I think there are a couple of problems with this. In the first place, advertising has never “worked very well” in the sense that any given ad impression doesn’t exactly get the viewer to run out and purchase the product being advertised. In the traditional advertising business, companies didn’t know which specific ad will work on which specific viewer, so they adopted a scattershot approach where they exposed millions of customers to dozens of ads and hoped a few of them would have the desired effect. But despite our ignorance about precisely which ads “work” on which viewers, it’s pretty clear that advertising “worked” in the aggregate. McDonalds and Coca Cola clearly get some value from the millions of dollars they spend on TV and print ads.

On the Internet, the scattershot approach is no longer necessary. Digital media allows advertisers to be a lot more specific about the users they want to target and to collect a lot more data about their effectiveness. Tom suggests that this is a bad thing because once companies discover their ads aren’t working well, they’ll stop spending money on them. But the flip side is that advertisers can measure when a particular ad is working, and that ad inventory becomes correspondingly more valuable. Even better, better measurement means that the average ad should improve over time. Ads that don’t work can get dropped more quickly, and the ones that perform well can be put on heavy rotation, emulated by other advertisers, and so forth. That can only be good for ad revenues.

Tom also suggests that advertising is doomed because the Internet makes it a lot easier to avoid it. But peoples’ hatred for advertising isn’t inevitable. It’s a consequence of the limitations of 20th century media technologies that required advertisers to adopt “scattershot” approaches to advertising. There was no way to target car ads at the 5 percent of the population that’s in the market for a car at any given time, so the other 95 percent of us had to sit through endless car commercials. But online there are lots of ways to more narrowly target ads at people who are likely to be interested in them. In the long run, as we’ve said before, advertisers are going to have to realize that content is advertising. If you can make ads relevant, interesting, or entertaining, people aren’t going to try as hard to avoid them. Search engines do this by only showing ads relevant to the particular keyword a user entered. Other advertisers have figured out that if they make their commercials fun to watch, people will be more willing to watch them. Of course, it’s hard to predict whether the total amount of advertising revenue will go up or down over the next decade. But as long as people buy stuff, companies will be willing to spend significant amounts of money to influence their decisions.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

Courtesy of Timothy Lee from Techdirt. Click HERE to view original article.

Rich Pearson, VP of marketing at Attributor, said the Redwood City, Calif. company will rely on technology to automate the process. “We are working with Politico, but it hasn’t been formally launched,” he said.

Last week, Reuters–a division of global information company Thomson Reuters–said it will incorporate government and political news from Politico, a unit of Capital News, into its newswire service in a revenue-sharing deal. The group will allow Politico to sell online advertising on their sites. Ad code attached to the media content will determine the revenue-sharing agreement.

On Tuesday, The Washington Post and The Baltimore Sun announced a similar deal to share select stories, photos and news content, effective Jan. 1. No word on whether they will share ad revenue.

Attributor either will give publishers an option to either rely on ad tags to track content and automate payments, or keep track of where the content appeared across the Web and collect the revenue from the ad networks accordingly. The tracking service relies on server calls, which identify the moment a Web site requests an ad to serve up on the page.

The trend emerged from a study released in November that looks at how content proliferates and the revenue opportunities associated with the transaction. The study shows that readership rises on average 140% when the publisher’s content posts on sites other than their own. These findings led Attributor to build the advertising syndication network service.

A related study released earlier this week allows Attributor to analyze the ad server calls across 75 million domains and determine from whom the publishers can collect ad revenue. Data came from Attributor’s October 2008 crawling operation. DoubleClick and AdSense took responsibility for more than half of all online-ad-server calls– 31% and 26% respectively, in November. The numbers include both display and text ads. Yahoo followed with 10%, AOL and Revenue Science, both at 7%. Microsoft, which owns ad-serving network Atlas, had 4% of market share.

The study looked at server share by vertical segments, too. Yahoo had 10% market share overall, but 14% in the health category. DoubleClick had 31% overall, but 58% in automotive. AdSense took 40% of market share for blog sites.

