Ad Networks and their TacticsThe advertising network landscape looks vastly different than it did eight, five or even three years ago. Like mostthings in their early stages, the industry in which ad networks exist has evolved rapidly. The general ad networkspace, which of course includes CPA and affiliate networks, has been maturing for some time now.Compared to traditional ad markets, the online industry could apparently accommodate a huge number of networksbecause of the massive growth in users, traffic and websites. In addition, accessing the web via wireless networksand mobile devices was beginning to take off, providing even more “reach” potential.Ad networks can be classified in two 1. Large or Tier 1 Ad network such as Google, Yahoo, Microsoft adcenter etc… 2. Small or Tier 2 Ad network such as Adbrite, casale media etc… Large or Tier 1 Ad network Small or Tier 2 Ad network Large number of advertiser and publisher base Small advertiser and publisher base High quality traffic Low traffic Premium brand of customers Unbranded customers can join the ad programme Better revenue Minimum impression only allowed per month Source of revenue comes from syndicated ads from Millions of impressions required other ad networksThe Ad networks can be differentiated based on 1. Representative Network – They represent the work they do in their portfolio with full transparency about their ads, these ad networks typically promote high quality traffic at the available market prices, they offer ROS (Run of Site) advertising Example – Travel, Auto Etc. 2. Blind Network – There ad networks typically work on low cost basis model where in they use remnant inventory combined with high campaign optimization and high targeting of Ads, these type of Ad networks run on RON (Run off network) Example – Interactive one (Publisher themselves use these ads sometimes as these ad space are very cheap) 3. Targeted network – These ad networks are called the next gen ad networks where in they specialize in behavioral or contextual targeting, these ad networks use consumer click stream data to enhance their inventory value, Ex – Google, Rocketfuel etc.Ad network space will have to create discernable value in order to differentiate themselves. Potentially powerfuldifferentiators include: • Technology and Targeting – This needs investments, and is where the battle is being fought by the new and emerging platforms that represent a major challenge to less sophisticated networks, this however can be seen as an opportunity by ad networks if they can build robust engines using real time targeting, bidding & analytics they could be way ahead in terms of their nearest competitor, some of the Ad networks use real time verification where in they check how their ads or surveys are performing through an indigenous technology by placing a cookie on the ad or survey, moreover the biggest challenge is to connect the brand advertisers and marketers with the customers of other brands.
• Compliance and Forensics – Having an in-house or reputable third party compliance and forensics group is not a luxury, it is an absolute necessity. There are emerging companies in this space who cater to networks and have cutting-edge technology and well-qualified staff that are specialists. This has the potential to be a huge competitive advantage for networks that move quickly because many other buy-side platforms are not yet focused on this issue. • Compelling Creative – Compelling creative’s could be said as different or unique kind of ad types fired by the ad network Ex – Ads below the video or Ads circumferencing the content of a website etc, Unique and compelling creative executions that can’t be delivered in an automated fashion through platforms run solely by technology will be key. Standard ad units and banners are fine and necessary, but those networks that can unlock unique and more powerful ad units will stand out. • Extensive Reach – Networks are able to provide immense reach as a value proposition, and for some networks this has increased consistently over time. Networks must continue to look for reputable partners – not just advertisers, but also publishers and other distribution partners – so that reach continues to be a large piece of the value equation. It is still the case that most advertisers are looking for efficient reach and expansion of their audience, and this is especially true for those large spenders.Below are some finer points for an advertiser to look for in an Ad network?They should look out for. 1. Quality of Sites and Audiences 2. One point of contact 3. One Pricing Model across Network 4. Transparency (it has to be open) 5. Targeting & Retargeting 