Author: Andy Atherton

Business Development Partner @ Link Ventures. Complete background on LinkedIn...

Are you actually buying what you think you’re buying?

Great article by Mike Shields in MediaWeek yesterday. According to the article, Tremor Media was running ad for major brands that were a) in-banner video as opposed to pre-roll, b) below the fold and c) adjacent to questionable content.

I want to highlight two separate issues in the context of this article: quality control and credibility.

Quality control is something that has been top priority for Brand.net since inception, because it was the number one concern of our branding-focused clients. I have written extensively on this topic and Brand.net’s SafeScreen platform is the premier quality assurance platform on the web, providing page-level filtering to ensure quality for every impression that runs through the Brand.net network. The monitoring capabilities Adam Kasper mentions in the article can be useful, but it’s far better to prevent quality incidents in the first place. He’s dead on when he says that quality control is the ad network’s responsibility. Unfortunately, too often that responsibility is not fulfilled.

On my second point, ad networks at large have a reputation for not always being completely honest with clients. This is another issue I’ve written on in the past. In response to this particular incident, Shane Steele, Tremor’s VP marketing, was quoted saying, “It’s a very nuanced space, which makes it complicated”. Actual pre-roll video is indeed more complicated than display, but the ads at issue here were display ads. They just happened to be running video creative. So answers like this don’t help build credibility for networks and they certainly don’t help build the trust that’s so essential for major brands to fully leverage the medium.

Tod Sacerdoti summed it up well when he said, “There is a gap between what an advertiser thinks they are buying and what they are [actually] buying.” This gap occurs far too often today and it needs to be closed before the medium can fully mature.

A very smart publisher

I just read a great piece by Michael Zimbalist of the New York Times Company on paidcontent .org. He clearly has a deep and precise understanding of the substantive issues at play in the channel conflict debate.  The more other major publishers and the market at large understand the distinctions he’s helping to clarify here, the better off we’ll all be. We’ve certainly done our part to help clarify terminology and to help publishers prevent channel conflict, so it’s great to see smart publishers joining that effort.

An interesting time for Display

An insightful article by Emily Steel in the WSJ this AM, picking up on recent trends and energy in the display market.  Ms. Steel includes some broad coverage on Google’s recent announcement of AdX 2.0 and implications for the display ecosystem, along with more depth on industry concerns regarding channel conflict between publishers and networks.  A quote from Jeff Levick of AOL ends the article: “All advertising shouldn’t be managed equally and all ads shouldn’t be treated equally”.

I agree with Mr. Levick of course, but the hard part for publishers is to set specific policy and develop supporting infrastructure to make sure tradeoffs are being made appropriately such that that the combined output of direct and indirect sales channels is maximized.  This is a mouthful even to say and not at all easy to do.  Brand.net takes the issue of channel conflict very seriously and we have been focused on mitigating it since inception, to the point of offering a set of experience-based principles designed to help publishers get started.  The bottom line is that with well-designed policies and systems, publishers can enjoy mutually beneficial business relationships with networks in both the short-term and the long-term.

Readers finding this article interesting may also be interested in another recent post in which we attempted to clarify some terminology in hopes of helping readers more easily navigate discussion of some of these trends and issues.

All this energy in the space is fantastic!  It’s a very interesting time to be in Display.

Your brand depends on page-level media quality

For anyone who may not have checked imedia today,  I wanted to steer you towards my featured editorial piece on page-level quality.  Online media quality is obviously a critical issue for brands, and one that Brand.net has focused on since day one.

Brand.net doesn’t just buy from a carefully screened and curated set of top comScore sites.  That’s just where we start. Brand.net doesn’t just report on the pages where your ad was placed adjacent to brand-damaging objectionable content. We keep it from happening in the first place.  Our industry-leading SafeScreen™ platform is the gold standard for active, page-level quality management and is included free of charge with every Brand.net buy.

Starting with the best sites and applying active page-level filtering technology to each impression.  That’s a real quality solution.

“Offline Metrics” Work Online Too

Still digging out of my baby-induced blog backlog and came across an interesting MediaPost article by Adam Kasper of Media Contacts.  He basically poses a challenge to the online media industry to pull together and come up with an online GRP.  This theme is echoed in a recent (and fantastic) whitepaper from Microsoft’s Atlas Institute, which gives a more comprehensive treatment along with some practical suggestions.

Development and use of online metrics comparable to those routinely used in offline media is an extremely important topic.  As Kasper points out, comparable metrics make it easier for marketers to follow their audiences online.  That’s for sure (and we still have a lot of work to do there), but there are also some practical reasons why these tried and true top of the funnel metrics are as important online as they are offline.  First off, keep in mind that nearly 90% of retail commerce still occurs offline (even higher in some key ad categories like CPG).  Offline sales simply do not generate the same volume of online-actionable direct metrics that, for example, a company like NetFlix does.  So there’s a real practical limit to the in-flight optimization that can be done for marketers whose supply chains terminate offline.  Concepts like composition, reach and frequency are still tremendously useful tools in this environment.  Secondly, for many campaigns more precise targeting may not valuable and/or may not be available at scale.  Privacy issues aside, I’m not sure that “laundry detergent purchase intender” targeting gets you much further than “women, 25-54 with children at home” does.  But I am sure that it’s more expensive and offers smaller scale.  These points are just a brief treatment of an issue I have written on at length in the past.

