Online Ad Pricing Trends: Learn How to Increase Ad Revenue

This 2009 Ad Pricing Report from PubMatic will show you the latest online advertising trends that will help to diagnose how ad pricing will change during the economic downturn as to know where the market will be going next years.

The article is subdivided in three main part:

1. Increase ad revenues - Revenue optimizations is an important part on the process to increase ad revenues in the long-term.

2. Understanding eCPM drivers - Publishers might have identified several eCPM drivers must be clearly understood how to make those drivers actionable in order to maximize the revenue flow.

3. Trustworthiness – The main important thing for publishers, is to manage trust relation when working with outside companies.

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Image Credit: Heberger Site

This report could give a great help to optimize your online ad revenues and better understand the specific online advertising strategies in 2010 and beyond.

Non-Guaranteed Display Advertising Forecasts (Global)

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While industry forecasts tend to vary significantly, nearly all analyst firms have forecasted dramatic growth for non-guaranteed display advertising over the next few years – some see the category doubling by 2013.

There will be several contributors to the growth of the 2nd Channel:

  • Ad abundance: A continued abundance of available ad inventory that can be much better monetized than in previous years.
  • Data management: Premium publisher ability to better utilize their audience data and manage data across multiple data providers, which will allow them to sell pre-packed media + data.
  • Pinpoint targeting: Better audience targeting and segmenting, including a much more sophisticated method of reaching users by “intent.
  • A shift in media buying: As media agencies improve their technology and continue to see better performing campaigns through the 2nd Channel, they will proceed to use ad networks and ad exchanges more frequently than in previous years.
  • Brand protection: Significant gains in brand protection capabilities from intermediaries will allow premium publishers to consider the use of 3rd parties selling their inventory less risky.
  • Better ad units: New ad units will be created and standardized that perform better than the banner ads that currently dominate the 2nd Channel.
  • Premium branding campaigns: As all of the above points evolve, more premium priced branding campaigns will be sold via the 2nd Channel.

Premium Publisher Ad Pricing Q3 2008 – Q3 2009

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While 2008 ad prices had precipitous drops due to the slow economy, the first three consecutive quarters in 2009 have shown a strong turnaround for ad pricing.

Q3 2009 ad prices for premium publishers are 32% higher than they were one year ago, Q3 2008.

About The Ad Price Data Methodology

The PubMatic ad price data used in this report is comprised of pricing data from premium publishers.

The data is analyzed by Albert Madansky, Ph.D., H.G.B. Alexander Professor Emeritus of Business Administration at the University of Chicago Graduate School of Business and recipient of the 2005 American Statistical Association Founders Award, and Michele Madansky, Ph.D., a media and market research consultant and former VP of Global Market Research for Yahoo!

The pricing data reflects net publisher monetization via ad networks and excludes ad networks’ share of ad spend as well as inventory sold directly by publishers to ad agencies or advertisers.

The pricing data is not representative of the performance of any particular ad network.

The PubMatic Premium Publisher Interviews

PubMatic recently commissioned Greg Stuart, Digital Media Consultant and Former CEO of the IAB, to conduct in-depth, face-to-face interviews with premium publisher executives in order to find out their key challenges in monetizing and managing non-guaranteed inventory.

The goal of the interviews was to find out directly from some of the largest publishers in the US what these challenges are in order to allow PubMatic to continue to develop industry leading solutions.

Methodology

All of the data was gathered during one hour sit-down interviews conducted over the course of four months (April 2009 – July 2009).

The target publisher list included select members of the US comScore 250 list of publishers.

Over 30 interviews were conducted with senior executives in the sales or ad operations function. Anonymity of the interviewees was guaranteed in order to receive open and candid input.

Key Findings Revealed

PubMatic is revealing three key findings from the interview series.

PubMatic believes these three findings are of most interest to publishers as they consider their own strategies and operational models for managing non-guaranteed inventory.

1. Revenue Matters Most

Premium publishers overwhelmingly care more about increased revenue as compared to any other aspect of managing their non-guaranteed inventory.

The fact that the interviewees held several different executive roles ranging from ad operations to sales, had a wide range of personalities, and dealt with different daily challenges, did not change the fact nearly everyone was significantly more concerned with revenue than anything else.

However, as most people working in this industry already understand, there are clear differences of importance of issues between sales executives and ad operations executives as outlined in the graph below.

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Conclusion

While maximizing revenue is the number one stated objective for sales and ad operations executives, a holistic solution that takes into account all of the key benefit drivers is the most likely to generate a long term successful partnership.

Several of the secondary benefit drivers, such as accurate reporting and creative control, are necessary components of a holistic solution.

2. Drivers For Increased eCPM Not Clearly Understood

Very few premium publishers can explain in detail what drives eCPM for non-guaranteed inventory.

We asked the following question to the premium publisher executives: “What drives eCPM higher for non-guaranteed inventory?

Many of the answers did acknowledge certain factors that contribute to increased eCPM, but many were focused on one or two specific reasons and did not have a holistic understanding.

Alternatively, a publisher might have identified several eCPM drivers but not clearly understood how to make those drivers actionable in order to generate more revenue.

Select premium publisher answers on what drives eCPM for non-guaranteed inventory:

  • Inventory quality.
  • Frequency caps – managing what you give the ad networks.
  • How the inventory was sold. CPM, CPA, etc. Networks are like stocks, they move up and down. Then creative – it should not be done by humans.
  • Negotiating better deals.
  • Category relevance and the algorithms; it’s all about real-time.
  • Just do not know.
  • Active management of networks facilitated by technology; then, understand the buy side and optimize for the highest bid; moving to be real-time.
  • Clicks, behavioral targeting,technology, algorithms.
  • Ad network deals, efficiency of ad calls, frequency capping, defaults.
  • Right ad to the right consumer, context, geography.
  • Relevancy, reporting, optimization / learn, CTRs.
  • Market conditions; networks vary a lot, good relationships with my network representatives.
  • Minimums; tech should drive it.

Conclusion

Premium publisher executives have the right hypotheses about what drives eCPM lift.

