Agency Trading Desks and the Quest for Transparency, Actionable Insights and Real ROI

By Phil Fougere | Published: April 23, 2013

A recent article in AdWeek regarding Interpublic and how the agency plans to move 50% of its media buying to its own Agency Trading Desk is interesting in its own right.  However when viewed through the broader lens of agency trading desks as a whole, the subject definitely is intriguing.

Agency Trading Desks (lets call them ATDs) by design are where the “best and brightest” media minds within an agency – those Agency Trading Desks, Transparency, Insights, ROIwho are focused on digital media buying  – go to add value to the agency’s media buying operation while helping the agency, through consolidation and scale, secure the best inventory through programmatic media buying thatdelivers the results that clients demand. Forrester Research has defined ATDs as “A centralized, service-based organization that serves as a managed service layer, typically on top of a licensed demand-side platform (DSP) and other audience buying technologies;manages programmatic, bid-based media and audience buying.”

ATDs are powerful not only because of the scale and size of their media buying efforts on behalf of their clients, but also because of the analytics they employ. In the past, much of the analytical work these ATDs did involved merely looking at the content and the context where the ads should/would be seen and choosing the appropriate buys using this top-level insight.

Now, ADTs not only plan and buy media but they also measure results and report audience insights (where/if possible) to their clients. Though deep analytical insights are not their raison d’être, smart ATDs can augment their knowledge by engaging an ad tech provider (raising our hand vigorously) to help increase their audience targeting efficiency and campaign response through continual optimization.

Yet, in spite of the success of ATDs, some clients are wondering what exactly they’re getting for their money. Some even within the agency’s themselves see ATDs as a threat to the money that they could earn through placing the media buys on their own.

According to the AdWeek story on Interpublic’s thoughts around their Trading Desk “as more dollars are spent programmatically, more clients are starting to ask questions. And individual agencies are pushing to take more control of their own digital ad buying. Plus, many insiders report that despite the high profit margins generated by trading desks (think 40 percent to 50 percent), not enough clients were using them.”

“Most agencies want the great profit margins,” said an insider interviewed for the AdWeek story, “But they’re afraid that clients will call BS. The money essentially goes over the wall, and they don’t know what happens to it.”

Perhaps even more worrisome for ATDs are the results of a recent study by Advertiser Perceptions. The study of 345 ad execs and ad tech investors and providers found that nearly a third had little or no awareness of Agency Trading Desks and the value they provide.

In fact, what may really be missing from the ATD equation is something as simple as transparency, clarity and a real understanding of the ROI being generated by the work being done.

Sell-Side Platform Rubicon Project held an interesting session earlier this month in Europe where they asked a number of ATD luminaries their thoughts on the subject. One of the execs on the panel was Xaxis Managing Director for EMEA Caspar Schlickum (WPP’s trading desk). Schlickum said that those within ATDs must be extremely transparent, with costs dependent on whether it was using proprietary or partner tech, data costs etc. He noted, ‘as long as we’re honest and clear, and the same rigour is applied to other parts of business, fine.’

With such high margins and the ability to buy at scale, it seems ATDs aren’t going anywhere anytime soon. The agencies would be foolish to stable such a cash cow. However, with the added pressure on ATDs from inside the agency as well as from clients and Ad Tech players (who’ve invented a better mouse-trap or come up with deeper analytics or audience insights), it seems only a matter of time before transparency, actionable analytics and real ROI will be part of each IO through those same trading desks.

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Does This New Cage Make My Data Look Big?

By Jerry Harris | Published: April 10, 2013

We’ve spent some time this Spring in the cage. However, unlike our hometown Boston Red Sox, our time in the cage doesn’t have anything to do with hitting. Instead, we spent that time preparing for opening day by rolling out our new continuously-processing backend.

ChoiceStream Software Engineering_CageWe’re hosting our new data platform built on Twitter’s Storm distributed computing framework and on HBase for our user profile and complex event data. Kafka will have its own cluster for feeding Storm and ZooKeeper will keep everything coordinated. All of these improvements in our cage will translate into faster processing and optimization for our advertising solutions that are powering campaigns for some of today’s biggest brands like Zappos.com.