Since March, AdSense gained share on large sites, while Yahoo lost 4 points of market share on large sites, but maintained share on smaller sites. These market share numbers provide a roadmap for publishers looking to tap into the viral syndication of their content through a direct relationship with ad networks.

Courtesy of Laurie Sullivan from Online Media Daily. Click HERE to view original article.

Yesterday I, Catherine P. Taylor posted about how the record companies (and, actually media companies in general) have no choice but to play ball with YouTube, in light of Warner Music’s decision to pull its content off the site. Today, I’d like to talk about why it may be in YouTube’s best interest to reach agreement with media and record companies over licensing content. It has little to do with the rise of Hulu and everything to do with its parent, Google. Surprise!

It’s no secret Google has aspirations that go far beyond being the king of online advertising. It is currently applying versions of its automated, accountable ad buying model to radio, TV and print. The long-term hope at Google is that this could become the de facto method for buying, selling and planning advertising campaigns, instead of the labor-intensive, relationship-driven model that dominates the industry today. To make this happen, Google obviously needs buy-in from advertisers and their agencies, and media companies, who have to agree to give up some avails to Google to sell for the model to work.

So far, it’s been a mixed bag. Its Google TV Ads product, for example, has deals with the likes of NBC Universal to sell some inventory on its cable networks; on the other hand, despite Google’s “Don’t Be Evil” credo, the advertising and media communities for the most part are suspicious of its plans. As Forrester Research analyst David Graves told Adweek in August:

It seems that the television establishment, both the buyers and sellers, are likely to want to buy it person to person. Changing the way TV is bought and sold is a not-insignificant task.

Therefore, strong-arming record companies which are ultimately owned by companies who peddle substantial amounts of ad time seems short-sighted. The media company rationale could be: “why hand over some ad time to the very company that is not properly compensating us for our content?” Interestingly, Universal Music, owned, of course, by NBC, came out saying last week it is seeing “tens of millions” in revenue from its own arrangement with YouTube. Could there be some connection between the corporation’s willingness to try out the Google TV Ads product on the one hand and its happiness with its YouTube arrangement on the other? Hmmm … ponder that over your first glass of eggnog.

Courtesy of Catharine P. Taylor by BNET Media. For original article click HERE.

Take Los Angeles-based Fanscape, a digital-engagement marketing agency that works with clients to better understand and influence niche audiences online.

“The jury’s still out, but I believe that revenue is going to grow by 15% next year,” said Terry Dry, president and co-founder of Fanscape.

That projection is lower than the shop’s average 20% growth rate over the past 10 years, according to Dry, but markedly better than this year’s growth rate of next to nothing.

“I wish we were doing better this year, but the world’s coming around to what we do,” Dry said. “Marketers now understand the value of what we do.”

Not that the agency has been ignored until this point. Fanscape has developed engagement campaigns–ranging in price from $25,000 into the six figures for a long list of top brands, including AT&T, Samsung, Paramount Pictures, M&M’s, State Farm Insurance, MTV, and Universal Music Group.

While every campaign is tailored to the desires and goals of the client, Fanscape services include everything from building unique email lists to consumer outreach throughout the blogosphere and popular social networks.

In one recent example, NBC enlisted Fanscape to build buzz for its prime-times series “Chuck,” using the popular texting community Twitter. In addition, NBC created a dating profile, a YouTube channel, and accounts with several social networks for the show’s main character, Chuck Bartowski.

Last week, the director of IPG’s Emerging Media Lab, Lori Schwartz, reiterated the notion that new media appeals to marketers during rough economic times. “We look at this next year as difficult, but filled with opportunities,” said Schwartz. “Online advertising is expected to grow, because marketers are looking for more accountability.”

Courtesy of Gavin O’Malley, from Onine MediaPost Daily. For original article click HERE.

ClickZ

Display advertising continued to lose ground this year. Indeed, it seemed like the only thing that was up was the number of depressing headlines about the state of display. Though 2008 wasn’t necessarily a breaking point for the original online ad format, it marked the beginning of a full-on showdown among the big Web players, each aiming to own the shrinking display ad market.

