In the first major reorganization of Publicis' digital media assets since it acquired Digitas and made David Kenny its chief digital strategy officer, the Paris-based agency holding company this morning unveiled a new corporate-level unit that will be the central hub of digital media services, tools and partnerships spawned by its disparate media operations: Denuo, Starcom MediaVest, ZenithOptimedia and Digitas. The new unit, dubbed VivaKi, will be led jointly by Managing Partners Jack Klues and David Kenny. As part of the reorganization, Laura Lang replaces Kenny as CEO of Digitas, and Renetta McCann, who recently stepped down as Global CEO of Starcom MediaVest, will lead a "talent development platform" that will be a key component of VivaKi. Starcom MediaVest, ZenithOptimedia and Denuo will continue to be led by their current CEO's, Laura Desmond, Steve King, and Rishad Tobaccowala, respectively, who will report to Publicis Groupe Media CEO Jack Klues. Curt Hecht, executive vice president-chief digital officer at SMG, will lead VivaKi's "Nerve Center." Singling out Publicis' acquisition of Digitas and its collaborative alliance with Google, Publicis Chairman-CEO Maurice Levy said the new unit is the next logical progression for the agency holding company. "We are today taking a decisive and transformational step by profoundly modifying the group's organization, by redirecting investments toward digital and by instituting a significant change in our professional approach," he stated. "All these changes will make our agencies and networks even more competitive and will help our clients build better connections with their audiences by increasing the efficiency and productivity of their marketing investments." Publicis said the VivaKi signals "a totally new and more integrated organization of the media, interactive, analog and digital universes is necessary in order to leverage scale and technological innovation," and outlined four of its operational goals: scale, innovation, technology and talent. VivaKi's scale will come from leveraging the disparate resources and media buying clout of the individual Publicis media units, and by centralizing their strategies and approaches to the market. The unit's innovation will be led by Hecht's Nerve Center, which Publicis described as the "heart" of the new operation, and which would be responsible for developing new technologies and working with key vendors such as Microsoft, Google, Yahoo, MySpace, Facebook and others to ensure Publicis agencies and clients are leveraging the best media assets and data they have to offer. Publicis said VivaKi's technology approach would utilize an "open source system" that would tape the best available open market solutions, as well as leverage its own proprietary systems such as Navigator and Insight Factory. The Talent Development Platform, led by McCann, would focus on finding and developing the human resources and training necessary to ensure the Publicis units are on top of the digital game. "Starcom MediaVest Group, ZenithOptimedia and Digitas will take what they need from VivaKi to strengthen their existing operations," stated Klues. "They will continue to operate in a completely independent way, developing customized solutions for clients. At the same time, these clients will benefit from VivaKi's ability to deliver proprietary tools as well as advantages of scale -- helping clients reinforce links to consumers in a more cost effective way." As for the name VivaKi, it is a synthesis of the French word viva, which means "life," and the Japanese word ki, which is used to describe the universal flow of energy.
