RSS FeedArchive for the ‘One Question’ Category

How Can House Ads And Oversupply Of Display Work Together Effectively?

One QuestionOften, a question doesn't have an easy answer in the digital advertising business. This is a column devoted to an answer to a single question or topic - and providing a bit of space for it.

Today's participant is Jeff Green is Founder and CEO of The Trade Desk, a demand-side platform technology company. He recently answered one question in a conversation with AdExchanger.com.

AdExchanger.com: Using your buy side perspective, how can the concept of house ads and oversupply of display work together effectively?

JG: First, I don't think most players in the space understand the economics, so that's where we should start. We have to explore the oversupply problem first. Then we can address the house ads portion of the question.

At a macro level, there is much more supply than there is demand. And as a matter of economic fact, that creates a buyer's market.

While many publishers don't understand that, some do. Many of those that get it have in the past been worked hard to prevent RTB and exchanges from ever being successful.

More generally, they've been avoiding the enablement of price discovery. They've been avoiding ever becoming open and transparent. There are a lot of publishers that are terrified that the world will find out that there's a massive discrepancy between supply and demand, and that there's a massive discrepancy in terms of CPM clearing prices between premium and remnant inventory (or "discretionary inventory", or whatever they call it next). And of course, the performance divide between premium and remnant may be quite a bit smaller than the CPM prices would indicate.

Admittedly, publishers have been rightly and justifiably concerned about rate cards, data protection, channel conflict, hurting their own sales teams, and most of all hurting revenues and margins that are already tighter and lower than many businesses can tolerate.

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What Does 'Demand-Side Platform' Mean To You?

One QuestionOften, a question doesn't have an easy answer in the digital advertising business. This is a column devoted to an answer to a single question or topic - and providing a bit of space for it.

Today's participant is Jeff Green is Founder and CEO of The Trade Desk, a demand-side platform technology company. He recently answered one, make that two, questions in a conversation with AdExchanger.com beginning with...

What does DSP (demand-side platform) mean to you?

JG: Let me start by saying that one of the unfortunate things about ad technology is that we ruin words. I was in the middle of this before when I created the first ad exchange (AdECN) in 2004. We went out into the world and said, "We've created an ad exchange and we're fair, neutral and transparent - and we run an auction for every impression."

Then suddenly, that idea took hold. Before I knew it, there was no longer any distinctions (at least in powerpoint) between ad networks and ad exchanges.  And nearly every ad network transformed into either an exchange or a marketplace, or something other than an ad network. The word “exchange” started to become diluted. We then had to open every sales conversation with, "Let me tell you about our type of exchange." We would oscillate between saying, "Our competitors are not exchanges," to "They're a different kind of exchange."

So, in 2012 it is now 2006 all over again, except that instead of us squabbling about the term "ad exchange," we're diluting the term DSP, which has come to mean something other than a demand-side platform. Instead it's come to mean,  "I plug into RTB (real-time bidding) inventory and I get access to the exchanges."

There are often a variety of business models built on top of that – such as arbitrage focused business that are operating on 50 percent margins and offering little transparency – which I would argue is a business model that is closer to an ad network.

I’d argue that more often than not, most so-called DSPs are an outsourced agency, or they are a new type of ad network. Some DSPs have more service layers than they do technology—and their margins, their staffing, and sales pitch certainly do not lead with “platform.”

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What Is The Future For Display Advertising?

One QuestionOften, a question doesn't have an easy answer in the digital advertising business. This is a column devoted to an answer to a single question or topic - and providing a bit of space for it.

Today's participant is Dave Morgan, who is CEO of Simulmedia, an ad technology company focused on the addressable television market. He recently answered a series of questions about the future of display in a conversation with AdExchanger.com...

AdExchanger.com: You’ve started Tacoda, Real Media (which later merged with 24/7 Media) and been deep in the display ad space. What do you think is going to happen with display in the future?

DM: [To preface] for the last three years, I've spent almost no time around display advertising. But someone asked me recently what I thought about the future of display advertising and I used it as a moment to reflect.

I tried to think of what the next five to seven years holds and, "What things are certain in display advertising" -which led to "We're going to see more page views and more impressions."

And then, "Where's that growth going to be?" –which led to "Five or so years ago Facebook had zero impressions and today it represents almost 30 percent of the page views in the United States - and outside of the United States too."

I don't see that slowing down as a network effect. In the next five to seven years, Facebook is going to represent more than half of the web page views on the Web.

