Brian O’Kelley wrote an interesting piece for Clickz this week on why ad nets are an essential part of the online ad eco-system. He argues that ad networks are entitled to earn good margin on ROI delivered to agencies and advertisers, highlighting proprietary technology, performance delivery and quality service as grounds for excelling ad nets to charge top dollar. He’s right, you know. But the comments below O’Kelly’s article indicate some of the concerns among agencies and advertisers – with regard to ad network inventory and pricing transparency. All is not well in ad land – and tensions are beginning to appear in the traditional buying chain.
Malvertising continues to plague the display market here in Europe, threatening publishers with severe losses in terms of ad revenue and resource required to unearth and remove unwanted scripts from ad servers. Increasingly criminals are seeing display advertising as an easy way to distribute malicious code and malvertising. The industry has been very active of late in combating and addressing the problem. The latest effort to protect publishers from this growing malvertisng threat comes from Admeld. Yesterday, it announced a global partnership with The Media Trust aimed at ensuring all ad impressions running through its platform are free from unwanted malware. The Media Trust’s proprietary malware detection technology will enable Admeld to detect tags for malicious code before they are launched via publishers’ sites. It is a necessary step given the growing sophistication of malvertisers in the display space. Instead of going after specific networks, criminals are now employing tactics similar to those used by DSPs and agencies for reach and better targeting across multiple inventory sources.
» Click fraud continues to be a major problem for online advertisers. The ClickForensics report points to a rise in click fraud across the globe. Based on data collected from more than 300 ad networks, the Click Fraud Index showed that the overall industry average click fraud rate was 18.6 percent – up from the 17.4 percent reported in the first quarter of the year. The rise is being attributed to the growing sophistication of botnets and malvertising. Countries with some of the biggest volumes of click fraud in the second quarter of this year include Singapore, Japan, China, Ukraine and Pakistan. But looking at the chart below, which gives the click fraud risk level for different countries, it would seem the problem is pretty widespread in mature European markets. The UK, France and the Netherlands have some of the highest risk ratings, highlighting the serious click fraud problems that exist in the European DR marketplace.
» Brent Halliburton does a great post on second-price auctions on Cogblog this week. Halliburton talks about some of the issues around the second-bid auctions, and how floor pricing can affect it. One of his key examples of how dynamic floor pricing can affect bidders is when a second bid is lower than the publisher’s asking price and the highest bid is significantly greater. In that particular scenario, the impression is returned to the publisher because the second bid was lower than the publisher’s asking price. He describes dynamic floor pricing as a “moving target” with both buyer and seller looking for price equilibrium. But the ad tech industry continues to work tirelessly at addressing these “growing pains”. Remember RTB is still a nascent buying methodology, and there’s bound to be some initial problems. It’s an interesting read, and follows on nicely from some recent analysis by Eric Picard. In a piece that focuses on DSPs, Picard touches on some issues relating to RTB, including asymmetric bidding and low bid density. He uses some nice and simple examples to illustrate his points on the second-bid auction. Picard’s perspective is useful for those looking to get up to speed on second-place auctions and bidding methodologies.
» And so the first chinks of information are making their way into public domain about the Times’ “daring” paywall strategy. The Guardian makes some “guestimates” on traffic numbers over at thetimes.co.uk since it introduced its mandatory registration page (the first step before it brings in its pay-as-you-view model). Based on data from Hitwise and previous surveys by the ABCe, the Guardian reckons that the Times’ daily visits has dropped from 1.2 million uniques to anything between 84,800 and 195,700 unique users – with only 10% of that figure subscribing to the new paid service. Remember that that new daily unique figure for thetimes.co.uk is going to the reg page, and that those users would have limited access to the rest of the site. That’s an unbelievable drop in traffic and is going to absolutely hammer online revenues. Beehivecity reckons the paid subscription number could be anything as low as 15,000 – and each digital subscriber would generate £120 per year. That would mean that subscriptions would only bring in about £1.8 million a year. How does that compare to online revenue? And has the Times sacrificed its traffic for something that will ultimately fail? I will endeavour to put some numbers together on how much thetimes.co.uk is actually losing in online revenue due to cataclysmic drop in traffic. [Guardian]
There had been rumours last week that DGM was struggling financially, and it seems those industry whispers have now been confirmed. DGM is informing creditors, and has officially gone into administration. Founded in 1999, DGM was one of the leading affiliates in the UK market. The company has a number of blue chip clients, including Vodafone, Tiscali and JD Williams. You wonder why they’ve struggled given the continued online budget shift towards DR and performance marketing. While DGM was going to the wall, two of Europe’s other affiliate heavyweights agreed a merger. Zanox and the UK’s largest affiliate, Digital Window, have confirmed that they are to merge. Not a huge surprise given that Zanox’s owners, Axel Springer and PubliGroupe, already had a majority holding in Digital Window. The deal will create the largest affiliate company in Europe.
Google’s partnership with Omnicom to build out the agency’s trading desk with the view of putting hundreds of millions of display dollars through automated channels (Google’s mostly) could well be a transformational moment for the display market. I could be accused of a certain degree of hyperbole here, but you have to look at the size of this deal and take note of the other significant relationships Google has already established with the biggest media buying agencies. It is slowly bringing the dsplay market under its control. You also need to recognise the significance of how details of the story were released: instead of giving the “scoop” to a trade press journo, it was given to Emily Steel at the WSJ. Google is serious about display, and bringing order to a ridiculously chaotic and opaque market. And it wants Wall Street to know this. Google maybe chasing profit, but in doing so it is pushing innovation in this space. This might be unpalatable for some in our industry who fear change, and would rather keep this innovation at bay. But change is upon us and we, as an industry, must act now.
