The Right Data Results in a Value Exchange - Eric Bosco

The poet laureate of baseball, Yogi Berra, once said, "You could observe a lot just by watching." To which I might add, "You can learn a lot if you ask and listen." This is precisely what we did in the planning stages for the launch of CRUNCH. I asked online advertising and publishing executives about their world and tried to incorporate what I learned into our new newest offering: aCustom Audience Platform.

When asked what's the top reason(s) you purchase digital display advertising?I was pleased to see that the responses reflect the industry's belief in display ad potential.

Generate sales                        42.4%
Drive traffic to branded site    33.3%
Acquire new prospects           33.3%
Create brand awareness       21.2%

The primary goal of any advertising campaign should be to generate sales. Even brand ads that are focused on building awareness and consideration should lead to more sales if they're targeted to the right audience. Acquiring new prospects presumes that you want to reach beyond your immediate -- and your known -- market to convince others to give your brand a try. Gaining incremental reach can be expensive if you don't know precisely where to go to get that next customer.

I then asked respondents to rank the online display placement methods in the order of most to least productiveandfound that advertisers are intent on finding their targeted audience based on any and all kinds of user behavior.

Audience targeting             93.5%
Contextual targeting           87.1%
Retargeting                          83.9%
Geographic targeting         83.3%
Demographic targeting     80.7%

The big challenge with Audience targeting is that there is no industry definition of, say a "car buyer." You can purchase a segment of 25 million 'car intenders' but roughly 10 million Americans bought a car last year so who is the other 15 million? How do you know of the thousands of segments out there, which ones are the right ones for your campaign? Contextual targeting makes the leap of faith that you can deduce audience from context, but in a world where more and more page views come from undifferentiated content, it becomes harder and harder to make that leap of faith. As far as retargeting, we have been retargeting for 10 years making personalized recommendations on behalf of some big merchants and found it is very effective at getting existing customers to return to your brand, but can't help with finding new customers. Finally, it is no surprise that demographic targeting is dead last. Demographic targets are not at all granular and are incredibly wasteful of impressions.

On to our next question. In spite of the many objections to large, interruptive ads, the planners I questioned seemed to favor them when I askedwhat type of ad units do you think get above average results?

Takeover or interstitial pages         44.8%
API, real-time dynamic units          40.7%
Fixed banners (any IAB size)          38.7%
Expand on mouse-over                   28.6%
Rich media including flash            27.6%
Preroll video                                       21.4%

Very interesting to see dynamic ads rank so high in spite of the "creepiness factor" and pre-roll video rank so low and standard banners land pretty much in the middle. Obviously, creative execution is a huge factor to ad effectiveness. However, I think that getting ads in front of people receptive to them is the best way to maximize the results of an ad campaign regardless of ad unit type.

Perhaps the most telling response came to the question do you believe that you are not reaching high-quality consumers with your display campaign?

More than half (51.7%) said NO.

Kind of reminded me of the John Wanamaker claim that half of all advertising is a waste.

We are in the second decade of online advertising with persistent improvements in our knowledge of who is online and what their interests are; yet half of our respondents remain skeptical that they're reaching their target consumers. Amazing! In my view you can only improve the quality of your audience if you spend time getting to know them, or in this case improve the quality of data about them. It is not enough to know that someone read a story about autos to classify her as an "auto intender." Advertisers and agencies need to take all other available data into account –sequence of behavior, other segments she belongs to, properties of the inventory where the ad is delivered etc. – the collection of which will reveal whether she is a good candidate for your ad.

Once you know something more definitive you can actually set up an Exchange of Value.

As Jeffrey F. Rayport wrote on Technology Review.com: "Walk into a local Starbucks, and you're likely to feel flattered if a barista remembers your name and favorite beverage. Something similar applies on the Web: the more a service provider knows about you, the greater the chance that you'll like the service."

This is the essence of an ad platform that serves ads based on actual intent or purchases -- to show consumers that you're committed to adding value to their online experience by showing them ads for products and services that they're inclined to care about.

Eric Bosco brings nearly 20 years of experience to the role of COO at ChoiceStream. Eric most recently was Chief Product Officer at marketing data and services company comScore. Prior to comScore, Eric enjoyed a long and successful career at one of the world’s leading online companies - AOL - where he held senior roles at related advertising companies as SVP of Global Products and US Operations for AOL’s Platform-A, Advertising.com and multiple roles at the parent company (VP of Community and Communications Products and Senior Technical Director of AOL’s iconic Instant Messaging product). Eric can be reached at ebosco@choicestream.com.