However, few publishers had a cohesive, data-driven understanding of the key drivers of lift, the priority of focus on those key drivers, and actionable strategies around driving higher revenue. This is not a surprise given the rapid innovation and fragmentation happening within the online display advertising space over the past few years.

As a result, publishers should seek to partner with solution providers that can create a long term partnership in which education is a key component.

3. Lack of Transparency and Trust

There is a consistent sense of frustration and lack of trust from premium publisher executives when working with outside companies to increase non-guaranteed inventory revenue.

Marketing from advertising companies is a problem for the executives at premium publishers because they believe that most companies exaggerate their capabilities. This has only gotten worse in the past two years as the ecosystem around non-guaranteed inventory has exploded along with the dollars and revenue flowing through this sub-category of online display advertising.

Select premium publisher answers on what they believe solution providers exaggerate about (sorted in priority order):

  • Creative management capabilities.
  • Who the company’s allegiance is with (premium publisher or advertiser).
  • Technological capabilities.
  • Ability to monetize consistently.
  • Reporting accuracy.
  • Everything.

Conclusion

As premium publishers are pitched various solutions frequently, it comes as no surprise that many have heard outlandish claims from solution providers. They are therefore rightly skeptical of companies that present their solution as having no flaws.

Many of the premium publisher executives chose not work with companies in the past because they just did not believe their claims.

It is important to manage expectations so that solution providers do not over-promise and under-deliver.

Similarly for publishers, it is important that solution providers come to them with a manageable test plan to prove out the viability of a solution before launching it at full scale.

  • Low defaults; site needs to have good performance, lots of people to manage the ad networks.
  • Written by PubMatic, and originally published as “Ad Revenue Report“.

    About PubMatic

    PubMatic is a global ad revenue optimization company with 6,000 large and medium publishers that provides online publishers with a service solution to manage and monetize non-Guaranteed ad inventory.

    PubMatic’s  is a real-time ad monetization and management solution that let the online publishers get the most money from their advertising space by deciding in real-time which ad network or exchange can best monetize each impression.

    Online Ad Optimization, What Is The Real-Time Bidding(RTB)?

    Real-time bidding is a fundamental shift in the online advertising optimization because allows advertisers to increasing the value of ad impressions by targeting users dynamically and  reach the right user at the right place and  time.

    Currently, ad impressions are sold at a pre-negotiated price, with result of a low CPM for publishers. Real-time allows advertisers efficiently select audiences in basis of their unique characteristics, instead to estimate them through statistical.

    Understanding Real-Time Bidding (RTB) From The Publisher Perspective

    Real-Time Bidding, or RTB, is sure to be one of the most frequently used online advertising buzzwords of 2010. Many advertising experts have argued that it is going to fundamentally change the course of online advertising as we know it. It has even been referred to as the next revolution in advertising for the benefits it will provide to all players in the ecosystem – the publisher, the user, and the advertiser.

    Real-Time Bidding allows advertisers to reach the right user, in the right place, at the right time – and assign an individual value to a particular ad impression. Leveraging advanced technology offered by a relatively small but quickly growing number of companies, advertisers place bids on reaching specific users dynamically, and on an impression-by-impression basis.

    PubMatic has found that publishers monetizing ad inventory via RTB can receive an increased eCPM because of the improved campaign performance that RTB offers. In the case of one particular US Entertainment publisher, the publisher was able to achieve a 106% increase in eCPM over a six-month period.

    Along with the clear benefits of RTB, publishers must be cognizant of the potential pitfalls associated with this emerging media buying trend. RTB was originally conceived as an advertiser-focused solution, and publishers must take multiple issues into account in order to make their businesses successful in an RTB-enabled world.

    PubMatic estimates that less than 1% of online advertising was purchased via RTB in 2009, and that will grow to 3-5% in 2010. Because RTB is the fastest growing segment of US online advertising, it is imperative that publishers understand the RTB landscape and how to successfully harness RTB ad dollars to their benefit.

    Unlocking The True Value of The Impression

    The most important promise that RTB holds for publishers is increasing the value of ad impressions. With RTB, advertisers have the greatest level of transparency available on the individual user in real-time, which can significantly increase the value of each ad impression and the corresponding publisher CPM.

    Having greater transparency about the user in real-time provides great insight to advertisers, but it is the difference in how media is bought and sold with Real-Time Bidding that is the true game changer.

    Currently, most digital media buying is done based on assumptions about certain audiences. For example, audiences bought through ad networks and ad exchanges are often purchased in buckets or by segment. How the audiences are categorized in certain segments depends on who is selling them. And while some audience sellers do a better job of segmenting users than others, so long as individual impressions are being grouped into a bucket and sold at a pre-negotiated price, they are not being fairly valued and are often sold at under-valued prices, as shown.

    In Example 1, a luxury car advertiser is looking for a very specific audience type and is willing to pay a premium price to reach a specific user that is highly qualified. The more qualified the use, the more the advertiser is willing to pay.

    On the right side of the example below, the advertiser (or rather the technology company placing bids on behalf of the advertiser) can see unique characteristics about the user and therefore is willing to pay a $3.90 CPM to target that user.

    On the left hand side, the same user would have been bucketed into an auto-buying segment and priced according to the segment price,which is far lower than what was paid via RTB for the individual.

    Example 2 below shows the ongoing luxury car ad campaign on a larger scale. Because RTB is conducted in real-time, advertisers,or their proxy vendor that facilitates their media buying, can buy impressions to reach specific users or reject them as the campaign is in progress.

    Therefore, in a real-time situation the luxury car advertiser would likely choose to reach many of the same users that would have been segmented for them as auto buyers in a pre-negotiated bucket buy.

    However, having more information about each individual user, the advertiser would also likely want to reach users that did not fall into the pre-defined auto buyer segment while also rejecting some of the impressions that would have made it into the segment.

    More importantly, the pricing would be different based on the unique characteristics of each user as opposed to an average across the segment.

    The Ecosystem Benefits of RTB

    In the long run, advertisers that have better performing campaigns can pay more to target the right users. According to Turn, a company that facilitates RTB transactions for advertisers by leveraging inventory from sell-side platforms such as PubMatic, advertisers are seeing up to 135% improvement on click-through rates and 150% improvement on conversion rates.