6. Integrated Solutions and Options (Video, Rich Media, Social, Mobile) 7. Guaranteed Delivery of Impressions 8. Third Party Ad Tracking (DoubleClick, Atlas, Eyeblaster) 9. Third Party Data/Research ProvidedSome of the added additional functionality could be 1. Frequency – Users may see the ad only for a limited period of time 2. Sequence Ads – User may see the ads in a specific order 3. Competitors Ads - The competitors ads will be excluded in the page 4. Eliminating Road blocks – Ads of an advertiser can own 100% of the inventory of a page 5. Targeting of ads based on user behavior using retargeting methodsFrom the above we can infer that ad networks performance is mostly based targeting or retargeting sizeblecustomers who could potentially convert and provide huge ROI.There are many types of retargeting 1. Contextual retargeting – Contextual Advertising is an intelligent form of advertising, which inserts Ads effectively and relevant to a websites content, this might happen by banners, Text links or Pop Ups, In Text Advertising mostly consists of Links related to the Content within Texts 2. Behavioral retargeting – This mode of retargeting is widely used by the ad networks (Covered deeply below)
3. Demographic retargeting – Targeting a set of people by age group sex etc.. is demographic retargeting, in this kind of retargeting business intelligence is a must as they come hand in hand for creating success, when the AD network uses business intelligence before retargeting they get data which enables them to do efficient demographic retargeting, shockingly 61% male and 48% male under the age of 36 search for diapers, this shows how business intelligence is helpful. More surprises: “Elle girl” searches 48% male (searching for Elle Macpherson, mostly), Travel: “honeymoon” splits 50/50, but “honeymoon planning” types terms 75% female, Ferrari is mostly searched by kids, this helps to learn new facts about our audience. 4. Geographic retargeting – Targeting the audience based on their geographic’s, Targeting by geography is another tactic a company might want to employ. Most serving technologies available today allow a wide spectrum of region-specific advertising; one can target as narrowly as a certain postal code. Geotargeted advertising is becoming more and more important within the industry, particularly as slower- adopting countries get on the web.One of the successful types of retargeting is “Behavioral retargeting”, this type of retargeting has earned millionsof dollarsSo let’s understand the “Behavioral retargeting” world.Retargeting (also known as “Behavioral retargeting” or “Behavioral remarketing”) is a form of targetedadvertisement in the online advertisement world, this kind of advertisement is based on previous Internet actionsthat did proceed to become a conversion, Retargeting is one of the most effective tactic used in the online world,Retargeting is serving ads to those people who have shown at least some amount of engagement in the brand so thismakes retargeting a smarter spend than most other display ad campaigns as it focuses on your brand’s engaged userbase.Most likely a company has spent marketing dollars to get a customer to their site in the first place, so the termRetargeting is derived from the concept of marketing to them again, some of the companies specializes personalizedretargetingHowever few concerns can arise • How do Retargeted campaigns know who your visitors are? • Will the ads overbear your users?The answer is the technology used for retargeting the consumers; it works by having you place one line of code onyour site, when a user visits your site, this single line of code drops a cookie onto the user’s computer which startsthe process and has your ads follow your visitors around the World Wide Web.Retargeting is very essential as it a definite tactic to build huge brand awareness, retaining visitors, battlingshopping cart abandonment, and driving users throughout your conversion funnel.What are Tactics?Tactic is a strategy which is carried out; planned and ad hoc activities meant to deal with the demands of themoment, and to move from one milestone to other in pursuit of the overall goal, It can also be referred to asmeans by which a strategy is planned & executed successfully, however success is never achieved without a definitestrategy, in an Ad network tactics are the DNA’s for the success story.Now the next big question is who drives the tactic or what are the factors that drive a tactic for achieving success,the answer is “KPI’s” (Key performance indicators), the KPI’s are very important such that they could be decidingfactor between a Excellent, Good & a bad tactic.
