WPP Group’s Media Innovation Group Addressing Attribution Challenge

AdExchanger.com: What is your perspective on the attribution challenge within the broader context of measurement and analytics?

EB: We see the lack of a viable attribution metric as a central, if not the central dilemma facing digital marketers. The industry is drowning in data, but decision-making remains subjective because marketers know that the last ad model can lead to wildly suboptimal decisions. A typical case is where bottom-funnel tactics receive the entire budget, while the top-funnel sites that are actually driving demand get little or nothing. If no one has faith in the metrics, the accountability model suffers. At the end of the day, the growth and power of digital media is constrained because we are still facing this fundamental measurement challenge.

How is the MIG’s attribution offering unique?

In developing ZAP Attribution, we focused on two major gaps in the market – lack of objectivity and lack of accountability.

Prevalent attribution solutions rely on an analyst to assign weights to different impressions. However, the rationale for these weights is ultimately subjective. This is the objectivity challenge that we solved – ZAP Attribution is powered by an algorithm that determines the impact of each impression on conversion. ZAP Attribution is one hundred percent data-driven. There are no assumptions, and the model delivers fact-based, unbiased results. This in and of itself is an important step forward for the industry.

The second issue is accountability. The attribution challenge goes beyond merely assigning credit beyond the last impression. The attribution algorithm should accurately predict the impact of an optimization decision on performance. We have benchmarked ZAP Attribution relative to the last ad model in terms of its predictive power and our solution outperforms by a wide margin. This means that optimization decisions based on ZAP Attribution metrics will actually deliver the intended gains in performance. It is this gain in predictive power that differentiates ZAP Attribution from other solutions on the market and will be the driving force behind its adoption.

How does data drive the model?

Our Zeus Advertising Platform (ZAP) and its suite of applications, including ZAP Attribution, are built on the comprehensive data foundation of user-level data stored in the Zeus data warehouse. The ZAP Attribution model leverages this atomic-level data and incorporates the core drivers of performance across media, frequency and recency along with other factors. Because ZAP has robust cross-channel tracking capabilities, the model is applicable across all digital channels. For example, we can determine the impact of display on search or affiliate marketing. These capabilities enable marketers to understand complex cross-channel relationships, identify the true drivers of conversion and maximize the value of their media investments.

Read More: AdExchanger

Does Google Really Know Anything about Display Advertising?

I have honestly been pretty unimpressed with Google when they have ventured beyond search.  I mean, it’s just a fact that they are the biggest when it comes to search and search advertising, but whenever they have ventured beyond that, into display, TV, etc., I’ve been pretty critical.

Mostly, I’ve been critical because up until now, their solution to everything other than search is to approach it as if it’s search – making them a one trick pony.  Google TV is search on TV, for example, which to me makes it dead on arrival.  As I mentioned in a previous post, who wants to type in a search box on their TV?  Yuck.  Sounds like a lot of work.

I have also been critical of them because, for a company that helps others to market themselves, their marketing of their own products is pathetic.  If you take a look under the hood, the number of cool technologies and tools Google has is mind boggling: Goog 411, Google Talk, Google Docs, iGoogle, etc. But, for whatever reason, they are content to just try and let these services market themselves. Hey Google, time to drink the Kool Aid.  Makes one a bit concerned when a company comes up with marketing solutions when they have a hard time marketing themselves.

But, as usual, I digress.  Recently, an article in the NY Times talked about some things Google is thinking about and doing in display advertising that frankly surprised me because a) they didn’t feel like they were just more search solutions for non-search problems and b) they seemed to hit upon a few key factors that feel right. 

Read More: MelesMusings.com

Vibrant Media Gears Up for Possible Public Stock Offering

Vibrant Media, purveyor of the once-confusing double-underlined hyperlinked ads in news articles, may be going for an IPO.

The New York-based internet company has hired a chief financial officer, Jeffrey Babka, who is known in the investor community as an IPO specialist.

“He fits into the business really well from a culture perspective,” said CEO Doug Stevenson. “He’s got a tremendous track record for success.”

Mr. Stevenson cited Mr. Babka’s previous role as CFO of NeuStar, a telecommunications company that launched an IPO in 2005 and raised over $700 million in the process.

“The markets were pretty difficult that year,” Mr. Stevenson said, “and that was one of the best new-tech IPOs of 2005.” More recently, Mr. Babka was chief financial officer at Sophos, a global IT security company based in Oxford, England, which was acquired by Apax Partners this past June at an $830 million valuation, according to the company.

