When retargeting first came on the scene, networks would typically lump campaigns in with other run-of-network buys and category-based creative: single, flat, non-rich creative was delivered to a narrow audience with no attention to frequency caps. Today’s process is much more sophisticated for ecommerce sites and, therefore, more effective: dynamic ads delivered to highly targeted consumers that drive significant sales.

The same early use of retargeting is now being seen with brand awareness campaigns. The efficacy of retargeting for ecommerce really requires its own set of campaigns and success metrics and the same is true for using the discipline to building brand awareness.

Advertiser profiles

So, how might we measure the effectiveness of retargeting in creating incremental engagement? I propose that success could come in two forms for two different types of brand advertisers:

1) For advertisers who are not providing a reason for the consumer to visit their site again. This could be due to a lack of promotions or content to drive them back. Success is typically measured by creating additional engagements in an ad unit.

Rich content, calls for interaction with social tools, promotions in the ad are all effective ways to do this, but a well-run retargeting program works to reach the entire lost prospect pool at the right frequency caps, right time of day, geo-location, etc. Success is then measured by creating the highest amount of ad engagements at a targeted cost per.

2) For advertisers that want to drive interaction with the brand and increase the engagement on the site itself. Advertisers who have significant content and offer reasons to return to the site fit this model well.

Automotive manufacturers, for instance, are ideal for this form of success measurement. Most car makers want consumers to continually drill down into the site and offer them opportunities to modify/create the exact car they want. In order to determine success, these advertisers must identify how to measure if these are incremental engagements.

Research determines incremental success

This second group – those advertisers that have a lot of content and offer reasons to return to the site – would be well served to use A/B testing to measure if sophisticated retargeting programs can achieve this engagement.

Controls groups are established to understand the average number of pageviews a prospect creates, how often they visit the site and the length of time between visits. Once a retargeting program begins, advertisers can measure the increases to the metrics.

Successfully increasing the number of pageviews and visits while decreasing the time between visits are both excellent ways to understand if the brand is achieving its objective.

Giving retargeting a seat at the measurement table

Marketers would not consciously choose to take their email database and send untargeted campaigns without paying attention to frequencies. Retargeting is no different.

Each advertiser has a finite number of consumers that have chosen to take time out of their day to engage with the brand. Running basic retargeting programs that deliver flat creative to the same people hundreds of times in a given month is likely to damage a brand far beyond the consumers seeing the ad units.

Retargeting campaigns that have their own focus and specific metrics can help to ensure success for both ecommerce and brand building initiatives.

The proposed logo, in the upper left-hand corner, for enhanced notice is being referred to as the “little i.”

Providing transparency and choice has been an area of intense focus over the past year by service providers in the online ad industry. A large part of this focus was gathering data surrounding how consumers interact with enhanced notice touch points, and how enhanced notice can impact the bottom line of both advertiser and service provider.

Last December Clickz published an article that outlined data provided by Google about its initiative around enhanced notice; which was done through Google’s Preference Center.

In this article, Nicole Wong, Google deputy general counsel states, “Of those who visit [Google’s preference center], four times as many people edit their targeting profile as opt out of targeting completely. A good percentage of users are saying they’d rather control [behavioral targeting] than opt out.”

I believe this tells us much about the real story behind privacy concerns. On one side, you’ll find those who constantly condemn service providers about alleged abuses inflicted to consumers privacy online, and on the other side you have data that shows that once consumers have clear notice and choice, they set their preferences to what they are comfortable with versus opting out.

Speculation is just that — speculation, and we shouldn’t be making decisions or regulation that can affect so many organizations and livelihoods without solid information and careful understanding.

That said, I do believe enhanced notice is the right thing to do. I also believe there are other factors driving it other than those who believe that consumers need to know what data is leveraged and how it is used.

This next generation will view privacy in a completely different way than we do. They’re the generation that is growing up posting every tidbit of their life for anyone else in the world to view, and at the same time this is also the generation that is learning how to control what information gets viewed by whom.

The fact that Google sees more people controlling their information preferences versus opting out of data collection shows that the majority of consumers get “it.” Data is going to be collected and used for marketing and consumer experience purposes.

It’s more about the dad who’s worried about what information is Google is collecting rather than the high school student on Facebook who knows how to set privacy settings, and does so accordingly.

I’m not saying that there isn’t room for abuse, there definitely is. This is why it’s important for those companies that do collect data for marketing purposes to open up the books and show us what’s going on. There are rewards when you give users control and visibility.

