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Why Publishers Should Embrace Programmatic Buying
Nov 30th
by Manny Puentes in Company, Lijit publishers, industry, technology
Those who “own” inventory are concerned that through exchanges, advertisers and trading desks have access to the same premium placements at lower CPMs, thereby diluting direct sales opportunities.
As a premium publisher, you probably invest in a sales team to monetize your inventory. You sell a unique readership, social engagement capabilities, contextual relevance, and other site-specific aspects that help value premium inventory at premium prices. Your team works hard to close direct deals with high CPMs to make sure the value of the inventory is not diluted so they can keep cash in their pockets!
On the other side of the coin is the brand advertiser. Brand advertisers also have concerns about exchanges because they are hyper-sensitive to brand alignment. They work hard to protect their brand from the “Wild West” we call the Internet, and are über-sensitive to the variability of content across the web.
Buying direct from premium publishers ensures contextual relevancy and protects against brand conflict. It’s the safe route that allows a brand advertiser to lock in contextually relevant real estate and track ROI.
A “true” private exchange turns potential dilution of inventory, internal struggles with the sales team, and contextual awareness into a big-time publisher opportunity. In a true private exchange, the sales team continues to work with advertisers to sell premium inventory. Let’s not forget what’s important to advertisers: (1) contextual placement and (2) guaranteed inventory/unique(s).
A “true” private exchange gives priority bidding to the select advertisers that have negotiated a higher mid-tier CPM. The CPM is higher than on an open exchange because it’s backed by data, yet lower than a premium CPM because it’s not guaranteed.
The industry needs to embrace true private exchanges. A “true” private exchange solves a real business problem for both the publisher and advertiser:
(1) Publishers can place inventory on a private exchange at a $3-$10 CPMs and offer it to a “select” set of advertisers
(2) Publishers can use the private exchange to build a process and compensation plan for the sales team
3) Advertisers feel safe using a private exchange that guarantees contextual placement and protects against brand conflict.
The private exchange is a true private marketplace where the prioritized advertiser with the highest bid wins.
Tags: ads, blogging, industry, Lijit Advertising Services | View Comments
The economic rules governing the advertising technology industry can seem a little counterintuitive when referring to pixels and cookies versus physical goods or financial instruments. Further, when it is as easy as installing a snippet of JavaScript on your page to start making money, companies can seem more like pyramid schemes than players in a fundamentally sound market. However, believe it or not, the advertising technology industry is governed by the same economics that govern most every other industry. And supply, demand, price, and quantity are some of the most fundamental economic concepts that can be applied to ad tech with just a little translation.
Ad “inventory” is essentially synonymous with “supply.” This is the available ad space on a website. Thus, publishers are the suppliers of the industry. And the price a publisher is willing to accept varies depending on content, seasonality, audience, location of the ad zone on a page, and many other variables. Considering the way that ad serving works, with an individual advertisement being passed from advertiser to network, to exchange, to SSP, to publisher, etc, this might seem backwards. But the best way to think about it is the way the money flows. Ad “inventory” is available for purchase, just like product inventory in a store or a warehouse.
On the other side is “demand.” “Demand” is essentially advertising spend. “Demand” by advertisers also varies based on seasonality, content, audience, etc. for the same obvious reasons. Where the supply and demand curves meet is the nexus we use to identify “price” and “quantity.” Of course, we, the ad tech industry, have our own word for “price” which is “CPM.” And we express the concept of “quantity” with terms like “ad traffic” and “fill rate.”
Once you boil the industry down to these fundamentals, it seems less populated with buzzwords and more with terms reflective of actual economic opportunity. Terms like “demand side platform,” “supply side platform,” and “ad exchange” make sense despite the fact that they sound more like they come from Wall Street than Silicon Valley or Madison Avenue (or Boulder, Colorado in our case). In fact, these terms are reflective of a healthy and fundamentally sound (although ridiculously dynamic) market with incredible economic opportunity for years to come.
Just take a look at LUMA Partners‘ Display Advertising Technology Landscape to get a sense for the sheer number of companies involved in this highly competitive and fast growing market:
The latest numbers from eMarketer estimate that the US online ad market will see dramatic growth this year with spending to increase 20.2% to $31.3 billion. eMarketer also predicts that by 2015, total US online ad spending will reach $49.5 billion, more than 58% higher than this year’s estimate. Now those are some ad tech economics!
