Just a quick post to thank Adam Cahill for his shout out on ClickZ yesterday. It has been great to see the market get behind the futures model as a necessary complement to spot.
Adam also raises an interesting point about one vs. many DSPs. Today it’s clearly necessary to use at least 2 to get full-funnel, futures (Brand.net) & spot (others) capability. But I think we’ll see this pretty quickly follow a path towards increased efficiency, i.e. towards a single unified platform that enables agencies and clients to manage spend against any campaign, any objective, using a common interface.
It will no doubt be an interesting road to get there, but it’s just a matter of time.
Solid article on ClickZ last week with some insightful commentary from Nielsen Online CEO John Burbank. Mr. Burbank correctly identifies lack of brand dollars online as the source of current downward pressure on rates and publisher revenue. He’s 100% right that without these dollars following audiences online, the online publishing ecosystem will degrade and that users will not like the results. This second theme was echoed by Omar Tawakol, CEO of BlueKai, in another insightful piece for AdAge. So without a robust online ad market online, online publishing will suffer. And if that ad market doesn’t include the large brands that funded quality content in other media, online content quality will degrade to the detriment of users, advertisers and publishers alike. A tragedy of the commons of sorts.
Mr. Burbank went on to make the important point if publishers want to attract brand spend, they need to help brand advertisers measure results using metrics that are appropriate to the objectives of brand campaigns. He suggests that rather than focusing on clicks, brands should be focused on “whether their ads reach the desired targets, change the way consumers think about their brands, or help sell products.” Couldn’t have said it better myself. This is something we discuss with our clients every day. We actually partner with Nielsen to help our clients in CPG measure the extent to which their online campaigns sell product offline. The results speak for themselves. Online advertising works.
I do disagree with Mr. Burbank on one important point, however. He seems to suggest that ad networks are responsible for the current challenges online publishers face. It’s true that ad networks can put downward pressure on CPMs for a publisher, but that is primarily driven not by the fact that a network is doing the selling, but that the vast majority of networks sell almost exclusively to DR buyers. Those buyers are extremely price sensitive and thus the downward pressure. If there was a healthy level of demand by brand advertisers for online content, this downward pressure would be balanced and the online publishing ecosystem would be much more stable. Unfortunately, online branding today remains too inefficient for brand dollars to follow audiences online easily and balance this equation. So an ad network focused on branding, such as Brand.net, actually helps matters, increasing efficiency for brand buyers to help move budgets from other media, while not undermining the economics of the premium publishing model. This is another topic near and dear to my heart, which I addressed at some length in an iMedia post earlier this year.
Quick note on the ClickZ article last week about CPG companies ramping up online spend. Branding is tremendously important in this category, which includes many of the largest advertising spenders on the planet (P&G, Unilever, etc.). Companies like these are increasingly realizing that their customers are consuming a greater and greater share of their media online, so if they want to protect their brands they need have their ad budgets track that shift in behavior. The alternative is to risk losing share to new brands or – particularly as wallets tighten through the recession – private label products. Research indicates that such share losses can be permanent, so continued investment is critical even in “this economy”. Glad to see them staying sharp.