Tag Archives: retargeting

Retargeting: Hooray, it works. Let’s do so much of it we piss people off

There was a really interesting article on digiday this week  about retargeting and how the industry enthusiasm for it is risking the health of retargeting, and increasing resentment for online advertising as a whole.

To give some background, the display ad industry has suffered from a reduction in the perceived value of their ad inventory ever since the industry’s inception. Many cost models now exist (CPC – cost per click, CPA – cost per action) but the original pricing model for online inventory was the CPM (cost per mille, yes I know it’s french but it means cost per thousand to the ordinary person). By cost per thousand they mean cost per thousand impressions, and an impression is counted each time one ad is served (each ad may have multiple images within a loop, a drop down or other engagement and run multiple times, but until the ad itself is clicked, or another link on the page, that still counts as only one impression).

When  I first started in online at MSN in *cough* 1999, we asked for, and (sometimes) received, £26 CPMs for untargeted Hotmail inventory, and £29 for targeted inventory which then was only available based on content, not user demographics or any other criteria. Due to limited availability the MSN business channel was always sold out at a rate card of £29 CPM, while we’d do deals for, say £15 for Run of Hotmail, and run a LOT of house and charity ads.

That was during the dotcom boom, however, and things had to change, if only because all the 19 year olds with random website ideas (and funding) either became gazillionnaires or failed miserably. What remained after the chaos was real businesses doing real things and having to use a proper calculation of profitability to justify their share value. That coincided with added trackability of online, past the point of click and all the way to sales or leads that could be attributed back to a media campaign.

Trackability allowed a realistic value assessment (which became a stick with which to beat the display sector), and the huge growth of consumer usage of the internet meant that billions of available impressions were being added to the inventory of websites each month. Within a couple of years we also had networks brokering deals for massive volumes of blind remnant inventory that the publishers just wanted to make *something* from, and the CPMs kept tumbling.

From a few pounds in the mid 2000s, CPMs kept tumbling to sub £1 levels for large buys, meaning display publishers were constantly struggling to make money from their users, and the “pile it high, sell it cheap” approach was a self fulfilling disaster for advertisers as the vast majority of the inventory was wasted.

As users gradually became blind to the banner (the dominant 468×60 pixel image that held sway for a while), click through rates also fell from single figure %s to less than 0.25% meaning every advertiser and publisher was scrabbling to buy as cheap as possible as this was the only way to make the performance figures add up.

It didn’t help that all this was happening at the same time as the growth of search advertising, which with a CPC (cost per click) pricing model was a lot less risky than display, and also fits into the user journey much closer to the final sale, the death knell of display seemed almost palpable.

and then along came retargeting….

Retargeting hinges on cookies. Basically once you have interacted with an ad (clicked on it) or visited an advertisers’ website – anything that can result in a cookie on your PC, you are potentially identifiable (not personally but as a string of text/numbers) as someone who has done this action. This means that advertisers can either a) serve you a specific ad or b) in some instances decide not to advertise to you at all depending on the actions you’ve taken.

Here’s an example:

Yesterday I went on the BHS website to look at lighting in their sale.
Today when I visit the Huffington Post website, this is the ad I see – featuring the exact products I looked at yesterday:

Image

This is a retargeting ad, and is possible because the cookie on my PC captured data of what I was looking at, and BHS have bought a retargeting campaign, probably from a large provider like Criteo or Struq, stating that they want to target people who’ve been to their site and abandoned items in their shopping baskets, to persuade them to come back and complete the purchase.

Brilliant stuff. This works like a DREAM compared to standard display ads.

Target market – BOOM.

In purchase mode – BOOM.

Relevant products – BOOM.

Happy users – BOOM.

No ad wastage – BOOM.

Inventory gains value – BOOM.

Comparative click through and purchase rates went through the roof, ads are capped to only show 4 times per user to avoid annoying them, suddenly display gets back on the media plan, and everyone’s happy, right?

In theory yes, except like pop ups in the mid 2000s, the most successful ad type gets used to the point of saturation. Many advertisers will now only use display for retargeting, and in their enthusiasm for it, they use multiple providers to serve the same campaign. The result of this is that the frequency capping becomes 4 per network or exchange (and many advertisers use several) so the user can see the ad 20 times+. Plus the complexity of managing this many campaigns means that it’s also unlikely they’re  pulling client 1st party data through to show whether the sale was actually made or not – so, as in my case I’VE ALREADY BOUGHT THE DAMNED THING!

How likely is it that customers enjoy this experience and are encouraged to return another time?

Easy answer. It’s not.

<rant>

Given the amount of times that I see an ad after I’ve bought the product, or an insane number of times you’d think that it was difficult to prevent this happening, but it isn’t at all.

Any agency or advertiser using retargeting who doesn’t manage cross campaign frequency is risking not just their own customers, but increasing resentment for the whole online ad sector. And for crying out loud, drop a cookie when people buy so they don’t keep seeing it ad infinitum.

</rant>.

