TruEffect Blog

Data mining in the media economy

It seems things always come in threes. This also holds true in Privacy News. Over the past holiday week, the US saw a series of pieces related to the on-going privacy/targeting debate in the media.  Stories percolated into Business Week and The New York Times related to the regulation/self-regulation discussion of behavioral targeting, while in the UK it was announced that British Telecom was terminating its controversial trials of the Phorm targeting service. What’s different this week? Just maybe the industry trade bodies are finally taking seriously the threat of external regulation? With that there is an escalated need to aggressively pursue a self-regulatory path.

A cross-section of industry groups have now produced 7 guiding principles for behavioral targeting and taken a passable stab at defining it:
“The collection of data online from a particular computer or device regarding Web viewing behaviors over time and across non-affiliate Web sites for the purpose of using such data to predict user preferences or interests to deliver advertising to that computer or device based on the preferences or interests inferred from such Web viewing behaviors. The Principles do not apply to a Web site’s collection of viewing behavior solely for its own uses” ¹

The specificity of the definition is very interesting in that it draws some very specific data practices into question. These relate to specialist companies that aggregate data across sites such as NextAction, Acerno, and data aggregators such as Blue Kai. However it may exclude companies such as Media6Degrees, that makes inferences based on your association to users you are connected to via social media. While such companies are very familiar to interactive advertisers, they are practically anonymous to the consumer and are, as such, clearly in the target area of regulators because they hold an ambiguous and undefined role.  Do we want to go this route and call out companies?

How does this apply and does it also challenge re-targeting and other practices related to data collection?  Re-targeting shares data from advertiser sites with media networks to allow the re-solicitation of visitors to an advertiser site.  You may have experienced this when you visit a site and then almost immediately start to receive ads from that company. A recent article by Wendy Davis in Mediapost shed light on this practice when she reviewed AT&T’s data sharing activities. Greg Neal , VP of Product Strategy at my company, TruEffect, observed in his analysis of the top 500 advertisers that, on average, data is shared through cookies 7-20 times, depending upon the industry.  

“AT&T is by no means unique" said Neal. "In fact they are better than many and have a very clearly articulated privacy statement related to these practices.  We typically see data being shared with between 3 and 10 companies.” What is more concerning for Neal is companies that do not understand how their sharing of data impacts their business and the brands they support.

“When reviewing client data practices it is not unusual to see data they have shared for specific re-targeting to be driving advertisements for competitive advertisers. I think advertisers often over-estimate the control they have of their data. When they share that data with another party, there is little control or regulation over the specific purposes and re-purposes for which the data may be used. It’s also extremely difficult to monitor or track. When the data is gone, it’s gone!”

This is a view shared by Match.com’s Jim McDonald who said, “We have rationalized the range of networks with whom we work based on compliance to our data standards. We have also begun investigating other methodologies such as managing all media within our domain. Users have a relationship with Match not any third party company they’ve never heard of.”

Doug Brown at Bank of America echoed this perspective, “We are actively testing different solutions. Our customers expect us to be stewards of their data but also recognize the relationship we share. The two should not be at odds. Our customers want us to be relevant but not intrusive, secure but accessible.”  Research supports Brown’s view 61% of users expect their interactions to be private but nearly the same number also want advertising to be relevant.

Chris Ahrens of agency Draft/FCB reiterated this sentiment saying, “Draft/FCB has taken a pragmatic approach to the BT area and deployed different technologies when most appropriate.  We were the first to use ad serving without cookies as well as supporting the use of the advertiser option when appropriate”.

Given advertisers have options, is the industry’s response really getting ahead of the issue or simply acknowledging a changed reality?  Behavioral Targeting comprises less than 9.5% of all display media sales² although they do comprise a much larger part of media selection and retargeting.

Nielsen’s Marc Ryan believes that many consumers have already created their own opt-outs. “For quite some time we have been noticing an increasing trend in users managing their data more aggressively, this includes deleting or simply not accepting cookies. Typically we see more than 50% of media being managed in this way by better tools and options in the browser and use of security software.”

Webtrends, a leading web analytics company, saw similar trends.  “We believe about 28%-33% of users now manage how their data is used in media.  Consumers are ok with sharing data with companies they know (and trust).  They are often a little more savvy than the industry gives them credit for or wants to admit as it impacts measurement accuracy and performance.  In site-side analytics we saw this a number of years ago and made adjustments by working in the domain of the advertiser. We see the same trend in media and believe companies such as TruEffect offers solid alternatives to current practices.”

– Martin Smith
¹ Self Regulatory Principles for Online Behavioral Advertising
² eMarketer, June 2008

At Least Get My Profile Right!

