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

Trio of Web firms announce new initiative to simplify online ad measurement, metrics

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.”  

 - By Mike Shields via http://www.adweek.com/

Single-digit growth will be the norm through 2014

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.

Online to take one-fifth of total ad spend by 2014

50% of respondents on the client side said they expect their own company to spend more on paid search this year

Search-engine marketing continues to grow, according to a survey released this month by the Search Engine Marketing Professional Organization (SEMPO) and Econsultancy, with money often being shifted from other kinds of marketing in order to fund it. But the survey's respondents (professionals in this field) say measurement of return on investment continues to be the foremost challenge for search.

Conducted online in January and February, the survey was promoted to members of SEMPO and of Econsultancy, the latter a digital publishing and training group with a broad membership among Internet professionals. Nearly 1,500 respondents participated, of whom about two-thirds were on the supplier side, including various sorts of agencies (digital shops, search specialists, general agencies, etc.) and consultancies.

Fifty percent of respondents on the client side said they expect their own company to spend more on paid search this year than last. On average, these respondents foresee their companies' spending on paid search increasing 37 percent this year. As for search-engine optimization (SEO), 52 percent of client respondents expect their companies to boost spending, with expenditures seen rising an average of 43 percent vs. 2009. The report of the findings estimates that revenues for the search-engine-marketing industry as a whole will grow 14 percent this year, to $16.6 billion.

With many small firms providing search services of one sort or another, the amount of billings each of them takes in can be pretty small. In paid search, 41 percent of agency/consultancy respondents expect their own firm's billings to be under $100,000 this year. In SEO, 47 percent expect billings this year under that threshold.

IN-HOUSE VS. OUT-OF-HOUSE
Moreover, client companies handle much of their search efforts on their own. In paid search, for example, 47 percent of client-side respondents said they "primarily" handle the work in-house. Fourteen percent use a "paid-search specialist," 14 percent a "search agency," 8 percent a "digital marketing agency," 6 percent an "advertising agency," 5 percent an "SEO specialist," 3 percent a Web-design agency," 1 percent a "PR agency," 1 percent a "social-media specialist" and 1 percent "other." The pattern was similar with respect to SEO work, with 51 percent of client-side respondents saying this is handled primarily in-house. Just 2 percent said their SEO work is primarily handled by the general category of "advertising agency."

Does the fact that general agencies conduct so little of client respondents' search work mean search is at risk of being isolated from (rather than closely coordinated with) a company's overall marketing program? "Hopefully, all of a client's agencies are talking together," says Sara Holoubek, president of SEMPO and CEO of her own strategic consultancy, Luminary Labs. "Obviously, the marketing works better if they all play nicely in the sandbox together." She acknowledges, though, that this is not always the reality.

And why do the general agencies cede much of the search work to specialized agencies and consultancies? Holoubek sees this as a legacy of the period in which big agencies and holding companies treated search "as an afterthought. That's why you see such a diverse collection of companies on the supply side," even though the big agencies have more recently taken steps to get up to speed (or to buy specialist shops) in this field. For that matter, she says, "Some clients may want a very, very specialized, dedicated provider" when it comes to conducting their search efforts.

WHERE DOES THE MONEY COME FROM?
In this period of severely constrained budgets, where are clients finding the money to fund their search efforts? In paid search, 30 percent of client respondents said it's "newly allocated budget specifically for paid search," while 25 percent said it's "money shifted away from other marketing budgets" and 45 percent that it's a combination of the two. For SEO, 39 percent said it's new money, 19 percent said it's money shifted from other marketing budgets, 9 percent said it's "money shifted from other Web site programs" and 33 percent said it's a combination of these.

When money is shifted into search from elsewhere in the marketing budget, what takes the hit? A plurality of client respondents (49 percent) and an outright majority of those on the agency/consultancy side (69 percent) pointed to print. It's not that search is inherently a predator vis-à-vis spending in traditional media. At the moment, though, with budgets often shrinking, it seems like a zero-sum game. "I think if it weren't for the recession, we wouldn't be talking about where the money is coming from," says Holoubek, especially since these old and new media ought to be working in concert. "In an ideal world, you have this virtuous circle in which media like TV and print create demand, and search captures it," she says.

Wherever the money comes from, its allocation to search had better pay off. But determining whether it is doing so remains a challenge for search, just as it is for any other form of marketing. When respondents were asked to identify the "greatest challenges" they confront in managing their paid search efforts, "measuring the ROI" garnered the most mentions from people on the client side (43 percent) and the agency/consultancy side (40 percent). The runner-up in each case was "optimizing destination pages." Measurement of ROI also was atop the list (in a tie with "optimizing destination pages," at 42 percent each) when client-side respondents were asked to cite the biggest challenges they face in running their SEO efforts. On the agency/consultancy side, measuring ROI tied (at 40 percent apiece) with "staying abreast of search engines' indexing algorithms and technologies."

DEFINING THE OBJECTIVES
Of course, measuring return on investment entails knowing just what it is you want that investment to accomplish. What do companies want from their SEO efforts? For client-side respondents, the highest number of mentions as "most important" went to "generate leads" (34 percent) and "drive traffic to Web site" (32 percent). That's in sync with agency/consultancy respondents' sense of what their clients want to accomplish, with "generate leads" (35 percent) and "drive traffic to Web site" (30 percent) getting the most mentions. With regard to the objectives of paid-search efforts, client-side respondents gave the most votes to "sell products, services or content directly online" (39 percent) and to "generate leads" (37 percent). Here again, that's consistent with what agency/consultancy respondents said, with "sell products, services or content directly online" cited by 43 percent and "generate leads" by 40 percent.
 
With social media drawing more and more attention from marketers, the survey sought to gauge opinion of search professionals on how this might be affecting their work. On the client side, 33 percent of respondents agreed that "Social media is very much part of our search activity." Significantly more of the agency/consultancy respondents (48 percent) agreed that this is the case. Likewise, agency/consultancy respondents were more likely than their client-side counterparts to agree that the rise of social media has had an impact on their search efforts, 74 percent vs. 52 percent.