Pinterest Owes Its Strong Q2 To A Focus On Advertiser Diversification

Pinterest had a great second quarter – which is also only its second quarter as a public company – but don’t expect the sort of numbers you see from Google, Facebook or even Snapchat. “When will we be as mature as Google and Facebook? I think it’s a long road ahead,” Pinterest CEO Ben Silbermann told investorsContinue reading »

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Want To Get More Out Of Programmatic While Balancing CX? Invest In Your Tech.

“The Sell Sider” is a column written for the sell side of the digital media community. Today’s column is written by Christopher Guenther, senior vice president, global head of programmatic, at News Corp. One of the oldest tenets of business has been to put the customer first – and it holds especially true for media. PublishersContinue reading »

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Comic: How Much Will You Spend With Us?

A weekly comic strip from AdExchanger that highlights the digital advertising ecosystem…

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PE Firm Buys Peer39 For $18M; Details Start To Emerge On FTC Antitrust Probe

Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Without Peer Sizmek offloaded its contextual advertising company Peer39 to private equity firm O3 Industries for $18 million, Business Insider’s Lauren Johnson reports. O3 reportedly beat out other bidders including The Trade Desk and Zefr. So what’s the future of Peer39? Mario Diez, whoseContinue reading »

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‘Just four dudes’: Inside EasyList, the community-run ad-blocking list disrupting the internet

In early June, employees at the digital car marketplace Autotrader UK discovered that they had a problem.

Dozens of site visitors were complaining that they were unable to see car listings supplied by site’s car dealers, rendering the site difficult, if not impossible, to use.

After some digging, Autotrader UK figured out that the malfunction was only happening to visitors using ad-blocking software, which helped lead staffers to the source of the problem: EasyList, an open-source, community-run list of rules that powers popular ad-blocking software including Adblock Plus and the browser Brave.

The crowdsourced list helps control the browsing experience of a substantial number of internet users. Though EasyList does not publish current figures about its use, Adblock Plus alone has been downloaded more than 100 million times. UBlock, another Adblock-owned blocking extension, has more than 15 million active users across Chrome and Firefox.

While the purpose of the list has always been to keep advertising out of web experiences, EasyList’s rules regularly break normal editorial features on sites. In the past six months, EasyList changes have broken the buy buttons on commerce site The Inventory, the video player on Animal Planet, disrupted site navigation on Fandom, and disrupted the style and CSS loading process on job search site Indeed.

Though most of these issues were resolved quicklyas publisher sites continue to evolve, they have to contend with the possibility that they might run afoul of one of the most important crowd-maintained documents on the internet. EasyList did not respond to a request for comment.

“It’s crazy that more people don’t know about this,” said Marty Kratky-Katz, the founder of Blockthrough, which lets publishers monetize using Adblock Plus’s Acceptable Ads program. “I don’t think they mean any harm or have any malicious intentions. But it’s not like they were experts in balancing publisher monetization, or like they were elected. They’re just four dudes.”

EasyList was originally launched in 2005, as a kind of add-on to the Adblock browser extension. Several different people have overseen it since then, and today, a group of four people, led by a man named Ryan Brown, is authorized to change EasyList’s rules.

Over time, its list of rules (and exceptions to those rules) has grown sprawling. Analysis conducted by Brave last summer found over 70,000 rules in EasyList, a mixture of network rules, which determine whether a site fetches sites or code from web addresses that match a certain kind of pattern; element rules, which dictate whether certain page elements, such as banners, can be displayed; and exceptions to the element and network rules.

The exceptions, which constitute about 9% of EasyList’s rules, according to Brave, are necessary because EasyList’s network and element rules sometimes break a normal site’s functions. In many cases, the breaks are caused when developers use a word in their code that EasyList has banned, such as “advert.” Those sorts of issues are easiest to fix by site developers. “Sometimes it’s easier just to change things on our end,” said Josh Butts, svp of product and technology at Ziff Media Group, which operates a portfolio of commerce, shopping and editorial sites.

