IOs Are Eternal

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highlander_smallADOTAS – I had the good fortune last week of sitting through one of the better panels I’ve heard in a long time at the IAB day at Connected Marketing Week in San Francisco. The CEOs/presidents/managing directors from Turn, DataXu, The Trading Desk, Triggit, and AppNexus took the stage and discussed a number of great points.

There were two great concepts that emanated from this panel. First was the notion that real-time bidding (RTB) really makes the idea of insertion orders for specific amounts awkward (if not obsolete). Second was that ad networks which have built their business based on so-called “proprietary” data, site lists, and technology, will become irrelevant very quickly in an exchange-oriented world where all the best technology is available to everyone.

Here is some analysis on why I don’t think the IO will be dismissed from duty any time soon, but why the black box ad networks will have trouble finding a home on those IOs as soon as 2011.

The Insertion Order Is Here To Stay

In an RTB environment every impression is valued as a combination of the site and the user behind it. Depending on which, and how many bidders are behind the platform bidding on that impression, the value of the impression will vary. As the industry moves to a full RTB model, the “pimply teen on killersuperpowerninjagames.com” impression that no luxury automaker wants could be worth $7 to hundreds of other advertisers. Just how many impressions within your desired target audience become available during a given time period can be roughly forecasted but never precisely so.

So, if an advertiser signs an IO for $100,000 to target widget buyers within a pre-approved site list, maybe the reality is that there is $89,541 worth of media to buy that audience during that timeframe, or maybe there is $122,562. So, why is the IO for $100,000 if it’s not the right amount?

Obviously, marketers are given budgets and for years have taken those budgets and allocated them more based on percent of budget rather than “desired audience to reach.” Some highly disciplined marketers do regression analysis to determine where the true point of diminishing return is, and these might be the marketers that actually do forego the IO. They would spend only to that point at which the return becomes less than the investment, and from there cut off the spend.

However, a $200 BILLION industry has been built on IOs, spending to budget, and validating delivery. Every major brand, agency, and media outlet in the country operates this way. As a result, there is no chance that our beloved IO goes away en masse any time soon. The institution wins again.

Not The Same Outlook For Black Box Networks

The days where ad networks glamorized themselves as a black box of information which held deep dark “proprietary” data knowledge and secrets is officially coming to an end. We all remember how five and ten years ago we heard outrageous claims which told of millions and billions of data points, contextual page crawlers which could decipher “luxury car” in 147 languages (including some non-written languages apparently!), and a never-ending behavioral targeting taxonomy which couldn’t be shown for confidentiality reasons.

Of course, no one could prove anything, and the networks that made the most outrageous claims were the most opaque. But there is no longer a need for any opacity. Full transparency is now coming around, so expect to see some previously-made claims debunked, and some technologies that were previously overlooked becoming more valued. Here’s how you can employ new transparency tools, and avoid being swooned by grandiose claims.

1. Blind site lists are a thing or the past, or at least they should be. With ad exchanges now transparently offering 4,000+ sites there is no longer any reason at all to have an opaque site list. No more “sample sites”, no more “representative” site lists, and there is definitely not a single network left with a “proprietary” site list. Demand a full, real site list, with the possibility (depending only on inventory avails and CPM paid) that you will appear on every single site shown.

2. Fully transparent behavioral data segments and sources are here. BlueKai changed everything. Not just with their own data, but the ability to plug into BlueKai and get Bizo, Polk, Axciom, and several other data providers through their system. There is no network that has more data than the BK exchange, and certainly no network that shows their classification and taxonomy with as much transparency as they do. Heck, they even offer real monthly forecasting of likely total users in each segment.

So, if you’re looking for a 50,000,000 impression campaign BT’d to farmers, and the BlueKai segment list says there are only 40,000 cookied farmers, do the math because something doesn’t add up! Get a full taxonomy of the BT data available to you along with an understanding of where that data is sourced.

3. Make sure you’re running across a significant enough percentage of a site list. We’ve all seen the networks with 500, or even 5,000 sites, and then wondered if our campaigns ran on 10 sites or a real representative sample. If you work with an ad verification company (like Adometry or DoubleVerify) you’ll no longer have to wonder. These technologies offer domain-level transparency into what the network is running, and you deserve to ensure you are running across a significant enough portion of the site list you agreed to.

Did you attend and pick up any other tips? We’d love to hear them.

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