People familiar with Yahoo say that this week it told at least three retargeting companies — Criteo, TellApart, and ValueClick’s Dotomi — that it would stop selling them its “Class 2” remnant inventory, which the companies used to purchase on behalf of clients and essentially resell at a premium. The idea, theoretically, is that Yahoo will sell more of those ads itself.

The move follows the formation of an ad alliance between Yahoo, Microsoft and AOL, which is meant in part to decrease the amount of inventory those companies sell to third-party players like retargeters. Industry sources believe Yahoo’s U.S. team, led by Ross Levinsohn, intends to follow its retargeter ban by going after ad networks — a much larger group of outside players who buy and resell Yahoo’s inventory.

But so far Yahoo appears to be acting on its own when it comes to keeping its stuff away from outsiders. Neither AOL or Microsoft have made similar moves.

Yahoo declined to comment and I haven’t heard back from Criteo and ValueClick. TellApart CEO Josh McFarland offered this statement via email:

TellApart maintains a good working relationship with Yahoo, yet this approach to the ad marketplace would be increasingly opposite that of Google’s.

It was my team at Google that built the ecosystem around AdWords, and third parties fueled huge growth in search advertising revenue as a result. DoubleClick is now compounding that success with real time bidding and an open Ad Exchange, which offers full access to all owned properties and the Google Display Network. This approach stands in contrast to Yahoo’s.

Retargeters try to track Web users as they visit clients’ sites — usually retailers — and try to sell them related ads when they move to other properties. (Here’s an illustrated guide from Criteo about the process, though it doesn’t mention the part about Criteo buying ads on other properties).

They’re part of a larger trend in Web advertising that puts a greater value on who sees the ads, and pays less attention to where they see them — which has diminished the ability of Yahoo and other “premium” publishers to charge high prices for their inventory. Meanwhile, retargeters, ad networks and other outsiders have been able to buy cheap unsold inventory from Yahoo and others, and resell it at a premium.

The Yahoo-led coalition with AOL and Microsoft is meant in part to give those companies more control of their inventory, and eventually the ability to raise prices. And apparently Yahoo’s unilateral move this week is meant to do the same thing.

But there’s a fundamental catch-22 here: Reclaiming inventory will only work if Yahoo can sell it. And the reason that Yahoo was willing to hand it off to third-parties in the first place was because it couldn’t sell it.

Yahoo U.S. head Ross Levinsohn is trying upgrade his sales technology and staff with a variety of moves, including his recently announced deal to buy Interclick, though that deal won’t close for several months.

Then there are the folks trying to make sure you can’t look away from their ads.

We can put Undertone’s new “PageSkin” ads in the latter category. I don’t love the name, but the idea is simple enough: The ad network’s newest unit fills up the empty vertical borders on the sides of  many, but not all, Web pages.

Like so:

Straightforward, right? You don’t have to like it, but that doesn’t mean Web publishers won’t try it: Consider it the digital equivalent of sticking ads in front of movies, or on PBS, or any other place that didn’t use to have them but does all the time now. Undertone CEO Mike Cassidy says he will “easily” get “double-digit” CPMs for these.

The persistence of the ad unit does run a little counter to other in-your-face ads other Web publishers have been adopting in the last year or so. Like “pushdown” ads that temporarily, um, push down the content you want to see to make room for an ad.

Then again, I’ve already adapted to those, or at least I think I have. I’m now conditioned to expect an ad-sponsored hiccup before I get to the stuff I want, so my brain takes a little pause as the page loads up.

Meanwhile, here’s an approach that I definitely like: Run an ad in a place where you expect to see ads–but run a different kind of ad.

I’ve questioned Google’s attempts to promote its online products with offline ads before, but I do applaud the company for attaching its Chrome Browser to Dan Savage’s “It Gets Better” campaign with a TV campaign.

Even more interesting is that while Google has run the spot during “Glee”, it’s also made a point of venturing farther afield: I’ve now seen it during a TNT NBA playoff game, and during daytime runs of ESPN. It shouldn’t be interesting that an explicitly pro-gay ad appeared on big-time sports broadcasts in 2011, but it is. And that’s sort of the point.

