Announcing the Jounce Media Webinar Series

Announcing the Jounce Media Webinar Series

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!

How Comcast Can Avoid Google's Header Bidding Mistakes

How Comcast Can Avoid Google's Header Bidding Mistakes

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.

Ushering in a programmable future for media

Ushering in a programmable future for media

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.

How Many Ads Does It Take To Cut Your Cellphone Bill? A Whole Lot

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.

Napkin Math

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.

Element Hiding: Ad Blocking’s Dirtiest Trick

KardBlock, the browser plugin that removes all references to the Kardashians, was met with great fanfare at its May launch. At its core, KardBlock is a customized ad blocker, and it provides a clean illustration of a technique that is rewriting the rules of ad blocking for the world’s biggest media companies.

Under the hood of Kardblock

KardBlock uses a technique called element hiding to produce a Kardashian-free internet experience. The tool simply looks for pieces of web pages that contain Kardashian content and hides this content from the user. As an example, take a look at the following before-and-after screenshots from E! Online:

Poof! No more Kardashians. But even in the screenshot on the right, the image of Kendall is downloaded to the user’s browser. KardBlock doesn’t prevent your browser from downloading Kardashian content, rather it just prevents the content from being presented on screen. E! Online’s website analytics will report two views of the Kendall image — one for each page view. Meanwhile only one of those two pageviews actually produced on-screen content.

What this means for ad blocking

It turns out that ad blockers are increasingly behaving like KardBlock, and this has some ugly consequences for both publishers and advertisers. In an attempt to outsmart ad blockers, publishers are adopting native advertising products that are largely indistinguishable from the site’s primary content. While ad blockers typically cannot prevent native ads from downloading, they can employ a KardBlock-like technique to prevent native ads from rendering.

Here’s an example of a typical Facebook ad unit:

 

Because these ads all load from the same domain as Facebook’s newsfeed content, traditional ad blocking fails. Enter element hiding.

Facebook loads this particular ad unit in the following HTML element:

<div class=”ego_column pagelet _y92 _5qrt _1snm”></div>

EasyList, the most commonly used set of ad blocking filters, contains the following rule, which hides this specific Facebook HTML element:

facebook.com##div[class=”ego_column pagelet _y92 _5qrt _1snm”]

When you visit Facebook with an ad blocker, all of the content inside this HTML element will be hidden from the user:

Poof! No more ads. But just like KardBlock, ad content is downloaded and then hidden, and that creates a real advertising mess.

Element hiding’s implications

Traditional ad blocking is bad, but element hiding is worse. In our example, Facebook will record the impression, but J Crew’s reporting system will not, leading to volume disputes between the companies. Without a record of the impression, J Crew’s performance measurement systems will also be unable to record any advertising success metrics like viewability, ad engagement, and post-impression sales. Facebook’s performance will appear weak. And depending on contractual terms between the two companies, J Crew may even be responsible for paying Facebook for this hidden impression. Through no fault of either company, their business relationship may be damaged.

So what are publishers and advertisers to do? The good news is that there are techniques for both publishers and advertisers to stay one step ahead of element hiding. The bad news is that the ad blocking playbook largely contains short term cat-and-mouse tactics, not long term strategic solutions. Brace yourself for some hand to hand combat between the ad economy and the ad blocking community.

For more ad tech thinking, visit the Jounce Media Blog

What Facebook Instant Articles Means for Ad Economics

Facebook Instant Articles is back in the news this week. After a bit of a sleepy start, Facebook is expanding the list of participating publishers and increasing the number of users who have access to Instant Articles content. Lots of people are going to start consuming content directly in the Facebook app rather than through embedded webpages. And that has some big implications for ad economics.

As a point of reference, consider three consecutive ads delivered to me in the Facebook app:

These ads paint a picture of who I am — a small business owner working in the tech space. Targeted advertising at work.

Next, I tapped on a Business Insider article that was posted in my Newsfeed. This loaded an embedded webpage within Facebook’s app. Refreshing this same page a few times, I saw the following ads:

A Spanish language car promotion, a cooking ingredient ad, and an offer for a trip to the Catskills? Who do these advertisers think I am? The answer is that they have no idea who I am because Safari (the embedded browser in all iOS applications) rejects third party cookies. Ads served in Facebook’s native app can be targeted based on my device ID, but ads served in Safari don’t support any user targeting. Inside Facebook Newsfeed, advertisers know who I am and can employ highly targeted campaign tactics. But within embedded webpages, audience targeting goes out the window.

The result of this targeting disparity is that advertisers are willing to pay much higher rates for in-app inventory than mobile web inventory. Facebook knows this and so do publishers. Facebook Instant Articles brings in-app economics to mobile content consumption, unlocking audience targeting capabilities for advertisers and boosting yield for publishers. Sure, faster article load times, lower bounce rates, and greater sharing activity are nice. But the real value of Facebook Instant Articles is ad economics.

Facebook isn’t the only platform looking to provide in-app hosted content and monetization tools to publishers. Snapchat, Twitter, and even Google are rumored to be building content distribution platforms to help publishers migrate away from the mobile web. Apple’s plan to starve the web of cookies just might be working.