Adchemy CEO Nukala Says Marketers Need To De-Average For Better Return On Ad Spend

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Murthy Nukala is CEO of Adchemy, a demand-side buying platform.

CEO Murthy Nukala of AdchemyAdExchanger.com: What is "de-averaging" as it relates to digital advertising and how does Adchemy "de-average"?  Would you say "addressable media" is an equivalent?

MN: De-averaging summarizes a trend toward increasing the relevance of digital advertising. Today’s dominant online advertising model primarily relies on a one-size-fits-all approach to satisfy the need for scale. Consequently, advertising designed for the “average” audience member really is not that relevant to any particular audience member. De-averaging means recognizing that there are many small audience segments that all require different marketing experiences. We also call this "different marketing paths for different people."  It’s a move toward greater relevance.

Adchemy technology gives marketers the capability to address micro-segments fully, improving relevance, conversion, and as a result, ROAS. It automatically micro-segments audiences, values them appropriately, and delivers relevant and consistent marketing to each—from banner and search ads and websites to merchandizing, pricing and promotions. As a result, marketers can massively scale their digital marketing campaigns while maximizing relevance, engagement and conversion.

“Addressable media” isn’t the same as de-averaging. Addressable media allows marketers to make more highly targeted media buys. It’s a start, but it’s not sufficient. If marketers don’t show highly targeted ads and landing pages to those targeted media buys, then there isn’t any better relevance.

Do you consider Adchemy a services or technology company?

Adchemy is a technology company with two businesses. The Adchemy Audience Management Platform℠ is software-as-a-service technology. Adchemy Actions℠ leverages this technology and provides performance marketing services.

What is Adchemy's target market, and how do you differentiate among the growing list of buying platform competitors?

Adchemy’s target market includes the Fortune 1000, Internet 1000, and their agency partners.

Adchemy is the only company to offer a suite of integrated solutions in both search and display, and address functions across the entire marketing value chain—from media buy, to advertisement, to landing pages. We’re relentlessly focused on the relevance of every advertising touchpoint with consumers in digital channels.  Adchemy has placed heavy emphasis on solving the “single view of your audience” problem as a software solution for advertisers. This is similar to the “single view of your customer” problem Customer Relationship Management solves. By solving the audience problem centrally, Adchemy enables highly efficient real-time bidding, conversion through dynamic banner ads, attribution and workflow applications atop the core audience layer.

There’s another major difference. Our solutions are operational platforms that continually update every marketing touchpoint in a marketer’s campaigns so that every consumer interaction with the advertiser is highly relevant—and not just relevant, which is a huge win, but optimized as well, using patented machine-learning techniques. It moves away from analytic solutions that merely present data back to the marketer with limited impact on any actual advertising being delivered.

As affirmation of this strategy, Accenture recently entered into a global channel agreement with Adchemy, and took a minority stake and seat on the company’s board.

What's your view on cross-channel attribution? Is Adchemy able to provide clients with cross-channel attribution analytics?  Just digital?

Cross-channel attribution must be addressed for advertisers to determine optimal online spend. Until now, online advertising has seen a number of point solution providers solve individual steps/channels in the conversion process. Adchemy’s Audience Management Platform enables marketers to comprehensively manage digital marketing from end-to-end in both the paid search and display channels. So we are able to provide marketers with a view into multi-session, cross-channel conversion paths.

What is your view on ad exchanges? Do you think the ad exchange model has fulfilled its promise for online advertising?

We love ad exchanges; they represent a fundamental and necessary sea change in how digital media is bought and sold. We have invested heavily in integrating with the major ad exchanges today and feel excited about the level of activity in this space.

In fact, we believe all digital media should be sold through ad exchanges. We’re a far cry from that today, so, no, the ad exchange model hasn’t fulfilled its promise for online advertising, but we think it’s just a matter of time.

Are you a behavioral targeting (BT) believer? Does it work?

BT can work great for marketers. To make it really successful, they need to pay the right price for the BT signal, show the right ad experience, and send those targeted audiences to relevant landing pages. Basically, you need to take a de-averaged approach when buying BT.

A hypothetical for you... If you ran a media buying agency today, which strategies would you put in place today to affect a successful tomorrow?

I would get a seat on every major ad exchange, invest in software infrastructure to efficiently manage my ad buys, and buy all types of inventory and behaviors.

I would pay a great deal of attention to employee skills and mix. Automation is accelerating, which means fewer people doing mundane tasks in media buying and a greater percentage of time focusing on higher value-added activities, such as strategic refinement of micro-segments to meet clients’ needs. I’d look to hire quantitative skill sets to round out existing creative and relationship skill sets, but in a focused way as some quantitative roles are being replaced by technology.

Will real-time bidding (RTB) be a game changer?  If so, any guess on a timetable?

RTB is a natural extension to the ad exchange model. We think it’s an important step for the industry, and Adchemy welcomes it as a significant opportunity for full investment.

It took a few years for ad exchanges to really catch on, so I wouldn’t be surprised if it takes a couple of years before we see a significant portion of the Web’s inventory on RTB. The speed at which RTB gains traction is going to depend on data density—the depth, reach and variety of data available—in a privacy-sensitive manner. We think doing this all in a privacy-sensitive manner is the only way any advertiser should move forward, and we have some useful solutions to do that.

What will the consumer get out of all this innovation in advertising technology?

In the end, this technology delivers relevance, which is really a joint win for consumers and advertisers. The consumer will get more relevant marketing experiences. Over a period of time, advertisers will get smarter about targeting consumer segments with appropriate messages at the right time and—almost as importantly—not showing certain segments inappropriate messages at the wrong time or in the wrong context.

You may have heard Rishad Tobaccowalla speak at AdTech in San Francisco this year. He commented that there is nothing subtle or nuanced about online advertising—it’s in your face with big arrows flashing. The technology investments we’re talking about are going to allow advertisers to be nuanced in their advertising. By being relevant they’re going to achieve results, and there just won’t be the same need for some of the annoying advertising we are faced with today. This should create a cleaner, more relevant online experience for consumers in the long run.

Follow Murthy Nukala (@mnukala) and AdExchanger.com (@adexchanger) on Twitter.

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