Tag Archives: Twitter

The Changing Face of Performance Display – the rise of Ad Exchanges

The digital media landscape is changing rapidly. “Why” I hear you ask? Well the short and simple answer is the economics of supply and demand, meets technical and mathematical innovation. Combined this with clients increasingly demanding more accountability out of their media spend, with increased knowledge about campaign performance metrics of post click and post view conversion attribution and we have a major force driving change.

The Industry’s answer to this is the advent of digital media exchanges which is in itself a major game changer, but more on that later.

Lets start of the supply side of the digital market. Anyone in the know, understands that the amount of amount of digital impressions available, is now almost infinite. This is due to a number of factors, but principally the explosion of social media where supply is endless and behavior is sticky. Think Facebook, Twitter, Blogs, Tweet image sites like YFrog .com, Flicker, YouTube etc etc the list is endless. Secondly the major publishers struggle to have 100% impression sell through rates via their traditional sales channels and you have a considerable amount of unsold remnant impression inventory. So in simple terms over supply.

With infinite inventory and limited demand, the value of an impression is fast approaching zero. Not a fact most major publishers generally want the industry to know.

Up until now most of this low value high volume inventory has been sold at next to nothing rates to the traditional Performance Networks, that package up “Performance Solutions” where they factor the amount of impressions required to hit a client performance guarantee like a CPC pr CPA. Most of the CPA deals though are heavily weighted towards post view conversion metrics somewhere between 95% to 99%, which in itself is questionable from a true DR perspective. These buys are also “Blind” where a client has little or no choice on the sites their ads appear on and there is no transparency across higher performing parts of a network, so effectively not allowing a client the opportunity to optimize and refine their performance media buy and minimize wastage and cookie spraying.

The unfortunate fact of the matter is most of these Performance Networks are firstly focused on maximizing their yield, where they mark up the remnant inventory they buy by a significant multiple. This allows publishers to monetize their unsold inventory at albeit a very low rate, they can hide behind a performance network and not devalue their otherwise premium inventory. Further this allows a traditional media agency the opportunity to blend performance metrics with low cost inventory, claim questionable conversions and support in some cases their otherwise ineffective digital media buys that support commissions and other high yield volume rebates.

All in all, not a very pretty picture for the advertiser.

Now the demand sides of the equation. Enter DME’s or Digital Media Exchanges. Globally we are seeing the rise and rise of the DME that allows a site owner or publisher to make freely available an amount of inventory to an ad exchange (think stock market here), where advertisers can compete and bid real time for the ability to serve an impression to a user. This can be behaviorally targeted as well (Site retargeting, Search Retargeting etc). This market mechanism allows an advertiser to rationally price the cost of digital media based on what conversion value it creates for them (CPA, ROI, ROAS, CPC etc). With the right technology, business rules of post click and impression attribution and performance conversion metrics reporting an advertiser can now maximize what parts of a network or what ad format works best for them on their terms due to complete network and performance transparency.

2010 looks like it will bring major change to the digital media landscape. In the USA, Google is starting to push their DoubleClick network heavily with real-time bidding and an API due for release we believe before June. Yahoo! is starting to push RMX (Right Media Exchange) a little harder too. Early indications are the exchange based media buys are resulting in a 50% cost reduction in the eCPM advertisers have been achieving, compared with the traditional blind Performance Network buy, with increased conversion based value metrics as well. The exchange mechanism is also starting to extend beyond the traditional IAB approved ad formats with reports of video ad exchanges also launching in the USA.

Now, I’m not pretending this is the total solution in the digital media landscape. There is still a roll for premium based CPM buys as part of a digital brand campaign. I see Ad Exchanges as an extra digital DR element to compliment premium buys, drive the economics of digital performance harder and gain incremental impressions and conversions for the advertiser in a transparent, rational, data driven way. It is the power of search maths applied to display markets.

Double Click

Yahoo!'s Right Media Exchange

A view of the Australian Ad Market..

AU accessible digital inventory

Any of you who know me, understand how passionate I am about this with my strongly held belief that this will be the dominant media buying mechanism across all media in the next 3 to 5 years, particularly around the burgeoning IP TV markets.

