Posts about ads

Rise of the network, fall of the portal

Mark today in the history of media. In today’s NY Times, we hear an ad guy praising networks over portals (and by portal, we don’t just mean Yahoo, we mean any closed media property, including TV networks and newspaper sites). Networks used to have cooties; they were supposed to be nothing but aftermarkets for unsold inventory — or so the big media properties wanted us and media planners to believe. But networks are quickly becoming more targeted, more efficient, and more economical. From the Times:

Some of the ad dollars that in the past had been spent at portals are being spread around instead. Ad networks, which fan out ads to thousands of sites, are adding targeting and are signing up reputable sites, making them more attractive for advertisers.

“There was a time when we would go out and buy inventory on the portals,” said Quentin George, global head of digital media and strategic innovation at Universal McCann, which plans media for clients like L’Oreal and Sony. “Portals make it easier for us to buy and place media on behalf of our clients. But as time continues and as analytics capabilities increase, you find that your media dollars can work better elsewhere across a range of different sites.”

Michael Hayes, senior vice president and managing director for Initiative Interactive, which handles digital spending for clients like Home Depot and Bayer, said that advertisers might be turning away from broad buys and looking for more targeted campaigns on smaller sites.

“This is hurting the portals,” he said. “There are more options.”

This is why I say that the Glam model — whether that includes Glam itself or not only time will tell — is a key business model for the future of media. Welcome to the post-scarcity post-media economy.

It’s about aggregation

One theme that came out loud in and clear, to me at least, from the panel on the internationalization of media brands that I ran at OPA this morning is this:

Top brands with international traffic should be banding together to sell that traffic and audience as a group. No one of them has successfully and fully exploited the value of this audience now and, as Martin Nisenholtz of the NY Times pointed out, each of those audiences is relatively small. But together, I say, they represent a powerful, smart readership. I’ve suggested this in the past to the UK brands: Guardian, Telegraph, Times, even the BBC outside the UK. At today’s panel, Chris Ahearn of Reuters — which just agreed to represent ad sales for the Guardian in the U.S. (full disclosure: a introduction I helped make) — said that all these brands are undersold. Of course, there’s self-interest there: Reuters would be happy to sell them. But I do think there’s potential there.

Later: From Jemima Kiss’ report (blogging from the front row):

The BBC’s sanction of advertising on its international website BBC.com was “enormous state-funded intervention in the international news advertising market”, the Guardian’s director of digital content warned today.

BBC.com was beginning to impact on international news sites as UK web publishers moved to monetise their overseas audiences, Guardian News & Media’s director of digital content, Emily Bell, told the Online Publishers Association conference in London.

“The BBC funds the biggest online news site in the world,” she said.

“It will be interesting to see how the New York Times and everyone else reacts. This is not our problem – it is everyone’s problem.

“The BBC is going to be an enormous state-funded intervention in the international new ad market.” . . .

Bell said today that advertising inventory on Comment is Free, the Guardian’s discussion site, was fully sold out because advertisers want to reach its audience of high-end, opinion formers.

Get that: ads sell out on a site with interactivity.

An open ad network opens for business

OpenX is building the start of a new, more open ad network infrastructure.

My Guardian column this week starts with a recast of my blog post about Google Ad Manager and then breaks a wee bit of news:

OpenX (nee OpenAds, nee phpAds) is putting together the elements of what I hope can become an open ad architecture that could compete with Google and create a more transparent marketplace that will support the creation of many more sites (I’ve been wishing for this for more than two years). OpenX is already serving about 200 billion ads over 30,000 sites each month with its free software. What I’ve been urging that they do is tie that together into a network that advertisers can pick and choose from for ad hoc networks of quality sites.

Today, I was told by OpenX founder and CTO Scott Switzer, they will have the first piece of that puzzle: an ID structure that will cookie users across any participating site.

Next, in the second quarter, they plan to deliver a bidding infrastructure so agencies and networks can buy ads on any of those sites. Thus an agency could put together an ad hoc network of great mommy blogs, or an existing network like Federated could augment its own sites with others sites that are using OpenX. And a site can take high-value ads from one network today and another agency tomorrow and backfill with ads from a remnant network — including, apparently, Google itself. So both the publisher and the site recognize higher value and that, I believe, is what can propel sites of any size to put together highly targeted and flexible networks that reach critical mass and offer greater quality than portals, which are merely collections of eyeballs.

