Most of what your local paper offers can be found in greater abundance (and at higher quality) elsewhere and, now that everyone is glued to their iPhone, rather than flipping newsprint on their commute, most of that content is only a click (or, more likely, a finger touch) away.

Jobs Section –> Monster.com
Real Estate Section –> MLS, Zillow
Business News –> WSJ.com
Weather Report –> Weather.com
Classified Sales –>Craigslist
Sports –> ESPN.com
Travel Section –>TripAdvisor.com
National News –> WSJ.com
Gossip –> PerezHilton.com

As the above demonstrates, the only area of superior content the local news website has left is local news, and even that has suffered as papers reduce reporting staff and rely more upon outside content providers to fill pages. Although local papers came to the online party rather late, they managed to quickly build reliable websites and leverage their most valuable content effectively.

Monetizing that content has fallen far short of revenue expectations for the most part. The AAAA’s recent report that ad agencies lose up to a third of their media cost servicing digital media buys (as opposed to only 2% with television) was eye opening, but probably nothing compared to what publishers feel.

Back when I was running sales for a Nielsen group, we were struggling with the fact that the same $100,000 once earned by selling a small schedule of print ads was now taking an enormous effort to create.

With print, you are simply selling space. The advertiser provided the content (a PDF) and you put it inside a magazine or newspaper, alongside compelling editorial. Publishers focused on producing the content they wanted and advertisers produced brand ads that appealed to a like audience.

Then, all of the sudden, advertisers started to lose interest in print advertising alone. Sure, maybe they still ran a small print schedule, but now they wanted some content to go along with it: maybe a “microsite” or a custom series of events, or perhaps an advertorial.

Then publishers found themselves allocating resources to writers, designers, and photographers—and acting like a small agency on behalf of their clients. Kind of cool, but the problem was that the advertiser had the same $100,000 to spend. They were all over you, and they wanted stuff like “ROI.” Publishers’ margins were compressed, resources (once dedicated mostly to producing their own content) were misallocated, and their employees were getting burnt out.

Let’s take this to 2007, and the emergence of social media. Now advertisers didn’t even need publishers to develop their content, because they could create their own blogs from scratch (Blogger) and start building online communities (Facebook). Enter Twitter and now every employee in the building has their own mini PR platform which could be leveraged for the company.

Talk about disruption. With thousands of really smart writers, photographers, and designers willing to work cheaply, from home — and with access to free, web-based tools equal or more powerful than any in-house software a publishing company could provide, now publishers were losing the only edge they had: the ability to produce content at scale.

The Googles of the world will always argue that they “need” content providers like The New York Times to continue to provide thought leadership, but web-based content marketplaces like Associated Content and others have only validated the concept that traditional publishers (no matter how big their websites are) are losing their power positions when it comes to content. (Except WSJ, which produces content so exceptional that people are willing to pay for it, but that’s for another article).

So, in this new reality, the publisher is left trying to protect his last tangible asset: his online advertising inventory. He can’t sell subscriptions, he can’t pay to have leadership in any other category besides local news, and now huge sites can geotarget ads to create larger audiences than he has. Spot quiz: who has more unique users in the Anchorage, Alaska DMA: Yahoo or the Anchorage Daily News? I don’t know either, but this is part of the problem.

When the starting point for most computers is search, local media misses the boat on what used to be their wheelhouse. Search for “Anchorage restaurants” on Google, and Fodors, Yahoo, and the local visitor’s bureau sites come up before ADN.com.

In response to this atmosphere of ever-increasing margin compression, competition, customer dilution, and constant need to understand and embrace new technologies, local publishers turned to the experts in online revenue monetization: networks, exchanges, and aggregators. Now (with networks and exchanges), as simple as placing a few ad tags throughout their pages, newspapers could monetize the 70% of inventory they couldn’t sell directly.

Establishing a daisy-chain of ad calls to backfill their unsold inventory was easy, and at least there was some visibility into revenue (amount of impressions available, divided by 1,000, times 65 cents). Despite the ease of use, the rates continue to be painfully cheap, and you never can really tell what the tolerance level of your audience is for an endless stream of teeth whitening, tanning, diet, or Acai berry offers will be.

Aggregators like Centro, LION New Media, Quadrant One, or Cox Cross Media offer a much better solution: real advertisers that need and respect real local inventory. These aggregators provide a great one-stop shop for advertisers and agencies that may not have the depth of knowledge (or personnel) to negotiate and service a multitude of small buys on dozens of local media sites.

