Category Archives: Ad Technology

Mar 03 2012
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Ad Ecosystem, Ad Technology, Economics

The Three Biggest Ad Headaches

 

(Originally published in ClickZ, October 2002) by Eric Picard

What does this industry need to fix? I’ll delve into three specific problems here… for starters.

Media Costs Too Low

This might not seem like a problem. For many marketers, it’s a godsend. But it’s a huge snafu. Media costs are depressed, making publishers’ margins too low. The cost of building and maintaining their sites and of serving ads are too close to the amount of money they bring in.

Media sales commissions are hardly lucrative. Really great salespeople won’t stick around in an industry where they can’t make money, because great salespeople are driven by a desire for wealth.

From an operations standpoint, the only way to effectively implement and manage an online advertising campaign across a large number of publishers (from the marketer/agency perspective) is to use a third-party ad server (3PAS) to manage, traffic, and report on campaign activity (see my column on 3PAS). Two years ago, using a 3PAS was a no-brainer for anyone who understood the value proposition.

At that time, media costs averaged around $15-20 CPM. The 3PAS costs were around $1-3 CPM. This was 5 to 10 percent of the media buy. Today, media costs hover around $2 CPM, and 3PAS costs around $0.75 — 20-40 percent of the cost of the buy.

For marketers and agencies that understand the value proposition of a 3PAS, value still significantly outweighs cost. Without a 3PAS, it’s difficult or impossible to calculate return on investment (ROI) and a campaign’s true value. Unfortunately, some advertisers won’t OK the additional cost to agencies managing their online campaigns. The advertiser loses the ability to properly evaluate campaigns, as site-side servers don’t offer post-event tracking (post-impression and post-click analysis). The additional labor involved in trafficking and reporting without a 3PAS cancels out the savings.

Ad-Server Discrepancies Still Too High

A few years ago if you asked what the biggest industry problem was, there’s a good chance the response contained the word “discrepancy.” Nothing’s changed.

Example: Advertiser buys 1 million impressions from publisher. The advertiser traffics the ads using a 3PAS to the publisher. The campaign runs. When it’s over, the publisher’s report shows it served 1 million impressions. The 3PAS shows a lower number. In some cases, a significantly lower number.

The industry average discrepancy rate is 20 to 30 percent, depending on who you ask. A few people tell me they regularly experience 40 percent discrepancies. That’s a big difference. The problem gets nastier. Since the advertiser has an available lower number, it often tries to get the publisher to accept the 3PAS number and lower the bill accordingly. This causes the publisher to request a discrepancy investigation, which costs both the site-side server and the 3PAS time and money.

Why discrepancies? By definition, there should be discrepancies. Really. The publisher serves the ad tag that calls for the ad. At that moment, the publisher counts the impression. The call goes to the 3PAS, which serves the ad and counts the impression at that moment. While the call is being sent the user could close her browser or click away, interrupting the process before the 3PAS counts the impression. By nature, there should be some discrepancy. Worse, some scenarios have 3PAS with ahigher number of impressions than the publisher, counterintuitive as that seems.

One cause is from publishers who filter IP addresses of employees. This is prevalent at large networks that systematically filter out employees at their own IP or domain. As these networks have a large internal population visiting their properties, this alone can cause a significant discrepancy.

Possibly the most common cause of this type of discrepancy between site-side server and 3PAS is caching (a Web page is stored locally for quick future retrieval). If the publisher counts page views rather than ad calls (as IAB counting methodology guidelines require), the publisher may not be aware of a page request if the content is cached. As 3PAS generally “busts cache” effectively, the advertiser may have higher numbers than the publisher. Its number would be more accurate. Since the advertiser got a deal from the publisher in this case, it generally doesn’t complain about this discrepancy. Effectively, the publisher gives the advertiser free impressions.

What’s an acceptable discrepancy? Only you can answer that. Most experts say 10 to 15 percent is OK. If you’re getting a lower discrepancy, you should be happy. When evaluating ad servers, ask the following questions:

  • What’s the average discrepancy between site-side servers and your product? If it’s over 15 percent, ask why.
  • What’s your discrepancy resolution policy? This sets expectations for resolution timelines and what form resolution may take.
  • What’s server response time (the time it takes the server to choose an ad and count the impression while sending the response back to the user)? The lower the response time (sometimes called matching speed), the lower the discrepancy. These should be measured in milliseconds. Due to the nature of Internet traffic, charting can show even a few milliseconds can cause significant changes in discrepancy rates.
  • How do you bust cache? The technology should use at least two methods.
  • Do you follow IAB counting methodology guidelines? This answer should be yes, and make use of the IAB robots and spiders list.

Technical Implications of IE 6 and Third-Party Cookies

Internet Explorer (IE) 6 has a default method for handling third-party cookies. IE 6 only allows cookies to be set by the domain visited, unless a third party has a P3P-compliant compact privacy statement.

This is relatively simple to set up. The third party confirms it’s not collecting personally identifiable user information. On paper, this sounds good. If you’re on Yahoo, for example, only Yahoo can set cookies on your PC unless the cookie is “safe,” meaning it won’t steal any personal information.

But Microsoft did this alone, and it doesn’t reflect the way the Internet works. It’s easy for ad servers. Most 3PAS and site-side servers (to my knowledge) are in compliance. Many publishers are owned by networks of sites that make use of consolidated cookies across all properties. In that case, if any of the servers that set cookies have different domain names, do collect personally identifiable information, or neglected to set up compact privacy statements properly, IE 6 blocks its cookies. This can cause problems: from the inconvenience of not having forms prepopulated or settings remembered to frequency caps not functioning on pop-ups (which really annoys users).

As you surf with IE 6, a red eye in the bottom of your browser’s window provides a privacy report when clicked. It’s illuminating to surf high-profile sites and learn they’re not P3P compliant.

There are plenty of other problems. These three are significant and often misunderstood. Let’s solve them and move forward!

Mar 03 2012
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Ad Ecosystem, Ad Technology, Economics, Media Agencies, Predictions, Publishers

Has Interactive Failed? Not the Way You Think

(Originally published in ClickZ, September 2002) by Eric Picard

Interactive industry pundits are complaining a lot lately about the negative treatment we’re getting from The Wall Street Journal and other traditional media.

Can we blame the media? An appalling lack of understanding about industry issues exists even among the online advertising “experts.” If our experts can’t get a handle on the issues, how can anyone outside be expected to do so? We stink at explaining ourselves to the outside world. We stink at communicating internally.

