Programmatic Branding

Today’s AdExchanger roundup highlighted a great presentation by Bob Arnold of Kellogg Company.   His talk was on brand marketing via programmatic buying.  We obviously hear a lot about programmatic buying (primarily RTB) for DR campaigns, but this is a great reminder that we’ve still just scratched the surface of what programmatic buying can offer.

First of all, there’s much more that can be done with RTB to help brands increase efficiency.  Given the size of Brand budgets, this is a big (huge) area for growth.  Bob shares some great case examples from Kellogg’s experience:

1)    Having the right measurement framework is critical.  Bob’s not talking about CPA and conversion attribution here.  He’s driving long-term changes in purchase behavior through an offline channel.  So he divides metrics into short-term (brand safety, viewability, composition and frequency), mid-term (attitudinal lifts like awareness and purchase intent) and long-term (offline sales lift as measured by Marketing Mix Models).  This is all stuff I’ve discussed before, but we in the tech community can’t hear it too often and it’s particularly great to hear it from a big marketer explicitly in the context of RTB.  Nielsen for one is listening.  They already had a big presence in the first and last buckets, and they recently doubled down on the middle with their Vizu acquisition.   Vizu and Nielsen work great together, so this is a very smart deal.

2)    Creative is fundamental.  In Bob’s words: “Creative quality is paramount…the media plan simply amplifies the creative message.  Studies from comScore and Dynamic Logic [show that] 50-80% of the value of a branding campaign comes from the creative…it’s imperative you get that right.”  Great creative is altogether too rare online, but there are some great examples out there, like this one.  This ad made me stop and think.  And the more I thought, the more it took me away.  I will remember it and it will make me more likely to buy Legos for my kids.  Bob’s comments and creative like this are a reminder that while advertising – the activity – will be an increasingly technical pursuit for the foreseeable future, the best advertising – the thing – will continue to be driven by great creative that leverages this technology to connect people with products in a way that creates a lasting impression.

3)    Doing it right drives great results.  Bob claimed that programmatic buying for Kellogg doubled targeting accuracy while increasing viewability to >70% (higher than direct buys).  It also cut eCPM (CPM adjusted by comp & viewability) by >50% from their starting reference point.  The combination of these factors (assuming creative was comparable before and after) drove improvements in ROI (via MMM) by ~5X.  Just a stunning impact.

These examples demonstrate the power of RTB, in the hands of a savvy marketer, to drive Brand results.  Good news for all of us.

But I also want to point out that there’s more to programmatic buying than RTB.  There’s a whole set of programmatic premium, automated reserve (or whatever else you want to call it) capabilities possible on which the ecosystem as a whole as has barely scratched the surface.  A couple of the pioneers in this area include Brand.net and isocket, but I assure you there will be other, larger players down this path after them.  These next-gen programmatic capabilities are a great complement to the current set of RTB capabilities and they are tailor-made for branding.

It’s exciting to see a large marketer smartly leveraging the available technology in a new way to drive such great results.  It will be even more exciting to see what’s possible as the market begins to deliver more technology focused on this important class of use cases.

Crack isn’t just a waste of time. It’s bad for you too

There’s definitely no shortage of research showing the irrelevance of clicks as an indicator of online campaign value.  Our own experience shows it and Nielsen data proves it.  This probably has a lot to do with the fact that the folks doing the clicking are a small portion of population and demographically far from the top of most advertisers’ target lists.   None of this is news, yet there remains a surprising (shocking?) amount of attention paid to click-based “optimization” of campaigns.  Perhaps it’s the crack-like allure that Cory Treffiletti from Catalyst SF discusses in a fun piece from last fall.

For all the richly deserved bad press the click has gotten as a metric, I hadn’t seen anyone focus on the angle that chasing clicks actually works against driving the metrics that do matter (much like how chasing crack limited addicts’ success in other more meaningful pursuits…).  That was the point of Monday’s article by Lotame’s Eric Porres.  Lotame’s research across >100 campaigns shows that “not only do click-through rates fail to measure what marketers are really looking for, they’re often negatively related to brand lift.”  While I haven’t seen the research myself, it looks like it was done based on third-party data from Vizu and Dimestore – both reputable survey technologies.  The findings would also comport with previous research.

