Wednesday, May 17, 2017
 Source: deviantart.net

Lets face it we need to change the business model in how we do things, it is not business as usual. All publishing companies have relied on two principal sources of revenue paid subscriptions and advertising to make it work. Then they were forced to distribute their content of the web for free and it has never been the same since. Journalism is also facing its greatest challenge from the invasion of the ad tech tyrants and the fake news business model. Before we jump on the fake news bandwagon, remember fake news has been around in mainstream news in the sports pages on contract signings, trades and rumours before we punish these tyrants.

 

Lets have a look at what I call two Web 2.0 publishing companies to see how they survive in the marketplace. What I am seeing is that publishing companies are becoming like a 3 headed dragon now and are now part ad/social agency, part publishing and part ad rep house as their business model.

 
This is the model of Ideon Media a small company with 30 people, their sources of revenue are 8 consumer magazine publishing sites, with a strong focus in the parent market like Savvy Mom that they own through Maple Media. They also represent 15 USA based sites and sell display advertising for them for the Canadian market. They work with the New Yorker brand and two sister sites that are geared for millennials like Vulture that was recently added to their roster.  

 

 

 

The third of head the dragon is the ad/social media agency services for their advertising clients as they can produce social media content campaigns, traditional media and buying and a programmatic media. According to Natalie Milne, they are building a model based on scale with 23 web properties that delivers millions of eyeballs for consumer ad programs. This scale is required to succeed in the digital space in a market where $2CPM prevail.

 

Here is second company to look at that is trying to ride the video ad wave and is one of the largest global video ad delivery/monetization companies - Teads. This video ad delivery system is a little different as the ad is not placed in the traditional position on the web like the top and right hand side, but is place in the actual article after the first two paragraphs. This is unique in many ways as now ads can be place contextually based on the nature of article. So advertisers looking for the right editorial environment can pick and choose.

 

 
All publishers that sign-up for the video ad delivery system can have any unsold inventory sold in a private ad marketplace they manage for demographic buys with other publishers. Teads will sell this private ad network to the ad community and has a local office in Toronto. This a two head dragon model, but it is global in scale with 40 publishers in the USA they are working with that include Time. They have operations in Europe and Asia.

 

What can we learn from these two companies is that both news and magazine companies needs to add some new tools to the toolbox if they are going to survive and prosper for the next 10 years. The olds ways while they still work need to be refreshed and new ways need to be added. 

 

BUT, basic business strategy rules do not change in this new environment, it just more confusing now as the ad tech tyrants throw out more digital ad concepts as the next miracle cure. This happens even for me sometimes, as we grapple with creating new sources of revenue online and ride the right revenue wave. Doc Searls says it best in this blog posting in our Industry Inspiration column on Masthead when he says.

 

“The only reason publishers go along with adtech is that they don’t know any other way to make money from advertising online ”

 

At the end of the day you need to adapt and adjust. I liken this to my experience as a hockey coach, what is a 5-tool player. A five tool player is one that can be skate, pass, shoot, puck handling  and puck sense. Other tools are competitiveness and physical play. Today’s publishing companies and employees need to be that 5+ tool player and cannot just specialize in one area any more to compete.

Friday, April 14, 2017

The smartphone has become the anchor of everyday life and is the primary device people use as part of their daily routines. This device gets more powerful each day and now the industry has accomplished the big screen experience with a mobile device through Virtual Reality. Your smartphone screen plus a VR goggle are used to create the virtual reality environment. This has the potential to convert your smartphone into a personal viewing device with a HD big screen feel. You will no longer have to use your laptop for air travel as an example and you can watch in 2D and 3D formats.
 