Tactics may be broken down further into line items which will enable the planner to hit the target harder andaccurateDefining KPI’s or Key performance indicatorsKey Performance Indicators can also be called as Key Success Indicators, help an organization define and measureprogress toward organizational goals, Key Performance Indicators are quantifiable measurements, agreed tobeforehand, that reflect the critical success factors of an organization. They will differ depending on theorganization & its causes.Now the question arises how a KPI is related to a tactic, let’s see the relativity below.One of the most required KPI for a business is “Repeated visitors”, without repeated visitors business cannot run,the repeated visitors are bought back for conversion by a tactic called a Retargeting.Types of Retargeting • Site retargeting – This is a chief method of retargeting which differ depending on what form of activity the marketer is capturing and this is the most common method, which involves placing the retargeting tag on particular pages of a marketer’s web site, or in the universal header so that all traffic from the site is recognized. • Creative retargeting – Creative retargeting, another method of retargeting, is the placement of the retargeting tag within online media that appears on a web site other than the marketer’s own site. A cookie can then be placed in the browser’s cache of a visitor who is served Flash creative or clicks on a standard banner that will identify that person when visiting other sites within the advertising network at a later time. Also known as fourth-party tagging, marketers can use creative running on expensive contextual sites to enable them to reach these same visitors again with future messages, or exclude them, as they visit other sites • Search retargeting - Related to creative retargeting is the method of search retargeting. Here the tag is placed on one or more landing pages of the marketer’s web site and captures the search term a visitor entered into a search box to navigate to the marketer’s web site. These search terms can often provide insight into what products or services the visitor is looking for the web site to provide, and search retargeting gives the marketer the ability to reach a person who has already, for example, searched for the marketer’s product and clicked on a corresponding text ad to go to the site.Let’s check some the real advantages from retargeting, the below picture shows how retargeting works and some ofthe statistics showing its advantages 1. When the retargeting tactic is implied it is said to have bought 5x conversion than the normal. 2. Retargeting using Facebook yields 3x more conversion 3. Retargeting using a promotional event can generate upto 44% more traffic
Now let’s examine some of the sample results from our clients who used retargeting usingdifferent funnels & goalsClient 1Funnel: E-CommerceGoal: Increase SalesType of Retargeting: Site RetargetingStrategy: Retargeting guarantees that your ads will stay in front of your audience. This guarantee can be veryvaluable for your e-commerce site in that it gives you opportunities to sell and resell! The best way to do this: • Retarget visitors of each product category with ads that highlight your brand and the specific category. Make sure to burn these users if they enter into your checkout process. • Once your visitors enter your checkout process, you can have a small retargeting campaign that’s focused solely on those who abandon their shopping cart. • For everyone who does convert, make sure to not only burn these people from the thank you page, but to also add another retargeting pixel on this page as well. This gives you an opportunity to advertise new products or promotions to your customers that they might be interested in.Client 2Funnel: FreemiumGoal: Increase SignupsType of Retargeting: Search RetargetingStrategy: Unlike e-commerce stores, freemium sites generally focus heavily on acquiring users for its one product,and keeping these users active enough to want to buy the product. This is a great way to build a long-term ROI.Here is an effective way to do it: • Use retargeting to advertise to everyone who has visited your site. This encourages them to come back and sign up for the free version of your product. If you don’t always drive the best or most relevant traffic to your site, you should test retargeting your website’s visitors against retargeting your pricing page’s visitors. These ads should link to landing pages that give a bit more information on your product and should have one call to action focused on driving sign-ups. • Use an additional retargeting campaign that’s targeted to everyone who’s signed up for your free trial. You will need two types of messaging for these ads: one that’s focused on driving activation (use our widget!) and another that’s focused on encouraging purchase conversion (sign up now and receive 15% off!). For purchase encouragement, offering a special deal or discount works well, if you can afford to do that. • Similar to e-commerce retargeting, you should pixel your converted audience – this allows you to target them later for future resell & cross-sell.
