Data-Labor-Technology

AdExchanger |

“The Sell Sider” is a column written by the sell side of the digital media community. Today’s column is written by James Curran, founder and chief product officer at STAQ. Publishers need to change the way they approach their programmatic ad sales business. Many publishers have not yet put in place the right planning, operations… Continue reading »

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A weekly comic strip from AdExchanger that highlights the digital advertising ecosystem…

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By Jay Wardle – president, Dstillery

It’s 5 p.m. on a Saturday. A shopper enters a Nike store in Philadelphia. At 5:35 p.m., she leaves carrying a new pair of running shoes. All along, her smartphone had been beaming her location data to a performance-data specialist, which then relayed the information to Nike’s marketing team.

But what did Nike really learn about that shopper’s path to purchase? Sure, they know roughly where she was, and when. But isn’t anyone who enters a shoe store likely to buy shoes? If brick-and-mortar retailers want to compete with Amazon, they’ll need to turn their stores into a competitive advantage. First, they have to harvest location data from their hundreds of outlets to collect a data set Amazon doesn’t have. Then, they’ll have to walk in the giant’s footsteps by using that data to make predictions that drive sales.

That’s where geospatial data comes in. Location data, collected in isolation and in real-time, merely offers measurement. Geospatial data offers location, plus the context retailers need to make decisions.

According to the Mobile Marketing Association, 40 percent of client-side marketers are deeply concerned about data quality and lack of transparency in data sources and methodologies. In another recent study, 94 percent of senior brand marketers said they found it challenging to work with location data, in part because it can be inaccurate, and in part due to their own limited understanding of which third-party providers can help them.

It doesn’t have to be this way. While raw location data helps a brand measure and answer questions such as place visit rates or where their previous customers live, a geospatial approach can be used to clarify that data and better understand where shoppers are in their path to purchase. Then, using that data, retailers can predict a shopper’s next move. Kimberly Yarnell, vp of digital media at Macy’s, commented that “location is not just about where a person is at a moment in time, it’s about where he or she has been and understanding where he or she may go.”

 

AI-driven geospatial data gives retailers a clearer picture

Accurate predictions must start with accurate data. Consider a high-end home furnishings retailer in Highland Park, Illinois. The retailer was using location data — simple latitude and longitude — to determine the number of customers visiting its store. But estimates didn’t line up with foot traffic. According to their numbers, the store should have looked like Black Friday every day.

In reviewing their data, Dstillery’s data science team discovered a common error. Because the retailer was looking for consumer data within an area rounded to one decimal point (i.e., 89.8 instead of the more precise 89.87654), the brand was seeing an abnormally high number of shoppers. In fact, consumers with mobile devices were walking the aisles at different stores dozens of miles away. Therein lies the risk of basing marketing decisions on surface level location-based data.

Geospatial data, on the other hand, takes into account a broader depth of dimensions beyond pure location. In this case, we noticed far too many devices at this location relative to other, nearby stores. Then, we used machine learning technology to filter out suspect location-based data, leaving us with a clean, accurate view of the store’s real visitors.

The retailer was finally set up for predictive success, using the precise data AI delivered.

Geospatial data improves channel strategy

One national sportswear apparel company asked Dstillery for deeper insights into its specific audience niches.

The company understood that its audience was made up of soccer fans. But what did that really tell them? If an amateur soccer player walks into a retail outlet, she’s likely to buy sports equipment. But a couch potato who happens to be a diehard Real Madrid fan is far likelier to buy apparel. By diving into various online and offline indicators, we were able to identify subpopulations with highly specific interests. And — crucially — we knew where those people lived.

It was the geospatial data that made those insights invaluable. For instance, if we isolated a geographic area with a high concentration of one or two specific subpopulations — say, fans or soccer moms — we could help the company deploy highly focused direct messaging campaigns. In areas with a general mix of subpopulations, a general messaging approach won out.

