Don’t count on the emergence of “native” advertising, larger ad formats or publisher alliances to do much to reverse the gains made by programmatic buying at the expense of traditional content-based advertising. In a keynote talk at the OMMA Premium Display conference Thursday, Brian Wieser, senior research analyst at Pivotal Research, offered a dim outlook for the future of premium Web advertising. In addition to the rise of audience-based buying, he pointed to factors including flat ad spending overall, a slowing shift of ad dollars to digital, and the stronger negotiating position of advertisers in digital media. “The reality is, I just don’t see a lot of growth,” said Wieser. “There are real practical reasons I see what we have historically seen as premium display is challenged for structural reasons.” His address follows a recent research report he issued titled “The Eventual Death of Premium Web Advertising.” One of the underlying hurdles is the overall weak forecast for ad spending into next year. Because of factors like the looming fiscal cliff and Hurricane Sandy, Pivotal has reduced its projection of U.S. advertising, predicting it will fall slightly in the second half of 2012 and be flat for the full year. It projects growth of just 1.2% for 2013. Wieser also pointed out that annual ad budgets for large companies in recent years has been flat — averaging about $60 million from 2001 to 2008. That lack of growth in budgets is compounded by a lack of new ad categories and advertisers entering the market. “Growth only occurs when you get new categories of marketers showing up," he said. He suggested the shift of spending from traditional media to digital has slowed, with big brands still heavily reliant on TV advertising for major campaigns. Brands have, in effect, used the Internet to substitute for magazines, limiting how large the digital portion of a media budget can grow. At the same time, the growth of audience-based buying through real-time bidding exchanges, agency trading desks and the like has made the economics of display advertising more efficient. But instead of reduced costs leading to increased spending, Wieser argues that marketers just do more with less -- reallocating spending to social platforms like Facebook or Twitter. In the digital realm, the advantage in negotiating for inventory also swings to the buy side because advertisers have better information than publishers to determine pricing. When it comes to negotiating with premium display owners, ad buyers have the upper hand. “All these factors put together do not create favorable circumstances for premium display,’ said Wieser, noting there will be a big winner from the same trends undermining premium advertising: Google. With the largest ad exchange (AdX), the Google Display Network, and a huge amount of aggregated content through YouTube, the search giant is poised to become the dominant player in display. What can conventional Web publishers do in the face of premium ad erosion? In his research report, Wieser advised them to find ways to become a one-stop-shop by making it possible to reach virtually everyone as often as a marketer wants. Plus, he suggested the combination of Yahoo, AOL and MSN into a single entity would “dramatically change conditions” in the industry by providing a counterweight to Google and Facebook.
IgnitionOne released support for Facebook Exchange in its Digital Marketing Suite (DMS) on Thursday. The function adds cross-channel capabilities, from search to display to social. Access to real-time bidding through the Facebook Exchange enhances the ability to present relevant Facebook ads based on first-party intent data, a well-known strategy by search marketers. Chris Knoch, vice president of strategic solutions at IgnitionOne, said DMS provides real-time bidding that allows marketers to bid only on impressions that meet key campaign criteria. It also allows for smart bidding logic to adjust bids based on various inputs, target users based on custom interest segments generated during a user's visit to a marketer's site, and add features like frequency caps, geotargeting and user recency targeting. IgnitionOne and other search marketing firms like Kenshoo and Marin Software continue to build out services to target ads on Facebook. The Facebook Exchange platform offers similarities in how display media works. Marketers can leverage remarketing tools and real-time bidding features, as well as audience and first- and third-party cookie data from eXelate and BlueKai. Facebook media buys in the marketplace are more similar to AdWords, complete with biddable media. Industry speculation continues to mount around Facebook's ability to build out a hybrid display ad platform that could also combine features familar in search. It would serve-up and target ads across the Web, similar to the Google Display Network. It may work if Facebook could avoid "crossing the creepy privacy line to serve Sponsored Stories-style socially contextual ads all over the Web," one executive said.
