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Struq’s Andrew Morsy On The Company’s Place In The Eco-System, Its Relationship With Agencies, & Staying Ahead Of Retargeting Commoditisation

Friday, February 24th, 2012

Andrew Morsy is Sales Director at Struq. Here he discusses the Struq personalised targeting solution, the company’s relationship with agencies and how Struq is staying ahead of the comoditisation of the retargeting market.

Agencies are beginning to adopt retargeting now as part of their model. What is Struq’s view on this adopted agency business model?

Retargeting is critical for advertisers as it converts browsers into paying customers, lengthens customer lifetime value and increases revenue per user. Agency adoption helps educate clients about the power of ad personalisation – that in order to persuade users to buy your product or service, it is imperative you deliver a personalised relevant ad to persuade that user. That has fuelled the adoption of Personalized Video and Personalized Pretargeting (advertisers acquiring new users) by advertisers and agencies.

Can companies like Struq really work with agencies? You clearly have client direct relationships in the ecom space? Aren’t you competition for the agencies?

Agencies are experts at what they do – they are aligned to plan and buy media as effectively as possible for advertisers.

Struq’s technology enables advertisers to acquire users at half the cost of any other retargeting provider.

As a result, the majority of Struq’s business is through media agencies as they seek to provide the most efficient means to spend money that results in post-click revenue for their clients.

Does Struq really need to work with agencies? Clearly the client direct relationship has paid serious dividends? Why would Struq need to work with agencies?

Struq powers post-click performance across the marketing funnel for Marketing Directors and Media Buyers alike. Both the Media Buyer and the Marketing Director have the same objective, to persuade users to buy products at the lowest possible cost.

Struq enables media agencies and clients direct to buy Personalized Video and Personalized Display advertising that delivers lucrative post-click revenue.

Retargeting is becoming an increasingly commoditised product – how is Struq differentiating itself from the competition?

Struq works solely with the largest brands in the verticals of ecommerce, retail, finance and travel across 19 markets. All of these brands have tried multiple vendors and continue to work with Struq solely because Struq automates the delivery of a post-click CPA because we understand the value of a user and what makes a user click and buy.

Struq ascertains which users are valuable to an advertiser. We then target the right users to hit an advertiser’s post-click CPA/COS/ROI target with fully personalised creative. Struq then provides unique insight to clients, enabling advertisers to understand which products, creative elements, publishers, etc. drove post-click performance for them (which they then frequently leverage across their other marketing activity).

Struq has applied our core targeting technology across display and video to deliver lucrative post-click performance across the marketing funnel for advertisers.

Is Struq’s technology proprietary and how do you compete against the growing number of DSPs offering dynamic creative solutions – particularly Invite which, according to rumours, will have a dynamic creative component (Teracent) built into its new iteration?

Unlike the majority of the RTB market, Struq has built its own DSP, Bid Optimisation Engine, Recommendation Engine and Dynamic Creative Optimisation Engine. These needed to be proprietary to enable the data to be extensible so that we could extract the value out of data to make user level decisions. Struq determines the display ad content, media placement, targeting criteria and bid price in real time based on data intelligence. The result is that Struq acquires a user at half the cost of any other video, display or retargeting provider.

Struq is looking to position itself as the leading Ad Personalization Company in the market. Can you talk to us in more detail what ad Personalization really is?

Advertising is a communication to persuade users to buy a product or service. Struq is transforming that communication from a generic push communication to a relevant personalised communication.

Personalised Retargeting by Struq showed that by delivering relevant ads to consumers, they were 12 times more likely to click and buy a product or service. Ad personalization breaks the one-size-fits-all paradigm, it is about making each ad both personal and relevant to each user. Ultimately, it leads to greater post-click revenue for advertisers, higher quality of ads for publishers and a much better experience for end users.

Struq is now bringing that level of performance to advertisers across a user’s entire decision making process.

You are rolling new products around video. Can you tell us a more about these new products? Are you simply launching these products in response to what Brainient has starting offering in the market?

Struq’s core purpose is serving personalized, relevant, performance-driven ads to users.

