Thursday, January 21, 2016
The growth of the adtech segment in the advertising world has gone through various lifecycle stages as seen in other industries. An adtech company is Google, Facebook, MSN, Yahoo, YouTube, Taboola, ad networks etc. The phases of any industry are early adoption, great growth, mass adoption and finally maturation where sales peak. For the ad tech industry I would guess estimate it is in early maturation phase as sales are starting to level out. The best indicator of this is the recent 28% decline in Apple stock in the past year.

 

As this community grew up they have learned a few lessons about what makes a good advertising media model. This learning curve includes criticisms on privacy, security, spam, malware, automated web traffic, ad fraud and now ad blocking.

There is a growing community of web users that have been irritated by all the ad tricks being used that include click bait, deceptive articles and flash ads. You can read my May 2011 blog posting on my Top 10 ways you can irritate and repel you reader, as they are still relevant today.
   
This band of users have established guidelines on what is acceptable advertising online and we need to listen, as they are telling us what ads works with them and would be a great creative guideline to adhere to as I agree with their concerns. Below is what they define as acceptable ads that the publishing industry should take notice of.

What is an acceptable Online Ad?
1) Acceptable Ads are not annoying:
People don't need to be tricked into clicking. Advertising can rise above the noise by being useful – and even tasteful. The blinking and jiggling just annoys the real buyers, means the people who do click did it either out of curiosity or because they are an unsupervised 6-year-old. Either way, an intrusive ad is not going to generate a sale – and it might just get you some negative press and ill will.

2) Acceptable Ads do not disrupt or distort page content:
Users can very well become interested in an ad, but advertising is not the reason one visits a website. You visit a site for its content, and therefore the page should not be sullied by ads that disrupt or obscure that content without permission – pop-ups and pop-unders, pre-roll video ads and the like. When ad placement and structure are done well, they may actually inspire you to explore more without resorting to nasty tricks.

3) Acceptable Ads are transparent with us about being an ad :
If it's an advertisement, just say so! There's a place for ads, and there's a place for editorial. And there's even a place for advertorials or native ads if they're not camouflaged as editorial content. Good stuff is always welcome, but it needs to be genuine.

4) Acceptable Ads are effective without shouting at us:
We could be in the library, or on an airplane, or in a meeting … you never know when we're going to click on an ad. So please don't embarrass us with blaring sounds by default. If we want to listen, we'll click.

5) Acceptable Ads are appropriate to the site we are on:
Website publishers need to manage the user experience with the user's benefit in mind: don't let inadvertently selected advertisers harm your brand. Accepting just any kind of ad to be shown on your website might be profitable in the short term, but allowing advertisers to compromise the user experience with obnoxious ads – or even scams – will not pay off in the long run. In short, Acceptable Ads aim to be appropriate to the audience of the site they are displayed on.

This movement is part of the growing use of ad blocking software worldwide and according to a Page Fair/Abobe 2015 Report on Ad Blocking. The report states that it has grown to 198 million users worldwide in June 2015 from 21 million in 2010, 900% growth in five years with Europe leading the way with 77 million users, followed by the USA at 45 million.

These early adopters of ad blocking software are millennials (18-34), technically savvy and male. The reasons they starting using it was because of the misuse of private data via surveillance marketing (50%) and the increase in the volume of ads (41%). It seems that Gamers (26.5%), social network (19.1%() and Tech/Internet sites (17.1%) are the hardest hit by this ad blocking movement. (Page Fair is a firm that supplies a solution for ad blocking software)
 
 

How does an ad blocker work? Well, it is simple, all you need to do you is add an extension in your settings feature in your Chrome browser and you are ready to go. AdBlock is offered by getadblock.com for free/honourware and is one of three apps listed in the Google Chrome Extension app store and boasts it has 40 million users.

I have tested it on my computers and it works great as it filters all ads even the pre-roll video on tv shows and sports highlights. The software, however, does not block ads that part of a digital edition as they are embedded and are not delivered by an ad server. In addition websites load faster and is a secondary protection against ad malware.

