Category Archives: Ad Serving

Advanced Ad-Serving Features, Part 2: Third-Party Ad Servers

(Originally published in ClickZ, November 2001) by Eric Picard

Last time, we discussed advanced features of site-side servers. Now let’s go deeper. This week, we’ll go into the even-more-advanced advanced features of third-party ad servers.

Third-party servers primarily serve the needs of advertisers and agencies. Sometimes they are called buy-side servers. They are part of the business infrastructure of these groups and must reliably and accurately deliver and report on ad serving and related user actions associated with the ads.

In addition to delivery and basic reporting, third-party servers provide unified comparative reporting for all publishers in a media buy, as well as many advanced features. From a feature standpoint, a third-party server is more complex than its site-side counterpart.

One thing to keep in mind: A third-party server is not able to “refuse” a call for an ad. If an ad tag is supplied from a third-party server to a site-side server and that ad is called, it must be served. Only a site-side server can schedule and deliver ad calls to users.

Beyond Banner Tracking

This is the big feature. Tracking beyond the banner enables the view of an ad session from impression to conversion (and beyond). This is a major reason a third-party server is a must for most advertisers. Some tracking types beyond the banner are:

  • Tracer tags. Tracer tags are single-pixel images placed on pages of the advertiser’s Web site so that activity on those pages can be correlated to the view or click of an ad. 
  • Post-click analysis. The user sees an ad and clicks on it. She arrives at a landing page on the advertiser’s Web site. She travels across three pages that have tracer tags on them. Each intersection of creative/tracer is credited to the advertiser’s reports. 
  • Post-impression (also called post-view) analysis. The user sees an ad but doesn’t click on it. That user (remembering the message) later travels to the advertiser’s Web site on his own. He moves across a number of pages with tracers on them. Each intersection of ad and tracer is correlated and credited to the advertiser’s reports. This analysis is a definitive branding measurement and is sometimes called a brand response report. Not all third-party servers collect post-impression data.

Reporting

  • Cross-publisher reports. A major reason to use a third-party server is that reports are covered across all publishers within a campaign. 
  • Comprehensive data sets. Since both post-view and post-click data must be recounted, reports must be unified and comprehensive.

Analytics

Some third-party servers offer advanced analytics capabilities. This is one of the fastest growing areas in the industry. Far more data is captured in an online ad campaign than in an offline one. Turning that data into actionable information isn’t simple. It takes days or weeks of human intervention and interpretation.

A powerful analytics package solves these problems by providing tools to get at actionable information more quickly. There are two basic types of tools to discuss:

  • Online analytical processing (OLAP) tool. This very powerful analytics tool enables the most control of data and reporting. Great power and flexibility comes at a great price, and few people are technical enough to use an OLAP tool to manipulate their data. In most agencies there are only a few, if any, people who can use these tools. It gets even sparser at the advertiser level. 
  • Wizard. To address problems with OLAP, some companies have started coming up with wizard-based interfaces for the most commonly asked questions. A good wizard-based interface can likely answer such questions as: Which publisher is the best media buy for my campaign goals based on the past six months of running ads across various publishers?

Optimization

Analytics deals with historical analysis to improve ongoing and future campaigns. Optimization deals with live campaigns that must be improved while still running. When done by hand (as is most often the case), only so much can be changed. Humans can optimize to a level of detail only so deep. This is best handled by technology, which provides much deeper analysis of data. Two types of optimization are:

  • Real time. Real-time optimization is the most powerful. Changes are made automatically to creative in rotation across placements based upon actual results read by the optimization tool. Real-time optimization requires real-time data to make changes. Few ad servers use a real-time reporting architecture, relying instead on 24-to-48-hour-delayed data. Real-time benefits include microtrend discovery (intraday changes in behavior within placements) and greater lift based on feedback loops. Additionally — if the system doesn’t make changes automatically, relying instead upon human approval or intervention — the lift is going to be lower. 
  • Recommendation. For situations where real-time data isn’t available, recommendation-based systems are the alternative. These systems read data when available and provide a list of recommendations to enable the customer to make changes. This inherently is a poorer performing model as changes are not happening quickly. Therefore, additional learning for the optimization tool is lost. The faster changes are made, the better the system gets at predicting performance. Still, this is a better method than hand optimization.

