Agencies and publishers are showing more interest in programmatic ad buying and selling based on positive results from early adopters of real-time bidding (RTB). For publishers, RTB is creating more demand and driving up CPMs. Here’s why:

In ad sales, getting on media plans is a challenge. If impressions don’t garner results, advertisers can move publishers, networks and DSPs off a plan quickly. However, agencies are allocating more budget to programmatic buying in exchanges, mostly through DSPs. When publishers sell via RTB in an exchange, they can get multiple cracks at a client’s budget. Publishers working with exchanges that integrate with leading DSPs can hedge their bets. If advertisers change DSPs, the publisher can still get the campaign, because another DSP partner will likely get that budget. Advertisers consistently spend, regardless of the DSP they work with. Publishers will likely retain the budget in some way.

Advertisers that retarget exclusively have scale problems. They work with a finite amount of data, making them undesirable partners for the largest ad networks unless the advertiser is significant. Site and search retargeting through RTB exchanges make the ad buy practical regardless of the client or audience size. DSPs, with access to infinite amounts of targeted media, can give retargeting real scale, an important consideration when reaching in-market audiences.Publishers can maximize exposure to the marketers, leveraging this channel to drive CPMs up. Local Advertisers

Like retargeters, local advertisers had difficulty getting ad networks and publishers to run campaigns because budgets were typically too small. If local advertisers wanted impressions in one Zip code, they’d work with several ad networks at small spend levels to achieve scale.With the variety of DSPs, publishers can use exchanges to aggregate the demand of SMBs and run their campaigns to make local advertising worthwhile. RTB helps access budgets from local advertisers that were mostly impractical in the past.

In a media plan with publishers and ad networks, if one partner underperforms, it can take weeks to manually adjust the plan. The result? Incumbent networks take on more spend, agencies try to fit new networks on the plan, then spend is redistributed. Automation can show campaign results immediately so agencies know how to quickly allocate spend based on individual site and impression insights. High performing impressions rise to the top and garner more campaign budget, while wasted impressions are removed.

RTB automation will lift CPMs and create new display advertising opportunities, as evidenced by the trend of publishers creating private marketplaces that facilitate direct deals with agencies. These relationships lift a publisher out of the sea of impressions available for bid on open exchanges and create demand by enhancing the overall consideration for the impressions.

On a premium publisher’s home page, if 20% of ad space is sold direct, 80% went unsold because the sales force couldn’t get consideration for more budget. It’s not because the impression is inferior quality. Publishers with large scale should have a conversation with agency partners about automated and guaranteed ad delivery because that 80% of inventory is just as valuable as the other 20%.

To lift inventory value out of the remnant bucket, publishers must have a conversation with the buy side rather than leaving it up to algorithms alone to pluck out those impressions. Advertisers use exchanges because purchasing impressions is simple. Private marketplaces magnify this effect with direct deals struck at the same ad delivery speed and effectiveness of programmatic buying. The ease of automation grows ad budgets by drawing more buyers to each display impression. The more ad budgets grow, the more RTB will continue to lift CPMs.

Co-opetition with Microsoft, Yahoo, AOL through AppNexus

Posted on December 8, 2011 by adsolver

It seems to the be question of the month for me from lots of players in the ecosystem in APAC….

What do you think of the Ad-trading unification of Microsoft, Yahoo and AOL inventory and why has Right Media decided to move to direct advertisers?

Just like the French News Publishers join forces to compete against the automated ecosystem of RTB it seems that larger publishers in North America are uniting and pooling inventory to a 3rd party agnostic platform; AppNexus. Has the horse bolted and the barn door shut after the fact? It really depends on where they are uniting – it is just on unsold inventory that has been manually carved out as these specific ad units on these specific pages that are unsold or is it a true case of unsold inventory? Will AppNexus leverage their data or will those three publishers still keep that at arms length? How does AOL and Yahoo value the AppNexus model since its partially funded by Microsoft but works completely independently of that.

AppNexus recently announced their Apps marketplace which actually seems impressive and specifically caters for those who are interested in deeply embedded technology provision.

In a nutshell; the trio-unification is most likely to survive the eco-system shift. I don’t just mean the shift to automated buying but also the drivers behind it. Essentially we have fragmentation to blame. Fragmentation of users, fragmentation of hardware, fragmentation of inventory and fragmentation of technology. That’s a mess in a world where advertising; at least online advertising is growing in popularity with advertisers specifically as it ties back to ROI in a more streamlined direct way. Can we say the same for offline radio, newspapers, tv?

