Operative Blog

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.

“It’s with great excitement that we introduce the 2010 OnMedia 100. This fresh batch of the hottest emerging companies in digital advertising joins illustrious alumni and gives us a great deal of insight into the coming trends in monetization… The 2010 OnMedia 100 winners have survived the upheaval of 2009 and are positioned to advance on the opportunities represented by the return to growth in the digital advertising sector. Congratulations—it looks like we made it.” 

Take a look at Operative and the list of OnMedia 100 Top Private Companies of 2010 under the “Advertising Service Providers” category!

Also, please join Operative CEO, Mike Leo at OnMedia NYC on February 2 at 1pm as he moderates the panel, “Will Exchanges Grab Market Share From Networks or Cater To Different Segments?  How Are Distribution and Bidding Evolving?”   Friends from IMO Entertainment, AppNexus, Google, PubMatic, and Peer39 will join in the debate.  We hope to see you there!

Definition: Extrapolate- http://www.merriam-webster.com/dictionary/extrapolate 

Still in the year 2010, Publishers lose sleep over inventory and how best to manage it to optimize revenue.  As we discuss this vexing conundrum with the publisher audience, the most common themes continue to be:

1. We have SICK excel formulas and tables that help us extrapolate our available/sell-able inventory.

2. We have clients that want us to dive deeper into our audience…in addition, the advertiser wants to geo-target. So, extrapolating the data and conveying the inventory is a PAIN.

3. Using charts and images to extrapolate the inventory data is pretty sweet.  But, again, creating this in excel is sub-optimal.

How do you extrapolate your web site inventory? What solutions have you come up with that other digital publishers could learn from?  Post a note and let us know.

In this afternoon session, Product Manager Andrew Sullivan explores the concept of multi-dimensional inventory for digital publishers.  Decrementing inventory, segmenting audiences, packaging products…..these challenges affect the entire organization and most specifically, the ability to optimize revenue.

What business goals are impacted by your ability/inability to perform multidimensional inventory?

- Selling out of one area of inventory impacts other areas of inventory: this is a tough message to convey to Sales

- Illustrating to sales the full spectrum of inventory they are selling; and reasoning behind why certain pieces of inventory have a higher rate than others

- Ability for sales to communicate the value of their audience to the advertiser/agency

- Packaging strategies…looking at what you can encourage sales to lead with while making good use of the inventory

What systems are you using today to capture and aggregate the inventory?

- Ad server logs

- Excel Sheets

- Rapt

Who interacts with inventory in your organization? What are some of the typical roles?

- Ad Ops Team

- Finance Team

- Analytics Department

- The Exec Team

- The “Ad Product Team”- they focus on product analysis and performance

- Delivery Managers

- Sales reps and Sales planners

- Analytics Teams

What is CRITICAL to your business when solving for MD inventory?

- Compatible with MULTIPLE ad servers

- One data set to have transparency into all the inventory sources

- Quick and easy way to pull the data, aggregate it, and help the product, sales, marketing and ops team make sense of it

- Ability to generate accurate inventory reports

- Flexible rates, packaging

- Not using Excel anymore! It’s too manual and publishers need to move faster!

In breaking for lunch, many clients were anxious to discuss trends and themes that are top of mind as they tackle 2010.  Some of the common themes included:

1. Campaign reconciliation and billing- this is NOT just a Finance responsibility anymore. Many Ad Operations managers are charged with preparing billing and invoicing for revenue recognition- therefore as an industry, we need to do a better job of making billing/invoicing easier for non-Finance-focused individuals.

2. Targeting data- many Publishers are using 5+ targeting tools to help them better segment their inventory to meet advertiser/agency requests. These targeting tools can be cumbersome to manipulate because none of them talk to each other.  How can we simplify data collection from these systems?  How can we then apply the data from the targeting system in a meaningful and easily consumable way for Sales?

Do these topics keep you up at night? Leave us comments on how you have overcome these hurdles and/or best practices you’ve adopted.

Also- want to see who’s here? Or what we’re doing?  Take a look at some pics!  CLICK HERE!

What IS Operative.One?

Operative.One is the NEW brand for our solutions philosophy- the concept that media companies need to utilize multiple pieces of the value system in order to sell, execute and bill digital advertising (CRM, Ad Servers, Finance/Billing, Audience Targeting, Pricing/Rate Card, etc), and that all of these fragmented solutions need to feel as “one”.  It is Operative’s job to make it feel like one…To help our clients become easier to do business with.  Therefore, the “Operative.One” brand will be the umbrella for all future business solutions.

We are at the Winter Client Summit 2010 at the Norwood Club in New York City.  Clients from Wall Street Journal Digital Network, NBCU, Reuters, MySpace, Cars.com, Top 10 Reviews, SmartMoney, Geeknet Inc, and National Public Media to name a few, are here today to provide input into the Operative road map, share experiences about their digital advertising businesses in 2009 and how they plan to grow in 2010. 

Keep following us for updates on themes, discussions, and debates from the Client Summit.

And- check out out tweets @OperativeInc

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.