Targeting in real-time: the new way to advertise

The Old American Stock Exchange

“The Old American Stock Exchange” by David C. Foster

As our company has developed, we’ve found it difficult at times to explain our product to customers, especially as we grow and adapt to the industry. Still, the individual user has always been at the heart of our offering. In its fullest state, the information about a user aims to encompass elements ranging from the user’s geographic location to his social influence to his interests and buying decisions. At its best, this collection should contain every piece of non-personal user information that can help to deliver the perfect targeting product that will benefit the publisher, advertiser, and of course the people inhabiting the Web.

Speaking for myself, I can say that perfectly targeted advertising always attracts my eyes, and I’ve never perceived it as being offensive. If you pay attention to the advertisements on Facebook, you might notice ads from surfing or snowboarding camps if you’ve listed an interest in boarding on your profile, like I have. I think my click through rate is close to 100 percent for these ads. But why aren’t there more of these kind of ads? I guess there are thousands of these sorts of camps around the world, but instead of seeing ads for stuff like this, I’m shown ads for all sorts of things I’m not even close to being interested in. Why are they bothering to serve me these ads? The reason is quite simple: there are agencies, advertisers, and publishers. The agencies are mainly responsible for booking advertisements, buying inventories from publishers based on the web sites where they believe the advertiser’s audience will be engaged. Considering the billions of web pages out there on the ‘net, how can one such agency manage to compile a list of all the sites I’m surfing?

I wish them damn good luck!

This is an impossible mission even for a giant like Google. So far, they’ve managed to index roughly 30-40 percent of the overall web. In the last few years, this sort of manually-managed business pretty much worked out for everyone involved in this value-added chain. I’m keen to say that, more or less, this era is ending.

2010 is simply changing the advertising landscape as we have known it. Why? It’s easy to explain. There are people in the market who’ve been asking the same question that we do: why can’t we just serve the right ad to the right person at the right place and time? The golden rule of advertising. But it’s never before been possible in the capacity that it is today. You can’t know what new websites will emerge in the next few seconds and grab customer attention.   What I do know is that everything in our life has turned into a stream. Some people call it a “feed,” but I prefer the term “stream” much more as it better expresses our changed perception of time in the last years (thanks, in part, to Twitter and Facebook). A stream keeps moving, it’s always changing.

At the dmexco 2010, everyone was speaking about retargeting as the next big thing. But as always, Europe is a bit behind the U.S. market on these issues. (I’d say currently about 12-14 months). What’s the chatter in the U.S. now? REAL-TIME. To be more precise, they’re talking about real-time bidding.

So what does real-time bidding (RTB) mean? Well, put simply, it enables companies like us to efficiently achieve that advertising golden rule of serving the right ad to the right person at the right place and time.

This kind of technology brings up to 200 percent more revenues to publishers, and for the advertiser it delivers a highly focused audience. How does it work? There are literally dozens of companies who now compete in real-time to serve the user an ad impression. It’s like the stock exchange (Der Spiegel, NYTimes). This means that you must be able to bid for that user in milliseconds, at most. If you technology isn’t capable of doing this job, you’re out of the game. And the better you know the user and the publisher environment, the more accurately you can set your bid and the more effective ad impressions you can serve.

In the end, this means that the world of online advertising is likely to begin to look like the stock exchange.  I’m happy to say that we have believed in this vision of a radically changed online marketing landscape since we first started our company. Now it’s the right time to prove this vision and we’re on fire. Watch out!