The Mobile Video Ad Serving Frontier

Mobile advertising technologies are swimming in an incredibly fragmented space right now in terms of streaming content and integrating paid advertising.  Mobile is the wild-wild west of online advertising right now.  It is the final frontier of video, which is arguably out there today already.

While we scramble to figure out which cell phone we want to carry – the iphone or something that comes close to it – people with content are racing to figure out how to get it to you while making a buck doing it.  We know it comes down to either a subscription model or an advertising model, and the latter is the most likely path. Continue reading

Direct Response is upon us. Live with it and ‘Fill a Need’

So how hard has the recession hit online advertising?  The growth of the industry has grinded to a crawl in comparison to almost every consecutive year going back to 1996.  Some say 3%, some say 6% and some even say 0%.  But not all sectors match this trend.  Search is projected to push a 15% growth in 2009.  In general, affiliate and lead-gen spending is also expected to continue to grow at a similar pace.  Yes, the recession is impacting spend levels this year, but it is how advertisers are spending their dollars that is really what has changed. Continue reading

Advertiser Control Over Ad Spend and The Swinging Pendulum

There is big pendulum swinging over who controls spend in Online Media.  The economy has taken a swinging nose-dive and everyone is looking for signs of fall-out.  One thing that is for certain, Advertisers are aggressively taking back control over their spend.  There will be budget cuts of 15% of more across the board in Q4.  The place where those cuts are starting is anyplace where an ROI can’t directly be derived.  If a publisher can’t prove a return they will lose the spend.  Response-based advertising is probably the most insulated area of the industry.  This means a push from CPM towards CPC and CPA, even for display.  Advertisers will be driving the pricing models and publishers will have to buckle in order to sell inventory.  With less money to spend, more pressure to perform, hundreds of publishers and networks competing for the reduced dollars at hand…advantage advertisers.

Here is the story…

My good friend, Jonathan Ewert says that every four years there is a great big pendulum that swings in our industry.  On the end of that ball is the influence factor over who controls the dollars in Online Media.


In the late 90s it was clearly the advertisers who had the control.  As they began to test the new medium and brought dollars to the internet in increasing amounts, advertisers tested all kinds of mechanisms that the publisher could come up with.  But it was the advertiser that dictated what measured performance, what the price they would pay and what services they expected in terms of campaign management and reporting.


Then the pendulum swung in the other direct – towards the publisher – as online media shifted from “new media” to internet advertising.  “Standards and policies” were written.  Publishers started driving pricing; and ad server utilization, campaign management provisions and acceptable reporting became organized and structured according to what Publishers were willing to provide.  Advertisers had to start working with what was available, throwing more resources and time at managing the diversity that clients were demanding which made the process of managing internet advertising increasingly more expensive.


Competition for inventory rose steadily once again following the recoil of the bust and price inflation followed.  The explosion of ad networks broadened advertisers’ options and the result was a drastic overload on resource requirements to manage just a single campaign.


While all of this was going on, Search outpaced display as advertisers began to recognize the value of response-based advertising and Google’s climb to the top of Everest was off to the races.


Fast-forward to the beginning of 2008 and you had topped-off CPMs, somewhere between 200 and 400 ad networks (depending on who is counting) and Google controlling 60+ % of the addressable Query stream on the Internet – 90% collectively controlled by Google, Yahoo and MSN. 


Throughout the first-half of 2008, prices hit all time highs in search as traffic growth online slowed and competition for popular keywords rose.  CPMs for targeted quality display inventory trumped the last four years and publishers began to push to reclaim inventory from the networks that had been previously aggregating and watering down their value.


Then the big ball started to swing.  With the advertiser no longer able to increase spend in search without compromising ROI and publishers reclaiming display inventory in order to elevate CPMs, something had to change.  Additional factors at play, aggravating the situation, was the continued consolidation of search (think Google’s increasing share of the Market – the Yahoo deal, Google running on ASK, etc.), the intense-resource demand on advertisers associated with managing disparate data sources, and publishers trying to push CPMs while a massive number of networks commoditize eyeballs. All of this equates to the advertisers almost hitting a breaking point.


Then the economy took a swinging nose-dive and everyone started to run around asking themselves what is the fall-out result for online advertising.  Is this the next bust?  Here come the layoffs.  How many VC-backed companies are going to go under which have promised huge returns with no revenues to prove it?  One thing that is for certain, Advertisers are aggressively taking back control over their spend.


You can figure there will be 15% cuts in budgets across the board in Q4.  At least that is what some of the larger advertisers are talking about and that is what some of the networks are already hearing.  The place where those cuts are starting is anyplace where an ROI can’t directly be derived.  Lookout publishers – if you can’t prove a return you’re going to lose spend. 


Response-based advertising is probably the most insulated area of the industry over the next 2 to 4 quarters given our economic environment.  Advertisers have to advertise to keep generating business, but branding online is going to suffer.  This means a push from CPM towards CPC and CPA, even for display.  Advertisers will be driving the pricing models and publishers will have to buckle in order to sell inventory. 