Targeting

  • Geographic targeting. Geotargeting is similar to site-side servers but somewhat less effective. You pay for the media regardless of whether you had an appropriate creative for the users an ad was served to. Wherever possible, try to geotarget at the publisher level. 
  • Profile-based targeting. As I detailed last time, ads can be targeted based on Web-surfing habits. Third-party ad servers have the same issues as site-side servers do. 
  • Session-specific targeting. Specifics include domain, browser type, and operating system. Again, this can be accomplished on the site side, usually to greater effect as the publisher only shows the ad (and bills you) when there is an appropriate fit. When served by a third party, you pay for the media even if it doesn’t fit your demographic.(Remember, there are plenty of other types of targeting I’m not covering here).

Trafficking Controls

Without a third-party server, trafficking ads to multiple publishers is a problem. It can be complex, with many points of failure. A good third-party server simplifies the process of trafficking campaigns and should provide valuable accounting methods for successful delivery and approval of your ads by the publisher.

Dynamic Ad Serving

Most publishers have a limit on the number of ads they will accept at one time. Usually this ranges from 5 to 10 creatives per week. Third-party servers use dynamic ad serving to rotate multiple creatives through one ad tag. This allows the advertiser/agency to traffic as many creatives associated with those tags as they want. This simplifies life for the advertiser and the publisher by cutting down significantly on the work done by both.

Conclusion

There are other ad server features not covered here. But this is a column, not a book! You should now be educated enough to talk to a salesperson without too much trepidation.

Next, I’ll write about a topic near and dear to my heart: how to work with tech companies for long-term success. It’s time to set a few things straight about this marketplace. Customers need to understand that while they are in a position to beat up their tech partners (notice I don’t call them vendors) on issues such as price, they should think twice. If there are any tech firms out there that would like to voice their thoughts on the topic, drop me a line.

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Advanced Ad-Serving Features, Part 1: Site-Side Servers

(Originally published in ClickZ, November 2001) by Eric Picard

A few things have happened since my last article:

  • DoubleClick did not buy Real Media, as was widely speculated.
  • 24/7 Media did buy Real Media.

With all the turmoil in the ad tech market, it might be time to review your tech partners’ stability. You can read my comprehensive (if a little dry) recommendations from way back in June. Boy, it sucks being right sometimes.

Last time, we talked about the basics of ad serving. I got a few emails from ad-serving companies arguing that I didn’t cover enough in that article. That was the point, actually, to write a quick overview. I doubt I’ll hear that complaint again — this two-part series goes into plenty of detail.

I will say up front that this is still a generalized overview. There are individual features of various ad-serving products that I won’t be covering. You still need to do a comprehensive review of various offerings before making a final technology decision.

I did get emails from individuals who couldn’t see much specific differentiation between a site-side and a third-party server. One wrote: After reading your article, I still do not see the advantage of having a third-party, other than the same reports in the same format… What more do third-party servers provide other than the number of impressions delivered and the number of clicks? Is there some other type of analysis of the campaign that the third-party provides?

First, I am not advocating the use of third-party servers over site-side servers. The two types of ad servers are designed with different purposes in mind. Site-side and third-party servers are not competitive. Site-side servers are aligned to publishers, while third-party servers are aligned to advertisers and agencies.

This analogy won’t earn me any points from the site-side server companies, but we could put it like this: A site-side server is to a third-party server as a freight train is to a passenger train. Both must be able to travel on the same tracks. Both must travel at the same speed. Both must deliver their content accurately and on time. But the passenger train needs to be a bit more refined in its amenities. The freight train needs to be able to handle a heavier load and deal with different delivery protocols (after all, passengers walk off their trains while cargo needs to be unloaded).

