End-to-End Platforms

Adap.tv is clearly trying to position itself (and doing a solid job) as an agnostic platform player that connects buyers and sellers. Amir Ashkenazi, CEO of Adap.tv, spelled out the challenges that the video industry has encountered to date: too many middlemen, rogue behaviour and practices and too many layers diluting the flow of investment.

In doing so, Amir painted the picture of a consolidated end-to-end video buying stack, unsurprisingly what Adap.tv are able to offer.

Removing layers and improving data transparency are, of course, positive developments for advertisers and publishers alike. We should take a look at the past to see how it might impact the future. Data-driven advertising, computational advertising or programmatic buying (however you define the digital advertising industry) was disrupted by innovative startups five years ago.

These startups challenged and disintermediated big media businesses and paved the way for the entire industry to rapidly evolve. Had this ‘big bang’ not occurred, would the portals, and the ad networks that straddled them, still be leading the entire industry?

Consolidating an industry to a few large players has positive implications, but would this then stunt innovation? If four or five large platforms control the majority of spend across display, mobile and video, where will the real innovation emerge? History has taught us that giant media companies are slow to innovate and are invariably bereft of groundbreaking innovation.

All About the Audience

The event provided a great insight into how large agency groups are looking at the future of video. Effectively, they want audience with improved targeting accuracy. As Marco Bertozzi, MD EMEA VivaKi, quipped, “show female ads to females”.

Agencies are perhaps at odds with the large broadcasters on their vision. They want video to be about audience, and zero waste, across a broad range of what would be considered premium, brand-safe content.

Is this really that different than TV? Agencies in TV buy audiences. They identify programming that indexes highly against said audience and execute a TV schedule based on delivering a certain number of TVRs across a broad range of content (which is optimised also against the need to deliver against specific volume and share deals).

These TV schedules might include the more desirable peak spots on Coronation Street and Britain’s Got Talent, but it might also include spots from multi-channel stations, with perhaps a smattering of daytime thrown in. The point here is that agencies want to buy video on an audience-based proposition against a range of brand-safe content to deliver against (predominantly) reach and frequency goals. Perhaps it’s not so different than the TV industry after all?

Universal Ad Platform: The Untapped Sky Go Proposition

When the industry talks about a future where a media partner will have consistent recognition of a user across multiple devices, rarely do we speak beyond Google; but what about Sky? Sky Go has enabled Sky to have consistent identification of a user across mobile, tablet and desktop (and potentially bundling in TV at some stage). Its ambition is to offer advertisers the ability to frequency cap across all platforms. This is clearly a compelling proposition and something the rest of the industry would eagerly use; but if only Sky deploys this kind of cross-platform targeting, what about every other media partner who cannot? The point raised by VivaKi was that marketers do not want Sky universally frequency capped across platforms, but across their entire media mix.

Does Sky have a right to play here however? Could Sky license this as an open opportunity on which everyone can build? Given that Sky is not an ad-funded business, it would need to put its users first. It is therefore unlikely this would ever materialise, but it is nice to dream.

Lukewarm Reaction to OCR

Nielsen have made a solid play in the market with the introduction of a common currency in the shape of OCR. Agencies and trading desks alike are already signing up to it and also buying on an OCR-guaranteed basis.

In an age of the cookie, many have downplayed the importance, or value, of panel-based measurement and targeting.

However, with the cookie’s days numbered, and device recognition software still having accuracy concerns, would panels of the size of Nielsen’s (leveraging Facebook as a partner) be significant enough to start building multi-device and format measurement standards?

eBay claim that GRP-type metrics are more suited to traditional brand-led advertisers. They question the value of such metrics for web-based businesses that have used data previously, with perhaps deeper data signals, to build more advanced proxy measures of effectiveness. Time will tell whether the OCR becomes the standard, but big brands seem to be throwing their weight behind it. The industry to date has tended to follow the money when it comes to evolution.

The Road to Programmatic

The panel hosted by ExchangeWire’s Ciaran O’Kane focused on the move to programmatic video. The discussion included Dirk Fiebig, Operations Director EMEA at Amnet, Fabian Magalon, MD at La Place Media and Tom Bowman, VP Global Strategy & Sales Operations at BBC Worldwide. The focus of debate was mainly around the adoption of programmatic buying and selling of long-form VOD – and whether it was something the market was ready for. CPMs in programmatic video are quite high, with some publishers getting £50 CPM for pre-rolls on long-form content.

Ever the programmatic contrarian (and rightly so) Bowman questioned the economics of the automated model, given how much his direct sales team was bringing in on negotiated VOD deals – but admitted he would get rid of his sales team if the yields were better via programmatic. Asked if he was testing, Bowman said he was always prepared to test, but needed to see the net value. Let’s see if the BBC Worldwide staff is redeployed to big ticket items if a programmatic sales strategy moves the needle.

