MetaMuse

Christmas Card to the Others Online Team

My core Others Online team -- Mike, Neal and Sam -- kicked serious ass this year, during the first half of the year when we were Others Online and even moreso during the 2nd half of the year as the Data Intelligence team of the Rubicon Project.

So they get a Christmas card like no other. And I threw in my dog Skye too!

Try JibJab Sendables® eCards today!

UW Guest Lecture Deck - MKTG 555

Here is the deck I used for the University of Washington School of Business class  (MKTG 555 - Entrepreneurial Marketing and Management) I guest lectured at yesterday. It's part of their Center for Innovation and Entrepreneurship program, and I spoke about "marketing your small business across the new landscape of the Web -- Online Marketing v2.0".

UW Biz School Lecture - Fall 2009

View more presentations from Jordan Mitchell.

New Challenges for Web Publishers, Reminiscent of Adware/Spyware Market 5 Years Ago

The market for 3rd party audience data continues to grow, but I'm seeing evidence of illicit activities that are somewhat reminiscent of the adware/spyware activities of 2003-2005. It's disconcerting, because the 3rd party data market has developed the right way so far -- for ALL parties involved, and especially for publishers. But we are now at a point where a few bad apples could spoil the whole bunch, and are causing new challenges for premium publishers.

In the last two weeks, I've been in San Francisco and New York, taking part in 3 different online advertising conferences, and meeting with top 3rd party data companies (such as eXelate, BlueKai, AlmondNet, TargusInfo, Rapleaf, etc.), ad networks, and publishers. A few observations ...

First, I'm starting to see more evidence of illicit data collection from publishers. Just as we saw advertising-based applications illicitly installed on consumer's computers 5 years ago, collecting consumer browsing behavior (without knowledge of the publisher or consumer), valuable audience data is being taken from premium publishers and used by 3rd parties without the knowledge nor the remuneration of the publisher. It's being done via ad tags, which if not properly reviewed/screened, may contain Web beacons that pass audience data to ad networks, advertisers and 3rd party data partners for re-targeting, re-use, etc.

As a result, premium publishers need to be on the lookout for unscrupulous ad networks and advertisers that bring short-term revenue lift but then leave with valuable audience data. And as the market for data expands and $ start to really flow, 3rd party data partners will need to be extra careful to control their data sources/channels. When publishers see these 3rd party Web beacons showing up on their pages via ad tags, it casts a negative light on otherwise reputable data companies -- not the advertiser or ad network who passed the data to the data company in exchange for payment.

Secondly, I noticed some 3rd party data providers are offering an API into their data store. Basically, it's a small snippet of JavaScript that, when placed in the ad tag, pings the data service for any user-specific information which is then appended to the ad server request. This is a fine model and service for publishers when they are using it on their pages, but publishers need to look out for 3rd party ad tags that contain these API calls -- every request out to a 3rd party from their site represents potential "audience data leakage".

Lastly, I was discouraged to hear that some unscrupulous advertisers are buying cheap run-of-network inventory via ad exchanges and running the NAI "opt-out" scripts within ad tags. Just as 5 years ago when spyware companies were detecting/uninstalling competing applications as an offensive maneuver, seems now we're seeing companies attempting to reduce the targetable population for their competition, increase their data acquisition costs, etc.

In the online advertising market where "audience" has emerged as king, safeguarding audience data is quickly becoming a core challenge/risk for premium publishers. This makes it doubly important for publishers to control their sales channels, work with trusted partners only, and leverage technology approaches to ad quality -- all hard things to do for publishers already burdened with increasing ad sales and operations challenges. Yet another reason why premium publishers will increasingly turn to sell-side technology platforms like REVV for Publishers. And for those publishers that don't, they not only risk their own brand and core data assets, they also impede the proper development of the market as a whole.

What is the definition of "Audience"?

So much talk this year in the online advertising market about "audience" -- audience insight, audience-centric planning and buying, audience targeting, audience optimization, etc.

But what is "audience"?

Of course there are multiple definitions, but in the context of online advertising I define it as a "self-selected group of people sharing similar attributes". It's not content. It's not context. It's about people, their self-identified attributes, and their attention. Can we agree?

Ads More Effective on Social Networks than Portals

According to this article and eBay Advertising's 2nd survey of European shoppers, 60% of consumers are most receptive to targeted display advertising when they are on an e-commerce site, compared to 5% on portals and 7% on social networks.

I take this to mean that e-commerce sites are 12x more effective for targeted display ads than portals (and therefore the eCPM cost of portal advertising has to be 1/12th in order for the ROI to be the same), whereas they're 8.5x more effective than social nets.

More shocking is their conclusion that targeted display ads on social networks are 40% more effective than portals!

Ad Exchanges are NOT Like Financial Exchanges

It seems everyone offering an ad exchange would have you believe that ad exchanges are like stock exchanges.  Right Media initiated the flawed comparison back in 2005, ContextWeb named their exchange ADSDAQ in 2007 (missing “NASDAQ” by one letter), and Google continues the comparison today. Certainly the comparison serves a marketing purpose – it conveys a proven model, market efficiency, standardization of the goods transacted, and fairness for all. But ad exchanges are NOT like stock exchanges.

Long before the concept of the “ad exchange” came around, there were other companies (ad networks, marketplaces, etc.) aggregating publisher inventory and advertiser demand. The biggest difference with exchanges though, hence the comparison to the stock exchange, was that their buy/sell model was based on an auction and a winning bidder – every buyer supposedly competes on the same basis for a given impression, just as buyers compete on the same basis for a given financial commodity. This model for buying and selling however is the only resemblance to a stock exchange – it ends there.

