The TruEffect Blog

Ad targeting regulations and media spending

eMarketer released a survey of US marketers reporting that their online spending habits will remain relatively unfazed by restrictive regulations about audience data. In fact, the survey analysis goes on to predict that such regulations could actually boost online ad spending by demystifying privacy concerns. The problem with this survey data, is it doesn't take into account that the landscape of vendors with whom the advertisers might spend this budget, or the services they might offer, could potentially change – a lot.

Being ahead of your time has it's pitfalls. One of our biggest hurdles here at TruEffect in recent years has been educating advertisers and agencies on the concept behind our technology, relationship advertising, and how it works.

US: What if you could dramatically improve the performance of your online display campaigns by using what you already know about your customers, but in a privacy centric manner that doesn't allow your customer data into the hands of third parties?

THEM: My customer data is in the hands of third parties?

Those of us in the online ad technology industry know how click stream, site analytics, shopping cart, and other data makes it's way into third party usage. We know how it is compiled and aggregated to retarget. We're data geeks. We also understand how it can be used on the advertisers' behalf, but also benefits competitors. Besides being chased around by shoes, you might, for instance, visit Sprint, and then be chased around by AT&T banners. A lot of wasted impressions follow us around in the name of retargetting, often inferring information that simply isn't true. I'm inundated with Verizon ads in my Yahoo mail after I go to their site to pay my bill. Wasted impressions.

We frequently give cookie demonstrations to advertisers to show how many cookies are set when a user visits their site. It's second in popularity only to the demo that shows how you can upload and schedule hundreds of creative in seconds – but I digress. The point is, display ad targeting can be smarter – much smarter. It already is.

– Layne Salter

Is Display dead, along with the Web?

“Thank you Chris Anderson and Michael Wolff for the thought-provoking Wired article “The web is dead- Long live the Internet.” It almost feels like they’ve spent some time in TruEffect’s planning sessions!  Web advertising has been long on promise and short on return. The fact that its digital content consumption is over 35%, yet it only garners 14% of ad revenues (as opposed to TV which has 30% of consumption and 40% of ad revenues) should be enough to make industry practitioners and VC’s stop and evaluate their next ventures. It seems we’ve lived with more-of-the-same for the last five years, with the hope we can deploy newer technology or better data manipulation to create value where it’s limited, at best.
 
The belief that the fundamentals of publishing will be reasserted, is interesting. Great content attracts a great audience, which attracts great advertisers. But while Wolff asserts this on the one hand, he also acknowledges a parallel phenomenon that the pool of advertisers having access to the channel is larger, thanks in large part to Google. Local pizzerias are therefore bidding for the same eyeballs as marquee brands. To believe that only marquee brands can elevate the quality of advertising is an interesting position, but one that detracts from the main argument that advertising is about effectiveness – and it’s failing.
 
Wolff’s discussion of click rates is actually more telling than he realizes. We’ve been stupefied over the past decade into assuming a click was anything other than technology’s answer to proving interest or intent. True practitioners moved past that hurdle a long time ago, but the topic is by no means dead and buried, judging by the amount of discussion it still receives. What Wolff identifies is the symptom to the underlying problem – a problem that will continue for Mr Jobs, or whichever new media baron rises. Advertising will never work the way it’s currently being measured – whether it’s in web 2.0 or Internet 1.0, in HTTP or DOM.
 
That’s because we’re still trying to use the same tools and methods that we used when the space was new. It’s an indictment of all the investment of time we’ve spent trying to support untenable measurement standards. It’s pathetic that the last true work on measurement accuracy was the 302 redirect. It’s not an accident that advertisers haven’t migrated $$ into a channel that can’t demonstrate an effective and predictable return – whether they’re a Fortune 500 company, or one that includes fortune cookies with your order.
 
Until now. Only when you stand back and look at all the facets of how advertising works can you really design how it should work. This has been TruEffect’s mission for the last 5 years. Wolff is right about a lot, but he may not be correct about how it all plays out. What we’ve seen in countless online display campaigns is a staggering change in measurement accuracy, a lack of clear understanding of how to make media efficient, and the importance of accountability in terms of response and managing ROI. To say it’s broken implied that it ever worked in the first place.
 
