IMV36 : Advertising to Niche Audiences and Online Communities

The following is a transcript for IMV36 : Advertising to Niche Audiences and Online Communities. The original podcast is located here.

Announcer:

Welcome to the Internet Marketing Voodoo podcast, brought to you by MindComet. And, now, here’s your host, Paul Lewis.

Paul Lewis:

Welcome to Internet Marketing Voodoo. I’m your host, Paul Lewis and today’s topic is the future of online advertising. Our guest today is Larry Braitman; he’s the CEO of Adify. Larry, can you start off by telling us a little bit about yourself and Adify and where that is in the marketplace?

Larry Braitman:

Sure Paul, thanks for the introduction. We started Adify roughly six or eight months ago and the mission of the company is to enable publishers and online communities to create novel, new ad sales channels, new advertising networks and new media properties to better serve niche advertisers and the communities themselves. We have a suite of tools and services that enable publishers and entrepreneurs and enterprise companies to essentially create storefronts or actual advertising networks focused on niche content areas containing highly relevant, vertical advertising space.

Paul Lewis:

And how would you say that that differs in the marketplace to other advertising networks? What’s unique about Adify?

Larry Braitman:

The basic advertising network model is really unchanged for the last ten years or so, and the basic model is in a very general way to gather together lots of different ad space across many different publishing sites and then run campaigns across that and either target or optimize to enhance the performance for the advertiser, and it’s a very efficient model and has created lots of value for both the publishers that participate and the advertisers that participate. But what we’re starting to see is a desire on behalf of both the publishers and the advertisers to create smaller, more targeted, more effective, closer to the customer, closer to the marketplace kinds of networks that are really more like the magazine industry. Very focused, niche content areas where you can, in a very understandable and natural way, sort of buy exposure to an audience that is on a site or is consuming content that is directly related to what it is that you’re selling.

So for example, we’ve launched a network called Clip-ins, which is a bicycling focused network, and it consists today of roughly twenty or so bicycling-oriented content sites, all very high quality, some of them are larger sites, some are smaller. These are all sites that are driven by passionate authors, passionate companies that are creating content around bicycling and they’re obviously a natural fit for bicycling and fitness oriented advertisers because it’s very similar to a magazine placement in Bicycling Magazine, with the added benefit, of course, of having the interactivity and the immediate feedback that you get from interactives. So what we do is we create tools to allow thousands of these kinds of networks to be supported. We do all the back office advertising management, campaign management, we do the billing and payment, we do the reporting, we provide a customer support layer and essentially enable these publishers or these networks to operate.

Paul Lewis:

How does the application process from the publisher’s side happen? In other words, can anyone be part of Clip-ins? If I have a site, if I write a blog that’s on bicycling, can I immediately join that network? Is there some qualifications that happen?

Larry Braitman:

Yeah, we do quality control and we have in our business model, we have a notion of a network operator, and that network operator can be Adify or it can be a third party. It could be, for example, another bicycling publisher that in addition to it’s own site, wants to sell ad space across the network to create a different kind of a product or broader reach product for bicycling advertisers. And the network operator has the say over what happens within the network in terms of who’s admitted or not, and we’ve seen a variety of different approaches there.

We’ve seen some network operators that really look for a lot of variety as long as it has anything to do with bicycling and want to give the advertiser the choice to say I like this particular content site; I don’t like this particular content site, and give them the kind of their choice in control. In other cases, the network operators are exercising much more sort of editorial control over the types of content and they are much more inclined to limit and to really qualify sites in a different kind of way, and then sell that package in a much more of a network fashion. You know, you basically get the whole package. So we’ve tried to create flexibility in our system, both in terms of how you structure the network, how you sell the network, how you handle pricing and the like, and there’s really nothing like that on the market today that enables this kind of third party network creation.

Paul Lewis:

So in some sense, it’s a network of networks.

