Interview: On Writing “The New Mobile Display Ecosystem”

MobileDisplayThe New Mobile Display Ecosystem, an Econsultancy report published in association with OpenX, surveyed over 20 leaders in mobile marketing, publishing, and technology to find out the latest trends in mobile advertising, and what the future might hold. Chris O’Hara, the report’s author, answers some of our questions about the research.

So, is 2014 finally the “year of mobile?”

Well, this “year of mobile” has been coming for some time, but our survey panelists are starting to feel that mobile has finally emerged as a player on the overall advertising scene. There are still huge discrepancies between time spent on mobile devices (a lot) and ad spending in the sector (relatively small). According to some research, people spend more than 20% of their time on mobile devices, but ad spending is at 4%. That’s a multiple-billion dollar opportunity.

What is keeping mobile ad spend from growing?

Our research showed that a large issue for advertisers was mobile creative—specifically, the lack thereof. The units are mostly small and prone to “fat thumb” clicks in browsers, and most of the in-app ads were fairly plain “install ads.” Not great for brand building or telling a story. Also, it is still somewhat difficult to get to scale without a “mobile cookie,” or persistent ID. That’s changing now, but without having statistical identification available at scale across many systems, only the large players like Google and Apple can effectively identify users across devices. That’s a challenge.

Who is most impacted by the growth in smartphones in the ad ecosystem?

For me, the retailers and product folks have it the worst. Soon enough, smartphones will reach 50% penetration. That means every other person will have the combined knowledge of the entire world right at their fingertips. What that means for retailers is what Google is starting to call the “Zero Moment of Truth,” an adaptation of an old P&G saying. What it means is that, when a consumer is standing in front of a product with their smartphone, they can find out every single thing—good and bad—about a product that’s ever been written with the click of a button. And, of course, the right price to pay. That’s an incredible dynamic.

What’s the most shocking thing you learned while researching the report?

44% of Fortune 100 companies don’t have a mobile-enabled website. That’s pretty scary, considering the “Zero Moment” dynamic, but it’s also a huge opportunity.

You asked panelists what “Mobile First” really means. What did they say?

Everyone agreed that both marketers and publishers have to start with mobile, because that is where people are spending their time. You can’t ignore mobile, or just make an HTML5 site and call it a day. If you are building a new website, launching a new product, you must do that with a “mobile first” approach, and try to leverage the unique touchpoints the channel offers to consumers. That’s the obvious part. I was pretty surprised to see how passionate people were about the idea of “mobile first.” Many think mobile is the biggest single opportunity out there for business. Suffice it to say, it is ignored at your peril.

What about the creative problem? How are marketers taking advantage of the unique data and form factors at play in mobile?

Native is certainly a big focus. The IAB has identified about 6 different categories of native advertising, many of which apply to mobile devices. OpenX has recently launched a new mobile exchange for accessing native mobile units programmatically. Native units tend to leverage more of the mobile form factor, which is great. Marketers are still struggling to take advantage of all the great data that can be used (altitude, motion, facial recognition, biological data, activity, etc), but some really cool executions are starting to be deployed. We are essentially ready for our Tom Cruise “Minority Report” moment from 2002, with ads that can follow us around and talk to us personally based on our situation.

What are the biggest threats?

Although everyone I talked to loves their “triple play” deal, and Apple or Android phone, nobody wants telecoms or big technology companies to be the only ones with cross-device targeting capability. All thr panelists were interested in a more diverse ecosystem, more akin to display advertising, where the “cookie” (albeit controversial) has enabled real audience targeting at scale. Marketers need to tell a sequential story, as the consumer moves from device to device. That’s only possible when you can link users to all of their devices, and that’s hard to do now unless you are Verizon.

Any final thoughts?

I think video is the way we are going to see mobile eat into established marketing budgets. The ads play amazingly well on new larger-screen phones and HD tablets. There are great creatives already established (the 10, 55, and 30 second spot ad), and you can actually tell stories with video, which is what marketers want to do. Videos are also the ultimate “native” ad. Video is where the action is right now, but other native formats suited to mobile form factors will follow.

