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Content Monetization: The Future of AdTech and Native Advertising

  
  
  


Ron ElwellThe old real estate maxim of location, location, location describes why identical houses can cost vastly different amounts based on their premium locations.  In the digital world the value of premium locations is quickly becoming devalued.   Publishers are faced with competition from an infinite amount of undifferentiated real estate.  Retargeting has created an easement across your waterfront property that allows everyone access to the beach.  Your audience is no longer your audience, it is something that can be accessed in countless ways around the web and the value of all property is trending to zero.  In fact a recent article shows a 58% increase in the number of display ads that has led to a 23% decrease in CPM.

 The fundamental problem across the industry is that all digital advertising has been about monetizing real estate. The publisher generates as many page views as possible, and on each one of those pages they run a number of ads.   In order to generate more revenue you generate more pages, more pages equals more impressions, more impressions equals more revenue.  However, as we have seen, we are now in a vicious cycle where the value of this real estate continues to fall, falling real estate value means falling revenue which means we need to generate more page views, which devalues the existing real estate which means prices fall further, which means we need to generate more real estate, which means….

 You get the picture.

 So, if the numbers are right and the trends continue what’s the way out?  At Swoop we believe the future is clear.  Native Advertising.  Stop trying to monetize your real estate and start finding ways to monetize your content.  Your content is what brought the reader to you in the first place, and it is what keeps them coming back.  Your content is what differentiates you from other similar sites or applications.  Your content is where all your unique value resides.   However, if we replicate the current real estate based ad experience inside of content, you will alienate your readers and lose your audience.  Placing Native Ads inside content has to be done completely differently. You cannot interrupt a user’s consumption of the content. You need to be respectful of the user at all times. You need to be incredibly contextually relevant so that whatever you do matches a consumer’s current mindset. Last but not least, you need to give consumers the choice of whether or not they wish to engage.

 In fact the ads must look nothing like ads as we know them today.  Instead they need to be much more akin to sponsored content.  Content that is relevant to the consumer’s interest or task at that exact moment in time.  Content that enhances the users experience.  Content that can keep them engaged and on your site.  And it all needs to be done in a way that is as scalable and as automated as the current real estate monetization tools. 

 When done correctly this can be the Holy Grail of advertising – relevant content that an advertiser pays you to provide, that the user asks to engage with, that keeps the user on your site longer and drives greater satisfaction.

 At Swoop we believe it is all about location, location, location.  But the location is not on your pages, it is in your content.  We are committed to leading this revolution to fundamentally remake online advertising into a helpful and relevant source of information for your readers, and a source of revenue that can ultimately foreclose on this broken ecosystem.

 In just 5 months since our launch we are thrilled that already over 350 publishers have agreed with us and are now partners in this effort.  While it is still early, the results have been incredibly positive and the support from publishers, advertisers and consumers has been inspiring.  Our commitment remains to bring more content and better experiences that will enhance your content and your revenue in the months and years ahead.

 If you would like to learn more please contact us at publishers@swoop.com.

Swoop on Digiday: Invitation is the future of Native Advertising

  
  
  
describe the imageThe problem with banner ads is that they're intrusive distractions bound to be rejected. Publishers have to walk a fine line as they need to make money from advertisements, but at the same time, they need to provide a great user experience for their visitors, and native Advertising could be the key. Read more from our CEO, Ron Elwell, on Digiday. Click here to read more

Running Shoes, Cheese Doodles, Beer and Native Advertising

  
  
  

By Ron Elwell, CEO and Founder of Swoop

I’ve been noodling on this post for a while, and I decided that the launch of our service to the public was the perfect time to sit down and polish it off. First let me give full credit to Bob Gilbreath for surfacing this idea in one of his blog posts. You can find his full post here: http://www.marketingwithmeaning.com/2011/03/04/how-new-media-is-eroding-the-mass-interruption-model/

Back in the late 1800’s John Wannamaker uttered the famous words “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Over 100 years later we have had innovations like the car, radio, television, powered flight, space travel and the Internet, yet this is an axiom that is still held to be true by most marketers. Given all the advances in technology and the tools at our disposal, doesn’t this represent a complete and abject failure of the advertising industry? How can it not? If we can really target consumers, if we can really understand the types of goods and services that you are most likely to be interested in, and if we can really forecast when you will be interested in them, then not knowing which half is wasted is inexcusable. Sure, the online video guys will tell you the waste is in TV, the TV industry will tell you it is in online display, and the online display people will tell you it is in search. But that is just so much parochial finger pointing.