We argue about a host of issues, all from Balkanized perspectives with little respect for other ways of doing things. Add to this cacophony agendas and approaches within various marketing departments, and confusion starts piling up.

Walk in the Other Person’s Shoes

We need empathy — the ability to see things from another’s perspective. How do you respond to the following statements?

  • Online media should be bought using traditional offline metrics, such as reach and frequency.
  • CPM media buys are absurd. Everyone should buy CPC or cost per acquisition (CPA).

The statements are one dimensional. Each points to valid issues but not to answers.

I see five major constituencies in our industry, although there are probably others. How the two statement above are heard and perceived depends on which group the listener is in:

  • Traditional brand advertisers have advertised offline for years, buying media by gross rating points (GRP), reach and frequency, and other traditional brand media metrics. They understand clearly the science behind branding and prove their value to advertisers by showing them how many people they hit within the target market (sometimes through brand recognition studies).
  • Traditional direct marketers scientifically approach consumers via direct mail and other direct methods. They focus only on successful acquisition and care little about brand effect. They have the research proving what results will be before they lift a finger. This group uses very specific methods and language to describe their work.
  • “Traditional” online advertisers/marketers think of themselves as a hybrid of the first two. They love talking about the branding “side effect” (offensive to brand advertisers) and embrace direct measurement. Their dialect doesn’t quite make sense to brand or direct people outside the online space. Most are decidedly weak in their knowledge of traditional offline marketing concepts. They typically misunderstand the direct marketer’s proven science and have virtually no understanding of branding and associated relevant measures, such as reach and frequency.
  • Online brand advertisers have decided the only way to save online advertising is to build measurement tools that will match those used by their offline counterparts. They have stared to eschew direct-response type information in favor of building consensus for the traditional brand path as applied to online.
  • Online direct advertisers only buy CPA or CPC when they have any say in the matter. They buy CPM when they must, but they make darn sure their actual CPA is very low. Some understand traditional direct offline science pretty well, others think they invented the concept of measuring return on investment (ROI). Those who know the science of offline direct are successful by using the same indices to build models online.

What does this all mean? Just because you’re an online direct advertiser, doesn’t mean you should issue orders that the entire industry move to a response metric to value online advertising. And just because you’re an online brand advertiser, doesn’t mean you should suggest we ignore responses and only focus on methodologies such as GRP. There may be two paths to take — as there are offline.

Rather than snipe at each other because each group has its own agenda, we must unify the messaging from our industry. A divergent but strong positioning of each segment (without diminishing the others) would be an improvement. For example:

  • Online advertising is proving to drive direct response better than any other medium.
  • Online advertising offers the best ROI on branding efforts of any medium.

Issues to be aware of: Online direct has been boosted by lower online media costs. If the online brand crowd is successful, online media will be revitalized — and costs will rise. This will hurt online direct, because they rely on cheap CPC/CPA buys. Unlike offline, online direct and brand share a much higher percentage of the same media space.

Diversionary Tactics

As troubling as the lack of perspective between groups is the lack of clarity in technology companies’ marketing messages. Many use industry issues (real or imagined) as weapons in their own marketing arsenals in ways that further confuse an already confused marketplace.

My comments are not aimed at the companies used as examples (which is why I’m using fake names — although some of you know who’s who), rather at their messaging. I’m not saying marketers at these companies should ignore the value they offer customers. Rather, they shouldn’t inflate minor issues or make untenable claims spun as solutions to major industry problem.

TrueMethods’s marketing inflates minor issues. Its Site Side Ad Serving Solution is promoted as the only privacy-friendly server in the industry, making the case all its competitors share ad-serving data across customers. Virtually nobody in this industry does this. Even those who do cleanse and segregate data to protect customer information. They’d be out of business if they didn’t. This is a minor issue for a few publishers and marketers. It’s not a broad industry problem.

OneStream is a rich media technology company. Its message claims it is building standards for rich media advertising. OneStream doesn’t promote industry standards, just its own solutions. As a business, it should sell its products. What does it have to do with standards? Nothing.

A standard, by definition, applies to numerous offerings from different companies. Anyone can build to agreed-upon standards. OneStream suggests that the solution to a lack of industry standards is for the entire industry to unilaterally use its products. How inconvenient for competitors. If its mission is truly to help set industry standards, it should open its formats and offer standards that competing technology can be built to.

ZeroMedia offers an ad-serving and proprietary client-side creative format for ads. It claims to have solved all problems inherent to “first generation” locally installed ad-serving solutions (such as RealMedia and NetGravity) and “second generation” hosted ad-serving solutions (such as DoubleClick) that use their own server farms. ZeroMedia claims to have solved these problems by using CDNs to serve ads and a proprietary “patent-pending client-side intelligence.”

Many ad-serving solutions use CDNs (including Bluestreak, RealMedia, and others). Their “patent-pending client-side intelligence” requires individual users to choose ad preferences so ads can be targeted to them based on their defined criteria. Since the ad-serving solution seems to rely on this, it drags more issues into question.

Unless this industry starts communicating well, we’re not going to get past the misunderstandings in traditional media. If The Wall Street Journal doesn’t stop bashing online advertising, we’re in trouble. But we can’t complain about misrepresentation in the media if we can’t get our own story straight.

The stories above are on my mind, but I’m sure there are others. What are your suggestions for issues needing some housecleaning? We’ll try to air them here.

Mar 03 2012
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Ad Ecosystem, Ad Technology, Predictions

The Future Is Coming! The Future is Coming!

(Originally published in ClickZ, August 2002) by Eric Picard

Two years ago, I made some predictions (some privately, some publicly) about what the world would be like in five years. These can be placed into four categories:

  • Unlimited long distance will be free in the next five years.
  • Cable operators are going to integrate personal video recorders (PVRs) into digital cable boxes, and pausing television (and skipping commercials) will be the norm.
  • Rich media advertising will become the norm for the online space, if only because iTV audiences are not going to respond to animated GIFs. But even without iTV, it will happen in the next five years.
  • Some technology advance is going to radically change the way the Web works and affects our daily lives, and it will be completely unexpected. This could happen any time, but certainly within five years.

It’s amazing how much has shifted in the world since I made these predictions, and I certainly could use the sweeping changes in the economy and in the world to take them back. But, if anything, the circumstances have only solidified the likelihood of these predictions coming true — if only because companies are making innovations spurred by that highest of motivators: fear.

