Media Tech Business

Using my daughter’s PC recently I was stumped by the lack of ads visible in either Firefox or IE. I checked and rechecked my settings to no avail. A quick search brought me to this little number. Try this at home:

Start>Run>C:\Windows\system32\drivers\etc\hosts

Every ad server, ad network, and even dozens of websites appear on this list on my PC. And every ad is blocked.

NYTimes.com – before fixing hosts file.

NYTimes.com – after fixing hosts file.

This appears to be a Windows-based equal opportunity ad destroyer. It kills everything in sight on both browsers and on every site on which ads are delivered by DART, Atlas, OAS, Zedo, etc. I’m wondering if this is malware planted during my kids’ excursions on MP3 download sites. It’s a nasty bit of business for our industry.

Tags: Ad Blockers, Ad Serving by Bennett Zucker
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Q: When does “sold out” mean “plenty of inventory available”?

A: Almost always.

Herein lies the dirty little secret that will continue to drive online ad prices down over time for all but a fraction of the highest value branded inventory. In February 2007, Right Media presented findings of an Insight Express survey conducted among about 100 small, medium and large publishers, with representation by directors, VPs and higher from sales, operations, administration, marketing and editorial.

This slide shows that, on average, only 52 percent of total inventory on respondent sites is sold by the site’s own sales staff. Another 25 percent goes straight to networks. Respondents also said they used more than one network, with 43 percent using four or more ad networks to monetize their inventory.

Download the deck here: How Publishers Think About, Manage & Monetize Non-Premium Inventory.

Tags: Ad Inventory, Ad Networks, Ad Sales, Monetization by Bennett Zucker
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Once upon a time, delicatessen was a “ten-dollar word.” Many letters, tricky to spell, born somewhere in our Saxon past, it’s easier and tastier when simplified to “deli.” Techs and web titans love big, ugly words, especially when they’re misspelled and coupled with “it’s” instead of “its,” and vice versa. With economic and academic inflation in this business, we’ve entered the era of the “ten-billion-dollar word.”

For example, a principle tenet of ad networks and media exchanges is that markets require liquidity in order to achieve efficiency. You use words like these all the time, though they have absolutely nothing to do with media, technology, advertising, publishing, business or what your mama raised you up to do.

Then there are people with too much education in the wrong subjects who inflict political correctness on our language in order to exert control over mortals. We can no longer say, “The consumer is not a moron; she is your wife,” for fear that this oft-mangled David Ogilvy observation may offend morons or consumers. Or wives. Maybe even women. But someone with a fifth-grade education can get the point. That’s communication.

Tags: Language by Bennett Zucker
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… ask what media can do for tech. So might JFK have put it were he inspiring legions of media publishers, rather than U.S. citizens, to step up and be counted on to make a difference.

How well do revenue-enhancing media technologies really perform for publishers? Henry Blodget takes a good stab at how much Tacoda might contribute to AOL’s network revenues. Like most industry observers, he misses some basic assumptions that result in overestimating the impact, at least near term.

When any ad network claims to reach X percent of web visitors, they’re typically describing potential reach, not the actual number of visitors to whom the network served an ad in the previous month.

Example: Network Z serves ads to Sites A, B and C, which have monthly unique visitors of 2, 4 and 8 million, or 14 million combined. After removing duplicates (N visitors to A also visit B, N+X visitors to A also visit B AND C, etc.), say we have an unduplicated total of 7 million visitors to all three sites, or 50% of the duplicated total. The network may claim a potential unduplicated reach of 7 million.

But on a typical site, 20 percent of visitors generate 80 percent of traffic. So Site A, with 2 million uniques, has fewer than a half-million visitors per month who generate most pages and ad impressions. These same heavy users consume the lion’s share of ads delivered by Network Z to the unduplicated total.

Back to Blodget. First, he is correct about how Tacoda, Blue Lithium, Valueclick and others take non-premium inventory that yields well under a dollar and then use audience targeting to convert some of this into inventory yielding around $3.

In his AOL calculation, he assumes that “25% of display inventory and 50% network inventory can be ‘enhanced’ and that the ‘enhancement’ might range from 50% to 150%.”

This is a well-considered discounting of how much enhanced targeting can do for a vast amount of inventory, but it doesn’t go far enough. Since most of AOL’s volume is in email, IM, and other hard to target inventory, the amount that needs enhancement is probably closer to 90% than 50%.

Most ad impressions are generated by a small group of heavy users. If frequency caps are in effect, and if heavy users don’t do a lot of web surfing on other sites in the behavioral network, then Tacoda will have the same trouble monetizing most of this traffic that AOL has today. Therefore, my guess is that increasing AOL’s run rate by $200 million (the bottom of Blodget’s 10% to 40% enhancement estimate) will take years and many new tricks.

Tags: Ad Inventory, Behavioral Targeting by Bennett Zucker
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If the dot-com boom and bust was our era of smoke and mirrors, five years after bottoming out we are all about firebombs and rivers of hot lava. In 2007, hype and hope still reign, but they’re backed by the full faith and credit of a $16-billion digital ad economy.I had personal interest in two of this year’s big deals: Yahoo!-Right Media and AOL-TACODA. I was with Right Media when Yahoo! bought a 20 percent stake in October 2006 and the remaining 80 percent last April (deal closed in July) for more than $700-million. Before I joined Right Media, I was with TACODA for three years, and I celebrated AOL’s $275-million purchase in August.

Right Media and TACODA created two of the most popular trends of the hot lava era of media technology. A lower tier ad network, Right Media, came out of nowhere to invent the online media exchange concept that became central to the acquisition and growth strategies of Yahoo!, Google (Doubleclick) and Microsoft (AdECN). And behavioral targeting, ably nurtured from an interesting idea to a mainstream tactic by TACODA, is being touted and reinvented by dozens of networks, technology providers, and entrepreneurs with visions of better media tech mousetraps.

I had the unique opportunity to help create a lot of the hype and to evangelize the real results generated by these technologies that were, are, right for their times. MediaTechBusiness will be a platform for me to synthesize a lot of what I’ve learned over a long career in marketing, sales and management in media and technology, but not just from these companies. As a four-time loser with other startups, I know as much as anyone about what it takes to succeed. Now, as the guy with the “hot hand” and a couple of big wins in a row, I’ve had the privilege to meet with dozens of CEOs, VCs, analysts, recruiters, media sellers and buyers in recent months for up close and personal investigations of the possible next big thing.

Where permitted, I’ll identify and interview principals of some of these businesses. Where I’m under non-disclosure agreements, I hope to be able to share some of the truly imaginative and exciting new developments I’ve discovered. If you are among my sources, and you know who you are, please let me know right away that you’d love to join the conversation. If we haven’t met, what are you waiting for?

Tags: Behavioral Targeting, Digital Economy, Media Exchange by Bennett Zucker
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