Visa Inc. on Tuesday unveiled a new marketing initiative on Facebook providing small businesses a total of $2 million for advertising on the social networking site. The credit and debit card processing giant is awarding $100 ad credits to each of the first 20,000 businesses that join its Visa Business Network, an application aimed at connecting small businesses via Facebook. About 80,000 small businesses have created pages on the site since last November. The Visa network will offer a set of tools and advisory services to help them add new customers, operate more efficiently and boost sales. Companies can also use the platform to share ideas and even strike deals. Google is supplying many of the new features including its maps, word processing, calendaring and site-building applications. Through The Wall Street Journal and Entrepreneur magazine, small business owners will be able to pose questions to business experts via Visa's Facebook network. Other partners including AllBusiness.com, Forbes.com and Microsoft will also provide news feeds, videos, blogs and articles on nuts-and-bolts topics such as cash flow management, attracting new customers and holding down costs. "We started thinking it was the right time for us to step in, help small businesses get more benefit from networking," said Alex Craddock, who heads small business marketing for Visa. The company partnered with Facebook because it already had a large population of businesses it could cater to rather than trying to build an online community from scratch. Michael Diegel, a spokesman for the National Federation of Independent Businesses, said the Visa program on Facebook could help small companies. "One of the things we hear from our members most often is their desire to build their businesses through networking," he said. "To the extent that this initiative can help them to do that, it will be a valuable tool for entrepreneurs." For its part, Facebook will certainly welcome the $2 million in advertising that Visa is paying for as part of the program. Despite its popularity, the social network has struggled to monetize traffic from its large but fragmented base of 80 million users. Market researcher eMarketer last month reduced its 2008 revenue estimate for Facebook to $265 million from $305 million because of a faltering economy and the inherent challenges in advertising on social networks. Meanwhile, the 24,000 applications built on Facebook over the last year typically generate ad revenue for developers rather than the company. Like other developers, Visa wants its new business-to-business app to go viral. Visa is hoping to drive people to the Visa Business Network via word-of-mouth, referrals from business to business as well as blogs about small business tools, Craddock said. The company will support the service with a multimedia marketing campaign beginning in July. So what will $100 buy in advertising on the social network? The credits are for Facebook Ads, the company's self-serve ad platform designed for smaller marketers. It allows users to select their target audience based on factors such as age, gender, interests and location and launch campaigns for as little as $5. How much a given amount buys depends on how much someone bids for an ad via Facebook's interface. Facebook is hoping that if small businesses like the results they get from using the ad credits, they will be willing to spend more on their own. "The Visa Business Network greatly enhances what small business owners can do on Facebook," said a company spokesman. "With the ad credit, the small business owners have an opportunity to go a step further and promote their businesses to a targeted audience on Facebook."
Vertical ad network management company Adify today is expected to launch an inventory forecasting module for vertical ad network builders to predict supply and demand across the publishers in their networks. Driving the need for the new module is the continued segmentation of the online content market that is requiring advertisers to further augment their branding campaigns with vertical ad networks. "Vertical ad networks are growing and the sophistication of buying on them is growing as well," said Russ Fradin, president and co-founder of Adify. "Advertisers and network builders want to ensure they have accurate information about availability not only across the entire network, but also by ad size, DMA, country and ad type." Mike McGuire, research director for Gartner Research, said it was too early to assess the effectiveness of Adify's new product, but agreed there is a high demand for more reliable metrics in this area. "Ad networks are a hot topic, so the demand is obviously high for better and more accurate ways to measure their effectiveness," McGuire said. With multiple algorithms, the module is designed to address the variability in inventory levels, which occur with vertical ad networks. Through inventory forecasting, Adify network builders evaluate the value of their online inventory over periods of time by analyzing the number of impressions generated and advertiser demand for the inventory. The tool begins to analyze data within weeks of a network's launch, and is at least designed to improve over time as vertical networks become more established. Adify's network builders rely on the company's technology to determine inventory pricing decisions, adjust ad rate cards, increase rates for inventory in high demand and lower rates for less attractive inventory. With the forecasting tool, network builders are expected to identify trends such as gaps in supply and demand and adjust accordingly with custom reports that forecast inventory based on ad size, location and type. What did Adify's clients do before the availability of the new module? "Many used Excel spreadsheets and tried to calculate a trend," Fradin said. "A number of our customers tried their existing inventory management systems which were designed and work very well for large publisher's single sites, and found that the estimates were not accurate enough or useful for their vertical ad network." Separately, Adify today is announcing that its platform is now 120 vertical ad networks strong. The latest networks to join its platform include SOAPNet and the Forbes Business and Financial Blog Network. In April, Cox Enterprises agreed to acquire Adify for a reported $300 million. Other ad networks that Adify powers include Time Warner, Comcast, and Martha Stewart Living Omnimedia.
