the q&a’s learn from the ecosystem€¦ · adexchanger.com 2009 year-end report the...

AdExchanger.com 2009 Year-End Report

The Q&A’s

Learn from the Ecosystem

AD NETWORKS & EXCHANGES, ADVERTISERS,

ANALYSTS, BUYING PLATFORMS

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AD NETWORKS AND EXCHANGES ...................................................................................... 50

Transactional Advertising Driving Lower CPMs Says 24/7 Real Media Chairman Moore ................................ 50

CEO Fanlo Says Real-Time Bidders Integrating On AdBrite; API Due In October............................................. 52

Real-Time Bidding Coming To AdECN Exchange This Fall Says Microsoft’s Nahum ...................................... 54

Adgregate Markets CEO Wong Says Landing Pages Will Be Unnecessary........................................................ 57

Adgregate Markets Moves Into Mobile Display eCommerce.................................................................................. 59

Adify CEO Fradin Says More Data Exchange and Social Targeting Integration To Come ............................... 60

Advertisers Are Scrutinizing and Optimizing Says AdReady CEO Finn.............................................................. 63

AdRoll Offering A Targeting Platform To Advertisers Says CEO Bell.................................................................. 65

AdShuffle Aiming To Maximize eCPMs For Publishers And Transparency For Agencies Says CEO Buell.. 68

AudienceScience CEO Hirsch Says Real-Time Bidding Enables True Value in Media ..................................... 70

AOL Platform-A’s Div Bhansali Discusses BidPlace SB and LeadBack.com..................................................... 72

Brand.net Getting Traction With CPG Clients Says CEO Elizabeth Blair ............................................................ 75

Bizo CEO Russell Glass Says Data Driving B2B Demand-Side Optimization, Too............................................ 78

Collective Media CEO Apprendi Says 2009 Is About Audience-centric Buying and Bigger, Richer Media... 81

Are You Ready? Real-Time Bidding Breakout Next Year Says Contextweb EVP Sears................................... 84

CPX Interactive CEO Seiman Sees Strength In Consumer Goods and DM Clients With Upfront Revenues 86

CPA Is The Only Meaningful Metric To Our Clients Says Dapper COO Aizen .................................................... 88

Online and Offline Data Used Together Yield Best Results Says Datran Media SVP Of Display Knoll.......... 90

Retargeting Continues The Conversation for Brand Marketers Says FetchBack CEO Chad Little ................ 93

Google’s DoubleClick Ad Exchange Is Officially Launched Says VP Neal Mohan ............................................ 96

AdExchanger.com Q&A With Google DoubleClick Ad Exchange’s Mohan and Spencer................................. 99

Inflection Point Media Seeing Shift Toward Targeted Vertical Ad Network Model Says CEO Hulse............ 103

InterClick Pres Katz On Ad Networks, Exchanges and Agencies ....................................................................... 105

InterCLICK Taps Markets For $12 Million; Pres Katz Says Ad Network Model Is Validated........................... 107

The Contextual and Semantic Targeting of LucidMedia with Ken Barbieri....................................................... 108

Netmining Brings Profiling Solutions Through Ad Network Model Says GM Vegliante ................................. 111

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OpenX CEO Tim Cadogan Says Exchange Showing Traction; OpenX Market Doubles In 2 Months........... 113

OpenX Update: On Microsoft ..................................................................................................................................... 115

ShortTail Media Providing Good Ads, Rates, Clients for Publishers Says Pres Jason Krebs ...................... 116

Tatto Media CEO Miao Says Ad Exchange Will Not Be Needed Someday ........................................................ 118

Platform Neutral TRAFFIQ Addressing Premium To Mid-Tail Inventory For Havas Digital And Industry Says SVP Portugal ................................................................................................................................................................. 120

CSO Schanzer of Undertone Networks Says Online Metrics Today Don’t Support Long Term Needs Of A Brand .............................................................................................................................................................................. 124

Xtend Media CEO Orzel Says Ad Networks Will Need To Rely On Media Buying Skills To Survive............. 126

Yahoo! Right Media VP Taylor Looks At The Future Of Exchanges And Media............................................... 128

Yahoo! VP Bill Wise Discusses Future Demand-Side Platform Plans For Right Media Exchange ............... 133

ADVERTISERS ...................................................................................................................... 134

From The Marketer: Mazda’s Collinson On Brand Dollars Moving Online And Display Advertising ........... 134

VP Federico Says Monster Looking To Leverage Display Ad Exchanges In The Future ............................... 136

ANALYSTS............................................................................................................................. 138

Yield Optimizers Poised To Migrate To Exchange Model Says ThinkEquity’s Morrison and Coolbrith ...... 138

BUYING PLATFORMS........................................................................................................... 141

AdBuyer.com CEO Ogilvie Says Marketers Need Help In Audience, Price, and Messaging.......................... 141

Adchemy CEO Nukala Says Marketers Need To De-Average For Better Return On Ad Spend..................... 144

New CPM Advisors Display Advertising Buying System – CPMatic – Is Now In Beta Says CEO Leathern 147

DataXu Bringing Sophisticated Buying Strategies With Real-Time Bidding Says CEO Baker...................... 151

Invite Media’s Turner Discusses New Self-Service ‘Bid Manager’ for Display ................................................. 155

MediaMath Riding Wave of ROI Accountability Says CEO Zawadzki................................................................. 158

Permuto Bringing All-Inclusive Ad Platform Says CEO Shamim ........................................................................ 162

Triggit’s Self-Serve Technology Platform Leveraging RTB Says CEO Coelius................................................ 165

Turn GM Philip Smolin Discusses Exchange Trading Desk And Turn Network............................................... 168

[x+1] CEO Nardone Says Predictive Algorithms More Relevant Than Ever With Real-Time Bidding .......... 170

X+1’s Korner On Emerging CPG Display Ad Channel........................................................................................... 174

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Ad Networks and Exchanges

Transactional Advertising Driving Lower CPMs Says 24/7 Real Media Chairman Moore

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David Moore is the Chairman & Founder of 24/7 Real Media, a WPP company.

AdExchanger.com: Doesn't it follow that there is channel conflict between ad networks and large publisher sites with sales teams? What must ad networks do, if anything, to make sure that publishers do not feel like they're inventory is being cannibalized?

DM: Sales conflicts never occur with networks if the relationship is established correctly from the beginning. Some large publisher sites do not want their name included in the list of sites that compose the network. This means that their inventory is sold blind and yields a lower return to the publisher. Other large publisher sites recognize that including their name will generate better advertising returns for them and their partners. When this is allowed, the network must carefully inform the advertiser that there is no guarantee of how many impressions are delivered to each site in the network, i.e., that the advertisement is rotated equitably among all the sites in the network. 24/7 has not had a sales conflict in over 10 years.

Do large media companies need to face the fact that they are never going to get the CPMs they once did whether online or off?

Large media companies need to understand that all advertisers are incorporating a "transactional" component into their marketing efforts. As a result, their advertising tends to be more focused on the bottom half of the "sales funnel". Transactions tend to sell at lower prices on the web as the smaller sites have no other choice for revenue. The “net-net” is that media prices are falling across all media as the Internet's abundant inventory supply continues to deliver results at lower prices.

Recently the OPA announced that a limited group of large publishers would begin offering three, new oversized media units that would only be available through member sites - not ad networks or exchanges. How does 24/7 Real Media's respond to this?

New creative approaches continue to evolve and we encourage this activity. These publishers are looking to develop competitive advantage and this is one of their strategies. Overall, if successful, these new strategies will be embraced by the rest of the industry. As your fellow panelist, Walker Jacobs of Turner, said at the most recent AdAge Conference, another complaint from large publishers appears to be the "punch the monkey" ads available on ad networks. How does 24/7 ensure brand safety? It is not the responsibility of any medium to weigh judgment on the creative aspects of an advertisement that an agency/advertiser has produced. Obviously, extreme, X rated or fraudulent advertising is never acceptable to 24/7.

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Can you share recent momentum with WPP Group's 24/7 Real Media as it relates to product development and revenues?

Our goal has always been to use our technology to create competitive advantage for WPP companies. That strategy is working.

How do you see 24/7 Real Media and WPP Group evolving in the ad exchange space?

Exchanges will be an important part of the digital ecosystem and will play a role with 24/7 based on their importance.

Are there too many ad networks? Or, for that matter, are there too many media agencies? Who gets disintermediated down the road?

The market place always determines if there are too few or too many players. That will be the case here.

Henry Blodget of Silicon Alley Insider, who moderated the recent panel with Jacobs, Denise Warren of the The New York Times and Vivek Shah of Time Inc., inferred that large sites are the only destinations with quality content. How do you respond?

The panel had a hard time defining "quality" content. What is quality content? Is it content that’s expensive? Is it content written by someone who you know who has a good reputation? Is it an excellent review of a product by someone you have never heard of before? There are hundreds of other questions that can be asked like this. I think the industry needs to define what quality content is as there seems to be confusion with the definition.

Do vertical ad networks from major media properties such as Martha Stewart post a threat to ad networks like 24/7 Real Media?

Any new digital sales offering is competition to a network; however, it also offers opportunities for partnerships.

How do exchanges evolve from the remnant inventory model to a premium AND remnant future?

What is remnant inventory.... other than a bad industry term? There is excellent unsold inventory that has great value to the advertiser. Through increased audience targeting, this inventory will command higher prices either through exchanges, publishers or companies like ours.

Follow WPP (@WPPonline) and AdExchanger.com (@adexchanger) on Twitter.

April 29, 2009 – 7:48 am

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CEO Fanlo Says Real-Time Bidders Integrating On AdBrite; API Due In October

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Iggy Fanlo is CEO of AdBrite, an online advertising exchange.

How's business at AdBrite? Is the exchange model working?

IF: The ad exchange model is very strong. We're seeing incredible results from our targeting algorithms (black boxes). The addition of third party (open architecture) data and targeting algorithms is being implemented and the early results there are also very encouraging.

Are you starting to see demand-side buying platforms hooking into you? What's the future here?

Yes. It's quite new, but we have more than a dozen real time bidders that are integrating and even more lined up for our advertiser API due in October.

Please discuss your real-time bidding (RTB) solution. And, how do (or will) advertisers take advantage of this opportunity?

It's essentially the next generation of search engine marketing. RTB allows ad buyers to examine important real-time variables, like time of day, day of week, user actions, etc and include them in their ad buying decision making process. Any advertiser that can achieve the latency requirements is welcome. Having said that, we believe strongly that in the AdBrite exchange any ad buyer either manual or through our advertiser API will have the benefits of real time bidding. Since we offer the addition of many 3rd party data sets as well as 3rd party algorithms and finally optimize across all of those dimensions, all advertisers get the benefits of RTB even without being an RTB [bidder].

When will brand awareness dollars come online?

Great question. I'm obviously a believer that online is a great venue for brands. My personal opinion is time. As the folks that makes buying decisions for brand dollars become more comfortable with online media, they'll allocate more and more to online.

What is AdBrite doing to improve brand safety for its clients?

Several things. First, we implement both an internal and third party service to control for fraud. Second, we review every publisher and every advertiser for content quality. Third, we divide our publisher base into 4 tiers of quality. Finally, since we are one of the very few truly and completely transparent exchanges, any advertiser can create their own custom network/buy of whichever sites fit their own quality criteria.

Please discuss your recent agreement with the Fair Syndication Consortium (FSC). How does it work? When do you think you and FSC will start seeing revenue?

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It's still an ongoing discussion, but we are very excited about the ability for third party to easily access and re-publish legally content. In the best case, it becomes the iTunes of digital content.

Are there too many ad networks? How will ad networks need to adjust in the future?

A fair question. I generally answer it the same way each time. For any business to sustain itself it must create/add value and it must charge both a market price and one that is no more than the value created. So networks that are simply standing in between buyers and sellers and adding no more value than that and charging upwards of 40-50% of the gross ad spend will have difficulty in the future.

What strategies would you be putting in place if you were in charge of a digital media agency today?

I'd be focused on a few things.

1. 1. This is the most important by far. I'd require ALL of my publishers to enter into a transparent and auction-based system; i.e. an exchange. I want all of my buys to be market driven, not negotiated. That negotiation is be definition skewed in favor of the seller who has all the information of where others are buying.

2. Building a capability to buy across all exchanges. A tool to efficiently allocate spend across all available inventory.

3. Focusing a lot more energy on creative.

Is AdBrite able to help with attribution for its clients? Is attribution still a black hole - especially cross-channel and not just digital?

Absolutely. But the onus in on advertisers. They will need to offer access to conversion pixels or other action based pixels that are important to them. In addition, the industry will need more ability to integrate offline and online data so that online influence can be properly attributed to offline behaviors.

Follow Iggy Fanlo (@iggyfanlo) and AdExchanger.com (@adexchanger) on Twitter.

September 11, 2009 – 7:42 am

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Real-Time Bidding Coming To AdECN Exchange This Fall Says Microsoft’s Nahum

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Jed Nahum is Director of Business Integration for AdECN and led Microsoft's acquisition of AdECN.

AdExchanger.com: Can you provide insight on current momentum and scale at AdECN? And, how is the Federated platform performing? What's next?

JN: Our federated platform is a real-time bidded exchange that allows massively scaled ad networks, ad brokers, and publisher brokers to connect to each other while preserving their ability to utilize their own proprietary ad serving and targeting technologies.

When the exchange is called on for an ad, the system takes the call and replicates it to all members – hence the name "federated." The ad call from the federated system looks just like any ad call our participants normally get using their own ad servers, and it passes user information to the them in exactly the form that they’re used to seeing it. The member then uses their normal valuation process for the impression and returns an ad and a bid for the exact impression. If the participant has real time bidding, the bid passed back to us will have been dynamically determined at the moment of the impression. AdECN takes that bid along with all other bids and shows the ad with the highest valuation for that specific impression.

Your question, however, is about momentum and scale. Six months ago we did some testing on an initial version of the federated system and, while pleased with the results, we went back to ensure the architecture was ready to scale. The system that came out of that process was recently launched only within Microsoft on a small but growing percentage of ad calls within the Microsoft Media Network. We are pleased and excited about the results and intend to bring external participants on board in the Fall.

Is real-time bidding (RTB) an important development in online advertising? Why or why not?

We’re strong believers in the power of real-time bidding and are grateful to you for your particular passion for it. We see real-time bidding as an inevitable outcome for interconnected networks, because real-time networks apply a fine grain instantaneous evaluation of the user, placement, context and other factors to truly understand the value of an impression. Real-time networks have an inherent advantage in that their knowledge is fresher, more discrete, and, we believe, more accurate - each impression is, after all, completely unique.

Is RTB a solution for all online display inventory?

RTB is a fantastic evolution in the world of online advertising. How that will work with guaranteed, reserved, takeovers, and even a futures type of market remains to be seen. There will always be a need for guaranteed blocks of inventory to be sold, though that very well may and can come into the world of auctions for additional price discovery.

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Will AdECN incorporate RTB in the near future?

We already do with our Federated system, which is running with only Microsoft today. As mentioned above, we will be launching the product to a broader group of online leaders and innovators in the Fall. RTB has always been the objective for AdECN, but when we started 5 years ago the industry was not yet ready for exchanges, much less RTB. AdECN has always run an auction for every single impression on the Exchange, and now with the Federated system, the bids into the auction can be made dynamically.

Is AdECN strictly a solution for the buying and selling of online media between ad networks?

Maintaining the neutrality of the AdECN Exchange is important for our model, and as such, AdECN never wants to compete with its members. Members of the Exchange can be ad networks, ad brokers, pub brokers, and some agencies. Individual advertisers or publishers are not allowed to trade directly on the exchange, they must come through a member broker.

How can each of these online advertising space participants benefit from AdECN's services whether directly or indirectly: direct advertisers, agencies and publishers?

Buyers and sellers greatly benefit from more granular control over what they are buying and selling - down to the individual impression - and they can do it all in a single, efficient marketplace. AdECN puts the control in their hands: buyers are able to buy only those impressions that are valuable to them and sellers are able to segment and control their inventory however they choose.

By bringing together the aggregators of supply and demand in a central marketplace, we will give buyers more reach and scale than before. They are better able to access the highly-targeted audiences they want and achieve their ROI goals. As buyers are able to buy more efficiently and with more sophisticated targeting, publisher inventory becomes more valuable. Sellers also benefit from a large marketplace because of increased demand and a per impression auction. Advertisers, agencies, and publishers do all of this through their existing ad networks or member brokers without the burden of building or managing the technology to best leverage the Exchange, instead they can focus on their own goals.

Yahoo!'s Right Media and Google Doubleclick's AdX appear to have a huge lead on Microsoft and AdECN in the exchange space. Putting aside any discussion about a Yahoo/Microsoft combination, can Yahoo or Google be caught?

Absolutely. We believe there is no leader yet, in particular in the RTB exchange world. Neither Right Media nor Google has RTB yet. With AdECN’s Fall public beta - which, along with the Microsoft Media Network, includes the top companies in display - we are confident the AdECN Exchange will be the leading Exchange in online advertising.

What can publishers do to prepare for an increasingly automated environment for the buying and selling of online media?

Automation represents opportunity for publishers. The number of ways to monetize their inventory will continue to increase dramatically for the next few years. The growth of data and targeting not only will increase advertiser ROI but publisher yield as well. In that vein, publishers should think about what kinds of information about their users they would like to share in order to enable better targeted ads to be served, yielding higher returns for their inventory. They should develop ways (through exchanges in particular) to enable intelligent buyers who bring their own targets.

New, demand-focused, media trading platforms are popping up such as MediaMath and Invite Media. Does AdECN plan to develop its own interface or continue to provide access to inventory for these buying platforms as it does today?

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We think of the media trading platforms as "Ad Brokers," basically demand side aggregators and optimizers. But, whatever you call them, they’re a critical part of the exchange ecosystem, and are perfectly positioned to trade through our Federated system. X+1, Invite Media, and MediaMath (agency-centric enablers of RTB into the various pools of inventory) provide leading edge buy-side tools, and AdECN is thrilled to let them focus on their areas of expertise. AdECN’s focus is on creating an open and efficient exchange that best serves the market.

In regards to search retargeting, is this an opportunity that could open up display advertising? Any plans for search retargeting through AdECN - perhaps using Bing and the network of Microsoft properties with display advertising?

We agree that retargeting is a big deal in display. All kinds of retargeting and data are enabled within the AdECN Exchange, well beyond just retargeting Search. AdECN is a very extensible framework into which even more data can be brought into the per-impression, RTB auction, but that’s a big topic for another time at a later date.

Follow Microsoft (@Microsoft) and AdExchanger.com (@adexchanger) on Twitter.

July 13, 2009 – 7:36 am

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Adgregate Markets CEO Wong Says Landing Pages Will Be Unnecessary

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Henry Wong is Chief Executive Officer of Adgregate Markets, a transactional performance ad network. AdExchanger.com: Given you and your team's experience (AdECN), how important is your familiarity with ad exchanges in the success of Adgregate Markets?

HW: Given the experience of the management team with AdECN, we understand the value that ad exchanges can bring to our ShopAds technology and platform in terms of being able to offer advertisers bleeding edge targeting and retargeting tools to execute performance based advertising campaigns. Adgregate Markets' ShopAds is the first certified transactional advertising technology to integrate with AdECN; which enables advertisers to use Microsoft's platform for ad targeting and retargeting, media purchasing and placement, and ad optimization.

Can you describe the challenge Adgregate Markets technology solves as well as a sense of scale for your business currently?

While the Company is still early in its development, the network is currently getting approximately 40 million impressions per month, reaching 12M+ uniques monthly, with 1M+ ShopAd embeds currently. Over 500 advertisers currently use the ShopAds platform.

The ShopAds platform enables advertisers to integrate e-commerce into any banner ad campaign to allow consumers to browse, interact, and ultimately purchase directly within an ad unit. When combined with an ad network's targeting and retargeting solution for advertisers, ShopsAds can offer a substantial lift to ad performance by capitalizing on prior data on a consumers' product research and browsing behavior. For example, in an instance where a consumer researches a product on a retailers' site and then leaves the site before purchasing the product, an advertiser could use the combined AdECN and ShopAds solution to not only retarget that user with a banner ad for a discounted price on such product, but also provide the purchasing functionality to capitalize on the impulse purchase, on whichever publisher site the user is currently browsing.

Providing e-commerce, transactional capability in the banner seems to remove the need for landing pages. Is this where you see media going?

Long term, yes. In our opinion, landing pages add unnecessary steps into the consumer's clickstream. Our objective is to optimize the purchase process and reduce the friction that occurs with traditional banner advertising. ShopAds accomplishes that by bringing e-commerce directly into the ad and by enabling targeting and retargeting campaigns.

Does Adgregate Markets have any plans to trade or advertise on its own behalf, or is it primarily a technology services business?

Adgregate Markets is a seatholder on the AdECN exchange, and thus will engage the exchange to find liquidity for its advertising partners as well as execute performance campaigns on behalf of the ShopAds network.

In addition, Adgregate Markets is offering ShopAds through various channels ranging from agency relationships, ad networks/exchanges, direct with publishers, and direct with advertisers.

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Can you talk about how publishers can benefit from Adgregate Markets technology?

ShopAdsTM enables visitors to complete purchases without having to leave the publisher's web site. By retaining visitors, publishers can now sell ad space that doesn't divert traffic away thus allowing them to increase page views and more importantly, increase revenue. In addition, affiliate publishers can use Adgregate's CPA marketplace to search for contextually relevant offers and products for its site.

How do ad exchanges move toward a premium inventory future - and can Adgregate Markets help the exchange model in this respect?

The value of inventory is often measured by quality and response rate; by enabling ecommerce and rich targeting/retargeting data, Adgregate Markets increases the opportunity for ad exchanges to better understand inventory value and close the gap between remnant and premium inventory.

Beyond direct response, does Adgregate Markets offer an opportunity for brand advertisers?

Adgregate Markets is launching a new brand affinity solution, BrandAdsTM, that will enable brands to increase awareness and reach by allowing advertisers to engage and interact directly with consumers through our technology. The combination of BrandAdsTM and ShopAdsTM bridges the gap between brand and direct response marketers, allowing them to share messaging, creative, objectives, and ultimately streamlining online advertising costs.

How will media buying agencies need to evolve in the future?

Media agencies will need to embrace technologies and solutions that bring greater value to advertisers. They're still applying an offline strategy towards online media purchases and that needs to change. ShopAds brings a new dimension and approach towards online banner placement with innovative ecommerce technology and targeting capabilities.

Follow AdExchanger.com (@adexchanger.com) on Twitter.

April 22, 2009 – 8:27 am

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Adgregate Markets Moves Into Mobile Display eCommerce

Henry Wong is CEO of Adgregate Markets, a transactional performance ad network and technology company. The company announced today that it ran its first mobile commerce campaign with NBC Universal using its ShopAds technology. Read the release. Generally speaking, when do you think mobile display advertising reaches significant scale and what may be some of the triggers?

US Mobile grew by 68M users according to Nielsen data in September 2009. As the number of users on smartphones grows, the number of available apps will drive mobile display advertising because the publishers of apps are monetizing distribution of those apps through display advertising. There's a direct correlation of the apps available with the number of mobile ads served. Apple iphone has over 115,000 apps just by itself.

Advertisers continue to use multi-channel marketing strategy to make their branding and marketing consistent among all media and as mobile web grows the dollars allocated to mobile display ads will continue to grow as well. There's evidence that the industry in recognizing that the mobile advertising is reaching scale vis a vis Google's acquisition of Admob.

What are some of the challenges in delivering a display ad to a mobile device (serving, tracking, non-standard formats across mobile devices?) and how does Adgregate overcome these challenges?

The challenge with mobile advertising is that there are many devices running different mobile operating systems to support. The beauty of our technology is that, by leveraging our cloud-based technology, advertisers can deploy ads across various platforms with minimal effort.

December 10, 2009 – 5:13 pm

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Adify CEO Fradin Says More Data Exchange and Social Targeting Integration To Come

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Russ Fradin is CEO of Adify, a vertical ad network solutions provider.

AdExchanger.com: From what I see on Twitter (@rfradin), you seem to be working as hard as ever - in spite of the "liquidity event" when Cox Enterprises bought Adify in April of 2008. Workaholic?

RF: I am working as hard now as I ever have and loving it. That may seem counter-intuitive but I think that is because of the hit-driven Silicon Valley / New York start-up culture. There is always an opinion that selling your company for a ton of money and providing great returns to employees and investors is the finish line, it isn't. It is certainly a fabulous financial outcome for employees and investors and a wonderful validation of the 2 years of hard work we had put into the company at the time of the sale, but it is barely the beginning of the story.

Think about it from the other side – when we started Adify we did it because we believed our idea would provide the tools and services for a whole new class of media businesses online. We believe the networks on our platform represent fundamental changes in online media for the better around the world (we have clients in 10 countries today) – benefiting both Advertisers and Publishers. We've accomplished a lot in our 3-1/2 years of existence but there is a lot more to do. Why would I want to be anywhere else? I get to run my company with a team I hired and an idea I've believed in since we started everything with the experience, multi-media assets and support of a terrific parent company.

I truly believe years from now Adify will be even larger and more successful and that's why I still work at it all the time.

Can you discuss Adify's revenue and product momentum? Is the direct sales business growing where you sell client's vertical network inventory? Or is it all about "white label" and providing the tools of ad network to branded sites?

Adify's Network Builder platform is the core of the business and always will be. Adify has over 180 partners creating vertical ad networks on the Adify Network Builder platform. Many of these partners take advantage of our full service offering while some are leveraging our platform for distributed advertising, content syndication, behavioral targeting and inventory insight. The Adify Media business supports our partners, who can opt-in to campaigns on a line-item basis. This supplemental revenue assists in maximizing publisher value and smoothing revenues month to month. Both Adify Network Builder and Adify Media are growing businesses.

How is Cox Enterprises providing new opportunity for Adify and visa versa?

Cox Enterprises is a highly distributed company. Every business unit makes their own decisions about working with another business unit. To date, we are very pleased that AutoTrader.com, TravelChannel.com, CoxTV and Cox Cross Media are all working with Adify. There are additional Cox companies currently in preliminary stages as well. In addition, many of our prospective Network Builder clients are thrilled to partner with a company that has 110 years of history as a high integrity partner.

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Given the recent downturn in the global economy, any reticence by branded sites in absorbing the initial cost and setup of a vertical network who instead choose to go with existing ad networks?

The two things are totally different. In this economy, branded sites want to protect their assets and extend them – by creating vertical ad networks. Many branded sites do not want to offer any of their own inventory to existing ad networks who are experiencing significant price pressure resulting in lower revenues to the branded site. These networks are also under pressure from advertisers to provide full transparency leading to significant pricing conflict between the branded site and the performance networks reselling their remnant inventory. With a vertical ad network controlled by the branded sites, the branded sites match price to advertiser value and they control the distribution of their content and brand.

Data exchanges and social media profiling companies are starting to gain traction as advertisers look for audiences. Has Adify considered how it can bring a data gathering or targeting element to its product line?

Adify Network Builder already offers an extensive behavioral targeting data gathering capability – I believe our platform is unmatched as far as BT ad serving goes. We are NAI compliant. We also offer extensive geographical and technology based targeting. The very nature of the publishers within networks formed by our partners results in content that is very high quality and in-context to the vertical ad network – giving Adify highly reliable contextual targeting as well.

In addition to all of our homegrown technologies we are always looking for ways to allow partners to plug-in their secret sauce to Adify Network Builder. We already work with a few data exchanges and social media profiling companies to allow our customers to leverage other proprietary targeting technologies on-top of our platform. You will continue to see announcements in the coming weeks and months on this topic.

Where do you see the ad exchange model fitting with the vertical ad network model?

I look at them as different ends of the online advertising spectrum. I fundamentally believe that brand advertisers will always value high quality, highly contextual, high-impact integrated ad placements alongside quality content. On the other end of the spectrum are people looking to buy bulk audiences. Both co-exist quite nicely in all forms of media.

I have said many times that I view exchanges as the natural evolution of the performance ad network. Why buy from a proprietary performance ad network when you can access enormous pools of remnant inventory from exchanges and leverage best of breed targeting technologies.

On the other side, I have always viewed vertical ad networks as the natural evolution of the portal. As fragmentation accelerates, quality content will be more dispersed across the web and brand buyers looking to reach a quality audience will need vertical networks to help them aggregate the quality inventory.

Could Adify someday provide a vertical ad exchange product which provides transparency and control to buyers and sellers?

Adify already provides transparency and control to buyers and sellers. Sellers have been setting their price floors, by ad space, since Adify first launched. Sellers have been reviewing and accepting advertising on a campaign and line-item basis since we first launched. Buyers have been able to select and see actual delivery and performance on a site by site and line item basis since Adify launched. The difference between Adify and a vertical ad exchange is that Adify restricts the publishing sellers to only those accepted by a Network Builder – accepted for quality content, quality design and minimal ad clutter.

I don't like to talk about what Adify does as an ‘exchange' because the relationships in exchanges tend to be transitory whereas the relationships between network builders and their publishers tend to be deep, integrated long-term relationships.

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Google DoubleClick recently announced the "DoubleClick Network Builder." Scared? How does Adify differentiate itself?

Honestly we were a lot more scared of the idea of DoubleClick Network Builder than we have been by the reality. Like all pre-launch products, DoubleClick was out in the market making audacious claims about what DNB would actually do. The reality, at least in the first version, has turned out to be far far less than promised. The product does not offer anywhere near the functionality of Adify Network Builder or a few other products in the market, for that matter.

Google will always have an advantage given their growing monopoly over the online advertising market so we'll obviously continue to pay attention to DNB, but at the moment we have 180+ networks on Adify and as long as we continue to innovate on both the technology and services side I am not scared.

Follow Russ Fradin (@rfradin), Adify (@Adify) and AdExchanger.com (@adexchanger) on Twitter.

May 19, 2009 – 7:37 am

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Advertisers Are Scrutinizing and Optimizing Says AdReady CEO Finn

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Aaron Finn is CEO of AdReady, an advertising technology company.

AdExchanger.com: Can you update us on current revenue and client momentum? Has the economy affected your business? Any surprises or trends you can share?

AF: We keep growing our client base and increasing revenue, and we’re still hiring to keep up with demand. The biggest change we’ve noticed with the poor economy is more scrutiny from advertisers on measuring every expenditure. Fortunately, that plays to our strengths, since the AdReady platform lets them analyze and update campaigns on-demand to maximize returns.

As an online media buying platform, it appeared AdReady was originally targeting the Long Tail of advertisers, i.e. smaller budgets, self-service, no handholding. With your premium services, you're tackling larger advertisers and agencies, too. Why the change?

We still put a large emphasis on the Do It Yourself (DIY) component of our business. The Premium offering is in response to some of our larger clients requesting more client service, based on their larger campaigns. Having an assigned account manager helps them track daily performance more effectively and optimize campaigns.

What is the revenue model with your agency partners? Per seat, per impression?

We have a one-time setup fee to pay for the development work of building a white-label solution. From here—like all of our partners and advertisers—we make a percentage commission/mark-up on the media purchased through the platform.

If you were a publisher, how would you prepare for the increasingly automated nature of online advertising?

Embrace technology. We built the AdReady for Publishers solution to help publishers get the most revenue possible out of their inventory and maintain a direct relationship with the advertisers. By using our service, they can better prioritize customers based on ad spend. Those under a certain spend threshold can work directly through the DIY interface, while those with larger budgets can work directly with the publisher sales teams. In that way, efficiencies are improved across the board.

What is your sense of the venture capital community today as it relates to advertising technology? Have they changed their strategy given the recent economic slide?

Not in our case. Here’s what Madrona’s Tom Alberg said recently, specifically talking about our focus: “We think there are opportunities in advertising still. Though advertising is down at the moment. Focused ideas around local

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advertising, targeting. We’ve got this company called AdReady, a self-service focus on banner ads. Banner ads have not been considered a hot area, but this company is already doing well. They’re growing every quarter.”

Is AdReady prepared for real-time bidding (RTB)? Is RTB important in your opinion?

AdReady already participates in a variety of auction-based exchanges and other types of inventory purchases on behalf of clients. We’re always researching and developing new options to push up ROI for customers. As more opportunities evolve to use this type of pricing, we’ll definitely look at them and may participate. Would you characterize AdReady as an ad network or an ad exchange? Can you discuss the transparency available to buyers and sellers?

We are neither a network nor an exchange—we’re a technology platform focused from the advertiser’s perspective. We give advertisers all the tools they need to maximize their budgets and manage buys across all sources of display inventory including networks and exchanges. We give buyers the opportunity to choose their own media and determine pricing. For sellers, it depends on the product line.

How important is the "ad templates" component of your business model? This seemed to be a key part of AdReady's strategy originally. Where do you see it going?

Historically, the biggest barrier to display advertising has been the expensive creative process. It’s difficult for smaller organizations to repeatedly pay an agency $5,000 to $10,000 to come up with a set of banners for a campaign—and then to wait weeks for them to produce and deliver all seven IAB banner sizes. And even if they deliver on time, what if they don’t work? It’s hard to analyze and measure performance. With the AdReady platform and reporting, advertisers can make split-second decisions and immediate tweaks—and our agency offering helps agencies offer that same value. Creative and reporting will always be key issues, and our templates should keep helping customers solve a piece of that puzzle.

Attribution is a missing link for display advertising to date as search gets most of the credit at the bottom of the purchase funnel. How close is online advertising to a solution which can provide proper attribution to the demand generation of display? Does AdReady provide such a solution?

We track and report on a broad range of data. Customers get full transparency, in close to real-time, about what creative is performing best and which creative we recommend keeping or discontinuing—and all of this comes at the direct conversion level and through latent conversions. At the publisher level, you get a full range of metrics to maximize your ad spend, ranging from Cost Per Click (CPC), to Cost per Thousand (CPM), to total impressions, and pretty much everything in between. For premium customers, the Account Management team works on their behalf to maximize returns.

Follow Aaron Finn (@ahfinn), CPX Interactive (@AdReady) and AdExchanger.com (@adexchanger) on Twitter.

May 27, 2009 – 7:15 am

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AdRoll Offering A Targeting Platform To Advertisers Says CEO Bell

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Aaron Bell is CEO of AdRoll, an online co-operative, advertising

network.

AdExchanger.com: What's been happening at AdRoll lately? Recession effects?

While we've dialed down some of our own costs (ahem – postponing the order for the office 72” plasma screen to showcase our world domination metrics), we've actually seen double-digit monthly growth despite the dour economic climate. This is likely because Adroll is focused on delivering tangible ROI for brands targeting hard to reach niche and enthusiast audiences.