But there are occasions when those changes are hard to make. In Autotrader UK’s case, for example, the change would have involved fixing hundreds of thousands of pages. That compelled them to visit EasyList’s message board, where it had to plead its case and hope an EasyList author would decide to make a change.

In many cases, fixes are minor and people from EasyList make them quickly, often within a matter of hours. But sometimes its authors dig in. The Autotrader UK example took nearly a week to resolve, in part because one of the list’s authors made it clear that he would prefer Autotrader UK to change code on their end, rather than write an exception.

Autotrader’s parent company did not respond to a request for comment.

Those periodic disruptions are trouble for both parties. But ad-blockers don’t mind. “Is there stuff they’re blocking that maybe they shouldn’t? Yes,” Kratky-Katz said. “But I think it’s a price worth paying if you’re in favor of ad-blocking.”

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Despite scandals, advertisers say YouTube Kids is effective

When YouTube Kids launched in 2015, media buyers were intrigued by the opportunity to advertise to kids in a safe environment. Four years later, even with the scandal of violent Elsa, advertisers within the kids’ demo are still putting ad dollars behind YouTube Kids.

A brand exec who buys ads on YouTube Kids said the platform allows kid-focused clients to reach the right audience safely online since children can’t be on social networks. YouTube Kids is not bucketed in the social budgets since it doesn’t have a community or comments, the executive said.

“Advertising on YouTube comes with trade-offs, scale versus kids. Kids and social don’t really mix. Kids are either not on social platforms or they’re not supposed to be on social platforms,” the executive said.

Indeed, kids love YouTube. But they aren’t supposed to be there. As one media executive said, “On [regular] YouTube, if you’re under 13, you don’t exist. You probably don’t have your own account. You’re watching on your parents’. But the amount of kids’ usage of main YouTube is vastly, dramatically under-reported.”

YouTube Kids was YouTube’s way of serving that audience while obeying the Children’s Online Privacy Protection Act (COPPA). YouTube Kids was YouTube’s attempt to build a platform designed for children as opposed to assuming that all users were over 13, said Dylan Collins, CEO of SuperAwesome, a company that focused on kid-safe tools and technology.

“The challenge faced by YouTube and a lot of the older technology platforms is they were simply not designed to accommodate the sheer volume of children using the internet today,” Collins said. “Google is an incredibly successful business engine that is entirely based on one type of internet user, an adult. Adapting this model to children requires them to do the opposite of everything they’ve scaled, going from maximum data to zero data, which is really difficult to do.”

At launch, YouTube Kids would include content specifically intended for children and be supported by age-appropriate ads. As Bloomberg reported in June, YouTube considered making YouTube Kids completely curated and subscription-only but opted for algorithmically sorted and supported by advertising. Unsurprisingly, scandals emerged due to YouTube’s unwillingness to vet all of the videos. In October 2017, Mashable revealed the unsafe, even violent, content that appeared on YouTube Kids.

In the wake of those reports, YouTube said it’s worked to curb the problem by introducing more curation and parental control. But YouTube’s systems aren’t foolproof, as it described in a blog introducing new parental controls on YouTube Kids: “We work hard to make videos in the app family-friendly, but no system is perfect.” Last month, the Federal Trade Commission reportedly agreed on a multibillion-dollar settlement with YouTube due to COPPA violations. YouTube declined to comment on the FTC settlement.

Still, advertisers have remained on YouTube Kids. The app has 20 million weekly users, according to a YouTube spokesperson. Paramount’s “Dora Lost City of Gold” has been advertising on YouTube Kids through an exclusive sponsorship of Dodo Kids, a new children’s programming division from Group Nine Media’s The Dodo. Dodo Kids’ videos appear on both YouTube and YouTube Kids and in tandem so do the ads for the new “Dora” movie.

