Banning the Banner Ad

 

As a longtime digital practitioner, I sometimes feel ashamed that I haven’t clicked on many banner ads in the last 10 years or so. It’s not that I don’t like banner ads. I recognize that advertising is the thing that supports all of the great content I read. I don’t even mind lots of ads in my paid, expensive, print and online versions of The Wall Street Journal – I sometimes even read them.

But standard banners rarely get any consideration or clicks from me, unless they are incredibly relevant. Standard banner ads aren’t particularly engaging – and the marketers buying them are getting frustrated with an ecosystem rife with fraud, technology taxes and nonhuman traffic.

Some of the world’s top marketers are actively working on “ban-the-banner” initiatives, driven by the theory that nothing but engagement matters – a KPI more easily correlated to watching an entire video than the much-maligned click. They believe great brands should tell great stories, so it seems obvious that the scant real estate and functionality offered by banner slots makes creating consumer engagement difficult, if not impossible.

At the intersection of an amazing technology-driven programmatic buying landscape and the increasingly creative social-led atmosphere of the new web is online video. It kind of snuck up on us, steadily creeping into our social feeds, blogs and favorite website destinations. That’s a very good thing: The reason linear television continues to command the lion’s share of media dollars is because people like to be entertained, and watching something is so much easier than reading something. Watching is a passive experience, but an emotional one.

Video is a place where brands can tell amazing stories, make a great pitch and drive consumer engagement. After years of perfecting 15-second, 30-second and one-minute spots, media agencies are eager to leverage their linear creative in new formats to reach audiences that seem to be abandoning traditional television in droves. This, coupled with a few other factors, is causing advertisers to rapidly move away from animated banners to video.

Millennials Don’t Like Television

Perhaps the most pressing dynamic forcing more video adoption among marketers is thatmillennials – who comprise an estimated 80 million-plus US consumers and will spend $200 billion next year – don’t really watch television anymore.

This is both from a delivery and physical dynamic; they do not watch video on television sets as much as they consume it on tablets, phones and other devices, and they also prefer on-demand viewing to scheduled programming. It makes sense. Even a 13” laptop with a retina display beats a 70” HDTV when held several inches in front of one’s face.

And the rise of streaming services has matured, giving consumers a legitimate option to “unplug” from traditional cable services and consume all the content they want on demand. Marketers must adapt to a reality that makes mobile the top priority for younger consumers, and adjust to the fact that many of the places millennials consume their content are relatively ad-free zones – at least in terms of traditional advertising units. It just so happens that video advertising fits into this new world nicely.

Time-Spent: The New Currency

If video ad delivery is going to be the mainstream unit, then it also follows that things like impressions and clicks are becoming irrelevant quickly. For video, the coin of the realm is time spent, and it is actually a pretty strong sign of engagement and valuable proxy for brand sentiment.

While it may be true that we are forced to consume some pre-roll before engaging with organic content, the best part of online video is that consumers waiting for content on their iPhones are much less likely to take a trip to the kitchen for a snack, as they do when standard commercials come on the tube. Instead of a solid three-minute block of commercials, they only have to engage with a single ad. Also, that ad can be tailored to individual preferences. That means even more engagement, less ad abandonment and a lot of measurability.

Data management platforms are helping marketers segment audiences that are prone to engage through an entire length of video and understand the types of content that produce longer viewing times and true engagement – and modeling those audiences to find lookalikes.

Linear And Online Video Must Connect For True Attribution

Probably the greatest thing about online video is the hope of leveraging data to connect online audiences with linear ones, and getting a better sense of media mix modeling and multitouch attribution.

Comcast certainly gets it. Connecting set-top box data with online ad serving means being able to touch a consumer with video across multiple screens – and bring real measurement of audiences that are increasingly device agnostic. Large telecoms, such as Verizon, are acquiring companies that provide the “last mile” of value from their broadband pipes, and that mile is as much about online video ad delivery as it is about website content.

The battle to do this correctly will be won at the “people level,” which is why we are seeing such a pitched battle of cross-device graphs; unless marketers can connect people with all of their devices, true attribution is simply impossible, rather than just being hard.

It’s an interesting time for modern marketers and publishers as they try and grow out of what we will see as the very early days of addressable advertising, and into a world dominated by on-demand content across a multitude of screens. The common denominator is video advertising, and I’m going long on the companies in the ecosystem that are going to power this new reality.

[This article originally appeared in AdExchanger on 6.30.16]

Why We’re all Thinking Big Data (Jump Magazine Q+A)

Interview by Heather Taylor

One trend that is dominating conversation across marketing and wider business practices, is big data. How we measure it, how we store it and how we use it to inform the work that we do. We spoke to Chris O’Hara, domain expert on platform technology to find out about big data, why it’s important and how it is changing the marketing world.

Q Why is big data such a big deal and how did it get that way?

A: I think the term “Big Data” is getting thrown around a lot lately. There’s “data” that’s maybe too big for some companies to handle, and then there is truly “BIG DATA,” like you would find in the human genome, or Google search. The simple fact is that data has gotten a lot cheaper to store, and infinitely easier to access.

Big data is a big deal because people are leveraging technology to get insights from data they have never been able to get without spending more than those insights are worth. In short, understanding data makes money for those smart enough to leverage it, whether you are a digital agency, CPG marketer, or hedge fund. As the recent McKinsey report points out, “The volume of data that businesses collect is exploding: in 15 of the US economy’s 17 sectors, for example, companies with upward of 1,000 employees store, on average, more information than the Library of Congress does. New academic research suggests that companies using this kind of “big data” and business analytics to guide their decisions are more productive and have higher returns on equity than competitors that do not.”

Q: Why and how is big data moving us toward a more integrated marketing approach?

A: The largest change is not that data is being used to drive advertising creative and placement; it is that the data is available immediately, and that creates the opportunity for optimization. I think we are still in the early days, though. Most marketers and publishers are content to use off-the shelf 3rd-party segments to define and target audiences, rather than plumbing the (infinitely more valuable) depths of their own, first party datasets. Take large CPG companies who maintain databases all over the world. In one large company, you might have as many as 200 large databases, across dozens of operating companies all over the world. It is likely that those datasets have never been directly connected, and certainly it is highly unlikely that this data has never been stitched together and plumbed for insights.

The data equation in marketing is quite simple: the more an advertiser knows about you, the better you can be targeted. The real question is whether or not the effort and expense of such targeting is worth the incremental yield that targeting produces. As data gets cheaper and the cost of accessing diminishes, it is obvious that data starts to create real value for marketers.

Q: How is the era of big data changing the practice of digital marketing?

A: One of he biggest ways that data can help is in terms of avoiding waste. Before large amounts of data could be processed easily, there was no easy way to find out, as an example, what an advertisers’ unduplicated reach was across channels that include mobile, video, game consoles, and the Web.

The so-called “sciencification of marketing” is real. If you look at Terence Kawaja’s famous logo vomit slide of the digital display advertising landscape, it is clear that it is 100% driven by data. The underlying data is mostly audience-based, but there is also ad performance data, search data, engagement data, longitudinal data, and attitudinal data driving digital marketing these days.

