Category Archives: rightmedia

Ad networks vs ad exchanges

I spent yesterday at the Right Media Open event in Half Moon Bay at the Ritz Carlton Hotel.


Right Media assembled an impressive list of executives and innovators including John Battelle of Federated Media, David Rosenblatt of DoubleClick, Scott Howe of Microsoft, entrepreneur Steve Jenkins, Jonathan Shapiro of MediaWhiz, Ellen Siminoff of Efficient Frontiers, and Yahoo!’s own Bill Wise and the Right Media team including Pat McCarthy to name a few.

It was an intimate gathering of maybe 120 people.

Much of the dialog at the event revolved around ad exchange market dynamics and how ad networks differ from exchanges. DoubleClick’s Roseblatt described the 2 as analagous to stock exchanges and hedge funds…there are a few large exchanges where everyone can participate and then there are many specialized networks that serve a particular market or customer segment. That seemed to resonate with people.

The day opened with a very candid dialog between Jerry Yang and IAB President Randall Rothenberg where Jerry talked about his approach to refocusing the company and his experiences at Yahoo! to date.

Battelle’s panel later in the afternoon was very engaging, as well. The respective leaders of the ad technology divisions at Yahoo! (Mike Walrath of Right Media), Miscrosoft (Scott Howe of Drivepm and Atlas) and Google (David Rosenblatt of DoubleClick) shared the stage and took questions from John who, as usual, didn’t hold back.

The panelists seemed to have similar approaches to the exchange market, though it seems clear that Right Media has a more mature approach, ironically due in large part to the company’s youth. Microsoft was touting its technology “arsenal”. And DoubleClick wasn’t afraid to admit that they were still testing the waters.

I also learned about an interesting market of middlemen that I didn’t know existed. For example, I spoke with a guy from a company called exeLate that serves as a user behavior data provider between a publisher and an exchange.

There were also ad services providers like Text Link Ads and publishers like Jim Mansfield’s PhoneZoo all discussing the tricky aspects of managing the mixture of inventory, rates and yield, relationships with ad networks, and the advantages of using exchanges.

I’ve been mostly out of touch with the ad technology world for too long.

Our advanced advertising technology experiments at InfoWorld such as behavioral targeting with Tacoda, O & O contextual targeting services like CheckM8, our own RSS advertising, lead generation and rich media experiences were under development about 3 years ago now.

This event was a great way to reacquaint myself with what’s going on out in the market starting at the top from the strategic business perspective. I knew ad exchanges were going to be hot when I learned about Right Media a year ago, but I’m even more bullish on the concept now.

Media As A Service

Much like print and tv are becoming marketing vehicles to drive people online, the domain name for an online media service is becoming sort of an abstract utility or maybe just a brand address for media services rather than the real estate upon which the core activity occurs. The service a media vehicle provides matters more than the vehicle itself.

And this isn’t only happening in the content space. Every aspect of the media business is pointing to a services model. Here’s what the key pieces look like, in my mind:

  1. Data is infinitely distributable. All data…not just editorialized words. The RSS standard opened the doors for vast distribution networks, and services like Yahoo! Pipes and Feedburner figured out how to make the distribution methods meaningful. There’s an endless supply of microchunks flying around the Internet, most of them unattached to any domain or URL except as a handy reference point.
  2. Data can be visualized in meaningful ways. AJAX and the many freely available widget kits and javascript libraries such as YUI are rendering these microchunks in the right place at the right time in the right way for people which, again, is not always on a web site. The Internet user experience is no longer held back by the limitations of HTML and the packaging a site owner predefines for their media.
  3. Media is created by everyone. Whether written in long form by a reporter or researcher, captured as video by a mobile phone owner, or simply clicked by a casual web site visitor, expressions of interest are shared, measured and interpreted in many different ways. This results in a seemingly neverending stream of media flowing in and out of every corner of the digital universe.
  4. Distribution technologies are increasingly efficient and inexpensive. Personal media services like instant messaging, blog tools, podcasting and collaborative media services like Wikipedia, del.icio.us, Flickr, etc. are easy to use and often free. Web services and open source software enable people and companies to scale distribution and production functionality for large audiences or groups of users with negligeable costs. Most importantly, these tools enable people to be influential without ever owning a domain.
  5. The distance between buyer and seller is shrinking. There are more and more ways for buyers to find sellers and sellers to find buyers from search engines to recommendation tools to coupon rss feeds, etc. Distributed ad markets like Right Media are enabling marketers and service providers to negotiate both the methods and the value of a marketing message. Advertising can operate as a service, too.

