ChasNote

Seth Godin has an odd — though perhaps too common — encounter with the robots that are building ad networks all over the internet. The robots in question, in this case, are employed by Forbes.

“A woman named Jennifer Rosini at Forbes sent a note that read:

Hi , You are invited to join the new community of the high quality business and financial bloggers from Forbes.com. Our community - the Business and Financial Blog Network, will launch shortly.

“I wrote her back, pointing out that she hadn’t even bothered to pretend it was a personal note… just a mail merge missing my name.

“She responded (this is the entire note):

I’m not sending these out. I have people working for me that send out 500 a day. Are you interested in joining, Seth?

“The juxtaposition of the third sentence with the second just highlighted the inanity of the entire enterprise. It’s a high-quality network, but 500 people a day are being asked to join, and it’s okay to spam people but do I want to join anyway?”

“The end result of spam (email spam, blog spam, Twitter spam, Squidoo spam, comment spam, phone spam, politician spam) is that it eats away at your brand. If you don’t have a brand, you might make some short term cash but it gets tiresome creating annoyance everywhere you go. If you do have a brand, a brand like Forbes, say, you don’t notice the brand erosion… until it’s too late.”

Needless to say, brand marketers don’t want to be associated with distressed brands — so what’s the point of this approach?

From yesterday’s WSJ in an article about traditional publishers acquiring web services platforms like Conde Nast’s acquisition of FM alum Reddit.

“Usually when publishers acquire technology companies it’s to spruce up their own Web sites. But increasingly publishers such as Conde Nast and Meredith are drawing on the technology to create advertising campaigns for marketers.

“This takes publishers further into the realm of marketing services. Instead of simply selling marketers ad space, they’re rolling up their sleeves and designing the promotions as well. For the next five months, visitors to the Dillard’s Web site will be able to rank products featured in a top-10 list selected by Conde Nast’s Lucky magazine and fashion Web site Style.com. The fashion lists will rotate seasonally, giving visitors the chance to rank new items every two weeks. The top-rated item on the list then will appear in Dillard’s online ads running on nine Conde Nast Web sites, including Teen Vogue, Glamour, Style.com and Vanity Fair.”

Smart. Also not surprising. High-end offline media companies have always had staff and production capabilities to provide marketing services well beyond trafficking and inserting commercials. This is part of what drives premium rates at leading media brands. Advertisers expect their media partners to do more than cash their checks; they demand that their media partners help them succeed among an audience that the media companies know best.

This is why I was confused by news that ESPN has discontinued working with ad networks. I get it that ad networks cause pricing and channel conflict because — despite promising publishers like ESPN to sell their remnant inventory in a blind manner, as part of a “channel” — they sometimes pitch site-specific opportunities. They offer lower rates for the same banners ESPN sells directly. This is a partnership problem, a serious one, but one that should be addressed with tactics short of termination. It’s not religious problem, as ESPN and others have portrayed it. From Mediaweek:

“ESPN’s decision crystallizes a philosophical debate in the online ad sales industry that has intensified since the Interactive Advertising Bureau’s annual meeting last month when during a keynote address, Martha Stewart Living Omnimedia media president Wenda Harris Millard gave her now famous warning against selling Web inventory like ‘pork bellies.’”

My interpretation of Wenda Harris Millard’s pork-bellies battle cry is this. Digital publishers need to remember that they are publishers — companies that engage with high-quality audiences around content in a unique and magical conversation, and service firms that know how to chaperon marketing brands into those conversations. In other words, companies in the mold of Conde Nast, Meredith and ESPN that offer high-touch marketing services.

Whatever ad avails you don’t sell, offer up on the pork-belly exchanges — online we call them ad networks (or Google Adsense), in TV we call them PI or DR rep firms. Hey, people sometimes want pork bellies, and audiences almost certainly don’t want 30-seconds of white static whenever a TV network fails to sell 100% of spots.

But if you don’t or can’t articulate what it is that makes your media brand uniquely valuable to your marketing partners (hint: it’s not your demographics), you’ve ceased to be publisher.

More on the difference between publishers and ad networks from Battelle.

Caught in the act by AdRants, Disney family resorts ads have been running alongside near-porn photos and content at sites such as Egotastic.

“Last Fall, some contextually placed Disney ads appeared in a webcam video of ‘Andrea’ fondling her breasts. Now, a series of banner ads are appearing on celebu-porn site Egotastic next to Keeley Hazell covering her breasts, images from a Kristen Davis ’sex tape,’ images from a Lindsay Lohan sex tape, Denise Richards displaying her crotch and more. Screenshots are here. No nudity per se but possibly NSFW. More than likely the ads appeared on Egotastic as a result of a blind buy with neither the agency nor Disney having knowledge. It’s yet another reason why blind buys are rarely a good thing for most brands, especially one so very conscious of its family-friendly image.”

Battelle takes a deep look at the difference between media companies and ad networks at Searchblog, and how the big online portals are confusing the two.

“Do we [in the media business] sell inventory to the highest bidder via algorithms, automated processes, and platforms? Or do partner with marketers and creators of media to build brands - both media brands, and consumer marketing brands?