On the direct marketing side, the transition from using mailing address data and surveys to target households to using IXI financial data to target online audience members via a cookie is not so different. Direct marketers can judge performance in real time with conversion data, and now brand marketers can leverage real-time engagement metrics to measure success.

Q: What are some examples of big data in integrated marketing?

A: The applications to use data in marketing are virtually unlimited. We are moving into a world where everything is interconnected, and we are surrounded by devices that transmit and store data constantly. These days, your supermarket partners with a brand to start a campaign on television, and that drives you to their website, to download a mobile coupon code that goes to your phone, and is used at the checkout line. Your purchase data is then stored, churned, and used to inform the next campaign. A better example of a big data approach to marketing (well, integrated digital marketing) is Google. Ingesting your search habits, video preferences, e-mail content, social network, mobile activity, and internet browsing habits takes a lot of expensive data storage, but it seems to be paying off for Google!

Q Which companies are jumping into the big data business and how will this help (and hinder) us?

A:  In the digital marketing space, you are going to see almost every progressive network, exchange, and data provider stake their claim to helping advertisers and publishers leverage their data. Some of them will be bigger than others. When it comes to managing truly huge amounts of audience data, there are very few companies that have managed to do it outside of the “big five” (AOL, Yahoo, Facebook, Google, and Microsoft). If a company truly has big data (petabytes, terabytes, or exabytes) then you need database software that can scale infinitely, and be able to query massive tables of data and return a result quickly. In marketing, that is starting to mean “real time,” which is not only a software challenge, but a hardware and logistical challenge as well. Marketers should look for a DMP that has actual experience working with massive data sets specifically for marketing applications.

Q What implications will digital marketers face with this big data trend?

A: Just because the data is there, doesn’t make it meaningful. These days it is possible to get a near real-time view of your audience at the creative level for digital display campaigns, but how many marketers can take advantage of the overwhelming amount of data that they receive every day beyond enabling a DSP to “auto-optimize a campaign, based on a single metric, such as conversion rate? Marketing insights that are driven by churning huge amounts of data are only as useful as the marketer’s ability to react to execute against them. That is why you are going to see the technology platforms that specialize in advertising execution team up with data platforms to try and get advertisers a true 360-degree view of the consumer that can be acted upon.

Q How can marketers leverage big data without being overwhelmed by it?

A: Try and learn what data is valuable and what is not. Even though I bought a new car 18 months ago, I am still bombarded with Volkswagen ads every time I check my email. Whoever is buying my “auto intender” cookie isn’t really getting their money’s worth, are they? My advice would be to perform a “data appraisal” that focuses on your own first-party data and see what you have. Even if your daily data is measured in gigabytes rather than petabytes, there is always something to leverage.

This appears in the current edition of eConsultancy’s Jump Magazine, which you can download here.

Best Practices in Digital Display Media (Interview)

Digital display is remarkably complex. Standard campaigns can involve multiple vendors of different technologies and types of media.

Today, eConsultancy launches Best Practices in Digital Display Advertising, a comprehensive look at how to efficiently manage online advertising. We asked the author, Chris O’Hara, about the report and work that went into it.

Why did you write Best Practices in Digital Display Media?

In my last job, a good part of my assignment was traveling around the country visiting with about 500 regional advertising agencies and marketers, large and small, over three years. I was selling ad technology. Most advertisers seemed extremely engaged and interested to find out about new tools and technology that could help them bring efficiency to their business and, more importantly, results to their clients. The problem was that they didn’t have time to evaluate the 250+ vendors in the space, and certainly didn’t have the resources (financial or time) to really evaluate their options and get a sense of what’s working and what isn’t.

First and foremost, I wanted the report to be a good, comprehensive primer to what’s out there for digital marketers including digital ad agencies. That way, someone looking at engaging with data vendors, say, could get an idea of whether they needed one big relationship (with an aggregator), no data relationships, or needed very specific deals with key data providers. The guide can help set the basis for those evaluations. Marketers have been basically forced to license their own “technology stack” to be proficient at buying banner ads. I hope the Guide will be a map through that process.

What was the methodology you used to put it together?

I essentially looked at the digital display ecosystem through the lens of a marketer trying to take a campaign from initial concept through to billing, and making sure I covered the keys parts of the workflow chain. What technologies do you employ to find the right media, to buy it, and ultimately to measure it? Are all of these technologies leading to the promised land of efficiency and performance? Will they eventually? I used those questions as the basis of my approach, and leveraged the many vendor relationships and available data to try and answer some of those questions.

What’s the biggest thing to take away from the report?

I think the one thing that really runs through the entire report is the importance of data. I think the World Economic Forum originally said the “data is the new oil” [actually, the earliest citation we can find is from Michael Palmer in 2006, quoting Clive Humby] and many others have since parroted that sentiment. If you think about the 250-odd technology companies that populate the “ecosystem,” most are part of the trend towards audience buying, which is another way of saying “data-driven marketing.” Data runs through everything the digital marketer does, from research through to performance reporting and attribution. In a sense, the Guide is about the various technologies and methodologies for getting a grip on marketing data—and leveraging it to maximum effect.

There’s an explosion of three letter acronyms these days (DSP, DMP, SSP, AMP, etc) that marketers are still trying to sort out. Do we need all of them? Is there another one around the corner?

I am not really sure what the next big acronym will be, but you can be certain there will be several more categories to come, as technology changes (along with many updates to Guides such as these). That being said, I think the meta-trends you will see involve a certain “compression” by both ends of the spectrum, where the demand side and supply side players look to build more of their own data-driven capabilities. Publishers obviously want to use more of their own data to layer targeting on top of site traffic and get incremental CPM lift on every marketable impression. By the same token, advertisers are finding the costs of storing data remarkably cheap, and want to leverage that data for targeting, so they are building their own capabilities to do that. That means the whole space thrives on disintermediation. Whereas before, the tech companies were able to eat away at the margins, you will see the real players in the space build, license, or buy technology that puts them back in the driver’s seat. TheBest Practices in Digital Display Advertising Guide is kind of the “program” for this interesting game.

To learn more about the Best Practices in Digital Display Advertising Guide, download the report here.

The Data Driven Agency

Three ways you can supercharge your digital media agency with data

Today’s digital media agency has access to enormous amounts of data, but using it effectively is what is going to make the difference between the shops of the future and the also-rans. Delivering data-driven insights is the key to being a 21st century agency. Here are three ways you should be working with data to secure your future:

Visualize it

How much time are you and your colleagues spending collating data, building reports, and formatting spreadsheets and PowerPoint decks for your clients? Most of the agencies I have worked with over the years admit to dedicating an embarrassingly large amount of (highly expensive) time towards these menial tasks. It’s not that getting your clients the data they need is not worth the time, it’s simply that there are now so many automated ways to deliver the data without burning salary.

To paraphrase former agency head and Akamai leader David Kenny, if you are doing things with people that you can be doing with computers, you have already lost. Why spend time formatting Excel spreadsheets and populating PowerPoint report templates with data, when you can be spending salaried employee time selling more services, optimizing campaigns, and delivering great strategy and creative?  Today’s automated ad management solutions and DMPs offer powerful ways to port both audience and ad serving reporting data into a single interface, to get instant access to key metrics such as frequency to conversion, churn rate, and channel attribution.

