Category Archives: Ad Technology

Mar 03 2012
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Ad Technology, Media Agencies

The secret media-buying revolution

(Originally published in iMediaConnection, November 2009) by Eric Picard

While you were going about your day-to-day business over the past year, the world changed, and you didn’t realize it. Everything you think you know is simply wrong. I’ve been predicting this change for years, I’ve spoken about it at conferences, and I’ve written articles predicting that this change was coming. But even I didn’t realize it had happened.

Last week, at the ad:tech New York conference, keynoter Sir Martin Sorrell, chief executive at WPP, talked about the massive oversupply of manufacturing capacity in every manufacturing category, in every market in the world. And he succinctly pointed out that another way to describe this oversupply of products was a shortage of customers. This hit me hard. Although the whole market has been talking for months about the vast (some even have said unlimited) over-supply of impressions, the reality is that there is a vast shortage of opportunities to expose advertising messages to actual potential customers. The glut of impressions is a glut of low value impressions — impressions that don’t get the message in front of the right person to achieve the campaign objectives. I thought about this for the rest of the day. It was like getting tapped in the nose with a series of quick jabs. Thwap, thwap, thwap.

Later at ad:tech, Quentin George, chief digital officer of Interpublic Group’s Mediabrands, sat on the panel “The Rise of the Audience Marketplace.” He followed up Sorrell’s eye-opening remarks with a few more taps on the nose. Thwap, thwap. He articulated much the same message as Sir Martin, but then added this: “In a world with such massive overcapacity, the only way for companies to differentiate and capture a disproportionate share of dollars is through building a brand.” It was the follow-up — the second half of a one-two punch — that just about knocked me flat.

What really caught me off-guard with this revelation was something I’ve understood intuitively, but hadn’t crystallized for me yet. These new models are not just about direct response buying of cheap remnant inventory based on CPA calculations. The opportunity is much bigger than this. It’s about everything: every methodology, every type of inventory — every type of objective. We’ll be able to measure brand effectiveness, target ads to audiences, and pay for reach as well as for performance. We’re witnessing a radical shift in an industry worth hundreds of billions of dollars — and most people haven’t even realized it yet.

On the panel, George spoke mostly about Cadreon, the new-model agency that IPG has rolled out on top of the various ad exchanges — which competes with Publicis Groupe’s VivaKi, among others. He talked about how efficiency and effectiveness has been improved between four and 10 times on campaigns run across the exchanges in this new model, and that the demand among the IPG agencies worldwide was immense. “If I don’t roll this out in the next six months in China, I’m going to be in trouble,” George said. He also described the complexities of this, given the lack of standards in formats and provisioning across each market.

In a brief conversation with my friend Dave Smith, CEO of San Francisco-based Mediasmith, he talked about his agency’s experiences in investing in these new models for buying, and expressed a deep excitement about how quickly and completely this was already changing things. Smith is the original innovator in our space — he’s been applying technology to the problem of media buying in more innovative, sophisticated, and effective ways for longer than anyone else out there. Thwap.

Also while at ad:tech, I sat with Joe Zawadzki, CEO of New York-based MediaMath, one of the new so-called “demand-side platforms” or “demand-side buying systems.” He talked about his company’s technology investments and the way that MediaMath is extending its system to support buying in every marketplace it can get access to. He talked about efficiency and effectiveness. We talked about the ability of these systems to bid in real time on every impression, about how the technology was going to change the face of the ad ecosystem. Thwap, thwap, thwap. Zawadzki has been at this for a long time now, as he was one of the founders of [x+1], now one of his competitors in this space.

Prior to attending ad:tech, I spoke with Brian O’Kelley, CEO of AppNexus, another player in this space. Like Zawadzki, O’Kelley is one of the early players in this space; he was a cofounder and CTO of Right Media. We talked about the advances in bidding mechanisms, the massive scale that this new segment of the industry is going to need to support, and how AppNexus was building applications to support this, as well as plumbing and infrastructure that he hopes the rest of the companies in the space come to rely upon. Thwap.

Up on the stage of the ad:tech panel, alongside Quentin George, Bill Demas, CEO of Turn, spoke about the differences in the way the market is currently working from more “traditional” online display ad buys. He talked about how the inventory that the players in this space have access to currently is “non-premium” inventory — that for now, at least, the premium inventory is still being represented by human sales forces. He also noted that media buyers and agencies are still negotiating on guaranteed buys, and he talked about how this new medium is primarily about discounts on the inventory.

But the panel was quick to point out that this idea of “premium inventory” was a relative concept. While brands certainly care about running ads alongside content that is of a premium nature, the quality of an audience is not qualified by this alone. While Demas talked about the discounts that advertisers are getting on inventory purchased this way today (since there is a disparity between those bidding on the high quality inventory that is “lying fallow” on sites today), I believe there is another dynamic that will play out.

Much like the early participants in the various paid search marketplaces were able to find incredible bargains on keyword buys due to a lack of competition, these early participants in these online display marketplaces are finding steep discounts on highly targeted audiences. But this is bound to change. George raised this issue specifically, pointing out that advertisers are more than willing to pay a fair price to get their messages in front of valuable audiences and reward publishers for attracting them. But the difference is that only the impressions created by valuable audiences would be rewarded in a world where every impression could be analyzed and bid upon in real time.

This does beg the question of what value premium versus non-premium publishers would provide to the market. One interpretation of all this is that The New York Times is only as valuable as the individual audiences it represents — and that the same users reading a blog would be monetized the same way.

I have my own theory on this. I believe that valuable audiences are going to drive high eCPMs, regardless of the publisher. Combining high-value audiences with high-quality content will drive that price up even higher. And impressions that contain fewer targeting parameters will drop in value. But I believe that untargeted impressions on non-premium publishers will become almost completely worthless in this world.

This bodes very well for premium publishers, which will get ultra-high eCPMs on their most highly targeted impressions of quantifiably valuable audiences. They will get lower, but still respectable eCPMs on their less qualified impressions that are still associated with high-quality browsing experiences. It’s the lower quality content — the UGC and impression 15-1,000 in an online photo gallery on a social networking site — that is going to take a hit on a blended eCPM basis. The hope is that some small portion of their impressions will cover a valuable enough audience that they’ll still monetize effectively.

Now don’t get me wrong. It’s going to take years for the industry to shift to this new model. Agencies will continue to hire armies of liberal arts majors for the foreseeable future and arm them with massive budgets and negotiating power. And publishers will still hire armies of salespeople to answer the RFPs and buy drinks, dinners, and golf games for the buyers. But I’ll officially call the fight at this point. Thud!

While we were going about our day-to-day, this new model has been playing rope-a-dope with us and is winding up for a haymaker. Ignore this message at your peril. Ding, ding, ding!

