Last week we were lucky enough to participate in three excellent online industry events taking place in Warsaw:

• Internet Poland Conference & Expo
• Forum IAB Poland
• MIXX Awards Ceremony

Internet Poland is the “biggest event in Poland presenting interactive marketing companies and issues,” and this year there were more than 800 conference attendees and over 3000 expo visitors and 90 exhibitors – quite a turnout for the first online industry expo ever in Poland. During the Internet Poland event, the fifth Forum IAB conference was held in Hall B, where lectures about various aspects of the Polish online industry were delivered by top industry speakers. In the evening, the MIXX Awards were presented in the same location for categories ranging from best Branded Content to best Direct Response.

One conclusion I can draw from these events is that the Polish online industry is experiencing exceptional growth. This is perfectly in-line with a recent article I read, Poland leads European e-Commerce growth. This article explains that the number of online shops operating in Poland is increasing by 30% per year, with 10,000 online shops counted at the end of 2010. This means that a surge in online marketing spend is sure to follow, and we are excited about serving both Poland and the greater Central and Eastern European markets with the most advanced display advertising solutions created for eCommerce marketers. 

Real-time bidding is sure to be an integral part of the continued growth of the online industry in Poland in 2012. We are prepared to be a major catalyst for that growth!

See more pictures of the event on our Facebook page.

Forum IAB Conference Overview

The conference was full of great presentations, but I wanted to take a moment to highlight a few that really stood out:

Keynote: Thank You Economy
Gary Veynerchuk

This keynote was primarily about social marketing and entrepreneurship. Gary drove home the point that “social media is the new decision influencer in our purchase decisions.” He spoke about the social graph as a collection of wisdom – Twitter as a cocktail party where everyone is listening to others to help determine their own opinions, because “we are not very good in knowing what we want, and we’re very quick to say ‘this sucks’.” This is where the opportunity lies for marketers.

Just as with social media, real-time bidding is about seizing a real-time marketing opportunity – taking advantage of a moment in time when a customer’s mind is open to have their opinion, and ultimately their purchase intent, influenced by what is in front of them on the screen.

The Polish Media Market – Offline vs. online
Tomasz Lis

Tomasz Lis is a famous polish journalist, TV presenter, and Chief Editor of the Wprost Magazine. He is opening a news portal, http://cosnowego.pl/. Though he comes from the offline world (print, TV), his investment into online media is an important development to demonstrate the growing influence of the online sphere in Poland.

Today and Tomorrow in Polish Online Advertising
Panel discussion
Robert Bednarski, Wiceprezes, COO Grupa Onet.pl
Artur Waliszewski, Regional Business Director Poland & CEE, Google
Anna Kaczmarska, Prezes, IDM Net
Dominik Czarnota, Prezes, NK.pl
Jakub Benke, Prezes, Starcom
Artur Gortych, Prezes, Artegence

The key point to this panel was that data will become more and more important.  The data is there, and the winners will be those who learn how to monetize that data. Polish online ad spending is still growing, but there is a lot to do in order to measure the online marketing reach in real-time. The big branding spenders are for the most part still taking their budget to TV. Some Internet companies in Poland are already tackling this challenge to grow the online slice of the advertising pie: Nk.pl (Dominik Czarnota) is working on individual user advertising for their community (like Facebook is already doing). IDMnet (Anna Kaczmarska) is evaluating new ways of monetization, including not just ad inventory but data monetization as well.

The Game Change: How Real-time Bidding is Revolutionizing Online Advertising

In the afternoon of Day 2, sociomantic had the honor of sending our Managing Director Thomas Brandhoff to speak on our favorite subject, real-time bidding, alongside Admeld’s Frederic Lamoulie. Many of the industry experts were waiting for these RTB slots, because this is a subject that is growing in interest to online marketers across the globe. Lamoulie presented details on the sell-side of the RTB equation and how publishers can earn higher eCPMs by incorporating real-time bidding into their yield strategy. Naturally, Brandhoff focused on the buy-side, explaining the bidding and personalization process, as well as why RTB is truly a “game changer” for advertisers in terms of transparency, efficiency, simplicity, and more. He also shared some recent projections from IDC reserach which forecasts that the RTB industry will swell to be a $6.5 billion industry in the U.S. and Europe by 2015.

Overall, it was two days of great events for the Polish online industry, and we are already looking forward to participating again next year!

