Here are the 10 winners of our first Ads Worth Spreading competition. With this competition, we're seeking to reverse the trend of online ads being aggressively forced on users. We want to nurture ads so good you choose to watch. On TED.com, ads run after our talks, not before. This means they can run longer than the TV-standard 30 seconds. And that's the key! In 2-3 minutes, there's enough time to really tell a story, share an idea, make an authentic human connection, become unforgettable. Instead of ambush, they offer pleasurable, intelligent engagement. We invite you to view, comment, rate -- and share!
Is the impression—the longtime currency of online advertising—on its way out?
It could be. Three major advertising/media trade organizations, IAB (Interactive Advertising Bureau), the ANA (Association of National Advertisers) and the 4A’s (American Association of Advertising Agencies), have announced a new initiative aimed at simplifying online ad measurement and metrics. The groups have hired management consulting firm Bain & Company and the strategic advisory firm MediaLink to help with the effort. And everything is on the table, including possibly ditching the impression as a currency.
The new initiative, Making Measurement Make Sense—announced at the IAB’s Annual Meeting in La Quinta, Calif.—won’t necessarily have a lot of teeth. But the three groups are hoping their efforts carry enough influence to enact serious change in the online ad industry, which continues to struggle to pull in its fair share of brand advertising, according to many prominent executives.
What the effort will entail is still unclear. During a press briefing, leaders from each of the three groups spoke in vague but grandiose terms.
According to Sherrill Mane, the IAB’s svp of industry services, the goal of the initiative is “to change everything we do when we transact digital media." Why? “To make it more brand hospitable.”
The group acknowledged that digital media is still not hospitable enough to brands. Digital buyers are faced with half a dozen sources when planning campaigns, including Nielsen, comScore, Quantcast and Compete. Different sites and ad networks sell using varied definitions of ad impressions. Video is even more muddled and disorganized.
“The supply chain is messy and ineffective,” said Mane.
Yet these industry groups won’t have a lot of authority, other than issuing guidelines or a whitepaper that they hope will guide brands, vendors and ad buyers. But Mane and her counterparts said that this issue has major momentum, particularly the support of the industry’s leaders.
“This is about getting agencies, publishers [on board] with what is best for the industry,” said Bob Liodice, president and CEO of the ANA, who predicted the group would produce some sort of results in six to eight months. “This is a standard setting exercise.”
Added 4A's evp Mike Donahue: ”This is not about being reflective. This is about being actionable.”
As we’ve written on our blogs before, new technologies are profoundly improving display advertising. In the last few years, there’s been a technological Big Bang, creating new ways to buy display ads across the web: exchanges involving real time bidding, demand side platforms, improved ad networks and more.
These technologies are enabling marketers to seize the digital moment and run far more effective campaigns, but just as the universe changed dramatically following the Big Bang, the digital buying marketplace has changed forever, requiring some new “laws.”
The three laws of display advertising physics
1. The Theory of Relativity: What’s better, a demand side platform, or an ad network? It depends
Our clients often ask us if they should use our DSP (Invite Media), or our network (the Google Display Network), especially as the distinction between the two platforms blurs. We often answer with an analogy from the world of stock investing (it’s not perfect, but it’s a first step). The first question is whether to buy and sell yourself, or engage someone else to manage your portfolio:
- The online broker model: For buyers looking to manage the details of their ad buying and use their own technology and data, a DSP like Invite Media is often the best option. This is similar to an online broker that lets you log in and closely manage your investments (and, as with Invite Media, get access to special trading features, market intelligence and expert advice).
Both platforms enable access to huge pools of ad space, deliver the same types of ad formats and facilitate similar ways of targeting ads. Again, it’s like buying stocks—whether you choose an online broker or stockbroker, you can select from thousands of types of stocks, markets and investment products.
- The stockbroker model: Some marketers have a desired campaign result (such as a target reach for a new car campaign, or a number of conversions for a sporting tickets campaign). They want to outsource the details and have a customized, transparent media solution designed for their campaign. The Google Display Network most often fits this bill—it’s like having a stock broker manage your portfolio to meet your investment goals.
2. Fusion Theory: Why contextual and audience buying release more energy when combined
Some have suggested that audience buying (delivering ads based on users’ interests) and contextual advertising (targeting ads to content) is an either/or proposition. However, we believe it’s the combination of the two that is most powerful.
- With effective contextual advertising, you can get the maximum reach while delivering your message in highly relevant locations—like news articles related to your products—in the precise moment a person indicates interest. Contextual advertising is vital to building brand awareness and reaching new prospects at relevant moments.
