Category Archives: News & Updates

The Basics: Audience Buying

Last week we looked at how publishers can take control of their own first party data in order to keep control of the sales process, extend their audiences, and offer additional value to marketers..

This week, let’s take a step back and revisit the path from buying media as a proxy for an audience, to being able to buy that audience itself.

Audience by proxy

RocketFuel's Audience Extension
Graphic from RocketFuel’s Audience Extension report.

Traditionally, advertisers were only able to target their audience indirectly, by trying to estimate who would be interested in a particular product or service based on a generalised demographic. This has supposedly helped advertisers to determine when and where to advertise—which publications, which venues, and what kinds of ads.

For example, want to advertise house cleaning products? Advertise on daytime TV or in women’s lifestyle magazines. Want to sell a Rolex? Target a wealthy and ‘masculine’ demographic in publications such as Forbes, or via outdoor on Wall Street and in the City of London. These may be somewhat dated examples but what they exemplify, apart from the reinforcement of age-old stereotypes, is a form of advertising based on certain assumptions about different kinds of people.

The idea is that, since you can’t directly buy the attention of a particular individual, you buy ad space where that audience is statistically more likely to be. And in many people’s minds, that is Advertising 101.

The rise of audience buying

The promise of digital for marketers has always been the increased ability to focus advertising messages to reach ‘the right person at the right time’, and over time this has indeed become more precise. But for a long time, digital marketing never fully managed to live up to this promise. Advertisers have still had to rely on publishers to reach audience segments that they deem statistically more likely to buy.

In recent years, though, things have started to change. We’ve seen the rise of ‘audience buying’: purchasing access to these audience segments directly rather than buying proxies for audiences. Thanks to the shift to digital and the increasingly sophisticated ability to track and store user behaviour, we have the ability to detect users’ activities, and to predict their interests based on patterns of behaviour.

In theory, this fulfils the promise of right time, right place, right person, right everything. The hyper-specific targeting of audience buying is more precise and more cost-effective, ensuring that consumers see ads that are far more relevant to them, and reducing wastage on ad spend for marketers. It also allows for a far more accurate attribution of ad spend, by making it clear which ad placements are truly driving engagement. In other words, it gives marketers full transparency, letting them see where their spend is going and with whom their message is resonating.

Fragmented industry

Audience TargetsThis shift has turned a hundred-year-old advertising industry on its head. It means that advertisers aren’t necessarily reliant on measurement and ratings companies to present them with their approximate audience segments, because they can create their own, collecting data from multiple sources and advertising anywhere that users can be detected and tracked. As we explored with the advent of publisher trading desks, publishers are also striving to reframe their own worth in this new context by exploiting their own rich user data, which they can sell within the audience buying model.

In some ways, though, this has led to such a fractured advertising landscape that we might wish for simpler times. The biggest problem is that the new and old models aren’t necessarily compatible, and yet many advertisers still try to use the old one and think audience buying can simply be tacked on.

For example, traditional TV advertising still mainly follows the old model while digital TV allows for much more direct audience targeting based on metrics like impressions and time spent with ads.

“The cost of using such different methodologies of buying selling and measuring TV and video is catching up to media companies that straddle both worlds,” says Lorne Brown, CEO of Operative. Brown continues:

Buyers and sellers often have separate media planning teams, technology stacks, sales teams, contracts and billing processes for the two worlds. As digital grows, it will not be sustainable to have two parallel processes. It also won’t be effective for advertisers, which will increase their expectations of measurable and effective cross-screen campaigns.

A cohesive model

At the same time, it might not be wise to ditch contextual targeting altogether because it can serve a different purpose. While audience buying is focused on the pre-existing behaviours of users whose data and habits have been tracked, marketers may still want to throw a wider net for growth on a larger scale.

Malcolm Coles of The Telegraph (UK) puts this in terms of ‘driving scale or becoming niche’:

a publisher has to choose between wanting to drive general engagement with their site and their brand, seeking growth over time, versus attending to the pre-existing audiences they have for, say, Telegraph Sport, or even a dedicated Arsenal FC page.

