Month: February 2018

There are changes publishers need to address to ensure we are thinking about the longer-term implications of site management. Reducing ads that create friction with our users makes logical sense in
reducing the need to leverage ad blockers.

AdExchanger |

With additional reporting by Alison Weissbrot. Sizable brands and top-tier publishers can use their clout to pressure media platforms into sharing more measurement data – but what are advertisers actually getting? Just enough to keep them spending, said Chris Kane, founder of programmatic consultancy Jounce Media. “Walled gardens will do the minimum acceptable thing so… Continue reading »

The post Duopoly Shares More Data With Brands, But There Are Snags​ appeared first on AdExchanger.

AdExchanger |

Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Social Backlash Speaking on NBC’s “Meet the Press” Sunday, Democratic Sen. Amy Klobuchar of Minnesota said she would support legislation fining social media companies that don’t weed out political bot accounts. “These are the most sophisticated companies in America. … I believe that they’ve… Continue reading »

The post More Calls For Fed Action Against Social Platforms; SintecMedia Rebrands As Operative appeared first on AdExchanger.

By AppNexus

In recent years, the World Economic Forum in Davos has offered a friendly stage for representatives of major technology behemoths. These are the companies that fundamentally reinvented the internet, along with industries as wide-ranging as media, advertising, and commerce.

This year, the narrative shifted, giving way to a rising tide of anger directed towards Facebook and Google — arguably two of the most influential companies of our time. George Soros summed up attendees’ negative sentiments when he accused the “duopoly” of monopolistic practices, called for tight regulation, and even declared their days of ascendancy numbered.

To be sure, it’s been a rough year for both companies. Facebook earned notoriety for enabling the spread of fake news and for becoming a favored tool of influence for Russian agents. Google has come under fire for monetizing violent and extreme content on YouTube — including videos in which children appear to be endangered. And these issues produced an uproar amongst Facebook and Google’s true customers: the brands whose ads are appearing next to objectionable content.

Unfortunately, many of these problems are of both companies’ making, and they bear an eerie similarity to the self-manufactured crisis that upended the financial sector in 2008 and 2009.

A decade ago, major financial institutions bundled together bad debt with good debt, packaged it all into CDOs and presented them to investors as safe, AAA instruments. Facebook and Google earn the lion’s share of their revenue from selling advertising inventory, but their approach is analogous to debt securitization. Neither company produces quality content, be it compelling journalism, music, or film. Instead, they package a small amount of other people’s quality content alongside a massive amount of low-quality, user-generated content (UGC) — cat videos, amusing memes, viral articles, and, yes, fake news.

Given their sheer reach and scale, Facebook and Google offer advertisers the opportunity to reach clearly-defined audiences across their platforms. So they can sell advertising inventory at a healthy premium. What they don’t tell advertisers is that there is a surfeit of low-quality and risky content beside which their ads may appear. As was the case during the financial crisis, the system hums along until the subprime inventory bubbles to the surface.

However, while the game might be up, the backlash is not (yet) reflected on the companies’ balance sheets. Facebook recently announced earnings of nearly $13 billion in Q4 and saw its stock price rise to an all-time high. While Google’s stock fell on news it missed Wall Street’s profit expectations, it still raked in nearly $32 billion in revenue. Together, the Facebook-Google duopoly takes up nearly 70% of the U.S. ad market, and both companies have market caps on par with the GDP of major economies like Turkey and Sweden.

The question then becomes, how long is this sustainable? How long will advertisers continue pouring money into a system that poses a serious brand safety risk? How long will consumers keep returning to platforms they perceive as damaging to their communities and political systems?

Even now, the cracks are beginning to show. Plenty of advertisers have decreased spend with Google following its content controversies. While Facebook’s earnings are strong, its daily active user count in the U.S. and Canada fell for the first time ever this quarter. It also appears that Facebook’s attempts to insulate its newsfeed from fake news, by de-emphasizing viral video and publisher content, may cause users to disengage further.

Facebook and Google will also see fiercer competition for ad dollars over the next few years as traditional media companies consolidate to challenge them. Disney and 21st Century Fox have joined forces to create perhaps the largest catalog of high-quality content in existence. Meanwhile, AT&T wants to buy Time Warner, which would allow the combined entity to combine robust user data with quality video.