The bottom line is that there is no free lunch.  There are tradeoffs that must be made when planning & managing media.  “Optimizing” for a metric that doesn’t matter isn’t just a waste of everyone’s time, it actually degrades performance against the metrics that do matter.


An exciting step forward in measurement

I am very excited about today’s release of yet another batch of fantastic campaign results for an Ad Age 20 CPG brand.  I am excited about this release in particular because of the use of both Nielsen and Vizu measurement technology for this campaign – an important step in establishing a link between improvement in purchase intent and improvement in offline purchase rate.

The Nielsen data establishes that this campaign, like our other SalesLink campaigns, drove a fantastic ROI as measured by offline sales compared to media investment. This metric is obviously critical because 95% of retail commerce still occurs offline. It’s easy to forget that in Silicon Valley, but ultimately advertising is about selling stuff and it makes a lot of sense to focus on the 95% rather than the 5%, regardless of medium. The Nielsen data is great in that sense, but it also has two drawbacks; Results aren’t available for 3 months after the campaign ends and those results have very limited granularity so it can be difficult to know what it was about the campaign that worked best.

Adding Vizu to the picture allows us to get granular data about what’s working best (creative, media mix, frequency) during the campaign, when we can still use those results to optimize. Vizu measures purchase intent not actual purchases like Nielsen, but we saw a very intuitive relationship between the two for this campaign. If this relationship holds reliably through further studies, then Vizu can be a very important tool in improving campaign impact. We don’t stop measuring offline sales, we just know a lot more a lot faster about what makes those results better.

Brands repeatedly tell us they want to be confident their vendors are doing what they say, but even more important are a) proving that their campaigns are effective where it really matters and b) helping them understand why.

Say what we do, do what we say and drive proven results. That’s our business.

The (Ad) World is Flat

I wrote a recent post in which I outlined our view on convergence in the online media market.  At a high level, we believe there are two major forces at play in the media market:  (a) increasing standardization of “online” media formats and (b) device convergence blurring the lines between what are today thought of as “online” and “offline” media.  Because of these forces working in parallel online display, online video, mobile display, TV, print and even billboards end up not that far down the line as one big (huge) 12-figure market.

In addition to expanding the market for online players, these twin consolidating forces will drive several broad and related trends:

  • Trend 1: Niches Vanish. Differentiated solutions for big, general problems will drive the most value (for customers, companies and investors) in this future, merged media marketplace.  That means focusing less on the medium and more on the customer’s business objectives, solving problems that exist in and across all media.  Solving format-specific problems will mean limited opportunity, as it will increasingly be the case that relatively small improvements within the pool of media that has already converged will be more important than even a major breakthrough in a specific medium that has yet to be “plumbed to the main line”.  And while we’re on the topic, that plumbing itself is more trade than investment.  It can create speculative value in the short-term, but gets marked to zero quickly as industry-driven, open standards emerge.
  • Trend 2:  “Good” gives way to “Best”. Building on the notion that niches vanish, the bar will quickly rise for what capabilities qualify as “differentiated”.  This dynamic echoes globalization.  In a global market, the best athletes (literally and figuratively) can earn dramatically more than the best athletes from previous generations.   However, those with less differentiated skills are increasingly marginalized – there’s a reason why millions of manufacturing jobs have moved to China.  As best of breed vendors in each medium begin to jump format boundaries and compete aggressively in a converged media pool, only the strongest, most customer-centric solutions will survive.
  • Trend 3: Higher Technology Hurdles. Scalable differentiation requires technology, so this rising tide of convergence also raises the bar sharply for technological sophistication.  As Warren Buffet famously said, when the tide goes out you see who has been swimming naked.  Well, as this tide comes in you’re going to see a lot of folks who can’t swim at all sink to the bottom, surprised by the speed at which the water rises.  For example, there was a time when a network could be run as a bucket shop, substituting hustle and excel for real technology.  That model won’t float in the media mainline.

So who wins in this world?