 

 

 

I got to experience some of the content available on VR at the DX3 Trade Show held on March 8 and 9 in Toronto as they had a Virtually Reality section where I got to experience first hand a movie, car simulation and an interactive school learning tool. I even took a trip down the Grand Canyon. When I did the tour of the Grand Canyon at the Samsung booth they also had a skiing one with poles and fan for wind. During my tour of the Grand Canyon, I looked up and saw the sky, I looked below on saw the river and when I looked left to right I had canyon views. In another one designed as an educational tool, I was putting together a 3D skeleton with a hand controlled device and I was in a room that had the perspectives you would expect by looking around.  This one was designed by Sponge Lab using HTV Vive software and headgear, below are some screenshots from their VR experience and a video link to a demo.
 

 
 

 

To set up your smartphone you will need VR goggles to make this work that can cost from $20 to $100, but some telcos are offering VR gear for free when you upgrade to a new phone. There are VR gear kits that don’t need a smartphone that start at $1,200 plus controls. One caveat, there will be a select number of smartphones that will support VR as it requires computer grade processing power. For Samsung it is the Galaxy S6, S7 and their new S8 phone plus 5 other devices the Moto Z from Motorola, Huawei’s Mate 9 Pro, ZTE’s Axon 7, Google’s Pixel and ASUS’s ZenFone AR. Apple officially has no VR apps or gear available at this time, but there are 3rd party apps that work. Microsoft has a different vision of VR with their Hololens headgear that projects virtual objects onto actual surfaces and environments like your office desk.  


 
 

 

Then you will need to download a VR app. Google has created the Daydream app that includes shooting VR video and photos along with a $20 cardboard VR goggle.  Samsung has their own exclusive app (Samsung VR) and VR goggles for their Android based devices. 
 

 

 

There are 100 apps for Samsung and 250 apps for Daydream in the Google Play Store. There are 250 VR game apps available combined between the two formats out of the 350 apps in the store (70%). There is a Samsung VR Star Wars Fan App that looks like an immersive experience with video and interactive features. You can get Google Street View and You Tube in the  Daydream app library and there is a live sports one that provides NBA, NFL, MLB games from NextVR. VR app download activity an indicator of the markets had a spike in the Holiday 2016 season, according to Sensor Tower, an app usage data company, as there were 45 million downloads in the Android (70%) and Apple (30%) platforms. Compared to 2015 this was a 300% spike (15 to 45 million) for all VR app downloads which suggest a good upside potential for mainsteam adoption of this technology. Or it can be like the hype surrounding QR Codes and 3DTV that arrived, consumers tried it and was  left in the trash after a few years like a fad.

 

 

 

To help design in this new environment, the Quill VR Illustration software from Oculus looks like a handy software to know. Oculus software and hardware platforms are widely used in VR app creation and powers all the Samsung devices and Facebook owns the company. The software has been released in beta, but has been used by Oculus’ Film studio (Story Studio) to create short animated VR films.  

 

The VR creative format opens the door of migrating from 2D to VR concepts and artists will now have a touch controller to design with, which sounds like a lot fun. Oculus sells one for $199 and you get the Quill software for free. In addition Oculus has goggles/hardware, developer tools for apps and a store with 700 apps.  Oculus has a 49 minute (link) overview on the creative process and the tools available to art directors plus one that talks with a game publisher (link) that allows you to have closer look and learn more about the technology’s capabilities. Have fun in the VR world.
  

 
Monday, March 06, 2017

The BPA as we all know provides circulation audit services for the publishing industry and is planning to introduce a private ad network for B2B publishers as part of their services for their over 900 clients worldwide with 60 in Canada. The selling points of programmatic media buying is that it supposedly provides better targeting of web display ads based on demographics such age, gender, income and geographic variables. This process is all automated and is bought in real time through a bidding process and enables the advertiser to tailor the message to the reader and create a more personalized message.

 

To the uninitiated here is a definition of the terms in the ecosystem according to IAB Canada. (To get a detailed glossary it is available at this link.)

Agency Trading Desk (ATD) – A department or arm of an Agency that oversees programmatic buying. Many Agency holding companies have trading desks. A Demand-Side Platform (DSP) is technology used to manage and optimize ad campaigns. ATDs work in combination with DSPs.