These mega-companies may match the scale and reach that Google or Facebook currently offers. But they also have something that neither of the behemoths can offer: quality curated content. For marketers, this combination will pose a far lower brand safety risk — at the very least, they can probably expect their ads not to appear next to jihadi recruitment videos if they spend with Disney. Combine quality content with user data for enhanced targeting, and you’ve put a huge dent in Google and Facebook’s marketplace position.

If this scenario plays out, Facebook and Google may have to learn how to become content creators themselves. We already see Facebook moving in that direction with the launch of its original video offering.

But can Facebook and Google really keep up with the likes of Disney and Time Warner when it comes to original content? We’ll see. Given the size of the task, perhaps Soros’ prediction of decline isn’t so far off.

The post Facebook and Google’s “duopoly” status might not be so safe appeared first on Digiday.

Another online conspiracy, this time surrounding the Parkland, Florida, school shooting, has provided an ugly reminder of tech’s role in helping spread false or misleading information.

InfoWars has arrived in the spotlight for a video from founder Alex Jones alleging the shooting was a “deep state false flag operation.” YouTube pulled the video and warned InfoWars it faces a ban if it has further violations. The move highlights the pressure distribution platforms like YouTube and Facebook face when it comes to controversial content. The same pressure is on monetization platforms used by sites like InfoWars.

Infowars was running a native ad widget from Taboola. Taboola said it would remove the widget after being alerted to it by Digiday on Feb. 21. The Infowars situation was due to a partnership with a third party that was unaware of Taboola’s policy to not work with publishers that intentionally deceive or harm consumers, said Adam Singolda, CEO of Taboola.

“This is an oversight of our policy not extending properly to some distribution partners, for which we take responsibility,” Singolda said. “Following this discovery, we have since asked to remove ourselves from Infowars through that partner and will work with all of our third-party partners [so] that all of our policies are implemented throughout.” Singolda added that Taboola has 30 full-timers working on preventing the spread of misinformation and fake news.

Videos and posts promoting a theory that David Hogg, a student who’s been outspoken about the school shooting, was a “crisis actor” appeared on YouTube and Facebook before those companies removed them, showing even the tech giants’ efforts to clean up their sites aren’t error-proof.

The conspiracy also shows there are still plenty of other ad tech tools for sites that promote such misinformation to find an audience and monetize. Revcontent, a content-recommendation network based in Sarasota, Florida, also has its widget displayed at the bottom of articles on Infowars, per the mobile screenshot below.

A spokesman for RevContent said the company does provide ads to InfoWars but “still have yet to be given any links that violate our extremely stringent terms with regards to editorial process.”

“YouTube, Facebook, Google, Twitter are all working on this and doing a good job, but the burden should not just be on the big guys,” said Marc Goldberg, CEO of Trust Metrics. “All these other third parties who are able to monetize these pages, advertisers have to stop funding them. You can plug into different exchanges, and if no one identifies you as a hate site, you can make money today. If we expect change, it can’t just be from the top.”

In a newly released Integral Ad Science survey of agencies, publishers and advertisers, 57.6 percent listed ads delivered within risky content as their second-biggest concern with programmatic, after ad fraud.

There’s been some progress in the digital ad ecosystem. Ad fraud is declining as advertisers get better at weeding it out, according to the Association of National Advertisers. Advertisers are pressuring the platforms to clean up their act because they realize that declining public trust in social media can rub off on the advertisers that use those platforms. Many of the fake-news sites that proliferated during the 2016 election are no longer around.

Increasingly, there’s an acceptance that there will always be a certain amount of controversial content that finds an audience and funding, though. Marcus Pratt, vp of insights and technology at Mediasmith, said the agency is increasingly using whitelists in automated ad buying, which helps eliminate unsafe sites. But advertisers are more concerned with violence and nudity than politically controversial content, and tech companies that don’t have a public image have less motivation to make sure they’re not associated with such content.