Mar 03 2012
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3rd Party Data, Ad Technology, Data Collection, Media Agencies, Online Privacy, Targeting

Facebook’s frighteningly impressive ad potential

(Originally published in iMediaConnection, September 11, 2009) by Eric Picard

I’m pretty active on Facebook. I check my account at least once per day, and I frequently will fill downtime by reading through my friends’ status updates on my phone. I find Facebook to be a brilliant and incredibly useful tool. It has reconnected me with old friends, given me a closer relationship with relatives who live far away, and helped create a closer, more personal relationship with many of my professional colleagues. And the amount of data that Facebook stewards for me is both impressive and scary.

In 10 years, Facebook will know what an entire generation’s boyfriends, girlfriends, spouses, and children look like. It will not only have a map of the social graph and deeply understand the relationships between people across the world, but it will also know what things they like, what companies they’ve worked for, and, in many cases, minutiae of value to advertisers — such as what products they’ve owned.

And despite the relative quiet around what Facebook is doing in advertising, the network has created one of the most powerful and elegant advertising tools I’ve seen so far. For the past six months, I’ve been telling people in almost every advertising discussion I’ve had that they should go and create an ad on Facebook. The process is a revelation.

The buying process inherently involves targeting. Keyword targeting is only one method used — and not required. Ads can be targeted not only to geography and demographics, but also according to workplaces, relationship status, and even ads shown on people’s birthdays. The tool implicitly gives you an estimate of the audience size you could potentially reach. And as an advertiser, I can’t imagine a buying scenario where I’d trust the estimate more. In a city like Seattle, which has numerous technology companies, an advertiser could even build offers specifically to employees of specific technology companies.

Recently I saw an ad from a guy who was trying to find a job in marketing at Microsoft (I work at Microsoft). His ad had a picture of him, a brief background, and a goal for what kind of job he was looking for. And it linked to his profile. Now, I must admit that I had mixed feelings about this ad, but I was also impressed at his chutzpah and also by the simple fact that it was possible to do this.

Scott Tomlin is a colleague of mine who owns a comic book store here in Seattle called Comics Dungeon, and we’ve chatted repeatedly about the difficulty he has as a local small business owner with advertising online. This is despite the fact that he has worked as a software engineer on advertising platforms for the past six years, and knows quite a lot about advertising.

Unfortunately the lessons of national advertising don’t apply very well to his local small business. He’s tried all the “usual suspects” in traditional media, but has really pushed hard on the idea of advertising online, especially given his main career. And he has had a hard slog of it — with the exception of his efforts on Facebook.

Next page >>

Scott’s main push with online advertising has been selling subscriptions to comic books, and while he’s a local business, customers of his subscription service are spread across the U.S. The main reason he focused here is that he can justify the relatively high acquisition costs for a subscription customer, rather than just driving in foot traffic. And his acquisition costs with online advertising have been high — especially via paid search.

As I mentioned, the one shining ray of hope he’s had is Facebook. With Facebook, he can target so incredibly well that he can get his ad in front of folks he could never reach using other methods. He walked me through some of the campaigns he’s running on Facebook right now, and the results were pretty impressive. With Facebook he’s been able to branch out beyond his subscription sales and effectively target local customers to bring traffic into his store. And with Facebook’s features for hosting events, he’s found a very powerful tool to bring potentially high value customers from around the region into his store.

Unlike a national advertiser, as a small business, it’s in Scott’s best interest to spend some time honing his campaign to address incredibly small micro-targeted audiences — audiences that would be too much work and too tiny for a big advertiser to bother with. He showed me one campaign he’s been running to promote an event at his store. With the five targeting parameters he’d assigned to the campaign, his estimated audience was only 620 people. But he had more than 40 clicks on this campaign and, at last check, had 24 people who had signed up to participate — using Facebook’s event promotion tools. It is this integration of incredibly rich targeting with tools specifically available for individuals, organizations, and companies that make Facebook so incredibly valuable from a small local businesses standpoint.

I first recognized this power when I happened to notice an ad for a local Vietnamese restaurant called Monsoon East on my Facebook homepage. I still don’t know if Facebook was somehow able to glean that I love Vietnamese food, or if the ad just targeted me as a local. But what really grabbed my attention was not the ad itself, but what happened when I clicked on it. The ad didn’t link me through to the restaurant’s website. It brought me to a group page for the restaurant. My first thought was, “Oh — smart — it’s providing a landing page for local advertisers so they don’t need a website.” But then I saw that Monsoon East did, in fact, have a website — and after a bit of clicking, I realized that the restaurant actually has one hell of a website. It’s elegant, beautifully designed, and a fantastic site for a local restaurant. At first I was baffled as to why Monsoon East didn’t link to its website, but I quickly realized that its group fan page is brilliant.

This was a fan page with concise, relevant information that told me about why I might like the place, and then the magical “bit at the end” — the members’ list and discussion board. Monsoon East currently has 109 members on its group page, mostly filled with young, good looking, active-lifestyle (judging by their profile pictures) people. Despite my cynical ad-pundit view of advertising, I thought, “This looks like the kind of place I might like.” Just that they had 109 members on their fan page made this restaurant much more legitimate to me (as a consumer). And that’s powerful.

So kudos to a savvy set of local entrepreneurs who are unleashing the power of social networking to promote their businesses. I think we all have something to learn from them.

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Mar 03 2012
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Rich Media

How we dropped the ball on rich media

(Originally published in iMediaConnection, July 2009) by Eric Picard

Back in 1997, I started one of the early rich media companies. Our goal was simple: Provide rich creative to capture attention (create awareness), interactivity to foster engagement (drive intent), and the ability to complete a transaction directly within the banner in order to drive a direct conversion — or at the very least to shepherd the consumer down the purchase funnel.

I remember clearly some of those early rich media ads. The ideas were strong, and the ads would be just as effective today as they were back in the late ’90s. Our technology enabled simple impactful ads that were very effective. We invented expanding ads to create more room so that audiences could interact and even purchase products right within the ads without leaving the pages that they were on.

For a major online book retailer, we created an ad that started with a simple rich interactive game (awareness and engagement with the brand). It offered the audience several choices for the next step — either browse some titles (foster intent), buy a book that was available for a special price (foster an immediate purchase), or sign up for one of the company’s numerous mailing lists. While we didn’t sell many books, the conversion rates on the mailing list signups were through the roof! And the amount of engagement that happened right in the ad was far beyond anyone’s expectations.