Speaking from the French perspective, Fabien Magalon said his co-op’s publishers were also very protective of direct deals on online video. Programmatic video still has some convincing to do, clearly.

The most interesting question came from Sky’s Tim Hussain, who questioned why publishers should sell at the same price in an auction as they are currently getting now directly. Surely with first- and third-party layers, the impression-level price should not be £50, but in hundreds of pounds. Amnet’s Dirk Fiebig countered the race-to-the-bottom argument that agencies were prepared to pay the money if they could achieve this granular level of targeting.

The Rise of the App Specialist

The last item on the agenda focused on a new app initiative from Adap.tv. Trying to position itself as a true platform with open APIs, the panel include reps from Brainient and Nielsen to discuss their apps. This is a clever strategy – not that dissimilar from AppNexus, who have really pushed this on the display side. The only concern for Adap.tv would be, how innovative is video advertising?

Given the stranglehold large agencies have over video, and the dearth of independents in the space, you wonder who would use these apps and who would build for such a finite trading community? Otherwise, it is solid concept, but it will be interesting to see how the market takes to it.

In the end, the Adap.tv gathering definitely offered up some excellent insight and debate. It managed to bring two alien worlds together: namely television and digital. How these two play together will determine how successful programmatic video will be long-term. Or will we see the inevitable brand and DR split, with mid-to-long-tail being sold to the traders and the fat head locked into agency trading TV deals?

It is interesting to see 1&1 in the UK really aggressively going after the local SME market with a blanket TV campaign. Owning the digital relationship with SME is a huge opportunity, and scale in this market is a massive untapped opportunity. Google makes much of its search revenue from the SME sector – but display thus far has failed to really open this market segment. 1&1 is now trying to offer social media management tools to its current clients so clearly owning the platform can allow you to upsell advertising and marketing management solutions.

By building the CMS as well as a media buying platform, we made the point that local media publishers could be the digital gateway for local businesses. Building another undifferentiated PMP is a good idea but it only addresses the buying needs of a finite number of big national/global brands – and budget especially when you are competing with big media and platform businesses. But how exactly can you execute a localised ad strategy?

Don’t build, borrow

Local media companies do not have the resources or the cash flow to build out platforms for the new SME marketing platform? And why should they when they can re-purpose or white label existing solutions on the market – as well as leveraging your local sales network?

Building the CMS on existing solutions

Building a platform is difficult. Local media planners trying to build the new CMS for SMEs should not entertain anything like this. Use the existing tools on the market. WordPress is the best CMS tool on the market. Built on PHP and the best open-source CMS on the market, it could easily be re-purposed for the basic requirements of the SME. A development team would be required, but could also be out-sourced. Push the new solution through your existing media channels to get adoption from local businesses. Once they are on-board, you can then begin to up-sell the media buying and digital marketing business. Or you could just call 1&1 and partner.

Self-service advertising the key for local marketers

It will be extremely difficult to manage and execute 1000s of small display campaigns, and it wouldn’t be a very efficient business. A self-service business is, as Google have shown, an effective way to sell to small and medium sized businesses. How would you do this in display – without trying to build a flawed ad technology solution? A tool that truly addresses the requirements of local marketers needs to be properly tested. Don’t assume what this market segment wants. Be mindful of the lean start-up thesis: build, test and learn.

What would this self-service tool look like? You could easily bucket everything initially into display. Tag up local business sites. Licence DSP. And execute retargeting buys (prospecting could be outsourced) via the DSP/platform you have partnered with.

A UI will be required to allow marketers to pick and choose audience buckets to buy from and track campaign performance. Many of these tools are already available on the platforms that have an open API and Apps strategy. Many of these apps are available, but a customised UI for local marketers is a requisite.

If this sounds too complicated, then simply whitelabel a vendor like PaperG, who offer a self-service marketing and retargeting solution for SME. Still based in the US, this company has identified a massive opportunity in the fat middle and long tail of display advertising. That newspaper advertising has to go somewhere, and why should it all go to Google? Much of this solution offering is re-targeting, and this type of display targeting has proved it can compete with non-branded search on performance.

How this SME-focused solution hasn’t been replicated in Europe (particularly Germany) is a mystery, given the market penetration of pure play platforms. Yes, it would be more difficult then simply selling into agencies, and aggregating unsold inventory in a PMP (not a bad idea in itself) – but the upside of a local marketing strategy would certainly yield more revenue and growth over the long term for cash-strapped local media companies.

Will getting more innovative help local publishers unlock new revenue?

The old media model is fundamentally broken, and is in decline. Matthew Ingram wrote a great piece recently on Paidcontent about why mass media is now not feasible in a world of platforms like Twitter, Facebook and in the case of local publisher localised search solutions like Yelp. Maybe the publisher needs to stop thinking like a legacy media company. Will selling more ads to big media buying agencies make up for declining print ad revenue? Not likely. It might yield single digit growth, but won’t stop the bleeding. A new type of thinking is necessary here.