    Better performing campaigns have a positive impact on all parties involved, not just for the advertiser. In the image above are a few key benefits that RTB brings to the publisher, the user, and the advertiser.

    Understanding The RTB Ecosystem

    Real-Time Bidding is very much still in its infancy, but the number of companies that help advertisers and publishers leverage RTB is growing rapidly.

    In 2008, the number of companies talking about RTB could be counted on one hand. In 2009, the number of companies involved in real time bidding increased dramatically, but each category in the RTB ecosystem plays a significant role and it is important for publishers to understand those roles.

    The Many Possible Flows of RTB

    Ensuring High Publisher eCPM With RTB

    A truly competitive bidding environment is essential for ensuring consistent and continuous revenue growth. PubMatic has seen significant eCPM improvements for its publishers that are participating in RTB campaigns, but because this is a bidding environment, a high price is not guaranteed.

    RTB is still in its infancy, and the number of RTB advertisers is relatively small, so without enough advertisers competing to reach the same user, a lucky advertiser could get the ad space for below market value.

    Increased Bidders Drives Value of Ad Space

    In order to ensure there are enough bidders to keep the value of the publisher’s ad space high, PubMatic’s Ad Auction Engine™ brings the greatest number of bidders together in a real-time auction for every impression.

    Three Categories of Buyers

    When advertisers find the user they want to reach, they are willing to pay a high price to reach that user-but they still want to pay the least amount possible in order to reach that user.

    PubMatic’s Ad Auction Engine™ does not allow any real-time bids to win an auction unless the bid is high enough, as shown in Example 3.

    Example 3: The Ad Auction Engine™ Process Works For Every Impression

    An RTB bid only wins if it beats the pricing coming from PubMatic’s Ad Price Prediction™ and direct sold insertion orders that a publisher’s direct sales team entered into PubMatic’s system.

    In this example above, the real-time bid of $3.05 bid did not win. Instead a non-RTB enabled ad network was willing to pay the most for the ad space.

    Due to the fact that there are far fewer RTB enabled demand partners than non-RTB ad networks and exchanges, in most cases an RTB bidder is not selected to serve an advertisement.

    In the cases where there are no RTB bidders competing for the publisher impression, PubMatic selects the highest paying ad network or exchange using the proprietary Ad Price Prediction™ process, or chooses to show an ad from a direct sold insertion order if it is the highest priced ad available.

    The Ad Price Prediction™ process is powerful technology that was developed over the course of several years by PubMatic’s 40+ full time engineers.

    The majority of RTB transactions that PubMatic facilitates on behalf of the publisher are received from companies that have their own campaign optimizing algorithms working the benefit of the advertiser.

    For example, when a DSP is working on behalf of an advertiser, the DSP continually adjusts its pricing during the course of the campaign in order to reach the right audience at the lowest cost to the advertiser.

    However, PubMatic’s Ad Auction Engine™ keeps ad prices high for the publisher by bringing together the greatest number of demand sources for each impression, and as a result, real-time bidders often have to increase their bids if they are to win the impressions they want.

    Example 4: The Ad Auction Engine™ Competitive Environment Encourages Higher Bids From RTB Partners

    RTB enabled demand partners fine tune their bids during the course of a campaign. If they continually lose auctions due to low pricing, they will increase their bids.

    In this example above, the real-time bid did win after increasing the bid price to reach a specific audience.

    It could be several years or longer before there are enough real-time bidders to ensure high pricing for the publisher. However, PubMatic is connected to the greatest number of RTB demand partners of any sell side platform.

    How The RTB Process Works For Each Impression

    It is critical to include as many RTB partners as possible in order to have the RTB partners increase the percentage of wins they have within the Ad Auction Engine™ process.

    The number of demand partners that are plugged into PubMatic’s API for RTB is continuing to grow at a fast pace and is nearly four times what it was just six months ago.

    The increase of RTB demand partners will help to increase bid prices, but the Ad Auction Engine™ remains a key part of the bidding process in order to get the most qualified advertisement at the highest price possible for the impression.

    Filling Impressions By The Numbers

    The chart represents an actual PubMatic publisher in December 2009. Every impression that PubMatic facilitates goes through The Ad Auction Engine™. The percentages represent where the highest paying ads are coming from.

    Ensuring RTB Data Safety and Brand Protection

    Real-Time Bidding has the potential to bring significant revenue lift to publishers, but RTB is not without its own brand control and data safety risks.

    Publishers need to understand that RTB was originally developed for the benefit of the advertiser, and therefore publishers should consider an RTB partner that is a strict publisher advocate and has the tools to protect the publisher.

    There are five key considerations that publishers should be thinking about when selecting a partner for RTB:

    1. Getting The Right Demand Partners From The Start Prevents Most Hassles

    As most publishers know, not every ad network or advertiser is well intentioned. A strict RTB partner vetting process should be required based on the objectives of the publisher.

    A publisher’s RTB sell side partner should enforce demand partners and advertisers to:

    • Meet the minimum RTB technical requirements for ad speed and data safety so that latency and brand control is not a problem
    • Actively bid on the RTB platform and meet a minimum number of bid wins each month to ensure that no “data squatters” on the platform
    • Comply with regular auditing of data that is collected vs. dollars spent on bidding

    PubMatic, for example, has set up a strict Trusted Partner Program™ for RTB and will pro-actively remove demand partners that do not meet the high expectations set in the agreement.

    2. The Publisher Should Set The Rules Around What Data Is Passed and Have a Way To Enforce Those Rules

    The publisher owns their own data and publishers need the ability to set rules around which data they pass to aspecific bidder.

    In some cases ad networks or other demand partners will try to collect more information than is needed for the campaign. Publishers should have a way of protecting themselves from data theft.

    For example, Data Firewall™, is a proprietary product developed by PubMatic that:

    • Gives publisher total transparency a about what data is being passed
    • Identifies pixels and tracks if ad network or advertiser is putting pixel on publishers without permission
    • Automatically alerts a publisher when demand partners go beyond “normal targeting

    3. Screening Ads In Real-Time Process Helps Prevent Unwanted Ads

    Ensuring creative control can be difficult. A publisher’s sell side platform partner should have a creative screening of all advertiser creative on the publisher’s site available to view in real-time.