It’s just the latest sign the digital media IPO market is heating up, though there are reasons companies considering the move should be cautious.

A host of internet companies have recently been touted as the next big digital IPO, but it was Demand Media that set the bar when it filed for public offering this past summer. The content company specializing in low-cost, how-to content is looking to raise $1.5 billion with its offering, which is being underwritten by Goldman Sachs. The company has yet to announce the actual offering date, but industry analysts said Demand’s announcement opened the gates for others to start looking at public offerings of their own. Some of the more high-profile companies that are reportedly ripe for an IPO are Yelp, LinkedIn and Hulu.

Read More: AdAge

Price Floors, Second Price Auctions and Market Dynamics

One of the things that is often discussed but not often written about are the market mechanics that surround the new RTB enabled exchanges & SSPs. From a design perspective most marketplaces these days have adopted some modified form of a second-price auction. The winner of the ad impression pays the seller not his actual bid, but the second highest bid.

Second price theory works as follows: Imagine that I’m selling a Monet painting. There are people that want to buy it and each has a maximum price he’s willing to pay but of course doesn’t want to pay a penny more than he has to to get the actual painting. If I tell my buyers that they’ll only pay the second highest price then each can safely give me their maximum price because they know they’ll only pay the amount they need to to beat the next highest guy. That sounds nice right? Second price auctions maximize revenue and make everyone’s life easier and create simple and efficient markets.

The problem is, reality doesn’t seem to quite follow the theory when we look at advertising today. Take a look at the below yield curves for two publishers coming in from two different exchanges. Both of these exchanges use a second price auction model.

Read More: MikeOnAds.com

Nielsen Testing a New Web-Ad Metric

Nielsen Co. is working on a service that would offer advertisers and Web publishers a new stream of data to improve audience measurement for online advertising, a move that may bring more ad dollars to the sector.

As with TV ratings, the new service requires the participation of media outlets, in this case Web portals and other sites.

So far, the media-measurement firm has lined up Facebook Inc. as a participant, according to people familiar with the matter. Other websites are expected to join as it moves out of the testing phase.

Nielsen is expected to unveil the new product next week at Advertising Week, and will conduct a test of the service shortly, according to people familiar with the matter.

The new stream of data would be an “online GRP,” these people say. A GRP, which is short for Gross Rating Points, is a formula that measures the reach and frequency of an ad, a method that has been used by the TV business for decades.

To get the new data, Nielsen will blend its demographic panel data with information from participating online companies about the people seeing a particular online ad, according to people involved in the research.

Information will vary from website to website, but in general it might indicate the age group and sex of a particular Web surfer and maybe even location, according to a person familiar with the process.

Only anonymous data will be given to Nielsen for the service, according to several people involved in the process.

Nielsen competitor comScore Inc. has been providing GRP data for online ads but advertisers say there is need for more competition in the area as it will drive improved measurement. ComScore tracks by age, sex and household income, among other things.

Nielsen already has lured marketers such as Procter & Gamble Co., the world’s biggest advertiser, and several big media-buying firms such as Publicis Groupe S.A.’s Starcom MediaVest to test the new research, say people familiar with the situation.

P&G declined to comment. Facebook and Starcom MediaVest referred calls to Nielsen.

Media buyers—executives who decide where and how marketers allocate their ad dollars—and advertisers have long complained they need an online measurement that is comparable to the way other media are measured.

Marketers often use site traffic as a gauge when they decide to buy Internet display ads—the ads that include graphics and text and appear alongside the border of the page. But traffic alone isn’t a perfect indicator of an ad’s effectiveness.

When people click on the ads, their specific actions can be tracked. But display ads are clicked on just a fraction of the time. That leaves room for an additional layer of measurement.

Media buyers say having an online GRP has the potential to give marketers a way to do apple-to-apple comparisons of media.

Having the information, they say, could lead to advertisers shifting more of their ad budgets to the Internet from other media like television.

The service will give advertisers “better accountability from the publishers, right now we don’t know whether the right people saw the ads,” according to a person involved in the process.

Nielsen’s latest push comes as it faces increased pressure in the media research business. A host of new players have begun offering measurement services over the past few years.

Some of the country’s biggest media companies and advertisers have joined forces and formed a coalition that is trying to come up with new ways of measuring audiences.

Industry trade groups—including the Interactive Advertising Bureau, the Association of National Advertisers and the America Association of Advertising Agencies—have been working to create a governing body to help facilitate the online ad measurement business.

