The day of ‘seller defined media buys’ will decrease as publishers understand the who, how and where in the context of a media buy.  Sellers need to not only understand the revenue picture but also the value of the audience.  

The question is not WHO owns the data, but WHAT can we use the data for? 

Advertisers and publishers hire vendors to solve their business problems.  The two sources of real data are from advertisers and publishers.  All of data is incomplete. 

Does data equal revenue? 

Are we managing data to get a stronger revenue stream? 

Data ownership is a false paradigm.  It is all about how we USE the data.  We must be respectful of the consumer and prevent legislation at the same time.  If we eliminate data and data usage, it will cause everyone more problems.  Controls are important for both publishers and advertisers.

Advertisers want to buy on frequency and modeling for maximum reach of a targeted audience.  We need a combination of trust and responsibility.  The holding companies want to be transparent and open.  

Big publishers and holding companies are afraid of start-ups who are doing non-ethical things that effect the revenue model for everyone.  But the truth is that big players need to take a lead in the marketplace.  There is a big disagreement between agencies and publishers as far as who can do what with data.   This is a fundamental issue that might not be solved for years.  Right now data is all over the place, no one trusts each other, and advertisers want to buy on an audience basis. 

So, what the value of targeting without context?  

What can publishers do to protect themselves moving forward?  

Don’t work with ad networks. 

Create a business policy on any 3rd party tags. 

Consider search and the influence of site indexing. 

One great way to think about inventory and data, is that we need to evaluate opportunity cost for each partnership.  The first step for everyone has to be transparent throughout the buying and selling process.

For more information, please click here.

A publisher has to decide:

1. All in- is it brand advertising? or

2. Are they optimizing for networks? 

A media company is based on the content and the sales force.  It is practically impossible to have a hybrid strategy and not lose value for your brand.  Most companies work with zero partners or more than 5 partners. 

86% of network impressions are brought in from the top 100 publishers.  This has a direct devaluation of publisher content.  If you are going to sell premium inventory, you have to know that your premium product won’t have the same value off your site.  Premium sites need large units, high reach, integrated advertising products.  There are a couple of ways to get reach: optimization, Tweeting, social media, possibly M&A, or aggregation.

In 2010, 25% of dollars will come from ad networks.  If publishers move to optimizing for ad networks, the trend will be to reduce of most of the premium sales force.

For more information, please click here.

Gordon McLeod, President, The Wall Street Journal Digital Network

The Evolution of Content

1. Paid content should be free. Once free, always free is a myth.

The hybrid model is the ultimate access with a paid and free model in the same market.  Drive traffic with free but keep the audience with paid.  Try to also think of different levels of pricing to create a lot of value but let the client decide how much they want to pay.  The highest level is also a great driver for the overall brand. 

2.  Platform agnostic

Print, mobile, web, e-reader, etc.  All of these can work with content.  The key is to make sure you understand the consumers on each platform. 

3.  Forget free, build a pay wall (2010)

Don’t literally build a brick wall.  Low traffic, no inventory is terrible.  Transparency and allowing customers to see the value helps attract higher value.  Make it easy for consumers to use your product.  Constant improvement and showing value is critical here.  Hybrid models could be a good fail safe.   Find a way to get new people  to the site to see the value. 

4.  Paid content is easy, charging is hard.

One view of the customer, the value of that customer is tremendous.  Take control of your business so you can set price.  Add in products that are complimentary but maybe not obvious.  Could industry bundles work as a solution? Bundling is the secret to paid content success.  Also, paid content actually adds value to the business.   With paid content, you get a higher premium.   

Book entitled Information Rules.  Best quote, “Technology changes but economic laws do not.”

For more information, please click here.

A lot of time is spent online, but we do not know exactly when and where.  Traditional information is moving from offline to online. 

Advertising models have not kept up with these changes.  Page views, impressions, friends, Tweets, buzz, uniques, etc are all ways in which people are buying media.   The Olympics has AS MANY mobile users as there are TV viewers!  The money in digital clearly has not caught up- 30% of time is spent online and 16% of the ad dollars are spent online. 

Why has ad spend not caught up?