Publishers are constrained by their own thoughts; resources and certainly the eco-system shift has left them perplexed. The days of milk and honey are slowing becoming dry days and the eCPMs of previous years are declining because we have more publishers who are highly specialised; more advertisers who are pressing for better ROI and more technology expediting the need for automation. The influence of agency lunches to bring in demand are out-dated and even APAC is starting to feel this.

What does a publisher do when it knows its core audience is not loyal and shops around for the latest news, weather or e-commerce deals? On one hand its losing the value from lower eCPMs of its inventory and  on the other hand its losing its users to more specific developed content across other publishers? How does a Yahoo survive when users are distracted to other sites whose value is lower than Yahoo eCPMs? Why would an advertiser pay for that premium price if they can buy them realistically cheaper elsewhere but still tied back price to the value of the impression? (RMX optimisation)

So its easy to understand why the big three are getting together. Its also a response to the potential threat of Google dominating the display market as it strives to build out its DoubleClick AdExchange and its Invite Media DSP. Its a very real threat; Google has executed very well and has bundled in youtube inventory into AdX and is also adding very interesting features to bolster the growth of the DC AdX. The real point is that it may just be too late.; the horse has bolted.

Rightmedia has had a challenging ride and one that is a close one to my heart because of where it once played the leading role in ad-exchanges; indeed it was the pioneer. It has now become the submissive one to the Google Ad Exchange and also AppNexus which make no mistake is a technology player that has an extremely large network of inventory; just recently CPX Interactive moved over from RMX to AppNexus.  In essence RMX had to move to direct seat-holders for various reasons; one being that most networks were now using their own technology or others to become their own DSP; it could also be that inventory has started being pulled out of RMX and RMX has direct advertisers it needs to strategically protect so it has to take off those large arbitraging ad-networks. RMX has to identify what it has evolved into because it is becoming more clearer that it cannot be seen as a ad exchange alone; it may very well become a DSP.

The real question is – are direct advertisers ready to handle this new way of buying? Most DSPs are actively using their technology, their managed service or a combination of both to help direct advertisers so will a direct advertiser seat achieve any difference? I think it will be a lot of hassle for advertisers to seek their own seats; then these same advertisers will hand over access to the managed services team at the DSPs – what will change is those arbitrage ad networks are looking less likely to arb under this model; there will be complete transparency between the DSP and the advertiser but will anything else change?

So in the short term its going to cost RMX money and hopefully in the long term it makes sense but given the propensity to want to understand the automated buying process from direct advertisers or agencies; I’m not certain that much will change. This will only give the upper hand to the likes of AppNexus and DoubleClick AdX to scale up and build a better reach. Both are extremely excellent at what they do; the edge for now sits with Google in amassing towards a full ecosystem in the display world.

Its certainly a big risk on the part of RMX but sometimes the highest risk strategy offers the best rewards.

Not long ago all anyone in digital hiring circles could talk about was the scarcity of qualified software engineers. Then, they tried to hire a salesperson.

Over the past year, it's become clear that demand for digital sales talent today far exceeds supply, birthing a marketplace in which tales of top digital salespeople with just three years' experience commanding compensation packages as high as $250,000 are not unheard of.

Jeff Lundwall

--> "Outside of engineering, the individual [sales] contributor for a digital property might be the hardest job to fill right now," said Jeff Lundwall, managing partner at Mercury Group, an executive search and training consultancy, and a former associate publisher at Conde Nast Digital.

Why? Venture-capital-fueled startups that first concentrated on building user numbers and traffic are now feeling the pressure to monetize their offerings, and they're poaching talent. They might not be able to match big-media or ad-tech companies in salary, but they can lavish equity upon a candidate as well as generous, if inflated, job titles. Plus, Google, Twitter and Facebook are rapidly scaling their ad businesses and sales staffs.

Meanwhile, traditional media companies are focusing more on digital sales as top advertisers shift more brand dollars online. Then there's the rise of ad tech and data companies. While their offerings are engineering-based, they still need salespeople to close deals.

Thrillist CEO Ben Lerer

-->

Junior demand
"It's a booming industry and there are only so many people that are really good at a specific skill," said Thrillist CEO Ben Lerer. "So anyone with digital experience becomes expensive, and really good people become really expensive."