The soft economy has added more urgency to the call for better online measurement since marketers are under increasing pressure to prove their ad dollars are working.

Online advertising has enjoyed healthy growth rates but the business still trails other media such as television.

Last year, marketers spent $52.6 billion on TV ads in the U.S. and $20.3 billion on Internet advertising, according to ZenithOptimedia, a media buying firm owned by Publicis Groupe.

The money in the online-ad business is “still a drop in the bucket” compared with television, says Keith Richman, chief executive of Break.com, an online video site focused on the male market.

Break.com has itself been trying to figure out a way to give its advertisers some type of GRP measurement but says it believes a broader industry-wide movement is needed.

Read More: WSJ.com

The Real Reason Consumers Are Creeped Out By Online Ads

Direct response marketers have been using various statistical models for decades to determine how to predict human behavior. They’ve built proven models that can help a marketer reach a highly targeted audience with a high degree of reliability and show that audience a message that has a higher probability of success than a random untargeted message. The easiest way to see this at work is to buy a house.

Two years ago, I bought a house (my timing was impeccable). Within weeks of my mortgage closing, I began to receive all sorts of interesting things in the mail. This was interesting because I explicitly opted out of having the data from my mortgage shared with anyone (or so I thought). As it turns out, this isn’t really possible — at least, I wasn’t able to pull it off, and I am aware of how the DR industry works. The average consumer hasn’t got a chance.

The kinds of mail I began receiving included lots of offers for things like mortgage refinance (despite that I had only bought my house weeks before), various types of insurance (most were flavors of home warranties), and then literally hundreds (possibly thousands) of offers from local businesses to try their services. This included some that were logical and tied to my physical relocation to a new neighborhood — various dentists, hair salons, landscapers, accountants, hardware stores, and roofing companies.

The DR industry has statistical models that clearly show the series of marketing opportunities that are associated with major life events. So when you have a baby, there are many things you’re likely to need to buy. When you buy a house, it’s very similar (in fact, these events are highly correlated). For instance, having a baby frequently is followed by purchasing a new (and safer or more spacious) car, SUV, crossover, or minivan. Life insurance is another highly correlated purchase.

Read More: iMediaConnection

Display Advertising Views Have ‘Positive Impact’ on Consumer Behavior

In a period of about 10 minutes of web surfing, how many advertisements would you say that you see? Ten? Fifteen? A new ad on every new page you visit?

The point: display advertising has become a huge part of our online experience.

Yet measuring the value of online ad impressions has proven to be much more challenging for advertisers than measuring results from traditional advertising. While click-through rates (CTRs) and search is easily quantifiable, impressions from display advertisements aren’t quite as obvious.

With display ads, it’s extremely common that while seeing your ad may not compel the viewer to take an action at that moment, it could inspire a later course of action. This is “the power of the view.”

Last year, comScore and Starcom USA released a study showing a sharp drop in the number of U.S. Internet users who click on display ads. This is why advertisers should consider the positive impact on their display ads of “the view” in relation to consumer behavior.

Read More: SearchEngineWatch

How Do We Bring Brand Dollars Online

As we all know, the balance between the amount of time people spend on the internet and the online share of marketing dollars is way out of whack.   Yet even as we all point to the problem, and as every VC pitch deck for a digital media venture includes the cliché slide showing the imbalance, the gap between offline and online dollars has remained wide.   As hard as it is to admit, the problem lies not with uninformed marketers who don’t realize how efficient internet advertising is.  The reason why the gap exists is that internet advertising still largely sucks and we have a lot of hard work to do to fix it.

To bring those dollars online we must build a media ecosystem that is better than television or print.   At the core of that problem are three challenges we need to overcome as an industry:

• The first challenge, which I have written about in the past on these pages, is that we have to be able to deliver scale to marketers where they can spend hundreds of millions of dollars easily and effectively.  If large media buys require cobbling together dozens or hundreds of independent sites or networks, we will never achieve scale and large marketers will not be able to utilize their budgets.
• The second challenge is that we must deliver quality audience experiences where marketers can use all the tools in the advertising quiver to amuse, beguile, entertain, educate and generally capture the attention of their audience.  I will leave that topic for another post, but if the miserably tiny and insufficient 300×250 ad unit is the apex of the canvas that we will provide for communicating, I am tendering my resignation today.
• And last for the topic of this post, before marketers will bring their dollars online at any scale, we must provide them with control and ultimately trust in the how, when, where, and why of their online advertising.

Read More: AdExchanger