That’s a lot of ads and, if my math is right, it comes out to a CPM of $0.25. Not very impressive for the most measurable, fastest growing, and arguably most watched medium in history. Maybe it’s because advertisers already know that somewhere between 25% and 40% of those ads are never going to be seen by anyone. Now, granted, even at the higher end of that estimation, the adjusted price is still only $0.42 CPM. Now, if tomorrow all publishers were somehow magically able to remove all unviewed ads and advertisers began to pay only for ads that were ‘viewed’ would the advertisers agree to a 67% increase in rates for the pleasure? I guess the market would decide but I’m inclined to suggest that no. They would not.

However, there’s an opportunity for premium publishers here to clear out a lot of dead brush, refocus on the ad units on their pages, and not make the same mistakes as we enter the curvy bit of the hockey stick growth period for mobile. It definitely seems like creating a bit of scarcity in this market would be a good thing. Whether it’s fewer, bigger display ads, innovative mobile formats that aren’t just shoehorn solutions of display ads, or clever native units, I think there is the chance to retool how premium sites operate. This is, in my mind at least, a huge win for everyone in the ecosystem (except maybe display ad serving companies who make money on every ad served).

There’s a bigger, better post in here that needs to be written and I’ll give it the attention it deserves some day soon. However, I think that for now editors, ad sales teams, creatives, agencies, tech companies, and brands need to embrace the need for this clearing out and see it as the opportunity that it is. Like a huge forest fire, it’s scary to watch and sometimes seems like it’s going to destroy everything it touches, but ultimately it’s a net positive and indeed necessary for further growth.

From Digiday:

The biggest adjustment for publishers in the viewability era is the reality that they’ll be serving fewer impressions via the same pages, which in turn means they’ll be making less money per page … which is why many publishers are still wary of the short-term effects of viewability’s widespread adoption.

But viewability can also work in publishers’ favour, at least in theory. If there are fewer, more valuable viewable ads, publishers can pump up the CPMs on their viewable inventory to compensate for the hit they take on their overall impressions.

via Publishers grapple with viewability’s biggest issues | Digiday.

A Start-Up With a Way to Filter Botnet Traffic Gets Funding – NYTimes.com

News that White Hat has revived $7M in funding says a bit more about their press profile and media presence than it does about the ingenuity of their underlying tech. I don’t see anything particularly new or ground breaking here.

Perhaps this piece in nyt (blog) gets the tech wrong, but a solution reliant even partially on flash would appear to fatally flawed. White Hat aren’t the first to offer such a service and others do it without relying on a bloated, outdated, and increasingly blocked technology.

Why all the attention to this company? Why now?

A Start-Up With a Way to Filter Botnet Traffic Gets Funding – NYTimes.com.

Unmet demand for scalable branded content abundant

It’s been a crazy week so far and it’s only Tuesday at 9:30 AM. Part of this craziness is that there is so much interest in the DistroScale solution. Publishers, especially top-tier, multi-title publishers, are chomping at the bit for a scalable solution for branded content that plugs directly into demand streams on the buy side. I had suspected that there might be some pent-up demand for services like these, services that don’t require a big commitment — or any commitment at all — from publishers, yet offers them monthly paychecks of purely incremental revenue. I’ve seen this before in the early days of RTB when Admeld was building a stable of top-tier premium publishers, offering them a check every month, and solving both their remnant inventory and multi-network management problems at the same time. In the end, that model and their strategy worked out pretty well for them, I’d say. It’s a great business to be in, both providing a solution to a problem and being able to pay people for the privilege.

One thing that has become abundantly clear as I’ve been holding these meetings is that the scope of confusion and misunderstanding of ‘native’ is rife in the online industry, even amongst those who have been in it for ages. I include myself in this pool and each day I get a clearer picture of what we, as an industry, actually mean by the term. However, it’s such a wide catchall right now, it’s not surprising people are so confused. I found this beautifully produced matrix/chart from TripleLift and I’m using it as a cheat sheet for myself and as an asset for clients. I suspect it’ll require nearly weekly updates:

A visual categorization of the major players involved from TripleLift.
A visual categorization of the major players involved from TripleLift.

It’s crystal clear that the industry wants scalable, programmatic solutions for branded content (i.e. native) and there will probably be a few winners in the space. I don’t think it’s a one-size-fits-all problem and I don’t necessarily think it’s going to lend itself to one dominant player. Again, I look at the RTB world, which spawned at least three extremely successful companies on the publisher side: Admeld, PubMatic, and Rubicon. On the demand side it spawned, and continues to spawn, many many more. I’m looking forward to being on the ground and in the trenches for this latest (r)evolution in ad tech.

Another Big Day in Ad Tech News – SingTel, Instagram

AcquisitionMaybe it’s because Cannes is kicking off but the Big News from Ad Tech land continues to pour in. In a week that already saw the announcement of French startup Alenty by behemoth AppNexus, we can now add:

  • SingTel’s acquisition of not one but two tech companies: Adconion and Kontera.
  • Instagram expanding advertising internationally

SingTel has added both Adconion and Kontera to their stable, adding to their recent buys of other ad tech companies of Amobee and Gradient X. According to ReCode the company:

will spend around $150 million on San Francisco-based Kontera, which helps advertisers track and place content on social networks, and $235 million for ad platform Adconion’s U.S. assets, but not its European operations. The Adconion deal includes another $20 million in potential incentive payouts, sources say.

