Alright, I got a budget from a client. We have a job to do - it’s a big client, a big brand. Of course they want people to buy their products but we also know that it’s not going to happen on impulse. And it not necessarily going to happen online. So it can’t be all DR, it has to be somewhere in-between.
Breathe in, breathe out. SEM gets a piece, it’s a no-brainer. Lower funnel, gotta work it. Volume won’t be as high as I would want. That’s just common sense. And I read studies that show how display adds lift in search, maybe 155%. Google published a study like that recently, too. Great - let’s do display too. Hopefully there will be good offers in place and the creative is good. Alright.
Display. OK. Breathe in, breathe out.
Ad networks, DSPs, premium direct publishers.
How do we optimize? Is it on clicks? Nah, there is the “natural born clickers” problem. Can’t really do it on clicks. Well, I could, but I wouldn’t know how to justify to the client if he has read that study. If I optimize on clicks I am optimizing only for a small group of people who click - the client’s customers are much more diverse than that.
Well, there is also the viewthrough conversions or even visits. Google says it’s good - there must be at least some truth to it. We could do that to pad the results of the campaign.
For brand awareness lift we could use Dynamic Logic or something similar - it will always show a wee lift, we could extrapolate and say that for the entire campaign can expect the same lift as on premium sites where DL was used. Cool.
Speaking of sites, it’s much cheaper to go with any number of the hundreds of ad networks out there, plus, the vultures they are, they will optimize for me and schmooze me out for lunches. But I’ve read that online advertising is more effective when it appears on a site that you know and that you trust. So premium would be better, but if performance is 5 times better, and the price is 10 higher, it doesn’t make sense. Or does it? Plus I’d have to negotiate prices before coming up with the actual ratios. Would have to call a bunch of them and make deals. That’s annoying.
And what about frequency? The more ad nets and publishers I use, the higher my average frequency could be if there is duplication between those sites. And there is duplication between sites, of course. People hate high frequency. It would better to just do one buy over a DSP and manage frequency through one channel. Whatever - that’s the price we gotta pay, can’t put it all in DSPs for now. It’s going to take a while to figure out which DSPs to use - and since ad networks buy over exchanges maybe I could just throw all of my budgets through a respectable ad network.
Uh, but we also need to show the client that we’re an innovative media agency, have to create some strategic control.
Data.
We could buy data, accumulate data, work our data. We’re still using a DSP like other agencies, and we got a multi-year deal for a third-party ad server from GOOG/Microsoft, so it doesn’t really matter, of course - we’re not creating much strategic control, but it’s a message that sticks these days. And where is this data we’re buying coming from? Publishers who sell data don’t want to be upfront about it, so there is a lot of trust involved with data exchanges. Kind of like with “behavioral advertising”, whatever that means these days, it’s just that the use of the data is now my own responsibility instead of someone else’s.
And what about retargeting? Have to drop some pixels on the advertiser site. Ugh.
Almost forgot! What about auditing! Don’t want to be ripped off by any of the ad nets and direct publishers that throw junk inventory my way. Below the fold or above the fold? Does the creative even go through the viewport? And does the fold matter? Designers say it doesn’t! But it would make sense to at least track when the creative crosses the viewport. Oh but it will only be for placements where we don’t go through iframes and maybe some publishers or ad nets won’t let me do it. Will have to try anyway.
DING! New email in my inbox. Looks like it’s the creative for the campaign!
This creative makes no sense. It’s a set of the ugliest 300×250’s I’ve ever seen (or since the last campaign, at least). The animation is way too long before the message becomes comprehensible. The call to action is terrible. Don’t understand what the offer is. But this went through a very long round of client approvals and there is no way to go back.
There’s been a lot of buzz about Terry Kawaja’s keynote at the recent IAB NE event. AdExchanger has posted the presentation and the video, “A few good DSPs” in case you’ve missed it.
