Auction theory – reverse auction example

As part of building next generation of adtech marketplaces i try and find & use as many different marketplaces as possible in other industries to see what lessons can be learned from the mechanics, and how it’s users behave. This time it’s home moving platform Anyvan!

 

AnyVan is a reverse auction platform allowing people who want things moved (buyers) to get the cheapest bids from people who can move them (seller/bidders).

 

I used it in my move to London placing a job which became a reverse auction, and had a good talk with the guy who won about how it works on the bidders side too.

 

In a reverse auction the roles of buyer and seller are reversed, and the clear price goes down with every bid. All bidders need to see the last bid price to know what they need to bid lower than.

 

FAVOR REVERSE AUCTION FAVOR STANDARD AUCTION
Many potential Publishers Few potential Publishers
Commodity or standardized product Specialized or custom product
Transactional prevalent relationships Long-term, strategic relationship is important
Excess Inventory Little or no excess Inventory
Price is the key selection criterion Other issues are as or more important than price

[ Perfect for Display not for Video? ]

The most common problem is each party being happy with the outcome. If the bidder makes a wrong assumption because there was not enough information from the buyer then she will be unhappy, if the buyer thinks the bidder knows what he’s buying but doesn’t honour the bid then they will be unhappy.

AnyVan solves this problem by forcing an exact job spec from the job poster (buyer), full transparency of every bids, each bidder, and with a slight risk to user privacy exposes all messages between a buyer and bidder to all the other bidders. This saves customer service acting as intermediary and creates a self informing auction. Bidders are scored by buyers to provide a self policing ecosystem.

adens-anyvanjob-dec-2015
[how my job went down]

The only thing it hides is the commission it charges. To users it’s fairly obvious because it’s the ‘deposit’ you make when accepting the winning bid. For bidders it’s not, they submit and see others bids without the commission applied. For me the winning bid total was £163, the deposit £40 , with the winner confirming he bid £123. So Anyvan’s commission was £40.

It’s a great example of how open transparency makes a vibrant marketplace with happy buyers, sellers and minimal overheads. With some polishing of the platform it could easily scale into other verticals or even to a Priceline model for travel & rentals.

How can this be applied to Adtech?

Reverse bidding is unlikely to happen anytime soon even for Display where there is a glut of inventory. Premium Publishers won’t get involved for fear of Advertisers using a lower bid price from a remnant Publisher to negotiate lower rates.

If however a DSP were to offer it’s own auction and invite Publishers to bid for their Ad spend then they would be swamped, albeit with remnant Ad networks.

[graphic here to demonstrate?]

Conclusion

The real lesson here is the importance of transparency which has always been missing in Adtech, limited by technology, publisher capabilities, fraud, and lack of incentives for the supply side to provide it.

The buy-side with its take it or leave it approach gives minimal information too, and big buyers like trading desks & large advertisers are only scored amongst publishers by rumours & backroom conversations amongst themselves.

Anyvan shows the kind of trust and vibrancy that can be created with a transparent marketplace. I for one am baking it into every product we build.

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Video Ad Tech 2016 Predictions!

There’s a rising tide in Ad spend, upcoming US election, Rio Olympics, European football, users demanding more respect, and new wave of premium inventory coming through – it’s going to be a busy year! Here’s what I hope or expect will happen in video ad tech.

