Monthly Archives: February 2015

The real reason advertising isn’t more relevant

By Eric Picard (Originally Published on iMedia – February 18, 2015)

I have been pretty publicly dismissive of the idea that we will see significant consumer value driven by ad targeting’s creation of more relevant advertising in the near future. Despite the frequent claim in the industry, I’d call this a false meme today; we don’t have nearly enough disparate messages from marketers to segment the population well enough. At the very least this future is further out simply because there are not enough advertisers spending enough money on enough distinct messages for enough distinct industry verticals, or enough products, to allow us to have enough relevant messages to show people.

Let me be clear: There are privacy issues with which we must contend. But if we step past them for the purposes of this article and look just at this issue of relevance driving value to the consumer, we have a long way to go. The current trend toward massive use of retargeting clearly isn’t hitting this mark if we just make our judgment based on anecdotal input from friends, family, and ourselves. How many times have you experienced (or been told by someone else about) the situation where you visit an online store, buy a product, and then get targeted with ads for the product you just purchased for several days afterwards on numerous websites?

Are the ads more relevant to you? Maybe. Do they add any value to you? Quite the opposite. You probably find the situation as annoying as I do. If I buy a new grill, show me products related to grilling — not the damn grill I just bought. If I buy a new pair of shoes, show me clothing or accessories related to the shoes. If I buy a new car, stop showing me ads for that car or even its competitors. Instead, show me ads related to the fact that I just bought that specific car, or even just that are relevant to a recent car buyer. But at the very least, stop wasting your money showing me the exact product I just purchased.

Frankly, there are reasons why the scenarios I suggest above aren’t happening. About 10 years ago, I had a conversation with an executive at a major publisher who was complaining about how irrelevant the ads on the website were to him. He hated the fact that he kept seeing a “toenail fungus” ad when he didn’t have toenail fungus. Instead, he would love to have seen ads for rock climbing gear, as that was his passion and he was currently looking for new gear.

I explained to him that the toenail fungus ad was creating both category and brand awareness so that if and when he eventually got toenail fungus, he’d remember that he could fix the problem. I also noted that we currently had literally not one ad from an advertiser that sold rock climbing gear available to target to him, so we could not meet his ad targeting needs in that way. This caused him pause. He finally got the point and was willing to concede that maybe he was a good target for toenail fungus ads — but that he hated the creative of the ad and found it “disgusting.” I explained that we could adjust the creative acceptance policy of the site to deal with that issue editorially and that maybe the ad would be more effective if the images were less graphic.

In those days, before programmatic advertising, the solution to the problem seemed like it was just around the corner. But now, a decade later, we still haven’t solved the issue. For clarity, I do very much believe that there will be a tipping point — that as we add the infrastructure and data needed to micro-segment audiences, we will see major changes. Once we have the ability to show a high-quality ad experience and effectively segment users to put ads in front of them with the same level of segmentation as a niche magazine content experience, advertisers in the myriad niche segments of advertising will flood the digital channels with creative that can be matched to the right user. We should explore this a bit.

Consider this example: We are trying to build an advertising experience that is more relevant, and the profile of the person is a 45-year-old male suburban homeowner who is an avid golfer and sports car enthusiast, with teenagers in the house. We can probably find some number of ads that are relevant. But if we want to really add value to that person, we need to have deeper profile information with a better experience of where he is in the buying cycle for those individual areas and categorization of creative messages to help tailor the ad experience for the individual.

Example: The avid golfer. There’s a whole ecosystem around golf that could be useful in creating value to the user beyond just showing ads for golf equipment in general. For instance, if our golfer was shopping for a new driver, it would be relevant to show him ads for drivers. Or if several new clubs had been purchased recently, maybe the ads should focus on balls, bags, shoes, or clothing.

Targeting our golfer based on specific product matches are pretty obvious, but equally interesting would be if he lived in the northeast, it was winter, and he’d recently showed interest in booking a vacation. In that case, the systems should be tailoring the vacation advertising around golfing destinations. This means ads for all sorts of products and services need to be categorized by the messaging used within them such that this kind of matching could be accomplished. Similarly, tailoring ads for numerous products and services around golf should be possible and make those messages more relevant to our golfer. But obviously to make that experience work well, we’d need lots of products and services that could be tailored around the “concept” of golf. Otherwise, we’d show this poor guy the same five ads all the time.