Facebook and Atlas

The first thing I knew about Facebook’s purchase of the Atlas ad serving suite from Microsoft last week was a trail of disbelieving social media commentary by colleagues saying “What? Are they insane?”. By “they” here they mean Facebook, as the overwhelming view amongst past and current digital media operators is that Atlas is a “pile of s***” and that Microsoft must be glad to be shot of it, even at the rock bottom price of $100million.

Facebook has an enormous job to do to regain the trust and support of the online marketing community for Atlas or anything else that they build based on its skeleton. I have spent the best part of the last 4 years complaining about Atlas to the tech support teams, to the product leads and vainly shouting and throwing objects at my screen when another huge spreadsheet of thousands of bespoke tracking URLs is lost in the ether at midnight when the campaign needs to go live by 8am.

When all pleading made no difference I made a very vocal point of persuading clients to move their advertising to other solutions wherever possible, and I am not the only one.

It wasn’t always thus – 5 or 6 years ago Atlas was the defacto ad server for every digital agency I knew, so much so that Google seemed to have played a slightly inferior hand with its 2007 purchase of Doubleclick, and Microsoft’s decision to buy Atlas seemed to make perfect sense.  MS did make a classic 2nd mover mistake of desperately throwing money at the problem however, and the purchase raised gasps throughout the market with its $6.3billion cost (Yes, $6.3 billion) – more than double what Google had paid for its acquisition.

Granted that $6.3billion cost (Yes, $6.3 billion) was for the whole aQuantive group, which also included Razorfish (which they later sold for $530 million) and Drive PM, which was absorbed into the Microsoft Media Network (and arguably did add value to the offering). This didn’t hugely impact the end result however, which was still that Microsoft wrote down $6.2billion in 2012, mostly due to the aQuantive purchase, for which Atlas is the biggest culprit.

So how did Atlas go from the dominant ad server in a growth market, to losing the entire GDP of a small country (such as Liechstenstein) in 5 years?

Without seeing internal figures its impossible to say how much Microsoft has invested in Atlas technology since its purchase, but as a user it’s clear that the fundamentals haven’t changed since the mid 2000s. Every team I have worked on has been shouting in frustration at the Atlas team for years about usability and how they literally *hate* using it. The only tech in advertising that stimulates more frustration is DDS (cue bloodcurdling scream).

In the 5 years since Atlas was bought there have been multiple changes in the digital advertising space along with the rest of the technology world, most if not all of which expose Atlas as inferior to more nimble competitors:

The growth of paid search bid management software 

Atlas search offers a very basic click tracking function rather than any operational help to the search operator. This means that any serious campaign will need another software such as Marin on top to ease the thousands of optimisation tasks and data analysis, which just adds cost to the technology stack, and yet more cookies with more potential data discrepancies into the mix.

Cross digital measurement attribution

Atlas “Engagement mapping” garnered a bit of support for about a minute until we realised that many competitor tags couldn’t be placed in the UAT (Universal Action Tag, their container tag solution). What’s the point in running an advertising campaign where your media choices are dictated by your tag provider, not their performance? Any cross-media tracking that exists needs to at least include all paid media (and preferably direct & organic driven traffic too), so again Atlas offers only a partial solution at best

Facebook & other social network launches

Facebook has obviously been a market changer for the advertising world, and its growth has also created a market for Facebook campaign management software. Good Facebook campaigns need hundreds of targeting clusters created to maximise creative performance, and this scale of tracking and the speed with which it needs to be done is impossible with something like Atlas.

Across all digital media many widely used technologies were developed to manage one type of media, but the market direction is towards bundling search, social and display management capabilities into the same technology. If that technology is already being used, such as the ad server (Doubleclick) or search bid management software (Marin and Ignition One) then the consolidation of technology saves an enormous amount of time and complexity.

The consolidation daddies of digital marketing technology are now Google and Adobe.

Google has an ad network, an exchange, an affiliate network an ad server and a free analytics suite sitting on the same technology stack as AdWords, the worlds largest global advertising platform. In the time it’s taken Atlas to lose all its customers, Google has totally rebuilt Doubleclick, and Doubleclick search, is adding new functions almost weekly.

Meanwhile Adobe’s frenzy of acquisitions in the last 2 years have added a Data Management Platform (DMP) and search management to its “Marketing Cloud” which now offers end to end creation, tracking and optimisation for video, social, search, site analytics and landing page testing.

While I understand that Facebook want to have access to technology that helps them to prove that FB advertising works, they’d have been better buying a small, nimble FB specialist plus a small ad serving company and building their own solution. Either way without site side analytics and/or search management their offering will not cover the full picture that a digital marketeer now wants to see (preferably with one login).

Add to this that unpicking someone elses’ tech to rebuild it and re-gaining the support of a busy, cynical group of people (with lots of shiny other options) is not a small task. Facebook will do well to learn from Microsoft’s mistakes that being the dominant force is not an unassailable position to be in. Watch out Facebook –

Only the paranoid survive.

Andy Grove