The answer lies in a number of the areas illuminated by Wolff. First, the bond between content and audience has been frayed. Intermediaries have attempted to build networks before they have assembled quality programming. Secondly, technologists believe their census based measurement is robust and empirically sound – but it isn’t!  Finally, we’ve been seduced into thinking we can finesse responses by identifying user attributes – and that this will overcome lack of context.
 
But most importantly, we need to discard what's never worked, and stop measuring performance with tools that aren’t up to the task. Stop trying to target with indiscriminate volumes of irrelevant data based upon a transit mechanism (third party ad serving) that’s poorly designed and wholly inadequate for today’s needs.
 
The answer lies in the relationship between the advertiser and the consumer, enabled by the publisher. Advertisers and consumers have relationships, intermediate service providers do not. Advertisers and their customers enjoy a dialogue (most of the time) about the value and meaning of their products and services. Intermediate service providers seek to ambush consumers on behalf of whichever advertiser is willing to pay the most! Advertisers and publishers nurture relationships through content and discussion. They produce things –you get the idea. But to do this requires a different type of technology which removes the intermediary from the dialogue between consumer and advertiser, and provides accurate measurement for effective analysis. This is what TruEffect does.
 
The hope here is that Steve Jobs will do for Internet advertising what he’s done for retail, and the micro-payments market with iTunes – make it relevant and resonant for the consumer. And shape it in a way they like to buy. To do this, however, requires reshaping the online advertising model to measure and engage properly. As the Lowe group used to say “Good advertising and bad advertising cost the same – the difference is priceless”.

– Martin Smith

Go ahead, put all those eggs in one basket

Now that advertisers are opening their pocketbooks more, it’s a great time to take a comprehensive look at how your online advertising dollars are working across all efforts. eMarketer recently reported some statistics from “2010 Lead Generation Optimization Key Trends Analysis” from CSO Insights revealing that most marketers are increasing their budgets for lead generation and new customer acquisition.

It’s interesting to note that the largest increases reported are on web design/content, email marketing, social media, and SEO.  But how many advertisers are working to ensure that all their channels work together?  How are online display advertising dollars impacting both natural and paid search campaigns? And what about those email campaigns?

In another article by Bob Rose, "Do You Have A Marketing Credit Crisis?", he cites various multi-channel attribution models and says, “But really all of them have interesting solutions to creating a matrixed framework of conversion events, assigning values to engagement, and other values to metrics such as time-on-site, pages viewed, tracking through the funnel the percentage of credit that each tactic should get – and aaaaaah my head just exploded.” Sound familiar?

A while back, TruEffect published a paper on The Impact of Display on Search and concluded that a first-party solution helps with the exploding heads by allowing advertisers to control online campaign data from one central point – theirs. What would it be like to see into the various measurement methodologies of your media and technology partners, and understand who, and what, actually attributed to the success of your efforts? First party ad technology can provide a centralized way to look at campaign performance across channels. It gives a whole new meaning to putting all your eggs in one basket. Seriously. More, better, actionable data – less exploding heads. Everyone's happy.

– Layne Salter

OMB unleashes new privacy guidelines for Government

Two weeks ago the Government Office of Management and Budget (OMB) issued two new memoranda, M 10-22 and M 10-23, regarding web measurement and the utilization for 3rd party technology for government websites. The new guidelines are part of the OMB’s “Open Government Directive” and seek to promote transparency, participation, and collaboration while protecting individual privacy.

Although the new memoranda reverse a number of previous mandates, what bears scrutiny is that while there appears to be some easing of restrictions around 3rd party technology use on government sites, most current 3rd party ad tracking serving and measurement technologies still cannot comply with the new requirements. For instance, new guidelines allow for retention of data for only as long as deemed necessary, but not to exceed 12 months. Most ad server cookies are set for a minimum of 24 months, while others range up to 10 years. And data is commonly retained for more than 18 months.