Furthermore, diversification of spend across less expensive, higher-returning publishers and networks will also draw attention.  This means that advertisers who have hit the asymptote of their returns on Google or the major display ad networks – when spending a dollar no longer returns $1.50 but now returns $1.25 – will start to look elsewhere to maintain their margins.  With smaller budgets to spend, ROI pressure will become intense.  We may even begin to see performance-based commissions between advertisers and agencies as competition for control over the spend increases between agencies.  Certainly this will be a likely case in the SEM arena.


So the pendulum, which started to swing in the beginning of Q2, went full tilt when the market dove.  Advertisers now hold the cards and publishers and networks that recognize the truth will step up and work with them to maximize the value of their relationships given the pressures present in the economy. 


With less money to spend, more pressure to perform, hundreds of publishers and networks competing for the reduced dollars at hand…advantage advertisers.

DoubleClick Launches Online Marketplace

As reported in iMedia Connection on April 4th, “Buyers and sellers of online display advertising will have a new forum for making deals; at least that is the premise behind DoubleClick’s  latest proprietary product, DoubleClick Advertising Exchange.”


A mediated exchanged between buyers and sellers for the exchange of advertising inventory is not a new concept.  Right Media is the best example of a well-executed version of this concept.  I commented on Right Media several weeks back in Disintermediating Ad Exchanges, Publisher Ad Auctions.  The argument back then was that in an ad exchange environment like a Right Media, where buyer and seller are brought together anonymously under an auction based environment, there is no relationship developed or fostered in the buy process.  My proposal hypothetical question in that article was, what if you could eliminate the middle-man of the exchange and put buyer and seller together.


That article generated a response from Right Media.  Bennett Zucker contacted me for a little education conversation.  Subsequently, I wrote a follow-up comment acknowledging the value proposition of Right Media.


Some of the things that I learned my research into RM and other exchange models is that publishers are migrating away from the traditional networks because they are getting better rates through the exchanges.  Inside sources have shared with me that Advertising.com, Tribal, Burst and other popular networks have all seen a measured decrease in publisher inventory while that same inventory has reportedly shown up on RM.


So now DoubleClick is going to enter the exchange game.  Think back a while and recall that DC was one of the original networks.  Of course I don’t believe there is a single person remaining at DC who was involved in that operation, but the heritage is there – and maybe some of the legacy technology.  Regardless, they’ve built the exchange technology.  They have the publishers with DFP and they have the advertisers with DFA.  Put them together and link the two systems and you have a broad network of exchange.  Get out of the way and you potentially have a model that will rival Google’s cake-and-eat-it-too mode of AdSense and Adwords.


DC has some challenges ahead of them.  I don’t know the nuances of how well they are going to tie together DFP and DFA, but as hosted solutions they can upgrade and link the two and the users will see the collaborative efforts.  If publishers start pushing inventory into the system and advertisers start looking into the system to buy, you have a strong value proposition for both sides of the transaction.  Under this model, neither buyer nor seller needs to go to a different system like a Right Media to transact. 


Under the DoubleClick exchange, it is largely publisher inventory that is at stake, whereas with Right Media is mostly network inventory.  So will advertisers who use DART start to look at the exchange for publisher inventory – or will publishers first begin to test the DC exchange in addition to “offshoring” inventory to networks and auctions?  Time will tell and the testing model of DC will be a good approach so the top-success-oriented players demonstrate the desired results.  But this is one to watch closely as it could be game-changing.


Reactionary with Insight

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How to Conquer an Inventory Crisis Lacks Advice

Eric Porres is a partner with Underscore Marketing and he wrote a 6-page In-Focus piece in iMediaConnection today about behavioral targeting entitled: “ How to Conquer an Inventory Crisis.”  Eric is a media guy and he knows the space pretty well, moreover he is a BT guy and has made some contributions to the industry on the topic in the past.  But this time around where you would hope for some meaty substance and take-away advice, Eric comes up a bit short.


He does a sharp job at getting a reader to agree that the point of any online campaign (direct response anyway) is capturing new customers and recapturing existing customers.  I guess not everyone wants to write the proverbial 10-step to … article, and thank god for that, but you still want the In-Focus pieces to give some practical steps about what you should do when you find yourself in the related conundrum.


Inventory is getting more competitive.  Finding the niche sites is harder to do.  Eric illustrates how to use MediaMetrics to your advantage but what about his mentioning of Alexa and Quantcast?  How are leading media buyers and planners using those as well?  How do you integrate to become more effective in an increasingly competitive marketplace?  With over 20M sites, Quantcast is one of the fastest growing media planning tools out there – especially for the smaller agency who can’t afford Comscore.  The cutting edge sites recognize that, and so they are flocking to Alexa and Quantcast for that reason.  They want the new, new media dollars.


