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Oridian’s Intelligence Initiative: Bob Regular Explains His Company’s Move to Consolidate and Smarten Up

Written on
Nov 9, 2006 
Author
Kiran Aditham  |
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Oridian’s Intelligence Initiative: Bob Regular Explains His Company’s Move to Consolidate and Smarten Up

So why display, not email or search first?

The reason acquiring a display based network was the first choice is that buying one of the dominant email and search companies are tough mountains to acquire. I think it’s very unlikely that Active Response Group, even though I’m sure they’d like to make the effort, would buy Google [traffic], or buy Yahoo [traffic]. If you don’t buy Google, AOL, Yahoo or MSN, your likelihood of owning or controlling the distribution publishers of searches is limited. Obviously there are a lot of PPC bidding companies that may be interesting, but the top search dogs are certainly out of acquisition range right now.

In email, it’s a similar situation. The dominant players driving email are Google, MSN, Yahoo, AOL, etc. It’s also unlikely Active Response Group is going to buy those companies anytime soon. So, email is controlled by a few dominant inboxes and the email marketing companies who work hard every day to reach them.

Display advertising was a great opportunity, you have a very interesting situation. You have a lot of companies behaving as a display network. Most of the ones that are popping up these days are small aggregators with none of their own significant publishers or advertisers. They’re just intermediaries, companies that have already sold advertisers or companies that already have publishers—glamorous brokers. It’s an interesting thing to remove the emperors clothes here, which is, are you really a network if you don’t own the publisher or you don’t own the advertiser? Oridian has significant direct advertiser and publisher relationships, so this was a strong solution for Active Response Group.

So, placing offers on display is straightforward, but is it a black and white issue?

There’s a lot of gray in terms of you can do it well and variations of well. So, that’s time and experience, understanding that if I’m going to sell an education advertiser, where should I run them, how much volume should I run them, what day should I run them, what creative should I use, and so on. Then you multiply that by every advertiser across every publisher, and you get a lot of variables. There’s a lot of intelligence that needs to go into it.

What Active Response, which is led by CEO Brad Powers, is we could take all those offers and products that they have, and we could take ownership of one distribution mechanism, which is display ads, and basically take advantage of that additional margin that’s being lost—essentially, you have two companies now.

In addition to that, where the real intelligence is there, on the network side, we have all this intelligence of where to put which offer where, when, why, and how. ARG has all the intelligence on their end of which products do really well where why, and how. If you can take those two analytics and cross-pollinate, and let the system make real live decisions based on real, live activity, then we’d be able to create a lot more efficiencies that currently, as two organizations we don’t do, since we don’t want to tell each other anything about our intellectual property.

It makes sense to coalesce in this way.

It’s not just like being a product company that buys a shipping company, and now we’re able to ship our products and save the margin of the shipping cost, that’s basic vertical integration. It’s actually a lot more than that. It’s more about now we get to learn about what you really know goes behind-the-scenes with the products and offers themselves, and if the customers are happy, that’s your secret sauce.

On the display side, it’s exactly the same thing. I don’t want to tell you exactly where I’m going to put you at what time of day, how, when, where, and what creatives make the best performance, because what do you need me for? In addition, you’ve got significant margin in the middle justifying both of our businesses to do that.

It reminds me of a Venn Diagram.

Now, when you breach the intelligence, it’s not human intelligence, it’s essentially computer intelligence. We’re going to cross-pollinate that knowledge base so that the display ad that’s shown on X,Y,Z website will know what is the exact, perfect offer to run from the entire suite of products to get the highest performance today. What will happen there is now, that efficiency will ultimately allow the eCPM, the total yield value of what you’re placing that media for, to rise significantly.

Let’s say if I had an 8th grade level of intelligence about what’s really going on in the backend of my advertisers, then I can only make that level of academic decision of what I should be doing with the media. If you give me a PhD level of knowledge and information, I’ll make a lot less mistakes and I’ll make smarter decisions. The theory is, and we hope to bear it out, that should allow us to pay more to the publishers for their inventory because targeting is smarter, more efficient, and if benefits both parties. The more inventory the publisher then gives us, because we’re buying more, the more we learn about the publisher and that learning bleeds back again into the intelligence of the system.





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