The chinese word for fortune ;-)
Would you like to earn $100 eCPM? Post a comment.
Simplify the technologies behind the new economics of buying and selling advertising.
... Now three Internet providers in Britain have gotten together to try to grab a plump piece of online advertising for themselves. Last week, BT, Carphone Warehouse and Virgin Media announced a deal with a company called Phorm, whose technology tracks Web users and serves them ads related to their interests.AOL Deal with Citysearch to Boost Local Ads for Platform A - Feb 15, 2008
The deal expands Citysearch's content and ad reach while giving AOL access to aWhat Drives Local Search Directories? - Jan 17, 2008
local sales force and additional ad inventory for Platform A. - Relevance: 82%
Technology? Content? Both...or something else? - Relevance: 81%Mobile Marketing's Wild Years to Yield a Gold Rush - Jan 15, 2008
ABI Research survey suggests consumers and marketers are joining the wagon
train. - Relevance: 61%
Local Online Ad Sector Filled with Challenges, Promise in 2008 - Dec 26, 2007
The local online ad market remains a tough one to navigate, yet traditional media firms, Web pure-plays, IYPs, and others are up for the challenge. - Relevance: 84%Google Adds to Local Ads - Dec 04, 2007
Distance, temperature, or connectivity provides targeting details for Placecast-created ads.Why Local Ads Aren't Coming Online - Jan 14, 2008
Blame it on creative production and a lack of online inventory.
Social Behavior Stat SnippetsConsumers have always been heavily influenced by each other when they make purchasing decision. They ask each other for advice, they observe and mimic each other’s decision making, and frankly they let peer pressure inform their decisions whether they like to admit it. ... This influence occurs in three ways:
- Compliance: an individual agrees with a point of view and acts in a specific way in order to achieve a favorable reaction among his or her peers.
- Identification: a person acts a certain way in front of a group because she believes in what she says, and belonging to a group is important to her.
- Internalization: your views are truly altered beyond the relationship with the group.
Jeremy Liew, venture capitalist at Lightspeed Ventures, challenged entrepreneurs to create $50-million businesses that are ad supported. Mr. Liew states that at average eCPM's of $1.00, over 4 billion views per month would be needed to become fundable. At $10.00 eCPM, 400 million views would be needed; 40 million at $100.00. Hundreds of entrepreneurs have commented on Mr. Liew's blog.
Dan Mitchell, from the New York Times, reinforced that (Popularity Might Not Be Enough) higher eCPM's are needed. (ed: eCPM, or Mr. Liew's RPM, is the effective CPM regardless of whether the views are monetized using CPM, CPC, or CPA.)
What is the reasonable CPM? It depends.
What Is Your Goal?
Legacy publications, like a magazine or local newspaper, don't target $50 million businesses. A publication with $500,000 income can be highly profitable and sustainable. Thousands of publishers have followed this formula to profitable, long lasting ventures.
Using Mr. Lieu's $1.00 eCPM, 40 million views might be enough for an online version of these legacy operators.
Online ventures require less capital. An individual, with a computer, can work part-time to sustain an IChannel. Thus, $50,000 income could be the goal. At $1.00 eCPM, the target would be 4 million views per month.
If 4 paid ads can be delivered per page without angering advertisers and viewers, the goal becomes one million views. (ed: Note that such ads must be CPM ads, like a small spot ad. CPC ads don't work, since viewers have already changed pages after one click.) A local news publisher sells 10 small ads per page, lowers the promised goal to 500,000 views, and earns $50,000 per year to supplement paper profits.
Techcrunch sells dozens of ads per page through multiple AdNets. It does not help the CTR for each advertiser, but their eCPM is much greater than $1.00.
4 billion versus 500 thousand, it depends on your goal.
Of course, higher eCPM's drives down the target and/or improves the profitability of the venture.
How to Increase the CPM
Mr. Liew challenges entrepreneurs to create targeted sites, where the audience has a demographic profile that appeals to advertisers. These sites, he estimates, could gain $20.00 eCPM. The observation is correct, but does not tell the full story.