Ask yourself if the cost of such a system is more than the cost of the time your employees you have been spending building reports—and, ultimately, more than the cost of your eventual demise, should you ignore the changes afoot in your business.

Aggregate and Activate it

Think of all the data you have access to from a digital media standpoint. If you are helping clients execute a digital media campaign, you have traditional serving data from your demand side server, such as DFA. You probably also have engagement data from your rich media ad server. If you have access to your clients’ website pages (or at least tags there), you have site-side data, including conversion event data. If you are using an audience measurement tool, or are doing audience-specific buying through a demand side platform, you also have audience measurement data. Great. What are you doing with all of it? Moreover, what kind of data does your client have that you can help them add to activate the common advertising data types I have just described?

Let’s take the example of an agency using an audience measurement reporting tool, alongside an ad server report. In this case, it is possible that the analyst knows that the highest frequency converters for his travel campaign belong to a popular PRIZM segment, and he may also know that visitors to a popular travel site are three times as likely to engage with his rich media ad creative. Now what? Obviously, the right move is to buy more of the audience segment and double up with guaranteed advertising on the travel site. But what about audience overlap?

How can the advertiser reduce ad waste by ensuring that members of his audience segment that he is securing for as little as $2.00 CPM on exchanges are not overrepresented on the premium site for which he is paying $18.00 CPM? Plus, how many members of that audience are also already registered as customers? If you are not deploying a DMP to aggregate your clients’ CRM (first-party) data alongside the site-side and ad serving (2^nd party) data and the purchased (3^rd party) data segments, then there is going to lots of duplicated uniques in your audience. Smart data aggregation creates ad activation through waste reduction, lifting conversion rates, while lowering cost per conversion. Getting an effective universal frequency cap across digital channels is very difficult, but every dollar not wasted on duplicate impressions is another dollar that may be spent finding a new audience member. Reducing waste adds reach—and performance, which every client likes.

Compare it

As a digital media agency, you’ve run hundreds, perhaps even thousands of campaigns, producing thousands of data-rich reports for your clients. How much of that knowledge are you leveraging? Although you might know the top travel sites and audience segments to reach “moms of school-age children in-market for a beach vacation,” how readily available is that knowledge? Is it sitting inside your Media Director’s head, or hidden in various documents that don’t talk to one another? How about access to normative campaign data? How quickly can you find out how certain sites performed against similar KPIs without doing hours of research?

Like or not, advertisers want to know how their campaigns are performing against known standards, and it’s gotten a lot more complicated than beating a 0.1% click-through rate lately. Knowing how your last 10 travel campaigns performed—from which guaranteed site buys succeeded, to which audience segments performed, to which creatives elicited the highest CTR—is just step one. Having that data available for quick reference means that every new campaign can start from an advanced performance level, and your media people don’t have to recreate the wheel every time you receive an RFP.

Today’s smart DMPs also feature the ability to leverage your data to an even greater extent, especially for audience buying. Why limit yourself to pre-packaged audience segments that do not include your client’s first-party data? Today’s more advanced DMPs give marketers the ability to create audience segments on the fly, building discrete segments from data that includes available third-party data—but also first-party data, such as registration details, transactional records, and signals from hosted social media listening solutions. It’s the difference between buying from an ad network and creating your own.

Summary

Buying into portals’ site sections was the first phase in the effort to bring contextual and audience relevance to ad buying. Networks followed, offering packaged audiences at scale. Then bidded exchange buying came, offering pre-packaged audience segments at the individual cookie level. Today’s best practices include marrying all available data types to give marketers the ability to create their own targeted buys, and modern data management platforms are helping the largest advertisers automate what they have been doing since the first direct mail piece went out: finding targeted audiences. Leveraging today’s DMP technology can not only help you find those audiences more easily, but help you understand who they are, why they respond, and help you find them again.

Chris O’Hara is head of strategic partnerships for nPario, a DMP with clients that include Yahoo! and Electronic Arts, among others. A frequent contributor to industry publications, this is his first column for The Agency Post. He can be reached through his blog on www.chrisohara.com

[This article originally appeared in The Agency Post on 1/25/12]

MediaOcean: So wrong, yet so right…

MediaOcean: So Wrong, yet So Right!

A “platform” is a system that can be programmed and therefore customized by outside developers — users — and in that way, adapted to countless needs and niches that the platform’s original developers could not have possibly contemplated, much less had time to accommodate.  – Marc Andreessen, 2007

Last week’s news of the merger between DDS and MediaBank was certainly exciting. In digital media management terms, it’s kind of akin to rooting for the Yankees; only their fans want to see them grow more powerful, because it sure ain’t good for baseball. These two behemoths have been fighting over agency budgets for the last four years, and have managed to steal a bit of market share from one another, while advancing the cross-media efficiency agenda slightly. The stated hope for this merger is that the corporate combination will give them enough firepower to finish the golf swing and solve the insanely complicated digital media puzzle, making cross media management possible in a real way.

Is this merger good for the digital media ecosystem? Maybe. Here are the three factors that will determine whether MediaOcean will become the digital media industry’s defacto system:

Standards are good: First off, it helps when everybody is reading from the same sheet of music, and there isn’t an industry that hasn’t benefitted from a common, accepted set of standards. The IAB has done a great job in terms of helping standardize ad sizes and out clauses, and some of the systems and procedures that help oil digital business transactions. An argument could be made that having 80% of agency dollar volume running through the same system brings efficiencies to the entire media buying landscape, but I’m not sure anyone in the industry would say that this was the case when DDS had larger market share.

For digital marketers, a significant hassle has been bill/pay and reconciliation, and that has been an area of focus for DDS and MediaBank across digital and traditional media. There is no doubt they can help standardize the process by which advertisers and publishers reconcile delivery even just by being the largest player – they can bring a de facto standard to bear, but how quickly can they really react to a rapidly evolving space with myriad nuances in ideal workflows for almost every customer? If they can change their DNA, they will be a force to be contended with.

— Platforms are good:  Secondly (and most importantly),  the right approach to solving this problem is an open platform approach. But none of the leaders in this space have shown any predisposition for opening things up.  This is in large part because the technology landscape has evolved so fast that the legacy companies haven’t been able to adapt their systems to keep up.  The market needs an open, extensible platform approach to solve its numerous problems, the question is can any of the existing leaders in the space, including MediaOcean, provide that?

My colleague, Eric Picard, learned about the power of platform effects while working at Microsoft over the last several years. He recently educated me on the varieties of platform approaches that could be taken in our space, and has offered to let me publish that here:

*  Systems vs. Platforms: The first thing to discuss is that most companies in our space have built systems – not platforms (despite everyone using the word platform for everything.)  A system simply exists on its own, is proprietary and closed – it doesn’t allow third parties to build on top of it.  This describes almost all the offerings in our industry today.

