For a couple of years I have written my predictions for the twelve months ahead in digital advertising. Everybody’s at it and, of course, nobody takes it too seriously. “I’ll predict they’re all wrong”, one of my colleagues amsuingly suggested last week but, of course, it’s him that’s wrong. Almost nobody fails with these “predictions” because – like the best clairvoyant – we can’t predict the big stuff & we’re all looking for the trends which will get a little bigger or smaller. So, even with our ears to the ground, we’re vauge and can hang our hat on almost anything to prove we were right. Let’s face it, if anybody could have predicted the rise of Facebook or – insert any shining tech starlet here – we wouldn’t be making lousy predictions on the web, would we?

While I readily admit to following the pack and, probably, highlighting the trends everybody else is seeing, I do always start by reviewing last year’s “predictions” so see how far off reality my senses were. So, albeit a few weeks into the new year, I’m starting with a review of my 2011 predictions.

I began with “increased data usage in advertising targeting”. Of course this is probably impossible to prove either way. Publishers are certainly more confident in their data conversations but who knows if it’s really being used? Given Amazon registered a patent suggesting an ability to understand more about you based on your choice of wrapping paper I think we can safely say we have not come to the end of this trend. As for anybody falling foul of the data comissioners, well Facebook seemed to do the opposite and get a good grade from Europe. Not a bad result on that one but nothing amazingly forseen.

Last year I called my second prediction “The Cloak Of Transparency” and I think this is one that didn’t (but should have) come true. Being more accessible with explanations of data usage can only be a good thing. I am, however, releived that we are not bombarded with opt-in/out boxes at every online interaction. My prediction about this was off but somebody will meet the need soon, I’m certain. My favourite article on the subject in 2011 was by Kevin Curtin who encouraged somebody (maybe, everbybody) to sell his data. As for my point about data validation services, did I miss any?

Did digital advertising grow in 2011? I think we really need to wait a while to get the numbers in, don’t you? But if Hearst Digital can report that their “U.S. digital media businesses were solidly profitable for the first time” [source] I think I am onto a winner with that one. Since 2000 digital advertising has “has leapfrogged every traditional advertising vehicle except television” suggested The Chicago Tribune, which must be a good sign. Back in October, the IAB reported UK internet advertising expenditure growing 13.5% to £2.256 billion in the first half of 2011. The cards are looking good for that one. And take a look at some of the excellent creative you may have missed in 2011. That one came true and, in an uncertain economy, I’ll happily take credit for being right on that.

Also back in October, an Econsultancy/Rubicon Project report suggested 44% of publishers were then selling their online display inventory via real-time bidding (handy if you’re in RTB, huh?). I’m using RTB as a proxy for the traded environment here, as I can’t find any stats talking more generally about trading. Without a doubt, there were even more ways to sell inventory on offer to publishers last year and, therefore, businesses need to understand the trading environment better. With 30 billion UK RTB-traded impressions seen during last year’s European RTB Insight Report, somebody ought to be making sure the money’s right. Of course, publisher’s might want to put analysts on managing their direct sold campaigns, which was a suggestion repeated a number of times in 2011.

But where was the exodus from the City to digital that I suggested might happen? Perhaps that prediction failed because the City bonus culture didn’t.

My final prediction last year was about advertising and social media. How could I fail with this one? Twitter claims 60 billion tweets in 2011 and the most re-tweeted was from a commercial organisation: the Wendy’s hambuger brand. There’s a long way to go here but Twitter did introduce an advertising play in 2011 and it will only grow in 2012. Groupon, the couponing site that IPO’d (can I say it like that?) last year, earned an average return of 6,352% for private investors and generated top line growth of 700% in the nine months ending Sept 30 2011 (year over year) [source]: impressive sounding numbers, if nothing else. So, I think my suggestions that coupon sites would still be strong came true. While new Daily Deal sites came – and some disappeared – in 2011, there is more to come from this sector I’d wager. Last year I didn’t say much about video; I think it’s a given that it’s now part of the online/digital mix. But online video continues to grow as a viable advertising medium, and not just with long form content. This year charlieissocoollike became the first UK channel to reach one million subscribers which suggests a continually growing audience for well-produced, non-broadcast video content. YouTube counts as social media, right? Oh good. Tick, then.