The local publisher needs to start thinking like the new platform businesses who are looking to own this new local marketing spend. By becoming the SME marketing platform of choice, this could well open a massive ad revenue opportunity for these media companies. Let’s see if local display can think outside of the box.

Ask a digital marketer why your marketing pounds should be spent online and, among the many (good) reasons they will come back with, will be its unrivalled accountability and targetability (not actually a word, but who cares).

They will tell you that you can find your likely customers (users who look like your existing customers), target them with your message and, best of all, see how many of them buy something from you as a result.

All of that’s true and, when put together well, it results in incredibly powerful marketing activity. The problem is that, with all of the data that’s available, it’s become a very easy system to manipulate. Online exchanges and DSPs have become very adept at ‘playing’ it so that everybody always appears to be doing an awesome job.

Thanks to the last-click model, in particular, running display advertising that looks good is actually pretty easy. Simply develop a method of finding users who look (for whatever reason) as if they are likely to convert, serve them an ad (and a cookie) and then take credit for this group’s higher than average conversion rate.

As such, serving an ad in an undesirable location (but to a desirable user) below the fold (where it’s nice and economical) has become a successful way of cheaply dropping a cookie on a user who looks likely to convert anyway.

Thus, taking all the credit for a conversion it had little, if any, role in driving. Think of it as the kid in the school playground smashing the ball into the net from two yards out when it was going in anyway and then running off to celebrate.

No one liked that kid.

The world of online display is increasingly becoming a battle to continue to look efficient by dropping the final cookie. I’ve written about the causality issue when evaluating online marketing here on ExchangeWire before, and also about how we deal with those issues here at Havas Media.

The market is well aware of these problems I’m sure, I’m certainly not the first person to point them out. So, why is this still the way it’s done?

Because the prevailing opinion seems to be that the last-click model provides a good proxy for site-placement and keyword performance, even if the overall ROI figures are inaccurate. So, whilst not perfect, it should still allow for analysis of relative performance.

That’s not true though. The last click model assumes that every user who sees a display ad then converts did so purely because of that ad. This means that, inevitably, display ends up taking credit for conversions that would have happened anyway. So, every piece of display is starting from a base conversion rate, the likelihood of the user converting whether or not we serve them an impression.

Without taking this base into account, analysis is measuring the incidental rather than the incremental effect of the activity. ROI analysis inevitably benefits cheaper placements in this model because, with everything starting from a high base, incremental effect makes up only a portion of the overall ROI.

This base conversion rate effectively gives cheaper placements a head-start when it comes to ROI and CPS and the incremental effect is rarely enough to compensate.

As a result, demonstrating the effect of any innovative and different display activity is extremely difficult. Branded online display still hasn’t really taken off because, no matter how good the creative, in a last-click-wins model it can never compete with dropping cookies on people who already look likely to convert.

Marketing is not supposed to (only) be about preaching to the converted, it should also be about changing people’s minds and introducing them to things (brands/products) they’ve never heard of.

The thing is though, stuff aiming to do that (rich media, brand building-display activity, etc.) never does well at driving the last click. People usually like to do a bit of research, particularly for high-value items, before they convert. So by the time they do eventually buy something, they’ve often been hit by some piece of opportunistic retargeting that steals away the credit.

To honestly evaluate display advertising would mean an inevitable reduction in ROI. Econometrics shows this to be true by continually assigning less credit to display than the last-click model.

In order to be able to make display campaigns be better, we need to accept that they will have to look a bit worse. Who’s brave enough to take that jump?

Democratising Data

Launching a competition to build the world’s greatest algorithm has a degree of geek cool attached to it, but the broader theme of data being democratised is infinitely more compelling. IPinYou is following hot-on-the-heels of Netflix, who also famously ran an algorithm competition. Beyond providing some valuable PR, it also gave them access to talented academics while also improving the product and user experience. This was potentially the first time that the hidden and often unknown art of data science really became popularised and brought to the fore. Netflix was the first but since we’ve also seen other companies get into crowd sourcing:

One of them is Kaggle. Kaggle can be best described as a type of Elance for Data Science and Analytics. It is a marketplace of sorts which connects companies with real-world data problems and real datasets with data science and statistical talent. Outsourcing your algorithm to some degree.

But another emerging theme is this concept of algorithmic exportability or having the algorithm as simply a component of sorts. Two interesting start-ups emerging in this space are Wise.io & Algorithm.io. Riding the crest of the big data wave these companies are effectively providing machine learning/algorithms in as-a-service type model.

The above examples further demonstrate the growing trend of not just data transparency, but data modelling transparency and ultimately transferability. Data Science no longer presents a black box. It provides a greater opportunity for the entire industry to have a greater understanding of how models are constructed, the underlying principles, which ultimately leads to the industry continuing to innovate collectively.