Now let’s get into a real time case study and find out the specific results we achieved byusing the Retargeting method.This client is a leading Hotel & Resorts.Situation – • A leading hotel and a resort destination wanted to increase visits to their resorts and spas. • Their target resorts/spas visitors are a female professionals with a family looking for a quick weekend and as usually last minute booking. • Time limit – 5 weeksChallenge – Locate this very specific audience such as working Mom’s aged between 25-54 and income greater than$150,000.00Strategy – • Started with demographic targeting of Moms between the age 25 – 54 & with income greater than $150,000.00 • Over laid Ad path audience targeting using a segment or line item called as “Recent travel research segment” • Scaled the segment or line item using SIP (Selective inventory partnership) • Added AD path site remarketing • Parllely we tested that other audience segments such as Female income greater than $40,000.00+ outperformed higher income groups, which was a positive boost for the campaignResults -When the above strategy was applied, we found the below resultsAstonishingly the cost per customer decreased as the sales increased and we could constantly maintain the CPA(Cost per action to $40) Cost per customer Goal eCPA $6,000.00 $45.00 $40.00 $5,000.00 $35.00 $4,000.00 $30.00 $25.00 $3,000.00 $20.00 $2,000.00 $15.00 $10.00 $1,000.00 $5.00 $0.00 $0.00 Week 1 Week 2 Week 3 Week 4 Week 5
Re-Targeting ChallengesHere are some of the reasons I think may be responsible for this discrepancy:• Finding the right message for the right audience - Finding the right people for your ads is one the greatest challenge that an advertiser will have to face in his day to day activities, one of the key solution for this is advanced segmentation of the population who use the internet, the benefits it could reap are increase in conversion, increased brand loyalty, increased visitor opinion of each interaction etc.• Communicating to your customers before the competitor does – Its important that the advertiser reaches to his customer before anybody else reaches him for a conversion, Real time data syndication & leveraging other display advertisers could be one of the solutions to overcome this problem.• Cost efficiency while acquiring or reacquiring visitors to the site: Acquiring or requiring the new or lost visitors is a huge challenge in this ever changing market, some of the solution could be • Retargeting segments through less expensive channels • Non-identified visitors via display campaigns • Registered visitors via Email campaigns • Reacquire paid searchers via display campaigns• Web optimization maturity: There has been a lot of talk about web analytics maturity models - and many companies may be in earlier stages where they are still defining goals and implementing solutions to measure these goals (which come before optimization), Some of the solutions could be • Evaluate across all channels for each key segment • Automate the integration of segment data to partners • Leverage attribution to better attribute credit to key investments • Understand how different channels play different roles in buyer lifecycle • Invest in the channel to trigger the desired behavior • Optimize spend through leveraging more cost effective channels • Continuously re-evaluateThe benefits from the above could be that the advertiser could understand how is marketing efforts are performing.Monetization using Re-TargetingIn the online world companies have gained money using the retargeting tactic - one such company is myThings aninnovator in personalized retargeting, secured $6 million in their third round of funding led by T-Venture, theventure capital company of Deutsche Telekom, with participation of Accel Partners, Carmel Ventures, Dot Corp andGP Bullhound.MyThings retargeting technology is enabling Europes leading online retailers and marketers, including Price Minister,Republic, PIXMania, Karen Millen, Etam and Orange, to benefit from increases in return conversion rates in excess of500%. The companys proprietary optimization technology facilitates serving personally tailored ads, generated inreal-time based on a range of performance-enhancing variables. myThings continues to win business and marketshare since introducing the product to a wider market in 2009.