And next will come a hosted ad serving service, which is now in beta; this would enable any site without benefit of a 16-year-old son and webmaster to serve ads from most anywhere.

What they’re really creating is an open ad call, since any other network or server can serve ads through OpenX. That, I believe, is the keystone to creating a new and more open ad architecture. That, I hope, is what will enable most any advertiser to place ads on most any site.

Switzer told me that they are being advised by a panel of sites, agencies, advertisers, and networks large and small.

Here’s where I hope this goes next, from my Guardian column:

Once we have an open ad network, we’ll also be able to expose data about sites and ad performance. We would establish the true value of our new medium, especially when we can track new metrics: behaviour, interest, influence, authority, the timing and spread of ideas, and so on. As an ad blogger once said: instead of measuring impressions, we’d measure the impressed. Or to twist another ad cliche: let’s stop reaching eyeballs and start reaching brains.

My hope is that an open infrastructure would encourage the creation of many new companies. Let’s start with a wealth of new content sites: niche interest blogs, hyperlocal blogs, innovative services, new, small-scale journalism. Next we’ll see new analytics companies that would help advertisers find their ideal buys. And we’d see a host of networks spring out of ad agencies and media companies to help us poor bloggers make a living.

The Guardian started such a network gathering green blogs. The Washington Post put together networks for high-value content areas such as travel. And last week in 13 US markets, CBS TV launched a network that places widgets containing news and ads – with promotions for stations – on local blogs.

So now the battle is on. Will big media brands, Google’s ad network or an open network win more of the online ad market? The stakes are growing ever bigger: last week, General Motors announced that it will move half its $3bn ad budget online. I’m just hoping that one of these networks will bring a few of those dollars on to my humble blog.

CBS stations’ local ad network

It warms my cockles to see a local blog ad network start, especially from a company as big as CBS’ station group.

They just announced a new widget ad network in 13 of their local markets (the owned & operated stations with newsrooms). In a week and a half, they’ve put together 80 blogs in the network, many more to come. They are all local blogs around various content interests: news, politics, sports, real estate, entertainment. This is pretty much just an ad network rather than a curated ad-and-content network like Glam. CBS intends to send the blogs some traffic, but unlike Glam, it’s not aggregating and curating their content. They’re looking for decent blogs that are local and are updated regularly, but they’re not yet turning this into a contest where the best quality wins (that day will come, I hope). When I spoke with them, they did add that they’re delighted with the quality of the local blogs they’ve seen.

You can see an example of the ad unit here and here: a constant feed of content (video stills in most cases, text in others) over an ad unit. So far, they’ve sold AT&T, Liberty Mutual, and the Honda dealer group in Dallas. They will sell in both local and national ads; it’s too soon to know what that mix will be, but they anticipate about an even split.

This is a model I like and one I’ve been pushing with companies I know: You could look at this as an ad with content attached or as content with an ad attached. So the blogger gets an ad, revenue, a some small dollop of content, and an association with a major media brand (which some still value). The station gets to push its advertiser as well as its content and brand and gets an association with those cool bloggers and its gets new inventory and audience. The advertiser has a better idea of the environment because there’s content next to the ad and because the station picks the blogs. What’s not to love?

The CBS unit also carries the local station’s branding plus a link to a pitch to join the network. Here are examples of the units.

I spoke with Jonathan Leess, president and general manager of the CBS station digital group, and Aaron Radin, senior vp for their ad sales and biz dev. They understand that this is not just about driving traffic to CBS domains but about reaching audience they may not now serve in other places. That’s the attitude.

I had to pull numbers out of them like baby teeth. They’re telling the bloggers to expect an effective CPM of about 50 cents but they quickly acknowledge that they’re subsidizing and backfilling the network, which is brand new. That is, they’re not yet selling the high-value ads and they’re not selling out, so they are putting in lower-value advertising in some cases and throwing in a subsidy on top. So that’s the net-net bloggers can expect today. But that’s not the value they’re selling to advertisers. That, they said, is more like a $10 CPM (though all life is negotiable). Compare that with $8-20 CPMs on CBS domain banner ads and $16-25 on video inventory. If they can sell a CPM approaching a double digit for local blogs and sell through enough inventory, that could be healthy. In the end, I ask, what will the value of a network impression be relative to a CBS domain impression? Again, it’s too early to say, but Radin guesses one third to one half.

