Posts about ads

Cookie Madness!

I just don’t understand Julia Angwin’s scare story about cookies and ad targeting in the Wall Street Journal. That is, I don’t understand how the Journal could be so breathlessly naive, unsophisticated, and anachronistic about the basics of the modern media business. It is the Reefer Madness of the digital age: Oh my God, Mabel, they’re watching us!

If I were a conspiracy theorist — and I’m not, because I’ve found the world is rarely organized enough to conspire (and I found this to be especially true of News Corp. when I worked there, at TV Guide) — I’d imagine that the Journal ginned up this alleged exposé as a way to attack everyone else’s advertising business just as its parent company skulks behind its pay wall and surrenders its own ad business. But I’m not a conspiracy theorist. That’s why I’m confused.

The story uses the ominous passive voice of newspaper scare stories: “…a Wall Street Journal investigation has found…” As if this knowledge were hiding. Cookies have been around as long as the commercial browser, since October 1994. Or was that 1984?

The piece uses lots of scare words: “surveillance technology” … “tracking technology” … “intrusive” … “no warning” … “surreptitiously re-spawn” … “rich databases” … “so powerful and ubiquitous” … and my favorite: “targeted ads can get personal” (well, yeah, that’s the damned point).

The Journal acts as if it has discovered a conspiracy of its own: “Marketers are spying on Internet users — observing and remembering people’s clicks, and building and selling detailed dossiers of their activities and interests.” Gasp! Mabel, hide the kids, the Romans Huns Krauts Commies Marketers are coming!

There is absolutely nothing new — thus nothing newsworthy — in what the Journal promises threatens to be a series.

The Journal does measure its own cookies, finding its site moderate (I count 34 Journal cookies on my new Mac and I don’t use the site often) in what it ominously calls an “exposure index.” Mabel: Bring the Geiger counter!

Well, except the Journal is unique because unlike the other sites the story writes about, the Journal has my personally identifiable information! It has my friggin’ credit card number and name and address and phone number as well as my web behavior and it allows me to be tracked by third parties. The Journal has more information about me than ANY of the sites it warns about. And the Journal is owned by a company some people don’t trust. Hmmm.

It’s a fine thing that the Journal also tells readers how to “avoid prying eyes.” And if enough people do that, then the value of the advertising-supported web falls. Without cookies, the effectiveness and price of advertising would plummet as ads everywhere turn into remnant junk (smack the money), reducing revenue for media sites and reducing their content to junk. Hmmmm….

A story like this might also affect policy as the FTC is looking at regulating online advertising and marketing; its chairman, Jon Leibowitz testified before Congress on the topic this very week. Hmmm.

I think the Journal should have told exactly how it places and uses every one of its cookies and beacons and ominous tracking surveillance spying technology. It doesn’t. The story doesn’t even link to the paper’s privacy policy, which says that cookies and beacons and all that scary surveillance/tracking/spying technologies are used at and its affiliates and also by third parties over which the Journal has no control. Opportunity lost.

If I were an advertising-supported site, I’d be aggressively transparent. I’d tell you exactly what we track and what impact that has on what we serve in advertising and content. I’d create an app to read the cookies placed just for you and explain them. I’d give you the chance to correct information. I’d give you the chance to select your own advertising (now that would be valuable). I’d treat this with radical openness.

Otherwise the scare mongers like those regulation-loving, anticapitalist commies at News Corp. will win the day.

: Oh, and I neglected to point out that it was the very same Journal that had the wingnutty story about privacy and RFID tags on our pants, quoting as an expert a woman who thinks that RFIDs are — and I exaggerate not — the work of the devil. What the hell is happening there? Are they going out for drinks too often with their new neighbors at the Post?

: Oh and here’s more scaremongering from the commie Telegraph in London, which equates Wikileaks’ Julian Assange with Facebook’s Mark Zuckerberg. Man, we are in silly season.