    Ideally, the sell side platform has this process built into their UI so that when the publisher logs in they can see the creative that is being shown on their site at that moment.

    In order to provide the publisher with a snapshot of what ad sare going across their site, or sites, at any given moment, PubMatic offers publishers a Live Creative Dashboard™ that:

    • Takes regular screenshots of publisher website in 5-60
      minute intervals
    • Emails screenshots to PubMatic’s Creative Services Team
    • Traces URLs referred to during ad serving
    • Reduces manual work of reloading ad tags for checking creative

    4. Preventing Unwanted Malware Is Key To a Good User Experience

    For the most part, RTB advertisers do not use malware simply because the cost of RTB campaigns are too expensive to waste on such advertising.

    However, it can happen and an extra safety net should be available to ensure that publishers have maximum safety.

    There are now products available for publishers that:

    • Automatically scans all ad tags
    • Pro-actively and quickly identify any potential malware
    • Alert the publisher if there is a security breach
    • Send an email detailing ad calls + URL / Ad Network mapping

    Publishers have the option of using the products themselves or partnering with a sell side platform such as PubMatic that has it built in as part of the service.

    5. Loading Speed Should Never Be an Issue

    Part of a good user experience is fast loading pages.

    A globaldata center footprint ensures that demand partners return bids in milliseconds to ensure positive end-user experience.

    Publishers may consider asking their partner about the location of data centers, and ask about:

    • Speed delivery times
    • How often the speed time is monitored
    • Whether or not a third party company verifies the speed time

    Publisher Results Using PubMatic To Participate In RTB Campaigns

    It is critical to include as many RTB partners as possible in order to have the RTB partners increase the percentage of wins they have within the Ad Auction Engine™ process.

    PubMatic has been live with Real-Time Bidding since February 2009, and as the first sell side platform to market with RTB, has been carefully monitoring the results.

    PubMatic publishers participating in a fixed minimum number of Real-Time Bidding campaigns in 2009 saw an average eCPM boost of 64%.

    Average Publisher eCPM

    The following case studies represent PubMatic publishers that have been actively participating in RTB campaigns for at least 6 months to ensure revenue lift was consistent and stable.

    The eCPMs reflect the averages before using PubMatic, the average using PubMatic without RTB, and using PubMatic with RTB.

    Publisher RTB Case Study 1

    Publisher RTB Case Study 2

    Conclusion

    If advertisers want Real-Time Bidding, publishers should think about real-time selling. And in 2010, we will see more publishers dipping their toes into the RTB pool as they realize its potential to connect them to more great brand advertisers and the opportunity to improve eCPMs for their valuable audiences as well as for their harder to sell inventory.

    While a handful of media companies have shut out ad networks or replaced third parties with homegrown networks, many successful publishers – with great brands, experienced ad sellers and the latest technology – still struggle to fill 50% or more of their inventory.

    “We have a very high touch sales organization,” an executive of one major publisher says, “and there has tended to be a bias against networks and exchanges.” In spite of intense debate in the company, they have committed to testing.

    “Some of our inventory is currently biddable on exchanges through our optimizer, and we are excited about introducing RTB,” he says, adding that early tests seem promising.

    He urges publishers to catalog and share successes and best practices. “Every publisher should be testing and getting ready for the day when RTB will become the norm. Otherwise, even now,you are just leaving money on the table.”

    On the buy side, Anthony Rhind, Co-CEO, Havas Digital, recently told CMO.com,

    “Buying at the impression level, as opposed to the placement level, allows segmentation strategies to be executed with greatly reduced waste.
    Of course, segmentation must be informed, so with impression buying comes the need to use data to profile impressions to realize that segmentation. This is where the fusion of contact / customer data with campaign data, site data and profile data becomes critical to directing trading strategies.

    This is an extremely exciting area for our industry, with major implications for our ability to drive clients’ business volumes that are attributed to digital media.”

    As RTB continues to grow, publishers may earn more for their inventory while also gaining insights into their audience’s value that was previously available primarily to the networks.

    Adding up the possibilities, there may be good reason to expect a five-fold increase in RTB volume this year.

    As PubMatic’s co-founder & CEO Rajeev Goel cautions,

    “Real-Time Bidding is still in its infancy, but it is gaining momentum every day. Publishers cannot afford to stay on the sidelines and let somebody else figure it out and take home the growing tide of RTB advertising dollars.”

    Disclosure The3dtechnologies has no commercial partnership with PubMatic and has been given permission from the publisher/author to present this report on the Web.

    Written by PubMatic, and originally published on pubmatic.com/real-time-bidding

    About PubMatic

    PubMatic is a global ad revenue optimization company with 6,000 large and medium publishers that provides online publishers with a service solution to manage and monetize non-Guaranteed ad inventory.

    PubMatic’s  is a real-time ad monetization and management solution that let the online publishers get the most money from their advertising space by deciding in real-time which ad network or exchange can best monetize each impression.

    Online Video Advertising: Guidelines

    Digital video advertising was born almost a decade ago after several seminal events, but many agree it was the sale of Mark Cuban’s and Todd Wagner’s Broadcast.com to Yahoo in 1998 for the sum of $5.7 billion that put digital video on the map.

    During the early 2000s, as the Internet valuation bubble burst and the interactive industry regrouped, digital video progressed slowly. As the interactive industry rebuilt, leaders such as Microsoft’s Windows Media Player, Yahoo’s Launch, The FeedRoom, and MSNBC’s video content inched the industry forward by selling “test” programs to blue-chip advertisers who wanted to learn about the medium and gain insight. CPMs tended to run on the high-end of the TV-CPM range and inventory was limited.

    At this point, many believed that the future of digital video content lay in a subscription,
    rather than an ad-supported, business model.

    Image Credit: battletopsman

    In 2005 however, growth began to accelerate quickly. An explosion of companies from networks to content providers made both premium and user generated video content available as new revenue streams. Widespread adoption of high-speed internet connections and improvements in video.

    Two events served to focus the advertising world on digital video’s bright future.

