CMOs are feeling increasingly comfortable diverting or devoting larger percentages of their budgets online, convinced that the benefits of online advertising are as revolutionary as promised. Brands spend tens of billions of dollars online, and they expect results.
How campaign performance is measured varies by brand or agency; some seek simple impressions, others seek clicks and conversions. One of the key selling points of online advertising is the ability to measure campaign performance against objectives in real-time. Tracking technologies record every visit and every impression, but the validity of these measurements have recently come into question. A major concern is falsely inflated impression counts, artificially inflating CPM prices for media buyers. Impressions are traditionally counted in tandem with page visits, which has proven to be a deeply flawed system of measurement.
AdXpose is changing everything.
Led by CEO Kirby Winfield, AdXpose verifies impressions by telling advertisers where their ad was placed on the page and, if below the fold, whether or not a visitor scrolled down to see the ad.
“If you’re counting every impression as viewable when only 50% are viewable, then every metric that you’re using to value your media is inefficient and inaccurate,” Winfield said. “You’re pulling in a bunch of impressions that have no chance to be viewed.”
The company also identifies the content the ad was placed next to, an important tool for CMOs demanding their ads be served beside “brand safe” content. Winfield argues the consolidation of advertising measurement data is vital if digital wants to slice into the holy grail of ad dollars, television.
“You have to go to one vendor to get viewabililty data. Another for survey data. A vendor to get audience verification. Another to get conversation data,” Winfield said. “You’re taking a buying process that is already 4-5x more difficult than buying TV and making it 4-5x more difficult to get metrics.”
comScore CEO Magid Abraham believes a pricing revolution is underway.
“Prices are going to adjust. All of the junk inventory is going to be significantly slashed,” Abraham said. “If you’re charging $.25/CPM but only 20% are visible, then the unit price is actually $1.25. We will move from a medium from where there is no scarcity to an industry where there is scarcity.”
comScore and AdXpose serve as a powerful duo at a critical juncture. As TechCrunch’s Erick Schonfeld astutely notes, “it’s not about clicks and conversions, it’s about attention.” Innovation in online advertising is at an all-time high; it’s no longer simply text and banner ads. Rich media, branded content and social solutions are transforming the industry with the aid of real-time exchanges.
Ferociously accurate data is the catalyst that can launch online advertising to the forefront of brand spending in the digital era. CMOs are demanding stronger performance, media buyers are getting smarter, auditors are more closely scrutinizing campaign performance, and this industry evolution is good for everyone. Brands get accurate, verified audience data, and publishers are able to charge premium CPMs through guaranteed, validated ad presentation.
The revolution has begun, and AdXpose is poised to create a shakeup with financial implications that will dwarf its $22 million price tag.
Earlier this year, Yahoo! made a splash with its acquisition of 12-week old media check-in app IntoNow for approximately $27 million. The tech media circles, often critical of Yahoo! in recent years, praised the move in spite of the multi-million dollar price tag and the fact that IntoNow was just 12-weeks old.
IntoNow utilizes wavelength recognition to listen to and identify television programs with the tap of a button, and has become an important tool in Yahoo!’s previously-maligned foray into social. IntoNow combines the addictive check-in elements of Foursquare and the clever utility of Shazaam with the seemingly unstoppable power of Facebook and Twitter. While this conflagration of new media stars yields hordes of adoring users and Silicon Valley praise, IntoNow is poised to tap into the well-established mega-billions of the traditional media television industry.
The Internet is transforming television, and the first-glance value of IntoNow is obvious. Anything that gets users in front of television screens, especially if paired with live event coverage a la CoverItLive, holds immense value to television networks seeing more and more eyeballs transition to the smaller screens of laptops, tablets and smartphones.
However, the multi-billion dollar potential of IntoNow and Internet-connected televisions (including Yahoo!’s ConnectedTV) lies in the value these tools can deliver to brand advertisers and CMOs desperately seeking ways to integrate campaigns across the increasing number of platforms used by consumers. The possibilities are endless:
- A consumer “checks in” to the live airing of the latest White Collar episode and receives a reward from USA Network (a badge, points, a sneak preview video, a behind-the-scenes look, etc.)