The prevailing industry trend is to eliminate cages in order to take advantage of the cloud for all deployments.  To that point, ChoiceStream has utilized Amazon AWS for years for development and production. Yet, we also believe that some serious time in the cage is important, especially because it to assures we’re ready to succeed when it really counts. That’s why we’ve maintained our own SaaS hardware for our CONNECT product which successfully powers product recommendations for such well-known brands like Tesco and Zappos.

These experiences have taught us the strengths and weaknesses of both approaches. As a result, we’re going to be using a hybrid approach for ChoiceStream’s new advertising solutions system. The backend system will be deployed in our own space and we will use the cloud for development and for real-time bidding (RTB). We’re also experimenting with a couple of Cloud providers to calculate the ROI for cloud or cage bidding.

Now, its time to step up to the plate and knock the performance metrics out of the park for our advertising solutions clients. Cage or no cage, our systems and our team are ready for the long season ahead. 

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Managing Metrics: Gross Rating Points Go Digital

By Bill Guild | Published: April 2, 2013

GRP or Gross Ratings Points is a metric almost universally applied to television advertising.  As more advertisers begin to bring brand spend online, it is becoming common practice to run campaigns across both offline an online media. In response to this advertisers will need a metric which allows them to compare the effect and efficiency of their campaigns across channels.

There have been some attempts to address this need by applying GRP metrics to measure the reach of impression based Multi-channel advertisingmedia. Online GRPs work on direct wholesale placements in much the same way they work on TV. The buyer commits to all or a portion of specific placements, then the number of impressions and the audience skew are fed into the formula.  However, the GRP formula comes up short in attempts to measure other types of impression based buys.

The Wikipedia definition of GRPs is clear and concise, and it makes a rational attempt to port the formula into impression based metrics.  An examination of that formula will quickly point out the challenges of impression based GRPs.

GRPs (%) = 100 * Impressions (#) ÷ Defined population (#)

There are only two inputs – Impressions and the Defined Populations. Impressions are very easy to read directly out of any ad server. So let’s figure out how to get the number for the Defined Population. This is the crux of the matter. In Direct Response (DR) campaigns, the essential definition of the desired audience is, “people who convert.”  It’s fortunate that advertisers running DR campaigns seldom care about GRPs. Branding campaigns have a similar, but fuzzier definition, which is, “people who eventually convert through a variety of channels.” Because this is so difficult to measure, brand advertisers usually revert to, “people who engage with my brand in a measurable way,” which translates pretty well into, “people who convert.”

It’s easy to get the population of a target audience like homemakers, urban professionals, and teens. It is much more difficult to find the population of people who convert for a particular offer, but up-to-date online advertising systems are built to find and target exactly that group.  These systems pick and choose a few homemakers, a few teens, and a few urban professionals, and the only thing this diverse group has in common is that they convert for a particular offer.

Getting good performance requires a campaign manager to constantly shift audiences throughout the campaign.  Brands expect audience targeters and programmatic buyers to run DR campaigns that learn from consumer response and adapt, in real-time to improve performance. For advertisers, this means, finding and targeting “people who convert.” Therefore, the audience being targeted will never be defined and should change very frequently (as often as possible) throughout the campaign. On the other hand, getting high GRPs requires a campaign manager to focus on a single defined audience and go after them relentlessly throughout the campaign. So, while it is possible to measure GRPs, doing so may counter to good campaigns performance.

The bottom line is that GRPs are a great measure of audience reach both offline and online. There once was a time when audience reach was the best available metric for measuring the impact of a campaign on a business, but that just isn’t true now. There are much better ways to measure the impact of a campaign that consider metrics beyond reach alone.

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March Audience Cost Calendar shows index rankings for both Careers and Cars heating up!

By Phil Fougere | Published: March 13, 2013

The latest results of ChoiceStream’s Audience Cost Calendar – a monthly aggregation of impressions traded on digital ad exchanges during the month of February – is available.

Travel maintained its overall top position as the most
popular ranked segment and the relative cost to
reach those travel segments increased in February as
well. Some new travel segments
entered the top of the chart with travel to European destinations 
including Portugal, Greece, Italy and France popular.

