Eric Roza is President of DataLogix, an advertising data and technology company.
ER: There's no question that data is hot all of a sudden. But, candidly, the use of data to drive online advertising effectiveness is still in its infancy. To give you perspective - the entire Behavioral Targeting market is barely more than $1B in 2009. By contrast, there are a dozen advertisers that EACH spend more than $1B on traditional media in any given year. Online media companies have begun to realize that to tap into the big traditional media budgets, they need to find the right audience, and there is no better way to do this than through proven data sources with which advertisers are comfortable. The agencies get this, big time. Digital advertising, whether it be search, email or display, is still dominated by "bottom-of-funnel" advertising and clickstream works well for this, but it's not where the big dollars are. The kind of data we are bringing in will enable advertisers to move up funnel and use the web effectively for branding, as they do today w/ traditional media.
Why is your recent announcement with Nielsen's PRIZM segments important? Could this be another step toward brand ad dollars migrating online?
You are right on - this is all about brand dollars, and moving online advertising up the funnel. The largest CPG companies and publishers use PRIZM to drive billions of dollars in segmentation decisions, and have never before been able to use this data online at the household level.
NextAction(tm) recently brought in a new majority investor, General Catalyst (who back Kayak, BigFishGames and JumpTap, among many others). As part of the investment, we rebranded the company to reflect a growth from our roots in direct response to a broader focus on being the best company at bridging offline data into the online world.
DataLogix announced a significant funding in October. What will the new funds be used for?
We'll accelerate investing in the data, technology and analytics that help drive cross-channel marketing solutions.
Discuss how marketers merge online and offline data today. Are you hearing that it's difficult? What's needed here, if anything?
Most marketers remain silo'd to a greater or lesser extent - meaning that the sharing of information across online and offline channels is sub-optimal at best and non-existent at worst. Our mission in life is to de-silo marketing. Like any other multi-faceted problem, the solution is quite complex. Issues from organizational realignment through technology, partnerships, and analytics need to be addressed. DataLogix is uniquely positioned to lead the charge in what we call "De-Siloing", and ensure that marketers are thinking not just "multi-channel" (which implies different channels acting autonomously and in ignorance to one another) but "cross-channel" (which implies that strategies in each channel are pursued in complementary fashion). As an example we recently pioneered the "Cross-Channel Campaign(tm)" which allows marketers to flight online display ads to the recipients of a direct mail campaign. We went to market about a month ago, and it has been the most successful launch in our history.
Have you seen more traction with conversion sensitive buys or brand buyers who are looking to reach a particular audience?
Interestingly, we've had considerable success with both. We have shown very significant lift in response for hardcore performance networks like Turn, and by the same token have been able to help the great brand networks like AudienceScience and Collective Media deliver really well-defined audiences and thus command higher CPMs.
What improvements can be made around using data in advertising, let alone online advertising?
Bringing Real-World(tm) data online to expand and improve online targeting. It has been eye-opening to see how the silos manifest in different ecosystem participants, whether it be clients, agencies, or big data companies. When we started working on this problem of bringing what we call "real-world data" to bear online, we would find that a large CPG company's digital team didn't even know that their brand managers used PRIZM to drive segmentation, they were so used to operating in a vacuum with a tiny % of the ad buy. De-Siloing has really become our mantra around here.
How do you overcome PII concerns?
Deliver value to consumers, respect their right to opt out, and safeguard data like crazy. If there is a fair exchange (information sharing in return for, say, free content and services, targeted discounts, etc) and I can choose not to participate, why would I have a problem with you showing me ads that are more relevant to me? Most importantly, our roots in offline give us a healthy respect for precedent. Direct Response Marketing is what has allowed the post office to offer daily mail service at reasonable prices for so many
years. And there are clear rules around data usage, etc. In the same way, online targeting will allow all kinds of advertising-based business models to flourish, permitting the free delivery of content and services to consumers. We have retained the best counsel in the industry to help architect our solution, but beyond this, I use a simple rule of thumb - if I can say "it's just like Direct Mail", then I know it will pass muster for marketers, agencies and consumers, because this model has been around since Sears and Roebuck was the only game in town....
Other than the new Nielsen segments, where do your offline datasets primarily come from? Catalog businesses, for example?
In addition to Nielsen, we currently offer Affiniti Demographics which are double-verified - this is actual data, not inferred, across almost every US adult and household. We also offer Affiniti Frequent Buyer segments based on 8 billion retail transactions at the SKU-level. And we will soon announce very significant partnerships in and around automotive data, grocery data, and panel-based segmentation. The Affiniti Data Platform(tm) makes all of this feasible. One of the platform's most interesting features is what we call the "OnRamp", which lets marketers target their own customer file online - until now, they couldn't even reach their own customers unless they had recently visited their website. So the OnRamp allows a marketer to leverage their own offline data online, which is a really big deal.
How does the DataLogix pricing model work?
We generally receive a percentage of media spend, with guaranteed minimums.
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