Then I thought about advertising. Let’s just say that web display advertising today is $13-14 billion annually in the United States. We probably think that in the next five, six years that's going to grow to $25 billion. An $11-12 billion increase.

Today, Facebook represents about $1.5 billion of that. In five years, where's Facebook going to grow? Most people think that in five or six years Facebook is going to grow to a 10 billion dollar advertising company. If you control something between 30 to 50 percent of the Web’s pages, you can expect your business to grow [similarly], particularly because media has a U‑shaped pricing curve.

It significantly advantages either companies with massive scale or really tight, very valuable, niche audiences. If you don't have a lot of scale you start coming down in the U. But you come down very fast. If you're a tweener, you have very low per unit value.

Then if you're very niche-y, like high‑end business to business, you can be very valuable.

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What's The Biggest Challenge For Search Marketers When It Comes To Display Advertising?

One QuestionOften, a question doesn't have an easy answer in the digital advertising business. This is a column devoted to an answer to a single question or topic - and providing a bit of space for it.

Today's participant is Chris Lien, CEO of Marin Software, an advertising platform technology company. He recently answered a series of questions in a conversation with AdExchanger.com beginning with...

AdExchanger.com: What's the biggest challenge for search marketers when it comes to display advertising?

CL: The main challenge for search marketers with display advertising is that they come at advertising from a different perspective. Search advertising grew from a direct marketing or direct response perspective where you were driving a consumer or a business to take a direct action such as purchasing something or fill out a lead form. There was almost no branding, if you will, or tracking of influence done by a search marketer.

Display is online television at its roots and, in terms of an influence medium, offers a branding opportunity or creates awareness. It has been a distant goal of display advertising to drive direct response - or a specific action – and, generally creates awareness in a person that later could take action -they would be influenced by the ad impression that they had viewed.

Those are fundamentally different perspectives and at the core of what is challenging both for a search marketer, and then similarly for display folks when they talk to search marketers. Display is more focused, in general, on influence and less on driving specific action. Therefore, it can often seem like the two groups are speaking different languages.

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What Are The Characteristics Of The Ideal Startup Employee?

One QuestionOften, a question doesn't have an easy answer in the digital advertising business. This is a column devoted to an answer to a single question or topic - and providing a bit of space for it.

Today's participant is George John is CEO of Rocket Fuel, Inc., an online advertising network. He recently answered the following the question in a conversation with AdExchanger.com...

AdExchanger.com: What are the characteristics of the ideal startup employee?

GJ: First, let me start with this vibe that exists in Silicon Valley.... and some guys that talk about The Lean Startup. Eric Ries came up with it.

I think The Lean Startup misses what I think is the right approach, which is that it's more The Scientific Startup - or a series of experiments and you'd have to have some idea of decision analysis around those. Like which experiments do you want to do versus which bets are you comfortable making? There's really no way to test it besides building it, and that's not a lean operation.

So in terms of the ideal employee in that framework, in my experience, there are different classes of roles within the startup that require either energy or expertise in different mixtures.

For example, really smart people can be told how display advertising works and they’ll be very creative at architecting solutions for some of our customers.

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What Aren't Publishers Getting About Real-Time Bidding Today?

One QuestionOften, a question doesn't have an easy answer in the digital advertising business. This is a column devoted to an answer to a single question or topic - and providing a bit of space for it.

Today's participant is Andrew Pancer, Chief Operating Officer of Media6Degrees, a social targeting, advertising company. He recently answered the following question in a conversation with AdExchanger.com beginning with...

AdExchanger.com: What aren't publishers getting about real-time bidding (RTB) today?

AP: Publishers think that RTB is deteriorating their revenue streams. In reality, with the right focus and strategy, RTB can be a very effective way to increase yield as well as gain valuable insights to help influence direct sales strategies.

The market for display advertising is bifurcated today. There are direct response campaigns and branding campaigns, and clients plan for them in very different ways. Ad networks and publishers are expected to deliver results using different objectives for each.

Publishers have amazing tools at their disposal for attracting marketers, including video, mobile, rich media, sponsorships, site sessions and takeovers. Many also have the capability to marry online and offline integration into a compelling package. These are the things that make their offerings special and unique.

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What Is The Impact Of The Private Exchange World Today?

One QuestionOften, a question doesn't have an easy answer in the digital advertising business. This is a column devoted to an answer to a single question or topic - and providing a bit of space for it.

