Paul Mant took over the role of general manager at New Zealand's biggest digital sales house/ad network Adhub almost two years ago. And as ad spend continues to head online, the business has grown at around 20 percent per year. So is the banner dying? What's so great about native? And are brands that use ad networks destined to be everywhere and nowhere at the same time?
Back in 2008, Shane Bradley and Josh Borthwick saw a problem. People had the skills to create online content and build websites, but they didn’t have any sales skills. So it tried to solve that problem by filling the role for publishers. Things have changed a lot in the intervening six years, of course, but it's gone on to become the biggest sales house in the country in terms of number of sites and the audience across them. And Paul Mant, who took over from Borthwick as general manager in April 2013, is confident it will continue in that direction.
"We try not to call ourselves an ad network, we call ourselves a sales house," he says. "Being an ad network can be something that’s automated, it can be a whole lot of different things to different people and I think it also has negative connotations."
He says this reputation is probably due to a combination of the 'five tips to fight belly fat' or flashing sweepstake ads that are part and parcel of the online world and the fact that online advertising fraud has come under the spotlight recently.
"I heard a really interesting stat yesterday from one of our data providers and they’re saying from their research at the moment that 15 percent of traffic into those big broad buys where you’re buying audience and scale is fraudulent. So it’s really important to have software that doesn’t count that 15 percent."
In the States he says the number is estimated to be 30 percent. And while he doesn't think this is affecting New Zealand sites in a meaningful way, marketers need to know their money isn't being wasted and he says Adhub has tools in place (as does its preferred ad network, AppNexus) to ensure it's reaching humans rather than robots.
Many publishers pinned their hopes on digital advertising rates continuing to rise as audience numbers grew. To their chagrin, that hasn't really panned out and the rise of adtech and the proliferation of media options has meant the opposite. So where's the growth? For Adhub, Mant says it's mostly in native, which is by far the biggest mover, and video.
"For us, premium display advertising is quite static," he says. "So we’re seeing as a marketplace CPMs drop as a whole. But where we’re seeing the increase is through innovation with ad units within sites. A big success story is a site like interest.co.nz, which has had substantial growth month on month, year on year [he says it gets around 90,000 UBs a month]. They’ve embraced the technology we’ve put forward, whether it’s in-content video, native or custom content. As a publisher, they’ve got the open-minded approach to make it sustainable and build new revenue streams. You can’t just do it with banners increasing on CPM level. You’ve got to be smart and maximize every page, without annoying your audience. So it’s a balance."
He says Realestate.co.nz is another page it handles that is seeing massive growth and it now has the most listings in the market ahead of Trade Me. And while it's a bit slower to move because of its board process, he says it's also adopting native, custom content and "some outside the box stuff".
"Native is advertorial in a lot of people’s heads. And everyone’s been doing it at a publisher level since back in the day, like a comic book advertising whoopee cushions that was in the same format as the comic. Now native is a mixture of creating content and also utilising sites that have relevant content to place ad units that are clearly marked."
- Check out Adhub's Visual Native sales pitch here.
He says it has distribution rights in Australia and New Zealand for a product called Triple Lift that he believes solves some of the major problems associated with native advertising, particularly scale, time and reporting. And where it works really well for Adhub is on sites that sell out of standard ad inventory, like interest.co.nz.
Initially, he says there was plenty of excitement about native. Agencies, clients and publishers would get heavily involved, but because it was so bespoke, the sustainability of being able to roll those campaigns out at scale and on a regular basis was troublesome.
"It took too much time, but then you’d compare the results to how banners worked and it was night and day ... What we’re offering now is the ability to do a one day native campaign. A couple of hours, targeted to a user, or a geo, which is what we’re doing in the banner space and we can get a campaign live in 15 minutes."
Put simply, an image, headline and some copy is supplied (or conceived by its in-house copywriter), dropped into the software and then it spits out ad code for thumbnails to suit different environments.
"Every page is different, the home page, the content page, what a sub domain page looks like, so to flow native through there in a manual way you’d have to hard code it in to all those pages. That’s a major problem. If we added 20 different sites, we’re talking massive amounts of work, because there’s all these different sign off points."
This tool removes that barrier. But where the smart stuff comes in when the content is relevant to each site, he says.
"At the moment we’ve got a Cook Islands native campaign running. If it’s on surf2surf.co.nz, you’d be talking about what the surf’s like there. If you were on a family site, you’d be talking about family holidays. And if it was a business site, you’d be talking about having a conference there."
The native product also lets users like the content on Facebook or pin it on Pinterest.
He says this tool has been the biggest innovation in its business to date and he believes it's leading the market. He says there are others who are leading the content side of things in native, such as nzherald.co.nz's recently launched Brand Insight. But he says you need both good content and good distribution.
"We created some content for a government department around immunisation for under 18 year olds [after they turn 18, they have to pay for them] because they wanted to be doing something outside of banners. That’s really difficult. How do you talk to people under 18 about getting immunised? So we did one on surf2surf.co.nz and talked about surfers when they finish school who maybe go on a gap year, but if you get immunised before you go you avoid a whole lot of headaches. There were a few cliches in there, like 'you don’t want to see sick conditions and be sick'. But it worked extremely well. The drivers are key. People aren’t going to stumble across that content. It needs to be on the home page, it needs to be spread socially and it’s got to be relevant."