Open Sourcing Data Models?

Getting back to the bidding algo contest, it is not yet known how IPinYou will present the submissions or present the entries. But it is not inconceivable to think that IPinYou might expose the winning entry. And why not? Perhaps this is the next iteration of adtech becoming as open sourced as cloud computing and infrastructure has?

Datacratic were the first to make the bidder open sourced. Could IPinYou be about to make the algo open sourced? Where does the role of value creation reside if everything effectively becomes commoditised  Questions would surely be asked, that in the instances of where ad tech companies are capitalised up to their eyeballs, how do they provide a significant point of difference when cheaper, open source kit is available to clients?

And also, who would be in the position to offer it all as an open source, free stack? Perhaps one of the larger media companies whose revenue is not dependent on SaaS deployments but rather where money is still made the old fashioned way? But if more of the middle layer became cheaper, then the transactional layer between buyer and seller gets more cost effective for both parties, which in turn perhaps drives increased investment?

How the market adapts to increased understanding of Data Science

What if data science becomes completely exposed, more accessible, how does the market react to this? This surely increases the focus and impetus on the likes of agency businesses to acquire more talent that understands how to read data and have proficiency in query languages and data analysis in tools like SQL and R?

These people won’t be confined to specialist, isolated teams which are marooned from the rest of the business. Over time, client service teams, planners, account management will need more data fluency. And the reason for this is because marketers will be more data fluent. The concept of data science being smashed wide open will also have telling effects on marketers and organisations. They will begin requiring their marketing managers, brand managers to understand how data influences all decision making within the business.

This provides an interesting challenge for service-based businesses, namely how will they re-architect their business to meet this challenge and requirement – and more importantly where do they source the talent? Perhaps as a basic requirement, all employees will need to learn how to use open source DBs like MySQL/PostgreSQL, and even the data scientist’s programming language du jour, Python?

The concept of algorithm contests, machine-learning-as-a-service might seem obscure right now, but it has the potential to shake up the very foundation of digital marketing. We will be doing a series on the “data tools of our trade” in the coming months, as we build upto ATS London.

It’s all about the platform play

There are very few independent pure play advertising technology platforms out there. Most are conflicted – due to competitive media businesses. Agencies and marketers want access to multiple audience and inventory sources. The fact that Google won’t be integrated with Facebook or Twitter any time soon is an indication that independent ad technology players are going to grow a bigger slice of this media buying business. And given the increasing cynicism of some marketers around black box solutions there could be a shift to transparent platforms. Salesforce wasn’t even in this game until it bought BuddyMedia close to $700 million last year. Now it has a Facebook platform for its CRM clients.

BuddyMedia’s agreement with WPP also gave it an “in” with the biggest marketing and media buying organisation globally. Rebranded as social.com and built into the Salesforce CRM, it has also recently integrated with Twitter to allow customers to buy across the social media channel. This is an important development, as it now positions Salesforce as a viable platform for marketers and agencies to execute social buys. You never really thought as Salesforce as anything but an incredibly powerful CRM, but now the SAAS solution is moving from the enterprise marketing layer into traditional ad technology country (whilst at the same time, the ad tech incumbents are trying to move up the value chain). When cornered at the recent SalesForce conference, Mike Lazarus also admitted that FBX functionality was coming.

Salesforce, The New Acquirer of Choice

This segues neatly into the another key reason for Salesforce’s new found status as ad tech giant, namely that it is in the market to buy companies. The traditional buyers in our space have been Google, Yahoo and AOL. All three look like they are not going to spend hundreds of million on this new crop of ad tech companies. Google has more than likely done its buying in the space. In fairness it has enough engineering might to cover any blind spots it might have (although the pace at which it develops is of course slower than a start up). AOL is a media company, now interested mainly in bolstering its content business through the acquisition of scaled media web sites. And since Mayer took over at Yahoo, we have seen nothing but small mobile app based acqui-hires – and that trend is likely to continue until the company unloads its Asian assets and its share prices collapses. So who is left? Adobe? The company hasn’t done a multi-hundred million dollar deal since acquiring Omniture and Efficient Frontier. But the company gets mentioned prominently in high-level M&A discussion.

Now that Salesforce is looking to move into real-time trading with a FBX integration imminent, you wonder what Salesforce will do? Will it build its own bidder and necessary infrastructure to make it work? Or will it kick the tyres of some of the solutions on the market, and buy to integrate into the platform? There are a lots of DSPs looking to IPO. Not all of them will go to market. If Salesforce does look to acquire, will Adobe or IBM follow suit? Or perhaps there is something to look into with Adroll? Salesforce themselves use Adroll for its retargeting, perhaps they’ll go the full nine yards and take it off the table for presumably a more sensible price than some of the other, larger DSPs? And why would Salesforce stop at FBX, when it could buy biddable media across Display and Search. A Kenshoo could be just as attractive to Salesforce, as it continues to build out that enterprise advertising / marketing stack.

