Media and advertising network Glam Media today announced the acquisition of display ad targeting and optimization startup AdaptiveAds. Based in San Francisco and Mumbai, India, AdaptiveAds is a 3-year-old startup with investors including Draper Fisher Jurvetson. AdaptiveAds' self-service ad technology will become the platform for GlamAds, a self-serve brand advertising system focused on premium display. "This acquisition will help optimize results for brand ad campaigns," said Samir Arora, chairman and CEO of Glam Media in a statement. AdaptiveAds will reinforce Glam Media's brand ads platform, Glam Media Evolution, and is expected to facilitate both agency direct and self-service media buying solutions. Through the acquisition, Glam Media is opening an office in Mumbai and establishing an engineering presence in Pune, India. AdaptiveAds' U.S.-based employees will join Glam's ad products team in Brisbane, Calif. Offices in Mumbai and Pune will become Glam's engineering and product development centers in India. AdaptiveAds co-founder and CEO Yogesh Sharma will become vice president and general manager of Ad Solutions at Glam Media. AdaptiveAds Co-founder Sanjay Sharma will lead the team in India. Glam is also reorganizing its technology, engineering and content teams to focus on brand engagement and display optimization, and expects to hire engineering employees in India. Glam expects a net addition of approximately 20 new employees with this acquisition, bringing the total employees at Glam globally to 200.
Blaming the worsening economy, AOL plans to lay off 10% of its workforce, CEO Randy Falco said in a letter to employees Wednesday. "Online marketers have tightened their ad buying across the board, reducing their spend by hundreds of millions of dollars," Falco said in the letter. The layoffs, which Falco said will take place over "the next several quarters," will likely result in the loss of some 700 jobs at the long-struggling Time Warner unit. In addition, AOL has ruled out "merit raises" this year, and plans to reorganize internationally and consolidate office space in Mountain View, Calif. and Los Angeles. An AOL spokesman said the company would not comment on the layoffs. Putting the news into a larger context, Falco said AOL was "two years into a three-year turnaround plan." "Since day one, our strategy has focused on building and growing mutually dependent publishing, advertising and social media businesses to take advantage of the shifting media landscape," Falco added. "In addition to focusing our investments, a successful turnaround plan also requires us to realign our cost structure against this three-pronged business model." Along with a review of its international operations, Falco said that AOL plans to review all of its products and services. Hitting at least one positive note, Falco said the reorganization would likely give AOL the "flexibility to invest in our growth strategy." Few companies have been immune to the present economic downturn. Even Microsoft, which has long resisted massive layoffs, just announced plans cut 5,000 jobs--or 5% of its workforce--over the next 18 months. For AOL, however, such bloodbaths have almost become standard practice. Most recently, it cut some 2,000 jobs worldwide in late 2007.
Signaling continuing consolidation in the online health space, HealthCentral has acquired fast-growing Web health community Wellsphere. Terms of the deal were not disclosed. Arlington, Va.-based HealthCentral said the deal would boost the size of its online audience from 6 million monthly unique visitors to 10 million. ComScore estimates both sites' traffic at much lower levels: 2.3 million for HealthCentral and 850,000 for Wellsphere. While the acquisition gives HealthCentral more heft to compete with larger competitors in the category, CEO Chris Schroeder stressed that the merger is as much about synergy as increasing size. He pointed out that Wellsphere's focus on wellness and healthy living topics will complement HealthCentral's health condition-oriented portal. "This gives us expanded reach," he said, adding that the two properties have little overlap in users. Founded in 2007 by Stanford Business School grads, Wellsphere features a central search box on its home page, much like Google, that allows users to search for information on specific health-related subjects. Results are presented via the site's WellPages, which combine articles, blogs, a Q&A section, and videos on the topic queried from sources ranging from the FDA to health and fitness magazines. Wellsphere itself boasts 1,500 bloggers, including medical professionals and "expert patients," around various health and wellness subjects. The company is also launching health-related mobile applications through its Wellphone platform, "which we think will have huge ramifications going forward," said Schroeder. Under the deal, the companies will maintain separate Web sites as well as separate offices on both coasts. But HealthCentral will incorporate Wellsphere's technical expertise, while the startup will benefit from HealthCentral's more established business and ad sales operation, according to Schroeder. Last fall, the Waterfront Media-owned Everyday Health Network merged with Revolution Health Network to overtake WebMD as the largest online health property, with 26.7 million unique visitors in December 2008. HealthCentral's acquisition of Wellsphere would still not lift the merged entity into the top ten health sites, according to the comScore rankings. But Schroeder downplayed the comScore figures, suggesting that HealthCentral and Wellsphere had higher-quality audiences than rivals because they have not relied on search engine marketing to drive traffic growth. "Because our traffic is organic...our audience members arrive more engaged, ready to act, and research shows they do act on what they learn," he said. "We now will be able to deliver measurably better ROI for advertisers on an even larger scale."
