Placements on smaller, niche sites increase response to ads

Many advertisers stick to the top sites on the web when planning an online campaign, but overlooking less-trafficked sites could be a mistake. A study by contextual targeting firm CONTEXTWEB of more than 1,000 ad campaigns across 18,000 publisher sites during the second half of 2010 found that ads placed on long-tail sites—those with an overall reach smaller than 1.5% of the internet population—had a significant lift in clickthrough rate compared with ads on larger web properties. Overall, long-tail sites lifted click rates by 24%. All advertiser verticals studied showed lift when ads were placed on sites in the long tail. Alcohol ads enjoyed the highest lift, at 50%, while automotive advertisers experienced a lift of only 12%.

The site categories that provided the biggest lift in the long tail were education, technology and computing, and hobbies and games. Some site categories, including pets, home and garden, arts and entertainment, parenting and family, and automotive had a negative lift.

However, accounting for the decreased cost of placing ads on long-tail sites, even a negative lift often translates into a more efficient ad.

Not only can the long tail provide greater efficiency in clicks for advertisers’ dollar, according to the report, it is critical in providing a truly mass reach for ad campaigns. The large crop of long-tail sites frequently provides access to a large audience unduplicated by top sites in the same category, and often with similar demographics as visitors to those top sites. And according to comScore, the vast majority of time spent on the web is spent with long-tail sites, while the lion’s share of ad dollars is spent on the short tail. Advertising on top websites is, of course, still critical, especially for major campaigns or for branding. But advertisers can use the long tail as a low-cost, efficient way to augment the reach and scale of their campaigns.

via emarketer.com

via : http://www.adexchanger.com/online-advertising/prospecting-with-search-and-display/

Single-digit growth will be the norm through 2014

MasterCard has launched an out-of-home campaign to promote its MarketPlace e-commerce site. The goal? To get consumers' attention both online and offline.

The credit card brand has put up storefront ads featuring black-and-white vinyl panels and taglines like "A smarter way to shop online" and "Where bargains find you." The effort, which includes ads in New York, Chicago, Miami and Philadelphia, wraps up this month. The displays, set up in busy retail locations, consist of motion sensor-activated screens on which items like purses, laptops and sneakers pop up when someone walks by. There is also a mobile component: Pedestrians can view the latest offers via MasterCard MarketPlace's RSS feed and e-mail deals to themselves. MasterCard hopes "to capitalize on consumers' dual online-offline shopping behavior by directly placing the MasterCard MarketPlace 'shop smarter' message within the physical, brick-and-mortar shopping experience," said Cheryl Guerin, the company's svp of digital marketing. Storefronts were a "natural channel extension," she said. In addition to the OOH campaign, MasterCard is running TV, print and online ads to promote its MarketPlace business. Digital efforts include tweeting "overwhelming offers," which are "time-sensitive" deals offered daily on the site, Guerin said. The company did not disclose the campaign's cost. It is, however, the first time MasterCard has launched an interactive outdoor initiative to support a larger marketing push. GSD&M Idea City, digital agency R/GA and Inwindow Outdoor worked on the campaign. MasterCard spent $164 million on advertising in 2009 and $31 million through the first five months of this year, excluding online, per Nielsen.

Omnicom Group has inked a deal with Google. The holding company has made commitment to increase spending on display ads with the Internet giant in exchange for technology services.
 