Struq is a single point for advertisers to persuade users at every stage of the buying process across any channel. Struq is able to both identify new prospective customers and convert prospective customers at scale through personalised display and video. Advertisers need to use an integrated offering across channels to gain understanding and insight into what drives customers to buy their products.

We have applied our core targeting technology across these mediums to deliver lucrative post-click performance across the marketing funnel for advertisers.

How have you seen the market evolve over the past 12 months and where do you see it heading in 2012?

The economic climate is bleak for 2012. Advertisers need people to click and buy products through their advertising to justify spending money on marketing in a tough economic climate. Struq’s Personalised Video and Display ads make ads relevant to consumers, which enables advertisers to make on average £20 in post click revenue for every pound spent. Struq’s Personalized products seek to meet the needs of advertisers in a tough economic climate.

Posted in Ad Network, Ad Trading, Agency, Agency Trading Desk, Behavioral Targeting, Demand Side Platform, Marketer, Online Advertising | No Comments »

Simplifying Display Buying: Why Ad Tech Should Be Listening More To People Like Richard Dance

Tuesday, February 21st, 2012

We are publishing another panel excerpt from the recent ATS London event. The panel in question focused on bringing brand budget into the automated channel. The panel was moderated by ExchangeWire editor, Ciaran O’Kane, and speakers included: Nathan Woodman, COO, Adnetik; Richard Dance, Director of Digital Innovation, Blue Hive; Alex Rahaman, CEO at StrikeAd; Andy Ellenthal, CEO, Peer39; and Bruce Journey, DataXu CRO.

It gave Richard Dance the opportunity to challenge some of the widely held views of our – sometimes – “navel-gazing” ad tech community. He provides some interesting commentary from the brand’s perspective, particularly around the complexities of the current display eco-system. He notes that Facebook has made it easy for marketers, and as such continues to suck up a lot of brand budget. Dance works closely with Ford on their digital strategy. He’s exactly the kind of person that should be canvassed by ad tech companies on where display is falling down. If you can’t sit through the entire panel session, you should skip to 11:25 on the video clip – where Dance suggests the simplicity of the Facebook proposition is one of the key reasons why it is attracting brand spend.

Posted in Ad Exchange, Ad Network, Ad Server, Ad Trading, Agency, Agency Trading Desk, Demand Side Platform, Facebook Display, Marketer, Online Advertising, RTB | No Comments »

How “Real-Time” Is Your RTB Platform?

Friday, February 17th, 2012

Brian O’Kelley is CEO of AppNexus. Here he discusses cache update cycles, how shorter cycles are critical for buyers using real-time platforms, and why traders should be placing greater importance on it.

Last week, Right Media posted a blog entry stating that it has “slashed” their cache update cycle to 45 minutes. This is a great excuse for the industry to take a closer look at trafficking update cycles and understand why they’re so important.

A real-time ad platform is built around a trafficking database which stores all the campaigns, creatives and other targeting information. It also has thousands of servers in multiple datacentres which store an efficient representation, or “cache”, of this database. The cache update cycle is the amount of time it takes for a change you make in the primary trafficking database – for instance, a new creative – to be syndicated out to each of the servers. When the change is out on every server, we consider the cache update complete.

A cache update cycle of 30 to 45 minutes doesn’t sound very long (and in fact, I think it’s better than the industry average). However, in the world of ad exchanges and real-time bidding, it’s an eternity. In the blog post Right Media says that it serves 11 billion transactions a day. We can assume this has a peak volume of around 200,000 transactions per second. That means that in the 45 minutes that a cache update cycle takes, around 550 million transactions will occur.

Let’s imagine a worst-case scenario (one that happens all too often): a trafficker puts a campaign live and forgets to apply targeting. He quickly realises his mistake and fixes it, but it’s too late: the change is already en-route to the servers. If we assume a $0.60 global CPM, this campaign could spend $324,000 before it’s possible to fix it. That’s a lot of money on the line every time a trafficker hits “submit”.

It’s a lot like driving a car: at slow speeds, you have a long time to react without consequences. At high speeds, you need the ability to make split-second changes or you’re in real trouble – and the consequences are potentially immense.