Last summer, the Future of Privacy Forum, in their reply comments to the Federal Government Websites cookie policy, recommended that “Only ‘first party’ domains should be used, rather than ‘third party’ domains, to avoid potential for unwanted correlation across unrelated Web sites.” Likewise the Center for Democracy and Technology recommended that Federal Government Agencies serve and measure advertising from their own first-party Web domain. We agree. That’s why “first-party” solutions, like our own TruConnect technology, are still the safest bets going forward in an industry whose privacy practices are increasingly being called into question.

– Martin Smith

What women want

In a recent iMediaConnection article, Emily Girolamo makes some interesting observations about Relationship Advertising and women.  Girolamo states that 53% of women feel they form “relationships with brands online,” and that nearly “90 percent of women studied ‘wish’ they were sent more tailored offers from trusted brands.”  I concur.

Traditional advertising, like television, has long revered the female buying audience. Apparently we control the purse strings which I guess makes total sense because we’re the ones with the actual purses.  So, it’s not surprising that women are anxious to receive more relevant ads. As a female, with a purse, who also works in the online ad biz, I’m always gratified, if not amazed, when I receive an ad that actually hits the mark.  With interactive direct response technology maturing, I guess the question is – why doesn’t this happen more often?

Is it so hard for advertisers to market to me directly on the internet?  Every time I visit a website, Yahoo! mistakenly thinks I’m a good candidate for its products. What they don’t take into consideration is that I’m already a Verizon customer.  And I was looking at those schools for someone else.  And I only Googled Toyota to find the local dealer so I could make an appointment for my recalled gas pedal.  Is this retargeting technology at its finest?

So, while every targeting company out there claims to find the advertiser the “right customer, in the right place, at the right time” – they fail.  Sometimes miserably.  Tell me there’s a technology out there that knows whether I’m already a customer. That knows if I’ve already purchased. That actually knows something about what I want.  Oh, you mean like TruConnect? Shameless plug, I know. But seriously – online ad industry, please stop serving me irrelevant ads. 

– Layne Salter

Dead internet ideas

Doug Weaver, founder and CEO of Upstream, and frequent speaker at iMedia Summit series gives a great, uncensored look at the truths we tell ourselves in the online ad biz in his presentation on “12 Dead Internet Ideas.” We talk a lot about consumer privacy and "relationship advertising" here at TruEffect, and how internet advertising hasn’t really changed much in 10 years. We should know – we were there in late 20th century, developing technology to serve the first ad. But Weaver, in Steve Jobs keynote fashion, puts it ever so much more eloquently than a PowerPoint ever could.

Weaver’s dead internet idea called "The Right to Target" calls into question the industry’s never ending quest to pull out all the stops on targeting technology, while lulling consumers into complacency around their privacy concerns by ensuring them that they are exchanging their data for really cool candy – like better and more relevant ads that keep the internet free. Weaver says "We think because we can, we assume that we may."

But by downplaying the relevance of context, we just provide more of the same –thousands of meaningless impressions that nobody is clicking on. To understand what will actually reach, and impact, the consumer has been the illusive grail of advertising since Madmen wrote the Brylcreem jingle.

But Weaver cautions that "the landscape we're destroying is the one we'll need to live in, and profit from, for years to come."  Even though it looks as if the "cookie opt-in" clause will not make it into the Boucher bill - for us to "celebrate dodging that bullet is like whistling past the graveyard."  He reminds us that if we think that consumers and government don't decide how it goes, one only has to take a look at how the "Do Not Call Legislation" put phone marketing out of business in 48 hours. 

But, it’s just a presentation, right?

– Layne Salter

Display still healthy - but old approach needs to die

We’ve all seen a trend of positive indicators for the health of online display advertising over the last several months.Kantar Media predicts it will grow 5.0% in 2010, a number which normally would underwhelm, except that it follows a year in which display grew 7.3% while the industry saw overall ad spend drop a whopping 12.3%. Meanwhile, Yahoo! paid $100 million for media newbie Associated Content to bolster its inventory of traffic-generating material, and Facebook surpassed perennial leader Yahoo! to become the top US publisher of display ads on the web. And finally, this morning brought the announcement that GSI Commerce is acquiring specialty retargeting network Fetchback.com.

