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The opening line, “Well, that didn’t take long,” of a Los Angeles Times article, unknowingly captured the reality that makes up the ever-changing behavioral shifts in the digital space.

The line was in reference to the cascading stock price of Facebook, and Mark Zuckerberg’s brief time on Fortune’s ‘Top 40 Richest’ list.  And while the post-IPO struggles of Facebook have been dominating tech news over the past few weeks, the greater story centers around what is causing this drop in perceived company value: consumer movement. In Facebook’s case, consumers are moving to mobile and the company has been slow to respond.  However, this isn’t a unique issue to Facebook alone. Once the trickle of consumer shift begins, it’s exceedingly difficult to dam the flow.

Here are some notable examples taking place right now:

Such is the challenge. Consumer movement is a hard thing to predict, but an easy thing to recognize, and that’s the key point here. As advertisers and marketers, our biggest challenge is finding profitable consumers at effective scale in order to move the business of the brands we service.  While the digital space is full of these opportunities through social, mobile and other new media, the target is a moving one that requires a watchful eye.

On May 30th, the venture capitalist Mary Meeker released her latest “Internet Trends” report. The presentation is packed with fantastic stats and charts that are destined to find their way into marketing decks over the next quarter.

The presentation does an amazing job of outlining the state of the internet, as well as highlighting the changes that mobile devices and increased connectivity are having on consumer behavior.  With a key focus on mobile, the report outlines the massive opportunity that these devices present for advertisers. The report also makes the case that it will simply take time for advertising dollars to follow the massive number of eyeballs that are increasingly moving “mobile.”

However, in recent weeks there have been arguments made that media companies need to do more than simply wait for mobile ad spend to come based on having a large mobile audience.  These arguments focus on the idea that companies need to offer advertisers opportunities that are core to what the mobile device is best at: the ability to combine location, context, and relevance.

You have to appreciate these arguments, especially in light of what is currently happening with Facebook.  With a mobile audience of nearly 500 million users and a recent 1B mobile acquisition, many are questioning how Facebook plans to monetize mobile.  Recently, Facebook has done more to offer advertisers new mobile ad offerings and it will be exciting to watch them continue to evolve their mobile strategy.

Having a sound mobile strategy will be key to Facebook’s success.  That being said, it’s still early in the game.  Far too many are still failing to adopt mobile and develop an effective strategy.  Too often mobile is still found on page 6 of the advertiser RFP instead of page one.  Publishers consistently fail to realize the true value of their mobile inventory and how to correctly monetize it.

However, these things will change.  The mobile space is moving far too quickly for it not to.  As Mary Meeker noted in her latest report, mobile represents a $20B+ opportunity in the US alone!  Whether advertiser or publisher, it’s impossible to deny the increasing importance of having mobile strategy in place.  However, the future success of advertisers and publishers will depend on how quickly they adapt.

(Wall Street Journal) – Online tracking on 50 of the most-visited websites has risen sharply since 2010, driven in part by the rise of online-advertising auctions, according to a new study by data-management company Krux Digital Inc.

Read more on Wall Street Journal.
Download the full Krux Cross-Industry Study here.

Our partner Krux, which sells a service for website publishers to protect their customer data, conducted a study on data theft by crawling 6-10 pages on each of the 50 most-visited sites. Their findings uncovered that the expansion of the online industry’s data-collection efforts has caused massive data leakage for publishers.

Data skimming and data theft continue to be pervasive, and the spike in activity makes one thing clear – web publisher data has tremendous value. Why else would so many be so focused on its collection and reuse?

The decision now lies within the publisher community. In the end, they are ultimately responsible for controlling their data and protecting the value of their inventory.

What if you could successfully complete your weekly grocery shopping from a train station? Peapod, a grocery delivery service based in Illinois, recently made this desirable experience a reality by combining mobile and out-of-home (OOH) advertising in order to launch a “virtual store” in a Chicago train station. The OOH creative entices consumers to download the Peapod mobile application (via a quick response (QR) code). Once downloaded, the application (via iPhone, iPad, Android) gives consumers the ability to scan barcodes of 70 products for purchase. After scanning, users can check prices, purchase goods, and schedule delivery times, all while waiting for their next train.

