The industry made a collective misstep by building on top of a loophole. When a powerful company like Apple controls foundational advertising technology, the rest of the industry is subject to unpredictable shifts.
Data half-life says a lot about the degree to which publishers can tolerate a culture of experimentation. Publishers with fast-burning data can test emerging programmatic sales channels, allow new third-party trackers on their pages and even explore direct data-licensing agreements without fear of long-term consequences.
In the tug-of-war between CMO and CFO, the CFO is winning. Advancements in measurement and attribution have made it possible for the CFO to demand proven returns from media investments. Like any other business investment, marketing is now being held accountable to achieving financial returns.
Clever applications of private marketplace technology allow publishers to move from reactively protecting data leakage to proactively monetizing their data assets.
So far, we've been communicating our perspective primarily through the Jounce Media blog, but we've been on the lookout for new ways to connect. We're eager to start a dialogue on the biggest and fastest moving challenges facing the industry and the actions our partners can take to stay ahead of the innovation curve. So today, we're excited to announce the Jounce Media Webinar Series!
FBX was the first mass market example of real time bidding’s applications beyond banner ads, and its closure is a signal of the growing power of walled gardens in the face of an open advertising ecosystem. But most publishers aren’t Facebook, and they are eagerly adopting the programmatic selling of native ad units.
Comcast's acquisition of StickyAds signals that the company may be trying to follow Google's playbook of building a fully integrated monetization solution for publishers. The strategy is sound, but Comcast should learn from Google's tactical stumbles and embrace unified yield management before header bidding infiltrates the video advertising world.
Programmatic advertising is dead. So says its self-proclaimed inventor, Mr . Brian O’Kelley, CEO of App Nexus. The new era is all about the core ad tech buyers — the advertisers and publishers. The winning technologies of the new age will be those that see customers as equals, that teach customers how to use the powerful tools they are buying.
Header bidding's adoption by premium publishers has been rapid and sweeping. In the past 12 months, header bidding has gone from a curiosity to a must-have for major digital publishers. So it surprised us to find that 45 of the 100 biggest US publishers haven't yet adopted header bidding.
The buzz around header bidding has focused on the implications for publishers. But what does header bidding mean for ad buyers? Is header bidding a good thing for advertisers? It is a good thing for DSPs?
Sprint's prepaid cell phone business, Boost Mobile, announced this week that customers can opt to receive a $5 monthly discount in exchange for seeing ads on their smartphone lockscreens. For Sprint to break even on this scheme, they either need to charge ultra-premium rates or sell a whole lot of impressions.
Sprint makes money on its new offering by turning a consumer's smartphone lock screen into ad inventory. Each time a user unlocks his phone, Sprint has the opportunity to sell an ad impression and generate a small amount of ad revenue. Open your phone often enough, and Sprint can more than make back the $5 discount.
To make this profit math work, Sprint either needs to charge extremely high rates or sell an enormous number of impressions. For people who check their phones only a handful of times per day, Sprint needs to charge upwards of a $50 CPM. Even for people who check their phones 50 times per day, Sprint's breakeven rate is nearly $5 CPM, well above typical display ad rates.
Keep in mind that Sprint doesn't get to keep all of this ad revenue. The offering is powered by a company called Unlockd (unlockd.com), which keeps some of the ad revenue. And of course there are additional ad serving middle men who also take a cut of ad revenue
Look To The Right
The chart above makes what seems like a reasonable assumption about the number of times consumers check their phones, but it turns out to be very wrong. According to Unlockd, the average consumer checks his phone 150 times per day, and the average millennial checks his phone 200 times per day. That's a whole lot of ad inventory, and it means we need to look much further to the right on our breakeven chart.
At 150 unlocks per day, Boost can recoup its investment by monetizing inventory at a $1.11 CPM. Those 200-unlocks-per-day millennials require just an $0.83 CPM. Profitability seems well within reach.
The Cost Of User Experience
Here's the rub. Imagine having to dismiss an ad every time you want to check your mail. Or answer a phone call. Or turn off your Monday morning alarm. Imagine doing this 200 times per day, every day. Is this hassle worth a $5 coupon? Customer reviews for the Boost Dealz app suggest the value exchange doesn't quite work:
Presumably Unlockd and Boost can improve the user experience with time, but in the end, they're left with a business model that requires delivering a whole lot of interruptive ads. Kudos to both companies for testing new ground on ad economics, but this feels like a short lived experiment.
Facebook is choosing to interrupt its user experience in order to build its identity data assets. Whether you love the decision or hate the decision, give Facebook credit for grappling with issues that aren't even on the radar for most companies. Facebook is playing the ad tech game at a different level.