In this economy, advertisers are looking for alternatives to premium ad buys. Adroll offers a cost effective way to access the same audiences available via premium buys by making sense of non-premium inventory. Our platform shines in its ability to “roll up” highly-targeted inventory found on niche sites and blogs. We determine the best placements for a brand by evaluating traditional metrics alongside peer recommendations we collect from publishers in the advertiser's “in-crowd”. This data provides us with unique insights as to which sites are the most relevant and highly regarded within a niche, and allows us to make intelligent media recommendations that are richer than merely advertising across a vertical or keyword. In fact, we've seen a 3x greater click-through rate on campaigns run against the highest rated sites vs. a category at large.

Additionally, Adroll allows brands to extend beyond the banner, generating coverage and buzz on relevant niche sites and blogs through our promotion tools. We've recognized that many brands expend considerable energy compiling lists of blogs and contacts followed by reaching out to these sites with PR materials. Leveraging our recommendation technology, Adroll makes it easy and cost effective to pinpoint and communicate with sites and blogs appropriate for your brand.

How do you position AdRoll - as an ad network, vertical ad network(s)? What challenge is the company's product solving?

With more inventory opening up and becoming consolidated through various means (exchanges, yield optimizers, etc.) the key problem for ad buyers is how to tap into this expansive pool and make use of it effectively. Today "non-premium" inventory represents 90% of available display inventory, but represents only 18% of the spend. Sure, a lot of this inventory is junk, but a lot of it is also high quality and attracts the most highly targeted audiences.

We like to think of our model as a "targeting platform." Adroll excels at making sense of display advertising inventory by combining traditional quantitative metrics (eg. past performance, ad space placement and size, etc.) with qualitative judgments sourced from the peers in a site's category. We've built the technology to make this scalable. Our holistic inventory recommendations have proven invaluable for advertisers who want to efficiently reach the right audience on the right sites. As an example, we've worked with a number of high end men's fashion brands. We are a natural partner for them because they see that their advertising does best when it appears on the

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hippest fashion blogs. In contrast, their ads do not perform as well on sites categorized as "fashion" by a semantic engine or shown to an out-of-context user merely identified as in-demographic or a frequenter of fashion sites.

What's your view on yield optimizers like PubMatic, Rubicon Project, AdMeld, YieldBuild, etc.? Are they partners or do you view them as a threat to AdRoll?

Everyone's favorite can of worms these days. To the extent that yield optimizers evolve from outsourced publisher ad ops, and develop viable technology for advertisers, then these services are potential partners for us. If you optimize for publisher eCPM, and don't consider the value and quality you're delivering for advertisers, then you're building something inherently unsustainable. Dollars will eventually fly to quality. It happened with eCPM-focused ad networks placing CPL/CPA ads a few years ago, and it will happen again. However, if they do evolve into real-time advertising marketplaces, then what makes them different from the established ad exchanges that already exist? At that point, the whole notion of “ad network optimization” is a bit of a red herring used to acquire inventory. That said, this optimization pitch resonates with publishers, even if the mechanics don't entirely make sense.

Can any publisher participate? What is your target publisher market?

Yes, the idea is that any publisher can participate, but as with advertisers, we're best suited for publishers who are focused on a niche or specific interest area. We provide a place for publishers to establish their identity and status in the online advertising ecosystem, and attract relevant advertisers by providing greater insight into their site's audience. For example, AdExchanger could build a profile and establish its place as a top influential online advertising site and attract more advertising dollars.

Any publisher can join Adroll, establish their identity, and rate other publishers in their niche. We understand that the value of a publisher's inventory can't be captured purely based on number of clicks, traffic volume or cookie data. Thus, the rating process is designed to capture the qualitative aspects of what makes a site good for advertising.

And on the advertiser side, who's a good fit and why?

Adroll helps advertisers who want to target specific niche and enthusiast audiences on the sites that their potential customers love. This tends to apply to smaller brands that sell niche products, but certainly can apply to larger brands as well. For example, we work directly with a natural foods startup that sells bake-at-home snack mixes, while we're also working with a large agency on a campaign to announce Atkins' new line of baking products.

In addition to advertising, we find many of our brands are interested in "grass roots" outreach. Since we've already established the best sites and blogs for the brand, we provide an ecosystem and easy to use communication tools that make this process scalable, transparent and effective.

What's your view on ad exchanges?

Ad exchanges represent a sea change for the industry in that they create exciting opportunities for new types of businesses, and also render some existing business models obsolete.

Exchanges are interesting to us because our expertise is making sense of online advertising inventory and making it easy to buy. Our view is that the more sites we can access, the better job we can do providing the best bundles of niche sites for our advertisers. As such, ad exchanges represent a fantastic opportunity for us to apply our unique targeting methodology to larger pools of inventory and make it useful for advertisers. It's not hard to create vanilla categories or channels of similar sites, but that doesn't necessarily show you the best sites in those categories depending on your goals (e.g., most relevant to the category, best ad response rates within the category, etc.) That's where Adroll excels.

AdRoll's ability to offer audience targeting across the Long Tail would appear to be a good fit for an exchange - or plugging directly into buying platforms. Thoughts?

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That's exactly what we intend to do, and why the trend towards open exchanges is so exciting for us.

How do you manage brand safe experiences for advertisers? Do brand awareness campaigns "work" on AdRoll or is it a DR opportunity only?

Our job is to scrutinize non-premium (e.g., medium to long tail) sites, and determine which sites represent the best opportunity for advertising, and which don't. Because Adroll collects tens of thousands of “in-crowd” opinions on this inventory set, we have a unique view as to which sites are the most appropriate for brands. We also provide advertisers with transparency regarding the sites where they are seeing the most traction.

We work with advertisers who seek to strike a balance between brand awareness and response. We help brands target relevant sites that people trust, and in turn, this approach delivers great response. We believe these go hand in hand.

Any thoughts on how real-time bidding (RTB) and demand-side optimization may impact online advertising and AdRoll, in particular?

Real-time bidding allows us to get more sophisticated with our ad decisions, incorporating down to the URL and per user information into targeting. It will also allow us to optimize campaigns more efficiently.

Please explain AdRoll's revenue model. Do you support text ads, standard display, rich media and/or video?

We keep a commission on the ad sales that run through our system. We also provide a set of free features: publisher profile/media kit, ad builder, and the communication tools that allow advertisers to interact with the site owners they advertise with.

In terms of formats, we currently focus on display ads including rich media and in banner video units.

Other than using AdRoll, of course, what recommendations would you have for publishers looking to grow a successful and profitable website?

Many small to medium size publishers have a targeted, valuable audience, but just don't have enough visibility and scale to efficiently attract brand dollars. These publishers often turn to a remnant solution, where their inventory is sold relatively anonymously and primarily valued for the clicks received. We recommend publishers find ways to raise their profile by banding together with similar sites and advocating for domain and URL transparency for buyers wherever their inventory may be on the market.

Aside from that, the best thing publishers can do is to focus on their content and try to keep an advertiser's goal in mind when laying out ad units. Now that the largest ad networks and ad servers are selling publisher's inventory to the highest bidder, there's less to be gained by meticulously optimizing a daisy chain or trying to swap through dozens of ad networks.

Follow AdRoll (@AdRoll) and AdExchanger.com (@adexchanger) on Twitter. August 6, 2009 – 5:54 am

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AdShuffle Aiming To Maximize eCPMs For Publishers And Transparency For Agencies Says CEO Buell

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Ruben Buell is CEO of AdShuffle.

AdExchanger.com: How has AdShuffle evolved since its inception? What opportunities is AdShuffle seeing today that it didn't see when AdShuffle began in 2005?

RB: AdShuffle started out as a real-time ad serving solution for publishers in 2005 and has grown into a fully integrated real-time advertiser and publisher solution that can easily be managed under one login. We built AdShuffle on a real-time architecture, so users could manage all their buys and inventory in real-time and run reports in real-time. Then we expanded to real-time automated creative optimization, then landing page optimization and then to integrated remarketing and targeting within our own custom targeted creative sets technology. We continue to push the boundaries of real-time analytics, leading the industry.

AdShuffle was founded on the idea that buying, selling, serving and measuring advertising online should be easy. The single greatest comment we hear from our customers is that their previous ad server was too complicated and didn’t deliver results. AdShuffle solves that. We built AdShuffle as one simple solution for both advertisers and publishers. And AdShuffle’s ongoing mission is to continue to make everything as easy as possible and to break down some of the process barriers that currently exist in the industry.

What's your view on the demand-side platform (DSP) trend? How does it relate to AdShuffle's business model?

Demand-side platforms are agencies’ response to the lack of transparency in the industry. This lack of transparency is one of the core problems inherent in the online advertising industry.

Agencies were frustrated by their inability to see what was going on with their buys, and they felt that the only solution was to do the work themselves. AdShuffle is solving this problem for them. We’re developing products and processes that provide that transparency, so agencies can focus their energies less on the technology and more on their clients.

What's in the DSP trend for publishers?

Demand-side platforms apply negative pressure to publisher pricing, eroding their inventory value in an already-tight advertising economy. AdShuffle gives publishers a way to maximize their eCPMs, helping them identify which advertisers and networks work best for them, and which do not.

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How do you compete with free ad serving capabilities such as those of OpenX with AdShuffle's EasyPay product?

OpenX is a very limited solution for publishers new to advertising. AdShuffle serves both publishers and advertisers with a flexible, yet robust full-service solution that maximizes both eCPMs and marketing spend, helping them to be more profitable.

Please define AdShuffle's core competencies - beyond "a global leader in ad serving and marketing technology." Who's in your competitive set?

AdShuffle is a full-service, real-time ad serving platform for advertisers and publishers. AdShuffle incorporates everything under one login allowing users to easily manage buying and selling media without having access to two systems and learning two different systems.

AdShuffle’s strengths include providing advertisers and publishers with real-time reporting, automated creative and landing page optimization, remarketing, advanced targeting (using what we call “targeted creatives sets”), campaign management and more.

Our competitive set includes larger players in ad serving, including Google’s DoubleClick and Atlas, now part of Microsoft advertising platform.

How have your previous roles at Wells Fargo and H.D. Vest Financial Services prepared you for the ad business? Any challenges? At Wells Fargo and H.D. Vest Financial Services, our focus was on maximizing what we provided for our clients and what they could in turn provide for their customers. We worked on systems that provided real-time data and these systems could not fail or they impacted a client’s purchase or sell of a customer’s stock or mutual fund. Coming from the financial services industry, we have no tolerance for failure within our systems and data and that’s coming from a different mindset than most people in this industry.

We also developed extremely creative ways to provide our clients with top-notch technology and services, which they in turn could provide to their clients. We’ve leveraged that background in real-time trading and stock quotes to bring real-time data to ad serving. Without having worked in the financial services industry, I’m not sure we would have had as much knowledge on the financial side of our clients business as we are as fortunate to have today. We understand finances and what it really means to have a return on your investment, which is what every single one of our clients wants.

Coming from the financial services industry, we didn’t accept the status quo of the online advertising industry. We constantly ask, “why is it done this way?” and then respond with “we can do it better.” And from the responses we get from clients, we are doing it better.

Is "real-time" really necessary for effective optimization? Can effective optimization be implemented without real-time feedback whether its conversion data, audience data, etc.? Real-time is absolutely necessary. Finding out an ad or a landing page isn’t working as quickly as possible saves advertisers from wasting money on the wrong ad or the wrong location. You also don’t know what’s working at certain times of the day if you don’t have real-time data. Without real-time data and optimization what do people do over the weekends? Typically wait until Monday to find out a buy didn’t work. Imagine how critical it is for advertisers to be able to run buys on the weekend and know they are performing effectively because of real-time information and results.

Optimization cannot be effective if it’s not in real-time. You will be without a doubt throwing money away. If you settle for optimizing once a day or only several times a week, you are basically saying that it’s okay to throw away 30-40% of your marketing budget.

December 13, 2009 – 7:23 pm

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AudienceScience CEO Hirsch Says Real-Time Bidding Enables True Value in Media

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Jeff Hirsch is President and CEO of AudienceScience.

AdExchanger.com: Do you agree that audience has become more important than placement? If so, what have been the key drivers?

JH: I absolutely agree that the reaching right audience is the most important component of any advertising. Contextual placements are often a proxy for reaching a specific audience. In addition, placement in context on premium sites is inventory supply limited, and with the need for campaign efficiency greater than ever, audience targeting is a vital resource to marketers.

Behavioral targeting is an effective form of online advertising. But - privacy concerns aside - where are the areas that can be developed or improved with BT?

We are able to create the most accurate audience segments, targeted to great detail; however the challenge to marketers is being able to efficiently match creative and messaging with each specific audience segment in a timely manner. Another area that can be improved is the analysis of the massive amounts of data (strictly anonymous of course) available to gain consumer insight on an individual level. Through deeper analysis we can target consumer with relevant messaging customized to their particular stage in the buying process and reach them anywhere on the web.

How effective is porting offline data (such as Datran or Aperture) to online campaigns today? Is AudienceScience using offline data on behalf of its clients?

This practice looks to be very effective; more data to incorporate into a segment can only improve targeting accuracy and scale. However, we do not engage in this methodology yet as we are still weighing the consumer privacy issues.

How will media agencies need to change to keep up with ongoing innovation in the online ad industry?

Media agencies will need to implement technologies and practices that give them a deeper understanding of their client's audiences. This advanced knowledge will empower agencies to deliver campaigns that reduce waste and increase ROI. Where should publishers be looking to improve yield in the future?

They should expand the boundaries of their site and not allow themselves to be limited by data or inventory. Publishers have spent years developing monetization strategies around their inventory . They need to spend the same energy developing strategies around the value of their audience. By doing so, they can dramatically expand their revenue opportunities.

Does AudienceScience participate in data exchanges or ad exchanges? Or will it create its own data exchange? We find value in working with any quality source of inventory or data. Our value proposition is to find audiences anywhere and any technology that offers us the ability to do so in a brand safe environment is important to us. We

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do not foresee building our own exchange as our core focus is on the qualitative construction and targeting of comprehensive audience segments.

How will demand-side optimization and real-time bidding (RTB) affect AudienceScience?

For AudienceScience as an entity that creates high value audiences and then targets those audiences on inventory we buy, RTB is a welcome development. We are looking for specific users that we want to target, and being able to bid on only those impressions we want is more efficient and benefits both buyers and sellers. Doing this on a per impression basis in real time enables us to determine the true value of the impression to us, and by extension to our advertiser clients, using all of the data available to us. We are better able to do demand side optimization.

Any trends you can discuss as to what part of the purchase funnel behavioral advertising is affecting today? Are brand awareness campaigns growing with BT or is it still direct response-focused with brand still a ways off?

We have seen success with brand awareness campaigns. Behavioral targeting has an effect throughout the sales funnel, because it does not rely on context or placement, and can tailor messaging and creative specific to audiences no matter which stage of the funnel they are in. It can be a powerful branding channel; unfortunately, automated brand measurement methodologies are still very limited.

Follow Jeff Hirsch (@jkhirsch), AudienceScience (@pubmatic) and AdExchanger.com (@adexchanger) on Twitter.

May 13, 2009 – 7:18 am

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AOL Platform-A’s Div Bhansali Discusses BidPlace SB and LeadBack.com

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Div Bhansali is director of self-service products for Platform-A, and serves as product manager for Platform-A’s self-service display advertising solutions, BidPlace SB and LeadBack.com. Div came to Platform-A by way of AOL

/ Advertising.com, where he served as Product Development Director.

AdExchanger.com: What is Platform-A's BidPlace SB and tell us about BidPlace's product pipeline?

DB: BidPlace SB is Platform-A’s new banner advertising solution for small- to mid-sized advertisers. Platform-A is known for offering large advertisers fully managed advertising campaigns across the largest banner ad network on the Web. BidPlace SB is the first Platform-A product specifically geared towards giving smaller advertisers access to that same high-reach network.

BidPlace SB is all about targeting, performance and control. Our targeting options are the broadest and most diverse of any self-service product, and combined with our unparalleled reach, they give advertisers the chance to achieve both accuracy and volume in lead generation. We’re an excellent performance option because advertisers can pay per click and set their own prices. And we offer control via on-demand reporting at the account, campaign and banner level. We encourage our advertisers to test different targeting combinations and banners to find what works best for their needs.

BidPlace SB is the first product in what will become a BidPlace suite of products. This summer, Platform-A will be rolling out BidPlace Professional, which will give larger advertisers a chance to combine self-service campaign management with full account support.

Is BidPlace SB an advertising exchange? If not, will there be an ad exchange appearing in the near future from Platform-A?

In my mind, BidPlace SB isn’t an advertising exchange (yet), because the advertiser can’t select the specific site(s) where they want to advertise. Right now, we’re a true advertising network, which means users are trading the transparency they would expect from an exchange for our superior value and reach.

At some point in the future, I expect BidPlace SB to offer both – a network for advertisers who want to target a specific audience, and an exchange for those who want to target specific sites or placements.

It looks like BidPlace SB is for advertisers only. How can publishers participate?

Larger publishers can learn more about monetizing their inventory within our network by visiting Platform-A's Publisher Solutions section (http://www.platform-a.com/publisher-solutions). Platform-A also has a self-service solution for smaller publishers, called PubAccess (www.pubaccess.com), which allows niche publishers to earn CPM or revenue-share payouts on their inventory. And of course, I encourage publishers of all sizes to try BidPlace SB and LeadBack.com to build their unique visitor base and bring them back to their sites.

What does BidPlace SB do to ensure brand safety?

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Well, the best way to ensure brand safety is to start with a network that has the highest-quality publisher sites. Platform-A conducts a rigorous screening process for all of our publishers, thoroughly checking applicants for inappropriate site content and/or behavior (auto-downloading applications, for instance).

The same applies on the advertiser side. Our Network Quality team checks every BidPlace SB advertiser, as well as their specific ad campaigns, to make sure they meet our content and creative guidelines.

Where does BidPlace SB get its inventory? Would you characterize it as remnant?

BidPlace SB relies on Platform-A’s Advertising.com network for our inventory. As far as whether it’s “remnant”, like any ad network, we buy inventory that varies greatly in its content and style. Some of it monetizes a lot better than others, but obviously we wouldn’t be achieving 91% reach across the Web without including a lot of very high-value inventory. What is LeadBack? Does it work with BidPlace?

LeadBack is Platform-A’s self-service retargeting product. Advertisers can sign up at LeadBack.com to show ads to people who have already visited their site. When the visitor leaves the site and goes to other sites in our Advertising.com network, LeadBack.com shows them that advertiser’s banner ads to bring them back to the original site. The theory behind LeadBack.com is that the best leads any online marketer has are the ones who have already visited her site. We know they’re interested, and LeadBack.com turns that interest into conversions. And best of all, LeadBack.com only charges for clicks back to the advertiser’s site, not for impressions.

Right now, LeadBack.com and BidPlace SB are two separate products. In the future, we may look to integrate them to some extent, to simplify campaigns and reporting for our clients who use both products.

Is there minimum pricing and budgets for LeadBack and BidPlace SB?

BidPlace SB has a minimum daily budget of $10, and pricing starts as low as $1 CPM or $0.25 CPC. The more targeted the campaign, the higher the minimum price. And clients have full visibility into our pricing for all targeting options, so they can find the balance of targeting and value that’s best for them.

LeadBack.com currently works on a campaign budget minimum of $200, but an advertiser can run through that budget as quickly or as slowly as their clicks allow. The larger their site population (i.e. the number of people who have already visited their site), the more clicks they should get via LeadBack.com.

Any plans for APIs from Platform-A with or without BidPlace SB?

That’s a great question. We’ve had significant demand for API’s for BidPlace SB from agencies and SMB partners, and we hope to be able to offer external API’s within the next few months.

Are there any upcoming shows or events at which people can learn more about BidPlace SB or LeadBack?

Yes, Platform-A will have a booth presence at ad:tech in San Francisco on April 21-23, and we’ll have BidPlace SB and LeadBack.com materials available there. We’ll also be at Affiliate Summit East in New York in August, along with our sister company, buy.at, which is a leading affiliate marketing network.

Who do you see as key competitors to BidPlace and LeadBack?

In the banner advertising space, BidPlace SB competes against Yahoo! and Ad Brite, among others. LeadBack.com competes against retargeting.com and Fetchback. Where online can one learn more about BidPlace and LeadBack?

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You can check out bidplacesb.com and leadback.com to learn more about the products. Also check us out on twitter (bidplacesb and leadback) for product updates and news.

What do you see as the advertising exchange's role in the future?

I expect advertising networks and exchanges to have a very bright future. From a publisher standpoint, any site that isn’t monetizing at 100% sell-through can benefit from a network or exchange, especially partners with a reputation for working to protect publishers’ brands. Meanwhile, advertisers are gaining one-stop access to site placements that they may not have been able to negotiate independently. Advertisers have a great deal of leverage in the current marketplace, and can use that strength to achieve exceptional value via exchanges and networks. I see this as a win-win for the industry. In your opinion, how do exchanges move from a remnant inventory model to a premium and remnant model?

The key is to better address what each side of the exchange equation wants. Advertisers are looking for transparency – not just at the publisher level, but by site, URL, and even placement. The more visibility they receive from an exchange, the more confident they feel about investing in a consistent spend with them. The goal here is to attract advertisers of every type, large and small – like Google has done with AdWords.

Publishers, meanwhile, are looking for avenues where they can safely and productively sell their premium inventory. If they could get the same payout rates and degree of brand protection from selling on an exchange as via direct sales, they would obviously reduce their overhead and move towards an exchange-only model. But most publishers aren’t there yet. The potential game-changer here is control. If an exchange gave the publisher full control over pricing, advertiser blocks, and how their inventory was tiered, publishers would have a hard time saying no. (Especially if a much more diverse audience of advertisers was flocking to the exchange, thanks to the transparency mentioned above.)

If exchanges become willing to relinquish the sense of influence over the inventory buying and selling process that they currently have, and cede that transparency and control to their clients, I think premium inventory can absolutely fall within their grasp.

Follow BidPlace SB (@bidplacesb), Leadback (@leadback) and AdExchanger.com (@adexchanger) on Twitter.

April 6, 2009 – 8:02 am

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Brand.net Getting Traction With CPG Clients Says CEO Elizabeth Blair

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Elizabeth Blair is CEO of Brand.net.

AdExchanger.com: Can you give us a sense of business momentum currently at Brand.net? Any surprises?

EB: We've been trafficking campaigns for 12 months. Our target market is the Ad Age 100 and to date we're right on target, with the majority of our revenue coming from that group. On the "surprises" front - we've had more and earlier success than we would have anticipated with the CPGs; 7 of the 10 biggest have worked with us already. Also, budgets have been larger than we forecast, each quarter average order size has been over $100K. What all of this tells me is that the biggest Brand advertisers want to use the web as a - eventually the - mass media for Branding. When the internet finally offers them the ability to do that well, scalably and efficiently (as it has done for years for direct response (DR) advertisers), their Brand budgets will move online.

How do you define "premium" inventory?

The word "premium" is at best imprecise and misused. We see agencies and end clients focused on "quality", which in the modern era requires two elements. First, (a) top comScore sites, where publishers continue to invest in delivering a very high-quality user experience and users recognize and reward that with their visitation and engagement. Second, (b) the page-by-page experience itself. Over the past five or six years, you have seen virtually every publisher aggressively thread UGC throughout the content (professional edit) experience. Often this occurs as user-posted comments below articles. The stated goal is to increase engagement - the unstated goal to increase page views - whatever the reason it has dramatically complicated the purchasing experience for Brand advertisers just as they were gearing up to move more Brand advertising online. Brands are very sensitive about inappropriate text and/or images appearing on pages where they place ads, especially so if their ad is directly adjacent to that content. Our SafeScreen product, launched in Q109, allows us to do page level content filtering - which gives advertisers "cleaner" experiences than if they bought directly from those publishers. This is not a trivial problem (nor an easy one to solve technically); we've already screened out over 25 million impressions that came from the highest quality publishers, in the content channels most popular with Brand advertisers. So (a) top sites and (b) safe page-level environment = quality to us and to our customers.

Where are the brands and their budgets? Do you think brand marketers see digital as direct response-focused?

Today, 95% of Brand budgets are spent offline - so in TV (even though the most attractive viewers are the most likely to use DVRs and skip commercials entirely), in print, etc. Brand marketers are smart - they know that spending 5% of their budget where their target demographic is spending up to 40% of its media time is a recipe for trouble. Beyond spending too much to reach too few, they flat out are failing to reach the people they need to buy their toothpaste and shampoo, cereal and soda, movie tickets and DVDs, cars and vacations. I think Brand marketers see digital as frustrating. They see it working brilliantly for their direct response counterparts - scalable, efficient and effective. But to buy Brand online the way they need to do it, they have to go publisher to publisher to

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publisher executing individual buys, then frantically try to "pull it all together" to make sure they are achieving their composition, reach, frequency and pacing goals. It is incredibly difficult to do this even across a couple of publishers at a time, and even more so to do it all contemporaneously with the offline (read: much larger) portion of the campaign. The final insult is that even though Brand advertising in the US is almost twice as large a business in dollars as direct response - and other mass media put the biggest and best, most scalable opportunities in front of the Brand advertisers - online we tell the Brand guys to get over it and use direct response tools and networks built for direct response. Again, when the internet finally offers Brand advertisers the ability to do Brand advertising well, scalably and efficiently, their Brand budgets will move online. That, of course, is what Brand.net is focused on doing.

How do you assure publisher partners that you are not "cannibalizing" their inventory?

I think what you mean here is channel conflict. I spent most of my career in publishing - first in the magazine business, then 9 years at Yahoo! I am passionate about great content. No advertising supported major media has ever supported great content without access to material amounts of Brand spending. So I assure publisher partners that I won't cannibalize them in a couple of ways. First, I tell them to sell every possible ad impression they can directly, using their own sales force, indeed right up until run time. To take the highest margin dollars they can get. But for several reasons (inventory volatility, supply/demand imbalance, etc.) no publisher ever sells everything and my goal, then, is to be their partner of choice. When they say "who can step in real time and monetize my unsold inventory" I am there with guaranteed spend from top quality Brand advertisers, with high end creative and better CPMs than they can get from direct response. This gives them the most money for any excess inventory which, again, allows them to continue to invest in delivering high quality user experience. Finally, while my advertisers know I only run on the top comScore sites in each content channel, they also know we don't disclose what sites they ran on and in what combinations for their specific buys. I am very proud of the great relationships we have with the best content sites online and I'll continue to do everything in my power to help them grow their businesses.

Can you see challenges developing in the agency model? Rapidly evolving technology is hard to chase for a service business, no?

I've seen the advertising agencies evolving their model and their business very rapidly over the past few years, in response to massive shifts in media usage and, then, the current economic environment layering on top of that. With these massive concurrent shifts, there has never been a bigger need than there is today for Brands to have a trusted advisor partnering with them to drive media strategy and buying. That's the role the agencies are uniquely suited to play. Do agencies need and use technology to do that? Absolutely. But I do think their business sweet spot, their emphasis, and their business model is going to focus on portfolio management - first, on cross-channel media allocation decisions, then on monitoring and thus driving best execution by vendors who are best in class across their disciplines. So the technology they will emphasize is the technology that allows them to do that portfolio management incredibly well. The big holding companies have and are enhancing those capabilities, and are actively working with Brand.net and our peers to evaluate which will make their shortlist of preferred provider partners.

Would you ever consider buying from exchanges? Under what circumstances?

Yes. We do work with exchange technology platforms when our direct relationship with the publisher enables us to know with 100% certainty what we are buying and using that platform provides operational efficiency for both the publisher and Brand.net. What's closer to the value proposition for Brand.net - that you offer brand-safe inventory or you are experts at building brands on the Web?

We are experts at building Brand campaigns on the web. Let's be clear - we are not a creative agency, and we don't do cross-media strategy and planning. Once the client and agency decide what the right message is, and that the web is a big part of where they want that messaging to occur, we step in and get that Brand message out in the highest quality online environments, with tightly managed campaigns, and clear Brand-focused intra- and post-

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campaign metrics. So offering Brand-safe inventory is certainly a core competency of ours, and a critical element of our value proposition, but only one piece. It's pulling it all together - efficiently, effectively and at scale - where we deliver value to the Brands and agencies.

Do you ever provide a site list to buying partners? How do you handle this request and assure brand safety?

As I discussed above, our advertisers know we only run on the top comScore sites in each content channel, and they also know we don't disclose what sites they ran on and in what combinations for their specific buys. We may provide comScore data or examples to help buyers understand what types of sites constitute a "channel". All Brand.net media runs through SafeScreen, our page-level content filtering system, to assure the safety of our advertisers' brands.

If you were a young media planner, buyer or seller (network side) in the digital media space, how would you proceed so that you develop key skills for a successful media career? Any suggestions?

As I said above, I think the elite agencies of the future will be true media portfolio managers, planning and executing cross-media strategies. So young people should focus on learning strategy and buying top to bottom, and across multiple media.

May 18, 2009 – 7:42 am

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Bizo CEO Russell Glass Says Data Driving B2B Demand-Side Optimization, Too

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Russell Glass is CEO of Bizo, a business-to-business ad network.

AdExchanger.com: Judging from your June release, Bizo business appears to have momentum. Has B2B been slowed in the recession or never stopped? What are you expecting from the economy in the next 12 months?

B2B has been hurt by the recession, but it has kept pace with the rest of the industry and its projected to take an increasingly larger share of the overall online advertising pie in future years. We call it a high-growth $4 billion business, but I've seen numbers placing it at over $5 billion for 2009 with steady, 15-20% growth over the next 12 months and beyond.

How is Bizo differentiating itself from other B2B ad networks? Is it technology or service? Please explain.

We like to think it's both. We work very hard to provide the best possible service and results to our advertisers, but our main differentiator is our technology. Our platform collects data from our B2B publishing partners and other company information sources, and we then organize and anonymize that data to create bizographic profiles that include such features as job function, industry, company size and seniority level. We're then able to use that data to target advertising across our growing B2B network without compromising individual online privacy. It's a proven model - it provides better results at better rates than competing offerings - and it's all dependent on the strength of our technology and the strength of our network.

Why did you spinoff ZoomInfo's ad platform to form Bizo?

We saw a hole in the market that we wanted to go after: bizographic targeting for the online B2B market. Although there was significant IP that ZoomInfo was able to bring to the table, that wasn't the business that ZoomInfo was in so it made sense to spin Bizo out into a separate business. It's all about focus for both companies.

For publishers, how do you increase their revenues without cannibalizing sales? Isn't channel conflict inevitable?

Good question. Our model is highly focused on the publisher. Because our sales are based on audience targeting vs. site targeting, we never compete with the publisher sales teams who are selling their site brand. In fact, we have advertisers who ask us for specific publishers, and we turn them over to the sales teams of our partners. At the same time, we're giving our publishers an opportunity to monetize their audience in new ways, without

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compromising that audience's privacy or user experience. With Bizo, a B2B publisher can extend their audience reach, monetize audiences off site, and increase the value of their unsold inventory by an average of over 300%.

What's your view on ad exchanges? Using any? If so, which ones work?

We think there is tremendous value and efficiency to exchanges on both the buy and sell side. Bizo currently gets more than 30% of its audience reach - and a lot of its margin - by buying and arbing supply from the exchanges. There are issues however, primarily around quality and transparency. Bizo's business is using data to improve the quality and value of an impression, and we consistently do so - by over 300% on average. The problem with exchanges is that making a $0.25 CPM impression worth $0.75 or even $1.00 doesn't do much for us. Our customers in B2B are looking for us to take a $5.00 impression and make it worth $15.00, and they're sensitive to quality. I believe the exchanges need to improve their quality and transparency across the board to break through.

How will real-time bidding and demand-side optimization affect your business?

It's already affecting our business in a huge way. We're spot-bidding 65% of our impressions today through the waterfall/default model. In some ways, we've created a loosely coupled exchange of our own through how our network partnerships are structured. We rarely take ownership of inventory, and we almost always have CPM floors in place where our publishers can dictate the rules that allow us to be on the top of the waterfall. We can use this model because of how high our average CPMs are for publishers - well in excess of $3.00 net. With respect to the demand-side optimization, our data drives demand-side optimization because the business audience is so valuable, and it's already being used by many of the big optimizers and networks to improve their campaigns.

How does Bizo address the purchase funnel for marketers?

Bizo is a display advertising network, so we're really the most focused on the top of the funnel - how do you drive demand and awareness for your products. There has been a ton of research of late from comScore, Microsoft, Yahoo and others that show how effective display advertising is in creating brand awareness and driving the top of the purchase funnel. Bizo is focused on helping B2B marketers take advantage of this phenomenon in an efficient way by targeting the specific audiences that they care about for their products and services. Additionally, Bizo has seen a lot of success with retargeting non-converts across our B2B network of sites, and focusing certain campaigns on sites where our audience members are showing some purchasing behaviors. These capabilities are much more aligned with the consideration and purchasing stages of the funnel, although it's not our primary focus.

For targeting, where do you get your data sets? Do you use data exchanges? Do they work?

We get our data through our platform which processes and normalizes data from the 300-plus publishers in our network and other data sources. We've processed billions of data points and we can now target over 45 million users in more than 200 targetable segments on a monthly basis. Yes, we sometimes use small business data from exchanges, but only rarely and for broadly targeted campaigns because it's not as targeted as our data is and it doesn't tend to work as well. From what we can tell, the data exchanges tend to be the most effective in high-value, "in-market" categories such as automotive and travel. We make our targeting data available to other ad networks and exchanges to help them more effectively work with the B2B market, and we will be making some significant announcements about this in the near future.

How does your revenue model work? Revenue share, transactional, performance, other?

Our advertisers pay us on a CPM, but we optimize to whatever metric they're looking for (actions, loads, time on site, clicks, etc.). We share revenue with our inventory and data provider publishers who benefit from the higher-than average CPMs due to our targeting. On average, our publisher partners are getting over $1.50 CPM for their data and $3.00 for their inventory. If they provide both, it's over $4.50 for the impressions.

What are the challenges of running a B2B ad network versus a B2C ad network?

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There are a few challenges. First, the B2B industry can get very niche - environmentally friendly dry cleaners would be a good example. There are marketers out there that are looking to reach every EFDC on the planet, and our goal is to provide them an efficient way to do so. However, scale becomes a problem there. If there are only 50,000 of these guys, there just aren't many impressions to go after, and you can pretty much throw optimization out the window. The upside is that the CPMs go way up in these niches, and our partners know how to sell to these buyers. The second issue is that the B2B industry is still well behind the B2C industry in their "move to the web," which makes some of our sales cycles longer than you'll typically see in the B2C world. That all said, going after a narrower market can be a huge benefit because we are able to focus and dig deeper to provide successful solutions than we would otherwise be able to. Also, because we view what we do as an audience-targeting platform based purely on B2B audience data - as opposed to a typical ad network - we can be much more flexible with our business model.

Follow Bizo (@follow_bizo) and AdExchanger.com (@adexchanger) on Twitter.