In essence the power is shifting from media and network owner to advertiser with the benefit of:

  • Complete transparency across network performace
  • Complete transparency across post click and post view conversion
  • Rationally priced media, based on the value it actually creates – not how it supports commission deals, incentives etc
  • Performance based media buys with prime media cost savings in the vicinity of 50%+

Downstream Marketing in Australia is launching the country’s first biddable display capability in conjunction with Efficient Frontier in California, using their seats on the ad exchanges to access the available inventory targeting AU based eyeballs across sites globally including AU based site inventory.

Economics of Digital Leadership & Thinking

I’m fortunate enough to be off to NYC next week to attend AdTech NYC 2009.  I attended AdTech SFO earlier in the year and found it hugely beneficial, mainly in terms of getting a wider perspective on digital trends from the USA from both leading advertisers and major agencies.

logo_adtech_new_york

Javits_Center

Sessions I’m attending include:

Day 1

Day 2

I hope to post interesting updates and views from each day, stay tuned if you are interested or as always drop me an email & I’ll send an update or session pack if I get one.

Digital trends from the USA

AdTech Day One Opener – San Fran 09I’m a little slow off the mark after coming back from the US & have a whole bunch of new posts that are currently works in progress. Great content on social media, online / IP TV, the Future Agency etc etc. In the meantime here is a quick snapshot of online trends from the US across digital media, social networking, ad revenue monetisation etc etc. Hope it helps or provides some insights for your work here in Australia. Digital Trends from the USA.

Economics of a Google & Twitter collision…

So I’ve been thinking about what happens when like things collide.

The most interesting thing I could come up with is a big social media trend & technical collision between Google & Twitter, think Toogle or Gitter…ok maybe not on a brand front. But seriously lets think about the two most potent forms of digital marketing on the planet today, Search & Twitter (Social Media).

Twitter - the new social tool

Twitter - the new social tool

Google - the new Master of the media Universe

Google - the new Master of the media Universe

In order:

Search

Google

  • Fastest growing media on the planet (Australian est 60% year on year compound growth)
  • Search network – larger scale than any ad / publisher network
  • Media with the highest level of accountability & conversion
  • Performance related media – no click, no pay
  • Live media auction based market driven by relative pricing mechanic
  • Investment based on conversion yield
  • Media with the shortest conversion latency
  • Highest integrity media – only deals in post click metrics and avoids the BS of cookie spraying, post impression conversion & analysis
  • A CONSUMER DRIVEN MEDIA THAT MAPS CONSUMER THOUGHTS WHEN THEY ARE IN AN ACTIVE MIND STATE

Twitter

Twitter Mobile

Twitter Mobile

Twitter - the real value is the searchable content

Twitter - the real value is the searchable content

  • Collaborative social media tool
  • Growing exponentially fast
  • Maps social groups & connections
  • Maps social conversations about content & brands
  • Combines desk  & mobile functionality
  • Has indexable content / conversations / links
  • Has location based functionality in mobile devices
  • Easy to execute algorithm based analysis on conversation value & stickiness of content or users
  • A Consumer driven media – WHEN IN AN ACTIVE ENGAGED MIND STATE


QUESTION : What if you combined the power of them both?

  • A performance based, digital media super power
  • Advertising at the speed of thought (or conversation)
  • Behaviorally targeted advertising based on a collective combination of conversations and connections / social media groups
  • Location based advertising & ad serving based on real-time geo-targeting
  • Two sticky, lean forward, consumer engaged media channels

IMPACT

Immense revenue scale for both Google & Twitter.

On Google’s side an inordinate amount of live, actively engaged impression inventory to serve ads to based on conversations (past & present), combined with consumer clustering (birds of a feather flocking together etc) and search & surfing history. For Twitter a ready made ad revenue stream of either text ads, by making Twitter effectively part of the content network ( yes some tweaks to algorithms required) or make it a part of the biddable display market from a content placement perspective.

Twitter would have a ready made, low or no cost sales channel at their instant disposal. Google would have the most valuable and dynamic digital inventory available.

Together they would be unbeatable, together they’d own social & performance media, together they’d have scale and momentum that couldn’t be broken. Together they’d provide a one stop, easy solution for brands to capitalise on both in terms of performance media, social media and mobile media.

Twitter explained….consumer advocacy in real time

Simple….