 

*  Simple Platforms – or Mashups: Most of us have experienced a ‘mashup’ in one shape or another by now. This is where a tool or web site is built that calls to numerous remote services (APIs or Web Services) to build one cohesive interface.   In this case, the platform is really all the multiple different systems used ‘behind the scenes’ to create one simple application that you could use.  Many web sites use this technique, using various content management systems, ad servers, etc… A lot of the SEMs and DSPs use this approach, building their own interface that hits each of the Paid Search providers or Ad Exchanges via API.

 

*  Consumable Back-End Platforms: Lots of companies now offer API access to their systems.  This kind of ‘back-end’ access is then used by third parties to ‘mash-up’ the functionality with either their own or other third party functionality.  AppNexus, Right Media Exchange, Atlas, DoubleClick, and numerous others provided this kind of back-end access by API.  Some of the more sophisticated providers, like AppNexus and RMX even enable third parties to extend their functionality to some degree – but they don’t make that extension generically consumable.

 

*  Ecosystem-like Platforms: A great example of this is Salesforce.com – which has built out a platform that really begins to live up to the market opportunity that the industry should be looking for.  Salesforce enables numerous services that can be consumed, like the platforms and mashups we discussed above.  But they also let third party vendors come in and extend the functionality of the core Salesforce platform.  They even provide an App marketplace, similar to iTunes, that allows third party vendors to distribute their applications to existing Salesforce customers.  This is a powerful approach, but requires a whole new set of skills that most companies in the ad technology space are not quite able to pull off.

 

Within this overall context of platforms verses systems, you can see the variety of approaches being taken by the various parties in the ad ecosystem:

Google offers third parties APIs to write against, but keeps the vendors playing in the search ecosystem on their toes by frequently changing the APIs, and it’s fairly clear that their goal is to be both the platform and the applications that run the advertising ecosystem.  They support third parties, but only as it furthers their end-game. 

The ad servers understand that their value is in the engine, much more-so than their workflow.  And they’ve opened up APIs to let other workflows plug in and become mashups that ultimately are powered by the smarts of the ad servers behind the scenes.   

Donovan Data Systems has brought one mashup workflow to market, their iDesk product.  It interfaces with DDS’s other applications fairly well, and can integrate with the dominant ad servers.  MediaBank has done somewhat similar things with their application suites, but has taken a more “Google-like” approach when it comes to their business – investing in their own DSP and automated media buying systems. This investment in products that compete directly with the very vendors that would need to integrate into the combined system causes me to pause a bit.

At the end of the day – it’s hard to understand who might have the right DNA among these constituents to actually roll out the right platform to solve the industry’s needs.

–Creativity is good: Finally, I think a development like this is excellent, if it actually creates an environment that transforms where digital media people spend their time. Right now, digital agencies spend most of their time and effort trying to wrangle an “ecosystem” of nearly 300 technology, data, and media providers. They spend the bulk of their time trying to execute media plans, rather than coming up with creative strategies to engage consumers. The mess of systems, lack of standards, multiple log-ins, and unmanageable hoards of data that each system throws off has created the ultimate irony: digital media is becoming the least creative, least profitable, and least measurable channel for marketers. If the merger brings us one step closer to making the digital execution piece easier, and gets the conversation back to creative, than I think it’s a step in the right direction.

After being out in the field, and talking to over 400 agencies about their digital media needs, I know that a standardized platform is what everybody wants. Whether or not MediaOcean is going to be nimble and creative enough to deliver a system that meets the needs of our growing ecosystem is very much in question. Technology has always thrived on choice, flexibility, and open standards. I believe that the company that can deliver on all three will end up winning.

[This commentary appeared in Adotas on 9/29/11]

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Digital Marketing Questions in Search of Answers

Over the course of the past year, my colleagues and I have gone around the country speaking to more than 400 agencies about their digital advertising businesses. These agencies represent the lifeblood of American business: They are the regional shops that market the local hospital chains, regional tourism, restaurants, and retailers. Whether they are in Anchorage, Miami, Sioux City, or New York City, they are all facing similar digital media challenges.

The 300,000-channel world of digital marketing is exponentially more complicated than the not-so-distant past when radio, broadcast, and out-of-home advertising were the only games in town. “Most clients expect some level of digital services from their agency,” according to Tammy Harris, the media director of Neathawk Dubuque & Packett, a leading healthcare marketing firm based in Richmond, Va.

This makes it much harder for agencies to deliver impeccable plans, provide great analytics, and continually ensure better rates and performance. Plus, clients want to use analytics to uncover how their products are selling in a new, connected age. The old black box of television offered a model that worked for a long, long time; if you had enough money to feed it, the television produced an audience broad enough to justify the marketing expense. Agencies fed the beast with commercials and earned market share. Now, with an audience splintered into hundreds of cable and satellite channels, and with 25 percent of the audience fast-forwarding through the commercials with their DVRs, that model is broken. Radio is better off, but even that is being corroded by pay-to-play models. Besides, it has always been hard to build a brand verbally.

So, agencies are faced with the need to build client brands online through websites and Facebook pages. They have to get customers to those pages via search marketing and display ads. Is it that hard to figure out where the digital audience for a product lives? Of course not. Agencies that want to reach young men can find themselves on ESPN or Break.com’s media kit within the space of 60 seconds. Want to reach people with hyperhydrosis (excessive sweating)? There’s a whole section of WebMD dedicated to it, and the site would be delighted to sell you a sponsorship. Want to build a Facebook page and stock it full of fans you can constantly tweet to? A few recent college graduates can have that up and running and packed full of content in a week or two.

The problem isn’t executing a digital marketing strategy or finding an audience. The problem for agencies is that is really hard to do it at scale — and even more difficult to make any money doing it. A recent study by AAAA cited that the cost of servicing digital campaigns averages 30 percent of an agency’s media cost, as opposed to 2 percent for television buys. That sounds hard to believe, but not when you think about the back-end an agency needs to be truly successful in the digital space.

As Harris puts it, “The bulk of the time required to plan and place traditional media happens up-front, while digital media requires attention throughout the run. The ability to track, optimize, and report so many metrics requires many hours, and because digital media often costs less than traditional, it means agencies are doing more work for less money.”

Even if you are just a media shop, you need some serious tools to get the job done. First off, you need to be able to build and maintain cutting-edge websites, and that capability encompasses a lot of expensive, technical personnel. Researching sites with any credibility means having access to expensive Nielsen or comScore subscriptions. Doing SEO and SEM? You better have a young employee to head up your search and analytics practice, and these folks aren’t cheap. If you want to serve ads with any volume, and have access to your own data, you will need your own ad server. How about tracking website activity? Enter Omniture, or other analytics software. What about optimizing campaigns, tracking conversions, putting up and taking down ad tags? Get ready to hire and maintain a serious ad operations team. And it doesn’t end with the campaign.

After all of this, in even the most successful online marketing effort, the billing and reconciliation game is just beginning. A client might ask, “My server says you served 100,000 impressions, and you are charging me for 125,000?” To which the agency might respond, “Who pays, based on whose numbers, and when am I getting paid anyway?” It goes on and on. In some ways, it’s hard to imagine how agencies make any money on digital advertising at all.