The muddled world of Native Advertising took a lurch forward with Instagram announcing that they will be supporting ads internationally. According to the company:

"We’ll work closely with a handful of advertisers in each country who are already great members of the Instagram community," a spokesperson told Mashable. "That could mean it’s a global brand with a strong presence in one of the countries, or a regional/local brand specific to that country."

It’ll be interesting to see if any other Big News comes out as we are just moving into the Cannes Lions. I’m sure some of these guys are sitting on big news. Will 2014 be the Summer of Consolidation?

The state of native advertising in 5 data sets | Digiday

More top quality content from Digiday looking at the state of Native. As I continue to dig into this marketplace through my work with DistroScale, it’s becoming clear to me that there is a crossroads in the distance. It’s a road we’ve been down before — first with display, then with rich media: Hype & Buzzwords; Tech Provider Cage Fight; Appeal to the Buyers; High CPMs; Wide Scale Adoption; Acquisitions; Devaluation; Commoditisation.I think we’re at the Tech Provider Cage Fight phase of this lifecycle right now. I keep a matrix of Native providers and it seems like at least once a week I need to add a new company to the mix. They are all clamouring for marketshare and to get in front of the buyers right now.

Vendors are currently in a cagefight.
Photo credit: Ketrecharc
What we are calling ‘Native’ is here to stay but I think we are in the very early days of this. It’s nothing new, per se, in the media world; it’s been going on for decades. What is new is the ability to deliver it at scale and across publisher sites — the ability to create a marketplace of brand content (i.e. native advertising) for publishers to review and cherry pick.

Here’s are Digiday’s top 5 takeaways:

  • Some are better at it than others: 40 percent of publishers expect native advertising to drive one-fourth or more of their digital revenue this year, while the other 60 percent expect it to generate less than a tenth
  • Publishers are controlling the content: Half of publishers take full editorial control of creating sponsored content; 36 percent let advertisers contribute content on a case-by-case basis
  • Brands are becoming publishers, too: two-thirds of the articles that were distributed on smartphones via Sharethrough’s 1Q campaigns were created by brands themselves, up 31 percent from 4Q 2013
  • Sponsorship method dominates: 41% [of publishers] are pricing ads according to a sponsorship model while 18 percent charge by CPM or cost per engagement
  • Subtle labelling performs better: click-through rates of native ads are 57 percent higher for those with a subtle background color compared to those with a strong background shade. When the font of the “sponsored” label is consistent with the rest of the site, the CTR is 64 percent better than when the font style is unique.

Tumblr inline ads
I think I would add to this list a few things:

  1. Publishers are becoming creatives: In Barcelona recently, at Digiday’s EU Publisher Summit, we heard from Dennis Interactive that journalists are being drawn into Native and recruited to create content for advertisers. This is a very intriguing development that blurs the line between commercial and editorial — not something every publisher will have the temerity to do.
  2. We need to differentiate between Native Content, Native Advertising, and Sponsored Content: It’s still the wild west when it comes to defining what we are talking about and any three marketers will have 5 different terms they use. However, I think an important distinction is between Native plays that keep you on-site and within the publishers domain (Polar, DistroScale) and ones that drive you off the publisher site (Taboola, Outbrain).
  3. Native thrives on mobile: Native works really well in mobile. Twitter and Facebook have shown this. I suspect it’s to do with the scrolly nature of mobile sites. People don’t mind scrolling down screen after screen to read mobile content. Embedding clearly labeled touts within that stream that are relevant and targeted are a great way to not frustrate users and to get your brand stitched right into the content.

Read the whole piece from Digiday on their site: The state of native advertising in 5 data sets | Digiday.

With Its “Demand Fusion” Tech, OpenX Helps Publishers Take A Smarter Approach To Real-Time Bidding | TechCrunch

My news feed this morning was topped with not one, not two, but three headlines heralding the launch of OpenX’s new RTB + Networks solution, "Demand Fusion".

OpenX Display FusionThe key development here is adding in an additional supply query to the networks, which may be offering a higher price for the impression and therefore delivery higher value to the publisher (supplier). In addition to the incremental revenue, Demand Fusion helps to reduce or eliminate daisy chaining on the ops side — a burdensome task for ops teams.

As described an OpenX press release earlier this week:

It’s rather simple. If a network accepts an impression at a price that is higher than the RTB bid, then by all means, give that impression to the network. But if that network defaults and the next highest price is an RTB bid, then sell it to the RTB bidder rather than simply passing it to another network without regard for the RTB bid.

From Tech Crunch:

SSPs will usually compare the ad network with the highest CPM to the highest bid from RTB. The approach seems to make sense, but the problem, as explained by Pranay Gupta, OpenX’s director of sales engineering, is that ad networks can say no to a publisher. At that point, however, the SSP is committed to the ad network route, so they’re forced to “daisy chain” through ever-cheaper ad networks until they find a taker — which means that they might make significantly less money than if they’d gone with the bid from RTB. “Daisy chaining is the bane of any ad operations person,” Gupta said.

