It was announced this week that Opera was buying mobile ad network Admarvel for $15 million. Opera has presently the biggest share of the global mobile browser market. Opera will probably leverage Admarvel to monetise all of its branded mobile products. Good move given its market reach.
Is this of the end to the wave of takeovers sweeping through the mobile ad market? There could be a few more big moves to come.
Microsoft does have some presence in the mobile display market – but might feel that it too needs to acquire an established mobile display player. Yahoo might also want to improve its present mobile ad platform and buy.
Behavioural targeting is on the radar of EU’s regulators. The EU wants to take the online advertising to task over perceived misuse of cookie data and behavioural targeting. They even passed a laughable directive late last year instructing EU publishers to offer explicit opt-ins for online behaviour tracking.
We can get into the semantics of what an EU directive actually means, but here it is in its crudest form: the EU drafts some legislation and then instructs EU countries to pass it into law; the EU has no say in how member states pass it into law and what form it will ultimately take.
There will doubtless be push back from some digital savvy member states and it will have to be re-worded. I can’t see the biggest online markets, like the UK, Germany and France, passing this directive (in its current form) into law.
In a bizarre announcement to clients yesterday, Microsoft announced it was closing its ad exchange. The communication referred all existing customers to John Ebbert’s Adexchanger.com for alternative vendors. CPM Advisors’ CEO Rob Leathern published the email in full on his company’s blog:
Dear AdECN Member,
Thank you for your use of AdECN’s services and participation on the Hosted system of the AdECN Exchange for the last few years. We regret to inform you that AdECN has made the difficult decision to close the Hosted system in accordance with following timeline:
- February 15, 2010 will be the final day that ads will be served. This closure will include all ad-serving, any default code, and all other AdECN services.
- However, we will continue to provide UI access until March 15, 2010, after which point there will no longer be any login access to the AdECN Exchange. You will not be able to access the AdECN Exchange, including any data you have stored on the system, after March 15.
- All balances will be paid in full by March 31, 2010.
We are committed to working with you to make this closure as painless as possible. Please contact support@adecn.com to tell us how we can assist you in transitioning your business. Contact support@adecn.com or your Account Manager by January 15 if there are major issues with the February 15 date to discuss how we can make this transition off the Hosted system as amenable as possible.
We will only be able to provide redirect services to third party ad exchanges or servers through February 15, 2010. Billing and serving data will be available via the UI until March 15; on request we can also provide you with copies of the last 9 months’ billing invoices (provided we receive your request prior to February 15).
You may also want to review a list of alternative ad exchanges and infrastructure providers here.
We thank you again for your participation on the AdECN Exchange.
Sincerely,
AdECN Team
After the story broke yesterday, Microsoft was quick to clarify that they were only shuttering a “legacy product” and would be concentrating on RTB. Microsoft has been very reticent on their exchange strategy, and in Europe they have said little about what they’re planning to do.
I have heard many industry people talk about how Microsoft will ultimately play a big role in the exchange space, but I’ve seen precious little activity on that front.
Maybe it’s just waiting to buy Yahoo outright. It could then throw its considerable corporate weight and resource behind the Right Media exchange. Add Ad.com and AOL into the mix and it could have an ad exchange fit to rival any Google platform.
Or maybe it is going to forgo the ad exchange platform all together and enter the DSP business. It’s still got a considerable cash pile to buy a ready-made one outright. But nobody is talking at Microsoft – and judging by yesterday’s email there also seems to be some confusion about what the company’s next move will be in the exchange space. What’s going on? Seriously.
Google continues its foray into traditional Yahoo advertising territory by beefing up its display offering with yesterday’s acquisition of Teracent.
Teracent’s technology produces display advertising in real-time based on the specific user and site. Its algorithm uses variables such as geographic location, language, the content of the website, the time of day and past performance to serve up the most “relevant” ad.
The platform allows advertisers to optimise the creative parts of an ad, such as colour and text, in real-time. This intelligent display technology could well be a huge draw for advertisers as it improves campaign performance on the DoubleClick Ad Exchange.
