10 Things I learned at AdTech

A simple, but hopefully enlightening post today. Its 10 things I learned at AdTech San Francisco:

1. Hulu Rocks! Good content, Tolerable commercial breaks (max of 1 per pod), Ability to embed, etc. Check it out.
2. Hulu doesn't negatively affect syndication. Instead it drives viewership for local partners. The theory is that people use Hulu to catch up on missed episodes rather than skip the rest of the season.
3. Premium Video is coming sooner than I expected. Much more willingness on the part of content owners, lots of new tools on the markets, beginning convergence of ad formats for video, etc. The pieces are coming into place quickly.
4. 3 Screen Experience. Nothing more than a spiffy catch phrase but it handles TV, PC, and Mobile quite well.
5. Mobile is easier to Monetize than the PC. This goes in the bucket of hidden wisdom, but seriously people will freely pay for mobile content (e.g. ringtones) even if they are loath to pay for PC content (e.g. the prevalence of piracy).
6. Time to Produce Online Video is Paramount. Great News for Qik. The time to produce video is a key ingredient in determining its ultimate 'success'. The example used was Walt Mossberg's review of the iphone. He did the video review immediately after first getting his hands on the phone, he did the video without a crew, he did it from his hotel room (with the bathroom door visible and half open!), but he got it done quickly.
7. Proactive Click-to-Chat can be effective. Cisco shared that 26% of leads generated from for their proactive click to chat converted. Note the 'proactive' part, this means the Cisco site is initiating the conversation!
8. Kids LOVE mobile. While Disney didn't share any specific numbers, they said mobile content has been by far their fastest growing content medium.
9. A Recession could cause a quicker transition from traditional media. During slowdown's ROI takes on new importance. The greater ability to quantify digital will be a strength in the downturn.
10. Lunch is by far the most fun networking opportunity. 30+ minutes of dedicated time where the topics can wonder from advertising to politics to pets. Note: if you do happen to sit down alone at a table filled with your competitors then it can become uncomfortable quickly. The adSense folks were nice to welcome me, but I think I stifled the conversation. Don’t be too obvious, but check out those badges before sitting down.

/Daniel

The numbers recently released by Newspaper Association of America show an accelerating decline in print advertising revenue. I don't want to repeat ideas already expressed more eloquently elsewhere (here, here, and here). But I do want to share a change in perspective that I've had over the past few months.

Simply put, I now find 'watching tv' odd. I've made the switch to the Internet as my primary source of video entertainment. I am still subscribed to cable tv, but probably not for long. I simply it odd to watch a channel. Its more than just the cable channel selection seeming incredibly poor despite the 100+ channels. Its more than the disruptive commericals which seem to take up a greater percentage of shows. These are just the reasons I started to explore the Internet as an alternative.

In that alternative I found time-shifting, content on demand, and an incredible variety of niche content. My favs happen to be Japanese game shows, Technology lectures (try searching video.google.com for "Computer History Museum", "Engedu", "Silicon Valley Web Guild" for some great stuff). And I am not hunched over my laptop screen viewing these either. Many modern tvs, and pcs come with the proper ports to connect to each other. Get such hardwire in your living room, toss in a wireless keyboard and mouse and you are set. To satisfy my appetite for mainstream media, I use Netflix's ondemand movies and its standard dvd selection. Another easy role for the PC, especially with Window's Media Center software.

Between the above push and pull, 'the transformation is now complete', my habit has formed. For me its been a gradual process. It only became apparent when thinking about the above news paper articles. Have any of you similar stories to share? e.g. Skype replacing landlines, Video conferencing (effectively) replacing travel, ebook readers changing your book buying habits?

-Daniel

For those of you using adCenter, you should have already received notice about the release of the v5 API. If you haven't drop us a mail to us at adplate at microsoft! I won't go through all the details of the upgrade here, this is a major release for us. It contains some great improvements such as 'Retrieving Objects by ID', 'Negative Keywords', Superior Error Reporting, and many, many others. Perhaps most key is the normalization of Object naming to match the adCenter GUI and the industry standard. We'll be supporting v4 and v5 in parallel for 180 days to ensure that everyone has a comfortable upgrade window.

