After seeing a tweet from Jonathan Mendez about 22 companies exhibiting at the upcoming ad:tech New York starting with Ad-, we thought we would confirm and paste those names in here. We have “Ad” in the second part of our name, but we often joke that some people think CPMa is a consulting company (we are not) and we are happy not to have Ad- at the start of our name. Here are the companies (with our best efforts at intended capitalization):

Ad-Juster, Adacado, adap.tv, AdBrite, AdBuyer, adfinity, adfunky digital media, Aditall, AdJuggler, adknowledge, AdManage, adMarketplace.com, Adoori, AdOptim, adperio, AdSide, Adsmarket , AdsMe, ADTECH, Adventive, Advertise.com, Advertising Database.

It’s an ad-world!

We recently had an ad network start buying via out CPMatic.com ad buying platform – even though we are already connected to them via the Right Media ad exchange, they have found immense value purchasing from us directly. They started with a $1000 test that quickly turned into $20,000 and more.

For ad networks that work in the RMX system, there are a few problems and things you cannot do currently some of which that were possible in earlier iterations of the system. 1) if firms are connected via the exchange, they cannot directly buy/sell behaviorally-targeted campaigns, 2) controls for directing campaigns to specific publishers are sometimes cumbersome and are very general, 3) there is a limit on the ‘depth’ of serving connections allowed, meaning that you cannot buy on another site or network via a partner even if it would make economic sense, due to limitations in the RMX adserving capabilities, and 4) we can of course apply our proprietary optimization techniques to make campaigns work.

We have had several networks buying media from us, and we certainly encourage them to set up an account and initiate it. While our system allows for the upload of ad tags for campaigns, please do note that we very closely scrutinize ad tags to prevent any issues from being introduced into the ecosystem. If you have any questions please contact us.

I read with interest recently that the brightest spot in the earnings release for New York Times was the performance of it’s About.com unit.

About.com has a lot of inventory and to monetize, and has been an aggressive user of various ad exchanges including the Doubleclick Ad Exchange where it is disclosed as one of the participating publishers. That is not to say that is the reason for their good performance of course, just an interesting data point. Online revenues dropped for the other parts of the company but not as much as the problems on the offline side of the business:

The company posted a loss of $35.6 million for the quarter. On an operating basis, the company reported a profit of $80.6 million ($0.16 cents a share). Total revenues were down 16.9 percent. Revenues at the About Group unit were up 7.2 percent, but on the digital front in total, it was a different story. Website dollars dropped 7.2 percent. The main point of the NYTCo’s digital struggles in Q3 were centered at the News Media Group, which posted an 18.5 percent decline in online ad revenue. On the print side, the digital declines don’t seem nearly as bad.  Advertising revenues fell almost 30 percent for the News Media Group, as print ads declined 31.2 percent.

Publishers need to start thinking about how they can extend the reach of their inventory into various online exchanges, including those that will be enabled for real-time bidding. As our CEO Rob Leathern mentions in this piece on AdExchanger, publishers will only be able to have a voice and shape the online advertising environment and hence their revenue picture by having a seat at the advertising exchange / real-time bidding table. Part of this will relate to participating as providers of data into these ecosystems, about attaching that data to their inventory but there will also be innovations that none of us can yet predict that need strong publisher participation to help make happen.

Having a name like CPM Advisors (we often like to go by CPMa if you hadn’t noticed) and being a company that for the most part, buys CPM advertising inventory to optimize for marketers’ at a CPA level, we obviously get into the CPM vs. CPA discussion a LOT. Several of us have a leadgen/CPA background which I think puts us in a good perspective to think about how we make something work for someone who has a goal that is on the more tangible side. Having run an ad network, bought media, sold media, etc. and been on both sides of the publisher-advertiser continuum (and in-between) I think we also realize the large effect that deal structure has on incentives to perform and make deals work.

