Tag Archives: RTB

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>.

Top 5 tips for selling media to agencies (digital and otherwise)

It is a universal belief in media negotiation that the other participant is, frankly, a bit stupid. The  adversarial nature of so many negotiations leads to sales people assuming that agencies are blind to the true (brilliant) nature of the media they’re buying; and agencies’ assuming that sales people are all money grabbing liars who would sell their own mother for a few quid and a free jolly.

Having sat on both sides of the fence I now believe that most misunderstandings are due to context; exacerbated by the poor agency sod never having the time to truly get to know the media marketplace and enjoy the negotiation process. I’ve seen many buyers make bad choices and salespeople lose out because one or other of them doesn’t understand where the other, or the client is coming from, so I’ve attempted to dispel a few myths.

All this of course may be academic in a few years when all media is digitised and bought through Real Time Bidding, but in the meantime let’s all enjoy the process a bit more.

1) Don’t pile on the pressure.

I have heard media sales training sessions where the trainer has said, without irony, “If the client/agency is still saying no, they obviously still don’t have enough information.”. Quite apart from the potential damage that could result from harassing the media buyer until they are backed into a corner, the arrogance of this view appals me. There are definitely varying levels of knowledge amongst sales, agency and client staff; but there is always the possibility that these people have access to more/different information than you have, which may not be shareable and may in fact make their decision a stroke of genius. Either way, pressure sales techniques almost always backfire in business relationships where you hope or expect to speak to them again. I have seen media buyers refuse to pick up the phone to certain sales people as they’re actually quite scared of them, or advise their colleagues not to do business with them either due to their approach. Be gentle, and if necessary sacrifice the one sale for the longer term view.

2) Be generous with information

Having said all of the above, there will definitely be pieces of information to which you have access, that the media planner/buyer may not have seen or had the time to hunt out. Sharing things that make them understand your market/product better regularly – not just when you’re in the midst of a negotiation, is a great way to both be appreciated and to be seen as an expert. This applies even more to competitor information that their client may love to see. Any interesting snippets about other clients in the same sector where they’ve tried something and had a great success is always worth sharing (with as much proof of results as you can legally share), as this will almost always be shared directly with the client and get you further to the top of mind.

3) Answer the brief

I cannot name the number of times when I have shared a detailed brief with a short-list of media owners, with quite specific needs, only to be disappointed. In my experience the vast majority do not answer the actual brief, instead either sending a re-purposed sales PowerPoint with the client’s logo pasted in (and sometimes not editing the text to ensure that the rest of it doesn’t mention the previous client it was sent to); or maybe sending over a proposal which clearly misses the cost or performance criteria with a weak “Well if you pay peanuts, you get monkeys.” pitch, with no clear evidence of why the agency should risk their reputation on recommending this buy.

I cannot state too clearly – read the brief and answer the question, with just one sentence if necessary. If it is impossible to make the metrics/target work – say so, and say so early. This will save you both time and mean you get another crack at another campaign that may have different criteria, and a reputation for being honest, which is always a good thing in an incestuous industry.

4) Put your best foot forward – immediately.

Many times I have spoken to media buyers to tell them that they have not been chosen for a particular campaign, only for them to say “Oh, well if you’d told me, we could have matched those rates.” This is negotiation suicide. Basically the days of agencies having plenty of time to ring you back, negotiate rates gradually down and then eventually settle on something are well past. If you don’t put your “walk away” rates down at the very beginning (which other people will) you risk immediately being excluded, and by the time you speak to the buyer again the decision will already have been made and it’ll be too late for you to pull something out of the bag. Clearly going back with a very low rate every time isn’t healthy for your business, so the important part is packaging your rates correctly. By all means respond with a menu of options – one of which is rock bottom, but in offering these rates you are clear that the sacrifice will be in terms of the quality/data/visibility, and always have other options for the buyer to choose from. If they don’t see it, they can’t sell it to their client either. Tell them which is your favoured option, and why it is so much better for the client. Give it wings so that it’s hard for them to refuse. Even if the first client doesn’t like it or simply doesn’t have the budget, it may just get re-sent to their next client as an option.

5) Save the expenses for people you’re already doing business with

If you’re busy and stressed, the thought of having to make small talk with a random 23 year old who’ll try to sell to you for an hour and a half is not appealing. Even if it is at the poshest restaurant in town. Building business relationships absolutely makes sense, but save the jollies for after you’ve built a working relationship. The only time you should invite someone you don’t yet know is to something that’s useful to them and will make them better at their job – normally an educational seminar or large networking event with multiple people. One to one jollies are for the people who you are thanking or building something with, not a way in.