This Peapod execution is a great example of how to integrate multiple channels to reach consumers. Mobile and OOH are media vehicles built to complement one another. The integration of these two media types presents advertisers with more opportunities to capture consumers’ attention. According to an IAB report, 28% of mobile users are using their phones to find product information and 29% of mobile shopping happens on the go. Peapod’s creative execution effectively brings products to phones and capitalizes on the shopping habits of mobile users.

To create an even larger impact, marketers should consider changing creative from static to dynamic and adding hyper-local mobile targeting to engage users on a local level.

What are some other ways in which you’ve seen mobile and OOH advertising work together?

The Internet has changed publishing forever—not just how people consume information, but also how marketers reach those consumers. Marketers can now build cross-web consumer profiles across sites and devices. And they can target those consumers on interests, purchases, actions, and inferred or explicit demographic details without the publisher ever being involved. For the first time ever, it’s not unreasonable to expect the marketer to understand a site’s audience better than the publisher. This creates a fundamental shift in the sales dynamic for most traditional web publishers and poses a serious threat to those publishers’ ability to profitably monetize the content and audience assets they have invested so heavily in to build.

Have no doubt, though, that content is still king. It is content that gives users a reason to log on to the web to begin with. Further, specific consumer content affinities identify all those die hard NFL fans or suburban commuters or urban renters or soccer moms, insights coveted by marketers and agencies. And finally, premium or differentiated environments will always be in high demand. The clean, well-lit environment still has value, as does the deeper, more personal relationship an audience has with a particular publication. In these cases, the content itself may inform consumer interest, but the contextual environment serves to amplify a marketer’s message and introduces the opportunity for a more meaningful consumer connection. Content and context will always matter. Period.

Just a few years ago, that fact left publishers with a lot of room to monetize. The user’s content affinity was valuable enough to sell premium advertising packages. But, things have changed. Today, many marketers are collecting valuable audience and site data with every publisher impression they buy, leading to a lower reliance on those same publishers with the next campaign. They are putting that data to work buying cheap media via RTB-enabled networks and exchanges, reaching their audiences for pennies on the dollar. According to a recent IDC report, RTB will represent 15% of the US display market in 2012, and more than 25% by 2015. That’s one-in-four ad dollars, off the table.

There are important offensive and defensive moves to be made in response. First things first, though, one must shore up the defenses. The simplest best practice approach includes: actively monitoring data leakage across web pages and auditing the data practices of particular advertisers, agencies, and partners; developing refined T&Cs that define acceptable data collection types and thresholds; and getting more explicit about the value of audience assets by taking action when folks aren’t playing by the rules.

Moving forward, those publishers that thrive will be the ones that successfully refine their product strategy, building on considerable content assets and deep consumer relationships to deliver audience-aware offerings. It’s no coincidence that just two audience-aware (Facebook) and data-driven (Google) media sellers now fully command a third of the US display market (eMarketer, Feb 2012). The publishers that win in the long run will be those that successfully seek market demand for all-things-audience while playing to their own unique first-party publisher strengths.

In today’s increasingly fragmented media landscape, publishers with high-quality, journalistic content can only survive by protecting their inventory and user data. It doesn’t take a rocket scientist to understand that scarcer inventory begets better rates.

Over the past several years, many exchanges and supply-side platforms emerged with their own solutions to help premium publishers capitalize on their unsold inventory. They promised premium publishers increased CPMs across tier-two inventory, while also harboring their inventory and user data in a protected environment and preventing leakage of these valuable assets across the web.