Teracent’s technology can pick and choose from literally thousands of creative elements of a display ad in real-time — tweaking images, products, messages or colors. These elements can be optimized depending on factors like geographic location, language, the content of the website, the time of day or the past performance of different ads.
This technology can help advertisers get better results from their display ad campaigns. In turn, this enables publishers to make more money from their ad space and delivers web users better ads and more ad-funded web content.
We’re looking forward to welcoming the Teracent team to Google and to making this technology available to our display advertising clients — including those who run display ad campaigns on the Google Content Network and our DoubleClick clients.
Rubicon Appoints Wunderloop Exec To Lead Sales Effort In Northern Europe
Rubicon continues its European hiring blitz. After a number of key hires in the UK market, Rubicon has announced the appointment of former Wunderloop Netherlands MD, Bas Seelen. Seelen has been hired to lead the sales effort in Northern Europe. He will be selling the Rubicon platform and service into key premium publishers in the region.
Rubicon is, in fairness, adopting a very pragmatic approach to expanding its operation in Europe by hiring local talent with deep knowledge of local markets. US media companies often make the mistake of running their European businesses out of London, and overlook the fractured nature of the region’s market. Here Jay Stevens gives an interesting insight into the multi-faceted nature of the European market, pointing out how some German publishers remain non-plused about working with ad nets and ad exchanges due to early bad experience and consistently low CPMs:
As we continue to expand internationally and meet with publishers in Europe and beyond, it has become apparent that bad experiences with ad networks and exchanges early on have created a somewhat hostile climate. In particular, publishers with established brands in Germany garner some of the highest CPMs for their audiences in the region, so they’re reluctant about turning any of their inventory over to an ad network or sales house that would potentially buy low and sell high. However, with his industry experience and knowledge of the market, Bas is well-suited to deliver the support and education that publishers need to start rebuilding trust in ad networks and in turn improving their channel management practices – and with it their revenue potential.
The non-premium market is growing. Adjug, RightMedia and Wunderloop continue to attract advertising budget. Google is launching their new and improved exchange in Q4. And even the mainstream media is having a go at explaining the new developments in online advertising.
Trading platforms now offer publishers a sales channel for their unsold ad inventory. Most have so far failed to grasp the opportunity: they’ve decided to either dump their inventory on the exchanges, selling it for a low CPM, or continue farming it out to an intermediary like an ad network.
This strategy is having an effect on publisher revenue. Oversupply is ultimately driving ad prices down. With some many ad impressions available on the market, it is no wonder – as Adjug’s Dirk Fiebig, observed recently – that CPM prices are in the gutter.
As agencies and advertisers look to buy audience rather than ad space on leading websites to better target campaigns, publishers will have to get smart about their data.
How will this user data help content owners make more money? The sale of this information – as allowed by regulators – will become an important revenue stream for publishers. The data will also help to turn the oversupply of “dumb” impressions into a valuable media buy, maximising the price paid for ad inventory.
A lot of the platforms are now offering publishers the ability to gain insight into their data. Layering this information on to the unsold inventory (“remnant” by the way is banned as it doesn’t help to progress the debate) publishers will see the value of their supercharged page impressions rise.
What about selling user data directly to an advertiser, agency or ad network? In the US there are a number of platforms where you can do this. The two market leaders, Bluekai and Exelate, allow publishers to sell anonymous user data in key verticals. This has become a growing revenue area for US publishers. But both companies have yet to establish a presence in Europe – and there is no platform available here offering a similar service.
An option would be to approach agencies directly and establish a data partnership. You don’t have to be a large publisher: if you have a small but valuable audience, you can sell your data directly to the agencies. This can be used by agencies to better target online advertising campaigns.
What to do with my data and where to go with it?
- Wunderloop Connect: Segmentation is built by Wunderloop using analytical models and the browsing data provided by the publishers. Wunderloop in other words offers insight into your user data, making the impressions more valuable to agencies and advertisers.
- RightMedia Exchange: Segmentation is wholly encouraged by the exchange. Most of the publishers actively trading on the platform get a higher price for CPMs when data is included in the mix.
