Media6Degrees Pancer Says Social Media Companies Need To Focus On Creating Value For Marketers To Drive Yield

Pancer of Media6DegreesAndrew Pancer is Chief Operating Officer at Media6Degrees. How would you characterize momentum in 2009 for Media6Degrees?

AP: 2009 has been a great year for Media6°! We officially launched our commercial product late last fall and have been able to deliver fantastic results for our marketing partners. An example referenced in Adweek on 6/28/09 cites a financial services client who saw an increase in conversions of 167%. In the travel category we have a client who is seeing over $40 of booking revenue for every $1 spent with us. Across the board we are hearing Media6° is among the top performers on client media plans. As a result we have a very high renewal rate and have been adding new clients at a steady clip every month. We are now working with over 50 clients across every major spending category. We are 100% focused on meeting our client’s objectives and delivering exceptional ROI for them.

Curious about a “typical” Media6° campaign.. For example, is there a testing phase where you try to find the right audience to meet the goals of the marketer’s campaign? If so, for how long? Can you understand whether an ad unit is above or below the fold and optimize accordingly? In that there is a ton of social inventory, it would seem a campaign could be delivered very quickly as opposed to other web destination genres, correct?

We function just like any re-targeting campaign. Only we add a whole layer of scalability to the mix. We ask our partners to put a Media6° pixel on their site. This pixel is used to identify a customer. We then look for that customer in our proprietary social graph. If there is a match, we identify that customer’s “network neighbors”, the 10 people closest to that customer who are most likely to share affinity for our customer’s product. We then market to those individuals through display advertising.

Typically we like to observe pixel data for up to 4 weeks before launching a campaign. We then buy inventory anywhere we see our audience, not just social networks. There is a ton of social inventory available but most of it is not what we need. We pay premium CPM’s to get the best inventory that will allow us to meet our client’s objectives. Neither we nor our partners benefit by purchasing $0.20 CPM ads that run below the fold 30 pages within a user session. We also manage even delivery of a campaign as best as we can and we set daily caps to ensure we do not have massive spikes.

Regarding your deal with Havas Digital, how is it progressing? Have you been running any brand campaigns for them yet?

Havas has been a great strategic partner. They are very forward thinking in terms of how they view the use of online data and we learn a lot from our interactions with their team. Our relationship keeps growing. We have run a variety of campaigns for them in the retail and CPG categories and continue to build momentum throughout their companies.

Are agencies your key buy side partners? Or direct marketers? How do you see this evolving?

The majority of our business is through agencies. They are terrific partners. We have announced several strategic partnerships to date. One being Havas the other ICrossing. We are currently working with most major agencies and I believe this will continue to be the major strategic focus for Media6° for some time. An agency focus allows us to sell our solution to a much broader array of clients than if we were to try and go client direct. We do very little with direct marketers at this time but I believe this is an area of opportunity for us.

Are ad exchanges an important development in terms of monetizing social media? If so, why?

Ad exchanges are critical to the environment. They allow companies to eliminate waste and provide better results to their marketing partners. We only buy inventory when we see a Media6° cookie. This eliminates the need for a “daisy chain”. We do not have to deal with loss from passing along inventory and we do not have to worry about extra latency issues. As a result we can pay higher CPMs to our publishing partners.

How can publishers work with Media6? Are social media publishers concerned about channel conflict?

Coming from the publishing industry I understand the issues they deal with and the concerns that they have about ad networks. At, 3rd party networks were a very significant revenue stream yet managing channel conflict was always top of mind.

Publishers should view Media6° and our peers as complementary, not a threat to their existing sales efforts. Right now, many publishers would probably stop reading. But hear me out. We are not looking to buy the areas where publishers are selling out at high CPMs. We are looking for individuals regardless of context. There are always areas that are undersold. Publishers typically either a) run house ads, b) sell these sections on a run of site basis c) bonus ads to manage ECPM down for larger advertisers or d) pass the inventory to ad networks.

For a portal I am not expecting to buy their Finance, Tech or Health inventory. I am going to get mail, news, sports, etc. These are the areas that have huge audiences but lower advertising demand. If I can pay more for this inventory than what a publisher would yield from any of a-c above, then it makes sense to work with me. Social media companies benefit even more. They typically have smaller sales teams and higher volumes of unsold inventory. Channel conflict is easy enough to manage through block lists.

How do you ensure brand safety for advertisers?

We only run on top tier sites and block any sites that would not be perceived as PG-13 or better. We have a huge incentive to make sure our advertisers run in brand safe environments. We have had the occasional bump in the road where an ad was on a top site but in against inappropriate content. We fixed the problem immediately and worked with the publisher to ensure it would not happen again.

