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.

(Reprinted from ADOTAS) 2010 is already shaping up to be the year of real-time bidding (RTB) technologies and demand-side platforms (DSP). The availability of real-time bid access into the major ad exchanges is converging with an industry-wide preference for agency-administered ad-buying and ad-trafficking platforms.

The traditional ad network model achieved many things but has yet to deliver on the promise of truly cost-effective scale. The rules of engagement changed when downward-spiraling CPM prices forced publishers grudgingly onto the emerging exchanges to improve their yield and back-fill diminishing ad revenues. The networks had to follow their publishers and a new aggregated sourcing model emerged.

Real-time bidding is the hot feature this year and a staple of the effective DSP. Now the combined capabilities of RTB-enabled DSPs built on the exchange model are replacing traditional ad networks with a new buy-side network paradigm that is more nimble, more economical and more in touch with advertiser goals.

Control is subsequently moving closer to the advertiser, intermediation is being reduced and prices are arriving at a true market-driven equilibrium. Not only do advertisers have more control over targeting, performance and safety, but buying has become more centralized and access to inventory become more streamlined.

It is no secret that LucidMedia has one of the most robust contextual targeting engines in the marketplace, but what we have achieved in the DSP space over the last year has not been widely publicized. Late in 2008 we began engaging all of the large aggregators to co-develop RTB solutions. Next we developed an advanced, proprietary ad server to give us one of the most nimble systems available for trafficking campaigns.

We also built a unified inventory management system that could dispense with the complexity of hard-wiring campaigns to inventory sources. We included an automated optimization engine that can evaluate thousands of campaign facets in real-time, project performance trends, and govern campaign targeting based on advertiser goals.

In January 2009 we deployed the platform internally, effectively making it the industry’s  first production RTB-enabled demand-side platform. Named ADvisor DSP, LucidMedia has since executed hundreds of successful campaigns on the platform and is currently processing up to 45 billion impressions each month. This pioneering experience makes us uniquely qualified to access the necessary features of a successful RTB-enabled DSP initiative.

There are certain universal features that agencies need for any successful DSP initiative. All buy-side platforms must offer multisource RTB integration and scale, an advanced ad server, page-level contextual analysis for targeting and brand-safe filtering, audience profiling for retargeting, universal frequency capping, detailed performance roll-up reporting with discrepancy management and reconciliation, flexible and intelligent bidding strategies, the ability to leverage third-party targeting data and a managed service deployment approach.

Advanced Ad Server: A good DSP starts with an advanced ad server. Core ad serving capabilities like frequency capping, day parting and targeting are minimum requirements. The savvy agency should also look for full-featured holistic campaign management features like cross-aggregator universal frequency capping, pre- and post- impression auditing, preemptive brand-safe filtering, page-level impression verification and hyper-segmented targeting based on content, demographics, behaviors, site, location, and time of day. Discrepancy management and reconciliation are also critical aspects of the built-in ad server.

Integrated RTB: Properly integrated real-time bidding is not standardized or modularized. There is still a great deal of heavy lifting development needed to bring on each inventory source, scale and balance the volume, and bid effectively. A good DSP needs to have these problems already solved.

Intelligent Bidding: Smart bidding strategies are also critical to an agency’s bottom line. The DSP model promises that agencies can claim a larger slice of the ad spend dollar, moving it further and further away from the networks. But without intelligent and flexible bidding, that slice can be lost. Look for detailed graphing of bid price and win ratios and the tools to quickly adjust bidding per source. Look for RTB solutions efficient enough to drive bid costs below the $0.001 threshold.

Retargeting: Another aspect of the successful DSP is the ability to roll up audience and link users to performance for retargeting purposes. Reaching the right audience with the right message at the right time is a core tenet of advertising and although this applies to all mediums, display always reaches its users through a proxy device.

The right platform goes beyond simply rolling up interpolated audience facets and instead segments users into actionable profiles using third party data based on their propensity toward a desired action.

Managed Services: The concept of an agency-side buying and management platform relies heavily on managed services at the inception of any in-house DSP program. The current transitional period is favoring the managed service approach to demand-side platforms as agencies step into the traditional ad network role. Managed services allow the transition and knowledge transfer to happen in the most effective manner.

Optimization: Automated optimization is a differentiator for the demand-side platforms. Historically optimization was the mystical secret sauce of the more technical ad networks but it has become a required attribute of the full-featured DSP. Look for optimization that can juggle thousands of campaign targeting facets, project outcomes, and model performance scenarios prior to launch.

Inventory Sources: Sources and scalability are key factors for every agency to consider. The right platform needs to plug into all the large repositories as well as the more niche aggregators plus the all supply-side optimizers. This kind unprecedented impression potential, scale and broad reach are requirements for large direct response campaigns, major corporate branding promotions and scaled niche segments of very specific demographic traits.

These are the major features as well as ad network staples like brand-safe filtering, transparent reporting down to the page level and flexible targeting to content, demographics, and behaviors that an agency should look for when selecting a DSP.

The right demand-side platform allows agencies to easily audit the networks and exchanges on their media plans, efficiently acquire page-level contextually and demographically targeted inventory, ensure brand safety across all sources and most importantly enforce a universal frequency cap. The new breed of DSP with integrated RTB gives agencies pre-impression filtering, post-impression auditing, and allows agencies to cherry-pick the most effective impressions in real time and then feed their campaigns with an optimization engine that automatically maximizes return on spend.

The new TNS Media Intelligence Report is out and Adotas has jumped on it with their Display Advertising Shows Signs of Life e-newsletter today. The reports indicates that for the first quarter of 2009, the total measured advertising expenditures they track dropped 14.2% versus a year ago, down to $30.18B. This follows a 9.2 percent decline in Q4 2008 as the advertising recession accelerated in the new year. While that may not seem like good news, consider they indicate that internet display-specific advertising spend is actually up 8.2% over the same time period last year which I believe is better than expected considering all the frozen budgets, wait and see attitudes, and narrowed lines of sight. Although it is lower than the original double-digit growth predicted last year, it is still growth–and very healthy growth at that. Wipe away all the historical (and semi-hysterical) predictions of double digit growth ad infinitum and look at 8.2% growth on its own–among a sea of declining numbers–and you have a very clear sign. So why is display standing out like a shining star pointing the way ahead in our rocky sector of space? A lot of the growth they are reporting is being driven by the new free market exchange models that are moving onto the plateau of productivity and at the same time relegating the old ad network models to the trough of disillusionment. From this emergence, not only is publisher yield inching back upwards, advertisers are finally smelling the real meat of return on their spend. That alone has been happening for almost a year now and is not the whole story behind this successful metric. The promise of data has recently begun to materialize through all kinds of platforms with their new insights and relevant analytics. It is this confluence of forces, the emergence of the exchange model and the promise of data being realized through the platforms that is drawing advertisers to invest in display at a healthy clip. And when the exchange playing field congeals a bit further, and at the same time a few of the platform players begin to dominate inside the agencies, we will see a whole new display advertising sector. Gone will be banners and CPMs and premium and remnant. We will have a truly value priced free market exchange of media in real time that rewards the publisher and empowers the advertiser. We’ll have less layers and less middlemen and less latency. We’ll have more return, more clarity, more accountability, and real transparency. If one thing is certain, it will be nothing like the display business of last year.