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Rise of the Intelligent Publisher

Posted November 10th, 2014 by Jonathan Mendez in Media, CPC, Performance , Publishers, Data, Analytics, First Party, real-time

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Last week was yet another digital advertising event week in New York City – ad:tech and surrounding events. Everyone involved was talking about all the great advances in advertising technology happening right now. Nobody was talking about the advances in publisher technology. Frankly, there isn’t much to talk about. Except that there is.

A certain group of publishers have advanced light years ahead of the current discourse. Advanced beyond the idea of programmatic efficiency. Advanced beyond the idea of creating segments by managing cookies. Advanced far beyond unactionable analytic reports related to viewability. These publishers, many of whom are the most revered names in media, have deployed machine learning and artificial intelligence in their media. They have moved beyond optimizing delivery of impressions to predictive algorithms optimizing ad server decisions in real-time against the performance of their media.

The movement towards publishers understanding and optimizing their media is one of retaining the value of ownership. It may seem obvious that publishers own their media but they don’t really. In reality when the buyer is the one that is optimizing the performance of that media and keeping the learning – even using that learning as leverage in what they are buying – the value in ownership, in fact the entire value of a publishing business, is called into question.

The smartest and most forward thinking publishers understand the stakes. We are entering a world where all media is performance media. Brands are getting smarter about attribution and measurement. They are getting smarter about marketing mix models and seeing the value in digital over other channels. They are gaining insight into how digital influences purchase. In this new world the imperative of publishers to be as knowledgeable about their media as brands is not about competitive intelligence. It is about better performance for these very brands – their customers!

Publishers will not survive in a world where they do not know when, why, where, how and someone is walking into their store. They will not survive if they do not know what customers are buying and how much they are paying. No business could survive that lack of data and intelligence. In fact, no customer really wants that type of store either. Customers want to buy products that serve their intended purpose. Customers want sellers to understand — even predict — what they will be interested in. Customer experience extends to buying media the same as buying anything else. This means marketer performance.

Publishers are ultimately responsible for the performance of their media and the happiness of their customers. Yet, many never think about it or feel helpless to do anything about it. They are the ones that will not make the transition to the performance media economy.

Like all intelligent systems at the core this is about data. Vincent Cerf famously said Google didn’t have better algorithms, they just had more data. The reality is no one has more data than publishers. Each landing on the site, each pageview by a consumer has well over a hundred dimensions of data. That data is fundamental to the structure of the web – it is linked data – and the serialization of it through each site session creates exponentially more of it. Unlike cookie data that does not scale this data is web scale. And it can be captured, organized and activated in real-time.

The data is a window into the consumer mindset and journey. Importantly for publishers it is an explicit first-party value exchange between the publisher and the consumer. It is an exchange of intent for content, of mindset for media. It is what brands want more than anything else. The moment, the zeitgeist, the exact time and place a consumer is considering, researching, comparing, evaluating, learning, and discovering what and where to buy. It is the single most valuable moment in media. It is right time, right place, right message. It is uniquely digital, uniquely first-party and owned solely by the publisher. It is a gold mine that Facebook and Google recognize and they have focused their recent publisher-side initiatives on capturing from publishers either unsuspecting or incapable of extracting the value themselves.

As publishers begin to understand these moments themselves, activate them for marketers and optimize the performance of the media against them, an amazing thing happens. The overall value of the media increases. It increases because of intelligence. It increases because of performance. Most important, it increases because of value being delivered to consumers. It also opens up new budgets. Over time, these systems will get smarter. With more data, publishers can even begin to sell based on performance thereby eliminating a host of issues around impression based buying and increasing overall RPM by orders of magnitude with higher effective CPMs and smarter, more efficient allocations of impressions.

Unfortunately for the hungry advertising trade publications you will not hear these most advanced publishers talking on panels about this or writing blog posts. Does Google talk about Quality Score? Does Facebook talk about News Feed? You will not hear industry trade groups arguing for publishers to sell performance to their customers either. In fact not one panel all of last week discussed first-party data created by the publisher.

Thankfully there is no hype related to this. Only performance. The people who need to know, know. As much as I’d like to share the names of every one of those publishers and agencies with you, more so I want to honor their competitive advantage in the marketplace.

The best publishers have the best content. The best content delivers the best consumers. The best consumers deliver the best performance. This is not new. The rise of the intelligent publisher in collecting, organizing, machine learning, activating and algorithmically optimizing this first-party data stream in real-time is. It’s the most groundbreaking thing in media happening right now and will be for some time because it has swung the data advantage pendulum to the publishers for the first time since data has mattered in digital media.