If you want learn more about real-time bidding solutions for eCommerce advertising in Poland or CEE, please don’t hesitate to contact me!

200 people were gathered yesterday in the center of Paris to exchange on Ad trading. Obviously RTB was on everybody’s lips.

It’s always amazing to see that what took 400 years in the financial market happened in just 17 years in total online.

Most of these 200 people were there to share information on this revolution that’s leading to increased ROI for advertisers and increased revenue for publishers. We’re still at early days and even though we are already able to provide volume and performance, there’s still a significant need for education of advertisers and publishers. Our ecosystem is generating scalability in a French market of only €600M display money.

The fact that there are many companies educating and innovating helps our market grow faster than in the US where a very few players are dominant. The key challenges for the future are going to be:

• Increased transparency between advertisers, service providers and publishers. Advertisers already clearly see the value of RTB, and most of the advertisers confirmed that they plan to increase their investment in RTB in the coming months. Education of more advertisers is key.
• Operational efficiency in managing campaigns. Managing not only pure retargeting but evolving to the management of advertisers marketing segmentation needs and offering users a richer experience when exposed to RTB display advertisement.
• Evolution on data

For us, the key success factors in this ecosystem will be:

1. People
2. Technology
3. Data

All of these factors have always been critical for us at sociomantic and we’re proud of being part of one of the fastest growing internet companies in Europe. As Pierre Emmanuel Cros, MD from Performics stated, it’s not about being specialists or generalists, it’s about who will provide the best performance for both the advertiser and the publishers. In our space, technology is critical — and that’s why we invested so much into it.

Beyond education, two areas of our ecosystem will need to evolve. The first one is Third party data. While at sociomantic we’re focus on customer first party data (for example CRM data) and our own data aggregation, there are several players on the market coming from offline or purely online offering third party data. They have great experience in aggregating social/demographic data and offer interest and purchase intent information. For a few players, those datas are aggregated on websites they’re working with, analyzing the content of the pages, creating clusters and defining target groups. For a few, those datas are aggregated offiline and historical players claim to offer up to 600 criteria per individual. There are still two questions around that. First is the lifetime value of purchase intent, for example. If I go to an e-shop, looking for a pair of shoes, how long will it take me to buy them on or offline? The other question which is critical to our industry is the business model that the data providers are offering to access the information. Interestingly enough, when the question about the business model was asked to the panel of four people at ATS, they looked at each other and didn’t really answer the question. Third party data is another milestone for our industry. The question is who will get this data — will it be the DSP like us, the SSP, the publishers?

The second area is the publishers themselves. Many publishers see already a significant increase of the display revenue coming from RTB. The vast majority of publishers still maintain a differenciation between a ”premium sales team” and what’s still called ”unsold inventory.”  They still differenciate based on what’s sold and what’s not, not analyzing the precise revenue generated and preferring not to generate revenue on what’s considered as ”premium placement.”  At the same time, publishers are expecting RTB to help them gain market share back from SEM and to attract back advertisers that have left the display side in the past years. They also recognize that there’s no cannibalization today between RTB and branding. We’re more in a unsellable by the internal sales team environment than a unsold environment. What RTB is achieving cannot be achieved by direct sales team with the traditional insertion order. RTB is bringing value in the display environment.

I used to run a publisher. At Bestofmedia, I had to outsource production of content to other countries due to the lower CPM achieved on display. Our ”unsold” inventory was sold at far less than what RTB is generating. The potential of the RTB market is too huge to prevent publishers from offering transparency on URL on the SSPs and adexchanges, and not to open their inventory, allowing us to start generating revenue for them. The coming year will be exciting. We should be entering back in a virtous circle in which publishers are able to invest more in content due to what RTB will generate. Direct sales teams will concentrate on special operations and special format that RTB technology cannot offer today.

ATS Paris was great. I hope that for the next session, even more advertisers will attend, leading to an event at which we can also exchange on customer performances and advertiser requirements.

Anyone who’s watched our Careers page or Facebook feed lately has probably noticed that we’re hiring. Demand for real-time bidding technologies is growing fast, and to meet that demand we’re continually expanding our team. It’s an exciting time to work at sociomantic, and an exciting time to be participating in one of the fastest-growing segments of online advertising.