Here is a funny video ad from the company:



 
 

One of the other ad blocking app firms is AdBlockPlus and they have a whitelist approach that allows websites to have their ads bypass the ad filter if they meet the “Acceptable Ads” criteria stated above. This is a free service for websites with 10 millions impressions or less, but it has been rumoured in the Financial Times that AdBlockPlus is charging a 30% cut of ad revenue for websites over this 10 million threshold. The irony of this is that people signed up to be ad free and then they are letting firms through by paying a fee, sort of the troll over the bridge business model or what I call “Extortionware.” These tactics are just part of the dog eat dog culture of the ad tech community and growing frustration and dissatisfaction with the ad tech industry.

This market force is part of the looming digital shakedown of the adtech community that I see growing in momentum in 2016 that media publishers can capitalize on. Based on what I am seeing and experienced the digital revolution is over in publishing as we are seeing a lot of recycled ideas in the marketplace, a growing digital burn-out by consumers and a cut-the-chord trend for cable tv influencing this opinion. As publishers we will need to listen to this growing voice for decisions you make on your digital strategy on whether it will be effective.  The time for us to stand together united and say we are the best media choice is now upon us, as an industry like creating Canada’s Publishing Industry Ad  Creative Guide based on the Acceptable ads criteria.
Wednesday, December 23, 2015
If I had a Christmas wish for the publishing industry it would be a recipe for the right mix for a modern media brand and a market opportunity to hitch a ride on. I think in 2016 both of these wishes may come true.

The first market opportunity I see is a web creditability problem, with the growing concern in the media buying community of automated traffic created by bots and spiders on the internet being estimated as high as 40-50% of global traffic. Current web stats cannot accurately tell the difference between a robot and real person. The only clues are single page visits and traffic from certain countries. This is a window of opportunity for media publishers to gain a competitive advantage in the market as publishers can deliver “real people” through a digital subscription model to compete against other digital ad offerings. The industry is also well positioned as the trusted content leaders to defend the content turf from the native advertising threat. Maybe the industry can use fear to their advantage instead of being subject to digital fear tactics.

 
The second opportunity is the resurgence in print in book publishing as sales for digital has peaked at an estimated 20-30% of industry sales in the USA, with a growing trend of digital to print readers. Digital did not kill the book industry as it did the music and video rental industry in spite of all hype from the tech industry.  I have also seen digital subscriptions for controlled free publications level off around 50%, which supports this trend in reader behaviour with digital adoption plateauing. So print is still very important part of the mix after the digital shakedown from the tech industry as they have moved on to the banks and cars as their next targets.

For a recipe for the best digital mix we can look to La Presse (French Daily newspaper based in Montreal) for inspiration. In 2011, it boasted a circulation of 263,000 for their Saturday print edition and now it sits at 136,000 in 2015, a 48% decline in print readership. In 2013 La Presse launched a tablet app that has a reach of over 500, 000 (This app won silver on the COPA 2014 awards) users. In September 2105, La Presse announced that in 2016 they would only publish a print version 1x week instead of 6x and concentrate on digital.   

LA PRESSE AUDIENCE PROFILE

 

 

 

 

La Presse is a shining example of what is working in the 24/7 news media space with a website, tablet app, mobile version and print edition, what I called the hybrid model. The weekend print edition enables La Presse to stay in the game for the lucrative retail flyer market. What was really smart in the app they created was that it was designed for the screen, took advantage of the benefits of technology and adapted to the scrolling habits of  readers. La Presse’s success has not gone unnoticed, as it is the technology behind the new Toronto Star app that was launched this year.

While the app model is a good distribution channel, my concern is that there is no subscriber database to build a business around long term as all the downloads are through a third party vendor and they will also own your subscribers. The app model also closes the door to other ways readers engage with your brands, as computers still have 50% share of the digital use. That is why I still like browser based digital edition technology for magazines as the publisher has complete control of the brand and owns the subscriber database.

Taking a typical magazine (8" x 10") size and transferring it to the web with this technology has had limited success as it is hard to read. It also requires a zoom to read as the text may be too small. That is not an optimal solution, as it has to be just like print – look and read; not look, zoom and read. The digital magazine is a useful digital subscription (free or paid) tool that delivers real people online and provides space for larger ads vs smaller ads (Leaderboard and Big Box) on websites that are not as effective.

