Tag Archives: technology

Tolls

As you might have guessed from the name of my company (Keith Ritter Media), I’ve spent a great deal of time in the media business, both as a marketer and as a publisher. The business model used to be pretty simple. Create something about which people care, make them aware that you’re offering it, get them to read, listen, or watch it, and aggregate those people into a saleable audience. You hired salespeople to meet with the representatives of your real customer – the advertiser. Usually, these representatives were media buyers from an ad agency. You with me so far?

In TV, we’d offer a unit of time at a “gross” price and asked the agency to remit a “net” price, which was usually the gross minus 15%. That commission was the toll we paid to get the revenue. Obviously, how much of that the agency kept was between them and their client but it wasn’t really our concern. We did our budgeting on the expected net revenues we’d get which was pretty much a straight line derivative of the gross monies sold. Other media had similar models but in every case, the dollars received by the publisher were directly and clearly tied to the size and desirability (to marketers) of their audience.

That statement in no longer true for digital publishing and the fact that it isn’t has serious negative implications for other media as they shift to a more programmatic sales model. I have no idea how digital publishers are able to do financial plans since they can’t project revenue from audience size. That’s because they’ve allowed themselves to generate billions of dollars in ad revenue while only capturing somewhere around a third of what is spent. The 15% that used to be paid in tolls is now more like 67% although some estimates are even higher. More importantly, it’s usually impossible to predict the net revenues received from the gross revenues sold. Digital audiences are growing while publisher revenue is declining.

Where is the money going? A sponsor pays $1 for an ad impression. The agency still takes their commission, but added to the toll-takers are trading desks, DSP providers, data providers, supply side platforms, ad serving platforms, verification services (viewability, etc.) and who knows who else. In some cases, it’s the agency double-dipping, but most of the time these are third parties. Most of these ad services have no interest in either the publisher’s or the marketing client’s success. They aren’t about a quality ad environment. They facilitate a transaction. In some cases, a platform that connects both buyers and sellers charges each side a separate fee without disclosing that they’re doing so. In short, publishers, agencies, and marketers have created a system that works for no one but the VC’s that fund these ad tech companies. What happens when programmatic spreads to other media such as TV?

Publishers have many other challenges. Facebook, for example, makes more money off of some publishers’ content than do the publishers themselves without paying the publishers a dime. But the real threat to a healthy media environment is the toll-takers. When you create great content and grow your audiences, you should be the entity that benefits and not some opaque service provider. More eyeballs used to mean more money to the bottom line. Can we make that equation true again?

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Filed under digital media, Huh?

Cars For Dummies

I bought a new car yesterday. Mine was going on 10 years old and was beginning to show those little warning signs that it was heading downhill. Advocate for proactive action that I am, I decided that 10 years was a good run and that the car and I should part as friends. I know this will come as a shock to you but today’s post isn’t a screed about how my salesperson mistreated me (he didn’t) or how the paperwork takes forever (well, only about an hour) or how I had to negotiate my butt off to get a fair deal (we agreed on numbers in about 30 seconds – yay for the internet bringing transparency).

What has surprised me instead is how much more complex the car is. The decade has turned our vehicles into rolling computers. The owner’s manual – which comes in a few volumes – is roughly the size of a paperback edition of War And Peace. It should have a “hernia hazard” warning on the cover. The car has radar on all sides so that there is no longer a “blind spot”. I can set the cruise control and the radar in front of the car will keep me at a pre-determined distance from the car in front of me regardless of the speed I’ve set. The car will also hit the brakes if it thinks I’m moving toward an object too quickly – useful for idiots that are texting and driving I suppose, but also in case the car in front of you stops short.

I have the ability to connect via Bluetooth, which I had in my old car, but the functionality is much more advanced. In addition, I can link in via a USB cable and have the car perform dozens of functions through my phone and the car’s software. I can install apps in the car, which has its own ISP address. Of course, that’s assuming I can understand how to use all of this. The media center has its own rather large manual as well. My favorite passage in both manuals so far? A warning not to test the collision avoidance system. I suppose some moron thinks driving at a wall doing 40 to see if it works might be fun.

Why am I bring this up? Cars are very complicated machines and while I’m certainly a long-time user of them (as well as a relatively sophisticated user of digital products) I’m kind of overwhelmed. Part of what we need to remember as we introduce new features to current users or our product to new users is that they need help. Jargon isn’t helpful nor are explanations written by technical writers who are engineers first and consumers second. I would have loved a short pamphlet that showed the “Top Ten Things You Will Want To Do First”, written in plain language, highly illustrated, and backed up by a newcomers’ hotline I could call if I ran into trouble. Expensive to support? Sure, but cars are expensive products. Could the dealer have sat with me and provided that service? You bet. Did they? Nope.

Selling the product is only part of the process. Making sure the customer gets every bit of value out of what you’ve sold them is just as important. I’m off to figure out just what I’ve bought here. At least I knew how to get it home!

