For all of today’s technological advances, from artificial intelligence to robotics, there is no sign of an impact on wages or productivity. But a case could be made that the economic payoff may now be coming, Greg Ip writes.
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Former Bush-Era Economists Considered for Fed’s No. 2 Job
The White House has interviewed two economists who served in senior positions in the George W. Bush administration to serve as the vice chairman of the Federal Reserve Board.
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An inflection point for the real-time display advertising market
By Gabriel Weintraub (associate professor at Stanford GSB and chief economist at AppNexus)
The information technology revolution has created a tremendous amount of change in how markets function today. Online marketplaces are complex platforms that can be “designed” and “engineered” through the different levers that a platform controls. In this process, there are at least three features that these marketplaces need to execute effectively in order to become successful, as discussed in Alvin Roth’s book “Who Gets What – and Why” and Peter Coles HBS case “Market Design in Online Businesses.” These three features are at an inflection point in real-time display advertising marketplaces, and I believe we have a unique opportunity to get them right for the industry. Let us go over them one by one:
1. Creating “thickness” and enabling transactions
This means the ability to bring many buyers and sellers on board and then facilitate matches and transactions among them. For example, e-commerce platforms provide “global” reach for otherwise local sellers, while sophisticated search algorithms help buyers find what they are looking for from a multitude of offerings.
The real-time display inflection
We would like to have a thick marketplace and header bid auctions are a case in point. Header bidding enhances the openness of the market, which increases thickness by bringing additional demand sources to participate in transactions that would otherwise be closed to them. To deliver on this promise, however, we need to carefully think about auction logic. First, SSPs and exchanges should avoid using straight second-price auctions for header bidding. Sending second highest bids to the ad server typically results in heavily discounted bids that cannot compete head-to-head with competing highest bids from SSPs and ad exchanges (such as AdX), and fails to increase thickness. Additionally, sending the highest bids without shading them could massively increase clearing prices, which would harm buyers. For these reasons, it is important to come up with creative auction designs that compete fairly with other SSPs and exchanges, effectively increase thickness, while at the same time ensuring good outcomes for buyers and enhancing publishers’ monetization.
2. Managing trust and alleviating asymmetric information
A few decades ago, there were serious concerns due to trust issues on whether e-commerce sites could be successful: who would conduct a transaction in a single occasion with a stranger? Today, we not only transact confidently on these sites but we also use platforms that allow sharing cars and apartments. We trust these platforms because of sophisticated reputation and review systems, payment security, and other mechanisms in place that alleviate asymmetric information.
The real-time display inflection
Historically, this is a dimension in which display advertising has been lagging. In fact, some platforms and sellers have traditionally exploited asymmetric information and buyers’ naivety via non-transparent fees and non-transparent auction logic. However, as the market has matured, buyers and the ecosystem as a whole are increasingly demanding transparency. Buyers, rightly so, would like to know the quality of the inventory they are buying, what fees they are paying throughout the supply chain, and the auction logic of the exchange. Platforms and sellers should provide all of this information in a clear way. Failing to do so will result in a significant competitive disadvantage moving forward.
3. Effective monetization
On one hand, the platform and sellers need to make enough revenue from transactions. On the other hand, buyers need to extract enough surplus from them so that they have the desire to participate. Note that our two points raised above are critical drivers of monetization. With a thick market, sellers enhance their ability to monetize because of increased competition, and buyers have more options to choose from. In addition, both sides of the market can improve their decision-making with better information, for example, regarding the quality of agents at the other side of the market. On top of this, agents can optimize to enhance monetization even further.
The real-time display inflection
Similarly, if the two points raised above are well-executed, both buyers and sellers should benefit. On one hand, with the additional thickness and competition created by header bid auctions, sellers should obtain better prices for their inventory. This will be especially true if sellers are smart when defining auction logic, specifically with respect to pricing rules and hard floors. On the other hand, with better information, buyers can and should become more sophisticated and make better decisions. In particular, given transparent fees and auction logic, bidders can optimize both their path to supply, that is to allocate their spend in the most cost-effective way, as well as their bids.
Overall, I believe we are well positioned to create a better marketplace. If we successfully implement header bidding, increase transparency, and enable supply path optimization, we can increase the size of the pie in the real-time display advertising industry. All sides in the ecosystem—buyers, sellers, and platforms—can benefit.