Economic analysis paints the complete picture.
Demand Exceeds Supply
When demand exceeds supply, prices rise. Conversely, when supply exceeds demand, prices drop.
Let's understand the economics for local advertisers. To reach 10,000 households surrounding a retail establishment, the advertiser typically spends $1.00 each for printing and delivery. Thus, the CPM is $1,000 (i.e. $1 times 1,000 copies distributed.)
A local newspaper or a coupon mailing service promises to deliver the same 10,000 households for $500.00. This is a nickel a piece or a CPM of $50. With few other suppliers, the $50 CPM is sustainable when compared to $1,000 CPM alternatives.
Can an IChannel target 10,000 households within a 2 mile radius? No. This includes Google, Yahoo, and Microsoft. There are no online suppliers. Thus, local ad distributors can still sustain the $50 price point.
Let's understand the economics for regional advertisers. To reach 500,000 households, metropolitan dailies and local TV broadcasts were the traditional suppliers. Coupon mailers don't have the economics of scale to compete.
Today, dozens of online ventures can reach 500,000 households per day. Supply without equal demand growth suppresses prices. It's easy to understand the profit pain for metropolitan newspapers with their high, fixed opex.
Analyzing online ventures, millions of diaries draw surprising audiences. With millions of suppliers, there is not enough advertising demand to raise CPM's. Thus, Mr. Lieu's $1.00 eCPM is already high when compared with IChannels reporting $0.25 eCPM's.
Language specific ventures may limit supply. However, sites like Blogger, Typepad, Youtube, and Myspace are moving quickly to support local languages. Supply blows past demand. Thus, $5.00 eCPM is unlikely based solely on language focus.
Today, new print magazines can still gain $200 CPM's. If you can thread the 'needles in the haystack' and consolidate 10,000 readers that a large group of advertisers desperately want to reach, you can earn $200. For each advertiser to reseach, build, and mail direct to their own lead list, their cost would be far greater than $1,000 CPM. Thus, they are willing to pay $200.
The Branded Value Add
to be continued...
How to Satisfy Venture Funding Requirements
IChannel enabler, AdNet, MarSP.
Conclusion
Which answer is correct for Mr. Lieu? Choice 4. An IChannel, AdNet, or MarSP that sells at $50 to $100 CPM. Forget choices 1, 2, and 3 that are based on a massively scaled IChannel with no target focus.
Do you have an idea to improve CPM's? Do you have an idea for a limited supply, high demand IChannel?
Don't tell us. Get to work.
January 24, 2008 CPMs Headed Up?, Media Post
In just the last few weeks, The San Diego Union-Tribune eliminated more than 100 jobs, one-tenth of its work force. The Chicago Sun-Times began a major round of newsroom layoffs, then put itself up for sale, and publishers in Minneapolis and Philadelphia warned that tough economics could force cuts there.
...
Others may seek shelter from market pressures by becoming nonprofit or going private; the Tribune Company recently did both. Other publishers, like the Washington Post Company and the E. W. Scripps Company, are shielded somewhat by having highly profitable non-newspaper holdings, but even they have made cuts.(full)
...
More than half of national online display advertising revenue goes to the top 10
portals, Millstein said.
Media giants in online ad venture Houston Chronicle - United States
The network will offer customized online advertising campaigns on a highly competitive basis, said Hayes, who is also senior vice president for sales for ...
Keep an eye on: Newspaper publishers huddle on ads By Paul Thomasch
That’s the size of the staff at a new company called quadrantOne, an online advertising network created by four of the largest US newspaper companies, Tribune, Gannett, Hearst and The New York Times Co. ...-
http://blogs.reuters.com/mediafile
As the new year begins, it's no surprise that online retailers cut back search engine spending as the shopping season wanes. The US retailers among Efficient Frontier's client base decreased spend by 31% from December 2007 to January 2008. Travel, on the other hand, receives a huge surge in consumer interest, and therefore ad spend, in January - our travel search engine spending was up 64% from December 07 to this January.