When you buy a share of stock on the NASDAQ or NYSE, you know exactly what you’re getting. You have access to the same standardized information about that share of stock as everyone else, upon which to form your own opinion or analysis, and the attributes of that stock are transparent and standardized. It’s on that basis of standardization that stock exchanges have become truly efficient market places. Any transactions based on non-public and privileged information are considered “insider trading”, illegal and economically detrimental.

In contrast, ad exchanges provide very little transparency or standardized information to what you’re actually buying – they simply offer ad inventory by the tonnage through an auction model and cookie retargeting. As a result, buyers are (by design) required to bring their own data to the table. This basically means ad exchanges as they exist today are built on “insider trading” principles and arbitrage – where the winning bids are by buyers who take advantage of market imbalances. These market imbalances allow them to buy the inventory at a price lower than what it’s truly worth. This of course works well for the buyers, but not so well for the sellers whose inventory is being undervalued. The greater the market imbalance, the greater the opportunity cost for the seller.

The imbalance revolves around DATA – all the attributes of the user and impression that increase market value. The more information available, the more potential value in the market place. As Rob Leathern from CPM Advisors points out in a recent AdExchanger blog post:

Despite people talking about how advertising online is data-driven, there is not a lot of good, clean data for buyers or sellers. Bits and pieces of data about a user and ad inventory are everywhere but publisher practices vary … Advertisers, agencies and buyers need to know more about inventory in a standardized, systematic, scalable way and for that to happen, this information needs to be created at the publisher end and retained throughout the buying process whether that is direct, via a marketplace or through an ad network … The more information that is available about an impression, the greater the chance I can make a good decision whether or not to buy it …”

Rob is speaking of course on behalf of buyers. The fragmentation of data, combined with a lack of standardization, makes his job harder. But data fragmentation also makes the seller’s job harder too, and with greater monetary consequences. Exchanges are in a position to level the informational playing field for all and become truly comparable to stock exchanges, yet they continue to separate information from media. Could it be because the exchanges are owned by the same companies that have the most data about each of us, the greatest number of advertisers, and therefore the most to gain from insider trading?

Until exchanges empower publishers with the tools, data and transparency they need to properly value and leverage their inventory in the market, they’re only encouraging the insider traders and arbitrageurs, further shifting the balance of power away from publishers. If exchanges continue to support the current one-sided model, their cost to publishers will exceed the benefit, and the comparison with stock exchanges will be but continued rhetoric.

Self-Diagnose Peter Pan Syndrome!

"Peter Pan Syndrome", as I learned just now, is the urge to stretch adolescence into mid-life. (Scientists call it psychological neoteny.) Hmmm ... I can identify with that. So it was with great interest that I saw the formula for diagnosing Peter Pan Syndrome in the new Outside issue. Diagnose yourself!

((annual salary in thousands) /(age - career changes))

                                                        X

(years in current profession + mortgages + marriages + children)

The answer is the age you're acting like. Seems to be around right for me -- my answer was 34, and that feels about the age I'm acting! So it appears I've got a little Peter Pan Syndrome. No surprise there ...

How Data is Revolutionizing Advertising

I'm serving on an interesting panel October 29th in NY to discuss how targeting data is revolutionizing the concept of “audience buying” and fueling better performance for advertisers. Really good set of panelists with representatives from ad networks, exchanges, advertisers and optimizers! See below (click for larger version).

Sponsored by eXelate and moderated by Forrester Research.

Freeride Mountain Biking Video - Mt Seymour / North Shore

Rode the North Shore of Vancouver a few weeks ago for the 1st time -- a freeride mecca of sorts, which I should have been hitting regularly since I moved back from England. My buddy Justin Herx had a flip video camera and, knowing the area really well, stopped in certain areas and took videos. Below is the compilation he finished -- well done I might add!!

I'm the guy with the smurfy blue Santa Cruz Bullit bike. All the terrain there is just incredible, but the video (generally looking up the trail) does not do justice to the technical nature of the riding and the consequences of a fall. Highlights include:

• At about 1:15 is the rock section (pretty sure) which I sailed through the 1st time (on camera, for proof!) but went over the handlebars the 2nd time when my front tire slid out to the right. Head/shoulder first into a large bolder -- took 2.5 weeks to recover from that one, and stopped me for the day.
• At 2:01 is where I took my 1st fall of the day -- not even a very hard section, mind you. Thought I'd pause at the time (trackstand) and get my balance, but then didn't have my balance. Same shoulder that I planted into the rock an hour later!
• At 2:45 is a fun shot of me coming down a large boulder. The descent is straightforward -- what you don't see is the fairly difficult approach/ascent (a skinny about 10-15' long).

View below or see larger version at YouTube.

Flannel and Figure 8s Bike Race

This is what happens when you get several "bike enthusiasts" (bike geeks, really) together for an afternoon BBQ. We take over half a parking lot, set up cones and have a "Flannel and Figure 8s" race.

For those of you unfamiliar with the concept, Figure 8 racing is basically what it sounds like, racing on a track shaped like a figure 8.  The track crosses in the middle.  As you can imagine, there is potential for carnage, and much entertainment.  

First we had the qualifying round (individual), then the full race, then the relay race. All of it below in the YouTube video. It's 9 minutes, so if you want to cut to "interesting parts" here are some:

• My seeding run at 1:25.
• Full race at 3:29 (all of us at once).
• Relay race at 5:09
• My leg of the relay race at 5:28 (followed quickly by Damon grabbing too much front brake and eating shit!)
• Final race at 7:12 (which I opted out of due to injuries sustained on Mt. Seymour)