Media Tech Business

Nice post by Andrew Chen about the proliferation of ad networks and the surprising success of several that have sold for very high multiples. He summarizes it this way:
My overall lesson from all of this is that a lot of times, people view things as “winner take all” and sometimes it is that way – but in this case:

mature industry + real revenue + adjacent space heating up
= huge outcomes for everyone

I think this is true, but it’s probably cyclical and there’s bound to be a lot of consolidation ahead. True, thanks largely to MySpace, YouTube, Facebook, et al, total ad inventory available has skyrocketed. True, no single network or handful of networks can meet 100% of this growing demand. And true, multiple pricing models and targeting technologies help to make this a market for the multitudes.

But consider some of the pressures working against “huge outcomes for everyone.” Various estimates put the total number of operating online ad networks in the hundreds. Yahoo’s Right Media Exchange and nascent others can accommodate all of them – but only for as long as they contribute real value to the marketplace. Better targeting, better optimization, better something is required for establishing a niche, staying in business and succeeding.

Without the exchanges, there is almost literally no hope for dozens of these networks. Media buyers are humans, and they are in short supply as it is. There is simply no way for them to add another thirty phone calls and meetings to every day to give serious attention to every network that wants their business.

Ultimately, there can and will be “a number of” winners. That number will probably be closer to 20 than 200, however, due to basic Darwinian principles. Some reasons why this is so:

1. The largest contributors of inventory to ad networks already work with 10, 20, 30 or more networks. It’s a big, ugly, inefficient process in which networks pass ad impressions back and forth, up and down a daisy chain or waterfall, depending on your metaphoric predilections. As in a beauty contest, there can only be one true winner, and that’s the number one network in line. Ad impressions get stepped on many times, the way poppies get reduced to heroin and then to a street mix that’s cut time and again before it hits the “user.” (At last, an excuse to relate web users and drug users

2. Conversely, the hundreds of ad networks are all selling the same media placements. They are all offering every known and quite a few imagined forms of targeting, but they all base their targeting decisions off the same limited data set – primarily context. This is true of contextual ad networks and of behavioral networks that rely on context to define behaviors or interests.

In the end, individual networks won’t win simply because inventory is growing and they’re bigger and badder in getting to the best of it first. Media placement, context-based targeting or some new spin on optimization don’t matter that much. With apologies to my publishing colleagues, that’s the commodity end of the business.

Advertisers need a better, more predictive and accurate data source to drive much more value through the media value chain.

Tags: Ad Inventory, Ad Networks, Ad Sales, Audience Targeting, Data, Media Exchange, Media Planning and Buying, Monetization by Bennett Zucker
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Compared with a year ago, which are you buying (or selling) MORE frequently, LESS frequently, or about the SAME?

- ACTIONS? – such as cost per action, acquisition, click, lead, order, etc.

- AUDIENCE? – behavioral segments, demographic targets, etc.

Ask any buyer or seller and you’ll hear variations on familiar themes.

For example, an analytics director for an ad agency in London who is buying actions less frequently says there are simply “too many conversion attribution challenges and distractions.” On the other hand, this buyer finds that “data and targeting are getting damned interesting, and the results are justifying greater investments.”

Meantime a counterpart at a US agency says, “Actions are prominent for us because everything is an action – a visit to a website, even if they don’t click, can be tracked and measured. Clicks, obviously, are actions. Sweepstakes, call center (pay per call), orders, conversions, leads, etc. are always a part of my goals. That is how I plan. Not to an audience, but to an action – and who is most likely to perform that action. Not take an audience and then try to fit the action to the person. THAT is the difference between marketing offline and marketing online.”

Will actions prevail, or will audience? Or are the lines between branding goals and metrics and direct response blurring into the long-sought new entity – branded response?

Tags: Audience Targeting, Digital Publishing, Media Planning and Buying, Monetization by Bennett Zucker
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Not very useful, that’s what a hammer is without a nail. In a business environment where everyone has a great idea, but most ideas don’t address and solve real problems, it’s great to find a hammer that slams the ol’ nail on the head.

Last year, Pierre Grenier was an associate at SF-based Catamount Ventures when he was dispatched to help portfolio company Piczo with its fast growing social network for teens. He quickly saw that the site’s staff spent an inordinate amount of time reviewing submitted images and posts for porn, abusive speech and other bad content that could ruin a family-friendly site. In short order, Keibi Technologies was conceived to solve a very real problem shared by all sites with user-generated content that requires ongoing moderation.

Paul Remer came over from Piczo as CEO to lead a team that includes Johan Wikman, VP of Engineering, and Jon Wilks, VP of Sales & Business Development, both of whom had worked with him previously on successful startups. With Grenier on board as Founder and VP of Product Development, last month they announced the launch of the Keibi Moderation Suite for automated moderation and classification of user-generated content.

