Online advertising and marketing tech company SteelHouse announced that brands that used their “Real Time Offers” technology saw a 21% increase in click-through rates and quadrupled conversion. SteelHouse’s announcement gets added to a long list of companies that have had recent success using real-time media. “Relying on only standard display and retargeting ads to message our potential customers doesn’t cut it anymore,” stated Caitlin Romig, digital marketing lead at Rosetta Stone. “The market has changed.” With that changing market is a shift to real-time media. SteelHouse’s success is just one example of “real-time” getting “real big.” OpenX received $22.5 million in new funding earlier this month. Rocket Fuel announced a 238% revenue increase for 2012 last week. Nexage also reported big numbers last week after seeing 171% growth from its real-time bidding platform in 2012. The list goes on. Mark Douglas, president CEO of SteelHouse, believes that 2013 will have more companies looking to tap into the real-time market. He stated: “This will be a big trend in 2013 -- marketers finding their gold mine [data] and building campaigns that integrate rich media using their existing content, and launching them into the right sequence of channels at the right time using one channel to reinforce the other.” Essentially, Douglas predicts companies being able to use big data in real-time to press all the right advertising buttons across multiple channels. Of course, that sounds a lot like the predictions from January 2012. But if 2012 was an indicator as to what 2013 holds in store for the real-time marketplace, next year at this time we will be writing about every company announcing big profits from real-time media...again.
Last week, OpenX Software announced a $22.5 million round of funding. New investor Samsung led the round, which brought OpenX’s total venture funding to date to more than $70 million. RTM Daily spoke with OpenX Chief Revenue Officer Jason Fairchild about the funding to see what the company had planned. OpenX Market, OpenX’s RTB exchange, was launched in 2009. Fairchild says: “We saw the power of it immediately. We are firm believers in RTB, and not just how it exists today.” He said that OpenX believed that automated trading would be the future of media, and said, “it really has been the catalyst for our growth in every respect.” Since launching its RTB exchange in 2009, OpenX has been a leader in the real-time media world. Fairchild says: “We were the very first RTB exchange. At that time it was client-side.” So, for a company that has been a leader of the RTB pack for a number of years, it makes sense to want to know what they have planned next. So how does OpenX plan to use that $22.5 million? The answer can be found between the lines of the deal with Samsung, a mobile company with an international platform. Fairchild says: “[We will be] looking at companies in the mobile category that are doing innovative things. [And] accelerating across the board, but specifically accelerating in international.” The partnership with Samsung opens up major opportunities for OpenX’s exchange in the mobile space. “Samsung was the first huge private exchange that inserted an automated trading platform into a major mobile platform,” Fairchild said. “Any time you have an audience that big (Samsung), that will drive ad opportunities.” In focusing on mobile, OpenX has another chance to lead in the real-time media space. The mobile RTB code hasn’t been entirely cracked yet for a variety of reasons, namely the different targeting technologies and the lack of cookies. And while Fairchild says it won’t happen overnight, he believes that mobile targeting will evolve “in a positive way.” Since landing international partnerships with Dentsu-cci in Japan and Orange-France Telecom in Europe in recent years, OpenX has strengthened their international presence, especially in Japan. “It’s great to see a whole economy growing in Japan around RTB,” says Fairchild. He says that Japan is “hungry” for RTB, and OpenX wants to be in the center of that feeding frenzy. “They are seeing the trends in the U.S. and Europe and they are moving quickly.” For the real-time media space in general, Fairchild says that the key question is figuring out how to get RTB more involved with the typical media plan. The key, he says, to getting RTB closer to 30% of the media plan rather than its current 10%, is to reposition RTB to a premium solution rather than just a remnant solution. “Our belief, firmly, is there is no reason that automated [trading] shouldn’t move upstream to be the dominant way that all media is traded,” said Fairchild.
