Over the weekend I was cleaning the basement and found my old Macroeconomics textbook. As I relived those fond memories of IS LM curves and Adam Smith, I began to think about how the basic laws of economics apply to digital advertising. The simplest way is to think about it is in terms of supply and demand. Here is a quick look at the supply side of the equation.
As we all know, the demand for digital advertising has been growing in the neighborhood of 20% a year - robust growth, by any measure. However, on the display side (and for simplicity I am lumping together traditional display, video, mobile, etc .) supply has, for all practical purposes, reached infinite proportions. On a monthly basis there are now over 50 Billion available display impressions, and in the near future we’ll top the 7 trillion per year mark. Page machines such as Facebook and Twitter continue to add even more supply at a breakneck pace. If you don’t think that’s infinite just go to one of the Demand Side Platforms and bid for impressions at 1 cent a click. You’ll get plenty of volume.
On the flip side we can see that the number of search queries has remained essentially flat over the last 3 years. Yet search, which still accounts for 50% of every digital dollar spent, has enjoyed the same growth rates.
So what does my trusty and dusty Econ book have to say about all of that?
On the display advertising side with infinite supply, no matter how much the demand curve shifts up, price can never rise. And in fact, as we take friction out of the market, and use technology to make all supply equally available to all advertisers, we approach a perfect market that should theoretically drive price towards zero. Obviously price will never fall to zero, since the supply side would pull inventory off the market as that happened, but it is abundantly clear, as the graph below illustrates, that price can never rise.
With search advertising we see a different story. As we saw, the supply of search inventory has remained fixed over the last 3 years. However demand has continued to increase as seen by search revenue growth keeping pace with the overall growth in the market. As our Supply and Demand 101 Graph below shows, fixed supply and an increase in demand translates to an increase in price. Of course the market is not quite this simplistic; there are vertical markets each with their own supply and demand relationship, and differences within mobile vs. desktop, but the overall market dynamic certainly holds true.
When we take a macroeconomic-look at the market the obvious opportunity is to increase the supply of search terms. Since we can’t force people to search more, how do we do that? Luckily the publisher community has solved the problem for us. Every publisher creates content that is tailored to be as specific to search queries as possible. The reason for this is obvious; over 50% of most sites’ traffic comes from Google search results. So the trick is to find a way to turn every page of content that is on the web into its own unique set of search queries. If that were done at scale you would create a greater volume of search queries than currently exists within the search portals. And our Econ book tells us that would result in falling prices and increased demand for search advertising.
And that is exactly the mission that Swoop has set out upon.
By Ron Elwell, CEO
Historically the line between the search portals and publishers has been clear. Publishers create or aggregate content and search portals index and rank this content to help users discover it. However, search portals have slowly been pulling publisher content into their search results pages, and like the frog in the pot of water, publishers may soon wake up to find that all the detailed content the user is looking for is available in the search portal. As the CEO of Goal.com I faced this choice with Bing. Should we provide a feed of live scores, player profiles and breaking news content for Bing to display in search results? On the positive side it puts you in the #1 position, driving more traffic to your site when the consumer wants more information. On the down side, you may be providing the consumer with all the information they wanted and obviating the need for a further click. At the time, the information we fed to Bing was very limited, so it seemed worth the risk (in fact if you search for a Global football player, team or score on Bing you are still likely to see the Goal.com feed).
However, over time these feeds have become richer and richer. To the point where your average high school student could write an entire report on van Gough simply by visiting the Bing search results page.
The ingestion of publisher content will only become more widespread, which raises the question; Are the search portals there to provide us with the best links to the information we want, or to provide us with the information itself? Given that most publishers rely on search portals for 50+% of their traffic, this is bound to become a point of rising tension.
At Swoop we believe the line is very clear. Search provides the consumer with links to the most relevant content. Content providers provide the content. And we believe that surfacing those links within the content itself provides an even better user experience. In fact we are taking the polar opposite approach from the large search portals. Our intent is to bring search links to the content, versus bringing the content to the search portal. We believe that providing consumers with links to more in-depth information on the topics they are currently interested in is the best role for any search product. Our hope is that by working with the publishers and embedding search into the content we can level the playing field a bit.
If you would like to learn more about Swoop’s Search Engine for content just drop us a line at Publsihers@swoop.com
Swoop is proud to be one of the leaders in Boston's thriving adtech industry! Read more in Boston Magazine to see how this city's most innovative companies are re-inventing digital advertising.
By Ron Elwell, CEO
A day doesn’t go by without our seeing another article about the rise of Native ads (I often find myself wondering if all those articles about Native Ads are Native Ads?) Or an article about how Native Ads are the next big thing and will solve all that ails the publisher community. Or an article about how they are misleading. Or one that says they are nothing new, they have been around since the printing press. But, however you view them, it is clear that they are here to stay.
