Posts about ads

OnMedia: It’s differenter than you think

I’m at the Always-On OnMedia confab in New York (yes, another conference… life is a conference). I’ll not liveblog it; after DLD and Davos, I’m liveblogged-out. This one is focused on investment and that’s good; that is the mother’s milk of innovation. But I’m frustrated that the people on the stage — as innovative as they are — are still thinking in old media terms on the internet.

They think it’s content. “The perceived economic value of content is approaching zero,” said Drew Lipsher of Greycroft. The reason that people come on the internet is for the content, says Jim Spanfeller of The problem with that, I think, is that the internet is more about connections and relationships — that’s where the core value is and content is a vehicle for that. This is like measuring the value of a car based on how much we like the seat. We don’t value cars because we can sit in them but because they get us somewhere. We’re valuing and measuring the wrong things.

They think it has to be big. Eric Hippeau said that critical mass for advertisers to pay attention is growing from 1 million to 3-5 million users. Jonathan Miller is waiting for a blockbuster hit on the internet that spawns sequels and t-shirt sales. That’s still treating us like a mass. That’s still about lazy advertisers who want to buy upfront and don’t want to converse with us as individuals or at least communities. We need advertisers’ money; that will be the primary support of online media. But we need to both retrain them and give them the infrastructure and data to enable them to market smarter and create meaningful relationships — and, in the process, support small instead of big. Part of that infrastructure is technology to enable better measurement and sales. And part of it is putting together curated networks that do make buying advertising easier.

They think life is neat. We’re still hearing this red herring about advertisers not wanting to be associated with bad things online. Name a brand that has been truly ruined because a banner ad appeared on a porn site. Name one. Oh, yes, there’ve been teapot-tempests — boiled by media — about a banner that ends up on a neonazi page but, c’mon, no consumer is going to assume that the brand is Nazified. The answers to this are first to recognize that life is messy and second to use networks that curate content. The draw of being included in that network and getting its money will be the thing that keeps the content safe. But, hey, advertisers, life is not neat. Shit happens. (Oops. I said shit. I guess the ads on the right will be disappearing.)

They think this is about selling. We’re still hearing about standard ad models and measurements. But someone on the panel pointed to Nike, which is moving away from CPMs and GRPs and heading to providing the infrastructure for communities to do what they want to do. Nike is turning from a manufacturer and marketer of products into a platform.

I don’t mean to say that everyone’s in the past and issue a they-don’t-get-it rant. Indeed, these people get it more than most. I’m just saying that the online life is — pardon me — differenter than we yet realize. The very model of media is only starting to come into focus. We think. We hope.

DLD: The network model

I heard vindication for my advocacy of the network model of media online in today’s DLD panel on ad exchanges (aka networks) with Samir Arora of Glam, Christoph Schuh of Burda, Magid Abraham of Comscore, and others. Randy Rothenberg was moderator.

One of the most controversial posts I’ve ever written — politics and Dell aside — was about Glam and its network model of media, arguing that in the connected internet, this will be a major factor. Some agree. Some disagree. The ones who disagree are generally from big, old media and it seems they find the network model threatening. They sell their premium on being brands and destinations and they fear — but shouldn’t, I say — this opening up of their space. See my spat with the Times’ Martin Nissenholtz at the Online Publishers’ Association in which I argued media should be asking “what would Google do?” — WWGD? — and thinking distributed while Martin argued this his brand is worth our trip to it. Those folks argued with me that only they could sell quality because they owned their content; Glam owns little of its. One wonders, then, why the Times is now selling Freakonomics.

In today’s discussion, networks are critical to the future, Comscore argued, because without them, even the biggest online brands don’t reach that much of the audience that much of the time. The top four sites, the search monsters, have only 5% share of page views on the internet and 7% share of their users’ page views. So networks extend them. That is why AOL, Microsoft, Google, and Yahoo have been buying big ad networks.

But Glam is different. It is a content and ad network that curates blogs and sites for women and sells ads and shares revenue on them. Some say that because it isn’t produced by big media, its quality is low. But I heard today that Arora insists on no automated, Googly ads; they only deal with agencies. Networks online are often remnant space filled with dancing monkees. So he wanted to avoid that. When he took over Glam, he asked, “What would it take for advertisers to act on the internet as they act in traditional print?” He also asked: “What is the definition of media going forward?” His next frontier, he says, is to define prime time and prime placement on sites.