The final panel at last week’s OMMA RTB was a “Grill the Vendors” session on the relationship between video and RTB. The title of the panel asked: Are video and RTB ready for each other? The panelists all believe that video and RTB are ready for each other, but there needs to be a shift in perception before the connection happens the way everyone envisions. Anthony Risicato, GM, VideoHub, believes that the lack of transparency in the RTB space has it aiming in the wrong direction. “If we go down the RTB path we are currently going down, which is mimicking what happened in display and search,” he said, “the only person who benefits is Google.” He went on to say: “But if we want to build out a real, vibrant, RTB-based business that brings in the brand marketer, then we have to focus on bidding for brand awareness, favorability, engagement, and allowing the brand marketer the absolute transparency into what they are getting out of that bid.” Essentially, Risicato was saying that transparecy is key. Advertisers need to know where their ads are being displayed, and he says that there is no reason that shouldn't be happening. Scott Ferber, CEO and co-founder, Videology, believes that RTB needs to “go back to the digital premise.” Ferber was vehement in saying that sales were the bottom line, and that following digital’s premise of creating the “best ultimate direct-response medium” was the way to go. Eric Franchi, co-founder, Undertone, disagreed with Ferber. Franchi said, “I probably fully disagree that we need to make it like display” -- AKA, the mindset of spending X and making Y is all that matters. He said, “I think it’s more complicated and nuanced with video, and it needs to be more like TV. A disagreement on such a fundamental level highlights the troubles of RTB in the online video space." The moderator next asked about the online GRP. Brett Wilson, co-founder and CEO of TubeMogul, said: “Until GRP pricing online takes into account wastage, then it never works for both advertisers and publisher.” The lack of a true standard of measurement -- and one that is easily comparable to television -- is an issue that needs to be solved before this connection can live up to its potential. It seems like video and RTB should be ready for each other, but the technology, measurement standards, and the fundamental ideas at the surface of the relationship need to be worked out first.
Just about everything these days involves some degree of computer-based automation. My coffee machine starts brewing while I am still snoozing. The subway that I ride glides into my stop as a robotic voice announces the station. Even as I compose this on my flight back from the Consumer Electronics Show I realize that we are largely on autopilot, connected to a central computer system that dictates our takeoff, flight path, speed, altitude and landing. And of course, media and advertising are becoming increasingly driven by computer algorithms, statistical optimization, and data-driven marketing equations. In many ways, this technological infusion offers benefits to both buyers and sellers. Speed, efficiency and cost savings can make a big impact on a marketer’s bottom line. And while it is estimated that 30% of all online ads are now bought “programmatically” through automated marketplaces, some predict that the number could go as high as 90% in the coming years. Plug in your target audience, your performance metrics, and your budget and press “go.” But the reality is that programmatic advertising will always be limited to the inventory that is "programmable" -- the standard placements with the standard dimensions on the standard sites. It is understandable that this media is becoming commoditized. But marketers want more, and expect more in this ever fragmented ecosystem such as customized marketing programs that integrate brands in unique ways throughout a site. Native advertising is a good example that incorporates special content from marketers and delivers something new and valuable to consumers. Interactive media and gaming experiences can also deliver brand messages in engaging ways. No two of these out-of-the-box media solutions ever look the same. And what about the issue of “scale”? Some proponents of programmatic advertising criticize native advertising for its inability to reach huge swaths of audience cheaply. To that I reply that scale is not the goal -- impact is the goal. Efficiency should be measured by cost-per-point-of-impact, not by tonnage -- and less overall reach can actually be more efficient if the marketing is intimate and engaging. And relevant, contextual marketing is the stuff that is read, watched, and shared. And if certain elements of more "native’" approaches start to become programmatic, they will cease to be "custom" and will therefore lose a degree of value to both consumers and marketers. So while sometimes it feels like the advertising world is headed for a future connected by a Matrix and filled with Terminator machines, human creativity still plays a vital role in creating emotional connections between brands and consumers. And at least we program the machines. For now.
Canadian consumers use social media for researching products, but still prefer to do their shopping in brick-and-mortar retail venues, according to a PricewaterhouseCooper’s “2013 Global Multi-Channel Retail Survey” for Canada. While 42% of 1,333 Canadians surveyed by PwC say they use social media at least once a day, and another 17% use it at least once a week, only about 7% said they use social media to shop. Globally, the proportion of survey respondents who said they use social media for shopping was 12%, according to PwC. Canadians were also less likely to use social media in general, with 29% saying they never use social media, compared to 24% of the global survey respondents. What’s more, a quarter Canadian respondents said they rarely or never shop online in any form, compared to 17% of all respondents globally. The data on social media shopping habits seems to echo some other recent surveys (of American consumers) which found that social media was the source of only a small proportion of e-commerce during the 2012 holiday season. According to IBM, Facebook was responsible for just 0.68% of traffic referred to leading e-commerce sites this past holiday shopping season. Looking at all e-commerce, the dominant social media players (Facebook, Twitter, LinkedIn, and YouTube) together were responsible for just 0.34% of all online e-commerce referrals. On the positive side, some new studies suggest that social media does affect consumer purchase decisions, even if the purchases aren’t made online as a direct result of using social media. Last week I wrote about a study from the Advertising Research Foundation based on a survey of 2,000 U.S. shoppers, which found that roughly one-third of shoppers said they were either introduced to a brand or product, or changed their opinion about a brand or product during the buying process, because of social media. In addition, 22% of shoppers surveyed by the ARF said that social media was “important in my final purchase decision.”