Our systems are on the cusp of these capabilities today. In fact, some of these scenarios could be activated by specific vendors in the industry. But the capabilities need to be ubiquitous enough that marketers drive those scenarios into their advertising creative and into their media plans. So it’s a bit of a chicken-and-egg conundrum: Marketers aren’t driving these scenarios to their vendors, so the vendors haven’t yet activated the capabilities to fulfill the scenarios.

We will get there. But it could take some time.

The New Premium: How Programmatic Changes The Way Advertisers Value Inventory

By Eric Picard (Originally Published on AdExchanger.com Thursday, February 5th, 2015)

Five years ago, if I told anyone in our industry that I wanted to buy or sell “premium” inventory, we’d all picture the same thing: inventory that was bought or sold directly between a media buyer and publisher’s salesperson. Maybe it would be home page inventory or a section front, a page takeover or rich unit. Or perhaps it would just involve a specific publisher that we agreed equated to “premium.”

New programmatic technologies are radically changing how we think of inventory overall, especially the term “premium.” Inventory is no longer one- or two-dimensional – the definition has become much more complex. It is a multidimensionally defined set of attributes that includes traditionally “publisher-controlled” inputs, such as page location, dimensions of the creative, category and content adjacencies. But today there are additional overlaid attributes that flesh out the definition.

Advertisers can bring their own data to the dance, which we’ll hesitantly call “first party,” and overlay additional data sources, which we’ll hesitantly call “third party.” And beneath the surface level attributes are underlying components that can be much more dynamic. These components can help predict how effectively an impression can drive a campaign’s goals or outcomes.

Programmatic buying platforms historically were tied to open exchange inventory, but increasingly, they are used as primary buying platforms across open RTB, private marketplaces, direct publisher integrations and even to support direct buys. This more holistic approach ultimately leads to a “programmatic first” point of view, as the new inventory definitions being rightly demanded by advertisers become their starting point on media buys. While RTB “only” represents 20% to 40% of budgets today, it’s clear that the rapid growth of programmatic will drive these broader inventory definitions across the buyer-seller boundary.

Achieving Symmetry

Publishers are embracing the newly empowered media buyers, allowing them to bring their own data for direct buys. They are also allowing buyers to connect directly to their ad servers for programmatically enabled direct buys and buy-side inventory decisioning in real time. For the past few years, the asymmetry of information in programmatic – publishers had no idea why advertisers bought their inventory on the exchange – has been a sore point.

Publishers point out that if buyers work with them, they can open paths to the inventory, inclusive of audiences, that buyers are looking for on the exchange. As we see more collaboration between buyers and sellers on these points, pockets of highly valuable inventory that were lying dormant inside the publisher’s ad server (dare we say “premium”) will suddenly open up.

To use a mining analogy, publishers previously sold unrefined chunks of ore to media buyers, who found a variety of metals inside, but only some of it was valuable to them. So buyers started buying inventory through other marketplaces that allowed them to use their own tools and data to locate the chunks of ore that contained the metals they cared about. Now publishers are saying, “If you’re willing to pay us what you think that metal is worth, we can find more of it than you’re getting on those secondary marketplaces. But you have to work with us to get access to it.”

This new approach is both exciting and refreshing. The industry is getting over old suspicions and reluctance to share information. The asymmetry is becoming more symmetrical, and everyone involved gets more value. Days are still early, and only the most advanced players are figuring out how to make this work, but it won’t be long before this new way of defining “premium” is the standard.

Evolving Definition

How do we define “premium” in this new programmatically enabled world? Premium inventory matches the advertiser’s holistic goals, inclusive of where the ad will run – publisher, category, page location or format – and the multidimensional profiles of anonymous users behind the impressions, including first- and third-party audience data definitions, as well as geographic, demographic and other data elements provided by publishers and other parties. The advertiser believes the premium inventory will help fulfill their goals and drive outcomes that they desire.

That’s a mouthful, eh? How about this: Premium inventory matches the goals of the advertiser well enough that they’re willing to pay a premium for access.