The Publisher’s Dilemma

By: Scott Knoll

Advertisers have been bitten by the audience bug, and who can blame them? Let’s face it, experience data and audience demographics are a powerful cocktail for direct response marketers and brand marketers alike.   The ability to target users based on current purchase desires, filtered through specific behavioral and demographic segments is very attractive to advertisers.  As new technologies evolve to enable more user insight, the desire to reach specific customer audiences has become the priority for advertisers looking to maximize the effectiveness of their dollars.

The ability to precision target an audience provides new sales opportunities for publishers, but at the same time creates new challenges.  Traditionally, publishers have focused on creating and maintaining quality content that would attract a specific niche audience.  Publishers use the demographic make-up and homogeneous qualities of audience to market to advertisers.  For example, in the early days of my career I worked at Time Inc.  Many of our publications such as Fortune or Time Magazine had an affluent readership base, especially in the Asia region where I worked.  In order to attract high end advertisers like Rolex and Four Seasons, we needed to maintain high audience standards.

The quality of the audience was much more important than the quantity.  Every year, we waited for third party validation that our audience was indeed high end, and we used this as a competitive advantage and an integral part of our sales strategy.

Now things are a little different.  Today’s technology allows us to dissect the audience data in more ways than ever before, and the measurement of user data has become more precise.   Beyond simple demographics, we can now discern when users are at the readiness point in the buying process.  With these advances, advertiser expectations have risen.  They want targeting intelligence across all websites, and want to exercise control over where their ads are placed.

That, as it turns out, is the publisher’s dilemma.  The type of data advertisers are clamoring for is not typically owned or validated by publishers themselves.  Rather, this information is owned by a growing collection of data companies who aggregate across search, display, email and offline sources and then leverage it to optimize advertising online.   So publishers have to deploy a third party to provide more information about their site audience to advertisers.

What’s more, the data practice industry is so new that there are no industry standards in place to validate the accuracy or quality of the data.  Anyone can become a data aggregator and present their data as the best in the business, but there are no guarantees that advertisers will get the level of targeting and reach that they are paying for.

So what is a publisher to do?   Relinquish control over their ad business to third party providers and give the advertisers what they are asking for, or maintain control and potentially lose out on lucrative advertising dollars? Even if a publisher decides to use third party data to target users on its site, the solution typically does not scale well.  The publishers can only target impressions based on cookies with third party data, which limits the inventory significantly. Yet if a data company claims they have a lot of scale, then it means that they do a lot of modeling, structuring and organizing data so that it can easily be manipulated.  This process dilutes the quality of the data, and results in less valuable targeting.

But what about the other elements of targeted advertising?  The good news is that despite the growing emphasis on data sets, context and placement still matter.  In fact, placement is often the most important component of a successful ad campaign.  You can set your sights on a specific target audience, but if they never see your ad it’s not going to make a bit of difference.

Today, publishers need an advertising solution that allows them to target specific data segments based on cookies, but also overlays this data with a virtual “heat map.”   This heat map tells the publisher which pages or sections on the publisher’s site have the highest concentration of a particular audience segment.  For example, advertisers may be looking for users in the market for a luxury sedan, or males 45-55 years old, or and married homeowners with 1 teenage child.  By using this heat map, the publisher can do a more effective job of combining placement with audience data and have a much higher ability to scale.

More importantly, publishers can take back control of their user base and build a sustainable advertising-based business model that will survive in the long term by avoiding having to rely solely on someone else’s audience.   Publishers have enough challenges in the rapidly evolving online advertising industry; they should not have to give up control of their audience.

The Fine Art of Targeting

By Chris Gaebler

My mother-in-law has a great expression.  In the family we call it, “updating your prior.”  What it means is that you always have to remember to update your prior view of things, because otherwise you are making false assumptions based on outdated information.

As marketers we often fall into the trap of neglecting to “update our prior.” We pick a demographic and a target profile, and we stick with it. This is natural byproduct of having studied and chased after a singular customer segment for many years. Over time, however, customer needs may have changed, and new prospects may have emerged unnoticed. Examples of this tendency include industries like automotive and electronics.  In these markets brands have been targeting men forever, not realizing that the wife in the family may be the primary decision-makers for household purchase decisions. Unfortunately, a narrow focus on demographics can cause marketers to miss critical shifts in their audience profiles.

A recent study by Microsoft confirms this theory.  The study shows that premium brands have been missing up to 50% of their best audience by relying too heavily on targeting only to the affluent. Purchase behavior turned out to be a more important indicator than affluence.  In fact, 43% of online customers in Europe are premium buyers, yet this group is not affluent by any traditional measure.

So what are some of the other reasons marketers may be missing their targets?