Perhaps most surprising was a rise in the Careers segments. Month-over-month from January through February segments related to Careers in HR, Marketing, Research, Accounting
 & Finance and Education all rose in both ranking as well as in the index showing the relative cost to reach each of those audiences.

Unsurprisingly, many automotive segments rose in February as well. Most likely aided by the big President’s Day sales events, many automotive categories rose in relative cost during the month including the Midrange, Economy, Off-Road, Minivan and Pickups categories.

During the month of February, the Audience Cost index ranged from a low of 55 to a high of 205.
Interested in seeing the complete March Audience Cost Calendar for yourself? Check out the infographic below:

2013_March_infographic

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Display Ads Will Help Marketers, No Matter the Cause of Concern

By Phil Fougere | Published: March 8, 2013

The Association of National Advertisers recent survey aimed at determining the top concerns of marketing leaders has been in the news of late. The results show that in the realm of marketing  the more things change, the more they stay the same. In fact, marketers pointed to the same top four concerns that they’ve claimed nearly every year since 2006 when taking the same survey.

The chief concerns are accountability and integrated marketing. In an interview in Mediapost on the survey results, ANA President/CEO Bob Liodice noted that those two areas are “processes that don’t get enough attention within organizations,” because senior corporate leaders “are not necessarily champions” of focusing on them. Instead, those senior corporate leaders insist that marketers support sales and brand recognition first Digital Marketing Challengesand foremost. Rounding out the top four concerns were marketing innovation and brand building.

One way a marketer can achieve absolute peace of mind and battle those concerns – the lack of accountability; poor integrated marketing; nonexistent innovation and watered-down brand building – is through using a smart performance-based or brand display ad campaign.

When it comes to accountability, perhaps no medium in history can offer a marketer more in-depth insights and analysis than online advertising. Measuring results of online ad campaigns goes far beyond measuring clicks as a recent iMedia blog post by Leslie Van Zee notes.  Instead, insight analysis and reports like those provided by ChoiceStream can show advertisers how different segments respond throughout a campaign,, what drives performance, and where campaigns were most effective by geo-location.

When helping to solve the integrated marketing conundrum, no other medium can put a brand message or offer in front of more consumers on the go than digital advertising can. How so?  Ask yourself this question: how many hours each day do you surf the web, check text messages on your smartphone, listen to streaming audio or watch an online video. Though digital display ads can’t solve the integration issues entirely they are a valuable component to integrated marketing campaigns, exposing your brand message and offers to consumers with the added benefits of both targeting (reaching the right audience) and scale (reaching a large audience).  Display ads can also work in concert with your SEO strategy, your social media strategy and your mobile marketing as explained by eConsultancy’s Graham Charlton.

The final two primary concerns of today’s marketing masters – marketing innovation and brand building – can also be supported by the smart use of display advertising. ChoiceStream uses innovative technologies to support two distinct types of ads – Localized Dynamic ads and Active Audience ads –  that are being used by brand advertisers like Zappos. In our Localized Dynamic Ads, we blend proprietary, first-part and third-party data with real-time weather data to present location-based targeted ads that get noticed. Zappos is using these Localized Dynamic Adsto help sell snow boots to consumers in the path of upcoming snowstorms and flip-flops to those in areas of the country where the thermometer is rising.

In our Active Audience ads, we use an embedded poll to ask a series of questions. The result of the polling assembles a new audience of self-declared high value consumers. Not only do these ads work, they also satisfy the needs of brand advertisers who want to more closely engage and engender a higher level of loyalty with their consumers and prospective consumers.

Marketing leaders are always going to have fears and concerns. However, the big concerns – accountability; campaign integration; innovation and brand building – expressed in the recent ANA survey can all be conquered by deploying smart display ad campaigns in conjunction with the other marketing programs you’re using.

For more information on ChoiceStream,including our insights and reporting, creative services and solutions for brand advertisers simply Contact Us and we’ll get right back to you.