Tags: ads, Lijit ad network, Lijit Advertising Services | View Comments
As a marketer, I’ve used Google Analytics for years. The problem with Google Analytics is that it provides too much information… so much that very few people know what to do with it all. It often comes up in conversation with our publishers, and they all agree.
Lijit’s goal is to provide an easy-to-use alternative to Google Analytics so we held a roundtable discussion with 15 publishers to learn about the most beneficial data for their site. Everyone agreed that “actionable analytics” are what’s important. Publishers don’t want or need every last detail about their website and traffic. What they do need is relevant data they can use to grow their site and make more money.
The premise: the more you know about your audience, the more you can tailor your content to meet their needs. This engages your audience which helps increase pageviews and grow traffic. The more traffic to your site, the more money you can make from online advertising.
We have recently done a lot of work at Lijit to enhance our Audience Analytics and focus on what we refer to as “actionable analytics” – meaningful and actionable stats that help you grow and monetize your site. For those of you who may not know about all the data we provide, you can each log into your personalized dashboard depending on the type of Lijit services that you use. Data includes:
- Audience demographics: age, gender, ethnicity, income level and education.
- Advertising performance: stats on ad requests, ad impressions, CPM, fill rate, and earnings to help you optimize revenue.
- Audience understanding: data on pageviews, geography, referring sites and searches, top posts, outbound clicks, and other sites that link to you.
- Search intent: statistics relating to number of searches, top searches and last searches, top clicked results and last clicked results, and searches that returned no results.
For those using Lijit’s advertising services, an ‘Ads Today’ section provides trending data comparing the current day’s ad performance to performance one week and one month prior.
Check out the cool interface:
To download Lijit’s Audience Analytics, click here. Please let us know what you think – we’re always looking for feedback!
Tags: Lijit publishers, lijit stats, publishers | View Comments
b.media forum: presented by Lijit and Foundry Group
Apr 22nd
by Sonya Caprio in Community, Company, events, industry
Yesterday, Lijit and Foundry Group hosted the inaugural b.media forum. Based in Boulder, b.media brought together the digital media industry’s top entrepreneurs and thought-leaders to discuss consumers, online advertising, and publishing. Click here for a full list of attendees.
The half-day interactive discussion included three panel sessions:
- Consumer panel: moderated by Niel Robertson, CEO of Trada. Panelists included Dave Heal, Tim Falls, Cali Harris, and Casey Finkel.
- Publisher panel: moderated by Todd Vernon, CEO and founder of Lijit. Panelists included Todd Sawicki, CRO of Cheezburger Network; Andy Clurman, COO of Active Interest Media; Kurt Kohlstedt, Executive Editor of Webist Publishing & Misnamed Media; and Jeff Reine, GM of TypePad.
- Advertiser panel: moderated by Seth Levine, Managing Director, Foundry Group. Panelists included Rajeev Goel, CEO of PubMatic; Philip Smolin, VP and GM of TURN; and Jay Ferracane, Creative Director of Angry Bovine Advertising.
There were numerous insights from the forum that we’ll cover in upcoming blog posts. In the meantime, check out our cool b.media video with tons of interesting market stats. And here are some photos below. Enjoy!
Todd Vernon, CEO of Lijit; Seth Levine, Managing Director of Foundry Group; and Jeff Reine, GM of TypePad
Cali Harris, consumer panelist
Our fearless leader, Todd Vernon, moderating the publisher panel
Lijit's Todd Vernon and Walter Knapp walking to networking reception with Lijit Board members Mark Solon and Paul Berberian
Rajeev Goel, CEO of PubMatic, and Alex Vogenthaler, Product Manager at Google
Brad Feld, Managing Director of the Foundry Group
b.media networking reception
b.media networking reception
Lijit CEO, Todd Vernon Featured As Cover Story On VUE Magazine
Feb 2nd
by Grace Boyle in Company, Featured, employees, industry
Our fearless leader and founder, Todd Vernon was just featured on the cover of the January/February issue of VUE Magazine (the magazine of the Marketing Research and Intelligence Association).