Barry Lowenthal, president of The Media Kitchen, threw out the idea that advertisers put a disclaimer on their ads saying they don’t endorse the surrounding content, which could pressure the platform in question to police the content. At some point, though, the question becomes how “safe” can the internet really become, given freedom of expression is a value, too.

“You’re never going to remove everything bad in the world. Should we prevent everyone with a divisive opinion to express it?” he said.

The post With conspiracy-peddling sites under the microscope, Taboola yanks its content ads off Infowars appeared first on Digiday.

YouTube has instituted new ad rules that “demonetize” small channels on the platform. The changes are forcing several YouTube networks to release creators with channels that fall below YouTube’s thresholds from their contracts.

YouTube announced its new rules for the YouTube Partner Program in January, with the changes going into effect on Feb. 20. According to the guidelines, in order for a channel to join or remain eligible for the program, it must have at least 1,000 subscribers and 4,000 hours of watch time in the last 12 months. Once those requirements are met, YouTube will further evaluate a channel to ensure it did not collect any strikes and isn’t hosting any spam or inflammatory content, after which YouTube will allow it to run ads. YouTube’s decision came as the platform continues to battle brand-safety issues.

Multiple YouTube networks said they don’t expect the changes to have a huge impact on the amount of ad revenue they generate on the platform. By YouTube’s own math, roughly 90 percent of the channels affected were making less than $2.50 per month. In the aggregate, this could amount to tens of thousands of dollars in lost revenue per month.

What’s clear is the sheer number of creators of many YouTube networks will take a significant hit. Paladin, a tech company that provides management tools for more than 50 YouTube networks and influencer marketing companies, estimates that more than 80 percent of channels within these networks fall below YouTube’s threshold.

Fullscreen, which Otter Media owns, and Bent Pixels were among the YouTube network operators that said they will release creators with demonetized channels from their contracts. Fullscreen declined to reveal how many creators within its network were affected by YouTube’s new ad rules. Bent Pixels, which used to have more than 23,000 channels within its network, now has roughly 1,100 creators across gaming, entertainment and lifestyle verticals, said Bent Pixels CEO Mike Pusateri.

“We have chose this direction because of our significant investment in brand solutions for our talent and because the risk is too high to effectively manage tens of thousands of creators and not be able to monitor the content as tightly as we’d like,” Pusateri said. “We anticipate those guidelines further tightening this year and beyond.”

John Holdridge, Fullscreen’s svp of social video strategy, said that while YouTube’s decision forced Fullscreen to cut ties with smaller creators, Fullscreen is still looking for ways to support some of these creators going forward. In some cases, Fullscreen is offering other tools and services that creators can use to upload content to different platforms and continue growing their audience. Once they surpass YouTube’s new thresholds for monetization, Fullscreen will bring them back into the network, Holdridge said.

With YouTube’s changes going into effect on Feb. 20, Holdridge added that creators that got demonetized will still be paid out anything they’re owed up to that day.

“We’re also looking into how we can help [demonetized creators] find a path forward. Maybe they need to make this type of content versus that type of content; maybe there are audience-development strategies that they can employ to build a sustainable audience,” Holdridge said.

That said, not all YouTube networks are cutting ties with creators. Channel Frederator Network, a network with roughly 3,000 channels focused on animation, said it remains committed to providing a full suite of services to creators within the network whose channels got demonetized. YouTube’s changes affected about a third of the channels within the network, according to Jeremy Rosen, vp of programming and product at Frederator Studios.

When YouTube announced the new rules, it did not give YouTube networks a warning, but Channel Frederator Network quickly came to a decision that it would honor the contracts, Rosen said.

“We were not the ones who walked away from the contract — it was YouTube,” Rosen said. “Just because they’re going to change the parameters on a deal we already made, it doesn’t mean we’re comfortable walking away from it.”

It helps that Channel Frederator Network is smaller and more focused than some of the bigger YouTube networks that have collected tens and thousands of channels. The company’s decision to keep its creators was also not only for altruistic reasons — through its Frederator Studios business, the network in the past has found different creators within the network to develop animated shorts and other video series.

“The network has been a great source of talent for us,” Rosen said.