Search spending from finance, auto, and dating advertisers increased slightly from December to January. The news here is that the December - January growth in the finance sector was much slower this year than last. Financial advertisers spent 24% more in January 2007 vs. December 2006, while this year spend grew only 3% in that period. It seems the economic slowdown, particularly in the mortgage space, could impact the search engines.
Ed: Does supply show seasonal shift?
This morning the OpenID Foundation announced that Google, IBM, Microsoft, VeriSign, and Yahoo! have joined the board. The OpenID Foundation was formed in early 2006 by seven community members with the goal of helping promote, protect and enabling the OpenID technologies and community. Today’s announcement marks a milestone in the maturity and impact that the OpenID community has had. While the OpenID Foundation serves a stewardship role around the community’s intellectual property, the Foundation’s board itself does not make any decisions about the specifications the community is collaboratively building.Social Networking's Next Phase
Last year, OpenID grew by leaps and bounds both as a technology and as a community. At the beginning of 2006, there were fewer than 20-million OpenID enabled URLs and less than 500 websites where they could be used. Today there are over a quarter of a billion OpenIDs and well over 10,000 websites to accept them. OpenID has grown to be implemented by major open source projects such as Drupal, cornerstone Web 2.0 services such as those by 37signals and Six Apart, as well as a mix of large companies including as Apple, Google, and Yahoo!. Today is about truly recognizing the accomplishments of the entire OpenID community which has certainly grown beyond the small grassroots community where it started in late 2005. ...
...solve the problem, several firms are pushing a standard called OpenID, whichMarch 3, 2007 - By BRAD STONE - Technology - 1227 words
would let users sign on and easily transfer profile...networking firm, People
Aggregator, was an early supporter of OpenID. ''Humans are migratory beasts, and
we do not want to re...
The key foundation set of constructs, web services and APIs to support when buildingthe mesh - is the domain of profiles, personas, friendships, relationships, social graphs and groups. It all starts with humans and every construct, element and component of the open social web we’re building has to do with people. So that’s I’m starting here.
You've heard a lot about OpenID, the decentralized framework for authenticating users across the web. OpenID is convenient for end users, allowing them to login to numerous web sites using one set of credentials - their OpenID. But how is OpenID doing today? Where can you get one? And more importantly, where can you use it? We took the pulse of OpenID to see how it's currently faring...
Advance Publications, Inc., is a privately held communications company that owns Condé Nast Publications, Parade Publications, Fairchild Publications, American City Business Journals, the Golf Digest Companies, and newspapers in more than twenty American cities; Advance Publications also has extensive interests in cable television, as well as in Internet sites which are related to its print publications.
Crain Communications
is primarily a publishing company providing vital news and information to industry leaders and consumers with over 30 titles. Each newspaper, magazine and electronic news site has become required reading and an authoritative source in its own sector of business, trade and consumer market. (http://www.crain.com/)
Cathie Black President, Hearst Magazines
“Hearst Magazines’ ongoing performance proves that we can not only handle change, but we can use it to drive growth. Embracing the challenges ahead, we can say now is a great time to be in the magazine business. Moreover, it’s a great time to be Hearst Magazines.”—Cathie Black, President, Hearst Magazines
HFM U.S. is part of Lagardère’s media division
At HFM U.S., our editors are committed to producing the highest quality targeted media products in five sectors: automotive, fashion, shelter, women and health and enthusiasts. Proven expertise, intelligent writing, extraordinary photography, video and design, along with independent testing and reviews, are the hallmarks of our editorial content which inspire enthusiasts’ passions and help buyers make smart purchasing decisions. Each month nearly 60 million people come to our print and digital brands, including Car and Driver, Road & Track, ELLE, ELLE Decor, ELLEgirl, Metropolitan Home, PointClickHome, Woman’s Day, Popular Photography and others, because they trust, as well as enjoy, our specialized content.
UBM Announces Plan to create a new electronics market focused company.
United Business Media today announced the creation a new information services division focused on the global electronics industry.
