Stupid RTB Tricks

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).

AdGear preview

So we’ve been working on our ad management platform for a while now, here is a wee preview of it. Check out adgear.com too!

Microsoft and OpenX?

Online advertising start-up OpenX and Microsoft Corp (MSFT.O) announced a partnership to promote each other’s Internet technologies to their respective customers.The deal will significantly expand the distribution of OpenX’s technology for serving ads on websites, as the company seeks to boost its roster of large Web publishers, said CEO Tim Cadogan.

OpenX will also make it easier for its Web publisher customers to use Microsoft technology that analyzes the content of a Web page and matches relevant ads to the page.

Microsoft and OpenX forge Web ad deal | Markets | Markets News | Reuters

What is never clear to me is how many of OpenX’s 50 million publishers are relevant. What is the proportion of these that runs local installations versus hosted/market ones? Or does the local installation now include a market component?

Kind of an odd announcement for Microsoft, isn’t it?

Quote from: Stackoverflow, Advertising and the Ethics of a Free Lunch ~ C for Coding

If the Internet has taught us nothing else, it has taught us that:

1. Advertising pays for otherwise free services;

2. People don’t like advertising; and

3. Advertising works. These conflicting forces always cause consternation and Stackoverflow is by no means immune.

Stackoverflow, Advertising and the Ethics of a Free Lunch ~ C for Coding

comScore and Starcom USA Release Updated “Natural Born Clickers” Study Showing 50 Percent Drop in Number of U.S. Internet Users Who Click on Display Ads - comScore, Inc

“The act of clicking on a display ad is experiencing rapid attrition in the current digital marketplace,” said Linda Anderson, comScore VP of marketing solutions and author of the study. “Today, marketers who attempt to optimize their advertising campaigns solely around the click are assigning no value to the 84 percent of Internet users who don’t click on an ad. That’s precisely the wrong thing to do, because other comScore research has shown that non-clicked ads can also have a significant impact. As a result, savvy marketers are moving to an evaluation of the impact that all ad impressions – whether clicked or not – have on consumer behavior, mirroring the manner in which traditional advertising has been measured for decades using reach and frequency metrics.”

From comscore

Nothing really new there. It would be interesting to consider the most active advertisers in 2007 vs. 2009. From a quick look at the TNS data in March 2007 and March 2009 it seems that the financial industry is spending more in 2009, but could also be that the proverbial long tail of advertisers is also getting longer. So, more small advertisers generate impressions no one cares about. Interesting stuff but the idea of “clickers” and “non-clickers” is kinda useless. Can we generally separate people interested in products/services/things and others who aren’t? Would that work in any other medium?

Intent generation versus intent harvesting

A commenter on my blog the other day (Tim Ogilvie) mentioned a distinction that I found really interesting between intent generation and intent harvesting. This distinction is critical for understanding how internet advertising works and why it is broken. It also helps explain why sites like the newspapers, blogs, and social networks are getting unfairly low advertising revenues.

Why content sites are getting ripped off — cdixon.org – chris dixon’s blog

Clever way to express the inequality. The whole chain is more complicated since search engines also provide content sites with traffic but whatevz.

And I guess I can see how Hunch fits into this (since Chris is a co-founder)

Ad Network Differentiating Factors

Data is also improving. But because it is also becoming more of a commodity, the real question will be whether this data can be proprietary.

Where will the next ad network breakthrough come from? « Lightspeed Venture Partners Blog

The question asked by Jeremy Liew is a great one and the post is worth reading. I’d have to add that one of the things ad networks overlook is actual metadata on the sites, placements and pages that are part of the network. 

This data is hard to collect, it’s hard to categorize and it’s even harder to make use of given the legacy ad servers they all use (hello DoubleClick), but this would allow networks to create other, new vectors of targeting. 

Imagine the ability to target a campaign based on how many ads there are on the page? Or whether the placement is above or below the fold? Or based on how prominent the placement is on the page versus content? How much time on average people spend on that page? All these criteria warrant a premium that advertisers would gladly pay. 

Since inventory is abundant, you have to separate the good from the bad and treat is accordingly on the sell side. Ad exchanges don’t solve that problem, but ad networks are well positioned to differentiate themselves this way. The same goes for publishers too, of course. 

Is the DoubleClick Exchange a game-changer?

Yesterday Google announced the launch of DoubleClick exchange, sending ripples down the blogosphere and beyond. A good list of discussions is available at TechMeme, one of the best ones being Andrew Goodman’s at Traffick.

Reading the blog post alone can be confusing. The platform is positioned as DoubleClick Exchange, specifically, and not Google Exchange. DoubleClick is the enterprise brand that completely dominates the ad serving market and has reach over 80% of large publishers and probably just as much, if not more, large brand advertisers. Why, then, does Google talk about integrating this platform in Google AdWords, the openly accessible ad platform where you can open an account with 10$, and not DoubleClick for Advertisers which agencies use? All while maintaining that this initiative “helps large online publishers on one side; and ad networks and agency networks on the other”?

