Let’s face it, “data” has become a huge buzzword in the world of online advertising, and the more people talk about it, the more complicated it seems.

At Triggit, we truly believe in unlocking the value of your customer data, so we’ve decided to create a three part series that’s dedicated entirely to data–what it means, how to leverage it, and the types of results you’ll get.

To kick off the series, we’re featuring an article by Triggit CEO Zach Coelius, first seen on Adexchanger.com, and still highly relevant today as an introduction to data.  Stay tuned for more!

The Power of Data

For anyone who has been watching the data space over the last year and a half, the explosion of options for advertisers is a little daunting. There are now so many data companies, with so many segments, that the average media buyer is completely overwhelmed.  So the question is, ‘Where should an advertiser get started to understand this new world of audience data and segmenting?’

Thankfully, the answer is easy.  Start with your data.  It is not only the most important data for you as an advertiser because of its tremendous latent equity value, but it will also reveal the path to understanding the kaleidoscope of third party data that is out there.

Your data is what we in the industry call “first-party data.”  First-party data is data collected by you, the advertiser, about your customers.  This can be accumulated as a result of users visiting a site, a database of email addresses, lists for offline marketing, data from a CRM system, offline transaction history, and any other data about customers.  This data provides a view into current customers as well as prospects.  By starting with this data, you can leverage all the hard work you have already done and begin with what you know is working.

The first step in using this first party data in the online display world is to work with a good demand side platform (DSP) that has the technical capabilities and offline data partners to enable you to anonymously map your users into their platform.  Once your users are mapped into a DSP, you will have the ability to target display campaigns to them anywhere they go across the web.  You can now slice and dice your regular customers into segments and market to them in very different ways depending on their value or preferences.  For instance, if you run a travel site, you may want to separately identify your users who are regular travelers or those who stay in luxury hotels. For the regular travelers, you might choose to show a display ad featuring the weekly special to their regular destinations, or you might cross-sell other offerings in those cities.  For your luxury hotel buyers you may decide to show them occasional brand advertisements to keep your travel site top of mind since they are such high margin customers.  Once you have mapped your users into a DSP, the ways that you can communicate with them are virtually limitless.

In many ways, first-party data and a DSP allow advertisers to communicate with their users across the web just as they would using email or offline direct marketing.  Moreover, because display is such a good brand-building channel, you can blend your direct efforts with awareness campaigns and work towards other more long term KPIs.

The second opportunity for using your first-party data is to determine the overlap between your users and third party data segments.  Once your users are mapped into a DSP, you should be able to generate all sorts of interesting methods for finding new customers by using the DSP’s ability to show you all the overlapping third party data segments on your existing customers.  This could be as simple as discovering that your customers fit a very specific demographic and geographic profile and then targeting other users who fit that profile.  Or you may see that there is a high correlation between customers who converted having been previously identified as intenders though a third party data provider.  You could then test that data as a means to reach new customers while they are in-market.  Alternatively you may find that your users congregate on certain types of sites that you hadn’t already identified, enabling you to buy display impressions on those sites to target similar people.  In short, once you have identified the characteristics of your customers, the options for branching out and growing your audience becomes much more apparent.  In a lot of ways building, testing and rebuilding audience segments resembles search marketing in the iterative process of testing keywords.

In the end, first-party data, your data, provides a road map for sifting through the universe of audience targeting options and enables the smart advertiser to leverage the value of all the data they accumulate though their other marketing efforts.  As the demand side keeps building better tools, developing more powerful platforms, getting access to more inventory, and incorporating more data into our systems, the innovate marketers who get in front of this trend and learn to use their audience data will reap the rewards.