It’s simple.  The ad buying process for online is VERY difficult.   There are roughly 30 steps to buying a single ad impression (ie: from RFP’s sent out, to email changes, to ad tag generation and testing and implementation….all of these tasks effect the marketplace).   And, for online video, standards are very different.  

7 predictions

1. Inventory should be frictionless.  is critical to success.  Marketers want to spend more time on creativity and less on paperwork.   28% of the costs for selling, executing and billing an online ad go to administrative work.  We need to do better.

2.  We could increase our revenue from gleaning better insights.  If the publisher had a more knowledge about the inventory, they could get a higher value.  It would also provide greater analysis for running the business. 

3.  More revenue from sophisticated yield management.  “If you are managing yield in an excel sheet, or managing it away from the ad server, you are losing money.”  If for example Michael Jackson’s death causes a spike, it should be sold at auction.

4. There are 1000′s of display advertisers.  Make it easier to create an online ad.  A site like www.issuu.com is a great example of self service ad creation. 

5. Have the perfect ad for your users.  Quality targeting makes for a quality experience. 

6.  Syndication is critical to having more people see your content.  It is not about having more content or page views.  It is about more premium content that lures advertisers.  Better syndication is critical for everyone. 

7.  Every campaign will have desktop, mobile and social elements.  Social does not mean Facebook, it is a mind set more than anything else. 

Innovation and implementation will lead to online advertising success.

For more information, please click here.

Bryan Wiener , CEO, 360I

Bryan is convinced that we are in the golden age of needing an agency for these 3 reasons:  

1. Consumers are in control

2. Content is everywhere

3. Innovation is critical

Yes, the current agency model is broken, but it can be fixed to become more relevant than ever before.  Currently, agencies (as a whole) are not servicing the client or the consumer in a relevant manner.  Think about this- 25k Tweets are sent out in 10 minutes and they are all about products and brands.  This consumer control is unprecedented.  Today, advertising is evolving from an interruption to providing more value and engagement.  Everyone in interactive advertising has to work together to create increased value. 

One major problem is the agency holding company structure.   Most traditional agencies are smart and well mannered, but the structure and compensation does not fit with today’s market.  The problem right now is the struggle between full service agencies and specialized agencies.  Too many agencies leads to chaos. 

3 ideas. 

1. The best defense is a good offense.  Allow consumers to be part of the brand.  Consumers are affecting brand reputations every day.  “A brand is what they say about you when you are NOT in the room.”  We can no longer protect our brand like we used to.  One person can change the vision of our brand, so as marketers, we need to allow the consumer to become one with the brand.

2. Committed relationships and not one night stand.   The wedding is not the end game.  We need to have continuous conversations to build a brand, not just one campaign.   If a brand represents a transaction, you are in trouble.  Any agency that wants to add value must foster relationship. 

3. The agency of the future needs the marketer of the future.  Both sides must help each other gain success.   If agencies want to radically impact the ecosystem, it will change the way marketers work. 

All of this brings us to the agency of the future.  It is all about the client needs.  The model with the most success does not exist today.  We should worry less about being the lead agency and more about the dream agency. 

The agency of the future will need to cultivate a core skill-set in order to win:

1. Excel at using the internet as a focus group.

2.  Search, social and mobile must be core.

3. Agencies must be willing to be platform agnostic.

Digital agencies are going to be extinct if nothing changes.  If you don’t like change, you are going to like irrelevance if even less.

For more information, please click here.

The Internet is allowing people to report, read, comment and blog about the news.  The web has encouraged opinion editorial and not just facts.  This landscape is changing the way we consume content.  The Huffington Post averages 2 million comments a month.  Consumers want a chance to interact with the news and to allow people to share it and be social. 

For the Huffington Post, technology is allowing them to run a much smarter and more efficient business.   

If it is the golden age of news, why is Huffington Post more entertainment?  The answer is all about what the consumers want to read.  If they like pop culture, HuffPo can offer more of that. 

Quality journalism…is it in the eye of the beholder?

For more information, please click here.

Tolman Geffs
Co-President
The Jordan, Edmiston Group, Inc.

In the last 2 years, there has been a major drop in acquisitions in the online advertising industry, but we are starting to see a rebound in activity and value.   Brand advertising has taken a huge hit, while direct and promotional advertising have spiked.  This does not mean brand advertising is dead. 

