Tag Archives: post click

The Changing Face of Performance Display – the rise of Ad Exchanges

The digital media landscape is changing rapidly. “Why” I hear you ask? Well the short and simple answer is the economics of supply and demand, meets technical and mathematical innovation. Combined this with clients increasingly demanding more accountability out of their media spend, with increased knowledge about campaign performance metrics of post click and post view conversion attribution and we have a major force driving change.

The Industry’s answer to this is the advent of digital media exchanges which is in itself a major game changer, but more on that later.

Lets start of the supply side of the digital market. Anyone in the know, understands that the amount of amount of digital impressions available, is now almost infinite. This is due to a number of factors, but principally the explosion of social media where supply is endless and behavior is sticky. Think Facebook, Twitter, Blogs, Tweet image sites like YFrog .com, Flicker, YouTube etc etc the list is endless. Secondly the major publishers struggle to have 100% impression sell through rates via their traditional sales channels and you have a considerable amount of unsold remnant impression inventory. So in simple terms over supply.

With infinite inventory and limited demand, the value of an impression is fast approaching zero. Not a fact most major publishers generally want the industry to know.

Up until now most of this low value high volume inventory has been sold at next to nothing rates to the traditional Performance Networks, that package up “Performance Solutions” where they factor the amount of impressions required to hit a client performance guarantee like a CPC pr CPA. Most of the CPA deals though are heavily weighted towards post view conversion metrics somewhere between 95% to 99%, which in itself is questionable from a true DR perspective. These buys are also “Blind” where a client has little or no choice on the sites their ads appear on and there is no transparency across higher performing parts of a network, so effectively not allowing a client the opportunity to optimize and refine their performance media buy and minimize wastage and cookie spraying.

The unfortunate fact of the matter is most of these Performance Networks are firstly focused on maximizing their yield, where they mark up the remnant inventory they buy by a significant multiple. This allows publishers to monetize their unsold inventory at albeit a very low rate, they can hide behind a performance network and not devalue their otherwise premium inventory. Further this allows a traditional media agency the opportunity to blend performance metrics with low cost inventory, claim questionable conversions and support in some cases their otherwise ineffective digital media buys that support commissions and other high yield volume rebates.

All in all, not a very pretty picture for the advertiser.

Now the demand sides of the equation. Enter DME’s or Digital Media Exchanges. Globally we are seeing the rise and rise of the DME that allows a site owner or publisher to make freely available an amount of inventory to an ad exchange (think stock market here), where advertisers can compete and bid real time for the ability to serve an impression to a user. This can be behaviorally targeted as well (Site retargeting, Search Retargeting etc). This market mechanism allows an advertiser to rationally price the cost of digital media based on what conversion value it creates for them (CPA, ROI, ROAS, CPC etc). With the right technology, business rules of post click and impression attribution and performance conversion metrics reporting an advertiser can now maximize what parts of a network or what ad format works best for them on their terms due to complete network and performance transparency.

2010 looks like it will bring major change to the digital media landscape. In the USA, Google is starting to push their DoubleClick network heavily with real-time bidding and an API due for release we believe before June. Yahoo! is starting to push RMX (Right Media Exchange) a little harder too. Early indications are the exchange based media buys are resulting in a 50% cost reduction in the eCPM advertisers have been achieving, compared with the traditional blind Performance Network buy, with increased conversion based value metrics as well. The exchange mechanism is also starting to extend beyond the traditional IAB approved ad formats with reports of video ad exchanges also launching in the USA.

Now, I’m not pretending this is the total solution in the digital media landscape. There is still a roll for premium based CPM buys as part of a digital brand campaign. I see Ad Exchanges as an extra digital DR element to compliment premium buys, drive the economics of digital performance harder and gain incremental impressions and conversions for the advertiser in a transparent, rational, data driven way. It is the power of search maths applied to display markets.

Double Click

Yahoo!'s Right Media Exchange

A view of the Australian Ad Market..

AU accessible digital inventory

Any of you who know me, understand how passionate I am about this with my strongly held belief that this will be the dominant media buying mechanism across all media in the next 3 to 5 years, particularly around the burgeoning IP TV markets.

In essence the power is shifting from media and network owner to advertiser with the benefit of:

  • Complete transparency across network performace
  • Complete transparency across post click and post view conversion
  • Rationally priced media, based on the value it actually creates – not how it supports commission deals, incentives etc
  • Performance based media buys with prime media cost savings in the vicinity of 50%+

Downstream Marketing in Australia is launching the country’s first biddable display capability in conjunction with Efficient Frontier in California, using their seats on the ad exchanges to access the available inventory targeting AU based eyeballs across sites globally including AU based site inventory.

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Economics of New Media Formats – Post Click Cookie Spraying??

There is a battle royal on between the post click & post impression camps in digital advertising & media. Clients are increasingly becoming aware to the metrics that make a difference to their marketing efforts and in a time when all marketers are demanding more from their investments, it looks like the post click camp is clearly winning.

If you’ve read my blog in the past, you will know what I think of post view conversion metrics. Generally I think they are BS and trying to find any link to a conversion from post view cookies that have been sprayed indiscriminately is clearly based on trying to prove value where value does not exist. Anyway…..if you’d like to review that post you can check it out here.

Today I came to work & logged on as I usually do, part of my morning ritual is to read the news online before they day starts and demands kick in. Today I experienced a new form of ad format developed by Fairfax & the smh.com.au. The format is a home page, page surround where the advertiser owns all space that surrounds the news content. Let me say I think it’s an ok idea for digital branding purposes, especially on a high traffic home page like the SMH.com.au. My problem though is if you unintentionally click anywhere outside the main content area, you end up on the advertisers destination site / page, like I did.