Web- and mobile-ready retailers can expect an upbeat holiday shopping season, new research suggests. In line with other estimates, Forrester predicts the coming holidays will generate $68.4 billion in domestic online sales -- a 15% increase year-over-year, and three percentage points higher than the expected overall annual online retail growth rate. “This optimism is largely due to ever-increasing numbers of consumers choosing the Web over physical stores and the rise in mobile commerce,” according to Sucharita Mulpuru, Forrester analyst and lead author of the ecommerce report. Given a less-than-robust economy, consumers continue to be price-conscious and will use the Web to search for money-saving offers, like exclusive deals and free shipping -- especially on key holiday dates, Mulpuru predicts. As such, to succeed this season, retailers need to compete on more than just price. “While price is critical, retail eBusiness executives must look to add value elsewhere in the customer purchase funnel to retain customers,” Mulpuru explains. “Ensuring that critical content is available (and tested) on mobile devices will be imperative this holiday season, as consumers will continue to use mobile devices for product research and even for buying.” By Forrester’s estimate, the average U.S. shopper will spend $419 online, this holiday season -- a 12% boost over last year. When it comes to mobile device owners, 18% now make purchases via smartphone, while 24% report having purchased a product in the past month on their tablets. Those numbers will only increase as more than 135 million U.S. adults are expected to own a smartphone -- and more than 60 million will own a tablet -- by the end of the year. According to Mulpuru, the value of mobile extends far beyond the transaction, as consumers more frequently use those devices to research products. “The mobile and tablet shopping trend tends to be amplified during the holidays as consumers spend more time shopping online with remote devices at home, in stores and on the go,” Mulpuru said. Across platforms, 56% of U.S. online adults tell Forrester they are more price-conscious than they were a year ago, while 57% agree they find better deals and value online -- up nine percentage points from last year.
Media buyers and publishers continue to struggle with bot nets, fraudulent clicks and mechanical thieves stealing impressions. RadiumOne execs call it "pixel jacking" -- using a pixel to create fraud on the Web, the "land of the new pirates." In fact, RadiumOne has verified more than 1,000 domains used for pixel jacking, and estimates it effects the more than 10,000 sites across the Web. RadiumOne suggests it cost the industry an estimated $324 million annually, about 5.4% of all budgets spent on display advertising. Kyle Napierkowski, director of ad optimization at RadiumOne, and his team connect the dots between data and the needs for brands and agencies to pay more attention to the depth of big data and exchange-traded ad impressions. As a means to combat the problem, networks need to provide audience analyses and validate sites. It turns out fraudsters have learned about lucrative pixels on sites used by companies to build retargeting segments to track consumers. They can identify "high value" consumers likely to convert. The bots will send garbage traffic to Web pages, "fire-up the pixels, and direct them to a fraudulent publisher's page where the networks vying for business will bid high for the conversion," said Doug Chavez, VP of marketing at RadiumOne. "These are ghost users on a botnet infected computer." It may seem small considering that display-related advertising accounted for $2.9 billion or 33% of total revenue in the second quarter of 2012, up 6% from the $2.7 billion sequentially, according to the IAB Internet Advertising Revenue Report conducted by PricewaterhouseCoopers (PWC). Any money advertisers forfeit to fraud is not insignificant. Chavez points to one of the biggest problems as marketers not having a way to validate consumers clicking on display ads are real. While CAPTCHAs provide verification for some conversions, not display ads. "Agencies and brands have no clue this is happening," he said, pointing to data, programmatic buying and automation as some of the biggest culprits.
More people than ever are using their cell phones to get health information. The share of mobile users doing so has gone up to nearly a third (31%) from 17% two years ago, according to a new survey from the Pew Research Center’s Internet & American Life Project. Smartphones are driving most of that activity. More than half (52%) of smartphone owners are looking up health information on their devices, compared to just 6% of regular cell phone users. Younger, better-educated adults, minorities and caregivers are also more likely to use their phones to get health information. M-health has long been seen as an area of opportunity for health providers, pharmaceutical companies and other industry marketers. A GSMA forecast estimated the mobile health market would grow to $23 billion by 2017 across mobile operators, device vendors, health providers and publishers. The Pew report identified certain demographic groups as heavier mobile health users: African-Americans, college graduates, women, those with an annual household income between $50,000 and $74,999, and those between 30-49. Pew estimates that 84% of smartphone owners have downloaded an app of any kind. But only 19% have downloaded an app specifically to track or manage health. Women, those under age 50, the better-educated, and those with an annual household income over $75,000 are more likely to have downloaded a health app. Given increased public awareness about tracking of app use by developers and third parties, it’s possible privacy concerns play a role in holding back downloading of health-related apps. A separate Pew report released in September found privacy considerations are leading most app users (57%) either to remove particular apps, or to decide against installing them. Exercise, diet and weight apps are the most popular types of health apps. Some 38% use an app to help track their exercise regimen, 31% monitor their diet, and 12% use an app to manage their weight. Other health apps track blood pressure, pregnancy, blood sugar or diabetes, and medication. The WebMD app was cited by 4% of survey participants. The latest study also showed few mobile users are texting for health-related reasons. While an estimated 80% of cell owners send and receive text messages, only 9% get any text updates about health or medical issues. Women, and those between the ages of 30-64, are more likely than other cell phone owners to have signed up for health text alerts. People potentially dealing with more serious health situations — caregivers, those living with chronic conditions, and people with recent significant health changes — are more likely to get text alerts. The Pew findings are based on a national survey of 3,014 U.S. adults fielded between August and September. The survey involved a mixed landline/cell phone sample and interviews were conducted in both English and Spanish.
