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Fighter Pilot

In 1980, retired Air Force Col. John Boyd walked into the Pentagon and pitched a concept that reshaped how the United States trains its pilots to win dogfights: the OODA loop. It stands for Observe-Orient-Decide-Act, and it’s a framework for decision-making that is used today by everyone from Olympic athletes to Wall Street traders. One of Colonel Boyd’s hallmark insights with OODA was this: Moving quickly through the whole decision cycle is more valuable than speeding through any one part of it. The world’s fastest trigger finger can’t hit a target that’s no longer there. Over time, pilots that cycle quickly – reacting and reorienting with each loop – will dominate their competition. The OODA concept can map to programmatic advertising – specifically to a single RTB auction.

Read the full story at AdExchanger.

drawbridge-logo-1

Drawbridge, an ad targeting startup backed by Kleiner Perkins Caufield & Byers and Sequoia Capital, is expanding its offerings today with a new feature allowing mobile advertisers to reach consumers with retargeted ads, regardless of whether they’re using an app or on the mobile web.

Founder and CEO Kamakshi Sivaramakrishnan said that while ad retargeting (i.e., ads targeted based on your past visits and activity) is possible within apps, things get trickier when you try to cross the boundary between apps and websites: “It’s literally two devices on the same device, separated by an iron wire.” (I question her question use of “literally”, but I think you get the point.) App developers can also try to reengage their users through alerts and notifications, but users can always turn those off.

In order to solve that problem, Drawbridge is “piggybacking” on its core technology. That technology examines user activity to help advertisers identify when multiple devices are likely being used by the same person. That allows advertisers to use data collected on the desktop to target ads on mobile. The company’s two products launched last fall include PC-to-mobile retargeting and mobile app marketing. The mobile-to-mobile retargeting is intended to fill out the mobile marketing product, Sivaramakrishnan said.

Drawbridge has already run test campaigns with e-commerce companies, who were either trying to bring old customers back to the site or to convince current customers to buy more. Sivaramakrishnan said that in a campaign targeting lapsed users, the client reached 100 percent return on ad spend within three weeks. Another campaign targeted active users and reached 100 percent ROAS within a single day.

Advertisers will have a chance to test this out for themselves, Sivaramakrishnan said, because the new capabilities include an A/B testing framework. So advertisers can run part of their campaign with Drawbridge’s retargeting and part of their campaign without it and see which ads perform better.

Earlier this year, Drawbridge announced that it was partnering with TRUSTe to allow mobile consumers to opt out of its targeting. Since then, Sivaramakrishnan said that some users have indeed opt out, but that the rates haven’t been “heavy”.

hug_it_out

Unsubtle reminder from Facebook to media companies: We’re really big, and we can send you a lot of traffic.

The longer version comes here, via a Facebook blog post boasting about all the eyeballs they have passed along to sites like BuzzFeed and Bleacher Report recently, in an experiment to boost referral traffic.

Facebook said it got those sites and 27 others to increase by 57 percent the number of articles they posted to the social network, and that those sites saw their referral traffic jump by 80 percent.

The bigger picture is that Facebook is making a renewed effort to get media companies to distribute their stuff on the site.

Today’s blog post is specifically about Web publishers. But Facebook has been making a particular push to engage TV programmers and networks to use the site, in the way that Twitter has been doing for a couple of years.

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If you were onstage, talking to Charlie Rose, in front of a very crowded room of ad people, and you were asked to describe the unique qualities of Larry Page and Mark Zuckerberg, you might get flustered.

Not Marissa Mayer.

Here’s what the Yahoo CEO had to say about the Google CEO and the Facebook CEO at the IAB/MIXX conference in New York today:

I’ve thought about it before. They each have their superpower.

Larry’s superpower is asking “Why not? Why does it have to be this way?”

I once witnessed a conversation where Larry really started challenging Dean Kamen, the guy who invented the Segway. He started saying “Why, why, why does it have to be this way?”

And he was actually having an argument over a physical constant. Finally [Kamen] said “because it’s a physical constant – an intrinsic property of the universe.”

And so, he loves to ask “why not, why not, why not.” His super power is asking “why not.” On everything. It helps him challenge.

Zuckerberg’s incredibly insightful about people. And that makes him a great leader, it makes him a great recruiter.

And I think it also makes him a great person to run a platform that connects us all. He really understands people and what makes them tick.”

AOL plans to sell some of its ads via what it is calling the first “programmatic upfront” event in September. The idea, modeled after the method TV networks traditionally use to sell their ads, is to convince marketers to commit to buying a certain amount of AOL’s inventory using automated ad technology, a big push for CEO Tim Armstrong.

omnicom publicis

Today Publicis and Omnicom, two of the “big five” global advertising and marketing agencies, announced a “merger of equals”, in which the two will combine to create the world’s biggest agency, with some $22.7 billion in annual revenues and a market capitalization of $35.1 billion. The pair say that the new Publicis Omnicom Group initially will be jointly run by the two existing CEOs, John Wren from Omnicom and Maurice Levy from Publicis, and headquartered both in New York and Paris, with a holding company HQ in the Netherlands.