Unlimited Long Distance

My reasoning behind this prediction comes from basic math. The growth of data transfer has outpaced voice by a very high margin. At a certain point, it makes sense to “throw in” long distance voice to attract customers for data services. But things have shifted since I formulated that opinion, and reality is outpacing my prediction.

MCI has jumped the gun by instituting its new service, “The Neighborhood.” It’s the strongest bundle of services I’ve seen yet in the nonwireless space. It includes unlimited calls (long distance and local) within the U.S. and all the bells and whistles (call waiting, caller ID, speed dial, three-way calling, and voice mail). The price is only $49-59 monthly (depending on where you live). Think about that for a minute. Because this includes local phone service, you deal directly with MCI instead of your Baby Bell-remnant local provider.

The only question most consumers will have is whether MCI will be around long enough to support this offer. But the genie is out of the bottle. It’s only a matter of time before this becomes a standard offering across all providers.

PVR Support With Your Cable Box

 

In my mind the biggest problem with PVRs — whether you’re talking about TiVo, SONICblue, UltimateTV, or another company — is they’re add-ons. Individual consumers must make the decision to go out and buy a PVR, set it up, and get it running. Though every existing PVR owner is out there evangelizing the hell out of this technology, the reality is they’re still early-adopter buyers. PVRs are great solutions, but my parents are not going to understand the value proposition.

However, if a PVR is a standard offering within your digital cable, then the ballgame changes. Seamless integration with your cable remote really will change things. Come on
— if you can simply pause live TV without adding anything to the system, that’s a big deal.

Earlier this month, The Carmel Group issued a new report that cited these amazing estimates:

  • PVRs will penetrate an estimated 1.5 percent of U.S. TV households by 2002, increasing to 25 percent in 2008.
  • Six PVR players will account for about 73 percent of the total market by 2008. The manufacturers are Digeo (Moxi), Metabyte Networks, Microsoft (UltimateTV), OpenTV, SONICblue, and TiVo.
  • Two pure-play PVR providers will emerge as leaders in the digital video recorder (DVR) race: TiVo for its branded PVR solution and Metabyte Networks for its unbranded PVR solution.
  • Cable operators will be more inclined to work with unbranded PVR solutions, such as Metabyte Networks and OpenTV, because they provide greater flexibility and control.
  • By year-end 2005, U.S. cable operators will have an estimated 4.8 million PVR-based users, up from 300,000 users in 2002.
  • By year-end 2005, U.S. direct broadcast satellite (DBS) operators will have an estimated 4.9 million PVR-based users, up from 1.0 million users in 2002.

In addition to these amazing estimates, Metabyte and Digeo (the two leaders in PVRs marketed toward cable operators) have announced major integrations with some of the leading cable infrastructure technology providers. Digeo is offering its Moxi solutions through Motorola and Scientific-Atlanta. Metabyte has also integrated with Scientific Atlanta. This is a major step, especially given the Moxi integration with Motorola supports existing infrastructure out of the box.

I’ve talked about the Moxi solution before, and I can’t stress enough how cool this solution is — and the cool factor goes a long way with home electronics.

Rich Media Will Become the Norm

I won’t spend too much space on this one — I think most of the leaders in the online advertising space would agree this is a basic truth. But it is likely happening faster than most realize, and I believe the time of rich media is finally at hand. Next month, I’m going to write a comprehensive review of the rich media space and detail what everyone should be watching for.

In my role at Bluestreak, I have access to the aggregate stats from our ad-serving efforts. We’re a great benchmark of what’s going on in the industry (although our rich media background does give us a bit of an edge in this category).

When comparing January stats with June stats, you can clearly see a big shift in the proportion of rich media being served.

Bluestreak Ion Server Stats
by Media Type
Ad Type Ads Served (%)
January 2002
Images 96 percent
Rich media 4 percent
June 2002
Images 80 percent
Rich media 20 percent

This came amidst a 32 percent increase in the number of total impressions served between those two months. About 80 percent of the rich media served in June was Flash, and the rest was spread pretty evenly between third-party rich media technologies (including our own) and HTML ads.

The Changing Face of the Web

Although I’m uncertain exactly what shape this radical technology advance will take, I’m pretty sure something’s coming along that will change the face of the Web. There are a lot of indicators of this, from the amazing work being done in digital identity to the innovations of Flash MX. It’s likely this change will seem subtle when it first emerges, but its implications will be broad.

To give you an idea of the kind of clear change I can see from a tool such as Flash MX, just look at this innovative Web site: Chipotle.com. This is a definite indicator of what I believe Web sites are going to be like in the next few years. They will be much more interactive, dynamic, and interesting. And this site only uses Flash the way its been used for years (albeit much better than it typically is used). See my coverage of Flash from a recent column, if you want a fuller picture of the specific implications of Flash MX.

Digital identity is a broad topic and difficult to sum up in a few sentences. It promises to revolutionize the way Web sites are built, used, and controlled. But it will be a quiet revolution, not a loud one. See more about the digital ID revolution at Digital ID World.

Mar 03 2012
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Ad Technology, Media Agencies, Publishers, Startups

How to Play Nice With Technology Gatekeepers

(Originally published in ClickZ, July 2002) by Eric Picard

Back when Bluestreak was a rich media company, I could have written a doctoral thesis on working with tech gatekeepers. This was back in the heady days when publishers had a certain sense of superiority fueled by the artificial inflation of their valuations. We went to extreme lengths to develop rich media technology that didn’t impact user experience — to the point we nearly killed ourselves getting our initial software download down to 5.7k.

For the Web publisher, a technology gatekeeper manages the adoption of third-party ad technologies used by advertisers on the publisher’s site. These include ad servers, rich media, and analysis technology. The goal is to make sure third-party technologies won’t crash the Web site, make user experience suffer, or cause significant data discrepancies between the publisher and the third party.

It wasn’t only technology providers like Bluestreak that faced the gatekeeper issue. Media buyers and creative teams faced it as well. Nearly all the players in the industry were under the close scrutiny and influence of the technology gatekeepers.

They were the sheriffs of the Wild Web portals back in the gold rush. They carried the fastest six-shooters and had a posse of deputies to research, track, and nail the most miniscule bug in a technology. A license to run rich media on Yahoo or AOL was like having Wyatt Earp let you carry your guns into town because he deemed you a “good guy.”

