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I do miss yesterday's Internet, when success was simpler -- whoever captured the most eyeballs won. Hype could also work. Remember Pets.com? It was a Pyrrhic victory, for sure. But the startup's sock puppet did get his (or was it her?) 15 minutes of fame, entertaining us all. Future-of-the-media debates were more fun, too, and largely benign. Legacy media could easily pooh-pooh the flash movie EPIC, which in 2004 predicted that a colossus named Googlezon would reduce The New York Times to a "newsletter for the elite and the elderly" by 2014. As 2014 comes to a close, that doesn't seem as surreal, especially inside a NYT newsroom that recently lost 100 jobs with who knows how many more to come.
Today, glowing tales of audience growth and make-believe press releases are everywhere. There are legitimate success stories, too. They sidestep an unfolding drama that is far more fundamental to the business. The media marketplace is more dynamic than ever because the triumvirate of publishers, ad agencies and their clients is in such turmoil. Everyone is desperate to change, to prove something. It often puts the players at odds with each other. I certainly don't shy away from telling the FORBES four-year story of transformation. When I do, it's mostly in the context of the industry's evolving relationships and the complexities faced in reconciling editorial costs and what advertisers are willing to pay. As for unique visitors as a measuring stick, they are important, but matter little without an array of ad products that align with a strategy that dynamically fills premium, sponsorship and programmatic display inventory on a page. The right formula is different by the day.
Fun Times: The Pets.com sock puppet made us feel good about the Web (Getty Images)
Yep, that's a mouthful. In simpler terms, it's still about the ever-lasting, morphing page view. Streams and feeds abound, but the location and price of ads on a page matter most. So does the type of page -- desktop, tablet or smartphone (portrait and landscape). Is the page an article or a photo, domestic or global -- and from which country? Of course, ad rates, or CPMs, are critical. They're higher if sold by a human, lower if sold by a machine, though the gap is closing fast. Ad performance, that is how many clicks per human (as opposed to a bot), certainly matters. Throw native ads into that mix, too. All that is only the beginning.
Journalists prefer to think about their stories. It's their job, after all. It's also a nice escape from reality. I once heard Arthur Sulzberger recommend that NYT reporters grab an engineer for a sit-down to learn about the digital world. I suggest journalists take an ad guy to lunch (perish the thought). Then, they should do the same with an editor. If the two "sides" don't believe they are responsible to one another, better watch out. To be prepared for those chats, here are five unfolding developments:
Ad Viewability: We already know that very few people (five out of 10,000) click on a box or a banner display ad. Surprise, surprise -- not every ad placed on a digital screen is seen by a human being in the first place. The current definition of in-view: at least 50% of the ad must be visible for one continuous second. At best, 70% of ads industrywide are in-view. The norm is more like 50%. There are many reasons for that. Connectivity plays a role. Many rich media ads take forever to load. Readers scroll fast and can bypass an ad in no time. Some ads are placed too far down on the screen to ever be viewed. I could go on and on. Marketers have had enough. Increasingly, they'll only pay upon proof their ads were in-view. The technology exists to track that, and marketers sometimes use it without telling the publisher they're doing so. Google plays its own role. For now, it won't permit time-based ad rotation to meet viewability clauses in RFPs. Our effort: In the next months, we'll soon test, then begin to roll out, a new global article page that provides the flexibility to meet viewability requirements in various ways. It will also include a new tool bar, or navigational construct, to potentially integrate global partners.
Fraudulent Traffic: First the numbers. The Wall Street Journal recently tagged total digital ad spending at $50 billion, 28% of all ad spending and up from 16% five years ago. Cheaters go where the money is. On the Web, the fraud is perpetrated through bots. Unscrupulous players set up phony Web sites to hijack traffic and ad dollars bought and sold on computer exchanges. Premium publishers can be victims, too. The Journal estimates that 36% of Web traffic is fake. That's a scary number to marketers who already question the efficacy of digital marketing. Our effort: Our ad operations team constantly monitors advertising campaigns for bot fraud, looking out for abnormal patterns of ad impressions and clickthroughs. We also allow our marketers to run third party verifications on the quality of the audience that engages with their ads.
Advertising Metrics: The new wrinkle (related to ad viewability) is selling advertising based on time and attention, or "engaged time." Moat and Chartbeat, both partners of ours, are big proponents.
Programmatic Buying: Money continues to pour into computer exchanges that match consumers and marketers with increasing precision. It's a world of microseconds and algorithms, humans need not apply. Every sales side of a news organization now needs a data play to segment its audience. With sharper audience segmentation, computers can do what they do to make an efficient marketplace for advertising. Our effort: We were among the first to transparently open our ad inventory to programmatic buyers, including display advertising once reserved for longstanding clients. It's worked for new and old marketing partners. By fine-tuning algorithms, programmatic sales account for a growing percentage of our far bigger advertising revenue pie.
Native Advertising: We've been at it since November 2010, side-by-side with Buzzfeed. Once the "death of journalism," every important journalistic enterprise is now in the mix with a professed differentiated offering. Some news outlets create content for marketers via expensive in-house "studios." Others contract the work to third-party content providers. Most will agree to put one, two, maybe three posts from a marketer on their site, then buy traffic to fulfill impression commitments. "They're looking for lightning in a bottle, meaning that a post takes off," says Mark Howard, the FORBES chief revenue officer. Native ad networks go "over the top" of a content management system. They'll deliver a marketer's content to a group of sites, effectively turning native advertising into generic advertising. Our effort: We're not into the short cuts taken by others. Our 50 BrandVoice customers put in the work, with our help, to attract an organic audience. That can take 10, 20, 30 posts a month. We see the smartphone as the next frontier for native ads. An upcoming product release will integrate our partners into mobile streams.
It all comes down to a new transparency made possible by sophisticated ad technology. John Wanamaker, the marketing pioneer, was famous for saying, "half the money I spend on advertising is wasted; the trouble is I don't know which half." The print business prospered under those conditions. The Internet promised detailed knowledge about which half worked. Marketers bought into the hope and started to migrate online along with their customers. For the longest time, the Wanamaker adage played out much the same way on the Web. Now, there is no hiding from the effectiveness of a digital ad. That does seem fair. Still, it puts publishers on the spot , and means a reckoning for newsrooms that unlike FORBES have yet to address their economics.
With all this, it's exhilarating to be part of a team building a modern, ad-supported media business. FORBES is already a worldwide brand. Now, with new investors, we get to extend our innovative models globally as well. It's far different from a startup relying on venture capital money, or news outlets that collect professional-service fees to subsidize newsrooms, or living off an individual's wealth (The Washington Post added 100 jobs since the arrival of Jeff Bezos a year ago).
I've been on a few hundred sales calls over four years and have learned this: the relationship between publishers, ad agencies and marketers remains beneficial to all. Consumers crave credible information, marketers must reach an audience to make a sale. I strongly suspect everyone would rather work it out than play in the world of Googlezon and the Evolving Personalized Information Construct (EPIC). Let's see where we are in 2024.
