Posts filed under 'Advertising'
Yesterday was a bit crazy. A lot of news hit, and most of it I can’t really say much about. Just a little rundown though:
Yahoo! Acquires IndexTools
This blog originally started with a focus on web analytics, so it’s near and dear to my heart. I’m excited to see how IndexTools is used both internally and externally for Yahoo!. Web analytics expert Eric Petersen has a good post about why this could be a game changer.
Former Yahoo! SVP Tim Cadogan Becomes CEO at OpenX
A great hire for OpenX, as I really enjoyed working with Tim while he was at Yahoo!. OpenX is a very interesting business right now, it’ll be fun to watch what Tim does there.
Yahoo! Tests Outsourcing Search Monetization With Google
No comment.
Yahoo! And AOL To Merge?
No comment.
NewsCorp To Join Microsoft In Yahoo! Offer?
No comment, man this blog is exciting.
AOL and Ad.com Jump Into the Small Publisher Game With PubAccess
Not too long ago I remember it was a bunch of fairly standard ad networks as the only options for small publishers. Then we launched Direct Media Exchange (formerly RMX Direct) at Right Media which was the first “tool” to help publisher manage multiple ad networks and make their lives easier. Since then we’ve seen more in this space like The Rubicon Project, PubMatic, now PubAccess, and Google’s AdManager in a less direct way. I don’t think we’ll see the last of it either.
Definitely not a slow news day in the world of Yahoo!
April 10th, 2008
Yahoo! has just gone public with AMP!, as pointed out in the New York Times by Miguel Helft.
The nice thing is now when talking with others outside Yahoo! they’ll have a bit more understanding of one of the major efforts I’m working on. Of course, there will be questions and confusion, for example Mashable saying it seems a lot like Google Adsense. I know Mashable is going off of very little information, but I thought I’d just note that’s not accurate at all. Watching the early preview video below should give a bit more feel of the direction the platform is moving.
April 6th, 2008
Yahoo! today announced the launch of their new women’s site Shine. While the site looks great, and as a Yahoo! employee I probably care more about Yahoo! news than most people, I didn’t think it’d really make much of a splash in the tech blog world and the feeds I normally read.
Well, Jason Calacanis stirred up a controversy by claiming that Yahoo! was competing with it’s advertising publisher partners by creating a site that competes with them. Normally, I tend to think Jason is on the ball with a lot of his opinions, but his post on this subject doesn’t seem well thought out.
First, Jason is obviously asking for some help:
Someone please explain to me why they would do something so dumb right now. Rafat Ali? Kara Swisher? Mike Arrington? Om Malik? Henry Blodget? Someone please clue me in… because this seems so dumb I can’t understand it.
Okay, so my name isn’t on his list, but I’ll try and explain anyway.
Jason seems shocked that Yahoo! would launch a content site:
Ummm….. hello
?!? isn’t Yahoo’s business to PARTNER with sites like Jane and the WSJ? Isn’t the point of the Yahoo Publisher Network to support and grow publishers and newspapers
What next a consumer electronics site to compete with Engadget and Gizmodo, or a sports site to compete with ESPN and Sportsline? A gossip site to compete with PerezHIlton and Gawker?
Actually, a large part of Yahoo!’s business for years has been to create content sites. As the #1 publisher on the web in areas like news, finance, and sports Yahoo!’s clearly a company that creates content for the purpose of selling ads on it. Jason is right that part of Yahoo!’s business is also partnering with publishers to sell ads on their site, and it would appear that this can create a conflict of interest.
However, we’re in the world of “coopetition” now on the web where you compete and cooperate with partners. Yahoo! has had news, finance, and sports publishing partners for years while it also had it’s own sites in this area. Shine is not a new case of this at all.
Additionally, Jason’s own company Mahalo should be well aware of the concept of coopetition as they compete with Google while also partner with Google to display Google search results in areas that Mahalo has no results pages built out. Should Google not partner with Jason and Mahalo because they know that Jason is coming after them?
