Mobtown Labs

The Next Big Ad Market Compression

The more I think about attribution the more it leads down the road of connecting the ads with the true direct response vehicle. I’m not particularly talking about direct response advertising as it has evolved to today as that is really just optimization of the bottom of the funnel.

And contrarily brand marketing has still done a good job of keeping itself disconnected from direct response. So what would happen if you started cutting that branding budget and relying on just direct response advertising?

Or what if you cut the direct response dollars and just tracked all the brand impressions back to the direct response mechanisms i.e. call centers, sales people, and online commerce carts. We can do this. So why don’t we?

Well I have to give google credit. They passed up the brand dollars. In their earlier days they offered cpm advertising at the top of keywords. They later cut this out and moved over to an all cpc model.

Now we are seeing facebook doing this as well.

So these are the two biggest marketing vehicles of our recent history and they are passing up the branding dollars which could have a major backlash on our industry.

We already saw the compression of ad dollars when google swooped in and captured massive ad budgets. Well arguably they are getting the same results as when people would spend 10X what they spend on google on TV, Newspaper, and Magazines. Now Facebook is coming in and offering the best targeting our industry has ever seen and is passing up the brand dollars.

I think we will see another wave of ad dollar compression industry wide from the facebook price change backlash.

Also, I think it’s time for disruption at the big agencies and starting to use some of the tools that we have with ad servers, scoring, data warehouses, and call tracking to connect the brand dollars with the call centers, sales channels, and ecommerce carts.

Maybe a new smarter view thru metric will be the catalyst for this…..

Report: Location Coming to Facebook Soon, McDonald’s to Be First Marketing Partner (insidefacebook.com)
Advertising: Proactiv Tries to Shed the Hard-Sell Approach (nytimes.com)
Twitter - The New Age Direct Marketing Tool (wealthyways4you.com)

Tags: Facebook Advertising Brand Google Direct-response marketing Business Television Market

The Advertising Technology Stack

Image via Wikipedia

So last week I attended the Admeld RTB conference along with a lot of former co-workers who have gone on to many different segments of the industry. It was good to catch up with old friends and also good to see what a lot of exciting startups are doing in the space.

The ad network space is evolving and what used to be contained in one company or one ‘stack’ is now being unbundled and the innovation that is going on on each level of the stack are opening up a world of debate and excitement.

This is maybe my current best guess as to what the stack looks like right now:

Publisher -> SSP -> Data Segmentation Engine/Provider -> DSP -> Agency -> Advertiser

This could probably look a thousand different ways and there are many different types of each and larger media companies and agencies are bundling some of these pieces together but at the end of the day there are 4 value components that technology can benefit. For those marketing majors, you can think of this as the 4 P’s of display advertising.

The Media - content in which everything shows up on
The Data - attributes of the site, content, user, history, frequency
The Ad - the actual piece of creative
The Sale - the product being sold to the consumer, how much it’s worth, how much the advertiser can afford to pay to achieve the sale of their product or the brand value and equity of that product.

At the end of the day this stack right now is most focused on trading of The Data and The Media. Why is that? Well because there is more money to be made in an efficient, scalable manner on trading media and data than on any other piece of the marketing mix.

The ability to show up on the right piece of media is the pinnacle of importance and the power of The Media! That’s why media companies are worth billions of dollars. If you can’t reach consumers and have your product show up to them…..you could have the best data in the world, the best ad in the world, and the best product but if you can’t get it in front of the consumer’s face, all is lost. And it’s massivly scalable. The more we make the more consumers consume and the more ads we can show.

Next in line I think is The Data. Showing up is the most important thing but showing up to the wrong user is a waste of money. So having data attributes on that user is probably the next most valuable thing…….at least that’s what we think right now because data can be sold in a scalable manner like media. The scale here is more limited than media as there are only so many users and the only way to scale is to further segement those users and increase the value as the segment gets more granular.

The Ad is a place where the advertising industry has placed a lot of value in the past with high priced creative consultants and creative agencies but this has taken a back seat in the online space. It could be argued that the industry is peaking it’s interest with the acquisition by Google of Teracent and the current buzz in the industry of companies like Dapper and Tumri. But the creative and the ad itself cannot be scaled as easily as media or data.

Finally there is The Sale. The Advertiser or the CMO, or the agency still really owns this process which limits scale value and innovation in the space. Only with Landing Page Optimization and deals like Accenture/Adchemy to really understand The Sale side of the equation and plug that back into the rest of the online marketing mix can you use technology to improve this piece of the equation….at least so far.

Tags: Advertising and Marketing Publishing Technology Advertising Brand Consumer

Mobile Advertising Coming of Age in 2010? - App ‘Search’?

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I just got finished reading a good article in Venture Beat talking about Mobile advertising and how they think it will start to come of age in 2010.

“Maybe 2010 will be the year when advertisers start seeing mobile less as an experiment and more as a serious part of their campaigns.”

- Venture Beat http://bit.ly/4TfJqT

They give a basic overview of all of the different types of mobile advertising going on right now and they claim that currently SMS and MMS is the most lucrative.

They also, in the quote above talk about how mobile isn’t really part of the media plan yet. I couldn’t agree with this more. Right now every agency I talk to says they have a mobile budget that is more or less an R&D budget. They don’t have any plan or strategy for mobile yet, and put a small budget against it just to be in the space. It’s not a significant percentage. That said online as a whole is still fighting for a whole number percentage for a lot of brands so there is plenty of upside.

That said, I don’t think 2010 will be the tipping point, but I do think some progressive advertisers will begin developing a mobile strategy for advertising. You will see a couple advertisers doing press around a marquee mobile campaign and the fact that they claim to have a strategy and the press release itself will be aimed at making the brand become a more progressive, younger, tech savvy brand.

I think in 2010 these will be predominantly branding dollars. I think for the medium to expand the industry needs to decide whether people will spend more time on mobile sites or with apps. If it’s sites, the online model can be applied. If it’s apps, more work needs to be done and app software middle-ware companies will be in high demand.

Also, if it goes the app route, there needs to be some more fluid App Browser or a better App search system. iTunes and the Android Marketplace will need to open up their source and allow external companies to index and create store-fronts for these apps so people can better organize and use them. ——> Enter the dawn of the Google/Yahoo/Askjeeves/Excite of mobile where directories and search engines (or the equivalent to that) will be the center of the mobile world.