Friday I was reading Steve Smith’s recent blog on MediaPost that discusses the recent increase in visibility of academic research around behavioral targeting and consumer privacy on the web.  He discusses how http://www.zabasearch.com displays it’s “profile” of consumers publicly – that’s their model.  Of course I checked my profile on ZabaSearch and found a host of inaccuracies.  (I guess I have lived in Erie, CO and Boulder, CO during some blocked-out phase of my life.)  But what this reinforced for me is how the online community is so dependent on offline sources of data.  When I worked at a very large corporation in the 90s, we “e-enabled” a host of consumer databases that had been buried deep within the bowels of the IT department.  By exposing the data we identified a lot of inaccuracies.  What that did was generate a flurry of “error correction” efforts that ultimately created a data set that was both leaner and far more accurate.  Perhaps one simple objective of our industry would be to provide consumers adequate reason (and incentive?) to purge their profiles of inaccuracies.  Knowing a data company has my data is one thing.  Attributing inaccurate data to me is simply salt in the wound.  What do you think?

– Scott Nelson

Would you want this job?

While "Terminator Salvation," sans "Governator" plays in theaters nationwide, President Obama declares that cyberspace is actually a real place, and gives it its own security force. To protect us from hackers, international terrorists, and even SkyNet Research, Obama announced today the creation of a new government post - Cybersecurity Coordinator. Sure, this is not a job most of us would want, but his speech announcing the post certainly underscores the importance of this virtual space we've created and adopted in droves over the past two decades.

He reminds us that the internet is not just about our growing personal communication and entertainment uses, saying "... make no mistake:  This world -- cyberspace -- is a world that we depend on every single day.  It's our hardware and our software, our desktops and laptops and cell phones and Blackberries that have become woven into every aspect of our lives. It's the broadband networks beneath us and the wireless signals around us, the local networks in our schools and hospitals and businesses, and the massive grids that power our nation.  It's the classified military and intelligence networks that keep us safe, and the World Wide Web that has made us more interconnected than at any time in human history. So cyberspace is real.  And so are the risks that come with it."

As geeks around the country rejoice at the administration's plans are to keep this virtual world "open and free," we wonder if the continued emphasis on technology and security will fuel even more government attention to consumer privacy concerns around online advertising and behavioral targeting?  Time will tell.

– Layne Salter

Bartz Boots the "Bucket"

While reading an interview with Carol Bartz, the Chief Yahoo, I found myself cheering her on.  Around here we talk about “buckets”.  Customers and vendors and investors all want to put us into a “bucket” so they know how to think about us.  If they can’t group companies or technologies or products with others, it’s as if they can’t make an evaluation.  In her interview with CNBC’s Jim Goldman, Bartz unapologetically “kicked the bucket” right out of his hands.  “We are not a search company.”  Followed shortly by “There’s no turnaround at Yahoo….”  And then “15% is the new flat.”  I love it.  The digerati have put Yahoo into a bucket of struggling search companies that need to find a new business model because of the dominance of Google.  Bartz vociferously disagreed and made her case forcefully.

 

The point I am making is that we need to break the way we think today.  The internet isn't new anymore and we've become lazy by relying on what's familiar and common rather than what's new and better.  New ideas get stifled because they don't fit the mold.  CPC and CPA pricing is one of the best examples.  Advertisers genuinely believe they are protected from wasteful spending because they only pay for a result.  By bucketing new offerings as CPA/CPC/CPM only, the search engines and ad networks can dictate the model and force advertisers to pay more than necessary.  

 

Bartz is approaching her business with fresh thinking and I wish her all the best in making the rest of us find a new bucket for Yahoo.

 

– Scott Nelson

Display bests Search - how well do your campaigns work together?

We've been hearing more and more about the value of Display advertising, and for good reason. A study released this week by Fetchback demonstrates that its retargeting technology outperforms paid search in tangible returns on the dollars invested in each. Their comparison tests showed between 74% and 112% higher ROI, compared with search campaigns. It's nice to have the validation, but we're not that surprised. The beauty of online advertising has always been its ability to deliver the right message to the right person, and the success of paid search is only a testament to that fact. So it's not surprising that display targeting technologies are rushing to close the gap, and succeeding in spades.

Not only can a well designed, targeted display campaign beat search, but data compiled on how display and search interact shows unequivocally that consumers' exposure to display ads has a definitive impact in lifting search conversion. An MSN/Comscore study in 2008 showed that a combination of search and display doubled site visits over Search alone, and tripled the size of the average purchase spend.

This week reports show U.S. consumer confidence up in April, so it's a great time to closely examine multicampaign attribution, and rethink online budget distribution. Smart advertisers can take advantage now with a good display/search media mix, as consumers shop and research online, gearing up for purchases as confidence in the economy improves. In their Multi-Attribution report from February, Forrester said "Given today's challenging economic times...marketers should begin measuring multicampaign attribution now, before it becomes a corporate mandate."