Next, Jason tries to compare Yahoo! to Google by saying Google makes it clear they won’t compete with you:
Folks at Google make a point of letting partners know they will NEVER move into the content space and compete with them. They understand that the partnership with content creators is greater than taking the business away from them. That’s why publisher are so upset with Google for even considering launching KNOL. If I were Google I would NOT launch Knol… it’s going to really jeopardize Google’s relationships with publishers.
Well, if that’s what Google is telling you Jason, they’re lying. Ever hear of YouTube? Google News? Google Finance? And as you mentioned, the soon to be launched Google Knol? I think these are examples of Google competing with their video/entertainment partners, news partners, and finance partners. They’re only missing a couple of other big categories before they’re competing with all of them.
And the other big ad providers in Microsoft and AOL/Advertising.com/Tacoda/Quigo also compete with all their partners with their own content properties. So if publishers were to follow Jason’s advice that publishers should drop Yahoo! over this, they’ll need to drop Google/Microsoft/AOL as well. That’s not leaving many options.
My last point is about why owning strong content sites in areas you partner with publishers actually makes sense for Yahoo!/Google/Microsoft/AOL. What does a Yahoo! publisher partner want from Yahoo? They want Yahoo! to bring them the best advertisers for their content area.
How does Yahoo! get relationships with those advertisers in order to include publisher partners in that ad buy? They use industry-leading content sites where the advertiser knows they’re getting a great audience. Yahoo! can go to a Charles Schwab and say “Hey Charles, we know you want to place an ad buy on Yahoo! Finance because it’s the #1 finance site on the web, but we can also run that buy efficiently across these other 10 great finance publishers we have relationships with.”
That’s a much more likely ad sale than if Yahoo! just came to Charles Schwab with the 10 finance publishers. Shine should actually strengthen Yahoo!’s ability to get good ad deals for it’s women’s category publishing partners.
March 31st, 2008
This article in Wired is a good read about Netflix’s competition to improve it’s movie recommendation engine.
I found it interesting for a few reasons. First, as a Netflix user I’ve always felt their movie suggestions for me have not been very good. I usually understand why they recommended what they did, but it’s never stuff I have much of an interest in watching.
Second, it’s amazing that the teams working on the competition who are competing for a $1 million prize are actually collaborating with each other and are more into accomplishing the goal then winning the money. That’s great to see.
Third, the dynamics of math algorithms versus human psychology is something that I’m curious to see play out. Will the psychologist outperform the math powerhouses?
This also leads to an interesting question for me. The advertising industry is now full of algorithms, and continues to move further in that direction. Could an advertising company do a similar thing and offer a huge monetary prize to have their optimization or prediction algorithms improved? I absolutely think they could. Netflix is positive that they’ll get over $1 million in value for improvements to their recommendation engine, not to mention all the publicity it’s generated. A larger advertising player could easily extract more than $1 million in value from improved algorithms.
Seems like a no brainer.
March 5th, 2008
Even though anyone who actively reads blogs is sick of them by now, I must admit I’m a sucker for yearly reviews and prediction articles and blog posts. Even though most of the time I realize the writer is just guessing, it’s interesting to get the perspectives of others on where they see the world going. In past years I’ve made posts with predictions on Web 2.0 companies, and have also weighed in with web analytics predictions. Since the advertising market has really been my intense focus this year, I figured it was long past time to make my own 2008 Online Advertising Predictions.
When I began writing this post, it was before the Microsoft bid for my employer Yahoo!, which I can’t comment on. The only thing I will say is that no matter what happens there, it’s bound to have profound effects on the advertising landscape in 2008 in ways that are hard to predict.
These predictions may not be as negative as Greg Linden’s, or as cheery as John Battelle’s, but here goes.
1. Publisher CPM rates will stagnate or decline in 2008.
As I recently posted I think, CPM rates for publishers will stay stagnate or decline in 2008 even though we should see technology improvements that would make us think CPMs will rise.