An online advertising solution where a retailers website visitors are retargeted while they browse the Internet, hasproven to outperform other leading online ad tactics, including contextual and behavioral targeting, according toresearch from comScore. myThings only uses non-personally identifiable information to perform its retargetingservice.Let’s see how retargeting has performed in the past years in the on-line worldRefer the below table where retargeting has been best tactic in the past years Lift in Trademark Search Within 4 Weeks of Exposure Total world statistics Lift Reach Index Cost Index Retargeting 1.05% 30 373 Audience 514% 30 329 Premium 300% 21 1471 Contextual 130% 73 1473 RON 126% 100 100 Efficiency 100% 57 140 *Reach Index = Avg. Reach of Strategy/Avg. Reach of RON x 100 **Cost Index = Avg. Cost of Strategy/Avg. Cost of RON x 100While display ads may once have been considered primarily a direct response vehicle, and many marketers still relyon measures of declining click through rates as primary display metrics, studies have shown that banner ads providean important branding vehicle and should be considered as such.Given the cost, reach and effect of various display campaigns, retargeting provides a large benefit with reasonablecosts.The study found that retargeting campaigns were nearly four times as expensive as simple run-of-networkcampaigns, but significantly cheaper than campaigns that used contextual or premium targeting and the reach ofretargeted ads was naturally much smaller than run-of-network campaigns, but the same as those that usedaudience targeting and wider than premium targeting.In return, retargeted display ads gave a 1,046% lift in searches on brand terms within four weeks after exposure.That was more than twice as high as the second most effective targeting method, audience targeting.
Some of the other facts and figures are provided below. Retargeting off Retargeting on # of Category Subcategory Campaigns # of Campaigns % Lift Home improvement & Retail goods and services Hardware 136 39 60.00% Financial services Banking 966 54 27.00% Automotive Manufacturers 860 33 17.00% Consumer packed goods Food and beverages 448 54 17.00% Business to business Marketing research & Data 141 38 16.00% Retail goods and service Appeal & Jewelers 47 47 107.27% Online and retail booking Travel services 91 45 1140.00% Financial Services Insurance 104 41 751.00% Consumer Packaged Goods Food and Beverages 107 38 320.00% Travel Lodging 196 149 562.00%Retargeting lift - by Industry 900 800 Lift % (Industry Average) 700 600 500 400 300 200 100 0
Below are some of the statistics where we can understand how retargeting is performing over the years. 2005 $220.00 Online Advertisment Spending 2006 $350.00 2007 $575.00 2008 $1,000.00 2009 Currency in Millions $1,650.00 2010 $2,600.00 2011 $3,800.00So now we would be wonder how could all these be possible, the answer is the robust technology used by the adnetworks to create and supply data and this high efficiency.So let’s deep dive into the technology part of the retargeting.Before we get into the actual technology lets understand the base on which the technology is built, thesetechnologies are based out of databases (Big companies use huge data bases and small companies use smalldatabases)There are two main types of marketing databases, 1. Consumer databases 2. Business databases.Consumer databases are primarily geared towards companies that sell to consumers, often abbreviated as B2C orBtoC. Business marketing databases are often muc h more advanced in the information that they can provide. This is muchmainly due to the fact that business databases aren’t restricted by the same privacy laws as consumer databases.Characteristics of a database 1. Each actual or potential customer is identified as a record on the marketing database 2. Each customer record contains information (used to identify the likely purchases of particular products and how they should be approached) on: • Identification and access (eg. Name, address, telephone No) • Customer needs & characteristics (demographic and psychographic information about customers, the industry type and decision making unit information for the industrial customers) • Campaign Communications (whether the customer has been exposed to particular marketing communication campaigns) • Customers past responses to communications done as a part of the campaigns • Past transactions of customers (with the company and possibly with the competitors).