The most interesting slide in that deck is the ecosystem map that Terry has worked out. We already knew how bad it is, of course. There are a lot of players in the marketplace. It’s a complex value chain where margins will be inevitably get squeezed. Too many players going for the same pie. Etc.
What’s striking in this map, however, is the imbalance in the number of companies being started on the advertiser side versus publisher side.
So why is this? Why is it that most ad technology companies are being started on the buy side? Is it because the greatest value to be created for advertisers resides in how media is bought and sold, and how precise the targeting is? Surely all these companies can’t all believe that given any 300×250 or 728×90 the client throws at them, they can make sense of it and create value for the brand, simply by adding targeting options and making inventory cheaper to buy?
The main reason is very simple. You can change the actual terms and start talking about DSPs, SSPs and whatnot, but at the core of all this is still good old ad serving. And when it comes to ad serving, the barrier to entry is much, much higher to work with publishers. A provider of buy-side technology can approach any client or agency, ask for a small budget to try out their “buying platform” (whether or not it even exists), and they can make it successful on a small scale with relative ease. The agency can include this new placement as an additional line item in an already long media plan.
If something goes down, it’s really not a big deal. In the case of RTB you simply won’t serve and no one will incur any cost. In the case of direct third-party ad delivery, you can make appropriate arrangements with publishers to take you out of rotation. Failing is really not that bad. The big guys such as Yahoo! certify you and make you sign SLA agreements but for the most part, it’s not a problem.
Compare this to working with publishers. Even taking into consideration how bad the legacy platforms they run are, convincing a publisher to change first-party ad serving technology is incredibly difficult. It’s mission-critical stuff. There are a lot of people to train. You simply cannot go down. If you do, money is being lost, literally. On the technology side there is a huge complexity of pacing and scheduling campaigns given their delivery objectives. As a publisher, you need to deliver on your commitment of volume. Data aggregation is also crucial and is very complex to manage on a large scale (see this post by Mike on Ads for more on this).
On the upside, despite the complexity, working directly with publishers really allows to create value for advertisers. It brings you closer to formats and site layouts, user profiles and data. It brings you closer to participating in the creation of new ad products that advertisers and agencies actually buy. It allows you experiment with them and showcase your value.
With AdGear we took the approach of starting with first-party ad technology, spending the time it took to work out the hard stuff. Fortunately, in this new RTB world first-party technology is also a huge asset for advertisers and agencies as well, since you essentially end up scheduling and pacing campaigns over a huge pool of inventory (albeit with more targeting and filtering).
No matter the number of players in that ecosystem map, chances are that at the end of the ad serving chain, it’s still the good old Atlas, DFP or OAS making the scheduling decisions and stopping delivery once the volume objective has been accomplished. These legacy platforms are still the backbone of what we consider to be the new value chain. The good news it that there is an increasing number of companies that are taking a stab at first party ad tech, too. And that is a good thing for the quality of advertising in the medium.
At BLOOM we’ve been integrating real-time bidding functionality and have been running campaigns through AdGear since November 20o9. We’re plugged in to the DoubleClick AdX 2.0 and although our volume there is relatively small compared to the “traditional” third party delivery, it’s been a lot of fun.
To anyone dealing with the sheer scale enabled by RTB, it ends up being a boundless source of ideas for very questionable practices. This, in turn, raises the issues of privacy and data ownership. There has been a lot of coverage of RTB, and of course AdExchanger has done an amazing job in covering the new generation of ad companies (including us!). But let’s talk about the dark side of RTB. The Stupid RTB Tricks. Media hacking.
1) Browser history retargeting. Imagine that you have a two-sided display campaign. On one end, you run on sites or networks bought direct, with huge reach. Everytime you serve an impression, you check user’s browser history (see a demo of the CSS trick here). What you check for are your advertisers’ competitors’ sites. In the second part of the campaign, you retarget those who have visisted your competitors’ site with a sweet call to action.