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Even Digital Advertising Needs Creativity

By Phil Fougere | Published: February 27, 2013
CRUNCH Creative Services

Bill Tortolini
Director of Creative Services, ChoiceStream

Targeting the right audience with your display ads is important. Perhaps equally important is how impactful the ad creative is. Even the most well optimized digital advertising strategy can fall flat if it is lacking creative optimization.

ChoiceStream’s Creative Services group is headed up by ChoiceStream’s Creative Director Bill Tortolini. Bill has been with ChoiceStream for 8 years and does freelance work for not only Marvel Comics, but with illustrious fiction writers such as horror-master Stephen King and Game of Thrones creator George R.R. Martin.  Obviously, Bill’s creativity is boundless. But improving display advertising is no fantasy for this artist and his team.

Bill’s team is entrusted with helping ChoiceStream’s ad clients increase the effectiveness of their advertising.  Along with creating normal advertising units, or improving upon existing unit, the CRUNCH Creative Services team also works with the Ad Ops team, creating two types of augmented creative ad units – ‘Active Audience’ and ‘Weather-Adaptive’ ads. Using either of these creative executions has helped many of our ad client’s display ad campaigns perform exceptionally well. What Bill really likes is the challenge in designing these ads for the major brands we work with. “Designing these ads allows us to see the advertisements from the consumer’s point of view. What motivates us is assuring consumers take the time to engage with the ad by making it meaningful and relevant,” said Bill. Read More »

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February Audience Cost Calendar Shows Highest & Lowest Cost Segment Range Tightening Up

By Phil Fougere | Published: February 15, 2013

The 5th installment of ChoiceStream’s Audience Cost Calendar – summarizing the monthly aggregation of impressions traded on digital ad exchanges during the month of January – has just been released. Overall, the Travel segments continued to be some of the highest ranked indexing segments.

However, the big news when looking at the figures as presented in the February Audience Cost Calendar was that the spread between the highest indexed and lowest indexed segments narrowed significantly during January. The Audience Cost Calendar results show that the index ranged from a low of 86 to a high of 147 (a spread of 61). In contrast, the spread in December was more than 340 points.

The contraction of the spread between the highest cost audience segments and the lowest between December and January could be attributed to simple supply and demand: when demand drops, the competition for premium inventory declines thereby causing the spread to narrow.

This phenomenon points to three interesting facts about the digital display ad market: 1) Seasonal shifts in demand drive significantly wider spreads allowing a set of premium inventory to emerge, 2) a significant number of advertisers are using systems that allow them to detect what is premium, and 3) most advertisers seem to be focused on similar inventory as premium for their campaigns. It will be interesting to keep tabs on this trend as it unfolds, so make sure to watch for the March Audience Cost Calendar.

Interested in seeing the complete February Audience Cost Calendar for yourself? Check out the infographic below:

Audience Cost Index, Audience Costs

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Retargeting: No Longer Is It Just “I Know What You Did Last Session”

By Phil Fougere | Published: January 31, 2013

ChoiceStream’s AdOps Optimization Engineer was recently interviewed by CNBC SquawkBox anchor Andrew Ross Sorkin about ChoiceStream and how our audience targeting solution makes a difference in ad effectiveness.  During the interview, Sorkin mentioned how he kept seeing ads for humidifiers during his recent bought with the flu after searching for the same item online. Sorkin was speaking of “retargeting” – an online ad technique marketers and advertisers know well.

humidRetargeting relies on delivering advertisements to a self-identified group of people who have already visited a website before, there is no doubt of the value of retargeting those consumers.

Retargeting works, as illustrated by Sorkin’s example. Yet, most retargeting campaigns are simplistic: touching only the surface of the data available to execute the campaign. For example most retargeting campaigns are simplistic: rely on showing the most recent product viewed or products abandoned in a shopping cart.

One significant weakness of the more simplistic approach to retargeting is a disregard of a key fact: most people who abandon items in a shopping cart or search on a site and leave without making a purchase do so deliberately.  Therefore, retargeting to those people means many wouldn’t have been customers in the first place.

