Eric Franchi

When To Raise Money in Ad Tech

Mon, 13 May 2013 09:03:51 -0400

There are essentially two paths in the lifecycle of an advertising technology/digital media business when it comes to the big questions on when to raise money.

Path A is most common, thanks to a healthy funding environment that still exists for ad tech. Have an idea, raise some money, build the tech and go to market to validate via customer sales. The ideal scenario, which happens in the minority of cases, is that the market likes it. Next step is either raising more money and becoming a pure play technology business or take the technology and combine it with a media offering and build a digital media business. The reality is that this linear path is rare and most of the time, companies get stuck somewhere trying to find a model that works on their investors’ dime.

Path B is less common. Thanks to the ubiquity of ad serving solutions that are available to “rent”, it is fairly easy to take an idea to market from the start completely bootstrapped. For example a mobile rich media play. Assuming the distribution channel is in place, a company can skip right to validation via direct sales, channel partnerships or a combination of both. And once the right formula is in place, that company has more choices: either raise money and be in a much stronger position due to that early traction, or self-fund and build out the technology that truly meets the market needs that are clear from time spent in market.

I am completely biased since Path B is the one we chose at Undertone but I believe that it leads to a more differentiated and stronger offering in the end.

What Exactly is Happening in RTB Land?

Thu, 09 May 2013 08:47:00 -0400

Last night, as I reflected on the flurry of recent news about the Facebook Exchange (FBX) moving into the News Feed, it dawned on me that you really don’t hear much about standard display units - good old banners - in the context of real-time bidding (RTB).

Even beyond FBX, the discussion about banner-based RTB has sharply declined. AppNexus’ latest partner summit was largely about mobile. Most of the supply side platforms (SSPs) and exchanges are talking about “programmatic guaranteed/direct/reserved”.

So I tweeted.

You know when Darren Herman, Terry Kawaja and Ari Paparo and others chime in, something’s there… but what’s interesting is that opinions are split.

Some think that there’s lots of hype and that banner-based RTB is driving much of the growth. Some think the exact opposite.

What’s going on?

I think it’s going to be interesting to look at the data at the end of the year if RTB budgets grow as forecasted AND FBX scales.

Will Ecommerce Drive a Wave of Digital Media Innovation?

Wed, 08 May 2013 12:37:00 -0400

Last year I posted a quick piece on the trend of big retailers and Ecommerce companies moving into digital media.

Since then we have seen things continue to play out with eBay being the most recent expansion into the market.

eBay was very visible at Ad Tech in San Francisco earlier this year.

One thing that is not discussed enough - credit to Terry Kawaja who has been evangelizing it - is this: Ecommerce is a trillion dollar business that may start driving more innovation and opportunity in digital media.

Think about it. Premium publishers such as Conde Nast’s are demand generation vehicles. Imagine if they were able capture some of the dollars generated by their efforts? What would it take to do it?

It’s an incredible opportunity.

Digital Media is an 'And', Not an 'Or', Market

Tue, 07 May 2013 14:54:21 -0400

In business there are ‘and’ markets and there are ‘or’ markets.

I define ‘or’ as markets where based on the need the customer has to choose. It’s company A or company B. For customer CRM, which feeds into marketing, accounting, workflow and all other business processes you are either going to use Salesforce or SugarCRM, for example (after a full assessment of course). Payroll processing is another example: Paychex or ADP. It would make little sense to use both.

Digital media is mostly an ‘and’ market. No matter the objective (brand vs. DR) or media acquisition model (direct vs. programmatic), a variety of media properties and partners are used to build reach and frequency, optimize, etc. Even on the technology side of things, with vendors having such varying capabilities and offerings such as DSPs, you often find that multiple platforms are being used. Probably the only ‘or’ decisions in digital are in ad serving (Doubleclick or ATLAS) and media logistics/workflow. Similar to the CRM example, the switching costs are extremely high.

The ‘and’ nature of digital means that its unique.

Mostly it means that things move faster. Planning and sales cycles, redistribution of funds, inventory management, product releases, marketing… everything moves fast.

It means that there is more opportunity for startups and new companies. People love to hate the clutter, confusion and LUMAscapes but the fact that things move so quickly, switching costs for most things are low and buyers like options is a boon for companies looking to start up and quickly gain traction and attract investment.

