Digital Advertising’s New Wave

Hello, I’m Jonathan Mendez, Founder & CEO of Yieldbot

Twitter: @jonathanmendez Company: Yieldbot (www.yieldbot.com)

Location: New York City Blog: Optimize & Prophesize (search “jonathan mendez”)

2006-2008 2008-2010+

“People don’t read ads. People read what interests them. Sometimes that an ad.”

- Howard Gossage

History Lesson # 1

“I do not regard advertising as entertainment or an art form but as a medium of information”

- David Ogilvy

History Lesson # 2

“What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention

...and a need to allocate that attention efficiently among the overabundance of information sources that might consume it.”

Herb Simon: Computers, Communications and the Public Interest. 1971!!!

History Lesson # 3

Tim Berners-Lee

“Information Management”

•Hypertext•Computer Conferencing•Document Retrieval•Information Management•Project Control

Services are not an ad supported

biz model!

“This is the first mass marketing medium that isn’t supported by ads.” – Seth Godin 2008

But old models die hard

•Media $$$•Free Search traffic•Big Display Networks•High CPM•Page Views

2001-2007: Easy Money

Google Changed Everything

Google Changed Everything

Search fractures information architecture

16% of Search Terms overlapped with the NY Times Information Architecture

6 months later 60% of top 50 terms the same

The largest value creation in web content

is not publishing

…but the tools for the discovery and distribution of it.

Who was focused on allocating attention efficiently among an overabundance of information?

•Discovery & Recovery of Info•Realtime & Historical•Targeting•User control/segmentation•Testing & Optimization

Search adds value to the content!

“The gap is widening between spending on simple search ads and display ads. Search ad spending is on track to reach $10.4 billion this year, double what will be spent on display ads.”- eMarketer, 2008

2008-2009 Efficiency & Performance

SEARCH = THE GOLDEN TRIANGLE

DISPLAY = THE GOLDEN SHOWER

“For all the new media spin it’s just old media”- Advertising Age June 2008

A World of Old Metrics

… and Lazy Marketers

We are not advancing in our use of advertising & marketing technology at the same pace our audience becomes more advanced in their use of the web.

Communication technology has always made consumers smarter and amplified their diversity.

Marketing is getting more difficult!

“80% of Americans spend as much time on the web as TV”

“Are Big Ad Agencies so clueless that people should avoid them?”

It’s a User Controlled Medium!

Self publishingAggregatorsUGCSelf-serve classifiedHobbyistCurators

Web 2.0 was the rise of new publishers

“Branding is why media buyers don't care about context. But Branding only works when people can't talk to each other, and compare notes on the "images" they are being sold. The web made sure that era is over. Branding, and so "impressions", don't matter any more.

Marketing is about identifying markets and fulfilling needs. Marketing thrives when people can compare notes, and Marketing craves context, because needs in a market are specific.”

-Jim Novo (comment on my blog)

How do you identify markets & fulfill needs?

Make Display more like Search!

THIS IS HAPPENING…

•AWARENESS

•REACH & FREQ.

•CPM

Display OS V 1.0

•PERFORMANCE

•DATA

•CPx

Display “Search” OS

1. INTENT

•BULK

•SITE / DEMO

•PAST BEHAVIOR

Display OS V 1.0

•DIFFERENTIATED

•AUDIENCE

•CURRENT BEHAVIOR

Display “Search” OS

2. SEGMENTATION

•NO VERSIONING

•HIGH DEV COST

•LEAD TIME

Display OS V 1.0

•TARGETED

•DYNAMIC

•SELF SERVE

Display “Search” OS

3. CREATIVE

•RATE CARD

•VERBAL

•I/O

Display OS V 1.0

•BID & RTB

•DSP/EXCHANGES

•AUTOMATED

Display “Search” OS

4. BUYING

•HIGH MINIMUM

•SWITCHING $

•NO OPTIMIZATION

Display OS V 1.0

•LOW MINIMUM

•NO SWITCH $

•OPTIMIZATION

Display “Search” OS

5. CAMPAIGN MANAGMENT

Advertiser Publisher

Publisher

Publisher

Publisher

Network

Exchange Publisher

Advertiser

Advertiser

AdvertiserNetwork

NetworkYield Opti Publisher

Advertiser

DSP

Display’s New Market Wave

Market Results: More inventory, lower prices

Strategic Result: Cookie users to serve impression in lower cost inventory

The Wave is Crashing on Pubs

Data & Analytics will save publishers

OWN IT!The value created by your

audience & content isDATA

THANK YOU!