While Demand Fusion sounds like a positive development, I’m not convinced it’s a ‘game changer’ as some people are claiming. However, it’s certainly picking up a lot off buzz this morning!

With Its “Demand Fusion” Tech, OpenX Helps Publishers Take A Smarter Approach To Real-Time Bidding | TechCrunch.

AppNexus Alenty Acquisition & 2015 IPO

AppNexus & AlentyI shared a story yesterday about the Euro ad tech scene. It’s definitely hotter than I’ve ever seen but with AppNexus’s snapping up of Alenty, I think the message is now being broadcast loud and clear: Not all innovation is coming out of the Valley or NYC.

At the AppNexus summit this week there were, of course, the familiar sponsor logos of Microsoft, Oracle, Millennial, and Peer39. However, there were also quite a few small, new, European startups. They came from the UK, France, Netherlands, and elsewhere. Companies like Grapeshot, FlxOne, Wywy, Adomik had a strong showing and I think raised the EU tech flag in a very visible and encouraging way.

The work I’m doing with AtlanticLeap aims to support these fast-growing companies as they look west to expand into the biggest ad market in the world, the US. Historically, the story has always been that there’s a sluggish pace of innovation and venture cash in Europe. That seems to be changing lately and the AppNexus acquisition of French tech company Alenty is certainly feeding the speed of that change.

I’ve been very impressed with the number of European companies that have been innovating and pushing the limits without huge amounts of funding. The model where you have to raise tens of millions to prove out an idea isn’t the only way to innovate. Our partnership and acquisition of Alenty is an interesting model for the future, where entrepreneurs are rewarded for creating real value, even if it’s not the entire value chain. Brian O’Kelley, CEO AppNexus

via AppNexus Tries M&A, Mulls 2015 IPO | AdExchanger.

The Future of Raising Angel & Venture Capital Funding

Entrepreneurial BibleThere’s been quite a bit of activity in the EU ad tech space lately. Alenty getting acquired by AppNexus is the latest EU startup getting rolled into a US giant. While Europe isn’t often thought of as a hotbed of start ups and VC, that is, in some spaces, starting to change.

Come along to meet other angel and VC investors, leading entrepreneurs, M&A execs and service providers supporting the entrepreneurial ecosystem. Gain insight into VC investing from Silicon Valley to London from active venture capitalists including Andrew Romans, author of "THE ENTREPRENEURIAL BIBLE TO VENTURE CAPITAL:
Inside Secrets from the Leaders in the Startup Game".

The event is held in London Wednesday, June 11, 2014 from 6:00 PM to 9:00 PM.

The Future of Raising Angel & Venture Capital Funding Tickets, London – Eventbrite.

5 takeaways from the Digiday Publishing Summit in Barcelona | Digiday

W BCNEarlier this week I was lucky enough to attend and speak at Digiday’s inaugural European event, the Digital Publisher Forum. The event was a valuable snapshot of the state of the European online ad market in the summer of 2014. Lots of consistent messaging: Native; Programmatic; Mobile; Eroding Publisher Power; ‘Tech Tax’ and other topics that are on everyone’s lips at the moment.

The team was kind enough to prepare a tidy summary of the key themes and takeaways.

I presented on the state and future of Programmatic Trading, with an eye toward risks and opportunities for publishers. One stat I cited was the lack of understanding from CMOs about this type of advertising planning and delivery:

Just 23 percent of CMOs understand programmatic advertising enough to use it in campaigns, according to a Wall Street Journal report. Still, Audra Martin, vp of advertising at the Economist Group, gave a compelling case study. When deployed well, programmatic can allow for premium efficiency at scale.

5 things we learned at the Digiday Publishing Summit in Barcelona | Digiday.

Brands should consider customising their AdTech stack – State of Digital

StackedThis review and summary of Hilton case study is pretty interesting. I spoke this week in Barcelona about how ad tech companies are moving further and further up the advertising food chain, trying to get ever closer to the actual brand advertisers. After all, that’s where the wellspring of cash is. And, if as we’ve seen in some cases, there is a 70% ‘tech tax’ imposed on publishers, why would technology companies want to work harder to get ever-dwindling returns from the players at the end of the funnel?

Hilton’s case is an interesting one and looks a lot more like a publisher story form 5 or 7 years ago. Hilton, acting as the advertising brand, is building out their own tech stack, in many ways bypassing the agencies, trading desks, etc. Granted, it’s an isolated case but it could be a very interesting trend, especially when combined with brands becoming publishers.

I can imagine an advertising and media technology singularity — The brand acts as publisher, building a campaign to run against their own inventory, delivered via their in-house customised tech stack.

I have had many conversations with various clients and industry peers and thought a lot about the place of custom solutions in AdTech. Are brands like Hilton, who customise their AdTech stack, rare isolated cases or could it be the beginning of a trend? Who should initiate customisation where it is required?

Friday Commentary: Brands should consider customising their AdTech stack – State of Digital.