Mobtown Labs

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So I recently engaged in a debate about how solving the attribution modeling problem could effect the ad market.  The conversation was broken into supply and demand where:

Supply = Publishers   (this post)

Demand = Advertisers  (the next post)

Supply

On the supply side solving the attribution modeling issue could affect publishers in a drastic way.  Since ad inventory is becoming so fluid as a result of companies creating marketplace environments out of their ad inventory, the value that an advertiser sees in an ad, could really affect a publisher’s business.

We already know that marketplace buying drastically compresses ad dollars.  We see that with advertisers who have pulled money out of newspapers and TV and put it into google.  Google takes these dollars and since they can deliver the eyeballs and customers at an incredibly inexpensive overhead cost, they allow advertisers to essentially set the price of each keyword ad.  Since there are so many keywords and relatively few bidders on each keyword and such low cost to deliver each incremental customer, this works extremely well so there is plenty of diversity for google to rely on their prices to continually rise as competition increases.

For display advertising it’s not the same.  A homepage 300x250 ad typically only has one advertiser per day and with 365 days in a year and between $50k - $2mm per day (depending on the site) that’s a lot of eggs in one basket for a publisher. 

So they are highly incented to keep advertisers from knowing the real value of their advertising and they can create scarcity in a high competition placement to drive up price.

The threat here is that if the small group of advertisers (it can’t be more than 365) all know exactly how much this placement is worth to them, they can hold the publisher hostage on price.

I think that gives an idea of two polar opposite sides of the spectrum for the supply side.  One area with a lot of diversity and little competition where having true attribution and REAL pricing will not threaten a publisher’s business model and another where little diversity and high competition if attribution is introduced could curb that high competition and cause problems for a publisher.

There is also the fact that REAL pricing and a sound attribution model could make advertisers identify what really drives incremental sales in which case all publishers win!

Image by Mundoo via Flickr

So one thing I’ve realized through the years of working in online advertising is, sometimes it doesn’t hurt to go back to the basics.  With everything thats going on with Engagement Mapping, Realtime Bidding, DSP’s, SSP’s, Dynamic Ad Optimizers, and everything else, sometimes it helps to go back to the core pieces of a media plan and make sure you are taking advantage of the basic tenants of online display advertising.

With that, I’ve decided to start a series of blog postings on some of the basic techniques of online advertising and we’ll start with Re-Targeting.

What is it?

Re-targeting is probably one of the most powerful methods of display advertising available today.  In plain terms what you are doing is running display banners ads to users that have already been to your website.

How does it work?

It work by placing two pieces of html code on your website.  One you would place on the entry point that users access your website by, and we will call this the “ON” pixel.  This can be either your home page or a specific landing page that you are driving traffic to.  The code gets pasted into the body of your website (probably want to do it at the end of your content code so if there are ever any issues loading, it doesn’t hold up your content).

The second pixel goes on the ‘thank you’ or ‘confirmation’ page of the action you are trying to value and we will call this the “OFF” pixel.  You want to place this to show after the user has taken the desired action you want them to take.  For instance if you are advertising selling a product or service that is purchased by credit card on your website, you would place this after you collect the credit card info and confirm the sale.  If you are generating leads, say for a car dealership for salespeople to follow up on, you probably want to place the pixel on the page that shows up after the user submits their information.

Essentially what happens is that when a user goes to your site, the pixel loads and the Ad Server writes a cookie on that users machine.  That cookie then has a variable.  Let’s say for example the variable can have two different variables and when the user sees the first pixel “ON” is written in that variable.  When the user sees the second pixel, “OFF” is written in that variable.  Then when your campaign is out there running and showing ads on websites, it will be set to only show uses who have that cookie and you can specify, that you only want to show to the “ON” people and not to the “OFF” people or you can decide to show to both.

Now why would you want to show to both?  Well, for the car dealership example, you would probably only want to target the “ON” audience because theoretically people only buy one car every few years so after someone has completed a lead, you probably don’t want to advertise to them anymore.  An airline, however, may want to target both audiences and show different ads to both of them.  Maybe the “ON” audience should get ads about booking a flight, and the “OFF” audience should get ads about their frequent flyer program.

Advanced Re-Targeting - “Cascading Re-Targeting”

If you haven’t realized already, in most cases the variable that is written to the cookie is pretty flexible so you can assign a variety of values to that variable and create a variety of audiences.  This can be very powerful to an advertiser who has a purchase with a longer consideration cycle.  This method of Re-Targeting, I like to call “Cascading Re-Targeting.”  Lets take an online retailer for example.  Most retailers have a variety of products and then have accessories to go along with those products that they want to sell a user.  For example lets say you sell laptop computers as well as monitors, mouses, printers, and printer paper.  You have a search campaign going where you are driving people to your homepage as well as product research pages.  Consumers typically either come in on the homepage, or a specific product category page or a specific product page.  You might want to set one variable in a pixel on your Home page called “ON”.  This will be your largest audience and it’s probably all of your users.  Then you might put another pixel and set the variable to “laptop_product” on your laptop product category page.  This will over-write the “ON” value and now you know that you should be showing that user banners that focus on advertising Laptop computers rather than your general site or brand.  You can take that a step further and set variables on specific Laptop computer pages and show that user a specific ad for the specific laptop that they were looking at.

Lets say this works an the user purchases a laptop computer and on the confirmation page of the purchase you have that same Re-Targeting pixel that would normally set the variable to “OFF”.  You may want to have this actually set to something else more specific.  Lets call it “OFF_Laptop” for now.  Now when we see this user out there on the internet again and we have the opportunity to show an ad to them, we know that they have purchased a laptop and we can try to sell them a printer, or mouse, or monitor.

Where do I get it and how much does it cost?

A lot of audience targeting is based on audiences owned by other companies these days and you need to not only pay the website you are showing the ad on for the impression but you have to pay the audience provider as well.  The great thing about Re-Targeting is that you are using YOUR OWN audience so you don’t have to pay for it.  So all you need to pay for is the media that you are buying the site on.  Most ad networks offer this as a service as well so if you don’t have your own Ad Server that you use, the ad network will most likely provide this as a free service and consult you through the setup process for free.  The only catch here is often times ad networks and websites will charge a higher CPM for Re-Targeting because they need to make sure you are eligible for every impression in your Re-Targeting audience that you have created but the higher price point is well worth it for the opportunity to access those users because after all, they have already shown purchase intent in your products so why not advertise to them to bring them back and close the deal!

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