A proposed class-action settlement that would require Facebook to allow minors to permanently opt out of "sponsored stories" should be rejected, two advocacy groups argue in new court papers.The Center for Public Interest Law and Children's Advocacy Institute say that Facebook should be required to obtain opt-in consent from parents before using minors' names or pictures in sponsored-stories ads. "Any settlement on this issue of commercial third-party expropriation of a child’s posted photos and information must involve the simple following element: If Facebook wishes to use the information posted online by a child, it must secure the advance permission of the parent," state the papers filed on Wednesday with the federal court in San Francisco.The groups, both affiliated with the University of San Diego, are asking U.S. District Court Judge Richard Seeborg to reject the deal.Seeborg already nixed an earlier version of the settlement, noting that it didn't provide for compensation to users. The current version of the deal calls for Facebook to create a fund of up to $20 million to resolve claims that the sponsored stories ads violated a California law about endorsements. That law provides that companies need permission from people -- or parents, in the case of minors -- before using their names or images in ads.The revised settlement explicitly states that Facebook will allow minors under 18 to opt out of appearing in all sponsored stories ads. Users over the age of 18 will have the ability to prevent appearing in future sponsored stories ads -- although apparently only on an advertiser-by-advertiser basis.But the Center for Public Interest Law and Children's Advocacy Institute says that an opt-out regime won't protect minors from potential problems associated with sponsored stories, which publicizes "likes" to their friends. Although the deal requires Facebook to notify users about "sponsored stories," the groups argue that teens aren't likely to see those notifications, let alone opt out of the program."The proposed settlement’s warnings and notices are textbook adhesive fig leaves," they argue. "They do nothing for the 13-year-old who is striving to assert her independence, yet is still simply too young to grasp the reach of her digital citizenship -- a reach that could tarnish her reputation for years to come through a few thoughtless clicks of a mouse."
Although the global advertising business has been primarily "cautious" in the current economy, it is not universal when it comes to all major advertising categories.Nielsen Global AdView Pulse says for the first half of 2012, telecommunications lifted spending by 7.9% -- the biggest category gain -- with the largest pushes in Latin America, up 32.5%, and the Middle East & Africa, 28.3% higher.Automotive advertising is also climbing steadily -- right behind telecommunications -- with a 6.3% improvement. Nielsen says even with the troubled Western Europe economies, automotive spending has inched up 1.4% in the first six months of 2012 versus 2011.Entertainment was next at a 5.0% increase, followed by media, up 4.9%; distribution channels, 4.9%; financial, up 4.5%; and clothing and accessories, up 2.8%.Losing ground in global ad spending was health care, down 1.2%, industry and services, 1.4% lower; and durables, a 4.4% drop.Overall, Nielsen says advertisers continue to spend "cautiously" with budgets up 2.7% to $266 billion. Specific territories show that North America was 2.4% higher, helped by growth advertising in the "industry and services" category as well as higher political advertising.As expected, Europe -- with a number of economies still in trouble -- has seen a 2.7% drop in advertising spending.