Since the start of 2010, the percent of listings on the job site Indeed.com that contain the phrase "digital sales" has more than doubled. Much of the demand is focused on junior and mid-level sales positions. At Tremor Video, for example, the company has increased the size of compensation packages offered to junior sellers -- typically those with two to four years experience who carry the title of regional sales manager -- by at least 25% from a year ago, according to Chief Revenue Officer Randy Kilgore.

"The pond for fishing for people with three years sales experience is pretty well fished," he said. "Plus, a lot of people are trying to hire video sellers. Yahoo is building up, and you see what YouTube is doing."

During that time, the company has increased the size of its sales force from about 25 to 40.

Mike Mobley, the new VP of national sales at IAC-owned CollegeHumor Media, said that the ballooning salary scale was one reason he asked his new employer to raise the salary ceiling for his department when he joined. But he said he would only use the new financial room for senior hires.

At his last job, a regional sales director position at CBS Interactive, Mr. Mobley took another approach in bringing on new talent for more junior roles. Burnt one too many times by expensive, but mediocre, mid-level salespeople, Mr. Mobley and his team opted to hire at what he called a "very entry-level position" and then train those hires in-house.

But Mr. Mobley's own job-hunting experience proves that the talent crunch also extends to more senior roles. When he was looking for his latest job, he found himself considering five offers, counting the one he took from CollegeHumor. This, he admitted, is not a sign of a healthy buyer's market. "There's a major gap in talent across the board," he said.

Education gap
Part of the problem seems to be education, or lack thereof. A recent IAB survey on interactive media trends found that about 65% of respondents said there are not enough industry training options. Penry Price, former head of Google's massive U.S. sales team and current president of Media6Degrees, says it's part of the bigger problem that the nation can't to turn out enough graduates with degrees in math and science and an industry that's been slow to recruit from other sectors.

"Even if you're smart from a marketing perspective or great at sales with great relationships, if you aren't the next level up in terms of analytical thinking, understanding how the ecosystem works and why, you'll fall short," Mr. Price said. "The thought leaders of the digital space are management-consultant types who are really analytical and looking at digital data first and emotion second."

Since individuals with those educational backgrounds aren't in large supply in the advertising world, Mr. Price looks to other industries, like the financial sector, or those who have gained an understanding of the math and technology behind digital media through real-world practice in non-sales positions.

"I have lot of interest in someone who's done a couple of years of account management, who understands how ad exchanges work, who understands why trading desks were built, who can turn the dials for real-time optimization based on some kind of conversion event that's happening," Mr. Price said.

Digital guru, or closer?
But Evan Gotlib, senior VP-advertising sales and creative services at Blip.tv, thinks digital employers needn't focus on "young digital killers" exclusively.

"I can teach digital," he said. "I can teach you what a click-tracking tab is, what an API is. But I can't easily teach you how to just close a deal."

For that reason, Mr. Gotlib has focused his hiring efforts on those salespeople with a track record of landing big deals, no matter the medium.

"There's a generation of young digital sellers who just don't understand what it really takes to sell," he said. "Selling is hard, getting your ass kicked eight of 10 times. You have to hire people who understand when someone says, 'No,' that that's just when the job starts. A lot of this new crop of sellers doesn't really understand that."

Sales salaries are cyclical, and the forces that fed bloated compensation packages may already be moving back toward equilibrium. Startups will fail. Job functions will shift or disappear as automated platforms proliferate.

"The market is flooded with companies, many of which are great ideas but only provide partial solutions," said Wenda Harris Millard, of MediaLink. "Not all of these companies can survive. There will be more consolidation in the industry and maybe that will be where supply and demand come together."

This 20-minute documentary looks at the past, present and future of connectivity and technology, and the impacts on people, business and society. The world is changing, and we are at the very beginning of it. Check it out.

Findings from a new study won’t do anything to ease the fears of brick-and-mortar retailers that are anxious over losing sales to mobile-empowered shoppers. The survey by consumer electronics site Retrevo.com found that many smartphone owners are not only using their devices to comparison shop in stores, but end up buying products online elsewhere.

Two-thirds (66%) of smartphone users overall say they have checked out a product in-store, but then bought it from a different store online. Electronics is the category where this pattern plays out most often, with 58% browsing items in physical stores before buying them from a competitor’s Web site. About 40% of smartphone users did the same thing when shopping for shoes and apparel, respectively.

