As retailers prepare to enter their busiest season – Q4 and the holidays – Akamai has announced its ADS predictive segments solution for online retailers who want to reach in-market consumers and drive incremental sales. The new product is part of Akamai’s Advertising Decision Solutions (ADS) line.
How big is the in-market opportunity? According to Akamai’s press release, there is significant scale:
“Akamai data shows that there are 30 million shoppers typically in-market at any given time. This data also reveals that every three weeks, roughly 80 percent, or 24 million new users, will come into market, replacing consumers that have exited the market.”
Akamai’s CTO and senior vice president of Advertising Decision Solutions, Mike Afergan, says this product builds on the technology and products of Acerno (acquired in late 2008), and particularly on the ability to cross-sell the solution to existing Akamai partners. Afergan believes the data cooperative shared among its retailer clients has lent to a more effective solution for the marketer, also.
The final piece to the predictive segments announcement is the “pixel-free” feature which was under development prior to the Acerno acquisition. So rather than 1×1 transparent pixels which can slow down a site or may not cover it completely as well as other issues, Akamai’s pixel-free technology means faster “time-to-live” for customers and less impact on site performance in addition to driving better ROI for marketing programs according to the company.
AdExchanger.com spoke to Afergan about the details of the announcement.
AdExchanger.com: How does the predictive technology work?
MA: Two key points. The first is the leveraging of the data cooperative by collecting data to identify users who are in-market right now and drive transactions for the retailer. There’s really nothing else like the predictive product we have in the marketplace today.
Second is the pixel-free component. Typically when you implement a program on a site, you place 1×1 transparent pixels. What we’re able to do, and given that Akamai delivers content for our retailers today, we can collect that data and information for them as opposed to doing it with pixels. Yes, it is done via the servers and the same data processing capabilities that Akamai has, but conceptually for the customer, and as we think about end user privacy and customer confidentiality, it’s done in a very similar way in terms of interaction with the user.
Do you see this as a solution to current concerns around user online privacy?
We don’t think this solution per se solves the problem, however, Akamai is a member of the NAI and we’re committed to working with the industry and our customers to advance approaches to privacy.
How does the retailer implement the predictive segments product?
It’s a very straightforward value proposition. Retailers think about this as a CPA-based media buy on the Acerno network that Akamai owns and operates. Any retailer who is interested in driving in-market consumers can think about placing a CPA media buy on the Acerno network and we’ll do the behind-the-scenes work and make sure that their banners go in front of in-market consumers.
Can you talk about what media you’re buying?
The Acerno network buys from Comscore 500 and, more specifically, Comscore 250 websites – high quality inventory. For our customers, it’s most important that we identify the in-market customers which we can drive back to the retailers’ sites.
How does Akamai’s predictive segments offering relate to the competitive set – specifically BlueKai and eXelate?
Those companies are taking a different approach to data. We’re uniquely building a data cooperative whose aggregate power has a unique, compelling result that provides high-performing audience at scale for our customers.
From our perspective, anything that is helping to drive audiences not impressions for this class of marketers is something that marketers should be considering.
How does the revenue model work?
Our customers pay us on a CPA basis. They pay us only when a transaction occurs.
We think that having a performance-based offering in the marketplace is important given the recent economic conditions.
What are the challenges of a technology company entering the media business?
We’ve always been in the media business to varying degrees across our businesses. The opportunity really starts with our customers who want us to help them do more in terms of the solutions and services that Akamai offers – it’s a natural extension. And with the pixel-free solution, we’re able to perform qualitatively better than the solutions in the marketplace today which resonates with the marketing and IT groups at our customers.
How can agencies work with this product?
From our perspective, Akamai sells to and works with anybody who is trying to drive incremental transactions to an e-Commerce website. We work direct with retailers, when appropriate, and directly with agencies who represent them.
Do you think there is an opportunity down the road for demand-side platforms (DSPs) to buy Akamai’s predictive segments where, in effect, the retailer would be reselling their data to these DSPs?
Clearly evolution of how media is bought and sold is ongoing and becoming increasingly efficient, where audience is bought not impressions. We’re keeping an open mind as to how the ad ecosystem evolves and how it might fit for our customers over time.
Does this announcement signify the realization of the Acerno acquisition at Akamai?
I think there are a couple of pieces that have already been realized as growth has continued this year which includes the cooperative. And, we’ve cross-sold to existing Akamai customers which is a key business benefit. But, clearly “pixel-free” is one of the key benefits and that’s what we’re announcing today.