Seoul Allows LG Display to Take OLED Skills to China
South Korea will allow one of its largest companies to build a new organic light-emitting diode production facility in China, the first time a Korean firm will transfer the sophisticated technology abroad.
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Isobar’s Jean Lin on marketing in China: ‘The speed of evolution is tremendous’
Jean Lin, global CEO of digital marketing shop Isobar, manages more than 5,500 people across over 45 markets. While many holding group agency CEOs are based in advertising hotbeds of New York and London, Lin has run Isobar from its Shanghai office.
Lin spoke with Digiday about the Chinese advertising landscape, the role of consultancies and how her team works with Baidu, Alibaba and Tencent (known as the BAT). Our conversation has been edited for clarity and length.
Why manage Isobar from Shanghai?
I come from the region, but I also see a lot of evolution from [the] Asia-Pacific [region] in general. A chart from the World Economic Forum listed the top 15 global cities that would contribute to global GDP [gross domestic product] by 2030. Nine are from China, along with Tokyo and Jakarta [in Indonesia], which says a lot. It’s clear that lots of dynamics are taking place in APAC, especially with the digital economy. I want to stay close to the market, and I think the world needs a more balanced view.
What examples of evolution do you see?
The speed of evolution in APAC is tremendous and amazing. A few months ago we partnered with Alibaba to improve KFC’s dining and checkout experiences with cashless payments. In China, I never bring my wallet because the only thing I need is my mobile phone and my WeChat. Most stores are WeChat-enabled or Alipay-enabled. That evolution has changed people’s lives and has an impact on retail and financial services.
What are hot topics for advertisers in China?
Everyone talks about “O2O,” which means online to offline, or “OMO,” which means online merges with offline. That requires the understanding of a complex infrastructure in China in terms of different industry sectors, how the trade middlemen work, and how to enhance brands’ logistics and design brand experiences.
The key is the convenience of mobile apps and how people are used to calling in services on mobile. For instance, delivery services in China are happening at an amazing speed. My colleague was trying to arrange a grocery delivery to her home yesterday, and the company would make the delivery in 15 minutes. In China, brands think about how they can speed up the delivery of their services, from brand inspiration to transactions.
Is marketing easier in China than the U.S. because of the BAT?
Not at all. A lot of traditional channels are still working, and they are really important, so there is more than the BAT. Meanwhile, there are lots of new offerings in automotive and financial services segments. You can’t just work with the BAT to reach over 1.3 billion people in China, although the BAT is very important. We look at the BAT’s respective strengths and form a different partnership with each company.
How so?
One clear strength of Baidu is its artificial intelligence development, which is understandable because Baidu has been big in search. We have also worked with Baidu on a lot of voice recognition projects. There are more than 30 different dialects in China, so if a brand is trying to make its customer feel at home, the brand needs to talk to them in their home tongue. We co-designed a robotic ordering device with Baidu for KFC called Dumi that can recognize over 30 accents from all provinces in China.
How about Alibaba and Tencent?
We work with Alibaba on connecting online and offline. We’ve helped clients improve in-store experiences and online promotions around Singles Day, for instance. Alibaba also gets more involved in the physical space, so we’ve also tested many technologies with Alibaba for offline stores.
We have partnerships with Tencent that help us do better targeting. In last year’s campaign for [culinary provider] Unilever Food Solutions around Chinese New Year, we only targeted chefs, as they [had to work at restaurants during the holidays] and thus couldn’t go back home during Spring Festival for a family reunion. Tencent’s data allowed us to do that.
You started Wwwins Consulting in 1999, which became Isobar’s China office. Is there tension between agencies and consultancies in China?
There’s more face-to-face encountering between consultancies and agencies, which actually gives clients more options on how to make things happen. The current gap with consultancies lies in creative and design areas. That is why they go out and acquire companies. One challenge for consultancies is to integrate creative culture into a strong consulting culture. They are still figuring it out, while agencies can do better in understanding insights, consumer behavior, emotional attachment that people have with a brand and how that impacts the brand’s overall experience. It’s a race between consultancies and agencies that are both expanding to have better integrated offerings, which is good for clients.