Larry Braitman:

Well, we think of it a little bit differently. We think if it as a platform that enables the best possible party for that niche to create the best possible network to serve that niche. Another example is a network that we’re working with, a group called Ready To Rare. And Ready to Rare is a network around trading cards, you know Magic the Gathering kinds of content, and comics and things like that, and it’s started by two guys who don’t have media experience per se, but they have been involved in the card gaming world for a dozen years and they’re really experts. They have an online valuation site and they are speakers at all the conferences and they know everybody in the industry, they’re very tied into that industry. And for them to be able to extend their current business in this space, and to be able to offer both the advertisers they know and the publishers that are creating content, an advertising network that’s specifically focused on this vertical is a tremendous value to them and a tremendous value to that community.

And the important thing is here that this isn’t third party interactive company, this isn’t Adify that knows the ins and outs of this industry, it’s the entrepreneurs who are involved in it and directly part of the community creating a network based around that. So what we want to do is we want to find the best possible party to really drive the network and in some cases we start them, in some cases we look for a partner that is really tied in and really has that domain expertise to start them and grow them and that’s what we’re trying to do. So we don’t view ourselves as a network of networks as much as a platform to enable thousands of uniquely designed, very close to the market networks to be created and operated.

Paul Lewis:

That’s really an interesting approach. As I listen to that, it makes me recognize that somewhere in a room as you were dreaming Adify up, you must have recognized the challenge of monitoring and really building out all these networks and knowing this very detailed content and recognizing that you need network operators who really understand that target audience.

Larry Braitman:

Exactly right. If you look at what the Internet does well, and has consistently done well since it really became part of popular culture, one of the things it does great is it supports thousands of niche communities of passionate, interested enthusiasts. And so if you take any breed of dog or you take any kind of car or really anything, any topic, there’s going to be people who are blogging about it passionately, creating web sites about it, following it with great care. And there really are no businesses today that address that and that give them tools and services to commercialize that activity.

And what we wanted to do was to give those communities a set of tools and services where they could interact with one another and form these kinds of networks and actually transact with each other. We believe that gives our business a great deal of leverage and it allows for the creation of a lot of unique, new media properties and new packages that we would never come up with on our own because we just wouldn’t know the ins and outs of it, and no network does. There’s no way that any of the existing advertising networks, up to and including Google’s AdSense, really understands the intricacies of that particular submarket. Magic the Gathering trading cards, no company has that expertise. But Matt and Brian at Ready to Rare do, and what we wanted to do was give them the tools so that they could basically create this network and operate it the way their community and their industry needs.

Paul Lewis:

Now you’ve had a long background in this space. Can you tell us a little bit about your background with Flycast and do you see this, Adify, as the natural evolution of where things are going?

Larry Braitman:

The folks who started in Adify and some of the early employees at Adify were also the founders or early employees at Flycast. And Flycast was really one of the very first large, direct marketing kinds of advertising networks that are still prevalent today, where we aggregated lots and lots of ad space across lots of sites and ran campaigns broadly against that and then optimized those campaigns based on performance, specifically measured as click-thru. We see Adify as a very different play. Again, the way we measured scale in the Flycast days was by the broadness of the reach, the number of unique impressions, the number of ads we were serving and the like. And the competitive advantage that networks in that kind of world have has to do with all those metrics and the ability to source advertising inventory with a very low cost. And they typically do that through you know, being blind, by basically having sites participate and not being called out by name, so that when you buy the Flycast network for example, when you bought the Flycast network, you were buying that Flycast network and the fact that you were on this site or that site really didn’t matter - it wasn't the point.

We see the world in a lot of ways growing beyond that in the last several years, and we think that a much more compelling offering is a much more transparent niche focused approach where again, we’re enabling the right person, the right network operator, to create their network and to operate it and really do it in a way that’s consistent with the needs of their community. So it’s a much more decentralized approach. We measure progress not so much by the broadness of the reach overall, but what kind of reach does that particular network deliver against the target audience. So for example, in something like a bicycling network, all of the online biking enthusiasts, measured by like for example all the visitors to online biking sites, and in a given month, how many impressions can that network operator, or how much reach can that network operator deliver against that universe? And we think that there’s roughly a kind of a ten percent threshold. If you’re able to hit sort of ten percent, then you’ve got a, you know, a very interesting proposition for an advertiser. And we work with the network operators to really kind of help them get there and achieve that kind of critical mass. And once they do that, once they achieve that critical mass, what we’re seeing is the growth from that point on tends to be pretty accelerated because there really isn’t any other game in town.