The companies will trade publicly as ONC (currently Omnicom’s symbol) on both the NYSE and Euronext.

The confirmation – after reports of the deal swirled earlier this week – was delivered today in a press conference on a hot Sunday summer afternoon in Paris – a slightly oxymoronic setting for a megadeal.

“For many years, we have had great respect for one another as well as for the companies we each lead. This respect has grown in the past few months as we have worked to make this combination a reality. We look forward to co-leading the combined company and are excited about what our people can achieve together for our clients and our shareholders,” the co-CEOs said together.

If Google is the world’s biggest digital advertising network, the merger of these two will create an advertising megacorp that will be the world’s biggest provider of advertising to feed that machine. It will be twice the size of its nearest rival, WPP. While there are two other agencies in addition to these, Interpublic and Havas, they are significantly smaller. This will lead, inevitably, to antitrust scrutinty from regulators. Today, the companies, both already global operators, noted that they will need regulatory approval in 41-46 countries.

“We are not expecting anything that would prevent us from going forward,” Wren said at the press conference (according to Reuters). “We are confident that we will get regulatory approvals,” Levy also noted.

It may also spur more merger activities among other players.

Without a doubt, the history of the ad industry has been one of ongoing consolidation, and in that regard this seems like a logical and inevitable step. Some of the agencies that were once rivals and will now coexist under one owner will include BBDO, Saatchi & Saatchi, DDB, Leo Burnett, Razorfish, Publicis Worldwide, Fleishman-Hillard, DigitasLBi, Ketchum, StarcomMediaVest, OMD, BBH, Interbrand and ZenithOptimedia, with clients covering some of the world’s biggest buyers of advertising, including mobile carriers like Verizon and AT&T, drinks companies like Coca-Cola, financial services companies like Visa, and many more. The companies say they will have “efficiences” of $500 million as a result of the deal; whether that will lead to layoffs or closures has yet to be announced.

But while this plays to type in some regards, the world of advertising and marketing is also up against growth of other disruptive forces, for example the change in consumer habits brought about by the internet. That has taken the rug out from some of the more traditional formats for advertising, such as print media, and pushed more spend towards digital formats like the internet and mobile advertising.

These are still relatively smaller players in the wider advertising ecosystem: worldwide there will be about $519 billion spent in marketing and advertising this year across all mediums. But if you break out a newer area like mobile advertising, it’s expected to be just under $9 billion this year globally, according to the IAB.

Still, the smart money sees the writing on the wall. TV advertising dominates today, Nielsen noted earlier this week, but it has grown by just 3.5% so far this year while Internet has gone up by 26.3%. The IAB estimated that mobile will go up by 83% this year.

Publicis and Omnicom’s rival WPP projects that by 2018, 40% of ad spend that it oversees will come from digital. That is driving a number of acquisitions and investments, but it is also fuelling the rise of a new kind of advertising company focused around advertising technology (ad tech) to better measure, leverage and distribute ads in these new mediums. The rise of digital media is also dovetailing with the growth of advertising and digital opportunities in emerging markets like China, South America, India and so on.

All of this plays strongly into the technology and startup ecosystem, both in terms of the companies that are growing up around these innovations, but also because such a large part of the tech world is built around the consumer internet, and much of the consumer internet is built on free, ad-based models. Consolidation of players like Omnicom and Publicis speaks to a growing desire to better scale and consolidate on the kinds of returns at can be made from newer platforms like the internet.

Janet Balis Headshot

Betaworks has hired former Huffington Post Media Group publisher Janet Balis as its chief revenue officer.

The New York technology studio – which owns and develops varied media-focused companies, such as social news aggregator Digg, news-saving app Instapaper and the hugely popular Dots mobile game app – has been girding its efforts to monetize its portfolio, said Betaworks CEO John Borthwick.

“Phase One of Betaworks was building great companies,” he said. “And Phase Two is really building Betaworks as an operating media company.”

Balis left her job at the AOL-owned HuffPost in May, after a year-long stint. She has also worked at Martha Stewart Living Omnimedia, Time Inc. and Newsweek.

In an interview, she noted that there was ample opportunity to knit together tech and data to serve advertisers better.

“There is a thread of social discovery for brands to think very creatively and strategically, and Betaworks properties are well positioned for that,” said Balis. “We have to think differently to bring those brands into the process.”

Betaworks has been searching for a CRO to work on a common monetization effort that it could apply across its many platforms, said Borthwick.

“We have been trying to tie together and figure out all the places we could monetize, and it surprised me how well it has gone with some early efforts,” he said.

Borthwick pointed to a partnership effort around Dots with industrial giant GE, which sponsored a new game mode called Gravity that was made available free for a week. The native ad implementation garnered 30 games played and 172 million views, he said. Later – due to its popularity – Betaworks rereleased the Gravity mode within the game, for $1.99.

Borthwick said that to help develop more such ideas with marketers, the company had also hired James Cooper as its head of creative, to “explore creative opportunities for Betaworks products and to help tell the Betaworks brand story.”

Cooper was previously at the production company Tool of North America, and has worked on a number of well-known digital advertising initiatives, such as the “Help I Have the Flu” Facebook app.

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