Publishers Sitting on a Goldmine

Posted February 6th, 2014 by Rich Shea in Publishers, gold, relevance

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If I was asked for one slide that best captured the motivation behind the technology and business direction of Yieldbot it would still be this original one. It IS the elevator pitch. And the points it makes are clear.

This slide is actually from the presentation that @jonathanmendez first made to me over four years ago when he was pulling me in to build Yieldbot with him. All this time later, it still best sums up the motivation behind our technology and how we view our market. I was fairly new to ad tech in 2009 and the thing I remember coming away thinking the most after our first conversation was: "It's not already done that way?".

Everything captured in that slide is as true in 2014 as it was in 2009 before any lines of code for Yieldbot had been written. In an industry that embraces the pivot, it's nice to have a slide that could still be used five years from now as much as it could five years ago.

Intent is Generated in the Publisher Domain

Search gets to take a peek at users' intent as they do part of their navigation through content on the web. But when a user is searching, they're searching *for something*. Search is a tool for getting the user to what they want. Publisher content is where users spend their time discovering new interests. Or digging deeper into existing interests. Their clickstream through the site and what they interact with is how they express what they are REALLY interested in.

Yieldbot's analytics discovers the intent of the publisher's users to use relevance as a tool for effectively monetizing the publisher's users interests. When advertising is relevant to the user's intent, it is not seen as intrusive. Done right it can augment the user's experience by delivering to them something that they are interested in. Something that matches their intent.

Only Pubs Can Effectively Harvest Visitor Event & Contextual Data

Publishers have a direct relationship with their users. As users consume content they are signaling what they are interested in. Yieldbot's technology lets publishers leverage this relationship, taking the value created by the content and making it monetizable when and where possible.

Yieldbot's javascript is loaded directly on the publisher's page. This arrangement is similar to first-generation web analytics. But while first-generation web analytics was useful for understating what happened in the past, Yieldbot is driven by real-time understanding of what is happening on the publisher's site and in the users' sessions, and can take action on it in real-time. Yieldbot's decisioning algorithms take into account the full range of context such as the site referrer to the session and time of day.

Only Pubs Can Weave Ad Optimization Tech Into the Experience

The publisher owns the experience on their site. This is where the three dimensions of optimization come together - the visitor and their intent, the context of their clickstream, and the creative for the message. This is what Yieldbot's technology does - our machine learning algorithms running in real-time with our ad decisioning pick the most relevant action presented in the way that's most engaging.

Other approaches, by not optimizing based on relevance, are by definition optimizing on the wrong thing for the user and publisher (and advertiser for that matter). Retargeting for example optimizes to a cookie that was set some time in the past on some other domain, without regard for whether the message is relevant to the user at that moment. That's why retargeting examples are so jarring. More often than not their message is no longer relevant, and the experience is a reminder to the user that they're being followed around the web; in the process detracting from the experience on the current publisher site. Contextual, as another example, only looks at one of the factors for relevance and can only drive simple targeting rules that are broadly defined.

The key here is that optimizing for relevance wins. Both brand and performance advertisers want relevance and will pay a premium either for relevant placement or performance (a natural byproduct of relevance). Publishers have a double-win of relevant messaging alongside their content from an experience point of view, as well as collecting the premiums that relevance brings from the advertisers. And the user always benefits from relevance in their overall experience of getting at what they are interested in.

Only Pubs Can Accomplish the Above Without Privacy Issues

Yieldbot does not track users across the web. We support Do Not Track initiatives because we don't think relevance for anyone involved (the user, the advertiser, and the publisher) depends on this type of tracking to be effective. Our results back this up.

With Yieldbot the value of the publisher's media is not diluted by bringing the insights about a user's intent and trying to monetize them somewhere else. Let retargeters dilute the value of the publisher's media and dilute the relevance to the user. By contrast Yieldbot makes decisions based on the user's intent on this particular site at this particular time.

Pubs Are Sitting on a Goldmine

For all of the reasons above, publishers are indeed sitting on a goldmine. Their domain is where users engage with content and express their interests. If this is the information age, then the value is where the information is. Publishers own the value of the web. Until we built Yieldbot, they were just lacking the technology that allows them to realize that value.

-- @shearic

Redefining Premium Content Towards CPM Zero

Posted August 2nd, 2012 by admin in Advertising , CPC, Publishers, CPM, Performance

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Say Goodbye to Hollywood

When Ari Emanuel, co-CEO of talent agency William Morris Endeavor said that Northern California is just pipes and needs Premium Content it’s clear that he just doesn’t get it. There is no such thing as premium content. There are only two things premium on a mass scale anymore - distribution and devices.