It didn’t stop at marketing. Geospatial data helped determine which retail partnerships to pursue. After all, if a company knows where its various audience segments shop — and what they’re likely to buy — it’s easy for that company to determine which stores its products should be in. And in areas where shoppers can’t properly be served by their local retail outlets, a company can favor e-commerce partnerships. Armed with geospatial data, companies can tailor marketing and retail partnership strategies to highly specific populations.

Predictive is the holy grail

Early on, WPP chief executive officer Martin Sorrell proclaimed location-based marketing the “holy grail” for advertisers. Seven years later, its promise still feels elusive, particularly for retailers. But there’s still plenty of  hope. Technologies have advanced marketers’ ability to tap into mobile devices as another channel to engage consumers, and the industry as a whole continues to tirelessly shed itself of endemic data quality and transparency issues.

By embracing geospatial data as a strategic discipline, committing to using it creatively to predict consumer behavior, and pushing partners to live up to higher standards with respect to data integrity and transparency, brands put themselves in a significantly better position to win — even in an Amazonian climate.

 

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AdExchanger |

Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. See To Believe It’s been two years since the ANA and K2 released a damning report on programmatic buying practices, and media agencies are still suffering a trust fallout. Assembly, owned by MDC Partners, has agreed to pay for clients to use a tool… Continue reading »

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With the General Data Protection Regulation being enforced in May, demand-side platforms need to figure out how to target users without relying on personal data. DSPs that are unable to adapt to the new rules are likely to lose market share and suffer a similar fate as the programmatic platforms that were late to adopt header bidding.

The GDPR demands that personal data only be used with explicit permission from individuals. This could become problematic for DSPs because they rely on audience data to target ads, and 50 percent of European internet users said that if given the option, they would opt out of seeing retargeted ads, according to a December survey by HubSpot.

Johnny Ryan, head of ecosystem at anti-ad blocking firm PageFair, said that when users opt out of having their data used for ad-targeting purposes, DSPs will have to scrupulously avoid using any information that ties back to an individual user. Data like IP addresses and cookies, which are the backbone of real-time bidding, will be off the table in these scenarios. These data restrictions will burden many vendors, and the GDPR will revolutionize ad tech akin to how the auto industry is being pushed to switch to electric vehicles, he said.

To obtain consent from users, DSPs have to rely on other companies along the ad supply chain since DSPs don’t have direct relationships with the end human being receiving an ad. It is the consumer-facing websites of publishers that ad tech companies will rely on to obtain consent, said Ratko Vidakovic, founder of ad tech consultancy AdProfs.

Obtaining permission from people to use their data for advertising purposes isn’t as simple as serving a one-time pop-up message that opts them in. Lawyers, sales execs, editorial people and web developers all get dragged into GDPR-related meetings, said Jeremy Hlavacek, head of global automated monetization at IBM Watson Advertising, which encompasses IBM’s media properties like The Weather Co.

Lawyers inform the rest of the company on what the policy permits, sales aims to make sure the new rules don’t hurt vendor and advertiser relationships, editorial’s focus is on embedding the consent forms in a way that doesn’t provide a bad user experience, and web developers build the features. Hlavacek speculated that small publishers will struggle to devote enough resources to GDPR compliance to make a smooth transition once the regulations take effect.

Since publishers’ opinions of ad tech vary widely, not all publishers are going to trip over themselves to get user consent for ad targeting. Those that rely heavily on targeted programmatic ads will be as desperate as their vendors to get user consent. But other publishers less beholden to ad rates may use the GDPR as an opportunity to re-examine the vendors they want to keep, and it is possible that some publishers fed up with data leakage won’t bother to bug their readers to opt into data tracking.

Publishers’ varied responses to the GDPR could create a patchwork environment where the readers of certain sites are more likely to give advertisers permission to use their personal data than readers of other sites. This will make contextual targeting more important for DSPs as they use content as a proxy to reach audiences, said Ari Levenfeld, chief privacy officer at ad tech firm Sizmek, which acquired DSP Rocket Fuel last year.

“This would necessarily whittle down the universe of targeting options in the EU,” said Eric Berry, CEO of native ad platform TripleLift.