  1. Rise of Ad-Supported-VOD (AVOD) over Subscription-VOD (SVOD) like Netflix, Now TV & Amazon, and the BBC are there first offering people strong content for a monthly fee. There are however only so many subscription services people will pay for, probably 3 or 4- it’s a zero sum game. There are however many media companies about to jump in and translate their strong brand recognition and original content into online platforms and apps. The big opportunity is to have these Ad supported instead of subscription based to gain market share quickly.
  2. Video SSPs bought or white labeled. This year there’ll be publishers creating more video, and traditional TV media companies taking their brand recognition and viewer base online. They will want to take their current Ad spend deals and run them against their new online inventory. This will require either whitelabeling or buying to help them vertically integrate to the demand side, take out more of the middle men and create a stronger proposition. On the flip side, 2nd gen ssp/exchanges who started in Display and didn’t move fast enough to Video will face a tough year.
  3. Shakeout of DSPs – They act as the gateway to the market for advertisers. As advertisers bring this knowledge in-house the DSPs built & modelled for this will survive. Ones that can provide a real point of difference, and can make the account managers using them look good will do well. Ones that present no points of difference are in danger, especially older ones with expensive legacy infrastructure & heavy manpower overhead.
  4. Trading desks under pressure as route to market becomes further commoditised. Those without their own compelling Ad products will be swept away.
  5. Agencies surviving by innovating creative, and partnering with supply tech providers to enable new innovative ways of storytelling. VR giveaway as with New York Times gives a good example of how cheap IoT hardware will be combined with Ad spend to tell both the publisher and marketers stories.
  6. Push back on in-banner, especially on mobile. Publishers themselves are already red-lining it. It won’t go away entirely, but just as small flash players were auto paused in chrome, the HTML5 <video> element which is now being used for in-banner video, could quite easily be auto-paused too. This would force the in-banner guys to go the HTML5 canvas route where the video is spliced into frames and sent to the browser as one large long image creating sudo video Ads that look like gifs. Mobile browsers are likely to clamp down on this harder to protect users data plans, but better 3rd party validation tech will achieve the same thing.
  7. Thinning of margins for the middlemen on the open web. If the content creator gets a bigger cut then this is a great thing. There is of course the danger of walled gardens like Facebook double, triple & quadruple dipping on charges in their closed ecosystems with new tech elements in their end-to-end stack, meaning pubs who put their content in them could end up with less revenue, especially with lack of available competition.
  8. Blocking of interstitials by browsers. Chrome already has ad blocking built in blocking popups. Browsers will do the same with Interstitials, especially full page “high impact” ad units. Of course email signup ones will get caught in this too, but you won’t find a user who’ll be put out by that.
  9. Leveling off of Adblockers. You can analogise it to other popular apps that users download, like Google maps on iOS – incredibly useful but only has ~30% install base. Android ad blocking is a pain, as more impressions move to mobile and connected devices like chromecast, then the net will start to level off.
  10. Mobile video to continue to grow, still lower fill than desktop, but stronger on in-app inventory where it can be properly validated. Fraud on mobile is the big issue not being talked about enough. The process by some mobile SSP’s of taking a video ad and transcoding it into a gif like animation to get around iOS not allowing autoplay video, thus creating muted sudo in-banner video will come out into the open.

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smarter-coffee-raspberry-pi

Smarter Coffee machine + Raspberry Pi = IoT coffeetime

smarter-coffee-raspberry-pi

The wifi coffee machine by smarter coffee is not a secure device. It can’t be allowed to connect to your main router, but it needs to be controlled by a group remotely …plus it’s fun to play around with right?

Solution:

Connect it to a satellite router with only a RaspberryPi for company. This satellite router can then be locked down to allow only these devices to connect. As no phones can be connected their iOS and Android apps can’t be used, so to make requests we’ll have the RaspberryPi make requests to the coffee machine instead. We can then call they by having Hubot on the Pi we can also have it connected to the office chatroom (hipchat or slack), or run a web server on it and have a secure REST API.

githubLink

You’ll need:

  • 1 Smarter Coffee machine (untested but might also work with iKettle 2.0)
  • 1 Raspberry Pi or Pi Zero
  • 1 Router – highly recommended to be a satellite off your main router

How to install, test and run it:

We’re going to create a project directory, clone the code into it, edit it for your network, and run it to test.

Open the terminal on your RaspberryPi or have it boot to command line.

$mkdir project-coffee

$cd project-coffee

$git clone https://github.com/AdenForshaw/smarter-coffee-api.git

Use Fing app or nmap to find the IP address of your coffee machine. e.g. 192.168.1.61

$cd smarter-coffee-api

$nano smarter-coffee-api.py

$change the IP address to you coffee machines

Now we’ll test it with the ‘reset’ command

$python smarter-coffee-api.py reset

If the machine lit up and says ‘reset’ then test complete!

If not then check the IP address, connections, and router settings.

Now set brew size/ strength/ brew type physically on the machine, and call the brew method –

$python smarter-coffee-api.py brew

Toast to your success!

bill-murry-coffee

Your hack is complete! What next?

Security: With any IoT device, hacked or not, you should do a security audit once its installed. In this case check the wifi router the project is on is locked down

Ai: You could store the date/time each brew method is called, then use this to predict when the next brew would be called!

Expand: You could expand on the basic API i’ve made in GitHub, and add more methods yourself, like brew size/ strength etc, and add it to the repo!

Team access: You could have a web server on the RaspPi, and have this project called as a REST API, or install Hubot and have it called from your team hipchat/slack/etc

Home automation: Create a smartthings device type and control it with your home automation switches, triggers or voice!

Whatever you do please let me know, i’m always interested!

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Talking HTML5 Ads with Ciaran at Exchangewire


Currently the Chrome beta has a setting enabled by default to pause any non-essential (embeds smaller than 530 pixels wide) of Flash movies on a page. Their plan is to make this default in Chrome 45 in Sept when it auto-updates the default Chrome browser. This video discusses the problems this will cause for the Ad industry, and what Publishers, Advertisers and AdTech providers in the middle should do about it.