Cox Communications' new traffic-shaping plan is drawing harsh criticism from some net neutrality advocates. "It is certainly a horrible idea and it's not the way the Internet ought to work," said Robb Topolski, chief technology consultant for broadband advocacy groups Free Press and Public Knowledge. "When I first heard about it, I thought it was an early April Fool's joke." Cox, the third-largest cable company, said Tuesday that it intends to test a plan to manage congestion by occasionally prioritizing "time sensitive" traffic while slowing down other, less urgent material. The time-sensitive traffic includes Web streaming, email, instant messaging, games and remote connectivity. The material categorized as susceptible to delay includes bulk transfers of data for storage or file access, peer-to-peer protocols, software updates and Usenet newsgroups. Topolski and other open Internet advocates criticize Cox's classifications as well as its methodology. Net neutrality supporters say that broadband companies should transmit traffic without discriminating between types of content or applications. "Cox is picking winners and losers for the Internet, and that is simply not the way a network operator ought to behave," he said. "You can't tell from the protocol whether or not something is time-sensitive," Topolski added. What's more, he said, Cox's categories are internally inconsistent. For instance, Cox says it will prioritize streaming but not peer-to-peer traffic--but sites that stream video often use peer-to-peer protocols to do so. Gigi Sohn, president and co-founder of Public Knowledge, likewise condemned the new plan. "The sketchy details of the Cox system make little sense," she said in a statement. "Usenet is a text-based service, just as is most of email. There should be no distinction between them. Video streaming takes up much more network capacity than peer-to-peer, yet is given Cox's seal of approval." Catherine Sandoval, a communications law expert and assistant law professor at Santa Clara University, added that the new plan "is explicitly not neutral in giving priority to some Internet traffic over others." Last year, the Federal Communications Commission sanctioned Comcast for slowing some peer-to-peer traffic. In its order, the agency said Comcast violated principles set out in a 2005 policy statement, including that consumers are entitled to run lawful applications and use services of their choice, and to access all lawful content. Comcast appealed that ruling to the U.S. District Court of Appeals in Washington, where the matter is still pending. Researchers at the Max Planck Institute for Software Systems in Germany reported last May that Cox also previously slowed peer-to-peer traffic. The company is believed to have stopped doing so sometime last year. Separately, Google Wednesday unveiled a new site, Measurement Lab, where users can test their broadband connections to determine whether Internet service providers are interfering with traffic.
Marin Software will unveil a tracking feature today that allows marketers to determine the return on investment from search engine marketing campaigns (SEM). The Multi-Conversion Tracker, a tool integrated in the Marin Search Marketer application, lets marketers define the worth of keywords by assigning metrics and parameters that monitor clicks to conversions. The tool also allows lead-generation businesses such as insurance and finance to measure the value of keywords, even when an immediate conversion of the sale does not occur. And marketers can get an accurate view of keywords that drive consumers into stores. For instance, a marketer typically pays $3 for the click to get a 2% conversion rate online. Marin's tool also assigns measurements to actions that help marketers understand the percent of people who print coupons online and use them in brick-and-mortar stores. "If you know that printing a coupon is correlated with going into the store and making a purchase, you can bid on those keywords that help you make the conversion," said Marc Barach, CMO at Marin Software, San Francisco. A gathering last week in Mountain View, Calif. brought together a select group of retailers, agencies and clients. Barach said that's where Google executives reminded attendees that the average ecommerce conversion rate from paid search stands at 1.72%. While that number fuels the $11 billion paid search estimate and creates $100 billion market capitalization for Google, Barach said, the 98% who click on ads and go to Web sites don't buy anything at that moment, but often search for product information and prices and reviews. In aggregate, the conversion is 3.5 times higher in the store compared with online. Marketers want to have an option to track that conversion from online to store, but many say they need a tool to measure, manage and take credit for the sale. Multi-Conversion Tracker is one of nearly seven tools that Marin plans to release this year. Others coming down the pike will focus either on campaign setup and management, bidding, reporting and analytics or keyword expansion. In late February, the company plans to release a tool that ties into a company's inventory management systems. This means that when an item sells out, the paid click ad that lands on the retailer's Web site will disappear until stock in the warehouse replenishes. The tool also would monitor pricing for the item. Another possible application would allow marketers to create campaigns automatically. Retailers rolling in spring inventory only need to enter an item number and the tool would do the rest to create campaigns. Adjusting bidding strategies and creative based on inventory is still up in the air. Part of a maturing vendor landscape means creating more or better automation for different pieces of search, said Forrester Research Principal Analyst Shar VanBoskirk.