Building features into dashboards for granular content targeting isn’t easy. The contextual targeting would have to be done at scale and across many languages, and these types of products can take months to perfect, Levenfeld said.

To prepare for the GDPR, the DSP Dataxu integrated Grapeshot into its platform about a year ago to beef up its contextual targeting capabilities, said Andy Dale, vp of legal and data protection officer at Dataxu, noting that Dataxu is working on building its own contextual targeting products. Dataxu also plans to hire a data privacy consultant in March to help it comply with the upcoming regulations.

DSPs are far from being the only sector of the Lumascape to feel pressure from the GDPR. Retargeting firms are scrambling to get consumer consent, and data management platforms are bracing for a tough battle to obtain the data that powers their businesses.

“We support ad tech companies and like working with them and want to see them succeed,” Hlavacek said. “But it is a dangerous time to be not fully compliant with all of these rules.”

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Even the most fervent believers in programmatic advertising believe it needs to undergo a cleanup, as marketers lose faith in ad tech due to issues like hidden fees, ad fraud and murky auction models.

The mood among marketers, agencies and vendors at AdExchanger’s Industry Preview event Jan. 17-18 in New York was a candid admission that automated ad buying is undeniably the future but has many problems that cannot be put off.

“There’s an element of trust missing right now,” said Belinda Smith, global director of media activation for video game company Electronic Arts, at the event on Jan. 18. “Frankly speaking, it’s not in my interest to understand every detail of the buy-side fee because as a marketer, my biggest focus is getting in front of my audience. But [building trust] means that my partners should be able to answer everything that I ask.”

Smith said on stage that her team has run programmatic on its own for a while, and it started owning vendor contracts last year to keep track of tech providers’ fee structure. Contract ownership will continue to be a big focus for Electronic Arts this year, she added. “As we pick up things, we learn tricks and tips [in programmatic],” Smith said. “We put how fees are charged in detail in our contracts, we look at [campaign] win rates, and we constantly talk to our publishers — if what we see and what they see don’t match and we can’t reconcile what’s going on, we will take money out of the system.”

Another presenter, Louis Paskalis, svp of customer engagement and investment for Bank of America, described programmatic as “the single worst thing that happened to advertising and only salvation for the future of marketing” because it promises to generate the highest yield at the lowest cost. “As a marketer, I need to know the context of my ads. If we have the same shoe ad following us for three months, that’s bad consumer experience,” said Paskalis on Jan. 17. “Programmatic could work if it optimizes the customer relationship instead of the transaction.”

Michael Roth, chairman and CEO for Interpublic, also said at the conference on Jan. 17 that IPG is in talks with many programmatic tech providers to make sure they optimize for media effectively.

Ad tech vendors are acting. For instance, Adobe and AppNexus announced a partnership to bring transparency to hidden fees. Meanwhile, video exchange Telaria introduced a program called The Fraud Fighter on Jan. 17 to ensure its video inventory meets or exceeds brand-safety standards. Rubicon Project also reduced its take rate from 24 percent to 11 percent and eliminated buy-side fees last year, according to the company’s CEO Michael Barrett. “Ad quality will also continue to be a big focus for us in 2018,” he said.

Yet most executives at the event agreed that more must be done. Speaking on a joint panel with Smith, Brian O’Kelley, co-founder and CEO of AppNexus, said mobile ad fraud is still rampant, and there’s no good technology to catch it, while Keith Eadie, vp and gm of Adobe Advertising Cloud, said marketers need more clarity on the auction dynamic that each exchange employs.

Smith, on the other hand, thinks that if marketers want more transparency, they must be willing to pay more for better inventory. “When you negotiate [the price] down and put pressure on fees, there’s only one way for that story to play out,” she said. “In that case, you shouldn’t be shocked that fees pop out in other places because people need to make money. Being cheap in everything doesn’t make [programmatic] a sustainable model.”