Of course you can never go wrong saying that there will be a “raft of technology announcements” in the coming year, I don’t think that was wrong. I may even use that again for my 2012 predictions which will be with you soon enough.

So, there we go. I think I idnetified the trends well enough and, while these predictions aren’t going to make anybody rich, they weren’t awful.

Let’s see what the crystal ball thinks we’ll do in 2012.

I didn’t see the whole Peter & Kerry thing coming. My predictions were clearly off, my tea leaves were not telling truths and my crystal ball was cloudy. Still, some things from my 2010 futureology (is that even a word?) moment are true. Digital advertising revenues are up and a few people seem happy about that. But I am not going to tick-off my successes because it only makes you highlight the nonsense I talk at other times. So we continue as if nothing happened. Deal?

Rupert (Murdoch, not The Bear) is pushing ahead with his pay wall idea. I’ve written before about how I see pay walls are good (and not necessarily in the way that you think) and I have discussed why they;re good for advertising. But, thinking today, I realise there’s a key advantage I missed in my previous musings on this matter (my use of the word musings makes my previous posts seem more considered, don’t you think?)

To summarise, I suggested that pay walls will rise and fall for most mainstream publications within a twelve month period. Sites that put up pay walls have an opportunity to understand their users a little more – market research if you will – through the subscriber data they are collecting. Advertisers will like pay walls because the users behind them both value the content they are reading and will be generally more engaged with it.

But I didn’t really talk about us users who sit on the wrong side of the pay wall. Of course, we have options and can go somewhere else for some of the news; and we probably will. But, and this is the key advantage I’m interested in exploring, does the rise of the pay wall re-emphasize the role advertising plays in supporting content? In turn, will that make us more likely to share data with publishers (given proper controls, transparency and disclosure) in a more explicit deal: data supported advertising for free access to content. And not just unobtrusive advertising but premium, targeted advertising that’s sold at a value publisher’s can use to invest in content (and, yes, make their profit margins).

Controlling my identity – and the data (preferences & behaviours) associated with it – is a key stage in delivering the above. Targeted advertising should carry a premium as it’s more likely to be put in front of people interested and responsive. Targeting can take many forms, and is probably the subject of another piece of writing, but targeting based on what I tell you as a publisher and/or advertiser (by allowing you to track my behaviour or by telling you directly) should be the most valuable and I would consider trading it for valuable content (again, as long as you had proper controls and were transparent in your use of it). But who do I trust?

Truthfully, I am not wholly convinced by my previous paragraphs. By which I mean I’m not clear if pay walls will re-emphasise the value of advertising in supporting content nor if that will make us more likely to trade data for content. I am not sure if I would trade (but I might). But I do wonder if it will happen and if the so-called advertising eco-system will become so complex that the value is lost.

We have many twists and turns on this road ahead. Publishers (and I mean all content producers here) need to scale their businesses for the new market which for many once large organisations means shrinking. You can;t even begin to talk about profit margins until that point. I’m not sure what that might mean for on-going coverage of Peter & Kerry but I’m sure somebody will have a cheque book for the wedding pictures. I’m hoping for an invite.

Every man and his dog, if he works in digital media, has an opinion on this one. Pay walls will, or will not, save newspapers, magazines, books and any other form of printed word. E-readers, iPads and digital paper is, or is not, the saviour of the free press. So, why shouldn’t I wade in here? I may as well be shouted down by those who think that paper has, or hasn’t, got a future.

And so as not to be sidetracked, I’ll repeat my first prediction that pay walls will lead newspapers and magazines into a better digital world (which may, or may not, save their business models in the long run).

My second prediction is that pay walls will be removed after – for arguments sake – twelve months.