I implore the rest of the industry to follow suit in respect to enhanced notice and to do so quickly. More specifically, advertisers need to jump on the bandwagon and agree that this enhanced notice the best move in the long run. It’s the right thing to do.

Privacy policies are an antiquated and confusing way to approach privacy concerns. Consumers have no idea why they see the ads they see online, and by not being forthright with them can cause them to fear the worst and opt out.

Companies who are upfront about what data is collected and why will be rewarded. Since releasing enhanced notice ourselves last year, we at FetchBack not only did not see an increase in opt-out rates (just like Google), but also the enhanced notice functionality actually served as education for advertisers as to how targeting like ours works.

Later this year, the Federal Trade Commission could be handed a whole new set of powers and control over issues such as this. It’s important that the industry remain vigilant and keep up the pressure with our peers to adhere to these new standards.

As it’s your “Dad” who’s in control of the FTC, and his lack of industry knowledge, technology and the culture could definitely create problems for everyone. The best defense is a great offense; and in this case, the best offense is enhanced notice.

His insights about the state of online advertising were inspiring, yet at the end I found myself frustrated. It’s exciting to see that the online advertising marketplace has grown tremendously and that there remains much more room for innovation; yet I am frustrated by the fact that in the online world we are own worst enemy. We have gotten so good at using terms like “clicks” and “impressions” that we have found a way to alienate those that are looking for marketing efforts that are not direct response driven.

Song shared the sobering facts that currently online marketing has a 30% share of a $68 Billion market for direct response, and only a 5% share of the $118 Billion Brand advertising spend.

To quote Song, “It’s not so good.” I agree – 5% of a $118 Billion Dollar budget? That is ‘not so good’ – especially when the online marketplace does have solutions that do drive brand awareness and PR. We just haven’t been very good at utilizing them.

First step I suggest to get us moving in the right direction is to recognize some of the existing tools that already exist and can be used for brand advertising.

For example, retargeting is one of the most valuable marketing tools for the Direct Marketer, but did you know that it can also serve as a tool for the company looking to build it’s brand and market awareness? Here are some examples we’ve seen some companies employ that are looking to build their brand in either a B2B or B2C capacity through retargeting:

- Site extension: When you really think about what retargeting is and how it works, it can be viewed as an extension of your website. The display ads you show via retargeting are like your site, but in miniature form. This allows you to keep in communication with individuals who have visited you in the past. What do you currently communicate via your site? How can retargeting enhance and strengthen this message? No better way to stay top of mind and create brand awareness.

- PR in a Banner: Who has visited your site in the past? It is more than just clients. It could be reporters, industry related companies, board members, and yes, even competitors. Use retargeted ads as a way to get your latest press release back in front of them.. If you have something you want to crow about, who better to do it to then all the people who have visited your site before? It doesn’t get more targeted than that. It’s an inexpensive and highly effective PR release vehicle.

- A recruiting tool: I’m always on the lookout for good talent for my company, and I’m sure your HR dept is too. Most likely you have a careers page or maybe a job board on your Web site. Use retargeting to show those who have visited career information on your site details about new job openings or the perks to working for you.

- Culture extension: An important part of your company is your culture, which is exhibited in your various communication tools. What better way to highlight a latest blog release? Blogs are an excellent way to allow people into your company and your culture. But if people aren’t aware of a new release (and they’re not regularly coming back to your site to check them out) you can use retargeting to get your culture out there.

- Give us a call: Using click to call tools in a display ad are an excellent way to create a conversation. Allow your clients to type their phone number into the ad and receive an inbound call or initiate a chat session when they click ‘submit’. Sometimes all it takes is a friendly reminder that you are still there and that you’re ready and willing to help them with anything they need.

- Giant Killer: You have a great product, a great site, and even a great staff – the only thing you have that isn’t ‘great’ is the size of your marketing budget. It doesn’t matter how big your company is. You can be a fortune 500 company and still have a budget that’s a fraction of your largest competitor. How can a company stay competitive, and stay within budget? Retargeting is one of the best ways to appear a big fish in an impossibly big pond. Retargeting is one of the cheapest ways to make your small budget seem huge – your ads will seem to everywhere that your customers go! Something your competitors may not be able to do.

Retargeting is just one example of how we can leverage existing technologies to increase our share in Brand Advertising spend. I’m sure there are others – what other suggestions do you have?