Large publishers, after having flirted with ad networks and ad exchanges such as Yahoo’s Right Media, are notoriously cautious of anything that can commoditize their inventory. The big concern, of course, is the notorious pork bellies problem which occurs when advertisers cherry-pick inventory and throw away impressions that don’t interest them. By far, that is the publishers’ highest priority given the rise in popularity of real-time bidding mechanics and the loss of ad budget commitments that comes with it. It just happens that this is also the exact value proposition of ad exchanges to advertisers and agencies.

There are two ways to make this viable for an exchange: 1) Try to fill all the inventory holes created by real-time bidding; and 2) Deal mostly with remnant inventory, creating little value compared to competitors.

The market is not nearly mature enough to make the first option happen anytime soon which will reduce the DoubleClick Exchange to a glorified AdSense for display, focusing mostly on the long tail and not making much of a splash in the brand advertising world.

There are some moves which may make this more interesting for advertisers, such as deep integration of the exchange in DoubleClick for Advertisers,  but Google may have to risk some of the handsome revenue they make on ad serving from the DoubleClick products somewhere along the line. Imagine a scenario where the publisher uses DFP, the advertiser uses DFA, and a third party network uses the exchange. That just seems like too much dipping.

Generally speaking, ad exchanges will become an important component in the creation of a global ad ecosystem where hyper-targeting is universally possible across multiple properties. A big part of this problem remains the legacy ad serving infrastructure used by large publishers and for which DoubleClick is largely responsible.  It really feels like it’s finally time for the next generation of ad serving platforms — a generation that plugs into exchanges and data sources alike in order to create actual competitive advantages for publishers and for advertisers.  From the technology standpoint, publishers don’t have to be part of marketplaces or put their inventory on the block to enable third-party targeting and truly leverage data.

It’s great to see at least some development in the market that is, as Andrew Goodman says, “in a frustrating state.” Too many are talking way too much science fiction and not doing enough problem solving.  We don’t need to do easier display advertising (as Google positions the exchange). We need to derive and show more value, which today means more integration on data and formats, and that definitely does not mean equating it to direct response.

Let’s concentrate on that, shall we?

Quote from Masters of illusion: The great management consultancy swindle

But consultants also know that an outrageously unjustified level of self-confidence can add several points to one’s perceived expertise quotient.

The most important of the all-too-human functions of shaman-consultants is to sanctify and communicate opinion. Like ministers of information, consultants condense the message, smooth out the dissonances, unify the rhetoric, and then repeat and amplify it ad nauseam through the client’s rank and file. The chief message to be communicated is that you will be expected to work much harder than you ever have before and your chances of losing your job are infinitely greater than you ever imagined.

So good. Perfectly describes some of the consultants I have come across.

Quote from Harvard Business: Who Are Mass Media’s True Customers? - Peter Merholz - HarvardBusiness.org

If you don’t work in mass media, you might be forgiven if you think that you — the reader, the watcher, the audience member — are the customer. When you work in mass media, you know that readers, watchers, and audience members are really the products, being served up to mass media’s actual customers, the advertisers.

Learning From Craigslist: Who Are Mass Media’s True Customers? - Peter Merholz - HarvardBusiness.org

This is true, but given that the context of this quote is a discussion about Craigslist (specifically, Wired article about it) the big difference is that Craigslist does not make most of its money from advertising, while big media publishers do.

Therefore, at least in theory, Craigslist’s interests are aligned with that of the audience, while big publishers only align their interests with advertisers.

The reality is much more complex, because what advertisers have so far demanded from “mass media” is just a specific audience. Not an advertising product, an audience. And mass media optimized their model mostly around that — coming up with content that attracts a specific audience, leaving the rest of the work to ad agencies who in turn filled out native ad formats for any specific media channel. Those formats include things like 30 second spots on TV, highway billboards or full-page ads in newspapers.

It is VideoEgg’s Troy Young that coined the term “native ad format” (I think), but this really does explain quite a lot. All the other native ad formats work because they are conducive to the context in which that media is being consumed.

With digital media things are more complex in every possible way. People spend little time on any given page. There is no native ad format. There is no established way to reach a specific audience since search engines fragment audiences by keywords, making the groupings less relevant (ex. I can search for “tomato” and land on an auto site, this doesn’t qualify me as an 18-34 male with X income). And so on.

All this means that delivering advertisers the same thing, a specific, hopefully captive (”engaged”) audience, is harder than ever. I guess that’s something the author of this story and I can agree on.

(link via chartreuse, and I oh so wish Tumblr imported posts properly)