SMH.com.au

Post click cookie spraying maybe?

What SMH.com.au have been able to engineer is the spraying of post click cookies ( yes hard to think really), where the site will record an inordinate amount of post click cookies and hence conversions within a reasonable cookie window. Again it raises the debate of data rules, last click attribution, consumer journey’s, cookie deduping etc. Personally I believe that post click is the ONLY way to determine online value creation, in combination with well-defined data business rules.

I see this as a way that the publisher community MAY, be fighting the post click / post view battle in a way that is attempting to build value back into online display advertising and stem the tide from display into Search. Is it right or wrong? You be the judge. My view….the only clickable area should be the ad itself.

Comments & alternate views welcome….

The Economics of a click vs. impression

Today no one can run from the economic downturn we are all facing. As the credit crunch continues to tighten its grip on the economy we are seeing advertisers demand more from every dollar they invest. In recent years we’ve seen the rise and rise of digital marketing as an effective way for brands to invest their dollars due to two key factors; the channel is the fastest growing on the planet and perceived level of accountability it offers. What is beyond me though is the lack of transparency and understanding most clients have around their digital investments and the blind faith they place in the reports they get from their media agencies. Without wanting to be alarmist most acquisition and engagement focused clients could save upwards of 30% of their digital display budgets with little or no impact what so ever on their campaigns performance. Even worse they can in most cases reinvest this wastage into performance based media and Search for a 50% – 200% increase in campaign performance.

The problem…

The primary problem is most (not all) campaign performance reports delivered by media agencies use blended metrics of post impression vs. post click success events (CPA etc). In some cases I’ve seen this blended metric as high as 95% post impression and 5% post click. With cookie windows of up to 60 days this introduces a high level of bias into reports. But today the problem goes deeper, some digital media plans are unethically designed to introduce a cookie spraying methodology into the media plan. Cookie spraying is a deliberate tactic to buy as much low performing, low placement, cheap remnant digital inventory  as possible. This type of media strategy can ensure upwards of 70% of an available Internet population ( e.g. Australian internet users) ALWAYS have a cookie on their machine.  In some instances I’ve seen a single client drop 4 billion post impression cookies in a 12 month period, with only 13 million active  Internet users in Australia you do the math. So a user may never ever click, engage or even see a brands ad, navigate to the brands site either by direct entry of another medium ( e.g. Search) and the value is attributed on a post impression basis to an advertising / media plan that had little or no effect on consumer behavior. Think how many times a consumer may visit a social networking site (www.facebook.com and www.myspace.com), use an IM program ( Microsoft Messenger, AOL Chat etc), use a free email service ( sponsored ad email) (Yahoo mail, Hotmail etc), or check the news or stocks from their favorite site. Every time they do this a cookie is dropped on a users machine.

The economic impact:

  1. Clients are relying on false or skewed data to make digital media investment decisions
  2. Clients are double paying for performance in some instances ( i.e. paying an affiliate commission, the cost of an impression or a Search click) – lack of ability to de-dupe
  3. Clients are missing their true value creation opportunity as their campaigns are being optimized and planned on fictitious data sets and not investing in high yielding digital media
  4. Some media agencies are falsely claiming media rebates and commissions they are not morally entitled to
  5. Some media agencies are doing this by deliberate design to meet their contract commitments to networks and publishers to gain OMI (other media income) and discounted wholesale rates that they mark up due to a group buy – all in the face of not operating in a clients best interest and not disclosing this as part of their strategy ( why would they?)

The impact on performance numbers

The impact on this practice on a clients performance numbers is significant. In some cases I’ve seen digital success metrics overstated by by to a factor of up to 20 times.

Example

Industry                              Blended Metric                                Post Click Metric(actual CPA)

Telco                                    $86 CPA                                             $679 CPA

Credit Card                         $54  CPA                                            $1894 CPA

Homeloan                          $205 CPA                                            $29,452 CPA

The Solution

  1. Base all value attribution ONLY to last cookie (last cookie should win in all circumstances)
  2. Understand the difference both post click & post impression metrics. A post click engagement is worth SIGNIFICANTLY more than an impression.
  3. Have a common cookie window policy across all digital mediums (display, affiliate networks, search etc)
  4. Understand conversion latency (time from click to conversion – they differ greatly between digital mediums)
  5. De dupe conversions / cookie pools etc
  6. Understand the consumer journey and what exposure a consumer has had to all digital advertising (what has lead to what)
  7. In the case of post impression metrics attribute value only within a very finite window ( i.e. 6, 12, 24 hrs from LAST impression)
  8. Apply a universal set of data business rules to digital value attribution
  9. Break down your media buy in transparent terms. Understand what components of the digital media buy is CPM, ROS (run of site) CPC, Remnant inventory etc.  This will allow you to understand cookie spraying if it is going on. Also get all performance reports broken down on the same basis, the results may shock you.
  10. Optimize a campaign investment on your value creation terms, not the agencies hidden objectives of OMI, media commissions, groups deals etc.


Examples of Cookie Spraying – you placement / low yield inventory

Woolworths Everyday Money - Ad at bottom of page below the fold, little or no post click value

Woolworths Everyday Money - Ad at bottom of page below the fold, little or no post click value

Low yielding HSBC ad - significantly below the fold, little or chance of engagement or a click

Low yielding HSBC ad - significantly below the fold, little or chance of engagement or a click

Europcar - Display ad at bottom of page significantly below the fold

Europcar - Display ad at bottom of page significantly below the fold