Daniel de Sybel (@ddesybel) is Director of Technology and Operations at Infectious Media.. Today Dan discusses the the issue of privacy, and what the online ad industry will need to do to address some of the growing concerns around the use of data.
Privacy is a pretty hot topic right now, especially with the furore about Facebook’s privacy policy and their seemingly endless intentions to try to make personal data available to whomever will pay for it. But you can see their point. Much of the value of Facebook as a business entity will lie in not just the demographic data that Facebook holds, but also in the habits and interests of their members. Commercialising this data will clearly be priority number 1 right now.
I find it laughable when people in the online ad industry baulk at publishers becoming media buyers. There is a general consensus that media buyers have a specific role in the marketplace and that publishers should just stick to selling inventory. Well that might have been the case a couple of years ago, but things have changed in a big way. Over the past twenty-four months we have not only seen publishers build out their own ad networks (The Daily Mail being the best example) but also augment their reach in weak inventory areas in order to increase ad revenue (note the buying relationship between De Telegraaf and Admeld in the Dutch market). I think it’s now time that we see more innovation in media buying from publishers. Some European publishers are sitting on a treasure trove of user data. What if some – particularly those in lucrative vertical markets – looked at leveraging their proprietary data for ad targeting purposes. Not across their own inventory but across media available in their vertical. That would be a powerful commercial proposition for agencies and advertisers. But there are only a handful of publishers that could possibly do this.
Comscore released some interesting data yesterday, indicating that cheap social media inventory is causing a significant drag on overall CPM prices. According to the Comscore numbers, the average CPM – without social media inventory included – stands at around $2.99 per thousand impressions. When social media inventory is included the price drops 19% to $2.43.
Brian O’Kelley wrote an interesting piece for Clickz this week on why ad nets are an essential part of the online ad eco-system. He argues that ad networks are entitled to earn good margin on ROI delivered to agencies and advertisers, highlighting proprietary technology, performance delivery and quality service as grounds for excelling ad nets to charge top dollar. He’s right, you know. But the comments below O’Kelly’s article indicate some of the concerns among agencies and advertisers – with regard to ad network inventory and pricing transparency. All is not well in ad land – and tensions are beginning to appear in the traditional buying chain.
Malvertising continues to plague the display market here in Europe, threatening publishers with severe losses in terms of ad revenue and resource required to unearth and remove unwanted scripts from ad servers. Increasingly criminals are seeing display advertising as an easy way to distribute malicious code and malvertising. The industry has been very active of late in combating and addressing the problem. The latest effort to protect publishers from this growing malvertisng threat comes from Admeld. Yesterday, it announced a global partnership with The Media Trust aimed at ensuring all ad impressions running through its platform are free from unwanted malware. The Media Trust’s proprietary malware detection technology will enable Admeld to detect tags for malicious code before they are launched via publishers’ sites. It is a necessary step given the growing sophistication of malvertisers in the display space. Instead of going after specific networks, criminals are now employing tactics similar to those used by DSPs and agencies for reach and better targeting across multiple inventory sources. 
» Click fraud continues to be a major problem for online advertisers. The 
» Brent Halliburton does a 
» And so the first chinks of information are making their way into public domain about the Times’ “daring” paywall strategy. The Guardian makes some “guestimates” on traffic numbers over at thetimes.co.uk since it introduced its mandatory registration page (the first step before it brings in its pay-as-you-view model). Based on data from Hitwise and previous surveys by the ABCe, the Guardian reckons that the Times’ daily visits has dropped from 1.2 million uniques to anything between 84,800 and 195,700 unique users – with only 10% of that figure subscribing to the new paid service. Remember that that new daily unique figure for thetimes.co.uk is going to the reg page, and that those users would have limited access to the rest of the site. That’s an unbelievable drop in traffic and is going to absolutely hammer online revenues. 
There had been rumours last week that DGM was struggling financially, and it seems those industry whispers have now been confirmed. DGM is informing creditors, and 
Google’s partnership with Omnicom to build out the agency’s trading desk with the view of putting hundreds of millions of display dollars through automated channels (Google’s mostly) could well be a transformational moment for the display market. I could be accused of a certain degree of hyperbole here, but you have to look at the size of this deal and take note of the other significant relationships Google has already established with the biggest media buying agencies. It is slowly bringing the dsplay market under its control. You also need to recognise the significance of how 
Daniel de Sybel (
I find it laughable when people in the online ad industry baulk at publishers becoming media buyers. There is a general consensus that media buyers have a specific role in the marketplace and that publishers should just stick to selling inventory. Well that might have been the case a couple of years ago, but things have changed in a big way. Over the past twenty-four months we have not only seen publishers build out their own ad networks (The Daily Mail being the best example) but also augment their reach in weak inventory areas in order to increase ad revenue (note the buying relationship between De Telegraaf and Admeld in the Dutch market). I think it’s now time that we see more innovation in media buying from publishers. Some European publishers are sitting on a treasure trove of user data. What if some – particularly those in lucrative vertical markets – looked at leveraging their proprietary data for ad targeting purposes. Not across their own inventory but across media available in their vertical. That would be a powerful commercial proposition for agencies and advertisers. But there are only a handful of publishers that could possibly do this. 
Comscore 
