AdExchanger: Are you worried about ad blocking?
MIKE MCCUE: If we started to retarget people with popup ads and use up people’s data plans and add extra time to page loads, then sure. But we’re looking to be a respite from crazy, annoying, problematic ads. Advertising works in print and we believe it can work in digital and mobile.
Are you worried about Facebook, Apple and Google getting into the newsreader business?
They’re an interesting phenomenon, but they have zero impact on us.
First, publishers are concerned about putting too many eggs into any one basket, so they’re increasingly looking at Facebook quite warily. Secondly, Apple isn’t in the advertising and media business – in fact, quite the opposite – so it’s unlikely they’ll be able to create an ecosystem that meets the needs of publishers. Apple also rejects social outright, despite the fact that most people want social signal attached to their consumption experience. For us, it’s all about curation.
How would you sum up Flipboard’s approach to advertising?
When publishers move their content to a digital experience, they usually end up going from gorgeous full-page ads to banners and popups – and, frankly, people hate it. The value of these ads continue to decline, the CPMs go lower and lower and stories can’t get the same level of subsidization this year as they did last year.
The nature of storytelling is changing to accommodate better monetization and, basically, we want to help fix that.
We’re a platform that lets storytellers, journalists and brands coexist.
Most of what’s moved from offline to online so far is the direct-response stuff, which can be highly quantifiable. That’s not really what we’re about. We’re focused on brand advertising – building desire for a brand – rather than harvesting that desire. Offline advertising still represents about 70% of ad spend. It’s the vast majority of the pie and it’s the advertising we’re going after.
Branding is hard to track. What kind of KPIs are brands asking for?
Every brand is a little different. Some care about general awareness and others care about hitting very particular demographics. We have basic proxies like click-through rate, which tends to average in the 2% to 3% range for full-page ads, but depending on the quality of the story it can sometimes go as high at 50%. We also do custom implementations with brands that are spending enough to warrant it. In one case, we worked with a brand to connect device IDs to their purchasing system.
What kind of targeting can you do?
We have something we call the interest graph which looks at how people and their interests are connected. We can tell if someone is interested in snowboarding or DIY. We know, for example, that people who follow coffee on Flipboard and people who love handcrafted beer are the same people – and if they aren’t, they’re about to be and they just don’t know it yet.
Beyond targeting, some of our brand clients are also using this information to inform their storytelling. Merrill Lynch, for example, has a whole editorial team creating content everyday about the world financial markets, and like any publisher out there, they need to figure out their editorial strategy and what resonates with their audience.
How do you approach native advertising?
Native is central to what we do, and we treat brands the same way we would treat The New York Times. They all get the same tools to drive audience and promote their stories or they can rely on organic audience development.
We have promoted articles, promoted videos and also something we call promoted collections where brands can group multiple stories together on a page. Those stories can either be developed by the brand itself or collected and curated from other sources. For example, Delta did something with us to promote their red-eye with a curated collection of content about the science of sleep from Scientific American, TED Talks and The Guardian that they put together into a package.
Do you sell programmatically?
Right now it’s a direct sales model and we think about it by vertical. We have direct relationships with financial services companies like JP Morgan, Merrill Lynch, Oppenheimer and Fidelity, for example, as well as direct relationships with luxury folks like Breitling, Rolex and Gucci.
We also work in partnership with our publishers and their sales teams. Some of our publisher partners are very specialized and they already have long-standing existing relationships with brands that we wouldn’t be able to match on our own.
We do see programmatic as a good opportunity, but we’re still figuring out how we might use it and, really, so is the rest of the industry. If it’s done too hastily, you run the risk of cheapening your platform and your experience.