- IntoNow utilizes a Pandora-esque algorithm to provide recommendations and offers brand advertisers the ability to provide highly relevant Sponsored Recommendations based on a user’s viewing habits
- Yahoo! pairs ConnectedTV and IntoNow with its own real-time ad bidding and exchange technology to deliver contextually matched, highly targeted ads based on what a user is watching right now
- A signed-in Yahoo! user receives time-sensitive television and movie recommendations from networks, Fandango, movie studios and the many advertisers Yahoo! already has relationships with based on their explicit IntoNow viewing habits and the inferred interests derived from them
- A viewer “checks in” to American Idol and is given the option to “Like” the show’s Facebook page, read the Idols’ tweets or purchase and download a song from the night’s episode directly from iTunes
The power of IntoNow in the right hands makes Yahoo!’s purchasing price of $27 million seem like chump change, and paired with ConnectedTV and real-time ad delivery, may be the spark that ignites Yahoo!’s rebound. Matching advertisers and brands with consumers is a ceaseless quest, and IntoNow gives Yahoo! a plethora of options to deliver value to a vast range of customers while capturing the always-critical adoration of its users. Execution matters above all else, and we’ve seen dozens of hot, nimble startups fall victim to the oppressive tides within a large and entrenched public organization.
In the wake of the explosive LinkedIn IPO, which saw a 109% first day gain that valued the nine-year old company with over 100 million users at $8.9 billion, an intense spotlight has been focused on the new wave of Web-based companies that have taken venture capitalists and private and secondary markets by storm. The highly anticipated and inevitable IPOs of Web titans Facebook and Groupon have – rightly or wrongly – brought up fears of a “bubble” reminiscent of the dot-com bust that wiped away the fortunes of millions and oversaw the collapse of hundreds of “companies” that rushed to go public without revenues, not to mention profits.
(My take? We’re not in a bubble. Not yet. The lessons from a decade ago are fresh enough in the minds of VCs and investors, and the simple fact that we are being cautious and asking questions proves we are eons away from the insanity of 2000.)
The promise of the new media era is dependent on a new era of advertising, one that is integrated across many platforms, channels and formats. The booming success of Google and others dependent on online advertising may lead some to think that the market is saturated, leaving little opportunity for new entrants or growth for existing players. However, the data paints a dramatically different picture. The IAB projects double-digit growth in global online advertising spending for each of the next four years, reaching nearly $100 billion by 2014, or 17.4% of combined global ad spending.
There is a significant trend that one doesn’t need to dive through troves of data to recognize: people across the world are spending more time online. The time spent online on computers, tablets and smartphones is dramatically increasing year over year, but even these markets are relatively under-served. Just 82 million of more than 330 million Americans access the Internet on their mobile phones, and just 31% of wireless subscribers own a smartphone. Even with the billions of dollars in profits enjoyed by Apple, Google, Nokia and Microsoft in the mobile sector, the market is just getting started. More users with more Web-enabled smartphones means more ad dollars flowing to Web companies from the world’s biggest spenders.
So does this mean the tens of billions of dollars spent on television advertising will magically flow online? No. New value is created by reaching consumers online, and that means new dollars will be spent. Television advertising offers benefits that the hottest social media and branded content companies could never provide, and vice versa. It is the value of connecting and conversing with consumers in the new media era that will entice advertisers to direct new dollars from their ad budgets toward online campaigns.
The power to connect brands and consumers where the conversations are happening (social) and at the point of intent (branded content, action-oriented content) provides the opportunity for companies that offer these services to capitalize on the significant upside potential in the online advertising market. Online advertising isn’t just text links and banner ads. The new formats enabled by tablet and mobile technology and revolutionary business models ensure Silicon Valley’s best executors will reap the rewards of a booming online advertising market in the coming years.
Hat Tip: AdWeek – The Changing Scope of Online Advertising
IAB Report: 2010 Internet Advertising Reveneus Increase 15% to $26 Billion, A New Record
Under the tutelage of Bill Gates, Microsoft exploded into one of the world’s largest and most valuable companies, generating billions of dollars in profits annually for shareholders. The dot-com boom made many employees and investors millionaires, and the company appeared unstoppable.
As the company matured, growth stabilized and new tech darlings like Google stole the spotlight. Delayed product launches of centerpiece operating systems, failed products and advertising campaigns, broken acquisition deals and an apparent lack of internal innovation gave Microsoft a reputation as a “has been” that had passed its prime, and current CEO Steve Ballmer lost the confidence of many investors.
However, new data is showing that Microsoft may be experiencing a reversal of fortunes, as the company’s investments in search are beginning to pay off. The brutally competitive search engine market has had one dominant player for the last decade – Google – which has held as much as 80 percent of the United States search market.
In October 2010, the U.S. search marketshare breakdown was as follows: Google (72.15%); Yahoo + Bing (23.64%). The most recent Hitwise data shows Bing has made substantial gains at the expense of Google and Yahoo. Bing-powered search now controls 30.01% of the U.S. search market, while Google’s share has fallen to 64.42%. (See below: Image courtesy of Mashable.)
