Friday, January 29th, 2010

Starting Off 2010 Strong

Twice a year, we bring all employees to New York for a week to talk about our progress as a company, growth and goals. The company met earlier this month at the Millennium Hotel for the first of these events. Coming off a phenomenal Q4 and with prospects bright for 2010, we had a lot to talk about.

2009 was a pivotal year for Undertone. We expanded the size of the company greatly and added key areas to support our customers including planning, insights and performance management. We successfully launched our technology platform, and rolled out products for our key partners: advertisers, agencies and publishers.

One of our favorite parts of Undertone Week is bringing in guests from outside of the company to participate in an interactive discussion. This year, Emily Riley of Forrester Research led a panel consisting of marketers and executives from Ameriprise Financial, ABC, Macy’s and Sharp Electronics. A diverse group for certain, but each one mentioned that their focus is consistent with some of the trends we are seeing, including the importance of rich media and video, campaign insights, leveraging social media and the importance of customer engagement.

With 2010 off to a great start, we’re jumping in with both feet and are on our way to our number one goal for the year – showing everyone that we’re not only a great online ad network – we’re the best.

Posted in: General by Eric Franchi @ 2:11 pm Permalink | Comments Off

Thursday, December 17th, 2009

Is Undertone over the Top?

I’ve had a number of interesting conversations with advertisers in recent weeks regarding brand safety and our guarantee. Whether at the iMedia Agency Summit or as part of 2010 upfronts, it’s been an interesting topic now, given the wave of new to market page level content filtering and ad verification technology.

What’s compelling is that the feedback I received was pretty consistent. Brand marketers today are very interested in the quality of the publisher and the position of the placement - and a bit less concerned about page content that may result from audiences providing feedback to or joining in with the conversation about the content in “live” sections of the web page. This is a direct response to the acceptance that we now live in a world where media is social and consumers expect to have the opportunity to interact with the content. Of course, this whole premise is based on a fundamental assumption that starts with publisher quality and the quality audiences attracted to this content. Marketers understand that the ecosystem today is very democratic.

Of course, if a marketer had a very specific concern (think airlines and disaster-related content on top-tier news sites) then we could and would deploy one of several off-the-shelf content filtering technologies now available to both agencies and networks (and I was happy to see a few of those companies participate at the December iMedia conference in Arizona). But, after running thousands of campaigns, page-level content filtering requests are limited. It’s just not as relevant when you’re running only on top-tier publishers.

Follow up discussion revolved around the Undertone Guarantee. When asking our customers why the Guarantee is important to them, I hear the following: Long before there were verification and content filtering technologies, Undertone built technology and just as importantly, a process, to monitor the quality of the publishers we work with, the effectiveness those publishers demonstrate at delivering our clients’ messages, and the emphasis those publishers put on the quality of the content on each page – whether professionally produced or user-generated. We have and will continue to put our money where our mouth is as we evolve to meet our growing customer base. The marketplace responds in kind to that message. When it comes to our passion for quality, some may actually say that Undertone is over the top!

We’re happy to see that our customers and competitors are responding to our positioning on quality and our guarantee. It’s an important conversation, and in fact it’s really gratifying to have our competitors join in the dialogue – even if they can’t match our guarantee.

Posted in: Ad Networks, Business, Social Networking by Alan Schanzer @ 4:41 pm Permalink | Comments Off

Thursday, December 3rd, 2009

Yahoo shutting down DMX

Approximately two weeks ago, I provided a contrarian perspective on the influence and impact of Right Media for AdExchanger.com. My central point being that, rather than being a vehicle that competed with ad networks, Right Media ended up being a major factor in the ad network explosion of 2006-2007 with DMX - the Direct Media Exchange.

On Monday, Yahoo officially announced that they were shutting down DMX in an effort to try to position the exchange as a more up-market solution. This is a significant announcement for two reasons:

1. DMX was the platform that many second- and third-tier ad networks built their businesses on. It provided access to inventory as well as an ad serving solution. Without DMX and particularly the ad serving capability, we may see the ad network shakeout that many have been predicting.

2. Yahoo would not be shutting down this business if it was an immensely profitable money maker. Closing DMX shows just how difficult the exchange business is.

We won’t have to wait long to see what happens as a result of this move. DMX will be officially closed in less than two months on January 31, 2010.

Posted in: Ad Networks by Eric Franchi @ 3:25 pm Permalink | Comments Off

Tuesday, December 1st, 2009

The Berkshire Hathaway of Display

A recent POV in MediaPost triggered a visceral response. The Efficient Frontier of Display ROI: UGC, Porn, & Torrent Sites? draws an apt analogy between media buying and stock trading. In fact, in the context of all of the emerging tools in the display space (DSPs, exchanges, analytics), I agree that there are several parallels that can be made.