When Mike Nolet and I started AppNexus, we wanted to build the ad technology equivalent of a precision driving machine: an ad server that could get cache updates out to thousands of servers fast. The engineering challenge is, as our team likes to say, “non-trivial”. In fact, this was my favorite interview question for new hires in the first year or two of AppNexus: “How do you build an ad server that can do fast cache updates at scale?”

What we came up with was a fundamental re-thinking of how an ad platform works. In the old days, when I was the CTO of Right Media (I have no knowledge of how the system works today), to do a cache update we would copy the entire database to a file, send the file to every box, and have them load it into memory. The problem with this approach is that the bigger the file gets, the longer the process takes. It would take a super-human engineering feat to get these massive cache files out to all of the Right Media servers in just 45 minutes.

At AppNexus, we do things a bit differently. Instead of sending the whole file out to each box on every update cycle, we only push out the changes. This dramatically reduces the amount of data that we have to send out each cache cycle, and means that we can update our caches as frequently as we want to. At the moment, any change you make through AppNexus Console or the AppNexus API is live on every server in three minutes or less. I’m making this sound a lot easier than it is, but hey, it’s nice to be the CEO, not the CTO!

Let’s calculate the economic impact this has. AppNexus processes around 15 billion impressions a day, so at peak we do around 275,000 transactions per second. In the three minutes that it takes to do a cache update cycle, we see 50 million impressions, meaning that the worst case trafficking error would cost $30,000. It’s still a lot of money for a trafficking error, but to use my driving analogy, we just dinged our Lamborghini instead of totaling it.

It’s a shame that most of the companies in the RTB space aren’t talking about this issue. The Forrester DSP analysis didn’t include cache update cycle (though it did include its siblings, reporting update cycle and optimisation update cycle) as an evaluation criterion. I think this is a major oversight. The volume available to real-time bidders is doubling each year, and with it, the amount of risk buyers take with every trafficking update.

When driving on the RTB superhighway, you need a fast car – but you also need precision steering. Kudos to Right Media for making big investments here, and I hope the rest of the industry follows suit.

Brain O’Kelley will be speaking at the Ad Trader Conference, Hamburg on April 19. Get your ticket today!

Posted in Ad Trading, Demand Side Platform, Online Advertising, RTB | No Comments »

Jason Bigler Discusses Google’s Bespoke Approach In Europe, The Cross-Channel Opportunity And How We Get To $200 Billion In Display

Wednesday, February 15th, 2012

Jason Bigler is Director, Product Management at Google and is the point man for all of the company’s display products in Europe. Here he discusses Google’s European display strategy, the bespoke approach that is required, the cross-channel opportunity, and how we get to that $200 billion figure.

We hear lots about Google’s display strategy in the US. Can you give some overview on the approach to Europe’s fragmented display market?

Our general approach actually isn’t very different on the core issues. Publishers look to us to help them maximise the value of every ad impression while advertisers look to us to help them achieve the best ROI on their advertising spend. If we aren’t delivering on either of those core concepts then we don’t have a business in any market.

However in Europe, as you point out, the market is more fragmented and each country can be in a different phase of product adoption. You really have to apply a country-specific lense when examining the best approach. As an example, we are seeing tremendous growth on the DoubleClick Ad Exchange in Europe. Spend has increased more than 130% year on year and the number of buyers and sellers has increased more than twofold over last year. This is going to be a big year for programmatic buying across most of the region. But is it exactly the same in every country across Europe? Not a chance. So in some countries we’re in full commercialisation mode and in others we’re still in the evangelising phase.

Will it be more of a bespoke approach given the huge differences between markets like the UK, France and Germany?

Much of the reason I’m here is to ensure we’re taking into account all of the nuances within each country when it comes to our overall display strategy. So yes, we’re most certainly going to tailor it to individual market needs by applying that country-specific lense I was talking about a moment ago.

Why did you make the move to Europe, and what experience have you of building products for European clients?

It’s certainly a great challenge for me personally. I’ve been in the display advertising technology business for over 10 years now and for a good portion of that time I was at DoubleClick leading our buy-side platform product, DoubleClick for Advertisers. That role was inherently a global role and I spent quite a bit of time in Europe making sure we were building a relevant product for the region. Recently, I also spent time at Collective Media as their head of product and strategy. During my time there, we not only launched Collective UK but we also acquired Web TV Enterprise, a UK-based video ad network. From a strategic perspective I was very much involved in the formation of their approach to the UK market. However, I think more than anything the scope of the role is what drew me back to Google. Our display ads business just hit a $5 billion run rate and as you can probably imagine the contribution from the European region to that number is not insignificant.