This type of experience was the norm — almost all of our customers had fantastic results — and the funny thing was that the more interactivity they injected into their ads, the more people interacted with them. As Flash began gaining prominence on pages across the web, I was extremely excited. I thought, “This is the beginning of a new age! Designers can build almost anything with Flash.” But 10 years later, what am I seeing? Amazingly executed Flash ads on every web page? No. I’m seeing basic, boring, simple animations that could be (and pretty much were) executed using simple animated GIFs. Flash offers an unbelievably powerful palette for designers, and we get the modern day equivalent of animated GIFs?

Now, rich media as a category is far from dead today. There are many companies out there building rich media ads, from rich media specific efforts from Eyeblaster, PointRoll, EyeWonder, Unicast, and others to rich media built on top of existing ad systems like Atlas, Bluestreak, DoubleClick and others. Rich media is certainly broadly available, able to be bought by any advertiser, and able to be run on almost any publisher’s site.

But that doesn’t mean that rich media is now the standard way to see ads on the web, nor that basic rich media functionality has made its way into the majority of standard ad formats out there. So let me offer a rich media manifesto for the coming decade and see if we can meet my challenge as an industry.

Minimum requirements
Every single ad should have enhanced interactive functionality built right in. Every stupid simple Flash banner out there should have buttons on the bottom of the ad (and I’d be ecstatic if the placement were standardized) with some simple (I’ll even go so far as to say template-ized) functionality that enhances the ad beyond a click-through to a web page. Simple functions that should be standard in all ads include:

  • “Watch a video demo of this product now”
  • Request a brochure by email or snail mail
  • See a map and directions to the store
  • Print a coupon

Numerous other simple types of functionality should be part of every single ad (and preferably not all in the same ad!)

Every ad should have the ability to expand (upon user request, by clicking a button) and show a larger version of the creative.

Beyond basic template functionality
I challenge every creative and art director to push the limits of what technology can do. The movie promotions have gotten pretty good at driving engagement right in rich media ads. But why aren’t pharma, autos, finance, and other categories doing the same? (Please don’t send me all the exceptions to my statements — I know there’s great rich media work being done in every category — but not enough of it! It should be the rule, not the exception!)

Every brand ad should have some capability right within the ad to move the consumer down the purchase funnel by letting them perform some action. Don’t just show a bit of animated sizzle designed to catch the consumer’s eye and create awareness; once you’ve created some awareness, let the consumer take things to the next level.

Let consumers raise their hand (by clicking their mouse on some action button) and start participating in the advertising experience right there within the publisher’s web page. Let them move beyond the list of basic functionality I provided above — push the functionality typically reserved for a website right into the ad.

Let consumers build a Mini Cooper or trick out their Scion right there on The New York Times’ homepage. Put features on one ad, and let the consumer drag them to another ad. And make the experience more than just fun — make it useful, educate them about the product or service, and provide them with opportunity to take things further.

And enough with the games already. Yes, they can be fun and engaging. But I’ve played enough rounds of miniature golf for various brands — none of which I can recall. And I’ve seen enough gimmicky rich media ads where some slick, cool, snazzy effect was figured out and applied to the creative — but had nothing to do with the brand, and didn’t enhance awareness, unaided recall, or any other important metric.

Show me the ads
I’ve just visited dozens of websites writing this story in hopes of finding some example of a cool, engaging, multi-faceted ad. One that does all the things I’m suggesting here. And I could not find one. I’m sure there is one out there somewhere on the internet right now. But I’ll be damned if I can find it. Instead I saw a banal animated ad for condoms (on a major publisher’s site), an ad on another major publisher for Time Warner Cable (which doesn’t offer service anywhere near where I’m sitting), an animated Flash ad for a major mobile carrier that could easily have been recreated as an animated GIF (this was a repeated and frustrating experience), and just a load of cruddy, awful, benign ads that don’t help the advertiser, and don’t capture the attention or add value to the consumer.

Sadly, the last decent ad I can remember seeing was one for Apple where the characters in the ad interacted with characters in another ad on the page. It was a great ad — brilliantly executed. And at the very least, it built awareness. But it was a home page takeover that isn’t scalable to execute (it couldn’t be run on any site any time). And it offered no engagement opportunity. It didn’t let me learn more about the products being discussed, and it didn’t let me find the nearest Apple store or a retailer offering their products.

We can do better! Much better! Come on, people!

Mar 03 2012
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Ad Ecosystem, Rich Media

Why online creative stinks so badly

(Originally published in iMediaconnection, March 2009) by Eric Picard

Recently Randy Rothenberg, CEO of the IAB, released a manifesto for the improvement of creative online. He and I have discussed this a few times, and I’m right there with him: God, we suck so badly. It’s an issue that has existed since the beginning of our industry, and despite all good work that’s been done by individual creative teams for individual advertisers, we still are a sucky environment for showing ads.

The size issue
I have lots of opinions on what has driven this, but the primary one is that our ad formats are simply too small, so we’ll start there. The historical background is simple on this: When the web was invented, people were accessing it over very low-speed modems. Every image was a big deal, and page load speeds were incredibly slow. So the physical size of banner ads was limited on multiple fronts.

As bandwidth increased and average resolutions increased, larger formats were approved. But it’s been six years since the industry adopted larger ad formats via the Universal Ad Package in 1992. Since then, we’ve increased bandwidth significantly — with much higher broadband adoption — and screen resolutions have once again increased significantly. Additionally, we now have a large number of widescreen monitors on the market, with the standards moving to the aspect ratio of HD content rather than SD television content.

It’s a negligibly easy thing to detect screen resolution and connection speed. Those of us who were pioneers in the rich media advertising space were doing this kind of thing way back in the late ’90s. There’s absolutely no reason that as an industry we can’t offer much larger ad formats to the market.

The formats I would suggest we look at are a 600 x 500 (twice the size of a 300 x 250) and a renewed push for standardizing the 300 x 600 ad format, which was previously named the “half page ad” (but which is hardly a half-page ad when used as a skyscraper on a modern widescreen monitor.

I’d also suggest that we as an industry lock down to a new “brand session” model, where we offer an advertiser the ability to reach each visitor to a website with a one-to-three impression brand exposure session. (This would be adding the concept of frequency to the online impression model.) All ad serving systems offer some degree of frequency capping, meaning that we could simply limit the number of these large-format ads that are shown to a visitor during a single website session. The session would start with one large format ad, then be followed by two of the current UAP ad formats that are standard in the industry today.

Interactivity issues
The other major reason our advertising creatives are so bad has to do with a lack of interactivity. The ad industry has simply not embraced the concept of interactivity — despite having the ability to build interactive ads since the late 1990s.