Display advertising demand was always sold on a site by site basis.  Now, selling audience is even more important.  This is a trend that Tolman expects will explode.   Audience targeting will grow a lot faster than typical web site display ads.   Both agency and demand side platforms are changing the way media is being purchased.   As we move forward, you have ad delivery servers vs publishers vs audience targeting sellers.   The winner will change how the online advertising space transforms. 

Premium publishers are losing a key advantage: premium content and premium audience.  What’s happening today is that premium audiences can be built much easier through a network.   The question is, can publishers provide more value to the advertiser and the audience to win back a majority of the margin?

Online video is getting funded at higher multiples than only 18 months ago.   Online video should be growing at a faster rate than most of the online advertising market.   TV budgets are shifting, and being used for both TV and streaming advertising units. 

 Mobile advertising has a good chance, but currently, mobile advertising is geared more towards promotions and direct marketing efforts, as opposed to brand advertising.  

Local online advertising is also experiencing a lot of activity in both mergers and funding.    

So what are the implications of M&A?  

Interactive activity will be robust in the next 18 months.  Innovation is happening faster, ad revenue continues to grow at a nice rate (8%) and there’s a lack of an IPO window.  Strategic buyers will be the busiest people with record cash- they need high growth business.  But, it is not just about big companies.  Private equity will play a major role in the coming years.  With an economic turnaround, we are looking for more activity with strategic buyers in the marketplace.

Welcome to the IAB Annual Leadership Meeting, “Ecosystem 2.0, Revenue the next wave“.  650 digital media leaders are here in Carlsbad, California- 30% more attendees than last year.  It’s Monday morning, February 22, and one of the resounding messages so far has been the fact that interactive marketing will grow next year.  2010 is about new services, products, and transparency- it is all about growth.  As an update, the Terms and Conditions 3.0 will take effect today and was based upon feedback from over 100 companies.

In one of the opening sessions, Jory Des Jardins from Blogher introduced Frank Cooper  from Pepsi.   Jory praised Pepsi’s innovative approach to interactivity.   She mentioned an example about  a consumer tweeting that they are thirsty, and suddenly a butler appears on the screen to offer a Diet Pepsi.  Companies like Pepsi are taking big risks which means they are taking a leadership position. 

Frank Cooper, Senior Vice President, Chief Consumer Engagement Officer, Pepsi Co Americas Beverages:

“We have a chance to make brands more appropriate to everyone’s lives.”  He believes the marketing that has been built for the last 75 years is now not relevant.  Brands need to add value to our lives.  The truth is that right now we are in the middle of a brand marketing crisis.  Less loyalty, lower prices, dysfunctional messages across the board, these are all problems with marketing today.  The truth is that brand marketing has NOT really changed in quite some time. 

As an industry of digital marketers, we need to rethink, redesign and rebuild brand marketing.  Brands provide consistent value and consistent price.  But identity value has become even more important to consumers.  How can brands bring new value to the audience?

Brand behavior must change from ‘only sponsorships’ to ‘opportunities based on experience’.   We must also build our brands around social networks. The consumer has to be able to sell for us and leverage outlets that are ‘connected’.  The digital space has technology that allows us to relate to consumers in a deeper way.  Social media allows brands to highlight people and elevate their experiences with a brand or product. 

Ultimately, advertising has to add more transactions, better value or higher prices to be successful.

In the Operative-sponsored Industry Participant Breakfast on Monday morning at the iMedia Agency Summitin Scottsdale, Arizona, three Senior Sales Executives sat on a panel to discuss ways to drive digital advertising revenue in 2010.  Participants included:

Moderator:     Mike Leo, CEO and President, Operative

Panel:

• Cheryl Lucanegro, SVP Advertising Sales, Pandora
• Tom O’Regan, SVP Advertising Sales, The Street.com
• Andrew Snyder, Chief Revenue Officer, Associated Content

How do you make it easier for an agency to buy from you?

According to Tom O’Regan from The Street.com, highlighting the value of sponsorships versus impressions will help them better interact with buyers.  Once an agency puts your brand in the ‘direct response’ bucket, the potential for revenue opportunity becomes obsolete. Pricing must be a combination of efficiency AND value.  The cost of doing business in digital advertising comes down to the Ad Operations team, and a focused, well-oiled Ad Ops team  is a true asset. 

