Eliminating Channel Conflict Between Publishers, Ad Networks

I just finished reading Andy Atherton’s Media Post article regarding eliminating channel conflict between publishers and ad networks. This is a topic that is near and dear to my heart, as we hear daily about the fear of channel conflict from our prospective publisher partners. Andy suggested some interesting ‘fences’ publishers could put up and I’d like to share my thoughts about each one.

Blind networks only
To me, this is a drastic ‘fence.’ I understand the reason Andy mentioned this – many networks in the past, and some currently, have adopted selling practices which allow for site specific representation in the marketplace even though the site may not have agreed to or even been aware of this. If I were a publisher and found out that a network was selling my inventory on an individual and transparent basis, I certainly would cut that network out of my inventory rotation. That being said, there are several networks in the marketplace, including Undertone, who are not completely blind yet avoid channel conflict by selling in a way that does not interfere with direct sales efforts. Providing examples of sites to prospective clients, and sometimes a ‘will not run outside of’ list gives clients a sense of security while helping to ensure that they do not bypass publishers by working with networks. Telling a client they may or may not run an unknown number of impressions across site X does not give them the same type of experience they would get by working with site X directly.

No delivery guarantees
I disagree here. In order to drive CPMs across the industry, networks need to be able to monetize each impression and user as effectively as possible. If impressions are delivered evenly for network buys, clients’ campaigns will perform better, thereby allowing them to pay higher CPMs which will then result in higher publisher payouts.

Auction based delivery
Although I agree with this method when measuring networks with standard product offerings, networks with non-standard differentiated solutions should be evaluated separately. We work with many publishers who place our inventory higher in the queue than other networks who pay higher rates because of the overall package we bring to the table and the value proposition we offer.

Maintain creative standards
The worst thing a publisher can do is degrade the value of a site and thereby the overall user experience. This happens time and time again with some great comScore 500 publishers who partner with networks that center on very direct response focused clients. Some publishers do not realize that the advertising messaging surrounding their content has a direct impact on the user experience, and they should for that reason partner with networks who match high quality advertising with high quality content. Maintaining creative standards is a must for any reputable publisher looking to drive revenue and performance for their clients.

I’m glad Andy wrote this article because channel conflict has been a hot topic for many publishers recently. That being said, I think the bigger issue at hand is the pricing and performance metric model which we as an industry currently utilize. Tracking performance by clicks or attributing actions based on the last cookie dropped are flawed metrics that cause some networks to buy below-the-fold ad units or ad units in cluttered environments. Buying this type of inventory may produce mediocre results based on these metrics, but they do not truly affect a user’s intent to purchase or increase brand awareness.

We need to come up with an attribution model that truly shows how every ad unit viewed in the purchase cycle affects users. Microsoft took a step toward achieving this with their engagement mapping model they introduced in testing mode last year. I hope that models like this gain traction because once that happens and these models are widely accepted, networks will be able to pay publishers the CPMs they deserve based on performance, not just based on market supply pricing. That is the main issue here – publishers will be happy to have their name in the marketplace (up to a point) if they feel the value they’re getting in return is worthwhile.

While a more accurate industry wide tracking system is developed that will attribute performance properly across all ad units users see, there is an immediate and more practical solution to avoid channel conflict. Publishers can partner with trusted networks that value their publisher relationships, reduce the over-supply of inventory which does exist in the industry (nobody wants or needs leaderboards at the bottom of the page, or the four ad units above the fold) and ensure that publishers are going to market with differentiated, high impact, integrated product offerings that networks are not able to reproduce.

NYTimes.com provides customized news

An interesting box caught my eye this afternoon when I began to read an article on NYTimes.com. The header was “News for Media Professionals” and it had a few articles that piqued my interest. Intrigued, I clicked on the “What’s this?” button and saw that the content was being customized for me based on my LinkedIn profile. You can read more about it here.

I’m a fan of both companies and of this idea. This partnership makes a lot of sense. LinkedIn gains exposure to an ideal demographic for new sign-ups, and NYTimes.com can provide a customized experience for its users.

FTC’s Revised Guidelines

The Federal Trade Commission recently unveiled a revised set of principles to guide self-regulation of behavioral targeting. The report lived up to expectations, which has been centered on industry self regulation. Privacy organizations are up in arms about the lack of clarity and definition, and are clinging to hope that the Obama administration comes in and establishes more stringent guidelines. And if not handled through the FTC, there are various Congressional leaders who plan to propose legislation that further defines policies and procedures.

