The health and safety of an exchange depend upon its participants ­ ­

Online security is a problem as old as the internet itself. Despite the ongoing efforts of the computer software and security industries to combat threats such as viruses, worms, Trojan horses, and other malicious code, we and other online businesses, find ourselves in an arms race with the perpetrators, who continue to launch attacks with increasing sophistication. Unfortunately, advertisers, agencies, networks, publishers and consumers are becoming more vulnerable to these insidious new threats, which threaten not just the online advertising industry, but the Internet economy as a whole.

What can you do?
As frictionless trading between ad networks becomes more and more important, advertisers are looking for innovative ways to maximize their return on investment and publishers are looking to limit the amount of unsold inventory. Liquidity in the marketplace should not come at the expense of quality, and we are committed to balancing the revenue or performance goals of our customers while at the same time helping them to drive a positive user experience.  This means that all stakeholders must be even more diligent about whom they do business with and use reputation as one of the determining attributes, instead of relying solely on revenue. If we sacrifice quality, there is a much higher risk of driving away brand advertisers who are turning to performance advertising as a more targeted, measurable and cost-effective marketing strategy.

Since the Right Media Exchange is an open technology platform that our customers—advertisers, agencies, networks and publishers—use to do business more directly and with greater visibility and control, we are not involved in ad creation or in the purchase or sale of online media.  That’s why the overall health and safety of our marketplace depends on the efforts of all platform participants.

The Right Media approach
Our approach to combating threats to the Exchange includes trying to proactively implement industry-leading safeguards that protect our customers, their constituents and, ultimately, their end-users.

For example, all creatives or ad tags that run through the Exchange are tested by our Creative Tester technology (part of Media Guard) in an effort to detect and ban creatives exhibiting malicious behavior such as viruses and program installs, or that display attributes we consider to be high risk. Creative Tester subjects every creative or ad tag trafficked into the Exchange to a series of tests which simulate an impression, load the creative and record the technical attributes detected during the creative load. When Creative Tester detects certain types of malicious behavior, it automatically deactivates the creative and notifies the Exchange member who trafficked the creative or ad tag.

The Exchange also uses an automated detection program called SCOUR that checks Exchange traffic regularly, searching for patterns exhibited by desktop software and flagging sections that exhibit what, in our opinion, may be malicious traffic patterns.  If we detect that some or all impressions from a particular section of a site on the Exchange have been initiated by applications that are prohibited by our policies, they are automatically deactivated (thereby making them ineligible to receive further ads via the Exchange and to generate any revenue for the publisher).

Keeping up the fight
Our continued investment in protective measures and the implementation of mechanisms like the ones highlighted above are helping Right Media protect all participants in the Exchange ecosystem from potential harm. However, attackers continuously find new, sophisticated ways to circumvent safeguards and malicious software applications continue to evolve in their behavior and delivery methods. We’re always working to understand these new threats so we can develop tools that can weed them out as quickly as possible.

Although the task at hand is challenging, we believe that by partnering with Exchange participants who are equally committed to eliminating these threats at their source, we can make meaningful progress. Right Media welcomes all thoughts and suggestions on this important issue because we believe that if we work together, we can maintain our leading position as the largest, healthiest and most successful online Ad Exchange on the market.

—Nilesh Zacharias, Director, Policy and Operations

Everyone’s talking about real-time bidding capabilities

I remember the day I realized that media exchanges like Right Media had technology that facilitated the selling of inventory on a per-impression basis, by allowing bids to be made on each and every opportunity. I was so excited by it that I immediately kicked the guaranteed world to the curb, and jumped head first into Right Media.

The concept was simple: The highest bidder won the impression. I was amazed that bids could be evaluated so quickly and a winner chosen in real time, and even more so that the value of the inventory could be decided in real time based on market demand. Once I learned this, I was unable to focus on anything else transpiring in the industry, especially guaranteed or reserved buying.

Now we’re heading into a new era. It is still real time, but now it is real-time bidding. Advertisers are rushing to get set up with their own real-time bidding capabilities and hook directly into Right Media’s supply pool. In fact, it is a topic of discussion in every client meeting I attend. Every moment matters and they want to optimize their bids—in real time.

