TruEffect Blog

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

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

Rocky Mountain News - Rest in Peace

Today I was saddened to hear the long-awaited announcement that tomorrow one of our local newspapers will be ceasing operations.  The Rocky Mountain News is two months from its 150th anniversary and has won a Pulitzer Prize for journalism four times – an accomplishment shared by very few newspapers in the world.  And other awards stack up behind the Pulitzers. 

Now it would be easy to ask why I, an internet media guy, wouldn’t see this as another validation that online is the future.  And, isn’t this failure just another example of an industry that has not remained competitive and deserves to go extinct?  Well, it’s just not that simple.  The internet, and internet media, has been an explosive success because it has enabled the sharing of information across society with an efficacy and speed that boggles the mind.  We can learn a great deal about almost anything in seconds, which has redefined business, education, government, global trade, culture, health care, and even how we interact as human beings.  But, the internet does not create the content. 

People are the authors of everything we share online.  Teachers share their lessons.  Analysts share their expertise.  Scientists share their research.  Musicians share their songs.  And journalists share their news stories, photos and commentaries.  The internet has not offered any substitute for this wealth of knowledge, yet it seems to have put into jeopardy the business models that feed some of these authors, journalists in particular.  At its most lofty, journalism is chartered with reflecting every side of an issue as truthfully as possible. Thomas Carlyle’s “Fourth Estate” has been a cornerstone of a free and open society, and has been particularly important in American history. 

So what difference does this make to those of us in digital media?  Each and every one of us in the business can attribute our revenue and our paycheck to the media budgets of the advertisers that pay to get their message in front of consumers.  Consumers want content.  Compelling content.  Entertaining content.  Useful content.  It’s the content that draws traffic that drives ad revenue.  And one of the earliest and most successful sources of content on the web is news.  Journalism.  Obviously, we’ve evolved from headlines on CompuServe to tweets and blogs from “citizen journalists”, but we collectively depend heavily on the news, weather, entertainment and sports reporting from professionals.  Professionals who have failed to morph their business model in a sustainable way, but continue to blindly feed the model that is their Brutus.  Walter Isaacson provides an excellent analysis and a provocative proposal in his recent Time Magazine article.

We have heard in the last few days that television seems to be surviving quite nicely, thank you very much.  And that’s true – kudos to the ability of that industry to remain relevant.  But newspapers are the most entrenched source for local issues and the most connected with their communities.  Newspapers at every level provide an enormous amount of quality content that drives a lot of revenue to our industry.  If we fail to recognize the need to nourish and grow quality content, then we’ll find ourselves struggling for relevance as well.  How successful would an internet be if comprised solely of advertising??

I grew up on a Midwestern river which fueled the growth of towns large and small and supports fish and wildlife as well as agriculture and recreation.  As commerce up and down that river grew, the Army Corps of Engineers decided to make the channel deeper and straighter in an attempt to facilitate large shipping barges.  This well-intended move to efficiency and effectiveness turned the meandering river into a fast-flowing “ditch” that has become too treacherous for many swimmers and boaters, and eliminated some of the shallower pools and eddies that were home to all kinds of creatures.  The need of the people living along the river to exploit this natural resource for commercial gain has eaten away at the real value it brings.  What a self-defeating tragedy it would be if the internet ad industry followed suit and drove quality content providers such as professional journalists out of business. 

- Scott Nelson

FTC Staff fires privacy shot across the bow

While I would like to think “everyone” cares as much about online advertising, behavioral targeting and consumer privacy as I do, my gut says most advertising folks didn’t gallop over to the Federal Trade Commission website to download and pour over the Staff Report on behavioral advertising last Thursday.  Based on that assumption, we’re going to devote a bit of effort to getting the word out because the implications of this report are far greater than may be apparent at first glance.  With this report, and, perhaps more importantly, the two concurring letters from Commissioners Pamela Jones Harbour and Jon Leibowitz, the FTC has fired their warning shot to each of us whose business exists because of online advertising.  The call-to-action starts with the first two words in the title – “self-regulatory”. 