Marketers combining these types of buying can reach a broad range of people, then hone their messages to particularly good prospects to maximize the impact of their campaigns. We’ve seen that this approach drives better campaign performance; third party studies back it up.
- Audience buying—such as remarketing—enables marketers to reach people who have already shown an interest in a particular topic or brand. This is especially effective for re-engaging consumers.
3. The Law of Perpetual Motion: Why marketers should embrace a rapidly moving industry
Display advertising is in a state of constant motion, caused by the acceleration of online media consumption and the explosion in new technologies.
- Advances in computer science are driving changes in advertising. To illustrate: creativity has always been at the heart of good display advertising. But look at what’s become widely used by marketers in just the last few years—rich media technology, new mobile and video formats and dynamic creative technology that can take a creative ad concept and automatically bring it to life over millions of websites.
- The industry is literally moving faster as media buyers start to increase their use of real-time bidding (RTB) technology, which allows them to evaluate and bid on ad space on an impression-by-impression basis. We recently undertook an industry study with Digiday, surveying more than 300 digital media buyers, agencies and intermediaries about their thoughts on RTB in the year ahead. Some revealing findings:We’re seeing this rapid growth and change first-hand. Since we acquired Invite Media in June 2010, the number of advertisers on the platform has doubled; agency spend has grown by almost 300%. And spending on display ads on the Google Display Network is growing more than 100% annually in a large number of countries. Publishers are benefiting from these changes as well (for example, a recent study found that publishers who participated in the DoubleClick Ad Exchange see an average 188% revenue lift when the exchange wins the auction).
- 88% of buyers plan to buy via RTB in 2011, up from 75% last year.
- 47% of media buyers say that the benefits or RTB will increase their overall digital advertising budget this year (16% said it would not, 37% were unsure).
- Spending on RTB is quickly moving out of the "test budget" range: 79% of buyers estimate that more than 10% of their digital display budgets will go to RTB in 2011. 33% estimate that 50% or more of their digital display budget will go to RTB. And 7% estimate 90-100% of their digital display budget will go to RTB.
- 29% of media intermediaries (such as DSPs, ad networks, and exchanges) anticipate their volume of real-time bidding will increase by 100% or more versus last year. 19% believe it will go up by at least 200%.
- More formats are moving to RTB: 34% of buyers say they are extremely or very likely to purchase rich media ads via RTB this year, 32% are extremely or very likely to purchase dynamic creative ads via RTB, 20% are extremely or very likely to purchase mobile display ads via RTB, 18% are extremely or very likely to purchase in-stream video via RTB and 14% are extremely or very likely to purchase mobile rich media via RTB.
- Nearly half (48%) of publishers surveyed say they plan to increase the amount of inventory they will make available via RTB. 28% are still deciding. Only 24% said they were not planning to increase RTB inventory.
In this new era, the most effective campaigns will be driven by marketers who rethink how they connect with people in this rapidly moving industry. Whether it means partnering with technology providers to buy better, or exploring the infinite possibilities of today’s creative units, embracing new media and technology provides a key way for marketers to differentiate and grow their businesses in a new universe.
Unlike the Big Bang, the expansion in our industry is not chaotic or random. We’re moving towards a single platform that seamlessly incorporates the best technologies for planning, buying, serving, creating and measuring display ads; one that will enable marketers to effectively reach and engage people across desktops, tablets, videos, mobile devices and TVs.
Posted by Neal Mohan, Vice President of Product Management
Your Digital Fingerprint
Companies are developing digital fingerprint technology to identify how we use our computers, mobile devices and TV set-top boxes.
Sample Faceified Seal
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Online ad firm Vibrant was able to build a healthy ad business by delivering contextually relevant text ads when users mouse over specific words within news articles and other content on the Web. Now, the company wants to bring the same contextual relevance to display ads.
Vibrant has rolled out VIA Dynamic, a display ad product that takes into account the subject matter of a particular Web page when deciding which creative placement to serve at a given moment. According to Vibrant, VIA Dynamic can instantly assess a Web page’s content using a combination of semantic analysis, word frequency, demographic information and other factors—and it can then serve whatever creative placement is deemed most appropriate.
For all the talk among among policymakers and the press about online privacy, it still isn’t clear how much average consumers are even aware of online ad tracking. Firefox, the browser of choice for a third of all internet users, is apparently looking to change that. The beta of the latest version of Firefox trumpets the new “Do Not Track” feature prominently—listing it, in large font, as the very first item on the “What’s New in Firefox 4” page. The move could increase the pressure on other browser companies as well as advertisers to beef up their own privacy options.