- Agencies: Who needs a data exchange platform? Go directly to the agencies and agree a deal. There are a number of ad exchange specialists and progressive digital agencies you could approach. Your audience is valuable, and you could be missing out on new revenue opportunities.
There has been a flurry of excitement from the luminaries of the exchange world about the advent of real-time bidding. News of Microsoft’s decision to add RTB functionality to its AdECN platform has the marketplace salivating at the prospect. It will add a real-time element to buying ad impressions – and no doubt improve the performance of online campaigns. But having sat through a recent event and listened to top publisher Executives baulk at the idea of their ad inventory being sold on an impression basis only, FM feels a proper business case for RTB needs to be put forward to both the media buyer and the publisher. In this instance we will try to give an overview of the methodology of real-time bidding for the uninitiated:
What is Real-Time Bidding and how does it work?
RTB allows ad networks, advertisers, media agencies to buy ad impressions in real-time. The prospective buyer can analyse the impression in a millisecond and bid accordingly. The value of the impression is derived from the context of the site and the user data made available. The real-time bidding functionality on Contextweb for instance offers pre-filtered ad impressions to the buyer with HTTP parameters and a referrer URL or Publisher ID, the User’s IP address, anonymized cookie ID of the user and any ad unit restrictions (restricted advertisers, creative types, product verticals). This ultimately gives the buyer a value of how much that impression is worth. The process will be mostly automated, with the demand-side using sophisticated bidding tools to buy real-time impressions. There will be a lot of “advertising quants” working on algorithms to maximise performance. Clearly, other exchange players will improve on the current offerings, and add more elements to improve the buying process.
How does the media buyer benefit?
Performance! Performance! Performance! Real-time bidding allows the buyer to improve and optimize campaigns. The technology can be pre-programmed with the maximum amount the buyer wants to bid per impression. Impressions are bought on the basis of this set amount, and the technology buys ad inventory accordingly. If the inventory doesn’t perform against pre-defined campaign targets, it can be optimised. This new automated process will replace a lot of the manual optimisation, safeguarding performance against potential human error and maximising the impact of the display campaign.
How will RTB make the publisher more money?
It might be crude to say that it’s all about the money, but the humble publisher is always looking to squeeze more monetary value out of ad inventory. Many industry experts believe that RTB will allow the market to determine the true value of a publisher’s ad impressions. The oversupply in the market has ultimately driven the price of non-premium ad inventory down. Lack of buyers and a lack transparent exchange buying has also contributed to this decline in value.
By allowing publishers to layer ad impressions with data about their site and their users, buyers can determine the true value of an impression. This might sound like a risky move for the publisher, given that an advertiser might value their inventory well below their expectations. But it stands to reason that market demand for publishers’ inventory, such as the FT (desirable demographic, top-tier brand site, and excellent content), would push up the price of an ad impression and let it settle at its true market value. Platforms like ContextWeb and AdECN will help to facilitate this market valuation, and help publishers achieve better returns.
Is the European market ready for RTB? We’ll have to see. But judging from the opinions at last week’s AOP event, my guess is that the exchange platforms will have to educate the market a little better about real-time bidding before it’s taken up en masse.
A research note written by a fifteen year old bank intern has media executives and analysts debating how teens consume media. In the note the teenager pointed out that his peers do not use twitter, have little time to watch TV and never read newspapers. The FT has more on the story:
Teenagers do not use Twitter,” he pronounced. Updating the micro-blogging service from mobile phones costs valuable credit, he wrote, and “they realise that no one is viewing their profile, so their tweets are pointless”.
His peers find it hard to make time for regular television, and would rather listen to advert-free music on websites such as Last.fm than tune into traditional radio. Even online, teens find advertising “extremely annoying and pointless”.
Their time and money is spent instead on cinema, concerts and video game consoles which, he said, now double as a more attractive vehicle for chatting with friends than the phone.
Mr Robson had little comfort for struggling print publishers, saying no teenager he knew regularly reads a newspaper since most “cannot be bothered to read pages and pages of text” rather than see summaries online or on television.