As someone selling media, CPM seems great but for the buyer it’s not the best experience. The seller need do nothing, really, for any particular deal. They collect money regardless of performance. Obviously in the overall sense, as word gets around that their CPMs are too high relative to performance, people will not buy from them, but in the micro case the onus is on the buyer to know the underlying characteristics of the media and make an assessment about whether to buy it or not. On the other hand, CPA gives the power to the buyer. They determine an activity or metric and the price they can pay for it, it’s performance-based, and absent any issues with fake leads or anything like that (not to be addressed here) they are happy. The incentive for the seller now is to collaborate and cooperate with the buyer and try to get the ads to work better to improve the likelihood of conversion. Some things are in their control – they can choose where to place the ad, when, what sub-segment of audience to target and so on, and if they are smart or have a very targeted audience they can sometimes make a lot more money than they could in the CPM case. But it takes work, and all-too often the incentives for the advertiser to care and make things work better are not there.

Run display ads with one of the big CPA networks. What do you see? Awesome Flash-based ads with great production values? No. More often it is crappy JPG and GIF-based ads with little interactivity or pizzazz to them. Part of this is a legacy issue related to making it simple for CPA pubs to pull these creatives down onto their site but REALLY in the age of pretty-much free adserving, sub-10c/Gig CDNs and the like you’re telling me you can’t get ad tags or flash onto a publisher’s page? It’s not that these ads don’t exist – the same advertisers are running the flash-based good stuff in their own often-CPM-based ad campaigns while their poor affiliates are sitting with the second rate JPG ads. The incentives are not properly aligned.

We need a new hybrid performance-model that gives incentives for the sellers and the buyers of media to come together to make campaigns work. We’ll be sharing some of our ideas on this with the industry soon, but we encourage idea sharing from others. This also means we need to empower publishers and media sellers with tools to better match their inventory with likely performing ad campaigns in a non-black-box way (some of their insights ARE useful, but with so many CPA options out there it’s a bit overwhelming for the average site owner). BUT the first thing I’d say is if you’re an advertiser using CPA or affiliate channels, bring your best creative game AND demand and actually use data and feedback they can give you about what’s working and what’ s not. Every impression is an opportunity to gather data, and make a sale. Put the crappy JPGs to bed and build a better marketing ecosystem for yourself.

CPM Advisors’ CEO, Rob Leathern, will speak at the Content Revenue Strategies (CRS) show being put on concurrently with Ad:Tech New York at the Javits Center, New York.

CRS is for small to mid-sized publishers looking for insider tips on how to maximize AdSense revenue, increase revenue opportunities via contextual optimization technologies, advertising network exchanges and the latest affiliate/lead generation alternatives.

Display Advertising for Search Marketers: Banners Aren’t Just for Branding Anymore
MODERATOR:
- Dax Hamman, VP, Display Media, iCrossing

PANELISTS:
- Roy de Souza, CEO, Zedo
- Rob Leathern, Founder and CEO, CPM Advisors
- Div Bhansali, Director, Self-Service Products, AOL Advertising

CPM Advisor’s CPMatic system has been approved to serve ads into the Google Content Network. If using the advertising network lingo, we are now an approved advertising network on the Google Content Network. We’re not the only one, but we’re one of the first. Here was the list as of today, I’m sure many more will be added soon. It appears the current order of the list is the order in which they were approved, though that may not be the case.

Our CEO happened to spot a mistrafficked ad on the Chicago Sun-Times website this past weekend when looking for information about the marathon winner. But what was really more interesting is what the page itself looks like from an advertising perspective, and the broader questions it poses for the future of newspapers and the online advertising model for those firms like many newspaper properties who were previously considered premium publishers on the Web.

First, when I reloaded the page from the link above, I found that the Westin 160×600 no longer was inside the top 728 banner, but it now was floating (see above) partially obscured by their SearchChicago classifieds widget. Eek. But more interesting were some of the other ads. The first is a content-looking box from ARALifestyle.com, discussed here by Jay Weintraub in a post. Very clever, “are you snoring yourself to death” of course is an “article” of sponsored content that reveals its sponsor very subtly at the end.

In addition, in the meantime there has been a popunder launched which has several similar-sounding ads to help with cellulite, flat stomachs, colon cleansers and the like. This is the company Adblade.com of course, although there is no longer any disclosure that we can see on the pop except for a very light “Advertisement” – there is no Adblade branding thereupon and I thought it was interesting that they chose to show the address bar with a Zedo.com adserving URL. No doubt intentional, much the way some networks hide they are doing pops.

