Disruption Tour --- Run To Survive

Billboards That Look Back
By STEPHANIE CLIFFORD
New technology has made it possible, using tiny cameras, to gather details about people looking at billboard ads, such as their age or gender.
Nytimes.com
http://www.nytimes.com/2008/05/31/business/media/31billboard.html?th&emc=th

Publishing 2.0

Why Traditional Advertising Formats Fail On The Web Posted: 24 May 2008 08:58 PM CDT As media companies struggle to figure out their digital future, the elephant in the room is that they have only been able to monetize online audiences for pennies on the dollar compared to traditional media. Here’s why: Traditional advertising formats FAIL on the web. By traditional advertising formats, I mean display ads, video ads, and any other ad whose format and value proposition approximates or imitates that of an offline advertising format. Google is the ONLY company that has succeeded in web advertising. Why? Because they perfected search advertising, an entirely web-native form of advertising, whose value proposition is perfect for the web and which has no offline analogue. Why do traditional advertising formats fail on the web? Because people have no patience for them, as they did in traditional media, where we were habituated to looking at print ads or watching TV commercials. Research by Jakob Nielsen puts this into sharp relief: Now, when people go online they know what they want and how to do it, he said. This makes them very resistant to highlighted promotions or other editorial choices that try to distract them. “Web users have always been ruthless and now are even more so,” said Dr Nielsen. “People want sites to get to the point, they have very little patience,” he said. This is why pre-roll ads on online video = fail, why overlay ads on online video = fail, and why online display advertising is a commodity business, where online publishers have to shovel page views and battle for every $1 increase in CPM. Some sites can get $50-100 CPMs on some pages from certain advertisers, but $1 — even $0.10 — CPMs are common on the web. Just ask newspapers and magazines about their ad pricing power in print vs. online. Can you imagine a print publisher getting $1 for 1,000 times an ad was seen? You’d go bankrupt after one issue. Here’s a sobering thought: If all advertising in offline media got converted to current online media CPMs, it would probably be worth a fraction of the value, i.e. $300 billion would become $50 billion. If 1 to 1 transfer of advertising value is at one end of the spectrum and 1 to 0 transfer of classified advertising value to Craigslist is at the other extreme, most of online media is closer to Craigslist — online publishers are vaporizing advertising value in the shift of dollars online. Even Google has struggled with this problem, as they still make virtually all of their money from pay-per-click search and contextual ads. But why, why is this so? Because most online advertising creates NO value for consumers. Search advertising, because it is relevant to what users are already searching for, creates enormous value. But the search advertising is largely about helping people buy what they already know they want. What about the objective of advertising to convince people to buy things they don’t yet know they want or need (or what never otherwise want or need)? Consider this: What is the most successful type of advertising online advertising that convinces people to buy something they weren’t in the market to buy? Email spam. Spam is probably the most inefficient form of advertising every created, and it creates more hate and loathing among consumers than the worst 30 second TV ad ever created. But it works. With millions of emails sent at virtually no cost, a 0.001% response rate can still be highly profitable. The reason why most online advertising fails is that web users see it as little better than spam. Display ads are ignored in the same mindset as spam is ignored — I’m trying to get something done online and your display ad is getting in my way. As Nielsen highlights, web use is driven more and more by utility. Despite the popular notion of viral content, e.g. viral videos, even entertainment on the web most often happens in a utilitarian context. Sure people browse videos on YouTube, but searching YouTube is the killer app. Want to find video content? Search for it on YouTube, and chances are someone has uploaded it (legally or not). Why do you think Google acquired it? Social networks have hit hard against the online advertising wall — I’m trying to talk to my friends and you’re showing me ads — get out of my face. I’m trying to talk to my friends and you’re shoving down my throat notifications of what my friends are buying (i.e. Facebook Beacon) — get out of my face! Is it any surprise that most ad spending still happens offline? Most advertisers use the web themselves. They know how annoying traditional ad formats are on the web. So what’s the solution? We need to invent new forms of advertising on the web. But it’s more than that. Facebook introduced Beacon as a new form of advertising — but it didn’t create a lot of value for users. Online advertising must create value for users or it will create little or no value for advertisers. This would seem self-evident, but it has not been the case with traditional advertising, which was developed for CAPTIVE audiences, and web users are increasingly anything but captive.