Assuming proper Web traffic hygiene such as filtering “bots” and internal traffic, it’s possible to explain most differences between panel-based data and server-based data with the following simple equation:
Difference = (Inflation Due to Cookie Deletion + Inflation Due to Cookie Blocking) * Inflation due to unfiltered International Traffic
Due to the multiplicative nature of these effects, the overall inflation can reach 10x or more. For example, a site that has a 2.5x cookie deletion inflation and 4.5x inflation due to international traffic will have a staggering overall inflation of 11.25x in its counting of unique visitors.
Deleted cookies disconnect users from their actions.
Request your copy of the Cookie Deletion White Paper at comScore.
Click Fraud Keeps Rising, Up 15 percent in 2007, Techcrunch, Feb 22, 2008
Forensics has some data out on click fraud (clicks on Internet ads that are not real) in the fourth quarter of 2007 and for the full year. The industry-wide average click fraud rate for the entire year went up 15 percent, ending the year with 16.6 percent of all clicks on Web ads being fraudulent. The click fraud rate for search engine ad networks alone, including Google AdSense and Yahoo Publisher Network, grew even more. That was up 47 percent in the fourth quarter, ending the year with a 28.3 percent click fraud rate. According to this data, nearly one out of every three clicks on a Google or Yahoo ad is fraudulent.
Accidental clicks fade into the background, Google AS
Earlier this year we stepped back to examine the value users, advertisers, and publishers derive from clicks on content ads. As you integrate ads with your site's content and navigation, we want to ensure a positive user experience. We identified a few areas for improvement and began implementing changes, starting with our new ad formats in April.
Continuing these improvements, we've just changed our text ads slightly to help reduce accidental clicks. In the past, users could click on both the background and full text of an ad, but now they can click only on the title and URL of a text ad. By allowing users to click only on the ad title and URL, we aim to decrease accidental clicks, better aligning visitor behavior with their intent. Overall, the decrease in accidental clicks will keep users on your website, interacting with your content, until they intend to click on an ad.
In addition, this new clickable format better aligns with the text ad formats shown on Google.com. We hope this format change contributes to a better, more consistent user experience.Finally, this change won't just improve user experience on your site; it benefits advertisers as well. We currently monitor clicks on Google ads for accidental clicks, and the format change complements our monitoring system by further ensuring advertisers only pay for meaningful clicks. By reducing accidental clicks, we hope to increase advertiser campaign value and satisfaction, encouraging additional spend and facilitating higher monetization for all publishers.
Hello all. I would like to get your feedback on the latest strategies for tracking WAP UU. It is generally accepted that tracking WAP unique users is inherrantly a more difficult process then tracking UU on WEB, with the leading cause being that the IP address exposed is that of the WAP carrier gateway, vs. on web where it represents the individual PC/user. As such, IP's are not useful in tracking WAP UU.
As far as I can tell, and what we have implemented at the company i work for, there are 2 basic strategies available for tracking WAP UU, and one theory I do not have much experience with: 1) Tracking users by cookie - PROS: Arguably the best current method of tracking WAP UU, based on accuracy + device compatibility . CONS: users can clear cookies, devices can auto-erase cookies, potentially leading to counting the same user more than once. 2) Tracking users by sessionID - assigning a unique session to each user per visit - PROS: sessioning removes the handset from the equation, and is a server side measurement. CONS: You cannot count a unique session as an individual unique user, as generally speaking, sessions are closed when the mobile browser closes, and re-issued when the browser starts up and visits the site again. Experimental strategy: 3) Tracking users with the openwave gateway parameter "x-up-subno" passed in the HTTP header. PROS: Given the parameter is passed, it is by far the most accurate method for tracking WAP Unique users. CONS: Unknown availability of this parameter. Carrier needs to be using the openwave gateway in order to then pass the parameter.