Second, unified reporting and trafficking procedures may not seem like a big benefit if you’re an advertiser that doesn’t do lots of trafficking and reporting for large media buys. But if you have to integrate 20 or more unique site reports into one single report for a client, it isn’t a simple process. It can take days or even weeks.

Otherwise, the reader is on the right track (pardon the railroad reference). The real strength of a good third-party server comes from its advanced features. There are plenty of advanced features to discuss on the site-side as well.

So let’s go deeper. This time, we’ll look at site-side servers, and we’ll go into depth about third-party servers in my next article.

Site-Side Ad Servers: Advanced Features

Just to reiterate: Publishers use site-side servers (sometimes called local- or sell-side servers) as part of their business infrastructure to accurately deliver and report on ad delivery. This includes trafficking controls, workflow, inventory management, and many other parity-level features. Many (but not all) site-side servers include the following features.

Targeting

  • Geographic targeting. This feature works best when applied on the site side. The ad will be sent to only those users who are where you would like the ad to be seen. The main issue in geotargeting is accuracy. There is wide disparity in the accuracy of methods used to target based on user location. Not all solutions are created equal. Some subitems include targeting based on IP address, Standard Industrial Classification (SIC) codes, and ZIP Codes. 
  • Profile-based targeting. A few of the bigger players spent millions trying to build accurate databases of user activity so that ads could be targeted based on Web-surfing habits. You can, for example, send an ad for a motorcycle to people who visit sites for motorcycle enthusiasts. This is sound in theory. In practice, it’s difficult to implement and very expensive to maintain — a critical consideration, given current market conditions. Ask how frequently a vendor’s database is refreshed and what the average age of its profiles is. Some experts question the validity and value of profile-based targeting, while others claim success. 
  • Content-based targeting. This is a feature generally offered by portals, networks, and search engines. Subcategories might include keyword search results and content categories. 
  • Session-specific targeting. This includes domain, browser-type, and operating system.

There are other types of targeting that you may come across, but the above are the primary methods.

Creative Rotation Controls

  • Frequency capping of creative. This allows you to specify how many times you want an individual user to see creative before you “shut it off.” Experts recommend frequency capping be used to limit the number of exposures an individual user will have to your campaign. Being able to cap frequency is the culmination of the desires of brand advertisers from offline media, which they cannot do offline. Direct marketers should take note, because it is possible today to review the effect of frequency on conversion. 
  • Sequential serving of creative. This feature lets you specify a sequence of creative elements shown as the users travels across Web pages. For example: A car drives along a highway with a tantalizing opening message. Next, the same car appears with the second part of the message. Finally, the last message appears with a hook or call to action to draw users in. 
  • Accounting interfaces. Some site-side servers include interfaces for popular business accounting packages, such as Microsoft Solomon.

You’re on your way to becoming an expert. Next time, we’ll examine the even-more-advanced advanced features of third-party servers.

Ad Serving 101

(Originally published October 2001) by Eric Picard

The ad-serving world has seen a lot of turmoil of late:

  • DoubleClick is on a site-side ad-server buying spree, with plans announced to purchase L90’s technology business and possibly Real Media. 
  • Bluestreak bought Engage’s third-party ad-serving business, AdKnowledge. 
  • Engage shuttered its media business (the former Flycast Network), leaving it with only its site-side serving business. 
  • Mediaplex (a third-party server) was recently snapped up by ValueClick. 
  • MatchLogic (also a third-party server) closed its doors not too long ago.

Site-Side Ad Servers

Back at the beginning of time, online publishers needed to monetize inventory through advertising. At first, they simply plunked ads onto pages as regular images and served them with standard Web servers. This worked for a little while, but it quickly became apparent that greater features were required than could be handled by standard Web servers.

Advertisers needed accountable reporting. They needed audited impression and click numbers, and they needed to know that methodology was used. They needed to be able to access reports for their campaigns on a regular basis and for specific date ranges.