    • 1. First, were upfronts by major media agencies such as Starcom and Mediavest. These were the first broadband upfronts in the history of advertising and the move proved to be transformational, positioning Starcom Mediavest as a leader in video advertising. Clients like Procter & Gamble, McDonald’s, Kellogg’s and Coca-Cola allocated millions of dollars for digital video and immediately focused media buyers across the industry on the value of premium online content.
    • 2. The second transformational event occurred in 2006 with the sale of YouTube to Google. For a $1.65 billion purchase price, digital video was back on the front pages of every newspaper around the world.

    Unlike 1998, however, advertisers, agencies, and publishers now had experience with online display and search advertising and were ready to expand their budgets to include digital video.

    Meanwhile traditional television marketers easily understood the power of digital video’s sight, sound, and motion and began to take interest in online’s video advertising capabilities.

    According to eMarketer, digital video grew to a $775 million segment in 2007 and the same source predicts rapid growth by 2011 with $4.5 billion in online video ad spending.

    Video Advertising Operating Ecosystem

    The operating ecosystem for video advertising can be complex and contains various entities, all of which play a different but vital role in the development, production and distribution of video advertising. These include:

    • Web Sites and portals,
    • Ad agencies,
    • Networks,
    • Measurement,
    • Auditing,
    • Research firms,
    • Ad serving technology and service vendors,
    • Video technology providers,
    • ……and more.

    In an environment as fluid as the Internet, these roles are sometimes blurred and can be confusing. The following table lists the key video operating ecosystem entities along with a description of their functions:

    Content Experiences

    With tens of millions of videos available online today and millions being added each month, consumers can view videos never before accessible through traditional mediums like television.

    Consumers can effortlessly go from watching a professionally produced television show to a 10-second clip of a friend describing their first year away at college. Although this universe of content is broad and varied, the disparity of video content can be classified into three main areas:

    • Premier programming: gives users professionally produced content, generally, re-purposed from broadcast video and cable networks. There is a large amount of professionally produced video that has not been digitized but is quickly working its way online.
    • Professionally-generated specialty programming: video content professionally but generally created for a specific subset of online video consumers. Whether it is original content for the web or content from traditional media like local news or community events, consumers are searching for and consuming video content relevant to their micro interests.
    • User-generated video: consists of clips created and uploaded by everyday people and make up the largest volume of videos available online. Generally, the majority of these clips are watched by a small group of users but due to viral word-of-mouth messaging some become extremely popular and are viewed by millions.

    While these categories may vary in production quality, time length, and resolution, consumers are drawn to each category for different reasons and a variety of video ad products have been developed to best fit each of these different experiences. See the video ad product compendium section below for more information.

    Video Ad Product Compendium

    In May 2006, the IAB broadband committee (now the digital video committee) defined a video ad as a commercial that may appear before, during, or after a variety of content including streaming video, animation, gaming, and music video content in a player environment.

    This definition included “broadband video commercials” that appeared in live, archived, and downloadable streaming content.

    Since 2006, both the experiences and consumption of video content has evolved significantly. While the 2006 definition of a video commercial is still relevant today, newer video ad formats have been introduced to compliment these emerging types of video experiences and environments.

    Through 2007 and into 2008, the most common digital video ad experiences were either viewed within or around “in-stream video”, “in-banner” or “in-text” formats.

    • In-stream video is generally played or viewed from a video player like a client browser.
    • In-banner video is generally displayed in IAB Universal Ad Package (UAP) banners.
    • In-text video is generally user-initiated and triggered by relevant highlighted words within content.

    Due to the fact that in-banner video advertising and in-text is generally tracked and operationally supported as a rich media advertisement, the major focus of this document will be on in-stream video advertising.

    While these three video ad types currently make up the majority of video ad inventory, there are other available methods of triggering a video ad experience, including brand integration like sponsorships and branded content.

    Another area of innovation in video advertising is to advertise entirely outside of the video all together, or within the perimeter of the video, leaving the video stream ad-free – this practice is generally referred to as an advertising “skin”.

    • In-text video advertising is similar in that it does not require video content to deliver a video ad.
    • In-text video highlights words and phrases within the text of web content and links the word to a relevant video advertisement. See example 3 in the video examples section below.

    In-Stream Video Advertising

    There are two core video ad product categories in today’s in-stream ad experiences. These are, “linear video” ads and “non-linear video” ads:

    Linear video ad: is presented before, in the middle of, or after the video content is consumed by the user, in very much the same way a TV commercial can play before, during or after the chosen program.

    One of the key characteristics of a linear video ad is that the user watch the ad instead of the content as the ad takes over the full view of the video.

    Examples of linear video ads include:

    • A traditional repurposed 15 or 30 second TV ad
    • A purpose-built digital video ad product with interactivity inherent within the core video product experience
    • A full screen display ad or bumper ad viewed within a video player

    Because a user cannot experience the intended video content during a linear video ad impression, the ads are either placed before the content (also referred to as pre-rolls), between the content, or after the content.

    Note: the term “pre-roll” is also regularly referred to as a 15 or 30 second spot, but in this document “pre-roll” is used consistently as a description for the placement of the ad which is preempting the start of the video.

  • Non-linear video ad: runs parallel to the video content so the users see the ad while viewing the content. Non-linear video ads can be delivered as text, graphical ads, or as video overlays. Common non-linear video ad products include:
    • Overlays which are shown directly over the content video itself
    • Product placements which are ads placed within the video content itself
  • Both linear and non-linear video ad products have the option of being paired with what is commonly referred to as a “companion ad”.

    • Companion ads: commonly text, display ads, rich media, or skins that wrap around the video experience, can run alongside either or both the video or ad content.The primary purpose of the companion ad product is to offer sustained visibility of the sponsor throughout the video content experience.  Companion ads may offer click-through interactivity and rich media experiences such as expansion of the ad for further engagement opportunities.

    The video ad products that publishers and vendors sell to media buyers are generally a combination of linear, non-linear and companion ad products packaged together in a compelling way.

    Popular combinations of in-stream ad formats include:

    • Linear ads (A) + Companion ads (C)
    • Non-linear ads (B) + Companion ads (C)

    In-Stream Video Examples

    1. In-Stream Video Ad Example

    video advertising

    In MSN’s video player example to the right, a linear video ad plays before the video content and is accompanied by a clickable, expanding 300 x 250 display companion ad product.