Display is not only alive and well, but it’s growing.But if display is going to continue to gain share of wallet from other channels, it’s entirely too inefficient. For what they’re worth, click through rates continue to remain below 1.0%. And while view-through has given display a tad more credit for performance, it fails to remove the waste. Digital display advertising is not like print or broadcast – so it’s time to stop simply throwing it out there to see what sticks (clicks).

At TruEffect, we work very hard to identify why our clients’ display campaigns deliver results, or not. If we focused only on the typical dimensions of performance like creative design, audience demographics, page position, interactivity or even copy, we’d miss the biggest part of the story.

Last week, TRA, a research firm devoted primarily to the cable set-top box, underscored our argument. According to President Bill Harvey, the gender and age of viewers has little correlation with the way they respond to ads. Yes, you may have a brand that is skewed heavily towards males with $100K+ incomes, but if the next affluent male you see in your campaign just bought your product, or a competitive product, that inventory is completely wasted. Some data we have assembled from recent campaigns tells the story better than words:

-A recent Telco client conducted an aggressive acquisition display campaign wherein 20% of the media was consumed by existing customers that could not make use of the offer and 42% was consumed by customers that were out-of-market and not eligible to buy.

-Despite frequency capping instructions provided to the publishers, a large direct response advertiser saw 42% of their display inventory consumed by 11.7% of their audience.

-And a large retail client saw 29% of all impressions consumed by users seeing a frequency of 30 ads or more!  (IOW – non-responders.)

These are just examples of why the industry feels that a 1% click-through rate and search-like CPCs are stretch goals. Display ads reach more consumers than any other online channel. If you can find out how to carve away even a small portion of the waste with a few simple techniques, it will easily become your most efficient channel.

– Scott Nelson

Ten years after

Instead of writing the typical January “how did I do with my predictions” post, I’ve waited until we’re back in the here and now.  Looking ahead, within the context of the progress we’ve made in the first decade of this medium, what we can expect?

February, 2000: Breathing a sigh of relief that we survived the Y2K conversion; a small group of men held a planning summit in Kuala Lumpur for a largely unknown consortium called al-Qaeda; Internet titan AOL had just entered into an agreement to “merge” with Time Warner and redefine the media landscape.  Internet advertising never heard of Google or Facebook, expandables and page peels were percolating in a lab, and the CPM was still king.

February, 2010: Breathing a sigh of relief that we’ve largely avoided a Swine Flu epidemic; airline travel is more time consuming than ever; and Time Warner just completed its spin-off of AOL after a painful marriage. 

A LOT has changed. But unfortunately, not enough.  We’re spending more than ever on interactive media, but the efficiency simply hasn’t scaled with that growth.  And when you look at the technology used today vs. ten years ago, very little has changed.  Sure, we’ve figured out some new economic models to buy and sell consumers’ attention, but the methods of delivery, measurement and targeting are basically the same as they were in 1997. 

Today, when we meet with clients and prospects, the triad of impression-click-conversion still rules decision-making.  Interactive advertisers have very few options other than massaging the same data with techniques such as path-to-conversion and weighted attribution.  The problem isn’t the math, it’s the data.

Ad serving, and soon thereafter bid-optimization, were both successful technologies because of the ability to consolidate both data and workflow.  Consolidating the data was thought to be the only way to effectively deliver meaningful performance.  But as the industry has matured, that couldn’t be further from the truth. 

A consumer’s perception of your brand and the interaction they’ve had with it (and I'm not just talking about purchases or customers – rather, any interaction) drives response more than any other variable.  This is further demonstrated when performing conversion attribution.  A recent study by a leading industry analyst recognized TruEffect™ in a wave study, as providing sophisticated attribution modeling worthy of recognition.  The difference is the data.  Not aggregated or consolidated data.  Discrete data owned and controlled by the advertiser. Data that describes the relationship an individual consumer has with their brand.

It’s this new approach to leveraging consolidated platforms with discrete data sources that will push interactive campaigns to new levels of performance.  Technology won’t be the foil, nor will new forms of content.  Treat each consumer appropriately based on what they’ve told you about themselves and their interest in your products or services.  And do so on an enterprise scale and in real time.  That’s what we can expect to be talking about ten years from now.

– Scott Nelson