According to a white paper from Xaxis titled Harnessing Big Data for Audience Buying, a cohesive advertising model should have several ‘audience tiers’, ranging from ‘demonstrated affinity’ at one end (‘the consumers who have demonstrated through action a predisposition for the brand’), to ‘inferred affinity’ at the other end (‘the consumers who have not yet expressed affinity through direct action, but may gravitate towards the brand based on broader data such as demographics’).

The stronger the affinity with a brand, the smaller the size of a group, which means that targeting only users with proven affinity—in other words, only direct audience buying—may be insufficient for growth on its own. A good marketing plan, therefore, needs a cohesive model that encompasses both a hyper-targeted audience and a broader contextual reach.

The Basics: Publisher Trading Desks

In the traditional advertising model advertisers and their agencies buy advertising space from media owners and networks. They do this in order to reach an audience they think will be interested in buying their products and services. Simple. Increasingly, however, these relationships are becoming increasingly murky as advertisers morph into media owners and media owners become buyers. One way the latter is taking shape is through the formation of so-called Publisher Trading Desks.

As the advertising and marketing market shifts from trading on media properties as a proxy for audience and toward a more audience-centric trading paradigm, publishers are finding new ways to leverage first party data. By doing so publishers can capitalise on their own audiences, to give them the competitive edge. The premise is simple: publishers can leverage the rich data from their own pre-existing audiences to advertise more effectively, and not just on their own sites, but on third-party sites too.

As such, they can charge a premium for the use of their proprietary data, something to which most advertising companies simply don’t have access. So clients come directly to the publisher and pay the premium to have their product or service advertised across the publisher’s trusted affiliate network.

So how does it work?

PTD Simplified Model
On the left is the traditional buying model. On the right, the publisher moves up the chain, closer to the buyer, to trade the publisher’s own audience across both their own sites as well as on the open exchanges.

A publisher sets up a trading desk using what was traditionaly buy-side technology like MediaMath, DataXu, AppNexus or one of the other Demand Side Platforms (DSPs). This tech allows them to better manage and monetise their audience data. Previously, this would have required advertising middlemen, who would have taken a chunk of the revenue, but the publisher having their own trading desk makes this unnecessary. The actual purchasing of inventory is still done through real-time bidding, but the publisher leverages their proprietary data to target their ads.

This works particularly well for vertical or trade publications. For example, a publisher such as The Guardian, which has its own trading desk, will have rich data on its own readership, segmented into different interest groups. They will be able to look at the data for their travel section or their business section, and can analyse user behaviour to determine which campaigns their readership has been attracted to, which devices they tend to use and other demographic data.

This data then informs the publisher’s advertising on third-party sites—determining the nature of the ads, who to target, and on which of these third-party sites it would be most appropriate to advertise. It can also help to determine which devices to optimise for, such as smartphones and tablets.

But it doesn’t end there. When the publisher buys inventory on these third-party sites, these advertisements then collect their own data through cookies, which in aggregate creates an even richer pool of data.

A better proposition

This audience extension creates a much better advertising proposition overall, by not limiting publishers to the ad space of their own websites, and by allowing them to build on their already rich datasets. It also allows publishers to build mobile advertising even if they have no mobile inventory of their own, or video advertising if they have no video inventory.

For advertisers, there’s an element of brand safety guaranteed, as publishers can bank on their own reputations and those of trusted affiliates. Publishers themselves have the opportunity to work with their internal marketing teams to promote to their own audience beyond their website and across their network, increasing the reach of campaigns and promotional events.

However, a publisher trading desk is not without its challenges. The publisher will first have to prove their value to advertisers and other buyers. Publishers will be required to take on all the usual responsibilities of advertisers, which means that they will need to be savvy with their data, build in-house trading expertise where there is none, and source and train on new platforms where they have limited experience.