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Publishers are nervously fretting about what will make up for anticipated declines in Facebook traffic. Apple News is unlikely to do that on its own, but some publishers are seeing promising returns. Women-focused title Stylist has only published to Apple News for a week, but it’s turning into the publisher’s most engaged platform. Readers of Stylist’s Apple News content spend on average 40 seconds with each article, the same dwell time as on Stylist’s own mobile site, according to the publisher.

News brands tend to fare better on Apple News than lifestyle publishers, partly because Apple News tends to surface stories about what’s happening in the world today. But after seeing engagement with the limited content Stylist originally published to Apple News, the platform approached the title’s parent company, Shortlist Media, last month to deepen the partnership and publish all Stylist content to Apple News.

Since then, Stylist’s Apple News content has had 150,000 unique users, a small but engaged group. A story on the claims against Aziz Ansari had an average read time of 1 minute and 56 seconds, and a piece on Chrissy Teigen’s response to Ivanka Trump’s #TimesUp tweet had 70,000 uniques.

“Apple was proactive and determined to make sure we had a voice on the platform,” said Owen Wyatt, managing director at Shortlist Media. “They were keen to reach women and saw Stylist as a vehicle to do that.”

Publishers are wary of relying on one platform for audience, even if referral traffic is seductive. Working with Apple News has been easier than working with other platforms, according to Stylist.

Media companies can publish content to Apple News with relatively little effort. To be a fully integrated partner — what Apple calls an Apple News Format partner — requires a couple weeks of development work from the publisher. As an Apple News Format partner, Stylist says it has broader customization options for typography and layout, but, more important, it gets access to more audience data. Stylist receives data from Apple News on shares, follows, reader demographics, article likes, saves, total views, reach, unique visitors and average read time.

“I’m not looking at the data and wanting more,” said Wyatt. “There’s a resource cost for Apple, but they make it easy to [access data] on its platform.” Of course, whether Apple News will be able to continue this level of service as it grows its partners is a key question.

Apple seems to have an interest Stylist’s cover stories, too. In February, to mark the centenary of women’s suffrage in the U.K., the publisher will style its site in sepia, giving it an aged look; Apple is exploring how to reflect this in Apple News.

“We’ve had very human conversations with Apple,” said Lisa Smosarski, editor for Stylist. “On Apple News, we can embrace our brand, rather than dilute it.”

While publishers have generally found Apple News useful for driving traffic, monetization through ads on the platform has been underwhelming. Apple’s commitment to ad-driven media models has been questioned, and it’s handed over Apple News ad sales to NBCUniversal in the U.S. and The Telegraph in the U.K. Wyatt said Stylist is having encouraging and open conversations with Apple News about branded content on the platform, but it’s not yet making money from the platform.

“They have absolute clarity on ad-funded media; that makes conversations more straightforward,” said Wyatt. “It feels like a tech platform is empowering us. Sometimes with tech platforms it feels like you’re screaming in the dark.”

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Artificial intelligence is touted as the future of media buying, allowing for automated analysis of several sources immediately.

“AI capabilities are making ad-spend decisions simpler, more efficient and cost-effective,” said Caroline Klatt, CEO of chatbot technology company Headliner Labs. “It’s a new age, and it will only be a matter of time until digital marketers across the board will be leveraging AI strategically to streamline their workflow.”

But while interest and adoption of AI for media buying is growing, the industry is still grappling with roadblocks.

These five charts illustrate the push and pull when it comes to using AI in media buying.

AI is long on potential
According to a Salesforce study from July, about half of the 3,500 marketing leaders surveyed are already using AI, and more than a quarter of these leaders are planning to pilot AI programs in the next two years.

Using AI for media buying is one of the strongest use cases for AI. Marketers believe AI can improve targeting and personalization when it comes to media placements. According to Salesforce’s report, 60 percent of marketers believe AI will have a “substantial or transformational” impact on their business’ programmatic and media buying in the next five years.