I’m in the camp that the industry can self-regulate. However, it only takes one offender to have the government change its stance, so each company in the equation needs to be diligent. Many of the privacy experts do not see any checks and balance measures with self-regulation which I disagree with. Everyone is accountable to someone. Networks, portals and publishers are accountable to the agencies, which are accountable to the advertisers, who are in turn accountable to their consumers.

The agencies and advertisers I have spoken with are very concerned with consumer perception and have been diligent about exploring behavioral programs. In turn, websites that rely on user traffic are also focused on ensuring a positive experience for those users.

Marketers: Don’t abandon brands or creativity

If you have a few moments, it’s always enlightening to read the IAB’s Randall Rothenberg wax about the current state of online advertising on his cleverly named blog: I, A Bee.

In this post, he makes a credible case for marketers not to abandon brands or creativity to the temporary reliefs of direct response. He begins by asking the question: “Quick -- name four fantastic, emotionally resonant, culturally significant and successful interactive advertising campaigns from the past year.”

Needless to say, Randall’s broader argument is that just because our industry can hyper-target to yield amazing ROI, doesn’t mean we always should; and that brands and media owners must steward the creative process.

Can Buying Blind Save Web Ads?

I have some additional thoughts to share about Abbey Klaassen’s article today:

• Transparency does not equate quality nor does it solve the issue of where your ads appear. While it might seem like it does, many advertisers already had transparency from their network when they had a bad experience. The issue is not what a network says but what it does. That is why we came up with the Undertone $50k Guarantee to help raise the bar for accountability. Marketers still need to be very smart and make sure they trust their network partners and not just rely on a list of sites. Unfortunately, this tactic has backfired for many.

• As far as the Brand.net perspective, very few high quality publishers have abandoned networks. There are a handful of isolated cases where less than 5% of premium display inventory is unavailable to networks. While the publishers making up the 5% are a notable and well respected group, they have a minority point of view. I do agree that you must respect the direct selling model, and perhaps 100% transparency is one way to avoid conflict between publishers and networks.

Super Bowl 43

I had expected to start this blog out with something like, “another Super Bowl has come and gone…”, or “another year, another Super Bowl.” But I don’t think anyone outside of President Obama (if you saw his pregame interview) thought that we’d be in for the best game in years! Congrats to the Steelers on ringing number six and the Cardinals for an extremely hard-fought game. Wow!

Amidst all the fourth-quarter drama, there was another battle brewing, and that was amongst the world’s biggest marketers who paid upwards of $100,000 per second for commercial sponsorship rights. If you followed us on Twitter (twitter.com/undertonenet), we talked about several themes and highlighted strong showings. Rather than give a complete review of every ad, I’d like to touch on a few themes and highlights from a digital perspective.

Timely themes: We are in a recession and there are hard times everywhere. We saw Bud Light address this directly with their spot “Meeting.” Most interesting to me was Monster and CareerBuilder’s approach. Both elected to position their service as a way to escape your job, boss, or in the case of CareerBuilder, awful cubicle mate. With tens of thousands of jobs being cut weekly it seems, I wonder if emphasizing the number and diversity of jobs available would have been a better pitch? It probably doesn’t matter either way: the fact that they are job sites came across loud and clear. Watch Quantcast to see what kind of traffic increase they see as a result.

Digital tie-ins and strategy: Not enough, in my opinion! GoDaddy rules the arena of building their spots around driving people to the website (and as a web-only business, they better!). Hulu clearly executed perfectly on this as well. Some advertisers like Jack-in-the-Box and Hyundai executed well - ending their spot with a true call to action that drove you to a microsite. Unfortunately they were hampered by technical problems that seemed to be because they couldn’t accept the flood of traffic. This should send a clear message to marketers: your audience is watching the Super Bowl with laptop on lap and smartphone in hand. Take advantage of your $3 million spend by continuing the conversation online and engage your audience (and make sure you have the capacity, too)! Look at the Google trend data - users were flooding the service doing searches on Super Bowl brands. Was there even a single advertiser who had a mobile component? How many people were watching with phone in hand or at least in pocket? Exactly.

Presence in social media: I spent most of my time Twittering and observing the conversation on Twitter. Some brands had a presence - Sobe, E*TRADE, Overstock and Pepsi, to name a few. I thought it was fantastic - the E*TRADE baby was Twittering away, in character, and all were interacting with their fan base. Other brands should be taking notice of this for 2010 as Twitter and the like undoubtedly will grow.

My top 5 (in no particular order): Bridgestone, Doritos, Coke, Pepsi and Hulu.