Andrew FrankBased on current trends, it’s common to figure that Google owns the future of performance advertising and Facebook owns the future of branding, with a little contention at the borderline. Now come two coincident announcements seeking a different future. Each alone might invite skepticism, but taken together portend something interesting.
The Yahoo-Microsoft-AOL announcement (press release, Yahoo! News coverage), in the words of Yahoo’s Ross Levinsohn, will deliver “a more efficient, effective and more effortless way to access true premium inventory.” Parsing this statement in the context of market trends is instructive: ad exchanges and real-time-bidding (RTB) are gaining traction and putting pressure on “premium” inventory, which is often used synonymously with advertising sold directly to buyers by publishers and portals rather than through a network or exchange. The prices for this “premium” inventory tend to be 10-20x what one might expect to pay on an ad exchange, such as Google’s AdX, which is a major pain point for this trio. So, by attempting to create a category of “premium” non-reserved RTB inventory, can the Yahoo-Microsoft-AOL alliance (YMAA) effectively shore up ad bid prices – and their collective fortunes – with a promise of quality and efficiency? Or, to put it another way, what would it take to move the needle on non-reserved pricing and get brands to consider it “premium?”
Cut to Adobe’s financial analyst meeting in NYC on 11/9. The company drew a great deal of attention to this event by announcing a restructuring that included layoffs and sunsetting of certain product lines, most notably Flash player for mobile devices. Most in the press naturally interpreted this as a victory for Apple, but my view is that, to the extent that Apple’s actions led Adobe to abandon its Flash browser plug-in strategy, they probably did the company a favor, and perhaps even undermined Apple’s own long-term positioning. The reason, in a word, is HTML5. As a consequence of giving up on the ubiquity of Flash in the post-PC browser world, Adobe has embraced HTML5 and will now apply its substantial development and market power to do all it can to accelerate its adoption as a universal multi-screen, platform-neutral standard. And it will allow developers versed in Adobe’s Flash Developer tools to continue to work in the environment they’ve mastered and export their creations directly to HTML5. That will be a huge relief to a great many creative developers in the digital marketing world. Moreover, it doesn’t appear that Adobe has a great deal of strong competition in the HTML5 tools category. And now that they are offering tools through Creative Cloud, they’re likely to become even more ubiquitous. So perhaps the plug-in was a costly crutch they no longer needed.
What does this have to do with YMAA? The answer lies in the connection Adobe is making between its Creative Cloud and its Marketing Cloud. Its digital marketing platform is focused on optimizing advertising – not just on the media side, but also creatively – through a combination of data services (Omniture, Demdex) and experience management (Day Software) – in particular, leveraging data from the creative suite to make marketing experiences adaptive and personal.
My favorite part of the Adobe FA meeting was David Nuescheler’s demo of how Adobe’s marketing cloud connects with its creative cloud to incorporate various types of data directly into the design of context-aware user experience. (David is Adobe’s VP of Enterprise Technology and the former CTO of Day Software – the demo is available here at 0:30:00 into the clip.) David demonstrated how marketers, using Adobe’s CQ5, could apply context information to vary user experience dynamically by demographic, social, and geographic factors, device characteristics and more, and simulate, test and measure the results. The demo showed clearly the complexity of managing and optimizing dynamic context-aware experiences on one’s own web site.
Another key point that was came up during the “fireside chat” section with high-tech investor Roger McNamee was that, with the rise of HTML5, it will become increasingly common and feasible for ads to function as apps, unleashing the rich capabilities of video, web sites, e-commerce and mobile apps within a display unit. This could at last unlock the long-predicted-but-still-unrealized Big Shift in ad spending toward digital media. As Brian Morrissey recently observed in a Digiday story, “What If Brands Never Love Web Banners?,” “it could be that it’s not that brands don’t love the Web, it’s that they don’t love the Web’s standard display advertising.”
With all this in mind, imagine if YMAA and friends could bring their data and inventory to Adobe’s Marketing Cloud in a secure way so that marketers could design and simulate context-aware ad/app experiences on participating third-party sites, using those sites’ own anonymous user data in context? Marketers could then use these experience designs to drive RTB bidding strategies for context-aware, personalized ads that really could deliver better results and support much higher prices based on value. Meanwhile, many of today’s challenges – lack of transparency, clutter, accountability, privacy (eliminating third party cookies), targeting limitations of mobile platforms, creative limitations of banner formats – might all be addressed with such an approach.
Then maybe non-reserved inventory might look and sell like “premium” after all, and the future may look a little richer for brands, portals and publishers.
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