But enough with 2011. Let’s talk about 2012…

1. Deep Data.  2012 will also be the year of deep data.  For the last three years, we in the industry have all worked hard to make data work, and we have made a ton progress.  Yet as far as we have come, the data we use is still pretty thin, and it often represents a single view into what are very complex user behaviors.   The next step will be the process of unlocking the deep, multi-dimensional data that we have on these users.  This means integrating CRM data, offline data, purchasing data, and complex demographics to build a much more nuanced and accurate targeting model.  2012 will be the year where all of the hard work we have been putting into overcoming these hurdles finally comes to fruition.
2. Google.  2012 is going to be the year of Google, just like it was in 2010 and 2011.  The boys and girls over there have built an amazing stack, market leading exchange, and powerful cross channel capabilities that are simply unrivaled.  The last few years have been about building, and now they have it, and it is awesome.  In 2012 we are going to see them start to flex their muscles and do things that cause the market to realize just how insanely powerful they have become.  Examples could include a big deal for access to advertise in TV inventory with someone like DISH or a cable company; a massive multi hundred million dollar plus direct deal with a major advertiser for multiple channels; a deal leveraging their Motorola purchase to do something to bring IPTV to set top boxes everywhere or something else equally crazy.  Google will be big and powerful in 2012, and it will scare people.
3. Yahoo, AOL, MSFT.  In 2011 the world gave these three the chance to become competitors of Google in the display world, and they largely disappointed.  It is not that they didn’t do anything.  They did some things, but compared to the thousand engineers and intense focus Google has on winning, they were bystanders.  2012 will be the year that someone steps up to compete, and my bet is that it won’t be the three amigos.  By the end of the 2012, at least one of these companies will no longer be independent as it gets eaten up by whoever emerges as the Google competitor.  And at least one of these companies will no longer be relevant as it either quits the market altogether or is simply no longer seen as a viable competitor.   2012 will not be kind to any of these companies unless something dramatically changes.
4. Multi-Channel.   2012 looks like it will be shaping up to be a year kind of like what we had in 2011 in display when it comes to video and mobile.  The groundwork and plumbing has been laid, and both in-stream video advertising and mobile are about to explode through RTB.  Next year will be a big one for both.
5. The Ad Network will be left for dead by the end of the year.  The ad networks have been dying a slow death over the last three years, and the smartest among them sold, diversified, or got out of the business last year.  By the end of 2012, it will be over, and those left clinging to hope will see it extinguished by the cruel finality of the market.
6. Congress will finally do something in 2012, and it scares the hell out of me to think about what it could be.  Legislating the internet seems to be something Congress is finally ready to act on as we have seen with SOPA this fall.  In 2012, they are going to pass something, and given their ignorance, it will do a ton of damage.  My fingers are crossed that it is not too bad.
7. The big offline media, cable, and telecommunications companies will get into the internet battle in a big way.  By the end of the year, it will be clear that they are in this game to play hardball.
8. The Ad Agencies will continue to leave their heads firmly in the sand as their services businesses are automated.  Somehow – most likely due to their remarkable capacity to rationalize – they are convinced that not innovating in technology is the right strategic play.   That decision will get them in a lot of trouble in 2012 as their world continues to be upset by technology and as their franchises are increasingly threatened.
9.  Adobe, IBM, Epsilon, Experian, Axciom, Amazon, Ebay, SAP, Oracle and others will continue their inexorable march to automate marketing.  2012 will be a big year for these companies as they make big moves and establish the new structure for marketing.   At this point, I can’t see anything in the way of these players becoming a huge and dominating force in our space.
10. The online advertising business will continue to grow like a weed, and we will all enjoy the ride.
11. And finally, 2012 will be a year of big winners and big losers in the ad tech space.  Some folks are going to have huge wins, as our good friends at Admeld did last year, and some folks are going to get knocked out of game.  By the end of the year, the Lumascape will be a memory of an innovation cycle that was a wondrous thing to behold but that is now much more consolidated and rationalized.

Happy Holidays from all of us here at Triggit.

Be sure to check out our recap of 2011 Predictions.

Before publishing my predictions for 2012, let’s see how the 2011 predictions did:

Triggit 2011 Predictions:

Without a doubt 2010 was a hell of a year for all of us here at Triggit. Not only has our space grown exponentially, but so have we. This year we grew over 2000% in revenue, our team tripled, and the number of RTB impressions that pass through our system grew by more than 15x. Needless to say, it seems like we are doing something right.

But the past is behind us, and the really exciting stuff is yet to come. Here are our 2011 predictions:

2011 will be the year when RTB and exchange trading crosses the tipping point and becomes the most important channel for buying standardized display media. By the end of next year we will look back on the antiquated ways we used to buy media and laugh.

• I was right on with this one.  There is no doubt the tipping point for RTB and automated media trading was crossed in a big way in 2011.  While at the beginning of the year things were uncertain and many looked at the space questioningly, now there is really no doubt that RTB is here for keeps.

Average CPMs on the exchanges will cross $3.00 and keep growing. This will have lots of follow on effects, but mostly it will mean more and better inventory will be cleared in the exchanges, and it will continue to fuel the network effects we are currently enjoying.