While Google's growth has largely been built upon the ease and simplicity of use of its AdWords paid search marketing platform, the rules governing ad placement, ad quality and how much advertisers pay per click have become increasingly complex. For example, the search giant made 20 quality improvements to Adwords ads in third quarter 2007 alone, according to Nick Fox, Google's director of business product management for ads quality and bidding. With all the changes, it has become difficult for agencies--let alone independent advertisers--to use paid search in the most cost-effective manner, which is why search marketing firms like AdGooroo are constantly developing bid and campaign management technology, as well as research. And the latest research from the Chicago-based search firm highlights the correlation between ad placement, conversions and average cost-per-click (CPC). Take ad placement, one of the factors advertisers try to influence when they make their bids. Attaining the top spot (either the first ad on the right side of the search page, or the first ad above the organic search results) would seem like a coup in terms of visibility, but AdGooroo's research found that the seventh spot was actually the most profitable for advertisers--particularly when bidding on broad keywords. AdGooroo found that if an ad was not profitable in the seventh spot, increasing the bid to get it to a higher, more visible position did not increase the profitability, regardless of whether the ad jumped by one, or even four spots. In that case, bidding more is "pretty much universally the wrong strategy," said Richard Stokes, AdGooroo's president and founder. "Though it would seem like getting a higher placement would increase conversions, we found that the conversion rate doesn't increase nearly as much as your CPC. You should work on your ad copy or landing page then, or even stop bidding on that keyword all together." In contrast, niche terms fared much better with higher placement, particularly the second and third spots. According to the report, bidding to snag the second or third spot with longer-tail keywords was key to profitability. And unless an advertiser had tracking reports to prove that the number one spot would be profitable, bidding for it would be a waste of budget. AdGooroo studied the performance of more than 300 search phrases (or keywords) over the course of December 2007. Each phrase had received at least 200 clicks during the test period, and had fluctuated in terms of position by at least one spot. The search firm took CPCs, click-through rates (CTRs), conversion rates and data like average order size into account when determining an ad's profitability. The study, titled "How keyword length and ad position impact clickthrough rate and cost-per-click on Google AdWords," is available as a free PDF on the company's Web site.
Cable company Charter Communications said Tuesday that it has postponed a controversial plan to share information about subscribers' Web-surfing records with behavioral targeting company NebuAd due to customers' questions. Charter previously acknowledged that it delayed a planned mid-June launch, but said it did so for "technological" reasons. Tuesday's announcement marks the first time the company has admitted that the NebuAd deal raises concerns. "As we do with all new service launches or initiatives, we conducted focus groups well in advance, which told us that most broadband consumers would look upon this service favorably," Charter said in a statement. "However, some of our customers have presented questions about this service as well as suggested improvements. As such, we are not moving forward with the pilots at this time." Charter gave no indication of when it might go ahead with the program. Charter's plan to work with NebuAd generated intense scrutiny in Washington. Reps. Edward Markey (D-Mass.) and Joe Barton (R-Texas), recently asked Charter CEO Neil Smit to hold off on implementing the deal pending an investigation. Digital rights groups and net neutrality advocates condemned the plan, which they viewed as more invasive than other types of online ad targeting, or serving ads to people based on their Web-surfing history. Older behavioral targeting companies only know when users visit specified sites that are part of the same network, which means they can collect only a limited amount of information. But Internet service providers have access to users' entire clickstream data, including every site visited and every search query entered. With that much information, it's possible to compile detailed user profiles, and in some cases, identify people even without knowing their names. And, while users can opt-out of these ad platforms, advocates question whether an opt-out mechanism will adequately protect subscribers. NebuAd says privacy advocates have no cause for concern because its data-gathering practices are anonymous, in that the company doesn't collect names or addresses. "NebuAd remains committed to delivering strong value to advertisers, publishers, and ISPs while setting the gold standard for privacy in online advertising," the company said in a statement. NebuAd added that it has met with members of Congress, and intends to continue talks with the government, trade groups and privacy groups. Markey Tuesday praised Charter's decision. "Given the serious privacy concerns raised by the sophisticated ad-serving technology Charter Communications planned to test-market, I am pleased to hear that the company has decided to delay implementation of this program, which electronically profiled individual consumer Web usage," he said in a statement. Marvin Ammori, general counsel of net neutrality group Free Press, also cheered the news. "We think that both the public and policy makers should have the chance to look at this technology before it's deployed," Ammori said Tuesday. Last week, Free Press and another advocacy organization, Public Knowledge, issued a report criticizing the technological aspects of the Charter/NebuAd deal. The report said that NebuAd's data mining methods, which rely on Charter's deep packet inspection technology, violate Web users' basic expectations about online privacy. Ammori added that the issue isn't likely to go away, although Charter is at least temporarily halting its plans. "NebuAd and their ad-serving proposal is just the first iteration," he said. "There will be dozens of attempts to use deep packet inspection for commercial advertising."