3. This enables the firm to decide on how to respond to the customer need needs. 4. The database is used to record the responses of the customer to the firm’s initiatives. (e.g. marketing communications or sales campaigns). 5. The information is also made available to the company’s marketing policy makers which enables them to decide: • The target markets or segments appropriate for each product or service. he • The marketing mix (price, marketing communications, distributions channel, etc) appropriate for each product in each target market. 6. Fields are similar to the concept of columns in a sp spreadsheet 7. Fields can be used in Boolean logic statements to generate a query. 8. The structure of a table must be pre defined before any data can be input, but it is not as free pre-defined free-form as a spreadsheet.The above steps are vital for an ad network the marketing campaigns are devised in such a manner to provide the network,most relevant information that the company is seeking.The growth of database marketing has been facilitated by:
• The powerful processing capability and the immense storage capacity of state-of-the-art computers • The manner in which the telecommunication technology is harnessed to make the customer and market data available to the wide variety of staff involved in the marketing and sales offices.Let’s now check some of the advantages & disadvantages of a databaseAdvantages • The one-on-one marketing, which directs the customized offerings to individual customers, has provided an additional thrust to database marketing • It has employed the database to capture the interactions between a firm and its customers at each point of time and utilizes the data analysis to search for patterns in these interactions. • These patterns provide the most attractive potential customers besides providing clues in customizing the products, pricing and promotions of a product • When utilized in the proper manner, the database marketing could provide insights into the customer’s buying behavior across the product categories, so that the companies could devise their programmes and plansDisadvantages • The cost incurred in setting up the software and hardware requirements has made the database marketing expensive in its establishment. • The database often demands new skills and organizations from new analytical and decision-making skills in sales and marketing to a revamped information system organization that could support the entirely new class of users. • The database marketing depends on the data quality, while the observational data is powerful the corrupted observational data could be ‘powerful misleading’, the quality also depends on the quality of analysis and the extent to which the databases are linked. • Till now the database marketing has been primarily used as a tactical tool.Competitor’s landscape Si no Name of the Database Paid Free 1 mSQL X 2 Firebird X 3 MySQL X 4 Oracle X 5 PostgreSQL X 6 SAP Max DB X 7 SQL Server X 8 Sybase X 9 DB2 X 10 Interbase X 11 Bird step (Velocis) X
12 Ingres X 13 Ovrimos X 14 Cache X 15 Informix X 16 GNU SQL Server X 17 Scimore DB X 18 DX store database system X 19 HSQLDB X 20 Cloud DB X 21 Hive/Hadoop X48% of the databases available in the market are from open sources and they are real powerful, one such opensource database is Hive where they are the pioneers who support big companies such as “Facebook” & “Groupon”.The TechnologyHadoop runs on Java 1.6.x or higher, preferably from Sun also rubs only on Linux.The PerformanceHadoop has been demonstrated on clusters of upto 4000 nodes.At 900 nodes the performance is good - It can sort upto 9TB data and takes around 2 Hrs)At 1400 nodes the performance is better - It can sort upto 14TB data and takes about 2.5 Hrs)At 2000 nodes the performance is at its best - It can sort upto 20TB data and takes upto 2.75 Hrs)The BandwidthIt mostly depends upon the types of job the users are running, however each node can process upto 100MB of dataper second, 30 nodes can be accommodated in a rack.Each node needs to shuffle 100MB/sec of data In aggregate, each rack is then producing about 3GB/sec of data,given even reducer spread across the racks, each rack will need to send 1.5GB/sec to reducers running on the otherrack. Since the connection is full duplex, that means you need 1.5GB/sec of bisection bandwidth for this job. So thebandwidth required is about 12Gbps.The DifferentiatorThe key differentiator is “Map Reduce” - MapReduce is based on functional programming, Functionalprogramming can also be called as multithreading, multithreading is one of the popular way of doing parallelprogramming, but major complexity of multi-thread programming is to co-ordinate the access of each thread to theshared data.These models derives from the map and reduce combinations from a functional language like Lisp (List processing),In Lisp a map takes as input a function and a sequence of values It then applies the function to each value in thesequence, a reduce combines all the elements of a sequence using a binary operation. For example, it can use "+" toadd up all the elements in the sequence.
It was developed within Google as a mechanism for processing large amounts of raw data, for example - crawleddocuments or web request logs, this data is so large it must be distributed across thousands of machines in order tobe processed in a reasonable time.This distribution implies parallel computing since the same computations are performed on each CPU, but with adifferent dataset.Map written by a user of the MapReduce library, takes an input pair and produces a set of intermediate key/valuepairs. the MapReduce library groups together all intermediate values associated with the same intermediatekey I and passes them to the reduce function.MapReduce is a programming model specifically implemented for processing large data sets. The model wasdeveloped by Jeffrey Dean and Sanjay Ghemawat at Google