• I was half right on this one.  Average CPMs on the exchanges have certainly continued to rise, and we often see averages of over $3.00.   But the prices have not gone up as much as I anticipated as instead more inventory has moved into the exchanges and diluted cpm increases.  Either way, it is good for the space, but the low average CPMs on the exchanges will remain until we move more of the display spend into the space.

Mainstream ad networks will find it harder and harder to source inventory directly from publishers. As a result, the companies currently in the network business will take a variety of strategic directions such as becoming video networks, rep firms for custom integrations, agencies or simply shutter their businesses. One strategy some will try is to become a DSP, yet they will find this very tough sledding as technology is a very hard thing to become competitive in when you are two years late to the game.

• I absolutely nailed this one.  Ad Networks spent 2011 juking and jiving to escape the end of that business model.  Some diversified into completely new business as Specific Media did with its Myspace purchase.   Some bought video, mobile or retargeting assets to diversify (or in the case of Valueclick all of the above).   Some simply faded away or shut down their ad network business as most of the ad networks outside the top 25 did.  Some of the most intrepid of the bunch have tried to join the innovation cycle as we saw Collective do on the buy side and Casale do on the sell side.  And the smartest of the bunch simply sold at a premium and got out before it was too late as our friends at Interclick did.  2011 was not a good year to be an ad network.

Most of the ad agencies will continue to make short-term decisions around technology and will suffer in the long term as technology companies increasingly threaten their franchises. One or two of them might bite the bullet and invest for the long run but no one is holding their breath.

• Yep, the agencies are continuing to think like agencies—no surprises here.  Yet while they haven’t invested in technology, agency trading desks have demonstrated remarkable growth and power in the new model.  I certainly underestimated how effective they would be in forcing their holding companies’ sister agencies to abdicate media buying responsibility and simply hand over their clients’ media dollars.

2011 will be the year that people start to realize that RTB is really all about making IP TV the most efficient and effective advertising medium ever built. Most likely, no one but Google will do anything about it. Maybe, old media will start to recognize the threat but it is hard to believe they will be able to respond quickly enough.

• I was a little early on this.  2011 saw significant growth in RTB for video, but it is still very early days.  The old guard has certainly not woken up to the danger that is around the corner.  Maybe 2012 will be the year?

Yahoo will realize that they can’t wait any longer as the market passes them by and they will roll out real RTB.

• Yep, Yahoo did roll out real RTB in 2011.  Then they turned around and shot themselves in both feet as they demanded direct seat licenses for buyers on their exchange.  They are finding themselves stuck in an innovator’s dilemma with their premium-pricing model under attack from the exchanges, and even as they want to innovate they seem to simply spin in circles.  Tough spot.

Microsoft will realize that in their focus on search over the last couple years they let Google steal a march on them in display. Microsoft will respond, most likely by buying their way into our space.

• Huge miss.  I think Microsoft has simply given up trying to compete with Google.

Someone (hopefully John Ebbert) will start a conference for around ad exchanges. Please. Pretty please.

• Missed this one too.  While the folks at Digiday have done some great things with their conferences, there still isn’t a good ad exchange conference.

Congress will get tied in knots and do nothing but continue to scare us.

• Yep. They did nothing, yet we all continue to be scared.   Watching the current testimony about SOPA terrifies me.  The thought of Congress writing regulations for the Internet is like thinking of a 3 year old trying to fix a vintage Ferrari.  Ouch.

Companies like Akamai, Adobe, IBM, Accenture, Amazon, Epsilon, Ebay, Axciom, SAP, Oracle, Salesforce and others will realize that the $50 billion media market is up for grabs by smart technology companies. A number of them will make moves in our space.

• Adobe, Google, Ebay, SAP, Donovan Data, Hearst and others made big moves in our space in the last year.  The big boys and girls are getting into the middle of it now.

We will all continue to have a great time, there is nothing as fun as a space growing as quickly as ours is.

• 2011 was a blast.  Nothing like exponential growth to make everyone happy.

Happy Holidays from all of us here at Triggit!

Click-Through

According to a March 2009 comScore study, only 16% of Internet users clicked on at least one display ad.  This was down from the 32% of clickers recorded in a similar 2007 study. The study also notes that “Heavy and Moderate” clickers, who make up only 8% of the entire Internet population, account for 85% of all clicks.