Re-targeting is hot.  Ouch!  Eric glosses over this with a simple explanation.  He knows this topic better and to assume that the audience just get’s it, is part of the problem in this space.  People are not spending time going deep with the details.  I blog about this topic too frequently to go off on it now, but I do think that when we get into an In-Focus article we should see more practical insight into how to use these technologies so that there is a take-away that we can apply ourselves. 


When you advertise on the same sites, month after month, the composition of your advertising audience is increasingly becoming more and more comprised of both your customers and your previous leads.  People frequent the same sites.  If you advertise in the same places – presumably because they continue to perform – you will be exposing yourself to more and more of the same people.  You still perform well because the audience is large enough to generate new opportunities.  But there are existing customers and former leads there too.  Re-targeting is very important to advertisers who spend money on the same sites.  Having the opportunity to communicate to your existing customers and your former leads is vital.  Why re-prospect your customers when you can cross-sell, up-sell and regenerate more revenue from them?  Why re-pitch a lost lead the same way again?  Acknowledge their disinterest the first time around and play on it, maybe it will work.


Everyone likes to use buzz words, I’m guilty of it too.  Long tail and Web 2.0 are two of my favorite.  People don’t even necessarily know what they mean any longer.  Or they never did.


“To be fair, the dilution of context when weighed in the balance of media efficiency may not justify the exercise, but in the end, we’re really interested in the behavior of our prospects.”  Huh?  Okay, actually this statement by Eric makes more sense in this blog than it did in his article.  I am pretty sure he was trying to explain that undervalued inventory, when bought in larger volume, can have as great of an impact as that premium space.  So look into that.  RightMedia Exchange is a great source of decent inventory at a great price.  And of course there are a ton of networks out there.  Eric did point out that buying behavioral targeting services will boost your response rates and if you buy that inventory at auction, you could be doing even better with your ROI.


Of course, there are always the non CPM models.  If you are buying direct response, you don’t have to buy CPMs.  Can you still deploy BT if you are not buying CPMs?  Actually you can.  You can’t count impressions, but you can cookie your visitors and your customers and use an ad server to serve your ads.  Obviously you will be serving a huge number of impressions, so find an ad server willing to negotiate a great rate for you – use a low file size and agree to a high volume commitment and some ad servers will play ball.  But if you use a first party ad server (TruEffect) or a BT-providing ad server (DoubleClick’s Boomerang) then you can still do it.


What about Search?  Can you do BT?  You can’t on the serve, but you can once the click takes place.  You can cookie the user or read the cookie on the user’s browser and then drive them to unique landing pages using something like CoreMetrics. 


This is the kind of information that Eric could have provided to us in his article.  The deep-dive In-Focus articles are meant to give us some meat where the daily 800-word essays don’t have room to provide.  Of course, Eric only used 1,000 words.


Reactionary with Insight

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Lead Gen 2.0: The New Opportunity and More if You Follow-Through

Michael Rosenberg has provided us with a good foundation to use for evaluating and selecting lead generation partners in his Lead Gen 2.0: The New Opportunity from MediaPost’s Performance Insider.  Michael illustrates some fundamental requirements that we should be demanding from a solid lead generation partner including:


(1)    24/7 real-time reporting


(2)    Access to multiple verticals


(3)    Access to and ability to leverage “your” customer once you acquire them


(4)    Low transaction costs


But when you work with a lead generation partner it is important to think about how you will leverage the assets you are generating through that relationship so that you can maximize your investment.  Lead-generation processes expose your offers to a huge base of prospects, and deliver qualified leads to your offering on a direct response basis.  You pay for performance and when someone actually becomes a lead, they are delivered to your doorstep. 


The lead information may be delivered to you, or they may be passed over to you for you to collect the information.  I always prefer to host the pages that are collecting the information.  Big difference as to whether you are collecting the information or if it is being collected for you.  The sooner you have access to the lead, the sooner you are controlling the conversion process.


Matt Wise discussed the concept of “data skimming” in his MediaPost article in 5 Questions to Ask Your Online Lead Generation Provider where he said “Most marketers should retain 100% ownership of the consumer data. Providers who practice data skimming — reselling your lead’s personally identifiable information — pose a serious risk of compromising your trusted relationship with the consumer.” 


I have a client who spends roughly $300,000 a month on lead generation alone and they actively are aware of the fact that they are getting skimmed data.  They are in such a niche industry that they have little control over the publishers that they work and therefore accept the practice.  But they are accepting poor quality leads too.  The leads are collected on their behalf and they receive the information after the fact.  Some publishers pass the individual to the advertiser so that they may collect the lead information directly and obviously those sources result in much higher conversation rates.


When you have access to the user sooner, you can immediately start to develop that relationship and rapport.  You can also start to do something else … tracking and measurement. 


As Michael indicated in his article, you want to make sure that you select a vendor who gives you access to 24/7 detailed reporting.  Jere Doyle, President & CEO of Prospectiv contributed an article to MediaPost on this topic entitled, Qualifying Your Online Lead Generation Partner wherein he said that you should insist that your vendor is “…measuring key data such as response rate, cost per lead, conversion rate, revenue by source….” 