The reason for this is that I think supply will continue to grow at a faster pace than demand shifts from TV and other budgets. Technology improvements can help CPMs rise, but I just don’t know if we’ll see growth this year, especially if an ad slowdown happens due to a recession.
2. Large advertising acquisitions will be few and far between.
This one already is looking wrong based on what’s going on with Microsoft and Yahoo!, but I do think that we won’t see as many purchases in the 250M+ range this year in the advertising space. Most of the big players have large acquisitions from 2007 they are digesting and integrating, and I’m not sure how many attractive larger companies there are left to acquire.
3. Smaller acquisitions will still occur.
Acquisitions won’t totally die though, we’ll still see some smaller technology and media purchases in 2008. There are some promising smaller technology companies as well as a few media properties that could be attractive acquisition targets for the giants.
4. It will be a year that seems to lack progress as the big players digest acquisitions and build behind the scenes.
There is a ton of technology work that’s going to be going on at Yahoo!, Google, Microsoft, AOL, News Corp., and others in this space. Most of these companies bought technology in 2007 that they need to integrate and improve upon in 2008 before advertisers and publishers really fully reap the benefit. So it may seem like there isn’t much that’s truly new in the space, but everyone is working like mad behind the scenes building out ad platforms.
5. There will be a privacy flare up involving online advertising.
There have been some minors ones in the past, but I feel like this year we’ll get our first big privacy blow up about something relating to online advertising. Behavioral targeting that goes too far? Tying ad data to customer ids? Not sure what it will be, or who will do it, but there will probably be a bigger deal made out of it than it deserves when it occurs.
6. People will begin to question very hard how Facebook and other social networks can monetize their audiences.
I actually wrote this before Google’s earnings call where they blamed their deal with Myspace for some poor results. But that’s exactly what I expected and what we’ll see with other social networks as well. The advertising nut on social networks has not yet been cracked, although some interesting stuff is being solved. And even at the low CPM rates they’re churning out, these social networks are still making significant money. But enough to value Facebook at 15B?
7. Video advertising will continue to suffer from lack of standards.
The IAB and others are making strides in trying to set video advertising standards, but 2008 will still see suffering. There are numerous video ad networks and video technology providers who all handle advertising differently. The lack of standards makes it harder for advertisers and agencies to distribute their buys across lots of publishers and networks, and makes it harder for publishers to get as much demand as they could otherwise.
8. Mobile advertising will start it’s upward trajectory, but it’s still a year or two away in the USA.
After now spending a large chunk of my web browsing time on my iPhone, I really believe mobile online advertising has a big future. I’m not sure what the format or best technology for it will be, but the web usage on mobile phones is going to skyrocket in the USA over the next few years as iPhones and other smart phones become as ubiquitous as computers and iPods. While on an iPhone you can still see standard ads while you browse sites, they aren’t the most effective way to hit the mobile audience. You’re usually not seeing the whole page at once, so you’re focused in on the text and the ads are basically not even on the phone screen. Also, the local tie-in with mobile advertising will eventually be huge. Give me ads for the restaurants I’m near, movies playing near me, stores I’m located by, etc.
9. Publisher advertising tools will get better.
There’s a lot of work being done to try and make publishers lives easier, and everyone is still not there yet. Even with all the focus of the past few years, it’s still TOO HARD for publishers to manage their advertising in one place and maximize their yield. 2008 will help by the end of the year.
10. Advertiser tools won’t, which is strange.
For some reason we’ve seen more technology enhancements recently in the publisher space, while the advertiser space has been for the most part ignored. Not totally, there are a few companies I know of doing cool things, but generally it’s still too hard to buy display advertising on the web. Search is easier, but also not perfect. Tools that help streamline the buying process and enabling my dad to do display ads for his Swopper chair business as easily as he can do search text ads would be a great start.
