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Posts from the ‘online advertising’ Category

NYC Ad Dinner

November 12, 2007

vcmike

Last week I hosted a dinner in NYC with a great group of folks to discuss the future of online advertising. I had meant to get some video interviews but forgot my trusty little flip camera. So you’ll have to settle for this blog post a week later.

We had the dinner at the Red Eye Grill (which was fitting as I was coming in off the redeye from SF!), which has a terrific room for private parties upstairs — complete with its own bar, a little sitting area with a fireplace, etc.

Thanks in part to the fact that lots of folks were in town for AdTech, we had a fantastic group assembled: David Rosenblatt (Doubleclick), David Payne (CNN.com), Larry Kramer (Polaris; CBS), Peter Horan (IAC Media), Pam Horan (Online Publishers Assn), Simon Assaad, David Carson, Eric Hadley (Heavy), Dean Denhart (BlackArrow), Ranaan Bar-Cohen (Automattic), Jeremy Shane (HealthCentral), Matt Cutler and Scott Velechko (Visible Measures), James Bilefield and Scott Switzer from OpenAds. And from Polaris, myself, Peter Flint, Alan Spoon, and Jason Trevisan.
Somewhat spontaneously, I made both Visible Measures and OpenAds pitch their company to the group.  So, we ended up having a fascinating conversation about video advertising and how to measure its efficacy, and the future of ad networks, the implications of the Goog-click deal, and advertising in the long tail generally.

All in all a terrific evening. Hoping to do another similar dinner soon in SF — I think we’ll make the theme “Madison Avenue meets Silicon Valley.”

In the Vortex — Emerging Video Ad Formats and Business Models

February 22, 2007

vcmike

Dianne Mermigas of the Hollywood Reporter has a terrific article discussing the impact Google and metric driven web advertising will have on the still much larger TV advertising business. (Hat tip: Heavy founder Dave Carson).

Boiled down to its essence, the article makes a few elementary — but big — points.

Mermigas’s broad thesis is that “Internet-related practices and values are fast becoming common place, and altering old media’s business models and expectations. The rapid adoption of digital broadband media applications is bringing us to the tipping point. You don’t hear much, if anything, about advertising resisting the change, especially when the giant likes of Google and Yahoo! are tripping over each other to quantify and qualify every legal and ethical detail about the individual users they are delivering. ”

As traditional media practices and business models morph, expect changes to many tried and true media conventions.

First, the age old ritual of TV’s “up front” ad buy, in which media buyers and sellers converge on Madison Ave. to negotiate the following TV season’s ad buy en masse, is short for this world.  In its stead will be something along the lines of Google’s auction system, which attributes value not to a piece of content and its ratings but to the actual connection of relevant viewers to marketers.

Second, unlocking the value of this more direct and accountable connection will allow ad-based programming to replace the notion of paid access to content.

Finally, Mermigas predicts that advertisers and programmers alike ultimately will dissolve the dichotomy between the different platforms and evolve a set of formats across platforms.

“The nagging dichotomy between advertising form, function and price on traditional TV and on the Internet is in the process of rendering a new hybrid standard to extend across all media platforms. But this year, it is much more than an “either-or” ad spending proposition. It is about reinventing the effective and innovative ways advertisers and target customers interface in a global marketplace on fire with interactivity. Even if traditional media’s structural and psychological transformation don’t occur fast enough, advertisers now appear willing to break from convention to follow targeted consumers into customized, niche spaces. That’s the difference a year has made.”

Is Online Ad Boom Slowing?

September 20, 2006

vcmike

Yesterday Yahoo! reported disappointing online ad sales results.

Is this an indication of a sector slowdown or a Yahoo! specific issue?

Gigaom takes this poll. He reports that 15% of respondents think the party is over while 43% think this is a Yahoo! specific problem.

(I voted that this is Yahoo! specific. And I sure hope I am right!).

ZDNet blogger Ryan Stewart agrees this reflects Yahoo’s poor execution and not a sector slowdown.

Two New Ad Measurement Models

June 21, 2006

vcmike

My morning reading today surfaced two interesting announcements regarding ad measurement.

First, MediaPost's OnLine Minute announces that NetRatings finally is extending its web measurement to online video, and will develop a way to measure combined viewership for video consumed both on TV and on the Internet.

"NetRatings says it will beef up existing Nielsen/NetRatings products and patented technologies in order to properly measure digital media usage and work with Nielsen Media Research to develop integrated measurement services for Internet and television convergence."

Second, the next volley has been fired in the battle between programmers and advertisers over how to handle the increasingly substantial problem of time-shifted TV viewing.  MediaDaily News claims it has gotten its hands on a Nielsen report which documents that–surprise, surprise–"the impact of time-shifted viewing will be profound on the broadcast networks."  You may recall that a few weeks ago the major broadcast networks conceded that they would not charge advertisers for ads that are viewed on a time-shifted basis. Now, though, the broadcasters are working with Nielsen on a plan to measure commercials viewed both live and time-shifted. We'll see where this goes, but you can bet that we have only seen the tip of the iceberg of the time-shifted advertising problem.