But once you have access to your lead, you can start to lay down your own reporting processes too.  Let’s start with the cookie.  When you first receive the individual, you can leverage a cookie to track the user’s behavior.  First, you can use a site-side analytics tracking beacon – like an Omniture, WebSideStory or WebTrends to track the user from source through the lead reception process through to (hopefully) a sale. 


From the sale point forward you will be able to track that individual based on their source once they join your eCRM system as well leveraging your own additional first party cookie.


But what if that person bails out before the sale?  Do you let them off that easily?  Hell no!  You can use event-based behavioral targeting to cookie the user as they go through the lead generation process to source the user just in case they bail in addition to the site-side analytics tracking described above.  This way if they bail, you have them tagged for future targeting using banner advertising.  If you work with TACODA or Advertising.com you can use their pixels to deploy behavioral targeting later on and try to recapture the lead again with messages that speak to the fact that they were previously a lead.


Third option is that you use a first party cookie during the lead reception process.  Integrate the event-based targeting process using the first party cookie so that the advertiser is tracking the lead reception process with their own cookie.  If the lead converts – you have the first party cookie in place for site-side analytics and eCRM.  If the lead bails, you have the behavioral targeting in place but it will be site and network agnostic meaning that you will have deployed it across the internet instead of just across a network.


Furthermore, you will also have deployed re-targeting even if the person is not a customer.  While going through the first party cookie writing process, you can write details to the cookie about where they are in the lead generation process so that if they bail you can target them based on where they bailed – like traditional behavioral targeting.  But if they return to your site directly you can also content-target them based on the same information that you’ve written into the cookie since it is your first party cookie.  Your content management system will be able to read the cookie and know this is a former lead and can receive them accordingly.


Lastly, if you used first party cookies, and they convert, you can re-target them as customers out on the web as I have discussed in the past using DirectServe™.  As a customer you will be able to recognize them, distinguish them from someone you don’t know and message to them accordingly.  You will be able to do this if they are a lead or a customer as I have just described. 


So again, why first party cookies instead of third party behavioral cookies:


(1)    If the lead converts you can use re-targeting


(2)    If the lead converts you can use site-side analytics and eCRM with the cookie fully integrated


(3)    If the lead bails you can behaviorally target anywhere on the web, not just on one network


(4)    If the lead bails, you can recognize them if they return to your site independently and message to them accordingly


(5)    If you happen to reach them through an email marketing campaign that delivers creative, and they open it, you will be able to recognize them and message to them accordingly


(6)    Third party cookies get deleted over 40% of the time – Jupiter Research


(7)    First party cookies persist over 95% of the time so you will have a greater chance of keeping your data current


Lead Generation 2.0 brings forth a lot of possibilities and we have to be aggressive in what we get for what we pay for.  But is equally important that we also leverage technology to maximize what we do with what we get after we pay for it.  If that last sentence makes sense to you, you’re already half way there!


Reactionary with Insight 

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3 Steps to Targeting Nirvana, Bennett Zucker Gives Us Open Market Benefits that will Improve BT

Go-Bennett, a great article in iMediaConnection on Thursday.  Three Steps to Targeting Nirvana defines behavioral targeting today and outlines an open marketplace, an open technology platform and what he characterizes as ‘an open mind.’


Up front, Bennett makes the argument that the onus of responsibility for accurate and aggressive BT should not fall on publishers.  Efforts results in wasted inventory, poor performance and lack of attention that should truly benefit the advertiser.  Advertiser-directed BT is where it’s at.  We have the technology and the science is far more impactful.  In fact, Bennett does a great job of presenting an example of a car-buying scenario which illustrates how advertiser-driven BT better serves publishers.


In the section on open market place, Bennett tries to present a clean argument.  Advertisers ideally should have the opportunity to cherry pick the inventory they buy, so as to promote the opportunity to select the inventory that will meet their BT needs.  I know that Bennett has struggled with the “I don’t want to be a self-promoting author” and so kudos for giving us several examples in your story.  Right Media is clearly the leading auction exchange model in the space.  But AdBrite is a solid player and a good alternative for people to be looking at, especially if they want to have an alternative to Right Media or want to investigate options before jumping into bed with a specific vendor (if you can even call RM a vendor, more like a facilitator). 


Anyway, Bennett is trying to paint the utopian picture for us here – advertisers cherry picking inventory.  I know that in theory that is what the auction model enables you to do – bid on the inventory that you want and forego that which you don’t want.  But most of the inventory on the Right Media Exchange is network  inventory so you really can’t be so laser targeted.  The RM Direct Exchange, however, may be something to look at in terms of publisher-specific inventory.


Bennett is honest to himself and us insomuch that he acknowledges that networks are inherently limited by the design of only being able to offer BT within their own network.  So even if you could cherry pick the inventory you wanted, you could only deploy BT on that network.  Using an ad server with BT would overcome that, if the ad server BT can be deployed across the networks.  Bennett surprisingly does not go into this in his article.