In some ways, YouTube’s new rules end up benefiting some of these bigger networks, said Paladin COO Thomas Kramer. Mostly, the changes will reduce overhead costs for networks tied to transaction costs, music copyright claims and other basic services that most networks offer to creators.

“Plus, the number of creators an MCN had was more or less a vanity metric,” said Kramer. “It was so you could tell Disney that you had 50,000 creators that could pitch Disney products. But the reality has set in, and any substantial influencer marketing campaign these days only has a handful of talent.”

For advertisers, YouTube’s decision is certainly a welcome change.

“This will make the ecosystem healthier in the long run, resulting in fewer established channels being demonetized accidentally,” said Brendan Gahan, founder of ad agency Epic Signal. “[There will also be] a higher degree of brand safety for the advertisers spending money on the platform because YouTube will be able to dedicate more resources to fewer channels.”

For more on all things video, subscribe to Digiday’s new weekly video briefing, written by Sahil Patel.

The post YouTube’s brand-safety efforts are forcing YouTube networks to cut small channels appeared first on Digiday.

Publishers are pivoting hard to subscriptions. In the past few months alone, publishers including CNN, The Atlantic and Wired have made moves to put up online paywalls. In a Reuters Institute survey of 194 global publishing execs, digital subscriptions were listed as the most important revenue stream in 2018, by 44 percent. With almost all digital ad revenue growth going to the tech giants and Facebook choking off the news feed for publishers, it’s no wonder publishers are looking hard at reader revenue.

But wishing for something doesn’t necessarily make it so. While it’s tempting to think reader revenue is the answer, the number of publishers that can pull off a scaled subscription business is likely to be small.

“A lot of people are going, ‘Reader revenue, it’s working for The New York Times, it’s working for specialty publications; that’s our path,’” said Vivian Schiller, a former Times and NPR exec. “I’m afraid for most news publishers, it’s going to end in tears.”

The optimism around subscriptions isn’t surprising. The Times, The Washington Post and The Guardian have grabbed headlines this past year for growing digital subscriptions and (in the Guardian’s case) reader contributions. At the same time, there’s been an outcropping of focused news startups including The Information and Stat for professional readers that command subscription prices of hundreds of dollars a year. The so-called Trump bump, which has since waned, has lifted spirits that people will pay for news online, despite it having been freely available for years.

In the case of newspapers, people have already bought them in print and online for a long time, and they have well-established subscription infrastructures. Remember that before the Times’ current much ballyhooed subscription model, it had two earlier failed attempts and went through “a hell of a lot of investment in data and audience segmentation,” said Schiller, who was at the Times during its second attempt, TimesSelect. “It’s tough to get it right.” These publications also all have highly differentiated content, and in the case of the niche publications, they’re often serving a professional need and can be put on the company credit card, which reduces buyer friction.

The reigning perception is still that most online news can be gotten for free. A 2017 Reuters Institute survey found 16 percent in the U.S. paid for online news in 2017, up from 9 percent in 2016. That sounds impressive, but 79 percent still said it was “somewhat or very unlikely” that they’d pay for online news in the future. And those who will pay are most likely to pay for news reporting, less so lifestyle and entertainment news.

Even for those that have been at subscriptions for a while, the portion of people who pay is still in the single digits as a percent of the entire digital readership, pointed out Raju Narisetti, CEO of Gizmodo Media Group and former svp of strategy for Wall Street Journal parent News Corp.

The recurring revenue of subscriptions is attractive, but the economics are hard. It costs money to sign up and hold on to a subscriber; turnover is highest in year one, and it can take a few years before a subscriber is considered hooked. Publishers can look overseas for growth, but will probably have to discount the price to appeal to people outside their home market, which cuts into overall subscription revenue, Narisetti said.

“If the idea is, it’ll create a revenue stream that’s less volatile, less dependent on factors outside your control like Facebook or Google or programmatic, it makes sense to have a subscription model,” he said. “But it’s going to be a fraction of your business that’s willing to pay, and even after all these years, it caps off in the high single digits, which automatically means you can’t expect that revenue to be that meaningful that it makes up for ad-revenue declines.”