: MONDAY: The Journal campaign against digital advertising continues today with a shocking exposé revealing that Microsoft is a business-friendly business that chose not to release its browser with a default that would have killed ad tracking and targeting. Horrors!

Now if the Journal were really a business newspaper still, there’d be no news there. The news would be if Microsoft did not do what was good for revenue.

Here’s a too-metered Microsoft response to the weekend’s follies from the browser team.

Google finally reveals AdSense cut: 68% on content

At last, Google is revealing its split on AdSense: 68% to publishers for content ads, 51% for search ads.

I had two primary complaints about Google in my otherwise admittedly and obviously wet-kiss book, What Would Google Do?: Google’s policy aiding government censorship in China and its opacity on advertising relationships. The first is pretty much fixed and this morning, Google is addressing teh second. so is the second. (Uh-oh, now I have fewer excuses not to be a fanboy.)

At a press meeting with Google execs in Davos in January, I pressed them about the advertising openness, having discussed the issue with publishers at DLD in Munich right before. In Davos, Google’s president of global sales, Nikesh Arora, replied that the company was reconsidering its transparency on AdSense. This morning, they’re revealing the deal in a blog post (to which I’ll link as soon as it’s up; this news was embargoed for 10a ET). From the post:

Today, in the spirit of greater transparency with AdSense publishers, we’re sharing the revenue shares for our two main AdSense products — AdSense for content and AdSense for search. . . .

AdSense for content publishers, who make up the vast majority of our AdSense publishers, earn a 68% revenue share worldwide. This means we pay 68% of the revenue that we collect from advertisers for AdSense for content ads that appear on your sites. The remaining portion that we keep reflects Google’s costs for our continued investment in AdSense — including the development of new technologies, products and features that help maximize the earnings you generate from these ads. It also reflects the costs we incur in building products and features that enable our AdWords advertisers to serve ads on our AdSense partner sites. Since launching AdSense for content in 2003, this revenue share has never changed.

We pay our AdSense for search partners a 51% revenue share, worldwide, for the search ads that appear through their implementations. As with AdSense for content, the proportion of revenue that we keep reflects our costs, including the significant expense, research and development involved in building and enhancing our core search and AdWords technologies. The AdSense for search revenue share has remained the same since 2005, when we increased it.

We also offer additional AdSense products including AdSense for mobile applications, AdSense for feeds, and AdSense for games. We aren’t disclosing the revenue shares for these products at this time because they’re quickly evolving, and we’re still learning about the costs associated with supporting them. Revenue shares for these products can vary from product to product since our costs in building and maintaining these products can vary significantly. Additionally, the revenue shares for AdSense for content and AdSense for search also can vary for major online publishers with whom we negotiate individual contracts.

Of course, we can’t guarantee that the revenue share will never change (our costs may change significantly, for example), but we don’t have any current plans to do so for any AdSense product. Over the next few months we’ll begin showing the revenue shares for AdSense for content and AdSense for search right in the AdSense interface.

They’re also not revealing splits for YouTube, a program that just started. Note also that big publishers, such as the New York Times Company, have long known — and negotiated — their splits, which also aren’t revealed. A Google spokesman told me last night that these splits hold for classic AdSense pay-per-click ads and also for newer display, CPM ads. They also hold globally.

How do the splits compare? It’s not uncommon for ad networks to take 50% or more. BlogAds, one of the more generous networks, customarily takes 30% on sales it makes and has other models (if sales come through a publisher site, only 14%; they also offer networked sales).

: LATER: On Twitter, I noticed some confusion about agency commissions vs. sales commissions. Agency commissions are on the buy side as ad agencies take a commission — often, 15% — for placing media. That’s not what we’re talking about here. This is a sell-side commission and I know, for example, that when it started, DoubleClick took at least 50% for sales. DoubleClick also serves ads and that’s a separate fee. I don’t have the latest numbers for these separate tasks; if you can add figures, I’d be grateful.

The hunt for the elusive influencer

Maybe there is no such thing as an influencer.