You recently released a report on publisher success on AdX. Can you give some insights on how European publishers are benefiting from automated selling compared to other sales channels?

In this particular report we demonstrated that for European publishers who make their inventory available in the Ad Exchange, automated selling beat competing sales channels 1 in 4 times. The competing channels included direct sales, other networks and backfills. And where it won over those alternatives, the revenue uplift was 73% higher. It also ended up delivering a fill rate greater than 90% for inventory where there was no other demand. I think this report demonstrates the importance of having a platform that can dynamically allocate across all types of buying relationships and deliver the best possible yield to the publisher.

How is the Admeld acquisition going to help European publishers? Can you outline some tangible benefits? Does the acquisition result in more Google-powered private exchanges popping across the continent this year?

It’s still quite early in this process to get into specifics here. We expect to be able to make Admeld’s services available to our DoubleClick Ad Exchange and DFP customers over time and to add to our publisher suite the functionality and services that Admeld provides. This will give publishers more control and flexibility in the way they manage their inventory and maximise their returns. However, it’s important to note that we will continue to invest in and evolve the current Admeld offering as we finalise our integration plan.

Google owns a DSP, an ad exchange, an SSP and both a buy-side and sell-side ad server. How do you respond to this “conflict of interest” argument – and the vagaries of the “end-to-end” ad stack?

The reality is we’ve built an open platform that we feel is the best in the business. For publishers, it helps them maximise the value of every single ad impression. For advertisers, it helps deliver the best ROI on their media spend. Long before today’s “app marketplace” plays and “neutrality” rhetoric we’ve had a platform where customers can integrate their own technologies or utilise their own point solutions should they make that choice. In fact, quite a few of our customers have made that choice. It is this inherent openness that makes the “conflict of interest” argument fatally flawed.

Your role at Google covers several channels, including video, display, rich media and mobile. How does this cross-platform perspective help Google’s clients in the European market?

At Google we have plenty of folks who are laser-focused on ensuring each of these channels is a best-of-breed solution, but I think it’s critical that we also have people thinking about how these channels can impact one another, how we can build complementary cross-product offerings, and most importantly, how these combined solutions can benefit our clients. In my role I’m certainly going to be influencing how we develop and commercialize these cross-platform solutions across Europe.

Your boss, Neal Mohan, reckons display could go to $200 billion in a matter of five years. Is this really possible, and how are we as an industry going to get to that figure?

What we know for certain is that there is still a significant imbalance between the amount of time users spend in a particular form of media and its associated ad spend. We’re betting that this imbalance is going to correct itself over the next several years while consumer consumption of digital media will continue to accelerate. As the line between online and offline blur, eventually we’ll see an entire reclassification of spend where there is no more offline versus online, it will simply be digital spend. That’s how we get to $200 billion.

In terms of how we’re going to get there, I don’t think it’s rocket science. Consumer behavior is what is driving the success of the industry and will continue to do so for the next decade. Think of all the types of devices/services we use today that didn’t exist 10 years ago. Think of what will exist a decade from now. That’s what makes our industry such an exciting place to be. Our goal is to help grow the industry to that $200 billion number.

Posted in Ad Exchange, Ad Network, Ad Server, Ad Trading, Agency, Agency Trading Desk, Brand, CEE, Demand Side Platform, France, Germany, Netherlands, Online Advertising, Publisher, RTB, Scandinavia | No Comments »

Euro Round-Up: The French Get “Serieux” About RTB; mediascale Reports Strong 2011 Growth; Jemm Goes All-In With AppNexus

Thursday, February 9th, 2012

Le Trading Media

In an epic twenty-seven pages on the potential of RTB in the French market, IAB France has outlined an impressive overview of the entire market. The report goes into great detail on the emerging data-driven advertising market in France, with explainations of key constituents in the exchange eco-system. It even includes some Q&As with leading ad execs in France, including recent ATS Paris speaker, Arthur Millet, Directeur Commercial at Amaury Medias Digital. Further insight on the growth of automated buying and RTB is provided by industry heavyweights like Sébastien Robin, Directeur Des OpérationS, at AFFIPERF. You can download the IAB report on the growth of RTB in France here.