How Social Media Has Changed Fashion
When I was a little girl, I pined over my only portal into the fashion world: the glossy pages of magazines. If you had told me that one day, I would have direct access to the crazy world of fashion from a tiny phone screen, I would have brushed it off as something from The…
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How to Collect Marketing Data Using Social Media at Live Events
There are many benefits to marketing your products in-person, including face-to-face interactions with customers, tours and live events. But historically, the internet has had one big benefit over in-person experiences. Online, customer behaviors can be easily tracked using a variety of software. Fortunately, technology has begun to connect the online and offline worlds. But while…
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The state of brand safety in 5 charts
Thanks to digital skullduggery, brand safety remains hotter than the devil’s anvil.
From the stump speeches of Procter & Gamble’s Marc Pritchard to the role of ad tech in funding misleading content to YouTube’s multiple ad scandals, the perils of digital media buying were on full display throughout 2017. Here are five charts that summarize the state of brand safety.
Brands claim responsibility
Whether you’re examining brand safety, fraud or data leakage, there’s plenty of blame to go around the complex ad-supply chain whenever a snafu arises. But brands have more to lose than others if their ads appear next to questionable content.
A survey of 30 brand marketers by Digiday+ showed that brands place more responsibility on themselves than on agencies, vendors or publishers, when it comes to maintaining brand safety. Marc Goldberg, CEO of anti-ad fraud vendor Trust Metrics, said brand advertisers should be leading the conversation on brand safety because if they don’t care about it, nobody else will.
YouTube’s brand pullouts
In March, brands like AT&T and Verizon took their ads off YouTube after The Times of London published an exposé that showed brand ads appearing in videos that promoted terrorism. Although most of the brands that pulled their ads from YouTube were back on the platform within a few months, posturing surrounding this event catapulted brand safety into elite buzzword territory.
The concept of brand safety has been around for years, but as seen in the Google Trends graph below, searches for brand safety peaked in March.
Violent content is widespread
From drugs to piracy to sex, there is a lot of content on the internet that advertisers try to distance themselves from. Violence is the category that ad-verification company Integral Ad Science blocks, most often for brand-safety reasons, for its advertiser clients.
Travis Lusk, vp of global sales strategy at IAS, said advertisers aren’t necessarily more sensitive to violence in content than they are to sex content or illegal downloads. Compared to other touchy topics, there just happens to be more content across the web that gets categorized as violent.
Brand-safety tactics
In November, video ad platform Teads surveyed 100 CMOs and vps at large brands about brand safety. Nearly 80 percent of them said they are more concerned about brand safety than ever before.
About half of the survey respondents said they had reviewed their agency and vendor contracts over the past year. More than a third said they layered on more third-party ad measurement to their campaigns.
“Marketers are stepping up to take control over the way their money is spent,” said Forrester analyst Susan Bidel.
Programmatic perils
IAS found that across display and video for both mobile and desktop, programmatic buys have a greater likelihood of exposing brands to unsafe content than direct buys. This makes sense, given that with direct deals, brands know who they are working with. Programmatic platforms, on the other hand, are engineered to bring ads to thousands of publishers simultaneously, and the long-tail sites featured on these platforms offer cheap scale at the price of appearing next to low-quality or sensational content.
As Pritchard noted in a recent interview with Digiday: “We’ve still got to do work on brand safety.”
IAB Reveals Future Focus On Smaller, Local Advertisers
The IAB will focus on a better understanding of how much ad growth is attributable to Google and Facebook, and the ad share they generate from local small and medium-sized businesses. “Building a
structure of understanding the dollar flows will be important,” said Chris Kuist, svp, research and impact at the IAB.
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Newsroom: Wearables Still Far from Mass Adoption in US
<p>Less than 20% of the US population will use one next year New York, NY (December 21, 2017) – Smart speakers will likely beat out wearable devices as the electronic gift […]</p><p>The post <a rel=”nofollow” href=”http://www.emarketer.com/newsroom/index.php/wearables-mass-adoption/”>Wearables Still Far from Mass Adoption in US</a> appeared first on <a rel=”nofollow” href=”http://www.emarketer.com/newsroom”>eMarketer Newsroom</a>.</p>
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