After re-reading this description myself, it looks like I’ve just echoed much of the whole Web 2.0 thing yet again. That makes me think I didn’t articulate the concept properly, as I believe there’s a very different way to visualize how data get created, packaged, distributed and remixed and how the various parts of a media business can be coupled both within the organization and across the wider network. Maybe that’s Web 2.0. Maybe it’s edge economics. SOA. Whatever.

The important thing is to think of how your media business can create for yourself or leverage how others offer Marketing As A Service, Sales As A Service, Operations As A Service, in addition to your editorial and community building efforts. Here’s a quick chart of how a media business might look that hopefully gets the point across:

Staffing Model Source Data Coopted Data Distribution Services
EDITORIAL Reporters, Community Managers, Assemblers (formerly known as ‘Producers’) Original News, Analysis, Columns News Wires, Paid Data Feeds, Free RSS Feeds, Links, Comments, Votes, Ratings, Clicks RSS Feeds, Content API (Read and Write)
MARKETING Customer Service, Evangelists, Event Organizers SEO, SEM, Paid Inclusion, Sponsorships, Staff Blogs Partner Promotion, Customer Evangelist Blogs Customer Help, Usage Policies, SLAs, Traffic/Referrals to favored partners
SALES Sales Engineers, Business Development Customer Data, On-site Inventory Partner Inventory, OEM Partner Services Ad Service API (Read and Write)

We’ve seen Journalism As A Service evolve with a little more clarity, particularly recently. Mark Glaser provides a step-by-step guide on how to structure a community-driven news organization:

“Reach out to the community for bloggers, muckrakers and go-to experts. Each topic area would require more than just reacting to news. The Topic Chief would be sure to enlist as many experts as possible not only to be sources but to also be contributors, commenters, and word-of-mouth marketers. Anyone who possesses the skills that go beyond basic participation can be hired on as freelancers or even full-time staff.”

Similarly, Doc Searls’ “How To Save Newspapers” post also lays out what needs to happen on the editorial side. Here’s step #5 in his list:

“Start looking toward the best of those bloggers as potential stringers. Or at least as partners in shared job of informing the community about What’s Going On and What Matters Around Here. The blogosphere is thick with obsessives who write (often with more authority than anybody inside the paper) on topics like water quality, politics, road improvement, historical preservation, performing artisty and a zillion other topics. These people, these writers, are potentially huge resources for you. They are not competitors. The whole “bloggers vs. journalism” thing is a red herring, and a rotten one at that. There’s a symbiosis that needs to happen, and it’s barely beginning. Get in front of it, and everybody will benefit.”

There is lots of guidance for the newsroom, but all parts of a media business can become services.

For example, the ultimate in Marketing As A Service is the customer evangelist. It’s not about branded banners, as Valleywag points out,

“When paid-for banner ads lead to another site that’s supported by banner ads, you know that something’s wrong. Anyone who relies on that circular spending is asking for trouble.”

Marketing should be about enabling customer evangelists whether your customer is simply promoting your stuff for you or actually distributing and reselling it. Fred Wilson thinks of this in terms of “Superdistribution“:

“Superdistribution means turning every consumer into a distribution partner. Every person who buys a record, a movie, reads a newspaper, a book, every person who buys a Sonos or a Vespa becomes a retailer of that item. It’s word of mouth marketing, referral marketing, but with one important difference. The consumer is the retailer.”

None of this needs to happen on a single domain. The domain chain in any of these actions probably should be invisible to people, anyhow, except maybe to ground the events in trusted relationships.

