Reach Machines » technology

July 23, 2008

Why Marketers Need to Think and Act More Like CFOs

Filed under: analytics, marketing strategy, metrics, technology — Tags: marketing — bstraley @ 10:24 am

The title of this post caught my eye the other day:

What Do You Do When Old Media Vehicles Are Losing Effectiveness And New Media Vehicles Are Not Proven And Generally Lack Measurement?

What’s interesting about it is the implication that “old media vehicles” can be measured effectively in contrast to the “unproven” online methods of today and tomorrow.

The author has it exactly backwards. The effectiveness of brand marketing via TV, radio, and print has never been something that could be cost-effectively measured. Even when metrics like “unaided awareness” are computed from costly survey data, one heavily discounts the value of this metric as a predictor of marketing spend ROI.

The ability to record, in theory, every impression and every action exists today on the Web, something never before possible with old media vehicles. As a consequence, the online advertising value chain can be constructed with far greater precision and at dramatically reduced cost than anything one could do with off-line media. The issue then isn’t that the data and metrics do not exist for marketers to quantify ROI and justify increasing spend on online marketing initiatives, it’s that “traditional” marketers and their agencies generally do not have the skills or experience required to construct the performance measurement and financial models that transform the presently available marketing data into information and knowledge that can be consumed and acted upon by upper management.

The fact is that the availability of all of this data is creating new responsibilities and opportunities for marketers to measure the effectiveness of their efforts, spot opportunities to increase performance, and optimize accordingly. This approach to marketing and promotion is in the DNA of every successful online merchant today starting with Amazon, Ebay, and Google. They measure and test everything they do and use the results to shape and guide their communications and promotions planning. It is also the way more and more boutique online advertising and marketing agencies combine the science and craft of marketing on the Web.

Going forward, marketing effectiveness will be driven by four things:

Strategy - The goals and objectives of the marketing plan must be closely aligned with the overall strategic plan of the organization?
Creative - The message, who it’s for, how it’s packaged, when/where it’s delivered, etc.
Technology - The effective use of technology to drive expanded breadth and depth (aka scale) of your marketing programs.
Management Methodology - Is everything being measured and is the data being transformed effectively into actionable information and insights?

Does your agency of record, or if you don’t have one the team you use internally, posses these three capabilities in sufficient strength to deliver the bottom line results your success requires?

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April 23, 2008

Ad Exchanges Are the Ad Networks of Tomorrow

Filed under: media planning, technology — Tags: technology advertising media-planning — bstraley @ 1:41 am

I read this article from Monday’s NYT with great interest. It describes the problem that we’re solving at Reach Machines. Advertisers are realizing the blunt instrument of the portal buy is inefficient and are increasingly turning to more nuanced and complex media plans to deliver the kinds of returns their customers demand. Today, the best method for managing more complex campaigns is to lean on advertising networks to shoulder the administrative load for buying, placing, and tracking ads across relevant sites. They also do the work of finding clusters of sites in particular verticals that offer the content and context the advertiser is seeking with which to engage with her audience.

While this is certainly a step in the right direction, we believe that as online advertising becomes more standards-based and a small number of ad serving platforms establish dominance, the need for ad networks as they currently exist will diminish. Why be limited by a network to a choice of a few hundred sites (if that) across the entire Web, when there are potentially thousands of highly relevant and potentially productive sites on which to advertise?

In the place of today’s ad networks will be more or less open exchanges that allow publishers and advertisers to buy and sell online advertising inventory in a much more efficient and transparent way than what is currently possible today. There is too much opacity and inefficiency in the online ad market that is in so many areas technologically sophisticated and performance oriented for this outcome to not be realized. This trend is starting to accelerate as evidenced by the emergence and subsequent acquisition of online ad exchanges (see Doubleclick, RightMedia, AdECN, etc.).

What’s inhibiting the emergence of the exchange model is the lack of metrics, tools, and capabilities that both publishers and advertisers need to value and manage spend through these marketplaces. Metrics are required to value advertising inventory on an advertiser-by-advertiser basis, the tools need to be in place to track and monitor fluctuations in value and available inventory over time, and organizational capabilities need to be developed to manage the information, analysis, and transactions that make such a system work.

While not solely focused on the exchange model of online advertising buying, we’re building Reach Machines out of the belief that flexibility, transparency, openness, and standards are good for the online advertising industry. While ad networks represent progress (in some cases), marketers will demand more and more online advertising solutions that help them find online advertising opportunities wherever they exist on the Web and enable marketers to pursue them. Ad exchanges combined with open ad serving platforms and next generation planning and buying tools will enable online marketers and agencies to do just that.