The agreement, according to Omnicom Media Group Digital CEO Matt Spiegel, calls for collaboration, notably around the development of Google's audience-based ad auction system and the tools Omnicom's trading desk uses to access inventory. "It formalizes the relationship we have in a strategic partnership," Spiegel said. "It's a recognition that we've spent a lot of time and energy investing in the future of the ad-exchange-driven display world." In return, sources said Omnicom would "substantially" increase its global spending on Google properties, either buying directly on YouTube, Google Finance and its ad network or through Google's ad exchange. The spending figure is estimated at "hundreds of millions" of dollars, per sources. In exchange for the spending increase, Omnicom will receive a raft of services, including technology consultation, integration assistance, training and co-marketing support. (See also: "Google - Too Many Moving Parts?") The arrangement could raise the question of whether Omnicom is using client-marketing dollars in return for such services. Spiegel said that's not the case, since the agreement does not include "guarantees" but "commitments." "We have definitely committed to working with them and spending more dollars via Google, but this is a natural bet as this space is growing rapidly," he said via e-mail. "There are no dollars committed to upfront and no minimum guarantees in place. Certainly as we work closely together, one of the ways we'll both judge the success of the partnership is the level of increased media volume through their tools and properties, but again, that doesn't mean we have to spend to a specific number." The deal illustrates, in microcosm, the outsized role Google is playing in the online ad market, even in the display space it has only recently begun focusing on. For example, Omnicom could use Google-owned technology to bid on display ads offered through a Google-owned auction platform that relies on Google's ad network for a big portion of its inventory. Those ads would then be served using Google's ad-serving technology. Close collaboration with media sellers is a foreign concept in the traditional media world, but it's necessary in a data-driven online ad arena increasingly reliant on algorithms, Spiegel said. Google has also struck a partnership with Publicis Groupe, for example. "The media business is fundamentally changing," he said. "A key element is sophisticated technologies at the center of the transaction process. It's critical we have wide expertise to use these technologies." Omnicom is in advanced talks with other top tech and media companies, including Microsoft and Yahoo, about similar partnerships, according to sources. nline ad exchanges are gaining momentum as agencies look to buy inventory based on specific audience segments. Omnicom rivals Publicis, Interpublic, WPP, Havas and MDC have all set up trading desks that typically use demand-side platforms to bid on exchanges. Google is banking on this emerging infrastructure to significantly grow the display ad market -- and its role therein. Google's DoubleClick Exchange has the largest pool of inventory available. Last month, Google bought Invite Media, a demand-side platform used by agencies to find and buy inventory on exchanges. The increased commitment is a sign that it is making progress in building a substantial display ad business to complement its dominant position in search. The agreement is non-exclusive, meaning Omnicom can use other technology partners for the trading desk and Google can continue working with other agency holding groups. Invite Media is a main partner for Publicis, for example. Omnicom uses Google-owned Invite in Europe, but it uses independent ad tech providers Turn and X+1 in the United States. It will continue to do so, Spiegel said. "I don't want to see a world where Google is the only dominant player in this space," he said. "Our objective is to work with best-in-class partners, of which Google is one."

Look for rapid growth over the next few years

The online video advertising market is poised for rapid growth over the next few years, according to eMarketer. The research firm estimates online video advertising spending will grow more than 48 percent this year, reaching $1.5 billion. By 2014, it expects the video ad market will top $5.5 billion. "Video fulfills branding objectives better than any other current online ad Format -- with the sound, motion and emotion of TV, but with better measurability and targeting," said David Hallerman, a senior analyst at eMarketer. "The continued development of more professional-quality video on the Web makes the target audience more receptive to advertiser messages and thereby encourages advertisers to spend more for video ads." Still, spending growth does not necessarily correlate with current market importance. While video ad spending growth will far outpace that of any other online ad format from 2009 to 2014, it will still represent only 6 percent of all Internet advertising expenditures in 2010.

Take a look at an "ecosystem map" by GCA Savvian banker Terence Kawaja. It is an 11x8.5, Pantone-hued, logo-vomit of incomprehensible names: Blue Kai, AdXpose, Yieldex, Apnexus, Dataxu, TRAFFIQ (full disclosure: I work for the latter one, pronounced "Traffic"). From left to right, the landscape depicts the players in the business of digital display advertising, from those that buy the ads (agencies and marketers) to those that sell them (online publishers) and everyone in between. Over the last few years, not only have the players on either side increased but, thanks (or no thanks) to technology, the broad middle ground between the two has exploded.

Now, the advertiser can access a buying platform and buy on an exchange that uses cookie data to target an audience found on multiple websites. The composition of that audience is verified by a third party, and can then be served an ad (featuring creative that might be dynamic), and finally reconciled and billed by yet another software provider. And this is just the run of the mill stuff. Even in an industry rife with middlemen, the noise in the marketplace for the average media buyer is epic. What is happening out there, and why is it so confusing?

To the optimist, all of this wonderful technology is helping marketers buy the audience they have always wanted to target. Instead of having to buy ESPN.com at double-digit CPMs, now the advertiser seeking "sneaker intenders" can plug into a million cookie-appended sites and hit users with a dynamically generated running shoe ad that hits the reader as he is accessing jogging content on a favorite long-tail blog and deliver him a geotargeted ad that shows him a coupon on his size Asics from the nearest shoe store. And all for an $8 CPM. So what's the problem?