In my end of year predictions I suggested pay walls would be good for advertising because an engaged, paying audience is, generally, attractive to advertisers. And it’s far too early in the year to be retracting such suggestions so I’ll be sticking with it. But, upon further reflection, I think there will be a second advantage to short term pay walls and it’s not the pay bit that’s useful but the wall itself; the act of registration and identification that will aid newspapers’ business models.

The subscription money may – or may not – be insignificant. But in a world where advertising is highly targeted to us as people, be that by our tracked behaviours or the things we write – or the games we play -in social media, knowing more about audiences is becoming a necessity to deliver advertising online. But most media organisations don’t know much about me as a user at all. I read anonymously with only an ip-address acting as a proxy for who I am.

But look at the market they are playing in. According to Hitwise, getting on for 6% of all UK web visits are to Facebook. And Facebook knows lots about me because I tell them in all my interactions on a daily basis. Google accounts for nearly 9% of all visits which, while admittedly being search-based (i.e en route to somewhere else) is still giving them tremendous insight into my behaviours.

Pay walls will start to give newspapers a better insight into their audiences and with that data they’ll start to be able to attract much more highly targeted media. Once that data is put to use newspaper will realise they need to tear down the walls to grab a big audience but those people will start to be given reason to identify themselves so that advertising can be targeted properly. And then another of my predictions will come true: it’ll be all about the data.

It is for that reason that I think pay walls may save newspapers and magazines.

I also predict personal jet packs are the future of transportation by 2011.

This is the day that we should be saying Happy Christmas to one and all. Season of good will and all that. Of course, I shouldn’t forget that you could also think of today as a birthday too. So Happy Birthday, er, BBC iPlayer. I wonder what the iPlayer team are wishing for as they blow out the two birthday candles?

For a good period of the last two years I worked with other organisations that are looking to put television onto the internet. My work in digital advertising has meant that I have been, naturally, working with companies who wish to place advertisements around that television content. As I noted here in 2008, I was involved in the launch of Microsoft’s ad-serving capabilities into their Mediaroom IPTV product and with others on over –the-web content.

The iPlayer was really the platform that pushed on-demand viewing across the internet in the UK. You wouldn’t expect anything less from an organisation with the resources (in monetary terms, in talent and engineering terms and in marketing and reach terms) that the BBC can bring. It’s still the iPlayer that comes to mind when most people think of watching TV via the web and the iPlayer was certainly the talk of other European broadcasters (at least it was when I was regularly speaking to them). It’s a shame as other on-demand services are equally as good, ITV in particular have made great leaps. The Sky Player has been made to work with their proven business model which can only be a good thing for the space.

Because the iPlayer is not commercially driven, however, there has been little discussion of advertising in on-demand platforms. For the commercial providers it has always been the advertising that pays for the content. ITV has always been great at ensuring you get similar experience online as you would watching the show on television: why would they show programming without advertisements and commercial breaks? At last, most organisations have reached the point of being able to replicate the linear television commercial break experience. Sadly, however, we’re not seeing a great deal of innovation in this space which intrigues me even more now I’m less directly involved in the technologies that power this advertising. It’s an area ripe for new ideas. I know people in organisations I worked for have ideas by the truck-load but, for some reason, they’re not sharing them right now.

The economic climate and resulting downturn in advertising spend can be used as an excuse for the lack of in-production experimentation and, for commercial television companies struggling with smaller audiences and reduced ad revenues, this may be valid. But where are the innovative tech companies pioneering new ways of advertising around on-demand television? They must be there somewhere.

So, my Christmas/Birthday wish, point me to the innovators. I’m @curns on Twitter and I’d be interested to read about something genuinely innovative in the way in which advertising content is presented to consumers of on-demand content.

I wrote sometime ago about the amount of advertising in the world and how we should not fool ourselves into thinking that advertising will pay for all the products and services we would like to use; be they a TV programme, a daily newspaper or a website. Advertising won’t pay for it all because there’s not enough money to go around. Basically, the well isn’t that deep. The pot isn’t that large. There are too many hands in the till. Those kinds of metaphors work here, I think.

