Operative Blog

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.

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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.

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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.

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.