RSS FeedArchive for the ‘Data-Driven Thinking’ Category

Should Every Agency Build A Trading Desk?

brian-stempeck-ddt“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Brian Stempeck, SVP of Strategic Business Development at The Trade Desk.

About three times a week, I hear the same question from presidents, media directors or technology directors of various mid-sized agencies: “Should we be building an agency trading desk internally?”

It’s a very real strategic question a lot of agencies face right now. Here’s how I’d weigh the decision.

What’s The Business Case?

A quick look at the financials of a publicly traded ad network makes a pretty strong case for why agencies are considering bringing media in-house. Take Interclick, for example, prior to its acquisition by Yahoo. In 2010, Interclick logged $101 million in revenue. Of that, it paid $58 million to publishers, leaving $43 million in gross profit, or a whopping 42.6%. Dang! Most agency media teams I know aren’t charging fees anywhere close to that, and even fewer realize how profitable their IOs have made the ad networks.

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I Like You, But Not In That Way

marc-grabowski-better“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Marc Grabowski, Chief Operating Officer of Nanigans.

A parade of limousines filled with elaborately dressed high-schoolers is a sure sign that prom season has arrived. The season evokes memories of confusion and awkwardness. Whether it happened to you or one of your friends, there's no doubt you are familiar with at least one prom crash-and-burn in which someone asked that special someone else to prom, only to elicit the dreaded response “I like you…but not in that way.”

You (or your friend) misinterpreted signals and bet everything on bad data. Worse yet, you (or your friend) lost precious time courting the wrong person while alternative dance cards filled up quickly.

This is the same fate that digital advertisers face every day.

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Tech Barriers To A Level Programmatic Playing Field

dinazelikson“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Dina Zelikson, Digital Program Manager at Bluestem Brands.

Few in the ad industry would deny these trends: RTB-eligible inventory growth is meeting with rising advertiser spending in programmatic; the potential to harness data via new technology and system integrations is augmenting ad relevance; and the growing presence of new media formats like video and mobile is fueling additional investment in the RTB space. Also, advertisers and publishers alike recognize the opportunities for increased efficiency in the programmatic direct realm. Momentum is pushing the industry forward with programmatic display.

Embedded in the many areas of consensus, however, lies a major point of disagreement. The reality is that programmatic direct (auto-traded direct sales) and programmatic guaranteed (private exchange and reserved) remain an emerging space. The majority of auto-traded inventory continues to live within the realm of open RTB. And the question that gives rise to some contention is “Are both sides of the industry equally equipped to benefit from the rising trend of programmatically traded media?”

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Changing Lanes: Solving the Decade-Old Problem of Cross-Channel Ad Attribution

kim-reed-perell“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Kim Reed Perell, CEO of Adconion Direct.

Recent debate surrounding deficiencies in today’s media attribution models is a positive indication that the industry is finally ready to move forward from its antiquated, decades-old measurement system. In theory and in concept, most agree that our rapidly changing media landscape demands a more dynamic, comprehensive value system. Yet we are still too far from a “perfect world” to realistically apply fractional attribution models across all types of media.

Ad attribution is not a new concept; for years, industry leaders have analyzed exactly what it means and how the concept can reach its potential. But now that the industry is ready to take this discussion to the next level, I’d like to address the real roadblocks preventing us from switching to a new system, discuss why these inefficiencies still exist in 2013, and propose a realistic solution to start improving them.

For most companies and digital marketers today, fractional attribution across multiple touch points and channels – or the idea of distinguishing the impact that each touch point plays in the success of an advertising campaign – is simply an academic dream. In reality, advertisers are still struggling to even recognize view-based attribution credit, which six years ago became the next advancement above last-click attribution.

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The Cookie Is Crumbling: What’s Next?

andrewshebbeare“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is by Andrew Shebbeare, Founding Partner and Global Chief Strategist at Essence.

Don’t worry; I’m not planning to reprise the old debate over whether data is good or evil here. I assume this audience sides mostly with the argument that using data to make ads better for informed, consenting audiences is A Good Thing. Instead, I want to talk about how we might try to fix the rapid erosion of our common currency, the humble cookie.

Our industry is among the most innovative on the planet. The speed with which the face of advertising has changed is bewildering – a testament to the power of free enterprise and accelerated competition with good information. On the other hand, we have a pretty poor track record in standardization or creation for the common good. Throughout the 13 years I’ve been lucky enough to be in the business, it has been awash with complaints about standards – including ad specs, viewability, GRPs, Do Not Track and so many more.

The one thing on which we’d been mostly able to agree was the basic building block of our data ecosystem – the cookie. Yet we can take no credit for inventing this standard; the cookie was never designed with advertising in mind. It was an accidental gift to marketers, one with which we made hay until “cookie” became a dirty word.

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Viewability Guarantees: Missing the Forest for the Trees

adrian-t-dataxu“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Adrian Tompsett, Vice President of Business Development at DataXu.

