According to President & CEO, Jarvis Coffin, it’s a busy place at BurstMedia these days, as people look to monetize greater portions of the Internet.  CPX Interactive’s COO & President, Rob Rasko sat down with Coffin at the IAB Leadership Meeting to talk about changes they expect to see in the industry in 2010. Coffin’s company is very comfortable with their longtime business model, principally representing long tail websites, and feels confident in their knowledge of the vast reaches of the Internet.

One of the hot button issues for 2010 is the concept of more intrusive advertising, as discussed in IAB Chairman, Dave Moore’s, keynote speech at the event. Coffin understands Moore’s message of thinking ambitiously and aggressively, but believes there is a middle ground. He stressed the importance of remembering that this is a consumer driven world, and therefore a common ground must be found in order for consumers to embrace the ad messages they see. Coffin also pointed out that it’s possible to be intrusive without being obnoxious, and he believes that the best way to stay on the right side of that line is by making creative a priority.  He sees targeting as an opportunity to be multidimensional, and put the message into context through strong creative.

Coffin and Rasko discussed the ad network race, in which Coffin feels the end user should be the winner. However, he thinks some work still needs to be done for that to be the case in the media business. Burst’s customers are publishers, and when Coffin takes a look at the value chain, he sees publishers getting less than what they deserve. This is something that needs to be corrected, and Coffin predicts publishers will take steps towards change, including starting to insist on fewer and fewer network relationships. Although the two leaders disagree on the value of exclusivity, they both see a marketplace with less ad network players as a positive in the future.

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Read COO Rob Rasko’s Q&A for the Online Advertising Blue Book, where he talks about CPX Interactive’s place in the ad network universe, and his thoughts about the future.

By David Shay, EVP of Marketing

It’s sort of funny that a process so clearly founded in free-market concepts would seem ‘confusing’ to an industry that so often enjoys employing market-based analogies to describe its own fundamentals. And yet, this seems to be the case in far more discussions than just Rich Cherecwich’s iMedia Connection piece of 7/24.

However strange the underlying phenomenon seems, though, Cherecwich is correct in pointing it out.

But, how ‘confusing’ should it be that an entity capable of driving true liquidity in a marketplace has the result of exposing the true pricing equilibrium in that market? In this particular instance, ad networks bring to the table thousands of quality publishers that, otherwise, do not have the opportunity to compete with their higher profile counterparts. This means that millions of ‘discount’ ad impressions hit the market each day, competing with higher priced impressions put on the market by ‘premium publishers’ that often end up performing just as well at lower costs.

Isn’t the natural result of that process that prices for inventory previously written off as ‘valueless’ to rise as its true value is discovered, while the prices that have been allowed to inflate, due to lack of competition, fall?

Nope…nothing ‘confusing’ about that.

CPX Interactive President and COO, Rob Rasko sounds off on the growing chorus of high-profile publishers calling for the demise of Ad Networks. Rasko addresses the value that Ad Networks bring to the industry and the reasons they remain a powerful ‘field leveler’ in a space where players run the gamut of sizes and resources in his article posted on MediaPost.

In a recent a article on iMedia Connection, Tom Hespos, President of Underscore Marketing, discusses the careful ethical line an agency must walk if it also intends to take distribution in-house. In the end, Hespos seems to agree with the points made by CPX Interactive CEO, Mike Seiman, in his own recent iMedia Connection article on the topic, that  agencies and ad networks are probably better off each handling their own area of expertise.

By Rob Rasko
President and COO, CPX Interactive

Despite a seeming barrage of predictions to the contrary, ad networks have emerged as essential players in the online ad space. With unprecedented access to advertisers, publishers and agencies, all three parties seek out our industry relationships and expertise (though sometimes begrudgingly) to help them make their online campaigns successful.

While it would be easy for ad networks to sit back on the successes of the past few years, I believe that this is the perfect time for ad networks to challenge ourselves to rise to the next level of innovation and collaboration with others in the industry. We should also take the opportunity to focus on the level of service we provide for our advertisers and publishers.