Here is where I think the article could use a fourth and maybe even a fifth section.


Requirement 4 – Ad serving that Re-targets With BT Agnostically


Several ad server offer BT that can extend across multiple networks.  Event-based BT like Boomerang by DoubleClick for example can enable and advertiser to track behavioral of people who have been on their site and then target them across the web – including across networks.  If an advertiser were to deploy event-based BT in conjunction with selective inventory buys on an auction exchange, they could be deploying BT with far more refinement.


Deploying first party ad serving by TruEffect is a second alternative.  With first party ad serving, the inventory acquired through the auction can be targeted using re-targeting methods of the first party cookie and any existing customer can be recognized and re-targeted in real-time.  Treated like any other inventory, all inventory bought through the network could easily be re-targeted using a DirectServe™ implementation.


Requirement 5Ad Serving that Integrates


A final consideration today, and a growing requirement is a concept that I have heard advertisers call a ‘universal’ or ‘megapixel.’  In the days where sites are getting tagged by ad servers, publishers, networks, site-side analytics and pretty much any other tracking mechanisms, there is a need for a single pixel that can shoulder other tracking beacons.


Dynamic Logic’s Universal Tag is one example of this kind of technology.  Shouldering multiple tags, this universal pixel enables an advertiser to tag the site one time.  DoubleClick has an alliance with DL so that they can offer this solution to their clients.  TruEffect has a similar technology called TruTags™ whereby they have one tag that is placed on the site and through it, multiple tags can be managed so that an advertiser only has to tag the site one time and any other tags can be added or removed through a single common interface.  The piggy-backing enables the advertiser or agency to eliminate the need to go back and keep tagging the site eveytime a new netrok buy comes into play.


The great benefit of these megapixels is that with Bennett’s story, one could buy inventory at auction – which will almost always be network inventory – use an ad sever that deploys BT like event-based or First Party DirectServe™ and then use a universal tag or megapixel to reduce tagging requirements as each new network is bought.  Snazzy.  Good article Bennett.


Reactionary with Insight.

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Right Media Offers the Private Label Publisher Auction Tool I Am Looking For


I always promise to seek out and find solutions that make a difference and I encourage us all to demand technology to push us to improve how we manage our online advertising initiatives.  Sometimes I find them and sometimes they find me!


 


This past week I touched on Right Media and the concept of online auctions as a mediated exchange between buyer and seller.  I also presented the argument that there are too many hands in the pot with this model.  Right Media’s new “Direct” product elevates the inventory quality potential by only bringing in publishers as opposed to it’s traditional exchange which is largely comprised of networks and non-premium inventory.


 


I had the delightful opportunity to speak with Bennett Zucker from Right Media yesterday.  He called me the “mad man in the mountains.”  LOL.  We actually had a great conversation and spent a lot of time sharing ideas.  But one thing that Bennett shared with me I am bringing back to you.  Right Media will private label their exchange technology.  My challenge has been met.


 


In my Disintermediating Ad Exchanges, Publisher Ad Auctions (http://arikaufman.com/2007/02/07/disintermediating-ad-exchanges-publisher-ad-auctions.aspx) I asked you to find a technology or develop a technology that would empower publishers to cut out the middle men so that they could run their own inventory auctions.  Right Media is doing just that.  I did not ask how much penetration they have or how many clients they have, but I was really pleased to learn that this exists.


 


Let’s look at the publisher technologies. 


 


Ad servers are pretty well covered, however meekly.  None of them are that great, as we all know, since every trade show floor is full of publishers wandering around looking for “that” platform, which can actually forecast inventory with a degree of accuracy and to save them lost monthly revenue. 

Publishers have whittled together DFP and Omniture and perhaps some additional Business Intelligence tools to create some insight into what is available to sell.  That’s the closest I have seen.  But the inventory insight is never more than a week or two out.  Yahoo has a room full of people calculating forecast models and they only get about a month out before their accuracy rates drop sharply. 

Basically you just sell an approximation of what you think is safe to sell, and make-good on what you over-sell the following month.  Publishers frankly have to rely heavily on networks to backfill the inventory that develops last minute, because they have no way of predicting what will be there in advance.



So we rely on networks to take on the excess inventory and they sell it cheap.  We have no way of knowing monthly over month exactly how much inventory we will give to them, and we tend to turn the dials up towards the end of the month as our direct-sell customer’s campaign commitments are being properly met. 


Enter the auction.  The Right Media Direct auction is a legitimate alternative to a network and, it seems, may be offering higher returns for publishers than networks (in some cases). 

Direct offers publishers the opportunity to push higher value inventory into an auction than they might otherwise have done with the exchange service.  They can do this last minute, with what they haven’t sold.  The result is that less inventory will flow into the networks, which offer low returns, and whatever the network doesn’t sell will probably end up back at auction again in the traditional exchange anyway!  That’s a nice model.  But not what I was hoping for.