2) Über-browser history retargeting. Adding on top of the first trick — create a segment for those who have visited more than one of your competitors’ sites. This might indicate that the person is in a serious shopping mode. Since browser history CSS trick works based on actual URLs and not just top-level domains, you could go really deep inspecting which products on your competitors’ sites were looked at. Targeting this segment through RTB is a no-brainer — bid like you’ve never bid before.
3) Using premium media as audience qualifiers. Buy a direct campaign with a premium publisher that reaches a very valuable audience. Say, WSJ. Run the campaign with frequency cap of 1. Reuse this data to serve to the same exact audience across the RTB universe. Do so for more than one advertiser, compensating the original advertiser whose budget went to WSJ.
Of course, there are many more opportunities of this sort. And although there is nothing really new here, having the possibility of doing it “on tap” without necessarily having a huge scale in the retargeting segments is definitely new. You don’t need to setup anything special with ad networks and run 10 witnessing tags from 10 of them, don’t need to commit ad budgets for retargeting without knowing what the final reach will be, etc.
I’d love to see other people post more examples of media hacking (both in the good and bad sense of it).
Fairly simple retargeting campaign, very simple bidding strategy. Running at around 50 queries per second. Very exciting to see live traffic this way, thanks to gltail.
“While it is in everyone’s best interest (theoretically) to have fewer, better performing ads on a page, in an exchange where little is known about any given placement, a bad actor can exploit good actors in the system to unfairly maximize his yield at the expense of other players. This results in a prisoners dilemma situation. The result is that, in many tests, publishers may find themselves in a death spiral of adding more ads to inventory to increase the effective yield of a page.”
Interesting perspective, and definitely one of the challenges when it comes to network buys in general, not just on exchanges.
But one of the main ideas behind DSPs is the benchmarking of sites/URLs across clients and campaigns. Granted, we don’t always have the URL on Doubleclick’s Exchange and it depends on publisher preferences, but frankly right now inventory liquidity is the biggest problem.
“A lot of the people who read a bestselling novel, for example, do not read much other fiction. By contrast, the audience for an obscure novel is largely composed of people who read a lot. That means the least popular books are judged by people who have the highest standards, while the most popular are judged by people who literally do not know any better. An American who read just one book this year was disproportionately likely to have read ‘The Lost Symbol’, by Dan Brown. He almost certainly liked it.”
This is really a huge insight that has repercussions in all sorts of other areas, from digital advertising to iphone apps to search engines. And it’s all based on the age old principle of people being afraid of missing things out. Hence the blockbusters.
Maybe one person’s attention span is composed on one hand of following others (blockbusters) and on the other, finding your own (niches).
My hunch has always been that advertising needs social proof — proof that there are other people that dig an offer or an ad. That ultimately creates curiosity stemming from not wanting to miss out on something that a lot of others are getting.
“While consumer attention has moved to the web, consumer marketing has not. Instead, the web has, in the words of IAB chief Randall Rothenberg, been colonized “by the evil aliens of the direct-response planet.” Those below-the-line marketing budgets are about generating a sale, a clickthrough, a download or a page view. In short, marketing on the web has not been about creating demand so much as reacting to it by delivering the right ad to the right person when they indicate they want it. This has been a boon for Google (and has given birth to 400 ad networks), and represents the best thinking of largely West Coast technologists. But it is increasingly disastrous to content industries that are watching offline revenue erode and finding no equivalent revenue stream online.”
“According to Deloitte’s fourth annual “State of the Media Democracy” report, due out today, 34 percent of Americans cite TV as their favorite medium, up from 27 percent last year. Second through fourth, respectively, were Internet, music and books, all of which are perceived by the average consumer as being less expensive than a night out at the movies.”
I am VP Strategy @ Bloom Digital Platforms. We're working on our shiny new ad platform, AdGear. Before this I spent 6 years in a large ad agency after my (small) ad serving company got acquired.
On twitter I am @vstesin. And here is me on LinkedIn. If you prefer to follow on Tumblr, there's that too.