Despite early predictions that ‘08 would be a good year for display advertising, it didn’t take long to recognize display would take a turn for the worse. First quarter results showed display ad spending slipped, along with all of online advertising. Display growth dropped from around 16 percent in Q1 2007 to 8.5 percent in Q1 2008, according to TNS Media Intelligence. Meanwhile, the Interactive Advertising Bureau weighed in with its overall online ad revenue tally, courtesy of PriceWaterhouseCooopers; spending growth decreased from 26 percent in Q1 2006 to about 18 percent in Q1 2008.

By the next quarter, big names in display advertising were reporting declines. In July, Yahoo reported weak display ad revenues, blaming advertisers moving away from higher-priced CPM-based display towards more cost-effective performance-based display advertising. The company’s President Sue Decker told investors spending on its guaranteed, premium ad inventory dropped as a result of the economic downturn and pricing pressure.

Yahoo said it would shift its sales efforts to accommodate greater demand for performance-based display advertising because of brand ad weakness. That same month, Microsoft and large ad network firm ValueClick also reported display softening. Regardless of predictions that Web advertising could weather the economic storm, the industry was starting to get hit.

Early in the year, JPMorgan thought the market had seen the bottom of CPM-based display costs. The firm’s analyst Imran Khan predicted CPM rates would edge back up, in part because companies would develop ways to better monetize excess social media inventory that had been pushing down prices. But by September, Kahn had done a 180, pronouncing display as the weakest of online ad formats. He reduced his forecast for display spending in ‘08 from $8.6 billion to $8.2 billion, expecting “long-tail advertisers” to gravitate toward performance-based advertising.

Next year doesn’t look good either: its display ad forecast was lowered from $10 billion to $9.4 billion.

And networks are bringing in smaller CPMs. Ad network optimization firm PubMatic reported in October that display ad rates were down for the second quarter in a row, to an average of $0.27. While social networking sites took in the lowest rates ($0.21), small sites with under one million page views per month grabbed CPMs three times that — $0.61 on average.

As the current oil market affirms, lower demand can lead to lower prices, especially when it comes to a commodity. Like it or not, display ads have become just that. “The eCPMs across our business have gone from about $2 down to about 40 cents, and I imagine within the next year, two years, it will continue to plummet,” said J. Moses, co-founder of Hearst’s UGO Entertainment at the recent UBS Global Media and Communications Conference in New York. Moses and others blame the increasing efficiencies and refined targeting enabled by ad networks, along with surplus social media ad inventory for declining CPMs. “No one would have predicted that better tools would produce a lower yield for publishers, and that is exactly what has happened,” he said.

“There wasn’t a precipitous drop in growth” for display advertising in 2008, said Internet and mobile analyst Jeremy Liew, managing director at Lightspeed Venture Partners. The pressure on display ad prices, Liew said, is part of a long-term trend. However, he added, the recession is adding to the display downturn. “I think it’s actually a pretty simple story.”

Companies Still Focus on Display
Despite the poor display market outlook, companies are clamoring to maintain and build their display businesses. When announcing its first quarter earnings this April, Yahoo expressed its desire to dominate display. Its long-anticipated ad platform, eventually named APT, would lead the way. Finally unveiled in September, the platform enables media sellers and buyers to package and purchase ad inventory in an exchange environment. Yahoo’s newspaper site partners have been using the system, which will be made available more widely next year.

Yahoo also showed display strength this year by bolstering its non-Yahoo display network through deals with additional newspaper partners, AT&T, and Wal-Mart. Recognizing Yahoo’s display ad prowess, some argued Microsoft’s failed bid for the firm was intended not only to shore up its search ad capabilities, but to help Microsoft compete in display.

In June, comScore Ad Metrix showed Yahoo controlled a 10.5 percent share of the display ad market, second to MySpace-owner Fox Interactive Media, which ran almost 16 percent. AOL came in at a distant third with 5.8 percent, and Microsoft with 4.7 percent.