Just look at where the “big guys” are investing — Google has gone gaga for RTB display in the last year (see for example their recent purchase of Admeld for $400 million), Microsoft has just announced some big improvements coming to their display machine, DG’s recent purchase of both MediaMind and EyeWonder… the list goes on. The digital share of the marketing pie will only continue to grow of the next years, and the growth of RTB will be a major component of that expansion.

The industry’s growth is just one reason why it’s an exciting time to work at sociomantic, but the benefits are many. In no particular order, here’s my top ten:

1. A sense of urgency
Every day is a big day at sociomantic HQ. For us, as for any startup, hurdles and challenges abound. Things are changing and expanding constantly, and for a certain personality type, the intellectual stimulation provided by this constant flux is what makes working here worthwhile.

2. Personal Fulfillment
From my experience, this is something that is much harder to achieve from within a large corporation. Working for a startup, you see the immediate, visible results of what you personally have contributed to the company. And as the company grows, you get to witness not only the daily effects, but the lasting impact of something you helped to build.

3. Research and Innovation
There are a lot of companies in this space that offer good, smart marketing solutions. That means it’s our job to create and maintain even better, even smarter marketing solutions and deliver them with superior service if we want to stay in the game. Our company was born out of academic research, and research and innovation remains (and will remain) one of the central tenants of our business.

4. Fast-Paced Learning
I’m a full supporter of higher education, but I get the feeling that I’ve learned more in my past 1.5 years at sociomantic than I learned in four years of studies. I don’t think this is necessarily the fault of my schooling as much as a characteristic of the work environment here. I can safely say that I head into each weekend with the feeling that I have expanded my capabilities or knowledge in some way each week.

5. Diversity
Our solutions are aimed at cross-border, multi-national eCommerce companies. So it makes sense that the people developing our products should come from a global background. Internationality is a key tenant of our business design, and we strive to build a team that is as diverse as the markets we serve. There’s a certain sensibility about people  with what we call an “international mindset” — the open-mindedness and flexibility that comes from immersing yourself in new and different cultures. This mindset — and the diversity that breeds it — makes this an awesome work environment.

6. Freedom
This may seem a little surface-level at first, but I think it has a huge impact on day-to-day attitudes at a company. At sociomantic, we are given a lot of flexibility — whether it comes to the hours and days we choose to work, what music we play on the office speakers, or the clothes we wear at the desk, our managers create an environment where the team can feel comfortable and do their best work. After all, if you hire someone because of his or her individual attributes that set them apart from the other candidates, he or she should feel comfortable expressing those attributes in their place of work, right?

7. Growth
Working in a startup like sociomantic, you really get to feel the pulse of an industry that is truly alive — growing, expanding, and changing each day. And growth is a really exciting thing, no matter what industry or company you work in. Watching trend lines that are going up — whether they are measuring efficiency, revenue, full-time employees, data volumes, or happy customers — is something that is sure to excite every department in the company.

8. Responsibility and Influence
One of the key differences in working at a startup versus a large corporation is in the level of responsibility given to individual team members across the hierarchy. We operate with a relatively flat structure here — all team members get to contribute to major projects, even our interns. Because each project team gets a high level of responsibility, people really tend to take ownership of their projects, striving for excellence on all levels.

9. Impact and Disruption
It’s a great testament to our founders that they have managed to build a company which is truly rocking the existing European display ecosystem, and it’s an honor to be part of a team that is dedicated to helping our customers take advantage of the most sophisticated online marketing approaches available in the market today.

10. Our Team
I can truly say that I am proud to work with some of the best and brightest minds in the industry today. As mentioned in the previous point, our diversity in both cultures but also in experiences gives us a creativity and agility that makes us champion innovators. On the other hand, the high-level digital marketing experience of our founders, management, sales, and product teams means that we know the industry inside-out, and can anticipate and accomodate customer needs and desires. Plus, these folks are just plain fun to work with.

Sounds pretty good, doesn’t it?

Are you looking for an unique, exciting, and challenging career in a dynamic and competitive industry? Maybe we’ve got a desk for you at the sociomantic office. Why not check out our Careers page and find out?