However, I adamantly disagree with the assertion that user generated content (UGC), porn (adult) sites, and torrent sites should be included on any type of media plan (re-targeting or otherwise). Despite the low CPMs, the content on adult sites is a completely inappropriate environment for any legitimate advertiser (DR- or brand-focused). Torrent sites are widely known to facilitate the practice of illegal file sharing - ask any marketer’s legal counsel about their view of sponsoring that content. And finally, two clicks in on imageshack.us provided some content that was at best extremely NSFW. The CPMs on these sites are low for a reason!

Frankly, I was amazed at the ads I was seeing after a few refreshes on the page. One of which was for a 200-year-old, high-end men’s clothing retailer whose flagship store is right up the block from Undertone headquarters on Madison Avenue. I’d be shocked if the brand manager for this conservative company was happy with this placement.

The good thing here, from my perspective, is that it seems that many advertisers know what’s going on, and are specifying that these types of sites be excluded from the plan from the start, as you mention. However it seems that some, as evidenced by the results of my imageshack.us experiment, are not.

It’s simply incorrect that advertisers should have to give up control and environment to drive results. There are companies (like Undertone) that are focused on delivering not only results, but in the highest quality environments. In the spirit of your finance analogies, call them the Berkshire Hathaways of online display: focused on only the best companies (sites) and, more often than not, beating index funds by a wide margin.

Posted in: General by Eric Franchi @ 3:14 pm Permalink | Comments Off

Wednesday, November 11th, 2009

Staying Productive in the Information Age

Many of us constantly struggle with time management and being as productive as we can. There are tons of books on this topic alone, but this article provides a quick summary and a good reminder of some basic tips as to how we all can be more productive.

Posted in: General by Dan Cassidy @ 8:11 am Permalink | Comments Off

Thursday, October 29th, 2009

15 Years Ago, the Industry was Born!

For all of us who are fortunate to touch this industry, make a living doing so, and have a wonderful place like Undertone to do it, take a moment to read this fun article. It reminded me (dated as I am) of the first time I sent an e-mail. My client was so excited (AT&T none the less) that we called each other and waited for the e-mail to arrive! Time does fly… enjoy every minute of it.

Posted in: General, Business by Alan Schanzer @ 9:41 am Permalink | Comments Off

Monday, October 26th, 2009

Newspapers Do Not Have to Miss the Online Rally

There was an interesting article in The New York Times yesterday titled “Online Rally May Sidestep Newspapers.” The main point of the article is that online divisions of major newspapers are missing out on digital dollars due advertisers’ low appetite for high-CPM sponsorship opportunities and the rise of ad networks and exchanges.

While the article was a good overview of the current challenges faced by digital newspapers, it falls short of presenting a case for a solution, or any hope for one at all. I hold a very different view. While newspapers may be struggling right now, it is partially due to a reliance on older business models that don’t necessarily take into account the shifts that have been made in how media is purchased. Rather than waiting for the economy to improve, or banking on unproven new ad units, I believe that shifting strategy to accommodate some of the newer trends is what is needed. Therefore, in no particular order, here are three initial ideas for newspaper organizations looking to maximize the online opportunity in display advertising.

1. International monetization: According to several sources, a full 40% of top U.S. Web properties’ visitors come from outside the U.S. For a large newspaper site like The New York Times, The Washington Post or the Dow Jones properties, an international focus can have massive revenue and profitability implications. Increasing international yield is likely a multi-year, multi-step plan that may include network partnerships and eventually establishing a larger international footprint. With the world getting smaller and more digital, this is a must for long-term revenue.

2. Audience monetization: One of the themes of New York Times piece I did not agree with was the notion that newspapers have to lose to ad networks when it comes to efficient audience targeting and optimization. The exact quote was: “They’re (ad buyers) basically trying to buy the same audience at a third of the price.” With the advent of products like Undertone’s U360 AudiencePlus, newspapers can leverage the same strategy to deliver targeted audiences in scale and at an efficient rate.

3. Ad unit analysis: A typical online newspaper – keeping with the overall industry trend of the past few years – has several ad units both above and below the fold. Obviously each additional ad unit, if sold, carries an incremental revenue opportunity. However this must be counterbalanced with the effect that more ad units have on performance, as more units to interact with equals less opportunity for each additional unit to garner the desired action. Create scarcity by eliminating some of the low revenue-generating and clutter creating units: below-the-fold standard ads, text boxes, or small ad units. This will make the most important placements that much more valuable and high-performing for advertisers.

