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-msg (Independent Analyst/Advisor/Consultant)

matthew.scott.goldstein@gmail.com  

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https://www.linkedin.com/in/msgmsg/

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What I Saw Happen -- Q1 2017

Overview

  • Q1 2017 was hard for publishers and for some ad tech companies, especially after a robust Q4 2016

  • Google and FB are finally starting to face some pressure from the EU (and leading US advertisers) in regards to fake news and ads running on inappropriate content; we need more controls from FB/Google

  • Year over year direct sales was probably down about 3% in Q1 and pacing down about 7% for the full year (msg agaddo estimate)

  • I spent a bunch of time in Q1 thinking about advertisers and how they act differently depending on the vertical they are in and the KPI of that vertical. As an example Retail vs CPG vs Media. So Target vs P&G vs Netflix; This category thinking is critical going forward for ad sales leadership

  • The larger advertisers are finally deploying Preferred Deals, Private Auctions and Programmatic Guaranteed Deals in the marketplace, I believe this is because the Open auction buying is too complicated and not transparent enough

  • Many talented senior individuals are now looking for new jobs, interesting to see what transpires here? I think they may all end up leaving ad tech into something tangential like retail, data, finance, etc.


Facebook/Google

  • Both FB and Google are facing pressure from the EU as they get too large and don't take care of some basics

  • Facebook is great for the retail category but some other Direct Response verticals though other categories may be harder for them to crack (e.g., CPG, Finance, Auto, etc..)

  • There is no number three in site, I don't think it will be SNAP and Amazon is way behind the duopoly with ~$1 billion+ in ad sales revenue -- https://www.wsj.com/articles/amazon-looms-quietly-in-digital-ad-landscape-1475782113

  • I still love the FB advertiser outcome score, while very DR driven still directionally right for marketers and publishers -- https://developers.facebook.com/docs/audience-network/AOS

  • Facebook has decided to embrace header and snubbed Google; Google has responded by dropping LAST LOOK; big changes afoot in that little dance of the big boys

  • Interestingly FB is happy to not be on page; recent announcement shows they just want to access supply through S2S managers, perhaps they realize that managing hundreds of individual publisher integrations is not worth it for them?


Marketers

  • Marketers will develop more advanced programmatic bidding strategies as they better understand if they are participating in a first or second price auction

  • Marketers are thinking more and move about the white list and/or move to more PMP's -- Preferred Deals, Private Auctions and Programmatic Guaranteed Deals

  • Feels like each marketing category has one or two advanced programmatic buyers and then the other markets follow -- Netflix in Media, Wayfair in Retail, Verizon in Telecom, Google in Tech, etc..

  • Mobile continues grow as a target for marketers (driven by facebook), although conversions are still much more effective in desktop

  • Marketers continue to have challenges looking at attribution - no one has a model they are happy with spanning Facebook, Google and all others; marketers have fatigue with attribution models is helping last click/last touch players resulting with marketers throwing up their hands w sophisticated models and just going with what's easy


Publishers

  • Too many Direct sales people in the ecosystem as we shift more to programmatic sales

  • How does a publisher organization combine their Programmatic and the Direct sales team, probably a good time to start think through the process

  • Many publishers start think much deeper about the categories/verticals any how to work with advertisers in each category (e.g., Finance vs Telecom vs CPG vs Retail, etc.)

  • Publishers need to build ad products that cater to the marketers KPI, again depending on the advertiser vertical

  • I think there are three publishers verticals that have the most potential for long term revenue and affiliate monetization -- Auto, Finance and Travel


Ad Tech (DSP/SSP, etc.)

  • SSPs and DSPs are starting to consolidate and marketers will expedite this by getting smarter and consolidating their spend on only a few top performers

  • SSPs need to bring to market a much better white list capability for advertisers to serve to legitimate publishers; there is still a lot of gamesmanship occurring, marketers will start caring more about reduced reach/higher value

  • Waiting for a SSP to start publishing and promoting a curated white list of premium publishers like the S&P 500 or Dow 30

  • SSPs and Header bidding is causing a glut of QPS for Ad Tech players; DSPs starting to turn off some supply

  • Some SSPs are struggling to compete and losing market position – the gap is clearly widening between the well prepared SSPs and ill-prepared SSPs.

  • Are we in a first or send price auction, is there enough visibility here, especially for marketers; when does this change