Like so many other online marketers from across the globe, we spent last week hopping between some of the biggest digital marketing events of the year. First stop, London, where we joined ExchangeWire’s Ad Trading Summit, the premier event for “Ad Trading Specialists” (aka ATS) from Europe and beyond. Then we headed off to Cologne, where we joined one of the largest meetings of online marketers in the world — the dmexco — where almost 20,000 visitors made their way between booths, keynotes, panels, seminars, and meetings. Needless to say it was a very busy and exciting week! Thanks to everyone we had the pleasure of reconnecting to as well as those we had the first time pleasure of meeting.

ATS London 2011

“I was really impressed with the range of opinions and expertise on the panels,” said Thomas Brandhoff, our Managing Director, of the #ATSL. “And needless to say the growth of the conference itself is a great litmus test for the growing interest in the topic of real-time display across the media industry in Europe — almost double the audience size from the conference earlier this year.”

There were many great thoughts shared at the conference from some of the industry’s most influential voices. The kick-off was a keynote from AppNexus CEO Brian O’Kelley, who took it upon himself to add one more TLA (that’s “three letter acronym”) to the already overflowing pool: ATS = Ad Trading Specialists. O’Kelley used this term to describe the bulk of the people in the audience: a new breed of digital marketers with specific focus on (real-time) biddable media, especially display. He also announced that AppNexus would be powering a new exchange for Hi-media, one of the biggest online media houses in Europe. This is certainly good news for advertisers as well as a great step forward in getting more European publishers on board the RTB train.

There were plenty of memorable moments throughout the conference. We couldn’t agree more with what Netezza’s Brad Terrell said about the importance of hiring world-class talent, and he was spot-on with his statement about never underestimating the importance of reducing data latency. According to Joe Zawadski from MediaMath, we are past the stage of installing the plumbing of marketing automation (ie, the “Liquidity” and “Automation” stages), and well on our way to the third phase: Optimisation (with an “S,” since we were in London).

One interesting suggestion from the panel titled “Moving Brand Spend to the Automated Channel” was for brands to use the digital channel as a testing ground for the messaging they would take to their preferred branding channels, such as television. Richard Dance, who works for an agency representing Ford, explained that using technologies like smart versioning and dynamic creative optimization, advertisers can use digital display to see which messaging consumers best respond to, then pass those learnings on to the other channels. Obviously most of the audience was keen to the fact that a whole new world of possibilities for both branding and DR will become possible as addressable TV comes to the market.

A message that came across loud and clear from the agencies and advertisers in the panels was “simplification!” To bring people across the bridge into the world of RTB, avoid talking shop in the purest sense. Leave the acronyms behind when possible, and make sure that customers and potentials understand the WHY before they try to wrap their minds around the HOW. It’s no easy task to educate the market about what’s so great about RTB, but if we all take a step back and try to make this simpler for the advertisers and publishers who can benefit from these solutions, they will be both excited and anxious to implement these technologies instead of intimidated by the mess of technical terms. Transparency was another key issue: one speaker said that now, because of these new models, it’s not good enough for a solution provider to show the advertiser the only “answer” to the question, but they must also “show their work,” that is, show how the end was achieved. Black box is not going to cut it anymore.

The moral of the story for the day: “If it’s digital, it will be traded.” We look forward to helping advertisers to add incremental value at an impression-by-impression level using RTB!

DMEXCO 2011

This was my second year attending the dmexco, and it was even more exciting than the first. This is truly a global gathering of some of the greatest minds in the business. I had the pleasure to meet and hear from many marketers that I admire a great deal, and share in the bubbling excitement that was flowing through the exhibition halls. This is an event that I would not want to miss any year!

“This is THE leading digital marketing conference for Europe,” says Lothar Krause, sociomantic VP Sales. “We were working hard on both the supply side by working with new and existing inventory partners, as well as growing the demand side by getting even more clients on board.”

At 19,300 visitors, this was the biggest dmexco to date, and you could really feel the energy throughout the two-day event. On the first day of the conference, Tommorrow Focus highlighted a study done with comScore which showed that RTB is the main area of automation that advertisers expect to invest in over the next year. The prominence of companies like Admeld at the conference also demonstrated that RTB was one of the main topics of the event, a word (err… acronym) that really was on everyone’s lips! One problem with this of course is that a lot of companies were claiming expertise on the topic, when there is reason to believe that they may not have much experience with “real-time, for real” — but it’s a good sign in any case that the real-time concepts and performance improvements they can deliver are on their way to being adopted across the display industry at large. The biggest challenge for marketers will be to weed out the PR stories from the true real-time technology players. If you need any direction on this point, you can always get in touch with us.