Key Dates:

• v5 Documentation Available - Nov 07
• v5 Release to Sandbox - 23 Dec 07
• v5 Release to Production - 14 Feb 08
• v4 Retirement - 12 Aug 08

We have a couple of great resources available to help with migration: the v5 Release notes on MSDN, and also a series of 'Open Sessions'. These Open Sessions are 90 min long meetings dedicated to helping users migrate - first 30 meetings preso, last 60 minutes Q&A. The next ones are:

• Apr 15th 1pm to 2:30pm PST
• May 20th 1pm to 2:30pm PST
• Jun 17th 1pm to 2:30pm PST
• Jul 15th 1pm to 2:30pm PST

To attend, just join the live meeting (https://www.livemeeting.com/cc/microsoft/join?id=P96SDC&role=attend&pw=AdCenOH). In case you can't make any of the above (or want to get an earlier start) here is the recording from Feb's session:

Cheers!,
Daniel

Going to OMMA this week in LA? If so don't miss the Online Content session:

Leveraging a Converging Content Ecosystem
Monday 3/17
12:15pm - 1:00pm
Session Description:
As platform interoperability improves, it is increasingly easy to partner with other tool providers and community builders to increase the engagement level and attractiveness of your own original content. How do these partners work? What is their revenue and customer acquisition model? How does this fit with your own goals?

I'll be on the panel. If you want say hi or grab a coffee and chat please let me/us know. A couple of the team are going to be in OMMA for the whole day. We'd be happy to meet. (just drop a mail to adplate at microsoft.)

-Daniel

Tools and Applications for Publishers
Speakers: Rishi Bal

Description: Learn about Microsoft ad tools and how they can be used by software publishers and agencies to develop a variety of ad publishing products and services.

Monetization 101

Speakers: Erynn Petersen

Description: Come get an overview of Microsoft's complete advertising platform.

Overview of Microsoft Ad Formats

Speakers: Alam Ali

Description: Learn about all the innovation involving Microsoft ad products ranging from mobile devices and games to desktops and streaming media.

Future of Advertising Technology

Speakers: Eric Picard

Description: Come learn how Microsoft views advertising and is approaching the rapidly changing advertising industry.

There's been plenty of buzz (more of the angry hornet variety rather than the just-inhaled-a-lungful-of-dope variety) about Phorm of late, precipitated by a press release that the company put out on Feb 14 in the UK, announcing partnerships with three major UK ISPs to provide a system "...which ensures fewer irrelevant adverts and additional protection against malicious websites". Critics of the system  (led by noted UK cage-rattler, The Register) claim that the technology is little more than spyware by another name. The negative press around Phorm's announcement has caused at least one of their ISP partners to back away from the deal, and cause their stock to plummet by more than 30%. It looks like this could be the latest in an increasingly long line of bungled targeting announcements from the industry (Beacon, anyone?). But what went wrong?

What is Phorm?

Phorm as a company is the new name for 121Media, a UK AIM-listed company who started out producing a browser toolbar which tracked your page usage to provide a social media environment, connecting you with other people who were looking at the same page. Ad-funded, the toolbar quickly picked up a reputation for being spyware (even though I agree with Phorm's protestations that it was really adware, which is better, but still tarred with the same brush), so it was dropped and the company renamed Phorm.

The new service Phorm has launched is called Webwise (not to be confused with the BBC site of the same name). Essentially it is technology that ISPs install at their data centers which analyzes the URL and textual content of web pages being served and uses this information to place users into interest categories so that they can be served behaviorally-targeted ads. The technology does this by intercepting the page request and sending a copy of it to a "Profiling" server which extracts keywords and uses this information to assign users to interest groups:

The same technology has a function to alert the user to phishing web sites; since the URL and content is being examined, phishing sites can be spotted and blocked. This functionality forms a core part of Webwise's value proposition to users.