The thing that makes me sad (yes, it actually does make me sad) is that at Bluestreak, back in the day, we were building ads that would still be seen as “groundbreaking” today from a creative standpoint. But from a functionality standpoint, we launched expanding banners in 1999 that could transact within the banner. We rolled out rich media interactivity and a design tool to build rich media ads. Designers could build interactive ad experiences with all sorts of “bolt on” capabilities, like video, audio, games, etc. Every capability we created in Java back in those days can be fully replicated today with Flash, and there are literally thousands (maybe even tens of thousands) of designers who are quite expert with Flash.

So we have every opportunity to build better ads, but nobody is doing it. I’d love to understand why. Essentially, Flash is used by the vast majority of advertisers to build “fancy animation” that is only a little more advanced than the animated GIF ads that began to surface in the early days of online advertising.

And size is not the issue. With expanding ad units available from every major rich media vendor today, giving audiences the ability to interact with ads in a space large enough to create an emotional connection is quite simple. Although rich media vendors are doing a great job when advertisers are willing to sign up for an “advanced campaign,” the overall percentage of ads that fall into this category is quite low. Frequently, the goal of the advertiser falls more toward direct response than delivering an emotional brand message.

Even if we look at a direct response model, advertisers are not taking full advantage of the medium. Back in the day at Bluestreak, we routinely found that conversion rates were extremely high for actions like newsletter subscriptions, contest sign-ups, requests for product information, or even, in some cases, sales of inexpensive products. I’ve confirmed with a few folks in the last year or two that they see similar conversion rates for ads that push the conversion action into the ad rather than requiring a redirect to a website. So if we saw this back in the late ’90s, why are so few advertisers making use of this kind of functionality?

Conclusion 
I do firmly believe that increasing the size of the creative formats is the primary issue to resolve. But adoption of rich media and interactivity is another area where we should see major adoption. Every ad on the internet should give users the option to expand the ad, request more information, watch a video demo of the product, or even to purchase the product right from the ad. I had this vision for our industry in 1997 when we first started building the technology behind Bluestreak’s now defunct E*Banner product. And the idea that more than 10 years later the industry still isn’t there is not just disappointing. It’s sad.

Mar 03 2012
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Ad Serving, Ad Technology

Ad Serving 101 (Revised)

(Originally published in ClickZ, April 2007) by Eric Picard

Way back in October 2001, I wrote a column with this same title. To this day, I get numerous e-mail from people thanking me for covering this topic. Given the state of the market right now, it’s probably time for an update.

Ad serving is increasingly becoming a commodity. The actual delivery of ads is certainly already commodity. The term “ad serving” is misleading and misunderstood. It sounds like just something that coordinates an ad’s delivery. There’s much more going on here than just that. Lets walk through it.

Publisher Ad Serving

Let’s begin with the nuts and bolts, the most basic functionality of ad serving, then I’ll dive in and explain where the complexities lie. Below is the simplest scenario. An advertiser bought advertising from a publisher and sent the files to the publisher to be delivered onto the page.

Examples of Publisher Ad Servers include Doubleclick DART for Publishers (DFP), Accipiter Ad Manager, and 24/7 RealMedia’s Open Ad Stream (OAS).

Publisher Only Scenario:

Publisher_Ad_Server_1.jpg

  1. Browser points to a Web publisher and communicates via a publisher Web server. The publisher Web server responds back to the browser with an HTML file.
  2. In the HTML file is a pointer back to the publisher ad server. The browser calls the ad server looking for an ad. The ad server responds with the ad’s file location. In this case, the file is sitting on a content delivery network (CDN) such as Akamai or Mirror Image.
  3. The browser calls out to the CDN requesting the specific file containing the ad’s creative content (JPG, GIF, Flash, etc.). The CDN sends the file back to the browser.

This is relatively simple and easily understandable. But this deceptively simple diagram masks what’s going on behind the scenes at step 2. Let’s talk about that for a moment.

ad_server_backend.jpg

Every time an ad’s called, a series of very fast decisions and actions must take place. All this very detailed work should take only a few milliseconds:

  1. The ad delivery engine is called and handed an ID that’s unique to a specific Web page or group of Web pages.
  2. The delivery engine reads the ID and asks a sub-routine to choose which ad to delivery based on a bunch of facts – we’ll call this subroutine the “ad picker.”
  3. The ad picker has a very complex job. It must hold all sorts of data ready, typically in memory or in very fast databases.
    • Picker looks to see if the browser in question is part of any targeting groups in high demand, e.g. geographic location, gender or demographic data, behavioral groupings, etc.
    • Picker looks at all business rules associated with each campaign assigned to the unique identifier.
    • Picker looks at yield across the various options for each creative that match delivery criteria (which ad is most valuable to deliver at that moment).
    • Picker sends final ad selection to the delivery engine. The ad is sent to the browser.
  4. Data handed to inventory prediction system to help determine future ad availability and yield optimization.
  5. Delivery and performance data handed to the reporting and billing systems.

I’ve masked some of the incredible technical complexity, particularly around inventory prediction and yield optimization, but the moving parts are relatively easy to track. I haven’t discussed the business management features of the publisher systems. Bear in mind there are sales interfaces, order input interfaces, billing and reporting interfaces, and many other features I do a bit of disservice to in skipping over.

So that’s publisher-side ad serving, and it’s relatively straightforward. Let’s look at the advertiser side of the equation.

Advertiser/Agency Ad Serving

It’s a bit misleading to call advertiser/agency campaign management systems “ad servers.” These solutions do serve ads, but only as a function of tracking them. Rhere are technical realities in the market that require the serving of ads in order to track delivery across multiple publishers from a central source.

Why does an advertiser or agency use these tools? Two reasons: workflow automation and centralized reporting. These agency tools allow a big chunk of an agency’s grunt work to be automated; the data input, creative management and trafficking steps are significantly automated. Since these tools deliver the ads across all Web sites in a campaign, they centralize reporting into one report set comparatively showing all publishers.

Examples of Advertiser Side Ad Servers include the Atlas Suite, Doubleclick’s DART for Advertisers (DFA), Mediaplex’s Mojo, or Bluestreak’s IonAd system.

Agency Ad Serving Scenario:

advertiser_ad_server.jpg

  1. This begins as before: Browser points at a Web publisher, and communicates with a publisher Web server. The publisher Web server responds back to the browser with an HTML file.
  2. In the HTML file is a pointer back to the publisher ad server. The browser calls to the ad server looking for an ad. This is where it changes. Instead of the publisher ad server pointing toward its own CDN, the ad server delivers a secondary ad tag, a simple piece of HTML that points toward the agency ad server.
  3. The browser calls the agency ad server, which returns the final location of the creative in its own CDN.
  4. The browser calls to the agency ad server CDN requesting the specific file with the ad’s creative content (JPG, GIF, Flash, etc.). The CDN sends the file back to the browser.

