If you’re an advertiser accustomed to purchasing inventory from individual publishers or publishers with groups of sites, working with a network, exchange or DSP is an entirely different ballgame. For one thing, you’ll be looking at information for thousands of sites instead of just one, two or a dozen. So questions like, “What are your site’s demographics?” are unlikely to yield useful information. It’s a new advertising world, one where you can give your preferred audience requirements to the network, exchange or DSP and they’ll deliver impressions to users who meet your requirements wherever they exist online.  This is instead of picking among several sites to see who has the best demographic profile and then hoping those users show up which is the way the direct buys work.  So in this brave new world of aggregated advertising with unlimited reach and scale, what questions should you ask when trying to select the right online advertising platform to manage your media buy so that you get the best return on your ad spend?

Can you apply a universal frequency cap?

If you’re working with a number of different networks simultaneously, it’s possible that your ad may delivered more than the maximum number of times to a single individual browser than is really optimal. Even premium publishers sell their remnant inventory on the exchanges so your ad could turn up for a single user from both sources more times than you would have planned if you’d had a choice. De-duping your media plan has historically been one of the big efficiency killers in display adverting and reach extension programs.  Managing your buy through a unified display advertising platform that allows for a universal frequency cap across all sources can help you reach your conversion goals in the most efficient manner.

What is the cost of the third party data you will be using to create my audience segments?

Unless a company has proprietary audience segments (which some do), they will most likely be purchasing data from a company like BlueKai, eXelate or AlmondNet. This data is not free, whether the company has a comprehensive agreement with one of the data companies that allows for the purchasing of data on platform or not. The cost will be built into the price somewhere and it may be beneficial to determine the cost of that data compared to a contextual system that targets specific keywords and key phrases or to a direct from publisher model that allows you to target certain sites or certain pages of sites.

Is the targeting used broad or narrow, optimized or fixed?

The direct buys were frequently limited in how much scale they could bring to the table.  You bought a site or a network of sites and your ads ran there, usually within a channel or two as a rudimentary form of “targeting”.  The new breed of aggregated campaigns can run as wide as the web so you need to stop and think about the approach, audience, content and scope of your campaign.  Do you want to reach a specific demographic trait like the lucrative A18 to 49?  Or is it more detailed like “Moms with Kids”?  Or do you want to run on certain kinds of content like golf equipment or hybrid SUVs?  These are fixed-type campaigns with a specific segment to reach.  Do you want to limit your campaign to only those requirements or do you want to run wider to make some serendipitous performance discoveries?  Running wide will often expose whole new pockets that perform for your brand.  We often see with our learning impressions that there are great performing segments, in audience and content and behavior, that can be exploited online to exceed goals.  These kinds of optimized campaigns run a parallel stream of wide learning media using an optimizer to maximize the learnings.  Then use your platform to scale the learnings to hit that perfect balance of pacing, price and performance.

The new frontier in advertising means asking a whole new breed of questions on how your buy will be put together. To ensure that you are getting the most return from your buy, make sure you’re asking the right kind of questions so you’re getting the kind of data you really need to succeed in a real-time world.

It seems like “brand safety” is getting to be like “transparency” in our industry; everyone offers it in one form or another but like transparency, brand safety means different things to different people.  And just like transparency, everyone defines brand safety differently.  There is one thing that separates effective brand safety from all the other forms of impression analysis and delivery verification out there today.  Preemptive.  Is your flavor of brand safety truly preemptive?  Or is the brand safety you are getting from your demand-side platform (DSP) provider post impression analysis?  Is it reactive?  This is another of the industry myths perpetuated by other solutions rushed to market.  Real brand safety, meaning a demonstrably safe environment for a brand advertiser to promote their message online, comes from truly preemptive brand safe filtering.  But in practice pre-impression analysis for applicability and safety is very difficult to do.  Evaluating a billion impressions a day for applicability takes a robust platform and intelligent integration with real-time sources.  But it pays huge dividends in efficiency.  With truly preemptive brand safety the pass back is meaningless.  With truly preemptive brand safety you only buy what is safe and there is no waste.  No wasted targeting, optimization, time, or ad spend.  Make sure your brand safety is preemptive before you put your message out there.