We were also lucky enough to get to educate the market a bit on the topic of RTB for eCommerce advertisers. Lothar spoke on the second day in the Speakers’ Corner to an attentive crowd.

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Thanks to everyone involved in these events for helping to make an awesome week in online marketing! We look forward to help even more advertisers rock RTB over the coming year!

From my own experience, I can say that many online marketing companies have been struggling to report actions within 30 minutes, and there have been times in the past where I have spent hours waiting for an interface to show hardly any numbers. Within the last 10 years, few improvements to performance and scalability have hit the display market at large. Therefore I ask: where is the innovation? Several large corporations dominate online marketing, but so far even these giants haven’t committed to acceleration of online marketing actions in order to keep up with the speed of how personal communication travels through real-time channels like Twitter and Facebook. Finally we are starting to see major investments into this area from some parties, but the progress has been slow to arrive.

But even within the “real-time bidding” segment, some of the prominent players on both demand and supply side report their final numbers as many as 12 hours after things have happened. We as an industry should be offering our clients more.

Many companies are still using old relational database systems for these massive amounts of data, when obviously relational databases aren’t built for this type of work! Of course the ability to store, retrieve, and analyze massive data sets in mere milliseconds is by far the most expensive and critical part of Research and Development when talking about real-time marketing. But it seems that when it comes to these technology decisions, the decision makers at most companies in the space must be thinking, “Okay, I want to have a safe way of dealing with this topic.” They aren’t yet taking the risks that will be critical to truly move this industry forward.

The term “real-time” has been abused within online marketing by a lot of companies telling you they can offer real-time services. Usually this means you get reports after 90 minutes and then campaign changes are applied after another 30 minutes. I think a more appropriate term for true real-time advertising might be “stream-based marketing,” as it tells that information is traveling with the speed of the network — which at best can travel as fast as the speed of light! (And in the finance industry they are already investing in the fiber optic technology necessary to achieve such speeds.) Real-time means milliseconds – and in the future, even microseconds — not minutes or hours. I’m not suggesting that the industry change its terminology (it’s already far too confusing). I’m just calling for a halt to the misuse of the term “real-time” that is rampant within this industry.

So what does it mean to build stream-based online marketing technologies? Well, it basically means three things:

1. You want to see your spending milliseconds after purchase.
2. You want to start, stop, and optimize your campaigns in real-time in order to minimize losses and find out what works and what doesn’t without having to wait.
3. You want to react on external effects as quickly as possible.

From a technical standpoint, this means you need to provide instant feedback to the user as well as enabling the user to update his campaign settings and see the effects within milliseconds. We need to innovate to make this possible! We need to enhance the user experience and need to learn from other markets in order to make online marketing more sustainable and performant!

So, who’s up for the challenge? Can you handle real-time, for real?

If you’re interested in joining our team of innovators from around the globe to develop stream-based solutions that will help move the online marketing forward, check out our Careers page.

• What is real-time bidding (RTB)?
• What’s so great about demand-side platforms (DSPs)?
• Why sociomantic?
• What exactly do you mean by real-time?
• What is the pricing model?
• Where will my ads appear?
• What is dynamic creative optimization (a.k.a. “dynamic ad personalization” or “dynamic bannering”)?
• What type of clients does sociomantic serve?
• What are the fees and recurring costs?
• What sort of setup does it take to get started?
• What do you do to ensure the safety of my data?
• Are you hiring?
• What sort of privacy controls do you offer for the end user?
• How does RTB eCommerce fit into my marketing mix?
• What if I have more questions?

Have more questions? Email us to learn more about how RTB eCommerce can drive incremental sales for your online shop.

In January, we said that “real-time bidding” was the phrase on the lips of online marketers across Europe, and it seems like the case is certainly true in Germany this summer. On Tuesday we had the pleasure of participating on a panel at the sold-out Ad Traders Conference in Hamburg, an ad exchange-focused event put on by Adzine and ExchangeWire (two great sources for commentary on RTB in Europe, for those who are new to the game). We met and heard from many of the key players of the real-time display industry in Germany, where the topic – and the technology – is picking up more speed every day.

See our overview of the recent D3Con for more insight on the RTB scene in Germany.