Eventually, a time came when the sheriff was running the town. It was difficult to do any kind of business without making him happy first. When the gold rush dried up, the sheriff lost his posse. The town fathers turned the jail into a welcome center. Suddenly, everyone was allowed to carry his guns in town, even those who fired them into the air after 7 p.m.

Things have started to equalize. Once again, technology gatekeepers have budgets and teams. They are regaining the ability to say no to technologies they don’t approve of. That means it’s time to start learning about this breed of hombres so you can work with them easily (and without flinching when you’re asked to present your guns for inspection).

The technology gatekeeper as sheriff metaphor wasn’t chosen at random. There are a lot of parallels between the jobs and the psychological makeup of these roles.

Keeper of the Peace and Protector of Babies

The technology gatekeeper does her job with a clear conscience. She’s making the experience of visiting her Web site a safe one. She keeps unsavory technology that misbehaves from causing problems in the community. This could be a rogue Java applet, or a Flash file that causes older machines to freeze because they overwhelm the CPU.

Remember: Gatekeepers feel they act in the best interest of the people they represent. Approaching them in any way that puts them in conflict with that role is a bad idea.

Don’t try to sway them by offering a bribe, even an innocent offer of industry schwag or tickets to a trade show. This is a surefire way to get their hackles up. Any tech gatekeeper worth his salt would be insulted or worse by that kind of behavior.

Never try to strong-arm or go around them (to the mayor
— or VP of sales) to get your way. If the VP includes the gatekeeper in the meeting you’ve set up (which she’s likely to do), things will just get uncomfortable. A better approach is to start off on the right foot by having a meeting with all parties ahead of time. Then, move on to the gatekeeper as part of the process. This gets all the issues on the table, sets the everyone’s expectations (including the gatekeeper’s), and makes everyone happy.

The only way to win trust from technology gatekeepers is to be trustworthy. Demonstrate you will not screw them. Keep them from getting in trouble for letting you walk their streets. Build the relationship over time and make sure you don’t let them down.

In ad technology, it’s likely you’ll eventually have a problem. These are the moments when you can actually improve your relationship with the gatekeeper. By being open and honest and doing everything in your power to fix the problem and keep him in the loop, you’ll win his trust and respect.

They Don’t Make ‘Em Like They Used To

The biggest problem we’ll face now that power is returning to gatekeepers is the majority of them are inexperienced. Disney, Yahoo, AOL, and some other major players have kept those important and skilled people in their roles, but they’re the exceptions. Most gatekeepers moved back to the traditional world where jobs with real salaries still exist.

Many of today’s new gatekeepers aren’t experienced in being empowered to turn away revenue under almost any circumstances. They gained their experience in a world where they were left to clean up the mess made by a third party rather than keeping the mess from happening in the first place.

Now that gatekeepers have some say again as the pendulum approaches center, they need advice on how to use of this power. Here’s mine:

Let’s not return to the “good old days” of letting technical issues drive the publisher’s business decisions. I’m a technologist. I completely understand why testing is needed and what can happen when things explode. But many lucrative deals were lost by this industry because of technology gatekeepers’ excessive conservatism.

There was fear user backlash from intrusive technology or techniques would drive people away from the publisher’s free content. This wasn’t the case. Let’s learn from that. Be flexible. At the very least, run live tests with companies without taking weeks and weeks to do so.

In the end, we should all strive for the same thing: success. Ours in particular, the industry’s in general. Everyone needs to work together. The overriding goal of the gatekeeper should be to facilitate the process, not throw a monkey wrench into the works.

Mar 03 2012
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Ad Technology, Rich Media

Flash Flood Rising

(Originally published in ClickZ, June 2002) by Eric Picard

In recent weeks, I’ve had a lot of reason to watch the rising Flash floodwaters with great anticipation. Macromedia is on the cusp of realizing the true potential of Flash, a development with encouraging implications for the rich media ad business.

About a month ago, Macromedia announced the release of Flash MX. The advertising world generally ignores new releases of Flash because of the player issues — we can’t use the fun features of the new Flash release until the corresponding Flash player hits at least 80 percent market acceptance across all Web users. But this time the capabilities of Flash have undergone a quiet revolution. You need to be aware of the hidden capabilities, because they could change the way you approach building rich media ads. And for those of you who build Web sites or are involved in wireless, iTV, and other interactive initiatives, there is similar change coming.

First, let me share why I’m so intimately familiar with the technology. Much of the strength I see in this Flash release has to do with dynamically generated content. Macromedia has discussed, but not yet announced, an upcoming release of a Flash Real-Time Server system, which will enable the simple creation of dynamic applications in Flash. Bluestreak, a company I co-founded, pioneered this in the advertising space in our Java-based ads way back in 1998. We built ads that were tied to customers’ databases, collected and distributed information, and showed real-time content.

I started investigating the integration of Flash more than a year ago. Flash clearly became the winner of the rich media wars when Microsoft removed the JVM from Internet Explorer. Bluestreak needed to dive deep into the Flash technology and see what competitive advantages we could uncover from an ad-serving standpoint.

As part of our investigations, I compared Flash with Java on stability, power, and extensibility. I have to admit being a bit surprised at what I found. Flash isn’t just “flashy,” it is also a very powerful technology — actually it’s very similar to the JVM that enables Java to run in the browser. So, we licked our wounds and gave Macromedia a call. We implemented Flash into our ad server as a natively supported creative format — and tied our existing rich media tracking directly to Flash.

Now Macromedia has released Flash MX and its corresponding Flash 6 player. Find out about the basics of Flash MX at the Macromedia Web site. I’ll focus here on the less publicized things that Flash MX can do — and why you should care.

One great resource I came across is a Flash white paper by Macromedia CTO Jeremy Allaire (former CEO of Allaire), which really gives insight into the corporate vision for Flash. Macromedia bought Allaire last year, and the MX suite is one result of this marriage. Flash MX is an integral part of Macromedia’s forward-thinking mission. To understand the power of MX, you need to change your view of the current world.

Today we’re very HTML-centric about how the Web works. Even nontechnical people are affected by the limitations of HTML — they just don’t realize it. Let’s look at some of these limitations — and the changes that Flash makes to alleviate each problem.

