Future of Advertising?

It doesn’t take a weatherman to tell which way the wind blows (Dylan).

The storm clouds are gathering and something is going to change in the seascape of online targeted media. Re-targeting, behavioral targeting, contextual targeting, etc all mean the same thing. The IP address has been cookied and the advertiser can track that user’s behavior and serve up ads that are better targeted to that user.

Conceptually it makes sense, especially as online banner effeciencies continue to decline. However there is a certain “creepy” factor to all of this. I for one am sick of getting the same ad delivered to me daily simply b/c I visited a site and did not “convert”, and would advocate for an opt-out button on retargeted ads.

One such retargeting company Fetchbak is doing just that and it may be a portend of things to come.

The FTC is taking a hard look at online targeting and based on the past of the new FTC commissioners I personally would not be surprised to see some changes coming soon. I have no interest in predicting but they might be but the cautious advertiser or agency should prepare for the worst.

The IAB is taking a step in the Fetchback direction by letting the consumer know that they are in fact being targeted.

If done properly, with good creative, and good frequency practices (i.e. the creative doesn’t scream “hey i’m watching you” and if I don’t convert after x impressions you leave me alone) this online targeting is very beneficial to the user (in my opinion).

But I am happy that the FTC and the IAB are taking note and we get ahead of this before things get all Minority Report on the consumers.

We all know the “bread and butter” targeting options available in the online advertising arena (ok, really, these basics apply to all marketing mediums). I of course am referring to geographic and demographic targeting. You learned it in Marketing 101 – how do I get the right message in front of the right people…and at the right time? With today’s technologies, advertisers are better equipped to make this happen.

So what are the new-fangled targeting options that are getting us closer to the perfect storm of advertising online? Several options abound, but for this blog post, I’d like to focus on the concept of user retargeting.

Site Retargeting
Not a new concept by any means, I mention to establish differentiation between other retargeting options. For those that aren’t familiar, in a nutshell, site retargeting cookies users that have come to your site and failed to convert – thus allowing you to serve ads to this subset of your customers. The upside is that you are serving ads to customers that have expressed interest in your product or service. However, be sure to target them with relevant creative and different landing pages. (Since what you did the first time, clearly didn’t work!)

Google Remarketing
Similar to site retargeting…but with a Google flavor of course! A relatively new offering available only on the Google Content Network, Google Remarketing is different in that it goes a step further than “standard” retargeting by allowing you to create audience profiles to retarget to. You could segment profiles based on pages visited (i.e. “Interested in trips to New York, prices are going up, book now!) or where users left the sales funnel (i.e. “There was only one more step, finish your order today). In Google AdWords fashion, remarketing is self serve and self implemented.

Yahoo! Search Retargeting
The only retargeting mentioned here that doesn’t require a user to have visited your site. Search retargeting is set up by providing Yahoo! a keyword list. When a user searches one of your keywords within Yahoo! they are immediately shown a sponsored text result; and then, within 15 minutes, they begin to be served with your display ads on the Yahoo! network. We have seen some great performance from these efforts in the past, however it can take some time to build up your user base.

Anything I missed? Do you have any insights or tips to share?

In a continued effort to control the world, Google has added another weapon to the arsenal. (I kid, I kid!) Using what Google refers to as “chump change” the search engine and web advertising juggernaut purchased mobile display and top in-application ad serving network AdMob yesterday. Not only does the move validate the growing importance of mobile advertising, but it is also pretty exciting to us mobile marketing enthusiasts.

Mike Wehrs, president/CEO of the Mobile Marketing Association, could barely contain himself! “We’ve been talking about the awesome opportunity that mobile marketing brings to the world. Some people understand that, and this deal shows that the largest and best-known advertising company—Google—understands the awesomeness of the opportunity, and they understand where this is going.” We agree Mike. Awesome.

Joking aside, this is quite an exciting move by Google. AdMob is specialized in areas of mobile advertising that Google isn’t, and is currently one of the top companies in the country offering mobile display ads and in-application ads (read: millions of iPhone users). However, this deal really should come as no surprise considering AOL, Yahoo! and Microsoft have made similar acquisitions in the past couple years.

So what will it all mean? According to a great post on Mobile Marketer about the acquisition,  Google feels the deal will “bring new innovation and competition to mobile advertising and will lead to more effective tools for creating, serving and analyzing emerging mobile ad formats.” And in the “real world”? Only time can tell, but as someone who has been researching mobile ad networks and ad serving platforms, I feel that the greatest benefit has to be availability of new placements and sites. The biggest drawback to most networks is that only some publishers offer mobile content placements, and those that do, have most likely chosen an ‘exclusive partner.’ Thereby I am hopeful that Google’s connections and influence will lead to an expanded offering and “one-stop-shop” convenience.

…And for the user? Well. Google has you on every screen now. Muhwhahaha!