Full disclosure – we’ve built our company on the belief that advertisers own their relationship with consumers, and the information defining that relationship should belong to them, not to some third-party technology company or ad network.  For that reason, I was pretty excited when the FTC explicitly validated our approach to data and behavioral targeting.  Their endorsement of the ‘first-party’ model as “more likely to be consistent with consumer expectations, and less likely to lead to consumer harm, than practices involving the sharing of data with third parties or across multiple websites,” profoundly confirms our position.  But as this warm glow of self-satisfaction waned, and we read further into the report, another message became clear – ignore this report at your own peril.   

To offer some perspective, since the 1990s, the FTC has kept a careful eye on the online advertising space, but has refrained from directly regulating.  They’ve consciously allowed all of us to go about our business and figure out models that bring value to consumers, and revenue to our top line.  The FTC Town Hall early this decade was the impetus for the formation of the Network Advertising Initiative and is as close to imposing regulation that they’ve come.  Now that we’ve developed more sophisticated methods of collecting data and targeting online ads, and a track record that includes the rise of über-data hound Google and the AOL search debacle in 2006, the FTC no longer feels they can stay on the sidelines.  Commissioner Harbour goes so far as to layout a timeline “directing staff to complete, by Summer 2010, a report that evaluates the efficacy of self-regulation in the realm of behavioral advertising.”  To stoke the fires even further, Commissioner Leibowitz warns all of us to keep our promises regarding the use of consumers’ information.  “If they fail to do so – whether first party or third party, online or offline – we will go after them.”  

I’ve been calling for advertisers to actively engage in this process since before I gave a presentation to the FTC’s Town Hall on eHavioral Advertising in November, 2007.  But companies whose business models are dependent upon the development of third-party profiling databases and targeting solutions are likely to not heed the FTC’s call sufficiently to prevent the drafting of regulation or even legislation.  The folks controlling the media budgets must insert themselves by helping to define acceptable practice.  Already, advertisers are struggling to allocate more of their (dwindling) media budgets to online, failing even to keep up with consumer adoption.  (Only 8% of media dollars are flowing online, even though we consume 28% of media from the internet - Forrester Research, January 2008.)  If regulation or legislation is forced down our throats, further impairing a brand’s ability to make the most of every media dollar, we will only see that gap widen.

Next week I’ll be participating in a workshop hosted by the Future of Privacy Forum in Washington D.C.  This will be a great opportunity to learn from some of the leaders in our industry.  Perhaps one of the most encouraging aspects of the event is the fact that some of the largest advertisers in the world are planning to participate.  Perhaps they’re taking “self-regulatory” more seriously this time around.

– Scott Nelson

Display - it's not just for branding anymore

This week Nat Worden of the Wall Street Journal wrote an insightful article on the state of advertising as a whole. Media titans everywhere are acknowledging that, even once the recession is over, advertising may never return in full force to major media outlets. The world is moving on.

No big surprises here, given that the past few years have shown a growing distaste among consumers for being advertised TO, rather than communicated WITH. Throw in the changing technology landscape and it's no wonder that traditional media is suffering. Disney Exec, Robert Iger, said they're feeling "signs of secular change as competition for people's time is increasing and the abundance of choice is allowing consumers to be more selective."

The rise of Search and Social Media have dominated the online arena as major players in the trend towards better relevance. "I searched on a brand, and voila! There it was!" Or " I'm going to try out this new [fill in the brand] because my BFF said it was so awesome." Well, It's a start. And research continues to confirm what we already knew – people don't consume media in a vacuum. Atlas Institute reports that the average person who converts on a site had 15 to 20 touch points prior to taking that particular action, and nine out of ten were exposed to ads from the same advertiser across two or more sites. So if your strategy to reduce media spend is to stick to only one channel, think again.

Advertisers and agencies might already be rethinking their online approach. Research shows that paid Search spending had its first major drop of 8% in Q4 of 2008. The decrease might simply represent overall ad spend cuts, or it could be signaling a trend towards a more balanced online media approach. With consumers having so many choices, being so selective, and demanding media on their own terms, doesn't it make sense to spread your word more wisely?

With Display ad technologies continuing to improve upon targeting and media accountability, and an inventory glut creating reduced display media rates, there's never been a better time to marry Display with your Search campaigns. And if you're already doing that, you can continue taming the online beast by taking a step back to re-evaluate the cost and effectiveness of all your online technology partners. There's always room for improvement.

