OMMA Adnets – Performance in the Ad Networks

Following the introductory views on the demise of traditional ad networks (ad networks are dead, long live ad networks!), the discussion turned to performance.  As Steve Smith said in his introduction to the conference, it’s no longer enough to just showcase the latest technology; you have to demonstrate that you can use it well.  It’s time for a gut check.  Is it working?

Agency Roundtable – Gut Check: Show us the Performance

Colin Gillis, Director of Research & Sr. Tech Analyst at BCG Financial (moderator)

Joe Kowak, Director of Media Systems & Technology at MediaCom US

Donnie Williams, VP of Digital Strategy at Horizon Media, Inc

Abigail Luther, Director of Search and AdNets at pHD

Jason Burnham, CEO at Burnham Marketing

Ben Winkler, SVP & Director of Digital at Initiative

Gills began the roundtable with a few questions before opening discussion up to audience questions.  Kowak believes that precise audience targeting through audience matching technological evolutions will benefit the ad networks.  Williams stresses the importance of diversifying your buy, and believes that audience targeting is not, as Gillis suggested, a “miracle”.  Luther notes that many clients still view contextual relevancy as the most important deciding factor of where to advertise.  She believes that these clients need to see clear analytics before they will move to using audience targeting methods.  It’s not about cost, it’s about return, according to Burnham.  Contextual relevancy is still important to many marketers.  One has to look at the whole media mix when determining tactics.  Conversations about CPMs are “boring and beyond the point”, according to Winkler.  In search, you optimize content to reach better targets, even when it costs more.  He believes that advertisers have to do the same, suggesting that he’s rather pay twice as much if he’s going to get an audience that’s three times as valuable.

Advertisers need to ensure that their publishers and clients are more comfortable with new technologies, according to Luther.  New technology is giving buyers more time to make smarter decisions and find better clients.  Williams explains that advertisers are being asked to be more fluid as they learn and explore new technology.  He is leaning more on strategic service providers than ever before.  While he’s learning a lot in the display space, he ultimately sees channels like video advertising as more lucrative.  Luther doesn’t see display as part of the discussion; data, analytics, and metrics are just an infrastructure.  Burnham agrees that have a measurable infrastructure is critical, and Williams thinks that this allows advertisers to make smarter decisions.

Winkler pays the most attention to automated technologies.  In order to grow, advertisers need to do less to get more.  With automated technologies, they can spend more time discussing big ideas, and less time on optimization.  Burnham sees media itself becoming a commodity as client turnover increases and compensation to agencies is driven down.  Automation is critical for agencies to maintain profitability.  Kowan doesn’t think that clients care too much about the science of advertising results as long as the algorithms are successful.  The “secret sauce” is in the people behind the ad buys, not in the algorithms themselves.  They are fairly transparent.

The goal of advertising is to convince a consumer to leave their digital world and enter a physical one, according to Williams.  Luther believes that advertisers have to deliver on their pitches.  Burnham notes that you get what you pay for.  Both understand that you have to get a client’s business before you can deliver on it.  It’s important to not get so tied into planning for execution that you overlook high-level strategy about when and where to advertise.

Luther’s pet peeve when it comes to attribution is when customers apply the same metrics to search and display advertising.  Her favorite metric is bounce rate, something basic but incredibly important to clients.  Williams’ favorite metric is delivery, that is, are his customers’ ads being exposed to the right type and number of people.  He likes to keep the story simple so that clients aren’t intimidated by the complexities of advertising.  Kowan like to keep metrics close to business metrics, examining the overall media mix.  Each advertiser may have different key performance indicators, so networks need to pay attention to these.

Gillis wonders why prices are rising in spite of new technology.  Kowan thinks that pricing trends will change as more ads flow into the new ad platforms.  You can’t dismiss contextual relevancy, even as you focus on audience targeting.  William thinks that premium publishers have an excellent handle of what works in traditional display advertising, so they are slow to adopt new models.  Winkler still views automation as critical for these publishers, however, so that they can move their time and focus to the more interesting and more expensive advertising.  Williams recognizes the strong human influence on advertising today.  Clients have a better understanding of their products and services than an algorithm can have.

Burnham feels that some companies are trying to optimize their advertisement too quickly.  It’s critical that publishers understand how many and what kind of views are necessary for conversion.  Luther sees data that can’t be used in optimization that benefits online and offline conversion.  Williams sees data only lifting performance 5% – 10%, which isn’t a lot.  In the future, though, Luther sees proper data metrics bringing a 60% – 70% lift.  The effect of an established brand is critical, according to Burnham.  For some, a 1% lift may be a phenomenal increase.

Keynote – Performance is in the Eye of the Consumer

Sean Kegelman, SVP of Partnerships at Vivaki, discussed the human side of the ad network business.  He feels that at conferences, we spend a lot of time talking about technology and platforms, but it’s essential to spend more time talking about consumers.  In the last few years, consumers have increased their impact on brands, whether through negative tweets or personal interaction.  Marketing to the masses has shifted to marketing to the individual.  New metrics like follows and Likes are being used to track consumers.

It’s not enough just to measure reach; reaching an audience is not the same as interacting with it.  We need to measure intent.  Advertisers and marketers need to find data that serves as a proxy for consumer behavior.  In other words, data needs a human lens.  Automated analysis cannot capture all the nuances (such as new trends or sentiment factors) that intelligent human analysts can.  Humans can look past factors of optimization and discover potential factors of success, for example, by determining that messages fail due to being targeted at the wrong segment instead of using the wrong content.

Human and organizational relationships matter.  The same principles of partnership and collaboration that have benefited business also apply to the new advertising network ecosystems.  They provide better insight and feedback loops as the market becomes more crowded.  Partnerships increase the speed at which innovation happens.  Kegelman notes that this is critical, as he says, “we can’t wait for dog years.”

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