We recently announced that we have teamed up with Right Media and Yahoo! to contextualize the world’s largest ad exchange. This was no small achievement and has been in testing for scale, robustness and accuracy since May of 2008. But the effort has been well worth it and industry publications like MediaPost, Adotas and ClickZ are recognizing this as a significant milestone within the interactive advertising industry. Even more general media like CNET News and DMNews decided to cover the story. So how does one set out to improve on the world’s largest advertising exchange? And what does it take to integrate with a live exchange currently juggling 50,000 active traders with over 175,000 live creatives in circulation across 6 billion daily transactions? For us it took almost 10 years of active development, testing and versioning to bring our hosted contextual platform–called ClickSense–to fruition. And that was only after cutting our teeth with the likes of AOL Search through their Web Offers program and in some of the world’s largest pharmaceutical organizations, Government agencies, and even other large ad networks. And then there was the accuracy side of the equation that had to be rock solid before it would get the green light. Driving real eCPM lift (and maximum yield) for publishers and at the same time creating significant ROI lift for discerning advertisers means you have to provide real-time, almost instantaneous, categorization that is backed up by tangible proof. This then becomes the data providing mechanism that advertisers need to develop their optimization strategies and publishers need to expose their inventory in the most profitable manner. In the end we got it done and it is working far better than we had ever dreamed it might. So if you are already on the exchange or wondering how this all works, visit our new Right Media section and get started using our contextual targeting today.

I was talking the other day with a colleague, Paul Rostkowski our new Vice President of Sales, and he came up with a term that I thought was very relevant to what we are doing here at LucidMedia. We were discussing what makes LucidMedia uniquely different in the crowded marketplace of ad networks and how we are passionately focused on the advertiser and their agencies. This is almost a 180 degree departure from the norm where the focus has historically been on the publisher and connecting them to advertisers. In that norm, however, real transparency is a pipe-dream that is never realized because the publisher network must be protected at all costs. As we were talking he casually said we are an “un-network.” The idea being that we are doing the opposite of the norm by empowering the advertisers and, unlike the blind networks, we provide transparency down to the page in the name of improved performance. I thought the idea had real legs and the more I thought about it, the more I wanted to take it to the next level. You see, traditional blind ad networks are a community of publishers and advertisers yet LucidMedia is an ecosystem of inventory aggregators built on the most robust contextual targeting engine in the business. You can look at it as almost a meta-network or a network of networks because we tie together and leverage a vast pool of ad networks, ad exchanges, vertical networks, publisher networks, and publisher optimizers. Basically we’re cutting a “channelized” swath of relevant, high performing super clusters of inventory across all the aggregated pools of inventory out there. It’s the right inventory anytime, anywhere, any way as long as it works. This is similar to the exchanges model as it’s an ecosystem of advertisers, publishers, ad networks, and advertising technology providers all happily steeping together in a free market broth. So maybe we’re a “nexchange” (pronounced nex-CHANGE); literally a network of exchanges. Isn’t that a meta-network? I like this term, nexchange, not only because it describes us in a single word but also because it is highly likely that our model will be replicated by other companies when the ad network and exchange space reaches equilibrium and has nowhere else to evolve. That day certainly has not yet arrived, as prophesied by Spanfeller in recent comments, especially with the recent explosion of publisher and vertical ad networks like quadrantOne, Healthline, and WPP. The supply of networks and exchanges will grow until they satisfy the existing demand and although they have created a sea of inventory and unprecedented reach, the demand does not seem to be satisfied yet. Advertising has always had an insatiable appetite for an audience and online display advertising, especially with its great ROI and measurable performance in an uncertain bearish economy, shows no signs of slowing. Maybe it is trite to coin a cute little phrase like nexchange for what we are doing but you watch, you will see more and more media companies taking this next logical step (if they can). More and more organizations will start cooking with the fresh ingredients of inventory across multiple networks and seasoning it with their own performance enhancing flavors. A dash of behavioral here, a sprinkling of contextual there, a smidgen of optimization, two cups of targeting, and a stick of demographic–and presto, a nexchange is born! Just remember who invented the succulent confection before you when it comes time to write the media plan or issue the RFP. When you need reach, an engaged audience, and a clean well-lit relevant ad space, at least you’ll know where to find the master chef in this Hell’s Kitchen. Dinner’s served!