Dynamically Generated Content

  • HTML. In HTML, the only kind of content that can be dynamically generated is text (and calls to nondynamic objects, such as images). And if you want to change that content, you need to reload the page.
  • Flash MX. The possibilities are truly endless with Flash. Anything can be dynamically generated, from graphics to charts and graphs. And the new application interfaces for features such as “Flash Remoting” promise amazing breakthroughs in what can be generated dynamically without refreshing pages.
  • Examples of use. Imagine a Web application for MapQuest that shows you one map of a city and allows you to drill down as deeply as you’d like within that map — all without refreshing the page. Imagine building charts for a Web-based analytics application that could show any graphical depiction of your data that you can imagine — and that graphic could be interactive, zoomable, and collapsible.

Data Transfer Size and Bandwidth Costs

  • HTML. When content needs to be updated on an HTML page, the entire page must be refreshed for you to see the change. An immense amount of data must transfer to pass a relatively small piece of data. This means big dollars from a Web-serving standpoint, and in this post-VC-funded world, you’d better believe that your IT department cares about bandwidth costs.
  • Flash MX. Content within Flash can be dynamically updated without refreshing the page. This means independent chunks of data (text, images, video files, new Flash files, etc.) can be passed into the page without refreshing other content.
  • Examples of use. Think about the millions of times an hour (across users) pages on a site like E*Trade need to be refreshed to see the text in stock quotes change. With Flash MX, only the text of the individual stock quotes needs to change — nothing else is uploaded or refreshed — saving the publisher lots of money on bandwidth charges and giving the user a much more palatable experience.

Compatibility of Distributed Content

  • HTML. Every browser version on every OS is slightly different and requires different coding behaviors by the HTML author. Nowhere is this more true than across devices, where the HTML shown on wireless devices and that on Web pages are radically different. This leads to immense development resource issues (just to support browsers, let alone multiple devices) and has a huge impact on quality assurance timelines.
  • Flash MX. The Flash player is virtually identical across browsers and platforms. In a sense, Flash is more universal than HTML — and truly a more “develop once, play anywhere” technology. Since Flash has a vector graphics engine at its core, it can scale content to any dimension (even to a tiny little cell phone screen) without loss of quality or need to redesign. This is more important given the host of distribution agreements Macromedia has signed with virtually every major device sector — from cell phone makers to cable infrastructure companies to game console manufacturers.
  • Examples of use. Imagine developing one Web site/application that would work on any platform, any device, any screen size or shape. The costs of supporting dynamic pages across browsers, platforms, and devices in HTML is very high (see the “download map to PDA” link in MapQuest for an example).

I’ve covered a few of the less publicized features of Flash MX that I don’t think most people have heard about, let alone recognized for the revolutionary features they are. But there is a lot more where those came from, and I hope all the designers and developers out there will start cracking their knuckles and jumping into the fray. This is just the beginning.

Note: In my last column I spoke about an atrocious ad unit that was running on MSNBC for an online casino. I was contacted by an MSNBC representative, who stated the ad referenced by my article had been trafficked in error and was implemented unintentionally. Once the company realized the error, it pulled the ad down. In the company rep’s words: “We care about our customers and listen to their feedback. As such, we apologize to any customer who encountered this ad and continue to be committed to closely reviewing the methods used to market products on MSN.”

Mar 03 2012
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Ad Ecosystem, Ad Technology, Rich Media, Writing

Is Our Industry a Modern-Day Sodom and Gomorrah?

(Originally Published in ClickZ, April 2002) by Eric Picard

Imagine you’re visiting a respectable news Web site — a major news site, not a niche one — and when you leave the page, suddenly all hell breaks loose on your browser. I’m not talking about a simple pop-under ad. I’m talking about a violent uprising — an advertising onslaught of fire-and-brimstone proportions. I mean a situation so evil that “the hand of God” should come down and squash the perpetrators.

Think I’m exaggerating? I honestly don’t think so. The site was MSNBC, and the advertisement was an “out of body experience” for an online casino. To see this ad (unless it was pulled down), please use this link.

Let’s dissect the user experience:

  1. You visit a news story on MSNBC.
  2. You click any link on the page to leave, or you close your browser window.
  3. Another browser window is launched that immediately expands to cover the entire screen — including your Windows task bar. The content of this window is a full-page ad for an online casino.
  4. A second browser window launches as a pop-up set to a specific size — also for the online casino.
  5. Frustrated, you click to close the small pop-up window.
  6. Growing more frustrated, you click to close the “uberwindow” that covers your entire desktop.
  7. Upon closing the large window, a small system-message window (not a browser window) appears asking, “Would you like to play our NO DOWNLOAD casino games right now?” And below the message are “OK” and “Cancel” buttons.
  8. 99 percent of you undoubtedly now hit “Cancel” while muttering under your collective breath.
  9. 1 percent of you are so intrigued (or angry) that you hit “OK” to find out what happens next. This opens yet another browser window (set to full screen, since the last window you closed was a full-screen window) that gives access to Java-based casino games.
  10. You either immediately close this new window, or play some games and close it later. When you do close it, a pop-up window is spawned that offers to do one of three things for you:
    • Add it to your Favorites.
    • Make it your home page.
    • Receive an email with a link to this site (a form field allows you to enter your email address).

    There is no “close” button, but there is a “submit” button.

    This is not a good idea. In fact, this is a very, very bad idea from virtually every angle at which you examine it.

    Publisher. MSNBC deserves every flame and hacker attack that it undoubtedly got from users who were afflicted with this ad. If I had this experience more than a few times in short succession, I would never return to the site.

    I understand (more than most) the need to hit revenue targets — both for the publisher selling media and for the advertiser buying it. Still, publishers need to make responsible decisions about what kind of ad content they will accept. They need to scrutinize both the product being advertised and the ad vehicle being used to promote it. Users will rebel at a certain point — and an ad like this perfectly illustrates the point when you’ll hear from more than just the “noisy few”; you’ll hear from the “loud masses.”

    <NOTE: I did eventually hear from MSNBC and they apologized and said that they took this ad down, and that this slipped through their ad operations process, but was not condoned or approved.>

    Advertiser. Short-term revenue gains don’t justify an “any means necessary” approach to attracting customers. On the other hand, this is a casino, and I’m not that familiar with this industry. The casino may be doing all kinds of research that says “People hate us already. We can do anything we want and not change opinion.” My advice to them: This is the kind of thing that will drive the regulation of online advertising. And that kind of regulation would be welcome and embraced by most users.