Now, there are many domains that can create wonderfully useful and valuable destinations once they reach a certain critical mass. Invoking another over-used dotcom jargon word, this is what happens at the head of the long tail. And there are obviously lots of nice advantages of being in that position.

Most media companies want to be in that position and fight tooth and nail for it even if it just means being at the head of a niche curve. But instead of or maybe in addition to competing for position on the curve, most media companies need to think about how they provide relevant services outside of their domains that do something useful or valuable in meaningful ways across the entire spectrum.

Posting articles on your domain isn’t good enough any more. The constant fight for page views should be positive proof of that. There’s a bigger, deeper, longer term position out there as a critical part of a network. Sun Microsystems’ mantra “The Network is the Computer” is still meaningful in this context. What is your role if “The Network is the Media”?

Similarly, is Marshall Mcluhan’s widely adopted view that “The Medium Is The Message” still true? Or, like many have asked about the IT market, does the medium matter anymore?

If we are moving to an intention economy, then those who best enable and capture intention will win. And that doesn’t have to happen on a domain any more.

Fun with ads on my blog

There have been 2 really interesting and innovative ad platform services to come out recently from Right Media and Feedburner. I’ve been playing with both on my blog, but I’ve only scratched the surface of the potential here.

First, Right Media’s publisher service is called RXDirect which hopefully will open up to everyone from the closed beta soon. It’s plenty robust enough to serve any small publisher’s needs, and some of its clever capabilities may prove useful to large publishers as well.

You get a simple self-serve ad management system where you can drop in new creative including ad code from your ad networks like YPN or AdSense or even Feedburner. I’ve also loaded in a house ad. It took only a couple of minutes to setup each ad.

Then you get your Right Media ad code to post into your web page templates.

Done.

Immediately, you get to watch nearly real-time reporting on your ads.

Now, here’s where it gets interesting. Right Media is also an ad network platform…not an ad network but rather an ad network platform for other ad networks to create inventory markets.

As a publisher, I can request permission to post ads on my page inventory from any ad network in the system. If the ad network approves me, then the ad network will serve ads to my site and pay me their rate for those impressions. I don’t need sales people on staff. I can just hook into an ad network that makes sense for my market.

I suspect that if they get the ad network platform right, we’ll see mini ad networks popping up everywhere, small telemarketing outfits in niche markets all around the world negotiating niche ad impressions for niche publisher inventory.

Wait, it gets better.

Right Media has opened up their APIs. They tell me they are using their own published APIs for their own tools, along with other internal APIs, I’m sure. And the APIs seem pretty well documented.

That means that market makers can potentially create their own ad networks, self-serve ecosystems, in essence. My mind spins at the possibilities here, but we’ll have to wait and see what happens at this early stage still. The key to this working is maintaining their self-serve approach. If it works, this system could be massive.

Similarly, Feedburner has taken a meta approach to creating niche publisher/advertiser networks. Publishers can create networks of feeds whose inventory can be purchased by advertisers. I setup a network called “Internet Voices” where I thought I might get a bunch of Internet media bloggers who use Feedburner to open up their inventory for advertisers. Feedburner will sell our inventory for us.

Feedburner is so focused on serving publishers you just have to admire them.

They also released a dynamic graphical ad unit generator. It’s basically a badge or widget. You give it a background image, and they burn your feed headlines on top of it.


The dirty little secret is that Feedburner knows that advertisers are quickly becoming publishers. As advertisers learn how to reach customers directly the role of intermediaries (media properties) changes. And an ad unit that publishes dynamic content starts to get at that.

It reminds me a bit of the huge outdoor billboard The Industry Standard had near the San Francisco Bay Bridge that scrolled current headlines we fed to it from the web site.

Anyhow, I took a feed from the FlipBait web site and created an ad unit that now runs in rotation on my blog via my Right Media ad server. I don’t have enough data to see whether the ad performs well, but that’s not important yet. This is the beginning of some new approaches to marketing.

Cool stuff, guys. Can’t wait to see what you do next.