Dotomi Riding Personalized Media Beyond Behavioral Targeting Says CEO Giuliani

John Giuliani is Chairman and CEO of Dotomi, an online marketing agency. What’s been happening at Dotomi in 2009? Any trends you can share on the client-side?

Dotomi is very fortunate to be experiencing double digit growth in 2009 despite macro economic trends and a general decrease in overall advertising revenue. Marketers are looking for advertising that works and they’re shifting their budgets to those tactics that can demonstrate a real return. For our clients, that’s a shift toward display advertising that’s more personalized and relevant for the consumer. Advertising that caters to the individual and what’s meaningful in their personal sale’s consideration. That also includes a bigger interest in understanding how advanced analytics plays a crucial role in creating that relevancy for the consumer. We feel we’re a great partner for media companies because our sophisticated approach draws in clients that otherwise would not consider running display advertising.

Advanced campaign testing is growing in importance for Dotomi clients. We invest a lot of our time and money in very sophisticated testing and analysis. We are constantly improving client campaign performance. Our multivariate testing platform allows us to run a myriad of campaign elements simultaneously so we can more quickly determine the best drivers to increase conversion. It’s a great value driver in the platform that we bring to the online media market.

Is ad network arbitrage on the way out? Will agencies start arb-ing through their demand-side platforms?

There’s always going to be roles for agencies, publishers, networks and service providers in the online advertising ecosystem. We all need each other to keep the system balanced. Ad networks create arbitrage value through aggregation and convenience. Agencies may be able to arbitrage for certain buys, but for the broadest reach and coverage, marketers are going to continue to turn to the networks because there are just limits to what the agencies can do.

Dotomi is not an ad network. We do buy media from networks, but we drive value by making each message more relevant to the consumer and that creates an entirely different dynamic. Everyone has their role.

What’s your view on ad exchanges? Does Dotomi use them? Which one is best and for what reason(s)?

We think ad exchanges are an important and growing part of the ecosystem mentioned above. They help efficiently move inventory – particularly lower valued inventory. They also serve to “sharpen” the focus of others (such as Dotomi) to continually drive incremental value out of every impression.

We work with several exchanges and each of them serves us well and they work differently for each of our customers.

Read any good books lately that have affected your business thinking?

I’ve recently read Presidential Courage by Michael Beschloss. It documents the difficult decisions that our US Presidents’ have made over the course of the last 230 years. These decisions were all made against the grain of what was then popular or conventional. But these leaders had the foresight and courage to make the right decision – the decisions that over the long haul were proven to be the best decisions and in no small way saved our country. Washington’s backing of the Jay Treaty and Reagan’s approach to the Soviet Union are nice bookends to our history. They are inspiring stories that influence me to stick with the principles that we know drive the greatest value for our customers and the industry – even when they aren’t always in vogue. We’ve fought the good fight over issues such as encouraging consumer control over privacy, attribution and analytics, extending the time aperture to analyze results, and driving towards the reality of true one to one personalized media.

How is personalized media different than behavioral media? How are you differentiating yourselves in the marketplace?

Behavioral targeting is a stepping stone to personalized media but doesn’t take into account the ability to get very granular and personalize every aspect of the campaign for an individual like personalized media does. BT is focused on selecting an audience based on mathematical models that determine who is appropriate for a given ad based on what other consumers sharing similar characteristics have done in the past. On the other hand, personalized media uses known information about a consumer to customize the ad itself, as well as where and how often the ad is presented, to make it more meaningful for that individual. Overall, it’s the difference between delivering a static ad to a segment of many verses a dynamic and intelligent message dialog delivered to a segment of one. Because of our client mix, Dotomi can help media partners take advantage of this approach and create real value for them.

Do you buy on a CPM basis still? How do you see pricing strategies evolving in online advertising?

We are a little amused at the debate over CPM vs. CPA. Dotomi is agnostic. We buy primarily on CPM, and many times we buy at a premium. But in our view CPM and CPA are essentially billing mechanisms. We encourage marketers to separate performance analysis from the method of billing. A big portion of the debate comes down to risk and trust. If you work with trusting partners than the perceived risk of certain pricing models diminishes and the advantages of those models can be assessed against the goals of the each partner in the relationship.

Are cross-channel advertising strategies impacting campaigns at Dotomi? Does attribution become a challenge when, for example, radio drives online to (ultimately) drive in-store sales?

We embrace and encourage it. Our analytics allow us to isolate the effects individually and show clients the impact on both their online and offline campaigns. If we can help clients understand specific cross-channel improvements, then together we can make the best campaign decisions. So if clients work in a trusting relationship with shared analytics, then pricing can be divorced from the analytics to create the right win-win for everyone. The payment method is simply a negotiation at that point.

How does Dotomi convince brand awareness marketers to work with you? Or, is it all direct response?

Brand advertising, like all advertising, ultimately has to be accountable and lead to increased sales. Dotomi has the analytics to demonstrate the brand effect and create a lot of transparency for our clients. That’s why we’re able to bring some big brand dollars – that haven’t otherwise been able to make display advertising work – to our media partners.

What is your view on real-time and impression level bidding – game changer? If so, how will Dotomi take advantage?

We’re currently involved in some tests. It’s hard to know the game-changing elements right now and who will benefit and under what circumstances. But it’s a great idea on paper and we’re anxious to understand how it will specifically be executed and evolve. If it meets its promise, we think it has potential to clear more inventory and create more pricing transparency. Since we buy media differently – we’re not really in the business of clearing inventory – it’s uncertain the effect it will have on us. There’s still a lot to discover.

In the meantime, Dotomi continues to work with our media partners by bringing great brands to the display space. We’ve put together some custom and innovative solutions that create win-win programs and we will continue to do so with willing partners.

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