These gains may be the result of a major multi-platform ad push by Microsoft for Bing, but the trend is a positive sign for investors and spectators that have remained loyal to the company.
Strong performance in search, high expectations for tablet and PC versions of the upcoming Windows 8 platform, new developer confidence in the Windows Phone platform following the recent Nokia partnership announcement, the smashing success of Kinect and Xbox 360 and widespread adoption of Microsoft’s iPhone and iPad apps are powerful indicators of a possible Microsoft mindshare and marketshare resurgence.
Less than a decade after Wall Street and Silicon Valley critics alike pronounced the death of Apple as a legitimate player in the lucrative personal computer market, the world has witnessed the resurgence of the Cupertino-based company as the dominant force in the rapidly-growing world of consumer electronics. Could we be seeing the beginning of an Apple-esque Microsoft turnaround? Critics will call it wishful thinking, but with Google in the process of a massive leadership change, Yahoo! undergoing a drawn-out transition phase and the tenure of Apple CEO Steve Jobs uncertain, the competitive landscape is changing and Microsoft has substantial opportunities in search, PCs and mobile.
Free utility software is one of the great perks of the Web, with generous tinkerers sharing their creations with the world at no cost. One of my favorite tools, Wordle, comes from Johnathan Feinberg and partial source code owner IBM.
Wordle is a clever tag cloud tool that automatically creates a custom text cloud from a slate of creative templates. Users can enter text manually, copy/paste text blocks, or allow the program to crawl any website and Wordle will create a custom word cloud with the given text. Users can then edit word orientation, edit text colors, alter color variation and access a host of other customizations.
(Click to enlarge.)
To create your own custom text cloud for free, visit www.Wordle.net.
What are your favorite free tools from around the Web? Share with a comment below.
Online advertising fueled the fortunes of Web portals like AOL and Yahoo! for years, and user targeting helped deliver relevant ad impressions at scale based on inferred preferences. These preferences could be cultivated over time through tracking and analytics, providing a sizable advantage over traditional advertising platforms.
However, the shift toward a long tail content environment and an increasing portion of the online community discovering content through social media is forcing advertisers to seek innovative solutions to connect with users beyond the point of awareness and point of interest. Enter intent targeted advertising.
Arguably better than any other company, Demand Media utilizes intent targeted advertising to fully capitalize on its massive library of Q&A-style content on its highly-trafficked properties. Simply put, Demand does not create any piece of content that has not been expressly demanded by users through search queries and other activities online. This metadata is run through Demand’s proprietary content value prediction algorithm and, through a human-intensive evaluation, creation and development process, is hosted on Demand’s properties like eHow, LIVESTRONG.com, GolfLink, Trails.com and more.
Related: [INFOGRAPHIC] Learn how Demand Media utilizes rigorous quality control measures in its proprietary content creation process here.
Users come to Demand Media properties to find everything from “How to Build a Backyard Deck” to “How to Buy Healthy Food.” While searching for titles like these, users are explicitly seeking specific information that drives them to act. By connecting advertisers with users at this so-called point of intent, Demand Media provides highly relevant advertisements to action-ready individuals. For example, when a user visits LIVESTRONG.com and reads “What Are the Best Dietary Supplements,” Demand may serve an ad from FRS, a healthy energy drink endorsed by Lance Armstrong and Tim Tebow. Users reading “How to Maintain a Vegetable Garden” may see a series of integrated Home Depot ads that provide a solution to the specific problem stated by the user and direct the user to a highly relevant solution. So what does this mean for portals like Yahoo! and AOL?
When users arrive at a portal, they view content that the portal’s editorial team has chosen to show them, and advertisements are relevant to the point of interest and awareness. Largely, portals only go one-third of the way, missing the next steps of the funnel – the point of intent and action.
[UPDATE 1/13/11:] AOL announces massive shift toward outsourcing its sports, health and real estate verticals. CEO Tim Armstrong noted that “it’s hard to sell ads if you aren’t a top 2 or 3 property,” a problem that has plagued Web portals since the rise of the long-tail content economy through social media and blogs.
At the end of 2010, The Wall Street Journal reported that online ad spending ($25.8 billion) surpassed print advertising ($22.8 billion) for the first time in history. Yet there is still a multi-billion dollar gap between time spent online and percentage of online ad spend as a percentage of total. With companies like Demand Media creating and publishing explicitly demanded and actionable content at scale, there is likely to be a flow of the growing wealth of ad dollars moving toward Demand and others who can excel at intent targeted advertising.