They hope to add 20 million incremental (that is, new) ad impressions per month per market, though they’re quick to add that their goal isn’t just ad impressions but also new audience. Amen. And note that they’re pushing not just web pages but also those high-value video views. Leess and Radin said they serve 20-25 million streams a month, about half of that from the stations’ sites and half from syndication to Yahoo.

By the way, Buzzmachine is not local so it won’t qualify. Drat. When will somebody start that media wonks’ network?

Google Ad Manager: It’s bigger than it looks

The biggest news of the week — well, besides the governor-erect (hat tip to the New York Post) — was not AOL’s purchase of Bebo or Yahoo’s embrace of the semantic web (about which I remain skeptical) or certainly Lacygate. No, the biggest, most game-changing news went by without a great deal of notice and that Google’s announcement of a free ad-serving platform.

Google Ad Manager is one critical piece in creating the open network of networks where any site can take any ad and any marketer can advertise on any site. When that day arrives, we all become atoms that can attract to one molecule or another, no longer locked into one network. We start to see a truer marketplace for online advertising. We also get to see small sites gather together in large, ad hoc networks to compete with big sites — and this, I believe, will encourage and support the creation of more small sites. God’s work. Or now Google’s.

The creation of a standard ad call — which any site can use and into which any advertiser can place an ad, which in essence is what Google is doing — is the foundation of what I envisioned when I called for an open-source ad infrastructure.

There’s just one issue: It’s not open-source. And it’s Google’s.

Google’s benefits are clear: By offering free ad-serving to sites, it has an opening to be on many more sites, and when they don’t have ads of their own to serve, Google can serve AdSense and make some more money. Google also gathers incredible data about ad performance and pricing and about the sites themselves. One big problem with its program is that it doesn’t share that data with the publishers and let them use it to more efficiently serve its ads. It also doesn’t share it with advertisers and let them take advantage of a more transparent marketplace.

No, Google’s holding onto that information itself and, once again, becoming smarter than all of us. And I say that’s our own damned fault for not building our truly open ad marketplace. It’s not too late, but it soon will be.

The closest thing we have to an infrastructure for such an open marketplace is OpenX (nee Openads, nee phpAds), a free and open-source ad platform now serving ads on 30,000 sites. What’s needed — and I told CEO James Bilefeld this when I met him sometime ago — is that all those separate sites should be tied together into an open network so advertisers can pick and choose where to place their ads. The other thing it needs is standard metrics so advertisers can decide where to buy.

Now Google promises to build that cross-internet ad network with Ad Manager. And Google has the metrics — only, again, it’s not sharing. It lets sites target ads on the most basic of criteria: geography, bandwidth, browser, browser language, operating system, and domain. Whoop-dee-do. Each site can use its own information to target. But it’s the cross-site information that is exponentially richer and it’s Google that sits in the catbird seat where that is visible.

We should be able to target on so much richer information: the cross-site behavior of users (that’s the basis of Tacoda, just bought by AOL); their influence (that’s part of the sauce cooking up at 33 Across, where — full disclosure — I am an adviser and investor); their place in the timing of a conversation (meme starters, meme spreaders); their own characteristics (what do the demographics of authors tell us apart from the demographics of audience?); their authority (too bad Technorati never found a way to exploit that for bloggers’ benefit); and so on. This is about moving beyond eyeballs to brains.

But I wonder whether entrepreneurs will be able to start building some of this structure atop Google’s Ad Manager: analytics companies finding the ultimate network of soccer moms; ad agencies or media companies putting together ad hoc networks. This will create greater efficiency and thus greater value. And it will tie together a distributed community of interest into a critical mass advertisers will pay attention to: the mass of niches. And that, again, will support the creation of a new wealth of content and communication; that’s what I want to see.

On a less momentous scale, the Google move also reduces the cost of serving ads to zero and that will have benefit for sites of any size. When I worked on sites that were DoubleClick clients (which will still charge for serving as it becomes part of Google… for now) it was too expensive to serve even our own promotional ads because we had to pay DoubleClick to do it. Now sites can use their ad inventory in new and more creative ways. That, too, is a benefit of Ad Manager.

Altogether, Google is simply doing what Google does: creating a platform. That benefits all its users and it benefits Google by putting it at the center of the market. But the more closed that market is, the more it benefits Google over the users. And the more Google becomes the sole standard, the more it can successfully make it closed. So if we’re going to create an open ad marketplace, now’s the time. If it’s not already too late.