We keep hunting the elusive influencer because marketing people, especially, but also politicians (marketers in bad suits) and media people (marketers in denial) think that if they can find and convince or brainwash that one influencer, he or she will spread their word like Jesus and their work will be done. But I think this quest is starting to look like a snipe hunt.

At this week’s very good Brite marketing conference at Columbia, Duncan Watts, Yahoo research scientist, presented interesting work trying to track down the influence of influencers via Twitter, with help from the data provides about links. He asked — hypothetically, thank God — whether it would be worth it to pay Kim Kardashian $10k for a tweet to her alleged 3.27 million followers. He found that targeting instead lots of people who have far fewer followers would yield “much, much higher ROI.”

What that says to me — ironically — is that trying to find the big influencer with big audience is really just old mass marketing in a cheap dress. Old mass marketing (go with the largest numbers … and breasts) isn’t economical; neither, it turns out, is marketing to just one or a few powerful people — the mythical influencer. That brings us to a new hybrid to mass marketing, which is what I think Watts is suggesting: Target many people who at least have some friends who’ll hear them. (Disclosure: This was a key insight in the development of the company 33Across that made me invest in it.)

Or to put this question in the current argot: Is there more influence in the tail than in the head? If you talk to 100k people who talk to 10 people each, do you get more bang than talking to one person who has 1m followers? (Watts did also say that a combination of mass and tail marketing is effective.)

In his talk, Watts referenced me and Dell Hell as an illustration of influence. But I protested. I’m no influencer, I said. When I wrote about Dell, I had no juice in the tech/gadget world; still don’t. I then pointed to the amazing Dave Carroll, he of the “United Breaks Guitars” viral phenom, who’d spoken earlier, and said he was no influencer in airline travel or customer service. What was influential in both cases was not the messenger but the message.

But if it’s the message that is, indeed, the key to influence then there’s really no way to predict and thus measure and replicate its power; messages spread on merit. That is a frightening idea for marketers because the viral influencer in social media — pick your buzzword — is their messiah for the digital age, the key to escaping the cost and inefficiency of mass media (and the cost and apparent tedium of real relationships with us as individuals). If you can’t bottle influence, you can’t sell it.

Now it’s true, of course, that the most magnificent message ever won’t spread if no one hears it, if a person with zero followers on Twitter says it. (Tree, forrest, etc.) But a banal message in Miss Kardashian’s Twitter feed — I know, it’d never happen — will go thud and die no matter how many people she speaks to if no one cares about it. Some people need to gather around the speaker for what she says to be heard. But more people doesn’t equal more influence. And this doesn’t make that speaker an influencer. The speaker is merely a node in a network.

So the message spreads not because of who spoke it but because the message is worth spreading. What makes us spread it? First, again, we spread it if it resonates and it is relevance; it has value to us and we think it will have value to others. Second, trust or authority is a factor. If I see Clay Shirky or Jay Rosen or Kevin Marks tell me to click on a link I’m more likely to do so because I respect them and trust their judgment and I’ve found in the past that clicking on their links tends to be worth the effort. They give me ROC (return on click). But if I followed Miss Kardashian (I don’t) and she told me to click on a link, I’d be less likely to, both because I don’t put her in the same intellectual corral as my other friends and have no relationship with her and because I have seen that clicking on her links gives me lousy ROC. Is trust or authority or experience influence? In a small circle of actual friends, I don’t think so. And in any case, having only a small circle of friends isn’t the one-stop-shopping influence marketers are seeking.

So abandon the hunt, marketers. You’re not going to bag the influencer. She doesn’t exist (well, one did but she quit her TV show).

What does this mean then for marketers in social media? I think it means they need to reread The Cluetrain Manifesto (out in a 10th anniversary edition) and recognize that messages and influence aren’t the future of marketing; conversations and relationships are. No getting around it. No shortcuts.