While there’s an additional set of hops between browser and ad server in this scenario, bear in mind that this entire transaction takes less than a second. As before, this relatively simple set of actions makes the complexity of what’s happening seem much simpler.

Behind the scenes is a complex, business-facing workflow system that automates about half of the tasks in a media buyer or agency ad operations person’s job. Without this automation, already complex agency roles would be unbearably difficult.

The next step is to get the last half of the agency workflow mapped into these systems and really automate the tasks.

Mar 03 2012
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Ad Technology, Predictions

Stretching Out: Technology and Advertising in 2010

(Originally published in December 2005) by Eric Picard

Every so often I write a column that looks forward a few years to predict the future. I’m taking another stab at it this year.

Rear Window

First, let’s look back on my 2000 five-year predictions and see how I did:

  • Unlimited long distance will be free in the next five years.

    Phone companies are continually expanding their programs for single-rate long distance coverage, but VOIP (define) really captured this prediction and ran with it. With telco-modeled firms such as Vonage; and free communications tools, such as Skype, MSN Messenger, AIM, and Yahoo Messenger; free voice communications are enjoyed by millions of people every day.

  • Cable operators will integrate PVRs (define) into digital cable boxes. Pausing TV (and skipping commercials) will be the norm.

    Not only are DVRs (define) integrated into cable boxes, the whole notion of on-demand TV viewing really took off this year. We now have a plethora of choices when it comes to TV content and how we’ll consume it, and an immense amount of control.

  • Rich media advertising will become the norm online, if only because iTV audiences aren’t going to respond to animated GIFs. Even without iTV, it will happen in the next five years.

    It did happen without iTV, which is only just now starting to explode. Rich media (depending on your definition) is certainly the norm now. Most ads are Flash-based, which is a minimum bar for using the term “rich media.” But for any kind of compelling brand advertising, rich media is the standard.

  • Some technology advance is going to radically change the way the Web works and affects our daily lives, and it will be completely unexpected. This could happen any time, but certainly within five years.

    I realize this one was vague, and it’s certainly a truism (one I’ll include in every list of predictions going forward!). Following, just four unexpected technologies that radically changed the way the Web works to the extent that they affect our daily lives:

    • IM. It was around back then but has really taken off in the past five years.
    • Peer-to-peer file sharing. From Napster to BitTorrent, the world will never be the same again.
    • Mapping. We all thought MapQuest was so cool, but Virtual Earth and Google Earth changed the game completely.
    • Search. Google was barely known in 2000.

Front Window

Here are four new predictions for the next five years:

  • Free Wi-Fi networks will eclipse digital cellular networks in coverage, sparking a revolution in free calling over IP-based networks. Portable digital information consumption devices will also explode.
  • Most TV content will be consumed over the Internet by download, and on demand over very high speed broadband networks. The TV networks will do just fine, and most content will be consumed for free with advertising, just as it is today.
  • Advertising will be much more relevant and effective due to appropriately implemented targeting and filtering technologies that will anonymously identify people across all media. Ultimately (maybe more than five years out), this type of targeting will extend across all forms of advertising, even what today is considered offline.
  • Some technology advance will radically change the way the world works, and it will be completely unexpected. This could happen any time, but certainly within five years.

I’ll even go so far as to guess at some of the technologies that may drive these changes. A huge area of expansion is printable technology.

OLED (define) technology is one of my favorite new areas for speculation. Essentially, the current crop of OLED technology makes flat-panel displays much cheaper because the display is literally printed onto a sheet of glass or plastic by industrial inkjet printers. A big plus is the display is flexible, so a foldable or rollable display is finally possible. But that’s just the beginning.

Last month, Siemens announced a new type of video display that can be printed on paper or cardboard. It’s so inexpensive, it will be used in books, magazines, packaging, tickets, and so on. Interestingly, it will utilize already available printable batteries. This makes the whole process very easy to produce — and very cheap.

Get ready for video everywhere, literally. Video ads will show up on cereal boxes, food wrappers, and all sorts of packaging. Also expect clothing, wallpaper, bedding, even paint to have video capabilities. This will lead to a revolution in information display, mapping, directions, and (of course) entertainment.

Let’s not forget RFID (define) tags and other tracking technologies, such as two-dimensional bar codes. These tools will change forever the way we interact with the world. In the next five years, the rules of engagement around these technologies will start to become established.

Mar 03 2012
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Ad Ecosystem, Rich Media

Make Rich Media Richer

(Originally published in ClickZ, July 2003) by Eric Picard

Last month, I pronounced control the killer app. Let’s discuss how to make use of that knowledge when it comes to the advanced use of rich media.

It isn’t enough to build hot rich media creative to seize user attention. It isn’t enough to follow any one or even several strategic “rules” to get the best results. To squeeze the greatest value out of your interactive efforts, approach your offering from the user’s perspective. Give users as much control as possible. At the very least, don’t make it hard for them to help you achieve your campaign goals.

Back in the days when Bluestreak was primarily a rich media company, I ran our rich media services group. We provided strategy and production. I worked on hundreds of rich media ad campaigns. We learned a lot about what works. At the time, much of that required our proprietary Java technology. Now, Flash supports almost all the things we toiled away on in rich media’s early days.

I no longer consult on rich media creative strategy, so I thought I’d share some insights (given there’s no conflict of interest). Below, how rich media can serve you better than most of what’s online today.

Remove Barriers

Ignore interactive design constraints at your own risk. Far too often, direct response campaigns employ rich media in ways that create barriers to the transaction. In many game ads, for example, a user is required to complete a series of relatively complex actions before gaining access to a form or being able to click to the Web site. This is fine for a branding campaign, but not for direct response.

If the goal is branding and building brand perception, measure as much about the interaction within the ad as possible. Record interaction time, conduct a Dynamic Logic study, track every action taken. This provides a good sense of increase in brand awareness driven by keeping users engaged with the ad.

But for goodness sake, if the goal is to drive traffic or convert users within the ad, don’t erect barriers that keep your audience from achieving your goal. It’s your goal, not theirs. Want to elicit a specific response? Make it easy.

Collect Data Locally

This one blows me away. Plenty of pretty advanced rich media ads collect data. But data is collected on a remote Web site, not within the ad itself. There are huge increases in response when data is captured within the ad rather than on a remote site. Back in the day, we averaged roughly a 70 percent conversion rate for non-credit card transactions within rich media ads.

Part of the increase could certainly be attributed to novelty. Few advertisers were doing this at the time. But much of it has to do with basic human nature. People are unlikely to disrupt what they’re doing to sign up for a newsletter or contest (even if they’re interested). If the conversion can occur right on the same page they want to be on, they’re more likely to convert.