Of course, the ad inventory available to YouTube Kids is limited. An ad executive at a holding company said they focus more on making sure their clients aren’t delivering to kids through YouTube’s main app.

“The best reason to segregate YouTube viewers into kids and non-kids is because more and more of our advertisers are looking to avoid delivering to children. With the ICO, U.K. government watchdog, some of our clients have been cited for certain types of ads, parents letting kids watch things that they shouldn’t. The only kids advertising we might do is co-viewing,” the executive said.

Though YouTube cannot acknowledge kids on the main site, there is the possibility of co-viewing by families. Andrea Ching, CMO of OpenSlate, a video analytics company that has worked with YouTube on brand safety, said she “didn’t believe co-viewing is a real thing when you’re dealing with the small screens of phones and tablets. Our experience is that advertisers targeting adults want to avoid content that’s obviously programmed for children as best they can.”

Yet there’s irony in advertisers’ desire to avoid targeting kids. For those who are so committed to brand safety, the most brand-safe channels tend to be kids content.

“The more you care about brand safety and suitability, the more it’s going to push you into kids content because there’s no profanity. Audience [data] tells you that it’s adult, but the content tells you that it’s kids,” said the media executive.

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‘It’s cutthroat’: Confessions of a commercial producer

Production companies, hoping to generate repeat business from agencies and brands, often spend above the budget of a commercial to improve its production value. Instead of asking agencies or brands to pay that extra cost, production companies instead eat the cost hoping to prove their worth and build out a longstanding relationship. But as brands zero in on price, spending above the allotted budget doesn’t make sense anymore. In the latest edition of our Confessions series, where we exchange anonymity for candor, we hear from a commercial line producer who has seen budgets shrink and tensions between production companies and agencies and brands grow.

The margin for a production company has been reduced in recent years. 
It’s gone from 32% down to 15% for some companies. The model has changed. It’s still changing. I don’t know where it’s going to end up outside of having clients just do their own advertising and get on with it.

How has the model changed?
In the ‘90s and the ‘00s, you’d work on a campaign for a brand and you’d probably lose money on the first job because you had cost consultants. You still have them. P&G really set the tone for that when they did a lot of work as a cost-plus because you’d only pay based off of receipts, so they knew exactly how much things cost. With these particular campaigns, you would bid on the first job and you might lose money but if you did a good job they’d come back to you. You would continue to work on that brand for the course of 10 years. That just doesn’t exist anymore.

What’s it like now?
It’s really just based off of money now. Can you make the number work? And, if you can, we’ll probably give it to you. It seems like they’ve taken any creative out of the equation.

Why do you think it’s changed?
You could almost attribute it to the Screen Actors’ strike in 2000, where the talent got fed up with the way the advertisers were making money off of certain things and they weren’t being included in it. Suddenly, you’ve got a strike on your hands and people are going out of town to produce stuff. That opened up the clients’ eyes to what the budgets were, and, as a result, the agencies were very fearful of more or less going against the grain with what the client wanted, what they wanted to sell and how they wanted to sell it because the client would just pick up and say we’ll get this agency to do this work, more or less make this project work.

So there’s more project work now? 
[With some brands], it’s all project work. There’s no agency of record. So you’ll bid on something, they’ll put out a brief and whoever comes up with the best idea and can get the best talent and do it for whatever the budget is wins the prize. It’s a different world. No matter how hard you try to appease everybody and make it all work, it really just comes down to the number. If you can do it for the money, that’s the bottom line.

To make that number work, you probably have to make cuts in production staff. How does that play out with agencies and clients?
[Sometimes] you won’t have video playback and you won’t have a script person. You’ll have a hybrid makeup artist and wardrobe stylist. [There are times when you] get to a pre-production meeting and suddenly the client or maybe someone higher up at the agency will find out that they don’t have a script person or playback. That’s when it gets ugly because someone hasn’t been keeping the client or the agency up to speed; they’ve just more or less said, “That’s all you can afford.” There’s no real education process between the agency and the client because everybody knows the client will just pick up and go somewhere else if they’re not going to get what they’re looking for. It comes back to the money. It’s always about the money, but it’s more so now than it has ever been.