That’s it for now, we’ll see how many of these come true in 2008.
February 10th, 2008
I can’t really comment on all the Microsoft and Yahoo! news as a Yahoo! employee, but I’m not sure I really have anything terribly interesting to say about it anyway. It’s just been an interesting few days reading all the news and analysis, and it looks like it will be an interesting 2008 to see how everything shakes out.
I’m working on an Online Advertising Predictions for 2008 post, and what’s funny is how rapidly some of my predictions change depending what happens. It may be a tough year to predict now.
February 4th, 2008
HipMojo points to and analyzes a report from WPP’s GroupM unit that Sweden will be the first country where internet advertising surpasses TV advertising in 2008, and it would happen in the UK in 2009. This is major. While I think it will take a bit longer in the USA, it’s happening faster than I would have predicted a couple of years ago.
January 4th, 2008
Scott Karp kicked off the new year with a good post called Five Guiding Principles For The Transformation Of Media Companies. It’s a good post that needs to be read by every executive at major media companies today, and in many ways a lot of it seems like common sense to those who have been watching the transformation occur and understand what’s going on.
Specifically though I wanted to address Scott’s final principle:
Advertising must create value
Google turned search advertising into the most profitable media business on the web by following the basic principle that advertising must create value for consumers. Search advertising is so powerful because the ads are relevant and USEFUL.
The most successful new advertising models will be those that create huge value for consumers, not those that manipulate users or violate their privacy (i.e. be like Google, not Facebook)
As we browse the web today, display advertising is generally not as relevant and as useful as search advertising. Search has a big advantage in that it knows the specific direct intent of the user at that moment in time provided by a keyword. While a lot of the display ads we get are entirely untargeted and seem useless.
To be fair, there are a lot of display ads that are targeted now based on behavior, geography, and other factors that end up creating value for the user.
There is a lot of movement with technologies like Yahoo’s Smart Ads, better behavioral targeting, and other technologies that are going to continually move display advertising to be more useful and relevant to the user. As I posted recently, this should lead to higher click through rates, higher conversion rates, and lead to higher CPM rates for advertisers.
Unfortunately, part of this increased targeting technology effort needs to be focused on scale as the amount of web inventory continues to explode. User-generated content is inventory that has achieved the lowest CPM and response rates due to the engagement of users in the sites they’re on, as well as the high frequency of as impressions each user is seeing. How can improved targeting technologies and ad budgets continue to get more relevant while also scaling to meet the inventory explosion?
When that happens, advertisers, publishers, ad networks, ad exchanges, and most importantly USERS will benefit.
January 4th, 2008
Techcrunch
comments on the “Nothing but Net” report released by
JP Morgan that discusses the prospects of online powers who derive a majority of their revenue from advertising.
There are a number of interesting items in the report, but the one that hits closest to home for me is their prediction that display advertising CPM prices will rise from their bottom in 2007 of $3.31 to $3.86 by 2011 through increases each year. The question is, will this occur?
First, many publishers may be wondering right now what they need to do in order to even get that $3.31 CPM which is the lowest the average has been. Publishers working solely with ad networks probably aren’t even seeing CPMs at that high a rate. Well, that’s why you need to get your site to the point where it’s quality and traffic allow you to sell ads directly or work with a high quality representation firm that can actually sell your site specifically. That’s when you start to see CPM rates that hit $3+ and up. Also, the largest publishers on the web such as Yahoo!, MSN, AOL, etc. sell a lot of their inventory at very high rates. Since these sites have a ton of inventory, it means the average moves up.
So, will this rise occur? The natural arguments for the rise to occur are:
1. Technology and optimization is improving.
Ad exchanges, behavorial targeting, improved optimization, advertisers monitoring ROI better, and other advancements in technology should allow publishers to earn higher rates.
2. More advertising dollars are moving online.
As brands and agencies begin to pull away more from TV, newspapers, radio, and magazines to online advertising that money should help CPMs rise.