Questions for the group: 1) Generally, we see about 75% of the user agents we detect as able to be cookied. That leaves 25% of our users to track using either sessionID behavior or the x-up-subno openwave parameter. What approaches have you taken to glean WAP UU from sessionID data. Can you come close to approximating X users to X unique wap sessions? 2) Does anyone currently use the x-up-subno parameter as a way of identifying WAP UU? If so, do you have any anecdotal information about relative success or failure in using this method? If you point your mobile browser to: http://t.wurfl.com/info.php - you may be able to see the x-up-subno ID for your particular device. I see it nearly 100% of the time with Cingular/ATT devices. 3)Are there currently any tools in the market that may provide either a) an out of the box "solution" for measuring WAP UU? b) some sort of analytics tools to run across a WAP site to validate currently used methods for tracking WAP UU? 4)Any other points of interest we might all be able to use to help get a more accurate picture of WAP UU? Many thanks, Lee
west-wind.com — A couple of months ago I started in earnest tracking the advertising hits that Google generates for me. And what I found is not a happy picture. About 30-40% of the traffic generated - ie. the traffic that I pay for - comes from link farms, that is Web pages that have nothing more than a bunch of links that redirect to Google Adsense links...
Exclusive: Google’s Click Fraud Rate is Less than 2%
Monday, December 11th, 2006;-- Andy Beal
Eyes on Google, Microsoft Bids $44 Billion for Yahoo, New York Times, Feb 2, 2008
Microsoft made a $44.6 billion bid on Friday for Yahoo, the popular search engine based in Sunnyvale, Calif. Yahoo’s rival, Google, has been working behind the scenes to stop the deal.
AdNet (advertising network)
MaSP (marcom service provider)
Newly Funded, Emerging AdNets
Widget AdNets
Video AdNets
Game AdNets
Local, Location
Mobile AdNets
More Potential AdNets - Legacy media forming AdNets
A&E Television Networks, AutoTrader.com, Bizjournals, Classified Ventures (cars.com), CNET Networks, CNN Money, Conde Nast, Cox Newspapers, Discovery.com, Facebook, Financial Times, Fox Interactive Media, Google, Hanley Wood, Hearst Digital, IAC Partner Marketing, Jetix (Disney.com), Martha Stewart Living Omnimedia, McClatchy Interactive, MSN, MTV Networks, MySpace, NBC Universal, New York Times Digital, Salary.com, Sports Illustrated, The Weather Channel, Time Inc., Turner, US News and World Report, Warner Bros., WeatherBug, Yahoo.
Internet Giants Vie to Snap Up Web Ad Firms, New York Times
AOL’s New Plan: It’s Not Working, New York Times
ClickZ Blog
Ad Networks 2008: Monetizing the long tail - DesilvaDistinction between promo and lead generation companies. Promo often requires multiple registrations with advertisers before qualifying for a contest. Lead generation shares registration among many parties.
IAB and FTC working on stronger language for full disclosure, opt out for these campaigns.
is a ad service company, that tries to help advertisers find publishers of lead generation web sites. Its software lets an advertiser run campaigns and get reports on them in real time. A publisher gets paid by the advertisers when a lead happens, such as a user’s registration for a product, happen.
The company, based in Brooklyn, New York, has just raised $2.5 million from New Atlantic Ventures and Greenhill SAVP.
Youth AdNets
Auto AdNets
Business AdNets
Sports AdNets
Technology AdNets
Vertical AdNet Providers
Ethnic AdNets
for Stanford GSB AlumsTop Search Engine Optimization Agencies
Advertise On All Search Engines. Reach Your Customers Online! (full)
Why have search engines taken a massive leap forward and SEO appears stuck in a time warp?
List of Global Agencies
Internet Giants Vie to Snap Up Web Ad Firms, New York Times
List of Interactive Agencies
http://en.wikipedia.org/wiki/List_of_interactive_agencies
INTERNET ADVERTISING (Mediapost)
ITV, RICH MEDIA, STREAMING, Wireless, AD SERVING, Campaign Management, ONLINE NETWORKS, RESEARCH, Search Engines, SYSTEMS
List your behavior targeting companies in the comments, below.
Aim High: Ad Targeting Moves to the Next Level, AdWeek
Adbrite is the fourth largest advertising network. Thus, the company is able to deliver a high volume of advertisers to iChannel participants.