In other words, while there are many apparent advantages to publishers setting up their own trading desks in order to regain control of their own advertising and boost their own revenue, publishers will still require a thorough, fully-baked data strategy for it to work effectively.

UK Publisher & Media Owner Map

I don’t know why I haven’t created this before but I sure wish I had. The UK Media Owner space is pretty complex and can be tough to navigate. There are brands within brands, publishing specialists, publisher networks, newspaper consortiums, etc.. I’ve spent god know how many hours searching corporate websites for who owns what.

This map is about 75% complete. I’ll be working on fleshing out the ‘leaf’ nodes — the individual titles for each group, or at least the major ones.

I’ve seen similar maps for agencies and for brands/advertisers, but I’ve never seen one for media owners. I thought I’d make a start of one. If you’ve got ideas for additions, changes, etc. please let me know.

Presentation – IAB UK Content Conference

I presented for Unanimis at the IAB UK Content Conference on July 24th. The event brought together, in roughly equal parts, advertising brands, agencies, publishers, and tech companies.

I chose to look at ways in which the online ad industry can scale up native to be able to deliver on it. Core to the presentation was that publishers and advertisers need to look at why Facebook and Twitter have been so successful as scaling up native so quickly and apply that to their people, process, and technology.

First, I set up an working definition of Native. This was:

  • Is it a piece of paid content, i.e. was it paid for by an advertiser?
  • Was it produced, at least in part or in coöperation with, the advertiser
  • Does it run on the publisher’s domain and does engaging or clicking through the content keep the user on the publisher’s site

Using this definition, I examined how publishers can use stories, posts, videos, and other content in a native, responsive, in stream manner. I asked attendees to question their systems and processes, to leverage existing assets, and to ensure they weren’t duplicating work in setting up a native solution.

The key takeaways were:

  • As yourself, what’s your definition of Native?
  • Do you have an internal Native Champion who shows a natural passion for the subject?
  • Is your native solution keeping your viewers on your site or taking them away? What’s the cost of driving a user off your site?
  • What skills sets are missing in your commercial, operations, and tech teams to deliver a successful Native product offering
  • How many systems or platforms do you need to use to successfully deliver a Native campaign? What’s the cost of these systems?
  • How, other than direct sales, are you sourcing demand?
  • Are you able to offer the full capabilities of a 2014 ad system in Native?
    • Programmatic
    • Scalable
    • Rich targeting & reporting
  • Tech / People / Process Scorecard for Native? How do you rank?

I will be writing up a longer post on the topic but thought I’d share this for now.

Facebook Buys LiveRail to Grow Its Video Ad Business | Adweek

Facebook Buys LiveRail to Grow Its Video Ad Business | Adweek

And another one is absorbed in what continues to be a busy, busy acquisition year. FBX + LiveRail is a pretty serious contender in the space, especially with LiveRail’s SSP functionality. I’m actually kind of surprised it wasn’t Yahoo! to snap this one up. They’ve been really stale on video lately.

This will be a particularly interesting one to watch!

Facebook Buys LiveRail to Grow Its Video Ad Business | Adweek.

Could Google Panda 4.0 kill the Press Release? | (from Econsultancy)

Does Google Panda 4.0 mean the days of PR newswires are numbered? | Econsultancy
Source: huebucket @tumblr

It certainly wouldn’t be a well attended funeral, except for those that wanted to actually see it dead. Ok. Maybe that’s a bit harsh, but these days press releases seem like an utterly redundant exercise. There are so many better ways to get your messaging out there.

We’ve all seen sites like these – PR aggregators disguised as news sites. I suspect though that the PR of old will find new life in the Native Advertising world as what were once press releases are now pushed out via Native exchanges and marketplaces.

I don’t even remember the last time I read a press release, so I don’t think that this will be too disruptive to my life.

According to the article

PRWeb, PR Newswire, Business Wire and PRLog lost 60% to 85% of their search visibility over night.

via Does Google Panda 4.0 mean the days of PR newswires are numbered? | Econsultancy.