mediascale Reports Strong 2011 Growth

mediascale, one of Germany’s leading independent digital agencies, reported a gross income of €5.6m last year – an increase of 17 per cent compared to 2010. The billings for the same period rose 22 per cent from €59m to €72m.

mediascale uses its own cross-platform targeting tool NE.R.O, together with Plan.Net, to develop solutions for clients and agency partners. Julian Simon, managing director of mediascale, is bullish on future growth for mediascale:

Right now we are running about 35 per cent of all campaigns on NE.R.O. By the end of 2012, we want to increase that by 40 per cent or more. This targeting will aid not only in direct sales support but also image and brand communications. It’s more about planning for consumer-relevant criteria such as purchase decision stages, interests and attitudes of the user. There is great potential in targeting, especially for content and creative solutions. The system combines information from the user profile with the matching design, text, product or price for the dynamic creation of promotional materials. Thus, advertising effectiveness and efficiency of the campaigns increase significantly.

The company also opened a new office in Vienna last year to service the fast-growing Austrian market.

Jemm Goes All-In With AppNexus

Jemm Group has chosen AppNexus as its exclusive ad technology platform, the company publicly announced this week.

Julia Smith, Global Communications Director at Jemm, is looking ahead:

By leveraging AppNexus’ technology platform, Jemm is able to deliver a strong proposition to buyers and sellers. We have moved away from a traditional ad network model and are now focused on working with other like-minded players in order to deliver a compelling offer for the publisher market.

Since migrating to the AppNexus platform, Jemm has seen click-through rates dramatically increase. In the first month alone, CTR tripled across campaigns delivered via the AppNexus platform. According to AppNexus’ proprietary reporting, the European market for RTB is growing rapidly, with an average of 25 billion advertising impressions served each month during Q4 2011 via the AppNexus platform. Over the last year the number of global impressions served via the AppNexus platform has increased by 859 per cent.

Posted in Ad Exchange, Ad Network, Ad Server, Ad Trading, Ad Verification, Ad Visibility, Agency, Agency Trading Desk, Analytics, Attribution, Behavioral Targeting, Data Exchange, Data Strategy, Demand Side Network, Demand Side Platform, France, Germany, Marketer, Online Advertising, RTB | No Comments »

The PostView: The Last Hurrah For The Horizontal DR Ad Network

Thursday, February 2nd, 2012

The PostView is a new coulmn written by senior execs working in the European online advertising industry.

They used to be the kings and queens of media arbitrage. The ad tech watering holes of Goodge street and Dusseldorf would only mention their names in hushed tones. Nobody could beat them on margins. Nobody. Not even Google. But times have changed. The business model of the typical horizontal DR ad network is in real trouble – and it is going to have to battle hard for survival in a landscape that’s been radically altered by the emergence of automated ad trading and the arrival of buy-side/sell-side technology.

About twelve months ago, ExchangeWire published a piece on the future of the ad net model, entitled “The Life And Death Of The Ad Network”. It still remains to this day one of the more controversial posts on ExchangeWire. The post detailed why existing ad net models were doomed, and why they would have to pivot in order to survive. It would seem much of what was predicated has already come to pass. But how did we get here, and what now for the DR ad net market?

Those Pesky DSPs/ATDs Stole My Business

It was inevitable that some bright spark in New York would come up with a way of disintermediating the ad networks. For years the ad nets acted as the go-to aggregation and optimisation layer for all of the top agencies. They delivered on that CPA target but made sure it was optimised at the lowest CPM possible. The ad network became very big. Large amounts of VC money was thrown at the new ad “middle man”. Some were acquired. Some IPO’d. And most built very healthy businesses. ExchangeWire estimated that around £260 million of display spend in the UK was going through the ad net channel. There was a slight flaw in their lucrative model though: it was almost totally reliant on the agencies. Getting on the agency media plan was the nexus of their business. So when the agencies starting using DSPs to aggregate and optimise, it was always going to be difficult for ad nets to hold on to that kind of margin in the market.