For Marci De Vries, former head of media of Baltimore-based IMRE, and now a small-agency owner herself (MDV Interactive), digital marketing can quickly become a zero-sum game. “If the developer of these tools can make money on expensive tools, then good for them,” she says. “What I’ve seen lately is that those expensive tools are bought by 10 percent or less of their market, and then are underutilized because only a few license seats are purchased. The overall value to an agency of expensive software is close to zero. Meanwhile, the web community is copying the functionality, databases, and ability to provide meaningful information and distributing it for free or almost free. The overall value to agencies is very high, although it also levels the playing field between small shops and big shops. The web community likes to level the playing field.”

Kent Kirschner, the owner of The Media Maquiladora, a Latin American specialty agency with offices in Sarasota and Mexico City, says the problem is starting to get even more pronounced as multicultural agencies begin to come to the digital party. “Margin compression is a phenomenon affecting all aspects of the industry,” he says. “The rise of CPC, CPA, and other performance-based pricing has compelled all marketers to think that our profession now should be held to a different measure. Our creative and strategic work is now almost inevitably met with skepticism if there isn’t some direct and easily identifiable performance metric attached to it. So clients value what we do less and drive us to wring more and more out of our media partners and our teams. In many cases, they don’t pull their own weight in developing appropriate data measurement systems to identify the impact of our work.”

It’s not only measurement that impacts an agency’s margin and daily workflow. Real in-house innovation must continue to be what differentiates agencies from each other — and the host of widely available tools on the market. “The internet continues to drive the price point for traditional agency materials down to zero every day,” De Vries says. “There is a community on the web that is in favor of sharing repeatable work so that more money can be spent on real innovation. To help eliminate what they consider mundane tasks, they offer free design templates, CMS platforms with extreme performance, and in some cases even free logo work.”

Peter Gerritsen, well-known ad man and now Transworld Advertising Agency Network (TAAN) head, feels the same way. “The squeeze of economic conditions on the advertising community, and on marketing budgets, has created an environment of cost-control at any price, even to the detriment of quality,” he says. “While this is short-sighted, it has become the lead in negotiating compensation. In many areas, it has become not about the value of doing it best, but how little it will take to just get it done. The advertising industry has commoditized many of the steps required to produce communications. A commodity is measured by cost, not by quality. Expertise is measured on outcomes and value. The experts command premiums for their work. Agencies need to position themselves as experts in defined businesses. Deep expertise is better than commoditized capabilities.”

Agencies are now forced to do what they always do when it comes to margin compression: share the pain with their publishing partners. The good shops send out a brief to 20 sites, collect creative ideas from them, and collate the best five into a plan that fits from the standpoint of budget and practicality. Usually, the largest sites get on those plans simply because the agency wants to create the least amount of friction when closing a deal. Want to reach young men? Look no further than ESPN.com.

Agencies that are charged with performance simply go to networks, which find them the cheapest “targeted” inventory they can. Agencies don’t know where their clients’ ads are running, but how else do you get geo-targeted, contextually targeted, user-targeted, and re-targeted inventory for less than a $10 CPM? But what have the agencies really done? They don’t know how they got the performance, or how to find it again. They don’t own any part of the value chain of that process: the sites, the targeting, the data, or the analytics. Scary. Sounds like something the client can get directly — for 15 percent less.

Gerritsen values the media mix more on performance than delivery. “The value is in the insights and the delivery of successful outcomes,” he says. “How this is delivered may not be through internal resources, but as a trusted method of information exchange between media, agent, and marketer. It’s not necessarily about who owns the data, but rather, about the creative use of the information to produce success. I don’t like the term ‘aggregator.’ It doesn’t demonstrate any value, just the ability to cobble together a pile of stuff. The value of the best networks and exchanges is the shared responsibility to balance costs and benefits to all participants.”

For agency owners like Kirschner, there is no question about maintaining control of publisher relationships. “Despite the fact that there is such a proliferation of options in the digital space today, it has never been more important for agencies to maintain direct relationships with publishers,” he says. “While networks and exchanges offer convenience and supposedly compelling pricing, the reality is that the publisher at the end of the loop ultimately wants to see a campaign succeed, and he or she has the direct experience and audience knowledge to ensure that happens. There are many tools available that allow these personal relationships to scale within a large media department, so the appeal of networks and exchanges diminishes.”

I currently work for a company that is trying to help small to mid-sized agencies tackle some of the technology aspects of buying and selling digital media. In most sales jobs, it takes a while to get a meeting with a decision-maker. Frankly, I was surprised at how quickly CEOs, CFOs, and digital media VPs agreed to meet with our company at first. Sure, we have a captivating sales pitch, but the reason we get so much uptake is that there is real pain out there on the agency side.

The online media industry is far from being sorted out. Until a standard set of practices and tools gets established (which might never happen), agencies are going to need reliable, trusted partners to help them profitably navigate the digital landscape. Agencies will forever be evaluating new platforms, networks, exchanges, ad servers, data providers, and myriad other tools and services. But, for the agencies we talk to every day, it’s not the tools that make the agency — it’s how the tools are used that ultimately makes the agency successful.

As De Vries says, “Agencies that were built on a manufacturing model (paying inexperienced employees to send mailers all day long) now need to focus on innovation instead because that’s where the money is now. It’s hard to innovate every day in an agency.”

Ad Tech’s Walking Dead Startups (DigiDay Interview)

Chris O’Hara is svp of marketing and sales for Traffiq, a digital media optimization company. He has referred to the clutch of ad tech companies with sizable bank accounts from VC investment, not profits, as the walking dead. O’Hara believes that it’s only a matter of time before a massive fire sale begins in the industry.

Explain the idea of a walking-dead company?

Walking dead companies are venture-funded companies that are sort of stumbling along revenue wise, making enough money to stay afloat or surviving on their financing by having a relatively low burn rate. They’re not going to have a super successful exit anytime in the future. They may be very exciting, innovative companies, but they have a hard time getting VCs pumped up. Venture funds tend to place a lot of bets and hope that they get big wins from a small percentage of them. Like any investment vehicle, a VC’s portfolio has its mix of winners and losers, although the typical VC portfolio tends to be less diversified in terms of its industry focus. When I heard Jon Soberg of Blumberg Capital — it is a backer of Legolas, HootSuite, and DoubleVerify, among others — use the phrase “the walking dead,” it felt extremely appropriate. A lot of companies in the digital display landscape are running out of capital after 3 or 4 years and several rounds of financing—and most of them will exit at low or zero multiple of valuation. Then again, smart investors like Grotech Ventures find a Living Social to invest in every now and again, and that is the kind of deal that can propel the value of an entire portfolio.

 

Are VCs beginning to cool in regards to investing in ad tech and social, in light of the economy?

On the contrary. I think the valuations of LinkedIn, Facebook, and Living Social have the VC community excited, maybe even overexcited, to be honest. The recent Buddy Media announcement is just one example, raising $54 million to plump its valuation to $500 million, and there are sure to more such valuations coming soon. I think what VCs aren’t too excited amount is the amount of companies within the display landscape that are going to flame out, or exit at fire sale prices. Unfortunately, according to Luma Partners banker Terence Kawaja, over half of the 35 deals in the last year didn’t produce a return on capital, and he expects that number to increase over time.