Think about it: I don’t want someone to influence me. I don’t want to be influenced. The whole idea of looking for influencers is so old marketing: spewing messages to people who didn’t ask for them. So looking for influencers only perpetuates the mistakes of marketing past. Stop.

: MORE: Brite organizer David Rogers wrote about influencers and Watts earlier.

Marketing’s next

Meredith, the magazine publisher, is taking on functions of ad agencies, as the Wall Street Journal describes in detail today. It’s a smart move by Meredith and it’s inevitable as we shift from selling scarcity to selling service to marketers. Meredith is taking on the functions of a creative agency. In a networked media ecosystem, I also think that media companies will take on the functions of the media-buying side.

See also this piece arguing that a company should invest not in marketing but in its relationships with customers.

Just two anecdotes in the ongoing shift that will hit the ad industry just the way it has hit media.

(Disclosure: Meredith brought me to Iowa to talk about WWGD? last year.)

Next to the gallows: Newspaper coupons

The best reason that some newspapers have to stay in print — at least a few days a week — is to distribute coupons and circulars (free-standing inserts, or FSIs, in the jargon). But as newspaper circulation declines below critical mass and as digital means of delivery of coupons and bargains catch on, the FSI line of business is the next to fall over the cliff for papers.

Rick Edmonds at Poynter writes about an NAA study that says the coupon business for newspapers is under siege. Meanwhile, brags that the growth of digital coupons is surging; printouts of deals at alone equaled $858 million last year. This comes as coupon use in America is growing overall for the first time in 17 years; we redeemed 3.3 billion last year, a 27% jump over 2008. Sunday coupons still account for the lion’s share of the business, but online is growing fast.

Newspapers defined themselves and their barrier to entry by their production — we already know what is happening to paper — and distribution — now we see what is to become of that.

It’s not just coupons that are affected. When I visited the very smart people at Best Buy a few months ago, I came to see that their circular is media as well; it provides value to manufacturers and consumers. Large retailers, like manufacturers, need effective distribution and as newspapers shrink, they will need to look at alternatives.

Is that the Postal Service? Well, they, too, are losing a fortune (more on that soon). Most of what the Post Office delivers today is advertising and I certainly don’t want to subsidize that with my stamps or taxes, so I’d expect advertising postal rates to rise, which will also put pressure on coupon and circular advertisers, motivating them even more to find ways to make digital work.

The problem with digital coupons and circulars has been portability: the extra and inconvenient step of printing out supresses use. But now enter the smart phone and the long-fabled day of the smart, mobile coupon may actually arrive. If I can check into a flight with a scan of my iPhone shouldn’t I be able to buy toilet paper with it? The value of that redemption is greater for the advertiser because (a) it may cost them nothing — no need to use media as a middleman if I receive deals directly and (b) the advertiser will know a lot more about me; that data itself is terribly valuable and (c) this allows the advertiser to target with far greater relevance, which (d) is better for us customers.

I think there’s a short-term opportunity here for someone to craigslist (as a verb) the newspaper distribution business, creating the means to deliver in key markets with greater reach and better Zip code targeting, drastically undercutting both newspapers and the Postal Service. As coupons do move to mobile and digital, this business will go away, too, but it won’t have much in the way of shut-down cost so there’s a way to disrupt the last dying ember of an industry and get some nice cash flow. If I were a coupon company — and News Corp. is — I’d do it myself.

The point: expect the coupon and FSI business to head over a cliff and with it, another important revenue stream for print papers, giving them more reason to abandon print.

ONE MORE THING: I’ve told this first part of this story before: When I was Sunday editor of the NY Daily News and we came back from a strike, we didn’t have coupons because Murdoch was feuding with our new owner, Robert Maxwell. When they did return, our circ went up 100k. Those people were buying coupons more than the paper.

Now the second part: I later proposed to a publisher starting a coupon magazine that would be sold at supermarket checkout. Yes, I said sold. I wasn’t going to charge readers for content. I was going to charge them for advertising. Didn’t happen, sadly. Still think it was a good idea.