This originally appeared on the Econsultancy blog on 8/5/14]

Death of the Digital Media Agency (Redux)

ImageLast year, I wrote that the digital agency was dead. I was mostly talking about how platform technology was going to knock a lot of digital media agencies out of business. In a world where over five trillion banner impressions are available every month, I argued, it was simply too much for humans to navigate through the choices and wring branding effect and performance out of campaigns. Well, digital media agencies are still around—but they continue to lose share to platforms as the amount of programmatically bought media increases. With RTB-based spending estimated to rise at an annualized rate of nearly 60% a year, according to market intelligence firm IDC, we could see as much as $14 billion in spending by 2016, or 27% of total display spending. Looks like the machines are slowly taking over.

Fairfax Cone, the founder of Foote, Cone, and Belding once famously remarked that the problem with the agency business was that “the inventory goes down the elevator at night.” That’s a big problem for an industry that relies on 23 year-old media planners to work long hours grinding on Excel spreadsheets and managing vendors to produce fairly mediocre media plans. Cone was talking about IP—what, exactly is the digital agency’s core intellectual property when the majority of the work seems to be hard labor? Digital creative agencies have no such worry. In this world of ubiquity, where everyone has access to wonderful SaaS-model technology that enables real-time bidding and access to trillions of exchange-based advertising impressions, the one place an agency can make an impact is on the creative side. Agencies that can create the miracle of getting more than 1 in 10,000 people to click on an ad, or watch a :30 pre roll video to completion are considered geniuses. But, what about the media shops? Can they really buy more efficiently than machines? More importantly, can they leverage the right machines to once again own the middle position between the advertiser and his prospect?

As I write in my recent report, looking at the history of display advertising, the future doesn’t favor the agency. In the beginning, agencies’ favored relationships with publishers made them a great way to buy media. Publishers aligned their content with the audiences that advertisers wanted (ESPN for sports enthusiasts), and largely controlled their inventory and audience data. Soon enough, the Network Era told hold, and smart companies like Tacoda started segmenting audiences based on context and behavior. By using technology to understand audiences better than the publishers themselves, they put yet another layer of IP between agencies and audiences. Then the DSP Era started, which further decoupled audiences from media. Agencies scrambled to create new vendor relationships with the MediaMaths of the world—but grew nervous that they would be disintermediated, and formed their own trading desks. This era is now evolving in the DMP Era.

After all of promises of easy audience targeting and automation, advertisers are looking at the same disturbingly low click-through rates, near impossibility of true attribution measurement, and spending waste—and determining that their own data is more valuable than most data that they can buy. Their desire to activate their “first party” data has given rise to the “DMP era.” Andy Monfried, who has brought his company Lotame through this transition, sees it this way, “Agencies are attempting to become technology providers for their clients, and from our perception, clients are hesitant to adopt. The larger agency holding companies have made an attempt at understanding first-party data but have come to be just a solution for clients to leverage third-party data. This is due to the lack of agency technology and lack of trust that clients put in agencies accessing their first-party data in a raw state.”

So, what happens now? Are advertisers simply going to license DMP technology, and build small practice groups for audience segmentation, targeting, and analytics? Or, are agencies going to adopt and learn how to become the centralization point for evaluating and helping clients implement new advertising technology? Media Kitchen digital head Darren Herman thinks the way through the trees is through education: “We are super bullish about teaching our strategists to learn the skills of data scientists. While the average media strategists will probably not have the skills of a robust data scientist with a PhD, from Stanford, an entire organization that learns to embrace data and make it useful will be more powerful than a few data scientists sprinkled [through] many. Knowledge of how to action data must both come from the top down and bottom up and be embraced by all. Building a culture that does this is hard as many people resist, but retooling and finding people who want this type of career is what we’re doing.”

Is your agency ready to hire a data scientist? Looks like the days of agencies hiring armies of English majors is over, and the next MIT recruiting session you see may have a few agency folks in attendance. Are digital media agencies dead? The data says not yet.

This post originally appeared on the EConsultancy blog on 12/13/12.

Choosing a Data Management Platform

“Big  Data”  is  all  the  rage  right  now,  and  for a good reason. Storing tons and tons of data has gotten very inexpensive, while the accessibility of that data has increased substantially in parallel. For the modern marketer, that means having access to literally dozens of disparate data sources, each of which cranks out large volumes of data every day. Collecting, understanding, and taking action against those data sets is going to make or break companies from now on. Luckily, an almost endless variety of companies have sprung up to assist agencies and advertisers with the challenge. When it comes to the largest volumes of data, however, there are some highly specific attributes you should consider when selecting a data management platform (DMP).

