SIIA Information Industry Summit 2010: Google's View on Ad Technologies In The Content Mix
When Google acquired DoubleClick, one of the assets that came over was Ari Paparo, who now serves as a Product Management Director focused on ad services. Ari was introduced and interviewed by David Sidman, Founder & Chairman of Linkstorm. Ari noted that 100 percent of ad agency holding companies are developing demand-side platforms, with 72 percent of Ad Exchange volume leveraging retargeting and 24 percent now regularly using behavioral targeting. Ari also noted that today's ad model is like a mutual fund, but that we're moving towards a "day trading" like model for ad buys, with more precise tactical acquisitions.l Research from Google is indicating that digital media is 50 percent less efficient versus other media in terms of overhead dollar spent, with 28 percent of video buyers noting that workflow efficiency a key issue holding back online video ad spends and 43 percent of U.S. marketing execs agreeing that brand measurement is holding back the growth of online marketing. So although the eyes are all turning to online content, the ad industry is still in its infancy in understanding how to compel audiences in online environments efficiently, even though online portals are getting to be more efficient in tracing an audience's footpaths.
The question becomes, though, when is an ad slot something more than a pork belly-like commodity? The premium value comes in when you can show that you can do something special in online environments. Sometimes that's "wow factor" via videos and online animated graphics, but Ari notes that in general the high-end creative approach works best when it's intense and impactful. Ari provided an example of a Harley Davidson campaign keyed to Veterans Day that enabled people to send tributes to troops overseas - combining altruism with sex appeal as a path to branding via a different approach. He notes that video is expected to be 15 percent of online spend in the next few years, but the efficiency factor is not encouraging. Getting overnight delivery of creative material and other basic logistics need to be overcome to make video a cost-effective choice, but in the meantime it's good groundwork that's needed to build expertise.
Data enrichment is key for effective ads also, such as data on specific real estate listings instead of just a generic ad for a realtor. Packaging for categories of users instead of categories of content is key also, enabling advertisers to target effectively to people who may be looking at more cost-effective ad inventory available in sections such a religion-oriented portion of a newspaper site. This can enable an ad sales force to raise their inventory up from "remnant" status to inventory that can be packaged more effectively for specific marketing targets.
David keyed off his questioning with a probe on paywalls; is paid content or ad-supported content going to pay the bills? Ari sees no one answer, but he sees it vitally important to segment effectively before you make decisions on what gets thrown behind a paywall. David notes that the ad side has the granular data, which can help publishers to make these kinds of decisions. However, Ari notes that publishers have lots of data that shows how site visitors move through a site. "There are gray areas," he notes, such as who is allowed to use cookie-derived data. Or, when someone buys something, would that site be allowed to advertise sporting goods based on what they have learned from inbound data? He recommends that publishers monitor their data and metadata rights carefully to control these kinds of opportunities carefully. The big mistake is to divide up inventories and missing the opportunity for in-depth understanding and analysis of data related to users. Publishers are now starting to monetize their on-site data off-site, renting lists to marketing and online services - an old business made new.
David and the audience probed on a few fronts in his questions for Ari:
- The benefits of content management and categorization tools to improve ad revenues, but Ari notes that much of the potential for these types of technologies has been realized already.
- On premium ad units, the cost-benefits of rich media are focused mostly now on super-premium brand advertisers, who do get some value as they connect to consumers. But down the value chain to typical retailers, Ari notes that it's not clear that rich media makes the cash registers ring.
- On semantic processing in ad placement, Ari was not forthcoming in detail, but he noted that some smaller vendors are working with focusing terminology. He hasn't seen that semantic technologies have brought that much to the table yet.
- On the ComScore panel/cookie hybrid measurement model, in which publishers are being charged for being ranked, he thinks that the panel approach is useful
- Agencies are having to step up their technology commitments in a big way, they are trying to adapt rapidly, he things that they are adaptable and will be around in the excxhange-oriented future of ads
- Mobile markets: advertisers are frustrated but very excited about mobile, formats and measurement still in its early days
Ari gave a great presentation, but the larger question does seem to be what marketers need to do in general to extract the most efficiency out of online advertising. Certainly improved data, audience analysis and measurement and better ad production techniques can be important advances. However, to some degree marketing itself is changing in the face of a Web that finds people spending a huge amount of time online in social media services that encourage one-to-one exchanges. Managing millions of individual personal selling relationships online is a far cry from managing CPMs. So although there is more efficiency coming in ad networks, the broader question of how companies like Google can help companies to measure success with online marketing is still a work in its early progress.
Labels: ad networks, adsense, advertising, adwords, agencies, auctions, creative, google, media, online, sales, web