The Guardian reports on a recent IPA report, which suggests that confidence is returning to the ad market. The number of companies cutting their marketing budget has fallen for a third consecutive month, and many surveyed for the report are seeing tentative signs of recovery:
Green shoots are sprouting in UK advertising and marketing budgets, according to the latest Bellwether report by trade body the IPA.
For the first time in more than a year, UK advertisers reported an improved outlook, indicating that the recession may have reached its nadir in the first quarter.
The report found that confidence was returning to the ad market, with the number of companies intending to reduce their marketing budgets falling for the third consecutive quarter.
Some 38% of companies reduced their marketing budgets in the second quarter, the report found, with just 10% revising budgets up. In the first quarter, 45% cut budgets, as did 49% in the last quarter of 2008.
A key indicator of green shoots was that, for the first time since the start of 2008, more companies reported a positive view of their financial performance than a negative outlook.
It was interesting to hear the perspective of publishers on ad exchanges at a recent AOP event in London. The event, which was focused on how to better monetise international web traffic, was attended by some of the largest publishers in the UK
The exchange debate has so far been dominated by how much the buy-side will benefit from the open trading platforms – so it was fascinating to hear the views from those on the supply-side.
In the panel discussion following the presentations there was debate on the value of exchanges.
Louise Wong, Head of Network Advertising at Sky Digital Media, had the following view on the exchange marketplace:
In my mind, exchanges can be used in two ways: one is to monetise the long tail or remnant inventory; the other way is to partner up with publishers, have a seat on an exchange and actually build your own mini network.
During a discussion on whether WSJ.com would ever put their international inventory on an ad exchange, BBC’s Tom Bowman questioned if the ad trading platforms had the right metric to help advertisers engage their audience:
Using the current technology, I don’t think exchanges have the right metric. Your metric is actually engagement, not ad impression. And on that basis I wouldn’t like our inventory to be traded on the basis of ad impressions… Advertisers are looking for engagement in the right environment – and with targeted audiences. On the current basis, I don’t think exchanges would be the answer for monetising our inventory.
Cameron Hullet, a consultant at Acceleration, made the point that media buyers and publishers were unaware of the complexities that can be managed within an exchange environment:
You can control dwell times. A buyer can put in place a remarketing campaign specifically related to dwell times. It is possible to get down to that granularity. People often underestimate the complexity you can build into an ad exchange.
Hullet also believes that Google’s new exchange will be a game changer in terms of how ad exchanges are presently perceived:
Google is really going after the market, but on the smaller buyer side. They’re not starting off at the agency level but with the small player who can buy on their own. At the moment you’ve got over-supply, but the buyers are starting to come fast. The new Google exchange will change the buying side, and as a result the number of buyers will increase rapidly.
It might have been just small area of discussion for attendees, but it does appear that the exchanges are now on the radar of the bigger publishers. It will be interesting to see how things move along once Google launch their new exchange in August. And will it be long before an ad trading strategy is developed by the top tier web sites?
In the meantime, yield optimisers like Admeld, Rubicon Project and Improve Digital might be in a better position to monetise international traffic of UK and European publishers, as many of them already have relationships with international ad networks and can plug into multiple exchanges.
FarneyMedia will be posting interviews iwith publishers in the coming weeks. The subject of the interviews will concentrate on their future and exisiting relationships with ad exchanges.
Bad news day for behavioural targeting firms, as Phorm loses more ISP customers. The Times Online reports that Carphone Warehouse and BT are the latest Internet providers to stop using its service. Phorm has been fighting against a lot of negative publicity in the British press, and it seems to be scaring away the big ISPs who are fearful of being embroiled in any privacy issue scandal:
BT, Virgin Media and Carphone Warehouse’s TalkTalk had all signed up as partners in the service. Last year, however, Phorm came under fire when it emerged that BT had been conducting secret trials of its technology on 36,000 of its broadband customers. Privacy groups said that the system was intrusive and even Sir Tim Berners-Lee, creator of the World Wide Web, condemned it: “I feel it is very important that my internet service provider supplies internet to my house like the water company supplies water to my house — connectivity with no strings attached,” he said.