ChoiceStream’s approach to retargeting is different: smart and more effective. We rely on a number of additional data points or signals – not just abandoned items and most recents – to select the right products to show your retargeted audience. We’ll look at lookalikes: people who searched for similar products or placed those products in shopping carts to see what they purchased.  We can also use weather-adaptive creative – ads that use local-weather to present relevant offers to consumers whom they want to retarget.  ChoiceStream can even use information like a person’s favorite sports team to retarget them with products and promotions that resonate.

The real benefit ChoiceStream CRUNCH can deliver to a retargeting campaign aside from the use of additional data and creative techniques to augment retargeting response is to further parse the segments most likely to respond.  Applying this intelligence will deliver more efficiency in a retargeting campaign.  We target only those segments and sub-segments most likely to take action and respond – something we call smart retargeting.

So instead of just showing Andrew Sorkin humidifiers over and over again, a smart retargeting campaign would show him additional items that could help his suffering and prevent him from catching the flu again.  Hand sanitizer, extra warm overcoats and scarves, vitamin C drinks, even travel offers to sunny destinations and more. Items he’s likely to buy to avoid catching that nasty bug again.

Interested in catching better performance from your retargeting campaign? It might be time to see what smart retargeting can do for you.

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The NHL and Baby Showers Big Risers in ChoiceStream’s Most Recent Audience Cost Calendar

By Phil Fougere | Published: January 22, 2013

The results of the 4th installment of our Audience Cost Calendar – the monthly aggregation of impressions traded on digital ad exchanges during the month of December – has just been released.

For the most part, the biggest performing segments remained true to form in December as the Gift Giving segment and Travel segments continued to rise. The Christmas holiday and the desire to get away or visit family and friends for the holidays undoubtedly contributed to the continued rise to those segments.

Most surprising was a rise in the Baby Shower segment, which rose substantially during the month, as illustrated in a 66% increase for the segment from November to December.

Other big movers include segments that can be lumped into what can best be called Pro Sports for lack of a better term. Particularly robust in December was the NHL segment, which saw a 40% rise month-over-month from November to December. The talks between the Players Union and owners in December probably had something to do with the rise. Subsequently, puck-heads (and those advertisers trying to reach them) were rewarded as the players and owners came to an agreement and kicked off play earlier this month (authors note: GO BRUINS!).  Also jumping in the month was the NBA segment (up 36% from November) and the NFL (up 28% from November).

Probably the most unsurprising figure in most recent Audience Cost Calendar (featuring December’s figures) was that the cost to reach most continued to increase. With December being a big month for advertising, the spread the Audience Cost Index ranged from a low of 42 to a high of 382: a spread of more than 340 points. In comparison, during November, the spread was less than 200 points.

Interested in seeing the complete December Audience Cost Calendar for yourself? Check out the infographic below:

January 2013 Audience Cost Calendar

 

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CRUNCHing Numbers – ChoiceStream Optimization Engineer featured in ADWEEK

By Phil Fougere | Published: January 7, 2013

Behind the scenes at ChoiceStream HQ for Ben's photoshootAs a company with a long history, ChoiceStream has been helping brands reach their consumers with relevant advertising and marketing offers for more than a decade.  We also have a long history of employing the best and brightest: smart, passionate folks who are committed to solving big problems and delivering excellence.

Take Ben Liang – one of those smart, committed professionals – who is profiled extensively in a great article in AdWeek entitled “The Geeks Shall Inherit the Earth.”

Ben works in our AdOps group as an optimization engineer.  He’s a data guy who loves crunching numbers and his job entails figuring out how to maximize the potential of the complex algorithms ChoiceStream CRUNCH uses each day to determine which audience will see which ad that we’re currently serving on behalf of many leading brands.

Advertising is undergoing dramatic changes as the era of creativity without reason is being usurped by those who excel at quantitative analysis. Those who understand audience behavior and can analyze the numbers to identify trends and preferences are increasingly becoming more important. Don’t take my word for it. AdWeek claims people like Ben (and his ilk here at ChoiceStream which include a Ph.D. in neurology from MIT, an M.S. in biostatistics from Harvard and a software engineer with a physics degree from Cambridge) are “increasingly the most important players in the advertising industry.” Read More »

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