It ain't over 'til it's over. Yahoo is either talking with Microsoft again about an outright acquisition or some kind of deal short of a complete merger, depending on which Web accounts you believe. CNet reported Monday that the companies are in discussions about a transaction that doesn't involve an acquisition. But on Tuesday, TechCrunch cited sources saying talks between the two were back on, albeit at a lower price than its original $33-a-share offer. Meanwhile, CNBC reported that no deal was in the works, though Microsoft was still interested in Yahoo's search business. Microsoft's pursuit of Yahoo appeared to be over earlier this month when the software giant said it was no longer interested in a takeover after final talks collapsed. Yahoo's board also decided against a Microsoft proposal to acquire only Yahoo's search business. The cleared the way for Yahoo's subsequent search outsourcing deal with Google. Rumors about a possible Yahoo-Microsoft pushed Yahoo's stock up almost 3% to $22.04 Tuesday.
The publishing industry can no longer side-step the impact of the digital world. While some publishers are achieving success with their digital properties, there are many publishers who are simply not giving their digital assets the best chance to succeed. The U.S. magazine market as we know it will continue to be in flux into the foreseeable future. Circulation, production and distribution costs continue to rise and print advertising budgets are at best staying flat with most major publishers showing declines through the first 4 months of 2008. The pie is no longer growing and your slice of ad revenues will continue to diminish. A surprising fact is that many publishers are not looking at their digital operations from a "long-term perspective" and are thinking about a "right now" strategy. I am not sure if I have ever heard of a magazine launch that achieved profitability in less than five years, so why do so many publishers expect such a fast return via their web properties? Developing a robust and profitable site is a process that takes time, testing and many mistakes. It is not unlike the evolutionary process of launching a magazine. When you start a magazine, it costs tens of millions of dollars. While you may not need to spend that kind of money to launch a digital strategy, it is time to dedicate the necessary resources to make your online activities a measurable success. The initial benchmark should be a one-to-one ratio of paid circulation to unique visitors. Sounds simple, but shockingly most magazines are achieving only 1/3 of their paid circulation base. The first step to succeeding with your digital operation is to truly treat it as a separate business and dedicate the right staff and resources to give it a chance for success. If you try and use your print personnel to launch and run your digital assets, your success will be modest at best. Content is written differently, technology options change weekly, ad sales inventory moves faster and traffic is built via partnerships. It is not so much that the business is holistically different than print, the problem lies in media executives not approaching it with these understandings. You are entering the software business, which requires constant evolution and velocity by rotating applications with a focus on constantly bringing value to your readers. Step two is to develop a "thoughtful" digital strategy that will marry technology with your core value proposition and ultimately mature into a valued and profitable business. Think before transitioning your business online and make certain that your site's intent is aligned with your economic engine. Additionally, while your brand equity and years of content present value and should be leveraged, this is not enough. If you do not create velocity by identifying and testing applications you will have modest growth among consumers and advertisers. Accept the fact that if you do not take the time to build an appropriate strategy that leverages your brand and the web you are severely handicapping your chance for long-term success. The future is here. Those that will succeed are the ones that accept the reality, step back and develop a long-term digital publishing strategy today.