[Excerpt image via Lord Jim]

Peer39 used to be in the ad network business, but switched gears a couple years ago: Now it sells data that’s supposed to let ad buyers find their audiences more effectively.

The pitch: Unlike other ad targeting operations, which try to find audiences based on their online behavior, Peer39′s system figures out what’s actually on a given Web page, so buyers can place an appropriate ad. That’s supposed to improve the ad’s efficiency, while avoiding messy privacy problems.

The company says it has been scaling up along with the rest of the display ad business as it moves into real-time exchanges like Google’s AdX; earlier this year Peer39 said it was analyzing 47 billion pages a month.

This was an inside round from previous investors including Evergreen Venture Partners and Canaan Partners; CEO Andy Ellenthal says he’ll use the money to expand in the U.S. and internationally.

The suit was filed on Thursday by the law firm KamberLaw on behalf of Jonathan Lalo, a Los Angeles County resident, in federal court in San Jose, California. It seeks class-action status.

The suit was filed less than a week after the Wall Street Journal published an article raising privacy concerns over the transmission of personal information based on a study of 101 mobile apps on Apple’s iPhone and phones that run Google’s Android operating system. The complaint, which sites the Journal investigation, names app developers Pandora, Dictionary.com, The Weather Channel and Backflip Studios, the maker of the Paper Toss app, as well as Apple.

Read the rest of this post on the original site »

We’ll see more of this over time, as the overstuffed ad network industry consolidates, and this one makes some sense on paper: BBE, formerly known as Broadband Enterprises, specializes in video ads, and Specific doesn’t have any video business at all.

I don’t have a price for the deal, though industry observers guesstimate that BBE might go for something in the $65 million to $85 million range.

I’ve asked officials at both companies for comment, but the best I’ve been able to do is get Specific Media co-founder and SVP Russell Vanderhook on the phone. He told me he was “not the one to speak to about that” and promised to pass my message on to his brother Tim Vanderhook, who is CEO. (There’s a third Vanderhook at Specific, too: Chris, who is COO).

BBE is one of the biggest ad networks in the world, at least by comScore’s measurement: It says the company’s ads reach 192.8 million unique visitors per month, enough to earn it the No. 6 slot.

By comparison, comScore pegs Yahoo’s ad network at 185 million, AOL at 183.6 million and Google at 181.5 million. And the measurement company says Specific Media reaches 158.6 million, which puts it in 22nd place. [UPDATE: The BBE number that comScore provides is for "potential reach," which is awfully theoretical, while the other network data represents a "real" audience. Thanks to Tod M. Sacerdoti, who runs BBE competitor BrightRoll, for catching my mistake.]

Specific is getting more than an ad network with BBE. The company runs its own video ad-serving arm, which industry observers tell me has been performing quite well.

BBE raised $10 million in 2008 from Velocity Interactive Group, now known as Fuse Capital. Specific has raised a reported $110 million since 2006.

[Image credit: Steve aka Crispin Swan]

The Wall Street Journal’s What They Know series has documented the cutting-edge uses of the tracking technology used to create profiles of consumers’ habits. The 50 most popular U.S. websites installed 64 tracking files on average, the Journal study found.

Many of these are of the type used to develop profiles of users for behaviorally targeted advertising, but there can be other uses for such files.

Many sites use Web-analytics programs, for example, to evaluate the traffic coming to their own pages. Cookies from these programs can come from the site itself, in which case they are known as first-party cookies, or from another service, in which case they’re called third-party cookies. Such services are generally separate from ad networks, but there are no rules governing the sharing of such data.

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Redmond is set to roll out AdECN, the “real-time” ad exchange it bought in 2007, within the next two weeks. But only in the most cautious of tests: Microsoft (MSFT) will open up AdECN to a handful of ad buyers and says it will only allow them to purchase a “select, limited amount of Microsoft inventory.”

Which means that even as Google’s AdX exchange, relaunched last fall, continues to gather momentum, Microsoft will still be dabbling around the edges. And some industry sources tell me they’re not sure that Microsoft is convinced it wants to launch an exchange at all.

The promise of the exchanges is that they allow ad sellers and buyers to haggle over specific pieces of inventory at the moment Web surfers are engaged with them.

