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Remainder aka remnant advertising are not exactly widely known terms, but the average person browsing the web for content knows perfectly well what it is. Anyone who’s ever browsed their favorite news site and has been exposed to advertising units that seem totally off base with the publisher brand, or even completely – even if unintentionally – juxtaposed to the content that’s being viewed has been a ‘victim’ of ads that were placed just to fill up unsold ad inventory, which is what remnant advertising comes down to.

5to1, a startup with a high-profile founding team that includes former Fox Interactive execs Jim Heckman and Ross Levinsohn, has raised $4.5 million in seed funding to work on a solution that can turn remnant advertising into premium advertising. The company’s breaking out of stealth mode today at TechCrunch50 with a service that could rid both publishers and advertisers of the extremely ineffective ad campaigns that are basically only beneficial to the networks selling them.

The 5to1 system allows publishers to get in between the remnant networks and the ad inventory to give them more control over what will appear on the site, where and when. The company’s founder and CEO Jim Heckman dubs it a “Match.com meets iTunes for advertising” because it allows publishers to dynamically create ‘playlists’ of ad units of sorts and easily run both proper ads and potentially placeable remnant ads on variable places on their website(s).

Ultimately, the goal is to make it easier for content publishers to increase the quality of – and with it, the revenue that comes from – the ads that appear on unsold inventory without too much hassle. And if it takes off we’ll see a lot less of these horrible screaming ads that you’d never click on even if they held you at gunpoint.

Expert panel Q&A:

Q – Marissa Mayer: At Google, we agree that optimization can be done. However, what technology do you have for matching content to advertising, and how can you provide for larger-size networks with lots of inventory?

A – Jim Heckman: We’ve been in stealth for a year, but we’ve noticed that publishers like hearing about being able to match advertising with context and having control over it. We didn’t want to compete with the Google model, but we’re more like iTunes: you ‘play’ ads whenever you want. It’s no different than what Web 2.0 has done for content. So if you’re a tech blog on gadget, you can see what ads work for gadget news sites specifically. It’s not algorithmic, but more of a marketplace.

Q – Roelof Botha: Can you demonstrate better CPMs?

A: We can find ads so fast, even with hundreds of thousands of ads in the system, literally in seconds. You can drag and drop ads right in the rotation. We talk to publishers and they tell us that even if we get similar CPMs but just prettier ads that don’t curse with the content, they’d already be happy. But talk to us again in six months.

Q – Tony Hsieh: Does it take a lot of time for publishers to deal with your system, and what about scale?

A: We showed publishers in our beta test that it doesn’t take a lot of time to manage their advertising units on unsold inventory. They want to be involved, and they seem to be motivated with the speed of our system. The key thing is: the compiled results of the entire network shows the context of just one ad in seconds.

Q – Paul Graham: Humans can only do worse than the best optimization, right?

A: Pages are dynamic. What we found is that a vast majority of ads are not contextual, and we can fix that.

Q – Marc Andreessen: Regarding the chart, which side do you lean most to?

A: All inventory is not created equal, but I’d say just in the middle.

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In between startup sessions at TechCrunch50, we are hosting a number of heavy hitters in a panel titled ‘Creating scarcity, value and brand protection as we face limitless ad inventory” in collaboration with AdMeld. On the panel we have Michael Barrett from AdMeld, Kenneth Fuchs from Sports Illustrated, Kal Patel from Best Buy, Peter Foster from Hi5, Jim Heckman and Ross Levinsohn from 5to1 and Aaron Broder from Gorilla Nation. TechCrunch CEO Heather Harde is moderating.

Talking about the dilemma that remnant ads pose to quality publishers, Ross Levinsohn cautions: “In many ways I think the Internet has killed itself to a degree because there was a notion that I will just add another page without maximizing the premium spots.”

Live blog:

Kal Patel is talking about Twelpforce, an initiative from Best Buy that taps into the essence of Twitter to leverage customer service.