While Google has branched off into numerous other Internet technologies ranging from Gmail to maps, their core strength and primary focus has remained search technology and contextual advertising. This focus has led Google to grow from a few guys in a garage to a corporate giant with a $138 billion market cap.

In the hyper-fast-paced world of Internet technology, however, competition can cause giants to fall at the same speed that it produces new millionaires from the next “I’ve got a sweet office in my garage” genius. While Google has clearly established their dominance over contextual advertising they are facing new competition from smaller ad networks like Quigo and Industry Brains among others. At the same time they are trying to extend their dominance into the offline advertising world. As a result, Google finds itself fighting battles on two fronts.

On the Internet side, Google is facing increasing competition from smaller ‘transparent’ ad networks. In a transparent network, advertisers can place ads on specific publisher Websites and publishers have the ability to control who is advertising on their Website. The key is the flexibility and control given to the publisher and to the advertiser.

At issue is the fact that a growing number of publishers want unfiltered control over who advertises on their Website. High profile sites will strong traffic volume are beginning to command this and companies like Quigo are there to serve them. While Google is beginning to offer limited transparency they will have a hard time providing the necessary tools and flexibility because this isn’t a case of technology — this is a case of culture.

Giving up control is not a phrase that you will find anywhere in Google’s mission statement. However, with the emergence of transparent ad networks that is exactly the kind of strategic decision that Google finds itself wrestling with.

Over the past year, a number of articles have been written about smaller ad networks that have begun to challenge Google’s dominance. The NY Times, USA Today and Business Week, just to name a few, have all published stories related to the growing competition for contextual ad market that generated $2 billion in 2006.

While Google is ready and waiting to take on anyone who challenges them on their home turf of Internet advertising, they are simultaneously mounting a new offensive trying to force their way into TV, radio and print ad sales, and they’re finding quite a bit of resistance.

Do they aspire to be a media giant? The leading online ad platform? An information destination? All of the above? Depending on which mission statement you come across on Yahoo!’s website, their mission is either to A) Be the most essential global Internet service for consumers and businesses, or B) Connect people to their passions, their communities, and the world’s knowledge.

Where is Yahoo! going? What do they want to dominate in and why? I’m not exactly sure. If you were to ask the same questions about Google, the answer is clear. Google’s stated vision is to “Organize the world’s information” (and make enough money doing it to finance the creation of a new world). Do I agree with that statement? I’m not sure I do as a lot of their actions aren’t congruent with the statement. I find them to be a large media company looking to utilize technology to distribute their advertisers wherever and however they can…but I digress. Agree with it or not, they at least have a vision statement that is clear and concise and their performance to-date backs it up.

How did Yahoo! arrive at its current place playing second fiddle to Google? There was a defining moment in the history of these two companies that has had ripple effects that we can still see today. In a recent article on Wired.com, Fred Vogelstein suggests that Yahoo! blew it during the summer of 2002 when their $3 billion offer to purchase Google was rebuffed and Terry Semel, Yahoo! CEO, balked at the higher $5 billion dollar valuation of Google.

After that failed merger Yahoo! subsequently purchased Overture. While it was a strategic move they needed to make to compete with Google, Yahoo! was already at a competitive disadvantage. Google was able to build their ad platform from scratch and seamlessly integrate it with their search technology. Yahoo!, on the other hand, had the monumental task of consuming Overture, a company I personally characterize as culturally dysfunctional.

I had business dealings with Overture dating back to their pre-Yahoo! days and one of the common criticisms shared by my peers in the industry was how difficult it was to do business with them. Their culture appeared to be dysfunctional from an outsider’s perspective.

If you’re familiar with the story of the Good Samaritan, Overture would have played the role of the other guy — the one that walked past the man in need. They often gave the appearance of a company that would just as soon ignore its partners/traffic providers/customers rather than offer assistance. This isn’t to say that this type of behavior is uncommon for companies that grow to a certain size, but Overture excelled at it.

The CPA auction model is a natural response to advertiser’s fear of click fraud in addition to their desire to increase the accuracy of their conversion tracking. CPA advertising is a perfect example of the inherent benefits of advertising on the Internet because no other media can match its tracking ability. CPA advertising is also one of the primary reasons that affiliate networks, like the ones that overran the exhibit floor at ad:tech, are thriving.