 

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Filed under Thinking Aloud, What's Going On

I Want To Watch

Yet another brouhaha over privacy has reared its ugly head and the group which represents marketers – the Association Of National Advertisers (ANA) – has weighed in on the topic. In a blog post entitled “Don’t Bother Us With The Facts“, the ANA talks about a new set of privacy rules contemplated by the FCC. Their quarrels have to do with the complexity of the rules and the timeframe given for analysis and comment before the new rules go into effect. That, however, isn’t our topic today.

Logo of the United States Federal Communicatio...

(Photo credit: Wikipedia)

The thing I’d like to discuss is a quote at the end of the post. The new rules are going to be imposed on broadband providers – generally, your cable company or telephone provider. It says:

Most importantly, ANA will remind the FCC that “there’s no free lunch,” and that consumers receive information today at little or no cost in return for companies’ ability to reach them via directed advertising that surveys show are acceptable to consumers. This approach has fostered a healthy, vibrant, and economically valuable Internet and mobile media ecosystem that must not be allowed to be severely undermined.

I have an issue with that since the topic isn’t monetization of websites and content but the ability of ISP’s to make extra money capturing and selling information about their customers. These customers (that’s us, folks) pay handsomely for our broadband service, a service which is generally inferior to that found in other countries with respect to speed and bandwidth caps (we rank somewhere in the low teens in terms of countries ranked by average speed). Is it too much to ask that we give permission to yet another entity monitoring and monetizing our behavior?

Another lobbyist stated that requiring consumers’ opt-in consent to behavioral targeting, would prevent broadband providers “from efficiently monetizing online data in the same way that Google and Facebook have long done, with astounding consumer benefits.” Sorry, my friend. Google and Facebook provide a free service. Anyone you know receiving free broadband access in return for being tracked?

Unless and until everyone involved in marketing recognizes that consumers should control what data they give to which entities in return for what benefit, problems such as ad blocking aren’t going to go away. The customer is in control now, and tracking them just because you want to watch what they’re up to can undermine even the best marketing.  Do you agree?

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Frictionless

One of the most basic principles of selling is that when a customer wants to give you money, take it. Take it as quickly and as seamlessly as possible. Any delay or friction is a chance for the customer to reconsider and for you to lose the sale. I saw this in action yesterday and it’s instructive for all of us.

English: Golf balls.

(Photo credit: Wikipedia)

It’s almost golf season. Rotten golfer and cheap person that I am, I generally buy “recycled” golf balls for my non-tournament play. These are balls that some intrepid soul fished out of a water hazard (nasty work as this article shows) and which are cleaned up and sold by any number of websites. I usually purchase 8 or 10 dozen before the season begins and since I had a couple of discount coupons in my mailbox, I logged on to the site from which I’ve made several purchases before.  I put my purchases in my shopping cart and went to log in so I could check out quickly.  My login credentials are stored in a password manager, which filled in the user name and password automatically.  Unlike the other few times I’ve used the site, a box popped up letting me know that my credentials would be shared with Hubspot, a well-known CRM system.  That’s when the fun began.

I suspect it had to do with the use of a third-party cookie, but I couldn’t log in.  I was told my information was incorrect (it wasn’t) and they couldn’t log me in.  Sure, I could have called their phone number (listed right on the cart – props for that) but who knows how long that would take.  I also could have checked out as a guest, but then I needed to find my credit card and type in all the billing and shipping information that was already on file.  In short, they’d created friction in the sales process, and at the very worst moment to boot.  What was worse is that a chat window popped up (more CRM) asking me if I was finding everything I needed?  I responded immediately, explained the situation and was greeted by a reply that stated “Matt” (the name that popped up) would be with me shortly.  At that point “shortly” was too long.

Since I had a coupon for another site that offered the same balls at a lower price and a 15% discount along with free shipping, I ordered from the competition. Sure, I had to type in the information but at least now I was getting a better price.  While I was willing to pay a bit more to do business with a site I knew in a seamless manner, when it became a hassle, thereby lowering the value, price became an issue.  Interestingly, about an hour later I received an email (automated) asking me if I had forgotten something since there were items in my shopping cart.  I responded to the customer service address with a shorter version of what you’re reading.  Maybe I should have charged them for the consulting?

These guys did a lot of things right.  Their site is  helpful and easy to navigate.  The pricing and costs of shipping are clear.  They clearly are using CRM and lots of it.  But they failed at the most important time. Selling is hard but the process isn’t.  Explain how you’re solving the customer’s problem.  Provide them with great value for the cost.  When they agree, take their money, say thank you, and leave them alone. Prevent friction, provide support.  You with me?

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Filed under Consulting, Helpful Hints, Huh?

Back To The Garden?

Over the weekend, I was thinking about how much the web has changed since I first started using it 20 or so years ago. Putting aside the tremendous improvement in speed (you haven’t lived until you’ve tried to load pages at 28.8kps), almost everything about the web is better. Graphics back then were minimal, video was non-existent. One thing that is the same, however, is that it is open. I think that it was that openness that let the web, accessed via a web browser, become the norm as opposed to the walled gardens such as AOL that were perhaps even more prevalent at the time.