Ross Levinsohn: Advertising doesn’t always work. Sometimes algorithms don’t function because it lacks a human touch. Big brands and advertisers need that, to not have machines take over where and when there advertising units appear.

Peter Foster: How low are we willing to go. It comes down to what are you wiling to accept and what aren’t you.

The real challenge to us as a publisher is to find a network that is truly premium.

Heather Harde: What percentage of inventory are you direct selling?

Kenneth Fuchs: We sell everything direct.

Peter Foster: We end up selling 5 to 10 percent.

Aaron Broder: Premium programs go beyond selling a box ad. It is really about connecting your ad with a marketer’s messaging. You obviously have to listen to the publisher and what they want.

Michael Barret: Typical publisher at AdMeld has 100 million impressions plus they can not sell directly, and they have direct sales forces. We’ve built this platform that allows publishers to tap into all of these different sources and concentrate on their direct selling.

Jim Heckman: You’re talking about campaigns that are built custom, programmed with a publisher. Something that will be complementary to the brand, ads that the user will relate to and not tune out.

When I was at MySpace, we had a 100 million (billion?) unsold ad impressions. Silicon Valley creates companies looking at the whole world of advertising, we are approaching a trillion unsold pieces of inventory.

When you have a nice ad followed by a fat belly ad after the sold inventory runs out, that hurts the publisher.

63% of all ads aren’t even looked at anymore, Consumers are tuning out.

90% of all ads are unsold, they are machine-based and pushed. So there is uplift, but when you disperse it among the inventory, the individual publishers are hurt.

Ross Levinhson: AT Fox Sports, 70% of the inventory was sold. If we sold out all the remaining inventory, I think in 2003, it meant only $250,000 in revenues. We made a determination that a quarter of a million dollars at that time wasn’t worth the hassle of policing it.

On MySpace, we had to create scarcity where there was no scarcity. So we had the homepage, ad networks were arbitraging. Tom shut that down, no more ad networks on that inventory. If you have a site like Hi5 or MySpace or Facebook, creating billions of impressions a month, you have to find a way to create some scarce inventory so you can talk to the Best Buys. They don’t want to be next to [remnant ads]

In many ways I think the Internet has killed itself to a degree because there was a notion that I will just add another page without maximizing the premium spots.

Kal Patel: We look at how does it actually show up in front of our customers.

Jim Heckman: What has happened is we are selling a small percentage of our quality content, and everything else is going to the remnant networks.

Peter Foster: Also back in the day there were a few dozen ad networks, now there are 500. That is the challenge, there are so many companies doing great work, but it is all being back-filled by the same inventory.

Jim Heckman: I think Ross is right. Creating scarcity in any business is essential. I think you are better off not selling an ad at all on your front age and protecting your ad integrity.

If you are Sports Illustrated and you have a story by a top writer with beautiful images. Do you really want to put a yellow teeth ad up there?

Video:

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Flickr has long had a way to note other users’ pictures that you think are worth saving. But the “Add To Faves” function is rather single serving, and not very social like the rest of Flickr. Today, the service is launching a new feature called “Galleries” to expand your interaction with others’ photos.

Basically, Galleries allow you to curate up to 18 photos from anywhere on Flickr into your own hand-made gallery. Previously, if you wanted to make a group of pictures surround something, you could only do it with your own. With Galleries, if you wanted to make a collection of the 18 best pictures taken at TechCrunch50, for example, you can easily do that, no matter who took the picture.

The top portion of these Galleries are the thumbnails and below each of them is the large-sized versions of the pictures in a stream. Clicking on any of the thumbnails jumps you down to the portion of the page where that particular picture resides. Here’s a particularly artsy one for you.

To add a picture to a gallery, just click the “Add to gallery” link in a picture’s menu bar.