As more ads got served, advertisers wanted to be able to rotate ads based on various trafficking criteria — just like in offline media. This required that publishers have control over their inventory — and that they could schedule ad flights to run in specific rotations and for a specific number of impressions. This is complex, because it involves prediction of available inventory based on current and past impression volumes.

The job of a site-side ad server is as follows:

  • Serve ad creative every time a page is called without serving “broken” banners — this is a mission-critical job process 
  • Manage the inventory of available ads and make sure appropriate ads are served to appropriate locations based on the media buys 
  • Report on the number of impressions and clicks that have taken place for a specific flight of media

A site-side server has many other features, such as geographic targeting, frequency capping of creative, and sequential serving of creative. But from a basic ad-serving standpoint, that’s the role of the site-side server.

Third-Party Ad Servers

As the online advertising industry matured, it became clear that though site-side ad servers performed their job for the publisher, they weren’t very friendly to advertisers who ran campaigns across multiple publishers.

Here’s a fictional example:

XYZ Finance is a big financial firm. It runs ads across 10 different publishers. Every month, it runs a new campaign with 20 different creatives. So, every month it sends 20 different creatives out (trafficks them) to the publishers. And every month, it gets reports back from the publishers with all its statistics.

 

The problem is that it then has 10 different reports in 10 different formats. All of which must be put into Excel and merged. Additionally, all it gets from the publisher is the number of impressions and the number of clicks, plus a click rate. As enlightened marketing professionals, we know the click rate is a horrible measurement of overall performance.

Additionally, if XYZ wants to change creative during the run of a campaign, numerous manual steps must be gone through, from contacting the publisher and having it pull the current ads to getting new ads trafficked out and having the publisher turn them live.

So the answer to these problems is the third-party ad server. While the job of the site-side server is mainly about delivery and management of inventory, the third-party server is more focused on trafficking, reporting, and analysis of results across multiple locations.

Here’s how it works at its most basic:

  1. The advertiser (or agency) has a contract directly with the third-party server. 
  2. The advertiser uses the third-party server to upload and traffic all its ads to various publishers. 
  3. The publisher, instead of placing actual ad creatives into its system, places an “ad tag” into the system. The ad tag calls the third-party server when it is placed on the page by the site-side server. 
  4. The third-party server is responsible for delivery of the ad when it’s called by the site-side server. Again, this is a mission-critical serving job and can never be down. 
  5. The advertiser has 24/7 access to the third-party server and runs reports any time for any date range. The reporting and analysis tools on the third-party server are much more powerful and refined for the advertiser’s needs. 
  6. Since reports are generated by only one solution, they are unified and similarly formatted. This enables clearer value analysis of each media buy. 
  7. If the advertiser wants to change an ad during the life of a campaign, this can be done dynamically — swapping the creative in one central location. That change populates automatically across all publishers.

Third-party servers have plenty of other features; these are just the basics of the value proposition. Next time, we’ll talk about some advanced features of the ad-serving space and see what kinds of advancements are being working on.

Protecting yourself from exploding Ad Technology partners

(Originally published in ClickZ, June 2001) by Eric Picard

As you might have heard, AdForce closed its doors last week. CMGI shut it down after failing to find a buyer. What a strange world we’re living in. It makes you wonder whose balloon is going to pop next, doesn’t it? It wasn’t so long ago that these companies were awe inspiring to many of us in the industry. How quickly things change.

So what is an agency or advertiser to do? If you make decisions about or manage the relationships with your technology partners, maybe we can come up with some guidelines for you on how to judge a company’s stability. The world is a dangerous place right now, and getting caught unprepared if your ad-serving infrastructure suddenly goes up in smoke could really hurt.

Public Companies

Let’s start by looking at the public companies. Once, you could assume that if a company was public, it would most likely be around in a few months. Not any more. Being public actually works against most companies in our space these days.

A very well-known industry analyst once told me that any company with a stock price of under five dollars is focused only on appeasing the investors, not on doing business, and certainly not on innovating. At the time, he said he didn’t even pay attention to those companies. I have to wonder if he still operates on that principle. Today, companies in our space with stock near or above five dollars are like superheroes.