Adbrite is easy to use for the ad buyers and sellers. For the seller, any IChannel can apply and get instant approval. Google and Yahoo restrict network participants. Adbrite also offers more ad formats including CPC text, CPM banners, full page ads, and more.
Adbrite fails on the economics.
Buyers at Adbrite tend to low-ball with bids like $0.10 CPC or $1.00 CPM. Thus the eCPM is low.
Even worse, when an IChannel starts with Adbrite, buyers pay the eCPM of the lowest buyer, not the maximum that a buyer bids. Thus, a buyer that bids $0.50 CPC pays the IChannel $0.04. The $0.04 is set by other buyers at the IChannel who bid $0.04 and received the click from the IChannel.
If the IChannel sets a high eCPM like $5.00, then no AdBrite ads are delivered. The IChannel has no track record to draw higher paying advertisers. Thus, the IChannel must start with Adbrite's automated pricing system and accept low rates. As the IChannel establishes a track record, you slowly increase the cut-off eCPM to increase the minimum accepted bid.
Note that the AdBrite CEO reports an average CPM of only $4.00 for full page ads. This is less than 10% of the reasonable rate typical for these disruptive ad formats.
Moving Forward
The company recently received $23 million in new funding and promises to move upscale with its services. They also promise efforts to target a better class of advertisers who are willing to pay higher prices.
Internet publishing is much more fragmented - harder to understand - but simpler for individual publishers to adopt.
Change Brings Fragmentation
Despite many acquisitions by Google, Microsoft, Time Warner, and Fox to consolidate media properties, technology innovations continue to fragment the market. The sum of the online revenues for these companies represents less than 5% of global and national advertising. Each has the cash flow to acquire many more companies.
Here is our categorization of the innovators.
IChannel (ed: The Internet is capitalized as a proper noun. Thus, we chose the capital IChannel.)
Internet Channels include developments that allow individuals or businesses to become publishers. Tools such as blogs, media sharing, and other social networking sites simplify self publishing. Server computers and networks are not needed.
Anyone can express themselves using words, photos, music, video, or other means of communication. Reporters become publishers - writing their own blog. Game publishers use Javascript or Adobe Flash to deploy games useable by anyone on the Internet. Photographers can post unlimited Flickr photos. Musicians promote themselves on Myspace. Videographers can start Youtube channels. Each is an IChannel with an audience.
Most of the tools are free of service fees - resulting in hundreds of millions of IChannels. Conversely, this trend dilutes the loyalty of the finite population to any one channel.
IChannel can be a traditional web site or any participant in hundreds of social sites.
AdNet
Internet advertising networks consolidate many IChannels and centralize the selling of advertising. Beyond CPM (cost per mille) models; CPC (cost per click) allows any publisher to earn a share of online advertising.
Services for IChannels insert text, graphical, and other ad formats - automatically allow IChannels to earn more advertising dollars with minimal work. New models are likely to change AdNet companies.
The term, AdNet, distinguishes legacy broadcast, magazine, and newspapers networks from their online cousins.
Google may be the largest AdNet, but dozens of new companies have carved new Adnets by market, geography, and need.
MarSP
Marcom service providers have created advertising tools that simplify the task for the largest ad buyers. Tools unify their purchases from many AdNets, create and serve rich media ads, optimize search keywod (SEO) purchases across many AdNets, and generate sales leads using creative strategies. MarSP simplify services for ad buyers.
iMedia
Large, integrated media companies have emerged to consolidate the most successful innovations. This includes acquiring iChannel, AdNet, and MaSP companies to expand their reach of users and advertisers.
These companies become the exit plan that motivates innovation.
Conclusion
MarSP, AdNet, IChannel, and iMedia summarize the categories of innovative companies in the new advertising economy. These terms simplify the memorization and analysis of the hundreds of innovators creating change.
Change creates fragmentation. Maturation leads to consolidation. The ad economics can be simple. This allows hard working entrepreneurs and investors to find niches and create wealth.