 

What are VCs doing right, or wrong, in ad tech?

If their funds make a decent return on investment, then they aren’t doing anything wrong! It may seem like that to company insiders working for some of the less fortunate companies, but VCs are not in business to keep ad-tech executives in panel discussions at cocktail-soaked industry conferences. They are in business to build companies to sell them, or put them into a public offering. I think certain well-heeled VCs may be making the venture capital business a lot harder by over-inflating the valuations of some of the larger companies in our business, but I think that’s due to the flight of money from increasingly unstable capital markets to other investment vehicles. There is a lot of cash on the sidelines right now, and venture funds are starting to look like a surprisingly safe haven. While that should scare the average investor, it makes for a very fun, frothy environment for ad technology!

 

So how should an investor, in this market, value a Demand Side Platform (DSP) company?

I would give them a 1x-3x valuation, similar to a successful digital media agency — and only if they were showing strong profitability and something unique about their process which was repeatable. The problem with the current landscape is that the excitement has been driven in large part by many of the companies that I have just described — companies with more hype than real technology with a unique IP.

 

What should ad tech Investors look out for?

I think investors have to watch out for a rapidly collapsing landscape, due to the social factor. You have an entire ecosystem built around audience targeting using 3rd party data. The problem? The companies with better and deeper first-party data have a lot more audience — like 750 million profiles for Facebook alone — than all of the companies in our landscape put together. And Facebook, LinkedIn, and Google have just started to define their display advertising strategy. If audience targeting is as easy as it seems to be now, via Facebook, then what is the real value of many of those little logos in the Kawaja map?

 

[This interview was originally published in Digiday on 8/25/11]

The RFP is Dead: New Concepts in Audience Discovery

The Programmatic Approach to Media Allocation is Coming Soon to a Platform near You.

Since its inception, advertising has always been about putting the right message in front of the right audience. Back when televisions were really expensive, and people used to gather around them in bars to watch baseball, beer companies started to do a lot of television advertising. While it’s still pretty easy for marketers to find the right beer demographic on sports programming in broadcast, the new world of multiple screens makes finding that audience at scale tougher every day.

The guy who was likely in the pub watching the game back in the 1940s and 1950s is now watching the game at home, but maybe on his iPad. Or perhaps he’s sneaking it in at work on his computer via Slingbox, or following along on his Android phone on the MLB Mobile app. The point is, there’s no easy way to find him, it’s almost impossible to find him at cheaply at scale, and we may have the wrong way of discovering him online.

The traditional method of finding your audience in the digital space is to put together a campaign request for proposal (RFP) that details the nature of your ad campaign, the audience you are looking for, where you want to find them, and the most you expect to pay to reach them. An agency’s trusted inventory suppliers receive and evaluate the RFP, and put together (hopefully) creative strategies that deliver a way to find that audience, and put the agency’s message in front of the user at the right time, in the right place. This approach makes complete sense. Except when it doesn’t.

Here are some ways in which the traditional, single RFP fails:

Multiple Pricing Methodologies: One of the problems in the traditional RFP process is that the agency is often limited to suggesting a single price range they are willing to pay for the media. For example, a typical RFP for a branding campaign looking for contextually relevant, above-the-fold inventory may suggest a price range to publishers of between $8-$12 CPM. This is fine if the proposal is only going to premium publishers with guaranteed inventory. But what if the advertiser is also interested in finding his audience on a cost-per-click basis? Knowing the historical performance of similar past campaigns, he might suggest a range of $1.50 -$3.50 per click. While the agency is comfortable buying using both methodologies (and certainly prefers the latter), the publisher is left wondering how to respond in a way that gives him the best overall price, and best revenue predictability. After evaluating the campaign, he may well decide that he will fare better on the CPC model, but in the absence of the granular past performance data of the demand side client, he will probably opt for the revenue visibility afforded by a CPM campaign.

Markets tend to work most best when both sides of the transaction have access to similar information. That leads to pricing efficiency, which in turn creates long-term sustainable performance results. Unfortunately, the traditional RFP process tends to strongly favor the demand side customer rather than the inventory purveyor. Add in the possibilities of buying on cost-per-lead (CPL) and cost-per-action (CPA), and you have a situation in which the demand side customer has the benefit of greater data visibility, and the supply side opportunity becomes purely speculative, leading to even more pronounced market inequities. These dynamics have largely occurred due to the seemingly unlimited supply of banner inventory (a supply side problem that will be debated in another article), but the fact remains that today’s standard agency RFP process falls far short of accounting for the multiple ways in which digital media can be bought and sold today.

Multiple Buying Methodologies: Along with a new multitude of pricing choices available to both sides, the emergence of real-time-bidding (RTB) makes the traditional RFP process even less relevant in for today’s progressive digital marketer. Say a marketer wants to reach “Upper income men in Connecticut that are in-market for a BMW 5-Series sedan.” That’s a pretty specific target, and I’ll bet that if a marketer could actually identify and find the several dozen guys in Darien, Stamford, and Greenwich that are looking for that specific make and model of car within the time period of the campaign, they might be willing to bid upwards of $500 CPM to reach him. Unfortunately, if you were to restrict the RFP variable to that exact target, you would end up serving a few hundred impressions, and probably fail to even spend $500 altogether. Naturally, the marketer is willing to bid a lot less find all men and women in Connecticut that are in market for a BMW; or just men in Connecticut in market for a car in general; or even just men in Connecticut, whether they need a car or not. Naturally, bids for each segment will vary widely, and can span from single to triple digits. Without a CPM-based pricing cap, it is not uncommon to see bids above $1,000 for certain impressions, although very few of them are won.

Well executed RTB campaigns have multiple segments that bid at different levels, and impressions are won at widely differing prices. While the marketer expects some visibility around what the effective CPM may be for such a campaign, RTB systems work best when agnostic to media cost, and should depend purely on the advertiser’s CPC or CPA goals. While a marketer can be very specific about his ultimate CPA, CPC, or CPL pricing cap, the traditional RFP does not address his tolerance for certain types of risk, his willingness to deploy a large percentage of media budget for data costs, and his willingness to forgo placement and context in exchange for reaching his ultimate demographic targets. This is just one of the reasons that agencies are having difficulty transitioning to the new world of demand side platforms in general.

New Discovery Mechanisms: Finding your audience by creating a well-crafted RFP and working with inventory suppliers to cobble together an effective buying program is still a great way to reach your ultimate goal, mostly because publishers know their audiences really well and have been able to offer new and creative ways to engage them on webpages (and, now, multiple screens). But what if the publisher isn’t really in control of his audience? What if the content an advertiser wants to be associated with migrates and changes constantly, based on user behavior and activity? I am talking, of course, about user generated content. Companies like Buzz Logic measure the “conversational density” around a topic and find where people are talking about, say, “organic food.” You can’t find that audience with a traditional RFP. The prevalence (or downright dominance) of social media outlets has created an explosion of UGC that is creating content almost faster than marketers can discover it. And that those new content areas are highly desirable to advertisers looking to engage consumers in contextually relevant activities. Those audiences are found via technology. How about finding people through the products they own (OwnerIQ) or even based on their occupation (Bizo)?