As a result these aggregators earn the money they arbitrage by providing the expertise to buy local media at scale. Smarter companies like Centro are leveraging the in-house systems they have developed over the years to navigate this process and making it available to agencies directly (Transis).

However, when it comes to selling premium inventory, specialized sponsorships, or anything beyond standard inventory, the aggregators can’t really play in that space at scale; advertisers still need to partner with local media to make those deals happen.

Ultimately, I see local websites winning by being able to offer more than just inventory. For them, hustling uniques and impressions is a zero sum game. They will never compete against the networks and (with 65-cent CPMs on their remnant space) the networks and exchanges aren’t exactly their best allies.

What agencies need is for technology to help them scale the way they reach advertisers, in an open and transparent way—and systems that give them the ability to do more than place an ad tag on their pages and pray for a good campaign to hit the transom.

We feel the future for publishers is an open marketplace that enables good local media sites to package their premium inventory to advertisers who truly value the local audience: the regional ad agencies across the country who service the local hospitals, schools, banks, and businesses that need local content aimed at local customers.

Ultimately, publishers need systems that can give them placement level control over their inventory, total pricing and deal point control, and access to both agencies and direct advertisers in the same environment. There should be a place between getting a 75-cent Acai berry ad on your homepage and running a $50 CPM rich media expandable.

Publishers need to be able to negotiate both types of deals, and do them at scale, with total control. An open and transparent marketplace that enables publishers to market their entire inventory—not just remnant—is where the future is headed.

How does a company differentiate? By integrating brand protection with your core offering — or rather making it a logical extension.

Launched today, Proximic’s brand protection is essentially an expansion of its contextualization and audience targeting capabilities. Altogether, the integrated services make for a cost-efficient service for networks, agencies and other players across the spectrum.

“We call it the carrot and stick approach,” says CEO Philipp Pieper. “The stick is singling out pages that you don’t want to feature brand advertisements on and the carrot is identifying the useful pages and users you want to target against.”

He admits that Proximic was sort of dragged into the brand protection arena by its clients — once you do contextualization for audience targeting, you might as well do brand protection. However, the mechanism for brand protection actually enabled the contextualization service to be more real-time and versatile in other languages. The solution can also be used to certify, monitor and classify network inventory.

At Proximic’s core is a language-independent search technology for contextual matching that allows it to evade linguistics, allowing for stellar testing in one of the most difficult language markets: China. One of the initial guinea pigs was Taoboa, China’s largest e-retailer platform that also includes an ad exchange and an affiliate network.

The company focused almost entirely on China because of the huge language challenges that stymie similar companies. China is a more challenging market than the U.S. with more dynamic pages and higher volume combined with a lower-value advertising ecosystem. Proximic was surprised to see how well the technology performed, actually surpassing the expectations of the clients testing it out.

Pieper believes agencies and networks will seek out brand protection this year, but after that the initial thrill, they’ll contemplate how to truly merge the service into their infrastructure, looking for technology platforms that offer multiple services such as contextualization, audience targeting and brand protection.

“Effectively brand protection is a cost issue when everyone is out to make more revenue, and that’s what we’re trying to facilitate with the rest of the services on top,” he says.

According to the latest research by the National Advertising Initiative, the eggs are more golden than ever. In its first-ever study of the pricing and effectiveness of behaviorally targeted advertising, data from 12 major ad networks showed that such marketing garnered 2.68 times as much revenue per ad as its non-targeted “run of network” cousin.

And fascinating enough, the relative cost of behavioral targeted ads was 2.68 times as much as standard ads — CPM of $4.12 vs. $1.98.

A smaller subset of survey respondents displayed conversion rates of 6.8% for behaviorally targeted ads, compared to 2.8% for run-of-network ads.

Increasing from 16.2% in the first quarter to 19.4% in the fourth, behaviorally targeted ads averaged 17.9% of advertising revenue for the networks in 2009. More than half — 54.6% — went toward the purchase of inventory and was shared with publishers.

Not really. Localization is the key, and success in the global marketplace requires an in-depth understanding of localization that goes beyond language and linguistic nuances.

It includes cultural differences, local regulations, currencies and payment methods… and these are only the tip of a very large iceberg that involves myriad subtle distinctions and unfamiliar parameters that can make or break an international advertising campaign.

The greatest challenge for advertisers is that almost everything they have learned about their home markets — what works, what doesn’t and why; how to approach the target audience; what to offer them; how to design the call to action –– all of this hard-won knowledge is, for the most part, irrelevant in other regions of the world.

