Put Branding In Context
May 2nd, 2008 by Christopher Weiss

 

Targeting for Brands
April 23rd, 2008 by Christopher Weiss

MediaPost recently wrote about Marketing Sherpa’s inaugural 2008 Online Advertising Handbook which showed that less than half of their advertisers use online display ads for branding purposes. I was happy to see that advertisers rated the ability to use behavioral and contextual targeting as an important aspect to ROI measurements though. InsightExpress reported that targeting was a key driver in effectiveness and advised advertisers that the context in which an ad is served is just as important as the ad itself. It comes as no surprise to me that context is important and targeting impacts effectiveness and ultimately ROI. What we need now is to take this a step further and understand which types of targeting work best. This is important because I have noticed that vendors in this arena tend to muddy the waters around targeting and in the end confuse the advertiser and their agencies. So I thought I would shed a little light on the difference between behavioral and contextual mentioned in the study. There seems to exist an almost unnecessary tension between the two different methods of targeting in the marketplace. I say unnecessary because when you compare the two, it is important to note that behavioral is to some degree dependent upon a contextual element; it is in part “contextual over time”, but advertisers still see it more as a black-and-white, one-or-the-other, which-one-do-I-choose situation. So it is worth investigating further. And to make matters worse I realized from this year’s Ad:Tech in San Francisco that many networks are claiming to do a mix of both but in reality they do very little contextual. No wonder there is confusion in the marketplace. Just take a look at two quotes from the industry press over the last few years. “The CPM of behavioral targeting was 24 percent less than the contextual placement, yet it delivered 50.3 percent more imminent purchasers … Therefore the CPM against imminent buyers was 50.6 percent of the CPM of contextual targeting. Behavioral targeting was twice as cost effective.” This is from a case study in TACODA’s Behavioral vs. Contextual targeting research done in 2006. Now here is another more recent quote that seems to almost contradict their findings. “The last two placements showed about a 19% lift in brand recall over the former, proving that when it comes to online ads, contextual targeting can have an effect. According to Marketing Sherpa data, 40.5% of marketers said contextual targeting delivers good return on investment; behavioral targeting was not far behind at 36.7%.” This is from Jonathan Lemonnier in Advertising Age early 2008. Ok, so is behavioral twice as cost effective as contextual or is contextual more effective? How are advertisers supposed to sort this out? To find the reality you have to compare how the TACODA case study was executed with the actual data in the research paper. If you look at the actual data in the TACODA study cited in the impressive first quote, the actual results are far less remarkable. The study is measuring the right KPI, cost effectiveness based on purchases, but the data in the study does not necessarily support the claim that behavioral was twice as cost effective. The case study assumes a certain CPM paid for both behavioral and contextual impressions and that is where the case study separates from the research data. If you look at just the research paper and don’t take into account the current market value of behavioral and contextual impressions, the subjective part of the claim, the empirical data seems to say that contextual targeting outperforms behavioral especially under a frequency cap!

(Number of looks at an ad)

(Seconds spent looking at an ad)

These images are from the actual study. Researchers measured the number of times the subjects looked at each ad on each page (looks, the first chart) and measured aggregate time spent looking at each ad on each page (seconds, the second chart). In the two charts you notice that contextual targeting outperforms behavioral until you add frequency. Only then does behavioral overtake contextual. In fact, on first exposure, contextual well outperforms behavioral for initial looks and ends up with almost similar look results at the second exposure. The story is even better when you look at seconds spent looking at a particular ad. Contextual well outperforms behavioral in seconds spent looking at an ad on the first through third exposure and it is only as you approach the fourth exposure, which is one reason why we frequency cap, where behavioral clearly begins to outperform contextual. Behavioral definitely has it merits. But this study, used to support a behavioral approach, shows why contextual targeting yields the highest returns for brand campaigns (as in the more recent Advertising Age quote). Contextual ads get eyeballs faster and they keep them looking longer especially under a frequency cap of four. In fact, brand advertisers should consider a frequency cap of three in light of this study. This is why big brand advertisers do so well on the contextual networks and why they continue to be a strong focus for them. Contextual gets eyeballs faster and keeps attention longer in today’s world of hyper-short attention spans and overcrowded messages. The moral of the TACODA study should be; “Just don’t over pay for your contextual impressions.”

Tags: contextual, behavioral, ad networks

 

It’s A Jungle Out There
April 11th, 2008 by Christopher Weiss

Rob Hof over at Business Week recently wrote about AdBrite and the launch of their new Open Targeting Exchange (OTX) in his Tech Beat column. The concept is an elegant solution to the challenge of high performance targeting for display advertising and we are excited to be AdBrite’s launch partner. AdBrite is “The Internet’s Ad Marketplace” so it is fitting that they are first to take what Rob calls “a sort of eBay for ad targeting technologies” to market. Here’s the idea, AdBrite is aggregating and integrating multiple external display ad targeting technologies under one sort of free market system that advertisers and publishers can use to target their ads more effectively. When a pageview is called on an AdBrite publisher’s site, OTX calls out at all the potential targeting technologies in real-time to determine the most effective advertisement for the given property, user profile, and location. This fosters competition among all the targeting technology providers creating what LucidMedia President and CEO Ajay Sravanapudi called a “Darwinian environment” where the fittest will survive and over time prosper. Publishers benefit from increased yield and advertisers get a better ROI. The proverbial win-win scenario. We were more than happy to throw our ClickSense® platform into OTX’s Darwinian savanna of 508M impressions a day and 60,000 publisher sites to sink or swim since it has already proven more than capable of handling some of the largest web properties for years now. But at the end of the day it is the user who gets an overall better experience with a more relevant ad and that is good for everyone in this business. We’ve let the lion out so keep an eye on AdBrite’s OTX in the near future.

