Small Shops Embrace Arbitrage; Google’s Adwords Update

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Boutique Arbitrage

On Monday, Ad Age profiled a small digital agency whose atypical business strategy might signal a growing trend. IMM is a Boulder, Colo.-based shop with a head count of 100, and the company is practicing arbitrage (typically undertaken by much larger companies). But shouldering the risk of buying media for clients before receiving compensation seems to be paying off for IMM, and the shop already works with some heavyweight clients like Chili’s and Quiznos. The secret to success, according to Ad Age, is taking a cue from the major industry players: “On the programmatic front, IMM’s arbitrage model is not too dissimilar from that of GroupM’s Xaxis.” Read more.

Google’s Caller ID

Google unleashed a new product on Monday designed to track when online ad impressions lead to phone calls. The latest addition to Google Adwords is Website Call Conversions, which marketers can adopt through the addition of several codes to their web pages. Google’s blogged install instructions explain, “After setting up conversion tracking for calls … we’ll replace your business phone number on your site with a Google forwarding number for people who have clicked on your ad.” TechCrunch’s Frederic Lardinois says the tool could help advertisers optimize their ads and bids to drive the calls that will likely unearth sales leads. Read on.

Data In Danger

Dstillery CEO Tom Phillips spoke to Street Fight on Monday and discussed how the shift of ad spend from desktop to mobile can compromise data. According to Phillips, there’s a data problem many in the industry are refusing to call fraud. “The infrastructure of programmatic advertising allows you to harness data in real-time, and that’s why it’s so important across all media that we solve the data problem,” explained Phillips. “Buying programmatically is not just an efficiency play anymore; its opens up the possibility of all sorts of new tools and strategies to do it better.” Read on.

Crowdsourcing Algorithms

Seattle-based startup Algorithmia is betting on the value of a marketplace for algorithms and just received a $2.4 million injection to fuel its aim. The platform, designed and developed by co-founders Kenny Daniel and Diego Oppenheimer, offers a place for algorithms to be uploaded, tested and exchanged. To monetize initially, the startup charges a base price, and developers who upload algorithms are compensated depending on how often their code is used. “It’s a crowdsourced approach to artificial intelligence,” said Oppenheimer. Read on at VentureBeat.

Investing In Ad Tech

Despite an increase in overall ad spend on web-based spots, younger companies are not quite delivering to investors the desired returns, says an article from The Wall Street Journal. Google and Facebook’s investors aren’t struggling, but for newer companies like Rocket Fuel, YuMe, Rubicon Project and Tremor Video, the surge in recent annual revenue does not necessarily translate to ideal net loss figures. What it means for the growing online advertising business could be delayed (or undervalued) IPOs, according to the Journal. “Investors truly don’t understand the space at all,” said Pivotal Research Group analyst Brian Wieser. Read more.

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