For the publisher, the problem is that it's way too cheap. After years of publishing all of their content for free, and placing a dozen network and exchange ad tags on their sites to monetize remnant inventory, the world is overwhelmed with banner inventory. Publishers -- who sell only 30 percent of their total banner inventory on a good day -- are stuck monetizing the large majority of their banners at an industry average $0.75. Yet, the networks and exchanges who have co-opted the publisher's very audience via cookie data, are making a cozy $5 CPM selling "audience segments" and "behavioral targeting." Ouch. You wonder when the (decent) publishers of the world will finally wake up and firewall all of that content they've paid a fortune to create and distribute.

In addition to the fact that publishers have been caught flatfooted by the broader trend of buying an audience vs. buying the place where it is found, they haven't really learned to leverage the tremendous power they wield: owning some very nice eyeballs on one of the most important screens in the market today. Are television ad sellers dependent on several dozen third-party intermediaries who skim 90 percent of their revenue? No. The money that they have lost due to channel explosion, they have found other ways to make up: namely, monetizing their content through different distribution channels (DVD sales and rental, DVR rental, overseas distribution, and cable licensing).

The introduction of the iPad was another painful reminder of how poorly publishers are doing when it comes to content monetization. Essentially, they have allowed the ultimate third party (Apple) to monetize all of their mobile content for them, and they are left begging at Steve Jobs' table for scraps. Oh wait -- the "ultimate third party" is actually Google, and publishers have already let the company control their site traffic and much of their content monetization through search. Oops.

So, what is my point, anyway?
The point is about control, and who is exercising it in this increasingly complicated landscape. Looking at the publishers' dilemma, it is clear that they have (for the time being) surrendered control to a variety of third parties with technology expertise in the hopes of staying relevant in a digital advertising economy. In addition, today's advertising agencies are increasingly becoming irrelevant, as they are increasingly dependent on the dozens of technology companies that control the way ads are created, displayed, measured, and transacted upon. The agency value proposition of publishers (we have the audience) and agencies (we know how to reach them) has eroded, which essentially opened the door to this new horde of technology players.

Yet, I am pretty sure both sides have only started to fight to get some of that control back. On the agency side, we have seen agencies building their own DSPs so they can control the inventory and targeting capabilities. On the publisher side, smart companies like Glam are building their own ad platforms (GlamAdapt) promising to deliver "a third-generation ad platform built for emotional digital branding" -- whatever that means. Both sides are trying to take control of the value they create by building platforms, which is admirable. But, in doing so, aren't they building closed systems that, over time, will create their own ecosystems and be unable to quickly adapt to changes in the market? In other words, are they building Windows, rather than leveraging Linux?

This battle for control is going to see many of the ecosystem players in the middle get absorbed by the larger players on either side of the equation, as well as an explosion of platforms designed to make sense of the large array of choices and ultimately organize the ecosystem as a whole. The real battle will be among those companies that are building open, scalable platforms that enable both agencies and publishers to choose among the various moving parts, based on their need.

In tomorrow's platform, an agency will register, plug in what ad server it uses (e.g., Atlas), its primary third-party data provider (e.g., comScore), its existing publisher relationships, the different data companies it uses (e.g., BlueKai), and its billing system (e.g., Advantage) -- and have a single interface to manage its search and display. Publishers will log into the same system and be able to participate in a marketplace where they set their own rates, and are able to leverage in-system data providers to create discrete audience segments and match them with advertiser needs. Tomorrow's ad platform will also include both guaranteed buying (great from brands) and RTB buying (great for performance).

In the end, for such a system to exist, all players must start by ceding more control back to the buyers and sellers at the end, and the parties in the middle of the ecosystem must develop the APIs and integration paths that make systems interoperable. As a series, "platform wars" will look at all the different players in the space, and the ongoing battle for control as digital media technology evolves, and winners and losers will be chosen.

7500+ campaigns for 1000+ referential clients since 2000. 1B+ monthly impressions on 3000+ sites. 35+ partnerships with major international networks. 60+ online media specialists. 10 offices in CEE, Germany and US. In other words, Httpool, a business started in Slovenia in 2000.