It’s clear from the day’s discussions that Germany is a unique market in the European ecosystem — with more than 400 ad sales houses and numerous agency-owned ad networks, it seems perhaps an unlikely candidate for quick adoption of exchange-traded media. But despite these barriers, the participants emphasized that many of these existing businesses will need to adapt if they want to hold on to their shares of the display advertising pie. As advertisers continue to learn about the value that RTB can bring to their display strategy, they will demand real-time bidding technology and buying expertise, or find new partners who can supply it. Or as allegedly stated by Arndt Groth from Adconion, “reselling arbitrage and fairy dust is no business model for the future.”

The topic of the display market’s (over-)crowdedness was a frequent favorite from the presenters. In fact, the infamous Kawaja LUMAscape made such a frequent appearance that one attendee offered a cold beer for the first presenter who didn’t use the slide. In all seriousness, Matthias Pantke from Adscale reported that they are currently working with 26 retargeting companies – all the proof you need that players who want to stay in the display game will need to go beyond retargeting.

From the supply-side, there were reports of many challenges, but confirmation that the number of real-time buys is growing. According to Admeld’s Tom Jenen, more than half of their ads now sell via RTB. In Germany, the key challenges for the sell-side to overcome with German publishers are fears of commoditization and sales channel conflict. As discussed at the D3Con and across numerous editorials in the past months, some suggest that the private exchange model may be a stepping stone for many fearful publishers to gain their first RTB experience.

As the sell-side brings more supply into the exchanges, the challenge for demand-side platforms like sociomantic and agencies like mexad and YD World will be to bring what Improve Digital’s Joëlle Frijters described as a “critical mass” of competitive demand to the ecosystem. It was clear to everyone that the potential of the channel goes far beyond retargeting, but in Germany many companies have not yet moved past this first phase. This is of course a huge part of the sociomantic mission – pushing the boundaries of real-time display beyond remarketing, bringing the efficiencies of the RTB channel to highly efficient reach campaigns in order to help online marketers squeeze full-funnel value out of display.

All in all, there were some great questions and calls-to-action raised at this conference, and we are already looking to forward to continuing the discussion here on our blog, on Twitter (@sociomantic), and in September at ExchangeWire’s Ad Trader Summit in London and the dmexco in Cologne. Bis dann!

Intrigued by real-time bidding but still trying to figure out how it could work for your online shop? Don’t hesitate to email us your questions.

Several times last year, Terrence Kawaja (of LUMAscapes fame) gave a presentation he called “The Science-ification of media,” in which he outlined online media’s transition from a world of Don Draper-like “Mad Men” to the new world of “Math Men” – a world of digital advertising driven by real-time data and analytics. In case you missed it, here he is giving the presentation at Google Zeitgeist 2010:

With the influx of real-time bidding (RTB) and related technologies, we are seeing ever-larger pieces of the display pie being given the scientific treatment. Although we can see science-ification in many different aspects of display – from audience targeting to ad impression pricing – today we want to focus on little thing called creative.

Getting Creative, with Science

In display advertising, “creative” is the world used to describe the ad itself – whatever fills up those little ad boxes that dot almost every page on the web. You might also know it by the term “banner” – but display creative could also be a video, a survey, or even a game. While in the pre-digital days, marketers used A/B testing to find out which ad variation worked best, in digital advertising the testing and optimization (ie, choosing which ads to show) happens in real-time and on an individual user level.

So what does that mean, exactly?

Think of it as “Choose Your Own Adventure” advertising. It means that online ads can look different based on who’s looking at them, when they see them, in what environment, when they last saw one, and any number of other factors. It means that, in the same campaign, a consumer electronics company can show dramatically different ads to the 25-year-old sales rep from California checking out game scores on a rainy Wednesday evening and the retired teacher in Delaware scoping apple pie recipes on a breezy Sunday afternoon. Sounds great, sure, but how does it work?

Performance-based Optimization

Performance-based optimization is digital’s answer to A/B testing. It allows advertisers to test different ad variations based on results they deliver. Maybe the purple ads don’t perform as well as the lime green ones for a particular campaign. Maybe there are more clicks with the button on the top instead of the bottom. Performance-based optimization just shows the better performing ads more often. The difference from traditional A/B testing is that the selection process happens automatically, and – with the right technology partner – in real-time.