LinkedIn: We're Selling Ads For $75 CPM

LinkedIn may have been trampled by the likes of Facebook and MySpace in terms of users, but at least it can sell advertising. Kevin Eyres, LinkedIn's managing director for Europe, told IDG the social network for careerists is earning $75 CPMs (cost paid per thousand viewers) for advertising in the US and $50 CPMs in the U.K. Prime reason: the site's average user is 41 and makes $110,000.

An industry wake-up call

imediaconnection.com

By Terri Seligman

 

for more of the article...

With legislators once again raising consumers' fears about their online privacy, the industry needs to prepare for possible fall out.

For several years, websites, ad servers and marketing companies have been tracking the online activity of millions of internet users. These companies compile and analyze this information, and then use it to help advertisers deliver ads to those most likely to be interested in their product or service. Most consumers may not have been aware that their online activities were being monitored and analyzed -- until now.

Consumer and privacy groups are challenging online targeted advertising, usually claiming that websites and advertisers should not be able to track online activity without providing notice to consumers and getting consumers' consent. Privacy advocates are also worried about the possibility that companies will combine anonymous online data with personally identifiable data, which seems increasingly likely as more marketing and database companies merge. 

Advertising Is Content; Content Is Advertising

by Michael Masnick from the took-'em-long-enough dept techdirt.com

There's been a bunch of buzz this week over an Ad Age report suggesting that firms are finally realizing that no one pays attention to online banner ads. For all the hype about online advertising, this one point should have been obvious from quite early on. That doesn't mean that banner ads haven't been lucrative for some publishers who place them on their sites -- but it does call into question how long that sort of advertising will last. Sooner or later the advertisers will recognize that they're not getting much bang for the buck. For publishers (us included, mind you), that could mean that an easy vein for revenue goes away -- but the end result should be better. Companies will start to learn that there are better ways to achieve their goals than banner ads.

There are a few key points in the discussion that shouldn't be surprising to most folks around here, but apparently have just hit the consciousness of ad execs on Madison Avenue:

1. The captive audience is dead. There is no captive audience online. Everyone surfing the web has billions of choices on what they can be viewing, and they don't want to be viewing intrusive and annoying ads. They'll either ignore them, block them or go elsewhere.
2. Advertising is content. You can't think of ads as separate things any more. Without a captive audience, there's no such thing as "advertising" any more. It's just content. And it needs to be good/interesting/relevant content if you want to get anyone to pay attention to it.
3. Content is advertising. Might sound like a repeat of the point above, and in some way it is -- but it's highlighting the flip side. Any content is advertising. It's advertising something. Techdirt content "advertises" our business even if you don't realize it. Every bit of content advertises something, whether on purpose or not.
4. Content needs to be useful/engaging/interesting. This simply ties all of that together. If you want anyone to pay attention to your content (which is advertising something, whether on purpose or not) it needs to be compelling and engaging.

So, for the "brand" marketers out there who are starting to worry that banner ads aren't particularly effective, it's time to start rethinking how you build a brand along these points. Techdirt even has a way to help you put these ideas into practice. Give us a call -- we'll explain how it works in more detail. So, yes, even this is an "advertisement," but hopefully, it's also useful content.

All Your Ads Are Belong to Us: Google's Double Click Buy Approved and Ad Manager Launching

www.profy.com

Google is still looking out for their #1 money-maker. Tuesday, the European Union approved Google's $3.1 billion (USD) purchase of DoubleClick, the online ad tracker. And today, they are expected to announce the launch of Ad Manager, a free service allowing web site owners to manage their own ad sales.

Ad Manager, which has been in a closed testing mode on a limited number of web sites, allows site owners to sell their own ads and use the service to serve them, with Google hoping that any open ad space can be filled with their ads. Google will provide Ad Manager services for free (unlike the DoubleClick model, which charges site owners for the service), and take a commission from any ads that Google sells and places. However, they don't plan on making it a requirement that site owners run the AdSense ads.

Google is, of course, trying to gain the lion's share of web advertising. And while they say that they have no immediate plans to make DoubleClick services free, why would you pay $3.1 billion for a company while building your own version of the service you just paid for, charging for one, and giving the other away? Will the ads they end up serving really net enough revenue to justify giving the service away?

It's an interesting announcement, to be sure, and dovetails neatly with Valleywag's post from disgruntled ex-Googler Hans Cardinal, who feels that the current code and staff involved with Google's ad business are subpar. And Google's stock is 40% off its high, so they need to do something to inspire more shareholder confidence. Giving away ad services in an economy where spending appears on the downward slide might not be the best way to go about doing that.