Along with the benefits of accurate and precise tracking, however, comes the inevitable outcry from advertisers that a percentage of the budgets are being wasted on the “Joe Mc. Hremlin’s” of the world. In case you are not familiar with Joe, he is one of the made-up names from a made-up testimonial on the website www.clickingagent.com that sells click fraud software. Not to be confused with click fraud detection software, this is click fraud enabling software. For the purpose of this article, we’ll assign the name Joe to all of the mouth-breathing types that make a living off cheating and scamming their way through life.

This Website and their product is only the tip of the iceberg. I’m amazed at the marketing copy (I use that term loosely so as not to offend anyone who actually writes marketing copy for a living) on their site: “Take your chance, try to fool advertisement companies and earn money! It only gets better – 1) Make your site more interesting to others, and/or 2) simulate that traffic and ad clicks so that advertising company thinks you’re a hell of a web-master!” Overlooking the horrendous grammar and creative use of the English language, the claims on this site are pretty clear: “Lie, cheat and steal your way to a better life…and do it all from the comfort of your living room/garage/trailer.”

While much of the click fraud that occurs is caught before it ever gets to the advertiser, the industry will always be at disadvantage. As long as the Joe’s of the world can make money by defrauding ad networks, they will continue to develop methods to stay one step ahead (or they will purchase software from more intelligent people who actually develop it).

The irony of this issue is that our ability to accurately track views, clicks and conversions is also a disadvantage when compared to traditional media. Conversion tracking for off-line media is inexact at best. Advertisers seem to have a certain degree of blind trust when it comes to magazine advertising for example.

How do they know the circulation and subscription numbers are real? How do they know the people that did purchase the magazine actually looked at their ad? Where’s the discussion on inflated subscription numbers and fraudulent page turners? What if Joe has 100,000 copies of a magazine shipped to his house and the locals all come over to flip through pages to view the ads!? Where’s the outcry for flip fraud? But I digress….

Getting back to the reality of online advertising and tracking, the solution to creating a better online advertising model is simple. In my opinion, a big portion of the market will be moving to an auction-based CPA model. Google is already moving in that direction along with a number of leading edge companies like www.turn.com. Google’s moves into analytics and shopping cart functionality play into this strategy as well.

While ad networks of all sizes will continue to work extremely hard and preventing as much click fraud as they can, I believe we should move forward with the understanding that there’s a built in cost for fraud and I also believe it’s not going to go away. There are some very smart companies out there that will help keep it in check and prevent if from growing further, but I firmly believe they’ll never catch-up to Joe and his network of fraud-perpetrating friends.

For this reason, the move to a CPA model is the most logical evolution for advertisers and ad networks alike. Alternatively, we can choose to stay on the same path and continue to supply Joe with the discretionary income he needs to purchase that new set of rims he wanted for his truck (that may or may not be located on blocks in his front yard).

Depending on the research you read, click fraud can account for 10% to 15% of all clicks. That would seem to imply that 10% to 15% of all online ad budgets are being diverted to fraudulent traffic. However, as Alan Chapell, President of Chapell & Associates, pointed out in a recent article Re-Evaluating Click Fraud, that percentage does not take into account the amount of fraudulent clicks that are already detected by networks and search sites which the advertiser is not billed for.

Regardless of how you choose to interpret the numbers or how you define click fraud, the root of the issue is traffic that does not convert, be it click fraud or any other source of traffic that generates a poor return on investment (ROI).

If the source of the click fraud issue is found in individual traffic sources, then it would seem to reason that providing tools to evaluate the performance of each individual traffic source would provide advertisers with a powerful tool to fight click fraud.

In a follow-up to the BusinessWeek article on click fraud Martin Fleischmann, CEO of MostChoice.com, Fleishmann urges ad networks to “allow advertisers more control over where their ads appear.” He addresses this issue by suggesting that ad networks create a three-tier system to help categorize traffic sources. In this proposed model, traffic sources would be grouped together into one of three categories: Big portal, small portal and search-only affiliate sites.

While the three-tier system he suggests would be a positive step, the advertiser is still limited to choosing between sub-sets of traffic sources, rather than individual traffic sources. This is analogous to an investor choosing to invest in mutual funds as opposed to individual stocks. For an investor they are placing their trust, and ultimately the control of their finances, in the fund manager to make wise decisions as to which stocks to purchase. For the advertiser, this approach still places the control largely in the hands of the ad network as they would be the ones defining which traffic sources would be assigned to each category.