Demand Side Platform (DSP) - A DSP is a technology platform through which buyers (Advertisers or Agencies) can plan, target, execute, optimize, and analyze digital media buying programs across 100% of the media plan. Through a DSP, the buyer can set targeting criteria, pricing, frequency, and other criteria governing the purchase of digital ad units. Advanced DSPs will provide additional capabilities to the buyer, including integration of various online and offline data sources, the ability to provision direct media buys (as opposed to just Programmatic), advanced optimization and decisioning capabilities, and creative tools

Ad Exchange - A virtual marketplace where participating suppliers auction their impressions to eligible buyers. The ad exchange announces each impressions, in real time, and asks buyers if they are interested to buy said impression and at which price.

Supply Side Platform (SSP) -  An entity which facilitates the sale of a publisher’s inventory through an ad exchange. SSPs offer services such as minimum bid requirements, etc.

Ad Network -  An Online aggregator or broker of advertising inventory for many sites. Ad networks act as sales representatives for the websites within their networks, whereby ads are bought centrally by media buyers and displayed on multiple websites that contract with individual Ad Networks, for a share of revenue generated by ads served on their site.

Data Management Platform (DMP) - A centralized system for gathering first-party data, integrating with third-party data, and applying this data to one's advertising strategy. Advanced DMPs offer users the ability to create custom segments, forecast segment volumes, sync segments with other sources, overlay advanced analytics, and are often integrated with or part of DSP platforms.

 

It has been estimated that publishers will get 40% of the proceeds of the ad sale with the rest going to the ad agency and technology companies. According to the World Federation of Advertisers (WFA) here's how the advertising dollar is split . First, your media agency takes about 5¢ in service fees. Then their trading desk takes about 15¢. Then their Demand Side Platform (DSP) takes about 10¢. Next, some other ad tech middlemen take about 25¢ for targeting, data, and verification. Then an Ad Exchange takes about 5¢. 

 

Now I can see why the ad tech is promoting the heck of this concept, as they will get 40% cut of all the action. Based on this math why would a publisher join this network as they got 85% of the cut before, with the agency getting 15%.

While this sounds good on paper, is there a limitation on what an algorithm can do?My question has always has been how does the algorithm find out the demographics of a reader and not step over the line on privacy issues while the person is surfing online, which contributes to the growing use of ad blocking in my opinion. My feeling is this predicative marketing approach will have a high failure rate and will be wrong in many cases as it is based on the surfing habits and cannot predict what a person’s true intentions are as there are too many variables that are not factored in. I remember the story of a colleague telling me about a book they were reading and sharing this on social media and all of sudden they were getting ads to buy that book.

This excerpt from the keynote speech from Mark Pritchard from Proctor and Gamble at a recent IAB Conference on January 29 on the state of ad networks in the B2C segment suggest there is more work to be done also as ad fraud is a growing concern.”We have a media supply chain that is murky at best and fraudulent at worst. We need to clean it up, and invest the time and money we save into better advertising to drive growth. It’s time we come together, put down our finger-pointers and solve these problems – all of us – marketers, agencies, publishers, ad tech platforms, suppliers. Frankly, this is a matter of collective will. Because surely if we can invent technology for driverless cars and virtual reality, we can find a way to track and verify media accurately.” You can read the whole speech at this link

With all these issues facing the industry the BPA is creating an ad network that deals with these concerns, as it will be offering a transparent and measured ad network for the B2B segment. This private ad network will differ from other consumer based ad networks as it will be fraud free as all publishers will have an audit statement for proof of audience. One of the key benefits of this network is that it can deliver scale to advertisers, as a lot of B2B publishers do not have sufficient traffic sometimes to attract certain advertisers. On the wish list of many B2B publishers is to attract consumer brands like cars, financial services and other consumer products using the demographics of the readers as a selling point ie: business professionals with above average incomes like lawyers. accountants, professors, real estate brokers etc. The problem has always been that the reach of a single B2B publication was too small to be considered by advertisers and with this network this objection will be solved.