To be successful at selling subscriptions or their high-touch cousin, memberships, publishers need to become like product marketers, something most don’t yet know how to do, said Michael Silberman, svp of strategy at Piano Media and former architect of New York Media’s digital business.

“This is a big shift, and it takes a new way of thinking and executing,” Silberman said. “It’s this shift not only from attention to engagement and from a content-centric point of view to a customer-centric point of view. And then applying your intelligence about that customer to create an editorial product that’ll really be appealing to them. I think we’re in the very early days of being able to go down that path.”

Recognizing a lot of news is commoditized, some publishers (Digiday included) have moved to memberships that bundle a lot of products and perks together. In theory, that makes it harder for a subscriber to quit, reducing churn. But pulling off a model like that takes a customer-focused approach than most publishers aren’t used to.

“Despite all the lip service, we’ve never been a reader-friendly industry,” Narisetti said. “If you try to unsubscribe to a major news brand, it’s a nightmare. And if you’re a member, the expectations for service levels go up because the whole point is to make you feel special.”

At some point, there may be saturation where publishers see their subscription growth taper off because there are so many offers out there, something some publishers are already worrying about.

But for now, they’re are still willing to experiment. The majority of print and digital-native publishers in Reuters Institute’s 2018 survey are pursuing multiple revenue streams, among them, subscriptions. Gizmodo Media Group, too, plans explore memberships across its publications, which include Gizmodo, The Onion and Jezebel. The experiments could include special access to an individual vertical or a suite of benefits for people who regularly visit multiple ones. But Narisetti is a realist.

“It adds a sixth revenue stream for us,” Narisetti said. “But we’re not expecting it to be a gigantic revenue stream in year one.”

The post ‘It’s going to end in tears’: Reality check is coming for subscription-thirsty publishers appeared first on Digiday.

More advertisers are starting to ask better questions of the supply-side platforms their demand-side platforms use to hopefully yield better results.

Hiring a DSP, for many advertisers, previously rested solely on the media objective — selling cars via the cheapest cost per acquisition, for example — it could deliver. Now, there’s more focus on whether that media objective is being met fraudulently or through unsavory means, a decision advertisers like U.K. telecommunications firm BT are making based on the origin of the inventory coming from the exchanges and SSPs their DSP uses.

BT is set to make changes to its DSP spending in 2018. Graeme Adams, head of media for BT, which moved an estimated £160 million ($223 million) in media spending to WPP-owned Essence last year, is turning his attention to BT’s ad tech partners in the coming months.

“Figuring out the right DSP is something I want us, our agency, the various marketing teams here to take the time to think about because I don’t think there’s been enough focus on it historically,” he said. “You can just end up in a particular place without really taking the time to understand it.”

Ad exchange OpenX is at the front lines of the shift in the way supply-side partners are being interrogated. As advertisers like Procter & Gamble and Betsson Group have settled on DSPs that are as close to the inventory source as possible, their focus is turning to the ad exchanges and SSPs plugged into those platforms, said Joey Leichman, senior director of buyer development at OpenX. Marketers, according to Leichman, are now questioning whether it makes sense to work with 60 ad exchanges if only six of them are authorized to sell a publisher’s inventory.

While every request for information for a supply-side partner will differ, the questions are likely to fall into three categories, according to experts interviewed for this story: The first set of queries would cover general information such as the number of publishers on an SSP and the type of media those sites support; the second batch would examine the SSP’s approach to quality, such as its adoption of ads.txt or safeguards against ad fraud; finally, advertisers would want qualitative information to back up the sales pitch. Advertisers don’t just want a nice story about quality from their numbers; they also want to know their partners can deliver media results.

“We’ve never seen more people at brands and agencies determined to figure out who their supply-side partners are, what their publisher relationships look like and what guardrails they have to ensure the integrity of the marketplace,” Leichman said. “It’s why we’re seeing more supply-side reviews happening. Call it the year of the RFI.”

Quality over quantity is not a new concern in ad tech. Brands like L’Oréal, Heineken and P&G have used their own workarounds to increase reach by reducing wastage for some time. But not every brand has the media acumen of those big-spending brands, and so many, like Jaguar Land Rover, have been more reliant on the widespread adoption of ads.txt and the proliferation of TAG-certified companies to question the practitioners pulling the programmatic levers.