The other part of the alleged value to users is that this profiling process does not permit the ISP to associate a user's profile with their IP address; that means that the ISP (and any government agency who subpoenaed the ISP's records) could not re-associate the Phorm data with a customer record (ISPs can tell which IP address was assigned to which customer at a particular time). The Phorm system does also not store any of the page information or extracted keywords; once the interest "channel" has been arrived at, all the rest of the data is deleted.

So Phorm claims that its system is a real step forward for user privacy on the Internet, whilst at the same time enabling advertisers to reach their audience more effectively. But the industry (and the public) haven't really seen it like this.

Why all the fuss?

Phorm's announcement was always bound to generate a certain amount of controversy, because it's in the sensitive area of behavioral profiling & targeting.  But there has been a particularly virulent reaction in the UK, which, whilst started by sites like the Register, has now spread to the "mainstream" media.

Some of the reasons for the fuss are (comparatively) silly things - for example, the renaming of the company from 121Media, which has just made people nervous, especially given the previous company's adware history, or the fact that the company operates out of serviced offices in the UK and doesn't really have a physical address in the US.

A more serious blunder on Phorm's part is their failure to anticipate the scrutiny that this kind of system would be placed under. In this kind of environment, given the firm's history, absolute transparency is essential, and Phorm hasn't provided this. There are still unanswered technical questions about Phorm's system, such as how it manages the opt-out (does data still get collected, or not?), and there have been inconsistencies in the claims that Phorm has made about third-party privacy audits of their software.

Phorm has also made the mistake of launching prematurely, with many of their partnerships still only half-baked. At the moment there is no benefit to users being delivered, because none of the systems that Phorm has announced are actually live within ISPs, and so all the focus is on the downside. Phorm would have done much better to wait until the service was fully baked with at least one of their partners and they had some real users onboard who could testify to the increased relevance of ads and how comfortable they were with their privacy with Phorm, before making a big splash. The press release looks like the product of an over-zealous PR agency looking to ensure their monthly coverage targets were being hit. Well, they've certainly done that.

What can we learn?

The main problem here is a poorly thought-out balance of benefits for 'costs' in this offer. Phorm have claimed that this system protects user privacy, but it doesn't really; it's just an ad targeting system with a better-than-average approach to protecting privacy. Users who are opted into Phorm will still receive cookies and targeted ads from other ad networks, and their behavior will still be tracked by those other networks.

Apart from the phishing protection (which is already baked into IE7 and Firefox anyway, and turned on by default), there's nothing in the Phorm system which provides users with protection of their personal data across the Internet. The only way that Phorm's entry into this market can elevate user privacy overall is if other providers of targeted ads who are storing more data decide to pack up and go home - which I doubt will happen.

The furore also highlights the challenges of partnering with ISPs for this kind of service. Because ISPs are the gatekeepers of the Internet (and because, for many people, switching ISPs is a pain in the a**), users are very sensitive to any perceived exploitation of this relationship by the ISPs. In the UK, ISPs are some of the best-known Internet brands, but also some of the least liked. Ironically the cause of this dislike (poor customer service) is a direct result of the price war that has precipitated ISPs' interest in this kind of service, as they are receiving a cut of the revenues, of course.

Ultimately the tale makes clear how careful any company has to be in launching a service like this - the balance of benefits has to be clearly stacked in favor of the user. As Chris Williams of The Register said during an interview with Phorm's CEO, Kent Ertegrul, said:

"a big difference I see between what you're doing and what Google does is that people feel that they're getting a service from Google. I don't think people feel they'll be getting a service from you"

It will be interesting to see how the Phorm saga plays out. Perhaps one day it'll find its way onto an online marketing MBA module syllabus.

-- Ian Thomas

http://bits.blogs.nytimes.com/2008/03/09/aol-brings-out-the-penguins-to-explain-ad-targeting-ok-saul-and-louise-post-with-article/?scp=1-b&sq=AOL+penguin&st=nyt

 AOL steps up and employs the gang from Happy Feet to put a happy face on targeting. Which reminds me: we're launching the latest latest version of AdCenter Analytics! New features include:

·         adCenter paid search integration: customers can link their analytics account with their paid search account – automatically importing their campaign and performance data and associating that with the pipeline for enhanced conversion tracking.