As I think about the most important things that my company (and other ad networks) can do to ensure success in 2009, six key factors come to mind:

1. PROVIDE PRODUCT VARIETY
2. COMMUNICATE THE FINANCIAL VALUE OF AD NETWORKS
3. MAKE BEST PRACTICES A PRIORITY
4. PRACTICE DUE DILIGENCE WITH PUBLISHERS
5. INITIATE SYNERGY WITHIN THE ONLINE ADVERTISING SPACE
6. ESTABLISH TRUST AMONG ADVERTISERS

PROVIDE PRODUCT VARIETY – In the simplest form, ad networks have two goals: we help publishers monetize their inventory and we help advertisers find the best placements for their ads. This oversimplification, however, does not do justice to the variety of kinds of advertisers and publishers there are, nor to the specific needs they all bring to the table. The ability to service every type of publisher, for example, from the largest recognizable brands to small niche site, is crucial to offering strong, diverse inventory choices to advertisers. A single network must understand and service publishers of all tiers in order to help them monetize 100% of their inventory from the first impression on the homepage to the last impression on the deepest page of their site. For an ad network to grow and compete in the coming year, it must learn to effectively serve every tier of advertiser and publisher from top to bottom, and build product offerings to facilitate that goal.

COMMUNICATE THE FINANCIAL VALUE OF AD NETWORKS - A valuable service is only as good as the provider’s ability to communicate its value to customers. In an effort to be all things to all people, I sometimes think that ad networks have forgotten how to pitch their bottom line value to their partners:
Publishers who engage ad networks conserve time and resources that would otherwise be expended on hiring, training and managing inside sales staff. They are able to use this time, instead, to develop and improve their content so that they can better engage their audiences.

Likewise, advertisers who use ad networks streamline their marketing dollars; enjoying the benefit of scalability that comes with large packaged media buys, and the benefit of audience targeting that comes with technology.

Networks that are best able to articulate these points to advertisers and publishers will pull ahead of the competition in 2009.

MAKE BEST PRACTICES A PRIORITY – When it comes to online advertising, the word ‘transparency’ can take on many meanings. It is easy to get stuck in a finger-pointing match, where each side derides the other’s meaning. Standing in between advertisers and publishers, an ad network can find itself inadvertently ‘choosing sides.’ The bottom line, however, is that only a truly independent network can be best committed to practices that assist all parties in creating the proper experience in online media. Smart ad networks will be mindful of the responsibility that their position bestows on them. As President of CPX Interactive, I spend quite a bit of time attending conferences to determine how we can best regulate our industry and protect the brands we serve, while continuing to support the industries’ freedoms. Ultimately, it is all about moving forward, and continually finding new ways to monitor publisher content, and provide advertisers with better brand protection.

PRACTICE DUE DILIGENCE WITH PUBLISHERS – As an ad network, your publisher’s content is your content. Getting to know your publishers and staying on top of their website content is a matter of responsibility and ethics, as well as good business practices. At CPX, all sites are evaluated and assigned a rating of G, PG or PG-13, similar to that of the MPAA rating system. Websites that give users the right to create their own content are assigned an N/A rating and monitored more closely. CPX Interactive does not allow X rated content into its network of publishers. We have an internal re-check process to be sure that the quality and category of content a publisher presented in the beginning remains consistent over time. An ounce of prevention is truly worth a pound of cure, as any smart ad network knows that even a one-time slip can cause a mountain of headaches all around.

INITIATE SYNERGY WITHIN THE ONLINE ADVERTISING SPACE- As the landscape of the online advertising industry continues to evolve, participants continue to clamor for education and thought leadership. With their connections to advertisers, publishers and agencies, ad networks are in the perfect position to take the lead in creating a more supportive and cohesive industry that can benefit all of us.

As the industry consolidates, strong partnerships will be formed. In the not so distant future, there will be more support and camaraderie in the online ad space which can only help to strengthen the industry as a whole. Smart ad networks will position themselves at the forefront of that process.

ESTABLISH TRUST AMONG ADVERTISERS – Ever ask yourself why television ad revenue is 10 times higher than Internet ad revenue? We do. And we think we know the answer. Advertisers know television. They are comfortable with it because they understand all of the moving pieces, even if their ROI falls short of what it could be in the more ‘inconsistent’ new medium that is online. Building trust in online advertising comes down to consistent results. As an ad network we grade our publishers so that we can tell advertisers where their ads will be displayed, and advertisers depend on us to give them accurate information. If an ad network labels their publishers too liberally, the advertisers will disappear and the economies of scale will break down. It is essential for networks and publishers to work together to create as much honest visibility as possible in the channel. This should be a major initiative of any ad network looking to occupy a top tier position. One thing we can never afford to do is to lose the confidence of advertisers. If you think winning trust is hard, try winning it back after it has been lost.