“We’re paying much more attention to working with partners that are ads.txt and TAG-certified,” said Ian Armstrong, gm at Jaguar Land Rover. “We’re not as sophisticated as some of the [consumer goods] brands, as we have historical issues that we have to contend with as an automotive player, but we’re trying to go through a process of standardization with the partners we work with.”

Last October, adoption of ads.txt among the biggest 1,000 publishers in the U.S. hovered at around 50 percent. Fast forward to mid-January, and three out of every four (82 percent) of the top 1,000 publishers now use ads.txt. Furthermore, companies like OpenX and MediaMath are mandating that their publisher partners adopt ads.txt in anticipation of big brands enforcing the anti-fraud initiative. Indeed, in a survey by the World Federation of Advertisers earlier this year of 28 companies that spend in excess of $50 billion globally on marketing communications, a third (34 percent) said encouraging ads.txt adoption is a major priority for the year ahead.

It’s not at the point where Jaguar Land Rover is only buying through publishers that have implemented ads.txt. The initiative on its own won’t untangle the web of challenges in transparent media buying. Jaguar Land Rover is also trying to improve on blocking malicious ads, identifying legitimate traffic and monitoring the quality of ad impressions bought. But there is more pressure on the automotive advertiser’s ad tech suppliers to adopt ads.txt.

Supply-side partner review can’t come soon enough to the industry, said Justin Kennedy, chief operating officer at SSP provider Sonobi. For a long time, it was as easy as getting a seat on a major exchange to launch a new SSP with access to seemingly endless supply. “Ads.txt and other initiatives such as header bidding are starting to help truly identify the companies that can provide competitive differentiation to the market,” Kennedy said.

The post ‘The year of the RFI’: Advertisers step up supply-side partner reviews appeared first on Digiday.

When Dotdash rebranded its home and food content as The Spruce almost a year ago, it took a risk: cutting ad loads by 30 percent. But thanks to The Spruce’s audience tripling over the past year to 30 million unique visitors in January, according to comScore, revenue grew 40 percent year over year in the fourth quarter. Direct-sold advertising is on pace to increase in the first quarter compared to last year’s fourth quarter. The company wouldn’t share specific dollar figures.

“There was a lot of doubt we could make hay in this space because it’s so crowded,” Dotdash CEO Neil Vogel said. “But the winds of what marketers and advertisers want change all the time. And the winds have blown in our direction.”

The site has compiled performance data on each of the advertising units spread across all of The Spruce’s page templates. That benchmark data about viewability, click-through rate, hover time and other engagement metrics is delivered to advertisers — excluding advertisers that purchase Spruce inventory on open exchanges — alongside the performance of their own ads.

Eric Handelsman, The Spruce’s gm, said The Spruce’s editorial staff puts considerable effort into keeping its content current. There are 54,000 articles in the site’s archive, and on average, each piece was updated less than one year ago. More popular content is reviewed once a quarter.

Because so much of the content is intent-driven — over 90 percent of its desktop traffic comes from search, according to SimilarWeb — The Spruce has spent a lot of time mapping its visitors’ interests and using that information to package articles together. The Spruce recently created a product it calls “journeys,” which group related articles together to encourage people to read more. Someone reading an article on how to make a martini, for example, will get a recommendation for “The Ultimate Cocktails Guide,” which includes a list of popular cocktails and a guide to buying cocktail blenders.

“We’re obviously concerned with engagement, but engagement is not the metric we look at as success or failure,” Vogel said. “We’re interested in them coming back.”

Revenue from e-commerce is also heading up, but most of The Spruce’s growth in 2017 came from selling display and branded content against 32 audience segments the publisher developed over the past 11 months. Without sharing specific dollar figures, Vogel said The Spruce’s advertising revenues were split about evenly between programmatic and direct sold, with its private marketplace revenues representing the fastest-growing segment.

The post The Spruce kept advertisers and audiences coming back in its first year appeared first on Digiday.