What’s more, among the 43% of those surveyed who have installed a retailer’s app, only 14% have used the app to actually buy something. A separate consumer survey released Thursday by mobile marketing firm Hipcricket found a similar proportion (13%) of smartphone users are visiting mobile retail sites to make purchases. People are mostly going to research prices (46%) and looking for coupons and offers (36%). 

That study also showed that 50% have checked a competitor’s mobile site while in another store. 

Manish Rathi, Retrevo's co-founder and vice president of marketing, said the company’s latest survey results suggests retailers’ need to retool their apps to lure users into making more purchases. “In today's market where many brick-and-mortar retailers are trying to stay competitive, retailers can't afford to merely serve as a showroom for Amazon," he said.

But if Amazon and other online outlets often have lower prices on items, doesn’t that just boil down to competing on price?

“While brick-and-mortar has to absolutely compete on price, that isn’t enough,” said Rathi. “The customer needs confidence if the product they are buying is right, and they increasingly look for Web-wide information to make that decision."

He pointed out that the study found that 53% of shoppers went to a store to buy electronics, but couldn’t decide what to buy. “So they walk out of the store, and then make that purchase online,” said Rathi. The biggest reason for leaving stores was not finding the product information they needed (30%), followed by feeling overwhelmed by the number of choices, and not getting enough help from sales staff. 

The Hipcricket study suggested there is still a lot of room for retailers and marketers to bolster their mobile presence. When asked whether any of their favorite brands market to them via their mobile phone, only 9% said "yes," essentially unchanged from 2010. At the same time, one-third said they would be interested in joining a mobile loyalty program for favorite brands. Only 12% do so now. 

Among other findings from the Hipcricket study, conducted in October via email and based on 607 participants:

-- 61% of smartphone users are at least somewhat likely to use their mobile device while shopping this holiday season.

-- 31% of all mobile phone users have interacted with a brand through their mobile device, up slightly from 2010 (30%), while 59% of smartphone users have done so.

-- 33% of cell phone users are interested in receiving offers based on time and location, such as a coupon delivered at 4:00 p.m. for $5 off a pizza at a local shop that night only. 

The results of the Retrevo study were drawn from an October survey of 1,000 people distributed across age, gender, income and location in the U.S.

Promotion of fall TV shows helped to lift home page ad sales for Yahoo and other Web portals in the second half of the third quarter, even as ads from daily deal sites all but disappeared, per a new report. The latest study of home page ad trends by Macquarie Research found that after a weak second quarter and first half of the third quarter, advertising rebounded strongly for Yahoo from mid-August through Sept. 30.

For example, the Yahoo login page, where the company began selling ad space last year, sold out on three-quarters of the days during that period, compared to just 17% in the first half of the quarter. Yahoo also saw gains in sales of higher-priced oversized/custom ad units and purely brand-focused advertising, largely fueled by campaigns for TV premieres.

Media industry advertising accounted for 35% of home page ad units in the back half of Q3 compared to just 7% in Q2. That reflects a higher proportion of media ads than AOL (22%) and MSN (19%). And 39% of Yahoo's ads were oversized or custom versus 26% and 29% at AOL and MSN, respectively. Among the four sites analyzed, including YouTube, Yahoo also had the highest percentage of brand-oriented advertisers, at 61%.

But the good news for Yahoo comes with an asterisk from Macquarie. "While we don't want to completely discount these clearly positive trends, given the disappointing display results in 1H 3Q and 2Q, YHOO may have used some discounting and promotions to help drive quality and sell-through," stated the report by analyst Ben Schachter. So Yahoo may have had to lower ad rates to drive higher sales.

For AOL, which has weaker-than-expected ad gains in the second quarter, the picture was more mixed. Its proportion of oversized ads increased during the period, but was still lowest among the four main Web portals. What's more, its highly touted Project Devil units remain rare on the home page and are not gaining traction with marketers. AOL also had the lowest proportion of purely branding-focused advertisers, at 26%.

Like Yahoo, YouTube saw a surge of home-page ads driven by the TV networks promoting new shows. The site's defining masthead unit sold almost every day, with 80% of the site's ads coming from the media, auto and consumer electronics categories.

MSN also enjoyed gains in the second half of Q3 driven by increased media sector spending, but the quality of advertising overall remained less than ideal. Endemic online marketers like for-profit education companies and various Web services made up its largest category of advertisers, at 24%. For the third quarter overall, MSN sold oversized ads 20% of the time compared to 15% in the second quarter and 17% in the first quarter.