“I know how the folks who no longer work at AOL, Yahoo, or MSN feel about this question. They’re all brand people. And it’s entirely clear how the Google-chasers have answered that question: They’ve collectively spent billions of dollars amassing ‘access to inventory’ and ‘ad platforms’ in single-minded competition with Google.

“It seems the future, according to AOL, Yahoo, and Microsoft, is in ad networks.”

Meanwhile, one of the top brands in quality content and marketing relationships with global brands, ESPN is severing ties with ad networks:

“The sites like ESPN have cut ties with Specific Media and several other ad networks saying that ad selling that relies heavily on arbitrage and algorithms is not for them. ‘We’re heading down a path where it no longer suits our business needs to work with ad networks,’ said Eric Johnson, Vice President, Multimedia Sales, ESPN.”

From Adweek’s coverage of a panel at Ogilvy’s Verge conference. Outgoing Facebook chief revenue officer Owen Van Natta defended the company’s Beacon advertising concept, while Gawker’s Nick Denton slapped back:

“Gawker media publisher Nick Denton said he believes the ‘innovation’ in social media ad models is mostly a result of their failure as media properties. Even MySpace gets higher click rates than Facebook display units, he noted.”

FM’s Battelle disagreed:

“Not all ads on Facebook perform poorly, though. John Battelle, founder of Federated Media, said Facebook applications like Graffiti Wall are running ad campaigns for companies like Dell that are performing well by all metrics. ‘There’s no engagement in ad networks,’ he said. ‘We haven’t yet figured that out yet, and I think social media will.’”

Here’s a keynote quote from Sunday’s IAB conference in Phoenix, as reported by Battelle, “We must not trade our advertising inventory like pork bellies.”

Great line, and important sentiment. Google has ushered in an era of ad-networkification of online advertising. Even erstwhile media companies, like Yahoo, that used to sell brand-advertising experiences have lost their way chasing Google deeper into CPC-land.

From an interview at Silicon Alley Insider:

“SAI: Haven’t ad networks played a role in holding down online CPMs?”

“Moore: I dont think its the networks that are doing it. I haven’t spoken to anybody who thinks media fragmentation is going to stop. I think we are dramatically underpriced compared to offline. The amount of money newpapers and magazines have been getting per thousand is outrageous. Newpapers and magazines are still getting roughly 30% of all advertising expenditures–yet if you look at their share of media usage, they’ve got between 7% and 9%. Thats why they’re having so much trouble.”

Oh, come on. Google and the ad networks are selling clicks, even when the advertiser signs an IO with the acronym “CPM” after the $0.70 price tag. They are giving away for free the vast majority of impressions, those that don’t generate a click. They are telling advertisers that those impressions have no value. Charging nothing for impressions that make a positive impact on creating demand and spurring consideration is, in fact, charging too little for the service rendered. Google and the ad networks are most certainly deflating CPMs across the media landscape.

I kinda wonder if Kohl’s thought they were buying placement on Glam.com but actually bought a wider rotation across the hundreds of sites in the Glam network.

New research commissioned by Starcom, Comscore and Tacoda finds that optmizing for clicks likely means optimizing away from building brand with your best customers.

“CHICAGO – Media agency Starcom USA, behavioral targeting network Tacoda, and digital consumer insight company comScore collaborated on a research study whose results call into question click-through rates as a primary source of accountability for Internet display advertising aimed at brand-building. Called ‘Natural Born Clickers,’ the study reveals that a very small group of consumers who are not representative of the total U.S. online population is accountable for the vast majority of display ad click-through behavior.”

The power clickers have less desirable demographics:

“The study illustrates that heavy clickers represent just 6% of the online population yet account for 50% of all display ad clicks. While many online media companies use click-through rate as an ad negotiation currency, the study shows that heavy clickers are not representative of the general public. In fact, heavy clickers skew towards Internet users between the ages of 25-44 and households with an income under $40,000. Heavy clickers behave very differently online than the typical Internet user, and while they spend four times more time online than non-clickers, their spending does not proportionately reflect this very heavy Internet usage. Heavy clickers are also relatively more likely to visit auctions, gambling, and career services sites –- a markedly different surfing pattern than non-clickers.”

And there’s no correlation between clicks and brand metrics.

“Further preliminary Starcom data suggests no correlation between display ad clicks and brand metrics, and show no connection between measured attitude towards a brand and the number of times an ad for that brand was clicked. The research presentation suggests that when digital campaigns have a branding objective, optimizing for high click rates does not necessarily improve campaign performance.”

Sez Erin Hunter, EVP at Comscore:

“‘While the click can continue to be a relevant metric for direct response advertising campaigns, this study demonstrates that click performance is the wrong measure for the effectiveness of brand-building campaigns,” said Erin Hunter, executive vice president at comScore. “For many campaigns, the branding effect of the ads is what’s really important and generating clicks is more of an ancillary benefit. Ultimately, judging a campaign’s effectiveness by clicks can be detrimental because it overlooks the importance of branding while simultaneously drawing conclusions from a sub-set of people who may not be representative of the target audience.”"