    User. I know almost everything there is to know about Web technology — and pretty much everything there is to know about online ad technology. This ad made me nervous that somehow (even though I intellectually knew it wasn’t possible) these guys were going to steal my email address without me knowing it — or install a virus on my computer.

    If even I had a momentary concern about this, think of the hundreds or thousands of people (depending on penetration of this ad) who were really worried about it.

    If anything is going to turn people off online advertising, this is it. As an industry, we need to halt this kind of thing. I would like to call on the Interactive Advertising Bureau (IAB) to look at asking its members to voluntarily ban this type of ad vehicle. This kind of thing must not be allowed to become a common practice. This cannot be the next X10 pop-under of our industry.

Mar 03 2012
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Predictions, Rich Media

Rich Media Trends, 2002

(Originally published in ClickZ, March 2002) by Eric Picard

In August 2001, I predicted a significant shift in the trend of rich media in the online advertising space. My theory was that we were going to see a change in the way things in the industry had “traditionally” been done — which was that ad agencies were driving the rich media technology development. My thought was that publishers were about to step into the lead. I was right, and this trend is continuing.

So, as the development of rich media progresses, let’s talk about various shifts I see going on right now and what these trends mean to all the parties involved — advertisers, agencies, and publishers.

Trend 1: Publishers are productizing rich media ad solutions.

As I stated in the aforementioned article, publishers are responding to a number of market pressures.

First, publishers have significantly “streamlined” their operations by cutting staff. This means that they have fewer people (with less experience) to implement complex campaigns and must simplify the way they integrate rich media campaigns. As a result, only the simplest implementations of rich media will be accepted as part of normal media buys.

This has had a chilling effect on third-party rich media providers, since many solutions require the publisher to jump through a series of hoops to run the creative types. The broad winner here is Flash, which has become the de facto standard for rich media advertising online. (See Trend 3, below.) The losers will be any rich media technologies that are complicated to implement and are targeted toward cross-publisher media buys.

Second, publishers have greater need than ever to differentiate themselves to advertisers by offering exciting and effective ad solutions. This means that they don’t want to focus on being part of a cross-publisher media buy. Publishers want to get media dollars that are uniquely allocated to them. This is driving publishers’ launching of customized “products” that their sales forces can offer to advertisers.

Great examples of this:

 

 

    • Eyeblaster, Ad4ever, and United Virtualities all license their products to publishers, whose sales forces can then use them as a point of differentiation.

 

 

    • Bluestreak has licensed its video products to AOL (a Bluestreak investor), which sells them to advertisers on its Moviefone property.

 

Trend 2: Agencies want to use standard design tools to build rich media ads.

Creative teams within agencies are billed out at an hourly rate. Agencies don’t want to spend extra time (read: money) getting their creative teams up to speed on the specialized tools needed to build an unusual rich media ad.

To add to this problem, designers demand an incredible amount of flexibility when building solutions. They hate working within constraints, and online advertising is all about constraints. If designers are going to build specialty rich media creative, they want to use tools they’re familiar with — Photoshop, Flash, Fireworks, and so on.

If a designer must use a custom specialty tool to build a special rich media type, the tools has to be either wizard-based and extremely simple or robust and very powerful. The problem is that the simple tools often don’t give designers enough flexibility and the powerful tools take too long to learn.

This has led to some major shifts in the industry. A few years ago, everything in rich media ad technology was Java-based. Today, everything is Flash-based. The long-standing rich media firms have all released Flash solutions, from Enliven to Bluestreak to Unicast. And most of the new rich media technology that has hit the street in the past year is some combination of Flash and DHTML.

Trend 3: Advertisers are not pushing agencies and publishers on which rich media technologies to use.

There was a time when advertisers tended to be extremely involved in pushing agencies to use specific third-party rich media solutions, and they leaned on the publishers to get that technology approved. Those days are nearly over. The market has matured to the point where the technologies available can meet advertiser demand without requiring a lot of extra work.

Solutions from all the veterans are very robust and meet most customer needs — Enliven and Unicast have been providing Flash-based solutions for years. Bluestreak just launched a new Flash solution this week that captures tracking information from Flash creatives and reports on it. Between Eyeblaster, United Virtualities, and Ad4ever, there are plenty of off-the-shelf solutions available for layers-based advertising. Point·Roll’s technology has been implemented often enough that it has achieved good penetration in the rollover space.

Advertisers don’t care so much what’s under the hood — they care about results, and the agencies and publishers have solutions that can easily be employed without twisting any arms or performing “unnatural acts.” This makes the position of new players in the medium rather tenuous, since they have a lot of ground to cover in a tough climate. It isn’t impossible, just difficult, because there are many mature solutions on the market.

This leads back to Trend 2. The newer technology vendors are discovering the lay of the land very early and are mainly focusing on offering solutions to publishers.

These trends may or may not be long-lived. It will be interesting to watch what happens over the next six months as the market (if the analysts are correct) continues to stabilize and advertiser growth on the Internet increases more quickly.

Mar 03 2012
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Ad Technology, Predictions, Writing

We have the technology

(Originally published in ClickZ, February 2002) by Eric Picard

As a kid, I wondered what the world would look like by 2000. We’re well past the benchmark millennium, even past 2001. We “should” have flying cars, regular flights to the moon, and holographic virtual reality. Well, not quite yet. But we do have some interesting new technologies that are not in development — they’re already reality. I have yet to see anyone take real advantage of them for marketing purposes.

DVD

DVD player and media sales have surpassed VHS. Most people I know have either bought a DVD player in the past few months or will buy one soon. I don’t just mean my single male friends — I mean most of the people I know.

Anyone who bought or rented the DVD version of “Shrek” knows that DVDs come with a massive amount of additional material on them. Some extras come in the form of interactive entertainment available only when you place the disk in your PC’s DVD-ROM drive, though some are accessible from the DVD player.

This opens up possibilities for advertising that (to my knowledge) haven’t been explored. For instance, as an advertiser, you could buy an unprecedented amount of space on a video or interactive environment to expand your brand.

I predict that we will see major advertisers buy space on DVDs for a variety of uses this year. Smart advertisers will build unique, custom content for this medium, creating standalone interactive games or exciting short films to showcase their products. BMW broke ground with Web-based short films. Imagine a similar concept with high-resolution, DVD-quality video. Or, a custom game that lets the customer play a movie tie-in game.