For me to say that is really easy but we also need to think about the pot/well/till and just how big it really is. There are a lot of resources that estimate the amount of advertising measured in all sorts of ways. And with different colclusions. Will budgets grow or will they shrink during the global meltdown? And where will the money go? Newspapers are suffering, traditional ad-funded TV and radio has long since lost any licenses to print money and digital advertising will grow, or maybe shrink. The outsider would assume that digital advertising has taken taken some kind of wild bungee jump into the well and the hands can, sometimes, grab the cash (if the cash was floating in the well … ah, you get the point).

But regardless of the current state of the budget we’re are moving into a world where there is a proliferation of ‘stuff’ that we all enjoy that we don’t dierctly, pay for. We pay by allowing the product/service to take a fraction of our time in viewing the ad. This proliferation of ‘stuff’ however, means the marketers/advertisers have to spread their limied budgets in an ever-growing number of places. The water in the well must now quench thirst for many more people.

Thinking about the well, I’ve started to wonder how long it will be before the amount of water in the well isn’t enough to keep anybody alive for very long. Are we moving to a position where things we all want to watch/read/consume will disapear because marketers are trying to use a little of everything? You know what I am thinking here: spend some money on social media marketing and take it away from TV. But now there isn’t enough money for either TV or social media.

Is this a concern? I don’t think my views are wholly thought through but I’m kind of throwing it out there to see what people think.

When will it end? When will the water run out?

The technology behind managing online display advertisments can be incredibly complex. The business behind it the technology even more difficult to comprehend. Then there’s the poor publisher behind who buys the ad-server technology to manage their own increasingly complex business. These are the people I work with day-in, day-out. Publishers trying to get a grip on technology when, truthfully, they don’t care about technology. Generally, they care about delivering the advertising campaigns that somebody is paying them to deliver. The tech should do that. Seamlessly.

Sadly, much of the technology in this space is a black box. Few people in an organisation understand how it determines how/when/why ads appear. While it’s not ideal, I don’t consider it to be too surprising given that the online display market is only just a teenager and is still maturing. New approaches to selling online media result in new tech features which in trun need to be understood and explained to an end business. Here, I am focussing on the publisher ad-serving business because different problems exist in the agency world.

However, there is one part of the business that I think we’re missing in the advertising tech game for online content owners. We need to be the dashboard for the advertising & marketing departments in a publisher or content owner. And we’re not. We are one of many systems from inventory prediction spreadsheets through unrelated billing.

Although we shouldn’t need to be every component of the system we do need to unify the data. Your ad-server makes the decision if it should serve an ad or not. Why then is a spreadsheet handling the prediction. Your ad-server knows how many ads it displayed. Why is that information being re-keyed into a billing system? (OK, not everywhere, but in many places). These are blockers to efficiency and suceess. They are not insurmountable. The industry will move in that direction.

However, there’s one area where we have a disconnect. The advertising technology systems don’t tend to work well with those web analytics systems. This, to my mind, is the biggest disconnect we have in the industry.

I do know all the arguements that explain the disconnect; I’ve used them myself. The systems are trying to achieve differet things and the stats from the analystics systems provide lots of useful data over and above the kind of advertising data our industry needs. Designers, content producers, systems admin and network people all need the data web analyitcs software delivers. Often it’s great and detailed data.

But web analytics systems report numbers of users on websites. In any business, these numbers are usually passed along to management and the board. They’re used on marketing materials to shout, “Hey, look how great we are. We have a big number here and it’s getting bigger by the month. My graph groweth towards the sky”.

People love good numbers and a good story. So, the board in the company gets the marketing people in the company to tell the good number story far and wide. And they really don’t have to go that far until they’re telling it to the ad sales people. Who, in turn, pick up the phone and tell the news to their customers. And before you know it, everybody wants to buy ads against these lovely big numbers because they have these big numbers.

Unfortunately, the ad-server disagrees with these big numbers. There are lots of reasons why. SOme valid reasons for different data, some valid differences between counting approaches, some just tech differences. Occasionally, these differences can add up to a big number.

Some years ago a major broadcaster had a site that generated big numbers. But their ad technology didn’t say the same number. Remember, people like big numbers. So the management didn’t like the smaller numbers from the ad-server. Smaller numbers meant a smaller revenue. And yours truely was asked to look into it.