Google garnered a mere 1.5 percent of the display market in June, according to comScore. But the search ad leader sought to change that this year. In March, Google’s President, Advertising and Commerce, North America Tim Armstrong, told the audience at the Bear Stearns Media Conference, “We have a long-term horizon here which is we want every advertiser in the world to put all of their assets into our system…We would be disappointed in 2008 and 2009 if we don’t have a very significant presence in the display market.”

Google managed to remove one major obstacle to boosting its display ad sales this spring. The firm began accepting third-party ad tags. Until May, Google’s system did not enable some rich media — and perhaps more important — it prevented advertisers from employing third-party tracking, reporting, and research technologies they had grown accustomed to using when buying on sites like MSN, Yahoo, AOL, and ad networks.

AOL also aimed to better compete with the likes of Yahoo, Google, and other networks for display dollars through an auction-based self-serve ad platform it launched in September.

While publishers build new platforms to ease the process of online ad buying in the hopes of moving more ad dollars online, some networks introduced more custom solutions to woo advertisers, including Federated Media Publishing, Glam Media, and NetShelter. NetShelter, for instance, created the TopTechGifts.com site to better integrate sponsor messages. Panasonic is currently running ads on the site for its VIERA flat panel HDTVs.

That’s one way to appeal to brand advertisers. But some believe a major flaw in the way the display market operates comes in on the back end. “Branding has been inappropriately measured by click-through rates,” suggested Liew, who agrees with a recent comScore report that promotes the use of ad metrics beyond simple clicks, based on visits to an advertiser’s site, likelihood of a user conducting a search about the brand, and likelihood of buying the advertised brand online or in a store.

“All these things are much harder to measure” than clicks, he added.

Some firms took a stab at it this year, though. Eyeblaster introduced a service that tracks consumers who click on display ads but don’t act right away, by identifying them when they convert via search later on. And, for its Atlas ad management clients, Microsoft unveiled Engagement Mapping, which assigns a value to various types of ads and impressions according to factors like frequency, ad size, and how recently the ad was shown. The goal is to apply credit to more brand-oriented efforts often dominated by display advertising.

Is it just me or is anyone else confused as to why 5min.com has recently been receiving overly positive coverage in the news. Apparently TVWeek is obsessed with 5min.com as they recently named them as one of 5 online video startups to watch in 2009 and then followed up that announcement with an exclusive interview with Ran Harnevo, CEO and co-founder of 5min.com.

Even though I am sure it is a very exciting honor to receive for their company I am still a bit confused as to what the big deal is with their website and company’s service offering. Yes, I understand that they are a niche online video syndication website that has focus on how-to do this and how-to do that, allowing people to share their knowledge with a requirement to do so in 5 minutes or less. Yes, I get the concept that syndicating such how-to videos out to premium Web publishers is a smart way to place relevant videos in front of a specific targeted audience. However, saying that this is a competitive differentiator or something to get all hot and bothered over is rather far reaching.

On their own website they are quoted as saying their goal is “to create the first communal Life Videopedia“. What? Videopedia? If I was sitting in their meeting when they were giving their elevator pitch and they said the word “Videopedia” I would have laughed out loud and certainly not signed a check for $5 million in funding. That said, 5min.com must have included something impressive in their pitch because the signees of that $5 million check came from a very respectable venture capital firm out of Boston, Spark Capital. This venture capital firm has a laundry list of impressive companies in their investment portfolio including Twitter, Tumblr and Veoh Networks so 5min.com must convinced them with something.

I don’t mean to sound harsh or like another know it all anonymous blogger that sits back and judges others about something I have no personal experience creating. That said, their are many positive attributes to their company, lets explore.  For instance, they have impressively gathered a monthly viewership audience of over 110 million unique users with the mass majority of views being generated by 5min.com’s distribution publisher partners such as Answers.com and Dictionary.com. Also, 5min has launched a syndication network for its videos called VideoSeed, which uses semantic matching to deliver relevant clips to participating sites. The platform matches keywords found on syndication partner pages and pairs them up with videos in the 5min database according to title and tag information (along with relevant ads to go with the video). Offering these types of services and products are all impressive accomplishments, but is it enough for them to successfully survive for the long haul, especially in a tighten Worldwide economy?