We tried to figure out what these findings mean for us here at Triggit. By digging into three months of data from a retail client, we measured the relationship between click-through rate and conversion per thousand impressions for over a thousand different creative units and multiple levels of data targeting. We saw what many before us have seen: no sign of positive correlation between clicks and conversions. By plotting the click-through rate of each of these individual ad units against the conversions per thousand impressions per each ad unit (using a 15 day view-through attribution), we can easily see the (lack) of a relationship between these two variables.

The graph produced is the archetypal “scatter shot” graph. Put simply, it looks as if someone took a thousand darts and threw them randomly at a board.  The line of best fit is fairly flat and actually has a slightly negative slope.  A correlation analysis between the two variables and a regression analysis also controlling for variables like ad size, eCPM, user level (previous customer, etc.), and above the fold targeting, claim a negative but statistically insignificant relationship between click-through rate and conversions per thousand impressions.

 View-Through

Based off our above graph, we can expect that when moving from a 15-day to a 30-day attribution window, this lack of a statistical significance surrounding click conversions only becomes more pronounced (the p-value jumps from .23 to .32; statistical significance is usually declared at .05 or .01).  This is where view-through metrics become truly important.

In the same March 2009 comScore study, researchers note that “exposed non clickers” are more likely to visit advertised sites in subsequent months than clickers.  Users who view an ad but do not click on it are still statistically significant, but the evidence of their conversion is more difficult to measure, as it doesn’t occur with the same immediacy.  This knowledge, paired with our 15-30 day attribution window for click measurement, helps to illustrate that time plays a significant part in determining conversions.  And, when we factor in research such as that from Madan Bharadwaj Visual IQ article, which shows that view-through accounts for 99.87% of all conversions in display advertising, it’s clear that view-through indeed does matter.  A lot.

Conclusion

Although the click is a bad indicator of conversion activity within a 15 or 30-day window, it is NOT a completely useless metric in display. The key to understanding the utility of the click in display advertising is removing the thought that it is a good measure of long term conversion activity and accepting the click for what it is: an indicator of immediate intent and interest generation.

For everything else—conversion intent, brand awareness, and long term conversion activity—view-through is key.

Read the full comScore study or the Visual IQ article

Also read: The Data Behind “Bigger is Better”

Zach Coelius, CEO of Triggit, will weigh in on the panel, “Can Data Truly Tell Us What Advertising Works?”

Panel Excerpt: Drowning in data, thirsting for knowledge. While there’s no shortage of data points to measure, extracting usable knowledge from a sea of data still remains a challenge for advertisers and publishers alike. Wannamaker’s 50 percent rule may no longer apply, but brands and publishers are still struggling to understand which ads are most effective across the full funnel. How has the shift to a data-driven media economy helped marketers figure out what is working and what isn’t?

AdExchanger.com reached out to a selection of companies in the ad ecosystem which use DSP technology. They were asked the following question:

“What’s your reaction to Yahoo! requiring seats for advertisers on Right Media Exchange versus buying through DSPs, ad networks, etc.?”

Zach Coelius, CEO, Triggit

“Over the last three years we have seen tremendous innovation in the advertising technology space as Demand Side Platforms (DSPs) have come to provide significant new value to advertisers. The billions of dollars that have shifted to DSPs are a testament to the value advertisers find in the new efficiency, targeting and scale. Throughout this innovation cycle Yahoo has chosen to play defense. They now find themselves in a situation where many of their customers have migrated to DSPs and Yahoo is faced with disintermediation. Without their own DSP to compete directly in this market against Google’s Invite Media and independent players, Yahoo is in a tough position. With this new rule Yahoo has chosen to do that only thing they can to attempt to maintain account control for the short term. Their hope is that by requiring advertisers to have accounts that they will be able to staunch the bleeding and keep their direct customer relationships. Unfortunately for Yahoo this defensive move is as unlikely to work as their earlier refusal to adopt RTB until years after the rest of the market. They must innovate, and start playing offense, or they will continue to get left behind by the rest of the market.”

 

Read the full post on AdExchanger.

 

Background
Kodak Gallery is a service that allows users to upload and store photos, as well as create and purchase one-of-a-kind cards, books, prints, and gifts with the stored files. Although seeing success testing various DSPs for customer acquisition efforts, Kodak felt that the user profile and purchasing data stored in their CRM system was not being fully leveraged to maximize advertising efficiency and grow their customer base.

