Online and Offline Data Used Together Yield Best Results Says Datran Media SVP Of Display Knoll

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Scott Knoll of Datran MediaScott Knoll is SVP of Display Media for Datran Media, a digital marketing technology company.

AdExchanger.com: What trends is Datran Media seeing from its digital media clients in 2009?

SK: Datran Media monitors and reports on trends across media clients and advertisers, including responses to our annual industry survey. One of the biggest trends we have seen this year is the need for campaign-based measurement. Media clients have understood the importance of targeting for a while, but now they are demanding ways to measure and verify targeted audiences on a campaign by campaign basis. Rather than just knowing the number of unique users and click rates, marketers need insights into the makeup of their audience and responders. This becomes increasingly important as marketers shift from targeting specific sites to targeting users on exchanges based on recent behaviors, characteristics or third party data.

Can you describe momentum for Datran Media this year?

Datran Media continues to grow. As revealed by our steady stream of press releases and the high volume of media attention we attract, Datran Media has strengthened our management team, signed on a blue chip roster of new agency partners and clients and increased the depth and breadth of the services and solutions we deliver. Most notably, we launched Aperture Audience Measurement in early 2009, which I believe will significantly change the way people utilize online media going forward. Okay I am biased, but I definitely recommend checking it out.

Revenues, deal size, vertical strengths, product interests, etc.?

As a private company, Datran Media does not disclose revenue information. However, we are growing, we are profitable and the size of our average deal is increasing. We have also expanded our product footprint across verticals. One key product move you will notice is the integration of our Aperture Audience Measurement and Reporting across other Datran Media channel offerings like our StormPost email marketing and monetization platform.

Can offline data compete in effectiveness with online data for online advertising campaigns? Which is better for audience targeting online?

I believe that online data and data derived from offline sources can each be effective, but we have found that when used together they yield the best results. Although online behavior can be a great indicator of interest and help to drive clicks or leads, it doesn’t always do a good job of differentiating between window shoppers and serious buyers. As online marketing programs are becoming more sophisticated and changing focus from just driving leads to targeting quality leads and high lifetime value customers, online data by itself is often proving less than adequate. Let’s face it, anyone with a computer and online access can do a search for “BMW 5 Series” with one click. Most online data platforms will forever categorize this user (as well as his 100 closest friends on Facebook and anyone who goes to similar websites) as a target for BMWs and other luxury goods regardless if he has the legitimate means to purchase the car. Thus this data can be very misleading. Data derived from offline sources can quickly help differentiate the true luxury car buyers from those buyers who have more modest spending patterns. Ideally a marketer will leverage both sources to maximize success.

Data derived from offline sources adds value to online marketing for several reasons. First, it’s not based on assumptions built on sites visited or self reported data and thus much more accurate. Second, it encompasses a lot more sources and thus is much broader in scope and applicable for more categories of products and services. Finally, the offline data companies typically have strong reputations with well established and transparent methodologies. If you are trying to build a brand image with luxury goods buyers would you rather target users who recently bought luxury goods in a retail store or target users that surf similar websites to one user who said that she had a high income in an online survey (in exchange for the chance to win a free ipod)? You get the picture.

With Aperture's focus on data, and Datran's overall concentration on performance marketing, it would appear that you were ahead of the curve when anticipating the move towards audience targeting vs. site targeting. What were the reasons for Datran's focus? What refinements can still be made?

Datran Media has always been very successful at performance marketing due to the fact that it realized early on the importance of data. In fact the name Datran is a play off of the words data and transaction. Ironically, when I came to Datran in 2007 to build an online display business, I planned to leverage Datran’s unparalleled data, but performance was a secondary thought to me. I firmly believed (and still do) that most online marketing was too focused on measuring clicks and conversions and the bigger opportunity was in finding a way to help brands more effectively reach their target audience online. I felt that if we could show brands specifically who their messages were reaching through audience targeting and reporting based on “real” data, we could convince them to shift more money from mass media like television to the web. In short, our goal was to build the best reporting platform the web had ever seen rather than a solution geared towards performance marketers. Fortunately we succeeded in creating a revolutionary audience measurement platform that truly helps marketers to understand who is seeing their messages. At the same time, Aperture also helps performance marketers to understand specific data elements that are highly correlated with desired actions such as clicks or conversions and to target more effectively using only the best performing data. So in the end, performance marketers will love Aperture as much as brand focused marketers and will likely drive much of the growth in the near future. More importantly, when big brand marketers are ready to shift the really large budgets online, Aperture will provide them with a rich analysis of the specific types of consumers and households they are reaching with their campaigns and effectively match this with engagement metrics.