That’s theoretically important because it means an ad buyer can determine if a visitor who is, say, looking at this Web page at this very second is worth more or less than the one who was looking at it just before. Or after. Etc.

Entrepreneurs and investors in ad technology think this is a big deal, because it will allow dollars to flow into online display ads much more efficiently. Traditional publishers, though, fear that the exchanges will simply function as more traditional ad networks do–that is, they will commodify most of their ad inventory and push prices even lower.

Microsoft itself is having that debate about its own exchange, sources familiar with the company tell me. They tell me that some executives in Redmond are desperate to launch AdECN in order to compete with Google (GOOG)–and likely, Yahoo (YHOO), which is testing its own real-time platform. But others aren’t eager to launch a product that may end up pushing down prices on Microsoft properties like MSN.

That would explain the long delay in launching AdECN, which has been promised for many months. Most recently, industry sources were telling me that Microsoft would launch the exchange in January.

It appears they’ll be off by a few days. Here’s Microsoft’s statement to me in response to a question about AdECN’s launch date and plans:

To date, we’ve been piloting the AdECN Federated exchange system internally with Microsoft Content Ads and through the Microsoft Media Network. In the next two weeks, we are extending it to a select group of advertising network partners in a test phase, which will enable participants to bid for media in real-time across a select, limited amount of Microsoft inventory. We’ve been intentional in our launch approach–by initiating this test with a small group we believe that will help us to refine and build future functionality. We expect to share more details about this test and our strategy in the coming months.

CBS (CBS) says it will stop doing business with the ad networks, which are ubiquitous on the Web, and will offer access to its audience of 60 million unique visitors solely via its own salesforce.

AdAge’s Michael Learmonth says CBS, bolstered by its 2008 purchase of CNET, is the biggest publisher on the Web to cut off the hundreds of networks that try to match publishers and ad buyers.

Sounds right to me. Because while lots of people like to complain about ad networks, almost everyone uses them.

Other big publishers that have cut off ad networks entirely include Time Warner’s (TWX) Turner Networks, the Gawker Media blog network and…not many others.

The ad network debate in a nutshell: Anti-ad network types argue that handing over inventory to the networks gives publishers a short-term boost because it allows them to sell ads they wouldn’t move on their own. But doing so trains buyers to avoid buying higher-priced inventory from the publishers themselves, which means that stuff gets harder to sell in the long run.

The counterargument: What are you people smoking? Ad buyers should be trying to reach their target audience at the lowest possible price. And trying to fight that impulse is like fighting gravity.

Still, there is a larger movement afoot to try to at least sell some inventory at higher prices, even if that means leaving dollars (or pennies) on the table.

That’s one of the cornerstones of Aol CEO Tim Armstrong’s strategy, and it’s what Yahoo (YHOO) is trying to do as it reshapes its Right Media platform. See also: Firms like 5to1, which say they can turn publishers’ low-rent “remnant” ads into more valuable stuff.

The countermovement, though, is at least as strong, as ad buyers and brokers use technology to move more and more inventory at ever-more “efficient”–i.e., cheap–prices. See: Google’s (GOOG) relaunched DoubleClick exchange and the one that Microsoft (MSFT) intends to roll out next month.

The Citigroup (C) analyst spoke with PubMatic and the Rubicon Project, two “optimization” firms that help publishers manage inventory they hand over to ad networks. And both say they’re seeing continued upticks in sales and demand.

Pubmatic, for instance, says pricing has increased every month this year, and Rubicon says that they’re seeing demand from–believe it or not–travel and auto advertisers. Just as encouraging, buyers are actually making “longer-term” plans, which was unheard of in the darkest days of 2008 and 2009.

Both firms also reiterate the conventional wisdom that we’ve been hearing for the past 12 months: The money that is being spent is increasingly going to “performance-based” ads, which are paid for only when someone interacts with them. That’s another data point in favor of Google (GOOG), whose core product is performance-based.

Again: Things were so lousy a year ago and through the spring of 2009 that it’s prudent to take these kinds of data in stride.