– Layne Salter

Measurement and Analytics: Do you know what you don't know

 This is kind of scary. A new report reveals that less than half (47%) of marketers actually use analytics to measure the success of their online marketing. A quarter of those polled said analyzing results is the hardest part of any campaign. Well, duh. And yet for the 6th consecutive year, online marketing investment is predicted to increase. Advertisers are sucking up paid search, video, email, display, social, and anything else they can get their hands on. But without a proper understanding of the true results behind campaign efforts, are they simply flushing money down the proverbial john? David Eldridge, CEO at Alterian said,“With the current economic climate, it is refreshing to see results that show businesses investing in areas that can directly drive sales – essential in this market. What is less encouraging is the low number of marketers who use analytics to evaluate and refine their campaigns.”

Online measurement and technology has definitely evolved, and it's quite impressive. The sheer amount of data available, even for free, is mind boggling. But the complexity of it all, as well as the inability of systems to work together, is scaring marketers off. Data analysis probably conjures up visions of expensive, geeky types we can't understand, sitting in the back office till midnight running SAS and crunching numbers in a spreadsheet. But it doesn't have to be scary weird science. Analysis is really for everyone.

In the 1990's internet advertising was very proud of the fact that it was measurable – impressions, clicks, even conversions! Now, recent opinions actually blame its measurability for recent problems facing the medium. We've backed ourselves into a corner where every dollar must account for itself. Even though, for instance, research shows that paid search is, indeed, impacted greatly by display advertising.

Today's business landscape requires a lot more than simple metrics. And, thanks to new technologies, including ours here at TruEffect, the disciplines and analysis born in traditional direct marketing really can finally be applied to online advertising. It may still take a little training and understanding, but new and better tools mean you don't really need a degree in statistics to understand the big picture of how your customers interact with your brand, and how you can now reach them in a more and more personalized fashion.

– Layne Salter

Webtrends and TruEffect First to the Party

Today we announced our partnership with Webtrends, one of the best companies in the industry.  We’re very excited about the news.  But, I see this relationship as something far more significant than an opportunity to jointly sell or enhance the offerings of each company.  Together, we’re giving advertisers a “seat at the table” within the online ad model by re-establishing the relationship they have with their customers and prospects.  I have been championing more engagement by the brands in the online community.  The folks funding this entire industry are still too detached and together, Webtrends and TruEffect are enabling them to re-insert themselves.

The collective “we”, referring to the companies that sell online ad technologies and/or media, have built quite a business creating and repurposing data about consumer behavior on the web.  Effectively, we inserted a layer between consumers and the merchants from whom they buy.  Now anyone in the business recognizes that this is not untrue offline.  Kodak relies on television networks and magazines just like they do search portals and web publishers.  But offline networks never developed the kind of individual, persistent shopper profiles that have been built for online consumers.  Typically the brand gathers and retains customer data in the offline world, not the channel.

Our partnership with Webtrends is one step toward redefining the brand as the entity with whom customers share data and develop relationships.  We consumers buy Nike Shoes, not Platform A.  We buy from United Airlines, not Acerno.  Technically, the way we approach the data has been coined the “first party” model.  It deploys the value our two companies bring to clients from within that client’s web domain, effectively creating silos of data by brand.  When a consumer views a client ad or visits their website, the transaction will truly be between the consumer and that known and trusted merchant.  The control is in the hands of the brand, exactly where we think it should be.

Congratulations to the Webtrends folks as they kick-off their Engage09 Conference in Las Vegas today.  We’re proud to have their confidence, and we’re already running full steam ahead to bring this new relationship to our clients.

-Scott

Data-driven Display 3.0

I like recessions because they sharpen the focus of what’s in front of us and demand that we look at business in new ways. I’m also a big fan of data-driven advertising.  I believe, in my delusions, that I’m actually one of its earliest and best practitioners, having been one of the few database directors to ever share an office with a creative director and live to tell the tale.  The results we achieved were the ability to improve yield by 100%-200% by applying what now seem to be relatively rudimentary techniques to improve circulation.

So, I enjoyed reading Ashu Garg’s blog on Data-Driven Display Media (Display 3.0). However, the real data I’m seeing through our Trueffect ad platform challenges at its core some of the established folklore of online media. It turns on its side some of the metrics the industry uses, and creates through its disruption, a new set of standards.  To understand this, the first thing I need you to do is put aside the fixation with trash-to-treasure stories of taking some inventory or data,  fusing it together and voila –  you now have inventory that matches high quality contextual media.  As the head of Procter and Gamble recently said, "what makes you think this is media?"  The second fixation I would lay to rest is that display is a broadcast medium. Again, we’ve nurtured a generation of interactive media personnel who think ‘reach’ not ‘relationship,’ ’impressions’ not ‘circulation.’ To paraphrase Ogilvy, they’re dependent upon data "Like drunks to a lamppost, for support not illumination."