RTB and data make finding very granular audiences an intriguing option for marketers, but the traditional RFP process makes it hard to describe a marketers willingness to mix traditional, contextual audience buying (finding fantasy football fans on ESPN, for example) from some of the new audience discovery options (finding college students online based on their ownership of mini refrigerators, for example). Both are possible, and probably great to deploy over the course of a single campaign, but the traditional RFP process doesn’t really address this well.

Allocation: In my mind, the most important aspect missing from the traditional RFP process is that it doesn’t bring the demand and supply sides together effectively to suggest proper budget allocation for a campaign. If you have a $100,000 budget, and suggest $10,000 per publisher, every publisher is going to suggest $10,000 in media—regardless of whether or not they have it available. Moreover, you are going to alienate some publishers that may have larger minimums. The real problem is that the traditional RFP process doesn’t easily allow budget allocation across multiple media types (guaranteed display, real-time bidded display, mobile, video, search, and social) or take into account historical performance data. Essentially, the RFP makes a crude guess at budget allocation, with the marketer using his gut and some past performance data (“well, the $40,000 I spent with Pandora last time performed pretty well, so I’ll do that again”). Although the amount of choices today’s digital marketer has have expanded greatly, his form of communicating specific campaign needs is still an essay-length Word document or form-based technology with limited fields that do not capture the breadth of choices available.

So, what is the answer? New platform technologies are helping marketers expand the way they describe their campaign needs-and their willingness to deploy differing pricing and buying methodologies to reach their intended audience. Real time bidding systems are also giving end users hundreds of different levers to control the types of bids they are willing to make, based on the granularity of the audience, and performance of the inventory they purchased. In coming months, technology will not only expand a digital marketer’s ability to better describe his goals, but also use past performance data to suggest more effective media allocations in the beginning—and during—a campaign. Based on granular campaign attributes, knowledge of price points where certain real-time bids are won, and historical campaign performance, systems will be able to tell the marketer: “Allocate this percentage to SEM, this percentage to guaranteed display, and this much to real-time display” while suggesting the most effective bids to place. This three-dimensional discovery technique is where we are headed. While we are getting ready for its arrival, marketers should start thinking outside the traditional RFP box, and begin configuring new ways to ask inventory partners to find their desired audiences.

[This post originally appeared in eConsultancy on 8/19/11]

Digiday:Daily Interview (Repost)

The right exit?

During the past year, the number of tech companies has exploded. There are some 245 logos on the (in)famous Luma Partners slide. Some of those have been acquired, but many have not and, in the eyes of several observers, are more features of products than standalone companies. In an economic downturn, with its focus on wringing efficiency, how many will be able to argue for a small slice of ad buys?

“People are all talking about the Luma slide,” said Tom Deierlein, managing director of Tagman, an ad technologies firm. “And they all want to pat themselves on the back and say, ‘Yeah, we made the Luma slide!’ If you go back to the original presentation of the slide, the point is that the industry is too cluttered. Too many people have their hands out, and there are not enough dollars to support all of the companies, and all of the tollbooths being put up. There is not enough money to support the ad ecosystem.”

Deierlein’s sentiments are echoed by analysts within and outside of the ad technology industry. The ad technology herd will “absolutely” be thinned, according to Erin Hunter, evp of media at Comscore. The proliferation of ad technology companies, some offering little or no transparency on their operations, won’t continue in an economy where brands want results, not simply assurances, according to Hunter.

“Brands want to know that there is a human on the other side of that impression,” said Hunter. She believes that advertisers will soon start to demand a system of “checks and balances” that will make ad technologies back up their product stack with verifiable results. Those firms not able to illustrate their value with transparency will eventually implode. At the end of the day, with the dizzying array of ad technologies, from DSPs to DMPs to SSPs to AMPs, there is still the question of what value each player is bringing to the table.

“When everyone has access to the same tools, there tends to be little differentiation and, consequently, value in an industry,” said Chris O’Hara, svp of marketing for Traffiq, an ad technologies firm. “Ad tech provides a highly robust example of this. Take DSPs and agency trading desks, for example. Everyone buys the same exact inventory from Google, Right Media, Microsoft, OpenX, PubMatic, Admeld and Rubicon, for example, and uses data that spring from the same sources such as IXI, Experian, Acxiom, etc. It’s extremely simple to get access to technology that enables you to leverage those things. So, what makes the companies that do real-time bidding valuable? They don’t own the inventory or the data. Many of them use the same machine-learning algorithms licensed by IPonWeb to drive optimization, and most deploy a roomful of smart account managers to help their clients manage and optimize their campaigns. As an investor, what value do you ascribe to those companies?”

And then there’s the simple fact of M&A: that there aren’t enough chairs to go around. There’s clearly the need for consolidation — Google’s vp of display advertising Neal Mohan regularly stresses this — but it’s hard to find a home for all those logos on the Luma chart.“Is there an explosion in the number of ad tech companies? Yes. Is that going to continue? No,” said venture capitalist Mark Suster in a recent Digiday interview. “In a bull market the number of startups in a category multiplies by as much as ten, and then when the markets collapse then they consolidate or shut down, and that is normal.”

The problem isn’t simply a general me-too mentality among startups, according to Deierlein. It’s that many companies bring nothing new to the table, often because they aren’t expected to. Companies are forgetting the history of the technology markets, Deierlein believes, and so many companies are simply plunging headlong into a complicated market without assessing whether or not their business model is an improvement on what is commonly offered in the “already cluttered ecosystem.”

“The clutter has come from the amount of money to be made in the ad technologies industry,” said Josh Kraft, marketing director for data analytics firm InfiniteGraph. “Eventually we will see companies being pruned, in a sense. Companies will have to back up their claims with actual client references. It requires a significant capabilities with data to compete, survive and thrive now.”

[This post appeared in DigiDay:Daily on 8/16/2011]

TRAFFIQ Talks Private Marketplaces and Other Platform Enhancements

ADOTAS – Demand-side digital media management platform TRAFFIQ expands its offerings so much that it’s hard to keep up. Fortunately, we were able to hit Senior Vice President of Sales and Marketing  (and regular Adotas contributor) Chris O’Hara with questions regarding the platform’s latest upgrades (including customized and private publisher portfolios and enhanced financial management tools) as well as the many partnerships the company has formed since the beginning of the year.

ADOTAS: Terence Kawaja’s infamous display ecosystem landscape places TRAFFIQ in “media management systems” with companies like Centro — closer to the supply side than DSPs. Do you think this is a fair placement and why?

 

O’HARA: I don’t think we should put too much emphasis on placement in the landscape chart. Many companies belong in one or more buckets—and some of the logos should appear much larger than others, based on overall impact within the landscape itself. TRAFFIQ, for example, could appear in many of the categories (DSP and Ad Serving being two of them), but I believe there is a revenue threshold to be met before LUMA will place you in multiple buckets.

That being said, I think TRAFFIQ is in the right category. Eventually, the notion is that TRAFFIQ would appear as an overlay to multiple sections of the map, providing dashboard level access to an advertiser’s entire vendor toolset.