Collection and Storage: Scale, Cost, and Ownership
First of all, before you can do anything with large amounts of data, you need a place to keep it. That  place  is  increasingly  becoming  “the  cloud”  (i.e.,  someone  else’s  servers),  but  it  can  also  be   your own servers. If you think you have a large amount of data now, you will be surprised at how much it will grow. As devices like the iPad proliferate, changing the way we find content, even more data will be generated. Companies that have data solutions with the proven ability to scale at low costs will be best able to extract real value out of this data. Make sure to understand how your DMP scales and what kinds of hardware they use for storage and retrieval.

Speaking of hardware, be on the lookout for companies that formerly sold hardware (servers) getting into the  data  business  so  they  can  sell  you  more  machines.  When  the  data  is  the  “razor,”   the  servers  necessarily  become  the  “blades.”  You  want  a  data  solution  whose  architecture  enables the easy ingestion of large, new data sets, and one that takes advantage of dynamic cloud provisioning to keep ongoing costs low. Not necessarily a hardware partner.

Additionally, your platform should be able to manage extremely high volumes of data quickly, have an architecture that enables other systems to plug in seamlessly, and whose core functionality enables multi-dimensional analysis of the stored data—at a highly granular level. Your data are going to grow exponentially, so the first rule of data management is making sure that, as your data grows, your ability to query them scales as well. Look for a partner that can deliver on those core attributes, and be wary of partners that have expertise in storing limited data sets.
There are a lot of former ad networks out there with a great deal of experience managing common third party data sets from vendors like Nielsen, IXI, and Datalogix. When it comes to basic audience segmentation, there is a need to manage access to those streams. But, if you are planning on capturing and analyzing data that includes CRM and transactional data, social signals, and other large data sets, you should look for a DMP that has experience working with first party data as well as third party datasets.

The concept of ownership is also becoming increasingly important in the world of audience data. While the source of data will continue to be distributed, make sure that whether you choose a hosted or a self-hosted model, your data ultimately belongs to you. This allows you to control the policies around historical storage and enables you to use the data across multiple channels.

Consolidation and Insights: Welcome to the (Second and Third) Party
Third party data (in this context, available audience segments for online targeting and measurement) is the stuff that the famous Kawaja logo vomit map was born from. Look at the map, and you are looking at over 250 companies dedicated to using third party data to define and target audiences. A growing number of platforms help marketers analyze, purchase, and deploy that data for targeting (BlueKai, Exelate, Legolas being great examples). Other networks (Lotame, Collective, Turn) have leveraged their proprietary data along with their clients to offer audience management tools that combine their data and third party data to optimize campaigns. Still others (PulsePoint’s  Aperture  tool  being  a  great  example)  leverage  all  kinds  of  third party data to measure online audiences, so they can be modeled and targeted against.

The key is not having the most third party data, however. Your DMP should be about marrying highly validated first party data, and matching it against third party data for the purposes of identifying, anonymizing, and matching third party users. DMPs must be able to consolidate and create as whole of a view of your audience as possible. Your DMP solution must be able to enrich the audience information using second and third party data. Second party data is the data associated with audience outside your network (for example, an ad viewed on a publisher site or search engine). While you must choose the right set of third party providers that provide the best data set about your audience, your DMP must be able to increase reach by ensuring that you can collect information about as many relevant users as possible and through lookalike modelling.

First Party Data

  • CRM data, such as user registrations
  • Site-site data, including visitor history
  • Self-declared user data (income, interest in a product)

Second Party Data

  • Ad serving data (clicks, views)
  • Social signals from a hosted solution
  • Keyword search data through an analytics platform or campaign

Third Party Data

  • Audience segments acquired through a data provider

For example, if you are selling cars and you discover that your on-site users who register for a test drive are most closely  matched  with  PRIZM’s  “Country  Squires”  audience,  it  is  not  enough  to  buy   that Nielsen segment. A good DMP enables you to create your own lookalike segment by leveraging that insight—and the tons of data you already have. In other words, the right DMP partner can help you leverage third party data to activate your own (first party) data.

Make sure your provider leads with management of first party data, has experience mining both types of data to produce the types of insights you need for your campaigns, and can get that data quickly.  Data  management  platforms  aren’t  just  about  managing  gigantic  spreadsheets.  They  are   about finding out who your customers are, and building an audience DNA that you can replicate.

