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
Online advertising spending is growing every year, and companies are looking for new, innovative tactics to reach and engage their customers. For many of the heavy-hitter ad spenders, this means premium, large, and interactive display ads. With total online advertising revenue in 2010 expected to hit $19 billion (up from $10 billion in 2004), and display advertising expected to grow 7% per year, reaching consumers through the Internet is a critical part of any advertising effort.
Online media giant Yahoo! ($YHOO) is positioning itself to be the premier platform for high-quality display advertisements, and the company’s outlook is heavily dependent on the success of this strategy. According to JP Morgan, Yahoo! leads the display ad market with a 17% share, ahead of Microsoft (11%) and AOL (7%). The company’s CEO, Carol Bartz, has stated numerous times that she believes display advertising is an integral part of the turnaround efforts at Yahoo!, and the evidence is clearly visible on the company’s homepage (www.yahoo.com).
Yahoo! presents 10 billion ads every day, and advertisers want to make each impression count. To maximize the value to advertisers and consumers, Yahoo! is facilitating a shift to large, interactive ads that allow consumers to actively engage the ad. An example below is a Lean Cuisine advertisement on the Yahoo! homepage. As you can see, the slide-out ad takes up a major portion of the above-the-fold area of the page. The ad involves a three-part “quiz” that users take, selecting food preferences to determine which new Lean Cuisine product is best suited for their taste. Not only does this engage consumers, giving them a sense of control, but it provides Lean Cuisine with a wealth of data for use in future product development.
This specific ad is highly representative of the style of ads that companies and agencies are creating to display on the site, and the platform and strategy has been lucrative for Yahoo! In their second-quarter earnings report, the company’s profits soared 51% from the year before, largely based on the success of display advertising. As the global economy continues its recovery and earnings continue to impress, companies are likely to ramp up their advertising spending. With consumers seeking more control over their purchases, agencies are delivering opportunities for consumers to be actively involved in the the ads they see, providing increased identification between brands and customers. Display advertising continues to grow as a percentage of overall online advertising spending, and for Yahoo!, this means improved revenues and continued increases in profits.