He admits the social spreading is a murky area in the marketplace. And while Mant says Adhub doesn't enter into this area, he says the issue needs plenty of thought from the wider industry because at the moment there are no rules around payment for distribution (the ASA set guidelines for ads on social media back in 2012, but, unless it's being used ironically, the #ad hashtag has been very rare).
"There are some huge Facebook pages. For example, MeanBro has over 120,000 on its Facebook page. That’s where they have influence. They ran the Blazed As ad and the amount of shares on the back of that was amazing. It's another form of publishing for certain audiences ... There needs to be some understanding around social media followings, because that’s where native placements are going to work quite well."
As banner blindness increases and ad blockers become more common, many publishers around the world are looking to put ads in the content stream. Some believe this is trickery; ads dressed up as editorial. Publishers claim that they're clearly labelled, but as On the Media's Bob Garfield said recently, if they wanted to be clear, they wouldn't call it sponsored content, they'd call it an ad. Mant says labelling is at the discretion of the publisher and, in the case of a TradeMe property post that ran on interest.co.nz, it's marked as sponsored. But as some of the New York Times' branded content shows, good content rises to the top, even if it is paid for. And Mant says it all comes down to relevance.
"It takes the look and feel [of content], but it's at the publishers' discretion ... We don’t want to put irrelevant ads on their page. On realestate.co.nz, someone who’s selling a paint product makes sense, but if you’re talking about 'go and see such and such movie,' it trickles down the effect on what it’s going to offer the reader and that’s when it becomes annoying."
Just as digital billboards seem to be taking money out of traditional OOH, he says this shift to native is taking money out of banners. And for publishers, it's worth paying attention to how the market is evolving if they hope to stick around.
"I’d like to say revenue is being pulled out of everywhere, but it’s from digital teams. It’s being pulled out of the premium banner space ... Our publishers say where they were achieving premium CPMs, that may have dropped by a third. So where’s that going to be in a few years time? You’ve got to be future proofing your business and this is a way to do it."
As for reporting, he says it counts page impressions, click throughs, social shares and established social reach. And it's also reporting on mouseovers so the viewability issue is being addressed (although counting a mouseover as 'engagement' is probably pushing it).
"It's something we can stand behind. It’s a bit more expensive, but look at what they’re going to get."
Programmatic buying is still just a sliver of the total online ad spend, here and around the world (in New Zealand, it accounted for nine percent or $3 million of the total $31.4 million spent on online display in the last quarter). But it's getting plenty of column inches and that spend is trending upwards. And in the last 12 months, Mant estimates programmatic has equated to around 20 percent of Adhub's business.
He says the type of ads that appear on sites are absolutely manageable. If you're happy having dodgy sweepstakes ads on your site, then they'll probably earn you a pretty penny. But there are filters available.
"It’s a business decision. There’s money at the end of that stuff. For some publishers, they might be okay with it if ad revenue is the key metric. We’ve had sites that can make more through that side of things but have non-relevant ads for their users. But, as an example, we look after NZX, so you don’t want to ever see that sort of stuff or we’re not doing our job. You want to see car brands, overseas travel, business decision making tools, stuff that’s relevant to that audience."
Many big publishers attempt to have their cake and eat it too by selling direct to clients for higher prices and then handing some of their inventory over to Google Display Network or one of the other five or six big ad networks that kick in when the inventory is available. So it seems to make sense from a publisher's point of view. But Bauer Media’s Paul Dykzuel said recently that he believes there will come a time when brands start to realise that it doesn't pay to be everywhere and nowhere at the same time. So is it worth playing in this sandpit and buying audiences across hundreds of sites, rather than buying space with known media brands?
"It’s still an audience. And it just comes down to relevance of the ad," he says. "For instance, nrl.com is the number one site New Zealanders go to for league results. They also look after warriors.co.nz so when you look at that granular level, it's absolutely worth it. There are some ares that overseas sites do so much better in terms of content, which is understandable. Every surfer in New Zealand wakes up and goes to surf2surf to see what their home break is like. But if you want to find surfing results, there’s no better site than what the Surfing Association does. We can buy those kinds of sites programmatically. So it makes sense for surf brands like Quicksliver or Rip Curl to be running across both those sites."
He says it favours New Zealand sites that have a contextual relevance because they do have a stronger appeal to New Zealand audiences (around 15 percent of its network is made up of local sites and, like Acquire Online, it also allows brands to set an amount that is spent locally). And it's also good for the whole online ecosystem.
"The more money they make, the more better content they make. There is an absolute flow-on effect up the ladder."
He says its business is growing 20 percent year on year (it takes a 30 percent cut on sales). And it's adding new sites every week, with GrabOne, undertheradar.co.nz and flicks.co.nz, which was one of its foundation clients, added to its roster recently.
"GrabOne with native is a huge coup for us. And I think that’s really interesting with their targeting options. If you’re looking for people going to beauticians, you can talk about beauty products, or the latest chick flick that’s out. That’s how you can utilise that along with display banners."