One of the amazing trends in our industry is the constant stream of forecasts of tremendous growth. Gartner expects Global Mobile Advertising to grow from $3B in 2011 to $20B in 2015. Emarketer tells us that online advertising in the US will grow from $26B in 2011 to $50B in 2015. And on and on. If you believe all these forecasts then aren’t they really telling us that in 5 years we will be wasting another $100B of Marketers dollars? Is that really the best we can do? Is that really fulfilling the promise of better understanding of the consumer, better targeting and more innovative advertising?

Let’s step back a minute and look at what is really happening to advertising spend. To do this I prefer to look back at recent history since this is the best predictor of future behavior. Over the last 5 years, from 2006 to 2011, overall Global Advertising spend has been relatively flat, growing from $392B to $411B, a growth rate of less than 1% a year. Yes, we have seen good economic times and bad economic times during those 5 years, but cycles are typical in any 5 to 10 year period. So clearly the Marketers are speaking with their pocketbooks. Even with the advent during that time of on-line video, social media, mobile advertising, iPhones and iPads, and the continued explosive growth of the Internet, they have not been willing to pour even more dollars down a black hole of 50% waste. In fact, all we have seen over the past 5 years is a shift in spend from Print to Online, with print decreasing by $39B and online increasing by $37B. The shift has simply followed consumer consumption habits as I now read my newspaper and magazine online (in whatever internet form they now take). The online ad display format looks very much the same, and the targeting, be it hyper local, lifestyle or contextual is also very similar to what print has been doing for the past several decades.

 The chart below shows total Global Ad Spending by Category in over the past 5 years.

RunningShoesCheeseDoodlesBeer

(Quick Quiz; How many of you knew that total Print Advertising spend was still 39% greater than all Online spending?)

So what’s really changed?

Well, when you strip away all the hype and look at the numbers…not that much.  And unless we do a better job of delivering results it means we will continue to see a modest shift in spend between Print and Digital and overall anemic growth in the total market spend.

So what does it mean if we actually live up to the hype?  What happens if we really do find a way to deeply engage with a consumer at the point in time that they become in market for a product or service?  What happens if, as a marketer, I can be invited into the consumer’s life to help them make an informed decision?  What happens if we stop wasting at least a large proportion of that 50%?  Will that mean we finally achieve that dramatic growth that has been forecast?  Well, here’s the dirty little secret, if we can actually accomplish all of this, if we actually do our job, the overall spend will GO DOWN.  Think about it, when I traded in my gas guzzling squirrel killer for a nice eco-friendly sedan my gas bill was cut in half.  I still go everywhere I want to go and do everything I want to do.  What I don’t do is drive twice as far.  The money I save gets spent on important things like new running shoes, Cheese Doodles and beer.  So if we can deliver more effective advertising what do you think the Advertisers will do?  Will they continue to spend as much, or will they take those savings and invest them in R&D and productivity tools, or just drop it to the bottom line?

So here we sit in our office in Cambridge, MA.  After 12 months of hard work by a lot of people a whole lot smarter than I am, we are excited to launch our new service.  What you see today is just the tip of the iceberg, but you will see how we can uncover billions of serendipitous moments of deep contextual relevance, all within existing content.  For our Publisher Partners we provide incremental content and utility for their users.  For Advertisers we invite consumers, at the moment of declared intent, to have a conversation at an unmatched level of engagement.  And for consumers we provide timely and relevant access to information they may not have known was even available, or would have needed to search to find.  We believe that this invitation driven engagement is the most valuable interaction a brand can have with a user.  We believe it so much we deliver only engagement driven, pay for performance campaigns.  We believe it so much we think that in the future we will be able to deliver better results, at lower spend, to allow Marketers to know which half of their Advertising Spend is wasted and ultimately lower their overall spend.

From the Web: Why the Days of Interruptive Advertising Are Over

  
  
  
This article by Dan Greenberg of iMedia Connection is a nice take on Super Bowl ads as “non-interruptive” advertising.  While we agree that non-interruptive advertising HAS to be the future of advertising, and that Super Bowl ads have become a content genre all on their own, what this doesn’t address is the scaleability and repeatability of this type of marketing.  At a production cost of $1 millon +, along with months of planning and execution, this type of high end, content as advertising, production is just not scalable across channels, contexts and audiences.
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