[photo: flickr/marshall astor]

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Looks like those DigiTimes sources were right: the ASUS Eee Keyboard will officially launch in North America and Europe in October. And while CEO Jerry Shen is keeping quiet on pricing, the original $400 to $500 estimates should hold-up. The Commodore 64-esque keyboard PC originally announced at CES in January features an integrated 5-inch display, 1.6GHz Atom processor, 1GB of memory, either 16GB or 32GB of SSD storage, 802.11b/g/n WiFi, Bluetooth, HDMI and wireless UWB HDMI. And given the October launch, we’re expecting this thing to run Windows 7 unlike the XP prototypes we’ve seen so far. Maybe Moblin too, if you want to save a nickle.

Filed under: Desktops, Laptops

ASUS: Eee Keyboard to launch in October, C64 fans unite! originally appeared on Engadget on Mon, 14 Sep 2009 07:13:00 EST. Please see our terms for use of feeds.

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Good golly, does climate change and its evil, earth-shattering impact know no bounds? Apparently not, because researchers have now chalked up a new victim. And that victim is beer.

Yes, we know this is hard and we’re very, very sorry to be saying this, but climate change has, according to some smarty-pants scientist, taken its toll our something we hold sacred: hops.

Czech climatologist Martin Mozny claims that a rise in air temperature has diminished the flavor-giving acidity of Saaz hops, a key, sanity-giving ingredient in pilsner lager. And things will only get worse.

It’s not just Czech hops that are at stake here, says Francesco Tubiello, a crop specialist at the European Commission and a lead author of the agriculture chapter of the IPCC Fourth Assessment Report. “The famous hop-growing regions of eastern Germany and central Slovakia are facing the same situation,” he says.

You see?! All the entire land of Europe has been endangered by the increased temperatures. And, more importantly, the world’s drunks, who will now be forced to inebriate themselves with inferior alcoholic beverages, like rubbing alcohol, have no choice but to fight for survival.

This, friends, is an international tragedy. The only thing that could make us forget that we humans have destroyed our world is booze. And now that’s gone. Someone, please, bring us a gun, for this life has become too ugly. Our symbolic amber waves of grain — or, more specifically, hops — have now been decimated. It’s every man for himself, so arm yourselves. And bring a flask. You’ll need it.

Image via defecto’s flickr.

A few hours ago, we got a tip from one of our readers that they’d popped into their iPhone messaging app this morning, only to find that they’d suddenly gained the ability to send MMS. We chalked it up as a fluke – AT&T promised it would launch on September 25th, after all, and they haven’t exactly been punctual about this whole thing thus far. Two whole weeks early? It seemed shaky.

Then a few hours later, we got another one. And another.

Social game startup Zynga sure does get into a lot of legal fights. Just as they settle down to business with the Playdom you-stole-our-playbook fight, we’ve confirmed that they settled a different lawsuit – one where they were playing defense.

In February 2009 Mob Wars creator David Maestri sued Zynga for copyright infringement. Zynga’s game Mafia Wars – a text-based game very similar to Mob Wars – was just too much of a copy of Mob Wars, said Maestri. Maestri himself had only recently cleared up his own rights to the game after a scuffle with his former employer, SGN.

The Maestri-Zynga lawsuit has now been settled as well. The rumor was that Maestri was demanding $10 million from Zynga to settle the litigation. Ultimately, says one source, he got a payment in the “high seven figures.” So that implies something like $7 – $9 million.

Wonder why the settlement was so high? It’s hard to believe, but Mob Wars was pulling in an estimated $1 million/month at one point from users eager to upgrade their weapons and other stuff. These games seem silly, but real money flows through them from virtual goods.

Not a bad payday for Maestri. And it also highlights the fact that none of these companies have a completely clean record when it comes to respecting the intellectual property of competitors.

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It’s less than a day before the third annual (and third sold out) TechCrunch50 launch event in San Francisco. Fifty startups are preparing to launch their new products on stage in front of thousands of people. Are they nervous? Yep. But its all part of a rite of passage into the wonderfully chaotic world of being a startup entrepreneur.