Collecting data in Flash is a simple, straightforward process Flash developers should understand. (If they don’t, the help files are a good place to start. Everything’s clearly explained.) Flash can submit data from an ad to your Web site as easily as you collect it from the site itself. You can even pass data into a Flash file from a remote site using a DNS alias (bounce me an email if you need details) or Flash Remoting.

Create Multipage Ads

Think of a rich media ad as a miniature Web site. There’s no reason to be limited to one page. Flash easily runs multiple “pages” of ads, and even loads multiple Flash files in one main placeholder file. The user experience can be broken into reasonable, bite-sized chunks, all from the same Web page the ad resides on (Warning: Make sure the publisher doesn’t set the page to automatically refresh on a regular basis).

By breaking the ad into multiple Flash files and loading them separately, the file size of each section is low. The ad loads quickly and adheres to the publisher’s size limits. Remember to delay loading additional content until either the page is finished loading (typically less than 10 seconds) or the user clicks within the ad.

Provide Value

Make sure you provide some reason for the user to go through multiple pages of ad content. Too often, rich media use is gratuitous. Each element of creative must be justified from a user perspective:

  • Let the user research your offer. There’s an unlimited number of pages at your disposal. Let the customer research the offer within the ad. Flash can load text files and information files dynamically. Take advantage of it! Use the pages on your Web site dedicated to describing the offer and includethem in the ad rather than popping open a new browser window.
  • Let the user explore. Employ multiple assets to make your case. Rather than build numerous creatives with different purposes, link all creative to the same back end to save money. Again, you can load new Flash as a separate file, so file size limitations aren’t an issue.

    For example, three separate “teaser” ads might attract attention and bring the user into the content. Load the same content into each ad. You could use a tabular interface with one option showing a product video, another providing a product description, a third displaying detailed technical specifications, and a fourth letting users sign up in the ad for more information or a newsletter. Further options might include a print option, chat, customer service or sales callbacks, even full product purchase — all right within the ad.

  • Expand your horizons. Even if you’re not dealing with large-format ads, there’s no reason not to think big. Many publishers let you expand ads right over page content. There’s no reason a 468 x 60 ad can’t expand up to three times the size of the original, providing plenty of room to maneuver.

Don’t Let Cost Stand in the Way

A complex rich media experience will obviously cost more than a simple GIF replacement Flash ad. Even when factoring in the additional cost of rich media production, return on investment should more than justify the expense. Don’t judge results on just a single campaign. You will learn more each time and will likely improve with experience.

Attend conferences, join discussion lists, and feel free to send me questions about your goals. Most of what works well is grounded in common sense. Above all, track everything you possibly can. The data will set you free!

Mar 03 2012
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Publishers, Rich Media

Why Rich Media Is Suddenly Everywhere

(Originally published in ClickZ, May 2003) by Eric Picard

Obviously, I believe in rich media. I founded an early rich media advertising company. I risked everything, convinced a few friends to join me, and started a company with the mission of improving online advertising results with innovative rich media ad technology.

Rich media has since ceased to be “standalone.” It’s a feature, not a product. It’s the special sauce, the frosting, the packaging that catches a consumer’s eye and draws her into a message.

I always believed rich media would dominate online advertising. Even to the point the term “rich media” would one day disappear. “High-fidelity” audio is an example of a term that vanished once the description became ubiquitous.

Rich media is on the verge of ubiquity. Every site I visit on a daily basis is filled with it. It’s a medium of choice for online ads. Animated GIFs account for the majority, but we’ve seen huge increases in Flash ownership. In 2001, Flash accounted for less than 2 percent of ads served through our ad servers. Today, over a quarter of the ads we serve are Flash.

The real question is, “Why?” Why did rich media finally achieve prominence? Why now?

Broadband Adoption

This is a sore point for me. Broadband adoption has soared over the past few years. Certainly, it hasn’t penetrated as quickly or deeply as some predicted, but it’s made huge gains. Broadband is a factor in rich media adoption, but its effect is more psychological.

Flash (for example) doesn’t require broadband to be effective. Most rich media technologies have employed mechanisms for some time to mitigate dial-up speeds. The misconception that rich media requires broadband certainly made it hard for adoption to take off before there was a consensus that broadband penetration was high enough.

Many of the biggest ad agencies are watching broadband adoption rates because they long to run online video (another story entirely). Until now, they didn’t feel the audience was large enough.

Flash Player Penetration

Macromedia has done an excellent job of hollering from rooftops that its Flash player is on nearly every browser on the planet. Once media and creative teams were armed with stats to show clients, the Flash adoption battle was won.

Branding and Direct Response

Numerous studies prove clearly online advertising has a significant branding effect. Many of those studies show rich media use significantly improves recall and other branding criteria. At the same time, plenty of studies indicate significant conversion boosts when rich media is used. This is one of the few times online brand and direct response advertisers have had consensus.

Falling Click Rates

Any sophisticated online marketer shudders at the thought of the click rate being used as an indicator of effectiveness. Unfortunately, it’s still a widely misused marketing success metric. As rich media enjoys much higher click rates, the metric is easy to use when trying to demonstrate an increase in effectiveness or mitigate a decrease in click rate for nonrich media.

Natural Selection

Possibly the least-discussed but highly significant factor in rich media’s rise. Since that oft-mentioned bubble burst, the online advertising industry suffered tremendous layoffs. Individuals who survived really are the cream of the crop. You’ll find very few dim bulbs anywhere in this industry today. It’s no accident the leaders in this space are all proponents of rich media and willing to push the creative and media planning envelope.

Publisher Financial Need

The number one reason rich media flowered. Online publishers have suffered huge revenue losses. They struggle to get a tiny fraction of prices they once charged for online media. This has made even the most conservative publisher open to almost any type of campaign.

If you’d told me three years ago Yahoo would be a Flash and rich media bastion, I’d have scoffed. The battles I was fighting! It wasn’t that long ago Yahoo had strict limits on the number of rotations an animated GIF could cycle through. Today, the site teems with floating ads, expanding banners, and all sorts of rich media that wouldn’t have been tolerated in the past.

Mar 03 2012
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Ad Ecosystem, Ad Technology, Economics

How to Fix Online Advertising (Part 2)

(Originally published in ClickZ, February 2003) by Eric Picard

In Part 1, I discussed three major problems rooted in online ad technology’s architecture. Now, possible solutions.

Neither is final, but at least we have a starting point for discussion. For those of you who read this for the “sparkling wit” of my commentary, bear with me. This is serious stuff for serious times.