Massive media fragmentation fueled by the Internet has forever redefined what is ‘premium’ content. The democratization of media – the ability for a critical mass of people (now virtually the entire world) to create, distribute and find content killed the old model of premium. Modern Family is a good TV show but when I can more easily stream a concert like this through my HDTV at any moment I want I’m pretty sure “premium content” has been redefined.

Since the web is the root cause of death for premium content it makes sense that the effect is no better exemplified than in web publishing. Since the advent display advertising publishers have sought to categorize and valuate their content in ways that were familiar to traditional media buyers. No media channel has promoted the idea of or value for premium content more than digital. Thus, print media’s inside front and back covers became the homepages and category pages on portals. Like print, these were areas where the most eyeballs could be reached.

But a funny thing happened in digital behavior. People skipped over the front inside cover and went right to content that was relevant to them. Search’s ability to fracture content hierarchies and deliver relevance not only became the most loved and valuable application of the web, it destroyed the idea of premium content all together. In reality, premium never really existed in a user-controlled medium because it was never based on anything that had to do with what the user wanted. It was based on the traditional ad metric of “reach” when in this medium, decisions about what is premium are determined by on-demand ability and relevance.

Sinking of the Britannica

The beauty of this medium is in the measurement of it. Validation for the drowning of premium beyond the fact that Wikipedia destroyed Encyclopedia Britannica rests in the performance of digital media. A funny thing happened as advertising performance became more measured. Advertisers discovered premium didn’t nearly matter as much as they thought. There were better ways to drive performance that yielded better and more measureable results. The ability to match messaging to peopleon-request and in a relevant way was more valuable in this medium than some content provider idea of what was “premium.” In this medium the public not the publisher determines what is premium.

As realtime rules based matching technology continues to improve performance advertising and marketing itself continues to grow at the expense of premium advertising. Today, despite those trying to hold on to the past, premium is little more than an exercise in brand borrowing and little else. Despite the best efforts of the IAB to bring Brand advertising to Digital it has fallen as a percentage of ad spend for five straight years. In the world we live in today Mr. Emanuel’s $9 billion dollar upfront for network TV primetime advertising is $1.5 billion less in ad revenue than Google made last quarter.

What this all means for the future of digital media (and thus all media eventually) is that it’s headed to “CPM Zero.” Look around - all the digital advertising powers - Google, Facebook, Twitter, Amazon - are selling based one thing. Performance. They are not selling on the premium sales mechanism of CPM. When ‘CPM Zero’ happens, and it will, these forces pushing the digital ad industry forward win. They own the customer funnel and they will own the future of marketing and advertising. It begs one big question. Where does this leave content creators and publishers?

Don’t Fear the Reaper

Publishers will never be able to put the CPM sales genie back in the bottle. CMOs and advertisers are already finding out that they are paying too much for premium. Go ask GM what they think. What publishers are finding out is that they are no longer selling their media; it’s being bought. Purchased from a marketplace with infinite inventory in a wild west of data. Therein lies the publisher’s ace in the hole and the strategies and tactics digital publishers (and eventually broadcasters) can use to combat the death of premium.

Like Search, Publishers need to have two crucial components to their marketplaces. They need the tension of scarcity in the marketplace.That will drive up demand and force advertisers to spend the time working on improving their performance. This was the cherry on the sundae for Google as a $1billion industry - Conversion Testing and Content Targetinggrew out of nowhere to support spends in Search. Most every dollar saved with optimization went to drive more volume – or back to Google. They need a unique currency for the marketplace. Keywords were a completely new way to buy media. Nothing has ever worked better. Facebook is selling Actions with OpenGraph. Ultimately advertisers are buying customers not keywords or actions but there is a unique window of opportunity for publishers at this moment in time to create something new and uniquely people, not page focused.

The tactics used to fuel these strategies all rely on one natural resource - data. Publishers have diamonds and gold in beneath the surface of their properties. Mining these data nuggets and using them to improve the performance of their media is the sole hope publishers have competing in the world of “CPM Zero.” Only publishers can uniquely wrap their data with their media and drive performance in a manner unique to the marketplace. That’s what Google does. That’s what Facebook does. That’s what Twitter does. The scarcity mentioned above is created because the realtime understanding of site visitor interest and intent is only derived using first party data as rules and integration with the publisher ad server for delivery. So pubs are really left with one choice – take control of their data and use it for their benefit creating an understanding of WHY people are buying their media and how it performs. Or let Google, Facebook, third-party et al come in and grab their data and know nothing about why it’s being bought and how much it’s being sold.

The ability to match messaging to people on-request and in a relevant way is within the publisher’s domain. It is the most premium form of advertising currency ever created and will deliver an order of magnitude more value. It will fuel the 20% YoY growth of digital advertising and marketing for the next 15 years. Who captures the majority of that value, the advertiser or the publisher, is the only question remaining.

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