As AI automates workflows, it will free up marketing teams to concentrate on strategy
Right now, marketers have a lot of resource-intensive processes to complete before serving the right ad to their ideal audience. The promise of AI is to make time-consuming steps, like data integration and algorithm optimization, simpler so marketers can instead concentrate on other areas like customer experience.

A Forrester study from July, commissioned by marketing automation platform Emarsys, surveyed 717 marketers and found that 79 percent of those surveyed think AI will allow marketers to move toward more strategic work. The report also found that 78 percent of these marketers said their spend on AI marketing technologies will increase by at least 5 percent over the next 12 months.

“The rapid evolution of AI in media will enable our people to focus on innovation and intelligence rather than repetition and reports,” said Norm Johnston, global CEO and chief digital officer of Mindshare.

AI boosts sales
Brands like Volkswagen and lingerie brand Cosabella are finding that AI is proving to be more effective than their media agencies. Consultancy Capgemini surveyed nearly 1,000 execs and found that companies that implemented AI systems have increased their sales and inbound customer leads.

AI spend is steadily growing
AI spending is still rather small now. But eMarketer forecasts a booming market over the next several years, reaching nearly $29 billion.

Lack of AI skills is limiting the speed of adoption
A World Federation of Advertisers study found a big shortcoming in AI skills like predictive modeling — outstripping other in-demand areas like augmented reality and virtual reality.

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Facebook’s recent decision to deprioritize news has many publishers re-evaluating their commitment to the platform. But the HuffPost is plowing ahead with its vertical strategy. It launched two more in December, Nurses, I See You, for nurses; and Not Alone, for friends and family of those struggling with opioid addiction, as part of a push into enterprise health reporting.

Ethan Klapper, HuffPost’s global social media editor, said HuffPost decided to launch pages for these communities because pages still offer a better way to build a scaled, monetizable audience than the Facebook groups many publishers have been flocking to. (It’s also using groups, for other communities.)

“I think we all agree that it’s really early to tell what those changes mean exactly,” he said of Facebook’s news-feed change. “We’re one of the leading publishers on Facebook, and it will still be an important platform for us.”

Huff Post’s broader experiment to create niche communities on Facebook has yielded mixed results. Canceled Plans and Tomorrow, Inshallah are considered successes internally. In the past year, Canceled Plans, for introverts, has nearly tripled the number of people who “like” the page to 225,000; Tomorrow, Inshallah, for millennial Muslims, has more than doubled to 55,000.

They’re tiny compared to the 9.8 million fans of HuffPost’s core Facebook page but are are within the general vicinity of HuffPost Queer Voices (428,000 likes), HuffPost Latino Voices (187,000 likes).

Growth on other pages launched during that experiment has been more modest. A travel page, Pack Light, Go Far, for example, has amassed fewer than 15,000 fans in the same time period. Growth of health page The Scope was flat in 2017, and the page hasn’t shared any new content since November. “Some topics lend themselves to more growth and engagement than others,” Klapper said.

Canceled Plans and Tomorrow, Inshallah each publish three or four pieces of content per day, but they source only a small slice of that content from HuffPost. The rest comes from other Facebook pages aimed at similar communities. The idea is to serve each audience with content that will keep them most engaged, whether it’s sourced from HuffPost or not.

HuffPost will use paid promotion to build audiences for Nurses and Not Alone. It’ll also post identity-focused content aimed at generating comments, which Facebook said it’s looking for, as it did with Canceled Plans and Tomorrow, Inshallah, two Facebook pages it launched at the end of 2016.

“These are not side projects for us,” said Klapper. “We’re looking at those pages as an experiment with using Facebook advertising tools to reach people we currently don’t reach.”

 

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The see-now-buy-now runway model has found a fitting audience — not in the U.S. or Europe, but in China.

NYFW: China Day, a new initiative formed in partnership between Alibaba’s e-commerce marketplace Tmall and industry trade association the Council of Fashion Designers of America, will launch this February during the men’s fall 2018 runway shows. Four Chinese designers and brands — Peacebird, Li-Ning, Chen Peng and CLOT — were chosen by the CFDA to host runways and showrooms during the official New York Fashion Week schedule.