In the four-page spread, titled: Going Lijit: Mining and Monetizing Blogrolls, Todd discusses online publishing, advertising, and how Lijit has built a network of over 15,000 sites by providing tools that help publishers engage and understand their readers.
Introduction from author and Editor-In-Chief, David Hamburg:
The founder and CEO of Lijit talks about the tools and services his company provides to Internet publishers, the small as well as the large. It’s all about providing relevant information, connecting publishers to their audiences, linking them to advertisers, and monetizing their sites.
Here are a few highlighted questions from the lengthy interview:
VUE: Are your aggregate search returns truer than those of Google, where search engine optimization tactics often get the higher placings rather than the best search results?
TODD: Exactly. What happens – and this is one of the premises that we got into this space – is that people bond with blogs and individual publications for a reason. Theose blogs tend to be spicier, but the real reason they bond with those sites is bceause of the persona driving it. It’s about the author. You’re getting all the opinions and all the thought. And they really believe what they write.
One of the things that we do for these bloggers is expose all of their content. We provide a great search service on everything that they have written on the subject, but also we will include photos from their Flickr account and videos from their YouTube account and stuff they’ve tweeted about. So it glues the audience to the publication and forms that one-on-one metadata that you get when you really know somebody.
You are accessing numerous conversations with these small publications. They are kind of proxies for real relationships, because all ships float higher. SO when a message about whether a pain reliever works for my child is out there and those bloggers are super-engaged, it becomes way more interesting to the reader than an ad is.
VUE: Your goal is to deliver value to both sides. The bloggers get their analytics, and the agencies or companies get to have their message delivered to a wide but highly targeted and engaged audience – a perfect fit for their products.
TODD: Spot on. We can put an advertiser in contact with specific authors and then do something like either a campaign or product review. We are like a giant site rep firm from the agency side. Actually, our relationship is very large and far-reaching with all our publishers, because we contact them once a week with an email and they come back to our site to look at their statistics. It becomes an escalated sort of relationship with our publishers. We start with the free service: the bloggers learn something about their audience. And as they become more interested in monetization and getting contacted by marketers or even newspapers, we can also provide them with a monetizing service. We are kind of like a business partner on the publisher side. On the agency side, however, we are about finding those authentic conversations and getting the agency into it.
To view the PDF of the January/February VUE Magazine in full, click here.
FOX Business Interview With Lijit CEO, Todd Vernon
Oct 12th
by Grace Boyle in Company, Featured, employees, industry
This week FOX Business made their way to Boulder to learn about the thriving entrepreneurial community and to interact with some of startups that have found their home in Boulder.
As one of the tech startups interviewed, FOX Business headed to the Lijit Headquarters in downtown Boulder, to shoot some b-roll and learn about what we’re up to.
During a series of interviews first starting at Boulder Open Coffee Club with Foundry Group (Lijit investor) Managing Director, Jason Mendelson and a second video (below) featuring Foundry Group Managing Director, Seth Levine and Lijit CEO, Todd Vernon. They settled in to talk at Atlas (a local coffee shop) about starting a business in Boulder, Lijit and the community at large.
Check it out here:
CEO: I Don’t Want a Business in Silicon Valley
Lijit Networks CEO Todd Vernon and Foundry Group Managing Director Seth Levine on starting a business in Boulder, Colorado.
This Wednesday, Frank Gruber and Eric Olson bring their traveling techie road show to Boulder for a second appearance. If you’ve never been to a TECH cocktail before, you’re in for an evening of fun. Imagine a bunch of tech enthusiasts, VCs, bloggers, and entrepreneurs drinking together, watching demos, and sending the geek quotient of the Boulder Theater through the roof. Yes, it really is that good. (And I’m not just saying that because Lijit is a sponsor…)
- Where? The esteemed Boulder Theater
- When? August 20th, from 6:30-9:00 PM (although the TC site says that it’s taking place EST, I wouldn’t bet on that, or we’re all going to be early…)
- Why? Duh…because geeks and beer are a great combination.