The bottom line is that, even though less sexy, these “offline metrics” can be just as useful online and we shouldn’t be ashamed of using them.  Brand.net has shown that quality media, tight management of frequency, maximized composition and full budget delivery drive measurable results at the cash register.  That’s sexy enough for me.

The Bottom Line is Online Ads Work for Branding and Sales

Last week MediaPost picked up a press release on some comScore research showing that online ads can be effective in driving offline sales.  Just as effective as TV in fact.  This came as no surprise to us at Brand.net.  We have seen similar results in our work with clients measuring offline sales impact in response to online campaigns.

This recent release apparently builds on some earlier research discussed by comScore Chairman Gian Fulgoni in his keynote to the OMMA metrics conference in San Francisco at the end of July (covered in another MediaPost article, from which I borrowed my headline).  In his remarks, Fulgoni gave some rough treatment to CTR (similar to a post last week from Cory Treffiletti).  I was on panel at the same OMMA conference.  The panel focused on Brand measurement and the moderator (Dan Beltramo from Vizu) asked each of the panelists to answer a few questions to get the conversation started. One of the questions was, “What is the most misused metric for Brand Campaigns?”. All 4 panelists including yours truly answered, “CTR.”, to which Dan readily agreed. The fact is CTR isn’t correlated with attitudinal measures that Vizu focuses on. Nor is it correlated with ROI as measured by offline sales impact vs. online campaign spend.

The moral of the story is that well-executed online advertising delivers results throughout the marketing funnel and those results come through in the metrics, when the metrics applied are meaningful.

Misconceptions about Yield Management and Channel Conflict

Another interesting article from Forbes.com’s Jim Spanfeller yesterday.  I wholeheartedly agree his point about the online ad industry focusing too much on demand fulfillment and too little on demand creation, as evidenced by my previous posts here and here.  That’s exactly why we built Brand.net from the ground up — to help advertisers with demand creation.  I also agree with his point about ad networks that offer some types of user-based targeting  representing a potential “data drain” and a legitimate privacy concern for publishers.  This is an important issue and just coming to the fore for the publishing community overall.

That said, I disagree with two major points Jim makes in this article.

First, he seems to be perpetuating industry confusion on the definition of “remnant”.  In the context of online ad inventory, “remnant” is commonly considered to be the opposite of “premium”, which is often used interchangeably with “high-quality”.  Thus if “premium” = “high-quality”, then “remnant” = “low-quality”.  Unfortunately this is often untrue.  When used correctly, “remnant” actually means “available to the spot market after forward commitments have been fulfilled”.   So the opposite of “remnant” is not “premium”.  The opposite of “remnant” is “reserved in advance”.  There are really two distinct axes at work here:  one describes quality of the inventory, while the other essentially describes the terms or process under which the inventory was purchased.  There is some correlation between the two axes, which I believe is at the heart of the persistent confusion; it’s a fact that remnant inventory is often of lower average quality than inventory that is reserved in advance.  However, due to traffic volatility, forecast errors, suboptimal pricing, supply/demand imbalances, etc., there is often significant volume of high-quality or “premium” inventory available in the “remnant” market. The airline standby example he cites is actually a good illustration of the correct definition of remnant, not (as I think he suggests) the incorrect one that has done so much mischief.  The standby seat has exactly the same physical characteristics (“quality”) as the seat sold in advance, but the difference in timing and deal structure results in a difference in value to both the airline and the passenger, which manifests in a difference in price.

This brings me to my second point: Jim’s position in this article on airline yield management practices shows some pretty fundamental misunderstandings.  Airlines’ lack of profitability has a lot more to do with unions, over-capacity and sub-optimal product offerings than it does customers risking their vacation plans or business objectives to save money on a last-minute ticket.  So I would echo Jason Kelly’s well-informed comments on the thread and add that to suggest yield management practices are somehow to blame for the poor financial performance of airlines is like suggesting that ERP systems and supply chain optimization practices are responsible for the poor financial performance of the American auto industry.  It’s simply not true.

The bottom line is that ad networks and publishers can work together for mutual benefit over the long haul, but to do so requires careful management of channel conflict, an issue we take very seriously.  This discussion is a valuable and important one, but I think we need to be more careful and rigorous in our thinking – the more so, the better off we’ll be as an industry.

Thoughts on the latest OPA report

A blockbuster report from the OPA late last week, at least if one were to judge by how it lit up the blogosphere (as AdExchanger humorously put it, “Is the OPA the greatest link baiting organization in advertising, or what?”).  I reviewed some of the coverage and the report itself over the weekend and I have to say, with all due respect to the OPA and its members, this report doesn’t measure up to their previous efforts.