How does a media management system differ from a DSP? Confused agency people want to know.

Mostly, it’s nomenclature. I think the term “demand-side platform” is a great term for a technology tool that helps advertisers manage their media. The reality is that now “DSP” means “technology tool for real time managing exchange buying.” Agencies have every right to be confused, as companies within the landscape are changing from network to “platform” and from data provider to “DMP.”

The difference is simply that a “management system” should provide tools that cover inventory discovery, vendor negotiation, offer management, contracts, ad serving, analytics, and billing; DSPs handle a sliver of the overall media buy. For example, TRAFFIQ customers will be able to manage several DSPs within our platform at once.

It seems like the new Private Marketplaces tool allows advertisers to customize publisher and exchange lists — fair assessment, or is there more, so much more?

Right now, TRAFFIQ private marketplaces enables advertisers to buy outside of our curated list of 3,000 guaranteed inventory sources, which is especially important in terms of giving agencies the control they need over media. Publishers increasingly want the convenience and efficiency of exchange buying…without exposing their quality inventory to the world.

Demand side customers like the reach and price efficiency they can achieve with exchange-buying—but still struggle with brand safety and transparency. Our next-generation system will offer both sides a lot more control over who they work with, and that is sorely needed in our business right now.

Can this tool also offer hookups into the increasingly popular private exchanges, such as The Weather Channel’s Category 5 and Quadrant One?

Yes, as long as the demand-side partner has a business relationship in place with the inventory supplier, TRAFFIQ will be able to enable the connection.

Why are agencies going gaga over your new finance management tools?

If agency CFOs could actually go “gaga,” they may be doing so over our new tool for the simple reason that most digital platforms don’t take the vagaries of agency pricing into account. At TRAFFIQ, we have to manage several different pricing scenarios at once.

What is the agency’s margin, and how do they want that margin reflected in the pricing (baked into the media cost, or shown transparently)? How about data and technology fees? Those can be added to the gross media cost, or shown separately as well. Also, handling net and gross costs with publishers has always been challenging.

Smart systems should recognize these fundamental business needs, and expose the correct pricing to everyone within the system, eliminating confusion and duplicative work.

Can you explain how the multiple user permissions work? Why is this important for your agency clients and how can they best be deployed?

For the demand side, multiple user permissions means giving access to a subset of clients for an individual account team. On the supply side, it means having the ability to put the right publisher rep with the right demand side customer.

For example, an individual agency account team may buy from Fred at ESPN for one client, and Joe at ESPN for another. It is also necessary for agencies to be able to manage which of their end-clients gets to view certain reports. Multiple user permissions adds the layer of flexibility that enables TRAFFIQ users to expose the right data to the right set of customers.

What kind of agencies are you working with these days and what kind do you hope to add to your client base? Are you working with brands directly as well?

For the past several years, our focus has been getting total product adoption from the small to mid-sized agency market. Some are the types of shops that have a thriving traditional media practice, but not necessarily the right tools to tackle digital media. Still others are strong in digital, but are struggling with multiple tools, and having a hard time putting all of the pieces together efficiently.

We partnered with some of the great agency groups like TAAN, Magnet Global, AMIN and Worldwide Partners to reach these shops, and have been quite successful. We have also done some work with the holding companies, but mostly on a campaign-by-campaign basis, rather than getting the large shops to adopt our solution fully.

The product features we are working on now will actually enable big agencies to adopt TRAFFIQ by enabling API connections to their existing systems (ad serving, billing, etc). You can’t walk into an agency and ask them to drop all of their vendor relationships at once… You have to be able to work seamlessly with what they have.

What sets apart your attribution services from your media management peers as well as other attribution providers? What kind of extra insight do you provide?

Right now, a lot of our customers are working with our embedded Aperture audience measurement reports. Unlike other platforms, we make it fairly easy to take those demographic campaign  learnings and take action against them. So, it’s not just click- or view-based data; it’s using third-party data to understand who is seeing your campaign, clicking on it, and ultimately converting against it.

We are the only platform that can help marketers react to that data through guaranteed buying—and RTB. In the near future, we will be able to show how our efforts in initial media budget allocation and optimization are driving performance. We also see a great opportunity to get some key attribution metrics out of search and display, once out customers are doing both types of media in the platform at scale.

How does TRAFFIQ integrate first-party and third-party data into audience buying efforts?

Right now we have over 15 data segmentation partners. Some of them work directly with our Trading Desk (we apply those segments to exchange buys), and some of our partners provide both targeting and media execution. We see our role as a platform as provisioning our advertising clients with the right best-of-breed partners, no matter what the targeting need.

That means Proximic and Peer39 for semantic; AlmondNet (now Datonic) for search keyword retargeting; Media6Degrees and 33Across for social targeting; Nielsen, Lotame and eXelate for demo targeting, etc. We also have the ability to match any first-party data with available audience within our real-time bidding system, and find that audience as well.

Do you foresee more mobile partnerships in TRAFFIQ’s future or is Phulant your one and only?

TRAFFIQ is an open platform, and that means we must be willing to integrate partners based on our clients’ needs. We see Phluant as a key TRAFFIQ partner for mobile ad serving, and have plans to work closely with them to define and grow our mobile capabilities. We want to see more standardization around mobile workflow, and that means making it easier for marketers to allocate budgets across different media types (social, search, mobile, video, and display) in one system.

Phluant has developed amazing technology to help marketers take rich media for display  and bring it to mobile devices. That’s a great starting point… and something that can be leveraged across multiple mobile inventory vendors.

Regarding your partnership with Bizo, what kind of opportunities lie in the realm of targeted B2B display?

Bizo is doing an amazing job of bringing the power of B2B to display advertising. Until recently, B2B marketers stayed away from display advertising (or struggled to get online reach with smaller, niche business publishers). Now, they can take the success that they are used to having with targeted direct mail in B2B, and apply that in real time display.

We believe that there are some real opportunities to make both B2B and local display digital advertising more manageable, scalable, and accountable.

Besides its “interesting” name, what about Oggifinogi (recently acquired by Collective Media) attracted TRAFFIQ to make it your video and rich media network partner?

Our customers use Pointroll, Mediamind, Spongecell, and all kinds of third-party rich media vendors, but we needed a reliable “go-to” partner that could help our registered demand-side client base tackle rich media and video more easily. We saw that “Oggi” had a strong commitment to both technology and customer service, and we felt that we could work with their team well. I think Collective media validated what a great partner choice we made there!

TRAFFIQ appears to have spread itself out pretty well across digital marketing channels, so what area is next on the agenda? Social?

The first big channel we are going to tackle after display is search. In a few months, TRAFFIQ will feature bid management tools for search engine marketing right in the platform—along with access to the Facebook self-service ad inventory. This means that, for the first time, guaranteed display, real-time display, search, and social can be managed within the same “media management system.”

It’s going to be exciting, but the real challenge will be making it seamless for marketers—and getting some great insights out of all the data that such an integrated platform will produce. That’s what we’ll be working on over the next several months.

[This interview appeared on 7/2711 in Adotas]