Jay Habegger is CEO of ownership targeting company, OwnerIQ.
AdExchanger.com: How did OwnerIQ begin?
JH: OwnerIQ was born out a few simple insights. Effective advertising is presenting the right message to the consumer that resonates and influences perceptions or compels actions. Our first insight, supported by research, is that knowing about a person’s stuff tells a lot about what the right message is for a particular consumer; we believe that you are what you own. A second important insight is that we could get at ownership information of consumer durable goods in a reliable and scalable way by tagging consumers as they participate in both shopping and owning experiences. To make these two insights actionable we built a software platform that would allow us to manage the myriad of “ownership signals” we acquire on consumers, group these together in meaningful ways for advertisers and acquire media to execute campaigns.
Does it all come down to in-market data? Can behavioral advertising work with a more macro approach such as demographic data?
In-Market data is useful and valuable. Working with our manufacturer partners OwnerIQ is able to deliver some of the most reliable and strongest in-market data for consumer durable goods. But, in-market is far from the entire picture.
How does OwnerIQ address creative? For example, do you offer optimization services for the creative or is that the responsibility of the client?
We have different classes of customers. We’re bringing a lot of new online display advertisers into the market, such as manufacturers. For these customers we try to be as helpful as possible in generating creative, dynamic ads and optimization. For our sophisticated advertising customers that employ a creative agency we typically have the creative handed to us. We will do optimization on a campaign, of course. Optimizing ownership signals that we use to target the advertising for example.
However, there is a larger question for the entire industry: as we acquire more data and deploy the management and media buying systems to use it at ever more refined levels the model for generating creative – a one size fits all approach with slow cycle times for changes – is increasingly inadequate. Although there are companies today that do dynamic ads for products, including us, they are really about product and offer cycling and not about changing the emphasis of a particular creative for a top-of-funnel advertiser. For example, we’ve run campaigns for retailers where the creative agency insists on using the exact same creative to simultaneously target in-market buyers, duress buyers and influencing the consideration set. That just can’t be the right answer, yet the economics of the current process dictate that anything else is prohibitive. All the capability we’ve built up as an industry to better manager online display advertising is being hobbled by our version of the “last mile problem”: the creative. We’re focused on this problem and on solving it for our advertisers using Ownership Targeting.
What trends is OwnerIQ seeing in the marketplace today?
This is an incredibly dynamic time to be in online display advertising. So many things are changing so rapidly. I just returned from the IAB Leadership conference. The number of attendees almost doubled from the 2009 to the 2010 meeting which indicates a very dynamic eco-system.
Having said that, the most important trend, and it sweeps up many things, is the trend toward buying a precise audience and not being constrained by the demographics of a particular site. Making this possible is the trend toward impression-by-impression inventory acquisition and decision making. We were early leaders in real-time-bidding access and made that a corner-stone of how we execute campaigns for advertisers. Another trend is the unbundling of cookie data from advertising inventory itself. It is almost as if we all woke up one day and discovered that the real-estate we were all familiar (display ads on websites) with had valuable mineral rights too (the cookies that could be sent the consumer and read mined later for better targeting). Now we’re trying to figure out how to profitably leverage the mineral rights.
What’s your view on ad exchanges? Good for advertising?
More efficient marketplaces are always a good thing. Exchanges have enabled businesses and capabilities that were not even possible just a few years ago. For example, without exchanges we wouldn’t be seeing the migration toward the precise packaging of audiences that we’re seeing now.
I also think this trend can be a huge benefit for publishers – especially quality long-tail publishers that have had to inefficiently sell their inventory through ad networks. I know that through our real-time-bidding systems we are absolutely willing to pay extremely high CPMs for our target audience on a quality, brand-safe sites and I don’t think we are unique in having that perspective. On exchanges that offer us the transparency to see where we are bidding we have our software programmed to do this. Increased efficiency allows us to raise our bids for quality while bidding down the price of junk. Lack of transparency acts like a Gresham’s Law of inventory: bad inventory drives out good. For this reason I’m encouraged at the stance that Yahoo has taken with RMX and tried to increase the quality, but I think all exchanges and publishers would be better served by rapidly making full transparency the norm.
Who owns the data? Given recent terms & conditions changes by some agencies, how do you see data ownership breaking out in the future?
The first thing that always seems to get lost in this debate is that the consumers own the data in any meaningful sense. The cookie is a file sitting on their computer totally under their control. They can edit it, tell their browser not to send it and delete it at any time. Any notion of ownership of cookie data by anybody else is tenuous at best.
The only things that can be controlled are who is licensed to put code on a web page that results in a cookie being sent to a consumer and who owns the keys to decoding the information in a cookie. When looked at from this perspective I actually don’t think the question of ownership per se is that difficult: the publisher clearly has all the rights in the world to decide who can drop cookies from their web pages and under what terms and conditions and the service provider dropping the cookie clearly owns the intellectual property on how to decode the information in those cookies unless it was created as a work for hire by the publisher.
I think the real question – and the locus of concern – around this question is more about open disclosure. Too many companies are using bits of code and widgets that seem to perform a neat function as a Trojan Horse to actually acquire data from publishers and often do so entirely without their knowledge. Terms and conditions for these measurement, sharing, or other widgets are notoriously vague about how the information collected is going to be used. Perform a simple test. Go ask your typical webmaster who installed one of these measurement services on their site if they know the data collected is being used for advertising and I’ll bet you 9 out of 10 of them will be surprised to discover that it is. That’s the problem in a nutshell from my perspective.
Any concerns for you and OwnerIQ regarding potential regulation around privacy?
Invasive regulation on the use of cookies for ad targeting would be bad for OwnerIQ and every other online advertising business I know of. It is just an incredibly bad and short-sighted idea. It’s going to be bad for consumers, it’s going to be bad for publishers and it’s going to be bad for advertisers. This will be bad for consumers because they are going to have a lot less online choice and quality. Almost every online innovation has sustained itself with advertising including free email, free news, and free social networking. Even Twitter isn’t a public service project; it will have to develop an advertising model and support itself eventually or it will cease to exist. This will be bad for publishers because without being able to introduce advertising products that add more value they are going to restrict services, kill innovation and actually subject consumers to poorly targeted ads and lots more of them because the lack of targeting will kill CPMs and the publishers that survive will have to run more volume. This will be bad for advertisers because the consumer they want to reach is increasingly online and they won’t have the tools to reach them.
Surveys of consumers by privacy advocates focus on asking consumers if they want to be targeted with advertising, but they never seem to ask the obvious alternative: do they want to pay for things they now get for free? Ask them if they want to pay $0.05 for every Google search they do, or $0.10 for every email they get. I suspect they would far prefer a relevant ad served up to them on something they were already shopping for.
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