– Layne Salter

Declutter your digital advertising

Now that we've all enjoyed the holidays and made our New Year's Resolutions (you did, right?) it's back to business as usual. Work… life… money…. You know the drill. And with the gloomy financial forecast hanging over our heads, what better way to douse the dismal than with the time honored tradition of cleaning house? Isn't it a great time to take a good hard look at your digital marketing initiatives, analyze the elements, and declutter the way you market online?

The online landscape is fraught with many, many players. And the more it grows, the more costly and confusing it can become. Every new technology promises the moon, while gobbling up a piece of your pie. Targeted ad networks, ad servers, ad agencies, social media, search, email, data targeting agents – to name a few.

Consumers are people too. Beyond the inherent digital clutter, advertisers are also faced with a new focus – engaging with consumers as human beings. Brian Morrisey, in an insightful AdAge article earlier this week, said, "as the Internet becomes more social, there will likewise be an acceleration of a move from purely technical implementations to using the Web's emerging social infrastructure to connect on a more human level." Anne Mack, Director of Trend spotting for JWT predicts that this year brands will adopt one word: authenticity, and that the financial crisis will force brands to regain credibility and trust.

Keys to the kingdom. This year, the keys to success will require achieving your business goals, and making sure your marketing initiatives, vendors, and media placements actually create a relationship between you and the consumer.

1. Which targeting assumptions are sound? You can target via your ad server, your targeted buys, or data agents. How much overlap is there, and what's the up charge associated with it? Are they really finding your customers and prospects, and improving your conversion rates, or could you accomplish your goals for less? Ask your targeting agent how they deal with 3rd party cookie deletions.

2. Do your ad technology partners play nice with your existing marketing ecosystems, or did you have to hire extra people to handle the millions of new tasks created by their systems? Are these solutions making your life easier, or harder? Did it ever fully integrate with your internal systems?

3. What is your key business metric? Agency's want to satisfy their clients by helping them meet their goals in the most expedient and cost effective way possible. Assess your internal processes and your assortment of vendors and publishers. Who gets the job done? Where is there overlap? For advertisers, the goals vary. Your real goal may not be Conversion Rate, Cost Per Acquisition or even ROI. Perhaps it's a revenue-to-spend ratio? Whatever the goal, align your online campaigns, vendors, and media buys accordingly.

4. Are you simply reaching your customers, or can your online efforts create a sustainable and lasting communication that nurtures the relationship and creates loyalty? Utilize all your existing resources and talent to hammer out your Engagement Advertising strategy.

– Layne Salter

2009 - a year for audacious innovation

Then – 2008 has certainly given the "Mad Hatter's Ride" a run for the money. It's been a wild year of firsts, fads, and fears – the Wall Street crash and government bail-outs, the election of our first African-American president, Googlzilla gobbling up the world, baby boomers outpacing Gen X/Y-ers online, Warren Buffett losing $13.6 billion, the iPhone, a retail clerk trampled to death by an early shopping mob when the industry feared everyone would stay home, and let's not forget, human communication reduced to 140 character tweets. Need I say more? Publications are already full of the "best of 2008" articles for our retrospective delights, and "2009 predictions" to satisfy our curiosities. But the only prediction I'd take to the bank is, it won't be 'business as usual.' So we'd like to invite you to take a deep breath, and a few minutes to get in touch with your inner marketer/advertiser/technologist.

Now – If we take only one lesson from history, it's that challenging times breed innovation. Not to diminish the tough times and anxieties ahead, but what better to bring out the best and the brightest? When things are going well, it's easy to settle into a rut, or worse, become complacent. While this year has been dominated by large internet mergers and acquisitions, and a failing economy – next year is almost certain to bring surprising success stories to both established and dark horse contenders alike. And the differentiator will not be size, but brains, audacity, and innovation.

Advertisers, publishers, and technology companies will, more than ever, seek the best ways to do more with less, and still maintain a competitive advantage. This creates a fertile ground for new ideas, competition and change. And even though interactive advertising is still scheduled to grow, albeit at a slower rate than originally anticipated, the industry, like the economy, demands change. Internet advertising has not brought us any truly 'new' technologies for 10 years – just iterations based upon the original inventions from the '90's that spawned impressions, clicks, and conversions. Accountability will be king, and those expenditures that don't earn their keep, will be evicted.

So, as we wring the old year out, and ring in 2009, let's take a few minutes to ponder what changes we'd most like to see. In fact, we'd love to hear what you think.

– Layne Salter