  • Data and Data Infrastructure. Information and insights are always valuable, and become ever more valuable as size of the spend across which you’re deploying them expands.  As more and more media becomes effectively “online” media and thus more dynamically targetable, the value of targeting technology and data itself increases.  This will benefit targeting technology providers like Blue Kai and Exelate, but will also benefit data owners like Acxiom, Facebook and Expedia.
  • Measurement. While I believe online media have over-emphasized measurement relative to other elements of the online media value proposition, this is a moot point in a converged media world.  It is true that measurability is a particular strength of online media so as more media comes “online” it will create opportunities for measurement vendors like Nielsen, comScore and Vizu to innovate, expand and drive increasing value for customers.
  • Supply  Side Platforms (SSPs). The fact that it will be technically possible for an increasing number of players to join this media mainspring does not mean each of them will have the knowhow and capability to do so competitively.  There is a space to help the “supply side” players– content owners and media companies – connect into the media mainspring, and make the most of it.  Folks like Rubicon and Yieldex have opportunities here, although the technology bar will be particularly high in this space.
  • Demand Side Platforms (DSPs).  Finally, we come to the “demand side” – the buyers of media. Last, but by no means least as demand drives the market.  Similar to the supply side there is a space for broad platforms to help manage and optimize campaigns over a diverse and complex online media inventory landscape.  As I have previously mentioned, there are fundamental differences between technology required to service DR objectives in the spot market and technology required to service Brand objectives in the futures market.  Most of the energy here has been focused on the DR/Spot side, but we’re going to see that change rapidly as major consumer brands get into the game for real.   For DR/Spot, Turn and Efficient Frontier are well-positioned and aggressively pursuing this opportunity.  Appnexus also has an interesting “meta-DSP” play.  For Brand/Futures, Brand.net is the clear leader, with market leading technology and strong customer traction.

Winners mean losers and the main theme in the “loser” category is the ad network shakeout – widely and frequently predicted over the last 5 years – finally materializing.  Here we go:

  • Single-Format Players. Those players whose businesses are built primarily on execution in one format and who don’t have best of breed capabilities that are broadly applicable to all media will wither without the shelter provided by format barriers.
  • Naked Swimmers. Demand side players that have substituted people for technology will get increasingly squeezed between agencies and exchanges.  Supply side players will find themselves with stiff competition from large exchanges in providing more/easier functionality for publishers.
  • Non-Aligned Exchanges. Between Google and Yahoo!, the market already has more than enough basic spot-market transactional capability.  Microsoft will likely also make an additional acquisition to accelerate their internal efforts, but once it does the music will have stopped.  With these huge, technically sophisticated, players already ramping quickly it’s too late for new entrants.  Only one current player will get picked up, and the rest better have a very strong DSP or SSP option or they’ll find their game over.

While this next wave of evolution poses serious challenges to many current players, it unlocks tremendous opportunities for those players with the right capabilities to ride the wave.

As always, I welcome your thoughts and comments.

The Bottom Line is Online Ads Work for Branding and Sales

Last week MediaPost picked up a press release on some comScore research showing that online ads can be effective in driving offline sales.  Just as effective as TV in fact.  This came as no surprise to us at Brand.net.  We have seen similar results in our work with clients measuring offline sales impact in response to online campaigns.

This recent release apparently builds on some earlier research discussed by comScore Chairman Gian Fulgoni in his keynote to the OMMA metrics conference in San Francisco at the end of July (covered in another MediaPost article, from which I borrowed my headline).  In his remarks, Fulgoni gave some rough treatment to CTR (similar to a post last week from Cory Treffiletti).  I was on panel at the same OMMA conference.  The panel focused on Brand measurement and the moderator (Dan Beltramo from Vizu) asked each of the panelists to answer a few questions to get the conversation started. One of the questions was, “What is the most misused metric for Brand Campaigns?”. All 4 panelists including yours truly answered, “CTR.”, to which Dan readily agreed. The fact is CTR isn’t correlated with attitudinal measures that Vizu focuses on. Nor is it correlated with ROI as measured by offline sales impact vs. online campaign spend.

The moral of the story is that well-executed online advertising delivers results throughout the marketing funnel and those results come through in the metrics, when the metrics applied are meaningful.