Plugging Into The Coveted Marketer’s CRM

Salesforce is the CRM of choice for tens of thousands of paying companies (87,000 and growing), with the majority of blue chip marketers using it.  This means that Salesforce is the gateway to the coveted CRM of many marketing clients. Now that Salesforce is looking to build on that key data store, they are in a powerful position to unleash the targeting potential of the CRM. Granted they will have to figure out how to segment and target users across devices without using PII, but the opportunity is too significant to ignore. March Beinhoff has been aggressive to move into to other areas to diversify the revenue streams for Salesforce. He saw an opportunity in social, and now that BuddyMedia is integrated into the platform there is now a big opportunity in data-driven media buying across multiple platforms. And Salesforce is sitting in the sweet spot to make that happen.

The March of the Enterprise SaaS Players

You can’t do a piece around Salesforce and not mention players like SAP, IBM and Oracle (or even the likes of Accenture and McKInsey). Accenture, in particular, has been very active in our space. Its recent deal with BMW suggests that the consultancy giant is looking to move its core competencies of implementing infrastructure projects into wider functions functions like marketing and media services. Both in its view are intertwined. So is this an opportunity or threat to the existing players in the space? It depends how you look on it. Consolidation is inevitable – and this could be a threat to current vendors in the space (namely agencies), as we’ve pointed out in a previous post. But if Salesforce opened up its platforms to non-competing vendors it could open up a whole new raft of opportunities for traditional ad tech vendors.

Building on top of the Salesforce platform with direct access to its clients’ CRM could enable deeper integrations, better insights and ultimately better targeting. Ad tech and marketing tech are converging. Forget the ad tech landscapes that have come to define our industry. The canvass is now a lot larger – with more room for growth. This will be key area of discussion at ATS London ’13 (25% of early bird tickets are already sold). This is the future of our industry and we’d better be prepared for the march of the enterprise marketing giants.

You recently spoke how attribution needs to be addressed – and fixed – before we see significant shifts on spend into digital display.  Can you expand on that point?

We’ve seen explosive growth in RTB over the last 3 years. However, for that growth to continue advertisers and agencies need to be convinced that their spend is driving real results. They have to trust that the attribution scheme is a reasonable proxy for the path to conversion. The current approaches of last click and last view attribution are so demonstrably flawed that advertisers are too often skeptical of the results. We recently had a client complain that our results were too good! He simply didn’t believe what his own ad server using his own preferred scheme (last view) was telling him. That scenario would not happen in Search. In Search, the path to conversion is trusted.

Last touch attribution has the advantage of being simple but in an RTB world that is dangerously simplistic. It incents an overuse of retargeting. We’ve all experienced a visit to an ecommerce site that yields more than 20 ads for that advertiser served over the course of the next 5 to 10 minutes! Many of those ads will be cheap placements, often unlikely to be viewed by the user. This is a gaming of the attribution system rather than a focus on driving actual (new) customers. This must be fixed for the good of the whole industry.

Are you looking for an industry standard to be introduced?  How could that be implemented?

Quantcast would certainly love to see the industry adopt an attribution methodology better aligned with causation and more representative of the customer’s actual path to conversion.

Implementation is a more complicated question though. Industry standards emerge as much through bottoms-up adoption as top-down implementation. Ultimately, Advertisers and their Agency representatives should be the driving force behind the discovery and adoption of effective attribution models. No one is more motivated to figure out what’s really working than the client footing the bill.

Advertisers and Agencies should ask a simple question: Does the attribution scheme I currently use lend itself to being gamed? Does it incentivize the easy tactic of retargeting at the expense of the hard work of prospecting – of actually finding new customers. If so, is there a simple, transparent attribution approach that will fix these challenges? How you score the game will determine how it’s played – it is the single biggest lever an Advertiser or Agency has to drive performance.

We, at Quantcast, have been leveraging our Big Data infrastructure to develop an attribution proposal – our advertiser and agency clients who have tried it have found it to be extremely useful. But ours is one approach and we’re happy to collaborate with any and all players in the industry.

Do you think this will be a difficult process given how many bespoke approaches are available on the market? Shouldn’t advertisers have unique models on a per client basis?

The various bespoke approaches are a crucial part of the discovery and innovation process. Again, advertisers and agencies will be the driving force here. We look at Search and Google Analytics as a pretty good model. Across advertisers, product types and verticals the same metrics are used. The expected values may vary but the entire industry runs on the same, simple to understand framework.

We’d suggest some caution – ensure that the bespoke approaches leveraging “Big Data” do three things:

1. Measure every touch – A few of these attribution systems measure only the last 10 touches.
2. Get correlation vs. causation right – If the bespoke attribution scheme suggests that you should do even more retargeting , its confusing correlation with causation.
3. Remains simple & understandable – If the Agency or Advertiser doesn’t understand why the attribution scheme is scoring things a certain way they can’t be on the look out for the gaming which I’ve referred to

What would a standardised model look like?  You mentioned a 2 touch approach before the actual conversion?  Can you explain how that will work?