August 17, 2009 – 8:46 am

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Collective Media CEO Apprendi Says 2009 Is About Audience-centric Buying and Bigger, Richer Media

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Joe Apprendi is CEO of Collective Media. AdExchanger.com: Any trends/momentum you can share in your display ad business?

JA: There are two major trends that developed in 2008 and are really accelerating in 2009. The first is the shift from site-specific to audience-centric buying among brand advertisers. Agencies/Advertisers are realizing there are many ways to reach a target audience beyond conventional site/section targeting. Second, in response to this trend, there is a greater emphasis among brand-name publishers to create bigger, richer ad units to increase the effectiveness of ad creative beyond standard IAB ad sizes. Not only will this continue, it is a critical ingredient to the success of a display ad campaign.

How is technology impacting the online ad network space?

Ad technology is at the core of the most successful ad networks. Of the 400+ ad networks, 90% of them have no proprietary, differentiated technology. In fact, many simply provide services on top of existing ad exchanges. I believe that the market is recognizing the ad network players who are providing a meaningful platform that increases the effectiveness of their display advertising spend. This includes audience targeting, yield management and ad effectiveness analytics.

What will bring the brand awareness dollars online in a way that matches the time spent on the Web by the consumer?

There are a number of factors that prevent this shift from occurring as rapidly as we’d like, but a few of them are front and center. It just takes time for the agencies/advertisers to understand how online display/video compare to ‘tried and true’ offline tactics (TV, Print, Radio, etc.). This is an education process. As ‘digitally trained’ media decision-makers become the majority of buyers, you’ll see more spending coming online. More importantly, we need to provide a comparable ad format and buy methodology. This is especially true if we expect online video to steal share from TV/Cable. If the online market could buy a :30 spot based on a Nielsen Rating, we’d be much farther along here.

Your messaging references Collective Media's ability to offer "full transparency." How do you provide transparency but prevent channel conflict for partner publishers? What does "full transparency" mean?

This is a great question, because it is the most important component of maintaining strong relationships with our brand-name publishers. We sell target audiences, not sites. We never sell site specifically or report site specifically. This way, our publishers can continue to do what they do well while we provide a complementary ‘audience-targeting’ solution to the same agencies/advertisers that they are working with.

Agencies are starting to provide services that ad networks provide and visa versa. Do both models merge at some point? What will be the key differentiators?

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Yes, they should absolutely be exploring ways to provide ad network technology and services to their clients. In fact, we operate very much like an agency ad network already. We just happen to service multiple agencies/advertisers in this regard vs. simply one holding company.

As technology provides real-time insight at the impression level, does it follow that more players, traders, networks (whatever you want to call them) will jump in rather than less?

As mentioned, if more display spending is moving towards ad network solutions, it’s likely that more players emerge. I think you’ll see leading diversified media companies, agencies and others step in to offer an ‘audience-centric’ solution to their advertisers. However, I don’t think you’ll see many more ad networks that offer any meaningful value beyond just a way to access commoditized ad impressions through ad exchanges. Differentiated technology, targeting and inventory matter most moving forward.

Can you discuss your AMP® platform and how you're positioning it to publishers and advertisers?

AMP provides a turn-key technology platform for any company that wants to build or manage an audience network. To do this successfully you need a sophisticated audience targeting engine, ad network administration and reporting solution. Whether you’re an agency network or publisher network, this applies. A nice feature about AMP is that it fully integrates with DoubleClick’s DART ad server, so customers don’t need to rethink their ad serving solution to capitalize on the benefits that AMP provides.

What recommendations would you make to web publishers who are looking to create strategies that compensate for the recent plummet in CPMs?

They really have to pursue two paths in parallel. First, they need to maximize the value of their site-specific ad revenue. This involves better ad units, targeting data and inventory management. Second, they need to explore an audience-centric solution, whether by building their own ad network or partnering strategically with an ad network partner that can fully capitalize on this market opportunity. It’s not just one or the other - it’s both.

Where does Collective Media's audience targeting data come from? How can advertisers be sure that it is accurate?

We acquired Personifi®, a leading semantic classification and audience targeting company last year. With this acquisition, we’ve created the AMP Audience Cloud™, which provides a centralized audience targeting platform for both contextual and behavioral targeting. We work with multiple third party data providers right now and continue to ad more based on advertising demand. One of the nice things about our platform is that we not only target against a myriad of audience segments, but we also provide complete reporting on what audience segments are working and which ones are not.

How important are audience analytics and what kinds of capabilities are available in this area? I think this is the most important component of adding value to publishers and advertisers. You need to report on both data and metrics that are meaningful no matter what the objective. We do this. But beyond this is the business intelligence that can be extracted from a great analytics tool. This is where research, analysts and service in general play a symbiotic role in meeting the needs of our customers.

How does Collective use engagement metrics to help enhance how consumers view and interact with campaigns? This capability is built into our ad platform. Clearly, clicks and conversions do not tell the complete story of the efficacy of a display ad campaign. In fact, they can be utterly misleading. This is where other metrics play an important role, especially for brand advertisers vs. direct marketers.

Will search retargeting in display inventory be a huge opportunity for advertisers and publishers if Google is able to solve privacy concerns? Has Collective Media had any success with Yahoo!'s search retargeting product? It already is. This is a key source of retargeting data for our advertisers today. This coupled with site, email and ad

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retargeting will provide new, innovative data sources for our marketers to better optimize their display ad campaigns.

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June 8, 2009 – 5:24 am

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Are You Ready? Real-Time Bidding Breakout Next Year Says Contextweb EVP Sears

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Jay Sears is EVP, Strategic Products & Business Development of ContextWeb, Inc. / ADSDAQ Exchange who announced their real-time bidding API recently.

AdExchanger.com: What will demand-side optimization provide for the advertiser/agency? Can you quantify performance improvements an advertiser might see in comparison to futures or reserved bidding/buying?

JS: More control. Very simply, real-time impression level bidding lets you make decisions at the impression level. The new agency “demand side platforms” are designed to interact with exchanges and conduct real-time valuation of impressions; layer proprietary data held by the agency or marketer and dynamically allocate impression level media to specific clients and creative units.

With guaranteed delivery (futures), decisions are made at the campaign level. Because of our name-your-price model with publishers, ContextWeb have been conducting real-time impression transactions and packaging this into a guaranteed delivery product since 2005.

Are there any publisher benefits? For example, could real-time bidding turn remnant into premium inventory?

More advertisers equal more money for publishers. More control equals more premium inventory for advertisers. The ADSDAQ Exchange AskPrice, where publishers set the CPM clearing rate for inventory, is still the primary publisher benefit. Real-time bidding is one way for another segment of advertisers to “plug-in” and trade. The more control (first look, content and context, specific audience, real-time decisioning) you hand the buyer, the more value they derive from each impression.

How long before real-time bidding and spot market buys achieve scale in the online display ad marketplace?

Market players—the agency demand platforms (WPP’s B-3, Omnicom’s trading platform, Publicis’ VivaKi, Interpublic’s platform, Havas’ Adnetik, MDC’s Varick Media Management), the exchange re-sellers (Invite Media, Media Math), the ad networks—will test and experiment with real-time bidding in 2009. Then 2010 and 2011 are the breakout years.

Will futures/reserved buying "go away" someday with the exception of sales through a publisher's direct sales team?

Not a chance. Reserved buying is here to stay. The value of predictability—guaranteed delivery—in a digital media world than is more and more fragmented—is something advertisers ascribe high value. With our ADSDAQ Exchange, it is about being additive—facilitating spot buying, facilitating real-time bidding—how else do we make the exchange most relevant for customers in each market segment.

How does the real-time bidding (RTB) API leverage ContextWeb's existing technology? Is there a contextual component to the API that buyers can tap?

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Contextual is one of the key impression attributes available in the real time API. Marketers have always associated value with context. Content is an essential “basis grade’ or high value common denominator that can be used across billions of sites and trillions of impressions to make media tradable at scale. Content is an excellent entry point upon which to then layer additional targeting such as geography or behavioral.

Effectively, we have been running real-time, impression based valuation, buying and allocation inside a futures offering since 2005. Now that the market is a bit more mature and some agencies and other supporting companies are ready to take part of this control themselves. You will see an entire industry emerge around exchanges, just like search engine marketing firms grew up around Google, Yahoo! and Microsoft.

When will the API be ready for implementation and open for real-time bidding?

Now. We have specifications and a development sandbox available and continue to roll trading partners into a live environment. Digital agencies, ad networks and other arbitrageurs interested in ContextWeb’s ADSDAQ’s Real Time API can contact the company and download the technical specifications at http://realtime.contextweb.com.

Will there be any additional infrastructure implementation required with ContextWeb's real-time bidding API? Co-location, cloud?

No. If your data center happens to far away from one of ours, partners may consider co-location for performance improvement. We need to keep the entire bidding process around 100 milliseconds.

How have your publishers responded to having their URLs exposed in the API? Is there potential for channel conflict with your publishers?

Channel conflict is solved by giving a publisher control over URL disclosure. Of 9,000 publishers, a couple hundred—mostly comScore 250 publishers—request we suppress the URL. In those cases we offer a "PID" or publisher ID number so a buyer still has the option of tracking that element.

Will all of your publishers be part of the program or will there be an opt-out?

Publishers don’t choose to be part of a futures, spot or real-time program. Publishers can opt-out or block specific advertisers from appearing in their inventory. It is a must-have feature, but in practice relatively few publishers actively use this capability.

Follow Jay Sears (@JaySears), Contextweb (@contextweb) and AdExchanger.com (@adexchanger) on Twitter.

May 11, 2009 – 7:50 am

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CPX Interactive CEO Seiman Sees Strength In Consumer Goods and DM Clients With Upfront Revenues

Mike Seiman is CEO and Founder of global online ad network,

CPX Interactive.

AdExchanger.com: How's CPX Interactive's display ad business? Any trends that you can share?

MS: Our display business is strong, we are continually seeing growth not only in terms of revenue but in terms of impressions served. Obviously, seeing revenue growth in this economy is becoming less common.

One of the things that makes us more comfortable in these tougher times is the diversity of our clients. Interestingly, we are noticing that consumer goods in the $100 and under range are still selling fairly well in this market, but big brands are pulling back more and more on spending. It also seems that direct marketers who’s revenue is generated before they pay for media are spending more then those direct marketers who have to frontload their CPA to earn residual money over the lifetime of a user.

Please provide a bit of background on CPX's use of ad exchanges. Why are exchanges important? Any exchanges "getting it right" these days, in particular?

We have embraced the model since its inception. We were one of the earliest (and remain one of the largest) players in the Right Media Exchange. We have also been happy to be beta users in most of the other exchanges that have popped up. We buy some extra inventory for our network through them all and allow them to buy on us to increase the cpm we provide for our publishers. It is probably still too early to say if anyone is getting it right as we don’t really know what right is yet. Ultimately, though, anything that makes the market more liquid is a good thing. Has CPX used real-time bidding (RTB) or demand-side optimization yet? Is RTB a "big deal" in your view?

We do use some RTB with a few publishers. I think it certainly helps competitive networks step up their game. As to whether it is a “big deal”, it can be, but today I don’t think there are enough players using it for it to be a “big deal” . Someday when you have 20+ networks and hundreds of publishers using it, it will be a really big deal.

Are you using data exchanges? Can data exchanges help the marketer? Any challenges?

We do use some data exchanges like Blue Kai. Whether they help our bottom line really depends on what data we are buying and how relevant it is to the campaign. Unfortunately, while it can provide decent lift in revenue, with the cost of the data, it can often end up being a wash.

It would probably be better for us if they pitched their services directly to the advertisers, and the advertiser paid for the data before they came to an ad network. With the model as it is now, I think ad networks will begin to think more creatively about how they can create their own data and push the value-add to their bottom lines.

With many trading platforms and services either in stealth mode or already available - such as Invite Media and Media Math - how will CPX compete? Have you built your own platform to aggregate across multiple exchanges or have you/will you outsource?

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These kinds of platforms can definitely benefit agencies by providing a window into our inventory, but at the end of the day it’s all about scale for us so CPX really remains in control of its own destiny. CPX manages over 30+ billion impressions monthly and 80% of those are direct and not from any exchange. Regardless of what platform an agency or advertiser uses, they need to come to CPX to buy that direct inventory. We are currently plugged into multiple campaigns and will shortly be able to provide better granularity across those platforms then these other service providers.

Is there value in placement? Or, is it all about audience?

There is absolutely value in placement and …yes it is all about audience. Great placement in front of the wrong audience is irrelevant and bad placement to the perfect audience will be equally useless. Both are truly needed to deliver real value.

Are view-through conversions an accepted metric by clients/CPX? How does attribution get solved going forward? Any thoughts on the ability to map to offline, too?

Most of the time, on high priced DM campaigns, view-through conversion is acceptable. Of course, the problem is the attribution. Our numbers often show 80% discrepancies on view-through conversions, so the question remains, “who is getting that credit and what value did our impression add to that sale?” I believe that, in the long term, we will be able to validate that as well as validate offline purchases through online media. Meanwhile, hybrid models are probably the best way to combat this in the near term, until a better analysis tool is created.

Do ad networks cannibalize publisher inventory? How does CPX prevent "cannibalization"?

Some ad networks probably do cannibalize publisher inventory. We often discuss, at CPX, that publishers tend to be the forgotten part of the equation in the industry. Their inventory is may be taken for granted and commoditized. We like to think that CPX is different, though. Carlton Hickman (CPX co-founder) and I were publishers, ourselves, before we began what became CPX. We have always understood the integral role that publisher inventory plays in the process and the importance of being able to convince publishers that you truly understand their bottomlines and speak their language. We have always paid top dollar for quality publisher inventory. Without it, after all, no ad network has a ‘product,’ so we strive to create the highest ecpms we possibly can for our publishers and ensure that we are buying competitively.

How do you see digital media buying agencies evolving? What recommendations would you make to the agency side?

As advertising budgets move more quickly from TV and print to online, traditional agencies are going to have to be better prepared to play in this part of the industry. Obviously, many large agencies are already successful in the space and I think we will see more following suite. My suggestion would be that they do their best to truly understand the factors that make online media buying different from the more traditional models, rather than simply applying old rules to the newer medium. We have been pretty successful in helping the agencies we work with along their learning curves. If you were a young digital marketer, where would you focus your training? Any tips?

At the risk of sounding self-serving, I would truly suggest that any digital marketer seek a better understanding of how they can leverage the scalable distribution of a quality ad network. There have been (and still are) issues that must be resolved so that all parties can achieve total comfortability with the process, but the truth is that the promise of the Internet is really the delivery of scalable targeted audiences. To maximize this strength, digital marketers must build a partnership with a company that can execute on that promise.

Follow Mike Seiman (@CPXceo), CPX Interactive (@CPXinteractive) and AdExchanger.com (@adexchanger) on

Twitter.

May 21, 2009 – 6:53 am

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CPA Is The Only Meaningful Metric To Our Clients Says Dapper COO Aizen

Jon Aizen is COO of Dapper, an online ad network. Please share what trends Dapper is seeing on the client-side in 2009. Any vertical strengths, typical campaigns, deal size, etc.?

Trends are toward performance-only metrics. We're seeing eCPA as the meaningful metric for our customers, and we're embracing that by offering it as a pricing option right off the bat. Verticals we're growing in are travel, where the emphasis on real-time pricing and inventory is obviously there, and now, Financial Services.

How does Dapper target the purchase funnel for its clients? Are you in the business of generating interest (top of the funnel), or fulfilling intent (bottom - similar to search)?

Definitely more down-funnel, especially when we retarget with our remessaging product. We're able to actually show the exact products the consumer was looking at before he/she abandoned the advertiser's website. Beyond that, when we do a RON campaign with our ImpressionDNA technology that infers intent from every page load, we're matching that intent with an offer from the search engine of offers we've created. So it works a lot like search.

Dapper appears to be offering automated behavioral, geo, creative and contextual optimization simultaneously with ImpressionDNA. Where is the behavioral information stored? It would appear that you use a combination of cookie data and semantic/contextual scanning to optimize. What is real-time in the process?

Behavioral information is stored in a cookie as per usual. What's unusual about this is that we're combining (as you note) these data with contextual / semantic data but also with user location data and past performance. The real-time part is when we add all this up with the proper weights with each impression to then search the offers we have from our advertisers. All this occurs in real-time with every impression. An example: an advertiser could be an online travel agency, selling hotel rooms in every major city in the US. This ad needs a user location and a possible date range.

That's on the advertiser side. On the media side, we're buying a ton of uncategorized RON media from a lot of the networks and scanning each page for a match to this "DNA Profile:" location (via geo-IP), date. When an impression loads that has a valid profile to match the ticketing ad's inputs, we search the OTA site for the right hotel for this user and voila! For the impressions where we don't find a match, we either find one with one of our other advertisers or we simply sell it back to the ad exchange. And of course, performance is used as a feedback loop in this whole process.

With so much power on the side of the algorithm(s), is there anything left for the client to do once the campaign starts?

Watch the conversions come in. Usually the client gives us feedback to expand the buy if it's something they're excited about, but because everything is automatic, there isn't much work on their side except to watch the campaign along with us. Often times we will work closely with our customers to continue the process of innovation on the ad creative, including optimization techniques for which offers to bring in.

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How does ImpressionDNA benefit the publisher?

It allows for ads on their site that actually look and behave like integrated site features more than ads. Thus, publishers gain content relevant to their users (think about a travel site with a built-in feature that guesses where you want to travel and knows your home city) that keeps these users on their site longer. In some cases, it means that they can sell Dapper Ads to their own advertisers at a premium, but obviously this is only the case with premium buys. In short, the ad becomes an extension of their content rather than a competitor to it.

Will real-time bidding (RTB) and demand-side optimization impact Dapper? Yes, absolutely. It makes the whole system even more efficient.

Are ad exchanges a "good thing" for Dapper? Does Dapper want to be an exchange with its impression level technology? Exchanges are a crucial part of our process. We're partnered with several, including RightMedia, OpenX, and AdBrite, and we utilize them to do the whole buying, categorizing, serving up the wheat and selling back the chaff that powers ImpressionDNA. We actually are far more interested in being an *offer* exchange rather than an ad exchange: we're building up our own search engine indexing our advertisers' millions of individual real-time offers and look to those offers as the commodity that we'll be marketing on the web in the long term.

Your site says that offers are matched to the "right consumer through targeting on pre-contexutalized Dapper media." Some might argue that when media isn't contextual, it stands out more and therefore performs better. What do you think? Our data simply doesn't support that. Nor does it our mission: we aren't out to get performance by dissonance (with all due respect to that approach), we're trying to get performance by harmony. Search works because it matches intent to a relevant ad, and that's why it's so successful.

Dapper said recently that "conversion performance is the only significant metric that we’re being measured on lately." Is the CPM dead? For DR, it is heading in that direction. You might get away with charging CPM to a client and feel like you're managing your risk pretty well. But, at some point, your contact and his or her boss are sitting in a room and looking at total conversions compared to total spend. The campaign became defined by CPA whether you like it or not, and if you're not lucky enough to have dropped a conversion pixel on their site, now you're not even in the room to see those data and defend yourself. In order to build long-term relationships with our clients, we should be aligning our pricing model to reflect the success metrics that actually matter to them and determine whether they call us back for the next campaign or not. CPA pricing also allows companies like ours, whose primary intent is to bring performance, to capitalize more fully on the upside of our value.

Thinking about your agency partners, how do you think the agency model will need to evolve in the future? It's hard to make generalizations across such a large industry, and agencies unfortunately get such a bad rap from tech companies. They're the human element in all this that understands the customer and the marketing goals of the campaign, and like it or not they're the filter of all the new technologies, most of which *don't* work, that throw themselves at their clients on a daily basis. Some agencies take more risks than others; some are more innovative. One thing that I hope won't drive them too much in the future is fear. When new technologies that have had some time to pay their dues and really do prove their worth happen to enhance (or even replace) a process that agencies perform, I hope that agencies continue to run to embrace them and integrate them in their processes.

Follow Dapper (@dapper_net) and AdExchanger.com (@adexchanger) on Twitter.

June 18, 2009 – 7:01 am

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Online and Offline Data Used Together Yield Best Results Says Datran Media SVP Of Display Knoll

Scott Knoll is SVP of Display Media for Datran Media, a digital

marketing technology company.

AdExchanger.com: What trends is Datran Media seeing from its digital media clients in 2009?

SK: Datran Media monitors and reports on trends across media clients and advertisers, including responses to our annual industry survey. One of the biggest trends we have seen this year is the need for campaign-based measurement. Media clients have understood the importance of targeting for a while, but now they are demanding ways to measure and verify targeted audiences on a campaign by campaign basis. Rather than just knowing the number of unique users and click rates, marketers need insights into the makeup of their audience and responders. This becomes increasingly important as marketers shift from targeting specific sites to targeting users on exchanges based on recent behaviors, characteristics or third party data.

Can you describe momentum for Datran Media this year?

Datran Media continues to grow. As revealed by our steady stream of press releases and the high volume of media attention we attract, Datran Media has strengthened our management team, signed on a blue chip roster of new agency partners and clients and increased the depth and breadth of the services and solutions we deliver. Most notably, we launched Aperture Audience Measurement in early 2009, which I believe will significantly change the way people utilize online media going forward. Okay I am biased, but I definitely recommend checking it out.

Revenues, deal size, vertical strengths, product interests, etc.?

As a private company, Datran Media does not disclose revenue information. However, we are growing, we are profitable and the size of our average deal is increasing. We have also expanded our product footprint across verticals. One key product move you will notice is the integration of our Aperture Audience Measurement and Reporting across other Datran Media channel offerings like our StormPost email marketing and monetization platform.

Can offline data compete in effectiveness with online data for online advertising campaigns? Which is better for audience targeting online?

I believe that online data and data derived from offline sources can each be effective, but we have found that when used together they yield the best results. Although online behavior can be a great indicator of interest and help to drive clicks or leads, it doesn’t always do a good job of differentiating between window shoppers and serious buyers. As online marketing programs are becoming more sophisticated and changing focus from just driving leads to targeting quality leads and high lifetime value customers, online data by itself is often proving less than adequate. Let’s face it, anyone with a computer and online access can do a search for “BMW 5 Series” with one click. Most online data platforms will forever categorize this user (as well as his 100 closest friends on Facebook and anyone who goes to similar websites) as a target for BMWs and other luxury goods regardless if he has the legitimate means to purchase the car. Thus this data can be very misleading. Data derived from offline sources

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can quickly help differentiate the true luxury car buyers from those buyers who have more modest spending patterns. Ideally a marketer will leverage both sources to maximize success.

Data derived from offline sources adds value to online marketing for several reasons. First, it’s not based on assumptions built on sites visited or self reported data and thus much more accurate. Second, it encompasses a lot more sources and thus is much broader in scope and applicable for more categories of products and services. Finally, the offline data companies typically have strong reputations with well established and transparent methodologies. If you are trying to build a brand image with luxury goods buyers would you rather target users who recently bought luxury goods in a retail store or target users that surf similar websites to one user who said that she had a high income in an online survey (in exchange for the chance to win a free ipod)? You get the picture.

With Aperture's focus on data, and Datran's overall concentration on performance marketing, it would appear that you were ahead of the curve when anticipating the move towards audience targeting vs. site targeting. What were the reasons for Datran's focus? What refinements can still be made?

Datran Media has always been very successful at performance marketing due to the fact that it realized early on the importance of data. In fact the name Datran is a play off of the words data and transaction. Ironically, when I came to Datran in 2007 to build an online display business, I planned to leverage Datran’s unparalleled data, but performance was a secondary thought to me. I firmly believed (and still do) that most online marketing was too focused on measuring clicks and conversions and the bigger opportunity was in finding a way to help brands more effectively reach their target audience online. I felt that if we could show brands specifically who their messages were reaching through audience targeting and reporting based on “real” data, we could convince them to shift more money from mass media like television to the web. In short, our goal was to build the best reporting platform the web had ever seen rather than a solution geared towards performance marketers. Fortunately we succeeded in creating a revolutionary audience measurement platform that truly helps marketers to understand who is seeing their messages. At the same time, Aperture also helps performance marketers to understand specific data elements that are highly correlated with desired actions such as clicks or conversions and to target more effectively using only the best performing data. So in the end, performance marketers will love Aperture as much as brand focused marketers and will likely drive much of the growth in the near future. More importantly, when big brand marketers are ready to shift the really large budgets online, Aperture will provide them with a rich analysis of the specific types of consumers and households they are reaching with their campaigns and effectively match this with engagement metrics.

Audience targeting is one part of the optimization pieces. How should a marketer manage the creative side? Considering its impact on performance against different behavioral, transactional and/or demographic silos, it's difficult for a marketer to know whether to continue fishing or cut bait, correct?

Traditional optimization compares the relative click or conversion rates of the various creative elements across a campaign and gives the majority of impressions to the ones that have the highest rates. Using Aperture Audience Measurement we have found that certain creative ads definitely work better for users with certain demographics, transactions or behaviors. In the simplest example, an ad with an older couple gets a better response from an older woman than an ad with a young couple. Whereas this seems like a basic concept, the reality is that it’s not easy to put this into practice in a scalable way online and most marketers optimize creative in a vacuum and show the best performing ad to everyone regardless of age or interests. It’s difficult to execute because accurate audience data and dynamic campaign analytics are hard to find. This is changing rapidly and as tools like Aperture give marketers creative analysis by behavior, transactions or demographics, marketers are starting to optimize creative by audience and truly get the right message to the right person.

What takeaways do you have from your days as VP/GM of Marketer Solutions at DoubleClick that you use today with Datran's display strategy?

I was fortunate to work at DoubleClick for almost six years and spent much of my time introducing new concepts such as online advertising networks, re-targeting and third party ad serving technology in the US and around the globe. DoubleClick often seemed to be a little ahead of the curve with its products and our job was as much about teaching and evangelizing as it was about selling. This took patience, but in the end the strategy prevailed. I find

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myself in a similar role today. Aperture’s campaign based audience measurement is really a first of its kind solution and provides a marketer with a myriad of insights into who is viewing and interacting with its ads. Seeing this data for the initial time can be both exciting and daunting for a marketer and often needs to be vetted by research, analytics, strategy and media planning experts in a single firm. Fortunately, Aperture appears to be the right solution at the right time based on our successful engagements to date. I know from my past that being first to market with something significant will pay off with the correct approach and I can thank my experience at DoubleClick for giving me the roadmap for bringing a new concept to market.

What milestones should we look for that tell us the display ad exchange model has taken hold and is a significant new tactic for online advertising?

The reality today is despite the fact that everyone is talking about buying and optimizing ad campaigns via exchanges, online marketers still spend a majority of their money targeting contextually and the much of the exchange activity is actually driven by ad networks. There are several reasons for this including lack of scale, lack of quality and transparent inventory, lack of education and the fact that it is simply easier to buy from a site or network than it is to try and bid through exchanges. New tools are addressing each of these obstacles, which will help, but until they are readily available exchange buying will still be a niche tactic or a way for networks to quickly scale up and down. In terms of milestones, I think exchanges start to become significant when more than a handful of agencies begin buying media direct for their clients.

Is RTB (real-time bidding) and demand-side optimization an important development? How will Datran Media take advantage of the coming RTB feature?

RTB is definitely interesting to us. Aperture’s targeting solution leverages the multitude of online and offline data we have to reach specific audiences (e.g. single women with children). Exchanges often provide us with the most scalable way to find Aperture cookies with specific characteristics. Whereas our data is very predictive, the best optimization strategy combines other factors such as click history, frequency and placement. Without RTB we can end up with a lot of waste as we pay the same for every cookie and throw out the impressions that don’t have a high likelihood of success. RTB effectively allows us to control waste by dynamically bidding based on the predictive value of a particular cookie.

Your ad network product, NetMargin, has a compliance module call "Brandshield." It would seem that compliance will be part of the exchange model. Do you see opportunities for compliance providers in the exchange space whether for conversion tracking, brand safety or other possible compliance data points?

In addition to NetMargin’s Brandshield compliance solution, it’s notable that Datran Media also operates a compliance company and integrates it across all the solutions under its corporate umbrella. I do believe that integrating compliance into exchanges is absolutely essential. Internally, we work closely with and look towards our Chief Privacy Officer to provide guidance on how and what to do to automate and advance compliance across our product offerings.

How is Datran Media tackling attribution on behalf of its clients? Is accurate cross media attribution possible or will it be? Cross media attribution is a complex challenge that won’t be solved in the near term. Most companies I speak with are still trying to reconcile the results of their display and search campaigns and haven’t yet begun to think about including offline channels. Our approach has been to try to focus on demonstrating the effect of online brand advertising on offline sales. We of course can’t do this at the individual level for privacy reasons, but can match advertising activity at the zip code level to growth in individual retail store sales for specific advertised products. So far the results have been very helpful in demonstrating the power of online marketing to drive offline sales.

Follow Datran Media (@datranmedia) and AdExchanger.com (@adexchanger) on Twitter.

July 27, 2009 – 7:53 am

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Retargeting Continues The Conversation for Brand Marketers Says FetchBack CEO Chad Little

Chad Little is CEO of FetchBack, a retargeting company.

AdExchanger.com: From your blog, I see that you've delivered $64.5 million in revenue for your clients - is that in the past two years? Care to elaborate in terms of net revenues to FetchBack, average deal size, type of clients, etc.? No – that’s ($64.5 million) a partial record of the total value we’ve provided over the time period. When we first started the company we didn’t implement the tracking of this figure.

We’ll charge on a CPM but we prefer to work with all of our clients on a CPA or Revenue Share basis. The averages depend on the product offering or lead being generated. It’s safe to say that it ranges from the low side of 5% to as high as 20% per sale/lead.

What trends are you seeing in the marketplace?

A continual push to performance marketing. As those in the industry are aware, this is the dominant form of marketing on the net but given the current conditions it makes sense. Given that, the trend (or should I say issue) that all marketers are dealing with is the need for a more robust solution for attribution issues. Something that’s independent of the ad networks and server solutions.

How do you differentiate yourself from companies like Platform-A's Leadback and any ad network that offers retargeting?

You wouldn’t fly a plane without the proper instruments. You shouldn’t run a retargeting campaign with a simple click and impression report as your only method of gauging success. Our platform was built from the ground up to provide advanced ‘actionable’ analytics specific to Retargeting. Excellent stuff – let us know if you would like a peek under the hood.

Regarding our business model: The best way to explain FetchBack is to use an example of an existing product in the marketplace. Omniture, Clickable and Atlas all provide a service that makes it easier to manage your paid search campaign along with improving performance. These solutions are not directly providing the media provider/publisher; they work on top of it. That’s what FetchBack does. We make Retargeting easier to manage and more effective for our advertisers. We work across many networks and publishers to increase reach and our technology delivers the most targeted ad available. At the end of the day it’s the data given to our advertisers via our analytics found in FIDO that makes the real difference.

Our vision is simple; To be the second most important innovation in online advertising.

Does placement and context matter anymore or is it all about audience?

Regarding our product offering, it has little to no impact. In fact, when the placement of the ad is completely out of context it only makes the ad stand out more.

Is retargeting a must-have in all digital media campaigns these days? What trends are you seeing in retargeting's necessity?

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It’s a self-serving question. The answer is yes, retargeting is must have for any marketer to some degree or another. I also say this after having been in the online marketplace since the mid 90’s. I’ve had a lot of experience in seeing what works and what doesn’t. This is the only form of online marketing that can work for any size advertiser other than affiliate and paid search. Marketers spend a lot of money and time driving traffic to their site; it only makes sense to extend your reach. If offline marketers had the capability to show ads based on a visit to a store or not – do you think they would do it? Without a doubt.

Any experience with Yahoo!'s search retargeting capabilities? Is search retargeting a big opportunity potentially? How will FetchBack participate?

No direct experience there yet. Search Retargeting is an excellent tool for driving additional impressions to in-market consumers. Our mission is purely about driving lost-prospects back to an advertiser’s site, so for the time being we don’t see participating in activities that are focused on bring people to the site in the first place.

FetchBack calls itself a retargeting company. In that retargeting can be construed as a form of behavioral targeting, is robust behavioral targeting capabilities a logical next step in FetchBack's product road map?

No, it’s not. I refer back to our mission statement of converting our clients lost prospects into customers. A good mission statement is much more that just saying what you do. It’s also about what you won’t do. While it’s very easy in this industry to get excited about additional opportunities; the hard thing is saying no. We don’t see ourselves competing with the Audience Sciences of the world. It would be very hard to differentiate our self and provide a unique offering. The other side of that is that it’s very hard for a company that doesn’t specialize in Retargeting to provide the ROI FetchBack does. If you need heart surgery you wouldn’t go to the family doctor. If you have a choice of a specialist over a generalist, the majority of the time you’ll choose a specialist and for good reason.

Beyond DR, how is retargeting useful for brand awareness marketers?

Great question. Back to the question of offline marketers having this type of capability. Even if they couldn’t track specific conversions, I’m sure they would find tremendous value in simply continuing the conversation. Let me give you an example of how we use it for FetchBack. Individuals might visit our site for multiple reasons. We’re not always looking for an advertiser to fill out a contact form during that first visit. As they leave our site and see Retargeted ads, they’ll notice that our ads that include messages about our latest PR and technology releases. Do I care if they directly drive an advertiser lead? No. It’s much more about having that top of mind awareness in someone who has visited our site before and they don’t have to return. That’s invaluable!

An additional example is how one of our advertisers has used a portion of their campaigns to allow channel marketers to communicate with each other and spur on friendly competition. The channel participants all visit a specific section of their site, so only the participants receive the Retargeted ads. A top performer in a given time period can have control over sending messages to other partners via the ads. What a fun way to build a brand if you think about it.

Why did you stepdown from AdOn Network?

The short answer is I’m a startup junky and always will be. I love creating something from nothing. The long answer is we started the process of selling AdOn in late 2006 start of 2007. We concluded the sale in 2007. I was already working on FetchBack at the time and had built out a successful management team that stepped in to lead the company.

What key learnings from AdOn are you bringing to FetchBack?

They’re too numerous to mention them all. I would say that has been the case for every company I’ve started. The most important learning is the importance of culture. Our company culture at AdOn was one of the things I was most proud of. We’ve continued that at FetchBack where we have a ‘home’ for the employees. I can honestly say that I believe everyone truly loves working here.

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The second most important learning would be what was mentioned before about the need to continually focus on something you can be the best in the world at and saying no to everything else!

Will ad networks disintermediate agencies?

I don’t believe so, but agencies will continue to search for differentiation and some will purchase networks much like we’ve already seen happen. While I don’t think networks will disintermediate agencies, I do believe that companies that can do a better job of managing and producing data have an opportunity to take a leadership position.

How do publishers participate in FetchBack's retargeting offering?

We only work directly with publishers that have a very large reach, IE Facebook, myspace, etc.

