Two words. Digital Convergence….

What areas of advertising and marketing are not changing? None.

They are all cowering over the sea-changes from technology and from the adoption of hardware by users; that are rapidly changing the existing eco-system.

It’s certainly a change for the better down the line to users but  as always in technology there are always casualties.

Digital convergence is changing performance attribution and as content cross-populates through various devices and mediums so does the adoption uptake with users.

Let’s take the example of newspapers – they have a shelf life offline (until you throw away the paper; most likely) and then the same content can be kept alive forever through web presence (the newspaper online website). This article may for some reason be appended to a twitter post and the content can live on through digital convergence.  In this case its a little clearer to see attribution but what happens when there is a large campaign for an advertiser who uses multiple  data sources to identify a potential audience. How do you verify what actually led to the ultimate conversion?

The last click to conversion or first click to conversion in the conversion path is flawed on some levels but when you have so many convergences digitally – how do we truly attribute conversion success? Well; there is no real answer here – lots of  debate but no real answer. We ultimately need new tracking metrics in order to understand conversion and its attribution to the right cause and effect.

TV Ratings to me has been a bug-bear one because it’s not wholly accurate but two because often great tv programmes have been axed because apparently they did not get enough rating points to deliver the key advertising revenues per show.

We have digitally evolved now to have cable boxes, freeview boxes (for those in the UK) and also DVR (or  Tivo for the States) and the latter actually allows you to scrub (ad skipping) through advertising and just simply watch the content you prefer.  How does tv ratings adopt to that new technology? How are advertisers going to receive their ROI based on such technology evading their customer base?

Some will consider IPTV interaction; others will diverse advertising revenue into online advertising.

Gaming seems to interesting especially in Asia where Gamers are more likely to enter gaming communities and Gaming companies are trying to making the Games more interactive with advertising and mobile, IPTV and the web.

Advertising is changing at such a rapid pace that those in the industry have to take notice and almost adopt the change as it occurs in order to understand, facilitate their business to the new world digital convergence order.

It’s surprising that those in USA and Europe are still only starting to move towards HTML5 – Asia is leap-frogging to the new technologies more rapidly; a major reason is the growth of broadband; the affluence of Asia and the adoption of different hardware platforms.

Its going to be interesting when e-commerce in Asia gets truly mobile; with the likes of group buying and hopefully Square mobile payment sitting on top of iphones. Next is the glorious impact of NFC……

That’s when advertising meets minority report :

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When the going gets tough the tough have to re-brand…

I’ve been in hiatus for some weeks working on the DSP platform at my new company and working with a dedicated team building a DSP start-up in Asia with us all in different TZ is hard but its getting very interesting and we’ve got excellent momentum. So time has been a commodity.

I’m going to focus on Yellow Pages. In the UK; its a directory and website for local users but most people tend not to use the big Yellow book anymore for information search.  Enter in the discovery of the WWW by Sir Tim Berners-Lee; yes a Brit discovered it whilst at that not-so-secret placed called Cern; anyway with the internet at the touch of a button we are used to up to the minute information that is SEM and SEO friendly and out goes the big yellow book.

So what does Yellow Pages do now? Its in the same position as the newspapers where it has to actually innovate to stay in the game. Today is an age where success alone and the recipe from yester-year cannot last forever; you have to innovate just that much to make your place in the commercial world.

Yellow Pages re-brands and is now the ‘ Local Search Association’ – smart it brings community and search together in a meaningful way.

Meet the “Local Search Association,” the new branded image of the YPA.

‘Embracing local search and mobile technologies to an entirely new degree, the YPA is lifting the curtain on its new visual identity in order to “reflect the industry’s transition from print publisher to a provider of local search services to small businesses and their consumers.”

According to the organization, while better than 60% of US adults still use the printed version of the Yellow Pages directories, the Internet and, in particular, the mobile web are drastically cutting into that percentage. As a result, the YPA thinks the time has come for a re-focusing of sorts that presents the Yellow Pages as a readily available online local search tool.’

Taken from:

http://www.mobilemarketingwatch.com/yellow-pages-go-mobile-as-ypa-officially-becomes-the-local-search-association-14779

They are not the only ones we have seen a host of smaller companies and start-ups now becoming more localised and concentrating on the community effect – its all about raising the eCPM for the SME business – which cumulatively is a large niche market.

