Trends in online display (or why I invested in AdSafe Media)
This week was a fairly big week for me. On July 4th I officially emigrated to the US, a date I am not likely to forget. Wednesday, we announced our new investment (my first in the US), leading a $7.5M round in adtech company AdSafe Media. Previous investors include Founders Collective and a serious group of ad tech insiders (chek out the advisors), some of which are reinvesting in the round.
Rather than wax lyrical about my new company (PR here), I wanted to take a look at some of the major trends in online display as I see them:
- Brands advertisers have yet to significantly migrate. In 2009, P&G still open spent 4% of its advertising budget online; I think l'Oreal was only 1%. We know the web has created the users and the engagement, but that ad spend is still badly trailing the level of engagement achieved. To bring that wall of cash into the market, which the industry so badly needs, we need to give brand advertisers an environment they feel comfortable in, so they can ensure the proper stewardship of the products that they promote.
- Advertisers buy audience, not media. This may not be music to the ears of the publishers who so carefully built their rate card and their USPs with brands and agencies, but the reality is clearly that we are moving away from allocating that working media to the top names in a given category to a much more distributed audience-centric media buy, which makes the media plan more extensive and complex.
- Content also goes real time and complexity ensues. Have a look at the Guardian which is at the forefront of content syndication and is now experimenting with automated news generation. Content is increasingly real-time, free of tight editorial guidelines, repurposed and redistributed continuously. A New-York based entrepreneur told me this week that fully 80% of traffic on news sites was driven by the fresh content, with archives only representing about 20%. If you bring all this together with social media, it's clear that keeping track of the content inventory is tough, whether you are an ad network, a blog network or an advertiser trying to buy across media types.
- Brand exposure is coming back into focus. For a while, display ads were derided ("people just don't click on them"). But as the web matures, the online advertisers are coming to appreciate what their analog forefathers already knew; you cannot simplify media planning to the last click. You need to measure the entire exposure path and track across channels from first exposure to conversion / repeat conversion. So yes it probably means you keep buying back your own traffic and you don't really know anymore which part of the your ad budget is wasted, but the reality remains that brand exposure matters … and that it can be done well online.
- Media planning goes algorithmic: media planning used to be a game of allocation of working media according to relatively stable and planned grids; the job of campaign planning being quite manual and artful. Now the level of complexity, whether we are talking about real-time bidding or not, is quite staggering. It's the domain of technology-enabled solutions, of maths and data science. I have repasted my Prezi on this topic (which was only an intro to a fireside chat with Dataxu CEO Mike Baker but hopefully interesting).
Let' rehash: we have moved from classic, publisher centric media planning to a complex world of fragmented audience targeting, ever-evolving and fluid publishing environments, and the advent of real-time media buying.
To serve this new world well, we need standards, we need tools, we need tech. Welcome to the age of display ad platforms.
Atlas Venture had recently invested in Dataxu, which is a leader in the demand-side platforms space and can best be thought off as the very powerful brain behind automated, real-time campaign execution across multiple supports.
Now we are adding AdSafe Media to the portfolio, a company essentially focused on making sure that brand advertisers feels comfortable with going online (how's that for plain English, I was told by my mum that my blog was too wordy). If you want to learn more, there is a good writeup on paidcontent or adexchanger. Beside the self-congratulatory (yes it's really a fab team and yes the industry traction is very impressive), the thesis here is that brand advertisers and publishers alike need:
- What I call "Trust Metrics": standards of content quality they can agree on to help them maximize campaign effectiveness and inventory monetization. Right what tends to happen is publisher bashing when brand guidelines are not respected which is not helpful to anyone.
- Pre-emptive action: if you are not supposed to advertise a diabetes drug to a specific set of users, it's limited use to be told after the fact. AdSafe can function in so called "firewall mode" to act in real-time (and hopefully still allow the publisher to monetize the impression).
- A holistic solution: ad agencies and demand-side platforms want peace of mind that their campaign guidelines are being respected, publisher and publisher networks want to understand when and why they screw up, yield optimizers want to be able to serve their clients well and maximize the yield lift and so on. You cannot solve this problem without getting the ecosystem to collaborate around the issue as a whole.
Whilst I am somewhat concerned about the big boys commoditizing most forms of adtech to zero, I am very excited to be part of this company given its ecosystem friendly approach, the great buy-in and commercial momentum it is demonstrating, and the very clear customer need it is solving. I am frankly also grateful to Helene and her team, as well as Eric Paley and the other members of our board and team to trust a newcomer to the scene with this exciting company.
Stay tuned and let's see how far out of the ballpark we can hit this one (see, Red Sox analogies already).