·         Visualizations that allow customers to explore the underlying data beyond report viewing.

o    Campaign report

o    TreeView

·         3rd party media provider integration: Support for importing campaign from other media providers, including Google AdWords and Yahoo paid search, as well as email, banner, and offline campaign.

·         Client Center integration: Analytics customers can now sign up without having an adCenter paid search account. This allows for an easier sign up process and allows us to convert them to adCenter paid search customers simply by upgrading their existing analytics account.

Visit http://adcenter.microsoft.com/analytics to use the service. If you don’t have an invitation code - click here to get one.

Despite the beautiful sunny weather in the Bay Area this weekend, I spent most of my time indoors reading Toby Segaran's book "Programming Collective Intelligence". (Ok, I did fit in a couple of trips to the Dog Park - expectations are firmly fixed there.) This is the most engaging 'data book' I've read since the Kimball Group's Data Warehouse series. Although most business scenarios I encounter can be solved by looking at the simple metrics, e.g. Orders shipped, Page Views, Conversion Rates, eCPM, Toby's book challenged me to think the issues more broadly. I've read a few of data mining books in the past that covered many of the same algorithms (e.g. collaborative filtering, Decision Trees, SVM) in the past, but none were as approachable as Programming Collective Intelligence.

Toby captures the relevant theory and mechanics of each algorithm in the narrative - many books leave this as a series of equations with minimal textual explanation. And he uses python code to implement the algorithm. It's awesome! Something about seeing working code for these algorithms speaks clearly to me. Yes, yes I could crack open R's source code. I've done that a couple of times but despite R being a wonderful language for data analysis it's code is not as readable as python. Nor do the comments in the R source code paint the picture as clearly as Toby's narrative. Furthermore, Python is more of a mainstream language, so incorporating it into current IT environments would be easier.

In short if you are looking for a friendly introduction to data mining check out 'Programming Collective Intelligence'. It may just make you want to crack open your web logs or customer database for another look. More about Toby and his book can be found on his blog (http://kiwitobes.com/). Also in case you are wondering I don't know Toby, I just admire his book :).

 -Daniel

With the Presidential Campaigns in high swing, especially in the ongoing contest between Barrack and Hillary, Health Care has found a large audience - perhaps only second to the Economy and the Iraq War. Normally a blog on Online Advertising would focus on health care, but I wanted to react to the NY Times recent 'bit' (http://bits.blogs.nytimes.com/2008/03/03/this-blood-test-is-brought-to-you-by/) about Practice Fusion (http://www.practicefusion.com).

According to the Times the 'dicey' part of the model is when ads displayed in the Practice Fusion application are tied to the patient data displayed. And from the comments, many readers share similar concerns. I also have concerns: could advertising affect prescriptions, treatments or even diagnoses? I don't know. But I have seen self-regulation be effective in other scenarios. For instance, Microsoft adopted strict guidelines around the content of ads (http://advertising.microsoft.com/Home/Article.aspx?pageid=708&Adv_Articleid=3211). These guidelines are in place to protect the end user. Advertisers recognize this value of these guidelines and they also recognize that strong guidelines also protect their brand.

Similar to this, the AMA has guidelines around advertising permitted on its own site (http://www.ama-assn.org/ama/pub/category/9609.html). If the AMA can advertise on its site, medical journals can have advertising in their pages, medical conferences can have vendor sponsors, etc. then I don't see much difference in allowing advertising within applications. Each of these scenarios could be argued to predispose Doctors to being swayed on prescriptions, treatments or even diagnoses as above. The main difference is anonomyzed individual user data being targeted. And rather than tossing out the solution out-of-hand I would like to see strong guidelines in place to like the above protect the end users - both the doctor and patient in this case.

In the states the coverage of our health care system is low compared to other developed countries (putting it in a nice way). If advertising frees up some cost in the system and allows coverage to be extended or allows digital medical records to be more widely deployed then great! I see the benefit far outwieghing the cost. ...though I would propose one guildeline should be to require all medical applications to accept subscription or license revenue instead of advertising - just to allow the option of easily turning it off. Thoughts?