The EU Approves Google’s DoubleClick Deal. Yahoo Needs To Pick a Partner Fast.

The last barrier to Google’s year-long quest to buy DoubleClick has been removed. The European Union’s antitrust regulator has approved the $3.1 billion deal “without conditions.” Word of the impending approval got out last week.

Now Google can move seriously into the part of the online advertising business it doesn’t control: display ads. The vigorous objections of Google’s competitors Microsoft and Yahoo may have delayed the approval, but ultimately the European Commission didn’t buy the arguments.

Interestingly, the commission seemed to ignore the possibility of Microsoft buying Yahoo, or Yahoo merging with AOL. According to CNNMoney:

The commission said it found the merged entity would not have the ability to engage in strategies aimed at marginalising Google’s competitors, mainly because of the presence of credible ad serving alternatives to which customers can switch, in particular vertically integrated companies such as Microsoft Corp , Yahoo! Inc, and Time Warner’s AOL.

But what happens when those credible alternatives go through their own consolidation in reaction to the Google-DoubelClick combination? Whether Yahoo merges with Microsoft or AOL, there will soon be one less major competitor. It seems odd that the European Commission would not take that into consideration, even if any such deal remains uncertain.

Yahoo had better decide quickly what it wants to do with its future because its comfortable position as the leader in display advertising is about to come under some major pressure from Google.

Users offered ad tracking choice

From the BBC.com

Broadband provider TalkTalk has confirmed that it will allow customers to 'opt in' to Phorm's controversial new advertisement system.

TalkTalk is one of three UK ISPs to sign up to the Webwise service which sees user's surfing habits tracked.

It has decided not to offer the service by default but rather to allow users to choose whether they want it.

It follows 1,000 people signing a Downing Street online petition saying the system breaches customer privacy.

"We will be endorsing and recommending take-up of the system but we want to ensure that customers make their own decision," said a spokesman for TalkTalk.

It believes that there is a two-fold benefit

Presidential Hopefuls Spending Little On Web Ads. Why? Social Networking.

From mashable.com

The 2008 U.S. Presidential election is in full swing now. Of course, it arguably has been geared up to a full-on race for the Democratic and Republican party nominations, yet only recently have we been given the privilege of hindsight into the contentious (not to mention hugely convoluted) primary process, which is still very much underway.

Given the present state of affairs on the campaign trail, we stand at a point at which it might be worthwhile to consider the investments made on the part of the candidates as far as their online presence is concerned. In particular, advertisements.

We all recognize the sheer insanity exemplified by the volume of spending for television spots in various markets around the country. By the time all is said and done, the amount of money involved in advertising - the bulk of which will naturally (or unnaturally, if that’s the way you prefer to see it) go to television - will most certainly be record-breaking in just about every which way one can think. Still, let us focus exclusively here on financing that has and will continue to go into the candidates’ Internet campaign efforts.

Many of us have already seen banners and boxes placed on sites operated by Web media outlets big and small showcasing the iconography and tag lines of the three main contenders. (Sorry, Huckleberry, but come on, let’s get serious here, your chances have already gone well south of the divide separating political miracles from political realities.) They’re on left- and right-leaning blogs alike. They can really be found most any place that is even tangentially related to the presidential race commanding the news feeds this year.

Yet, they’re not everywhere. That is to say, they’re not as prevalent as many may have suspected they would be at a moment such as this. Though the battle for the Oval Office is turning out to be the most engaging in recent history, online ad sales for the campaigns of Barack Obama, Hilary Clinton, and John McCain have been quite low. At least for the Democratic hopefuls, anyway, says Michael Learmonth of Silicon Alley Insider this morning.

Learmonth says, for example, that out of the $18 million spent by the Obama campaign, just $163,188 went to purchases of static and video-enabled ads online in January. That’s…tiny, yes? (more…)

Accelerating Online Ad Spending in 2008

infectuousgreed.com

JPMorgan's new 312-page "Nothing but Net" report on the outlook for Internet-related tech equities in 2008 is good reading, but the initial headline takeaway is a big ramp in the forecast for online ad spending this year. From a prior estimate of 19.9%, analyst Imran Khan and team have ratcheted their forecast for U.S. paid search growth waaaay up to 31.9%.