 


What I like is that Right Media will enable a publisher to run their own auctions in-house.  They will private label the technology.  So a publisher can sell their own advertising directly and then run excess inventory through their own auctions.  Quality inventory that doesn’t sell can go to the private auction rather than a network who returns less for it.  This is not the top-level inventory that they sell directly, but it’s better than that which should be getting farmed out to networks or to Right Media’s exchange auction. 


 


Publishers will retain a higher yield for their inventory while simultaneously moving more of their inventory directly.  This I like.


 


This self-directed publisher auction model will enable a site to increase sales without having to increase their team or the costs associated with growing the operation.  In fact, they may even find that they can move more inventory with less people!  From my publisher days, there was always that juggling act.  How much inventory can a sales person sell.  A top-performer vs. and average performer.  What is the ramp-time of a new hire.  A direct-selling auction tool offers a publisher the opportunity to have their own clearing house with a much higher return value than their current network clearing house options.  I really like this.


 


Right Media has a solid set of models here.  They are a destination for remnant inventory that a network can’t sell or for publishers that would prefer to work with the auctions directly as a clearing house for non premium inventory.  Advertiser’s like it because it is an easy way to buy advertising and is increasingly familiar due to the commonality of search advertising auction-style buy models.  With regard to publishers who participate directly, advertisers know exactly where their ads will run, which they prefer to networks.  And the private label model offers publishers the opportunity to auction-off more premium inventory to advertisers directly.  This will help them retain a greater share of their own advertising revenue and will offer advertisers the opportunity to get access to more premium inventory at a lower rate because the auction model will offer access to better rates.


 


So in the end, I really appreciate the call Bennett.  We found something that we were looking for.  Now I know that there are solutions for publishers to manage auctions both for Search and Banner advertising directly.  Superb.  Great talking to you.

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This I believe

So for several months now I have been closely watching the industry, reading articles, PR releases, product releases, financial releases and generally paying attention.  I have been taking bits and pieces of what I care about and have been making comments and providing what I believe has been an insightful perspective on how technology can be better leveraged to improve how we advertise online.


 


I have looked at the ad servers, the networks, the lead generation tools.  I have examined the search engines, the publisher tools and the creative formats and provided you with feedback on what other reliable people have had to say.


 


And I have discussed ad agencies, their workflow, the media buying process and the tools that people use to do their jobs, however inefficiently I may believe that to be.


 


Here is my position.


 


The agencies have engaged the interactive medium completely.  Estimates for 2007 are that between 12 ½ and 20% of advertising budgets will go towards new media.  This is no longer the edgy side-project.  Engagement with technology is here.  But it is about refinement. 


 


Search is essential but everyone is coming to recognize that there is something wrong with the model.  It is extremely time-intensive and expensive to manage.  Furthermore the ROI metrics seem to slip the longer you run campaigns.  As I have said in the past, a tipping point is coming. 


 


Networks have been doing their thing the same way with some minor tweaks for a while now and people are demanding more disclosure.  Tolerance for media showing up on inappropriate sites is very low, accountability is high and additional capabilities like behavioral targeting has become an expectation.


 


That brings me to behavioral targeting – a very common topic on this blog.  I have ripped this topic up and down.  My intent has been to redefine this concept as event-based targeting and to justify that there is little about behaviors actually associated with it at all.  Just because someone took a navigation path, or saw a page means little about their behavior, the predictability of their behavior or their preferences.  All we know is something that happened.  Historical targeting is a better description but I have used event-based targeting over the last couple of months.


 


I have never tried to minimize the value of BT, only put it into it rightful place as a solid prospecting and direct response advertising mechanism.  BT does not represent the best means to capturing known individuals, in fact, it does not have the capacity to associate with knowledge about people at all.  Only with events.  But I believe that BT should be part of a comprehensive campaign.


 


People have approached me both on and off this blog about my position towards BT and some of the networks, but I think its because they have been defensive and protective of their positions as representatives of these companies.  Others have engaged me – usually advertisers, agency representatives or others who see that the evolution of practice is inevitable and being on the adaptive edge of the curve is better than the laggards edge.


 


I have also spent a lot of time plugging a concept called first party ad serving.  Forgive me for the plugs.  Obviously as a member of TruEffect I have a lot of passion for what we do here.  But I also spend a lot of time looking for other technologies that can rival or at least coexist, companion or compliment what we are doing here.


 


The patent-pending DirectServe™ Technology that TruEffect has brought to the market represents the next generation of ad serving.  It leverages the knowledge that an advertiser holds about its customers, registrants or users to re-target through ad campaigns.  This is not a replacement for other technologies out there – I have said that before as well – but a great new way of doing it.  An addition to a comprehensive advertising strategy.


 


First party ad serving is about customer re-targeting.  BT is about event-based targeting, best applied when trying to capture unknown individuals.  One is for bringing in new business; one is about farming and growing existing business.  There is no point is re-prospecting existing customers while advertising online.  DirectServe™ takes care of that.  BT leverages previous events so that you can increase the likelihood of putting the right message in front of the right person at the right time based on historical events.  DirectServe™ puts the right message in front of the right person based on known customer segmentation models, knowledge already held about customers.  This a potential marriage.