When I first talked to Remer about Keibi back in June, what got me excited was not simply the nuts and bolts problem Keibi squarely addresses, but its potential to help sites that have both edited and user content to provide advertisers with a new layer of content that has been moderated and classified as, for example, “brand safe.”

Say a large social network has a highly saleable home page, section fronts and additional edited pages below the section fronts. Perhaps ten percent of their ad inventory is on these pages and they monetize this effectively. The other 90 percent, however, is user-generated and therefore largely off-limits to brand advertisers. The site typically works with multiple ad networks to fill in with low-priced performance-based inventory. If the site can chip away at the 90 percent, adding a layer of safe content that has been moderated and classified using Keibi, it’s a big win for the site and for brand advertisers that want to reach prospects and customers where they spend their online time, but are fearful of doing so within unmoderated content.

While the sweet spot is among online communities, if you’re an ad network or an advertiser with this problem, or an edited site that has additional user content, Keibi is also worth a look.

Tags: Ad Inventory, Digital Publishing, User-Generated Content by Bennett Zucker
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It’s a hot and humid October 5 in New York, a typical lazy summer day, misplaced. A perfect time to let someone else do the heavy lifting.

MediaRiver knows what you’re searching for and brings the content to you before you request it. Starting life as a desktop app called Watson, the engine would infer from data and activity on your hard drive what you were working on and it would query databases for other content that would be highly relevant at that moment.

As ClickSurge, the product is now a widget that applies visual semantics to create a query from the entire page you’re viewing, not just keywords or word patterns, and it feeds back live content from other sites on the same topic you’re viewing. Given the right distribution and business model, this has potential to displace contextual search: after all, consumers are far more likely to click on relevant editorial content than an ad, no matter how relevant. For the publisher of that content, it’s an incremental page view on which they’ve already sold ads.

Steve Rubel wrote in AdAge recently about efforts under way at Microsoft, Google and elsewhere to bring content to the viewer. Commercial content vs editorial content: It will be interesting to see a head to head comparison.

Noting the as-yet untapped potential of social networks to use data on the interests of millions of participants, Rubel concludes, “Over time, as these technologies revolutionize how we interact with media and become increasingly seamless, sites will rely on a mix of people and technology to bring you content that is relevant to you. This will usher in a revolution in advertising that makes everything we do all the more relevant, timely and measurable.”

Tags: Digital Publishing, Search by Bennett Zucker
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Greg Smith tells me EchoTarget now offers lifestage targeting thanks to new parent, Acxiom, which enables targeting and creative optimization based on income, net worth, age, presence of children in household, and other datapoints of importance to financial services marketers.

And Greg Stuart wrote to remind us that his top secret projectRialto is moving stealthily along. Thanks to the Gregs and other correspondents!

Tags: Behavioral Targeting by Bennett Zucker
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By next March, a dozen companies you’ve never heard of will launch notable products, ad networks, or services based on behavioral targeting. Some are newborn; others are already making money, but still flying low. They come in lots of new flavors:

1. Targeting with ISP data. Competitors include Adzilla and Nebuad, which have raised $10.25MM and $30MM recently, and Phorm. They all work with ISP subscribers’ data to target more relevant content and ads. Other companies with strong ISP relationships will enter this market, as will a venture that includes ISPs as founding partners.

2. Data exchanges. As one founder described it to me, “it’s a little Tacoda and a little Right Media. It can’t miss!” The theory is that sites will gladly sell user data rather than continue to give it away to ad servers, networks and research companies. At least two raw startups and two veterans are racing to produce the first commercial-grade data exchange, where advertisers can bid on audience by behavioral segment. They split the ad market, with two of them being all about performance and two going for brands.

3. Purchase behavior. Tom Hespos wrote recently that purchase behavior may be the new behavioral “thumbprint.” And he’s right: One company documents a conversion rate increase of 790%. The aCerno Transaction Marketplace is an online data co-op whose 300+ customers can target their own and each other’s customers all over the web.

4. Exotic behavior? Agent-based modeling is the secret science that will propel one startup’s better targeting engine. The goal is to super-size valuable segments comprising enormous populations of target-lookalikes.

5. Beyond behavior. Mindset Media offers brand marketers the chance to tailor their messages according to twenty elements of personality, such as “Humility” and “Bravado,” “Creativity” and “Compliance,” each of which has up to five distinct “mindsets” that can be targeted at scale. Tasty.

More flavors and details to come.

Tags: Ad Networks, Behavioral Targeting, Data, Digital Economy by Bennett Zucker
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