Mozilla announced months ago that it would put a Do Not Track option in the new version of Firefox—so in that sense, the release of the beta version isn’t a surprise. But what is unexpected is the headline “Opt Out of Ad Tracking” splashed across the company’s upgrade page.
What’s New in
Opt Out of Ad Tracking
Privacy challenges by public interest groups and the FTC are threatening to dismantle or seriously curtail the behavioral targeting model of interactive advertising as it stands today. Fearful of damaging relationships with their readers, many publishers are removing third-party widgets and other technologies when those technologies are found to capture and sell user data without the user’s express permission.
Even Facebook itself has cracked down on unauthorized data scraping. Recent “Do Not Track” efforts are trying to move choices about data sharing from publishers to the people via browser technology. But these are merely symptoms of a larger problem with interactive advertising: a lack of transparency. It’s a problem that new social tools will play a significant role in addressing.
Rather than an endgame where consumers completely block any sort of data sharing, I see a future where marketers take the high road and both sides benefit from better quality data, advertising and content.
The concept of “Permission Marketing” isn’t new; in fact, Seth Godin’s 1999 book about “turning strangers into friends and friends into customers” seems remarkably prescient in today’s age of “Friending,” “Liking,” and “Following.” Godin told the (then e-mail-dominated) interactive industry, “By talking only to volunteers, Permission Marketing guarantees that consumers pay more attention to the marketing message. It serves both customers and marketers in a symbiotic exchange.”
Today, technologies like Facebook Connect and OAuth are helping to redefine the concept of permission marketing. Using these technologies, brands, retailers, publishers and other sites are able to actively establish a permission-based relationship with their users and customers on their own websites. Now websites have the opportunity to embrace transparency, to be upfront with people during the registration process about how their data will be used, as well as how it will benefit both parties.
We have a new generation comfortable using Facebook and other mobile apps and who, according to recent survey data, are quite willing to share personal information with companies and brands in exchange for value provided. They are also relatively unconcerned about the security of data they share on social networks. The bottom line is that this type of authorization-based relationship between brand and user is likely to become the norm.
This Year’s Model
So what exactly is the data and advertising opportunity for sites? The Huffington Post is the poster child for this new social data-based permission marketing approach. Readers register on the site using their existing Facebook, Twitter or other social identity, thereby giving HuffPo access to data with which the site can personalize the user experience.
For readers, this means they can see what their friends are reading and sharing on their site, giving them a powerful social filter for relevant content. It also means The Huffington Post can sell advertising on their own site based on everything they know about the user from a social perspective.
I had a chance to meet Huffington Post CEO Eric Hippeau at last year’s IAB leadership summit, where publishers get together to talk about the future of interactive advertising, and he shared with me that their integration and application of Facebook Connect and similar technologies to create a social news experience has been the key driver of their phenomenal traffic growth over the past year plus. Social advertising is also a key source of their revenue growth. HuffPo considers their site to be in the category of social media, and structures their ad sales team to serve that unique buyer. For publishers and advertisers, this approach has the power of Facebook ads, yet is superior because it combines the best of both worlds –- deep context plus social data.
While Social registration, also known as Social Sign-On, is the foundation for this new relationship-based model, the layers on top of that foundation are the most promising for the future of advertising. In addition to basic demographic targeting, sites could offer advertising based on interest data, targeting movie fans or iPod fans for example. Sites could also sell against social influence and activity — factors such as the number of friends, propensity to share and history of driving referral traffic, or even the number of items “Liked” as an indicator of engagement. Reward programs driven by game mechanics are a key part of the nurturing process in this new model, where a loyal, engaged and most importantly non-anonymous audience is the new currency of advertising.
Sites and brands need to ask themselves: What am I offering people that they will truly value in exchange for permission to talk to them as a friend and not an anonymous user? Badges may not be right for every site experience, but successful apps and other web experiences like those on The Huffington Post prove that it is not an unattainable goal.
As with all new models, there are challenges to address. Sites need a critical mass of users to grant them these permissions in order to sell advertising effectively. Privacy concerns with social network data will evolve over time and regulatory pressure will certainly cause the interactive industry some headaches as we move to a new equilibrium. But it is inevitable that a permission-based model will prevail, and those that are able to rapidly embrace this model and experiment with its possibilities will win higher CPMs, new ways to differentiate against the competition, and a more loyal audience.