Here’s my take:

1) Most networks are focused on DR metrics and not the upper-funnel branding metrics that are the focus of the OPA study.  So even if we stop right there, it’s not shocking that that the study shows weaker results for networks.  This difference in focus is fundamental to Brand.net’s business by the way.  Unlike other networks, the Brand.net platform offers a  full suite of capabilities designed from the ground up to help brand marketers leverage the web to reach their audience efficiently and effectively drive these upper-funnel metrics.

2) The OPA report didn’t include or consider cost data.  If you believe the >10:1 spread between publishers’ direct and network deals cited in last year’s IAB research, this is a critical omission.  OPA pubs performing 50% better than networks doesn’t look so good in the context of a >10:1 price ratio.  Obviously the devil’s in the details here – the IAB research isn’t perfect either for reasons I have discussed previously on this page – but it’s clearly perilous to draw the sweeping conclusions OPA is going for without considering costs.

3) I don’t wish to cast aspersions on the study or methodology overall, but a couple of the data points just seemed counterintuitive to me.  For example, slide 19 of the OPA results deck states that ad networks deliver insignificant improvements in purchase intent for the financial services category.  This particular point caught my eye, because I know that well over $1B has moved through ad networks from hundreds of financial services companies over the past 5 years, the vast majority of which has been measured on a CPA – as in actual purchases, not just purchase intent.  It’s extremely hard for me to believe this money would have continued to flow in such volume over such a long time period if it wasn’t actually driving purchases.  If you agree, then we’re left with only 2 possible explanations: a) the data referenced to make this point is somehow not representative or b) purchase intent as measured by DL was not correlated with actual purchases.  Neither is particularly comforting.

4) In addition to the metrics OPA focuses on in this report, I would have liked to see an analysis of actual sales lift – i.e., the ultimate result that improvement in the attitudinal metrics discussed in the report is intended to drive over the long term.  This certainly isn’t easy for every client on every campaign, but it’s a powerful capability that proves real business results for many.  For the next study I would be interested in seeing similar data from OPA.

Some of these thoughts have already been expressed by others, including some who commented directly on WSJ’s coverage of the report, but I thought there was enough new here that it was worth joining the discussion.

Let me know what you think.

Microsoft continues its push into online branding

As I work through my current events backlog after coming back to the office, I wanted to call out this press release from  Microsoft re: their recent deal with comScore to provide enhanced R/F and audience composition tools for branding-focused media buyers.  The release highlights a theme we are passionate about at Brand.net and have mentioned time and again on this page:  online advertising lacks brand-friendly metrics and tools, which makes it too difficult for brand buyers to plan and manage campaigns in a manner consistent with the rest of their (primarily offline) spend.   These metrics and tools position brand marketers to deliver real business results and are essential in helping brand budgets follow audiences online.  Our friends at Microsoft were even kind enough to quote our analysis estimating only 5% of brand budgets have yet made this transition.  As today’s Wall Street Journal also observed, this represents a major opportunity for all the players in the space.  It’s great to see the online ad industry increasingly recognizing the brand challenge/opportunity and mobilizing to address it!

Purgatory for Ad Exchanges

Thoughtful MediaPost article from Cory Treffiletti of Catalyst while I was out.

His basic point is that Ad Exchanges in their current incarnations have failed to live up to the promise of “ad exchange” as a concept.  I agree.  As Cory points out, current exchanges require too much effort and involve too many compromises for both advertiser and publisher for them to become a critical piece of the advertising technology “stack”.  Current exchanges can be effective for some direct marketers where CPA is essentially their only requirement, but they fall far short of many advertisers’ – particularly brand advertisers’ – requirements.  Without some changes for all parties in the value chain, unfortunately I think Cory may be right; the pendulum may swing back towards more custom solutions.  I think that would be lost opportunity so I’d like to make some suggestions about how to improve from the status quo.

Here’s what needs to change:

Exchanges: Embrace the reality that brand marketers are essential to the health of the online ecosystem.  Many, most campaigns cannot be reduced to a CPA – an issue I have discussed at length.  In order to become critical infrastructure, exchanges must build for brand requirements as well.  This means content quality filtering, R/F management, composition management and smooth guaranteed delivery.

Publishers: Open inventory to competition from multiple sales channels.  Remove barriers to revenue and efficiency in the form of advertiser block lists.  Manage channel conflict using other tools.

Advertisers: (yes, you’re part of the problem) Embrace efficiency for some portion of your buy.  Consider that a streamlined, scalable operational process for a more standardized buy may deliver better results when considering all costs (media, headcount, serving fees, etc) than a less efficient process for a more customized buy.  For example, consider whether non-standard creative (integrations, expandable units etc), fine flighting, custom targeting with limited scale are delivering results in-line with the significant operational friction they create.

These steps are not easy, but they are essential to building a long-term scalable advertising ecosystem.  Let us know how we can help.