How do they earn revenue?

We manage campaigns directly through them.

What recommendations would you make to young entrepreneurs in light of your own experiences?

Focus.

Corporate messaging such as vision, mission, values are not just exercises to be done at an off-site meeting over 2 days and then placed on a wall. They should really mean something and if they do you’ll know it because you’ll use them every day.

Culture is a very real competitive advantage. Ask Tony from Zappos.

Follow FetchBack (@FetchBack) and AdExchanger.com (@adexchanger) on Twitter.

June 10, 2009 – 5:40 am

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Google’s DoubleClick Ad Exchange Is Officially Launched Says VP Neal Mohan

This is part one of our meeting with Neal Mohan, Google's Vice President of Product Management and Scott Spencer, Group Product Manager regarding the official launch today of the new

DoubleClick Ad Exchange - read the post from Neal on the Google blog.

Below, Neal gave us a background on the evolution of the exchange at Google and its expected impact for all members of the advertising ecosystem. For a one-sheeter from DoubleClick on their new, updated ad exchange,

click here.

By the way, no more "AdX", it's just The DoubleClick Ad Exchange.

Neal Mohan: "This (the ad exchange) has been a major area of investment in terms of the DoubleClick Google integration ever since our deal closed last year.

It’s one of the key areas where we think we can add significant value, and the objective for Google is to grow the overall display advertising pie for everyone involved. That’s the big objective behind this.

So, let me take a step back and give it context so you can see where Google is coming from.

Today, display advertising is still not really living up to its full potential despite the fact that the industry has been around for well over a decade. My advertiser clients, agencies and publishers tell me this every day – of course it’s not a surprise when you have 1,000s of advertisers, 1,000s of publishers across 1,000s of ad formats – it literally takes advertisers 1,000s of hours to get a display campaign up and running. Because of that, advertisers simply drop out because of this complexity and inefficiency that exists even though display advertising may be the best way for those particular advertisers to get their message out.

On the publisher side, this translates into 40 or 50% or north of that for publisher inventory simply going unsold. The way I think about it is if an airplane was taking off every day with more than half of its seats unfilled because it was simply too hard to buy them – that’s sort of the way display advertising is today.

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Google thinks that system can get better. The way we approach many of our problems today is through technology and this is how we hope to grow the [display advertising] pie for everyone.

So, there are three fundamental principles that we’ve tried to adhere to as we’ve been executing on our display advertising roadmap…

The first is simplicity. First and foremost, we want to eliminate as much of that complexity and inefficiency that I just described that exists and that’s what our DoubleClick platform has been focused on for 1000s of advertisers and 1,000s of publishers.

Of course, we don’t want to stop there. People spend money in display advertising to get results, after all. So we want to drive up performance for our advertiser and agency clients as much as possible - whether they're brand advertisers or direct response advertisers - and allow them to be able to measure it.

All the features and capabilities we’ve built on the Google Content Network and on YouTube – accessible to all of our AdWords buyers over the course of the last several years – are really geared towards driving that performance for them.

And then the third pillar, if you will, of our strategy, where the ad exchange fits squarely in, is to really open up the ecosystem. In a nutshell, we want to democratize the world of display advertising and make it as accessible and as open as possible to large and small publishers, large and small advertisers – just as search advertising is today and that’s kind of our objective.

Having said that, what is interesting about the new DoubleClick Ad Exchange is that the participants are the large publishers on one end, our advertising network partners on the other end, we’re bringing over all of our partners from the existing exchange platform on to this new platform in addition to adding several more. For example, we have the majority of the top 25 ad networks in the U.S. already signed up and ready to go even though we’re only launching it formally [today]. In addition, the biggest element and key capability of this is the seemless integration of AdSense on the publisher side and AdWords on the advertiser side. That means that the hundreds of thousands of AdSense websites will now automatically be able to participate on this exchange platform and they’ll be able to do it through the existing AdSense interface that they have. So they’ll get the benefit of the increased demand that comes from all of those exchange buyers in addition to the AdWords buyers that are already competing for their inventory.

Similarly, AdWords advertisers will be seamlessly integrated into this and be automatically eligible to not only buy the AdSense inventory that they’re buying today, but also now all this premium ad exchange inventory that’s coming online they’ll be able to buy, again, in a seamless fashion through the same AdWords interface that they know and love and have the benefit of a much broader inventory pool to buy across.

Couple of other things.. In addition to this new pool of advertisers and publishers. [Regarding] the benefits of dynamic allocation for publishers, so real-time allocation between directly sold and indirectly sold channels so that the ad slot that is filled by the ad that will generate the most amount of revenue for that publisher and the ability to have that decision be made in real-time on an impression by impression basis. If you can point an ad slot towards the $10 CPM ad instead of the $5 CPM ad in real-time and you do that millions of times a day across lots and lots of impressions, it adds up to real money for publishers.

Similarly one of the new capabilities is the real-time bidder on the advertiser side – it’s the way advertising networks can leverage their data, optimization capabilities and ad serving technologies to bid in real-time based on the information that is given to them in real-time right before that impression is delivered so that they can buy only the sites, audiences and ad space that they’re looking for.

Some of the other new capabilities are enhanced controls for publishers and advertisers, easier reporting, measureability and a new API by which ad networks can programmatically access the exchange. Last not by least, something that is a significant component of this platform is in regards to one of the other areas of inefficiency in display buying - the end of the campaign process: the billing and invoicing step. What we’re doing with this

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platform is to take care of that for all of our publisher and advertiser participants so that we can handle billing and invoicing across multiple geographies, multiple currencies, etc. and really take care of the clearing on behalf of our customers.

This is the general overview of not just the exchange, but perhaps more importantly, where it fits into our overall display strategy and vision. And, as I said at the beginning, the real objective is to grow the advertising pie for everyone."

Part II including a Q&A with Neil and Scott will be published Monday.

September 18, 2009 – 12:41 am

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AdExchanger.com Q&A With Google DoubleClick Ad Exchange’s Mohan and Spencer

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This is Part II of AdExchanger.com's discussion with Neal Mohan, Google's Vice President of Product Management, and Scott Spencer, Group Product Manager, regarding the official launch of the new DoubleClick Ad

Exchange. Part I is here. (Today and tomorrow, we'll have reaction to the launch from across the industry.)

AdExchanger.com: What percentage of the inventory on the DoubleClick Ad Exchange is real-time bidding-enabled? Is all of it ready to go and available to advertisers in a real-time bidding system?

Mohan: All of the inventory will be available for our ad networks to be able to access through the real-time bidder.

Spencer: Google is in a unique position because we can actually enable real-time bidding to many different buyers, we have unique architecture and a footprint of technology that allows us to let many buyers use this simultaneously. Something that is fairly unique to Google’s infrastructure.

Is there anybody that RTB is not enabled for on the buy side?

Mohan: The participants on the buy side of the exchange are these large ad networks as you know. This tool has been designed for them. Our AdWords advertisers, which represent hundreds of thousands of AdWords advertisers that access that interface every single day, would simply continue to participate in AdWords and get the benefits of that new exchange inventory just simply through the AdWords interface.

Can you give me the top line on how you feel you differentiate in the exchange marketplace from other exchanges such as Yahoo!'s Right Media or Microsoft’s AdECN?

Mohan: I can’t really comment on what other players are doing in the space. We’ve really been focused heads down. We have a very large number of engineers focused on this integration between DoubleClick and Google, and that’s what we are trying to address here.

From our standpoint, we have tried to build this with as much feedback and participation from our publisher and advertiser partners as possible. The way we look at it is we really want to create a means by which we can actually grow the overall display advertising pie. In addition to making it easily available to our large DoubleClick publishers, our AdSense publishers, AdWords advertisers and ad networks, we want to develop those capabilities that make it most effective for them such as the real-time dynamic allocation on an impression by impression basis for publishers, the real-time bidding technology, the payment and clearing capability which is a complicated part of the process, and creating as much rich controls for publishers and advertisers such as - if I’m a publisher - which ad networks do I want to have participate and access

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my inventory, which ones I don’t, for ad networks, things like frequency capping, etc. – all those controls you need to make display advertising that much more effective.

Is a good fit for AdX 2.0 the big brand media site or the advertisers with the huge budgets? Who’s a good fit? Can you discuss the attributes?

Mohan: The way I think about it is to put it in the form of an analogy. The ad exchange is like a stock exchange. So, just like on a stock exchange, large institutional investors can participate directly – meaning large publishers, newspapers, magazines, entertainment portals, etc. – people with premium inventory. Similarly ad networks that are sophisticated in terms of their optimization and buying capabilities, those folks can participate directly as institutional investors on the stock exchange. While, also on a stock exchange, individual investors participate through things like brokerage houses which add another layer of value and so we see our AdSense and AdWords publishers and advertisers, respectively, participating [on the exchange] through AdSense and AdWords. We think the platform and the way that we’ve designed it is suitable for all of these constituents.

Let’s talk a little bit about fraud and spam. Google has worked hard on cleaning up click spam in AdSense. But, now we move to the display ad exchange environment. Given that exchanges such as Right Media Exchange have struggled with impression spam at times, what is Google planning to do about impression spam?

Spencer: What we’re doing is taking the great controls that we’ve developed for the AdWords and AdSense system for ad quality and inventory quality and we are extending those to operate on the ad exchange. And, then we are enhancing those to incorporate checks and validation under the hood to work with the customers that we have. I can’t talk about the details of them since we can’t disclose - to those who would try to thwart – what they are, but we’re taking what we have and building it up.

Let's talk about cookies and cookie matching. On Right Media Exchange, RMX stores the advertisers ID in their RMX cookie, but as I understand it AdX 2.0 offers a unique hashed user ID for each cookie that the advertiser needs to store and track. Why did Google choose to go this route?

Spencer: We’re trying to be as sensitive as we can in terms of privacy. First of all, we prohibit buyers from using any PII or sensitive categories when they’re buying on the exchange. The approach that we’ve taken is basically to allow people to use their data, but we want to make sure there is no means for anything to happen with that.

Potentially, this (the DoubleClick Ad Exchange offering a unique, hashed user ID for each cookie that the advertiser needs to store and track) is going to put more work on the advertiser's side and it’s going to create some duplication [and inefficiencies] as they buy impressions across multiple, supply sources [if they don't manage the mapping of their cookies properly].

Doesn't [Google's unique, hashed user ID] break the universal cookie model that helps create efficiencies for advertisers and, ultimately, more frictionless advertising for the user which seems to speak to what Google, at its core, is about?

Spencer: We haven’t received feedback that it’s a challenge. We’ve gotten feedback that it really enables buyers and they’re comfortable with the protocols we have in place.

It seems to me there's an opportunity for a company to facilitate this matching and create the universal cookie - helps all parties, ultimately, including the user. Would you agree that the universal cookie ideally makes sense?

Spencer: We’re just trying to enable buyers to buy the way they would normally and enable them to use their own services and their own systems. And, the protocol, the real-time bidder we’ve developed, we’ve gotten great feedback. We’ve developed it in conjunction with our partners and they’re very happy with how way they’re able to do it. It seems to be a big efficiency gain for them and so we’re very happy with the feedback and, frankly, the usage we’re getting.

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How does buying AdSense inventory on the exchange differ from buying it via AdWords? For example, is there a way that I can use AdSense's contextual matching to help target my exchange-side buying?

Spencer: The experience for AdWords buyers buying is exactly the same as it is today. The real benefit for AdWords buyers is they get access to more high quality inventory that we have available for the exchange. For exchange[-side] buyers, they’re typically bringing there own targeting with them so they can leverage what they have. We do provide high-level vertical targeting as one piece, but they have their own basic targeting. Any buying that is done on AdSense [from the exchange-side and non-AdWords] is going to be certified, so we’re not necessarily letting all the buyers come into AdSense inventory. They will be able to buy only if they’ve been certified by the Google AdSense team.

What I’m getting at here is AdSense has contextual matching technology and I’m wondering if that is going to be made available somehow through the exchange. Your point seems to be that you’re allowing advertisers to bring the data to the exchange and that could be, for example, contextual technology. Yes?

Spencer: That technology, the ability to target through keyword targeting through AdWords, is an AdWords feature. Other networks buying on the exchange have their own versions of things and can use their own targeting.

How critical is AdSense to the inventory supply on the exchange currently? Can you quantify it as a percentage of overall inventory?

Spencer: We don’t know how the inventory size is going to shake out now. I think what’s exciting here is that we’re doing the integration and enabling the AdSense inventory and AdSense buyers to come to the exchange. We don’t really know that distribution will look like.

What restrictions, if any, do bidders have when buying AdSense placements through the new DoubleClick Ad Exchange?

Spencer: Advertisers who come through AdWords are able to buy inventory on AdSense – obviously that’s what AdWords typically buys on. And they also will now have an opportunity to buy on inventory that we get from the exchange.

Ad networks coming on to the exchange must be certified in order to buy inventory from AdSense.

We’ve been very careful to give publishers lots of controls about how they manage their inventory. So, publishers participating in the ad exchange have the ability to decide which ad networks can purchase their inventory. And so, any given publisher can exclude any given buyer – and that’s up to them.

How does the revenue model work both on the publisher side and the advertiser side and, of course, what Google takes?

Spencer: Yes, sure. The model is a rev share with the publishers, and the networks are bidding on the inventory they want to buy. It’s a CPM-based auction so we don’t dictate any of the pricing.

In terms of Google’s transactional fee, is there a transactional fee for the advertiser? - I guess you’re taking a percentage of what the publisher gets?

Spencer: It’s very simple. The only thing is a rev share with the publisher.

For ad networks, can they buy and sell? - or are they just demand-side on The DoubleClick Ad Exchange?

Spencer: Depends on the network. Some networks can be publishers who represent inventory and they can work with the exchange as a seller. We allow them to rep inventory. What we don’t allow is chaining of inventory across [the exchange].

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What's your view on third-party aggregators like yield optimizers PubMatic, AdMeld and Rubicon Project? Are they allowed to buy and/or sell?

Spencer: It’s not really designed for them. We’re working and focusing with our partners who are the large publishers on the sell side and the ad networks on the buy side typically, and designing the system to integrate well with their own ad servers. So, customers that are using DART for publishers get that benefit of dynamic allocation which Neal and I mentioned earlier. And that’s really what we think makes this powerful for them – their ability to check whether or not that if they’re about to sell something for $10 that there’s a buyer that’s willing to spend $15 for it, that they’re able to capture that incremental yield.

Given a lack of sophistication around technology or resources for some advertisers, can they do retargeting on the exchange without using RTB?

Spencer: It depends on the ad network. The system is designed for ad networks as buyers, not for direct advertisers. Ad networks for varying sophistication will have different targeting – I can’t say really what targeting any given network has - we’re just trying to enable the technology and targeting ability that they do have.

Talking about what data you can bring into the exchange as an ad network, can you bring in data from providers on the exchange such as a BlueKai, Bizo or eXelate?

Spencer: We have prohibitions about buyers using PII or sensitive categories when they buy. Other than that, it’s their targeting that they’re using and that they’ve got. The publishers have controls about what data can be purchased from their inventory, so they can decide whether or not they’re going to enable remarketing or whatever it is. But, really it’s up to the network to be bringing their own targeting.

What can Google or DoubleClick do about helping to provide advertisers cross-platform attribution for its clients? For example, an advertiser will know if they will impact a conversion or end goal if they make a buy on TV AND in online display advertising through the exchange. Is Google looking to solve this?

Mohan: That’s a great question. We don’t have anything to announce on that today. You can imagine that we would love to deliver capabilities across channels, but we don’t have anything to talk about today in that regard.

Last question, the idea of a futures market or exchange. Can you see a futures exchange or reserved exchange developing in the future?

Spencer: We don’t have anything to say in that area. Who knows what the future will bring. [But], we don’t have anything we’re announcing on that.

Part I of our discussion with Neil Mohan and Scott Spencer is here which includes an overview from Neal Mohan

on the new features of the exchange.


September 21, 2009 – 6:22 am

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Inflection Point Media Seeing Shift Toward Targeted Vertical Ad Network Model Says CEO Hulse

Chris Hulse is CEO of Inflection Point Media, a business-to-business ad network.

Any current trends that you can share in Inflection Point Media's B2B ad network business - strengths, weaknesses? And, have publisher CPMs cratered like they have in the B2C world?

Inflection Point Media's complete focus on the SMB market has been our strength. In a recession, marketers are looking for efficient ways to put the right message in front of the right prospect at exactly the right time. That's what we do at IPM. We do this by networking over 140, highly focused SMB sites and search engines. We are able to identify key "inflection points" by the type of keyword search or targeted browsing an SMB does on these sites. By valuing the audience and monetizing it off site, we generate incremental revenue for our publishers in a non-cannibalizing way.

Publishers are struggling right now. Downward pressure on CPMs in a recession is a fact of life, though the B2B vertical is a bit more buoyant than the more general B2C world. Publishers that have great content, provide real value to their users and have tight control over their own inventory will always do best in down times. We see that first hand with the publishers we work with. It's tough out there and that's why we believe we launched our company at exactly the right time.

For publishers, how do you increase their revenues without cannibalizing sales? Isn't channel conflict inevitable?

IPM doesn't conflict with a publisher's existing sales force, reseller agreements or traditional ad network relationships. At IPM, our promise to marketers is that we have high quality, scalable segments against fragmented B2B audiences. Because we do not take any inventory on our publisher partner sites, our efforts never conflict with their sales efforts.

We sell aggregated audience segments of shared intent derived from many SMB sites and search engines. We're selling access to an intent driven audience, not a site. Publishers may not have enough critical impressions for that site to sell against that particular activity. IPM can bundle that activity from multiple sites to create, highly focused, sellable segments. We then retarget these segments across a completely separate network of sites. When the SMB re-appears on one of these sites we serve a relevant ad based on what we know they're looking for. So we're able create revenue where revenue wouldn't have existed under normal circumstances. We don't sell data or our segments by specific site of origin.

What's your view on ad exchanges? Using any? If so, which ones work?

Every day, there is a new and better technology being developed to give greater transparency into how you can purchase inventory on ad exchanges. Companies such as Xplus1, Invite Media, Google, Audience Science etc. are developing breakthrough platforms giving more and more control to the marketer. Our goal is leverage one interface that can access the top exchanges. Right now, through our partnerships, we are working with several ad exchanges.

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How will real-time bidding and demand-side optimization affect your business?

Real-time bidding and demand-side optimization will help performance by giving IPM more transparency, flexibility and efficiencies when buying inventory to target ads.

How does Inflection Point Media address the purchase funnel for marketers?

Inflection Point Media identifies SMB decision makers at the point their intent is identified. We give the marketer the ability to put their message in front of the right person at exactly the right time. In the B2B world, most purchases are more considered than in the B2C world. The fact that an SMB user just searched for Payroll Services, Web Hosting Services, Phone Services, etc. doesn't necessarily mean they're ready to buy right now. They most likely just hit an inflection point in their business where they realize they now need a solution.

IPM delivers the marketers message to people who are "in-market". Our job is to get our marketers' messages in front of these SMB buyers and influencers as they are considering a solution for their business. So the part of the funnel we impact most is between "post intent" through purchase. What are the challenges of running a B2B ad network versus a B2C ad network? Our goal isn't to be the biggest audience network. This is not about sheer volume. We serve the SMB marketplace exclusively. There is still a high percentage of B2B budget being allocated on B2C networks and we'd like to gain share by creating a new solution, not just a new spin on and old one. We offer a solution that includes only quality data from best-of-breed SMB publishers. Our growth may be more gradual than some other broader B2C offerings but we are never willing to sacrifice quality for quantity.

Does licensing buying platforms make sense for ad networks? Or is it better to build in-house? Building an in-house platform is an expensive and labor intensive proposition. The right platform will provide true transparency into media buying on network and exchanges. That is where the rubber meets the road.

We continue to evaluate various solutions but certainly consider transparency and quality as crucial factors in that decision. We are encouraged that through rapid advancement in this area, solutions we only dreamed of a year ago are now available.

How do you see the ad network model evolving in the next five years? We see a continued shift toward more targeted vertical ad networks. There is no one size fits all solution. Ad networks are likely to build cross platform solutions utilizing other mediums - from online, to TV, to print to Mobile. The networks that understand their audience's and that audience's specific needs best will win.

What strategies do you think agencies need to implement to be successful in the increasingly automated world of media buying? It may be an automated world, but you still need to know why something is good. With automation comes efficiencies that will give the agency person the ability to do more with less. I've been working with agencies for 15 years. Whether in direct marketing, display advertising, or search, the best agencies seem to understand the value of an impression or the value of an action. Typically, if you measure one data point, you're missing the bigger picture. Our hope is that with automation comes insight into real metrics that matter.

Any issues with creative these days? Do you see clients taking advantage of the feedback it provides? What recommendations would you make about creative? When you consider how much time is spent on finding the right audience, it is interesting how often the creative served to that audience is the same as that used in so many other, broader campaigns. Creative targeted to specifically to in-market SMB users is always a welcome sight and almost always performs better. We would also like to see advertisers adopt creative sequencing and more dynamically generated landing pages.

Follow Chris Hulse (@ChrisHulse) and AdExchanger.com (@adexchanger) on Twitter.

July 21, 2009 – 7:16 am

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InterClick Pres Katz On Ad Networks, Exchanges and Agencies

Michael Katz is President and Founder of InterClick.

AdExchanger.com: Is it more difficult being a public company than private in the advertising industry? Does this give an advantage to your competitors?

Good question, I get asked this a lot. There have been many advantages and disadvantages to being public. I think being public has provided us with credibility among advertisers and publishers. Relationships are still a key driver in this industry, being public has given us a sense of credibility and in turn allowed us to build trust with our partners. In addition, being public has required us to focus on continuous operational improvement. Sometimes you need to be backed into a corner to really excel and being a public company has required us to be focused on revenue growth, margin improvement and operational efficiency via better supply chain management. Obviously the capital markets could be a little better than they are right now but that's not anything we can control so its not something we tend to worry too much about. Can you give us a sense of revenue and product momentum for InterClick? Any observations on the online ad industry you're seeing as a whole right now?

2008 was a tremendous year for interCLICK, we made great strides in terms of our building out our technology, growing our salesforce around the country, and improving our operational performance. Revenue growth has been directly correlated to providing consistent results for our largest advertisers via targeting and transparency. 2009 has been tremendous for us so far. Due to the economic downturn, advertisers are looking to maximize the value of their ad budgets via more effective and more granular targeting. Our platform has proven to provide advertisers with the ability to run highly effective and efficient campaigns at great scale.

InterClick has changed its focus from contextual targeting to behavioral targeting. Why?

"Behavioral targeting" is a bit of a catch all. We partner with 3rd party data providers to determine the most relevant ad to show to the consumer. Some of our partners provide us with purchase intent data, others with demographic, social data, or even contextual consumption data. The shift has been to allow for a more all encompassing approach rather than focus on data mining.

Is online display advertising dying?

Ha. No, its evolving and those who aren't evolving are dying. Currently, with the economic downturn there is a paradigm shift occurring at the advertiser level. Advertisers are no longer consuming media as a proxy to reach consumers; they are buying very targeted audiences with a higher propensity to complete a desired action. Whether that action is a purchase, a click, if its something that occurs high up in the funnel or at the bottom, advertisers are looking to maximize their ROI at all costs. Companies like interCLICK and some of our competitors who are able to meet clients' demands are thriving, while others are being left behind.

You suggested to AdExchanger.com that advertising players were jockeying for position. What do you mean?

There are a lot of changes occurring right now in the industry. The big topic these days is disintermediation and at what level it will occur. Will it be networks, agencies, both, neither? The end game is to provide the advertiser with the most efficient and scalable solution. Historically, the ecosystem consisted of advertisers (agencies), networks, and publishers. Guys like B3 and MediaMath are attempting to wedge themselves in between agencies and networks, I have heard them referred to as "Meta networks". The "optimizer" guys like Pubmatic, Admeld, and Rubicon have entrenched themselves between the networks and the publishers and will most likely begin to

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directly compete with networks eventually. If they do, they aren't much different fundamentally then the "meta networks." The ultimate question is how do you maximize advertiser value, there are a lot of different approaches right now, which is what I mean when I say there is a lot of jockeying for position.

If you were running a multi-national media buying agency right now, what would you do to prepare for the future?

Buy an ad network with a proprietary technology. Obviously.

How does InterClick ensure brand safety for advertisers? And for publishers?

interCLICK has always been focused on providing brand safety via our commitment to transparency for both the advertiser and publisher. What separates interCLICK from other networks is our notion that transparency shouldn't end when the campaign begins. Transparent reporting on the inventory and data levels provides advertisers with a safe and trusted brand friendly environment. For publishers, we ensure brand safety by allowing them to see and control which advertiser campaigns are running in the system and providing them with an interface in which they can actively manage which creatives run and which don't with a click of a button. This helps to eliminate any sales channel conflict as well as preserve user experience on their site.

How is InterClick using the ad exchange model today? And in the future?

interCLICK is not very active on the various ad exchanges at this time. This could change over time but we are very much focused on providing scalable solutions via our own proprietary technology. We aren't one of those networks that utilize a 3rd party ad server then wraps some front end UI around it and resells it as if it were our own.

Do ad networks "cannibalize" publisher inventory and, consequently, revenue opportunity? How does InterClick prevent cannibalization? Or does it?

Depends who you ask, right? Its obvious there is a lot of friction currently between ad networks and publishers, but at the end of the day we need each other. However, I believe this issue simply an economics 101 lesson, supply and demand. The value of inventory isn't created on a rate card, Value is a function of the price at the intersection of Supply (traffic provided by the publisher) and Demand (the money being spent by the advertiser). If an advertiser or set of advertisers can derive higher value based on their set of unique objectives from a publishers inventory, they will pay more. If the traffic quality is poor relative to advertisers objectives, then price must be lowered until equilibrium is met. I have no idea why most publishers cant understand this.

How do exchanges move from the current remnant ad inventory model to a remnant and premium future? I think the shift will occur via increased transparency and control. Look at most of the ads that flow through the exchanges and you will find that primarily they have been the CPA based lead gen offers. Because context is not a primary concern when driving large quantities of leads, these types of advertisers have much looser restrictions on where their ads run. These types of ads generally yield far lower eCPMs which in turn fails satisfy more premium inventory pricing requirements. Premium advertisers have shied away from exchanges because of a lack of control but as exchanges start to offer this level of transparency, rates should rise in the aggregate and there will be a shift from "remnant" to "premium."

How do you see InterClick evolving in the next 18-24 months? We have an aggressive product roadmap which should hopefully be completed in the relatively near future. This will allow us to do some very interesting things that haven't been done yet in the industry. The most I can say is just wait and see.

Follow AdExchanger.com (@adexchanger.com) on Twitter.

April 21, 2009 – 7:58 am

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InterCLICK Taps Markets For $12 Million; Pres Katz Says Ad Network Model Is Validated

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Fresh from its move to the NASDAQ, InterCLICK announced that it has succesfully placed "2,875,000 shares of common stock to a select group of institutional investors." Given the sale price of $4.50 share, InterCLICK now has a cool $12 million in net proceeds to play with. Acquisitions? More tech? Feet on the street? We'll see. Read the release on Yahoo!.

AdExchanger.com caught up with InterCLICK president, Michael Katz...

AdExchanger.com: What does the investment mean for InterCLICK? And, can you characterize the openness to investment in advertising technology companies these days by investors? Market improving?

MK: This is a significant development for us and hopefully continues to validate the network model amidst other industry trends. Having access to significant capital (for the first time) will allow us to continue to deliver innovative solutions on behalf of our clients.

Its tough to compare the openness to investment between us and private companies because they are two very different types of investors but hopefully we are helping to validate the model for everyone.

AdExchanger.com: Looking back at the ad industry the past year, any surprising developments come to mind?

MK: The most surprising development was the hype around RTB, still way too early.

By John Ebbert

December 16, 2009 – 4:10 pm

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The Contextual and Semantic Targeting of LucidMedia with Ken Barbieri

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Ken Barbieri is Vice-President of Business Development at LucidMedia Networks, Inc. and is responsible for developing and growing strategic partnerships with online publishers, advertising networks and advertising exchanges at

LucidMedia.

AdExchanger.com: How's business for LucidMedia? Any momentum you can report?

KB: At LucidMedia we are having a record year for revenue growth and client acquisition. And our momentum has been increasing rapidly this quarter. Much of this is due to the launch of our Verified Inventory Platform (VIP) that provides deep data insights to performance and brand safety online through our agency partners. Advertiser response has been incredible especially after initial tests proved the returns are there. We also recently won an OnMedia Technology Innovator award.

What trends are you seeing in online display advertising?

Trend #1 is performance. All the trends we are seeing are towards performance-based advertising and increasing return to “do more with less”. Advertisers are looking for new ways to increase their return with a flat budget but all the same growth pressure. They are turning more and more to direct response, CPC, and CPA solutions to move the media risks as far away as possible and guarantee the backend performance. Apparently our fully transparent platform with multiple optimization facets really resonates with clients in this tough new economy.

Trend #2 is exchanges. We are seeing a dramatic shift from networks to exchanges. The exchange model has matured at the same time the network model has had its reputation tarnished. The real-time bidding and open, transparent nature of the free market exchange model has finally distilled to the top as the solution of choice when efficiency and return become as important as reach and scale.

Is it fair to say that LucidMedia is the contextual solution for Right Media Exchange?

Yes and no. Yes, we are a contextual engine on Yahoo’s Right Media Exchange but that is not our core business, it’s just one of the many irons we have in the fire these days. And our work on RMX is a two way street. We provide contextualization services to publishers and advertisers there but we can also purchase media there. We have many of these types of media arrangements because it is how we provide the scale, efficiency and performance that are so appealing to our advertisers. It took years to do but we are now able to pass those benefits on to our advertisers and our agency partners. That is a key to the current rapid growth and momentum I mentioned in the first question.

Any plans to work with Yahoo!'s APT Platform?

We are watching APT closely, as many are, because it holds a great deal of potential scale. Obviously we’d like to continue our close and positive relationship with Yahoo and Right Media and integrate with APT when it is fully operational.

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Can you take us through the process of how LucidMedia's deal with Right Media works from a technological perspective? For example, tell us how it all works for a single ad impression on a publisher's site. Right Media has established 63 standard categories that correspond to a 4 digit contextual flag. RMX publishers have to deploy new ad tags and then advertisers can target their inventory more effectively. LucidMedia's ad tags are distributed to RMX publishers instead of YieldManager tags. Then, during ad call, the LucidMedia tag analyzes the context of the page in real-time to determine the most appropriate categories. We a YieldManager tag with additional Query String Codes that represent the most appropriate Right Media Exchange categories. All advertisers have to do is use Right Media’s Query String Targeting capability when they setup a campaign in YieldManager and they can access the highly targeted contextual inventory right away. Your readers can go online to find out more about it too.

Can Lucid Media's ClickSense technology contextualize social media other than, say, the "social media" category?

Sure. Our technology does not care about self-declared categories. Rather we deal with exactly what the content is about and categorize it accordingly. Our solution scrapes the page in real-time to determine precisely what each inventory page is all about. What we find is that the majority of content is improperly categorized at a high level. We find social media can be all over the map category-wise. Technology, Arts and Entertainment, Automotive, Sports, Pets, Family and Parenting, Health, and so on. So we tag media at the page level for what it is about and not what it is supposed to be about. And our performance proves out the approach. We’ve worked with advertisers who have studied this and their findings are always the same: that context is a true predictor of intent. How is the contextual engine for LucidMedia different than the competitors such as AdSense, Contextweb, Kontera and others?

Although we all have a contextual solution in common, our focus is on providing a broad platform that encompasses a range of advertiser and agency services beyond just running media. In fact, clients can actually utilize our platform as a compliment to some of the other contextual providers. In terms of technology, our approach is a bit different as well. At the core of our platform is a patented semantic solution that includes advertising industry-focused taxonomies which let us target content at a very granular level.

In the future, can you see a network providing the essential services that an advertiser requires and, thereby, disintermediating media agencies?

I think that is unlikely to happen. For example, our focus is on providing a media management platform to agencies that allows them to outperform their competitors and pass on new levels of efficiency, transparency, and safety to their advertising clients. So we are not trying to act like an agency, we’re trying to put tools in their hands that make us a crucial part of the value chain. We feel our position between the agencies (and the advertisers) and the networks (and publishers) is the best place to do business. This allows us to act as a media buying platform for the exchanges—and even the other networks out there—and provide our data as the new currency of performance. It’s a very exciting place to be right now!

How is LucidMedia ensuring brand safety? And, how does LucidMedia provide access to the Long Tail?

Brand safety is rising in importance these days. Our Verified Inventory Platform (VIP) leverages our deep contextual technology to find the right content to meet the ever-tightening advertiser performance goals. But we can also block content in the same way when they indicate something is inappropriate for their brand. Because we evaluate the true meaning of each page for categorization, we get the by-product of knowing exactly what topics are on each page. We have compiled an extensive list inappropriate topics that we call our Objectionable Content Filters. With these filters enabled we can make sure that their brand won’t appear on pages about hate or pornography or even things like natural disasters or war. And these are all customizable by the advertiser because what is inappropriate to one may be desirable content to another.

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As for accessing the Long Tail for our advertisers, we deployed the concept of Media Classes within our platform to take advantage of the Long Tail. We not only categorize the page content accurately, we also categorize the type of source it is found on like news sites, social networks, blogs, enthusiast forums, gaming sites, wikis and webmail portals. We also categorize the sometimes undesirable media classes like peer-to-peer file sharing sites so advertisers can not only target specific media classes, they can also filter against certain classes of media if they want. This opens all kinds of doors for our advertisers.

In your opinion, what will be some of the key drivers which will allow ad exchanges to progress from a remnant-only to a premium and remnant model?

The key drivers will be their openness, a clear value proposition to the publishers, and their ability to support real-time bidding. The exchange platforms have to be easily extensible so everyone can play. And we’ll need the publisher side optimizers to keep advancing as well. They play a key roll that the exchanges are not filling today and they exert a great deal of pull on the publishers drawing them to the exchange model. I expect to see a lot of interesting changes in the next few years and LucidMedia plans to be right in the middle of it all adding value to the agencies and advertisers.

Follow LucidMedia @lucidmediaVIP and AdExchanger.com (@adexchanger.com) on Twitter.

April 14, 2009 – 7:18 am

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Netmining Brings Profiling Solutions Through Ad Network Model Says GM Vegliante

Dean Vegliante is General Manager of Netmining, an online ad network and optimization company - and a division

of Innovation Interactive which also owns SearchIgnite and 360i.

AdExchanger.com: What problem is Netmining solving for its clients?

Netmining helps marketers drive significantly more revenue from their websites and online advertising. That's the heart of what we do.