Bidding through third-party integration
Third-party integration requires two key platform capabilities: auction broadcasting and real-time bidding systems. What’s needed is the capability on the supply side to externalize the auction (auction broadcasting), while partners on the demand side provide the real-time bidding systems that are able to respond to that broadcast in real time.

If all of this sounds awfully similar to what Right Media already does on behalf of our demand and supply customers on every ad request, you’re correct: We’ve been doing real-time bidding for years. We were the first to offer it, we became the largest provider, and we are still the largest supply pool of real-time, bidded, non-guaranteed inventory.

What’s so special about this?
Externally broadcasting supply opportunities allow demand aggregators (large publishers, networks, agencies, and tech providers) to use their own predictive engines to decide on a unique bid value per impression. Traditionally these bid values were static, set per line within Right Media, and Exchange members relied on Right Media’s predictive technology to bid on their behalf within pre-configured constraints.

Today, Right Media’s dynamic pricing evaluates impressions and bids differently for every impression, based on many parameters in our predictive algorithm. In the new era of real-time bidding, external third parties will be able to use and control their own prediction mechanisms outside of the Exchange, and to use their own ad selection logic and optimization.

Who needs real-time bidding?
Real-time bidding won’t be for everyone. For many of our customers who bring demand to the ecosystem, using Right Media’s predictive algorithms is the best path to take, as it’s in real time and is dynamic. You won’t need to make large capital expenditures to build out the capabilities needed to participate in real-time bidding. Also, you’ll be able to get very sophisticated with your Yield Manager set-up, including automating the adjustments of bids per line item by using Right Media’s APIs.

Stay tuned for more on this exciting new technology, and please share your thoughts on real-time bidding by posting comments on this blog. Is this good for the industry, or bad? What are your concerns as an advertiser, or as a publisher? Will it raise publisher CPMs and performance? Comment below…

— Pedro Ponce de Leon, Senior Manager, Professional Services

Marketplace Select helps you avoid surprises with your ads

It’s Monday morning. You have your coffee, your bagel, and your morning meetings ready. Then, the call comes: “What the *#% is my finance ad doing on an adult site?” Well, your Monday and next-quarter budget are instantly undone.

This is exactly why people get nervous working with blind ad networks or exchanges. And it is exactly why brand advertisers can have a hard time making the transition into the nonguaranteed space. Never ones to shy away from a challenge, we decided to tackle this issue on our blog.

Know where your ads are
It’s clear that the way around this problem is transparency and control: transparency from sellers and controls that allow both buyers and sellers to help ensure proper delivery of ads. That’s why we created the Marketplace Select program at Right Media. We aim to create an open, transparent environment where even the most brand-concerned advertisers can have visibility into the content that they are purchasing through the Exchange.

Participation in the program is, of course, voluntary. So we decided to ask who would be willing to share a list of sites with approved partners for transparent media buys. The response has been overwhelming. Most networks and publishers on the Exchange not only don’t mind sharing a list, but care just as much about cleaning up inappropriate content and creating a trustworthy marketplace as buyers. That’s a good thing, because this goal takes cooperation from everyone.

Everyone benefits from a better marketplace, too. As one publisher said, “I can’t imagine anyone saying no. I’d think all Exchange participants would want brand campaigns with higher CPMs.”

Managing ad placement
Marketplace Select enables partners to share, manage, and approve site lists. We also recommend best practices for reducing content risk through, among other things, URL targeting and auditing.

Inappropriate content often shows up because networks have trouble controlling where their publishers place ad tags. To help alleviate this, we worked with Exchange members and derived a targeting solution for Marketplace Select that doesn’t depend on publisher classifications.

This system uses something called validated URL targeting, which lets the Right Media Exchange read the top level domain that an ad call comes from. That way you know exactly where the ads are running, regardless of publisher tag placement. This solution has become the preferred method by most Marketplace Select members and speaks to a growing commitment toward working together to keep the Exchange a viable and safer place to do business.

So, if you’re not part of the program, what are you waiting for? Contact your account manager to get involved. Your buyers will love you for it.

—Maggie Neuwald, Consulting Services
Sean Smith, Engagement Management

Brand campaigns seeking better performance look to behaviorial targeting

As brand dollars shift online and as brand campaigns shift more towards performance, we’re beginning to see a lot more interest in the performance benefits of behavioral targeting (BT).  BT takes information such as the pages users have visited or searches they’ve made, and enables you to serve ads that are more  relevant to a user’s interests.  The argument then becomes: if you can show relevant ads to interested users, the performance of your campaign should increase – hence the natural link between performance campaigns and BT.