But with the need for more content now across various social channels for brands, isn’t there more work than ever?
This is the other problem. You’ve got production companies that are vying for this work so they’ll go the extra mile. You might have a budget that reflects everything being shot on an iPhone, but they’ll go out and get a broadcast-quality camera and all the accouterments with that. They’ll probably go out-of-pocket hoping that they’ve made a friend and that more work will come to them. But in the long run, the budget still only reflects an iPhone. It’s really just for social, and social is a 1080 or 1920 kind of resolution that makes it overkill if you have any broadcast [equipment].

If there’s no repeat business anymore, then what’s the incentive to go out-of-pocket to boost production value?
That’s something that remains to be seen.

Does it impact the production company-agency relationship? 
[That’s more strained now.] We’ve been in a situation where it’s a check bid, [or a bid that’s not an actual bid for a job but a bid that’s used to check what the cost of a production should be], but you haven’t been told that. What happens is that you think you’re in the running for this commercial only to find out the decision was made well before you even got a piece of it. Really all they’re asking you to do is bid the thing to keep the other guys honest and keep the money where it’s supposed to be. They had no intention of giving you the job. In the old days, that was friendly business. An agency producer, if you’d done some work for them, would say, “Hey, I need a check bid.” It would be no problem. We’d give them that check bid. We’d know we weren’t going to get the job, but it’s a favor and the favor would be repaid. Somewhere down the line, something would come to you. Now, we’ve done a couple of jobs where it was clearly a check bid and we didn’t find that out until after the fact. You never even get the call of who got the job. It’s cutthroat.

Where do production companies go from here?
You probably end up cutting your overhead in half. Instead of having a legitimate brick-and-mortar place you end up in a WeWork position where you can grow and deflate on a month-to-month basis on the work that’s coming in. You hope that doesn’t change the perception in anyone’s mind of your ability to produce something with efficiency and creativity to the best of your ability. You have to change as the change happens.

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How Zappos used AI to rebuild its search engine

Zappos, the Amazon-owned retailer that sells shoes, clothing and accessories online, is using machine learning and AI to improve the e-commerce experience, drive down return rates and improve search results.

The in-house team of roughly 20 data scientists, machine learning scientists and software engineers is led by Ameen Kazerouni, who is responsible for figuring out ways that predictive machine learning and artificial intelligence can reduce friction for people shopping Zappos’ site. In the past year, Kazerouni’s team has focused on two particular areas that customers struggle with: figuring out fit online and getting accurate search results for queries that could have multiple different meanings to a search engine.

Both are key to driving online purchases. Zappos, which employs approximately 1,500 at its Las Vegas headquarters, generates $2 billion in revenue per year. The company, launched in 2001 and acquired by Amazon in 2009 for $1.2 billion, was an early e-commerce player for shoes and fashion, but the space has become increasingly crowded as digital consumer startups launch with more focused style curation. Having to sift through Zappos’ massive inventory selection can put the company at a disadvantage for time-pressed online shoppers, so the data science team has worked to get customers to what they’re looking for faster.

With a new model called genetic algorithms, Kazerouni and his team built better term recognition into Zappos’ search that pulls in historical data and quickly picks up on new keywords that are introduced as soon as fashion trends start to pick up speed. In addition to smarter results, customers also see more personalized results based on what they’ve searched for in the past.

“We see upwards of millions of unique search queries a month,” said Kazerouni. “Trying to capture the meaning of those words is where we saw this opportunity. It can be very difficult to put search into words, but general customer search queries are looking to track a feeling rather than product descriptions.”

Kazerouni used the example of the search term “classic short,” which is commonly used to find that style of Ugg boots. Instead of boots, the search engine was pulling up a variety of shorts.