We also simplify the execution of online behavioral solutions with our Smart Tag. One simple Netmining tag in the footer of a marketer's page can be used to deploy behavioral optimization across their website, email and display campaigns. Any future changes can be controlled by Netmining offsite, reducing the need for marketers to get their IT and website folks involved.

Who is your target market? Please describe your revenue model.

Netmining's customers include some of the world's leading digital agencies, as well as direct marketers, particularly in the automotive, retail, travel and B2B markets. Right now we find ourselves best suited to work with marketers who can tie us to a performance metric where we are consistently the best performer for customers like Red Roof Inn and Borders.

In terms of our pricing, we're in a fortunate position because the rich data we collect and use in our algorithm provides us with the best performance in the space and thus allows us the flexibility to be open to different revenue models – CPA, CPM, rev share. We flourish in all of these models and work with clients to determine the best approach for them.

On your website, the LiveMarketer product is described as analyzing customers on a website in real-time to deliver profiles - targeting profiles I believe. How critical is real-time conversion data - after the purchase? Or is this more about top-of-funnel demand generation when creating the user profile?

LiveMarketer is a real-time visual representation of Netmining's proprietary audience profiling engine as it analyzes the visitors on a marketer's site.

Real-time performance data is critical and a key reason that we're able to consistently drive more revenue per impression than any other behavioral and remarketing providers. Because we track a large number of declared and undeclared behaviors about site visitors in real-time, we're able to quickly take consumers in and out of segments as their interests change. This inevitably leads to better performance because we're able to ensure that ad delivery and marketing messages are relevant – served at the right time with the right message to get that customer to convert.

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It's not about top or bottom of the funnel. We look at RFM (recency, frequency and the monetary value of the products looked at) to identify consumers that have the highest propensity to convert and buy at the most appropriate moment. Netmining figures out the optimal message and time to serve it to make that happen.

Plus, LiveMarketer is a really powerful visual tool. It gets a big ‘wow' factor in every meeting we have with marketers and we have yet to find anyone who doesn't like watching the "bubbles." It's the Bloomberg Terminal for CMOs.

Why is email marketing a natural extension of audience targeting and website optimization services for Netmining?

Our audience profiling engine gathers data that gives companies the ability to customize the entire online marketing lifecycle for a more seamless 1:1 dialogue with consumers. We help make the messaging more relevant and timely. Email is a natural extension of that philosophy and a marketing vehicle that is very clearly driven by performance, an area where Netmining excels. Our technology is also compatible with all major CRM systems, further strengthening our services in this area.

First and foremost, do you consider Netmining a technology or a services company?

Brands and their agencies aren't looking for technologies or frankly even "services," they're looking for solutions that help the brand drive more ROI from their online efforts. Netmining provides solutions that consistently increase conversions and the revenue generated from display, email and a marketer's website.

What is the difference between a demand-side platform and an ad network in your estimation?

For ad networks, the relationships are one-to-one. We work directly with our clients, be they an agency or a brand. For agencies with demand-side platforms, they are working with multiple ad network vendors to optimize the media buying process on behalf of their clients.

A year from now, what are some of the milestones we will be looking back on for 2010 for Netmining?

2010 is going to be a banner year for targeting (pun totally intended). At Netmining, we have an aggressive product pipeline focused on leveraging our existing audience profiling technology and targeting capabilities to scale our reach while still retaining the high quality of our performance and results.

Follow Netmining (@netmining) and AdExchanger.com (@adexchanger) on Twitter.

December 20, 2009 – 6:02 pm

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OpenX CEO Tim Cadogan Says Exchange Showing Traction; OpenX Market Doubles In 2 Months

Tim Cadogan is CEO of OpenX, an online advertising technology

company.

AdExchanger.com: When you say (MediaPost 6/29) OpenX Market is more like a search marketplace whereas Right Media is more like a financial market, what do you mean?

TC: Just to be clear, OpenX Market is an exchange for display advertising. Specifically, the Market is an easy to use, structured exchange in which publishers can maximize revenue for their ad space by selling their ad inventory to a wide array of competing advertisers and advertisers can access targeted, primary ad inventory across a broad array of publishers. The reference to a search marketplace comes from the fact that both sellers and buyers immediately participate in the entire market in a simple, easy way, thereby reducing friction. Buyers also benefit from a second-price auction like search. This means that advertisers can bid their true value, but only pay $0.01 more than the next highest bidder. This compares to a model like Right Media - which is more like a classic stock exchange – where participants first need an “exchange seat”, then need to link to the other players they want to trade with and is predominantly first-price, all of which is more work and friction.

Is there an auction with OpenX Market or is it first-come, first-serve where all the bidder needs to do is beat the publisher's floor price?

Yes, there is an auction with OpenX Market. The auction model is designed to both optimize revenue and eliminate economic risk for publishers. The basic mechanics are pretty simple. When a publisher chooses to pass inventory into the Market, they set a floor price – this is usually the maximum price they can generate themselves. OpenX then runs a real-time auction to see if it can generate a higher-priced ad than the floor price set by the publisher. If the auction results in a higher-paying ad, the publisher runs the ad from the Market and makes more money. Only then does OpenX Market then take a transaction fee (15%) because it has created more economic value for the publisher. If the auction does not result in a higher-priced ad, the publisher runs their original ad and OpenX takes no fee. Publishers are in complete control of both what inventory they choose to put into OpenX Market and their floor price. The floor price is key to protecting publishers against any economic risk because the publisher determines at what price the auction “starts” (the floor price can also be thought of as a “reserve price”).

How would you characterize the competitive advantage of OpenX Market compared to other marketplaces and exchanges? Five key things: simplicity, segment focus, primary inventory, price and independence.

• Simplicity: With OpenX Market we make it very simple for sellers and buyers to participate. For example, for sellers we feature 1-click integration into the Market from the OpenX Ad Server and for buyers the second-price auction greatly simplifies bidding strategies.

• Focus: Unlike the other major exchanges, e.g. Right Media and DoubleClick, our focus is on the mid-market and upper tail, a traditionally underserved group of publishers.

• Primary inventory: partly due to our focus on mid-market publishers, nearly all the inventory in OpenX Market is “primary”. This means it comes directly from publishers rather than “secondary” inventory which

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is passed-on by ad networks. We also believe that mid-market publishers often have very valuable audiences, even if they are somewhat smaller individually. By creating a market to pool these valuable but diffuse audiences – a process we call “de-fragmenting” - we are endeavoring to significantly increase revenue for publishers by making it easier for buyers to reach them.

• Price: OpenX Market is free to use and OpenX only takes a transaction fee if we beat the publisher’s self-established floor price.

• Independence: OpenX is the only major exchange operated by an independent player.

Can you discuss the adoption rate and scale of OpenX Market publishers? It's been in beta for a while, correct? It’s definitely still very early days, but we’re been really pleased with the rate at which publishers have begun to participate in OpenX Market. In just a couple of months since the Market formally launched, it has already doubled in size as measured by the number of impressions that run through the exchange on a monthly basis.

What’s also very exciting is the immense potential. Approximately 300 billion ad impressions flow through OpenX ad serving products monthly, so the potential for growth is enormous. And that’s just for publishers who are already in the OpenX ecosystem - OpenX Market is in no way limited just to publishers who use OpenX Ad Server (our ad serving technology). Any publisher can participate in OpenX Market by the simple use of a third-party ad tag and many already are today.

How can buyers (advertisers and ad networks) participate? Buyers can participate either through our web-based interface – called Ad Console - or through our Ad Console APIs. The Ad Console enables buyers to select their target audiences based on geo, page context, frequency, various technical parameters (browser type, OS, etc.) and ad size. We also support re-targeting. We’ll be adding more data dimensions (e.g. demo) over the next few weeks. In addition, we are piloting real-time bidding with a major buy-side partner.

From where does the demand or advertiser side of OpenX Market come? The demand side for OpenX Market comes from a combination of ad networks, agencies and direct advertisers.

What is the revenue model for OpenX with OpenX Market? Transactional, rev share? The revenue model for OpenX Market is transactional and completely linked to increasing economic value for ad inventory. When the OpenX Market’s auction process generates an ad that beats the floor price a publisher has set (i.e. drives more revenue), then the Market takes a transaction fee (15%). That’s it. There are no other fees for participating for sellers or buyers.

Do you have any plans for demand-side optimization and real-time bidding (RTB)? How far off? Yes. In fact, we already have real-time bidding live with a major beta partner and are working on several more.

Generally speaking, when do you think publishers will be willing to start selling more premium in the exchange? Because publishers have complete control over their participation they can already place premium ad inventory into the exchange. They simply protect the premium nature of this inventory by placing higher floor prices on this inventory. For OpenX ad serving users, we make it extremely easy to flow any class of inventory (contract/premium or remnant) into OpenX Market. We expect to see more premium inventory flowing into the Market as we further build our scale and attract a deeper and broader set of ad buyers. Thinking more broadly, the nice thing is that auctions have a well-documented history of maximizing value for high value items (think Sotheby’s for fine art or Google for high value search terms) so we draw on a strong tradition of using open auctions to maximize economic value. We think the next year or two is going to be very exciting.

Follow Tim Cadogan (@timcadogan), OpenX (@openx) and AdExchanger.com (@adexchanger) on Twitter.

July 1, 2009 – 7:29 am

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OpenX Update: On Microsoft

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Tim Cadogan, CEO of OpenX, spoke with AdExchanger.com about the OpenX/Microsoft deal announced last

week.

AdExchanger.com: How will revenue be driven to OpenX from the deal announced today with Microsoft? Does OpenX get a share of PubCenter revenue from OpenX pubs, for example?

TC: We're not breaking out financial specifics, but in general terms OpenX expects to gain paying customer for our Enterprise ad serving product which will obviously generate revenue for OpenX. Will OpenX ad serving technology be used on MSN properties? Curious about the large publishers mentioned as an opportunity for OpenX in the release.

The partnership is focused on third-party publisher ad serving so will not include MSN properties.

Considering OpenX open source roots, it is ironic that OpenX is making a deal with Microsoft - known in the past for a walled-garden or proprietary strategy for software. What does this mean about the way both companies are evolving today?

We have certainly found Microsoft very open to creative partnering opportunities. In their public statements they have been clear they are increasingly approaching the space with an "ecosystem mindset" which means sometimes working with third parties to solve customer needs. This partnership is obviously a great illustration of that. I have a feeling Microsoft might start to cause people to reevaluate some of their assumptions about them.

From the OpenX side, openness has clearly been fundamental to our approach since our founding. When we evaluated this partnership we thought, as we always do, about our core company goals. Those goals are very clear; first, to make advertising technology ubiquitously available to help businesses grow online and second, to help connect those businesses to revenue sources that help them make more money. We felt this partnership really helps us make progress against those twin goals.

First, it will help us enable more online businesses to grow by exposing our advertising technology to more potential customers via the referral arrangement with Microsoft. Second, the content ads component of the partnership enables us to make another revenue option easily accessible to OpenX publishers while maintaining comprehensive publisher choice and control. As such, the partnership made terrific sense for us and our publisher community.

By John Ebbert

November 13, 2009 – 2:29 pm

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ShortTail Media Providing Good Ads, Rates, Clients for Publishers Says Pres Jason Krebs

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Jason Krebs is President of ShortTail Media.

AdExchanger.com: What must ad networks do, if anything, to make sure that publishers do not feel like they're inventory is being cannibalized?

JK: The reality is they are being cannibalized by most networks. The networks make the publishers feel like they are not being cannibalized by sending them nice checks every month. How's business? Can you give us a sense of revenue momentum at ShortTail Media and where you're seeing strengths and weaknesses?

Business is "okay." We're making progress but it's never as fast as you'd like it to be. Visibility is about 6 weeks out. We're seeing strength in consumer products, food/beverage, entertainment and travel. We're very excited about a new video ad platform we are launching this summer called the Digital 30. Stay tuned for more on that.

How does ShortTail differentiate itself from other ad networks?

We are actually partners with our publishers, not arbitragers. We do not buy media, but instead, we work with our publishers to secure access to great placements and with our advertisers to provide broad reach and/or targeted audiences in the clean, well-lit environment of the nation's top websites. Unlike other networks that promise you'll get "sites like these," at ShortTail, advertisers receive complete transparency -- they only get the sites they request. To our publishers, we deliver good ads, at good rates, from good clients who they wouldn't normally be calling.

How does ShortTail Media ensure brand safety?

We only represent 50 or so professional media brands. They are all in the "clean, well-lit space."

In ShortTail's day-to-day operations, what trends are you seeing in the current online advertising marketplace such as CPM direction, use of targeting technology, etc.?

The marketplace is stratifying in the high and low ends, with the former requiring customization and the latter being largely click-performance driven. The targeting questions basically have not changed in the past 10 years. Of course if I'm an advertiser with a very specific product, with a definitive, exclusive audience, then a fine target makes sense. However if an advertiser has a new line of snacks, or a new flavored beverage, or a better detergent to clean my laundry, we don't believe that level of targeting makes sense.

Can ad exchanges become a viable option for premium inventory? Under what circumstances would ShortTail use an ad exchange?

No. None.

Will there be more or fewer ad networks in the future?

Fewer.

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How must ad agencies adjust as digital advertising evolves?

We don't think agencies should be so obsessed with marketing solely to pre-conceived groups for most products. You still have to convince consumers that they need a product and then tell them how good the product is. Years ago we were told in brilliant marketing that Volvo was the safest car on the road. Volvo would never have been a success if they waited for people to type "safe car" into a search engine. I've got dozens more suggestions, how much time do you have?

Do you feel the Internet Advertising Bureau (IAB) adequately represents the needs of ad networks?

I'm not sure they need to. What the IAB should do is to make sure that consumers understand that access to all of the greatest news/information/entertainment in the world can be kept free of charge if they just take the time to look at a few ads. I am confident on Randall's leadership to drive the industry forward. (I feel the same confidence about Pam Horan of the OPA as well)

No pun intended, but does ShortTail consider the Long Tail a "scary" place to advertise?

Be afraid, be very afraid.

How do you see ShortTail Media growing in the next 12-24 months?

We'll be showing Fortune 500 advertisers that these beautifully designed websites, that ensure a safe environment for their message, while being delivered to the most desirable of reader, are the perfect place for their video commercials and their elegant banner creative. This is not your father's Internet.

Follow ShortTail Media @ShortTail and AdExchanger.com (@adexchanger) on Twitter.

April 28, 2009 – 7:32 am

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Tatto Media CEO Miao Says Ad Exchange Will Not Be Needed Someday

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Lin Miao is Chief Executive Officer of Tatto Media, an online advertising network.

AdExchanger.com: Tell us a little bit about Tatto Media. You position Tatto as an ad network, but during a recent panel at the ad:tech Chicago conference, you sounded more like a DR agency to me. What's the story?

LM: Tatto Media is the third largest global advertising network (comScore, July 2009) and we are focused on performance campaigns. We tailor to advertisers that are familiar with direct response already and who are seeking a larger, more global audience in addition to requiring next generation behavioral tools that enables them to segment leads more accurately.

What momentum are you seeing on the client-side today?

We currently cater to more than 1,000 advertisers that fall specifically in the following categories: Finance, Education, Entertainment and Insurance. These clients are usually well-versed in direct response and are constantly looking for more accuracy and quality in the delivery of leads, larger scale and complete global presence.

Tatto Media was founded in 2005 and since then we believed that behavioral targeting should exist as a support tool specifically for direct response and not for brands. As more direct response agencies and networks enter the space, it is imperative that large advertising networks focus on technologies that can improve lead quality. Behavioral targeting makes sense in assisting advertisers to reach a higher quality of an audience and thus should increase conversions.

How is Tatto Media buying today from Publishers? Is it upfront, spot buying, etc.?

Tatto Media typically works with publishers on a revenue share.

Can you give us a sense of a typical campaign these days?

Tatto Media is a display advertising network. When looking at the overall network picture, there are very few display advertising networks that focus strictly on direct response clients. This is typically because the creative resources and customized tools required for lead generation is very different than the traditional CPM model.

A major difference in our self-serve display advertising platform is the fact that we focused much of the technology on the ability for advertisers to customize their banners on a performance level. As long as the creative is designed in flash, we can strip all elements of a creative such as color, wording, shades and elements and from there we can tell you if, say, blue is converting better than red. The advertiser is then given the opportunity to allow the system to change the creative automatically based on a proprietary algorithm. We understand that not all advertisers have a large graphics team that can modify every single banner so we created a tool that minimizes labor costs and increases the ease of getting a display campaign up and live.

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How does Tatto Media differentiate itself from other ad networks? Is it all about effective arbitrage and/or is their proprietary technology involved?

Tatto Media strictly focuses on direct response clients. This enables us to be specialized in two specific areas: targeting (behavioral) and creative design (self serve creative optimization). Because of our global scale, it forces us to build sustainable technology that can automate much of this on a large scale. The sustainable technology that replicates our success on billions of monthly impressions is what differentiates us from the rest of the industry.

How do you see the ad network model playing out in the future?

While there are some doubts on the ad network model, ad networks will continue to exist on a consolidated level. For example, every network has its own strengths and weaknesses and there are various reasons why publishers choose one over another. Some networks may be experts at monetizing Japan, for example. A publisher cannot monetize every country effectively by themselves, nor do all have the resources to have a full blown sales team. Publishers will need help in certain countries or certain types of inventories.

And the agency model - what are your thoughts?

I do believe that more and more of the traditional advertising networks and agencies will need to build a performance/DR division as that is where much of the industry is moving toward even on a brand level.

Are ad exchanges good for ad networks? And, do you see impression-level, real-time bidding as a game-changer?

There are a lot of inefficiencies in the online advertising model between publishers, networks and advertisers. Ultimately, many publishers simply don't know better and make less than they should. When a publisher chooses a network and runs a campaign, that campaign could be brokered 5-6 times, so naturally there exists 5-6 companies in the middle all taking their cuts. The result of this is that the publisher only makes maybe 25 percent of what it really should be making if it went directly to the advertisers. The trend between eliminating networks in the middle and a direct publisher to advertiser relationship is more imminent than ever.

Ad exchanges exist simply because of all of these inefficiencies. Ad exchanges even add an extra level of inefficiency into this mix. Once the inefficiencies get eliminated and the industry changes and improves, then the need for ad exchanges no longer exists.

Does brand advertising work on the Web?

We don't work with brand campaigns, but I believe that brand campaigns need to evolve with more performance metrics embedded.

Finally, what's the story with the spelling of "Tatto"? Inquiring minds want to know.

Tatto is Italian for "authentic". We chose the name because of how Tatto was started – with only $100 between three college students. We find that to be quite a unique, and "authentic" start to a multi-million business.

Follow Tatto Media (@tattomedia) and AdExchanger.com (@adexchanger) on Twitter.

October 7, 2009 – 6:50 am

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Platform Neutral TRAFFIQ Addressing Premium To Mid-Tail Inventory For Havas Digital And Industry Says SVP Portugal

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Scott Portugal is SVP, Global Business Development at TRAFFIQ, an online advertising marketplace.

AdExchanger.com: Discuss the momentum for TRAFFIQ in 2009. What's going on right now?

SP: What isn't going on! Obviously, the announcement yesterday of our strategic partnership with Havas Digital is big news. We're extraordinarily excited about the chance to work with an agency of their caliber. It's also another validation of our belief that the market and the industry are in need of a company like TRAFFIQ now. Organizing the mid-tail and premium display advertising space – and facilitating transactions between those buyers & sellers - is something that needs to be addressed, and it's telling of Havas' forward thinking that they see an opportunity to have us help them address this challenge.

The Long Tail has been adequately addressed by all the names we know: Right Media, AdBrite, AdECN. Even publishers own long tails have been addressed: AOL has AdBidCentral in addition to Ad.com; Yahoo! has RightMedia; MSNBC has their AdReady-enabled system. But for agencies & advertisers trying to parse through 1000s of clean, well-lit sites ranging from premium category leaders to niche enthusiast sites, very little has changed over time: it's still very siloed and inefficient.

Agencies and advertisers are all striving to become more effective in reaching audiences as they fragment, but maintaining brand and price control is a challenge – one that we believe we're addressing through via an open and transparent marketplace that operates very much like a traditional exchange. The commodities example – and for the record, I am NOT intimating that ad inventory is in any way commoditized yet – actually works: an open market of buyers and sellers moving different products (current and futures) where buyers can apply downward pricing pressure and sellers can extract true market value of their goods.

The premium nature of our marketplace also aligns well with the ongoing push of smaller advertisers into display inventory. Because you've got local and regional advertisers starting to push online display advertising in a big way – clients who are comfortable with see their ad in the local paper, hear their ad on the local radio – they want that safety in the digital space. Semi-blind agencies and exchanges offer efficiency and reach and scale against those audiences but they inhibit brand and price control. By empowering these advertisers and their data with those controls, they can safely move more and more budget into display media. It's a win-win.

Let's talk about TRAFFIQ, the company, and revenue momentum as well as affects of the economy.

Everybody has been affected by the economy and TRAFFIQ is no different. It's meant the acceleration of our business hasn't happened to the degree that I think we expected prior to the recession really starting. However, the upside is that were given a window in which the product itself – the marketplace and tools around it – matured significantly. It's meant we were able to make sure TRAFFIQ was ready for prime time, and now that's playing out

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as we had anticipated: we're seeing significant month over month revenue growth as well as significant month over month user growth on both the buy and sell side.

What do you mean by "user"? Who do you target as a prototypical TRAFFIQ customer?

Buyers and sellers of digital display media who care where their ad appears. Agencies, direct advertisers, publishers as well as ad networks. Like anybody else, networks and exchanges have excess inventory and need alternate business development paths to monetize that space.

One thing we don't have is a pure vertical focus. We have enough liquidity so that whether the agency is targeting Travel, Auto, B2B, Moms, Sports Fans, etc., they can build their plan according to their own specs. TRAFFIQ simply enables them to do that with greater efficiency, scale, and control.

Our sweet spot has been working with agencies that want to gain greater efficiency beyond the sites they always buy on and at independent, local and regional agencies who are seeing local revenue flow online and need to increase their buying power.

We're seeing a lot of independent agencies be able to use the web-based walk-up nature of TRAFFIQ and start to grow their own businesses. With free ad serving, a deep set of analytics, consolidated billing and on-call support staff, these shops can accelerate their own understanding of best practices in the display space. That drives more revenue out to more publishers and networks, and again, everyone wins.

Let's go back in your past - to Tacoda. You read what Tim Armstrong said he wants: AOL should own display. What are your thoughts?

It's the smart play. They have always had strong content: at one time that maintained 120 owned and operated businesses. Putting an integrated display program in place around strong content is the killer for them. Taking the disparate ad tools – such as Tacoda, Ad.com (and the Ad Learn, machine-learned optimization system) – they should become an even stronger player.

The challenges of Platform-A is obviously similar to those that companies like Yahoo!, IAC, and other multi-site media companies face: excess inventory, various targeting options and methodologies, publisher overlap, and often times dozens of ad networks involved. Look at Yahoo!: they have their own ad space, O&O's, Blue Lithium, Right Media, their newspaper consortium….lots of overlap, plenty of inventory. Baking that all together into a cohesive and integrated inventory monetization system is a beast – but if anyone can figure out how to do it, it will be Tim.

One advantage Tim has is what's left of the TACODA technology. Behavioral targeting has shown to be effective is in the brand & branded response space: right user, right time, out of context, it resonates, they recognize it and it creates positive brand awareness. What AOL can do is stagger their inventory utilizing the positive CPM's that BT commands: start with premium ad partnerships, then step the subsequent ad calls down to behaviorally-targeted campaigns. Ideally you deliver all you can against that user at quasi-premium CPM's, then below that slot in Ad.com inventory maximizing the performance value of that user. It sounds like Yield Management 101, but pulling it all together is going to be essential to realizing the best value per impression each session. What is the new platform trend on the agency side about?

It's about control. Back in February, Rob Norman was quoted in the Wall Street Journal saying ad networks should not have been allowed to exist. What he meant – and what he went on to explain – is that while agencies were so "heads down" on serving their clients, they couldn't focus on targeting technologies. So in a world of oversupply, the door opened for aggregators to start to pool together blocks of impressions. They then created slick, efficient targeting mechanisms to take advantage of that pool of inventory and better extract the real market value of their supply chains. Thus agencies & advertisers were left flying semi-blind in order to access the inventory they want insight into.

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The agencies were smart enough to realize that, it's their data, their campaign budget, and that they need to reach targeted audiences as efficiently as possible. So now the holding companies are fighting to regain that control over price, brand, and most importantly their own data. It's why WPP changed their data ownership terms. It's why IPG built Cadreon. It's why OMG is doing what they're doing and why Havas has Adnetik and Artemis etc. For these shops it's about being able to maximize the value per ad call in real-time, pulling data from their own campaigns, buying data out of BlueKai, eXelate, Brillig, Datran, etc. – and in turn helping publishers achieve maximum yield.

One challenge that the agency will face will be supply chain management. Ask anybody who has worked on the publisher side of managing an ad network and they will tell you that there's a lot of staff there that is needed to maintain relationships down to page load problems, "ad-tag-broke-my-page type stuff". Partners who can help them in this space are well positioned for the long run. How is TRAFFIQ going to fit in to the platform world?

We think we are the perfect partner to help these agencies both manage their supply chains AND drive the efficient "deeper" buying that their clients want to see. Agencies and advertisers will always maintain strategic publisher relationships, as there is real value in working closely with a publisher to develop integrated programs. The performance component will be addressed via new agency delivery platforms. But it's everything in between that TRAFFIQ can help with.

We've created a platform where agencies can go direct-to-publisher to maintain brand safety, but also use real-time data and flexible optimization tools to re-allocate the buy to hit campaign KPI's.

We're not in a pure brand or performance world anymore. Advertisers can and SHOULD care about both brand and performance metrics simultaneously. TRAFFIQ offers agencies a platform through which they can negotiate direct-to-publisher and negotiate infinite numbers and permutations of media plans, execute through a single, easy-to-use interface, and re-allocate and optimize with full transparency which is part of the other game. This allows every buy to be brand safe AND optimized.

As audiences fragment, coalesce, and then fragment again, agencies and advertisers need a centralized location to be able to find best-of-breed sites, evaluate targeting options, extract the best price on an order by order basis (not ad call by ad call), and ultimately manage and execute against that without returning to the siloed process that exists today. It's simply not scalable. Our system helps advertiser & agencies achieve that sorely needed scale.

How will TRAFFIQ participate in real-time, impression-level bidding?

I think it's a natural outgrowth of our current business. Like anybody else, we can't be all things to all people. We started in an area of the market that we believe was underserved. From there, we are looking to expand in a number of different directions.

Agencies and publishers are going to find the exchange that works best for them, and a continuous serving environment is certainly on our roadmap for consideration. Over time, as TRAFFIQ develops secondary products, one of those options might be a TRAFFIQ powered auction-based buying platform.

Let's talk about a shift in messaging for TRAFFIQ. In 2007, TRAFFIQ identified itself as an exchange. Today, TRAFFIQ identifies itself as a marketplace. Why the change? Are you still an exchange?

We had been running a futures-based auction – a model that I don't think the industry was necessarily ready for. Managing auctions against current and future blocks of inventory on a non-real-time basis requires a level of liquidity that we may not have necessarily had, as well as publishers who needed to maintain a level of diligence in terms of managing blocks of inventory that on a futures basis – which can be difficult.

What we saw was a need for a better combination of both automation and transparency, thus our switch in messaging to what you see today – TRAFFIQ as an open and transparent marketplace.

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Isn't that an exchange, though?

Absolutely! The term exchange has been linked in our space to ad networks because their aggregators of inventory and do sort-of real-time delivery. Like I mentioned before, we've built TRAFFIQ almost like a commodities exchange where you've got actually buyers and sellers with market-makers in the middle helping facilitate transactions. It's a return to what ad exchanges were originally developed to be.

Who are your competitors? Exchanges like DoubleClick AdX or buying platforms such as MediaMath and Invite Media?

I'd consider the DoubleClick AdX as our closest relevant competitor.

How do you compete with them and differentiate with THAT company hanging around?

The independent nature of TRAFFIQ is obviously a huge value for both everybody in the market. We're platform neutral. You don't have to be DFA/DFP/DFE-enabled: we are interoperable with all major serving platforms. Additionally we have our own ad server and analytics package that are free as services to help utilize the marketplace.

The free nature of our platform is also a critical differentiator: agencies and advertisers only pay for the media they buy (we work on a revenue share with publishers). This revenue share is more favorable than what many third parties offer, and because of the open model of our market, agencies, advertisers and publishers communicate directly with each other.

But the biggest point of differentiation is most likely the quality of inventory available in TRAFFIQ. AdX may have massive scale but it's against long tail inventory. Because TRAFFIQ is a biz dev tool for publishers, we see publishers selling premium bocks of inventory, including high-engagement placements like video, interstitials, roadblocks, sponsorships, etc..

Finally, remember that this is our only business – we don't have to worry about maintaining ancillary products and platforms – it's just TRAFFIQ. This centralized focus means we can quickly iterate the platform and grow the market without distraction. We put out new product releases monthly, not annually. It allows us to stay ahead of agency & publisher demand and address marketplace needs as they arise.

How does TRAFFIQ grow in the future? Do you need more funding? Or do you just drive sales?

We launched the product as it exists today in January, so like any other maturing business, today it's all about sales and marketing.

You have 500 directs, 400 agencies, 1700 publishers who work with TRAFFIQ. Among the publishers, directs and agencies, which is the most difficult to grow and why?

Agencies, as they certainly have the least amount of bandwidth to evaluate new opportunities.

Utilizing TRAFFIQ means a new tool to plan, buy, execute & manage display media campaigns, and in the agency world, anything new means a longer time for consideration. However, in the long run this consideration is beneficial to us, as the conversation is no longer about media being a good fit for one client, but instead it's a healthy conversation about how partnering with TRAFFIQ is it right for ALL clients and campaigns. Buying deeper with greater control impacts every agency & advertiser, and we look forward to helping buyers achieve the efficiency they want and the control they need.

You can follow TRAFFIQ (@TRAFFIQnews) and AdExchanger.com (@adexchanger) on Twitter.

July 23, 2009 – 9:02 am

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CSO Schanzer of Undertone Networks Says Online Metrics Today Don’t Support Long Term Needs Of A Brand

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Alan Schanzer is Chief Strategy Officer, Undertone Networks, an online advertising network.

AdExchanger.com: Of the four ad solutions you provide according to your website (Display Ads, Synched Ads, Undertone Video and Full Page Ads), which is the fastest growing and why? Any surprises or trends that you've seen in 2009?

AS: We are seeing growth in most of our higher impact units including all forms of video, rich media and a new product which allows a user to connect an ad or offer directly to a mobile device, Web based calendar, Twitter stream or social media environment. This growth is being driven by brand and direct response marketers who seek both impact and performance and are interested in experimenting online beyond the basic banners with units that have TV characteristics (site, sound, motion) but aren’t necessarily a replication of TV creative.

In a recent Advertising Age article, it was noted that Undertone will refund a campaign as much as $50,000 if impression quality slips. How do you determine quality? Please provide an example. Have you made any refunds yet?

Undertone does not acquire inventory through an ad exchange or from other questionable sources. Each publisher in our network must be professionally produced, provide a blend of the ad units we deliver, and offer above-the-fold inventory. The publishers that meet that criteria are scored based on the quality of the layout and the content to ensure a safe, well lit environment for brands that want performance without sacrificing quality and control. Publishers that meet the Undertone Qualified Publishers (UQP) requirements are further analyzed based on their ability to deliver brand or direct response objectives.

We issued the Undertone Quality Guarantee(SM) to help clients make sense of all the noise in the market. Too many networks tout quality and appropriate placements yet few can deliver on that. The Guarantee was about raising the ante and showing clients that accountability matters. What is most interesting is that since announcing the Guarantee, not a single network has followed suit or offered anything of its kind.

Will real-time bidding (RTB) or demand-side optimization play a part in Undertone's strategy in the future? It seems like a behavioral marketer's dream given the data intensive model.

We are currently investing in technology that will make the Undertone network seamless and easy to use for third parties to "bolt" on and work with us. This will extend through demand and sell side systems. A real-time bidding system is not in the plans as the nature of our inventory is not best utilized this way.

Trading platforms and systems such as Invite Media and Media Math are aggregating exchange and publisher inventory and beginning to enable agencies and ad networks. How does Undertone meet this challenge?

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Undertone has and is continuing to invest in inventory management and optimization systems that will compete head on with trading platforms from a performance standpoint, however, we are not concerned with long tail or remnant inventory. We are carving out a secondary media marketplace that is focused on quality and performance and is best suited for brands that need a certain level of confidence and protection. Undertone will stay very focused on this position, along with a suite of quality products to deliver our value to marketers and agencies. Data, analytics and such play a critical role, but let’s not forget we are still in a service business where clients are looking for more than just algorithms. We are focusing considerable effort on this. How do you assure your publisher network that you are not cannibalizing their inventory?

Undertone is a strong proponent of publishers direct to agency sales channel. We do not provide transparent site by site reporting and defend that position vigorously. As a result of a direct to publisher buying model, Undertone's inventory and pricing is marketplace driven by supply and demand side economics for secondary inventory. With a much smaller set of publishers, Undertone is able to establish specific rules of engagements with publishers that may govern who and when our sales teams can target. Our goal is to provide incremental monetization to the publishers’ direct efforts – never channel conflict.

One of the best things we can do for publishers is to help them drive additional revenue by leveraging their strengths. Our new product called U360 will do that and we are excited about the response we have already seen in the market.

What has been Undertone's experience with data exchanges? Do you use them? Do they provide ROI?

Undertone has successfully used data exchanges and is now expanding its partner list to include vertical data sets where appropriate. Beyond providing positive ROI, well vetted exchanges provide access to clean opt-in data that scales across segments and categories. We are releasing products that will increasingly leverage third party data and help make access to data in large volume simple and effective for agencies and marketers.

In your opinion, why is it taking so long for brand awareness campaigns to come online?

It’s a big scary leap for brand marketers to move away from proven TV based models that go back 20, 30, even 50 years. The transition needs to be slow because the metrics today don't necessarily support the long term needs of a brand, and traditional econometric models don’t do a good job of capturing and attributing online exposure to sales and/or brand success.

The answer will come as research and metrics evolve. Not so much away from CPx but away from the very short term view we have today that looks at success over weeks and perhaps months (if you are lucky) and move toward measures that define the value of online communications to the long term growth and success of a brand.

Are your clients running display with their search campaigns? If so, have they seen any boost in overall ROI? Generally speaking, display advertising creates demand which provides lift to search efforts, certainly lift to the number of searches conducted for a brand, keyword or phrase. We recognize the value of synchronizing efforts between display and search to drive results but don't spend a lot of time thinking about it given the significant impact other, typically offline channels, will have on these results.