    2. In-Stream Video Ad With Skin

     

    In this example by heavy, a 1020(w) x 620(h) ad unit surrounds a video for the duration of the program and actually becomes part of the viewing experience.

    3. In-Text Video Ad Example

    Vibrant media’s screenshot to the right shows a user mousing over a relevant word which triggers a relevant video advertisement.

    4. In-Stream Video Ad Overlay

    This screenshot depicts a non-linear overlay ad product in an original show. The advertiser is McDonald’s in a broadband enterprises production “The fantastic two

    5. In-Stream Video Ad Overlay

    In this screenshot, Yahoo! offers a non-linear overlay that is triggered by the user mousing over the video advertisement content. This overlay communicates a call to action to the user.

    6. In-Stream Video Ad Overlay

    This screenshot illustrates a non-linear overlay ad format with an accompanying companion ad to the right of the video.

    Metrics

    The core metric used for currency in digital video advertising is a “digital video ad impression“, also referred to as a broadband video commercial impression as described in the IAB’s broadband video commercial measurement guidelines released May 2006.

    In 2006, the IAB’s broadband committee and measurement task force developed a set of broadband video commercial measurement guidelines.

    Specifically, these guidelines determined at what point a video commercial is counted by defining a video ad as a commercial that may appear before, during, and after a variety of content including streaming video, animation, gaming, and music video content in a player environment.

    The key point to this guideline is that the video impression is measured at the latest point possible in the delivery of the ad creative to the user’s browser, which is the closest opportunity to see by the user.

    The 2006 measurement guidelines are still the basis for the currency of video buys in 2008, specific to in-stream, linear and most non-linear video ad products.

    In the future as the IAB embraces new non-linear ad formats into the mix of standardized video ad products, careful attention will be paid to determining the proper currency metrics for these new formats where appropriate.

    Other non-currency measurement metrics exist today but because of the amount of innovation in the medium, none have become standard.

    General Business Overview of Video Advertising

    The buyers of digital video advertising include the interactive and traditional ad agencies and extend to major marketers, long-tail marketers and resellers. For the most part, digital video advertising buying mirrors other media buying behaviors.

    Today, most buying of digital video is being done by interactive agencies on behalf of the major marketers. Traditional agencies and buyers of traditional media have lagged thus far, but are entering the marketplace. Progress at agencies where digital buyers are working closely with traditional buyers presents a powerful model for the future.

    The sellers of digital video advertising range from the largest portals and media companies to the most specialized user-generated content sites on the web.

    The major online portals and broadcast media companies comprise the bulk of the video traffic and all have made strategic moves in both the content and technology space to insure their leadership positions.

    The smaller content sites generally use both direct sales and/or network sales strategies to fulfill their inventory needs. To take advantage of incremental video advertising revenue many websites are now choosing to deploy in-text video advertising within their content pages.

    Current pricing practices in digital video suggest that the medium is quickly maturing.

    CPM-based pricing is the predominant model for buyers, particularly the In-Stream, Linear Ad format (pre-rolls, post-rolls, etc).

    CPMs can span a wide range and are based on a number of factors including the quality of the site’s content and users, targeting capabilities, and individual programming.

    The CPA and CPC models are also available and are the predominant measures for in-text video advertising.

    These buying models are helping to bring large, direct marketing advertisers into digital video and long-tail marketers or “mom and pop shops” that have not had a place in the medium in the past.

    Many brand-based advertisers believe the CPA and CPC models lend accountability to brand-based advertising where other media have traditionally struggled.

    Current Industry Challenges

    There are many components of digital video advertising that have yet to be standardized, including creative units and new metrics.

    While the video industry is still relatively young, the IAB digital video committee recognizes the importance of simplifying the buying and selling process as an impetus for further long-term growth. The following have been identified by the digital video committee as current key challenges:

    Article written by the Internet Advertising Bureau Digital Video Committee for IAB.

    Source: A Digital Video Advertising Overview

    About the author

    The IAB digital video committee has the purpose to creating and implementing a comprehensive set of guidelines, measurement, and creative options for interactive video advertising. Additionally, the committee will educate markets and agencies on the strength of broadband as a marketing vehicle.

    Online Advertising Management: Frequency Capping To Optimize Ad Revenues

    Frequency capping has long been used as a method for helping advertisers to improve the performance and reach of their online advertising campaigns.

    In short, frequency capping allows the advertiser to limit the number of times a user sees a specific ad, resulting in increased return to the advertiser for every dollar spent.

    While the benefits of frequency capping for advertisers are clear, frequency capping can result in significant challenges for publishers.

    In particular, for advertising campaigns run by ad networks on a publisher’s web site, frequency capping can result in significant revenue loss for publishers.

    Publishers have very limited insight into ad network pricing and are unable to determine how to allocate inventory to ad networks based on particular frequencies.

    This white paper describes current trends in online advertising, the challenges publishers face with respect to managing their ad inventory, the components of a solution that take into account the relationship between frequency and eCPM in ad serving decisions, and PubMatic’s frequency revenue optimization solution.

    Market Trends Are Expediting a Shift To Performance Advertising

    Marketers’ success metrics are defined by the advertiser or media agency, and vary with respect to how they are measured. However, today’s economic climate has created a need for advertisers to demand more campaign accountability with less monetary investment, or greater ROI.

    This has helped to expedite an already growing trend: advertisers are moving away from pure branding campaigns where the success metrics can be very subjective, and more towards performance based campaigns where success metrics are more clearly defined.

    Economics are not the only reason why performance based advertising is a quickly growing trend; technological advancements have made it possible for advertisers to closely monitor and measure a more granular level of performance metrics of an advertising campaign.

    Advertisers are taking advantage of these technology advancements to get better control over where, when, and to whom their ads are being displayed.

    Traditional Role of Frequency In Online Advertising

    One of the ways that advertisers are achieving enhanced performance from their online advertising campaigns is through the use of  frequency capping.

    The term “frequency capping” refers to restricting (capping) the amount of times (frequency) a specific visitor is shown a particular advertisement within a period of time.