Asia is already pouncing with a wealth of startups that are adding their small level of innovation into the mobile; ad-network or SEM business to localise and start serving the community business aspect and its slowly evolving and looks to help innovate the market further.

It would be interesting to see how soon the APAC VC market ripens; for now its just starting to look really really interesting.

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Mobile Advertising Market in Asia is ramping up

Sitting in Asia I get to hear, see and feel where the market is going and the stats indicate the same feeling.

Its getting hot in here…no not the Nelly song but the feeling of mobile ad domination in APAC.

Admob through Google published the below:

http://googlemobileads.blogspot.com/2011/01/where-are-2-billion-daily-requests-in.html

and it’s not only very valid but indicates that:

Three countries – India (26%), South Korea (13%) and Japan (12%) – accounted for just more than half of ad requests from Asia in December 2010. Five countries in Asia – South Korea, Japan, China, Singapore and Thailand – had growth rates of more than 1000% in 2010.

Of course this information is purely from their own network of inventory but given that Admob is the largest player in the space I’d say its a more than fair indicator of what is transpiring. We all know 2011 will be the year of mobile explosion in advertising; its been predicted time and time again but what is interesting is that the Advertisers are pushing the agencies to ensure that mobile is part of their ad campaign.

Sitting from Singapore I’ve had numerous conversations on what that exactly means; is it merely to show that mobile is a tick box where advertisers can say yes we’ve included it in the media plan to their CMO or is it being recognised in Asia as a much needed medium of targeting.

Well its a practice combination of both at the moment but what is interesting is to see if from the point of the country I reside in. Residents in Singapore are more and more engaged with their hardware outside of the home; from carrying ipads onto buses to checking latest football scores from the EPL on their phones. Being born and bred British I know for a fact that its very unlikely to see iPad owners out with their ipads from fear of theft but here in Asia its safe (or at least in Singapore) and seen as an image builder to have the latest gadgets.

So Singapore is seeing advertising budgets being cannabalised and split across different types of advertising mediums although mobile adoption is relatively low among advertisers in APAC generally its being addressed by mobile companies moving out to APAC namely Singapore to set up their APAC HQ’s. Just recently 2 have moved out here with another larger mobile company interviewing for talent. These are large companies with VC funding in their millions so it’s not hard to see the knock on effect in the next few years.

The level of interaction here between mobile users and ads is also very interesting; especially in areas of entertainment. So movies, games and events have very high CTR and with more and more campaigns becoming interactive and creative; the level of engagement will only increase.

OutThere media just recently announced their global marketplace model across Asia and Europe which brings together the mobile carriers and advertisers under a common platform; much like RightMedia did with display advertising. It reaches over 500M subscribers across Europe and Asia and is poised to push the mobile market even further by making advertising more relevant through its marketplace model.

Even Australians seem to be happy to see mobile advertising on their handsets; in research conducted between Inmobi and Comscore approx 75% were comfortable with such advertising:

http://www.warc.com/LatestNews/News/Australians_open_to_mobile_ads.news?ID=27874

Interestingly electronics and entertainment was also top category choices for these Australians who were interviewed.

It’s clear to see with marketplace tools across mobile, display and search. Advertising is going to become more relevant, more engaging and more targeted to user habits but it’s also going to compete for engagement across all the other types of advertising to hit the golden ROI; all advertisers seek. Its going to end up as one big marketplace where trades are made based on the single most important factor of all; ROI.

 

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Will 2011 dilute publisher power?

Yup, Yup I got a few emails asking me about why I’ve not updated my blog. Its been a transformational quarter for me; in a new role.

Okay so 2010 has been the year of ad buying power where ad buying has undergone intense creativity with technology pushing towards real-time bidding. DSPs, SSPS and Data enablers have all crept into the limelight but where does that leave the publisher? Kind of like a victim around a few large muggers….!

Publishers have felt the barrage of change in 2010 but that change has not even fully evolved yet. 2011 I believe will be a tipping point for the publisher.

Does the publisher succumb to the DSPs and utilise them or does it shut itself off from real-time bidding and push for its sovereignty. It all depends on the clout each publisher has in the industry and of course whether it can maintain that clout.

What’s making the eco-system interesting is at the height of all these changes on the buy side we’re also seeing similar changes on the supply side.