Those seem like two pretty compelling arguments right?
Well, there’s a big counterargument as well.
1. The amount of available inventory is increasing.
The rise of social networks, blogs, forums, and other ways for all of us to create content on the web has led to an explosion of available inventory. You have sites likes Myspace and Facebook, blogs being created every second, and just more of us creating web content on sites everywhere. While all this content is being created, it means ad dollars are being spread even thinner across all the content.
Therefore, the big question is if the technology advancements and increased ad budgets online can counteract the continued explosion of available inventory in which ads can be placed?
My prediction for 2008, is that it will be a stalemate.. By 2009 I think we’ll see the user-generated content explosion cool down, and ad technologies will really start to kick in gear leading to a rise in CPM. Predicting beyond 2009 just seems like guessing to me with how rapidly the advertising and web industries change.
January 3rd, 2008
Due to a number of factors my blog post frequency (and quality) has drastically deteriorated over the past few months, but that’s okay. I hope to improve it as things settle down, but I haven’t had the time to dig in and do any high quality posts. In an effort to just let everyone know what’s going on at the moment I’m going to try and increase the frequency by at least doing brief updates on what’s going on around me and the business topics I blog about.
Let’s get it started:
1. I’m in San Francisco at the Web 2.0 Summit. If you’re here and would like to meet, let me know by commenting here or emailing me.
2. I’m violating company policy by making this post from a Flickr reserved cube when I don’t work for Flickr! (See above photo)
3. I think this is the 7th Yahoo!ww office I’ve been to, and yes, the majority of them are purple and yellow.
4. It’s amazing that this is the 4th year of the Web 2.0 conference. 4 years of Web 2.0? You’d think we’d be to the next version by now.
5. I’m taking on a new role with Right Media/Yahoo!, as the head of exchange product strategy. It will be fun, challenging, and probably be more work as the scope grows from focusing on tail web publishers to the entire advertising ecosystem.
6. I’ll be back in the Bay Area early next week for the Right Media Open at the Half Moon Bay Ritz. It’s turning out to look like it will be an amazing event. Not only is Jerry Yang keynoting in a fireside chat format, but we also will be having a lively competitor panel featuring DoubleClick’s CEO David Rosenblatt, DRIVEpm’s president Scott Howe, and Yahoo!/Right Media’s founder and CEO, Michael Walrath. This panel will be moderated by John Battelle.
7. I’m tired of social networking getting so much hype, yet I do still find myself mildly participating in it. I understand the hype, but frankly think that we’re quite a ways off from extracting enough revenue to justify the valuation of Facebook and other sites right now.
8. I love Oregon Duck Football, so I’m enjoying the current season with the Ducks ranked in the top 10.
9. Mark Zuckerberg of Facebook is now having his informal chat with John Battelle at Web 2.0, and he’s answering questions extremely honesty. Pretty refreshing, and maybe that’s youth, but it’s fun to watch. He also seems to have quite a bit of that geek genius that some of the best companies have. Although, I must say I still don’t know that the revenue will be there.
10. My kids are growing up fast, and it seems like it’s just getting faster. I’m really enjoying it, but can already tell I’m missing things about when they were younger as well. There’s nothing better than being a parent though.
11. It’s amazing that I almost entirely read my news and educational content in my feed reader. I’m not sure if RSS is going mainstream as fast as people thought it would, but man do I love it.
12. It might be time for me to get a better car. My 94 Accord is wearing down a bit, and now that I’m driving my kids around in my car a bit more, I feel like it might be time for something newer and safer. Any suggestions?
13. 20% of the audience for Zuckerberg’s speech are currently building applications for Facebook. Impressive.
14. It’s fun getting perspectives from people you meet at conferences. People’s world views just aren’t the same.
15. Is the advertising world getting easier for web publishers yet? I think progress is bieng made, but is it enough?
Alright, that’s enough for now. More blogging soon…
October 17th, 2007
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