Moreover, a new layer of optimization is required which will impact on all the existing parameters and will therefore influence the entire course of the campaign. Without properly building and implementing this critical layer, it is all too easy to miss those lucrative opportunities.

Click ‘Aqui’ or Click ‘Here’

Message translations must utilize relevant jargon and appropriate buzz words — and be fine-tuned to language nuances and cultural preferences — to deliver a spot-on message that generates the sought-after response. Similarly, when selecting a prize, advertisers had better be sure that the specific model actually works in the target country!

The complexities inherent in targeting an international audience require a lot more than just reaching them with translated messages. Local regulations -– as well as creative and technical requirements of local service providers — must be taken into account. It’s not enough to prepare a great landing page that presents savvy marketing content and format; if it doesn’t comply with the technical guidelines of the local infrastructure or service provider, it may not even open when potential customers click on it!

Additional Optimization Layer for the Value Chain

To successfully lead local audiences to the desired action, smart, subtle and sophisticated optimization is required across all campaign parameters, guided every step of the way by the mantra, “Different strokes for different folks!” From promotional offers to messaging, placement, creative and conversion funnels, a perfect blend must be created that will maximize bottom-line results.

For example, an incentivized lead generation campaign is running in Germany, France and the United Kingdom. Which prize will work best?

This is, in fact, quite a complex issue. Since products have varying value and emotional associations from country to country, correct selection demands extensive knowledge of local attitudes.

In the United Kingdom, for example, an Audi might be considered the perfect draw. In France, cars can also work well, but almost any car will do. In Germany, however, an iPhone would be a stronger incentive, since winning a car sweepstakes is considered unrealistic and would therefore not attract the audience.

Rule of thumb: the selection of the promotional offer should always be region-based; in some countries, a particular product will generate high ROI, while in others, the same offer may not work at all.

The above example is a relatively simple one. Just imagine the complexities involved when dealing with multiple markets that are distant and diverse geographically, linguistically and demographically.

No less important than the prize is the selection of media and placement, a task that involves much more than locating publishers to run specific campaigns. In some regions, it is crucial to run a campaign only on “safe” websites that are seen as respectable and reliable. And in certain parts of the world, color plays a significant role, often equal to seemingly more critical issues.

Advertisers must also carefully consider their sales approach. Should a hard sell or a more sophisticated tactic be implemented?

Help Is Out There

How can advertisers overcome these multiple and seemingly insurmountable challenges? Don’t despair. Help is available.

One solution is to work with local partners in each targeted region. They know the lay of the land, understand the subtleties and are experts at fine-tuning.

The problem is that finding the right partners is a complex and time-consuming process that needs to be done separately for each target market. Though this model can work exceptionally well for some advertisers — aggregators and ad networks may be the answer for others. This channel enables you to reach diverse media, links and markets with just one click.

Like local partners, aggregators are experienced in acquiring local media and can manage the entire value chain and relevant localizations. Familiar with cultural differences, they are adept at targeting specific market segments — e.g., differentiating language and nuance between Mexican Spanish and the Spanish spoken in Spain, or among Spanish dialects across the various regions in Spain.

Whether you decide to build a network of local partners, work with aggregators or a combination of the two, these localization experts will maximize your success and minimize your risks — while you capitalize on the vast opportunities awaiting you in the international market.

An exchange is any interactive platform that lets buyers and sellers flexibly get access to partners’ budgets and inventory. These may or may not include automated bidding systems, targeting, real-time pricing or other sophisticated mechanisms. They may just be phone-order-based systems for connecting buyers and sellers.

The biggest exchanges are Yahoo!’s Right Media and Google’s DoubleClick exchange. But other companies offer formal exchange capabilities including Open X, Pubmatic, Rubicon, AdBrite and AppNexus. Each has a slightly different focus, and each has different volumes, capabilities, rules and opportunities for integration.

At their best, exchanges provide a very flexible mechanism for buying and selling inventory online. Direct inventory acquisition (i.e., outside of exchanges) allows for very fine control, long-term relationship management and guaranteed volumes and rates.

But these kinds of relationships can be very slow to set up. For major sites and portals, it may take several months to get started.

On the other hand, with an exchange it is possible to test lots of different kinds of inventory sources very rapidly. With some effort, one can test dozens of new sites in a single day.