As we here at Location3 ramp up into an increased role in our client’s online media buying campaigns, we have been seeking an ad serving partner to suit our needs. I spent a few weeks last month wading through the options out there. So I thought I would take a few minutes to discuss some key points of differentiation between the top dogs, and things you should ask yourself before hitting the mean streets and choosing your own. (Or save time, energy and heart break, and let us manage your campaign for you!)

Let me start by saying that my knowledge of ad serving platforms came from months of struggling with and cursing at DFA 5. For those traffic managers that have dealt with DFA 5 – I’m sure you feel my pain. There exists a myriad of glitches and weird user functionality that cause a giant headache, (not to mention dizziness and profuse sweating if you try to use the ehhem “help” section). Things as simple as you can’t hit ‘back’ on your browser, you can only run the interface in Internet Explorer, and daily reports arrive as late as 5pm.

All that being said, I still included DFA 6 in my consideration of ad platforms. Being the major player in the market, the brand I was familiar with, (and owned by Google), I figured they were a good yard stick by which to measure. I also closely reviewed and demoed Mojo, AdTech and ZEDO. (A fellow coworker had already ruled out Atlas and Eyeblaster).
The key features I reviewed were:

• Usability
• Support
• Availability of advanced reporting
• Price
• Contract length

In the end, Mojo beat out the other services. I think it was expressed best by my colleague Sarah; she said that Samantha and I lit up like first time home buyers walking into ‘THE place.’ It offered the usability and reporting that were the biggest points for us. They were also able to offer additional bells and whistles like bi-weekly webinars and behavioral targeting.

How third party ad serving works. Image found at www.liesdamnedlies.com

Although Mojo was the best solution for our needs, you should make sure you determine yours by gut-checking a few of these points:

1. What type of campaigns will you be running? Make sure your ad platform can keep up with your mobile, rich media and video plans.
2. Can they offer reporting that will track your display campaign performance along with your other marketing efforts?
3. What is the contract length? What if you don’t like the interface, or the support you are receiving?
4. How established are they with most major publishers and networks?
5. What support do they offer, does it fit your regular office hours? Your extreme office hours?

What are your experiences? Any tips?

Perhaps it was Capella University’s intention to target the demographic of the Awkward Family Photo website, but I doubt they would enjoy seeing their lovely banners next to such “awkward” content. It looks like Capella is buying through an ad network and, as such, probably doesn’t control or even have knowledge of their placements (they do seem to be everywhere these days, or maybe I’m just getting retargeted because I was curious about their landing pages).

Moral of the story: Try not to have your ad on an photo of kids playing with “feminine products.”

Did you know that 7 out of the 10 top indexing sites reaching U.S. Hispanic adults who prefer Spanish (comScore) are non-U.S.-based? Check out MediaPost’s Engage: Hispanics blog for the full list of sites. Popular portals like Univision and Telemundo have substantial global competition. The blog and comments discuss how this is in part due to a relative lack of quality Spanish-language content on U.S. sites, but also that international sites give Hispanics an opportunity to connect with their country of origin, whether it be through a social forum or a local newspaper.

I mention in the comments that including well-chosen international site placements can be an extremely effective tactic for reaching Spanish-preferring Hispanics. There are numerous Spanish-language international-based sites available for placement targeting through the Google content network. Many, including Musica.com mentioned in the article’s top 10 list, offer multiple ad formats (text, image and video). On high-traffic or broad-topic sites such as Diario.com (Mexican newspaper El Diario online), keyword-themed content targeting can be used in a placement campaign to ensure the ads are contextually relevant.

The takeaway for Hispanic marketers is that this segment of online Hispanics can be elusive without expanding to this global online inventory.

As an online marketing agency it is our job to squeeze the most performance out of every dollar. To that regard we look at banners far down the line in our planning, well after exhausting PPC, SEO, Analytics, landing page optimization, and even Social Media Management. Why? Simply becuase the ROI can not compete with other mediums. It seems that while others feel the same way the budgets are still flowing to banners. This can be especially frustrating when their is more available PPC budget that is left on the table due to the banner buy. Based on recent conversations the tide is turning and banners are losing their foothold in budget meetings. Just like my household budget, online marketing budgets are being closely examined, and hopefully the banner budget will go the way of the double shot soy chai starbucks run. Pretty fancy but really not worth it.

When you’ve been media buying for a while, you get into certain patterns of expectation on the Kabuki dance you go through to get a good rate. It usually goes like this: Ask network for a quote, they come back with a $3 – $5 CPM, you tell them to quarter it, they say “we couldn’t possibly…”, they pretend they’re make a big exception for you and end up cutting the rate by 3/5ths, you run the campaign, it barely works, then you yell at your publisher about a variety of things until they get your effective CPM down to 1/4th of what they initially quoted you at the start, and the whole thing finally works.