Dynamic Creative Optimization

In your basic performance-based optimization, the advertiser uploads a selection of pre-made variations of the creative. Then the system serving the ads (for example, sociomantic) discovers which ones work best and shows those ads more, making adjustments as the performance shifts.

If what I described above is your basic A/B(/C/D/E…) testing for digital, then dynamic creative optimization is it’s cooler, smarter big brother, multivariate testing. This means that each element of the creative — such as the copy, the image, the product, the offer, or the call-to-action – is an independent variable to be optimized.  By supplying the ad server (that’s us) with multiple options for each variable (eg, five sets of copy, seven possible images, four possible buttons, ten possible background colors), this allows for the automatic creation of dozens or even hundreds of ad variations.

What makes this practice especially potent is pairing it with audience targeting data. This allows advertisers to “micro-segment” their audience, serving up highly specialized ads to highly specific audience groups. And of course performance comes into play again here, but instead of optimizing across-the-board, each segment is optimized independently from the others.

Isn’t it amazing what machines can do these days?

DCO Best Practices: Remarketing and Dynamic Ad Personalization

We’ve said it before and we’ll surely say it again: remarketing is a tool that should already be in every eCommerce advertising toolbox. But finding the “right person” – one who has already visited your shop– is only valuable if you can show him or her the “right message.” When it comes to remarketing, dynamic creative optimization plays a pivotal role in the delivery of this message.

One of the coolest things about real-time bidding is that it allows you to reach an individual user at a singular point in time. In addition to impression-level pricing (pricing efficiency), RTB provides the opportunity to personalize each ad to the consumer who’ll be reading it. It’s the “micro-segmentation” discussed above, but down to the user level. And it drives serious results for online retailers.

It’s one thing to show a previous website visitor a generic creative with a “Free shipping” offer. It’s quite another thing to display the apartment rentals she checked out last week alongside offers for several similar flats in the same part of town. Of course personalization starts with the individual user’s previous behavior on your site, but the possibilities hardly stop there – we can also incorporate historical CRM data, deep shop analysis on product and category levels, real-time performance data, and more.

The moral of this advertising story is that science-ification of creative has brought the possibility of one-to-one marketing to the digital world. Now advertisers wishing to reach customers and potentials with individually tailored ads have that possibility at their fingertips via real-time bidding.

Many thanks to T. Kawaja for the use of his made-up term in this blog post.

If you’re interested in learning more about dynamic ad personalization or any of our other science-ified solutions, don’t hesitate to get in touch.

What is most clear from the report is that CEE is a market full of incredible potential for online advertising growth. Gemius offers a fine summary on page 10:

The online market in Central and Eastern Europe is developing; therefore the dynamics of its growth is still one of the key factors indicating its great potential. Despite the fact that differences in the development of the internet in various CEE countries are visible, an increase in the number of new users in the whole region is not losing momentum. In this respect, the Central and Eastern European online market is growing from strength to strength and appears to be a forward-moving and extremely promising business sector.

Although our home base, Germany, is the largest internet market in Europe, with about 50 million unique visitors (according to comScore Media Matrix, March 2011), both Russia (~47MM  uniques) and Poland (~18MM uniques) are in the top ten European countries measured by unique visitors. According the Gemius report, across the whole of CEE (including Turkey), there were 117 million internet users as of the beginning of 2010 – not yet half of the region’s population of about 300 million people. That’s a growth of 9 million users since the beginning of 2009 –  more than the entire population of Slovakia

The internet penetration rates in these countries show that there is still room for massive growth in much of the region. While Germany already had 79.1% penetration in early 2010, penetration the CEE countries ranged from a low 21% in Ukraine to 71% in Estonia.  In Poland, the penetration grew 7 percentage points from 2009-2010 to 55%. At the beginning of 2010, the penetration average across the region was at a mere 49% — and it’s for this reason that the report describes the online market in CEE  as “something akin to a half-written book.”

But despite the low penetration numbers, the growth rates show that more people in these countries are getting online and advertisers are following them with budgets. “Currently, there is no need to convince anybody in the CEE region that online advertising is the future and the basis for commercial operations within digital media” (p. 18). In 2009, online advertising spend in CEE totaled 1.3 billion Euros, an 11% increase over the previous year. The greatest amount of online ad spend is found in the larger markets – Russia, Poland, and Czech Republic. Czech Republic saw a 32% year-over-year increase in online ad spend between 2008 and 2009, and in Ukraine the increase was 45%

The moral of this numbers story is that CEE is an online market that is growing incredibly quickly. As more of its users move on online, advertisers will be looking for easy, efficient ways to reach these users at scale. We hope to provide that scale for the display channel by working with our supply partners to access the increasing number of online users throughout the region, and by helping our advertisers to reach these users with personalized ads that boost eCommerce spending.