Making it Work
At the end of the day, it’s  not  just  about  getting  all  kind  of  nifty  insights  from  the  data.  It’s   valuable to know that your visitors that were exposed to search and display ads converted at a 16% higher rate, or that your customers have an average of two females in the household.  But  it’s   making those insights meaningful that really matters.
So, what to look for in a data management platform in terms of actionability? For the large agency or advertiser, the basic functionality has to be creating an audience segment. In other words, when the blend of data in the platform reveals that showing five display ads and two SEM ads to a household with two women in it creates sales, the platform should be able to seamlessly produce that segment and prepare it for ingestion into a DSP or advertising platform. That means having an extensible architecture that enables the platform to integrate easily with other systems.

Moreover, your DSP should enable you to do a wide range of experimentation with your insights. Marketers often wonder what levers they should pull to create specific results (i.e., if I change my display creative, and increase the frequency cap to X for a given audience segment, how much will conversions increase)? Great DMPs can help built those attribution scenarios, and help marketers visualize results. Deploying specific optimizations in a test environment first means less waste, and more performance. Optimizing in the cloud first is going to become the new standard in marketing.

Final Thoughts
There are a lot of great data management companies out there, some better suited than others when it comes to specific needs. If you are in the market for one, and you have a lot of first party data to manage, following these three rules will lead to success:

  • Go beyond third party data by choosing a platform that enables you to develop deep audience profiles that leverage first and third party data insights. With ubiquitous access to third party data, using your proprietary data stream for differentiation is key.
  • Choose a platform  that  makes  acting  on  the  data  easy  and  effective.  “Shiny,  sexy”  reports  are   great, but the right DMP should help you take the beautifully presented insights in your UI, and making them work for you.
  • Make sure your platform has an applications layer. DMPs must not only provide the ability to profile your segments, but also assist you with experimentation and attribution–and provide you with ability to easily perform complicated analyses (Churn, and Closed Loop being two great  examples).  If  your  platform  can’t  make  the  data  dance,  find  another  partner.

Available DMPs, by Type
There are a wide variety of DMPs out there to choose from, depending on your need. Since the space is relatively new, it helps to think about them in terms of their legacy business model:

  • Third Party Data Exchanges / Platforms: Among the most popular DMPs are data aggregators like BlueKai and Exelate, who have made third  party  data  accessible  from  a  single  user  interface.  BlueKai’s  exchange approach enables data buyers  to  bid  for  cookies  (or  “stamps”)  in  a  real-time environment, and offers a wide variety of providers to choose from. Exelate also enables access to multiple third party sources, albeit not in a bidded model. Lotame offers  a  platform  called  “Crowd  Control”  which  was  evolved  from  social   data, but now enables management of a broader range of third party data sets.
  • Legacy Networks: Certain networks with experience in audience segmentation have evolved to provide data management capabilities, including Collective, Audience Science, and Turn. Collective is actively acquiring assets (such as creative optimization provider, Tumri14) to  broaden  its  “technology   stack”  in  order  to  offer  a  complete  digital  media  solution  for  demand  side customers. Turn is, in fact, a fully featured demand-side platform with advanced data management capabilities, albeit lacking  the  backend  chops  to  aggregate  and  handle  “Big  Data”  solutions  (although  that  may   rapidly change, considering their deep engagement with Experian). Audience Science boasts the most advanced native categorical audience segmentation capabilities, having created dozens of specific, readily accessible audience segments, and continues to migrate its core capabilities from media sales to data management.
  • Pure Play DMPs: Demdex (Adobe), Red Aril, Krux, and nPario are all pure-play data management platforms, created from the ground up to ingest, aggregate, and analyze large data sets. Unlike legacy networks, or DMPs that specialize in aggregating third party data sets, these DMPs provide three core offerings: a core platform for storage and retrieval of data; analytics technology for getting insights from the data with a reporting interface; and applications, that enable marketers to take action against that data, such as audience segment creation, or lookalike modeling functionality. Marketers with extremely large sets of structured and unstructured data that go beyond ad serving and audience data (and may include CRM and transactional data, as an example), will want to work with a pure-play DMP

This post is an excerpt of Best Practices in Digital Display Advertising: How to make a complex ecosystem work efficiently for your organization All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher.

Copyright © Econsultancy.com Ltd 2012

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 Guidedownload the report here.