Video Games

Some advertisers create Web-based games. LifeSavers built a site to entice kids to play LifeSaver-themed games in a virtual environment. RadioShack built a series of high-end video games available for free through the MSN Gaming Zone. They drive interest in a line of radio-controlled toys.

Games will play out in our industry (pun intended). Product placements in video games are often free to advertisers — as game developers tend to request brands to include, not the other way around. Developers need established brands to increase a game’s realism. There’s no reason an enterprising brand manager seeking the right demographics couldn’t push her own brand to appropriate game developers.

Wireless

Ho-hum? I’ve reacted that way to wireless myself recently. Now, the space is about to change. Why?

My wife is one of three sisters. All three got new digital wireless phones over the past few months. At a recent family dinner, I posed some questions. First I asked, “Are there any circumstances in which you would be OK with getting ads on your wireless phone?” The initial reactions were violently negative: “No way!” Then I posed questions that got very different reactions.

“How about if you only got ads from companies you use — like Wal-Mart or eBay?” Knowing all three sisters are Wal-Mart and eBay freaks, I was confident of the answer I would get, “Oh, well, that’s different! I wouldn’t mind, as long as the ads were for things I’m interested in.”

I pushed. “Would you be willing to receive ads on your phone if you got paid with phone minutes for each one you listened to?” Another positive response. I finished with my secret weapon — the question I laughed at originally, the thing I pointed to as a “just plain stupid” idea for wireless not too long ago.

“Would you be OK if Starbucks sent you a coupon for a discounted cup of coffee when you were within one block of a Starbucks?” The answer? A resounding “Yes!”

PVR

TiVo, ReplayTV, Ultimate TV, and others broke ground. It’s time to grow these products into a maturity. I once believed this could only happen when cable companies integrated personal video recorders (PVRs) with digital cable.

A new player in the space, Moxi, is garnering much attention. Moxi plays directly to the cable companies as an infrastructure developer. The Moxi Media Center is basically a combined PVR, digital cable/satellite receiver, cable modem, and MP3 jukebox. One of the coolest things about this system is that you can hook it (wirelessly!) to as many as four TVs in your home.

The reason I mention PVRs (besides wanting to discuss Moxi) in this column is that they are currently viewed as a detriment to TV advertising. Users can fast-forward past the commercials. Let’s look at this from another angle.

What if you could provide a compelling piece of original creative content users want to watch — and what if you could sponsor that content exclusively through the PVR or cable company itself? You could contract with Moxi to download your content to a user’s PVR hard drive, then you could place a sponsorship icon in the menu of the channel guide. The user could click on your icon to play back the original content.

Perhaps this is an opportunity for traditional brands to push products in an infomercial-like way. The Web taught us that users want access to deeper information about products and services than a 30-second spot can provide. If you could offer the opportunity for a user to learn the benefits of your product/service in an extended format — outside of the 30-second spot — it would be valuable.

People may be more inclined to watch an infomercial-type ad on their PVRs. They don’t need to worry about what they’re “missing” on TV.

As with the Internet, you must build for the medium. Repurpose from other media, and you’ll get diluted results. Stretch your creative and media teams’ abilities by pushing innovative ways to use these new technologies. Find the value.

Mar 03 2012
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Ad Ecosystem, Ad Serving, Ad Technology, Rich Media

Technology Partners, not Vendors

(Originally published in ClickZ, December 2001) by Eric Picard

The online advertising industry requires technology to exist. More than any other ad medium, we’re technology-driven.

Recently, my colleague Tig Tillinghast wrote a mind-expanding article about the inefficiencies of the Web as an advertising medium. In it he states: “Newspaper can print a whole 32-page tabloid with 250 ads in it for $0.20 each, but it costs a Web site 25 percent more to serve the same number of ads.”

This may be true, but let’s analyze why it costs more. We’ve been printing (and advertising in) newspapers for literally hundreds of years. That’s plenty of time to figure out what the economies of scale are and to enable printing 250 ads for $0.20 each. The technology is relatively simple. Any changes over the past 50 years have only made it cheaper to produce a higher quality product.

You can’t compare the delivery of 250 online ads with that of 250 print ads, any more than you can compare print with TV ads. It’s apples to rhubarb.

The real world of online advertising requires certain technologies. Therefore, you need to forge relationships with your technology providers.

There’s a difference between viewing a technology provider as a vendor (weak relationship) or a partner (strong relationship). Dictionary.com defines “vendor” as: “One that sells or vends: a street vendor; a vendor of software products on the Web.” “Partner” is defined as: “One that is united or associated with another or others in an activity or a sphere of common interest.”

This should apply to your approach to tech providers. You can relate to them as a utility, like the electric or gas company. You can view them as a mission-critical service provider, like the phone company. Neither model suffices. You both have the same interests. They succeed if you succeed. Grow your business, you’ll have more need for their services.

Even services such as ad serving, often referred to lately as a commodity, are not mature enough to treat dismissively. There are not enough providers to choose from (and fewer after this year). There’s too much volatility, too much change, and too many issues for you to make that mistake.

Here are some basics about partnering with technology providers:

  • Yes, the economy sucks. No, you can’t beat up your tech partner on pricing to the point that it can’t turn a profit. It’ll go out of business, and that doesn’t help anyone. 
  • Find ways to pay your technology partner more by having it help grow your business. Tie your businesses together to gain the most from your partnership. Don’t slip into a valueless “paper partnership.” Apply resources and watch the relationship flourish. 
  • No company has every feature or widget you need. Product development (or customization) is required before you’ll be happy. A technology company will meet the needs of partners before worrying about customers who treat it like a vendor. 
  • Partners often participate on advisory councils and are involved in product research and development. This leads to measurable benefits, such as accessing new features before anyone else. You’re not likely to get that level of service from a mere vendor. 
  • Choose technology providers with upside potential and whose values match your company’s. Ask hard questions about service expectations, commitments to quality, and what the plan is when problems do arise (they always do).

Work from a common set of realistic expectations. There’s been so much over-promising and underdelivering in our industry that most customers are wary of committing to deeper relationships.

If a tech provider makes claims that set off your “spidey sense,” have it explain exactly how it’s going to live up to the claims. If high expectations are set by sales or marketing, ask to speak with a senior product or engineering rep to ensure the entire company is in alignment.