Remember the first part, the $3 – $5 CPM the networks usually start with, and now imagine my surprise when one of my favorite sources of tech wisdom, WIRED magazine, dropped this phrase: “Lookery, an ad network specializing in social media, offers display ads on MySpace, Facebook, and Bebo for only 13 cents per thousand times the ad is served (CPM); Yahoo’s average CPM is estimated at $13.”

Imagine my jaw dropping here.

Not at the price, that’s obviously wrong, but at the fact that they published 1) that someone has a $.13 CPM, 2) that Yahoo’s average CPM is $13! The first thing that came to mind is my conversation last week with Yahoo where I was negotiating their $3 CPM downwards.

Where did they get this outrageous CPM figure of $13? I’ve never heard of anyone paying that kind of rate as an average. The top CPM I’ve ever been quoted was from the highly selective New England Journal of Medicine, and that was $48 CPM, but then again, it reaches the .3% of Americans who are practicing physicians (and wealthy enough to have a $1000/year subscription to NEJM). So in many ways, NEJM is justified in their price due to the scarcity of their audience in the general public, and desirability among certain online marketers. Yahoo does not approach this, and thus, the $3 quoted CPMs. If I had to guess at an average, when counting networks, and everyone else who bought blocks of inventory, I would bet it’s closer to $2 than $13.

But the second aspect that troubles me is the quote that Lookery is offering $.13 CPMs on social networks. I’ve tried to verify this rate, and figure out the specifics on how it works, but to no avail (yet). Trust me, if I can drop my cost by 90%, I’ll find a way and get it done. But I assure you dear reader, that there is not a 1000% spread between Yahoo and Lookery’s CPMs, as WIRED claims.

You’ll know that I got that $.13 CPM because I won’t tell you, talk about it, or let it be known whatsoever.

In all the hubbub about the on again, off again, benign, then hostile, then negotiated, etc. bid by Microsoft for Yahoo!, it seems my favorite little interactive media company that could has been left out in the cold… always a bridesmaid, never a bride; IAC Interactive. Right now, with a market cap of $5.35B, and shares hovering near 52 week low pending the outcome of some legal woes, it just might be a good buy for Microsoft to snap up this gem for one tenth what they will likely have to pay for Yahoo!

But the price tag isn’t the only thing, the market needs an underutilized resource to provide value for a merger. Here’s one that’s bothered me for a long time, Evite. When I buy media placements, such as those found on Evite, I want to target as much as possible. If I have a beer client (New Belgium, we’re available to help), I want to put ads on every Evite for a summer BBQ that mentions beer, or asks people to bring beer. Essentially it’d be like content targeting on steroids for display advertising. I have made inquiries, but this level of targeting is not available on Evite.

Consider what is available; this is a recent Evite I received (the PPC Handy Man does have a social life!) for a graduate school graduation party:

An unbiased, computer-esque reading of this Evite could inform an intelligent text reading software of a couple of key points: 30 year old host, birthday party, graduation party, master’s thesis, afternoon start time, and Denver.

Now, I may be biased since this is a friend, but all of this speaks more to showing beer ads than education, especially since Denver, for better or for worst, is officially the drunkest town in America… TAKE THAT, ANCHORAGE! All of these traits suggest to my marketing attuned brain that you could more easily sell that person’s guests some sort of adult beverage than a discounted Sylvan Learning Center package (the ad that’s there, presumably based on the “education” elements in the Evite).

So there we are, any reasonably sophisticated search technology provider could engineer a targeting system to take advantage of the assets of Evite, and I even think Microsoft might be able to pull it off as well (oh, slam!). Somebody call Steve Balmer, and let him know I work at a very reasonable .01% on deals over eight figures.

As an online marketer, I’m frequently amazed at the technological innovations that ad distribution networks come up with. We call most of what they do “targeting”, but in short, they figure out information about you which marketers can then use to show more specific ads. There are two conflicting arguments about the ethics of this type of technology. On the one side, privacy advocates hold that this is an invasive misuse of user data and should not be engaged in. On the other side of things are marketers who defend the technology on the basis that it allows them to show you ads for products more likely to be of use to you than they could if everything was random.

Personally, I’m a little ways into both camps, but I thought it would be interesting to illustrate just how effective this technology has become. Here is a screenshot from when I was logging into PhotoBucket to manage some photos for this very blog.

You will notice the two prominent ads. The MSN ad was likely populated because I have PPC engines in my search history (AdWords, Yahoo, and even MSN – looks like they haven’t yet implemented negative matching). The Rich Dad, Poor Dad ad was delivered because for some strange reason, our Colorado office has a Atlanta IP Address. Both of these ads (assuming my IP Address was set up correctly) are incredibly targeted.

Once this technology migrates onto other mediums like radio and TV, the privacy concerns, as well as the frenzy of marketers, will increase dramatically. I don’t have an answer to the right or wrong of it, just don’t be surprised when this all comes to pass. I give it 4 years.