“We now have a new search solution for every search term comes in,” he said. “What that means is when we see the term ‘classic short,’ ‘short’ will not be weighed as a clothing type, it will be weighed as a product name. If someone comes in and looks for hiking shorts, it [the algorithm] will look for shorts. So it’s learning in real time what attributes are relevant in specific terms.”

To gauge the success of the search algorithm, Kazerouni’s team looked for a reduction in multiple, similar search terms per person — if someone needs to keep refining a search themselves in order to find the product they want, that adds extra steps. It also looked at the number of search queries that resulted in conversion. After less than a year of using the genetic algorithm technology, Kazerouni said it was too soon to see if it contributed to driving repeat customer visits or longer-term customer loyalty — an important metric for e-commerce companies competing over mindshare — but that customers are now able to shop faster, are applying fewer filters, and aren’t doing multiple searches before they find what they’re looking for. “It’s an objectively simpler experience, and it’s less frustrating,” he said.

For Zappos, investing in this type of internal technology is meant to also improve the cost of doing business only online. As made clear by e-commerce brands relentless parade into physical retail stores, there’s an inherent barrier online for people who would rather see and try on items in person first. One of Zappos’ biggest barriers is its vast, overwhelming inventory: Selling hundreds of thousands of items online is good for selection but can lead to decision paralysis or frustration. To drive more customers to purchase, Zappos offers free returns up to a year after purchase, which Kazerouni said is a good customer incentive, but costly.

To help keep free returns and diminish return rates, the data science team also built a fit finder that suggests sizing based on customer reviews, past purchases and brand particularities.

“Lowering the return rate is one of our priorities. Returns are expensive. We could start charging for returns, or limit them per person,” said Kazerouni. “Instead, we invest in solutions that make it better so customers return less.”

As an Amazon brand, Zappos isn’t going to be letting up on competitive shipping and return policies — the company is run separately, but Amazon took over Zappos’ warehouses when it acquired it — so, following search, the fit finder is the second step in the AI-driven process meant to get more customers to buy.

“A retailer has to really understand customer service to feel like a good shopping experience,” said Malinda Sanna, founder of the agency Spark. “Companies like Zappos have taken it to the new level and redefined what an online shopping experience can be.”

That experience is an internal priority as the company builds out its data team. Kazerouni said that Zappos’ data scientists are given full reign to build new technology and models in house, as long as they believe they can build it better than what’s on the market.

“At the end of the day, it’s not a recurring expense — once it’s working, it’s working.”

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The #1 Variable of Success for Every Business | Inside 4Ds

The #1 Variable of Success for Every Business | Inside 4Ds
In a recent 4Ds session, Gary meets with a group of entrepreneurs to give them some business insights and answer their questions. The group discusses sales vs marketing, transitioning traditional ad budgets, why quality outweighs every other variable and plenty more… Enjoy!


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Gary Vaynerchuk is the chairman of VaynerX, a modern-day media and communications holding company and the active CEO of VaynerMedia, a full-service advertising agency servicing Fortune 100 clients across the globe. He’s a sought out public speaker, a 5-time New York Times bestselling author, and an angel investor in companies like Facebook, Twitter, Tumblr, Venmo, and Uber.

VaynerX, also includes Gallery Media Group, which houses women’s lifestyle brand PureWow and men’s lifestyle brand ONE37pm. In addition to running VaynerMedia, Gary also serves as a partner in the athlete representation agency VaynerSports, cannabis-focused branding and marketing agency Green Street and restaurant reservations app Resy. Gary is a board/advisory member of Ad Council and Pencils of Promise, and is a longtime Well Member of Charity: Water.

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Banker Picks Science Over Art: Is It The End Of Time?

A banker (not an industry with a reputation for warm, fuzzy customer relations to begin with) has decided that machines can write better marketing copy than human beings.