It also means that the rules of engagement in the field are a little different. Everyone is competing but it’s also a relatively congenial environment, particularly since with the speed of transactions and innovation partner opportunities abound.

I find that unless they have worked in an ‘and’ market it’s something that investors and execs new to the space need adjusting to. And to be honest, since I’m having trouble coming up with a single B2B example of an ‘and’ market, I can understand why. Maybe it’s us!

Quarterly Business Reviews

Fri, 03 May 2013 21:29:00 -0400

This week the senior management team at Undertone met offsite for our quarterly business review (QBR).

QBRs are a time to review the company’s performance as a whole, KPIs for each functional area, the annual plan, priorities, challenges, opportunities, strategy and big picture ideas. Also, given geographies and travel schedules, it is often the only time our senior team can be together in the same room for more than a few hours.

We have been doing them or a few years now. I think they are something that companies of any size can get a lot out of, but few do them. I highly recommend doing so.

Apple - iPhone 5 - TV Ad - Photos Every Day - YouTube

Sat, 27 Apr 2013 07:10:41 -0400

Apple - iPhone 5 - TV Ad - Photos Every Day - YouTube:

I love the new iPhone 5 TV ad. It nails how people use it for photos all day.

I am getting into quantified self via the Nike Fuel band. I had...

Fri, 26 Apr 2013 20:23:51 -0400

I am getting into quantified self via the Nike Fuel band. I had used one previously but got out of the habit. I love how Nike makes data fun.

Someone once told me that it’s good break habits and seek out a...

Thu, 25 Apr 2013 20:53:12 -0400

Someone once told me that it’s good break habits and seek out a little discomfort to refresh the mind. With spring finally here in the northeast, I have been riding my bike to the train station instead of driving when I can. It’s just enough of a break in my routine to have the desired effect. Think about what habits you might be able to break. A little can go a long way.

On April 16th, 2013 the New York advertising community came...

Sun, 21 Apr 2013 19:01:00 -0400

Our logo and our mantra.

Over forty volunteers made this event happen.

Over seventy companies donated silent auction items or made a cash donation, helping us raise $241,500.

Emcees for the evening Danielle Monaro, Mike Woods, Ines Rosales and Paul "Cubby" Bryant.

Over five hundred attendees came out to show their support.

Seventeen companies sponsored the event.

Flanked by my co-organizers John Nitti (left) and Mark Mannino (right).

A very special and emotional moment: Frank Siller (to my right) and FDNY presented us with a piece of steel from the twin towers.

Angela "Big Ang" Raiola was a special guest for the evening, but Karen Gravano (left) and Ramona Rizzo (right) made a surprise appearance.

The party continued on well into the night.

On April 16th, 2013 the New York advertising community came together to raise money for residents of Staten Island who, six months after Hurricane Sandy, are still in need.

Between sponsors, donations, ticket sales and silent auction items, an amazing $241,500 was raised for the Stephen Siller Tunnel to Towers Foundation. The Foundation was there the day after Sandy and has committed to being there until the job is complete.

I cannot thank my co-organizers John Nitti and Mark Mannino, our volunteers, sponsors, attendees and other supporters enough.

Courtesy Sara Beer Photography, here are some pictures from an evening that I will never forget.

On-camera interview at the 2013 IAB Mobile Conference.

Sat, 13 Apr 2013 11:07:48 -0400

On-camera interview at the 2013 IAB Mobile Conference.

Ten Random Things from Ad Tech 2013, San Francisco

Fri, 12 Apr 2013 13:50:00 -0400

Adexchanger’s Programmatic.io conference. From the venue (St. Regis) to production, everything was top notch.
Rishad Tobaccowala’s keynote at Programmatic.io.
Cappuccino at The Grove, 690 Mission Street.
The W Hotel and St. Regis have become the official meeting spots of Ad Tech and it was impossible to get a seat. Mental note to find an under the radar location for next year.
Tea (Schizandra Berry) and lunch (grilled cheese) at Samovar Tea Lounge. Then catching up on email and phone calls at nearby Yerba Buena Gardens.
Most mobile players are focused on the app market, whether it be monetizing or driving installs of them.
The Creamery at 4^th and Townsend.
NYC and the Valley are still where it’s at, but Boston and Los Angeles are seeing more traction as VC firms and technical talent emerge.
Basically everything at Tropisueno.
Terry Kawaja’s keynote at the Appnexus Summit on the Future of Digital (consolidated, mobile-everything and a trillion dollar commerce opportunity).