I was reading Mike On Ads’ multi-part series on Ad Exchanges and I got to wondering what forces came together to create the current ad exchange phenomenon? There’s no denying the emerging ad exchanges are replacing the old yield management solutions out there. They are aggregating the supply to drive new market efficiencies and a new level of transparency in the non-premium marketplace. One of the early factors motivating this was the proliferation of ad networks which have been growing at a staggering rate. ThinkEquity Partners recently reported that there were over 300 ad networks in 2007 which means the number doubled in less than two years. They went on to report that the non-premium market will grow at 28% annually from $2.2B today to $7.6B in 2011 so it’s no wonder the number and the types of ad networks exploded. Vertical, contextual, behavioral, demographic, re-targeting, geographic, site specific, there is no shortage of ad networks out there now. Because of this explosion the mantra of the crowded, long-tail, remnant world of non-premium advertising has become differentiate or die. Why? Because there was (and still is) pressure from all sides to stand out. Pressure from eroding gross margins, strain from publisher recruitment, competition over inventory, negative stigmas about duplication and a lack of transparency, and a fast and furious industry roll-up. The growing revenue base and customer demand needed another solution and the ad exchange was the logical evolutionary path. Ad exchanges are streamlining the process with a whole new level of efficiency that the ad networks tried to deliver but lost along the way. The ad exchange is basically an ad server ecosystem through which advertisers, publishers and networks all manage their advertising business. They do this together and in an open, platform agnostic way that allows market dynamics to work their magic. So now the ad networks are feeling pressure from the exchanges too driving an ever increasing need to differentiate themselves. Think Right Media and the DoubleClick Advertising Exchange as examples. Advertisers and agencies rely on ad networks for the efficiency, reach, and optimization they bring to the table and are willing to give up some editorial control for it. But ad networks tried to control the whole process through proprietary means. This opened the door for exchanges to step in because they simplified and unified the trafficking process on an open platform that was transparent to the process. And there we have it, transparency is the final piece to the puzzle that unlocked the exchange phenomenon. Transparency takes the duplication out and removes the waste. We’ve all heard the timeless advertising adage, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Well transparency addresses that problem. So the ad networks out there will continue to differentiate themselves if they want to survive. The winners will be the exchange-friendly networks who can deliver the same transparency that enabled the exchange phenomenon in the first place.

Adotas recently posted an interesting, albeit oddly written article on the value of the ad exchange. The real story seems to be the value of the vertical ad networks–with which I cannot agree more–but their analogy between mutual fund managers and ad exchanges is a fascinating one. They equate the ad exchange to a specialized mutual fund manager who can add real value to your portfolio and that is very true for the new breed of ad exchanges out there today. The scenario buy that they walk through truly highlights the value that an ad exchange can bring to a media planner. They point out that when an advertiser wants to maximize ROAS they need their media buyer (their agency folk) to create a balanced “portfolio” mixing direct investment in large targeted sites with the specialized engagement of the vertical ad networks and the broad reach from the many low cost remnant networks. The share of voice and audience is highest on the expensive premium sites, highly relevant on the vertical ad networks (vertical search sites for instance) and yet there is massive reach to be had across the broad remnant networks. It is the mix that is critical to getting the job done. This is how you nail the ROAS for a big branding campaign where audience engagement is a critical factor–and this is just what the exchanges are good at delivering. They have the mix all ready to go, you just need your media planner, your mutual fund manager, to recommend and execute that perfectly balanced portfolio and your investment will pay off. What an exciting time for interactive media!