 


Now BT is largely touted by networks, so there is a limitation as to how you can use it.  I talk about TACODA a lot – which I think Dave Morgan has not be thrilled about – but its because they have been the leader in the space.  I have also talked about Advertising.com and Blue Streak and Tribal and others as well.  But ad servers offer BT too.  DoubleClick’s Boomerang does it.  TruEffect does it.  And that extends beyond networks.


 


I also talk about integration.  Agencies are not on this trail so much as advertisers.  Well, some agencies are but they are the minority.  I have strong opinions about this because I feel that they pieces of the puzzle are all here now for us to put together a great picture of our online marketing so that we can make better informed decisions about our web site compositions, product placements, online advertising and budget allocations.  But nobody has fully engaged yet.  There are leaders that are putting the pieces together, but I am advocating the full-monty and that is what you read about on this blog.


 


Tying it all together will enable an advertiser to make the best possible decisions regarding allocation of online media spend.  It will promote the best utilization of technology, improve product placement on web sites, increase the value of existing customers, the initial value of new customers and enhance the likelihood of increasing the utilization of interactive media as a channel for marketing.


 


See my ten-step recipe for full-integration of all the technology pieces of an online advertising campaign.


 


First let me redefine that a third party cookie is a vendor’s cookie and a first party cookie is an advertiser’s cookie.  Here is the recipe.

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10 Tips to Find the Perfect Ad Network, Andreas Roell Tells All


Andreas Roell wrote an article today in iMediaConnection, 10 Tips to Find the Perfect Ad Network.  All I have to say is that it is a great overview of how you should be evaluating your network advertising initiatives.


 


Andreas breaks down 10 points:


 


1.) Representation


2.) Compensation


3.) Ad unit offerings


4.) Targeting capabilities


5.) Transparency


6.) Optimization


7.) Cookies


8.) Content matching


9.) Re-targeting


10.) Reminders


 


This is a great article whether you have an established network buying practice in place or if you are looking to get started.  If you are new to this way of buying media, you will likely be left with a lot of questions, which is good.  At least you will have questions to ask.  If you already buy network advertising, then you will agree that Andreas is pointing out where your network partners need to be more transparent.  There are some hidden aspects to buying network advertising that can make it shady – but that is not speaking for all networks and, in fact, many of those practices are no longer common.  But digging in to make sure that you understand how your network acquires its inventory and getting reports on where your ads are running are great suggestions.  Checking up on the publishers that participate in your networks to see how they allocate their inventory to your networks is another great pointer.


 


Read the article and pay homage to Andreas contribution.

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Should CPA Networks Provide you with Impression Counts?


When buying CPA advertising on networks, it’s all about the acquisition of something – a click, a lead, a registration, an application or maybe a sale.  So we don’t care about the impression right?  We don’t care about the click-thru rate, only the end-result performance of the ads we run.  We just care about the yield we are getting.


 


When we buy CPA advertising on a network, all we care about is that our $10,000 is generating 2000 new leads – or whatever CPA you’re targeting – and that you are able to maintain a positive ROI trend. 


 


If you can keep the CPA targets in sight, buy leads all day long, right?  Go to as many sites and networks that will do the deal and off you go.


 


But what about the backside?  Why is that when you first run a CPA campaign you notice a growth trend?  You are able to grow the lead-generation from, say 1,000 leads to 5,000 leads but then things stall out.  Networks stop growing the lead flow and some even start to contract.  The CPA starts to inch upward and you find yourself having to broaden your buys to more publishers and networks.  What is it that’s happening here?


 


When you buy CPA you’re not focusing on the performance of your creative on the click-thru level, only on the acquisition level; which creative generates the best volume of acquisition.  But that does not reflect the impression count.  The networks and publishers are looking at click-thru rates so that they can optimize the utilization of their impressions.  Your highest performing banner by lead-generation could be your lowest performing banner by click-thru and hence is getting little play on the network; whereas the lowest performing banner by lead-generation gets the highest performance by click-thru and results in a higher impression count. 


 


This can lead to the stall-out of your lead flow growth rate, the potential contraction of your lead flow and a creep in the CPA on a specific site or network.  The longer you advertise with a site or network, the more they optimize their allocation of inventory with your campaign.  So they give you fewer impressions with the same acquisitions and still make the same amount of money off of you.  You don’t notice the difference, or the change is marginal, and of course the impact is that your potential for growth is capped.


 


What do you do?


 


You need to have the ability to measure the effectiveness of your advertisements at the impression level so that you can determine which creative is performing well on a click-thru basis so that you can optimize the creative you start with.  If you want to continue to grow CPA campaigns, you should be starting with the click-thru value of the ad and measuring all the way through to the acquisition even though you are buying on a CPC, CPA or CPL basis.