While CPMs have increased slightly, we have not seen  monumental improvements in these areas. In fact, a recent study shows that CPM’s have remained roughly consistent, and that first quarter rates are roughly the same as fourth quarter of 2011 and the first quarter of 2011. (Joe Mandese, Mediapost, “RTB Ad Market Soars in Q1”, 4/24/12). In addition, inventory and data leakage is more prevalent than ever.

In order to create value and drive demand, you must first create scarcity. Media buyers are savvy and know that they can access your valuable inventory in a multitude of places.  Until premium publishers put a stop to inventory and data leakage across the various SSPs, open exchanges and ad networks, we will not see a significant increase in rates anytime soon.

One of the largest problems is that SSPs don’t have large, well-trained premium sales forces sourcing directly from advertisers.

They instead trade inventory amongst many other networks and exchanges whose main goal is to pay the lowest CPM possible—and brand advertisers have caught on. They know the same inventory is for sale in numerous locations and they can simply shop around for the lowest rate. At Centro, we saw this practice first hand with our niche local network, Spectrum. Over two years as we tried to push for higher rates, the response we kept getting was, “Why would I pay Spectrum $1 more when I can buy the same publishers from 10 other places for less?”  Centro, and the publishers we serve, had hit a price ceiling.

We realized the industry was continuing to head towards exchange-based models, so we evolved Spectrum into our own proprietary ad exchange—The Centro Brand Exchange. You’re probably saying, “Wait!  She just went on and on about why exchanges are flawed. Now she’s saying that Centro started an exchange??”  YES, because the problem isn’t in the technology, but rather in how publishers are using it.

The Centro Brand Exchange enables publishers to regain control of their inventory and their user data (you can read more about the data piece in this blog post from our friend and new partner Krux). Instead of re-trading our publisher partners’ inventory, the Centro Brand Exchange offers a protected environment backed by over 500 advertiser and agency relationships. Limiting where inventory can be bought creates scarcity in supply, while sourcing campaigns directly from advertisers and agencies creates demand; this combination increases yield for publishers. It’s pretty simple. Our goal is to protect our partners’ valuable inventory and prevent data leakage to third parties.

Now let’s talk about volume. One exchange solution will not provide publishers with enough volume to fill 100% of their unsold inventory… yet. This is where our publisher partners come in. In the near future, we’ll give our partners’ sales forces the ability to buy from Centro Brand Exchange as well. The Centro Brand Exchange revenue for 2012 has already surpassed the Spectrum revenue from all of 2011, while still growing Centro’s premium direct business. We’ve proven with Spectrum that we can grow a network product without cannibalizing our core direct business, and also drive higher CPMs for publishers across their unsold inventory. With the recent launch of the Centro Brand Exchange, we feel like we’re just getting started.

NBC Universal announced that it will make more than 3,000 hours of Olympics coverage available online to viewers who currently subscribe to cable. This is a choice that more and more media companies are making as they move towards the “TV Everywhere” model of doing business, which requires that users prove that they pay for TV content before they can stream online content.

This has always been HBO’s online strategy, and rumors have been circulating recently that Hulu will soon require users to authenticate their cable subscriptions in order to view online content.

I’m one of the cable-cutters that you read about whenever a story like this breaks. I haven’t owned a TV for about five years, and I can usually find all of the content that I enjoy through other means like Hulu, Amazon Instant Video, iTunes, and Netflix.

The big exception, however, is live programming like the Olympics, the Oscars, and the Super Bowl. Without a way to stream online content, I usually end up missing it and just watching the highlights on my favorite blogs the next day.

I’m not alone in deciding that the expense of a TV and a cable subscription doesn’t make sense for my lifestyle. In 2011, about a million people in the U.S. and Canada agreed with me and cut the cord.

This is a growing number of people that media companies are failing to reach during some of the biggest brand advertising events of the year. By not engaging with this audience, media companies and advertisers miss out on the opportunity to engage sophisticated, tech-savvy consumers.

While I applaud media companies for taking a step in the right direction by acknowledging that consumers want the ability to watch content online, I think they must also recognize that there’s a growing population who only watches online.