Any solution must be industry-wide. It isn’t something one company working alone can achieve. Many approaches are possible. Below, two possible directions, both of which address the following:

  • Media costs are too low to support the industry. The widely accepted solution is conversion to reach-and-frequency-based media buying and selling. There’s no way to implement this today due to technical barriers.
  • Discrepancies between site-side and third-party ad servers are too high. Both proposals remove serving duplication by the publisher and third-party ad servers. Only one counts impressions.
  • Inventory control systems are too unpredictable. My proposals make this more predictable by streamlining inventory control system function and selling by audience as opposed to general volume.

Let me clarify my definitions of ad servers. I refer to an ad server representing a publisher’s inventory as a “site-side ad server” (SSAS). An ad server delivering an advertiser or agency campaign on its behalf is a “third-party ad server” (3PAS).

Some basic assumptions are made in each proposal (you may disagree):

  • Reach and frequency planning and buying are desired to increase online media’s value.
    • Media planners/buyers need tools covering reach and frequency/gross ratings points.
    • Third-party ad serving is required for multiple-publisher buys.
  • Business models are as important to the architectural changes as working technology.
  • Adopting a new architecture will be a long process but must happen within two years. A plan must be achievable in that timeframe.

Architecture Today

Current architecture separates SSASs and 3PASs. Integration issues include:

  • A 3PAS is managed by the site-side system through a redirect, but site-served ads are not. This is the root of the discrepancies between the systems.
  • Advertisers pay twice to serve ads: to the publisher and the 3PAS company.
  • There’s no mechanism for a 3PAS to request the SSAS change how the media is rotated or handled. This is required to support cross-site frequency capping (a root requirement of reach and frequency).
  • Inventory control is viewed as a linked system to site-side serving. No mechanisms support views into inventory control from the 3PAS or from media planning tools.
  • Little integration exists between all systems used in online advertising, and virtually no automation exists.

Cookies: A Major Barrier

A barrier to any workable system overhaul is HTTP cookie handling. Due to cookies’ use restrictions, a solution enabling identification of unique users between publisher and 3PAS is needed. Not a privacy issue — this is anonymous. To track and value activity of aggregate anonymous users, a mechanism is needed to recognize them when they intersect with a campaign across multiple publishers.

There are two schools of thought resolving this issue. One advocates a universal cookie carefully shared across the industry with companies agreeing to a strict privacy policy. The other calls for some kind ofDNS-alias-creating mechanism. Both are complex, but it’s believed resolution is possible. The solutions below assume the cookie problem is resolved.

Solution 1: Divorce Inventory Control From Ad Serving

Change the relationship between inventory-control and ad-serving systems. The 3PAS’s nature won’t change much. It still serves its own content and the site maintains control over inventory. But hierarchy changes. In essence, the site separates inventory control from content delivery. Any ad serve is treated as a redirect, whether served by the publisher or third party. The impression is tracked at the same point for either server.

Pros:

  • Media pricing will be “purer.” Ad delivery cost is separate from media cost.
  • The advertiser can have content delivered by the SSAS or 3PAS. Paying twice for serving isn’t an issue. This reduces costs.
  • The ad server — site side or third party — remains on one level, eliminating the discrepancy issue.
  • This supports the need for the 3PAS to serve its own content to track rich media activity (particularly Flash).
  • It creates more room for innovation when a third party serves the content. 3PAS can differentiate technically from others with varied capabilities for rich media tracking or other solutions, such as automated optimization.
  • Inventory control is simplified, with a more specific focus on that part of the system without concern for ad serving.

Cons:

  • Third-party serving fees are not reduced. Savings would have to be on the media side, when the publisher didn’t serve the content.
  • Publishers must trust the 3PAS for tracking or open a pretty deep API (which many are reluctant to do) for tracking integration.
  • Advertisers must accept publisher media volume numbers (impression opportunities) as distinct from the impression number given by the ad server. A business model shift, but the fairest way for all parties to be paid an equitable fee. Billing media on page views versus ad serves is an old debate.

Walk-through:

  1. The media planning tool hooks into the publisher’s trafficking and account management system and queries available inventory. It recommends inventory to the agency or advertiser based on criteria.
  2. The media planning tool exports campaign information to the 3PAS.
  3. The 3PAS traffics the campaign to the publisher’s trafficking and account management system (a component of the SSAS).
  4. A user visits the publisher’s site through a browser. A call is made to the publisher’s server, generating an HTML page.
  5. While generating the page, the publisher’s server calls the inventory control system for an ad tag. The system selects the relevant ad tag based on available inventory, confirms the user is not subject to frequency capping, and returns that ad tag to the publisher.
  6. Depending on the architecture, a call to the ad server (SSAS or 3PAS) may occur. Most likely, this step is skipped.
  7. The page is rendered in the user’s browser, which reads the ad tag. A call is made to the ad server (SSAS or 3PAS) for the creative. Methodology (including the redirect of the user) is identical for all ad servers.

Solution 2: Third-Party Servers Stop Serving Ads

Solution two removes ad serving from the 3PAS. It turns the 3PAS into a campaign management, data collection, and cross-publisher media management system. On the surface, publishers are comfortable. Their side looks much as it does now. But most advertisers will find limitations on rich media and reporting problematic.

Pros:

  • Media pricing model stays much as it is. The publisher charges a mixed cost for ad delivery and inventory.
  • Third-party ad-serving fees drop (the majority of the charge today is for ad delivery costs).

Cons:

  • This solution requires more work and trust between publishers and 3PASs.
  • Reporting timeframes are restricted to what the publisher can support. Most use log files, meaning data will not be updated within campaigns for longer periods of time than most 3PAS customers are used to.
  • There is no way to use a 3PAS to “audit” publisher activity. The publisher supplies all impression and click data. With the broader mix of 3PASs on the market, advertisers and agencies can choose one they feel is accurate rather than rely on the accuracy of the publisher’s tracking.
  • Many innovations are reduced in effectiveness or simply not possible, including rich media tracking (which requires a 3PAS to serve the creative). It relies on publisher-side solutions, traditionally less advanced than those offered by 3PASs and rich media companies.

Walk-through:

  1. The media planning tool hooks into the publisher’s trafficking and account management system and queries available inventory. It recommends inventory to the agency or advertiser based on criteria.
  2. The media planning tool exports campaign information to the 3PAS.
  3. The 3PAS traffics the campaign to the publisher’s trafficking and account management system (a component of the SSAS).
  4. A Web user visits the publisher’s site through a browser. A call is made to the publisher’s server, generating an HTML page.
  5. While generating the page, the publisher’s server calls the inventory control system for an ad tag. The system chooses the relevant ad tag based on available inventory, confirms the user isn’t subject to frequency capping, and returns the relevant ad tag to the publisher.
  6. Depending on architecture, a call to the 3PAS may occur. Most likely, this step is skipped.
  7. The page is rendered in the user’s browser, which reads the ad tag. A call is made to the SSAS for the creative.
  8. Impression and click data passed back to the 3PAS.