I attended OMMA Behavioral late last week and had the pleasure of taking in several interesting presentations and speakers that focused on the growth of BT and its impact on publishers and advertisers.  The best of these was “How Are Brands Looking at Behavioral Targeting?”, presented by Doug Chavez, senior manager of digital marketing at Del Monte Foods.  He confirmed the above trend when this equation flashed across the screen: “Brand + DR [Direct Response] = BT Growth”. This is backed up by a June 2007 forecast by eMarketer, which projects behavioral targeting to more than double between now and 2011.

Brand advertising and BT can be a particularly strong match, because brands have a deep understanding of their consumers and how to engage them.  Brand advertisers and their agencies try to use a precise combination of demographic and psychographic information to target the appropriate audience.  BT lends to this extremely well. We’re starting to see more brand-relevant segments offered in the market – the Avid Golfer, the Family Chef, etc.

The one thing I took away from OMMA Behavioral and Doug’s talk in particular is that BT may not be a silver bullet but it does align very well with what brand advertisers seek.  Doug underscored the importance of BT providers being transparent with advertisers with respect to how their BT segments are created.  Brands are not looking for the “special sauce”, but more for the ingredients that are necessary to show the most relevant ad to the most interested user.

— Megan Bergtholdt, Consultant, Professional Services

A round-up of things seen and heard at the OMMA Ad Nets event in L.A.

Yesterday, OMMA hosted its second Ad Nets program in Los Angeles (sponsored by Yahoo!), and the conversations certainly mirrored the ad network space itself: a lot of opinions, and subject matter that was somewhat confusing at times.

Jarvis Coffin from Burst Media summed up the persistent theme of the day during the vertical ad network panel with the line, “How horizontal is your vertical?” As an example, vertical ad networks were developed to target specific interests, but now they need a broad toolset to fully service their partners. Each panel seemed to mention new needs, tools and services now needed by advertisers.

There’s been a profound shift in digital buying to audience that has opened up a lot of opportunity; today Aggregate Knowledge just announced their own audience optimization product. Add in the agencies and their proprietary networks, and it is looking like we are in store for a renaissance in network growth. Correct me if I’m wrong, but don’t you usually see a consolidation of assets in a recession? I guess we’re not in a recession after all.

OMMA AdNets was full of content, covering macro and micro trends with no shortage of new buzzwords. Panelists talked about “private exchanges,” “audience verification,” “real-time creative optimization” and even “secondary premium inventory.” Non-guaranteed inventory turned into “unreserved” inventory (is that like standing room only or general admission inventory?). At this rate, OMMA will need to add a glossary to their program just so the audience can follow along. The term “network” itself still has a negative stereotype apparently, leading QuandrantOne and Disney to call their networks a “platform” or “portfolio” instead.

Regardless of the differences in toolbox and terminology, ad networks are some of the best innovators in the space. There are hundreds of networks because there was, and still are, market opportunities for new solution sets, like campaign and audience verification.

Jordan Rohan from Clearmeadow Partners summed up four key factors to be a successful network: Get big (70% reach is now table stakes for a network), get niched (be different, have a story to tell, and tell it well), get data (an agency panelist repeated that client data is the secret sauce), and get good salespeople (good salespeople don’t stay at poor networks).

I quietly laughed when I heard a panelist say that we still are in the “early times,” but after listening to the whole program, that might just be true. Two topics that were mentioned but saved for the next OMMA event was measurement and attribution. Quentin George, Chief Digital Officer at IPG Mediabrands, talked about it during his keynote, saying that the Atlas Institute had done some good things, but that there was a lot more to be done.

For more scuttlebutt from OMMA Ad Nets, check out #Ommanets on Twitter.

— Christopher Murphy, Director, Business Development

Yahoo! talks to publishers about managing multiple sales channels

Yahoo!’s Professional Services team is everywhere these days. Last week we blogged about several events Yahoo! would be participating in, an IAB Professional Development class about Managing Multiple Sales Channels being one of them. The class, led by Marc Grabowski, senior director of network sales, and Jeanne Hwang, director of consulting, helped publishers and networks set up their sales teams to develop ad packages that cross sales channels and maximize their inventory. Luckily for me the class was in San Francisco: No travel required!