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Is Ad-blocking the next Adpocalypse?

ad-block-basketball

What’s going on?
Viewability is the zeitgeist inside the industry, outside it’s all about Ad-blocking. On desktop there’s very little friction to installing an Adblocker. On mobile there is still friction to root or sideload, but with iOS9 adding new blocking support mobile will grow massively.
Google still make it hard to do with Chrome on android, but with Firefox it’s as easy as on the desktop.
Even my mum asked the other day “there’s too many ads on Facebook how do i use this blocker i heard about on the radio” – for her it wasn’t a discussion about data, or intrusiveness – just the shear frequency getting in the way of her Facebook fix. The radio show in question wasn’t some niche podcast, but BBC’s Radio ’s flagship news show (4m).

Why?
Users are annoyed by the high frequency, interruption getting to the content, and talk of their ‘data’ being hoovered up corrupting their web time against them. Their browser is after all technically called a User-agent, it’s their agent online, requesting content from the Publisher on their behalf and showing them the returned content on-screen.

“Basically anything that might affect me viewing the site or will play a sound that I don’t want to hear – like a ‘highly engaging’ Ad that covers the whole screen – it’s like the loud guy at the bar, he thinks he’s the coolest guy in the world and everyone wants to be his friend, really he’s just an obnoxious drunk.”

Generally users don’t mind visible, hate in intrusive and abhor invasive.
There’s a view amongst those over 30 that as you can skip a tv or radio Ad with a PVR or podcast, then online Ad blocking is morally the same. Those under 30 have a view that everything on the net should be free.
There are lively debates going on that are worth reading, and I’ve tried to answer each in the FAQ below.

What kind of Ads?
I’m not talking just bad creative, bad contextuality, or even bad puns – but ones that users feel break to undeclared social contract between the publisher and themselves.
online-advertising-networks-vibrant-media-review-lightbox-ads-sampleFull page interstitials are often cited as “crossing the line”.

Platforms sold to Advertisers as “High impact” formats, and you see why they’d buy them as they look good and promise high engagement with a user. The dirty secret with these formats is that they often count clicking the close button as ‘engagement’. I once spoke to someone who made these, they said they ran a click-heat map for a campaign and all the ‘clicks’ counting click through engagement were around the close button. They never ran a heatmap again…
In-banner video or Flash Ads that aren’t muted, it’s like going to someone’s myspace page with auto playing music. Super intrusive examples
Sheer weight of browser requests. Ghostery, ABP, uBlock all lay bare all how display ads work, calling so many demand sources, each dropping cookies for user data, header bidding will only exacerbate this. There may only be 3 slots on a page, but over 20 ad requests would be made.

When the value of the space to show an Ad is too low, ironically when there is not enough data to know anything about the user, or it is a non brand-safe site like a torrent or illegal streaming, then you get these really low rent Ads. Not many people want to meet busty russian chicks in their area.

adblocker-dodgy-ad

At least punch the monkey was fun….

Is there a legal limit on bad Ads?
Publishers are allowed to show as many Ads as they like. Of course there are region specific laws around advertising content like firearms or alcohol, to children, and miss advertising products
There’s a legal frequency cap for Ads shown on Television –around 8-12mins per hour, but this does not apply online.


How big a problem is it?

Picking up speed across the board, in some demographics like male-gamers, it’s already over 50%. All the big media sources are picking it up, even the NYTimes.

Adblocking-Penetration-US-2015-Chart-PageFair-w-border-e1439323368968-620x442


Options for Publishers?

1. Go to war – defeat the Adblocker and show Ads anyway (SourcePoint, PageFair). Use code like FuckAdBlock. You’re entering an arms race with a large and enthusiastic open source community, along with ignoring the user’s explicit instruction to not show an Ad.

Gandalf-ad-block-banner

 

2. Content Blocking – stop access to the content unless the user deactivates or whitelists them (Hulu & 4oD)block_warn

Channel_4_Ad_Blocker

3.Build a paywall – A full paywall limits your pool to those with disposable income, and then it’s a zero sum game, there’s only so many subscriptions a person is willing to have. Micro-payments still have too much friction and don’t work. A part paywall can seem attractive, but the irony is that those will to ay are often the ones that Advertisers pay most to reach, and therefore can disproportionately cannibalize your remaining ad revenue.

nyt-paywall1

ooyala-paywall-features

4. The “Jimmy Wales” – detect the Adblocker and ask users to whitelist your site. (3-5% people will)

09a

Guardian_Ad_Blocker

Ad_blocker_Wired

5. Ride out the storm – only work with non-invasive Ad demand partner. Strip out all the invasive units. Engage & educate your users on your revenue model, data you collect and the Ads you’ll allow. Do more transparent native. Get enough scale to enough dance with the devil and get on a Adblockers default whitelist.

