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Gaining Clarity in the Spot Buy

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Data-Driven Thinking“Data Driven Thinking” is written by members of the media community and containing fresh ideas on the digital revolution in media.

Today’s column is written by Roland Cozzolino, CTO of MediaMath, an online advertising technology company.

Whenever someone wants to understand the basics of RTB, I like to tell them that they need to understand its data side, if you will, along with the importance of transparency, since that makes for effective ad trading.

What Transparency is NOT

Web servers and sites sort of know your machine.  In fact, that server only knows your machine specific to the session you are on, and the browser you are using, if and only if you have cookies enabled.  Switch browsers and you look like a new “thing” (let’s avoid the term person, since we never, I repeat, NEVER know people).  That combination of items, machine + session + browser + cookie, is our unique “thing”.  Furthermore, cookie data is specific to the server, meaning this data is only visible if our server under a specific domain placed the cookie.  Outside of that domain, we know nothing.  In fact, the machines visibility into the end-user is but a minute fraction of reality.  Little known fact, credit card companies know more about you than your family does.  So please don’t confuse transparency with some sort of personal identification.

I Digress, a Little History

Publishers have historically driven our industry.  They sell their home page to Bob’s Cat Emporium at $50 CPMs.  Bob is happy since it appears to be working.  Bob then finds out he could buy another page on Publisher X for 50 cents on a remnant exchange.  Bob is no longer happy, nor is Publisher X since they make all their money via the 5% of direct ads sold.  What does this mean?  Publisher X does NOT want you to know who they are.  This poses one big problem: at the end of a campaign, after the ads are served and the beer is flat, advertisers like to know what worked and why.  When the spot buy is totally opaque, nobody can make an intelligent guess, thereby diluting the value of all impressions going forward.  Fun little problem we got ourselves into.  So how do we make sense of the spot buy?  Let’s look at what data is available and quantify that to something viable.

Houston We Have a Clue

From now on consider transparency as seeing the all the various data points on an impression.  That being said, every impression has certain set of inherent characteristics, which include:

  • Geographic Information (city, state, country, …)
  • Date and Time (month, day, year, hour, minute, second, time zone, …)
  • Size of an Ad (728×90, …)
  • Publisher (when available, see above)
  • Domain Level Cookie Data
  • Browser (IE, Firefox, Safari, …)
  • Operating system (OSX, Windows, Linux, …)
  • Price we paid to buy this impression

Then there are attributes you can buy into or may be lucky enough to get if you ask nicely:

  • Third Party Data Segments (Blue Kai, Monitored, IXI, etc.)
  • Site Classification (auto, finance, etc.)
  • Social Demographics (friends of friends)

And finally, there is the random data we all want, but exchanges and ads vary in what they offer:

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  • Above/Below the Fold
  • Coordinates on the Page
  • Size of the Browser/Resolution
  • Search Terms (if any)
  • Ad Interaction (hover, click, etc)
  • What someone historically pays for this class of impression

That is actually a lot of data (I definitely forgot some, but that’s enough for now).  Take all of those points and multiply each one by their respective degrees of freedom +1, them multiply those together to get the total combination .  That is one giant, multi-dimensional thing.  So breathe for a second and realize, you do NOT want to analyze this much data.  Why, you ask?  Because you can’t do anything with it, it’s too big.  Go ahead, plug it into your favorite stat package and watch the machine cry. Let’s entertain that you actually could process all this stuff.  If so, you will narrow your audience so much that you will very quickly stop spending money.  Furthermore, the web and advertising is somewhat chaotic, thus choking the inventory prevents you from ever finding new pockets of value.

Effective Trading

So there has to be a better way, right?  Thankfully there is and its not brain surgery.  First and foremost gain insight into the various data points available.  Spend time determining what your client wants and what you believe will work, then bust out the shotgun and start firing blindly.  Go ahead, spend some money.  Now get some reports that aggregate this information in a clear and concise manner and start finding what works.  Remember what I said before, don’t ask for all the data, and just ask for subsets so it’s manageable.  Now break out the rifle and start aiming.  Keep in mind when you see something that you like, you should and will pay more.  Furthermore, don’t stop firing blindly because you never know what the next day brings (feel free to dust off a stochastic book if you like that kind of torture).  Repeat this over and over again till it paints a clear and concise picture.  In the end there are 3 things that should come out of your mouth when talking to the client:

  1. We verified the audience YOU believe loves your offering is accurate (people like being told they are correct).
  2. We found a completely new audience you never knew existed (this is the performance side of trading and bless you if you can pull this one off).
  3. We figured out who does NOT want your product (give us more money, we are narrowing this down to something tangible).

Any of those 3 statements will lead to better campaign management and a happy customer.  What isn’t acceptable is, “We got lift, increased ROI, saved money … but … have no idea how that happened”.

Summing It Up

RTB offers a ton of information per impression and understanding the data points is paramount to successful trading.  Don’t expect to take all of this data and make any sense of it, its just too big.  If you do, you will find yourself caught up in the details while missing the big picture.  And finally, make no assumption you know the audience ahead of time, let the audience show itself via the data.  Now that’s real transparency.

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