These solutions were assembled in my “spare” time. I’m not a programmer or an architect. I just happen to have a good brain for how technology works and an understanding of how things are configured today. My goal is to get things moving. To be a catalyst for change. Without someone taking a stab at this, I fear nothing will happen.

Mar 03 2012
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Ad Ecosystem, Ad Technology, Economics

How To Fix Online Advertising (Part 1)

(Originally published in ClickZ, December 2002) by Eric Picard

 

A few months ago, I wrote an article about some of the problems with online advertising. As a follow up, today I’m going to discuss some major industry problems, but this time from the perspective of how these problems can be addressed. Those problems are:

  • Media costs are too low.
  • Discrepancies between site-side ad servers and third-party ad servers are too high.
  • Inventory control systems are too unpredictable.

I’m going to be so bold as to offer a solution to the industry — probably not the actual solution, but apotential solution — that is, a viable solution that, at least on paper, would solve these problems plaguing the industry.

Today I’ll lay the groundwork for my proposal, and next month I’ll offer a version of the proposal to the industry. This is a big undertaking… and a bit of a risk. Frankly, I know the solution I come up with is not going to be a final solution, but at least it will be a starting point for discussion.

First, let me clarify my definitions of ad servers (for the millionth time) just to make sure I don’t get yelled at by misunderstanding vendors. I’ll refer to any ad server representing a publisher’s inventory as a “site-side ad server” (SSAS). Any ad server that delivers an advertiser or agency campaign on their behalf I’ll call a “third-party ad server” (3PAS).

How Do We Get Online Media to Be Valued Properly?

As I said last time, media costs are low for a number of reasons. But the general consensus in the industry (not complete consensus, mind you) is costs are low because “traditional” offline media teams cannot plan and buy media online the same way they do offline. There isn’t even a translation mechanism available, as far as I am concerned. Therefore, online media does not get valued properly.

Offline media teams plan their buys using reach- and frequency-based tools. The idea is simple. Reach is defined as the unique audience who saw an ad over the course of four weeks. Frequency is the number of times you reached the members of that audience over four weeks. This translates into a system of gross rating points (GRPs) by which each media vehicle is valued.

A number of companies are developing media planning solutions for the online space based on offline metrics. But even if they succeed, there are still big holes that must be filled.

Offline media is very predictable compared to online media. A radio media plan, for instance, is very accurate when it is bought — the planner knows almost exactly how many GRPs he is going to get. Online media is much less reliable — it fluctuates wildly. This means a stabilization factor must be added to online media buying to compensate for this.

Luckily, there is an answer — frequency caps. The idea is simple. Once an individual member of your target audience has seen your ad the desired number of times (across publishers), turn off your campaign for that user.

Unfortunately, implementation isn’t as simple as the idea, because currently no technology is availablethat the market could adopt to meet this need. It just isn’t available today, nor is it possible for one company alone to build this solution. A broad cross-industry solution is needed to enable this, and it won’t be easy to build.

Media Planning, Buying, Trafficking, and Discrepancy Resolution

The next two problems may seem very unrelated but are actually tied together in the chain of processes within our industry. Let’s look first at the way our industry processes work together.

As you can see in the graphic below, the business model for working online is complex.

Working Online Business ModelFor an ad to actually appear on a Web site:

  1. The media planner must research the available Web sites and assemble a group of sites from which to buy inventory.
  2. A media buyer contacts the sales teams at the short list of publishers she’s interested in with a request for proposals (RFP).
  3. The publisher’s media sales team must review the company’s inventory management system to see if the inventory is available, generate an RFP, and send it to the media buyer.
  4. The media buyer reviews the RFP and, if approved, sends an insertion order (IO) over to the media salesperson.
  5. Next, the IO is handed off to the ad operations team on both ends.
  6. The publisher ad operations team gets the space reserved within inventory control.
  7. The agency (or advertiser, if it’s handled internally) creative team and ad operations team put the campaign into a 3PAS.
  8. The creative team creates the ads; the placements are generated with creatives assigned.
  9. The agency ad operations team traffics the ads through the 3PAS to the publisher.
  10. The publisher ad operations team picks up the ad tags through the 3PAS and places the ad tags into the SSAS.
  11. The campaign runs, and the agency reviews reports from both the 3PAS and the SSAS.

Now, in a perfect world, the campaign would run perfectly. The publisher would run the exact number of impressions specified in the agency’s IO. The impressions and clicks shown by the publisher’s SSAS and those shown by the agency’s 3PAS would match exactly. Unfortunately, in the real world, this just isn’t common.

Most likely, the campaign will be either under- or overdelivered by the SSAS. This happens for many reasons, but primarily because the problem of managing real-time inventory is very difficult. Also, the media buy is negotiated by volume of general delivery rather than by audience delivery, which makes the whole thing less predictable.

In addition, there will always be a discrepancy between the SSAS and the 3PAS. It is inherent in the nature of the technology — the SSAS counts before the 3PAS does, and users sometimes close a browser or click an available link before the ad call is received by the third party. This is just a basic fact. Because the SSAS and the 3PAS count separately, the likelihood of them having matching numbers is almost nonexistent.

These are three big problems. How do we fix them? I’ll tell you my answer next time. But I’ll leave you with one last issue to ponder.

Today, SSAS and 3PASs support the workflow model I’ve shown above. Below is a diagram of the way these systems interact, so ads run on the user’s browser when she views a Web page.

SSAS and 3PAS InteractionWhen a user calls a publisher’s Web site in her browser:

  1. The publisher’s Web server asks the SSAS inventory control system for an ad tag.
  2. The browser calls back to the SSAS for the ad (an impression is recorded) and is then redirected to the 3PAS.
  3. The 3PAS delivers the ad to the browser (and counts an impression).
  4. The user clicks on the ad, is sent to the SSAS (a click is counted) — and then is redirected to the 3PAS.
  5. The 3PAS counts the click, then redirects the user to her final destination.

This process is far too complicated. Even though these redirects typically take less than a second, the fact we’re counting at different times makes discrepancies unavoidable. This model also requires publishers to bear the brunt of coordinating complex delivery schemas, when they’re already dealing with a difficult inventory control issue.

In addition, this system requires publishers to continually upgrade their ad-serving systems to manage increasingly complex rich media implementations. Meanwhile, the 3PAS has a far more demanding reporting role and must serve much of the rich media content anyway, so rich media and post-event (beyond banner) tracking can occur.

My proposal will be a comprehensive plan to solve all three of these problems in one rebuilding of the existing process. I hope this column and the next will spark some ideas with readers — ideas that will move the industry forward. See you next time when I make my proposal.

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