- How much? Totally free, but you must RSVP
Last time the boys brought the show to town, we found out that as a sponsor, Lijit was supposed to be one of the demos. We hadn’t really thought about that and, at the last moment, grabbed our homemade widget to bring with us to the party. People loved being turned into widgets, as Frank Gruber can attest…
While we’re not sure if the widget will make an appearance this time, the TechStars are coming out to play and they will be demoing their wares. TECH cocktail will be the conclusion to their day-long investor presentations, so you can imagine the relief these teams will be feeling. The TechStars have been working hard all summer and honestly…the least you can do is to come out and support your local tech community by drinking some beer. Is that too much to ask?
In conclusion…
What more could you want? (Unfortunately, due to the limited supply of Lychee liqueur, there will probably NOT be any Lijitos made at this event.) You can RSVP here and we hope to see you on Wednesday night!
Tags: Community, good times, lijit, tech events | View Comments
Transparency is More Than A Word
Jun 18th
by Micah Baldwin in Company, employees, features, industry
One of my favorite bloggers (who still *ahem* hasnt installed Lijit on his blog) is Loic Le Meur the founder of Seesmic. As Loic built Seesmic, a short form video startup, he recorded a video blog about the struggles and triumps of building a startup. Every day.
That’s transparency.
At Lijit, we embrace transparency. Like so many other companies, we understand that the increased access that users have to a company’s founders and employees (for example, you can follow the following members of Lijit on Twitter:
- Todd, CEO
- Tara, Community Catalyst
- Micah, VP, Business Development
- Leslie, Senior Director of Product and Operations
- Daniel, Integration Engineer
- Mike, Designer
- and many others…including Lijit itself (yes the company itself tweets!)
But that is just one form of transparency. That is the transparency that speaks to what we are doing in building the product.
As publisher advocates, its important that we explain to publishers exactly what installing Lijit provides them in terms of functionality, and, more importantly, how we get that info, and what we do with the data.
We, of course, have a privacy policy and terms of use that outline specifically what we do with data.
As a Lijit publisher, you know that we provide a wonderful suite of stats around searches and searcher behavior. To provide those stats, we collect the following pieces of data around the search itself, the publisher, and the behavior associated with the query:
USER BEHAVIOR:
- Wijit views
- Wijit tag cloud clicks (side note: if you dont use the search cloud, you are missing out on 3-5x the total number of searches you could be getting. Im just saying…)
- Wijit searches
- Searches on a users profile page
- Search paging
- Search result clicks
- Site/result clicked
- Re-Search (side note: Yeah, me again. If you arent using this feature, you are almost suggesting to your readers to click the back button once they get to your site from a search engine. You like giving traffic back to the search engines do you? I didnt think so.)
- Re-Search result clicks
- Site visitor behavior across installed publishers
- Search(terms, clicks) behavior across installed publishers
PUBLISHER DATA:
- Account Demographic Info
- “Blacklist terms” – publisher selected “negative” terms
- Wijit data (is it installed? Its style, etc.)
- GEO data (collected through a provider)
- Trust and content relationships (content sources, blogroll, mybloglog, tags, etc.)
All of these data points are shown in our stats package, which a publisher can make public or keep private. For example, Brad Feld opens his stats to the public.
At Lijit, transparency is not a word we just throw around.
For us, our singlar belief in providing a service that helps publishers be better publishers means that there are no secrets. We gain nothing if we dont view our relationship to our publishers as a partnership. So, ask us, you might be surprised at the answer.
(As an example of this openness, I have started to leave my email address: micah [at] lijit [dot] com and my cell phone number (720) 231-7120 on FriendFeed and other places. Have a question? Call me. Drop me a line. I will always be open to helping and telling you how I will dominate the sushi eating contest.)
Tags: data collected, lijit stats, privacy policy, research, transparency, twitter | View Comments
I’m proud to share another in a series of guest posts written by Lijit employees. This week we present an installment from Mike, who seemed overly excited about writing and sharing this post.
Hi, I’m Mike Merideth, the Director of IT here at Lijit, and I’m going to talk a little bit about the nuts and bolts of how we do what we do. Over the past year I’ve had the opportunity to design and implement the production network and server infrastructure on which Lijit runs. It’s been a great year of challenges and breakthroughs, but if there’s one key architectural concept that has gotten Lijit to where it is today, it is virtualization. We use Xen for our virtualization technology, which has the advantage of being free Software (both in the “free beer” sense and the “free speech” sense). CentOS 5.1 (a Linux distribution which is based on the market leader RedHat) includes this functionality out of the box, and has performed very well for us.