Make sure the company knows you want to partner with it. Be clear about expectations you have from a partnership as opposed to weaker relationships it might have with other customers. Make the opportunity attractive. Sell the company on your value as a partner. Expect and demand more. Be willing to cooperate. You’ll both come out ahead.

I hope your holidays were wonderful, and you and your family are approaching the new year with great expectations. –Eric

Mar 03 2012
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Ad Ecosystem, Ad Serving, Ad Technology, Media Agencies, Publishers, Startups

Advanced Ad-Serving Features, Part 2: Third-Party Ad Servers

(Originally published in ClickZ, November 2001) by Eric Picard

Last time, we discussed advanced features of site-side servers. Now let’s go deeper. This week, we’ll go into the even-more-advanced advanced features of third-party ad servers.

Third-party servers primarily serve the needs of advertisers and agencies. Sometimes they are called buy-side servers. They are part of the business infrastructure of these groups and must reliably and accurately deliver and report on ad serving and related user actions associated with the ads.

In addition to delivery and basic reporting, third-party servers provide unified comparative reporting for all publishers in a media buy, as well as many advanced features. From a feature standpoint, a third-party server is more complex than its site-side counterpart.

One thing to keep in mind: A third-party server is not able to “refuse” a call for an ad. If an ad tag is supplied from a third-party server to a site-side server and that ad is called, it must be served. Only a site-side server can schedule and deliver ad calls to users.

Beyond Banner Tracking

This is the big feature. Tracking beyond the banner enables the view of an ad session from impression to conversion (and beyond). This is a major reason a third-party server is a must for most advertisers. Some tracking types beyond the banner are:

  • Tracer tags. Tracer tags are single-pixel images placed on pages of the advertiser’s Web site so that activity on those pages can be correlated to the view or click of an ad. 
  • Post-click analysis. The user sees an ad and clicks on it. She arrives at a landing page on the advertiser’s Web site. She travels across three pages that have tracer tags on them. Each intersection of creative/tracer is credited to the advertiser’s reports. 
  • Post-impression (also called post-view) analysis. The user sees an ad but doesn’t click on it. That user (remembering the message) later travels to the advertiser’s Web site on his own. He moves across a number of pages with tracers on them. Each intersection of ad and tracer is correlated and credited to the advertiser’s reports. This analysis is a definitive branding measurement and is sometimes called a brand response report. Not all third-party servers collect post-impression data.

Reporting

  • Cross-publisher reports. A major reason to use a third-party server is that reports are covered across all publishers within a campaign. 
  • Comprehensive data sets. Since both post-view and post-click data must be recounted, reports must be unified and comprehensive.

Analytics

Some third-party servers offer advanced analytics capabilities. This is one of the fastest growing areas in the industry. Far more data is captured in an online ad campaign than in an offline one. Turning that data into actionable information isn’t simple. It takes days or weeks of human intervention and interpretation.

A powerful analytics package solves these problems by providing tools to get at actionable information more quickly. There are two basic types of tools to discuss:

  • Online analytical processing (OLAP) tool. This very powerful analytics tool enables the most control of data and reporting. Great power and flexibility comes at a great price, and few people are technical enough to use an OLAP tool to manipulate their data. In most agencies there are only a few, if any, people who can use these tools. It gets even sparser at the advertiser level. 
  • Wizard. To address problems with OLAP, some companies have started coming up with wizard-based interfaces for the most commonly asked questions. A good wizard-based interface can likely answer such questions as: Which publisher is the best media buy for my campaign goals based on the past six months of running ads across various publishers?

Optimization

Analytics deals with historical analysis to improve ongoing and future campaigns. Optimization deals with live campaigns that must be improved while still running. When done by hand (as is most often the case), only so much can be changed. Humans can optimize to a level of detail only so deep. This is best handled by technology, which provides much deeper analysis of data. Two types of optimization are:

  • Real time. Real-time optimization is the most powerful. Changes are made automatically to creative in rotation across placements based upon actual results read by the optimization tool. Real-time optimization requires real-time data to make changes. Few ad servers use a real-time reporting architecture, relying instead on 24-to-48-hour-delayed data. Real-time benefits include microtrend discovery (intraday changes in behavior within placements) and greater lift based on feedback loops. Additionally — if the system doesn’t make changes automatically, relying instead upon human approval or intervention — the lift is going to be lower. 
  • Recommendation. For situations where real-time data isn’t available, recommendation-based systems are the alternative. These systems read data when available and provide a list of recommendations to enable the customer to make changes. This inherently is a poorer performing model as changes are not happening quickly. Therefore, additional learning for the optimization tool is lost. The faster changes are made, the better the system gets at predicting performance. Still, this is a better method than hand optimization.

Targeting

  • Geographic targeting. Geotargeting is similar to site-side servers but somewhat less effective. You pay for the media regardless of whether you had an appropriate creative for the users an ad was served to. Wherever possible, try to geotarget at the publisher level. 
  • Profile-based targeting. As I detailed last time, ads can be targeted based on Web-surfing habits. Third-party ad servers have the same issues as site-side servers do. 
  • Session-specific targeting. Specifics include domain, browser type, and operating system. Again, this can be accomplished on the site side, usually to greater effect as the publisher only shows the ad (and bills you) when there is an appropriate fit. When served by a third party, you pay for the media even if it doesn’t fit your demographic.(Remember, there are plenty of other types of targeting I’m not covering here).

Trafficking Controls

Without a third-party server, trafficking ads to multiple publishers is a problem. It can be complex, with many points of failure. A good third-party server simplifies the process of trafficking campaigns and should provide valuable accounting methods for successful delivery and approval of your ads by the publisher.

Dynamic Ad Serving

Most publishers have a limit on the number of ads they will accept at one time. Usually this ranges from 5 to 10 creatives per week. Third-party servers use dynamic ad serving to rotate multiple creatives through one ad tag. This allows the advertiser/agency to traffic as many creatives associated with those tags as they want. This simplifies life for the advertiser and the publisher by cutting down significantly on the work done by both.

Conclusion

There are other ad server features not covered here. But this is a column, not a book! You should now be educated enough to talk to a salesperson without too much trepidation.

Next, I’ll write about a topic near and dear to my heart: how to work with tech companies for long-term success. It’s time to set a few things straight about this marketplace. Customers need to understand that while they are in a position to beat up their tech partners (notice I don’t call them vendors) on issues such as price, they should think twice. If there are any tech firms out there that would like to voice their thoughts on the topic, drop me a line.

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