Here is an example of the digital edition of Harrowsmith Country Life (client of mine) that is optimized for the screen (ie: it is just as convenient as print as you do not need to zoom when reading). Harrowsmith is a digest size magazine, which happens to be the optimal dimensions for a digital edition magazine with engagement similar to print readers ie: 50% spend more than 1/2 hour reading.

Harrowsmith is now published 4x a year and its print/digital hybrid model is printed 2x a year.  The demand for print is still strong with paid newsstand sales of over 55,000 copies for the Fall Almanac edition and 30,000 copies for the Spring Garden issue. As we all know, paid is the ultimate proof of readership.

 

 

So there you go, my Christmas wish list for the publishing industry that includes a recipe for digital success and a market opportunity to hitch a ride on. The publishing industry needs to forge their own path in 2016 as a united group to compete in the digital landscape, not just copy what everybody else is doing in a me-too strategy. 

The ability to create a qualified audience that delivers real eyeballs has always been an industry strength and is even more important now in the digital age. My personal Christmas wish is that technology be used to create world peace and harmony. Have a nice holiday!

PS: Masthead is a sponsor of FFWD Advertisng and Marketing week that is being held in Toronto, Jan 25-29. You can enter in a draw for a pair of tickets at this link. Winner will be announced on Jan 11.


Monday, November 30, 2015
As we enter the holiday season we will be seeing a lot of TV ads, so I thought I would reminiscence on some of the high tech classics and talk about online video consumption. There is no denying the fact that a TV spot, through the power of sight and sound, can cultivate a cool brand image. Adding “Cool Product” to your brand is a huge competitive advantage for technology products, but it is not easy do and sustain over time. Here is a look how DELL, Apple and Microsoft used TV spots to create that “Cool Image” for their brands in these classic TV ads.

DELL DUDE Ad - “All I Want for Christmas” (2000)
In the early 2000’s, the “Dude you’re getting a DELL” TV ads created a national sensation and Ben Curtis the actor became a celebrity during the course of the campaign. The ad added cool to the brand through “Being a Dude” and was key contributor to DELL’s status as the #1 PC manufacturer at that time. They produced 26 commercials before the campaign ended in 2003. After this campaign DELL has never reached the cool status again (now occupied by Apple) as they became a tech giant and the ads became less risky.

Apple “1984: Super Bowl Commercial introducing Macintosh Computer

This classic TV ad help launched the aura of the power of a Superbowl Ad. In 1984 the Macintosh Computer was launched with a legendary 60 second commercial during the Superbowl. This TV spot helped define Apple as a company and Steve Jobs as a visionary. The commercial used an unnamed heroine to represent the coming of the Macintosh as a means of saving humanity from "conformity." The ad instills a sense rebellion and lead to the “Think Different” branding that Apple used for years.

Microsoft WindowsXP TV ad - Ray of Light – Madonna

The Launch of the Microsoft XP operating system in 2002 used a 1998 hit song from Madonna – Ray of Light. The commercial portrays an aura of reaching new heights in the human condition using the technology. The use of a pop singer like Madonna to get people’s attention is a classic case of piggybacking on Madonna’s popularity and hit song.  Microsoft is still using the “Reach New Heights” approach to advertise for Surface Pro Tablets and the message is getting a little stale. They need to “Cool Up” to compete with Apple.


I think it is time to step back and take a breather on how growing online video consumption will affect ad sales. There is a growing myth that this shift in demand for online video content will kick start demand for video ads and will translate into new revenue streams for publishers. As you can see in the above examples production values for TV ads are high in order to truly create an effective entertaining ad.

The spot requires more than cheap technology, it needs a great concept, creative director, writers, art directors, musicians, actors and those do not come cheap. The minimum production values required is still a cost barrier for most advertisers to use video. If the advertiser was not willing to spend $10,000 on video before, why would they spend $10,000 on a video just to put it online that reaches say 10,000 people. So I challenge this myth as it does not make economic sense.