After being provided with two data sets I started looking at them and, quite quickly, I found a bunch of clear and obvious discrepancies. The nice analytics numbers counted all the pages, even the ones without ads (and there were a good number of them). The analytics numbers counted non-human traffic from search engine bots and other robots. You can’t serve ads to them. And if you do people don’t like it.

I could go on but this is already long enough.

Let me be clear. This is not a problem with trhe analtics industry nor the ad technology business. The analytics cmompanies could easily provide reports that matched up by filtering in the same way ad-servers do. That’s just a report to them. But the issue is at the end client. They don’t want to know the technicalities of the differences. And why should they? But equally, they should not be allowing sales and marketing folks to be building & selling advertising models against numbers that they stand no chance of delivering.

My appeal to the ad-server business is this. Develop an interface that marries analytics data with ad-serving data. For my purposes let’s assume that’s easy. Create a single view of the data for the end business so they buy, sell and predict from the same numbers. Make sure predictions and post-delivery reports are based on the same data,

I think it’s the only way we can make the industry work without the distrust that happens when different systems purport to report on the same things but provide different reports.

And don’t get me started on differences between ad-servers!

Je viens de rentrer d’une visite à Paris. If that doesn’t read as, “I’ve just got back from a visit to Paris” then you’ll know O-levels weren’t as good as the rose-tinted view of the dumming down brigade suggests. That, or I’ve just forgotten everything Mrs Taylor taught me about cats sitting on tables or buying one-way tickets to La Rochelle.

A Paris, j’ai rencontré des gens très sympathiques. But, I wasn’t there just to be friendly, I was there for the second part of the pan-European tour for Microsoft Advertising’s regular outreach sessions, MSA Today. And, in case you’re imagining musician-on-a-bus type touring, it was date two of two (the first being last week in the UK) and so a ‘tour’ is perhaps a little “licence artistique” on my part.

I was part of a group of people showcasing Microsoft Advertising’s offerings to publishers: a set of tools that help media owner’s understand advertising inventory; delivery premium advertising content and monetise remnant/discretionary inventory. It’s a neat set of tools that you can find more about here.

To give a bit more background to what I noted last week, while working on the presentation (which has been made available over at Microsoft), I became increasingly convinced that one particular piece of terminology was incorrect: the industry refers to some of that technology as an ad-server and, for most publishers, that name isn’t accurate. And before I’m accused of being pedantic, I think we (those of us work in the business of helping publishers manage advertising inventory) are doing ourselves a disservice by not properly describing what we’re doing and what value we are bringing.

I appreciate that my distinction – certainly in technical terms – is overly specific. But for most publishers and ad-server can be said to do around about six things and in the vast majority of cases the publisher system never actually serves an advertisement (my definition here requires the ad-sever to hold the advertising creative and provide the asset or the URL of the asset back to the user’s browser). And I am talking about publisher ad-servers here; the equivalents for buy-side, optimisation or network players in this space might ‘serve’ the ad more often than not.

And now you’re asking “Pourquoi est-ce important?” (or something similar). I believe the serving aspect diminishes the value because it’s seen as a technical not a business process. Not that it should, the development and innovation behind serving digital advertisements is often overlooked but nonetheless we’re dealing with realities in this small space of the industry.

A publisher needs a system that provides order management; that provides inventory analysis (both pre and post-sale); provides workflow tracking for the ad operations team; provides reporting and insight on delivery, sales and finance and, finally, makes the decision on which advertisement should be shown through fast analysis of targeting rules and the browser’s request. In the world in which we operate today, at the point of selection the publisher’s system hands-off responsibility for delivery to the advertiser (buy-side) or network’s delivery system which takes responsibility for telling the browser where to load the ad from.