So why does Lijit use virtualization? There are a number of good reasons:
Flexibility: When you’re launching a new web product, it can be hard to predict what pieces of the application will need more resources than you originally gave them, and which will need less. We’re able to change the amount of memory, the number of CPUs and the amount of disk space a server has quickly, easily and remotely.
Availability: Because we use an iSCSI SAN for most all of our storage, we can move virtual servers between pieces of physical hardware. So if we lose one of our physical servers, we can quickly bring up the virtual servers it hosted somewhere else.
Resource utilization: CPUs today are incredibly fast and powerful; far more so than most applications need. Similarly, RAM has become cheap enough that a server with 16 or even 32 gigabytes of RAM is not particularly unusual, or particularly expensive. Running a simple web server on such a system would be a waste of CPU and memory, and therefore a waste of electricity. If you can run several virtual servers on such a system, however, you can get the maximum return on your investment by making sure you’re fully utilizing all of the CPUs and all of the RAM. Which is all tied to…
Cost savings: Colocation is expensive, and electricity certainly isn’t getting any cheaper. Using virtualization means we can get the absolute greatest value out of the rack space and electricity we’re paying for.
As of right now, we’re running about 200 virtual servers on about 25 physical servers. Just a few years ago we would have needed scores of physical servers consuming thousands and thousands of watts of power to do the work we’re able to do in this relatively modest environment. For a startup that would mean a higher burn rate with a shorter runway, and greater stock dilution for the founding stakeholders because of the amount of capital needed to get the work done. If you’re trying to get a tech startup off the ground, you owe it to yourself to see if you can leverage virtualization in your IT architecture. You’d really be crazy not too.
If you managed to read this post without your eyes glazing over, you may be interested in my new Linux infrastructure blog at http://linfrastructure.blogspot.com. I’m keeping notes on my experiences there, in the hopes that what I’ve learned over the past year can benefit others who find themselves in the same boat.
Photo credit: Leonard John Matthews
Tags: guest post, IT, Mike Meredith, virtualization | View Comments
At Lijit we collect statistics on thousands of individual blogs, blog networks, and conventional online publications. For some time we have noticed that blogs that use the Lijit Search Wijit, specifically those that use the Re-Search feature, enjoy a page view lift as a result. Recently, we started digging into some of the usage statistics from our database and found some interesting trends.
In an earlier post, I spoke about the concept of “second click“. When a user enters search terms into Google or Yahoo and selects “search”, that is the first click. The large horizontal search engines own the first click.
When the reader selects a result from the list of items that Google or Yahoo has returned, that constitutes the second click. It’s the second click that leads readers to a publisher’s site. The average blog within in our network sees approximately 25% of its page views coming as a result of a referring horizontal search engine (or second click). The big search engines are a great source of new readers and page views if you can successfully hold on to that reader. The Lijit Search widget takes advantage of this situation to promote publishers’ content to readers when a blog page displays as a result of a referring search.
In our study, on a daily basis, the Lijit Search Wijit promoted a publisher’s content an average of 874 times and the content items in the re-search box were clicked on average 4% of the time. This converted to real-world page view increases, which ranged between 0% and 10% with an average of a little over a 1.5% increase.
These are all meaningful numbers in the world of publishers and subscribers. More page views results in more ad revenue and more engaged readers.
Some other interesting observations from the study… Publishers with the Lijit Search Widget above-the-fold (i.e. higher on the site) showed markedly higher second click conversion than those publishers with the Wijit installed below the fold. Publishers with information-centric sites optimized for SEO showed much greater second click impressions. Those publications that were more focused on Q&A or providing concrete information showed significantly higher second click conversions. Interestingly, higher page view publications were more likely to have a larger percent of users arrive from search engines, thereby setting up the second click scenario. Presumably, this is due to the higher page rank of these sites and the positive feedback loop that occurs as a result of this – basically, the big get bigger.
In the future I intend to dig into some of the interesting dynamics of blog networks. Blog Networks have specialty dynamics that make some of these results even more interesting and more pronounced. Stay tuned.
For now, make sure you have Re-Search turned on and your Lijit Search Wijit displayed above the fold to maximize your page views!