The shows that take place on NYFW: China Day will be entirely shoppable, making use of the see-now-buy-now model that failed to launch in the U.S. What was categorized as a revolutionary change for the fashion industry has since been abandoned, as designers question the need for New York Fashion Week all together.

The CFDA, which owns the rights to the New York Fashion Week calendar, is looking to broaden the event’s reach. According to CFDA president Steven Kolb, the goal of the partnership is to expand globally by roping in an international audience.

“In any of the programs we do, we’re measuring impact,” said Kolb. “This is a time of great experiment for designers, and we’re exploring, as well. For us, that means we’re expanding our scope.”

The shop model for NYFW: China Day mirrors that of Alibaba’s Singles’ Day see-now-buy-now event: Show attendees and viewers (the China Day shows will be streamed online on Tmall’s and CFDA’s websites) will be equipped with buy buttons in the Tmall app. As items appear on the runway, they’ll simultaneously appear on users’ phones in the Tmall app. With a tap of the button, items can be added to cart and placed on pre-order. Orders will then be fulfilled by Tmall.

The streamlined selling process comes to NYFW at a time when the see-now-buy-now model, as it’s been tested in the U.S., is in need of a serious revamp. Designers who have tested the in-season runway show and selling model, including Thakoon and Tom Ford, have since abandoned it. Hangers-on include Tommy Hilfiger, who’s turned his runway shows into consumer-centric spectacles, switching location backdrops from New York to L.A. to London with every new season. See-now-buy-now dissenters have claimed that shoppers are used to, and fine with, waiting a period of time for items that are considered luxury.

Putting the model in front of Tmall’s 500 million active users, however, brings the need for immediacy back to the forefront. Customer behavior in China is highly concentrated on mobile, and shoppers are conditioned to buy in the moment, regardless of price. During November’s most recent see-now-buy-now Singles’ Day event, a few Lexuses were purchased.

“As Chinese consumers become more fashion-forward and technology-savvy, they want to purchase what they see, when they see it,” said Jessica Liu, president of Tmall Fashion. “As online and offline shopping merges, it is imperative that we continue to innovate and deliver the most interesting content and seamless shopping experience for consumers.”

The announced lineup for China Day follows the announcement of the CFDA’s partnership with production platform Nineteenth Amendment, a company that specializes in on-demand manufacturing for brands. With the support of a platform like Tmall, a ready and willing customer, and a production cycle that’s viable for an in-season model, brands — particularly those looking to launch in China — are getting the necessary leg-up to launch a see-now-buy-now runway show. That logistical support has, so far, been missing in the so-called in-season revolution, and the only brands that remain on board the new model, like Tommy Hilfiger and Burberry, are massive brands with the resources to pull off an overhaul.

“It’s extremely hard to disrupt any industry, and fashion is one of the oldest,” said Kimmy Scotti, partner at VC firm 8vc. “You can’t change an engine while a car is in motion. What the first run of see-now-buy-now has shown is that designers need support industry-wide to pull off major change.”

Bringing Chinese designers to New York by way of NYFW: China Day is the latest step in the partnership between Alibaba and the CFDA. During the see-now-buy-now event in November, Jason Wu and Opening Ceremony showed collections that were instantly shoppable. Overall, U.S. designers are plotting strategies to reach China’s high-spending and fast-growing luxury customers, either on their own or through partnerships with Alibaba’s Luxury Pavilion, JD.com’s Toplife.

“We are promoting a common exchange between Chinese and American fashion industries.  We want to help outstanding Chinese designers gain more recognition in the international fashion community, while also supporting commercial labels to build their brand and expand globally,” said Liu. “We also like to attract quality U.S. fashion brands and designers to the China market and use Tmall’s assets to help them succeed. Tmall is not just a place for merchants to sell their products, but a platform to grow their brand. We are excited about this partnership with NYFW and we will continue to work with more international fashion and luxury brands to bring about creative collaborations and innovations.”

Image via CLOT

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