Coffin sits down with our executive editor to talk about how ad networks are maturing, how they relate to behavioral targeting and more.
Jarvis Coffin is a co-founder of BURST! and has served as its President and Chief Executive Officer since its inception in October 1995, and as a Director since January 2000. From September 1993 to October 1995, Coffin worked at the Los Angeles Times where he was Director of National Advertising. Prior to that, Coffin was Vice President of Sales at Business Week from September 1991 to September 1993. From 1985 to 1991, Coffin was employed at USA Today, where he held various positions, including Director of Northeastern Sales. Coffin has been a member of the Advertising Club of New York, Lantern Club of Boston, the Boston Idea group and the Massachusetts Interactive Media Association, as well as Chairman of the Newspaper Association of America’s Committee on Financial Advertising. Coffin obtained a B.A. in Political Science from Hobart College.
Recently, Jarvis Coffin sat down with me to chat about ad networks, where they've been, how they're changing, how to choose the right one for your marketing needs, among other things. Our topics include:
Page 1: Intro, what Ad Networks are and how to choose
Page 2: Ad Networks and Behavioral Targeting
Page 3: Predictions for Ad Networks in 2006
Page 4: Is blog inventory different?
Page 5: The biggest challenge for Ad Networks
Page 6: The internet and media accountability
Brad Berens: I have the good fortune of sitting here with Jarvis Coffin of BURST! We are talking today about what the heck is going on with ad networks. So, let me start off with kind of a long first question, which is -- from my seat, here at iMedia's Culver City offices -- that 2005 seems to have been a year of extraordinary proliferation for ad networks. It's not quite to the extent that every time a bell rings an ad network is formed, but there are moments when it seems that way.
Jarvis Coffin: Right.
Berens: And so, my first question is this: you have been in this game for awhile… why now?
Coffin: Well, first, great to be with you, and chatting, and thanks for your interest in the ad networks space. Why now? I think the answer to that question, Brad, is that people have suddenly come to terms with the fact that it is a distributed media model. That is how I position it. It is a distributed media model online, that people have suddenly realized that (and, by people I mean sort of the general “we” out there in the internet space) realize that, in order for the businesses to scale, they have got to be able to move horizontally, not just vertically.
So, what does that mean? Five years ago, all of the conversation was still about portals, right?
Berens: Sure.
Coffin: It was all about aggregating audience. Well, here is what changed in 2005 -- and it became a catch phrase -- the consumer is the aggregator of content today. Accordingly, the network is the model.
Berens: Scott Deaver of Cendant said, at one of our events a few years ago, "integration doesn’t happen in the marketing department. Integration happens in the consumer’s head.” And, you are saying the same thing is true of aggregation.
Coffin: That is absolutely correct. I completely agree [with Deaver], and I was there for that [event]. It was a wise comment then, and it applies today. And, I think that is really what is driving the network business. And, you are right. Who isn’t in an ad network today? It is more competition for companies like us. But frankly, the upside is much better, because you have got an entire marketplace now that is essentially talking about what matters, and that is: getting the message to the consumer, reaching them at the point of contact with what they are interested in.
Berens: I guess the real question for people who are new to the space, or for people who are just recovering from the notion that ad networks are all about remnant inventory -- which I think is certainly the abiding tale that the Institute was telling during the bubble --
Coffin: Hmmm.
Berens: -- Going on from there, the pressing question is how people can tell among different ad networks. How do people make those decisions -- I am going to go with this one; I am going to go with that one? So, how should advertisers be adjudicating among them?
Coffin: This is the other important thing that happened in 2005 -- if I can sort of go back, and retreat a little bit on that question. When 2005 started, no one was trying to differentiate among networks. There was a general sense that networks were starting to emerge (as your first question has already accounted for).
Now, at the end of 2005, we are trying to discriminate. And, there are big differences. Right now, though, I think it divides into two. And, it is just a broad cut down the middle.
On one side of the line are sort of the networks -- the model -- that got us through the last three or four years. And, that is the broker/dealer arbitrage, “blind buy network” type -- a strong, performance-based model…. and, still a very distributed media model, but…
Berens: But, you don’t know where it….
Coffin: You don’t know where [your ad] is. Lots of cheap banner impressions across a bunch of amorphous websites.
On the other side of the line is the more transparent model, trying absolutely to sell the value proposition of vertical niche content. If you are an advertiser, then what you have got to do is make a decision as to what are you trying to get done.
If most brand advertisers in the internet space today are more preoccupied with the “transparency component,” then they need and want to know where their ads are running because that may be material to the media plan.
A lot of the direct response advertisers are coming to the marketplace. They are looking for hard-core performance metrics, and they can discriminate among networks on that basis. Does that make any sense?
Berens: It does make sense. It still sounds like a whole lot of work.
Coffin: It is. Networks are there to provide a turnkey solution to advertisers, to marketers, who are trying to reach the right audience, depending on their media strategy.
Let me go back a little further here. When we started our company -- ten years ago -- we were really trying to solve a problem that had been dogging the advertising and marketing community for a couple of generations. And, that was: how do I reach my best, most important prospect and eliminate media waste. So, we are on the side of the line that advocates, or that advances, transparency.
We solve that problem by representing highly vertical, single topic, content rich websites, which we can bundle into a -- literally -- infinite variety of customized packages. Essentially, we sell a hundred percent composition. The network model that I think people have sort of generally understood -- the “blind buy media” network -- solved the media waste problem a different way. They didn’t charge for it. And, that is what gave rise to CPL, or CPA advertising -- Cost-Per-Action advertising.
Berens: Rather than impressions.
Coffin: Exactly. So, fundamentally, that is what is going on. The Internet is capable -- and has been since day one -- of helping to eliminate media waste. So today, the question for marketers -- and the way that they should be thinking in terms of how do they discriminate when it comes time to make a media buy online -- is, "who am I trying to reach and, under what circumstances?"
If I know who my best, most important future customer is, and I know where to reach them, then those solutions are available to you on a One Order/One Bill basis. Networks can provide them to you.
If I am a direct response advertiser, or a brand advertiser with -- for that particular moment in time -- a performance media requirement, and I want to eliminate media waste by simply avoiding the chance that I have to pay for it, then there is a One Order/One Bill solution available to you through any number of providers, the champion of which, of course, has been Advertising.com for a long time.