When I look at the digital newspaper space, I do not see gloom and doom. I see trusted organizations that bring top-notch content and huge brand equity to the table. A focus on improving digital offerings will pay off with long-term success.

Posted in: Ad Networks, Business by Eric Franchi @ 10:34 am Permalink | Comments Off

Friday, October 23rd, 2009

Hulu to Charge for Content in 2010

Hulu will begin charging for access as early as 2010, according to Chase Carey, News Corp.’s president and chief operating officer. Frankly, this is not surprising given the pay-for-content rhetoric that has been the theme over the past few months from News Corp. and others.

What is not clear from currently available information is what level of access, if any, will remain free to the user. Perhaps the strategy will be freemium, in that the newest and most popular content will be behind the subscription wall, and the rest free and ad-supported.

Is this the beginning of a pay-for-access trend in 2010 and beyond? It remains to be seen. What is clear, however, is that users want their content, and they are used to getting it for free. Check out this sample poll on EW.com.

Posted in: Video, Business by Eric Franchi @ 12:07 pm Permalink | Comments (0)

Friday, October 9th, 2009

The Ad Network Cleanse: A Response

I read with interest this week’s Publishing Insider titled “The Ad Network Cleanse” by Ari Rosenberg. I actually was at the very same MPA gathering he wrote about, and had the pleasure to meet Ari and talk to him for a few minutes. I can also attest that channel conflict was certainly a topic of discussion that day.

Ari’s article was especially timely as I read it on my iPhone during a break at the Pubmatic Ad Revenue Conference in New York City today. Ad Revenue 2009 was an entire event dedicated to the topic of monetization of the “second channel”: namely, inventory that is not sold by publishers’ direct sales teams. During the keynote, Pubmatic CEO Amar Goel presented some interesting information regarding publishers and secondary channel partners such as ad networks. One of the most important was a statistic from ThinkEquity, who forecasts that the secondary channel will contribute up to 34% of publisher revenue by 2012 - up from 10% today. Even at 10%, that is significant revenue and much higher than the oft-quoted 2% from the 2008 IAB/Bain study.

10-34% of overall revenue is a statistic that can’t be ignored, and also can’t be solved by swearing off ad networks for 90 days and seeing if direct sales teams can move the inventory. A typical publisher has 30-70% of impressions unsold for a very good reason: their in-house teams are focused on doing what they do best. Selling sponsorships and guaranteed placements at a premium to agencies and marketers, which is a time- and labor-intensive task, pays off in highly profitable partnerships. It would not be in publishers’ best interest to have those very same salespeople trying to sell huge quantities of ROS inventory to performance-based advertisers. The overall effects on the publisher’s top and bottom lines could be quite damaging over the long term.

Instead, I would propose publishers think about a strategy that may look somewhat like the opposite of Ari’s on the surface. I suggest the publisher takes a hard look at their business and their secondary strategy over that same 90-day period and ask several questions - all of which will take time to answer and discuss. Do they have a person or team in place on the operations or product side that is qualified to manage yield and optimization? What type of technology do they have in place to do so? How many partners are they working with? What do those partners bring to the table as far as advertiser quality, control and sales policies that support direct sales efforts? Do those networks (or exchanges) daisy chain other networks when serving ads on the site, leaving a trail of belly-fat ads on the site? Do their channel partners bring incremental revenue opportunities to the table? Do they propose ways that the publisher can leverage their data and audience, again for significant incremental revenue?

The opportunities for publishers to drive significant revenue through the secondary channel over the short and long term have never been greater. However, to maximize results will require commitment on the publisher’s part and a focus on the right kinds of partners. This may not end up being a complete cleanse, but maybe a toxic partner or two (or more) who don’t bring anything to the table will be eliminated at the end. A partial cleanse, if you will, that will pay major dividends in the long term for the publisher’s business.

Posted in: Ad Networks, Business by Eric Franchi @ 12:17 pm Permalink | Comments Off

Thursday, October 8th, 2009

Busy Agency Lobbies Again!

Yesterday I visited two of New York’s largest media buying firms and was encouraged to see lots of sales reps filing in with their gifts and laptops. Busy ad agency lobbies are a sign of industry vitality that we should all be grateful for. I think sales competitors and oversold buyers should all be grateful that budgets are breathing back into our space and sales reps are swarming around them; and not just for the last calendar quarter but for next year as well.

I never thought I’d be happy to see so many sellers competing for my money! It’s good for everyone.

Posted in: Agencies, Business by Ed Carey @ 8:07 am Permalink | Comments (0)

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