Is Efficiency Bad For Digital Display?

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ohara-ddt-nextmark-usethis“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 Chris O'Hara, Chief Revenue Officer at NextMark.

I’ve always loved the notion of programmatic RTB. As a data hound and an early adopter of AppNexus, the idea that advertisers can achieve highly granular levels of targeting and utilize algorithms to impact performance is right in my wheelhouse. Today’s ad tech, replete with 300 companies that enable data-driven audience segmentation, targeting and analytics, is a testament to the efficiency of buying ads one impression at a time.

But what if driving efficiency in display actually does more harm than good?

Today’s RTB practitioners have become extremely relentless in pursuit of the perfect audience. It starts with retargeting, which uses first-party data to serve ads only to people who are already deeply within the customer funnel. No waste there. The next tactic is to target behavioral “intenders” who, according to their cookies, have done everything but purchase something. Guess what? If I searched four times in the last three hours for a flight from JFK to SFO, anyone who serves me enough ads is likely to eventually get last-view attribution for my ticket purchase. Next? Finding “lookalike” audiences that closely resemble past purchasers. Data companies, each of whom sell a variety of segments that can be mixed to create the profile of a 35-year-old suburban woman, do a great job of delivering audiences with a predilection to purchase.

But what if we’re serving ads to people who are already going to buy? Is efficiency really driving new sales, or are we just helping marketers save money on marketing?

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Tumblr Is Yahoo's Instagram – Or Is it?

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Yahoo Tumblr InstagramFor the most part, internet analysts and ad industry observers are applauding Yahoo's $1.1 billion acquisition of microblog Tumblr. The timing appears to be right for both companies. Yahoo CEO Marissa Mayer, fresh from a series of acqui-hires, saw an opportunity to bring a new media network with a young, socially engaged, and logged in audience.

In turn, Tumblr has been turning heads with some proof that the six-year-old company could actually start to generate meaningful ad revenues with the launch of mobile ads on Tumblr’s iOS and Android apps – a year after the PC version of Tumblr rolled out “Radar” sponsored ad units.

AdExchanger asked a number of Yahoo and Tumblr watchers for their take on the  acquisition news and what it means for the two from an advertising perspective.

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Google Open Source's RTB Tech; Pahade Returns To Ad Tech

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Open Sourcing RTB

Google is offering its RTB technology in a roll-your-own format. Developers can access the company’s customizable toolkit for real-time bidding applications using tech from DoubleClick and Google Cloud Platform. A Google developer blog post says, “With Open Bidder buyers can significantly lower the latency of their bidders by leveraging Google Compute Engine’s scale, speed, and proximity to DoubleClick Ad Exchange.” Read more.

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What Yahoo Sees In Tumblr: A Logged-In, Cross-Channel Audience

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mayer-tumblrThere were two adjectives Yahoo CEO Marissa Mayer used repeatedly when discussing the advertising opportunity with Tumblr, which her company agreed to buy for $1.1 billion. Those words: "native" and "aspirational."

It's what you would expect. In its short history of monetization, Tumblr has focused on organic ad formats, tentatively rolling out tools to promote organic posts. Yahoo execs, eager to demonstrate the huge price it is paying for Tumblr, are telling investors to expect ad revenue to go big-time in 2014.

But there's an additional opportunity around ad addressability of the constantly logged-in Tumblr audience – across both web and mobile – that is increasingly valuable in this era of decaying cookies. Mayer hinted at this opportunity.

"I don't want to pre-announce anything today," she said. "It is quite clear that the psychographic profiles on Tumblr are different than we have on Yahoo, which enriches the user base."

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Adelphic Names WPP Mobile Exec Michael Collins To CEO Spot

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michael-collins-adelphicAdelphic, one of a handful of companies helping brands and publishers identify audiences across devices, has scored a CEO from agency land.

Michael Collins was the chief executive at WPP-owned mobile agency Joule, which he built from scratch in 2007 into a global mobile-centric marketing agency with outposts in North America, Europe, Asia and Australia.

Collins will help two-year-old Adelphic bring its publisher- and advertiser-facing technology to market. On the supply side, the company works with its publisher partners to profile their traffic and, in the words of cofounder Jennifer Lum, "make each user and ad request much more specific and descriptive by appending data to them to open up many more targeting possibilities."

Among its rivals are Drawbridge, Tapad and AdTruth.

From the marketer perspective, Collins says he tested many "data-enhanced" mobile ad products at Joule and believes Adelphic is one of the few to drive significant performance improvements.