It’s clear that there is still a lot of room for research on the dynamics of this region – in fact we hope we can look forward to a third edition of the “Do you CEE?” report this year. In the meantime we can only wish the guys at Gemius good luck tonight for the IAB Research Awards!

Are you an advertiser looking for traffic in CEE? Contact us today to find out how we can help you reach this quickly growing audience.

Note: To read more about online growth in the Polish market in particular, you can check out my blog entry, “Internet Poland 2010 – Facts, Trends and an Outlook into 2011“

At our last presentation in Hamburg at Online Marketing Rockstars in February, most of the audience seemed to be completely new to the topic of real-time bidding, so our presentation really stuck to the basics. At d3con we spoke to a room full of display experts, so the topics discussed were much closer to the heart of RTB. Despite this general level of expertise, perhaps future conferences around the topics of data driven display and RTB could consider starting with a small introduction to the basic principles of this complex universe – maybe 15 minutes of explanation to make sure everyone in the room is on the same page.

As in the display market itself, the presentations and panels could be divided into three distinct categories: supply-side, data, and demand-side.

Supply Side

Across the supply-side presentations it became clear that the supply side is a step ahead of the demand side in terms of market development in Germany– the opposite situation to what exists in the U.S., where demand outpaces supply. According to Oliver Whitten, sell-side platform Rubicon Project is serving 10 billion bid requests per day.

Much of the discussion around supply focused on the private exchange, which could be a good solution for many sales houses to generate their first experiences with RTB. (For more info on private exchanges, check out “Private Exchanges- The Key To Unlocking High Quality RTB Inventory or Just A Repeat of Vertical Ad Nets?” by Sara Livingston.) From our perspective, it’s not a problem to have many different private exchanges develop because a demand-side platform can integrate with any number of private exchanges. But I don’t necessarily think it’s always the right move for a publisher to go for the private exchange model instead of putting their inventory into the open RTB supply. After all, publishers can define the same controls via their SSP without starting a private exchange (e.g, pricing floors), and a private exchange limits the number of advertisers competing to buy your inventory, which could mean lower CPMs. Additionally, when a publisher runs a private exchange they are responsible for building up their own pool of advertisers, whereas plugging into an SSP’s general RTB supply offers them the pool of advertisers connected to every integrated DSP.

In any case, it was clear from the supply-side that RTB will be a relevant channel in the selling of online media alongside some existing ways of selling ad spaces. Of course sales houses (like Zeit Online, who was represented in the supply panel) will be testing the RTB channel against their other channels to find the right balance for their business.

Data

First and foremost, the presentations showed that there is still not enough high-quality third-party data available in Germany and Europe at large, especially compared to the U.S. (eXelate had no good data examples for Germany, and according to adyard not more than 20% of German audience is available via data exchanges.)  Of course, this topic will become more relevant as the data market grows, but for now the scarcity of high-quality data means that much of the RTB buying in Germany is still focused on retargeting (especially compared to the nearby U.K. market.) This point confirms our strategy of powering RTB efficiency using advertisers’ existing first-party data in the first instance. Which leads us to…

Demand Side

It was interesting that the demand-side panel didn’t actually have any demand-side platforms represented. (The panel included advertisers, digital agencies, an ad marketplace, a DEM agency, and a targeting company.) So in this conference, sociomantic was the only DSP presenting. Altogether I think the conference was a great confirmation our offering — that the best efficiency for the advertiser will be found by leveraging their first-party data first, and afterward we can look to 3rd party data for more expansive campaigns.  Here’s my presentation on the topic from the conference:

Conclusion

Big thank you to Thomas Promny for organizing such a great event. Every event in this area will help the development of RTB in Germany and across Europe, and we are already looking forward to the next event: the Ad Trader Conference in Hamburg on 28 June (where we will take part in a panel). We hope it was not the last event from Mr. Promny in RTB!

You can find pictures of the event and downloads of the presentations here.