    For example, a frequency cap of “3 per 24” for an ad means that after exposing the user to the same ad 3 times, the visitor will not be shown that ad for 24 hours.

    Some of the key benefits of frequency capping are:

    • Increased reach – frequency capping is an efficient way to increase reach by expanding the number of unique users that see the ad. Rather than using a marketer’s scarce budget to show the same ad to a small number of users over and over again, frequency capping can be used to ensure that a wider audience is exposed to the marketer’s message.
    • Increased CTR – frequency is used as one of the key drivers to improve advertising campaign performance.  Click Through Rates (CTR) have been shown to drop precipitously after the first exposure and to plateau at four because of “ad blindness“, wherein the user becomes so used to seeing the ad that the user essentially becomes blind to that ad.
    • Improved conversation rates – similar to CTR, the conversion rates also are highest on the first impression and typically diminish after 46 impressions.

    Decoding The Frequency – eCPM Relationship With Ad Networks

    frequency capping

    Ad networks generally have multiple campaigns running at any given time, and those campaigns have different frequency cap, pricing and other characteristics, as specified by the advertiser.

    Based on the success metrics defined by the advertiser and expected performance of the campaigns, ad networks value the first impression a user sees more than their second impression, and so forth.

    Ad networks then allocate the highest paying campaigns to the first user impression, followed by the next highest paying ad campaign and so on.

    While ad networks have their campaign delivery structured in a way that will maximize their performance metrics, the ad networks’ data is not made transparent to the publisher in a way that allows the publisher to maximize their revenue.

    Without access to ad network pricing, it impossible for publishers to allocate their inventory in the best way possible. As a result, publishers require a solution that gives them insight into ad network pricing so that publishers can maximize the value of each impression shown on their web sites.

    In order for publishers to maximize revenue on every impression, there first needs to be a method to predict where the most valuable impressions are coming from, and when.

    The best method for achieving this is collecting historical data in order to find the relationship between frequency and eCPMs, and then creating a frequency eCPM curve.

    A frequency eCPM curve is created by averaging eCPM data across thousands or millions of users on a site. Such a curve reflects the average eCPM that can be expected at different user frequencies from a particular ad network.

    Optimal Impression Allocation Based On Ad Networks Frequency eCPM Curves

    frequency capping

    Given these frequency eCPM curves it is evident that in order to maximize the revenue for the publisher, an optimal impression allocation strategy across all of its ad networks can be set up as shown in the graph below.

    For example, instead of giving all impressions to Ad Network -1 first, the publisher would allocate the first impression to Ad Network -1, the second impression to Ad Network -2, and the third impression to Ad Network -1 again and so forth as is detailed in the table below.

    Implementing Optimal Frequency-Based Decision Making: Frequency Revenue Optimization

    The data that is collected and applied to the frequency eCPM curve can be used for predictive modeling. However, leveraging this data to maximize the revenue of every single impression requires real-time decision making, and that is impossible to do without the assistance of advanced technology.

    Understanding this, PubMatic has developed a propriety solution called frequency revenue optimization.

    How frequency revenue optimization works:

    Frequency eCPM curve predictions – By observing the frequency impression distribution, default impression distribution, and eCPM trends from an ad network on a continuous basis, an overall frequency eCPM curve for each ad network can be predicted.

    Dynamic impressions allocation to ad networks using Frequency eCPM curves – Each impression can then be optimally allocated to the ad network with the highest expected frequency eCPM, maximizing overall revenue.

    Benefits To Implementing Frequency Revenue Optimization

    Increased revenue for publishers – by intelligently allocating ad impressions across a mix of ad networks, based on the frequency – eCPM relationship, publishers can generate significantly higher revenue for each ad impression.

    Reduced number of defaults – default rates for ad networks can be reduced significantly by allocating impressions to the best monetization opportunity. This results in reduced ad serving costs for publishers and ad networks as well as a better user experience because of faster web page load times.

    Better user experience – frequency revenue optimization improves the user experience significantly by showing different and more relevant ads to a user during a web session. This is reflected in higher CTR rates on ads.

    Higher quality traffic to ad networks – ad networks win with frequency revenue optimization because the web sites in their network perform better. The reduction in ad blindness and higher click-through rates translate into better performance for advertisers.

    Examples of Publishers That Have Used Frequency Revenue Optimization

    Benefits derived from frequency revenue optimization vary from site to site. There are several examples of publishers of varying sizes and verticals that have enjoyed demonstrated success with PubMatic’s Dynamic Default Optimization.

    Conclusion

    The major challenge presented to publishers with frequency capped campaigns is allocating inventory to ad networks in a way that will maximize publisher revenue. What makes this a challenge is the lack of transparency from ad networks about pricing, which makes it impossible for publishers to allocate their inventory in the best way possible. As a result, publishers leave substantial money on the table.

    About the author

    Founded in 2006, PubMatic is an ad revenue optimization service that helps web site publishers run the highest paying ads from top ad networks.

    Frequency revenue optimization is a solution that PubMatic has developed as a way to give publishers the insight they need in order to implement an optimal inventory allocation strategy for frequency capped campaigns.

    Over the last 8 months, PubMatic has developed a proprietary frequency revenue optimization solution that maps the relationship between frequency and eCPM for a particular ad network and optimizes ad serving decisions in real time.

    This solution has been deployed to over 100 large publisher web sites, resulting in the following benefits for publishers:

    • Up to 35% increase in eCPM
    • 50% to 210% increase in CTR (click-through rate)
    • 10% to 50% decrease in ad network defaults (ad requests for which the ad network has no ad to show)

    In addition to the significant publisher benefits, frequency revenue optimization has also increased the flow of desired traffic to ad networks, reduced their ad serving costs by decreasing their default rates, and enhanced the end user experience by loading more relevant ads faster.

    To date, over 100 premier publishers have successfully leveraged this solution to increase their revenue.

    Creative Advertising Campaigns That Makes You Look Twice

    Usually, people don’t look or even read advertisements because annoys them. However, not all advertisements are bad and a few companies have thought to design some very clever advertising campaigns.

    These bus straps designed by Jung von Matt/Alster for watchmaker IWC lets to bus travellers at the airport to try the product first to buy them at Berlin, Germany.