I just looked at the list of 43 stocks I’ve been tracking for the past three years. It’s made up of companies either active in online advertising or peripheral to it. I noticed that 34 are trading under five dollars or are no longer trading at all. Of those 34, 12 are trading under one dollar, and 17 of them are no longer actively trading. Some have stopped trading because of merger or acquisition, but most are just out of business.

So how do you make sure you’re safe?

  • Look at the makeup of your technology partner’s customers. And I don’t mean its “portfolio” — since this often contains customers no longer working with the company. I mean active customers.
  • Ask your contacts for active customer references. This might be a tough play, but at least you’ll be able to judge the stability of the company. If a company doesn’t have one customer willing to say something good about it, you might want to reconsider.
  • Find out how much operating capital the company has. DoubleClick is an example of a public company in our space with lots of operating capital. 24/7 Media is an example of one without any operating capital.
  • Make use of the fact that the company is public. Look closely at its public disclosures. Read quarterly reports. Read analyst reports. Judging which companies are in trouble is mostly a clear and commonsensical act.
  • Check if the company traded as an over-the-counter or bulletin board (OTC:BB) stock. If so, you should be especially wary, because the regulations about reporting here are much less clear. Since there is less regulation, companies trading as OTC:BB are often seen as stock scams at worst and as a little shady at best.

    The main change these days is that since many companies have been de-listed from the Nasdaq, as victims of the times, they have ended up on the OTC:BB. If the company is a real business, you should be able to tell pretty easily. One quick test is to verify that its “gallery” or case studies are real, not mocked up. Be direct and ask — even ask for real customers you can talk to if you feel uneasy.

    One of the first questions I ask a company is if it is public or private. If it’s a small company and it’s public, I immediately ask if it’s an OTC:BB.

Private Companies

Now that we’ve looked at public companies, we should review how to judge the stability of a private company. It’s not so different, but some of the information isn’t available publicly.

First, make sure that the general items are covered from above — and especially focus on customers. Since public companies are accountable for things that they say in public, they usually are relatively credible (minus the marketing spin). Private companies are not so tightly regulated, so make sure to do your due diligence.

Usually, private companies’ financial health is the hardest point to establish. And today, this is the most critical factor to review. There are, usually, some indicators:

  • Private companies generally start up through bootstrapping or venture financing. If it’s the latter, you’re in luck. It’s a huge win to get investment from a venture capital (VC) firm, and the general response is to issue a press release.
  • Review the company’s press releases, and try to figure out how much money it’s raised.
  • If it has been growing and hasn’t raised any money in the past six to eight months, your warning bells should go off. The only situation in which that shouldn’t worry you is if the company is bringing in lots of revenue. This is tough, given the market right now.
  • Next, you should figure out how much time it has to get profitable. Once you do (explained below), feel free to ask the company directly how it plans to achieve profitability. Again, you may not get an answer, but it doesn’t hurt to ask.
  • Get a general idea of the company’s burn rate by using the following guidelines:
    • How many employees does it have? Usually, the company will tell you.
    • Where does the company have offices, and how many people are in each?
    • What kind of capital expenditures might it have? If it’s an ad-serving company, how much is it spending on server farms?
  • This is closely held competitive data, so a company is unlikely to just hand it over, but you can make some educated guesses about these things:
    • Figure that a company with 30 employees is burning $150,000 a month for salaries (if it’s aggressive).
    • If the company is in New York, figure that it’s paying big-time rent (even with some of the new deals opening up). An office for 30 people will run roughly $35,000-45,000 a month, depending on location and other costs beyond rent.
    • That gives us close to $200,000 monthly without even getting to hardware or server infrastructure.
  • When you look at (a minimal) server infrastructure and costs for setting up and maintaining the business, we’re talking about $250,000 monthly, or about $3 million a year.
  • That gives a company of 30 about two years of life if it’s raised $6 million. You can work out the various scenarios for different sizes and funding.
  • I’m being quite conservative here, and this is based on a whole lot of assumptions. For instance, if the company happens to have offices in New York and San Francisco, you can imagine that the costs are a lot higher.
  • If the company is too large for the amount of funding it has, it will burn out fast. If it’s too small for the amount of business it has, you’re going to get horrible service.