This flexibility allows you to quickly test and find new valuable inventory sources. Exchanges also allow advertisers looking for a particular person (e.g. someone who has just visited their site) to look for that person everywhere the exchanges operate — potentially the entire web.

The primary perceived problem is lack of control. Advertisers are scared that by buying on exchanges they lose control of where their ads show up. This can be a major issue for brand-oriented advertisers who demand “brand-safe” sites.

But this concern does not reflect the full array of features available on exchanges – an advertiser always has choice and control. If you don’t want to have your ads show up on unknown or high-risk sites, you can easily prevent that from happening.

On exchanges, knowledge is power. Exchanges can become a very powerful mechanism for reaching exactly the audiences you want on exactly the sites you want — if you watch what you are doing. For advertisers and agencies, the use of exchanges shouldn’t be a yes or no decision for partners, but instead the question should be “How are you going to use exchanges to create value for me?”

Publishers, on the other hand, are concerned that these new kinds of trading mechanisms will turn their sites into commodities — the “pork belly” fear. But this fear is misplaced — publishers do have control. They can leverage these new trading tools to get more value for inventory that they cannot otherwise sell.

Used wisely, exchanges and ad networks can be massive drivers of incremental revenue and help maintain floor pricing for large sites. Unfortunately, this argument has been lost amidst the politicking and grand-standing of some publishers who are using this debate to advance their personal agendas.

So do exchanges create value or suck it out of the market? Well there is certainly the potential for both. All exchanges take a cut of the volume that runs through them.

If used poorly, this cut can become a tax that doesn’t add value to the marketplace over all. However, if used well, all the players can benefit, and the exchange costs can be a perfectly reasonable fee as part of this transaction.

Five things to think about when using exchanges:

1. Testing. As in all forms of marketing, you have to be prepared to test the heck out of exchanges. Setting prices, frequency caps, volume limits and so forth takes a lot of trial and error before your team will really understand what are the right settings for each campaign. And of course, each campaign will be different.
2. Know your target. In the rush to try new things marketers can forget this basic, obvious tenet. The better you understand your target audience, the better you can leverage exchanges. They provide tremendous flexibility in terms of targeting, channel and the ability to connect external data sources to your ad campaign.
3. Understand the value of your data. This is perhaps the hardest technical problem with exchanges. All your experience in setting prices, caps and so forth, as well as understanding the value of your data partners’ products, takes discipline and careful measurement. It is very easy to try stuff out, but harder to learn from the experience. And harder still to have your campaign learn on the fly. The exchanges cannot solve this problem – you have to manage this yourself.
4. Develop good relationships with your publishers, ad networks and data providers. All these new tools don’t disrupt old fashioned partner development. You still have to take time to build good working relationships with all the other members of this value chain. Understand your partners, their needs and interests, and you will be able to drive your own business more effectively.
5. Find a good exchange expert. Some of the newest generation of ad networks are emerging as exchange experts. This expertise is based on more than just experience – it means they’re building integrations with many or all of the exchanges so that it is possible to more easily manage campaigns in such a complex environment. Finding a good partner that you can work with is crucial — in many ways this marketplace resembles the emerging SEM space in the early days of search as experts start to build scalable practices to support buyers.

How many exchanges should you use? This is where the serious marketers are separated from those with insufficient budgets or expertise.

The right answer is “all of them,” but building the infrastructure, team, operations and processes to do so is a major challenge. Ultimately, being able to buy efficiently across as many sites as possible, and in a marketplace as fluid as a possible, will give you competitive advantage.

This comes back to the previous question — finding a partner to help you will increase your chances of success.

The reports will help agencies determine likely prospects based on site visitors’ shopping patterns. In addition, data segments are recommended to target the prospects over BlueKai’s current online media partners such as ad networks and exchanges.

In addition, a goal is to improve advertisers’ targeting profiles via unexpected attributes that show up in the reports, as well as encourage creativity in feature campaigns based on user data.

“Advertisers need to know more about their site audience and what they are shopping for,” said Omar Tawakol, BlueKai’s CEO. “The BlueKai In-Market Report is the first of its kind to provide knowledge into actual shopping patterns versus audience surveying.”

Wizzard will have its own brand channel that will enable users to access streaming video podcasts from the Wizzard Media Network. YouTube will run ads against the shows on the channel. The two companies will share ad revenue generated by the streamed podcasts.

Under the agreement, content from the network will be allowed to be incorporated into the Google AdSense Network. Wizard has also opted to share a percentage of these revenues collected with the show’s creators.