There seem to be as many types of Native Ads as there are opinions on them. They take the form of sponsored editorial content in the WSJ, irrelevant ads in your Facebook newsfeed, or Buzzfeed videos. All of these ads purport to be Native. If I put my publisher hat back on from the days I was the CEO of www.Goal.com, and thought about what I would want from a Native Ad experience it would be;
Seamless integration into the content
Wouldn’t interfere with my readers’ consumption of my content
Would positively add to my readers’ experience
Would be scalable and programmatic
These qualities make a pretty high hurdle, and I doubt if any of these examples gets over the bar. Facebook and Twitter in-stream ads are certainly scalable and integrated, but do they positively add to the user experience? WSJ and NYT sponsored editorials can certainly add to the user experience, but is that a programmatic and scalable model? And the programmatic insertion of standard IAB ads into content certainly detracts from and interrupts the consumption of my content.
Over the last three years at Swoop, we have developed a solution that allows search advertisers to seamlessly extend their Google search campaigns to content. We never think of it as Native, we think of it as Search. But, Swoop is a programmatic solution. Swoop inserts 42 character search ads into the content, adjacent to the search match, no matter where it falls on the page. Swoop never interrupts the user, rather, we invite them to discover additional information that is directly related to the content they are consuming. Swoop saves the user from having to return to Google to continue their search for the right information
So is Swoop a Native Ad solution? How about a Native Search solution instead? In any case, we’ll let you be the judge. Just contact us at email@example.com and let us know what you think.
Disclaimer: This is a Native Advertising Blog Post Sponsored by Swoop
By Nick Aquino, Director of Client Services
The IAB 2013 Internet Advertising Revenue Report is out and Mobile stole the show. In case you were too busy mourning the death of your NCAA bracket last week, here are the highlights: Mobile revenue grew 110% from 2012 and now commands 17% of all internet ad revenue. However, there is one important detail in the report worth noting: mobile search revenue is counted towards mobile, not search. When the mobile search revenue is added to Search, Search commands almost half of all internet ad revenue and is the 2nd fastest growing format, behind the rest of mobile. Internet traffic and revenue is moving to mobile and search is once again leading the way.
With almost 25% of all page views coming from mobile, publishers are facing new challenges to monetizing content. Search is effectively capturing the revenue that is moving to mobile. To add insult to injury, Google is finding new ways to provide users with content rather than pointing them to it. Publishers need new strategies to effectively monetize the growing share of mobile page views while internet ad revenue continues to shift to search.
The move to mobile poses new challenges for advertisers as well. For starters, the page, or “target”, got smaller. For the sake of user-experience and humanity, ads cannot be sprayed across the mobile screen the way they are across many sites on the non-mobile web. This means less impression opportunities per page view. The opportunities that advertisers do get need to be as effective as possible. In other words, put the shotgun away and hire a sniper.
In an open letter recently published by the IAB, some of the biggest publishers in the market called the current offering of mobile ads “inept” and “one-dimensional”. The open letter called for advertisers to develop mobile creative with HTML5. The letter argues that ads built with HTML5 are significantly more captivating. HTML5 also allows for responsive design, which is absolutely necessary in a mobile experience.
Swoop offers solutions to the array of challenges that both publishers and advertisers face in a rapidly evolving market place. For publishers, Swoop extends search campaigns to your content across all devices. This means you can tap into growing search budgets and effectively monetize mobile page views.
For advertisers, the Swoop technology carefully optimizes the targeting and placement of each ad. This means more effective ad spend on the mobile and non-mobile web. All Swoop creative is developed with HTML5 and is responsive across all platforms. The target got smaller and the stakes got higher. Rest assured knowing that Swoop is the sharp shooter you need.
Recognized for innovation, value, and impact.
BOSTON, MA April 11, 2014 – Swoop today announced it has has been selected as a finalist in the Most Innovative Ad Technology category for the MITX What’s Next Awards. This year MITX combined its annual Innovation and Interactive Awards into a single show recognizing Boston’s entire digital ecosystem.
Since 1996 the MITX Award shows have grown to become the largest and most prestigious awards competitions in the country for marketing innovations, celebrating the best creative and technological accomplishments emerging from New England.
“The finalists that emerged from an unprecedented number of submissions received for this year’s MITX What’s Next Awards demonstrate the creativity and innovation of our region’s rich digital ecosystem,” says MITX Board Member and Communispace Chief Operating Officer Howard Kogan, who serves as Chairman of the MITX What’s Next Awards Advisory Committee. “From startups to large corporations and everything in between, the individuals behind this work continue to raise the bar for the entire digital community.”
Swoop allows Search Advertisers to directly extend their Google Adwords campaigns to any piece of digital content, on any device. Swoop’s patent pending technology is unique in both; its ability to extract search queries from content, and to create virtual ad slots within the content in order to insert search ads once a query match is found. The result is that Swoop is the only technology that allows advertisers to directly run Google AdWords campaigns in content. The result is the opening of massive new inventory of high quality search terms for advertisers, and providing publishers access to the billions of dollars of advertising spent on Search Engines.
“We’re exited to be recognized by MITX in the Most Innovative Ad Technology category,” says Ron Elwell Founder and CEO of Swoop. “The team at Swoop has a mission to make the web a better place by; giving users access to the most relevant sponsored content using far fewer pixels than any adtech player trafficking IAB units, by providing advertisers the higher ROI and engagement they have come to expect from search, and by helping publishers tap previously inaccessible search advertising budgets."