 -Daniel

First, advertising was a core part of Wednesday's keynote.  The topic comes up after the Ray Ozzie portion, so stick with the keynote for a bit to get to the advertising part.

http://sessions.visitmix.com/?selectedSearch=KYN0801

Next up, the normal sessions.

Advanced Search Engine Optimization: Generating More Site Traffic from Search

Wednesday, March 5 3:00 PM - 4:15 PM

Speaker(s): Nathan Buggia

Come learn how to use search to drive significantly more traffic to a site including the top ten best practices for designing and developing a site for search engine optimization (SEO).

Silverlight and the Advertising Opportunity

Wednesday, March 5 4:30 PM - 5:45 PM

Speaker(s): Mark Kapczynski, Dan Penn, Michael Scherotter, Eric Schmidt, Jon Tabak (Panache), Alex Thompson (EyeWonder)

Come learn how advertisers, vendors, and publishers are using Microsoft Silverlight to create amazing rich media and monetize in-stream video ads. This session covers popular topics including packaging content for ad servers, Silverlight and Flash co-existence, using Microsoft Expression Encoder to create innovative in-stream experiences, time- vs. frame-based tracking, and more.

And if I could indulge you for a moment, I think everyone who is delivering products, software, content, anything to customers should take an hour out of their day to listen to this session by Lou Carbone.  It'll really get you thinking.

Getting Clued In to Experience Management

Wednesday, March 5 1:30 PM - 2:45 PM

Speaker(s): Lou Carbone

Experience Management thought leader and author Lou Carbone urges managing "experience clues", conscious and unconscious, because clues affect the emotions that shape customer attitudes that drive their behaviors. He stresses the need to adapt our business thinking from the "make and sell" approaches of the industrial age to "sensing and responding"-a dynamic change that requires new framing and competencies. He discusses how the systematic design and delivery of experiences can be achieved, and the immense impact this has on customer value, loyalty, and the bottom line.

Until next time.

-Eric Totherow

If you're attending MIX08 conference in Las Vegas this week, be sure to check out the sessions being conducted by members of the Microsoft Advertising Platform team.  And even if you're not able to attend MIX08 in person, the sessions are being recorded and posted to the MIX web site (www.visitmix.com) the day after.

Here is a quick rundown of the relevant sessions.

Overview of Microsoft Ad Formats

Thursday, March 6 2:30 PM - 3:45 PM, Delfino 4003

Speaker(s): Alam Ali

Audience(s): Creative

Session Type: Breakout

Learn about all the innovation involving Microsoft ad products ranging from mobile devices and games to desktops and televisions.

Monetization 101

Thursday, March 6 10:15 AM - 11:30 AM, Delfino 4003

Speaker(s): Erynn Petersen

Audience(s): Business, Technical

Session Type: Breakout

Come get an overview of Microsoft's complete advertising platform and hear how it is being built.

Future of Advertising Technology

Friday, March 7 8:30 AM - 9:45 AM, Lando 4201

Speaker(s): Eric Picard

Audience(s): Business, Creative, Technical

Session Type: Breakout

Come learn how Microsoft views advertising and is approaching the rapidly changing advertising industry.

Tools and Applications for Publishers

Thursday, March 6 4:15 PM - 5:30 PM, Delfino 4003

Speaker(s): Rishi Bal

Audience(s): Technical

Session Type: Breakout

Learn about Microsoft ad tools and how they can be used by software publishers and agencies to develop a variety of ad publishing products and services.

Last, and perhaps least, yours truly will be presenting on something not at all advertising related.  However, this is a topic that is near and dear to my heart.  It's one of the most mysterious aspects of software development and design for most folks.  It's something that's easy to mess up, and requires real knowledge and teamwork to get just right.

Delivering International User Experiences

Friday, March 7 11:45 AM - 1:00 PM, San Polo 3401A

Speaker(s): Eric Totherow

Audience(s): Business, Creative, Technical

Session Type: UX Track

Come hear why creating excellent user experiences in software or services that have a global audience presents a number of significant design and technical challenges that make it difficult to find the right combination of technology, knowledge, and collaboration to produce a cost-effective, viable product. Also, learn how Microsoft is addressing internationalization in a way that produces much better software and user experiences.