It’s been a busy couple of months for the emerging viewability metric.

Here’s a small sample of headlines:

Many marketers are also jumping on the bandwagon to dictate that they only pay for viewable impressions. This appears to be an entirely rational move, right? If my ads are not seen by consumers, then I won’t pay for them. With this policy in place, my marketing spend by definition will be more effective. Or will it?

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What Candy Can Teach Us About Digital Advertising

michaellowenstern“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Michael Lowenstern, Managing Director of Digital Advertising for R/GA.

Around last Christmastime, I was listening to one of my favorite podcasts, NPR’s Planet Money. The topic was – and I paraphrase – “Why Economists Hate Christmas.”

The economist being interviewed explained his argument: When buying something for yourself, you know what you want, you go out and find it, and you exchange money for it. The amount you exchange is generally equal to your perceived value of that item; presumably, you wouldn’t have bought it otherwise. But when buying a gift for someone else, you could exchange $50 for something that has no value to the person receiving the gift – like a toaster or a Power Ranger. That inherent value disequilibrium actually has an economic term: deadweight loss.

Like everyone else probably  listening to that podcast, I started thinking about display advertising. It’s a natural leap.

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Don’t Overlook The Potential Of Connected TV Advertising

billschild“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
 Today’s column is written by Bill Schild, SVP of US Marketing at Specific Media.

The smart TV market is on the cusp of explosive growth. In 2012 the number of US homes with connected TVs grew more than 25% to nearly a quarter of all US households, according to an eMarketer study.

With the rise of smart TVs, customers can choose how and when they want to enjoy digital video content, making them more engaged and aware than traditional TV viewers. Changing purchase trends and consumption behavior in the TV space offers brands unique ways to engage with captive audiences through a variety of connected TV advertising opportunities. Despite this, many advertisers have yet to harness the full power and reach of smart TVs. The slow adoption of connected TV advertising is driven by two main issues: the lack of industry standardization for advertisements and limited content available on smart TVs.

But before I delve further into those challenges, let me talk a bit more about the potential of connected TV advertising and why marketers should care about this missed opportunity. Smart TVs are being embraced by a savvy and diverse group of consumers. The growth of US homes with Internet-connected TV, rather than cable or satellite TV, is evidence that consumers’ approach to digital viewing parallels their Internet attitudes; consumers expect to find and access everything where and when they want it. Meanwhile, the popularity of subscription video streaming apps such as Hulu and Netflix has given rise to new ad-supported services ideal for consumers who don’t mind watching ads in exchange for free and good digital content.

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Search and Display: A Lesson In What Works

frostprioleau“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Frost Prioleau, CEO of Simpli.fi.

Search advertising is widely considered to be the gold standard of online advertising. One measure of success is that search has achieved recurring line-item status in the advertising budgets of almost all major advertisers. Another measure is that despite consuming only 4% of consumers’ time online, search accounts for 46% of internet ad revenues, according to the IAB Internet Advertising Report. Display, on the other hand, generates only 33% of Internet ad revenues, despite consuming almost all of the remaining 96% of time that users spend online.

While highly successful, search does have some significant limitations. Limited frequency is one issue, in that advertisers only have the opportunity to communicate with prospects at the time of their search. Another issue is search’s limited effectiveness as a branding tool, as search ads consist of several lines of text, mostly without graphics or animation.

This is where display advertising enters with its broad reach, high frequency and wide-ranging graphical capabilities. Exchange-traded display, real-time bidding , demand-side platforms and the like have the potential to combine the effectiveness of search with the reach and brand impact of display. But display still has a long way to catch up with search in terms of advertiser spend.

So what lessons can display advertisers learn from search to become effective and attract more budget? Here’s a look at a few of the most important lessons.

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Buy It Now: Changes Needed To Improve RTB Valuations

casale-ddt“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is by Andrew Casale, VP Strategy, Casale Media.

What’s an ad impression worth? That question remains surprisingly difficult to answer when it comes to real-time bidding. On our exchange with connected demand-side platforms, we’ve seen bids within the same auction for the same impression range from one penny to $999.99. The perceived value of these impressions is all over the map. And would-be buyers who are outbid never find out which price ultimately won the impression they attempted to buy, thus raising a huge barrier before the alignment of bid prices with market demand.

Improving today’s system of price discovery is imperative if we want to continue enjoying torrid growth rates in the RTB marketplace.

To dive a little deeper, less than 5% of the auctions we run have a second bid within a penny of the winning bid price (e.g. $2.50 vs. $2.51). That would be a sign of a positive valuation curve in which those in the market mutually agree upon the approximate value of an impression. By contrast, in our auctions the winning bid price is quadruple that of the second highest bid (e.g. $1.00 vs $4.00) an eyebrow-raising 40% of the time, underlining the lack of agreement on appropriate valuation.

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