Does search retargeting offer significant promise in increasing ROI and interest in the display market? Has Undertone tried Yahoo's offering or will it? Undertone offers search retargeting from a landing page which is one step further down the funnel toward sales or desired actions. The ROI for these efforts is extremely positive. We have not tried Yahoo’s product.

Follow Undertone Networks (@UndertoneNet) and AdExchanger.com (@adexchanger) on Twitter.

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Xtend Media CEO Orzel Says Ad Networks Will Need To Rely On Media Buying Skills To Survive

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Adi Orzel is CEO of Xtend Media, an online display advertising network.

AdExchanger.com: How will ad networks need to change to remain viable?

AO: I think that ad networks will need to rely much more on media buying, rather than developing their publisher networks, due to the fact that more and more publisher relationships will move outside from ad networks to exchanges and yield optimization platforms. As a result of that change they will also have a huge opportunity to put a bigger focus on the advertiser’s needs when running a campaign, rather than the inventory they own and need to sell. I see ad networks being the dominant buying force on exchanges and not the agencies. Agencies will move slowly when it come to non-guaranteed display inventory. I think it will be a challenge for them to adjust to this opportunity. The ad networks are there and ready to take it on with full force and all of their campaigns, and I believe they will continue to be a valuable player in the value chain between the ad exchanges and the agency / final advertiser.

Where does XTEND fit in the online advertising ecosystem?

XTEND is a global performance display ad network. We are part of an international performance marketing group called Adsmarket. As such we bring value to media companies and publishers by helping them monetize their international inventory even in the most remote markets. On the other front we focus on direct response advertisers that look for a network with a strong global marketing approach.

What’s your view on Demand side platforms?

I think DSPs are a must when it comes to working with the new ad exchanges. The real challenge relies in connecting the bidding algorithms and decision making mechanism to the back end data of the advertiser. For DR campaigns I think this is the most important challenge; you want to be able to bid effectively for what’s converting. We are looking into working with DSPs to get quicker and more efficient access to the exchange platforms. I’m intrigued to see how we can integrate our backend data into their bid logic. Other parts of the solutions such as API integration with the exchanges are quite simple. I’m not running into developing under the same concept that we don’t need to build our own ad server in order to be in the business. However, we are enhancing our data analysis capabilities to build stronger campaign management logics.

What percentage of your business is brand, will you pursue it?

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I’d say about 20% of our business is brand. We don’t pursue it that much. We want to stay focused on our agenda of performance advertising. We believe that many brands will develop their DR strategy from search into display in the near future.

How do you solve creative optimization? Multi variate tools? In-house team?

We use extensive conversion data to optimize creative optimization and publisher performance for our clients. It’s an ongoing process that never ends and relies heavily on the supply of new creative for the campaigns. We do have an in-house creative team that works with our clients to generate new ads and concepts for our campaigns.

Discuss the inventory across quality, across exchanges, ad networks and direct publisher relationships. How concerned are you about the placement from a quality perspective?

I think that inventory quality control is a burning subject in the industry right now and rightfully so. The problem resides across publishers, ad networks and exchanges. Basically anyone who is working with UGC inventory is exposed to the risk, because you can’t predict when someone will upload a bad photo or video file that your ad might appear next to. There are also publishers who might register one legit site on a network and then use the ad tag on 10 other sites that are not approved. The solutions we are looking at using or developing can help us assure quality across our own inventory, but when it comes to media buying from other exchanges / networks / platforms, you’re pretty much limited to what you can do and you have to rely on the other side.

Do you think Behavioral works? Contextual?

I see limited success with Behavioral targeting when it comes to conversions. I think most of the activity is still Retargeting campaigns for brands that still measure it at a CTR level and not much beyond it. I think that the potential there still needs to be proved from a DR perspective, because even if you get a 50% lift in performance, the scale is limited. With Contextual, we are still at early stages when it comes to display advertising, we are testing it in different cases, but again the scale of the opportunity is always a big trade-off when you narrow the targeting down.

What trends are you seeing from clients? Goal types? Vertical strengths? Budgets?

I think that during the last 12 months I’ve seen most of our clients turning defensive. This means aiming at CPAs rather than CPLs, and in general bringing the CPA targets down. These measures were taken due to fears that life time values of clients will shrink due to the current financial recession. We’ve also seen that clients who were used to consuming as much media as possible within their CPA targets moved to budgets in order to limit their risks. This is especially true with advertisers who are based on subscription model and long term user transactions.

Are you thinking about RTB? Do you consider this an opportunity?

Yes, I do think it’s an opportunity for us. Although, we do not use a lot of external data for targeting yet, we will need a way to hook our backend data analysis into the media exchanges bidding mechanism. This will have to be through automated processes and RTB access is the way to do that.

Follow Adi Orzel (@adi_orzel) and AdExchanger.com (@adexchanger) on Twitter.

November 13, 2009 – 8:52 am

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Yahoo! Right Media VP Taylor Looks At The Future Of Exchanges And Media

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Antony Taylor is VP of Display Platforms at Yahoo!'s Right

Media Exchange.

AdExchanger.com: It feels like it's very early in the understanding of display ad exchanges especially as it relates to feedback from attendees at recent conferences.

AT: After a recent exchange panel, an attendee said to me, "None of it. I got none of it. Why don't you guys just start with how an exchange helps a direct marketer?" Now, we're doing this every day, but I still thought the feedback was good. We may think we're on to the next big thing, but there's so much education that still needs to happen.

How is this education going to happen around display and exchanges?

When people think ad exchange, they think biddable media, the auction, opportunities for advertisers to compete for audience. But [Right Media] learned early on that the exchange was only going to grow if we made it relevant to the business problems our customers were facing. For Publishers that meant an efficient inventory distribution platform and pricing and yield management engine. For networks, that meant seamless access to supply and the tools to manage ROI effectively at scale. For advertisers that meant solving for supply fragmentation in display, managing frequency of user interactions and leveraging data across disparate supply sources and competing ad servers.

Would you say it's about performance display these days?

There is no question advertisers are looking for accountability in their media spend. I also think the industry is in its next stage of evolution – the shift towards audience-based buying and selling. Advertisers today are pretty clear that they want to find, target and buy audiences. And they want a platform that can provide them that. In some cases they're saying, help us define the online audiences that make sense for our products. They acknowledge that contextual or content-driven buys are just a proxy for finding effective audiences. They need to be able to leverage their own data and insights.

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Getting legacy ad servers out of the way – manual arbitration and zero predictive optimization – no doubt paved the way for performance advertising. But the bigger story here is the digital shift towards audience and our industry's run at traditional advertising mediums.

Let's talk about the features of ad exchanges. Why do you think interoperability between ad exchanges is important?

Well once you understand we are at another inflection point as an industry – one that is focused on helping advertisers reach and buy audiences at scale – interoperability becomes an imperative. Advertisers need to be able to interact with consumers at optimal frequencies across different supply sources.

Now some networks believe that they can actually service 100% of an advertiser's needs. "I'm Joe Network, I'm big enough. Just give me all of your spend, and I'll find your audience." That's obviously nonsense, unless you own the internet – especially when you consider consumer web experiences.

At the same time, ad exchanges had the vision of a single technology platform for the industry. While we made incredible progress, advertiser needs are moving faster. So instead of battling over hosted supply solutions, we are ensuring that we can plug-in to an auction environment and know that our advertisers are not disadvantaged in auctions we don't host.

In this way, Right Media is now not only an operator of the largest ad exchange but also a platform for marketers. We are partnering with large advertisers and agencies that need more efficient buying platforms. All of them require access to supply that may not be hosted in Right Media Exchange and we are going to give it to them.

Do you think that DoubleClick will give them the same access to you?

It's a great question and you should pose it to them. From our perspective, we can't not be doing this for our marketers.

Is that what Yahoo! 3PI is about?

Yes. We began exploring "Yahoo! 3PI" 2.5 years ago.

This isn't widely known. Is this a new branded term?

Yes, third-party integration. You either have a lot of demand and want to plug-in to supply marketplaces regardless of platform or you have a lot of supply and want to ensure your marketers can leverage all of their insights and capabilities to drive ROI.

But let's do some myth busting. It took 2.5 years to get to beta because there aren't a lot of companies that have world-class ad decisioning capabilities that enable them to decision on a per impression basis. There are maybe 4 or 5 companies that can scale it enough to warrant their investing in real-time integrations. However, there are a lot of advertisers with data who want to map their segments into Right Media. This is very powerful as it enables audience-based buying at scale. But, it's different from the deep 3PI we talk about in real-time bidding.

Does Yahoo! offer real-time bidding (RTB) through Right Media currently?

Yes, we are beta-testing our first few partners. The challenge is scaling. It's not easy – we're really talking about drinking from the fire hose.

What is the value of RTB through Right Media in your estimation?

For companies that can do it, we are ultimately trying to drive greater campaign effectiveness (reach and ROI) which leads to greater yield for publishers.

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The other value proposition is that we have reduced technology friction that has constrained advertiser and publisher performance.

Such as ad serving? How does that evolve?

When you talk about ad decisioning, prediction, unifying guaranteed and non-guaranteed marketplaces, the next generation of ad serving innovations is extremely exciting. However, the basics of legacy ad serving systems have become commodity. Period. They are important in as much as they can service the needs of advertisers and publishers. The reality is those needs have evolved in sophistication and complexity. Legacy ad servers have not innovated to meet those needs.

Imagine in the direct mail world if as a consumer you opened your mailbox and in it was ten of the same credit card offers from the same company. Imagine the waste inherent in that kind of marketing execution – to say nothing of the consumer experience and brand impact. This is the digital world marketers face today due to these legacy systems.

RTB allows us to solve for this despite fragmentation. And it paves the way for the next wave of exciting innovations in ad serving.

Let's talk about yield optimizers. What do you think of their services such as those of PubMatic, Rubicon Project, AdMeld, YieldBuild and Yieldex?

Let me start by saying the Right Media product used to be described as an airplane cockpit of functionality – enterprise level, some up-front investment, etc. The yield optimizers have attempted to dumb that down. And, I'm obviously generalizing here…

Publishers say to us: I love getting one check at the end of the month, I love feeling that my networks have to compete, more than anything I love the workflow tools that make life easier for my operations team: billing, reconciliation, discrepancies. Yield Optimizers stepped in to address that narrow but important focus. What I am less clear about is whether they're actually optimizing yield.

What do you mean by that?

Well, pricing time-based inventory isn't easy and it doesn't just emerge from a slick user interface. We all know that frequency is a fundamental determinant of publisher yield. Managing to optimal yield across a yield curve requires careful analysis, predictive algorithms, optimal marketplace design and a world-class salesforce or competing salesforces. It also cannot be retroactive. You need to ensure you are serving impressions to the highest paying advertiser based on time-of-day, frequency, recency, etc. The architecture of ad technology – whether exchanges, yield optimizers or 1.0 ad servers – is critical to ensuring that is happening.

So, the positive is that "yield optimizers" took a lot of friction out of publisher workflow; the negative is that I am not certain that the architecture of these systems actually enables true yield optimization. Some of these companies are thinking about it the right way but some of them are not.

Have you solved the "airplane cockpit" perception regarding a high-level of complexity when integrating and managing campaigns through Right Media?

It's bold to think that a single technology company can build the best UI, reporting interfaces, best data management warehouses, best prediction for every customer segment. We are partnering with companies who we think service customer segments that are not in our focus, helping them to design products that meet the needs of their clients. We are also partnering with technology providers that we think can augment features and functions on our platform. In that way we ensure our customers are getting the best-of-breed capabilities.

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At the same time, every partner is bringing more to the table today. Two years ago it was rare to have API conversations in pre-sales. Today, everybody wants to see our APIs and build on top of them. That's cool because we're totally evolving the way we think about product development. It's almost like a shared product roadmap with our customers. Some of it we'll build, some they'll build.

Finally, for the segment of the market that is critical to us they require an enterprise level product. For them, the cockpit mixed with our services is exactly right.

So, services – as in people – are critical to the success of your enterprise product?

Yes, it is for the market we want to win. As with any enterprise product, we have built a services layer to ensure our clients are getting the most from the platform. We are then leveraging partners for segments of the market we are not addressing. This allows us to apply the right focus to our target markets and also to ensure that the entire market can benefit from the exchange through our partners. This is what it means to be an open ecosystem.

Let's pretend you work at an agency and you're a strong a proponent of demand-side platforms, but you're surrounded by traditional minds, what is the principle argument you make to your executive layer about why they need to get into a demand-side platform buying strategy?

The principal argument is margin. Digital agencies have razor-thin margins and a single media trading platform offers them the efficiency to yield more margin on the buy-side.

The second argument is that advertisers need the efficiencies that supply consolidation, frequency management and data provide. Only a platform can do that and agencies are well-positioned to be that provider, whether they build or buy.

The argument against is straight-forward. Can the agency make the level of investment required? If they can, do they have the right technology and services DNA to make it work? Finally, can they engineer the kind of change management within the agency and on the client side to make this really effective?

So there are definitely challenges to making the shift. But for large agencies and even some of the smaller ones the question is when not if.

What happens to ad networks down the road?

Everyone is surprised by the stat that in the last 3-4 years we've seen an expansion in the number of ad networks. With exchanges, we removed the artificial barriers to entry of relationship and technology – we literally opened a closed market. Who did we expect would enter the open market first? The companies who are most capable of managing risk effectively! Now as agencies, advertisers and publishers evolve their own in-house capabilities, there will be increased pressure on ad networks to prove their differentiated value. So we'll either see less of them or margins will be squeezed. Or both.

I am not providing a timeline. This will ensure I am right eventually.

Are the search marketers the first step for improving liquidity with exchanges and demand-side platforms?

No. I think they're the last, in fact, which is surprising. They have all the right ingredients; actionable data and insights from their search buying (and we now know how to leverage those into display), media buying and optimization DNA, an understanding of managing ROI across marketplaces. But the focus on display has not been there. Display is a very different animal in some respects.

No, the earliest adopters emerged from the Exchange 1.0 space. These companies quickly saw the marketers' need. They said nobody is doing this for marketers, we might as well. And they've proven hugely successful at making themselves a more meaningful part of the agency media plan. It will be interesting to see how this evolves.

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September 14, 2009 – 6:07 am

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Yahoo! VP Bill Wise Discusses Future Demand-Side Platform Plans For Right Media Exchange

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Bill Wise is Yahoo! VP/GM, Ad Platforms. Wise answered a few questions that follow up on yesterday's announcement regarding Right Media's new positioning.

AdExchanger.com: When will Right Media have DSP capabilities?

Right Media already has DSP capabilities by leveraging exchange inventory and linking and numerous decisioning, optimization, and analytics technology within the company, and has further invested in servicing. We will continue to invest in advancing these capabilities and growing our services team as we scale. This will help head marketers, ad agencies, and enabling leading DSP players, which we believe is an important part of the ever-changing marketplace.

Define what the features of a Yahoo! DSP will look like. How is it different than what exists today, for example?

Capabilities of a DSP include dynamic decisioning, the ability to build and optimize audiences, advanced analytics, real time interoperability into supply marketplaces and a services layer.

We've built out a professional services offering to support our DSP layer. The core services include:

• Working with agencies to translate "the who," or agency target personas that capture the personality of the users to reached into targetable audiences. For example, a media planner may explain the user of a cosmetics brand to be a female from 18 - 54, who is a social leader that encourages who friends to try new products and her motto is "there is no such thing as an ugly girl, only a lazy girl!." The services team has the expertise to translate these offline personalities to actionable online triggers.

• As agencies continue to shift offline dollars online, we work closely with each brand to translate offline success metrics to directional online success metrics. This may include a range of metrics from panels such as Nielsen Neteffect, online surveys (such as Dyanmic Logic or Dimestore), coupons, email sign ups, CTR, or reach.

• We work with the agency to deliver audience insights from online buys to better inform the "who" to use for buying across all buys (offline and online)

There is a perception there is some low quality inventory on the Right Media Exchange today whether through ad networks or direct-to-publisher relationships. Will you be discontinuing these relationships? If so, when?

We are the largest and oldest ad exchange, with over 120,000 buyers and sellers trading 9 billion transactions daily. We recognize that there is some undifferentiated supply in the mix. As part of this announcement, we have segmented the market into priority customer segments and have a go-to-market which will focus on premium partners. We believe as the leader in the exchange market, it is our responsibility to have a premium marketplace on behalf of the end advertiser and end publisher to allow them to transact their business in a brand safe exchange environment.

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November 17, 2009 – 6:36 am

Advertisers

From The Marketer: Mazda’s Collinson On Brand Dollars Moving Online And Display Advertising

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Mike Collinson is Director, Marketing & Product Strategy, Mazda Canada Inc.

When will brand marketer dollars finally shift online in a way that syncs with the overall time spent online versus other mediums? - For example, when there are better attribution models perhaps?

MC: This is a complex question, I'll try to be succinct. Budget allocation by media is largely dependent upon brand strategy for the coming year - is it a launch (or model change) year or a sustaining strategy. We try to let the overall strategy set the brand development objectives (upper or lower funnel) and then have the strategy determine the best way to reach the target. For example, 2009 is a launch year for Mazda3 so the majority of the buy was focused on the upper funnel, since we have 2 distinct targets to reach with Mazda3 we utilized a broad media strategy (i.e. Cinema to reach the younger target and TV for the older demo) along with strong digital presence in both upper and lower funnel sites. Better attribution models would help moving more budget to on-line, but our target is very broad and our experience demonstrates we need to utilize multiple media points to get the awareness levels we need. Another layer to this discussion is the automotive purchase cycle is very long, so we allocate a portion of the budget to reach in market consumer, this is most effectively executed using SEM and automotive portal sites.

Can you see brand marketers taking more of their media buying and planning (digital-only or cross-channel) in-house in the future? Why or why not?

Mazda Canada has no plans to bring media buying or planning in house, we believe the media costs are lower when a large media agency negotiates on our behalf. In addition Mazda Canada would not be able to buy the necessary research to make good decisions.

Do you think online display advertising is effective? Where are the holes - any improvements you'd like to see?

We have had mixed results with display and I believe creative is critical. We've been most successful with expandable ad units on upper funnel sites. We're still searching for the optimum formula for lower funnel sites. I'm frustrated by sites that don't offer expandable or video capable banners, so this would be the largest improvement

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area. However, display is just one component within a broader strategy and effectiveness is dependent upon what you want the units to do. To achieve creative effectiveness, engagement is key. Effective display happens when more addressable messages are lined up with targeted media. Improving engagement levels is an ongoing process of learning and tactical refinements, which digital media allows for unlike any other medium. We also strive to move beyond just a CTR or CPC measure to ultimately a CPA (cost per acquisition) metric. At present we measure effectiveness beyond CTR and CPC to determine quality of leads by looking at some of our key conversion metrics.

Have any thoughts on agencies announcing demand side platform strategies such as Interpublic's Cadreon or WPP's B3? How will these affect the advertiser in your opinion?

I'm not very familiar with demand side platforms, as you know they are not as popular in Canada as they are in the US. I think at present the biggest benefit is in potential reduced costs, but for Canadian buying shops, reaching critical mass is a big barrier. My comments from the previous question are appropriate here too, if the media site is optimizing my ad to ensure click thru from qualified customers at competitive rates then I don't care who is selling it, without losing site of driving the key engagement measures beyond CPC and CTR.


November 12, 2009 – 7:04 am

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VP Federico Says Monster Looking To Leverage Display Ad Exchanges In The Future

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John Federico is VP, Global Media and Marketing Alliances at Monster Worldwide, an online employment website.

AdExchanger.com: How important is online display advertising to your media buying strategy? Are there any current challenges to display that keeps you from spending more?

Display is very important to us - especially for our b2b advertising efforts due to the nature of our business and the way customers interact with us. The challenge as always on the b2b side is scale and the ability to get in front of users at the right time and place with a highly targeted message. We are constantly testing new strategies and tactics to improve on the effectiveness of our b2b marketing.

What do you do on the b2c side? Is online display significant there as well?

Display is a key component of our consumer advertising as well. We have had success supporting our NFL partnership with flash, in banner video and rich media display in driving entries for our Director of Fandemonium promotion. We just launched season 2 on October 1st and it concludes with the winner announcement at the Super Bowl in February. The key with display moving forward is to find ways to break through the clutter without being overly intrusive. We're testing a variety of sizes, placements and technologies in order to find the right combination.

As an advertiser, what trends are you seeing in the marketplace today?

We have surprisingly not seen a significant decrease in CPM's this year as one might expect. There has not been a big upswing in CPA opportunites as was seen in the last downturn either, so publishers have clearly learned from that experience and of course the industry has matured since then. We have seen increased flexibility in contract terms, though. There are more integrated opportunities available as vendors are trying to maximize their assets and stand out - and mobile apps as well as social media elements are becoming more and more a part of those packages, which is good to see from an advertiser perspective as that is what consumers are engaging with.

And how about internally - any trends you've experienced, such as more requirements on accountability, less budget, etc.?

We certainly have been impacted by the recession as you read daily in the headlines about the employment challenges we're facing both domestically and internationally. Our marketing and media has been shifting in a similar fashion to the marketplace - lower budgets, focusing spend on the most effective and efficient channels at driving the business, which for us in media are SEM and digital display.

Does Monster use ad exchanges today? If not, why not?

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We have limited experience with ad exchanges to this point, although I can see that changing as we go into 2010 with the help of our new media agency, OMD. I have nothing against ad exchanges conceptually, and we have been discussing ways which we think we can leverage them for certain parts of our business, we just haven't executed to any great degree, yet.

Can you envision a day when many of the buying services of a media agency are brought in-house to Monster? I can envision that very well as from 2004-2007 we did all online planning and buying in the US in house through a team that I built! We still support some business lines through in house media buying. As far as the future goes, we have no plans to bring planning and buying back in house for the careers business at this time.

Where do you net out in terms of buying audience versus placement/context? Is it all about addressable media for you?

Due to the nature of our business, we have an extremely broad audience. Our approach is to manage a balanced portfolio which allows us to both buy audience as well as go vertical and segment according to business priorities and customer needs.

In general, how are agencies responding to the ongoing innovations in advertising? If you were running a media agency right now, what sort of strategies would you consider to make sure you're around 5 or 10 years from now?

One of the main reasons we chose OMD as our new media AOR is based on their approach to innovation and navigating the constantly evolving media landscape. The traditional big agency approach is outdated and if agencies and media vendors don't evolve with consumer behavior they will be left behind. As media consumption habits change and fragmentation grows, we need to take a much more holistic approach to how we reach and engage with our audience. The media agency needs to be more of a marketing partner who lives and breathes in these new mediums/technologies and understands how we can take advantage of these changes to help grow our business.

How comfortable are you with your attribution models today? Do you measure cross-platform, for example? Or, thinking just about your online campaigns, are view-throughs in display considered even though the consumer may end up going through search, ultimately, to fulfill a conversion?

We are in the process of building our own custom attribution model as we do not think the last click model that is still the dominant model today is the right one. We do measure cross-channel activity, and are looking at upgrading our tool set to better track and understand the impact of our marketing across channels. We do look at view activity and think there is value there, especially on the b2b side as our products are not impulse buys and typically include an extended purchase decision making process. The key is understanding the entire conversion path and weighting each action accordingly. I don't think there is a one-size fits all model - every business will have a different way of evaluating attribution and the industry needs tools that allow for easy customization.

Follow Monster Worldwide (@monsterww) and AdExchanger.com (@adexchanger) on Twitter. October 13, 2009 – 6:22 am

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Analysts

Yield Optimizers Poised To Migrate To Exchange Model Says ThinkEquity’s Morrison and Coolbrith

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Bill Morrison and Robert Coolbrith are equity analysts at ThinkEquity Partners and recently authored a report entitled, "The Opportunity In Non-

Premium Display Advertising."

AdExchanger.com: Are data exchanges the key to unlocking value in social media? Who's getting it right in the data exchange space?

BM and RB: We'll defer the second part of your question until a later date. As investment research analysts, it's hard for us to identify "winners" without the help of industry participants, who provide us with invaluable insight and opinions. In our recent conversations with networks and exchanges, when we asked about the most important new companies in the space, the data exchanges invariably came up. However, it still seems to be pretty early in the development of the data exchange model, and we didn't sense any clear consensus from industry participants on who is taking the lead.

While data exchanges are certainly "hot," it's an open question as to whether an auction-based marketplace is the "right" paradigm for monetization of proprietary consumer insight. People have pointed out the similarities between the data exchanges and the offline list marketing/direct mail model, and we think it's a fair comparison. In both cases, the buyer pays up front for the data and then leverages the data to market to consumers on an individual basis. But that's complicated in the online world by the matter of actually reaching the identified consumer, which can be a bit like finding a needle in a haystack. An alternative approach might be to realize that the haystack is full of needles, but of varying types. So, allow the inventory to dictate the targeting, not the other way around.

Regardless of how the mechanics play out, we think third-party data exchanges will be important for the monetization of all display media, but will be particularly important in social media, where the inventory doesn't typically contextualize well, the platforms are rich with demographic, behavioral, and social data, and current monetization levels make targeting a real priority. One thing we're currently wondering about is which could be the bigger opportunity for social media: the inventory (where value should be enhanced through the use of both first- and third-party data) or the first-party data that can be directly monetized through data exchanges to enhance the value of display inventory across the Web. The data exchanges, by providing a transparent pricing mechanism for behavioral, demographic, and social data, should help answer that question.

How do you see large publishers evolving as media trading achieves scale?

The very largest publishers will be deeply involved in media trading, both as the sponsors of the key liquidity platforms, and, in all likelihood, as traders in their own right. Regarding a broader set of "large publishers," including the leading vertical publishers, social networks and smaller portals, there are likely to be a lot of changes in terms of how they manage O&O inventory. Direct sales organization will remain relevant for sponsorships and custom integrations, but sales of banners, IMUs, etc. are likely to become more automated, data-driven and audience-centric, whether that inventory is sold through forward/futures markets, co-selling arrangements with partners, or non-premium spot markets. In terms of incremental reach extension, larger publishers will likely find varying degrees of success via curatorial vertical network strategies and via data-driven media trading.

Could agencies disintermediate ad networks or visa versa?

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It seems that many traditional media agencies are deeply envious of the margin profiles of their ad network peers, and are intent on putting the ad networks out of business as a matter of principle. Whether or not they'll succeed is another matter entirely. Agency and network business models appear to be rapidly converging as the agencies build out private networks and adopt media trading, and as the networks gradually abdicate their role in inventory aggregation to the ad exchanges and yield optimization platforms. Agencies have the advantage of adjacency to the client, the client's data, and the client's budget, but it remains to be seen if they can successfully adapt to a technology-driven business model—although third parties like MediaMath and Invite Media should be helpful to them in doing so. When it comes to media trading, leading technology-oriented ad networks have significant first-mover advantage—they've been dynamically pricing and optimizing ad inventory for years within their own private "markets". The ultimate winners and losers should be determined by who boasts the best performance on behalf of clients, but there appear to be a number of complicating factors at work.

How do you define premium inventory?

We define premium in the way that Yahoo! and other large publishers traditionally have, as inventory sold with specific guarantees as to placement, timeframe, volume, etc. It is unfortunately a confusing nomenclature, and Yahoo! now makes use of alternate terminology such as "guaranteed" and "Class I". The distinction between premium and non-premium can, however, be a bit fluid? Run-of-site behavioral targeting sold on the Wall Street Journal, premium or non-premium? Probably premium. Run-of-site demographic targeting across Fox Interactive Media properties? Probably non-premium. These fine distinctions are part of the reason we point to the emergence of a "secondary premium" inventory category encompassing co-selling arrangements, inventory sold through automated sales platforms and forward markets like Yahoo! APT, etc. In formulating our industry estimates, however, our general rule of thumb is that directly-sold inventory counts as premium, inventory sold by third parties as non-premium.

In your report, you suggest companies like Vizu will aid in providing analytics and support for brand awareness campaigns and the long-rumored brand dollars. Do you think agency compensation structures have kept media budgets tilted toward traditional media too? Hence, the slowness in moving branding budgets online?

We're not sure that compensation plans vary all that significantly between online and offline media. However, there is clearly a large opportunity cost for sales people when they focus on selling digital brand campaigns to their clients. Executing an online media campaign is far more complex, time consuming, and expensive for brand marketers and agencies than it is to execute a campaign in television, for instance. Publicis/Denuo recently completed a study and found that the cost of executing online campaigns (excluding creative development) represented approximately 15-20% of the media spend on average, compared to offline execution costs on the order of 2-3% of media spend. That is an astounding cost differential, if you think about it, and one of the major reasons that only 3-4% of brand dollars have migrated to the Internet to date (compared to ~15% for direct response). There are a number of other "pain points" within the online advertising ecosystem that are slowing the offline-to-online migration of brand dollars, including a lack of standards for comparing the efficacy of brand campaigns across online and offline media, too many proprietary formats in emerging media categories like video, sub-optimal inventory allocation decisions by publishers, inventory forecasting challenges that often lead to over or under delivery of campaign goals, etc. The good news is there are lots of companies that are trying to create solutions that alleviate these "pain points," and we remain optimistic that online will continue to take share from offline brand budgets.

How will demand-side optimization affect pricing and performance of online media?

We view any limitation on buyers' performing their own allocation decisions (and iterative refinements) as an economic externality in the online display ad market. While we don't think this argument has been generalized, externalities in auction-based sales processes tend to impose a tax on the seller. An unfair auction process provides bidders with an incentive to offer less than their best price. While we wouldn't qualify the display ad market as "unfair," buyers have had very limited ability to perform real-time inventory allocation decisions prior to the advent of now-emerging real-time-bidded ad exchanges. As transparency to buyers increases, prices in general should increase. As the options available to media buyers in terms of inventory allocation increase (e.g., agencies may direct impressions to the client account of their choosing, or re-vend the inventory in a spot

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advertising exchange), prices should increase. So, we view demand-side optimization as a significant catalyst for both pricing and performance.

Your coverage of the yield optimization companies such as Rubicon Project, AdMeld, Pubmatic, YieldBuild and Yieldex in your recent report was extensive. What initially drew you to the yield innovators? Are they the new ad networks and/or exchanges of the future?

When we became aware of the yield optimization platforms in late 2007, we were initially skeptical. The Right Media Exchange had already been acquired by Yahoo!, DoubleClick (and its advertising exchange) had already been acquired by Google, and AdECN had already been acquired by Microsoft. Why would the world need yield optimizers if it already had dynamically-bidded ad exchanges (on their way to real-time-bidded models)? The dynamic default management approach typical of the yield optimizers should offer superior yield and efficiency versus static default management by human ad operations personnel in most (but not all) cases, but seems unlikely to outperform a liquid ad exchange.

The problem of yield optimization is not trivial, in as much as it involves dynamically allocating inventory to optimize revenue derived from multiple buyers whose pricing varies over time and across variable inventory; complicating matters is that this optimization process is performed utilizing retrospective pricing data. By comparison, in an ad exchange, revenue for each individual advertising impression is maximized by an auction in which each bidder offers their best price (assuming no marketplace externalities). We believe that ad exchanges represent the likely endgame for non-premium display inventory aggregation over a several year time horizon; what we had not earlier appreciated was that publishers required a near-term solution for yield management given ad exchange liquidity constraints and marketplace inertia. Now that many of the yield optimization platforms have built substantive publisher footprints, they appear poised to migrate toward the ad exchange model—real-time APIs for ad network partners appear to be just the first step in that direction.

If you had to pick one company in your recent report that is under the radar but has an exciting opportunity ahead, which one would it be and why?

It's not in our report, but we think AdExchanger.com is terrific and has a bright future ahead of it.

Good answer.

If you'd like a copy of Bill and Robert's report, "The Opportunity In Non-Premium Display Advertising," email Bill at:

- wmorrison at thinkequity dot com.

May 20, 2009 – 7:00 am

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Buying Platforms

AdBuyer.com CEO Ogilvie Says Marketers Need Help In Audience, Price, and Messaging

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Tim Ogilvie is CEO of AdBuyer.com, an online media buying platform.

AdExchanger.com: What is AdBuyer.com and how did it begin?

TO: AdBuyer.com is a media buying and optimization platform for auction-based media. We provide a full suite of tools to help online marketers understand how their online advertising is performing and what they can do to improve it. We’re integrated with the major search engines and ad exchanges.

We started in 2007 by providing an automated platform for SEM optimization. That includes centralized reporting, bid management and keyword recommendations. We saw display as the next big opportunity to deliver ROI, so we started porting our search algorithms to display about 12 months ago.

Do you consider AdBuyer.com a services business or a technology business?

We’re a technology business. We’re singularly focused on building a platform that delivers the highest ROI for advertisers.

We provide account management and support that helps advertisers become self-sufficient when getting started, but that team is constantly challenged with identifying how we build technology to make our platform easier to use and more automated.

How do you differentiate from other buying platforms and services such as those provided by MediaMath and Invite Media?

1. We’re a holistic platform across both search and ad exchange buying. This allows for better attribution, smarter media allocation decisions, and creates a data asset that we help marketers exploit.

2. We’re an automated platform, allowing us to service advertisers of all sizes. Like some of our competition, we provide the power tools to help larger advertisers exploit the ad exchange opportunity. But we’re also helping more typical search advertisers succeed: they can start with a credit card, customize pre-built creative templates, and get access to the same high-end analytics that deliver significant improvements in performance.

What is your revenue model?

We receive a percentage of the media spend.

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Why should marketers combine search & display campaigns into one platform?

There are three major benefits that marketers achieve:

1. Attribution: We help marketers get a clear view into which placements are driving results across both search & display. This helps advertisers understand when a search conversion may have been helped by a display impression, and vice-versa.

2. Improved ROI: As marketers increasingly think about their display and search spend as an investment, it becomes important to optimize the overall portfolio. It’s crazy to lose money in search marketing if there’s a highly profitable opportunity in display (or vice-versa), but we see this all the time because budgeting decisions are being made in silos. We help marketers understand their overall marketing portfolio and manage it profitably.

3. Data opportunities: Many of the advertisers we work with have very powerful “data assets” in their existing search campaigns. This can be their own re-targeting data, information on what creative & landing pages work with various customer segments, etc. We help them understand and unlock these opportunities through the exchanges.

Who do you see as your key competitors?

On one hand, there are many competitors who provide similar services or substitutes across pieces of what we do, including SEM firms, ad exchange optimization firms, and ad networks. On the other, I’m not aware of anyone else who’s helping advertisers pull together search and ad exchange buying in a single platform.

Given the size of the opportunity, we expect others will enter the market. We’re always excited to put our algorithms head-to-head against competitors and let the results speak for themselves.

Given your IAC experience, what are some of the key takeaways that you're bringing to AdBuyer.com?

I helped build two very large marketing platforms under the IAC umbrella. The first was for the IAC search toolbar business, a large display buyer that predated the ad exchanges. I then helped build Pronto.com from nothing to one of the largest comparison shopping engines in less than two years. Pronto is now among the top search buyers.