Advertisers are using video, but not in the traditional way. They are are using in-house “Selfie Videos” to promote themselves on social media. Marketing expert and COPA judge, Doug Brownridge, says, “These “Selfie Videos” are a low cost and low risk way to personally engage with your customers through social media networks and appear authentic.”

Advertisers are now creating in-house video studios to feed the demand for video content on social media channels. Adnews.ca reported that L’Oréal Canada has opened a production studio called "Content Factory" as an in-house resource for the creation of online product reviews, make-up tutorials and testimonials that will be used for social media. So perhaps the myth of the ad sales gold mine for online video for publishers is more hype than fact, as I don’t see the money.

While we stroll down memory lane with some classics ads, I want to share with you one more  that Coke did in 1971. “I'd Like to Teach the World to Sing (In Perfect Harmony)” to wish you happy holidays.

Coca Cola Commercial - I'd Like to Teach the World to Sing (In Perfect Harmony) – 1971



Wednesday, October 21, 2015
One man’s junk is another man’s riches cannot be more true when you look at the recycling efforts being made with electronic waste generated by the digital revolution.

With every new Apple iPhone release that breaks sales records, somebody has to dispose of the phone in a responsible matter via recycling efforts, as E-waste contains toxic materials that cannot be sent to landfill sites. Even with this knowledge it's estimated that only 30% of E-waste is recycled globally with the remainder sometimes going to landfill sites in Asia and Africa in a growing multi-billion E-waste industry.

In China, there is a city of 200,000 people, Guiya (200 miles NE of Hong Kong on the SE coast) that is the E-waste capital of world that processes 1.5 million lbs. a year (7,500 tons), a small fraction of the over estimated 50 million tons generated worldwide.
 
 

The mass adoption of smartphones has caused a spike in e-waste as consumers change phones every 1-3 years. This e-waste is going to get higher as the next wave of consumer electronics, wearable devices, from companies such as Misfit, Jawbone, Withings and Garmin grow in adoption. These devices are fitness and health trackers that can be worn as a watch, wristband, jewelry/bracelet and clip-ons. These devices have a companion app that works on your smartphone to monitor your heart rate, sleep activity and body movements (I will be having a closer look at wearables in a later blog).

I believe Canada is a leader with established programs for E-waste recycling initiatives that are available in municipalities across Canada. The Ontario Electronic Stewardship’s recycling efforts boasts that 87% of E-waste is recycled in Ontario. that is dramatically better than the 30% rate we see in other countries. Part of the model in Ontario is an environmental levy fee for all new purchases of electronics to fund the collection of E-waste. But there is still a lot of phones that are collecting dust in homes that need to be disposed of. According to Stats Canada there are two unwanted cell phones in each Canadian household that has not been disposed off.

The chart below illustrates the stats by province and disposal habits.

 
Governments can encourage people to recycle, but in a market economy it needs to make economic sense to sustain recycling efforts, as it will need to earn a return on capital. E-waste contains valuable metals like aluminum, gold, silver, palladium and copper and recycling these metals are cheaper than mining from new sources in some cases.

A ton of used mobile phones, approximately 6,000 handsets, yields about 3.5 kg of silver, 340 grams of gold, 140 grams of palladium, and 130 kg of copper, valued at over US $15,000 ($20,000 Cdn) based on market prices.

Check out this video on how they mine gold from computers.



Let’s see what the potential bounty is in Canada for E-waste recycling/mining based on a 2 year lifecycle for smartphones and 28.5 million smartphone users in Canada in 2015. This means that there are 14.25 million cellphones or 1,786 tons of e-waste generated every year worth $35.7 million ($20,000 Cdn/ton) in recycled precious minerals. Two phones per household are still not disposed of and it is estimated at 27.2 million (13.6 million HHs) phones weighing 3,400 tons valued at $68 million are still waiting to be harvested.

E-waste recyclers offer 10-cents per lb. for raw e-waste or $200 per ton. The Electronic Recyclers Association offers $5 for laptops and $1.40 - $120 for smartphones depending on the model in addition to the 10-cents/lb. Based on these rates the value of one ton of scrap smartphones (6,000) start at $8,400 per ton.