San Francisco-based consultancy SALT Branding has released "Trends in Branding 2009", a review of "some of the opportunities and threats facing businesses and brands in the immediate future." SALT starts by advising brands to "stay on brand" in order to survive during a recession: "Tough times call for tough actions, but don't lose sight of who you are." Citing Twitter as an example of a brand that emerged into the public consciousness in the 2008 recession while such established brands as Circuit City, Lehman Brothers and Aloha Airlines headed in the opposite direction, SALT nonetheless cautions other brands that "befriending" customers on social networks like Twitter and Facebook "has a price." That price includes providing consumers with financial discounts, inside information, sneak previews, competitions or incentives. The question brands need to ask about that price, SALT declares, is: "How high is it?" SALT cites Mercedes-Benz as a brand that has succeeded in the social networking space by creating its own Generation Benz social network "to target prospective customers and learn what they value." Social networks are also a leading player in what SALT terms the "engagement train," or allowing consumers to "sit in the driver's seat." This, too, has its potential costs, such as Chevy's user-generated video concept bringing much negative response to the brand. But SALT cites Dell's IdeaStorm and StudioStorm as two sites that have successfully invited consumers to act as "brand advisors." Mobile phones are another technological harbinger for 2009, with SALT saying they "could be the best direct marketing tool ever invented.... What's happening now is changing not how we use the phone, but how it can use us." The report is particularly keen on mobile couponing ("imagine driving past a coffee shop and receiving a coupon for a free pastry with the purchase of a latté"). SALT cites Crunch Gyms, which used outdoor billboards to encourage viewers to snap photos of the ad from their camera phones and then bring the photo to the gym for a free guest pass. "The next wave in mobile couponing," the report continues, "will encourage customers to scan product barcodes and receive offers directly at the point of purchase." SALT also predicts that 2009 will see more numerical and alphanumerical brand names, as Xbox 360 has already proven successful. "We are simply running out of available, real words and the legal ability to use them," the report states, and numbers provide "increased potential for trademark and URL availability." Brand names get trademarked, of course, but increasingly so do "unconventional new types of intellectual property, like shapes, scents and sounds," according to SALT, which points out that a record 401,000 trademarks were issued in 2008. "Expect the significant capital and resources invested annually in defending existing assets to increase," the consultancy says, because "protecting valuable trademarks is cheaper than creating new ones." One successful trademark cited is Apple's unique configuration of a circle, square and rectangle on its iPod products. Apple is also praised for using "intelligent design"--another trend that SALT says will also increase in 2009--"to deliver better products, services and experiences that also help to make the world a better place." Other successful brands that SALT mentions for design innovations include Target, Whirlpool, LG, Johnson & Johnson, and Nike for its custom-designable Nike ID products. Often tied in with design is another trend, dubbed "ethical consumerism." When consumers are "faced with two branded options," SALT says, "the one that offers them the opportunity to support their community or a good cause will increasingly win." Companies singled out by SALT include Target, with its "Do 5% Good" campaign, eBay's World of Good, and Project RED, which has partnered together with such brands as Apple, American Express, Starbucks, Gap, Microsoft and Hallmark. Beyond such charitable efforts, SALT says that "finding the right partner can ensure that 1+1 equals a lot more than 2." Examples cited include Nike and iPod's development of the Nike+ brand to reach their common "on-the-go audience interested in enjoying their music while they exercise"--and Ford and Microsoft's development of Sync voice technology, to be installed in more than 1 million cars this year. Buying a Ford is undoubtedly buying American, but while tough economic times inevitably lead to calls to buy domestic products, SALT notes that after "20 years of American leadership in the growth of the global market," very few products overall are actually manufactured in the U.S. Yet American brands remain world leaders, so in 2009 "rather than 'Made in America ... expect to see much more in the way of 'Inspired,' 'Created' or 'Designed in America.'" To drive home the point, the report adds: "This was written on a Macintosh computer, designed by Apple in California." [And so was this Marketing Daily article].