Audience targeting is one part of the optimization pieces. How should a marketer manage the creative side? Considering its impact on performance against different behavioral, transactional and/or demographic silos, it's difficult for a marketer to know whether to continue fishing or cut bait, correct?

Traditional optimization compares the relative click or conversion rates of the various creative elements across a campaign and gives the majority of impressions to the ones that have the highest rates. Using Aperture Audience Measurement we have found that certain creative ads definitely work better for users with certain demographics, transactions or behaviors. In the simplest example, an ad with an older couple gets a better response from an older woman than an ad with a young couple. Whereas this seems like a basic concept, the reality is that it’s not easy to put this into practice in a scalable way online and most marketers optimize creative in a vacuum and show the best performing ad to everyone regardless of age or interests. It’s difficult to execute because accurate audience data and dynamic campaign analytics are hard to find. This is changing rapidly and as tools like Aperture give marketers creative analysis by behavior, transactions or demographics, marketers are starting to optimize creative by audience and truly get the right message to the right person.

What takeaways do you have from your days as VP/GM of Marketer Solutions at DoubleClick that you use today with Datran's display strategy?

I was fortunate to work at DoubleClick for almost six years and spent much of my time introducing new concepts such as online advertising networks, re-targeting and third party ad serving technology in the US and around the globe. DoubleClick often seemed to be a little ahead of the curve with its products and our job was as much about teaching and evangelizing as it was about selling. This took patience, but in the end the strategy prevailed. I find myself in a similar role today. Aperture’s campaign based audience measurement is really a first of its kind solution and provides a marketer with a myriad of insights into who is viewing and interacting with its ads. Seeing this data for the initial time can be both exciting and daunting for a marketer and often needs to be vetted by research, analytics, strategy and media planning experts in a single firm. Fortunately, Aperture appears to be the right solution at the right time based on our successful engagements to date. I know from my past that being first to market with something significant will pay off with the correct approach and I can thank my experience at DoubleClick for giving me the roadmap for bringing a new concept to market.

What milestones should we look for that tell us the display ad exchange model has taken hold and is a significant new tactic for online advertising?

The reality today is despite the fact that everyone is talking about buying and optimizing ad campaigns via exchanges, online marketers still spend a majority of their money targeting contextually and the much of the exchange activity is actually driven by ad networks. There are several reasons for this including lack of scale, lack of quality and transparent inventory, lack of education and the fact that it is simply easier to buy from a site or network than it is to try and bid through exchanges. New tools are addressing each of these obstacles, which will help, but until they are readily available exchange buying will still be a niche tactic or a way for networks to quickly scale up and down. In terms of milestones, I think exchanges start to become significant when more than a handful of agencies begin buying media direct for their clients.

Is RTB (real-time bidding) and demand-side optimization an important development? How will Datran Media take advantage of the coming RTB feature?

RTB is definitely interesting to us. Aperture’s targeting solution leverages the multitude of online and offline data we have to reach specific audiences (e.g. single women with children). Exchanges often provide us with the most scalable way to find Aperture cookies with specific characteristics. Whereas our data is very predictive, the best optimization strategy combines other factors such as click history, frequency and placement. Without RTB we can end up with a lot of waste as we pay the same for every cookie and throw out the impressions that don’t have a high likelihood of success. RTB effectively allows us to control waste by dynamically bidding based on the predictive value of a particular cookie.

Your ad network product, NetMargin, has a compliance module call "Brandshield." It would seem that compliance will be part of the exchange model. Do you see opportunities for compliance providers in the exchange space whether for conversion tracking, brand safety or other possible compliance data points?

In addition to NetMargin’s Brandshield compliance solution, it’s notable that Datran Media also operates a compliance company and integrates it across all the solutions under its corporate umbrella. I do believe that integrating compliance into exchanges is absolutely essential. Internally, we work closely with and look towards our Chief Privacy Officer to provide guidance on how and what to do to automate and advance compliance across our product offerings.

How is Datran Media tackling attribution on behalf of its clients? Is accurate cross media attribution possible or will it be?

Cross media attribution is a complex challenge that won’t be solved in the near term. Most companies I speak with are still trying to reconcile the results of their display and search campaigns and haven’t yet begun to think about including offline channels. Our approach has been to try to focus on demonstrating the effect of online brand advertising on offline sales. We of course can’t do this at the individual level for privacy reasons, but can match advertising activity at the zip code level to growth in individual retail store sales for specific advertised products. So far the results have been very helpful in demonstrating the power of online marketing to drive offline sales.

Follow Datran Media (@datranmedia) and AdExchanger.com (@adexchanger) on Twitter.

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