One type of advertising that fell off for all the portals was that from daily deal sites, perhaps reflecting the waning of the Internet coupon craze. After several quarters of strength, advertising by daily deal/group-buying sites all but disappeared over the past six weeks, according to Macquarie. The investment bank estimates that just 1% of ads across the four portals came from deal sites, and none from the most prominent players like Groupon and LivingSocial.

That compares to 5% in the first half of Q3 and 8% in the second quarter.

"Obviously, this calls into question the sustainability of attracting new subscribers, or at the very least of paying for high-profile, mass-reach ads to do so," noted the report, in relation to the deal sites. Category leader Groupon has repeatedly pushed back its IPO. and other, smaller competitors have shut down or consolidated in recent months. 

CI's Display Advertising Solution Ensures Highly Effective Targeting With a Complete, Integrated Platform

While many retailers give lukewarm reviews to the service providers managing their targeted advertising campaigns, Channel Intelligence (CI) clients say the company is breaking boundaries with its Display Advertising Solution. The high returns on campaigns managed by CI are prompting many of the company's clients to reallocate marketing dollars. Those changes have been significant, averaging fourfold display ad spending increases as the clients ramp up for the fourth quarter.

Rock Bottom Golf was looking for a way to rise above the fray in their highly competitive space while still maintaining a tight rein on expenses. Brian Schwank, director of marketing for the discount online retailer, was cautious about launching a display-ad campaign because the industry-standard returns didn't meet his established threshold for success. But after learning about CI's TrueTag technology and profiling engine, Schwank implemented a campaign in May of this year to see exactly how effective targeted advertising could be. It didn't take long for him to realize the value.

"The results we achieved with CI's Display Advertising Solution far exceeded our initial expectations. It has become a vital, ongoing part of our advertising mix," said Schwank. "The most important thing for us is that we've been able to keep our brand in front of both regular customers and potential customers as they surf around the Web. Our brand is everything to us, and the creative from Channel Intelligence has been incredibly effective at conveying our message and reinforcing the brand."

Jeff Allums, director of performance advertising for Channel Intelligence, says the primary driver of this above-average display success is CI's unique ability to personalize ad messages by segmenting users.

"Our complete display platform includes a profiling engine and dynamic ad serving technology, making it possible for advertisers to connect with users on a more personal basis," said Allums. "Someone who put an item in the cart and then left the site could be served an ad for 20 percent off their total purchase. While another user who browsed the site but never carted an item might see an ad for free shipping on orders more than $75."

Allums says CI's Display Advertising platform includes:

User tracking and profiling

Audience segmentation and targeting

Dynamic ad serving to personalize the ad to user or audience segment

Innovative analytics to measure ad effectiveness

In-house marketing consultants to manage and to optimize campaigns

 

To learn more about CI's Display Advertising Solution, you can send an e-mail to: gabe.elliott@ciboost.com or call (321) 939-5060.

The opportunity to understand what marketers are thinking and doing during a period of unprecedented change and increasing expectations makes the Unica Annual Survey of Marketers especially valuable. Last year, the survey revealed that the key concerns among marketers were an overall shift to online marketing, a greater emphasis on website personalization, and a general dissatisfaction with IT support for marketing's technology needs.

This year, the survey found continued interest in many of the same issues, plus a more urgent need to turn data into action, increasing recognition of mobile's marketing power, and a desire for more integrated technology solutions.

When asking marketers about their key issues, this year's survey changed one of the answer options on the questionnaire from "measuring results and increasing effectiveness" to "attributing success to marketing". While a subtle yet distinctive shift in perspective, the option struck a nerve, and attribution took one of the top spots. At the same time, "turning data into action" leapt into the lead, but was clearly a more urgent cause for North American marketers than European. "Determining optimal channel and contact frequency," an issue that ranked fairly low in the previous survey was also in the top. Interestingly, despite the buzz and media hype, social media pulled in dead last with only 19%.

Top 3 Important Issues to Marketers
	% of Respondents
Issue	Total Respondents	North America	Europe
Turning data into action	62%	70	52
Attributing success to marketing	53	49	58
Determining optimal channel and contact frequency	48
Integrating marketing across channels	44	48	28
Influencing buying cycle	38
Allocating marketing budget	33
Shifting to social media	19	14	27
Source: Unica, "State of Marketing, 2011," May, 2011