WPP CEO Sir Martin Sorrell on Google and frenemies

Thanks to James Sandoval for the link. Nice piece to start the day, the week, the month, and the second half (gulp) of 2014. While I feel like Sorrell is a bit overplayed in our industry, I do find myself often nodding along to what he has to say.

In this piece he’s looking at the increasingly intertwined worlds of brands, agencies, tech, and media owners. The walls are coming down and roles each plays in the greater ecosystem are blurring.

Do viewable impressions actually present a bigger opportunity than threat?

Forest FireViewability, probably second the ‘native’, has been the hot topic in ad tech for at least a year. The issue, on its face, is a simple one: Advertisers want to only pay for online ads that at least have a chance, that is to say are in the viewable area of a device or browser, of being seen by the user. Once again we are hoisted (held accountable to) our petard (crowing about how we are the most measurable media). Obviously magazine advertisers are charged whether someone looks at the page or not — or even half the page for less than a second.

However, in the US alone this year ComScore predicts over 4 trillion online display ads will be served. Xaxis stated that it last year it paid more than $750M for more than 3 trillion ads. Woah. That’s a lot of ads and, if my math is right, it comes out to a CPM of $0.25. Not very impressive for the most measurable, fastest growing, and arguably most watched medium in history. Maybe it’s because advertisers already know that somewhere between 25% and 40% of those ads are never going to be seen by anyone. Now, granted, even at the higher end of that estimation, the adjusted price is still only $0.42 CPM. Now, if tomorrow all publishers were somehow magically able to remove all unviewed ads and advertisers began to pay only for ads that were ‘viewed’ would the advertisers agree to a 67% increase in rates for the pleasure? I guess the market would decide but I’m inclined to suggest that no. They would not.

However, there’s an opportunity for premium publishers here to clear out a lot of dead brush, refocus on the ad units on their pages, and not make the same mistakes as we enter the curvy bit of the hockey stick growth period for mobile. It definitely seems like creating a bit of scarcity in this market would be a good thing. Whether it’s fewer, bigger display ads, innovative mobile formats that aren’t just shoehorn solutions of display ads, or clever native units, I think there is the chance to retool how premium sites operate. This is, in my mind at least, a huge win for everyone in the ecosystem (except maybe display ad serving companies who make money on every ad served).

There’s a bigger, better post in here that needs to be written and I’ll give it the attention it deserves some day soon. However, I think that for now editors, ad sales teams, creatives, agencies, tech companies, and brands need to embrace the need for this clearing out and see it as the opportunity that it is. Like a huge forest fire, it’s scary to watch and sometimes seems like it’s going to destroy everything it touches, but ultimately it’s a net positive and indeed necessary for further growth.

From Digiday:

The biggest adjustment for publishers in the viewability era is the reality that they’ll be serving fewer impressions via the same pages, which in turn means they’ll be making less money per page … which is why many publishers are still wary of the short-term effects of viewability’s widespread adoption.

But viewability can also work in publishers’ favour, at least in theory. If there are fewer, more valuable viewable ads, publishers can pump up the CPMs on their viewable inventory to compensate for the hit they take on their overall impressions.

via Publishers grapple with viewability’s biggest issues | Digiday.

A Start-Up With a Way to Filter Botnet Traffic Gets Funding – NYTimes.com

News that White Hat has revived $7M in funding says a bit more about their press profile and media presence than it does about the ingenuity of their underlying tech. I don’t see anything particularly new or ground breaking here.

Perhaps this piece in nyt (blog) gets the tech wrong, but a solution reliant even partially on flash would appear to fatally flawed. White Hat aren’t the first to offer such a service and others do it without relying on a bloated, outdated, and increasingly blocked technology.

Why all the attention to this company? Why now?

A Start-Up With a Way to Filter Botnet Traffic Gets Funding – NYTimes.com.