This network will offer advertisers 3 ways to buy. First is the direct sell of media brand, an industry buy such as the auto sector and lastly the audience buy based on job titles or demographics like Men 25-54. Publishers can provide unsold ad inventory to the network for this program without fear of cannibalizing existing sales as the rates/CPM offered to clients can be protected to ensure that your direct clients still get the best deal as a floor price is part of the publisher controls. These controls also include a whitelist and blacklist of advertisers, so you will not get for example ads that do not fit your brand profile or editorial standards.

The BPA estimates that each publisher may have up to 50,000 ad impressions each month to sell of unsold inventory that can fetch $25 -$50 CPMs or more depending on the publisher. If you are using Google Ad sense as you secondary source of online ad revenue this may be an opportunity to generate more revenue as the ads are sold by impression and not by clicks and publishers have more control on what ads are featured.

I asked Glen Ashworth from University Affairs on his thoughts of the new B2B ad network and he states “University Affairs has used several banner ad networks for unsold ad inventory over the years, with limited success. The low CPMs and questionable ad creative being served were big problems. A private ad exchange could offer better inventory, more publisher control and more transparency. Most importantly, advertisers will feel that their brand are in a safer web environment. The ad network revenue split does seem to be on the low side for publishers compared to what you can get with a direct buy. However, small publishers are often not even on the radar of big clients (like the automotive and financial services industries) for direct buys. So it’s a case of getting a little piece of revenue via a network vs. nothing at all. “

The limitation of any ad network is that it does not encompass what is called in the industry an integrated media buy that includes the magazine in print and digital, email newsletters and web display. Native advertising and email newsletters are on the future roadmap for this service. This private network will be launched in the 2nd quarter this year and it looks like a great opportunity for publishers as they can now have what you never had before and its is called scale that can compete effectively with the other ad networks that can delver millions of impressions and can provide advertisers with a one-stop buying service for multiple B2B websites.

Tuesday, February 07, 2017

The use of fake news scams is the topic of the year in the media industry. There are many victims in this crime that include advertisers, content distributors and readers who think they are true. Check out this NY Times story on how fake news is created. The IAB at their leadership conference on January 29 revealed that the digital supply chain needs to rid the system of these bad actors. Marc Pritchard, global chief brand officer at Procter & Gamble, delivered a keynote at this conference stated the media supply chain as murky at best, and fraudulent at worst, Pritchard said it’s time to get tough and delivered four key actions to the industry for 2017: adopt one viewability standard; implement accredited third-party measurement verification; get transparent agency contracts; and prevent ad fraud.

It all starts with Facebook and Google as they need step up (They are victims too) as these scams targeted their networks because they are the biggest. These digital gamers manipulated the key word search, landing pages and user behavior to break through the content firewalls on these networks. Google has just announced in a blog on January 25, 2017 that they took action against 340 websites and 200 publishers were banned, but in my opinion they only did this because they were caught letting this happen. It is nice that they are cleaning house, but what about the advertisers that paid for the ads that went on these fake sites, should they not get a refund for this criminal behavior, nobody talks about that. Check out this story that says Google is magnifying Fake news


Facebook used to have fact checkers, but they went instead with an algorithm to solve this with the mis-guided belief that technology will do the job better (plus save money). They are trying to automate this process and we all know there are some pretty smart scammers that will find holes in their system eventually. These actions are just a hollow attempt to shield themselves as crooks are always smarter, just ask the malware and virus cybercriminals. They let stuff like this go on until somebody complains and have a more reactionary attitude versus preemptive. Their comeback has always been they are technology companies and not responsible for the content is just some lawyer speak to shield them from civil liability lawsuits.