Take for example social media and its growth. Not only has the leader of the pack; Facebook seen massive growth around the world; its seem ridiculous growth in APAC.  Clearly; the world is becoming smaller as we all connect onto one platform and abandon the small social websites that once were Kings (e.g. Friendster).

This growth in social media is so alarming that its ensuring its competitors; Portals and content aggregator sites are losing ad dollar share and market share.

As users, we are spending longer time on social media sites and in doing so creating hundreds of ad units for Facebook which is leading to so much ad inventory that it has to make an impact on large publishers to a degree.

I’ve used this example many times but let me reiterate it again:

Consider your daily internet usage. Let’s use mine. I get to work log on to http://www.yahoo.co.uk, then http://www.telegraph.co.uk for news then perhaps some more Yahoo Singapore and add in a peppering of Twitter, Facebook and some TechCrunch and the odd search term.

I am the same user that went to all of these different websites and if some of these websites are selling their excess inventory onto the ad exchange and then DSPs – it means that an advertiser can at differing points of my journey purchase me at different price points.!

So on Yahoo I might be worth $4CPM, on twitter I may be valued by the exchange as .50 cents and on FB perhaps .25 cents. Technically you can buy my view or eyeballs for that specific ad buy on RTB at the cheap price of .25 cents.

Why then would the advertiser want to still pay $4CPM for the same person?

Well its a little more complicated than the above scenario because as you know with ad exchanges like RMX et al your impression is calculated based on its activity and its propensity to click or convert so it’s decisioning and prediction modelling kicks in to justify that a cheap impression coming from a user who is also accessing premium websites may not be hitting an advertisers ROI goals.

That’s easier to explain in my interaction with each website:

1. On Yahoo I may click on ads as I use this as a portal/aggregation of news, interests and email.

2. Twitter I go in to post a url and comment and come straight out.

3 On FB I interact longer (rarely, as I don’t have time) but never click on anything on the right hand side (where the ads are) because I’m interested in spending time catching up with family or friends.

So the predictions/learning models within ad exchanges/DSPs have an ability to capture this type of association and then value the eCPM of those impressions; but that and history building takes time so there is a chance that I can still be purchased cheaper than paying $4CPM on premium site.

So coming back to my original point; publishers will see major disruption in ad dollars as DSPs come to the fold in 2011 but they can still hold out and push back on entering RTB.

Is that wise?

RTB is still a utopia as no one single exchange or DSP can serve 100% of its inventory in real-time bidding. The only one I know is RMX but that is with approximately an hour or so delay from actual real-time bidding. So when it does arrive, will publishers be pushed down this road?

In my opinion; Yes you can’t stop it.

Publishers tried hard not to  work with ad exchanges (well 80% is usually unsold! so its a no brainer they eventually did) but reluctantly had no choice and utilised them in order to avoid sales channel conflict. Publisher power is diluting because the large social media website Facebook is taking such a foothold of market share that reach numbers are fading with the major publishers and actual time spent on publisher sites is declining across the board.

Hopefully crowd sourcing can save the day and content creation from the crowd can help offset the greater decline; its unlikely.

Publishers will dilute their power but they will have to add creativity and differentiation in order to hold onto the ad dollars. It will surely be a 2011 year of discontent where the onus is on each publisher to work harder and show advertisers why they should choose them. In an age where users are loyal only to themselves and their hardware; publishers will have to come up with some compelling sticky content to keep the ad dollars coming in.

What is more likely to happen is that publishers are fearing the dawn of the Data Enablers (some call them DMPs – data management platforms) because most publishers have been sitting on their own data for some time and not thinking about its core value. In an age where data segments are now trading between advertising value chain players – they should be in fear because a publishers own data is extremely valuable – only when used. Publishers still will only be able to manage their own data… or do Publishers actually think outside of the box and start paddling the ad exchanges to become a large data aggregator/ or audience extender themselves?

Now that would be a sweet spot for the smart large publishers – to see the fear of the mid-sized publishers and to round them up and start buying/selling and data trading amongst them while at the same time with the ad exchanges. This way those ad dollars will still roll in and maybe just maybe the large publishers will still have a strong enough publishing power….

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Like a moth to a butterfly the life cycle of value chain players…

I know it’s been some time since my last blog but I’ve been pushing down on workload in my full time job at Y; here’s something to keep your thoughts going.