When we take publisher tools into a multi-platform world (which, to some extent was the point of my pitch for Microsoft) we’re taking them further and further away from having responsibly for ‘serving’. In the IPTV world, in the online video world and, to a large extent, in the mobile world publisher tools are making a decision and letting something else do the technical side of the delivery. This is not to play down the important of solid, reliable and timely delivery but it’s just not how publisher ‘ad-servers’ have evolved. In the cable television space we’re already talking about a legacy web ‘ad-server’ as being a ad-decision service and that, more accurately, reflects what we’re doing.

Again, I am trying not to be pedantic about this but selection, targeting, analysis, prediction and workflow management are sophisticated tools that power publisher’s businesses. The serving is really the last item, admittedly vital, in the chain but often it is not done by the publisher’s system as we know it today. Why is it not a referred to as a delivery analytics platform or a decisioning system?

I really do wonder if we are doing ourselves a disservice in underplaying the business systems we’re providing. Back when we were just rotating ads every few seconds, and I once worked on a system which selected the ad based on the numerical value of the second you requested it, our tools were primarily a mechanism to deliver. Now they are a mechanism to mange, process, refine, analyse and invoice. Systems have been – rightly – integrated into CRM and billing systems as well as into content management and analytics platforms. The value a publisher ‘ad-server’ brings is infinitely better than those systems of old yet our terminology hasn’t changed.

As an industry we need to be better at highlighting our real value. I don’t believe ‘ad-server’ serves is well any longer. It’s time to change.

Part One of this piece was written after the UK version of the presentations and can be read in That’s Not An Ad-Server.

Disclaimer: the views here are my own and are not necessarily the opinions of my employer (who sent me) nor customers (who I spoke to while there). You have read the full disclosure, haven’t you?

If you follow the things that I write here then you’ll know that I am involved in the technology of the digital advertising industry. A few years ago I would have said that I work for an ad-serving company; at a push I worked for a publisher ad-serving business. Just over a year ago, the ad-serving company that I work for was acquired by Microsoft (as part of their aQuantive purchase) and I have been part of Microsoft Advertising for some time now. Putting the fact that Microsoft is an enormous company to one side, I honestly don’t think I can say that I work for an ad-serving company any more (and I don’t mean because I work for one that now makes Xbox and Word). No, I believe that the term ad-server is out-dated and we should stop using it. Ad-serving is dead (at least for publishers).

There are some that will balk at that statement but stay with me.

Microsoft has some big ambitions in digital advertising, just look at the other acquisitions aside from aQuantive: ScreenTonic, Massive and AdECN, and as part of those ambitions we have been welcomed – quickly – into the Microsoft Advertising family. And to that end we’re included in the marketing events. And that is why today I stood in front of a group of publishers, as part of the Microsoft Advertising Today conference, to declare ‘The ad-server is dead. Long live the ad-server’ just without any robes, royalty or a crown anywhere to be found.

Strictly, my part of the day was entitled, ‘Beyond Ad-Serving’ – which is to say if you’re a publisher you shouldn’t be focusing on just the delivery of the advertising because, well, chances are your system isn’t delivering it. Sure, it’s making all the decisions (and you should be very interested in how your system can handle the different prioritisations required by different campaign types) but it’s passing of the heavy-lifting of delivery to a third-party system (or even to a network who will then pass it on to an advertiser system). Frankly, as we move into an era of networks, exchanges and bidding systems, publishers need to think about much more than the serving part.

Those of you vaguely familiar with the kinds of systems I am talking about will know I’m being overly picky in my use of terminology but I do, genuinely, believe that this is an important point. How does your system handle basic sales order workflow, yield management and business intelligence? These days, a publisher ad-server needs to be great at decision making, great at making those decisions for multiple platforms – preferably while understanding the audience across those platforms – great at forecasting and a great optimiser. Serving the ad? That comes next.

So, ad-serving is dead because the ad-server has matured.

Microsoft have kindly put up a copy of the presentation that I did. You may be surprised to hear that I was encouraged to remove bullet points. Yes, at Microsoft (sadly, the pdf rendering isn’t great but you’ll get the point).

Disclaimer: the views here are my own and are not necessarily the opinions of my employer (who lets me talk about my opinions) nor customers (who I spoke to). You have read the full disclosure, haven’t you?