So now you’re an expert in evaluating those companies you’re working with. Go out and look at them. There’s no time like the present.

Embracing the Promise of Interactive Advertising

(Originally published in ClickZ in January, 2000) by Eric Picard

The explosion of rich media advertising in 1999 was just that, and it forced many traditional advertising agencies to evaluate how they could offer this exciting, dynamic interactive medium to their clients. While some successfully made the leap to rich media, too often the alleged limitations of the technology – or simply a fear of it – prevented people from tapping into the wealth of experience they had accumulated through ad creation in broadcast and print, as well as in GIF banners.

When I taught photography classes in graduate school, I once had a student who felt she couldn’t comment on her classmates’ work because she wasn’t a “photographer.” This woman, a talented fabric designer, had a powerful sense of contrast and texture, and was certainly qualified to comment on just about any visual media.

But she ignored her extensive knowledge of design and all her proven design skills because she found herself on uncertain ground. I pointed this out to her, and over the length of the course, she ended up consistently giving other students extremely insightful commentary on their work.

Rich media advertising holds the great promise of increasing both click rates and conversion rates, but only if advertisers consider it as an evolution of advertising solutions, rather than an offering that exists in a void.

In the past year, the underlying technology has evolved and become an easy-to-use solution for creating attention-grabbing, interactive campaigns. The technology now enables advertisers to choose how, when and where to use the medium, depending on the objectives of the ad campaign.

However, the real success of rich media advertising rests squarely in the hands of the creative team that conceptualizes and creates the banners. Currently, very few agencies have figured out how to tap into the full power of rich media to use it for creative, effective ad campaigns.

Simply overlaying GIF-creation mentality is not enough. Creative departments need to approach this new medium with the same vitality and energy that they brought to traditional ad campaigns and standard banners. By doing so, these teams can quickly begin creating rich media campaigns.

Three things advertisers should keep in mind when working with rich media:

Draw on your experience, but don’t allow yourself to be shackled by it. Innovative and unexpected use of the technology is the most important aspect of building effective rich media. In the same way that you begin to ignore the “to do” notes you’ve plastered on your monitor, users stop clicking on ads that use certain “tricks” once the novelty and excitement wear off.

Therefore, you need to continually tweak an ad to keep it fresh and interesting. The most effective way to accomplish this is to tap into previous experiences and put a new twist on them. Do something unexpected. For example, if you’ve gotten great results with dark backgrounds and light text, keep on doing what works, but include a subtle (or not-so-subtle change) to grab the viewer’s attention. Maybe make the shadows move, or create some call to action that invites the viewer to interact with the ad.

Don’t rely on your competition to figure it out for you. Your competitor may have a successful ad campaign, but don’t simply copy what they’ve done. At the same time, don’t ignore their success. Push yourself to experiment with the medium and don’t limit your ideas because no one else has done it. Rich media is still in its infancy, and we will continue to see methods and practices prove themselves over time.

Keep an eye on the future. While so much of the click rate is dependent on great creative, our team at BlueStreak.com has been running experiments to learn methods of improving click rates that are non-specific to the messaging or creative. Basic issues like effective colors and messaging are already well-documented in varying studies of banners. But things that we are learning now will allow us to make automated improvements to any ad – regardless of creative content – in the near future.

In the end, a powerful combination of proven techniques, innovative approaches, scientific methods and new advances will determine what works best with rich media.

In the meantime, advertisers need to take advantage of the great new technologies being developed. If agencies with no rich media experience want to make the move to offering this medium, I would recommend the following: Remember everything you’ve learned creating broadcast, print and GIF banner campaigns. Bring to the new task all your vitality, creativity and well-honed skills. And fully embrace the possibilities of rich media.