If you make it to one of these sessions, be sure to stop by and say hello.

Until next time.

-Eric Totherow

Ask yourself, "When was point in your life when you switched from traditional media to the Internet as the primary source of news?".  For me it shortly after I got wireless set up early last year. That's when my laptop  invaded my evenings and the couch.  But I have absolutely no regrets. I can read text about 3-4x quicker than listening to the spoken word.

For me that why a  story in the BBC (http://news.bbc.co.uk/2/hi/technology/7125666.stm) struck me so hard. The story in brief touches on two main points the rapidly growing reliance on advertising to fund much many sites and profiling the most frequent ad responder as typically lower SES and older. The second point could be debated in many ways number of clicks, value of clicks, response medium, analyzed sites, etc. It’s the first point I wanted to comment on: I've long been a fan of the BBC. Watching Doctor Who as a youth steered me into studying science and mathematics. And today the BBC news website is my preferred source of news. I believe they provide a balanced and international perspective to news. I don't pay British taxes so arguably I have been freeloading. And even though I love the BBC, if they were to start charging I would likely just starting reading the CBC.

But advertising on the BBC suits me well. Of course few solutions are ever perfect. As Mr. Thompson mentioned sites could become addicted to advertising and this could serve them poorly during difficult economic times. Also I  add that some publishers could be tempted to modify their content to attract the best paying ads or to structure their pages to increase click through. This scenario doesn't immediately come to mind in the BBC's case, but it’s a focus of work for many other publishers - especially the smaller ones. Then again had they gone the subscription route other influencers could arise e.g. the need to cater towards those people most likely to renew their subscriptions.  Again no solution is perfect, but I for one  welcome advertising as the BBC's choice.

You know you are a geek when your friends and you meet over the holidays with explicit instructions from spouses to 'geek out'. Well geek out we did and being that peculiar sub species of geek concerned with data, we geeked out on current trends in data and technology. The topic that caused the most disruption and excitement for us was the question how much headway hosted BI systems will make over 'installed' the next few years. Specifically we debated on how to best track so-called web applications – the hottest area of development in the past few years. We broke up the analysis into setup costs, design, build, etc. See for yourself:

So the total score is: Hosted 3, In House 2. Of course the specifics of the business data needs far outweigh our generalizations. Being happy with saying that both the hosted and inhouse will coexist, we are watching the auspicious beginnings of general purpose offerings like Amazon's SimpleDB. While as mentioned above it currently doesn't have the flexibility of an in house solution, the rate of change of hosted solutions can be faster (for both reasons of controlling everything server side with the release every few weeks and also the open interface that allows more companies to collaborate on developing) and with costs often 1 to 2 orders of magnitude cheaper its hard not to imagine some exciting developments in this space.

In case you haven't seen it yet, you can find the now infamous and well researched IBM study here:

http://www-03.ibm.com/industries/media/doc/content/resource/business/2898468111.html

There's no question in anyone's mind that advertising in 3 years is going to look very different than it does now; the big question is what it's going to look like. The other day I saw the first ad in a while that caught my attention. It was a simple skyscraper, but the text was clean, the image was engaging, and it caught my eye. I clicked on it just to see where it went. It was as far as possible from my experience with the dancing man/dancing alien/dancing dog mortgage ads. I didn't book the hotel that placed the ad, but I am going to book it next time I go to Vegas. Most importantly, the ad wasn't an interruption. It was useful.

The most useful point in the IBM study is  this: " Consumers will conitnue to gain more power over content, but they will not 'skip' all forms of advertising." Consumers aren't anti-ad- they are anti-bad ad. And so are advertisers. The answer to the question of "When are advertisers going to catch on and start moving money from TV onto the internet?" may not be "When they finally get it" but may be as simple as they are- and they need to be able to find the tools to make it easy to create, run and measure ads. Silverlight, anyone? ;)