OK, so that’s his pitch. That’s just one network. My problem is that there aren’t more of them and that big, old media don’t sell them. Oh, they get involved in networks like Tacoda. But they don’t curate and enable and encourage outside distributed networks. That’s what I want to be a part of.

Exploding TV

I’m at the Guardian Media Group’s offsite. Not planning to blog it. But I can’t help this: David Muir, CEO of WPP’s The Channel, gives the agency’s ad share projections for the UK. Online is now at 25% (far ahead of the U.S., by the way) and they predict it will surpass TV — and all other media — next year. But he cautioned that 79% of that online advertising goes to search. Google is God.

CORRECTION: I missed a step in the math. Muir says that search takes 79 percent of online advertising and that Google, in turn, takes an estimated 75 percent of that, three-quarters of three-quarters.

Silly advertisers

A story in today’s New York Post exposes the silliness, stupidity, the strategic blindness of advertisers, who insist on creating scarcity — and higher prices — where it does not exist (probably because that’s how their agencies get paid):

It’s a conundrum for advertisers: even as ratings fall, ad prices on network TV are soaring.

Although it seems counterintuitive, it’s the law of supply and demand. As the TV audience shrinks, advertisers have to buy more ads to reach their target number of viewers. But that increased demand for ad slots creates scarcity, which in turn leads to rate hikes.

This year, a number of factors conspired to drive up ad prices, in particular for advertisers that waited until the last minute to shop for ad time on the open “scatter” market rather than buying spots in advance.

In the fourth quarter, advertisers on average paid 18 percent more for primetime “scatter,” or spots purchased on the open market, compared with the year-earlier period, according to SQAD Inc., a media research firm that tracks TV ad costs.

At the same time, the average rating sold in the fourth quarter, when retailers are eager to reach holiday shoppers, was down 14 percent from a year ago, the figures show.

Of course, there are no end of new ways to reach that audience — and reach a more targeted audience. But that would require advertisers — and their agencies — to work a little harder and move past the one-stop-shopping of TV and upfront to putting together networks online. Actual work? Heaven forbid.

I screeched about this two years ago when advertisers complained about a shortage of inventory on Yahoo’s home page — when most people ignore home pages today. And the other day, I complained about newspapers still insisting on selling to big advertisers instead of creating an infrastructure to sell to a mass of small advertisers.

It’s their own damned fault, paying higher prices or missing new revenue. They keep assuming that the essential structure of media economics is unchanged. Silly advertisers. Stupid media. Nothing’s the same.

Why are we behind?

Zenith Optimedia came out with its regular report on ad spending (coverage at AdAge, PaidContent, and MediaGuardian). Online will hit many milestones:

We predict internet advertising to pass three milestones over the next three years. We expect it to overtake radio advertising in 2008; to attain a double-digit share of global advertising in 2009; and to overtake magazine advertising in 2010, with 11.5% of total ad spend.

That will put online third behind TV (37.5% share) and newspapers(25.4%). Nothing surprising there.

What strikes me again is how behind the US is versus the UK and Europe. Says PaidContent: “Britain, Denmark, Norway and Sweden are the only four places where online ads account for 15 percent or more of total spend, according to the TimesOnline. But Zenith’s projections say that will change by 2010, when the internet will comprise more than 20 percent in each of the same four markets and more than 15 per cent of the ad spend in ten other countries.” Adds MediaGuardian: “Internet ad spend is currently ranked behind radio globally but will surpass the medium’s share next year. In the more developed UK market digital ad spend passed radio last year.” Note that this occurs even though UK radio is better than US radio.

Why is the US behind? Is it that the national media markets in those countries are more competitive and thus, perhaps, innovative? Is it something about the culture of American agencies or advertisers — and if so, what? Is it the nicotine habit of TV upfront here? Is online just more of a pain to buy than upfront? The audience is shifting online faster than the advertisers. Online is more efficient and measurable and more competitive, thus less expensive. So tell me: why are we behind?

Your theories or, better yet, experience?