As both a measurement and advertising company, Quantcast sees both sides of the attribution challenge. A few key points have emerged through our work with clients on attribution:

- Display clickers aren’t converters – ample evidence has long made clear most users don’t click most display ads. This is consistent with findings from Nielsen, Comscore, Facebook and every other credible source who have studied this issue
- Site Visitation is a common, crucial, and often ignored event in the conversion path – most users visit a Marketer’s first before making a purchase. It marks the transition point from the hard work of prospecting to the more straightforward work of retargeting

Based on these three insights, Quantcast has been developing an attribution methodology that better aligns delivery with causation, which we call ‘View Before Visit’. This methodology gives credit for each conversion to two touches – the last impression before the initial site visit as well as the traditional last impression before conversion. This setup treats the Prospecting phase and the Retargeting phase separately thereby:

- Preventing Retargeting from taking credit away from Prospecting, which is, after all, the more challenging task
- Holding Prospecting accountable – Prospecting gets credit only for eventual conversions rather than simply driving users to the homepage

The Advertiser or Agency controls how to split the credit between Prospecting and Retargeting – if they think that the two phases are equally valuable they can decide on a 50/50 split. If they think that Prospecting is more valuable they can make the split 80/20.

This approach has the advantage of being simple to understand. This small, transparent change removes the incentive to over-rely on retargeting and game attribution. Separating these two distinct phases, and explicitly acknowledging the role that both play in driving conversions, allows Marketers to better optimize delivery over existing, simplistic methodologies such as last or first view.

Do you think publishers are not fairly rewarded for the part they play in the value chain with the current attribution models?

Probably yes.  Almost all attribution systems today reward quantity over quality.  This has led to a proliferation of supply, and a bias against quality, particularly quality of engagement and interaction.  Quality metrics like Viewability and related data will play an increasing role over time in attribution, if the technical challenges of accurately measuring these metrics can be worked out.

Is it possible only a couple of companies can really introduce a truly universal attribution model – like Google and Facebook?

Not necessarily, but large AdTech companies like Google or Facebook could certainly help to accelerate the process. Ultimately, better attribution will help the entire ecosystem, not just one publisher or vendor, as Advertisers will see better ROI and thereby increase spend over time. Google owns both Google Analytics and the Doubleclick platforms. Facebook now controls Atlas. Either or both could do a huge service to the industry by focusing on attribution and looking for simple, transparent approaches that address the current shortcomings. We’d certainly be willing to work with them to address these issues.

How does the market initiate this process? What steps should you take to start implementing a full blown attribution project?

The first step is an understanding and acknowledgement that this is a key issue, arguably THE key issue in the industry. There are a number of dedicated attribution companies – the one that cracks this central issue will create a huge amount of value for the industry and, no doubt, differentiate themselves from their peers. There are also the major ad servers whose clients desperately need a better solution than the antiquated approaches currently on offer. The IAB has done a great job of bringing Viewability to the front burner in a thorough but also judicious way – they could do a similar job around attribution. All players in the Display industry have a common incentive to solve this problem so we welcome any and all paths to a solution. In the absence of another solution, in the short-term, we’re focused on continuing to offer our free, simple approach to our advertiser and agency partners.

How important is it to be capturing all touchpoints – regardless of whether the touch point led to a conversion? 

It is crucial. Let’s look at a simple way that only looking at a subset of impressions can lead to attribution gaming. A few attribution systems measure only the last 10 touches. Some vendors now serve 10 Retargeting ads just in the handful minutes after the site visit, crowding out any upper funnel prospecting ads shown to actually drive the visit in the first place! Again, Retargeting gets all the credit even though Prospecting has done majority of the hard work.

Where do you sit on the Causality vs Correlation debate?

We don’t believe there should be a debate.  Differentiating between correlation and causation is a classic challenge in statistics. That said, this issue is at the core of attribution – mistaking correlation for causation will give the appearance of progress, as budgets are shifted between seemingly effective tactics, only to find that the number of customers the client sees come through the front door is flat, or worse, declining. 

And that’s what it’s really about – all advertisers want the same thing, customers. The key challenge for any attribution vendor is to make sure their approach, no matter how apparently sophisticated, avoids this trap. A simple test that any Advertiser or Agency can conduct: Does the attribution scheme suggest doing more Retargeting than a last view attribution approach. If so, you’re into correlation confusion – you’re crediting the rooster for the sunrise.

The growing involvement of publishers and technology partners has fuelled French programmatic buying progress. StickyAds Video Exchange’s recent integration with TubeMogul’s buying platform has allowed access to French premium video inventory. This is a very positive development for the French RTB market and it is becoming increasingly apparent France will play a key role in the development of programmatic buying across Europe in all digital advertising formats.