There’s no silver bullet but data disclosure and higher Ad quality more strategically used are a start.

In the long run, there could be a hidden benefit to blocking ads for advertisers and publishers: Ad blockers could end up saving the ad industry from its worst excesses. If blocking becomes widespread, the ad industry will be pushed to produce ads that are simpler, less invasive, and are far more transparent about the way they’re handling our data — or risk getting blocked forever if they fail.

 

Won’t people just end up paying for what they like?i-m-sorry-i-thought-this-was-america-7
This is a very rich western world view, and talked about by those who have disposable income.Even for them it’s a zero sum game, people will have so many subscriptions. If you’re a knowledge publisher then spreading & discussing ideas is key, and in a world where 50% of humanity live on less than $2 a day you’re shutting out a lot. In china where Ads are even more prevalent Adblockers have negligible penetration.

In the same way Browsers eventually stopped pop-ups and popunders, they will eventually bake in blocking of full-page interstitials and invasive ad formats. Chrome pausing Flash ads on 1st sept is the first step.

Screenshot 2015-08-28 15.37.13

Imagine “Interstitial blocked” or “Annoying Ad unit banished to hell…”

There are interesting services like Adieu.io built on appnexus, this lets users essentially buy the Ad space on sites themselves, with the publisher earning revenue in their standard method. It works out to $10 eCPM which is a bit cheeky for the mass market, but interesting nevertheless.

Screenshot 2015-08-28 15.34.01

Won’t the big guys just solve it?
Google and Facebook obviously have too much at stake to let this continue right? Yes they are both heavily reliant on Ad revenue, but both are pressing mobile as their future, which is harder to block ads in-app and so kicks the can down the road. There’s no leadership from either, and the IAB has put out very weak language on the matter, discussing the in-fighting between mobile operators and publishers rather than the consumers who are actually doing the blocking.

Over time the implied contract between publishers and users will find a natural balance. In the same way that Crackle, Hulu & YouTube exist in a world with Netflix, Now tv & Amazon Video, Advertising will still exist and subsidise the content, but users will want a less intrusive experience in return.
The mix of ad supported to subscription paywalls will grow, but only in demos with enough disposable income, the irony is that as these demos are the most valuable for Advertisers to reach, the overall revenue from the remaining Ad space will drop.

What am I doing about it?
I believe online Advertising serves a valid purpose, but without doubt bad players shoehorning invasive ads in users faces, and tracking their every action has crossed the line. I will never work with or create companies that do this. There is right way, but it requires integrity and a will to create something of lasting value.

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Santa Barbara : an honest review

With Coull’s expansion into the US via the purchase of a great local agency, I’ve had the good fortune to hop over to Santa Barbara a fair few times. I never really find that TripAdvisor does that good a job of highlighting the best spots, so here’s my advice if you fancy visiting.

Nightlife

Some of the Best nights I’ve had out there have been at the James Joyce on state street, great selection of whisky, live music and general atmosphere. Elsie’s is well worth a visit, a locals favourite, great drinks selection, a veranda out back, and stays open late.

The local whites are very drinkable, although they are deservedly proud of their Syrah. The beer on the other hand can’t be faulted. The Firestone brewery makes easily the best ales I’ve had anywhere in the states, and if this is your thing then a visit to Union Ale is definitely worth your time. The service is excellent, and the beverages even more so.

California state law prohibits selling alcohol after 2am, and most bars shut around 12. Of the few clubs, the latest closing and worth your time is probably the Savoy. To get into most bars you will need to take your passport out with you no matter your age.

Places to avoid: Any touristy “British pubs” – just as bad as American themed bars are in Britain, except with more Stella Artois and worse than a wetherspoons.

Dining

Santa Barbara has some great restaurants, being a sucker for a great steak, then no visit is complete without a trip to Holdrens. The wine list is fantastic, aim for a well aged local Syrah and you won’t be disappointed.

Beaches

I L.O.V.E the local beaches. During the day my Somerset grown fair skin can only take so much of the gorgeous weather, but going for a run along the beach at dawn or dusk is one of my all time favourite things. A short drive down the coast to Refugio Beach will find you a sublimely gorgeous authentic beach, great for camping and spotting the local wildlife like diving birds, dolphins, sealions – all the hits.

Hotels

It’s worth staying in a hotel on the sea front even though they are only 3-4 star. The sun bursting through your blinds inviting you to sit out on the balcony overlooking the sea, morning coffee in hand is worth 5 stars on its own. The harbor view inn next to the pier is perfect for this.

Coffee

The French press on state street is easily the best, it refreshingly concentrates on the coffee more than the pretension.

Culture

I was pleasantly surprised how good the local art galleries were. The local Art Museum is the star of the show, and has some excellent examples of modernism which kept me enthralled for a good hour alone.

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