Swoop will be recognized with the other finalists in the category of Most Innovative Ad Technology at a gala awards ceremony traditionally attended by over 1,000 of the region’s top interactive marketing and technology professionals. Winners will be announced at a ceremony at the Westin Waterfront Hotel on May 29th. Tickets can be purchased at www.mitxawards.org/The-Ceremony.aspx
The 2014 MITX Awards are sponsored by: HavasMedia, Miller systems, PwC, tripadvisor, Bingham, Cassidy Turley, SapientNitro, Atom Group
Swoop is a search advertising company that allows the extension of Google AdWords campaigns to any content on any device. Swoop’s patent pending technology allows for the extraction of search queries from content, and for the creation of virtual ad slots within the content wherever a search match is found. Founded by a team with deep experience in web publishing, advertising technology and consumer marketing, Swoop is located in Cambridge, Massachusetts. For more information visit us at www.swoop.com
Established in 1996, MITX -- the Massachusetts Innovation & Technology Exchange -- is the leading industry organization focused on the web and mobile, bringing together the digital marketing, media and technology community to engage in what's next and how it will impact the marketing and business worlds. Connecting more than 7,500 professionals in New England, MITX is a dynamic community of thought leaders and collaborators in search of insight, education and opportunity. Creator of FutureM, MITX is headquartered in Boston, MA. For more information, visit http://www.mitx.org/.
617-871-2155 ext. 708
By Ron Elwell, CEO
A big thank you goes out to Google for killing the experiment they were running that put large banner ads on search results. Granted, the reason they killed them was likely due to the fact that they couldn’t turn them into a significant new revenue stream. But, we’ll take the elimination of yet another annoying interruption of our Internet experience as a victory nonetheless. Now, if only there was a way to get rid of the other 5 trillion (no kidding – 5 trillion!) banner ads we could make the Internet a better place!
But take heart, we’re working on it!
Topics: banner ads
By Ron Elwell, CEO
With over 50% of every digital dollar going to search, Marketers have indicated with their wallets that placement on the Search Engine Results Page (SERP) is the most effective form of digital advertising. In fact, the nearly insatiable demand for search advertising is such that search spend would further dwarf other forms of digital advertising if there was more inventory.
Today the gap between search, and the next most effective channels, is wide and frustrating to marketers. Targeting becomes less precise: keyword and phrase matching gives way to content targeting, demographic targeting, or e-commerce retargeting. Click through rates plummet, and, more importantly, post click engagement falls to a fraction of that seen on the SERP.
Swoop has endeavored to fill this Great Void. We offer ad solutions that fall within this waste land between high-performing Search Advertising, and the world of low CTR, Banner Blindness and low conversion that is the world of all standard display ad formats and targeting. How do we do this?
First, we use true SERP targeting. The same proven targeting that has been developed and refined over the past 12 years by every major advertiser. The Swoop Search Engine indexes every content page, mobile or web, and simply finds more of the best performing search terms.
Second, we use precise placement. Finding the search term is only half the battle. If you place the ad in a standard IAB unit, in a spot pre-determined by the publisher, all the effectiveness of the targeting is lost. It is the dynamic placement of the search ad, within the content and immediately adjacent to the search term, that provides the reader with the information they are looking for, at the exact moment of interest, in a location where they can easily take action.
The result is an ad solution that fills The Great Void between search and everything else. Maybe not as effective as the best search terms on SERP, but a dramatic improvement on both marginal search terms as well as any AdSense placement.
If you would like to enjoy 5X improvement over your Adsense offering, just drop us a line at firstname.lastname@example.org
By Ron Elwell, CEO
Being a web publisher is full of challenges. Falling CPM’s, audience retargeting and duplicative content are all continuing threats to profitability. Now we can add to the list of challenges a rapid shift to content consumption on mobile devices. As page views move from web to mobile, the user experience demands fewer and smaller ad units on each page, further driving down revenue per page. Almost universally felt among the publishers we talk to is lament that mobile CPMs are even less than web CPMs. And with the constraints of the device there is even less opportunity to creatively explore new monetization strategies.
However, recent developments have made search advertising a great opportunity for mobile publishers. Google’s move to Enhanced Campaigns effectively eliminated the differentiation between the desktop and mobile device, with the net effect being a dramatic increase in search revenue directed to mobile. Now publishers can take advantage of that shift with Swoop, and capture these incremental dollars.
Like Google, the Swoop Search Engine is device agnostic. Our ability to extract keyword matches from content and insert new search ads directly into content after the page has loaded, works as seamlessly on mobile web as it does on desktop. And best of all, the advertising rates are the same on mobile as they are on desktop. Of course any Swoop search ad is incremental to every other ad unit or monetization strategy you have on mobile. So why not take advantage of your growing mobile traffic and tap into the 50%-of-every-digital-dollar that goes to search? Just drop us a line at email@example.com and we’d be happy to show you how.