Paul Lewis:

When’s your product launching?

Larry Braitman:

We’ve launched a couple of things already. We have a self-service tool, which enables publishers to create a storefront and then sell advertising directly to their advertisers, and that’s been in the market since June, July. And then we’ve begun to roll out some vertical networks as well over the last couple of months, although we haven’t officially launched. So what we’re doing now is we’re really in beta with the build your own network tools and services, and we’re working with roughly a dozen enterprise and entrepreneurial kinds of clients to create these networks. We’ve got a very healthy sort of backlog and waiting list of more, but we’re really trying to make sure that we understand the whole formula before we roll it out more broadly and we anticipate doing that in the first quarter of next year. As I said, we’re announcing it in November, the general availability and then we’ll be taking applications and the like.

Paul Lewis:

I just was wondering about the competitive threats. Do you believe there’s a window of opportunity in the uniqueness of your product or do you think these are things that Google and other companies are going to be jumping on a similar bandwagon, other networks are going to try to copy you?

Larry Braitman:

You know that’s a great question. I think that a couple things. One is that it’s a very big and very dynamic and fast growing kind of a space, and I believe that there’s room for lots of alternative approaches coexisting. I don’t think that there’s any one answer that’s the right answer. So there’s again today, many thriving advertising networks that deliver value and I think that that will continue because they serve their advertisers and they serve their publishers and that includes Google’s AdSense product.

I think that we are unique in again really empowering a network operator to give birth, if you will, and then raise a new media property. The things that you need to be able to support that are a fairly unique combination of technology that we’ve been building for almost a year and some unique feature sets in that technology specifically designed to support a network operator that get, it’s really not part of the mix in other network models. B, an understanding of the service requirements and again, specific service needs around network operators that other people aren’t developing ‘cause it’s really not part of their model. And then C, a fairly deep understanding of what you need to do to successfully operate an advertising network, and that’s something that we have a lot of you know, depth in and experience in, and part of the value that we bring to network operators, even very sophisticated enterprise publishers, large publishing companies that you’ve heard of, they haven’t run networks before, and running a network is different than just running a large site and selling advertising on it. There’s a unique set of demands on customer support, there are unique demands from your customers in terms of things like optimizing the buy, and there are unique ways to manage your inventory because it’s not just inventory on your site, but there is inventory on other people’s sites that you have to be able to access and view dynamically.

So there’s lots of little pieces to being successful in the network business and what we deliver is a combination of the technology, the service, and the know-how that enable a third party to do that. And what we’re finding is that’s a very appealing proposition for both entrepreneurial network operators and very large, very institutional enterprise customers. Large publishers.

Paul Lewis:

Outside of Adify, what are the things you’re seeing develop in online advertising? Where is this marketplace going? What’s exciting that’s out there today and where do you see it going in the near future?

Larry Braitman:

There’s a lots great things that are happening, and I think Adify is really, you know, kind of part of this. Publishers are thinking about publishing in a very different way now, online. It used to be that if you were an online publisher you took content, typically offline content, put it online, drove traffic to it, and sold ads in it. Now what you’re seeing is people developing content specifically for online and they’re leaving white spaces in that content that they want to fill with third party content, either from their users or from other third parties, and then really what they’re doing is they’re integrating packaging and then merchandising that content, that combined package under their own brand to a variety of different channels.

And what we do is we basically give them the, kind of the commercial operating system to handle the advertising side of that. If you want to run advertising across that integrated content, again you have many of the issues that you have in operating a network, how do you handle billing and payment to the different contributors? How do you manage and see where performance is coming from among these different pieces of content that you’ve now integrated? How do you handle commissions to sales people? How do you handle commissions to your different distribution channels as you go out through RSS or you go out through different portals and the like? We support all of that and we have the technology to manage all of that, and again the service layer to do that as well.