To encourage collection at the grassroots levels, charity fundraising programs are available to community organizations to help collect E-waste. The David Suzuki Foundation or Electronic Recyclers Association would be a good start to creating your own collection day at your office or neighborhood. So join in on the E-harvest for charity this fall, or find a place to drop off your E-waste where you live for a charity of your choice.
Thursday, September 24, 2015
Cyberspace is still full of unknowns to explore and I found it fascinating to know that the World Wide Web can be divided into two segments: the “Surface” web and in the shadows, the Deep web. The Surface web is all the content that can be indexed by the public search engines and is estimated at 15-20 billion web pages or 4% of all pages. The Deep web is a place that is not indexed by search engines and is ball-parked at 400-500 times bigger in the number of pages. These deep web websites typically are password protected and thus cannot be accessed by search engines.

 

 

Your entry to the deep web requires anonymity and begins with a special browser called TOR short for “The Onion Router,” that enables anonymous communication on the internet. The USA Naval Intelligence community initially developed the TOR web browser software as a spy craft tool in the mid 1990s; it was designed to prevent network surveillance and traffic analysis. It is now an open source project  (free to use) with an estimated 36 million users and has been used by military, police, journalists, political activists, whistle blowers and the underground economy or the Dark web. The story of Silk Road is the most notorious Dark web story; it was launched in 2011 (taken down 2 years later) and was an online illicit market for the drug trade using bitcoin currency as their ecommerce model. It was a TOR based website that enabled encrypted computer-to-computer communications. TOR websites typically have a .onion in the address instead of .ca or .com.

 

It seems that there is always a new hacker attack in the news launched from the Dark web. So, what can a small publisher do to protect themselves online and protect their readers and customer’s identities from these villains? First, rate the potential of an attack on your company’s data based on what they are looking to harvest from your site for free by some creative means. Sooner or later hackers looking for vulnerabilities will visit your site in their search and sniff web robot software programs (Bots).
 

Hacker’s Wish List
  1. Credit Card Numbers – Financial Fraud is a constant threat
  2. Contact Information – Identity theft and spammers
  3. Email Addresses – Spiders scraping sites for email addresses for spammers
  4. Fake Article Comments (HAM) – Paid campaigns from content shapers
  5. Free Content – Content scraping by fake websites using SEO link inflators
To protect your website from this online litter I chatted with Martin Smith, CTO at Newcom Business Media and he suggests the following practices to maintain security for small publishers that don’t have a big web development team.

1. Web Server - Who is your hosting provider? Typically the hosting provider provides the initial layer of protection to your website as the web servers are located in a hosting datacenter with the latest hardware security for protecting your website as they will provide the initial security layer.

2. CMS Software upgrades
– Next is to make sure your CMS software is to up to date as hackers like to exploit outdated software. There are regular updates for open source content management software like Drupal, Joomala and Wordpress that most small publishers use.

3. Online touch points – Email, comments, subscription, commerce forms.
Martin suggests 3rd party service providers for these functions whenever possible. This approach enables them to hand off security concerns to the service provider and allocate resources elsewhere. To minimize the risk during a hacker attack ensure that all your web forms are cleared on a weekly basis and transfered to another database that is not connected to the website.

You have to admire the creativity and entrepreneurialism of the huckster mind with all the scams and hacker activity that I have witnessed and learned about during my career. This negative presence is part of the everyday fabric and will never go away (the Yin/Yang theory of life), so education or digital street smarts is still the best weapon to keep the negative forces in balance. The price of freedom is the right of “freedom to choose” and some people choose to do this to earn a living. They would be great assets to society if we could get them back from the dark side.
About Me
Martin Seto

 
Martin Seto is the principal of Reflex Media, a media consultancy practice offering media owners digital publishing, event management and ad sales help. His media expertise also include working with ad agencies as a media buyer/planner for tv, radio, print, outdoor, magazine and online. He has been in the advertising and media industry for 25+ years and he has been an instructor/speaker with Centennial College and at magazine conferences across Canada. He can be reached at marty(dot)seto(at)
reflexmediasales.com or 416-907-6562, and on LinkedIn.

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