Why am I mentioning this today? I think we are approaching a “back to the future” moment. You see it in what Google and Facebook and others are doing with their versions of a private internet, which I interpret to be a new walled garden. Ostensibly, this is to help users see the web much more quickly. After all, one of the main reasons people use ad blockers is because publishers overload their sites with beacons, graphics, autoplay videos, and the like.  The big guys are asking that pages be cached on their servers, in theory to provide greater speed and less incentive to block the ads.  Maybe it even allows them to substitute ads that they sell in case you can’t fully move your inventory.

The problem with this is the potential for a return to the walled garden.  If you don’t think that could happen, have a look at what happened to Facebook in India.  the company was forbidden to fully launch its internet.org initiative, which was meant to provide free internet access to million who don’t have it.  The problem is that it wasn’t access to the full, open internet at all; only to a series of sites which Facebook permitted.  That, my friends, is exactly what a walled garden looks like.As marketers and publishers, we desperately need a good solution to ad blocking.

As marketers and publishers, we desperately need a good solution to ad blocking.  From my perspective, a return to the era of walled gardens isn’t it.  How about in yours?

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Gone In A Flash

If you are using Google Chrome as your browser, and over half of you are, your experience as you use the internet is about to change. Google has decided that as of tomorrow, September 1, they will begin pausing many Flash ads by default to improve performance for users. What that means is that if you are desperate to see an ad you will need to click on it to manually enable it. Otherwise, ads will remain plain images by default. Firefox is also doing this  and Amazon also said that it would no longer allow Flash-based ads to serve on its network or across its Amazon Advertising Platform.  In short, the bulk of web browsers is now Flash-unfriendly. This prompts several business thoughts.

First, yay Google and others!  Flash creates all kinds of issues, the biggest of which are that it drains batteries quickly, it doesn’t really perform that well on mobile devices (in a world that’s now mostly mobile) and, most importantly in my mind, it has abysmal security.  Just look at the recent malware attack launched via MSN‘s ad network as an example. This is a good thing for consumers and maybe makes our digital world a little safer.

Second, this is going to have a major effect of the digital ad world.  The supply of ad space is actually going to drop since much of what is out there is Flash-based.  That should kick prices up.  The question in my mind is will the price rise get publishers rethinking their ad load strategy?  I don’t know about you, but in my mind surfing much of the web has become a stroll through the proverbial Arabian bazaar – one hawker after another in an extremely cluttered environment.  Maybe this is how the tidal wave of ad blocking is pushed back?

Third, what will this do to the numerous ad-serving companies?  Who has technology that is so tied to Flash that their business model is disrupted and where are the opportunities in companies that aren’t Flash-based?

Finally, this points out how interdependent every digital business is.  The browser companies make a change and ad companies and publishers are affected.  A hardware company decides to change a business model, as Apple did with iTunes years ago, and nearly every subsequent business deal is held up to that standard.  Never a dull day in digital – how about in your business?

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Idiotic Injecting

No one that I know enjoys going to the doctor and getting an injection. Whether it’s as simple as a flu shot or something more complex such as a regimen of allergy shots, it’s not a particularly enjoyable experience. 

Today’s topic is an injection of another sort, but the experience isn’t enjoyable either. It turns out that AT&T has jumped on the “no free lunch” bandwagon with respect to offering wireless hotspots to its customers. A Stanford computer scientist and lawyer was travelling and discovered that the AT&T hotspot to which he had connected was serving ads over web pages he was accessing. When he went to Stanford’s home page, for instance (a page that has zero ads on it), he saw a pop-up ad for jewelry and AT&T itself, and the ads persisted for several seconds until he could close them.

He discovered that the ISP was tampering with HTTP traffic – that’s what serves web pages. It is using a service from a third party to inject the ads and to monetize the traffic. AT&T is far from the first “free” service to do this – Comcast and Marriott are just two others. But as the professor wrote:

AT&T has an (understandable) incentive to seek consumer-side income from its free wifi service, but this model of advertising injection is particularly unsavory. Among other drawbacks: It exposes much of the user’s browsing activity to an undisclosed and untrusted business. It clutters the user’s web browsing experience. It tarnishes carefully crafted online brands and content, especially because the ads are not clearly marked as part of the hotspot service. And it introduces security and breakage risks, since website developers generally don’t plan for extra scripts and layout elements.

In other words, while you might have accepted that as your ISP the folks at AT&T will see and record everything that you’re doing, you might be concerned about an outside company doing so.  Moreover, as a publisher, your beautiful content environment is now sullied by ads from which you derive zero revenue.

If you’re on an AT&T hotspot, you’re already an AT&T customer.  I don’t believe you can log on if you’re not and you’re probably paying them handsomely each month (I know I am).  This sort of nickel and diming might help revenues (I wonder how much in the scheme of things) but it doesn’t help with customer satisfaction. That’s a point from which any business can learn.  Idiotic injection from my perspective.  Yours?

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Filed under digital media, Huh?