My key takeaway from those experiences was to focus on actionable data. Successful online marketing is about building lots of 5% and 10% improvements into a commanding lead. Most marketers that we talk to are drowning in data, but can’t act on that data because they’re overwhelmed or the data lives in different silos. We’ve built a platform that puts all the data in one place, makes it easy to identify improvement opportunities and just as easy to act on them.

Will exchange traders be able to buy AND sell media with your trading software?

No. We’re focused exclusively on helping marketers take advantage of buying opportunities.

What exchanges and networks is AdBuyer.com hooked up to today? Will it make sense to buy inventory direct from publishers and go around exchanges?

We’re currently integrated with Google, Yahoo & MSN in search, and Right Media, OpenX, APT from Yahoo!, and AppNexus on the ad exchange side. Right Media is fully integrated into our platform, while the other partners are largely reserved for larger spenders. We’ve built an open platform that takes in new inventory providers easily, so we’ll add folks like DoubleClick and others in the near future as they ready their APIs.

We don’t try to circumvent the exchanges by going directly to publishers. We think exchanges play an important role connecting buyers and sellers and that our buyers benefit from the auction-based pricing and centralized liquidity.

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Do you think it's possible to optimize creative, behavioral/demo and contextual/semantic targeting data simultaneously today? If not, how far are we from turning a dial to optimize interactive campaigns broadly and effectively?

It’s definitely possible and our predictive models facilitate large chunks of this today. We’re beta-testing a product we call Audience Finder that gives advertisers a single dial they can use to cut through the sea of targeting options and zero in on their target audience through the exchanges. We assign an Audience Score to each impression and allow our advertisers to buy only impressions that meet a minimum threshold. This allows marketers to get the benefits of site, demographic, behavioral and contextual targeting and measure them through a single metric: the advertiser’s goals. We can then help put the right price on that impression.

We’re not done. We think marketers need help in three areas: audience, price, and messaging. We’ve got great solutions for audience and price, and will continue to enhance those based on client feedback. We also expect to deliver significant improvements around creative optimization in late 2009.

If you were a publisher right now, how would you consider leveraging advances in ad technology?

There are currently too many sellers with too many impressions, which will continue to push down prices on “standard” inventory and reduce the historical premium for reach. As a publisher, I would look to create scarcity to differentiate my inventory.

Every publisher will have a slightly different strategy on how to create scarcity, but it can be through data, through outstanding performance for advertisers, or a unified sales strategy. I think the ad exchanges offer great opportunities to use and accumulate data that will pay dividends for smart publishers and command a long-lasting premium.

How do you think the agency and ad network models will be playing out? Will one disintermediate the other?

I expect the distinctions between agencies and ad networks will continue to blur, but I don’t know that I can pick winners & losers. That said, I’m fairly confident there will be a major wave of consolidation as the winners and losers start to emerge.

Follow AdBuyer.com (@adbuyer) and AdExchanger.com (@adexchanger) on Twitter.

June 30, 2009 – 6:15 am

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Adchemy CEO Nukala Says Marketers Need To De-Average For Better Return On Ad Spend

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Murthy Nukala is CEO of Adchemy, a demand-side buying platform.

AdExchanger.com: What is "de-averaging" as it relates to digital advertising and how does Adchemy "de-average"? Would you say "addressable media" is an equivalent?

MN: De-averaging summarizes a trend toward increasing the relevance of digital advertising. Today’s dominant online advertising model primarily relies on a one-size-fits-all approach to satisfy the need for scale. Consequently, advertising designed for the “average” audience member really is not that relevant to any particular audience member. De-averaging means recognizing that there are many small audience segments that all require different marketing experiences. We also call this "different marketing paths for different people." It’s a move toward greater relevance.

Adchemy technology gives marketers the capability to address micro-segments fully, improving relevance, conversion, and as a result, ROAS. It automatically micro-segments audiences, values them appropriately, and delivers relevant and consistent marketing to each—from banner and search ads and websites to merchandizing, pricing and promotions. As a result, marketers can massively scale their digital marketing campaigns while maximizing relevance, engagement and conversion.

“Addressable media” isn’t the same as de-averaging. Addressable media allows marketers to make more highly targeted media buys. It’s a start, but it’s not sufficient. If marketers don’t show highly targeted ads and landing pages to those targeted media buys, then there isn’t any better relevance.

Do you consider Adchemy a services or technology company?

Adchemy is a technology company with two businesses. The Adchemy Audience Management Platform is software-as-a-service technology. Adchemy Actions leverages this technology and provides performance marketing services.

What is Adchemy's target market, and how do you differentiate among the growing list of buying platform competitors?

Adchemy’s target market includes the Fortune 1000, Internet 1000, and their agency partners.

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Adchemy is the only company to offer a suite of integrated solutions in both search and display, and address functions across the entire marketing value chain—from media buy, to advertisement, to landing pages. We’re relentlessly focused on the relevance of every advertising touchpoint with consumers in digital channels. Adchemy has placed heavy emphasis on solving the “single view of your audience” problem as a software solution for advertisers. This is similar to the “single view of your customer” problem Customer Relationship Management solves. By solving the audience problem centrally, Adchemy enables highly efficient real-time bidding, conversion through dynamic banner ads, attribution and workflow applications atop the core audience layer.

There’s another major difference. Our solutions are operational platforms that continually update every marketing touchpoint in a marketer’s campaigns so that every consumer interaction with the advertiser is highly relevant—and not just relevant, which is a huge win, but optimized as well, using patented machine-learning techniques. It moves away from analytic solutions that merely present data back to the marketer with limited impact on any actual advertising being delivered.

As affirmation of this strategy, Accenture recently entered into a global channel agreement with Adchemy, and took a minority stake and seat on the company’s board.

What's your view on cross-channel attribution? Is Adchemy able to provide clients with cross-channel attribution analytics? Just digital?

Cross-channel attribution must be addressed for advertisers to determine optimal online spend. Until now, online advertising has seen a number of point solution providers solve individual steps/channels in the conversion process. Adchemy’s Audience Management Platform enables marketers to comprehensively manage digital marketing from end-to-end in both the paid search and display channels. So we are able to provide marketers with a view into multi-session, cross-channel conversion paths.

What is your view on ad exchanges? Do you think the ad exchange model has fulfilled its promise for online advertising?

We love ad exchanges; they represent a fundamental and necessary sea change in how digital media is bought and sold. We have invested heavily in integrating with the major ad exchanges today and feel excited about the level of activity in this space.

In fact, we believe all digital media should be sold through ad exchanges. We’re a far cry from that today, so, no, the ad exchange model hasn’t fulfilled its promise for online advertising, but we think it’s just a matter of time.

Are you a behavioral targeting (BT) believer? Does it work?

BT can work great for marketers. To make it really successful, they need to pay the right price for the BT signal, show the right ad experience, and send those targeted audiences to relevant landing pages. Basically, you need to take a de-averaged approach when buying BT.

A hypothetical for you... If you ran a media buying agency today, which strategies would you put in place today to affect a successful tomorrow?

I would get a seat on every major ad exchange, invest in software infrastructure to efficiently manage my ad buys, and buy all types of inventory and behaviors.

I would pay a great deal of attention to employee skills and mix. Automation is accelerating, which means fewer people doing mundane tasks in media buying and a greater percentage of time focusing on higher value-added activities, such as strategic refinement of micro-segments to meet clients’ needs. I’d look to hire quantitative skill sets to round out existing creative and relationship skill sets, but in a focused way as some quantitative roles are being replaced by technology.

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Will real-time bidding (RTB) be a game changer? If so, any guess on a timetable?

RTB is a natural extension to the ad exchange model. We think it’s an important step for the industry, and Adchemy welcomes it as a significant opportunity for full investment.

It took a few years for ad exchanges to really catch on, so I wouldn’t be surprised if it takes a couple of years before we see a significant portion of the Web’s inventory on RTB. The speed at which RTB gains traction is going to depend on data density—the depth, reach and variety of data available—in a privacy-sensitive manner. We think doing this all in a privacy-sensitive manner is the only way any advertiser should move forward, and we have some useful solutions to do that.

What will the consumer get out of all this innovation in advertising technology?

In the end, this technology delivers relevance, which is really a joint win for consumers and advertisers. The consumer will get more relevant marketing experiences. Over a period of time, advertisers will get smarter about targeting consumer segments with appropriate messages at the right time and—almost as importantly—not showing certain segments inappropriate messages at the wrong time or in the wrong context.

You may have heard Rishad Tobaccowalla speak at AdTech in San Francisco this year. He commented that there is nothing subtle or nuanced about online advertising—it’s in your face with big arrows flashing. The technology investments we’re talking about are going to allow advertisers to be nuanced in their advertising. By being relevant they’re going to achieve results, and there just won’t be the same need for some of the annoying advertising we are faced with today. This should create a cleaner, more relevant online experience for consumers in the long run.

Follow Murthy Nukala (@mnukala) and AdExchanger.com (@adexchanger) on Twitter.

December 3, 2009 – 7:04 am

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New CPM Advisors Display Advertising Buying System – CPMatic – Is Now In Beta Says CEO Leathern

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Rob Leathern is CEO of CPM Advisors.

AdExchanger.com: CPM Advisors... so I take it you believe the CPM is not dead?

RL: CPM Advisors ("CPMa") typically works with advertisers who are optimizing to a CPA or CPC metric, but realize that they cannot get volume and scale unless they can tap into CPM advertising options. We are smart about how and where to find quality inventory at fair, market-driven prices. Today, that is driven largely (but not exclusively) by the exchanges and some of the aggregators.... we want to automate the process and systematize the knowledge. CPM Advisors - as a name - seemed to capture that ethos fairly well, though we are certainly not wed to the notion of CPMs in the long-run.

The current online advertising system does all come back to a CPM and will for a while. A publisher or network has to assess any CPA or CPC deal and compare it to what they will realize on a CPM basis, and CPM is thus the "base currency" for selling space online. I do believe that the fractional-user-attention "impression-based" CPM as we know it should have been dead by now if true innovation had occurred in the online ad market over the last 5 years, but it isn't gone and won't be for quite a while: changing the way people do business always takes time. Audience- or attention-based metrics are still a ways off. How has your buying evolved in the last 12 months? What about the next 12?

As we've built out our software and systems, at the same time running billions of impressions and millions of dollars of ad campaigns for clients, we have continued to become smarter and figure out more and more ways to automate the different parts of the media buying and optimization process. For CPMa, it's an exercise in continual learning and improvement as it should be.

We will continue to build on our early success. For the next 12 months, there should also be several new exchanges that finally become commercially interesting. The more sources of good-quality inventory that become available with API interfaces the better for everyone, not just us. Display advertising is fragmented and inefficient. Since the learning curve to even the most basic display ad buying system is steep, via the economies that exist in multi-system integration CPMa will grow further as a buying option for advertisers and agencies.

Are you using your own buying platform or using a third-party? Any observations regarding who will win the "buying platform" race and why?

We have our own buying system, which is now in beta at http://www.cpmatic.com. CPMatic is a technology-based ad buying service with an interface. I think that there are/will be companies with multi-exchange buying ad servers,

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for people who want to tweak dials and levers themselves, and this is a backend component of what we have as part of our service. We provide a front-end that allows the user to set up their campaigns, upload creatives, get reporting, retargeting or conversion tracking tags and so on - and that's helping solve a lot of the campaign initiation inefficiency that exists today. Then of course, very important for us and the advertiser are the smart bits on the back end: the technology to figure out where to set up ad campaigns and how, how to achieve consistency across channels and optimizing frequency and spend across those channels.

Figuring out the differences between what can and can't be done in the various ad systems is not trivial, grabbing reporting, making changes, tracking budgets, propagating creatives and knowing how and when to do it. It's a difficult set of problems encompassing both integration and optimization. What I helped build at NexTag is quite relevant to my view on things: in creating an adserving, media management, analytics and creative management infrastructure, we were able to become a top 5 online advertiser by spend - automating as much of the display media buying and optimization process as possible to a point where the company could have statisticians looking at data to decide whether to run certain media buys. We got the optimization piece put together, but back then our 'integration' with third parties was mostly scraping reporting data from publisher adservers so we could track costs accurately, and API opportunities for buying media in an automated way make the space much more exciting now and allow a company like a CPMa to exist.

I'm not convinced it's a winner take all (or even most) market: the market is so big that there are going to be a number of players who can cater to differing marketer and agency needs, and whose techniques work and have application in different subject areas. I think the biggest race and one we all need to lend a hand in (and I applaud adexchanger's part in this) is to educate our clients and potential clients about how the marketing world is moving to a new kind of technology-driven accountability, and help move more dollars online.

Is there any value in placement anymore or is it all about finding the right audience?

There is absolutely value in the placement. Because placement is about more than a place on a page spatially, it's often also predictive about what the user is doing at the time that space is occupied by an advertisement, and what they're going to do next. Search in many ways is easier than display because there are fewer behavioral modalities involved, and much less variation in how/where the placement shows up to the user - in consequence response is easier to model and predict. So analyzing placement is hard but worthwhile, especially when you can combine it with a notion of who the viewer is and his/her interests at the time. Advertisers and agencies need as their partners the experts who can programmatically *apply* behavioral data from a variety of partners to a detailed knowledge of placements and user modalities. I count CPM Advisors among a small group of providers who are doing that and building the tools to do so.

What's your view on ad exchanges? Did your experience with Root Markets or Consorte Media help inform your opinions and strategies regarding the exchange model?

I believe in making online media, in general, and display media, in particular, easier for advertisers to try, to target and to buy in volume. Ad exchanges frequently fall prey to false comparisons with financial markets. A lot of it centers around the false notion that impressions are commodities and can be "traded" interchangeably. It's just not so (and definitely not true when it comes to leads either...). But take a look at two leading "exchanges" - Right Media and Doubleclick AdX v.1.0 . The former is a venue where there are some buying exclusively, some selling exclusively, and some entities that buy and sell from one another. It's a matchmaking service and an adserving technology with a shared cookie space that I think has opened the eyes of a lot of people to the possibilities and the perils of multi-party buying/selling, and as such must be judged a success, even if it appears it is not (in its current form) going to be the definitive central place to buy or sell most media online. Doubleclick is more of a venue for buyers to quickly buy across a larger number of (mostly) direct-publisher sellers, where Doubleclick plays the middleman and absorbs payment risk, provides liquidity and anonymity in some cases.

There are many other parallels between the Root Markets experience and ad exchanges - and funnily I spoke with some of the Right Media people on several occasions when I was at Root Markets. There are a lot of parallels between what we were trying to do in the lead generation space (unsuccessfully) to what Right Media has both succeeded and failed at in the broader online advertising market. We both wanted to create a marketplace for the

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actual buyers and sellers of leads to meet, and disintermediate some of the middlemen, but realized that to get liquidity initially we would have to work with the aggregators (leads) or ad networks (display). In both cases there weren't always incentives for the sellers with their captive salesforces to regard the exchange as anything more than an outlet of last resort to sell their unsold inventory. I think Right Media may have had the same initial vision of disintermediating some networks who don't add value (of course there are many that do add value).

Both RMX and Root made efforts to reach out to quality suppliers - we drove leads ourselves by buying media and did deals with pubs like the New York Times; Right Media created their own ad network and also started encouraging standalone advertisers, agencies and others to use their exchange, and some networks started using it as their sole platform and source of supply.

And of course the same issues come up in these environments regarding quality (that pesky commodity point again), transparency, channel conflict, and so on. But they can all be overcome with enough effort and investment. How do you make the case for brand marketers to use ad exchanges? Or, do you?

There is a lot of value for brand marketers here, although being able to reliably predict volume is still a concern - but this is improving all the time as well. You need to work with a specialist like CPM Advisors who knows where the good quality and the bad quality publishers and networks are. The shared cookie spaces and increased data available mean that things like cross-platform frequency management are possible, something novel that brands should be thinking about as they strive for the right balance of reach and frequency within their target audience. At any rate, I would make the case to pretty much all brand marketers not to try to do it themselves. And even for most agencies representing brand marketers, it is still too hard to do efficiently themselves. Where financial analogies make more sense - you wouldn't advise a retail investor to go to the NYSE to buy 100 shares of Microsoft; brokerages and others have grown up in this market as on-ramps to help the end-user get buy they need, whether that is an individual stock or a mutual fund - so firms like ours can help be the on-ramp for agencies and advertisers to these new markets.

A recent CPM Advisors blog post said, "There is so much 'untargeted' display inventory out there, much of it of dubious value, growing at a fast rate. The costs to trying out all this inventory, however, is going to be very high for advertisers or ad networks looking to benchmark it." Will real-time bidding and the ability to bid on single impressions mapped against advertiser data unlock display and overcome the "untargeted" issue?

My point here was commenting on someone's idea that as inventory expands, the price goes down and approaches zero which I don't think makes sense because impressions are not a commodity and are often of unknown value (so inventory spots with known characteristics are more valuable). Real-time bidding is still a cool idea whose specific implementation details and value is uncertain. It certainly doesn't make sense to bid on every single impression given latency, overhead and cost, but for highly desirable users there needs to be some kind of bidding/auction mechanism in place. In whatever way real-time bidding makes sense and can help advertisers, we will be doing it. But it's not the panacea to make display magically work for everyone.

Do you feel you have effective attribution models that can leverage the scale of display to drive conversions through search? What more can be done here?

CPMa's goal is to get every online marketer who is buying search to at least do some display advertising in the form of retargeting. We've created a quick self-service way for them to do it with a credit card at http://cpmatic.com that allows them to create their pixels, set up their campaign and everything without having to talk to a salesperson or fax an IO - the ROI is fantastic as you know, but volume can be low so reducing overhead is key. Attribution is an extremely complex issue, and it will remain contentious for some time to come. There is little doubt that display and search work together to create value for marketers, sometimes leading to unfair lower ROI for display media at the cost of search. But impression-based conversion is also fraught - witness past tactics by certain companies to buy lots of untargeted super-cheap display units to get view-conversion credit for large-scale campaigns. Once you add retargeting into the mix... it gets even more confusing since you could potentially have multiple display partners claiming success, but the case for search + display retargeting is an easy one for us to make.

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How do you see the ad network model evolving?

One scenario is a bifurcation probably - a smaller number of very big, either technology-driven or sales-driven networks... the smaller sales-driven ones falling away and then a large number of targeted, focused specialized networks (either vertically or some other targeted orientation). Technology and lower serving costs means more people can get into the ad network business. Whether they should, remains to be seen. In some ways, more networks could mean more friction, but it could also mean more people able to service unique advertiser needs and the agency and ad network models start to blur. There's some balance or equilibrium in there.

In your opinion, what do media agencies need to do to prepare for the increasingly automated media buying environment?

Hire developers and math PhDs and invest in technology in addition to what they are doing now, or focus on their relationships, the creative and the cross-media aspects of the puzzle and work with companies like ours who are building the platforms and technology components. But I honestly don't think anyone has the answer yet as to how to properly resource the online ad business yet and what business models are going to make sense long-term, so we would like to talk to everyone from agencies, networks, data providers to publishers about how to create real long-term value for advertisers. I'd rather talk about how we move many more dollars from less accountable media to the more accountable media world we live in, than grabbing with others for the relatively small share that is already here.

You can follow Rob Leathern (@robleathern), CPM Advisors (@cpmadvisors) and AdExchanger.com

(@adexchanger) on Twitter.

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DataXu Bringing Sophisticated Buying Strategies With Real-Time Bidding Says CEO Baker

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Mike Baker is CEO of DataXu, a demand-side, media buying platform.

Tell us about your new agreement with Havas. What does this mean for DataXu? And, even advertising as a whole?

We have enjoyed a fruitful collaboration with Havas. Their marketplace insights have helped us apply our technology to make the process of buying and optimizing online display advertising more efficient. I think the relationship is also a sign that ad agencies are starting to embrace leading technology to "game change". As digital media consumption becomes pervasive, media leaders are realizing that they need to actively re-tool their assets and competencies to compete successfully.

How did DataXu begin?

DataXu was founded to commercialize a new data-driven decision language created by several of my co-founders at MIT in support of NASA Mars Mission Planning. The decision system automatically designed 1162 viable Mars Missions by sorting through billions of different combinations of vehicles, crew plans, orbital trajectories, and technology choices. The DataXu team transported from Mars to Madison Avenue after confirming that the technology could solve a similar data-centric problem for advertisers: making real-time decisions about ad placements leveraging vast amounts of data.

What are some of the challenges you see in the advertising space today that has created an opportunity for DataXu?

Display advertising online has yet to deliver on its promise. Even while the industry grows, many advertisers aren’t really getting the ROI they seek. Publishers are bemoaning low eCPMs and low sell-through rates. Both sides are recognizing that the transaction costs in the buying and selling of media are higher than they should be. Wasn’t it ThinkEquity that noted that as much as 28% of the spend on premium advertising is pure transaction cost whereas it’s something like 2% for a mature medium like TV?

Bigger picture, agencies are striving to create greater value for their clients by more expertly gathering and leveraging data to optimize ad spend. If they can create more value, then they will better attract and retain clients and also build more profitable businesses.

So, what would you say is the top line for DataXu?

The top line is that the buyers of interactive advertising have really never had control over their data, algorithms, ROI and yield. That’s because the ad inventory supply chain has been closed. But the opening of real time bidding API’s creates new opportunities for them. DataXu’s objective is to provide the right technology platform for the buyer to implement more sophisticated, automated strategies leveraging RTB. And this is good news for

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media companies and other sellers of ad spots: if we can empower buyers to obtain a better ROI and yield management capability than is possible in other ad media, we’ll all enjoy a significant increase in spending on display. There are a lot of brands that still don’t allocate much budget to online display.

Who do you consider being in your competitive set and how do you differentiate?

We’re focused exclusively on providing buy-side technology for real-time bidding, and we have yet to see direct competitors. Many ad networks have somewhat limited tools for buyers so there is a little overlap with them, but their focus is equally weighted on media sellers and creating a marketplace; so I believe they are good partners for us. And while many marketing services firms focus exclusively on buyers’ needs, they tend to have more limited technology capabilities, so there are partner opportunities there as well.

Let’s talk about how agencies can work with DataXu. How does it work?

Large agencies that are launching their own “media trading” operation can license our technology, which we host as a service, and we will integrate it into their existing infrastructure as mutually agreed. This has the benefit of leveraging existing system investments, which might include ad serving, analytics or data warehousing. Smaller agencies, or players new to the exchange space, can purchase our technology as a turn-key service that includes everything you need to execute out of the box. The benefit here is that you can get learning and experience with exchanges and RTB, and if you think it’s strategic you can transition to a platform relationship.

How is this different from what Appnexus is doing – aren’t they built from the ground up with RTB capabilities like DataXu?

We see Appnexus as an important inventory supply partner. (They’ve done a great job pioneering the technology required to make an RTB marketplace work.) DataXu is a demand side platform designed to optimize for ad buyers. So we connect our system to multiple marketplaces, including Google, Yahoo, Appnexus and others as our buyers suggest or require.

So how where does DataXu get its data?

The data is not our data, but rather our customers’ data. And it comes principally from their past and ongoing ad campaigns. But we also ingest multiple other types of data, including search, email and site data. This is why our name is DataXu! Our core intellectual property and value add is the ability to make better targeting and valuation decisions about the data – and to do that in real time.

How is DataXu’s decision technology different from an ad network’s?

What you usually see from companies such as ad networks is that the decisioning is not done in real-time, but rather pre-cooked in a linear, batch-mode optimization. And, that’s a fine way to match ads, if you have a lot of time, the decisions are simple, and the related data is not dynamic. What we’ve found is that Internet data is increasingly dynamic, such that even something optimized six hours ago that’s loaded into production for ad matching will serve out differently now from how you intended. One bucket will be empty and one will be overflowing, because the page volume now compared to the past has a different composition, for example. And the decision-making gets super complex in RTB because you need to accurately assign differential values to each ad within 100 milliseconds!

What we’re talking about is the real-time web. The best way to understand DataXu is that we are for online advertising what Twitter is for communications — we are both building systems for the real-time web and start from the assumption that to keep up with the dynamism of the traffic requires a fundamentally different system.

In that DataXu is a data-intensive company, what’s your opinion - is there a shelf-life for data?

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Totally. I think best practices will emerge that have the industry retaining data for shorter and shorter periods of time. It’s best practice from a consumer perspective, and also from a provider perspective, because the value of the data declines over time and the grows as data accumulates.

In fact, in the early days of behavioral targeting, like when I was at Engage in 1999, the “going in” thought was that we’d collect data for years and there’d be all these wonderful patterns with a giant data warehouse. Some brands are eager to skip the hardware costs and rely on vendors who can efficiently “use and lose” the data to produce good benefit at lower cost.

What’s DataXu’s target market right now?

We have two segments right now. One is large brands and their agencies. The other is a direct response marketer who is interested in achieving the lowest cost per acquistion.

Is it expensive to work with you guys?

We’re currently not running anything below $50,000 as part of an upfront, initial commitment, and most of our initial campaigns are larger.

Is there an opportunity for the Long Tail with real-time bidding?

Yes. Absolutely. The small marketers embraced search engine marketing because it was very cost efficient and easy to buy on a performance basis. I think RTB will deliver very good efficiency but that it will take a little bit of time to make it as easy to buy as search.

How does DataXu benefit publishers?

It benefits publishers in a couple of ways - and, it’s worth noting that my last job was running a premium publishing network at Nokia. The biggest benefit to publishers is if we can get more brands spending on display. Some of the largest eCommerce brands in the world essentially spend nothing on display today. Providing those brands with an effective way to drive sales through display advertising is a multi-billion dollar opportunity. With that money in the space, sell-through goes up, eCPMs go up for publishers, and I think we can all agree this is a good thing.

Also, publishers have realized that they need a waterfall sales strategy, where the direct salesforce is going to attain the highest average eCPMs, but it’s the highest cost of goods sold. A network may be a secondary channel. The question for the publisher will be where does real-time bidding fit in, where in the waterfall? The answer is that real-time bidding can monetize unsold inventory without creating channel conflict and also do it with a very low cost of selling.

If there’s one thing well-known about DataXu is all the MIT scientists that are involved. Does this mean that you don’t need to know anything about media to provide a useful tool/system for the advertising industry?

Some of the biggest breakthroughs in industry and science are made by “outsiders.” DataXu has a team of aerospace engineers with backgrounds in real-time control systems, and we are applying some of the techniques learned from flying rockets—and course correcting them—so they’ll reach their intended targets [laughs], which is not that dissimilar from helping an ad campaign meet its goals.

Discovering fresh and new ways of solving problems is a great way to innovate. Having said that, my background is interactive advertising. Many members of the team here go back to Engage Technologies with me, where we built the first profile serving technologies.

How do you address creative in your optimization process?

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In the DataXu system, we look at three data domains: context, consumer, creative. We’re looking at parameters within each domain, such as for context for the site, the content of the page, the location on the page, time/day of week. Consumer parameters would include where they came from in their web browsing, recent behavioral interests and maybe search terms or other information that describes the consumer. And for creative we’re talking about parameters such as each creative’s concept, media format and other design elements. So, we’re incorporating and looking across all of these data dimensions to find combinations of data that are most successful for driving actions on the web. So, fully integrating creative data is key to our optimization.

What are some of the key learnings that you’re bringing to DataXu from Engage, Enpocket and Nokia?

I've learned two really important things: first, to succeed commercially young companies need to be very focused on providing a significant customer benefit; and second to succeed as investments that create value for shareholders, they need to have a scalable technology that can support profitable growth and obviate the need for armies of people manually supporting the business. It’s no secret that there are a lot of hamster wheels running in the interactive advertising business. A core investment thesis of DataXu is that the most successful media buyers of the future will need scalable, automated technology to transform their businesses.

How important is interoperability between exchanges to you?

Actually, a primary benefit of our system is providing interoperability among the exchanges. From a buyer’s perspective, the question is how do I manage one budget, one set of campaign objectives, and one set of brand-oriented profiles across multiple supply pools? We provide single source, integrated access to streamline campaign management.


September 17, 2009 – 7:30 am

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Invite Media’s Turner Discusses New Self-Service ‘Bid Manager’ for Display

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Nathaniel Turner is Co-Founder, President & COO of Invite Media.

AdExchanger.com: What is Invite Media and how did it begin?

NT: Invite has built what we call a "universal buying platform," Bid Manager. In one sentence, Bid Manager allows an agency, ad network or media buyer to automatically buy and manage display media across multiple ad exchanges through one interface. We've integrated with all the usual suspects, including Yahoo / Right Media, Google / DoubleClick, and real-time ad exchanges such as AppNexus (and more coming). I can't get into a lot of the secret sauce of what we do or how some of our customers use the platform, but we feel that Bid Manager is really pushing the envelope with how display will be traded.

Invite got its start after one of my co-founders and I worked at VideoEgg for a summer, which gave us a crash-course in digital advertising (albeit video in that circumstance). Long story short, like typical college students we thought of an idea or two that wasn't protectable passed 6 months, and then constantly morphed the idea into what it is today. Honestly though, we can't take much credit for the idea transformation, as we surrounded ourselves with some tremendous investors and advisors who believed in us and gave us a ton of their time and feedback. Without them we'd probably be pitching small local businesses on online video ads right now.

How is the beta progressing? Projected launch data? Any performance metrics you can share?

We are extremely happy with the progress of the beta. We have seen tremendous interest and traction for the platform, and are up and running with well over a dozen clients (with many more in the queue). The pace at which this industry moves is mind-boggling. To be honest, our biggest concern two years ago was how quickly the market would evolve to adopt technologies like ours; now, I would say that is the least of our concerns, probably thanks to the economy. In terms of performance metrics, we aren't disclosing any specific numbers, but I will say that we are very satisfied with the progress thus far.

Do you consider Invite Media a services business or a technology business?

We are a technology business. We are not an ad network and we are not a services-only company. We are building and providing a technology platform upon which agencies, ad networks and media buyers can build and manage their business. We, of course, provide complimentary services to assist our clients, but that is only to enable our technology. I think that is a key differentiator for Invite. We learned early on from our advisors that many digital advertising companies bill themselves as tech companies in the beginning, and then 2 years later after taking the "easy" money from advertisers and providing services, they realize "oh crap, we forgot to build tech." You also can't just one day make the switch to be a tech company, as your company's DNA is decided pretty early on. This has been a huge point for us, and we made the clear decision early on to stay the course as a tech company. I think our clients respect that about us, as trust comes from knowing that our tech platform is 100% transparent and open. We want to give them the keys to drive.

Will IM provide self-service and full-service offerings?

Our platform, Bid Manager, is entirely self-service. As I mentioned previously, we have assembled an internal team, located at our new office in NYC (and often times out of our client's offices), that assists our clients in using

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our platform. We realize that the display industry has a long way to go in terms of maturity, and most of our clients are still scaling up and learning the space, so we can't expect all of them to already have teams in place that are ready to start buying and managing display campaigns internally.

You're like.. 23 (?).. what the hell do you know about media buying?

Ha! I hope a lot, but we're always learning. One thing I will say is that we've always said internally that age can be an advantage if you use it correctly (all of the founders are either 22 or 23), and I think with media buying it's no different. There's always a point where experience matters, but being able to approach a market with a fresh perspective without bias or preconceived notions on how things work can be extremely valuable. I can't tell you how many people I've run into (and continue to run into) who are resistant to change because they have "10+ years experience in media buying." In order to learn the fundamentals early on, we really just stumbled around and did our homework for a couple of years while our parents were still paying our rent and food bills during college. Having that luxury and very few life obstacles really freed us to learn the space. More specifically, we really just threw ourselves into the fire and managed media plans for clients, which exposed us first-hand to the moving parts of campaigns, how to make things work, what the metrics are, and my favorite, the absolutely mind-boggling vocabulary of terminology you need to know.

Can the agency model survive given the rapid transformation toward digital media trading? What are key steps in your mind that agencies must make to be successful in this new, trading environment?

This is a conversation I seem to now be having every day now, which means it's on a lot of people's minds. I think that both agencies and ad networks are going to go through some major transformations in the next few years. I personally see agencies having to adopt new technologies in order to build expertise and process around smart media trading. They can't continue to outsource and give up that knowledge-building process to ad networks. I also see ad networks losing the protectability of "owning" and managing a large scale publisher base, which in order to survive will start building expertise around client service and catering to advertisers, as well as furthering campaign performance. For the ad network, this also may mean a shift to being more transparent with the agency or advertiser. And of course, both will start (or continue) to take advantage of user-level data, which may or not be proprietary to the agency or ad network in some situations. In other words, I see the line that is currently separating agencies and ad networks starting to blur.

Do I think that every agency and every ad network will die in the next two years if they don't evolve? No. I think they're all in for change, but change isn't an overnight thing. However, before we know it, some ad networks will all of a sudden start looking more and more like agencies, and vice versa. When that happens, agencies will find themselves pitching an advertiser against some of the faster-evolving ad networks, and who do you think the performance-minded advertiser is going to pick? My hunch will be the one that can deliver better results, which in a measurable world will be the one with better understanding of media trading and use of technology, among other things. That's a key point. Sure, agencies provide many services that go beyond media buying (which there will always be a place for), the largest of which may in fact be "client services," but a handful of ad networks could be successful at following. Even if advertisers still (and maybe always) look to certain agencies for creative work and "brand story telling," agencies have to begin building expertise around smarter media buying now that the playing field is becoming flatter. I've heard numerous conversations where either (a) a major agency has asserted that they plan on spending zero money with ad networks in a few years, or (b) an ad network is scared that the value-add they thought they had with agencies is being eroded, and that they need to evolve. We're talking billions of dollars at stake here.

In terms of key steps, I think agencies need to start thinking "DEM" in addition to "SEM," which will entail applying the same expertise and measurability they have with search to display. In my mind, this first involves finding the right people to champion and lead the movement internally, which will probably be individuals who understand performance and measurability (which can't be said about everyone at a traditional agency). Maybe that person used to lead or work at an ad network or comes from a performance and measurability driven world, such as search. Second, agencies have to think strongly about the technology they use and the data they have. They have to grab the reins.

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Who do you see as your key competitors?

Honestly, we're still trying to figure that one out. There are a lot of people who share the vision and the story, but very few that I know of that are taking our approach (and most importantly, have anything to show for it). There are also plenty of companies who provide the "function" at a pure client-services level, and will most certainly move in our direction in the future, but aren't offering the same thing in our client's eyes. All of these guys, however, are really educating the industry and are getting things moving in the right direction. Instead of pointing out specific competitors and where they stand in relation to us, I'll just list a few names that tend to come up in our conversations: MediaMath, DataXu, Turn, and Collective Media.

Will exchange traders be able to buy AND sell media with your trading software?

Yes. Clients can choose to "re-sell" any single impression to other bidders who operate on either our system or other third-party systems.