And if you really want to be half-empty about it, you can note that the inventory Rubicon and Pubmatic sell is the cheapest real estate publishers have to offer. Which means it’s hard to say how various sites’ high-end real estate–the stuff they sell themselves–is doing.

We’ll get a better sense of that in about a month or so, during Q3 earnings season, when we get color from Web publishers like Time Warner’s (TWX) AOL and the New York Times (NYT).

But, as I said, this is supposed to be an optimistic post.

The paper says “some readers” have seen unauthorized pop-up ads promoting antivirus software on NYTimes.com, and warns visitors who see the ad not to click on it but to restart their browsers instead. While the Times doesn’t spell this out, the newspaper has likely had its site hijacked by a “malware” scammer who is trying to trick visitors into installing pernicious software onto their hard drives.

MediaMemo reader Tim Minter passed along an image of the pop-up below (click to enlarge). Here’s his description of the way it appeared on his desktop:

The ad hijack[ed] my computer. Say I’m reading an article (the Clean Water Act was the one that caught me). It then redirects my browser involuntarily to sex-and-the-city.cn. That site then redirects to the ad I screen-captured.

At no time did I click anything. That’s what is so nefarious about this malware.

Thankfully, since I run OS X, I knew immediately it was malware (seeing WindowsXP on a Mac where that’s not installed is suspicious).

You generally have to travel farther down the Internet publishing food chain to find this kind of bogus ad–go hunting for porn and/or illegal downloads, for instance, and you’ll find plenty of this stuff.

But Web advertising is still a wild and woolly place, and this type of thing still plagues high-end publishers too. Sometimes it’s the fault of ad networks the publishers use to move their unsold inventory; sometimes the bogus ads are bought directly from the publishers themselves.

I’ve asked both the Times PR staff and ad tech team for additional information about the ads, but haven’t heard back yet. Still, you have to give the paper credit for flagging this on its front page at all.

UPDATE: The Times’ explanation: A hacker duped the paper by buying the ad directly from the paper’s sales staff, then disguising it as a legit ad for a week.

But one observer says it’s already here: Ad optimization firm PubMatic reports that prices for ad network inventory it sees have increased 35 percent since the beginning of the year.

The firm’s data make for a hopeful chart (click to enlarge):

But these numbers could be less meaningful than they look. The most important thing to keep in mind here is that Pubmatic is only tracking prices for ad-network inventory. And if low-priced ad networks are taking market share from display ads, as is likely the case, then these numbers won’t do much good for  publishers–perhaps like the very one producing this site–who specialize in big, premium ad buys.

And the other obvious point to make here is that Pubmatic’s data are only about pricing, not volume, so they don’t really tell us whether advertisers are spending more, or less, than they used to.

But for what it’s worth, I made my own informal channel-check with two big publishers who do specialize in branded ads yesterday, and they told me things had picked up recently, as well: They differed on the degree of enthusiasm for the remainder of the year, but both cited demand from entertainment advertisers, as well as for advertisers of consumer packaged goods.

So maybe Pubmatic’s numbers are at least directionally accurate. That’d be nice, right?

A few weeks ago I sat down with Josh Marshall, the journalist/entrepreneur behind Talking Points Memo, and had a great chat about news, new media and the business of running a self-funded Web site. But my notes and video have sat on my hard drive since then, for no other reason than I never got around to publishing them.

Thank you, Maureen Dowd, for the kick in the pants I needed: Over the weekend, the New York Times (NYT) columnist has given Marshall a huge, if unintended, endorsement by borrowing his work and then getting caught.

After an initial attempt by Dowd to explain away the similarity between her work and his, the Times is now running a correction on Dowd’s Sunday column, noting that she “failed to attribute a paragraph” to Marshall.

You’ll read plenty more about this on the Web over the next few days, if you’re inclined. But it would be a shame if that’s the only thing you know about Marshall’s site, which is an interesting hybrid of politically focused reporting, commentary, and aggregation/blogging.

And I do mean a mix: If you just glimpse quickly at his site, you might think it’s the same grouping of links and headlines that you can find anywhere else on the Web. But Marshall was a real reporter prior to starting the site and his 12-person staff does real reporting. Its best work, to date, was uncovering the Bush administration’s U.S. Attorneys scandal in 2007, which led to prestigious Polk Award in 2008.

