Happy Friday 13.12.18.
One Week To Go!
|SimonJHarris||Dec 14, 2018|
In the penultimate newsletter of the year, we look at Verizon writing down half of Oath’s value & discuss what that might mean for the venerable house of brands. Next we turn our attention to Hulu who in the new year will offer advertisers new ways to access their premium inventory through programmatic pipes, exciting times.
Next we look at Xandr’s drive to transparency; the artist formerly known as AppNexus is in the midst of re-structuring publisher contracts so they can more freely disclose fees to advertisers, this is a good thing. Finally we look at news that Essence are bringing data, measurement & automation further upstream in the planning process & consider what this means for the future. Enjoy!
Verizon Calls Time On Oath?
H2 2018 has been tough for Oath, it saw an exodus of senior management & now their new management appears to be calling time on former CEO Tim Armstrong’s vision of turning a patchwork of beloved dot-com-era businesses into a business that could compete with Google & Facebook:
Just this week the wireless carrier cut the value of its AOL and Yahoo acquisitions by $4.6 billion, effectively halving the value of the division which houses AOL, Huff Post, Yahoo etc. The revision leaves the goodwill balance- a measure of the intangible value of an acquisition--at about $200 million.
Oath recently re-launched its proposition, combining lots of the neat features from BrightRoll & Yahoo Gemini into one DSP, there was lots to like and it is definitely a step in the right direction for them, but some have noted it has taken them 18 months instead of the the 9 months they initially forecast & during this time their competition continued to iterated at a breakneck speed. There’s an interesting thread on the history of the integration here:
But that’s the past, what of the future? Well Facebook and Google remain dominate forces in digital advertising, an ascendant Amazon & the continued success of The Trade Desk means competition looks set to be stiff into 2019. Competition is good for the market in general & it typically spurs innovation, but it won’t make things easy for Oath so it will be certainly interesting to see what the next 12 months bring.
Hulu is set to expand its programmatic business in the new year by offering select advertisers access to a new private marketplace for on-demand & live TV inventory:
The marketplace is invite only and once vetted by Hulu advertisers will be afforded the same protections they can get through direct buys, including frequency caps, category separation and viewability measurement.
It is said these deals will not impact up-fronts or sponsorships & in this context it will be interesting to see whether or not Hulu can convince some buyers the premium prices associated with PMPs are worth it, Given that The Trade Desk recently reported Connected TV grew over 10X YoY I suspect there is a lot of pent up demand for premium inventory & Hulu will have no problems here.
It’s worth noting that this isn’t Hulu’s first foray into private auctions, but unlike those introduced in 2015, this product will allow marketers to bid in real time based on audience data instead of targeting specific audiences at a preset price. This is an exciting development & I for one would love to see more options like this on this side of the Atlantic.
Xandr Offers Increased Fee Transparency
Xandr (formerly know as AppNexus) has been engaged in the discussion about financial transparency in advertising exchanges for some time, over a year ago former CEO Brian O’Kelley disclosed the fee they charged publishers averaged 8.5% way below their competitors. At the time some critics suggested their take was artificially low because it included fees of businesses who had invested in the AppNexus, but most (myself included) welcomed the disclosure as a step in the right direction.
A year on and Xandr have been taking things a step further restructuring their contracts with publishers to allow them to disclose at a much more granular level what their fees are. @AdExchanger reported this week buyers will be able to see fees disclosed for 82% of transactions in North America & 58% of transactions globally.
Xandr’s SVP of product said “We’ve felt for a long time… that marketers should be able to maximize their working media dollar,” I agree with this sentiment & welcome Xandr’s continued engagement in this area. Some however are now arguing that the shift to first price auctions is directly at loggerheads with the statement about maximizing working media because whilst the percentage fee taken is generally decreasing & now transparent (unarguably a good thing) the take actual fee charged hasn’t decreased as much as it should/could have, because the low & now transparent fee % is charged on a first, not second price auction.
This may or may not be a fair critique, but I think long term the discussion about % take rates goes away. It is very clear that as more & more high yield inventory comes into the programmatic ecosystem, exchanges will increasingly move towards either SaaS models charging for usage or charging publishers on a CPM basis. My thought on this is buyers who are increasingly savvy when it comes to SPO will shape spend to towards those who do & this will make the one criticism of what is step in the right direction completely moot.
Automation & Media Planning
One of the best articles I read this week was by @ronan_shields, an excellent journalist with a great scoop on a how Essence are beginning to use automation to power media planning:
The article outlines Olive, a campaign stewardship system that assists Essence with campaign planning, execution and outcome analysis. Amongst other things the platform will show how much money is being spent through a particular platform & which partner is driving the best conversion rates.
Such tools have been around in various guises/silos for some time, but what sounds really interesting is that Essence have started to link things like people’s time sheets into the system to see how time spent drives the performance of the campaign.
I find this interesting because it points to a future where automation becomes as prevalent in media planning as it is now in buying & also a future where work in general is increasingly measured & optimized. This year already we have seen the launch of smart planning tools from the Trade Desk which put more data at the finger tips of planners & assist them in building innovative strategies, I expect to see others follow suit in 2019.
Beyond planning one can envisage automation benefiting other areas of media operations with smart contracts automating financial reconciliations & payments in real time. Exciting times.
Okay that’s another newsletter done. Next Friday will be the last newsletter of 2018, if you want to suggest anything I should cover you can connect with me here:
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Thanks & have a lovely weekend