Emarketer reports that advertisers are starting to realized they have been scammed and we may see a shift of ad dollars into more trustworthy mediums like newspaper, magazine and tv station websites as they are considered premium websites that are not sold on ad networks where fraud is prevalent. This is a problem that plagues programmatic ad networks  as they deliver a lot of junks ads and the advertisers has no control of the media selection in the network. Just ask as the advertisers that showed up on the Breitbart.com website unknowingly. This Globe and Mail story tells it all

The next emerging issue are the use of social media influencers or brand ambassadors as they are, in my opinion, borders on deceptive advertising as they are paid endorsements but appear as arm’s length ones that fools the reader that they real. The Advertising Standards Canada has established guidelines for their use on disclosure that is required in order for a testimonial, endorsement, review or other representation (in any medium) to comply with Clause 7 of the Code.

1  A testimonial, endorsement, review or other representation must disclose any "material connection" between the endorser, reviewer, influencer or person making the representation and the "entity" (as defined in the Code) that makes the product or service available to the endorser, reviewer, influencer or person making the representation, except when that material connection is one that consumers would reasonably expect to exist, such as when a celebrity publicly endorses a product or service.

2  If such a material connection exists, that fact and the nature of the material connection must be clearly and prominently disclosed in close proximity to the representation about the product or service.

At the end of the day the online medium is becoming more untrustworthy and is shooting themselves in the foot and need to clean up their act and step up and be accountable for their actions or lack of action. So I am going to say for all the advertisers that have been scammed. I want a refund for all the times I have been scammed on your website or ad network.

Monday, January 09, 2017
 

The race for the next killer app that will have the same success as the Apple iPhone that is 10 years old now is the carrot that drives innovation in the Tech industry. But not all these companies will succeed. But the industry is hoping for the Apple Halo effect for their product just the same. The latest in smartphones, computers, car technology, drones, home tech, medical tech, wearable technology were unveiled at CES 2017 that has just finished in Las Vegas.

I have selected the Best of CES stories from some of the  leading magazines in the industry to show you what is out there. One caveat like all technology while they may look good on paper, I want to remind you of the experience of the hype of nuclear technology and how it is out vogue now. This may apply in the future for auto-driving cars when the technology fails to meet expectations from the hype.

ANDROID AUHORITY 
Best of CES 2017: the most impressive products from the show
http://www.androidauthority.com/best-of-ces-2017-741647/

CNET 
CES 2017: The final word
https://www.cnet.com/news/ces-2017-the-final-word/

CRN 
CES 2017: The Best Of The Best
http://www.crn.com/slide-shows/mobility/300083330/ces-2017-the-best-of-the-best.htm

ENGADGET
Presenting the Best of CES 2017 winners!
https://www.engadget.com/2017/01/07/presenting-the-best-of-ces-2017-winners/

ITBusines.ca
Consumer Electronics Show: 50 years of unveiling ground-breaking technology
http://www.itbusiness.ca/blog/consumer-electronics-show-50-years-of-unveiling-ground-breaking-technology/85199

PASTE MAGAZINE
The 10 Best Gadgets of CES 2017
https://www.pastemagazine.com/articles/2017/01/the-10-best-gadgets-of-ces-2017.html

PC MAG 
The Best of CES 2017
http://www.pcmag.com/news/350860/the-best-of-ces-2017

POPULAR MECHANICS 
CES 2017: Popular Mechanics Editors' Choice Awards
http://www.popularmechanics.com/technology/g2906/ces-2017-popular-mechanics-editors-choice-awards/

WIRED MAGAZINE 
BEST OF CES 2017: THIS YEAR’S MOST INTERESTING GADGETS
https://www.wired.com/2017/01/best-of-ces-2017/

About Me
Martin Seto

 
Martin Seto is the principal of Reflex Media, a media consultancy practice offering media owners digital publishing, event management and ad sales help. His media expertise also include working with ad agencies as a media buyer/planner for tv, radio, print, outdoor, magazine and online. He has been in the advertising and media industry for 25+ years and he has been an instructor/speaker with Centennial College and at magazine conferences across Canada. He can be reached at marty(dot)seto(at)
reflexmediasales.com or 416-907-6562, and on LinkedIn.

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