I am just concerned that their barrier to entry to help fight off competitors is way too low and their core business is really one missing channel genre away from being crushed by much larger online video websites like YouTube, MySpace or Yahoo! Video. Imagine if YouTube decided to launch a dedicated how-to channel with the same video requirements and revenue sharing distribution partner program as 5min.com maintains. YouTube would be able to build a video how-to catalog larger than 5min.com’s 40,000 plus video database and generate more page views in a matter of months if not weeks. In addition to such all-inclusive video website competitors that could compete with 5min.com there is also a long list of direct how-to video website competitors that could become problematic as such as Wonderhowto.com, Howcast.com and Videojug.com all fighting for a share of the available market. I guess only time will unfold the truth. It will be interesting to watch and see what happens. Good luck 5min.com, all the best.

Max Levchin

I tend to sleep pretty little. I’m into endurance cycling at the moment, so on Monday and Wednesday I get up at 5.50 to go training, even though I might not have got to bed until 3am. Cycling long distances over challenging terrains is an excellent way to clear your head. At weekends I do rides of up to 80 miles north of San Francisco. I’m not really into breakfast, but my wife, Nellie, is a huge breakfast fan. We’re both vegetarians and obsessively healthy eaters. Given the training, I tend to pound the protein, so breakfast will be some sort of yoghurt or an egg-white omelette with asparagus, which is very popular in California right now. Croissants are an occasional treat for us, perhaps on the weekend.

During the week I have various routines. I’m a bit of an obsessive-compulsive that way. If it’s not a training day I’ll get into the office at about 8. I’m the CEO of Slide, which lets people share pictures and movies with friends across social networks like MySpace, Facebook and Bebo. I set it up after we sold PayPal to eBay in 2002. I was 26 then.

At work I don’t have a separate office. I just sit out on the floor with everyone else, so there’s lots of opportunity for people to come and talk to me. We have nearly 100 employees now.

My parents started teaching me English back in Ukraine at the age of two. I thought I’d find it difficult when we arrived in Chicago — I was 16 — but I discovered I was pretty fluent. My mother is a theoretical physicist, like almost every member of my family apart from my father, who writes poetry and plays which are quite avant-garde. When he was young he was in a student group in Ukraine which was relatively anti-government. Later, I discovered the KGB had tried to recruit him.

There was also a noticeable element of anti-semitism around us — someone painted a Star of David on our front door. I was approaching the draft age, and there’s a high mortality rate in the Russian army, but that number skews a lot higher for Jews. That was why we left.

I was already obsessed with developing software. I’d made a tiny amount of money selling my services to various contractors: I’d write some code for them for 100 roubles, for instance. On the flight to the US I wandered around, picking up magazines and newspapers and looking for ads for PCs, trying to find a good deal. At the time the entire family had $700 to its name, and there were six of us. My uncle, who had already moved to the States, gave me my first computer. He said: “If there’s one thing this family needs, it’s a computer for Max.”

In school I planned to be an academic and supported myself by working for the US army, because it paid better than other jobs on campus. But then the army found out I was not a US citizen and booted me out. I was hanging around on campus when two guys approached me and said: “You’re Max. You’re famous because you like to stay up and write code all night.” This was mid-1994 and the web was just starting up. We established a company providing online advertising. One minute I was writing code in my bedroom, the next I was vice-president of engineering. We failed, of course, because we couldn’t raise enough money. The others moved to California, so I packed up my stuff, put it in a truck and drove across there too. It took five days.

I met a guy there called Peter Thiel, who was giving a talk to some students at the time, and we set up PayPal, the web’s first secure online payment system. Within nine months of launching, it had 2.7m accounts.