There is a lot of talk about better analytics and attribution capabilities for online advertising. Are you satisfied with ROI metrics that you're tracking? What needs to be changed? I think the industry has a long way to go in terms of ROI metrics. So many parts of display aren't measurable the way advertisers and agencies would like them to be. Many traditional ad networks have been feasting on this lack of measurability for years, and will probably continue to do so for years to come. The inefficiency in the market due to this lack of complete knowledge is pretty astonishing. Attribution on things such as a post-view conversions, impact of display campaigns beyond direct response, and the cross-pollination affects on other online efforts driven by display are all parts of the industry that need maturity on how they're being tracked, measured, and attributed.

How does the online ad exchange model shift to a premium AND remnant inventory model from remnant-only?

It's a good question. I think companies like AppNexus (with their AdNexus exchange) will really be at the forefront of this model shift, and are making a ton of progress. New technologies like these will be required that successfully "work" with existing publisher ad servers (ex. DFP) and get the publisher comfortable with having all of their inventory (i.e., not just un-sold / remnant) available for auction. What this means is that the publisher needs to believe that if someone is willing to pay more than one of their internal campaigns for a premium impression, that it's worth it across the board. Not every premium publisher cares solely about that one dollar they get for 1,000 impressions like they do for unsold. They also care about things such as the signals they put out for the other 100mm impressions that they sell internally each month. Again, I believe that the reason we really haven't seen this to date has been because the publishers just aren't comfortable. A unified platform has to support concepts such as allowing the publisher to selectively approve or reject individual creative's and advertisers (i.e., competitive exclusions), to allow their inventory to be visible as part of a broader "bucket" of inventory with a site list and not be 100% transparent on every impression, etc…

How will Invite Media evolve in the next 12-18 months? Come back and ask me that in 12-18 months Follow Nat Turner @natsturner, Invite Media @invitemedia and AdExchanger.com (@adexchanger.com) on Twitter.

April 20, 2009 – 7:51 am

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MediaMath Riding Wave of ROI Accountability Says CEO Zawadzki

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Joe Zawadzki is CEO of MediaMath, a media trading solutions provider. AdExchanger.com: When "last we left" MediaMath, the New York Times had just featured you. What's been happening over the past 9 months? Any updates you can share about traction, product line, etc.?

JZ: We've been fortunate to continue our two-year consistent growth trajectory, despite the broader economic challenges in the market. In fact, the greater focus on ROI accountability in today's market has actually accelerated the adoption of our platform (a trend we didn't call when we started the company). As a profitable firm, we've been able to "lean in" to this opportunity while others have pulled back, building out an already great team of smart, passionate, and nice folks (a rare combination, imho!).

In Q1 of this year we released our SaaS media trading platform that allows our agency clients to opt for either the turnkey results of our managed service offering, or a self-service and whitelabelled offering giving them the tools, technology, and training to do media trading in-house, informed by the MediaMath lessons learned from the monthly execution of millions of dollars in spend and billions of impressions bought.

It's been really fun, although it takes until Sunday morning for the kids to warm up to dad again.

Any insights you can share in online display advertising such as overall eCPMs, CTRs, category trends, etc.?

We're excited to see more publishers embracing "biddable media" (we don't view the spot market as remnant!). While the tier one / direct-sold market was booming, senior management at publishers were rather rationally focusing on their "premium" sales efforts. Over the past couple of quarters we're seeing more and more high-quality inventory coming onto exchanges, as publishers focus on making more from their unsold-in-the-futures-market supply than they have been able to traditionally command.

We're focusing on making sure publishers don't regret it by bringing high-quality, Fortune 500 advertisers into the spot market. A healthy spot market paying fair value on an eCPM basis for good audiences on good publishers, benefits the entire ecosystem and encourages more supply and demand to enter the system.

Is Media Math a services business or a technology business?

Proudly both. This market is a ridiculously dynamic one: over a dozen exchange entities ranging in sophistication from impression-level bidding to fairly manual UI processes, all focused on growing supply; third-party data sources that are transforming media properties into information marketplaces and blurring the line between media and audience; agencies, media companies, networks, publishers, and advertisers all trying to figure out their place in this new ecosystem.

To innovate in this market requires having both the right tools and the expert practitioners that know how to design and use them. To us that meant building a platform that could integrate with all exchanges, provide turnkey campaign setup for our clients, deliver best-in-class optimization, and provide campaign reporting and insights. But when we started two years ago, there were no practitioners around to use and refine that platform. So we did it

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ourselves. It's hard to imagine building a media trading platform without actually getting our hands dirty using all the existing exchanges, ad serving technologies, and analytics platforms on behalf of real life client goals and constraints.

For the past two years, our managed service team has been responsible for delivering results, over hundreds of campaigns and tens of millions in media spend. That makes our solution "real world" and cuts through the vapour out there. In parallel, our SaaS development team distills this learning into the shared technology that enables both our internal traders and our agency clients to succeed.

It turns out the dual service-and-technology model fits well with the two types of agency needs we see. Some are looking for us to solve this problem, now, i.e., generate immediate client returns, provide insights and visibility, and work within my existing business model. Others are asking to "provide me a platform" that will allow me to build out an internal media trading discipline they are looking for a technology solution. In many cases, we see agencies starting out as the former and migrating to the latter.

You call yourselves 'digital trading experts'. Can you give us an example of what a typical MediaMath engagement might be like?

Well, the definition of typical is changing. Twelve months ago, we were working "bottom up" focused on proving the performance across brand and direct response with hard and soft objectives, insights, and power of MediaMath's technology atop biddable display through a high profile advertiser or two within our agency's client roster, and then scaling horizontally within the agency.

Of late, we've become more "top down" -- prospective agencies know we can produce results and the discussion is more about "how do I structure this within the agency or holding company to roll-out aggressively across my enterprise?"

Frankly, we've learned a lot from our agency partners as well! We've seen a tremendous amount of smart thinking and entrepreneurialism from our clients, and the product set has grown to meet their evolving needs.

Can the agency model survive given the rapid transformation toward digital media trading? What are key steps in your mind that agencies must make to be successful in this new, trading environment?

Absolutely and without question. Rumors of the agency demise have been greatly exaggerated: the agency model is on the brink of resurgence.

Marketing is becoming more complicated, not less. Digital is becoming a bigger percentage of the total, not smaller. Channels are integrating, not growing more siloed. The consumer is getting smarter, not dumber. Metrics are getting deeper, not shallower.

Marketers can't quarterback a coherent program spanning all of this complexity on their own. An agency - the transformed, modern agency, well-versed in technology and analytics - is needed to orchestrate this dynamic landscape, pulling together the best tools and the best practices to achieve success for their clients, under incentive models making them partners in that success.

As to how to succeed? Find a trusted partner to provide the technical and quantitative DNA, who understands and believes in the agency model and can "get the flywheel spinning". It gets easier with some success. Perhaps obviously, we think agencies are better served by working with a best-in-class and extensible solution instead of trying to assemble a hodgepodge of tools and providers.

Will Media Math ever trade its own book?

I'm not totally sure what this means. We happily bear performance and payment risk for our partners, because we're confident in what we do, as well as supporting those who prefer to handle both themselves. Our singular

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focus is delivering superior results for our agency clients, whether through our SaaS solution or our managed service.

Does Media Math help facilitate the selling of display advertising media back to the exchange? Or is it just facilitating media buying at this point?

We are buyers only. We think selling media creates a conflict of interest that would put us at odds with our clients. The question of: should this impression get sold to our client at $1.00 CPM when it clearly performs for them, or should we sell it to the exchange at $1.20 CPM so we can profit, creates divided loyalties. We don't want to deal with that, and thus, we only buy. This said, more and higher quality demand in an auction model helps media suppliers, so we view the relationship as "symbiotic". Analytics creates value the game is not zero sum.

Of the ad networks and exchanges out there today, who's getting it right? That's a tricky question. Everyone seems to have standardized on the right vision at this point: real-time impression-level bidding, prices driven by fair market supply & demand, easy access to third-party data sources, open access to APIs and support for "bring-your-own-algorithm," preference to overlap versus underlap when resolving sales conflict, integration of premium and remnant, guaranteed and spot. Where people are on that roadmap, of course, varies. Some have chosen to emphasize certain parts of that vision over others, but most agree on the horizon and acknowledge, and the need to get there sooner rather than later.

What's Mathtag.com?

It's our proprietary pixel-serving technology that allows us to normalize information across supply sources, append third-party data, manage attribution and metrics, and build bid models based on our clients end-advertiser goals. Agencies tend to have standardized on DART or Atlas, and we focus on streamlining their workflow, not disrupting it.

Is there room for brand advertising with performance display advertising, or is PDA strictly about direct response?

Definitely both. Exchanges are about providing sources of biddable media where prices are driven by supply and demand, and where data, media, and audiences can be bought and sold programatically and algorithmically. Whether the goal is brand impact, engagement, direct response, etc., doesn't matter -- all types of goals can be, and are, supported. Considering exchanges "remnant" or "direct response" is hugely limiting.

Put another way, all marketing should be "performance based" just with a broad definition of the goals that include brand (that traditionally are viewed as unmeasurable) and direct response metrics. Yes, even brand marketers have goals, whether they be cost-per-audience member reached, brand awareness, net promoter score, or what have you and the tools exist to measure these. Simply replace "CPA" with these goals, and the entire power of this medium cost-efficiency, targeting & optimization, transparency, scalability, etc. are all brought to bear on brand marketing. This really needs a whitepaper or a book to answer well. Short answer: yes.

There is a lot of talk about better analytics and attribution capabilities for online advertising. Are you satisfied with ROI metrics that you're tracking? What needs to be changed?

MediaMath's systems support a whole range of upper funnel brand metrics and post-transaction "downstream" metrics. Our technology lets us develop real-time bid models against billions of impressions per day against all of these metrics today, while continuing to aggressively support more traditional online metrics like CPM-against-target, CPC, CPA (thank you page).

As the company's name suggests, we're metrics pioneers but we look to avoid the proverbial arrows by tempering zeal with an acknowledgement of market readiness for metrics broader than reach and deeper than CPA. Our goal

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is to make available the tools for agencies to help their clients clearly define, report on, and action against more sophisticated measures of return, with systems built to handle them, without requiring the adoption of same.

How does the online ad exchange model shift to a premium AND remnant inventory model?

Power buyers - like a MediaMath - move upmarket to create a "premium spot" market with deep, quality supply relationships, pricing above remnant, explicit avoidance of channel conflict, and quality advertisers.

The beauty of the free marketplace is that the cream rises to the top. We firmly believe that top publishers who have distinctive content, valuable audiences, and aggressively innovate can garner higher prices for their inventory in a premium spot market than the blended economics of direct sales.

How will Media Math evolve in the next 12-18 months?

Take advantage of our two-year lead in this market. Go from being a successful first-mover in media trading with a stellar client roster to the industry standard solution for top-tier agencies. Despite the allure of profitability and a track record of successful organic growth, we've elected to bring in a financial backer to provide the substantial capital base and expertise to help us extend our lead rather than just maintain it.

We hope the adexchanger audience helps us succeed! We strongly believe that a healthy ecosystem helps our partners on both the buy side and sell side win. We're very excited about being participants in the new world that the adexchanger is chronicling and increasingly helping to define.


April 27, 2009 – 8:06 am

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Permuto Bringing All-Inclusive Ad Platform Says CEO Shamim

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Shaukat Shamim is CEO & Co-Founder of Permuto.

AdExchanger.com: Where did the idea for Permuto come from? And how about the name - what's the story there?

SS: We are a company comprised of online advertising junkies, all of the founders been involved in online advertising from the formation days of Internet. We had our hands on building ad servers and other core technologies that eventually became backends of Yahoo! and DoubleClick. Naturally, we looked at online display advertising and we saw large inefficiencies.

Everyone knows that "search" has revolutionized online advertising. When we dug into search, we made a surprising discovery where a large majority of the top 100 advertisers of search are ecommerce shopping, travel and auto retailers. That was a light bulb moment. We decided to build a company that will make display advertising "effective", as effective as search, and to be very much focused on bringing search-style economics in display advertising.

Permuto means "Total transformation" in Latin. During the early days, as we were scrambling for a name with deep correlation with our business, Navdeep Saini, our CTO, pointed out the name, and lucky us, it was available.

What's your view on ad exchanges? And how will they play a part of Permuto's plans?

We work with a number of ad exchanges, and we will continue to do so. Ad Exchanges enable us to get access to a large number of users quickly. Our plan is to continue to work with ad exchanges and even expand that coverage.

Do you do a rev share with publishers? Any plans to buy and/or resell user cookies from publishers?

We work with publishers on a variety of financial models – revenue share, media purchases, etc. Because we want to make it as easy as possible for publishers to work with us, we have experimented with different compensation structures.

No, we do not plan to sell any data that we collect to anyone else. Our purpose in collecting anonymous data is solely to serve ads to shoppers. Period.

On the advertiser side for Permuto, how is data important for targeting? What data sets do you use? Data is very important to us. The better the data about consumer shopping habits, the better our advertisements can be and the more value we bring to consumers. We have found that the more granular and specific we can get

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about a user’s purchase intent, the better opportunity we have of featuring a relevant ad. We use a variety of data sets, some from third parties, some from our own network and all collected in a privacy friendly way without any Personally Identifiable Information (Non-PII).

What is ShopperConnect?

ShopperConnect is the name of our offering. It is an all-inclusive advertising platform and network that integrates shopping data, dynamically-optimized creative, media buying, backend reporting and ROI calculation – all in one solution.

We have three products lines:

• ShopperConnect Engage - a first-of-its-kind solution that helps merchants acquire and connect with new customers that they have never seen. Participation is almost that of SEM, the platform lets retailers target shoppers who are in market for shopping for particular product and then automatically generating thousands of dynamic ad campaigns based on their product catalog and shoppers’ specific interest.

• ShopperConnect ReEngage - Serves personalized, product-level dynamic ads to customers who were shopping on a merchant’s site, but left before the transaction was completed.

• ShopperConnect Reach - Delivers brand marketers a high-quality, brand-safe and carefully selected network of themed shopping-oriented websites to reach ActiveShoppers. The network includes online retailers, comparison-shopping engines, review sites, sale & bargain sites, and product-oriented blogs.

Beyond the tag line, how is Permuto "Reinventing Online Display Advertising" as you say on your website? As most of us know, the graphical advertising market hit a big bump in the road in 2008. From Q4 of 2007 to Q4 of 2008, the average price of remnant inventory for all sites declined from an eCPM of $0.50 to $0.26. That is a decline of almost 50%! In one year! There are several factors for this decline – the recession, an increase in supply of pages – but the essential reason is the same: display advertising does not work. That is, to say, it is not as effective as, say, search in driving direct return on ad spend. We are looking to correct that.

To do this, we have created a system that does two things: (i) serves ads only to users who are interested in the content of the ad and (ii) makes it easy for advertisers to buy. To accomplish the first, we identify users by their purchase intent and serve an ad that matches that intent. To accomplish the second, we have a platform that:

1. Eliminates the need for a merchant to spend time and effort making ad creative; 2. Eliminates the risk to merchants that their ads will not provide new leads; and 3. Monitors performance of our ads to ensure that our network is delivering good quality leads to merchants.

Imagine the influx of thousands of new merchants into the advertising pool – paying for, and getting performance from, display ads in the same way that they are paying for search. That is revolutionary!

Where's the sweet spot in terms of your target market?

Our target market is really any merchant selling product online. Because we are focused on the online shopping space, we do not currently work in any other verticals (i.e., travel or real estate). As for the shopping space itself, we welcome almost any merchant. While we would love to work with any product, we have found that there is a minimum CPC below which we cannot make the payouts work for most publishers. As a result, we do not usually feature the very low CPC products, like books. Otherwise, anyone selling products online is squarely within our purview.

Where does optimization fit in with Permuto's products? Optimization is core to what we do. In fact, without it, we will not survive. Because in our model we take on the risk that the ads we feature will click and ultimately convert into sales, our ads must work. As a result, we are

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constantly optimizing the performance, based on a variety of factors: product, ad creative, publisher, comparison product, size of brand, color, font – you name it.

Will real-time bidding (RTB) impact Permuto's display advertising product?

Yes. We believe that over time real-time bidding will eventually make our whole model even more efficient.

Will agency buying platforms provide an opportunity for to Permuto?

We certainly hope so. Anything that makes it easier for advertisers to purchase from us is certainly welcome by us.

How does your experience at Rhythm NewMedia, a firm that specializes in individually targeted mobile ads, inform the development of Permuto? At the time I founded Rhythm NewMedia, I was very intrigued by the lack of monetization and efficiencies in the mobile industry. But we had to take on multiple tasks of educating the market, creating forward-looking services and selling to brands only.

That experience played a big part in founding Permuto as we got an early conviction that an open performance-based marketplace is the big opportunity to have.

Follow Shaukut Shamim @sshamim, Permuto (@permuto) and AdExchanger.com (@adexchanger) on Twitter.

October 14, 2009 – 6:06 am

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Triggit’s Self-Serve Technology Platform Leveraging RTB Says CEO Coelius

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Zach Coelius is CEO of Triggit, an online advertising technology company.

AdExchanger.com: So what is Triggit - and where'd the name come from? Are you a buying platform? A media buying services company?

ZC: Triggit provides Real Time Bidding (RTB) technology and services to innovative marketers and their advertising agencies. Specifically, Triggit’s technology individually prices and bids for billions of impressions daily on the real time display exchanges. Triggit’s media partners include such companies as Google, OpenX, Admeld, Pubmatic, Adnexus and more.

At Triggit, marketers use our technologies to allocate their media budgets on the real-time bidding enabled media exchanges. In this process we provide our clients a range of offerings to meet their needs. For sophisticated agencies, ad networks and large ad buyers, Triggit’s self-serve technology platform enables them to leverage their own data, insights and media buying expertise in the exchange buying process. Others want a more hands off approach to their media spend, and for those clients Triggit’s account managers take complete ownership of the campaigns and provide full media buying services as well as technology to achieve unprecedented ROI.

As far as our name goes, Triggit is Scottish for "playful," and more importantly "URL" for not taken. We picked it a long time ago for a very different business model and have never found a reason to change it. It also happens to be pretty memorable. We like it.

How do you differentiate from other buying platforms in the space?

Triggit has been building RTB technology since the space first went live with Adnexus and Pubmatic in December of 2008. The technology stack required for individually pricing and bidding on billions of impressions a day is very challenging and different then anything the ad industry has done before. RTB is all we do, and we have gotten very good at it. For instance not only can we take any advertiser’s or third-party's cookie set and target against it on Google and other exchanges, we can vary the price we pay for each matching placement according to its expected value. We have found that the ability to value and bid on each impression individually, and to do a multi-variate calculation on all the valid data points, results in a significantly more efficient and effective media pricing process. At the end of the day, it is all about results and we stand behind our ability to deliver for any marketer.

Are you buying from Google's DoubleClick Ad Exchange? Any early results you can share?

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Yes. We have been live with RTB on the Google exchange since September. We were really lucky that the technology we built for bidding on Adnexus and Pubmatic was architected in such a way that it was pretty easy for us to integrate Google’s AdX. We are starting to see huge scale now, over 2 million bid requests per minute and growing amazingly fast. Google has built an excellent system and deserves a lot of credit for validating RTB as the standard for the next generation of media buying. We buy across the Google Content Network (GCN) as well as the Ad Exchange and are excited about how quickly Google is exposing more and more GCN content.

Do you think impression-level real-time bidding is a proverbial game changer? Why?

We have seen results from hundreds of campaigns that show impression level bidding with good data behind it results in an exponential increase in ROI. It is basically cherry picking the best impressions for our clients at a huge scale. When we no longer have to buy a million, poorly-targeted impressions just hoping to reach a few of the right users, we can be far more efficient with our client’s media dollars. Essentially, per impression bidding enables us to de-average the price we pay for each ad and have that price more accurately reflect the expected value. In an ecosystem where other bidders on the exchanges still use rules-based line items, with average prices like you see on Right Media, we are able to buy good impressions at lower prices.

On Triggit.com it says that you offer "Fully Transparent Analytics" - what does that mean?

Because proper real-time bidding involves the passing of a transparent URL as well as a user ID, it allows us to share with our clients full site information before and after a campaign. For instance, before a campaign begins we provide our clients with a site list of all the domains we see across the exchanges. The client can then use that list to target specific sites for their campaigns. This pre-campaign transparency allows the client to very carefully manage the content adjacency of their advertisements and to ensure that they are not being run anywhere they don’t like. Once the campaign is live we provide the client with a login that enables them to monitor where every impression, click and conversion is recorded on a fully transparent site-level basis. This transparency is very important for our clients and we feel it is one of the most important innovations that the real-time exchanges have provided.

What are your future plans for Triggit? Perhaps you could start with telling us how many employees you have today and your hiring plans? Will you need more funding to grow the way you want to?

Triggit currently has ten employees and is growing like crazy. We are having a lot of fun and are looking forward to 2010, which we think will be a great year on the exchanges for DSPs.

How important is effective creative in your campaigns? How do you work with clients on creative? Creative is tremendously important. We work closely with the clients to build libraries of creative that we can optimize for the campaigns. One of the more interesting capabilities of real-time bidding is to use the data that we have about the users and their intent to serve highly targeted creative. For instance, when a user completes a search on a travel site for a flight to New York, we can immediately target the user with creative for New York hotels, tourist attractions and maybe even a helicopter flight into Manhattan.

Is there going to be one winner in the buying platform race? No. This is the sort of market where there will be a number of companies that develop robust DSP capabilities. Because clients have very different needs there will be DSPs that emerge and develop different specialties for different parts of the market.

How do agencies need adjust their model to keep up with innovation in the digital space in your opinion? I don’t think there are many people who dispute the fact that media buying is going to become a highly automated data and algorithm driven process going forward. In that sort of world agencies can make a choice. They can either bite the bullet and learn how to build, manage and innovate with technology or they can become dependent on vendors. If they want to retain the important role they play in the media buying process they will have to learn how to start adding value on the technology side. If instead they want to remain focused on their current competencies, they can give up their media buying arms and outsource that function to the next generation of technology-driven companies.

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Follow Zach Coelius (@zcoelius), Triggit (@triggit) and AdExchanger.com (@adexchanger) on Twitter.

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Turn GM Philip Smolin Discusses Exchange Trading Desk And Turn Network

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Philip Smolin, General Manager, Platform Solutions at Turn discusses yesterday's announcement regarding their new, white-label buying

platform solutions.

AdExchanger.com: How do you differentiate with other solutions in the marketplace such as MediaMath and Invite Media?

PS: Turn is best-in-class for custom audience targeting, optimization and analytics. A number of vendors are providing basic exchange management solutions, and certainly Turn's platform provides all of the core features you would expect: a unified dashboard for managing all ad exchanges and yield managers, centralized retargeting and behavioral buys, universal frequency caps, transparent reporting, etc. But where Turn really excels is in the ability to help media buyers go beyond traditional retargeting and behavioral targeting to actually discover and convert entirely NEW audience segments they haven't previously reached.

Some of the differentiated technologies driving Turn's platform include real-time behavioral data assimilation and modeling; predictive bid optimization that blends user, site and page context information; and direct, real-time bidded (RTB) exchange integration. The end result is an extremely powerful audience targeting and optimization platform that is still surprisingly easy for the media buyer to use. The final component is an advanced analytics system that goes beyond basic performance reporting to include deep demographic and behavioral insights.

For media buyers who want to drive the system themselves, the platform is available on a self-service basis. For others who want all the benefits of exchange management but without the overhead, Turn also provides a full service solution. Our highly experienced professional services organization provides full lifecycle campaign management and consulting, ensuring the agency a seamless and successful deployment.

Please discuss how you will manage the appearance of a conflict of interest between the ongoing management of your own network while offering a white label version of your network's buying platform?

Actually, full transparency ensures there's no conflict of interest and in fact the two services are extremely complementary. When an agency uses the Exchange Trading Desk, Turn Network is an optional ad inventory source just like any other RTB-based inventory source. If the agency chooses to deploy the campaign to Turn Network along with all of the other sources, the platform automatically optimizes budget allocation based on performance. This means that if Turn Network is performing better on an eCPA basis, additional budget will be allocated to it. But if Turn Network is performing worse, then budget will be taken away and re-allocated to the better performing sources. Because performance data and budget optimization is fully transparent, the media buyer can see and manage what is going on at all times.

What makes the Turn Network so complementary to the Exchange Trading Desk is the incremental reach it provides. The simple fact is that not all publishers use exchanges, and many publishers place only a portion of their inventory on exchanges. Frequently, Turn Network is able to provide access to inventory that would otherwise

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be unavailable via an exchange. The end result is access to increased reach and frequency, which ultimately can have a huge impact on campaign success.

When will the Private Network and the Exchange Trading Desk model be available?

Both products have been in closed beta for some time with major agencies and are now available in market.

It would seem the Private Network option will appeal to agencies in that they'll want to source their own inventory beyond Turn's options. Agree? Or do you think you have scalable audience available through inventory that Turn can currently access?

The Exchange Trading Desk is designed to centralize and optimize buying across all auction-based inventory sources. Turn Network is just one of the many optional RTB inventory sources the Trading Desk platform optimizes across. Larger agencies with multiple advertisers and campaigns will absolutely continue to source their own inventory, and they can use the Private Network to expand optimization beyond the exchanges to include their direct publisher and ad network buys. It really is a great strategy, because the more campaigns the agency can consolidate, the greater their buying power. This enables agencies to make bulk inventory purchases and have the Private Network platform optimize the use of the impressions across all of the available campaigns. We've already seen this model in use and its driving amazing performance results.


July 24, 2009 – 6:17 am

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[x+1] CEO Nardone Says Predictive Algorithms More Relevant Than Ever With Real-Time Bidding

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John Nardone is CEO of [x+1], an online buying platform and data company.

AdExchanger.com: What trends is [x+1] seeing from its clients in 2009? Can you describe momentum for [x+1] this year? Revenues, deal size, vertical strengths, product interests, etc.?

JN: [x+1] has been extremely fortunate in 2009 to see its client list, revenue and average deal size all grow quarter on quarter from 2008. After the first quarter, we announced 81% year over year growth. We’ll be in the same ballpark for Q2.

Results have been based on the strong performance and critical insights we’ve been able to deliver to clients. The insights pay major dividends in terms of client retention and our ability to win additional share of budget. As our clients respond to the global economic recession, we’re seeing them move more money online and specifically into accountable, performance based campaigns. This has been great for us and our outlook for the remainder of 2009 looks very strong.

What third-party platform and data providers is [x+1] using today and why? What is the ultimate goal as you aggregate partners?

Our core platform is entirely our own. We have our own optimization engine…we don’t rely on yield manager. We have our own data centers and distribution network…we don’t rely on AppNexus. We have our own decision and ad server infrastructure. And we’ve built this platform to be open and extensible. This allows us to work with any ad server on the market as well as any of the myriad data providers in the industry.

The fact that our optimization engine (POE) can accept any kind of data is particularly central to our strategy. It seems like there are new data providers launching weekly and we’re committed to helping our agency and advertiser clients test and utilize these new data sources. Importantly, we have no designs on being a data broker. We are simply enabling as many data providers as we can on the platform so that our clients have choices for the data they can use.

To this end, We’ve also done a ton of work to ensure that we can leverage the data transfers and APIs that the major ad servers have published. We’re aware that our clients have invested both time and money to integrate these technologies into their process and workflow and feel that it is critical to be able to integrate with them as seamlessly as possible.

How has [x+1] evolved in the past few years? And, how have shifts in the marketplace affected [x+1] strategy?

Originally [x+1] (formerly Poindexter Systems) was focused on optimizing external media campaigns. Unfortunately, in early 2000 the market wasn’t ready for our audience-centric optimization because media buyers purchased content sites as a proxy for audience targeting and there was no mechanism to only purchase impressions for individual audiences. In a sense, we couldn’t drive the improvements we knew were possible

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because context and audience could not easily be separated. We adapted our solution for website and landing page optimization where targeting and optimizing message delivery to specific audiences could be shown to have a huge impact on results.

In 2008 we returned to external media optimization in a major way, utilizing the infrastructure and decisioning engine that we had built and perfected over the years. We started purchasing inventory through networks and exchanges as a means of executing our predictive targeting. We are now expanding our media solution to tap into other media channels and are preparing to offer it to agencies and advertisers as a self-service platform.

In a sense the recent changes in the media market have allowed us to really unlock the power of POETM, our Predictive Optimization Engine. Not only has it always been the center of our company, it is also the only proven engine in the marketplace.

Are you seeing more brand or DR marketers who are interested in your products? Where do you see this going?

Direct response marketers have been our primary customers but we are absolutely committed to expanding our products to support brand marketers. We recently launched a couple of new products aimed at the needs of brand marketers: total campaign reach and frequency analysis and pre-campaign audience modeling, which are both getting a lot of interest. The ability to do brand-based analysis in terms of reach and frequency and audience profiling of both exchange and non-exchange buys is very appealing to brand marketers who are used to managing delivery metrics. In addition, we are working on a portfolio management product so that brand marketers like Kraft and P&G can buy online media “up front” and intelligently decision which brands within their portfolio’s get the impressions that are best for each. We should have this live by the end of the year.

We are also seeing more dollars that are neither pure DR nor pure brand, but are hybrids. I think this is a reflection of an overall trend for accountability. Even brand campaigns are using objective measures, and the most enlightened clients are using multiple metrics as barometers of brand effectiveness. The car companies do this extremely well.

What is your view on ad exchanges? Benefits? Any traps?

We believe that we’re in the infancy of something that is going to become very, very important to the media ecosystem. The ad exchanges will become a platform that carries a significant portion of overall display spend. That said, I don’t think direct publisher buys are in any danger of going away. Rather, smart planners will use targeting tools and analytics to combine and optimize an overall plan of which exchanges are an important part.

The biggest trap that I’m warning clients about is solving for the problems of today instead of planning for and solving the problems we’re going to see in the future. I use the Wayne Gretzky analogy with my clients all the time: Stop trying to optimize to the state of business today. Watch where the puck is going and make sure you are planning for where it is going to be a year or two from now. Our business is in a period of very rapid innovation. The current state will be very short lived.

On a more tactical level, we’re seeing the usual traps associated with the exchanges, such as privacy, inappropriate content and sales channel conflict that need to be addressed. That being said, we believe that technology, smart policies and process improvements will ultimately address these shortcomings.

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Is there a perfect model for online attribution and can it be achieved?

No, there is no perfect model for online attribution. That being said, we work with a lot of direct marketers and in many cases we get visibility on their display media, search and website sites and we know that the current, prevailing last click / last impression attribution methodology needs to be improved ASAP.

We provide our clients with tools for understanding the interaction of online channels and are beginning to help them figure out a more accurate attribution methodology. We do that for clients today because we have a very strong competency in analytics overall, including regression and mix based analytics.

But there is no perfect answer. We believe there is likely to be a different model for every client we work with.

Is RTB (real-time bidding) and demand-side optimization an important development? How will [x+1] respond to this new feature of the exchange model? In that it's based on a just-in-time/spot market, are predictive algorithms relevant?

Yes, RTB is an extremely important development.

Predictive algorithms are more relevant than ever with real-time bidding and demand-side optimization. In fact it’s the only way to go. If you don’t have a predictive algorithm in the new real-time bidding environment, how are you going to do things like optimal bid pricing and delivery forecasting? You can’t have media buyers eyeballing this kind analysis if you hope to drive the best results.

For us the term ‘predictive modeling’ is all about understanding whom is likely to convert. In the real-time bidding environment you’re trying to answer the question ‘What impressions should I buy and how much should I be willing to pay for them?’ and you can’t really answer these questions without predictive models.

If you were a publisher, how would you be preparing to take advantage of the increasingly data-driven world of online media?

We believe that publishers need to embrace the fact that they are not only content creators but also data providers. Publishers need to realize that they have a wealth of data inside their own house and they need to make sense of that if they’re ever going to get the maximum value for their audience.

Representing the interests of the advertisers, I’d like to see publishers be more creative with the custom packages that they make available to advertisers, both in terms of creative format as well as how they bundle audiences. For example, Yahoo’s search retargeting product is very powerful and effective. An example of a custom media package we’d like to see is session-based placement. A lot of premium publishers could totally change the game for themselves by selling the first 3-5 pages of a consumer’s session, so there is an opportunity to tell story as the user moves through content. We’re hearing from our clients that they would like access to these types of programs.

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It would seem that predictive targeting would have some application to the publisher side - perhaps predictive yield? Does [x+1] have any aspirations on the publisher side?

Great question. We get asked by publishers all the time to use our algorithms for yield optimization and the answer we give is no. We are 100% focused on the buy side so we avoid any potential sell side conflict of interests and our clients can have a greater degree of confidence that we’re going to get them the best results.

A general question for you: What will media buying agencies need to do to remain relevant in the future?

Media buying agencies need to realize that how they buy their target audience is changing. Media buyers need to learn and adapt classic direct marketing competencies and integrate them into their view of what media buying online is all about. That starts with buying audiences rather than buying placement. That also means that they need to acquire a new technology platforms that allow them to manipulate and enable audience data in a way that they never had to think about before. We’ve been speaking to a ton of media buying agencies and feel that they’re really starting to get it and focusing on acquiring these new skills and technologies which is great.

Follow [x+1] (@xplusone) and AdExchanger.com (@adexchanger) on Twitter.

June 29, 2009 – 7:55 am

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X+1’s Korner On Emerging CPG Display Ad Channel

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Toby Korner is VP, Account Management at [x+1], which released a new CPG-focused product today (Release here. More here from AdWeek.)

AdExchanger.com: Why offer a CPG product? Curious your thoughts on product development for this as I assume you see identified CPG as low-hanging fruit for a reason - perhaps for brand dollars?

TK: You could say low hanging fruit for brand dollars, but also to allow the CPG players to have the same type of online presence as Ecommerce and direct marketers have enjoyed for years, even in the performance space. The ability to target based on actual purchase behavior and online behavior across the entire Internet as well as accurate measurement on the back end is a major gap that we are filling in the industry.

Talk about the tracking of offline purchases in CPG Connect. This would appear to be entirely dependent on what the client can offer to you - ideally it should be in real-time for optimization purposes, no? Is your product dependent on real-time offline transaction feedback?

The media is tightly integrated with IRI's consumer panel data. We have anonymously matched our online data to their panel and in-store purchases. We work closely with IRI to define the consumer segment that the CPG advertiser wants to target, then integrate that with our own and 3rd party data to accurately and efficiently target consumers that look like the target audience. Post campaign, we measure the in-store impact of the exposed panelists vs. non-exposed panelists based on actual sales. In short, the client does not provide the sales impact, we bring it to the client through our integration with the panel.

December 2, 2009 – 11:15 am

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