Last year was a big year for demand-side platform (DSP) and ad network Rocket Fuel.
The company went public in late 2013 and analysts remain largely bullish on its continuing growth prospects. Known mainly for its offerings in the traditional display ad space, the Redwood City, Calif., firm is ramping up its pursuit of mobile ad dollars as well.
AdExchanger spoke with Mark Prior, Rocket Fuel’s VP of mobile, about the company’s approach to targeted ads and the mobile trends it’s watching in 2014.
AdExchanger: What distinguishes your mobile offerings?
MARK PRIOR: Our basic thesis is that the demands of advertisers in mobile are not that different from those in other forms of digital advertising. We focus on advertisers who are interested in direct-response measurements as measured by an effective cost per action or other online response. We’ve also created businesses to take advantage of location data as well as the app download and optimization business.
What kind of mobile tracking and targeting capabilities are you offering? How do you address the limitations of cookies in mobile?
We’ve invested heavily in creating an extension to our infrastructure that deals with app specific identifiers such as the IDFA and the Android ID. There are cases where more advanced approaches are required where you’re looking at the configuration of the phone and making estimations for attribution purposes, which we also do.
We think 2013 was the year in which questions about tracking, mobile RTB and third-party data were the focal points, but this year, we think the mobile business is going to become really measurable and act like the rest of the digital marketing space.
What’s limited development in this area up until now?
Mobile advertising is about the same questions around ROI that we’ve aspired to in the display and social world. Sadly though, for the past few years, most mobile buying has been done by separate media-buying teams. They haven’t conformed to a lot of the metrics that their peers in the display space world are beholden to.
For example, CTR remains the standard for most mobile buying. We’re pushing our clients to forget about CTR and focus on the same metrics that they’re using in their display campaigns for mobile. That would be an effective cost per action, like form fill-ins, email subscriptions or a transaction. We’re pushing CPM as a standard for buying in the mobile space and we think it will become the de facto standard as it has become in display.
What kind of location data are you working with? Are you mainly looking at the latitudinal and longitudinal data from an ad request?
Yes and the trend we’re watching in 2014 is taking that lat/long data — which is data from apps that the user has acknowledged is being shared with third parties — and using the specific location of the individual to build better marketing campaigns.
Geo-targeting has been effective for retailers looking to drive last-minute promotions, but we think that’s version 1.0. What will be more applicable to the broader advertising space and drive more performance improvement is using location data to better understand consumer behavior.
Can you give me an example of how you’re using location data to understand consumers’ behavior?
Just like we can build a profile of a consumer’s interest based on their digital behavior, we would do the same for mobile. For example, we’ve created targeted profiles of individuals who spend a lot of time in recreational and outdoor settings like gyms and hiking trails as people who are interested in athletics and are appropriate for certain campaigns. We’ve done similar profiles around bar districts, music and entertainment.
One of the things that makes our technology unique is our ability to evaluate multiple criteria around a consumer and decide who are the best people to serve an ad to and how much they’re worth to an advertisers.
What is your approach to privacy in mobile?
Location data has become a very critical issue for any vendor. We don’t track any PIIs and we support the opt-out standards in the Web and app environment.
On the location side, we’re making a conscious effort to not track a certain level of granularity. We do use a consumer’s location at the time it’s passed to us when a user opts into an app download, and in many cases they’ve had the opportunity to opt out of the system, so we feel comfortable using the location of the user when ad call is made.
We also decided not to track the information about the user’s previous location. We simply correlate that user to their proximity to certain types of locations. We don’t actually know their raw location. It’s a subtle but important difference.
What are mobile data sources are you using? Are you using mainly third-party data sources or a mix of first- and third-party data?
We’re pulling from both first- and third-party sources. Our larger, more sophisticated clients sometimes come to us with first-party data integration opportunities we aggressively use the data that they provide us with. We get both cookie- and app-specific consumer profiles from BlueKai that we use for putting together brand campaigns in the mobile space.
What type of trends are you seeing in terms of in-app ads and browser-based ads?
Because we’re focused on letting technology make decisions, we don’t have individuals who are making hard decisions on “Do I use an app for this campaign or do I use Web traffic?” Generally there’s a lot of app traffic coming online into the exchanges currently. There is a burgeoning set of app-specific exchanges that are creating a lot of new inventory in the industry. We see that the majority of the traffic we have access to though is coming from apps.
Which ones are clients more interested in?
Which media our system ends up buying depends primarily on the conversion metric that we’re driving to. A lot of our campaigns are about advertisers trying to drive specific activities on mobile-optimized Web pages. Think of an auto manufacturer trying to increase test-drive signups on a tablet. Our general observation is that inventory from the Web tends to work better in driving that activity. If we find that location data is driving a lot of behavior and that primarily comes from apps, that campaign may use more app inventory.
What opportunities does iBeacon offer your clients?
We expect to see a lot of conversations on “How can I know that my ad is working in the real world?” Many vendors have been focused on proving your spend is working in the digital world, which is relatively easy to solve with Web technology and pixels but it’s much harder to solve in the real world.
We think the introduction of common pervasive beacons through the Bluetooth energy standard is going to create a revolution for in-store tracking that’s going to give vendors like us a whole new set of data to use for closed-loop marketing where we can say, you spent this much in advertising and that drove this many people to enter your store with even greater accuracy that we can do today.
What are you seeing in terms of private mobile ad exchanges?
We’re open to private exchanges. It’s an easy extension for us and we’ve invested heavily in private exchanges in the display space where a lot of inventory from premium publishers is coming online.
Are you seeing a growing demand for private exchanges in the mobile space?
I have not observed this as a trend that’s becoming popular in the mobile world. The mobile exchanges that we work with have not been coming to us about getting access to a publisher through a private exchange. Given that most of the mobile inventory tends to come from newer companies, they don’t have the historical weight of the direct sales teams and the historical expectation of direct sales CPMs.
App media providers, like a game developer, are much more open to putting their inventory on the generally available exchange than, say, a traditional newspaper publisher who hasn’t fully accepted the RTB world. If you’re a game or an app developer and you don’t have a sales team that’s offering a primary account for you, then you’re less likely to be hesitant about monetizing through an exchange.
What else are you focusing on for this coming year in terms of your mobile strategy?
We believe people will start treating mobile as a high-growth channel so our focus is to become as successful in the mobile channel as we have in the display channel. We think we’re well positioned to grow in the mobile RTB world. We will also be helping advertisers get beyond downloads to focus on retargeting and in-app purchases and pushing for the development of general measurements in mobile. Getting customers comfortable with the more traditional ROI logic of display is our biggest challenge and our biggest hope for this year.