 


A couple of options:  You can use an ad server to serve your ads, and you will be able to measure impression counts, click-thrus and post-click events (acquisitions).  You can rotate the ads and maximize campaign performance with optimization.  The problem is you don’t control the number of impressions you will be getting through a CPA or CPC campaign and so your ad serving volume could be off the charts.  Maybe you could negotiate with the ad server and get blocks of ad serving units at low rates so that you can run on networks to keep costs low.  It would be kind of like buying the bandwidth instead of buying impressions.  If you are buying 100s of millions of impressions, you might be able to negotiate a different deal with an ad server rather than the standard CPM.  Maybe.  Even I don’t know if I could make that happen. 


 


A second alternative would be to get the networks to cap impression delivery so that you can control the ad serving costs.  I have clients that do this.  They run CPC or CPA campaigns and have limits set with the networks because they are using an ad server.  This keeps the ad serving costs in check, and enables them to measure impressions and click thru.  It also gives them the ability to control banner selection and rotation and provides the consolidated reporting that most advertisers prefer.


 


A third alternative and probably a better way to go, is to partner up with a network and get them to work with you strategically.  If a network can be brought to recognize that by sharing impression data with you, you can measure the effectiveness of your ads.  You obviously have to commit to providing creative that will better perform based on the knowledge gained, but your effort will be empowering the network to better optimize your impression delivery.  This will support the growth of your campaigns and your spend level on their network. 


 


Networks don’t usually provide impression counts unless you buy on a CPM basis.  If they did, you would see how crazy your impression counts were, how low your CT rates were and how they fall off pretty quickly.  But if they did share the data with you, you could make it worth their while so long as you applied the data effectively.


 


Talk to your network partner and get them to work with you.  Buy CPC, CPA, CPL and incorporate the impression data into your metrics.  It’s okay if you get 100M impressions and your click-thru rate is 0.02% (20,000 leads) and your CPA is $20.  If you know that, then you can generate creative that targets a 0.05% CT% and increase your spend level with the network by 50%.  Additionally, you may also manage to drop you CPA by a couple of bucks to as your creative improves CT rate.  It’s a win-win for you and the network.


 


Reactionary with Insight.

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In Search of the Magical Blend, Turn.com

Phil Leggiere interviewed Jim Barnett, CEO of Turn.com in an article posted in MediaPosts Behavioral Insider.  It caught my eye as it boasts itself as the next generation of behavioral targeting.  Actually what caught my eye most is the Jim is a fellow critic of the current ad networks targeting models.


 


Turn.com makes some powerful claims of elusive algorithms that offer far more targeted capabilities than other behavioral networks which make it capable of delivering ads to individuals on a wider range of parameters than just the simple single event or demographic or other anonymous segment profile.  I love the word algorithm.  It’s the new buzz word in our space.  It conveys a sense of complexity, technical innovation and secrecy all wrapped up into one elusive word.  In the end it simply means we do something with data that we’re not going to tell you about regardless of how simple or complex it may be and then we spit something out that results in something we deem to be our product or service!


 


Anyway, so turn is advancing behavioral targeting.  I am going to dig deeper into this one.  Maybe Jim will talk with me about this technology and help me understand how it advances our space.  I would love to get an understanding of how the customer profiling capabilities exist.  When you read the article he said: “the network will recognize the user based on profiles advertisers have provided about what type of users and what type of results they’re looking for.”  So if that is accurate, that would imply that an advertiser can share customer profiles data and then Turn can use those profiles to recognize individuals.  Other behavioral targeting networks and ad servers (Boomerang for example) can do this provided that the advertiser wants to go through the process of having the third party assign a cookie to the customer segments as the customers interact with the advertiser’s site.  For example, when a customer conducts an event – i.e., buys something, the advertiser can route that customer to a specific page that correlates to a segment property and then the third party vendor can cookie that user to associate the user with a new segment.  Then the third party can target that user as a member of a segment.  But those events have to have occurred and that advertiser has to be willing to setup those specific pathways on their site and be willing to behold a third party responsible for maintaining the cookie properties of their customer segments.  A lot of “ifs.”  Maybe Jim over at Turn has another way.  Or maybe I am giving him more targeting credit than it all deserves.


 


From this perspective I am all ears on looking for what would advance the event-based targeting technologies.  Obviously I am an advocate of the customer re-targeting technology that DirectServe unique offers the market through its patent-pending technology, but that is only one side of the coin.  Prospect generation still has to rely on behavioral targeting.  The TACODA, Advertising.com, Datomi’s and other network models of the world have their place in the industry and when it comes to driving new users forth new behavioral targeting technologies that advance the ability to identify and target suitable prospects is worthy of investigation.  Turn may be it.  TACODA has been dominating.  Revenue Science has been a player, but recent news shows they are losing marquee clients to TACODA.  For example the recent Dow Jones steal.  Dave Morgan talks about how the industry has plenty of room for more networks.  But I believe that there has to be differentiation or else the tipping point will come fast and consolidation will follow in the space.  Obviously Turn is looking to come forth with something different.  Time will tell if they have it.  Customer reaction will be the proof.


 


Reactionary with Insight

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