Just as interesting: It’s a profitable business that has never taken outside investment and until recently, has made almost all of its money by relying on ad networks. The most effective ad network, says Marshall: Google’s AdSense. See! Google (GOOG) really does support content!

More recently, Marshall has hired Yahoo (YHOO) vet Diane Rinaldo to serve as the company’s first real ad rep, trying to translate the site’s one million (give or take) monthly unique readers into more significant revenue. That’s alleged to be a real challenge since advertisers are supposedly loath to touch political content. But then again, start-up blogs aren’t supposed to do real journalism–or act as unattributed contributors to the country’s most prestigious newspaper.

]]> http://allthingsd.com/20090518/meet-maureen-dowds-favorite-writer-talking-points-memos-josh-marshall/feed/ 0 http://allthingsd.com/20090129/the-new-york-times-says-energy-companies-are-advertising-hollywood-isnt/ http://allthingsd.com/20090129/the-new-york-times-says-energy-companies-are-advertising-hollywood-isnt/#comments Thu, 29 Jan 2009 14:10:46 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=3655 As I noted yesterday, the New York Times is going to stop providing monthly updates on the state of its business, which is a bummer but also understandable. But company execs do seem willing to discuss their business in detail during the quarterly earnings calls, which is extremely helpful.

Yesterday, for instance, the New York Times (NYT) provided a wealth of information about the state of the ad business. Here’s a summary, with an assist from Seeking Alpha, of stuff I found interesting:

What kinds of companies are still buying ads? Corporate advertisers like energy companies and financial companies–those that haven’t gone bust–trying to reassure customers; advocacy groups trying to influence the new administration.

Who’s cutting back? Hollywood: Fewer movies released, and less marketing money put behind each release (though that will change during awards season this spring); telcos, because there’s less growth out there; books, for obvious reasons.

Classified ads are killing us. Above and beyond anything else, the newspaper business is dying because its super-lucrative classified ads business is (still) dying. Technology, in the form of competition like Craigslist, critically wounded classifieds, and now the economy is finishing it off. The dropoff in the help-wanted category accounted for half of the the Times’s digital decline in Q4, said digital exec Martin Nisenholtz.

NewYorkTimes.com is a meaningful brand for display advertisers. Other properties–like About.com–aren’t. Nisenholtz says ad rates at NYT.com actually increased for most of the year. But About.com, which had been the company’s star digital performer, fell apart at the end of the year because of its display ad business–there’s nothing about the site’s brand or audience that commands a premium from display advertisers. The paper is now redesigning About.com to emphasize cost-per-click ads–that would be ads from Google (GOOG), primarily–because there’s still growth there.

Perhaps as much as 50 percent of the company’s digital inventory is sold by ad networks In response to a question, Nisenholtz wouldn’t put out an exact number. But he came close: “I would say that from an industry-wide perspective, you are probably looking today at around 50 percent. Some of our properties are above that, some of them are below that, but that’s about where the industry is at this point.”

]]> http://allthingsd.com/20090129/the-new-york-times-says-energy-companies-are-advertising-hollywood-isnt/feed/ 0 http://allthingsd.com/20090106/one-less-ad-network-peer39-shuts-down-semantic-ad-network-concentrating-on-technology/ http://allthingsd.com/20090106/one-less-ad-network-peer39-shuts-down-semantic-ad-network-concentrating-on-technology/#comments Tue, 06 Jan 2009 19:30:39 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=2812 I’ve yet to find anyone with a firm grip on the number of ad networks out there: 300? 400? Many more? But now there’s one fewer: Peer39, a New York- and Israel-based company, has turned off its “Semantic Ad Network” and laid off its four-person sales staff.

CEO Amiad Solomon says the company will focus its resources on its core semantic technology, which is supposed to let publishers, ad agencies and other clients quickly assess the content on any given Web page and post an appropriate ad. The company employs 50 people, but will expand to 60 or 70 by the end of this year, Solomon tells me.

The company has raised $11.7 million from Canaan Venture Partners, Dawntreader Ventures, and J.P. Morgan.

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