AdExchanger.com recently compiled a chart of comScore data comparing ad network performance in February 2008 to February 2009. The chart shows that  CPX Interactive was the second fastest growing ad network over this time frame. CPX’s percentage change in both Total Unique Visitors and Total Pages Viewed is second only to Turn Inc.

By Michael Fleischman, EVP of Business Development, CPX Interactive

There are a number of factors that lead us to believe that there is significant growth ahead for the internet advertising sector. Some of these factors include:

1. Worldwide Internet penetration continues to rise.
2. Newspaper and magazine businesses continue to lose ad market share while dependence on mobile and Internet use increases.
3. Failure of newspapers to manage their existing cost structure, making their business model unsustainable in the future.
4. Increased dependence on the Internet medium for breaking news.
5. Emergence of blogs as a trusted news source and opinion provider.
6. Growing broadband penetration is a catalyst for more robust commercial Internet activity.
7. Growth of online retail is closely related to increasing broadband penetration.
8. Over the past five years, performance-based advertising has gained market share over the CPM based model.
9. Advertisers placing higher value on clear ROIs; hence, a shift to performance-based models is likely to accelerate in this recessionary environment.
10. Brick & Mortar retail bankruptcies, and especially store closings, should lead to pricing pressure, and thus margins pressure on the survivors in both online and offline retail.

The Internet is a constantly changing medium, and in late January, members of the domain industry gathered in Hollywood, CA to discuss how they can best anticipate, confront and conquer these changes. The venue was DOMAINfest 2009, a conference created in 2006 by DomainSponsor as a way to bring industry professionals together to learn, network, and develop business relationships. CPX Interactive was one of three Gold Sponsors for this year’s event, and hosted the opening party at Universal Studios. A section of the park was closed down to the public, and several rides were opened especially for attendees. CPX provided food and drinks, and everyone had a great time.

According to the DOMAINfest website, there are over 168 million domain names currently registered. This conference attracted “domainers” large and small, as well as marketing and advertising companies of every variety. Panel discussions covered topics such as: “Domaining 2.0—what does the next evolutionary phase of our industry look like?” “What Can We Expect from the Legal and Regulatory Environment?” and, “The Google Perspective: Winning over the Advertiser and Optimizing Site Performance through Analytics.” The Keynote Speaker was Steve Wozniak, Co-Founder of Apple. Wozniak spoke on initiating change in the Internet space, and maintaining an entrepreneurial spirit despite facing challenges.

For many, an invaluable aspect of the event was the networking opportunities it provided. In addition to “structured networking” periods after panel discussions, sponsors and exhibitors set up “pods” which provided a space for constant discussion. Yael Klein, Publisher Relations Representative at CPX Interactive, and Chris Brennan, Senior Sales Director of Publishing at CPX, attended the conference, and found that they spent most of their time in the pod meeting people and making new connections.  Brennan emphasized the importance of forming new partnerships in an industry that has until now been an untapped resource. He feels that CPX is a valuable partner for domainers because we can offer domain by domain tracking statistics that no one else provides.

CPX Vice President of Publisher Acquisitions, Mike Zacharski, also attended the event, and echoed this sentiment; he sees a lot of growth potential for CPX in the domain space. Zacharski explained that CPX sponsored and attended this show in order to better understand the needs and sentiments of the domainers as well as evaluate how CPX can be a leader in developing new tools and bringing new ideas to the domain space. DOMAINfest provided these opportunities and more, and CPX Interactive is excited to continue work on releasing new products for the domain space in the near future.

1. Privately held ad network that has been profitable for over 7 years.
2. Corporate offices in New York, Los Angeles, Milan and Madrid with Istanbul coming soon
3. Approximately 90 employees to date …and growing
4. Serving over 1 billion global ad impressions, daily
5. A network of over 3,500 quality web sites with over 200 million monthly unique visitors
6. Significant international traffic in over 65 countries across the globe
7. Largest buyer in Yahoo!’s Right Media Exchange (RMX) – supplying approx. 30% of exchange traffic
8. Major player in DoubleClick’s advertising exchange and marketplaces including Openx, Rubicon, Pubmatic and Admeld
9. Ranked 15th on comScore’s list of largest ad networks by monthly US unique visitors, 5th by monthly US page views
10. Differentiates itself from other ad networks through global footprint, campaign targeting and optimization skills and industry leading campaign development services

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