Though I think one of the things we’re saying is the sort of mix and match world, this mash-up world that we live in and that’s evolving is very exciting, it’s creating, there’s so much dynamism and the new things coming out of that, that’s great. The other thing we’re seeing, of course, is much more power to individuals and small businesses, where an entrepreneur in Bangalore can basically create an advertising network and compete in a niche market with Google. And we want to empower that kind of activity as well, so we’re seeing worldwide lots of entrepreneurial activity around online publishing, advertising sales, network creation, and we want to be a partner to those folks.

Paul Lewis:

Putting my advertiser hat on for a moment, so one of the things that I would benefit from, hopefully from the Adify network is the ability to really effectively target and reach my niche audiences.

Larry Braitman:

Yep.

Paul Lewis:

On top of that, will I be able to see any cross network data such as behavioral targeting type things where I can look for people who have gone to and expressed an interest in sailing and golf?

Larry Braitman:

That’s a great question Paul. We’re not really doing that today. We are talking to some of the behavioral targeting folks in terms of working with them and making some of their capabilities available to us and to our network operator partners. Generally speaking though, what our network operators are doing is aggregating content that is from a content standpoint so focused and so appealing to users that the value to an advertiser is very clear. And it’s very apparent.

You know, one of the things with some sort of technology driven targeting, the kind of contextual or behavioral targeting, is that in many ways advertisers are a little bit leery because it’s somewhat of a black box. They’re not really sure what’s happening and what they’re buying, and they’re not sure if they can replicate it. The nice thing about content verticals that our partners are creating is that it’s very clear, people have been buying magazine advertising for many years and they understand the value if you’re a bicycling manufacturer of being in Biking Magazine. We’re delivering kind of parallel value to our network operator partners to advertisers and it’s a very simple and clear-cut value proposition and a very fast sale for that reason. There’s not much in the way of black magic and there’s a lot of very obvious and very clear targeting.

Paul Lewis:

Great. As we close out the podcast, I wonder if you could share, obviously with your extensive experience in online advertising for our marketing and advertising listeners, what would you suggest as the top three tips or things they need to keep in mind when planning a successful online campaign?

Larry Braitman:

Yeah, the number one thing I would think is put yourself in the shoes of your users or your target customers. It all starts with the customer, it all starts with the user or the consumer you want to reach, and too often people I think get lost in the intricacies and some of the industry practices that have grown up around media buying and selling and really you’ve got to keep the customer in mind and be thinking about it from their perspective. So a very simple piece of advice, but that would be the starting point.

The second thing that I would do is really understand what goals you’re trying to achieve. Are you a direct marketer where the return on your investment is the only purpose or are you also investing longer term in the brand value of your product or company and therefore need to be thinking about media a little bit differently?

For the third tip, you want to be places where all of your competitors aren’t, and in that situation, the opportunity to find niche content or a niche vertical of the kind that our partners are building I think is a great value. You get much higher share of voice, you have an opportunity to reach your consumers much kind of closer to home, and in an environment that is less cluttered and somewhat more natural to them. So those are the things that I’d be thinking about. I’m sure there’s you know, many more tips but those are my top three.

Paul Lewis:

Great Larry. Well thank you so much for being on the show with us today.

Larry Braitman:

Yep, my pleasure.

Paul Lewis:

If you have a question for Internet Marketing Voodoo, call us toll free at 1-866-206-4461, or visit us on the web at www.internetmarketingvoodoo.com. If you’d like more information on Adify, visit them on the web at www.adify.com. Thanks.

Announcer:

For more information on this week's topic, visit http://www.InternetMarketingVoodoo.com. This podcast has been brought to you by MindComet, The Relationship Agency.

[End of Audio]

Marketing Resources
Listen to the IMV36: Adify podcast.

Contact MindComet for more information on media buying and media planning.

Subscribe to the Internet Marketing Voodoo podcast in iTunes.

Technorati Tags
online advertising, adify, web 2.0, online communities