As a channel, online video will appeal most strongly to brand marketers and is the fastest growing segment in the French digital market (60% growth in H2 2012). As the Video Exchange only launched recently, I’m eagerly anticipating the next set of growth figures to see the impact that programmatic buying has on this growth. Personally, I am expecting to see stronger numbers than in other markets.

Indeed, such a private environment is the answer video publishers are looking for, with a recent study by AdMonsters and Adap.TV reporting 73% of EU publishers not offering video inventory on RTB due to their fear of pressure on CPMs in open exchanges. However, 30% of publishers surveyed said they will be running a private video ad marketplace within the next 12 months. The continued growth of video, predicted to be 55% of all consumer internet traffic by 2016, will ensure it remains top of the publisher agenda.

On the demand side, early market assumptions may have led advertisers to believe that only low-value or remnant video inventory was being traded programmatically. However, in our experience, this has definitely not been the case. We are currently running campaigns for our clients in the UK, and other European markets, on premium video inventory sources such as Fox, BBC Worldwide and MTV, to name a few, as well as taking advantage of the vast reach on YouTube. In addition, StickyXchange in France hosts inventory from premium publishers like TF1/Wat, Bolloré, Lagardère, Prisma, Microsoft/MSN and many more.

We have managed to get impressive early results from online video via RTB by using this inventory. Our campaigns have proven a cost effective way to reach a client’s target audience with a TV-style message, but at the right time and in the right context for the individual user and with minimal waste.

As promising as this is, few of these budgets are currently originating from TV plans, and a lot remains to be done to make these two channels work together. In terms of buying, a lot of development focus is going into bridging this gap. We can soon expect to have real-time TV schedule data available in DSPs or second-screen offers (applications in mobile devices interacting in real-time with TV schedules).

In terms of planning, online video campaign measurement tools such as comScore’s Validated Campaign Essentials and Nielsen’s Online Campaign Ratings (OCR) tool will be critical. Their capacity to deliver comparable TV metrics such as GRPs and TRPs, reach and frequency, make online spend both relevant and accountable for TV advertisers. These metrics have been widely implemented in the UK and we are already seeing 20% of our client spend going through video, with great success.

There is little doubt that the integration of the StickyAds private video exchange into more DSPs is a stride forward for the French programmatic market and another unique feature in the European landscape. Along with the convergence of TV and online video planning metrics, this provides the perfect foundation for a successful year for online video in France.

Speaking Premium in Germany

We deliberately set out to frame much of the discussion at this year’s conference around programmatic premium/guaranteed/direct. German Sales Houses do not like (publicly, at least) the idea of impression-level buying. And you can understand why. The market has the highest CPMs of any European market. The sell-side fear price erosion, and many are still highly suspicious of this new wave of US innovation.

This was all referenced in Philip Missler’s keynote early in the day. Missler has always been outspoken about the recent wave of ad tech innovation, and outlined this in his presentation. He stressed a one-size-fits-all strategy will not work in Germany – and instead a more customised approach will be required in the current market environment. Having covered the German market for some time, ExchangeWire feels it was a fair assessment. If you look at the UK, German and French markets they could not be more different. I don’t think the keynote was a slight on US companies. Afterall Interactive Media is using AppNexus as its performance ad server, and its exchange solution – and the last time I checked AppNexus was “made in New York”.

Keeping on the premium theme, we had a number of vendors working in that area present at the event. Of particular interest was Adslot, the programmatic direct vendor currently working with a number of global publishers in automating premium selling. They are part of a whole wave of vendors – isocket, SSPs et al – trying to dominate this publisher revenue “sweet spot”. If there was any feature ad tech company that could do well in Germany it is this category.

Premium is the lingua franca of digital advertising in Germany. If you have a data-driven solution then the UK is the best starting juncture in Europe. If you are automating the premium layer then Germany (and the Nordics) are your best entry points presuming you can overcome the inherent difficulties in getting into those markets. The UK market is a DR dominated landscape – where Germany still has huge upside on premium. It is quite unbelievable that a local German company hasn’t jumped into this space already – given their unique ability to build excellent localised propositions.

Another fascinating presentation came from SHiftForward’s Paulo Cunha, who discussed the importance of functional ad forecasting when dealing with automating the premium layer. To get a flavour of this presentation, you can have a look at a recent piece he did for us on that very subject.

Adapting Real-Time Trading In The Commercial Environment

With very few publishers in Germany doing anything of note in terms of ad trading or progressive yield optimisation, there are no case studies to demonstrate the value of this approach. But on a European basis there are a few notable examples. De Telegraaf is probably the poster child of this approach. Now a partner of Rubicon, Martin Van Der Meij, Head of Revenue Development took the stage with RP’s Jay Stevens and Neal Richter. During a 20 minute Q&A session, Van Der Meij outlined De Telegraaf’s new approach to automated buying and selling.