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Yahoo, Tumblr And The Race For Identity

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tumblr-identityYahoo's planned acquisition of Tumblr brings it "coolness," young demos and mobile eyeballs, says the blogosphere. The deal, reported at $1.1 billion, is Yahoo's Instagram – even with aging Flickr already aboard.

Okay, fine.

From here, this acquisition may also be a new, strategic move into "identity." Yahoo Mail used to be the portal's identity magnet, but product development neglect and brand issues blew that apart. Google, Facebook and even Amazon own identity right now. When you're on those properties, and most of us are (reach!), you're logged in and they know it. And that creates unique, one-to-one conversations with consumers, a.k.a. addressable media. Yahoo needs a similar first-party data play.

As to whether this is the identity or even mobile Holy Grail for Yahoo – doubtful. Tumblr will likely not be the next Facebook. But, unlike Yahoo, Tumblr does require its users to sign up with an email address or login if they want to surf the Tumblr-sphere, let alone post. That's valuable.

Ultimately, Yahoo CEO Marissa Mayer can't just can't sit there and implement cost-controls like former Yahoo CEO Carol Bartz. She's got to roll the dice, just like the Yahoo board did when it hired her and decided to aim at "product" rather than "media" (Ross Levinsohn). And Mayer's first big acquisition-related roll is Tumblr. Internally though, it gets more difficult. She's gotta flip the Yahoo "borg" into a lean, mean, product-driven fighting machine or all these acquisitions will wither and die.

With more Alibaba cash waiting in the wings, a few acquisitions like Tumblr seem likely in the next five years as Yahoo learns about itself and the market, attempting to smooth a path for whatever its future holds.

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Mobilewalla Q&A: Tackling Mobile App Churn With Big Data

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mobilewallaIt’s no secret that the mobile app market has exploded. Roughly 224 million people use mobile apps on a monthly basis, compared to 221 million desktop users, according to mobile analytics firm Flurry. Advertisers are eagerly reaching out to this growing audience. Enter Mobilewalla. The three-year-old startup is betting that the demand for targeting ads across mobile apps is only getting started.

AdExchanger spoke with Mobilewalla founder and CEO Anindya Datta.

AdExchanger: When Mobilewalla started out you were in the app discovery business, but you’ve moved away from that. What led you to pivot, and what does Mobilewalla do now?

ANINDYA DATTA: At its inception, Mobilewalla quickly became one of the most used independent app search and discovery engines in the marketplace. But when we looked at our business strategy for MW, we felt that the massive amount of data collected from the native app stores (which were being analyzed to support semantic discovery) could yield analytics that had greater business value than the discovery service itself. Hence the pivot.

What we have now is an analytics platform. We collect vast amounts of data regarding apps. When I say data, we don’t have an API or handle that developers put inside their apps to collect data. We actually collect from the market. So for instance, we get every piece of information that you could get about apps from the app stores like iTunes and Google Play, as well as from Twitter, YouTube and Facebook.

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Should Every Agency Build A Trading Desk?

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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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Yahoo To Buy Tumblr; Marketing Automation Windfall

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big-dealHere's today's AdExchanger.com news roundup... Want it by email? Sign-up here.

Yahoo Youth Movement?

Perhaps a chance to capture a younger audience, Yahoo is buying blogging platform Tumblr. The WSJ says the $1.1 billion deal is done (subscription) and so does the NY Times.  All Things D broke the story late last week and referenced a quote by CFO Ken Goldman at [JP Morgan’s Global Technology conference] as a driver of the acquisition: “One of our challenges is we have had an aging demographic. Part of it is going to be just visibility again in making ourselves cool, which we got away from for a couple of years.” Read more. A growing revenue model (advertising, presumably) and management structure need to be worked out at Tumblr. Nevertheless, it’s seeing consistent traffic growth. More from Forbes. A special “product” announcement is scheduled for today by Yahoo. Last but not least, Businessweek explores Tumblr’s porn “challenges.”

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Ad Op Partners In Place, Pandora Makes A Grab For Local Radio Dollars

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Doug Stern, PandoraStreaming audio player Pandora has increasingly focused on building ad revenues from the local level up but has met with some hurdles in trying to pry ad dollars from the $15 billion terrestrial radio market.

This week it struck deals with two media buying and planning software providers, Mediaocean and STRATA , which Pandora hopes will simplify the process of buying local audio ads.

"We knew that a substantial portion of the $15 billion radio market is bought through automated systems," Doug Sterne, VP of audio sales at Pandora, told AdExchanger. "About 70% of all spot radio is transacted through those systems. So we're trying to duplicate the workflow associated with buying radio. Using Mediaocean and STRATA will allow us to directly tap that pipeline of spending."

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