In my view, the mass adoption of time-shifted TV viewing will ultimately be viewed as one of the more important developments in the media industry, up there with the emergence of broadband as a key platform for TV and video content.

Taking A Swing at Local Advertising

June 11, 2006

vcmike

"Next generation" advertising has been an area of keen interest for me over the last few years, and one way or another has had something to do with pretty much every investment I've made in the Digital Media sector.

Most of the activity in this sector has focused on large national advertisers.

Recently, however, it seems like a bunch of startups are starting to go after the more elusive, but gigantic, market for local advertising.  Most would agree that there is lots of opportunity for whoever figures out how to crack the local advertising nut, and take a chunk of the billions of dollars spent every year on Yellow Pages, local broadcast and local cable advertising.

A bunch of early efforts in this vein were failures, but my hunch is that this time around there are going to be some pretty big winners. Spotrunner (quick and cheap ads for local cable), Jingle Networks (ad supported Directory Assistance) and MerchantCircle all are early stage companies doing some pretty interesting stuff with local advertisers.

I think I am willing to take a bet or two here.  Stay tuned to see what happens…

And, more importantly, let me know if you are doing something interesting with local advertising on the digital platform, and/or if you know of interesting projects/people/research I should know about. Feel free to comment or send me an email at mhirshland@polarisventures.com.

Thanks!

Google PPC Video Ads

May 23, 2006

vcmike

In the '90's venture guys were afraid to back startups that would compete with Microsoft.

Today's Microsoft is Google.

For those of us who invest in consumer internet ventures, the "why couldn't Google do this and crush you?" question is a pretty common refrain.

I recently (like, this morning) had a very close encounter with the Google factor.

Over the past couple of months I've spent some time with a very talented entrepreneur who is building a self serve network for video ads, or, in other words, an "adsense for video" product.

I have to say I found the proposition pretty intriguing, though at the end of the day (last Friday, actually) we decided to pass on the opportunity. The Google question was one of a few factors that pushed me over the edge.

And what do I read in TechCrunch this morning? Sure enough, Google has come out with a PPC video ad product or, in other words, adsense for video.

WHEW!

TechCrunch has a good description/discussion on Google's move, and lots of comments worth crusing through. Michael Arrington and the bulk of the comments don't think Google's move was a good one.

Personally, I am predicting that, over time, this is going to prove to be a pretty successful play. The biggest question I have is not whether Google's PPC video ads will work for advertisers and generate revenue — they will — but rather what content will prove most fertile for this genre of ads. It is not clear to me that run of the mill text content will prove to be a good medium for a video ad product; however, as the web itself goes multimedia, it only stands to reason that ads will to. Google might be early, but I for one think they are on to something.

MySpace and Social Network Advertising

May 19, 2006

vcmike

MediaPost has an interesting interview with MySpace's senior ad sales exec on how they are seeking to sell advertising. It is a quick, worthwhile read. 

TV Upfronts 2006

May 18, 2006

vcmike

The television industry has converged on NYC for the annual "upfronts," during which the major television networks tout their upcoming season of programming and try to sell advertisers big ticket "upfront" packages.

I am going out on a limb to predict that 2006 will be looked back on as a watershed upfront season.

Couple of reasons.

First, digital/broadband is no longer an afterthought but an integral piece of the broadcasters' offerings.  In response to advertisers' ever growing demand to reach consumers through digital platforms, the major broadcast networks are falling over themselves to satisfy the advertisers' ever growing demand for alternative digital ad inventory.  (I think it is now clear why we saw the spate of announcements over the last couple months that programmers like Disney and Fox would make substantial chunks of programming available on the web). And, perhaps an even more intriguing harbinger of things to come was the emergence of upfront campaigns by a number of broadband pureplays (including my portfolio company Heavy.com which had considerable success with their upfront campaign).  Advertising on the digital platforms has achieved critical mass.

Second, this is the first upfront where the TiVo ad-skipping phenomenon was widely accepted as an important, soon to be quite commonplace, aspect of television viewing. Even Nielsen is beginning to measure Tivo viewership. To be sure, there is a lively debate over what the implications will be.  Whether TV ads will go the way of 8-track tapes and VCRs as opposed to morphing into "TiVo-proof" models remains unclear (my personal view is the latter), but I think the industry now gets it that, one way or another, the Tivo effect is here to stay and one way or the other will have to be addressed.

Third, as a result of the above, the fact that television audiences have become exceptionally fragmented, and the growing recognition that traditional TV advertising just doesn't work that well, TV broadcasters clearly are losing the leverage they used to have over advertisers. In fact, a few major advertisers didn't even show up for this year's up fronts.

For me, all of this wraps up into yet another data point that the media industry is in the midst of some very dramatic changes and reinforces our view that it is an exciting and promising arena in which to be searching for new opportunities.