No… The Automated Channel Is Killing My Business

For DSPs to work they needed dynamic supply. The Yield Optimizers (later to pivot to SSPs) – who were essentially managing the yield of unsold inventory on behalf of publishers – were about to offer the agencies the supply they needed to compete with the ad networks. It was at the time that the concept of RTB appeared. Buying at the impression-level, offered the agencies the type of transparency their clients craved – kicking traditional media-buying on its proverbial arse. While RTB has had its teething problems, its growth in the market has been phenomenal.

Despite the obvious protestations form current incumbents, it’s hard to deny we are now in the automated age. Automated trading – whether at the impression level or at a pre-agreed price with agency trading desk/ marketers – is the way publishers are going to trade their unsold – and possibly premium – inventory. That is a fact. Where this leaves the traditional DR ad net is open to debate. But anybody can see that its traditional brokering role in the market is no longer required by publisher or agency. Ad nets have been forced to buy inventory from same dynamic sources. All well and good. But where’s the differentiator from the agency trading desks.

The Inevitable Ad Tech Pivot

Ad nets are not clueless. They saw this coming and the pivots have been coming thick and fast. The most notable has been Specific Media. Cursed by countless agency execs over the years for the eye-watering margins they were making in the European display market, Specific was clearly going to be the biggest casualty of the move to automated buying – especially when you consider they have no prop inventory and data as well as an ageing ad server stack.

While Specific has been ridiculed for its celebrity hookup with Justin Timberlake on the MySpace acquisition, I think it could end up being quite an astute move. MySpace has 30-40 million uniques globally. If Specific succeeds in turning this into a a proper distribution channel, and can execute on its plan to produce ad-funded video content, it could move the company away from DR and into the lucrative brand budget. I have to admit I like it. It doesn’t seem as flimsy as its under-threat DR model. With brands looking to produce their own content and requiring go-to distribution platforms, Specific could easily leapfrog agencies to service advertisers direct.

The same logic could be applied to the thinking behind AOL’s recent GoViral acquisition, and why its abandoning Ad.com. Is abandoning a tad extreme in the case of AOL? Arguably. But then if you let all your talented people move to competitors then I think you are entitled to be accused of neglect.

Pivot Number Two… Moving Closer To Publisher And Agency

It’s interesting to see how many middle men DR networks have moved either closer to the agency or publisher. On the publisher side you now have some ad nets claiming to have SSP capabilities. While white-labelling the AppNexus platform for the purpose of managing publisher inventory in the real-time channel would seem like a smart move, it is a tough market. Lots of well-funded players play in the space and given the small margins you have to have serious scale to make this work. And on the demand-side you have ad nets working closer with just the advertiser. Smart. Until you realise you are competing directly with the agency trading desk. Incidentally, whatever happened to going direct to the client? The agency relationship could work of course if all re-targeting was in-housed and the ad nets on the plan were left to prospect…

Enter The Direct Response Prospectors (DRP)

While it’s probably the last bloody thing we need in this industry, this TLA will be popping up with some regularity over the coming twelve months. It is fact that re-targeting will be internalised by the agency. Anybody moaning about the situation needs to go and get their own clients. If you don’t like it, then you need to go client direct. If you don’t want play the agency’s game, go client direct. It’s that simple. As long as the agency controls the relationship you must play by their rules. And most DR networks will be forced into a new prospecting rule. Now it will be interesting to see how these ad nets survive without the re-targeting pixel. Is prospecting really for them? I can only count two or three pure prospecting networks doing this at the minute, MediaIQ and CPX spring to mind. But then bigger players, like Tribal and Unanimis, could also pivot. There might even be a big opportunity for some pure play CPA affiliates to capture DR budget too.

Whatever happens next, the DR landscape in Europe has utterly changed. Things will never be the same. So lets bid a last hurrah to the traditional DR network. Long live the arb!

Posted in Ad Exchange, Ad Network, Ad Server, Ad Trading, Demand Side Platform, Marketer, Online Advertising, Publisher, RTB, The PostView, Yield Optimisation | No Comments »