Today's participant is Matt Greitzer is Co-Founder and COO of Accordant Media, media buying and optimization company. He recently answered a series of questions in a conversation with AdExchanger.com beginning with...

AdExchanger.com: What is the impact of the private exchange world today?

MG: The biggest is overall impact is positive.  What I've seen with private exchange announcements from Weather.com, quadrantONE, NBCU and others is that major publishers now viewing exchange‑traded media as a legitimate sales channel, not as an afterthought or as something to be afraid of.  These publishers are actually building a strategy around “uncommitted” inventory in which exchange-traded media is primary.  From the buy‑side perspective, this is a very good thing because it means that there's going to be more inventory and there's going to be more inventory from established, well-known publishers with whom major advertisers are comfortable transacting.

The main drawback, coming from somebody who's looking for buy-side opportunities, is that private exchanges take a lot of the inefficiency out of the market. As publishers get more and more control over how they manage their exchange-traded inventory, it’s going to be less and less of a buyers market.  But, so be it. That's the way the landscape is going to evolve. Most buyers who aren’t focused solely on the arbitrage opportunity are perfectly happy to work in that environment.

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If You're A Publisher Today, What Are Your Data And Ad Exchange Strategies?

One QuestionOften, a question doesn't have an easy answer in the digital advertising business. This is a column devoted to an answer to a single question - and providing a bit of space for it.

Today's participant is Scott Knoll, President, Datran Media’s Aperture business. He recently answered the following question during a conversation with AdExchanger.com...

AdExchanger.com: If you're a publisher today, what are your data and ad exchange strategies?

SK: If I'm a publisher, it's a real challenge right now because every RFP from an advertising agency asks for some sort of audience targeting, and audience targeting is typically defined as someone who is actually in market for some type of product or service.

As a publisher, in order for me to give them what they want, typically I need to use a third party aggregator of intent data. Whereas I can cut a deal and do that, it really puts me in a tough spot. I lose control of my audience.

If you think about how important an audience is, it goes back to the days when I was at Time Inc. and "Time" magazine. In those days it was all about the "Time" magazine reader. Our value was the collection of readers who came to our publication.

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Regarding Misconceptions About Data For Ad Targeting

One QuestionJason Lynn is Chief Strategy Officer of interclick, an online advertising company.

Lynn is responding to Hooman Radfar of Clearspring who authored a One Question piece recently - "What Is The Biggest Misconception About The Use Of Data For Ad Targeting?"...

Leaders in the data targeting business uttered a collective 'Amen' to Hooman Radfar’s assertion that many data types and sources have to be considered for any marketing campaign.

Mr. Radfar’s comments address a common misconception in the industry.  Too often, marketers approach their online data in the exact same manner that they do offline data yet these data sets are fundamentally unique and should be treated as such.   It’s a familiar scenario - a marketer insists on a specific audience strategy based on an offline segmentation model.   Consequently, the campaign results show no lift over campaigns which do not use data, leading the marketers to conclude that "data doesn't work." There are few instances where data minimally benefits a campaign; however, nine times out of ten, the problem is improper selection of the audience data or an inappropriate audience selection process which stems from “traditional” marketing analytic practices.

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What Is The Biggest Misconception About The Use Of Data For Ad Targeting?

One QuestionOften, a question doesn't have an easy answer in the digital advertising business. This is a column devoted to an answer to a single question - and providing a bit of space for it.

Today's participant is Hooman Radfar, CEO of Clearspring, which provides content sharing platform AddThis. He recently answered the following question during a conversation with AdExchanger.com...

AdExchanger.com: In terms of data, the use of data and ad targeting, what would you say is the biggest misconception out there?

HR:  Where do we start?  All joking aside, there are so many misconceptions.  This is a relatively new and rapidly growing area.  Things are changing fast.  That said, I would say the single biggest misconception is thinking that one particular data type is the answer.  And here’s the punch line – it’s not.

I remember when search retargeting first came out.  People said search is all you need – it works for Google, right?  Search is a powerful signal of intent.  But all things being equal, if you were to say, “I'm only going to use search data - I'm going to eliminate all other data that could give me indication on purchase signals – that just doesn't make sense.”

So you have these companies, whose entire thesis is built around a particular data type. Advertisers and agencies need to think longer term.  I'm not arguing that the entry positions of single-data point companies doesn’t make sense, or even that their data is not incredibly valuable.   Everyone is evolving.  But to just hinge your long run targeting methodology on a single data type is simply myopic.

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