It is interesting that premium publishers like Yahoo! have banned all advertisers like these from their network and yet they are still seeing a lot of action on newspaper sites. Further down the page there are a couple of other banners in rotation, at one point it looks like Pulse360’s text ads are there with more negative-option weight-loss ads showing up.

These offers appear to be where a lot of the online ad money is currently, and whether it works out for them or not, all kudos to Yahoo! for saying they don’t want to have these ads on their network (Microsoft has not yet done the same, by the way). It certainly doesn’t seem to perturb the newspaper sites. But moving along to the bottom of the page  we round out our quick analysis with one more shot showing a few more ads….

Another set of text ads at the bottom with a display unit way on the bottom – to bring the total for this page to:

1 x pop with 6 text+image ads

1 x top 728×90 display banner

1 x 300×250 “content-like” banner

1 x dynamic classified ad banner/link unit

1 x Left 120×600 with text ads

1 x Right 160×600

1 x bottom 300×250 with more ARAlifestyle ads

2 x bottom 728 x90’s with text and display ads

So at least 7 in-page units with a big popunder. Is this really that different from offline newspapers? Maybe not. But the main point here is that we encourage advertisers to think about the context in which their ads are being placed when they assess whether it is better being on a legitimate site they may not have heard of with two other ads versus being on a brand-name site like this with 6 or 7 other units stuck way below the fold at the same price. Or perhaps they shouldn’t care – both options are useful – at some price. It just seems unlikely that the so-called “premium” publisher today is getting the benefit of understanding the true value and the true tradeoffs they are making when selling their ad space this way, and we as an industry on the advertiser side need to do more to build tools to help bridge the information gap so we can get more of what we need and the publisher can be more fairly compensated for the audience they are able to deliver.

Our CEO, Rob Leathern, wrote an article on InternetEvolution.com about user value per hour recently in which he presented information about the number of hours that consumers spend with various media and how much advertising revenue can then be boiled down per user hour. Here are some of the figures and calculations in more detail for anyone who is interested (data mostly gathered based on 2008 figures):

Hours of television per year for US Adults: 230,117,876 US Adults per the Census Bureau (18+) x 120.8 hours of television per month (Veronis Suhler Stevenson) = 27,798,239,421 adult-tv-hours per month, multiply by 12 = 333,578,873,050 television hours.

Television advertising dollars: $66,997,840,000 = added a 4% increase over a 2007 figure from TNS Media Intelligence.

Television access costs: $78,886,000,000 for all cable television revenue from SNL Kagan (referenced in the US Census Statistical Abstract 2009, Table 1105). You could probably make an argument about Premium cable and non-cable delivered premium services but then you get into online premium services etc. so I chose to focus on this figure instead.

The ad revenue per user television hour is thus the TV ad dollars / the Hours of TV per year = $0.20 per user hour

Access costs for television is Television access costs / hours of TV per year = $0.24 per user hour

Internet hours for 2008 for the US = 65,163,488,083 which figure was from comScore, adding up the monthly millions of minutes for each month in 2008.

Internet ad revenue for 2008 = $23,448,000,000 from IAB/PwC report, as is the split between search and non-search (45% is search for 2008 according to the report). From looking at these two numbers you get the online ad revenue dollars per user hour = $0.36

Based on comScore and Nielsen figures on the split between time spent with search (5%), we end up with 3,258,174,404 user hours for the year for search, and 45% of the revenue ($10,551,600,000) leading to $3.24 of search ad revenue per user hour spent searching.

Internet access fees were a little more difficult to get which is why my numbers were a bit more uncertain. I got from Pyramid Research a figure of $32 billion for broadband access but the dial-up and other access proved a bit more elusive so I guesstimated another $12 billion – so if you take $44 billion in access fees you end up with $0.68 per user hour for internet access. The figure is probably more if you take into account the costs of work access and so on, but we figured a $0.50 to $0.70 range is probably reasonable and conservative.

Anyone who has build forecasts and models knows that there is always uncertainty about figures even at this scale, but hopefully the analysis is interesting to people and draws attention to the job we have to do better as online advertising practitioners – driving user engagement with brands and products and making online advertising more effective AND useful.