1. Customers Are a Moving Target

Changing habits and overlapping interests and hobbies can sometimes be hard to correlate with buying behavior. While there is a preponderance of information available on the Web, many data providers offer a limited view of the user.  With the right audience measurement tools, however, marketers can put the pieces together to create a coherent picture.  A story in Ad Exchanger describes a marketer targeting home-based business users with children.  In order to reach this demographic, he had to combine data for micro-business users, home-based users, and households with children from three separate data providers. Scaling audiences can be particularly difficult without the ability to normalize and aggregate audience profiles in one place. Using web-based tools to measure who is engaging with your messaging and who is responding to your offers will give you a better view of a larger potential customer pool.

2. Aiming at the Wrong Target

Products are often delivered to market with preconceived expectations about who the audience will be.  When David Roberts, the CEO of PopCap launched a game called Bejeweled on Facebook, he fully expected the game to appeal to a young male audience.  Instead, he was astounded to learn that 70% of the game players were women.  The social aspect of the game was an attraction for young mothers who were stuck at home, and wanted to play and interact with friends and family.  I’m not sure why anyone thought a game called Bejeweled would be a magnet for young males, but never mind. The company had to integrate this new view of its customers into its marketing strategy.

3. The Unintended Target

Toyota Scion was a car designed specifically to appeal to a youth segment with a focus on customizable features and a low price.  The original target was young people, 20-25 years old, and Scion avoided the Toyota brand name because they felt it was too ‘old’.  Toyota soon discovered that the Scion appealed simultaneously to both millennial upstarts and empty-nest boomers.  Auto makers now are looking to replicate this model and design more Twin Peaks Cars. That is, cars that have two peaks in a line graph of the age distribution of the buyers.

So how can brands best identify and consistently maintain the right targeting?

The key to developing good market targets is to be clear on your segmentation strategy, and then market specifically to those targets. But don’t fall in love with a target profile, be flexible and ready to make changes based on updated data.  Ideally, marketers should measure customers based on three yardsticks, behavioral, transactional, and demographic. Behavioral marketing allows brands to identify their highest value segments.  Transactional data allows marketers to revisit their current customer profile to see if anything has changed.  Demographic data makes it easy for brands to understand their audience and identify customers.

Marketers need to learn how to optimize marketing based on business intelligence gathered during the campaign.  The real-time technology platforms that enable audience measurement and campaign management provide an advantage to the marketer.   Those platforms, coupled with smart targeting techniques, create a new opportunity for greater scale and efficiency in online marketing.  Marketers can discover new customers by using audience measurement that provides more insight into those responding to your message. In other words, sometimes you just need to update your prior.

The Case for Online Branding – Taking Measure of the Metrics

By: Scott Knoll

The truth behind the axiom “if you can’t measure it, you can’t manage it” resonates with brands and marketers everywhere.  In an industry that spends approximately $446 Billion on advertising per year, measuring the effectiveness of the dollars spent is no small matter. While most folks in the online marketing industry would agree that the Web delivers the most measurable ROI of any advertising medium, only about 15% of advertising is spent on the Web, and only a tiny sliver of that is spent on online branding.

Why is this so? For one thing, the Internet remains curiously undervalued as a branding medium.  Geraldine Madeira of Microsoft recently stressed the point by saying that the Internet is still disproportionately used for direct response advertising, even though its capabilities for branding have grown exponentially. Advertising technology has evolved to include social media, rich media, and interactive video, all of which create robust opportunities for building brand awareness and brand loyalty.

I would take this idea one step further. For an industry that has been talking about the value of online measurement for ten plus years, we are still suffering from a startling lack of comprehension about advertising analytics that go beyond direct response. Marketers continue to measure ROI through the narrow lens of static metrics. Direct marketers want to achieve clicks, signups, or instant sales.  However these are inadequate metrics for brand advertisers, who strive to achieve awareness, interest and intent. These are dynamic and fluid concepts that don’t fit the standard Web analytics model. Gauging branding by direct metrics is like using a slide rule to measure the velocity of a wave. This is the primary reason that brand advertising hasn’t migrated to the web en mass, despite the increasing amount of time people spend on the web every day.

The perception of online measurement simply needs a rethink, especially when it comes to branding. Audience insights gained through business intelligence post-campaign are very powerful and can inform marketing strategy for both branding and direct response advertisers alike. To get the most value from online branding, marketers should be asking:

• Am I reaching the audience I am paying for?
• Who has seen my ad and how often?
• How has my message or creative resonated with my target audience?
• Are there new segments of the population who I should be targeting with my message?

We are witnessing a transitional period in the online advertising industry. Today, emerging audience measurement technologies exist that rival offline metrics for providing deeper insight into customers. Advertisers are no longer simply buying media on Web sites to reach a particular audience; they are using behavioral and audience data to learn more about their customers.

To get better at branding on the web, we need to use tools that are designed to provide valuable insights into the user behind the browser. This is a clear migration towards better leveraging the plethora of data that differentiates the Internet from any other form of media. Until marketers can quickly and accurately measure the actual audience who is exposed to their advertisements with a standard 3^rd party data set, the Internet will never reach its true potential as a mature advertising medium.