Within the first few minutes we heard why attendees had given up three hours of their day to be there. The reasons the attendees gave ranged from getting a handle on yield management to developing streams of new ad revenue to dealing with channel conflict. With this industry changing as quickly as it is, I understood where these people were coming from. Luckily, Jeanne and Marc had a few tricks up their sleeves to deal with these issues. The three biggest takeaways were:

Times, they are a changin’
The industry is undergoing a dramatic shift. Marketers are becoming savvier; they have fewer ad dollars to spend but have more metrics at their fingers than ever before, and they want results. Over the last few years we’ve seen a shift in ad dollars from brand to performance. Roll in agencies’ demand for more transparency, and you can see how this is causing a pain point that publishers and networks must address. Bottom line:Publishers and networks must become savvy sellers of performance advertising.

Just say no
Successful sales teams work with marketers to identify the goals of a campaign but, more importantly, they help determine if the campaign is likely to see success on their site or network. Is the marketer looking for clicks or conversions, and what are those worth? Who is their target audience?Does the creative have a clear call to action?Is the conversion path short?Does it require minimal registration information that is easily provided (Such as a zip code as opposed to a social security number)?Bottom line:If the answers to the previous questions point to a bad campaign, sales teams must learn to just say no.

Differentiate to survive
How do you avoid conflict among channels that are selling the exact same inventory?You don’t—it’s inevitable. If marketers are able to access the same inventory from multiple sales outlets, they can take the lowest price, ultimately degrading the value of your inventory. You can fight slipping CPMs by allowing different channels to sell different slices of inventory determined by targeting, frequencies, properties, and so on. Bottom line:Differentiate what sales channels are able to sell to help avoid conflict.

—Megan Bergtholdt, Engagement Manager

Yahoo! Professional Services offers new performance and display advertising services

Do you ever get the feeling that the advertising world might be leaving you behind? Whether you’re a publisher, an agency or an ad network, it’s getting tougher to give your advertisers what they want. This week, Yahoo! Professional Services is announcing two new services—Display Extension and Performance Sales Enablement—that can help you capture more brand performance ad dollars.

Our Professional Services team works with the first and the largest exchange in the world, which conducts 8 billion transactions a day, and we provide advertising solutions that can help give you an edge in the business. We have several offerings, but today we’ll focus on the two new services.

Display Extension
You may be a search agency or network who’s dabbling in display, or who simply wants to offer your clients more options. Either way, you’ll want to think about combining search and display in a single powerful solution: Display Extension.

Search and display are more powerful together than they are apart. According to a December 2006 comScore study (Close the Loop: Understanding Search and Display Synergy), users who have viewed both types of ads are 244% more likely to purchase something online and 89% more offline compared to users who haven’t seen either. That’s stronger than either search or display separately.

Display Extension lets you target display ads on the Right Media Exchange to users who have clicked on your search ads on any search engine. So you get the visibility of display ads on our robust xchange in front of users who are looking for what you offer. Our assist reporting gives you insight into your advertiser’s sales funnels, so you can understand the contributions of both search and display. We offer you creative services and consultation to help you package your search and display products together.

Performance Sales Enablement
Advertisers are watching every dollar they spend, and they increasingly want to pay only for ads that are performing for them. If you’re a publisher, that means you need to be offering performance-based pricing. Performance-based pricing grew by 11.8% in 2007, says the 2008 IAB Internet Advertising report, where as cost-per-impression pricing shrunk by 13.3%. But shifting to performance pricing is not easy to do without help.

Creating a successful performance-based program isn’t just about changing how you charge – it also means you have to transform your business operations and your way of selling. And that’s where our Performance Sales Enablement offering comes in. We train your sales force, develop messaging for your advertisers, analyze your inventory and help you create performance-based advertising packages.

What can you get out of all of this? Well, happier advertisers, since you’re giving them what they ask for. But you can also get more out of your inventory by capturing more performance dollars. You’ll be leaving less of your money on the table.

You’ll be hearing more about both solutions and others in the coming weeks. In the meantime, visit our Professional Services website to get started with us.

—Megan Pagliuca, Director, Consulting Services