Phorm insists that users are stored as a “unique random number” rather than a name, that it does not gather personally identifiable information and it does not store IP addresses. It said yesterday that its British ambitions remained intact.
It’ll be interesting to see how the privacy issue affects other companies in the BT space. Standby for lots of hysteria in the press about user data.
Adfonic launched a self-service mobile ad marketplace this week. The platform allows advertisers to build, execute, monitor and control campaigns. Publishers have access to tools and real-time reporting and analytics to maximise their earning potential from mobile advertising. Advertisers can bid on the mobile ad inventory, and price is dictated by supply and demand. Mobile sites won’t be able to set a floor price on their ad inventory, but it is something Adfonic are keen to introduce.
The company is aiming to develop an open exchange with real-time bidding capabilities for mobile. Victor Malachard, Adfonic, Co-Founder and CEO, spoke to FarneyMedia this week to explain how the service will benefit publishers and advertisers – and how the company would like to emulate the exchange model for mobile advertising.
How does the new Adfonic service work?
The Adfonic site connects publishers of mobile sites and applications to advertisers who wish to reach their target audience via display advertising (banners and text links on mobile screens). The platform combines advanced targeting and matching with lessons learned from real-world campaign management. This consists of defining your campaign parameters, specifying targeting options, putting together your different creatives, setting budgets and notifications, and then monitoring performance and managing spend via real-time reporting and analytics. On the flipside, publishers define their app or site parameters, give us a profile of their audience’s interests and demographics, and integrate the code snippets generated automatically by the platform into their mobile properties. Once live, they can then track and optimise their earnings in realtime. It’s a win-win situation: advertisers reach their target audience more accurately, publishers benefit from the higher engagement, and end users ultimately find more contextually and personally relevant offers.
The platform is a fully self-service model?
Adfonic is completely self-service. Our philosophy is to provide our users with all the tools they need to drive successful campaigns. It’s low cost, easy to use, and puts them fully in control — and it facilitates our ability to scale globally.
Can you explain how the biding functionality works?
We operate both CPC and CPM advertising models. The prices are set by supply and demand; placement is driven by performance — based on bid, yield, relevancy, targeting constraints and best practices (e.g. frequency capping). Bids can be changed in real-time, generating a dynamic and transparent marketplace.
The media buy on Adfonic is blind. Are there plans to make it more transparent?
Blind networks prevail in the mobile advertising space at the moment, and our view is that that needs to change and align with the transparency one finds in the online exchanges. We’ve launched with feature parity with the other mobile self-serve networks but have designed the system to support the market’s evolution to a much more transparent approach.
Is the service aimed at long-tail or premium publishers?
Both. Long-tail publishers benefit from Adfonic’s intuitive and straightforward approach, but big publishers reap the same rewards of enhanced monetization and control. We’re also developing our vision of private branded networks, where premium publishers can demand top dollar for their inventory.
What kind of targeting do you offer agencies and advertisers?
The campaign management experience is designed around giving advertisers the tools to reach their target audience. To help them accomplish this, we divide our targeting into multiple layers corresponding to the current buying patterns in the market. These layers consist of location, time (day-parting), mobile operator, demographics, and target devices. On top of these, we give advertisers a Web 2.0 style approach to matching up with relevant publisher inventory by using tags: user-generated keywords that provide much more precise contextual hints than a pigeonholed channel/category approach.
Have you plans to introduce real-time bidding on ad inventory the platform?
Yes, this is a fundamental principle of the Adfonic marketplace.
What are your plans for the platform? Is it to aggregate mobile ad inventory on an open exchange?
Adfonic is all about making connections. Our philosophy of openness, transparency and innovation goes beyond connecting buyers and sellers, and drives our vision for richer ad formats, deeper campaign tools, and broader platform reach. We see the ultimate power of mobile advertising being the seamless integration of the unique aspects of a personal, location-based device with the traditional world of demographics, technographics and psychographics, in order to get the right message to the right person at the right time.
Marketers and agencies are increasingly looking for open exchange platforms to access highly-targeted audiences. Adfonic looks set to fill that need in the mobile ad market. Their new service is available to use at the Adfonic site.