Nate Silver, the nerdy economist and New York Times blogger, apparently used big data algorithms to correctly project the presidential vote in all 50 states before a single ballot was cast. According to one report: Rather than reporting on nebulous aspects of a political race such as "feel" and "momentum," Silver's analysis relies solely on statistics. Having seen Mr. Silver in action on “The Colbert Report,” I am not certain it would be any less painful to feature his predictions in place of the absurd pre-election analysis of say, a Fox or MSNBC News -- both of which traffic in unnecessary partisan hyperbole. But give math its due credit. And now let's get the Nate Silvers of this world redeployed to more important tasks. Without question, the top priority is a better system to pick the nation's NCAA football national champion each year. Surely by now Nate has enough game stats from each BSC school to pick the top two prospects and save us from the other nearly 40 bowl games that are as pointless as they are often tedious to watch. Let's get it down to 10 teams playing just five bowl games, which spares players from having their seasons extended five or six weeks just to play in a bowl sponsored by a car part or a fast food item. As an aside, they should draw and quarter whoever decided six wins was enough to make a team "bowl-eligible." Move it up to eight or 10 and everyone saves a little face. I don't personally know anybody who gets to cast a vote for the Academy Awards, but if there was ever a flawed system for deciding anything, this is it (nearly as stupid as the electoral college). While nobody in their right mind would say to base winners on box-office success alone (since Hollywood panders to the lowest common audience IQ denominator), there should be a way for Nate to tap into audience reaction engines such as Flixster and decide winners based not on special-effect quantity, but script and acting quality. I don't care who wins anything else having to do with entertainment, including Emmys, Country Music Awards, MTV Videos and Grammys, so as far as I am concerned Nate can take all that extra time and improve weather forecasts, or predict whether Brody will or won't be a terrorist. Now, some in this industry spend a fair amount of time and effort developing "proprietary algorithms" to predict which ads audiences will best respond to. I suspect Nate could look at some basics -- like, is this a product or service anybody in his or her right mind would buy (something that should raise the barrier of entry considerably for most online ads), and if they would, is the creative approach somewhere beyond crotch jokes, animals and old ladies? Suddenly the pool shrinks like an Atlanta reservoir. Finally he can calculate who gets the attribution when the product sells. That ought to tie up his Excel for a few months alone. One of the great new buzzwords in adland these days is "signals," which I suppose is more acceptable than data points, crumbs or user droppings. Surely Nate can amass enough "signals" from all of the time we spend online these days to predict pretty much anything. Why not tell a kid that he will die in the third level of “Meal of Honor” and save him a couple hours? Or that no matter how many times she goes back online or calls to confirm, there is nothing more the Family Travel Planner can do to assure adjoining seats on the flight, or earlier notice that they will cancel it altogether, anyway? Or, in spite of differently named sales every three-day weekend, that the best time to buy that car is, say, Aug. 14 or Jan. 8? Or maybe Nate should put his money where his spreadsheet is, and take up picking stocks. Certainly more potentially lucrative and fun than picking Presidents.
Some brands may have hesitated to jump full force into digital as the primary channel for reaching existing and potential customers. Those days are now over. Brands have finally come to realize the power of digital conversations. Interactions that include discussions of brands, products and services circumvent the established flow of information online. Google's rocket ship growth the past 15 years was predicated on the fact that when a consumer wanted to learn more about a product and service, they automatically typed the name of the product and service into Google's search box. Then Google connected them with more information — and moved them down the purchasing funnel either via organic search or a paid ad. However, Google's established business has already changed in a fundamental way. With the rise of seamless sharing via multiple social media channels, a larger share of those informational searches have shifted away from Google. They've been replaced by social discovery and word-of-mouth from friends and family. Everyone has seen questions in their social streams such as: "What's a good steak restaurant on the Upper West Side?” Five years ago, that question would have been asked via a search engine, not crowdsourced to your friends and family. (That’s why Google has committed enormous funding and time launching and trying to get traction with Google+.) Given how discovery has shifted from search to social, brands and marketers must devise a way to build a lasting connection with consumers. If a consumer jumps onto Facebook to ask, "I'm so tired of the shampoo I've been using, what shampoo do you love?" most brand managers would kill to have friends recommend their product. How can brands do a better job of fostering these relationships so that they're at the forefront of consumer's minds? 1. Develop a great product. Not to resuscitate the Mac vs. PC argument, but there's a reason many people aren't hesitant to recommend their MacBook or iPhone to a friend. 2. Facilitate social sharing. Brands need to be engaged with consumers via social media, and brands need product sites and marketing programs that facilitate seamless social sharing. 3. Create sampling programs to reach digital consumers. Many influential digital consumers are eager to discuss their love of specific products and brands. Marketers need to reach and engage them in innovative ways, such as via sampling programs, contests, coupons. 4. Get game. Brand can introduce game element through badges, achievements, and prizes to turn their consumers to brand ambassadors and engage them in a fun way. As more consumers turn to social discovery from friends and family to make a wide range of purchasing decisions, marketers must have an authentic share of voice with those consumers.