Andy Monfried is CEO of Lotame, an advertising technology company.
AdExchanger.com: Lotame is on the Comscore list of ad networks? Overall, how do you position and differentiate Lotame today?
AM: That’s a great question, and the answer is: It depends. For example, some agencies work with us as a one-stop shop for media procurement, creative development, and ad delivery. In those cases you might call us an ad network (or an agency trading desk!). In other scenarios, our clients use our platform in a self-serve fashion in order to build their own data network. You might call that a Data Management Platform (DMP). However clients want to work with us, we offer a superior way to organize otherwise unstructured publisher data in a way that makes true audience marketing possible through Crowd Control, our platform.
Please share a use case of how the co-op works for a publisher. What are the revenue implications from both a data and media perspective?
A publisher can work with Lotame by participating in the media co-op, by entering the data audience marketplace, or by using our Data Management Platform (or any combination). Right now, the greatest revenue implications for publishers come from the media co-op, because that is still where most ad dollars are spent today. However, the data market has evolved quickly, and as a result, we are seeing much higher demand for data that is purchased separately from media.
But what is that data? It’s not intender data. The overwhelming majority of publishers today don’t have a commerce engine, nor are they the point-of-purchase departure that you find through search. But to say that intender data is the only valuable data in this ecosystem is nonsense. For intent to exist it must first be sparked, and sparking intent is exactly what most publishers do. As a result, we’re investing significant resources in building easy-to-use audience-building tools and audience and data revenue analytics for non-purchase intent publishers so that they can aggressively partake in the new data and audience ecosystem.
Who is in your target market today? (marketers and publishers)
We have 4 lines of business:
- For marketers, we provide audience insights and a way to seamlessly integrate Crowd Control into their audience marketing programs.
- For agencies, we provide a vertically integrated data/media/creative solution.
- Our data solutions business supports buyers (e.g. holding company trading desks) who are comfortable with separating and reforming discrete data and media assets.
- Finally, publishers who have seen the audience economy take off in the past 2 years, and want to participate and add significant revenue to their bottom line, are ideal partners for our technology.
Lotame, like some others, offers above-the-fold targeting. Can you quantify what you're seeing in terms of performance improvements with above-the-fold? How does this affect scale of a campaign?
We don’t believe in the fold. One of our earliest inventions was InView, which measures the amount of time a reader is exposed to an ad. Time measurement renders fold position useless: Either an ad was in view, or it wasn’t. Having said that, I don’t believe that we as an industry are in a place yet where there is a consistent measurement method for ad exposure. If there was, I think we’d see an even greater influx of dollars, because time spent equals real frequency, as opposed to presumed frequency when an ad call is executed (no matter where that happens on the page).
Any trends you can share about Lotame's client business this year?
We’ve always had strength in CPG and entertainment, and those deal sizes continue to grow. Politics is an intriguing growth area and ideally suited for our solutions.
Publisher CPMs have held steady despite the rocky economic environment, and in some cases are rising as a function of data contributions to our data marketplace.
The other trend: marketers embracing technology. The marketers with whom we speak understand the ability to segment audiences in ways they couldn’t before. We’re showing marketers how they can use Crowd Control for data segmentation, activation, and insight.
Discuss how you're transparent with your data offering. Also, how does Lotame identify age and gender accurately in its datasets?
Lotame is able to show precisely how every single audience is created for its data offering. We can show what behaviors or categories are included in an audience, the recency and frequency of each behavior in that audience, and where that behavior comes from. Bottom line: there are no black boxes, and we challenge our competitors to be just as transparent when pitching audience solutions.
Our age and gender data comes from registration data, so it is very accurate. From time to time we hear the “oh, reg data isn’t accurate, it’s just a way for people to get free stuff.” In fact, the opposite if true when working with some of our partners who operate social networks or other online communities: if you’re a 42 year old male, you’re not going to lie to your former classmate or friend that you’re a 24 year old female.
How many employees is Lotame today? Profitable? Another round of funding any time soon?
We’re just shy of 60 employees. As a private company we hold our financial cards close, but we have a healthy business, cash in the bank, and are primed for explosive growth across all lines of our business.
Overall, where are we in the evolution of the ad network model today?
The old ad network model encompassed single, direct publisher relationships for media and data procurement. Ad networks today must use a multi-faceted, multi-partner, multi-tiered approach in order to acquire data and media. Managing this new approach can become very complex — and perhaps impossible, if the next-generation ad networks do not have the proper technologies and processes in place.
Where do you see potential internationally? Don't privacy concerns preclude moving into certain countries given Lotame's data-centric focus?
We recently opened our first office in the U.K., and are seeing business-development interest from Japan. Certainly we are mindful of privacy guidelines internationally, and will adjust our deployment approach accordingly.
What success metrics are your clients using today? What do you recommend?
I’ll address this from the marketer/agency perspective: Each client has a different objective, so success metrics vary. Those who look to us for pre-roll solutions care about completion rate for audience-targeted pre-roll, which we’re able to prove is twice as effective as buying pre-roll as a channel — because a channel buy wastes valuable video impressions. For others, in particular the categories of entertainment and CPG, buyers are interested in viewership and purchase intent, respectively. For larger budget commitments, we can connect the dots between online advertising and offline sales.
We’re about to release an updated cross-correlation metrics guide from the report we issued earlier this year. The upshot is that any brand marketer who wants to get beyond CTR can measure most of the health of a brand, product, solution, etc., by asking just one question: How likely are you to recommend this to a friend? We have found that Likelihood To Recommend is the metric most closely correlated to the other leading brand metrics brand marketers already care about (awareness, purchase intent, viewership intent, favorability, ad recall). We see a bright future for LTR.
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