After we sold it to eBay, I decided to travel the world, but soon I realised that all I wanted to do was to work. The Slide offices are next to an area of San Francisco called South Park. It’s very European, like the place I grew up in, with really good cafes and restaurants, so there are plenty of places to get a coffee and a sandwich for lunch.

I have more meetings in the afternoon. The time I finish normally depends on Nellie. She works in the financial-services industry, which is very stressful. We have a modestly regimented marriage. Thursdays, for instance, I’ll be home at 7.30pm and we try to spend quality time together. We might cook a healthy meal and eat it with a glass of wine or just enjoy a few Zen moments together. Sometimes we’ll go to the local ice-cream shop for fat-free frozen yogurt. We might watch a movie, or bond around our dog, a wheaten terrier, taking it for a long walk or a visit.

Other days I’ll be later. Tuesdays I’ll turn up between 8 and 10pm — that’s a mini-date. Monday and Wednesday I carry on until my work is done — it could be 3am. Typically, I fall into bed between 1am and 3. I’m so exhausted by then that when my head hits the pillow I’m gone.

Interviews by Simon Brooke.

Portrait by Jonathan Sprague

Courtesy of TimesOnline.co.uk. To view original article click HERE.

PixelFish announced the acqusition on their website, lets have a read: PixelFish, a leading provider of affordable and effective video advertising solutions, has acquired Eyespot Corporation for an undisclosed sum. The acquisition enables PixelFish to accelerate the development of its market leading video advertising platform by augmenting its custom video ad creation and optimization technology with Eyespot’s advanced video publishing, online video production, transcoding and advertising-related applications.

“The Eyespot acquisition brings to PixelFish technology critical to our planned platform development, saving us significant time and money required to develop this capability ourselves,” said John McIntyre, Founder and CEO of PixelFish, Inc. “The online video production tools and real-time video transcoding technology will be an integral addition to our advertising creation and optimization platform.” The acquisition includes the provisional patents for a number of critical online video technologies.

“We’ve spent four years building a video creation, syndication, and monetization platform that is well-suited to profitably serve video publishers of all sizes, working with even the smallest of Web sites to understand their needs, while applying insight from our implementations with leading brands,” said Jim Kaskade, Co-founder of Eyespot. “This platform is ideally suited to automate the creation of video advertising and is an ideal fit for PixelFish’s industry leading custom advertising solutions”.

Founded in 2006, PixelFish provides a wide range of video solutions to businesses of all kinds, focusing primarily on the small-to-medium sized business advertising market. The company’s scalable business model, proprietary production processes and next generation video platform allow for lower production costs, making its video solutions more accessible and affordable.

Eyespot created Web-based and mobile video applications and media libraries for publishers of all sizes that are used to personalize and virally distribute video content, powering leading brands in digital media and over 10,000 mid-to-small sized publishers. The Eyespot Personalization Suite features drag-and-drop online tools that allow users to upload content from any source, edit, manipulate and mix content with rights-cleared material and user-generated content, and export the resultant media in multiple formats for use on the Web, mobile devices, or as conventional files.

About PixelFish 
PixelFish, Inc. is a technology-driven provider of award-winning video advertising solutions primarily for small and medium-sized businesses (SMBs) and their advertising partners. The company has developed an innovative platform for quickly and easily creating and optimizing the most affordable and effective custom video ads. Its intuitive online applications enable a range of video solutions that meet the varying needs and budgets of SMBs, supported by its global network of more than 2,500 professional videographers. PixelFish is the leading provider of video ads for Google, Yellowbook and many other search, directory and ad network providers. Founded in 2006, PixelFish is a privately-held corporation headquartered in Torrance, California, with additional locations in New York and Hyderabad, India. To learn more about PixelFish, please visit www.pixelfish.com.

###
Contact
Stephen Condon
PixelFish, Inc.
Tel: (310) 212-3200
Mbl: (858) 775-3488
Fax: (310) 212-3201
scondon@pixelfish.com
www.pixelfish.com

Courtesy of PixelFish.com. Click HERE to view original article.