Tags: adbrite, otx, ad exchanges

Differentiate or Die
April 3rd, 2008 by Christopher Weiss

I was reading Mike On Ads’ multi-part series on Ad Exchanges and I got to wondering what forces came together to create the current ad exchange phenomenon? There’s no denying the emerging ad exchanges are replacing the old yield management solutions out there. They are aggregating the supply to drive new market efficiencies and a new level of transparency in the non-premium marketplace. One of the early factors motivating this was the proliferation of ad networks which have been growing at a staggering rate. ThinkEquity Partners recently reported that there were over 300 ad networks in 2007 which means the number doubled in less than two years. They went on to report that the non-premium market will grow at 28% annually from $2.2B today to $7.6B in 2011 so it’s no wonder the number and the types of ad networks exploded. Vertical, contextual, behavioral, demographic, re-targeting, geographic, site specific, there is no shortage of ad networks out there now. Because of this explosion the mantra of the crowded, long-tail, remnant world of non-premium advertising has become differentiate or die. Why? Because there was (and still is) pressure from all sides to stand out. Pressure from eroding gross margins, strain from publisher recruitment, competition over inventory, negative stigmas about duplication and a lack of transparency, and a fast and furious industry roll-up. The growing revenue base and customer demand needed another solution and the ad exchange was the logical evolutionary path. Ad exchanges are streamlining the process with a whole new level of efficiency that the ad networks tried to deliver but lost along the way. The ad exchange is basically an ad server ecosystem through which advertisers, publishers and networks all manage their advertising business. They do this together and in an open, platform agnostic way that allows market dynamics to work their magic. So now the ad networks are feeling pressure from the exchanges too driving an ever increasing need to differentiate themselves. Think Right Media and the DoubleClick Advertising Exchange as examples. Advertisers and agencies rely on ad networks for the efficiency, reach, and optimization they bring to the table and are willing to give up some editorial control for it. But ad networks tried to control the whole process through proprietary means. This opened the door for exchanges to step in because they simplified and unified the trafficking process on an open platform that was transparent to the process. And there we have it, transparency is the final piece to the puzzle that unlocked the exchange phenomenon. Transparency takes the duplication out and removes the waste. We’ve all heard the timeless advertising adage “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Well transparency addresses that problem. So the ad networks out there will continue to differentiate themselves if they want to survive. The winners will be the exchange-friendly networks who can deliver the same transparency that enabled the exchange phenomenon in the first place.

Tags: ad exchanges, transparency, ad networks

Premium Pork
March 27th, 2008 by Christopher Weiss

Dave Morgan, TACODA’s founder and Executive Vice President of Global Advertising Strategy for AOL, just hit the nail on the head with his blog commentary on the stigma surrounding ad networks. He points out that the ad network brought a pork bellies commodity attitude to online advertising in the lean, post-bubble days when any revenue was good revenue. He goes on to point out that this is changing and bravely outlines a few solid reasons why. What drove this home for me was his conclusion that networks are going to have to continue to deliver solid value, with high-quality ads and rates, to begin to offer something that publishers will never be able to deliver on their own because of their focus on the content. He highlights the need for networks to deliver effectiveness over efficiency. Bravo. This is really the crux of the situation and a very real opportunity for ad networks to step up to the plate. And this is exactly where contextual networks are the strongest, in bringing increased effectiveness instead of just new efficiencies through scale, technology and focus. When publishers can sell their inventory with 6 levels of categorization to pinpoint the meaning of their content there is a very real lift in conversions. This assumes all the underpinnings are in place like engaging creatives and streamlined landing pages but when it all comes together there is a tangible return. Hopefully more ad networks will take this approach and bring real increases in effectiveness to the table in the future and begin to erase the negative connotations around the ad networks.

Tags: ad exchange, premium, tacoda

Tags: ad exchanges, media planning, vertical networks

Turn Around
March 5th, 2008 Christopher Weiss

 

Turn Networks has been making a lot of noise in the press recently with some additional capital and the launch of their fully automated ad network. I perused their literature and demo and really like some of the ideas they are taking to market. I especially like the fully automated nature of their targeting based on multiple factors including a mix of contextual site analysis and past behavioral. I also have to give them credit for what looks like a good pricing model for everyone. I would be very interested to see some data on how well their targeting works through their automated approach. All too often I see ad networks talk about contextual targeting and providing relevant ads but in the end I usually find out they are using just caveman-like site or network level targeting to get the job done. That means most networks will sell you categories of automotive related content or health related content but the determination of what content is about which subject comes from looking at the publisher’s overall theme. Cars.com is automotive content and Health.com is content about health. That sort of thing. The reality is that much of the content on these sites is not about cars or health. It can be about almost anything especially when it includes socially-driven content from things like forums or community features. The only way to truly target for relevance is to look at each URL and analyze the content you find there and not lump it into a broad, site-level grouping. Only then do you find that your ads really start performing and your KPIs go through the roof. In a recent case study LucidMedia found that eCPC rates went up 76% over the typical run-of-site campaign when thorough contextual targeting was employed. That’s how you really lift your ROAS.

Tags: automated, network, Turn