They say the best startups are inspired by problems that you...

Thu, 28 Mar 2013 08:31:00 -0400

They say the best startups are inspired by problems that you can’t get out of your head. Well, meet our new startup. Launching 04.16.03 in NYC. Join us.

"Twitter is best to reach large audiences and react in real time; Google+ is best to leverage video..."

Mon, 25 Mar 2013 17:23:00 -0400

“Twitter is best to reach large audiences and react in real time; Google+ is best to leverage video stories and Facebook to maintain an ongoing conversation and two-way interaction. Tumblr, in many ways, is the best canvas to tell a story.”

- Rishad Tobaccowala on use cases for the various social networks.

Coverage of the viewability discussion at the IAB Leadership...

Mon, 04 Mar 2013 09:01:01 -0500

Coverage of the viewability discussion at the IAB Leadership Meeting in Adweek today.

Running through pics from last week. Google party in AZ. Ice...

Sun, 03 Mar 2013 09:45:10 -0500

Running through pics from last week. Google party in AZ. Ice cubes glowed. Good crab cakes too. Never without my iPad (left).

Time: the Forgotten Native Digital Unit

Tue, 19 Feb 2013 14:28:00 -0500

Last week I met with Jonah Goodhart. Jonah is an online advertising pioneer (Colonize), investor (Right Media) and founder/CEO (Moat). This was the first time we met, and we hit it off. His company Moat is up to some really interesting things with respect to measurement and analytics.

One thing Jonah and I have in common is that we share a vision and focus for helping brands navigate digital. We also have similar industry backgrounds. A decade-plus ago, we were both helping advertisers in a media buying capacity when online, and display advertising in particular, was dominated by direct response.

As we reminisced about those days and how creative was such a focus (largely to drive high click-thru rates), Jonah raised a good point. Given how users interact digitally, a marketer only has a short amount of time to get noticed. This is why early banner ads, designed for the click, were very offer- focused (and at times flashy).

As much as digital has changed over the past ten years, this aspect of it has not. As a marketer, you only have a short time – approximately one second – to have your message noticed by the user and make an impact. I think that we should think about time (and units of time) as a native digital concept.

Picture how you navigate a site after clicking a link to an article. The site loads, you begin to scroll and within a second, you will have noticed an ad and/or engaged with it, or ignored it and kept going with your reading. Time is everything, whether you are looking for a click, an engagement or to influence a user from a brand standpoint.

What are the implications of time and how can we optimize for it?

It underscores the importance of good creative. Understanding that you have a second or less to be noticed, it’s crucial to have creative that makes an immediate impact. It means giving the user the good stuff up front… or giving them a reason to want to see more, whether that is a longer ad experience, a click, or an engagement. It means clear messaging and calls to action.

It means that page delivery and design is important. A page should render quickly to avoid user abandonment. Think about the homepage of Google – Larry and Sergey understood this early on. They resisted early pressure to add display ads and other content to the main search page so as to be as user-friendly as possible, thus creating the opportunity for maximum revenue on the search results page. Google notwithstanding, a site page should not be cluttered. Featured content and advertising should be up front with a minimum of scrolling (cluttered pages are unfortunately the rule, rather than the exception, today). The page should be configured to give advertisers’ messages the opportunity to be viewed, via impressions that are viewable by the user for that crucial one second of time.

Frequency becomes a factor as well, as in measuring and understanding the optimal level of depending on campaign goals. This is an area that is very under-researched, but also highly individual. Credit goes to Ari Paparo for pointing this out. His belief is that because of the immediacy of digital, more frequency than is standard these days is likely best (by the way, check out the Twitter debate that exploded when I teased out this topic on Saturday morning).

The concept of time to digital marketing is fundamental and significant. I’d love to see more conversation and research around it. The more we understand this, the better job we will be able to do for marketers.

"If agencies are purely middlemen, they deserve to be cut out. Clients should pay for value and..."

Sat, 16 Feb 2013 20:40:00 -0500

““If agencies are purely middlemen, they deserve to be cut out. Clients should pay for value and leadership from agencies.””

- Darren Herman, chief digital media officer of Kirshenbaum Senecal + Partners

http://www.digiday.com/etc/shifting-roles-in-digital-media/

Ironically, this afternoon I was trading notes with a social media agency founder. He was telling me about Facebook strategies he is running for clients that are getting off-the-charts, almost unbelievable ROI (both in-store and online).