Andrew Snyder of Associated Content said, “We’ve never heard an agency say ‘I want to work with you because you are cheaper than your competitors’. In reality, the agency is looking for performance measurement of some sort. You need to create the perception that your property drives results.” 

Cheryl Lucanegro of Pandora emphasized that being ‘easy to do business with’ runs from sales to ad ops and even to finance. The integration and alignment of these functions are critical to a publishers ability to develop long term relationships with buyers.

Mike Leo then asked the room of 80+ publishers, “How many people think that NOT being easy to work with negatively affects revenue?”  Most of the room said yes. 

A few years ago, hiring more salespeople was easy. Measuring their results has been very difficult in the past.  What are you doing today to gain more knowledge?

Cheryl said that Pandora uses Salesforce to track most of the revenue. She has 3 different sales teams selling 3 different products.

Tom’s focused on creating more dashboards to be able to see his work in a different and more descriptive manner. 

Andrewis going through the data flow right now, and trying to figure out how to gain transparency and present the information more effectively. Sales Reps could use a lot more insight as far history, close rates, etc.  Visibility into these metrics can only HELP drive positive results and behavior.

For more coverage on the iMedia Agency Summit, who attended, what trends to look out for in 2010, check out the event website. 

For the last session of the day, Operative CEO and President, Mike Leo, lead a discussion with Rob Deichert, Senior Vice President, Global Sales Development and Operations, AOL Advertising and Mark Ellis, Executive Vice President, Sales, AOL Advertising.  The panel explored how Sales and Ad Operations  work together to drive revenue, increase customer satisfaction, and continually optimize the consumer’s experience. 

We are in an industry of mass customization.  Everyone and every web site needs something unique and specific and customizeable - but are we there yet?  How do we deliver a custom product but on a mass standpoint?

Question: How does Sales work with Ad Ops? 

Answer: First and foremost, the work starts when the sale happens.  Ad Ops is a major partner, not an obstacle to winning and closing deals.  It’s common that the Sales person always wants to push the envelope with an agency buyer.  This is where Ad Ops has problems- a new custom environment for every agency client. 

Question: Is there one part of customization that would dramatically help? 

Answer: Optimization and billing would have a major impact on making the sales cycle better. 

Question: Does Sales appreciate Ad Ops? 

Answer: Yes (smile).  “All custom = no profit.  And all mass = no innovation.”   The key for any publisher is to find the happy medium because that is how a publisher can advance to the next level. 

Question:  Lets look at an example- AOL’s largest spending customers get the best and brightest opportunities because they have real dollars to spend.  Can we spill less blood than we did 2 years ago, if so, how do you do it? 

Answer:  The major change is that there are definitions for all products (Project Management), like an Operations role.  But in 2009, Ad Operations emerged as a major part of all implementations once a sale happened.  The majority of time though, even today, Ad Ops and Sales are not on the same calls.

Question: How do you manage inventory? 

Answer: The forecasting is more accurate when you add in multiple areas.  There is a balance between very specific sections and the ability to sell the entire site.  Managing inventory is entirely based on the market conditions.  The order of magnitude of creative in online versus TV is so different.  Online averages one piece of creative to 70k users versus a broadcast campaign which over 1 million.

Question: If the agency knew it was easier to do business with a publisher and that made business a lot easier, would the agency move more of the budget to them?  

Answer: Yes, the ability to provide fully baked programs at a strong value creates a much better relationship. 

Question: Is it part of your sales pitch, that “We are better at Ad Ops”? 

Answer: Yes, but it is subtle.  When you don’t have the best product, cheapest price, or largest site, customer service drives a large part of sales. 

Question: What improvements in the sales process have helped the most?  

Answer: One sales person, one person to talk to, one insertion order = huge win.  The online offline combination has a long way to go.  Video and TV will be the first to converge.  Others will follow.

Question: What will be the Big Wins in the next 3 years?  

Answer: The system between agency and publisher with regards to creative and discrepancies. 

“Looks like its cocktail time…”  Mike Leo