Campaign Objectives
Maximize order revenue while maintaining or improving an ROAS of 700%

The TRIGGIT Solution
By directly integrating Kodak’s complete data set, applying advanced retargeting techniques, and validating results via proprietary attribution technology, TRIGGIT far-exceeded expectations:

1. A deep data integration was done via JavaScript and site pixels to directly connect Kodak’s CRM data with TRIGGIT’s DMP.
2. Three specific user segments were identified (anonymous users, registered users, purchasers) and tags put in place on the site to enable segment-specific targeting.
3. Proprietary retargeting technology was used to buy impressions for each segment, including real-time bids and optimization, dynamic creative serving based on purchase funnel history, and A/B attribution testing.
4. Conversion data, including products purchased, amount of spend, and customer segment were automatically fed back into the optimization algorithm.
5. TRIGGIT’s account services team did ongoing analysis on campaign results, and made site list allocation and bidding strategy adjustments to each segment as needed.

Exchange forecasting: gain campaign insights without spending a penny.  Now, for advertisers and agencies with large budgets tied to data-driven campaigns, Triggit offers the new Triggit Exchange Forecasting Tool.  With this tool, advertisers are able to get a clear sense of what their campaigns will look like, before spending a single cent.

With Triggit’s Exchange Forecasting Tool, advertisers gain unique insight into their users’ behaviors.  Forecasting campaigns allow advertisers to:

TRY BEFORE THEY BUY

• See how many impressions will match the set parameters without actually buying/serving the impression.

EXPLORE CAMPAIGN OPTIONS

• Set up specific campaign parameters as they would appear in any standard campaign. 

SEE REAL RESULTS

• Receive detailed reports, broken down by sites and by targeting groups.  Get complete transparency into available inventory by campaign.

SPEND SMARTER

• Detailed availability reports can be used to better forecast/allocate budgets for upcoming campaigns.

All of this combined gives our advertisers the distinct advantage of better understanding their users’ behaviors without having to waste any portion of their advertising budget.

The Triggit Exchange Forecasting Tool is ideal for those large, data rich advertisers and agencies that want to optimize their advertising potential efficiently, without the hassle of paid test campaigns.  It is just one of the many ways that Triggit continues to stay on the cutting edge of DSP technology.

To participate in Triggit Exchange Forecasting, SIGN-UP or contact your account manager today.

Exchange Forecasting is only one part of the Advanced Targeting Options of the Triggit DSP.  Other options include:

• Choice of Languages
• Above or Below the Fold Display Options
• Browser Specifications
• Custom User Queries

To answer this question, we dug through over 40 thousand retail conversion activities and about 50 million impressions in our system.  We then used regression analysis and other statistical shamanism to measure the relative success of five different common ad sizes (160×600, 300×250, 468×60, 728×90, and the beautiful, half-page 300×600) with last-ad-seen conversion attribution.

We found what we expected to find: bigger is indeed better!  But our “bigger’ ad size, the 300×600, wasn’t just “better”, it absolutely dominated its smaller counterparts across any performance metric by hundreds of percentage points.   The 300×600 ads averaged almost 5 times as many orders per thousand impressions than the 160×600 ads, and about 3 times more than the second best performing size. The revenue generated per thousand impressions served followed suit, with the 300×600 outperforming the next best performing size by over 250% and the 160×600 by 480%. Even the average click-through rate for the 300×600 ads were nearly double (193%) the next best performing ad size (160×600). Even when we controlled for known audience characteristics and conversion type, the 300×600 ads still outperformed the other sizes by almost three times in revenue and orders per thousand impressions (286% and 297% respectively).

Although the 300×600 drastically outperformed its smaller counterparts, there obviously is a higher premium in media cost for a bigger ad size, right? Although the average CPM for bigger ads does tend to be higher, our data actually showed that the bigger ad size was so effective at conversion generation that the media cost per order was significantly LESS for orders attributed to 300×600 ads. The average cost per order for the half-page ad size came in at about 50% of that of the next-best performing ad size and at about 23% of the cost per order of the skinny 160×600.

Bigger means more clicks, more orders, and more revenue.  More orders and more revenue mean more dollars in everyone’s pocket. Why, then, do publishers continue to choose to go smaller?  Go big, go RTB, or go home.