This is a very important issue for our industry and we are looking at new technologies to help manage campaigns for our clients.

If you were a social media site publisher today, how would you be driving yield? In terms of display placements on a social site, does “less is more” apply?

In order for social media companies to drive yield they need to focus more attention to creating value for marketers. Your audience must to be your top priority, but if you want advertisers to pay the bills they need to be a very close 2nd. I have seen too many social media sites, and traditional publishers for that matter, who think that building an audience is enough to attract advertisers. That is not nearly enough in today’s world.

Media6° has a couple of social media partners who are providing advertisers with very good placement of larger IAB units above the fold. They have only 1 or 2 ad units per page and these are strategically placed. Guess what? Performance of advertising on these sites is significantly better than their peers. As a result Media6° buys this inventory for much higher rates. And we are not alone. Most networks and advertisers would pay more for this inventory.

On the publishing end we used to talk about brand and audience. You have a trusted brand and a desirable audience so advertisers should take notice. But the new 3rd leg of the stool is data. The ability to tap into your audience and market to them in more effective ways is fast becoming the requirement. Any publisher who does not accept this is taking on significant amounts of risk.

Where are key areas for future growth for Media6° – more social media publishers? Improved technology? International? Moving beyond standard display placements?

We will always focus on the core technology first. Our ability to identify and build custom audiences of socially connected people is the driver of our business. It can be extended across borders and into other forms of advertising. It’s hard to look beyond the next 12 months but what we have on the immediate horizon are international expansion and search related products.

We have already launched beta tests in both Canada and the United Kingdom. They are going quite well and I expect to see material growth of non-US revenues in the 2nd half of this year.

As part of the ICrossing deal we announced on 6/15/09, we will be launching search based retargeting products. We expect this to be a very big area of growth for the company in the 2nd half of 2009 and beyond.

What’s your view on real-time bidding (RTB) in exchanges? Important development or hype?

We are experimenting with RTB in several environments. RTB has tremendous potential but it is still very early to tell how important it will be. The ability to dynamically bid at the impression level is very attractive but how much will it really move the needle? If yield/performance improvements are only on the margin it will probably not be worth the effort needed to build and manage the needed systems.

Could Media6 offer data feeds with social targeting information that could help determine biddable value of a single impression in an exchange with RTB? Why not open a social data exchange?

Media6° could offer data feeds that would allow others to tap into our social graph. We have done some preliminary testing in this area and the results are promising. Down the road this may be something we offer. But right now we are focused on our own sales and execution efforts.

Follow Andrew Pancer (@apancer) and (@adexchanger) on Twitter.

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  1. In the successful case studies that Andrew cites, I’m curious how much of the value came from standard retargeting and how much came from social retargeting.

    It would also be great to hear which product categories are showing the strongest results in social targeting. I assume that fashion brands and entertainment advertisers would see the best results, since people are often connected to others who share similiar “tastes”. I’d also think that financial brands would see success, based on the assumption that people tend to affiliate with others of the same socio-economic status.

    I would assume that social targeting is less effective for CPG products. I don’t know the favorite mustard brand of any of my friends, and I don’t think I’d be more likely to respond to a French’s mustard ad just because one of my friends click on the banner.

    I’d also be curious if Media6Degrees has considered partnerships with creative providers that would be able to incorporate a friend’s endorsement into the ad unit itself.

  2. Tobey Van Santvoord

    Greg – Thanks for your thoughts and questions about our social targeting platform!

    We are currently working with more than 50 major brands who are using our social targeting platform. In almost all cases, we are compared to other vendors that provide standard retargeting. We’ve been able to not only provide a lift in performance over standard retargeting but we’ve been able to also build more scalable campaigns that help marketers reach NEW consumers – something that standard retargeting cannot do.

    We have driven great success across a number of different verticals. Retail and fashion brands, as you mention, tend to have very tribal customer bases. We’ve also driven tremendous ROI in the telecom and retail categories, along with others. CPG is a new vertical for us. Because the brand affinity for CPG brands isn’t always very tribal in nature, we try to identify those brands that have audiences that shares very tribal interests and lifestyles. For example, we’ve worked very successfully for several CPG companies that target stay-at-home moms – a group of consumers that are VERY tribal in nature. We will continue to explore how we can roll out the value of social targeting across CPG brands.

    At this time, we have not considered partnerships with creative companies to integrate social endorsement of a product or service. Based on concerns around the use of personally identifiable information (PII), we’ve decided to focus more on implied word of mouth and endorsement, as opposed to explicit endorsement.

    If I can help answer any other questions you have about our technology, please don’t hesitate to ask.