SVP of content development at Wizzard Media, Skip Fredericks said, “We are ecstatic to be partnering with YouTube in creating a Wizzard channel. This is a fantastic opportunity for our producers to expand their audience base and for our advertisers to be able to tie into the YouTube universe with targeted programming from the Wizzard Network.”

In the email sent by Etology to their BitTorrent site customers they write: “Due to the legal implications involved with sponsoring torrent sites, our management team has made the decision to remove from our network torrent sites that promote copyrighted content.”

They probably mean “promote sharing of copyrighted content”, but that’s a minor detail. According to Etology this move is needed in order to to minimize risk for their advertisers. It is not sure what the risk is, but apparently some of their bigger clients don’t what their ads to appear on BitTorrent sites. At this point it is not clear if only BitTorrent sites are affected, or also the huge list of warez sites in their ad network.

Most companies don’t want to be associated with sites that offer links to copyrighted material. Others see it as a great outlet to advertise their products, last year Wal-Mart placed targeted ads for DVDs of popular TV-shows such as “The Sopranos”, “Smallville”, “Desperate Housewives” on The Pirate Bay during the holiday season. The ads appeared on pages that linked to corresponding torrents.

Etology served ads for Demonoid, Torrent-Finder, TorrentReactor, TorrentPond, BTScene and several other sites. There are still some options for BitTorrent site owners to monetize their websites, with Adbrite as the leading ad provider. Other alternatives are CPX Interactive, AuctionAds, ShoppingAds and unfortunately plenty of adult and gambling related programs.

Compliments of Torrent Freak 

http://torrentfreak.com/etology-removes-bittorrent-sites-071127/

Large discrepancies result in unnecessary administrative complications and other disadvantages for a Network. I see it all the time – one offer is being run using distinctly different tracking platforms, with split testing resulting in one of the Networks reporting more successful actions than the other, resulting in larger revenues for the Publisher. When this happens the Publisher has an easy decision as to which Network through which they’ll continue to run the offer. Additionally, Networks that choose to update statistics to show unreported leads may spend several hours and waste valuable resources doing this data importation.

So how do we eliminate these tracking discrepancies?

I should first point out that I don’t think there is any way to successfully track campaigns with 100% accuracy, as there are too many variables that can skew data and thus disrupt the tracking process. However, I do think there are methods available to close the gap and report data with improved accuracy.

Don’t Rely On Browser Cookies

Most tracking platforms use persistent browser cookies and pixels to track conversions. However, the majority of platforms aren’t prepared for customers who have cookies disabled on their computer, which results in the customer not being tracked through the conversion process. So what do we do if a customer has cookies disabled? In Commission Junction’s Publisher FAQ they address cookie tracking accordingly:

Q: What about customers who have their cookies turned off?

A: Over 99% of all Internet users have cookies enabled in their browsers (less than 1% of all users have their cookies disabled). The fact is that cookie-based technology is a reality that will remain a part of consumer tracking for individual Internet businesses. In the highly unlikely situation that a customer elects to have cookies disabled, the customer is out of the range of publisher tracking and sales cannot be tracked.

I fully agree with CJ that cookie-based tracking is the best overall method for tracking customers. Cookies allow easy identification of unique customers, and they can help prevent fraudulent activity. However, I strongly disagree with CJ’s position that “the customer is out of the range of tracking” when they have cookies disabled.

I should point out that although less than 1% of users have cookies disabled, an unknown percentage of cookies are being removed or deleted in other ways:

• Customers manually delete browser cookies;
• Cookies often expire based on time constraints;
• Cookies are regularly removed by anti-virus and anti-spy software.

We can only speculate as to the adjusted percentage of cookies that are actually unavailable by the time a conversion occurs. It seems more than feasible that the 1% of customers with cookies disabled, combined with those removed through other means, could inflate the percentage closer to the three to ten percent level that Networks are currently experiencing.

By logging specific user characteristics that do not require browser cookies, we may be able to more accurately identify customers and better track conversions. Although cookies may not be available, we still have access to other information that can be evaluated at the time of conversion. These include:

• IP address
• User agent (browser)
• Operating system
• Screen resolution
• Language

If we log all of these characteristics at the moment a click occurs, we may be able to identify customers at the time of conversion (when the pixel fires) and eliminate a portion of the conversion discrepancy. I have yet to hear of anyone using this type of tactical measurement approach, and it may open up the possibility of reporting false-positives if not properly executed. But it merits closer examination and testing.