    Another creative idea in the New York City. This cup of Folgers coffee print was placed on top of manhole covers. The holes on the print allows the steam to come out and make it very realistic. The message around the cup says ‘Hey, City That Never Sleeps. Wake up.” from folgers.

    This advertisement make seem people like if are actually operating inside vending machines, but in reality is an advertisement for a job recruiting company in Berlin, Germany. The message say “Life is too short for the wrong job”.

    This creative idea was designed for a fitness company. As you can see, it seems like the person holding the safety bar is doing weights. Heavy Weights were put at various subways in New York City.

    This creative ad gives the perception that the Mini Cooper remain very large. It’s been placed in a train station of Zurich.

    This giant mirror was placed in a shopping mall in Tokyo, Japan, and allows anyone to stop and look at themselves wearing clothes.

    In my view, some of these ads are very clever, while other might be annoying to use for commercialism, also, much humor in an ad might overshadow the product. What do you think?

    Banner Does Not Work With AdToll Pell Away Ad

    Just a year ago I put adToll Peel Away ad to one of my blog. I’ve included it at the right corner, and add a small animated image(about 50×50 pixels) that once overed with the mouse it reveal much larger image.

    Well, over the past few months, I’ve paid attention to my AdToll Peel Away stat. I always throught, just as you need to track the traffic coming in and out of your website, it important to track the performance of your banners. So, I did it.

    adtoll peel away
    Image credit: Munilfari

    The result is: Sorry Adtoll, but I was disappointed by the Adtoll Peel Away ad performance. Now, I’m not saying that this is totally bad, but recently there was some thing that did not work it well.

    Here, are three reasons why AdToll Pell Away Ad worked bad on my blog.

    1. New owners – AdToll company was sold and managed by new owners, I think publishers has ended up to lose by that change.
    2. Stats wrong – The first thing I noticed, was that stats are inaccurate and wrong and  while old owners had It fixed within a day, max two, their seem have abandoned the site totally.
    3. Can’t Edit Pre-Peel Image - The pre-peel flash image is the most important thing on a peel away ads, better than the 500×500 mouseover image, but AdToll doesn’t let you edit it.

    Goodbye AdToll Peel Away Ad, Welcome Peel Away Ad

    However, i removed it from my blog because it doesn’t meet my requirements of software for make money online, thus I replaced with the Peel Away Ad as that you see here. This is one of the coolest ad units yet. The pre-peel flash image is customizable, and personalized support is included with your purchase. Also, you have 8 Week 100% Satisfaction Money Back Guarantee”

    I already running Peel Away ads in other my sites and for only $17, has made more than my money back from it in less than a week.

    I expect to see this type of advertising become more common in the future. You can get high click rates, then you can use the script to promote your own affiliate program.

    I’ve personally used both  Adtoll Peel away ads and Pell away ads, and I have only had a real succes with the second script, so I  wrote this article for those are thinking of adding it at their blog.

    Make Money Online With Peel Away Ad .

    Cool, Innovative Corner Advertising, Corner Stay Ads Better Then Peel Away Ads?

    I always stated, one of the few ways to make money quickly through an existing blog without making too work, such as creating products like e-books or providing services like search engine optimization is certainly the direct advertisers.

    In my view, text ads are crowded, banner ads are invisible, thus before you go spending your money for a product who promises to make you rich … let me tell you a little about Corner Stay Ads for those who are unfamiliar with this product.

    corner stay ads

    What Is Corner Stay Ads?

    Corner Stay Ads is a piece of script that create a pop up image at the corner of any page(look image below) and the ad is revealed when you move the mouse over.

    The guys who created Peel Away Ads, Harris Fellman and Richard Osterude, after released version 3 of the Peel Away Ads,they have come up with a new type of   script that you can use on any your website.

    According to the creator of Peel Away Ad, the ad is unobtrusive and super effective because it makes people want to see what’s hiding behind it.

    As I said before, once you move your cursor over the graphic a small window pops up next to the graphic. In my view  Corner Stay Ads is a little more complete than Peel Away Ads, as it  you can put any thing you want here and use any graphic you like.

    Order Your Corner Stay Ads With My Special Bonus

     

    Example 1

    corner stay ads

    Example 2

    corner stay ads 

    The main reason why you should buy Peel Away Ads are:

    • Increase Your Monthly Earnings. You’ll get a steady stream of money by affiliate programs.
    • Get Higher Click Through Rates. Getting attention from your customers, you have more chance to increase your Click Through Rates.
    • Install On Multiple Domains. If you have more then one site, then, pay at once and you can use the same script in all your websites
    • Supports 100% of online browsers
    • One Time Payment. Just $127 $67 $37 right now(with my bonus).

    We could probably add a lot more to this list, but is enough to know the potential of this script.

    Special Offer, 120% Discount

    The3dtechnologies readers can get  Corner Stay Ads at 120% discount. Just $127 $67 $37 right now(with my bonus). If you haven’t ordered your copy it’s not too late, you can purchase Corner Stay Ads and you are still eligible for my bonus until this post is online.

    Also, here is what you get when you buy Corner Stay Ads today:

    • The Corner Stay Ads™ Script for you to use in as many sites you wish.
    • Access to the “Fill In The Form” Installation Page.
    • 54 Pre-Made Graphics for your corner ad graphics.
    • 6 Sample Hover mini-pages to get your imagination jump started
    • 15 Templates so you can customize your own graphics
    • And many more surprises for you

    Order Your Corner Stay Ads With My Special Bonus

    What’s Your Opinion Of Corner Stay Ads?

    Corner Stay Ads can be a new good way to attract the customer’s attention. I can say this, because yesterday I bought a copy and I’m using in one of my site. Since putting it up an hour ago, I’ve already received five new sign ups. So, we might expect a lot from Corner Stay Ads, right?

    I would also like to hear from you, about your experience with these type of programs. Please, feel free to leave any comments.

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    THE3DTECHNOLOGIES

    The3dtechnologies.com is an encouraging blog, dedicated to helping people build a business online, creating killer graphics design to increase product page conversions, as learn to save money, as extreme frugal living as well, so you can earn more and save more. I'm glad to have you here!


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