The lifecycle of butterfly stems from a moth – this is what my friends three year old child told me; she went on to draw the cycle. It looked rather like a Jackson Pollock painting. Actually it reminded me that advertising world is morphing. Agencies are now becoming ad networks and now ad networks are becoming DSPs – it’s like the threat of extinction is leading to a new revolution.

This means those long established barricades between the buying side and sell side parties in display are now diminishing and leading to an open-ended solution. This has many connotations and allows efficiency to flourish. Whilst it does that it allows the players to start spending time defining their services. We’ve seen ad exchanges come into the market since 2007, then we’ve seen agencies spend money in building their own ad networks (B3, Vivaki etc), ad networks have started to fear the encroachment of agencies and have differentiated on their offering and are now morphing into DSPs. Now the mouse has become the cat and ad networks are threatening the agency business model. So the game has changed the players changed it and now the loss is disintermediation out of the value chain.

The game has also become a media play to a trading play where the prize is huge arbitrage margins. The growth of online coupled with the new markets waking up to new hardware means the game is so large that everyone wants a piece including traditional hardware companies like Cisco! We are ushering in a new era of creative technology in advertising and not all players will survive.

The new trading game is now Data. Data rules the advertising world and if you don’t see it, you will very soon. Data leads to the ROI every client wants to strive for. In Asia we don’t have a real data play here yet but the heavy weights are coming; audience science set up in Japan, Bluekai has strong relationship with key ad networks in Australia so the wave is coming.

The amount of hiring in APAC has tripled according to close sources and it’s only just started. Agencies here are recruiting internally and externally for the new technology evolution. Publishers are now building their own ad network strategy in order to stay in the game and protect their interests. This is leading to innovative strategies in differentiating premium inventory and indeed starting the pouring process of inventory into ad exchanges. Monetization routes are now being efficiently optimized and remnant inventory is moving away from the concept of ‘unsold’ and is starting to trade as efficient inventory or premium performance.

Just recently I went to see an agency about the evolution of advertising and the messaging has started to hit the streets in Singapore and it looks like the planning for 2011 is encompassing the technology pipe cost for agencies. I don’t even mean the cost of the technology but the cost of the opportunity, the cost of re-training, new hiring etc. It’s an exciting time in the industry and one where each market is pushing further along into performance advertising.

This time last year I was professing to Vietnamese clients that we’re entering a change and that Vietnamese market had hardly any performance advertising then and now they are roughly spending 15% of their budget in performance. Technology is driving a push from premium to performance and the hardware market is driving adoption of internet users; this makes for an exploding large market for advertising.

Stay tuned

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offline optimisation? Airports?

Anyone in advertising especially online advertising will know how important the word ‘optimisation’ is now and how it coupled with BT is now changing the face of online advertising. Recently I  was talking to former colleague about his role of  managing Airport advertising and how brand is so necessary in determining purchases at airports. I argued that it was like the new film the Joneses where people identified their wants and needs through lifestyle and not necessarily the advertising. Well it seems that out-of-Home media specialist EYE is using the latest technology called neuro imagery to focus on advertising airport effectiveness.

Extracted from below url:

http://www.moodiereport.com/document.php?c_id=1113&doc_id=24977

‘Neuro-Insight Pty Ltd, with operations in Australia, Germany, the UK and the US, has been commissioned to carry out EYE’s studies, which will kick off in Australian shopping centres later this month. The study will then roll out across a series of UK airports in the last quarter of the year with further international studies planned in 2011.’

It seems that the multitude of online optimisation and ROI effectiveness platforms have encouraged and indeed raised the stakes with offline advertising, and the blur between brand and performance is diluting further.

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Futures, Forwards and Contracts Part 3

It’s not often I can predict the price of milk let alone where an industry is going but looking at my past posts in Futures, Forwards and Contracts- its clear to say Eureka!

Ad Auction Marketplace Debuts Futures Market, Predictive Pricing Model – http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=134057e

AdBidCentral has built a platform that allows you to bid on future inventory through future pricing for premium inventory. Then it goes to further that by allowing you to hedge and cancel the contract.

It looks to shift the spot market of remnant advertising away to build out a futures market in premium advertising. Just when DSPs were coming into the market to boil down impressions as worthwhile or worthless across premium and remnant inventory; along comes a new platform that sets to distinguish the inventory.

Advertising looks set to become a commodity…..

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