Having recently emerged from infancy, mobile advertising will take greater strides in 2009. Media companies are demonstrating a clear need for content monetization, and with technical know-how starting to catch up to creative visions, we expect to see a host of innovative monetization opportunities emerge. What's to come in the year ahead? Some baby steps, some seminal changes and a whole lot of improvements. Here are nine predictions for '09: 1. New and improved experience Despite a sputtering economy, smartphones continue to increase in popularity. This represents a great opportunity. As media companies move to present content in ways that take advantage of these advanced devices, advertisers will follow suit with campaigns that are targeted to high-end users and are more palatable to consumers in general. 2. Relevancy still an issue Although the technology exists today to target advertising based on context and personal behaviors, most advertising is still placed indiscriminately. While these issues won't be completely resolved in the year ahead, consumers and publishers will continue to push for more relevancy in advertising. 3.Emphasis on fill rates A primary goal for media companies in '09 will be bringing fill rates--or the percent of advertising inventory sold--into the 80-90% range. Once this has been accomplished, it becomes possible to target advertising much more sharply and push CPMs higher as a result. 4. Focus on measurement Especially given the shaky economy, it will be even more important for media buyers to demonstrate returns on their ad dollars with detailed campaign reporting. Look for honed metrics and an end to "experimental" marketing budgets in the year to come. 5. Chew on this "Snackable" content, as well as "snackable" rich media advertisements, will also be more prevalent in the year ahead. Bite-sized content is geared specifically for mobile and is well-suited to a mobile user's on-the-go lifestyle, screen size and battery life. Moreover, it addresses a growing concern on the part of carriers by reducing bandwidth load. Technologies that facilitate the creation and navigation of snackable content will also gain traction in the year to come. 6. A new role for consumers This year, we'll see the emergence of the "consumer as content distributor" model. Given the economic conditions, it behooves both advertisers and media companies to lean on consumers to virally distribute both rich media content and the advertisements that are stitched into it. It's a win-win situation--consumers enjoy viewing and commenting on content and advertisements, then sharing the annotated media with friends. These contacts, in turn, comment on the material and pass it on--cyclically creating more advertising inventory. 7. Fine-tuning the pacing and spacing of mobile ads The online video realm has been particularly successful in enabling viewers to watch free content interspersed with an "optimal" amount of advertisements. In fact, NBC and News Corp.'s Hulu announced late last year that 93% of nearly 18,000 viewers were satisfied with the amount of ads they see. As media companies attempt to emulate this level of satisfaction on mobile, we'll see more attention paid to ad pacing on mobile in 2009. 8. Localization = monetization The mobile handset is the only media consumption vehicle that travels with the user at all times. For this reason, location is of special importance in determining what is relevant to the mobile content consumer. Presenting users with content and ads related to their physical location helps to forge a personal connection and drive consumer response--the key to monetization. 9. Beyond the humble banner ad We'll see a concerted effort to move beyond text and banner ads, and as advertisers demand tighter integration with content, we'll see better targeting and increased accountability. More innovative and creative approaches to advertising will gain ground, and video ads, particularly when paired with interactive banner ads units, will continue to command high prices despite overall downward pressure on prices this year. As we look ahead at '09, there are exciting growth opportunities for mobile advertising. Ever-improving technology, combined with consumer demand for a high-quality mobile Internet experience, will help stimulate change. There's a lot of work to be done to help the industry mature--and a lot more to look forward to at the same time.