What’s being measured in the current model is flawed because it doesn’t comprehend the number one driver of response – relationship. That's why I think Ashu has it half right.  Advertisers need to use their data, but it’s the way they’re using it that needs tuning.  Current industry practices associate pixels across domains, which is not only counter to the spirit of the domain security policies, but also being lambasted by the FTC in their Self-regulatory Principles. Any good circ planner knows that to do data-driven advertising, you need to stratify circulation across 5 key dimensions – audience, timing, offer, creative, and context. When you do this, it lays out perfectly to revenue. Fourteen percent of users generate 63% of sales.

Display 3.0 can do this, not by increasing the media vendor pool, but by changing the way the advertiser engages with the consumer at the time an ad is being served.  The only way to do this is to alter the characteristics of the ad server, which neither Google, Microsoft, nor emerging vendors have chosen to do. In an environment where the pendulum has moved to the publisher side, why should they support the advertiser in a model with a proven 200% - 300% lift? Because maybe the pendulum will move back again. Gravity and 80 years of advertising history suggests it will – it's only a matter of when. What’s needed is not new technology; TruEffect has already developed and implemented this on a very scalable basis, but some new vision on the client and agency side. At that point, Data-Driven Display 3.0 will not just drive improved media performance; it will completely recalibrate the metrics and the investments of online advertising.

We’ve seen a major advertiser reduce or reallocate media spend by 50%, without the need for new budget or the expense of being held hostage by non-value add players in the eco-system.  This is based on reviewing the actual results when you apply a stratified circulation methodology, and knowing how to control 50% of the traffic quality. It's just a matter of adoption. Unreasonable advertisers wanted!

– Martin Smith

It's a Brave New World

It's easy to forget how new the internet actually is. A lot of recent coverage is devoted to following the ins and outs of the new presidential administration's use of the internet to build the national community it promised during the election. Not since Kennedy bested Nixon in the 1960 television debates, has the use of technology been so prominent in politics.

It's hard to imagine that it was only about a decade ago that Clinton ushered the White House into the online world with the creation of Whitehouse.gov, and a mandate that all federal agencies get online. David Almacy, Bush's Internet Director said, "Clinton was the first Web president. Bush is the first digital president, and Obama is the first online social networking president." Even Congress is tiptoeing in the waters of YouTube, though it may take better directing to 'whip' our representatives into a believable presentation. Maybe Oliver Stone is available.

Digital Technology - faster than the speed of....
uh, the latest fast thingy?
It's not surprising that technology leaders, advertisers, marketing professionals, and privacy officers around the globe seem to always be playing catch up. This week an eMarketer report showed the first Direct Mail drop in over 60 years - no big surprise here. But the prior week they also published a report showing that Google, for the first time, is losing, rather than gaining, share in Search. And the hits just keep coming. This week brought us a new Nielsen Report on Social Networking's New Global Footprint that shows "member communities have overtaken personal email." If that's not enough to raise your eyebrow, how about the fact that time spent on Facebook last year not only increased by 566%, its greatest global growth comes from people aged 35 - 49? Even the strongest advocates for social media must be astounded by this speed of adoption.

Couple all these lightning fast changes with a recession spawning massive budget cuts, and I'm sure many marketing professionals feel the need for a long vacation (of the paid variety of course). We've talked about simplifying a lot in the past, but with this schizophrenic environment, it's more imperative than ever. TruEffect does its part by continuing to help advertisers make sense of the digital advertising landscape. It's all about forging meaningful relationships with customers, while spending less time and money on it and, of course, keeping kosher with online privacy regulations.

– Layne Salter

Newspaper impressions

Jim Nichols takes a different angle on recent newspapers' demise in his iMediaConnection article.  He points out the fact that while the internet has played a major role in killing paper news by giving consumers free news and content, it's still largely in the infancy stage of figuring out its own business model.  But he also reminds us that many papers are doing a fantastic job creating and offering digital content.

I think he's hit on something. It's true that news content has the ability to generate a highly sought after audience. Couple that with the fact that online offers superior technology in ad targeting. Unlike newspaper readers having to wade through pages of huge furniture and auto ads that may have no bearing on their interests, digital content can provide its readers with targeted, even custom ads. Online targeting promises a lot, but will it deliver enough to boost display advertising?

I second Jim's call to advertisers to go out and buy some impressions on a digital newspaper. Who knows? You might save a journalist's job, and keep the world safe from glib and depthless television news.

– Layne Salter