A bunch of good articles giving advice to launching startups have been posted over the last couple of days. We’re linking to them here, because when CNET and others look back at TechCrunch50 2009 and sort the winners from the losers, you want to be on that winners list. So take the advice of these grizzled veterans seriously. And then ignore most of it and forge your own path, like all good entrepreneurs do anyway:

22 Tips on How to Operate a Trade Show Booth: Jason Calacanis gives solid, useful advice on how to run your TechCrunch50 (or any conference) booth.

An Open Letter To All TechCrunch50 2009 Startups: The TC “Bump”, What It Really Means & How To Navigate It: Sean Power with Alistair Croll talk about their experience of launching Akoha at TechCrunch50 2008, and how to make the most out of the traffic and attention you’ll receive. Good advice: “Being Talked About Is Nothing. Being Remembered Is Everything.”

Don’t drink your own Kool-Aid (surviving TC50): Mark Suster says not to get too into the hype and attention you’ll receive right around the conference. Memorialize it, but don’t believe too much of the hype. Use all that attention to build a sustainable business.

See you all tomorrow!

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With TechCrunch50 less than 24 hours away, and already the reviews and advice to startups are coming hot and heavy. For all of you who want to know how to keep on top of the latest Tweets, posts photos, and news from the conference, just remember one thing: #tc50. That is the hashtag we are encouraging people to use for all TC50-related posts, photos, videos, etc.

The more people who use that, the easier it will be for others to find Techcrunch50 related content. You can also use the hashtag #techcrunch50, but that’s a whole eight characters longer. Here are some examples of how you can use these hashtags to connect with fellow attendees and folks on the web.

Twitter: #techcrunch50 or #tc50
FriendFeed: #techcrunch50 or #tc50
Flickr: techcrunch50 or tc50

And for those social location fans, we’ve even made a venue for TechCrunch50 on Foursquare. Who will be the mayor?

Hope to see you all on Monday morning!

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After raising a total of $11.2 million since its founding in 2005, Tiny Pictures sold to Shutterfly on Friday for $1.3 million in cash and another $1.3 million in restricted stock to employees, which has some performance triggers. If you back out the earnout, investors only got back about a tenth of what they put in.

Those investors include Mohr Davidow, Draper Fisher Jurvetson, and angel investors Reid Hoffman, and Joi Ito. The company’s last venture round was $7 million led by Draper Fisher in February, 2008. But Mohr Davidow, which held preferred shares, might have been the only investor to see any of those proceeds at all. Shutterfly disclosed the acquisition in an SEC filing, which only mentions Mohr Davidow as a recipient of some of the $1.3 million in cash.

It also mentions that Nancy J. Schoendorf, a managing partner at Mohr Davidow, sits on the boards of both companies. Although she did not vote on the acquisition, the connection raises the question of whether or not Mohr played a role in bring the deal to Shutterfly in the first place.

Tiny Pictures operates Radar, a mobile photo sharing app which never got a lot of traction beyond a core following. The service is actually pretty slick, centered around a photo commenting stream. You snap photos with your mobile phone which instantly is shared with your friends who also have the app. They can then comment on the photos.

It sounds simple enough, but the app never achieved a critical mass of users. The service is focused more on sharing life moments through photos with people you actually know than creating a public photo stream. So if you don’t know anyone who uses it, there is little reason to join yourself. The friends-and-family aspect must have appealed to Shutterfly, however, which is based on exactly that type of picture sharing. It already has a rich database of people who like to share photos with one another. Radar helps them extend that to mobile phones in a social and fun way.

Update: Tiny Pictures CEO John Poisson confirms that he will remain with the company at Shutterfly as VP, Tiny Pictures. He says that Mohr did not broker the deal in any way and that other preferred shareholders, including Draper, Hoffman, Ito, and himself, also saw some of the proceeds of the sale. As to what he’ll be doing at Shutterfly, he is kind of vague, but it has something to do with mobile social media, sharing photos, and self-expression.

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