The approach of the De Telegraaf was essentially to abandon the traditional waterfall style of allocating inventory – and instead bring direct, indirect and all sources of demand into an all-in auction thus increasing yield and maximising revenue. By bringing in direct (sold by the sales team) De Telegraaf was able to bid on its own inventory, increasing bid density in the auction. There are a number of smart publishers doing something similar, but on this type of scale De Telegraaf is out on its own

It’s an approach that many German publishers would balk at – and not likely to make it through committee. But still it did make many of the big Sales Houses think about how they are approaching this space – and in conversations after the conference it was certainly one of the things sell-side execs wanted to chat about.

Things Are Not Always As They Seem

During a spirited publisher panel, where we were again treated to the public line that the German market must find its own way of trading. RTB won’t work, Impression-level buying won’t work. But yet there are billions of premium .de impressions sitting on Adx – albeit all sold blind or bundled into some non-transparent premium bucket with no detail passed to the buy-side.

This is all fine. But to be protesting about price erosion while engaging in this type of practice is a little short sighted. Maybe Google might persuade them to be more transparent – and the flood gates will inevitably open. It feels as though the the Sales Houses are finding their way, and will eventually reach a consensus on how programmatic buying and selling will pan out in the next six-to-twelve months. The choice of vendors they go with will be interesting to say the least – given German publishers’ love/hate relationship with Google.

A taster for ATS London

The most interesting discussion of the day was not a German Sales House panel nor a sell-side debate – it was instead a conversation framed around the customisation of marketing and advertising technology. Exploring the concept of bespoke versus off-the-shelf, this fireside chat examined how service providers in the future will need to be re-engineered to help advertisers navigate the myriad of options open to them from a technical and analytical perspective.

Featuring Zalando’s Oliver Roskopf and IPONWEB’s Derek O’Neil, a number of progressive themes were addressed – particularly around the intersection of advertising and marketing technology, something which Terry Kawaja highlighted in his presentation the week before at the AppNexus summit in San Francisco.

Expect to see a lot of that at this year’s ATS London, as we try to move the narrative beyond the narrow confines of programmatic display and into a bigger focus on how ad technology can become a key constituent of the martech stack.

Progress in a roundabout kind of way

What about the German market then? Some say it hasn’t moved on. But if you look at some of the innovation in the market (particularly on the buy-side) and some of the behind-the-scenes strategy of German Sales Houses you can see that a change in the way media is traded is imminent. It won’t look like the UK or the US, it will be the German way. What that will look like is anyone’s guess. But if you were to venture an opinion, it will likely be built around premium and be a much more customisable strategy. If there ever was a barometer in the German advertising market then it is Thomas Falk, and the fact that he is now diving into this space suggests that that local market will hit its stride soon.

Save the date, ATS London 2013 is returning Tuesday September 10.

ATS London 2013 signals evolution. We believe that the past three years have transformed the industry, from an advertising technology perspective. We also believe that the next phase of growth will come from the broader enterprise ecosystem, and we intend to take you along on that journey.

At its heart, ATS London has always embodied the theme ‘data-driven’. In 2013, we intend to widen the focus of the event, while staying true to the core values of ATS.

It will remain inspirational. It will remain educational. It will also remain the de facto forum for the smartest minds in our industry, providing unrivalled networking opportunities for the largest cross-section of the global ad trading community.

To ensure the event is fresh and relevant, ATS London 2013 will take a detour from the typical sponsored programme format. This year’s event will be unconventional — featuring entirely unsponsored content. We want to pay homage to the enormously valuable contribution of previous years’ speakers, sponsors and supporters who have helped us curate great events and build the ATS brand. So, we have created a blank canvas for the content forming this year’s event, which we want the industry to help shape.

We have appointed a small advisory board, comprised of the industry’s finest, who will guide ExchangeWire in the right direction. We want to present opportunities for the newest startups, solving some of the most difficult industry challenges, to take to the stage and expose their message.

As ATS London grew over the last three years, the content became broad in an attempt to be sure that we were bringing everyone into the conversation. This presents a key challenge: How do you educate and inspire 500+ unique people for an entire day? That is why this year ATS London will be delving even deeper into specific topics, while presenting extremely high-level, exec-driven thought pieces from the broader enterprise space.

How do we accomplish both? ATS London 2013 will introduce the TechTrack — a dedicated discussion forum for Ad Tech engineers, CTOs and data specialists within the industry. (More details to follow on this soon.)

Expect more content focussing on emerging and existing themes, including: marketing analytics, measurement, open data, wearable computing, multi-connectedness, open source technology and many more subjects that will be new to our core ATS London audience.

We need to evolve the industry together, and we look forward to hosting you again in September.

Early bird discounts are available for one month and only 100 tickets will be sold at this hugely discounted price. Click here for more details.