Agencies who focus on business-building strategy, innovation, stellar execution and category expertise will be in demand for years to come.

Mobile Advertising Frustration and Conversation

Thu, 07 Feb 2013 15:40:00 -0500

Gary Vaynerchuk had a good, short video blog last week elaborating on his frustration with a recent mobile advertising experience: namely, receiving a “roadblock” ad from Samsung prior to landing on ESPN.com. Check it out here (warning, language).

Gary is a smart guy and I think he articulated some of the challenges of mobile advertising well from the user perspective. Most notably that mobile is a different medium than any other and for many, is an intensely personal experience.

Mobile display advertising simply must get figured out by this industry. At the pace mobile web is growing, it represents not only an incremental opportunity but a threat as it takes share from the PC-based Web. Mobile revenue lags time spent with the medium for a variety of reasons; one being that the advertising units themselves are not compelling. It seems mobile ads are either tiny (and thus easily ignored by users and not very valuable for marketers), or fairly intrusive such as the one Gary received. It’s a dilemma: how can advertisers stand out on mobile?

I had a good exchange on Twitter with Gary and Adam Kmiec (head of digital for Campbell’s Soup Company) and a couple of others weighed in as well. You can see it here. Consensus of this group was that a more customized and native approach is the best solution. This is not surprising. Besides search, native units are clearly what are working on mobile today based on the momentum of Facebook and Twitter.

So, is that it: is a custom, native approach the future of mobile display advertising? If so, what does that mean for ad exchanges, which are built for standardization and scale? Or smaller publishers, who may not be on the radar for native advertising experiences? Is there a display unit that has not been invented yet, one that can help advertisers stand out while preserving the user experience?

Clearly there are more questions than answers when it comes to mobile advertising, at least today.

Are (Much) Shorter Video Ads Native to the Web?

Sat, 02 Feb 2013 15:59:00 -0500

This is something that I have been thinking about since Twitter launched Vine. I would love some feedback on this thesis.

Are shorter online video ads native to the Web, and are they going to be the norm in the near future?

YouTube seems to be doing well with its :05 video ad format, after which it allows the user to skip or continue on to watch it. This creates a user-friendly ad experience that matches the clip-based nature of YouTube while still most likely most likely improving brand lift. It also potentially delivers a much more engaged and qualified user who decides to watch the entire message.*

In addition, some video advertising technology vendors are providing brands the ability to allow users to “watch the full video”, after a standard ad time. Somewhat consistent with the YouTube model.

Vine limits users to :06. I think that Vine will be huge, for the same reason that TV is huge and online video can’t grow fast enough: sight, sound and motion beats the alternative every time Brands are already experimenting vine for creating neat video ads. Check out Wheat Thins and GE. These videos are native to Twitter and its experience, easy to produce, distribute and share.

When online video first started, brands used their :30 TV spots because they had nothing else. Today, you generally only see :30s in full episode player (FEP) experiences. :15s are the norm, but perhaps they are even too long for the consumer Web and (importantly) mobile Web experience. Maybe :05s and :06s are the online equivalent of the TV :30.

*Credit to Digitas SVP Adam Shlachter, for this idea.

Starting vs. Scaling: What Do They Have In Common?

Sun, 13 Jan 2013 07:54:00 -0500

Starting a company requires, amongst other things: an idea, the guts to go out into the world and create something around that idea, the passion to attract a team to work on that idea, the leadership to bring out the best in them and a business model to make it real.

Scaling a company requires, amongst other things: a business model that is appealing to a much larger customer base, the systems and processes to support that larger customer base and activity, professional management in all functional areas, a focus on people, culture, performance and retention, and the leadership to bring out the best in a much larger base of people time and time again (no matter what the business challenge and economic climate).

There is a lot of information out there on starting a company and a lot of press coverage devoted to startups. And that’s a great thing. Startups are the engine of growth and innovation. There is much less on what it takes to get from $10,000,000 to $100,000,000, growing from 10 to 200+ employees, managing that growth successfully, integrating acquisitions, and everything that it takes to scale a businesses. It’s understandable since the number of companies that get there is small.

Having been a part of both starting and scaling, I can tell you there’s a common driver. Can you find it?