Bots, Cookies, Fraud & The Great Identity Crisis

“It is far better to advertise to people than to highly sophisticated robots.”

- Sun Tzu, The Art of Ad Tech

To say that there is a ton of turmoil in Advertising Land right now would be a major understatement. Viewability continues to be both a major trend and issue as does fraud and non-human traffic. And in case you missed last week’s bombshell news courtesy of Mediacom’s former CEO Jon Mandel, this opening paragraph from Adexchanger sums it up quite nicely:

“Agencies are not transparent about their actions. Agencies recommend media that is off-strategy when it works for their gain. Agencies accrue media earned by advertisers’ spending and resell it to other advertisers. Agencies demand pay-for-play from vendors in order to be recommended, and cross the line in partnership relationships.”

Whoa! Being an advertiser right now is a rough deal, huh? You’re buying fraudulent often times non human traffic as well as likely paying for ads that never even had a chance at being seen. And to top it all off, your agency is ripping you off, buying media that is not in alignment with your goals and based on the statement above, potentially even profiting from your ad spend by selling extra impressions to other advertisers. Well there’s just about no way to spin that scenario in a positive light…Sorry but that’s all pretty bad. Sure, the world isn’t ending but a potentially large portion of your budget is being wasted, completely and totally wasted…there’s no question that stings.

The tides have started to turn however. Typically large, savvy brands that spend a ton of money on advertising didn’t get that way because they enjoy wasting their money. The rise of attribution vendors was a start. In an online media landscape where everything is measureable, the premise that brands could start to tie interactions and exposures to advertising back to actual results was simply too important to ignore. And all of a sudden the tech world took notice and within hours of each other, Google & AOL both acquired attribution vendors. Rakuten & Oracle (via its purchase of Datalogix) also got in the game with their own acquisitions and there will be more on the way.

Attribution is important but only represents one piece of the puzzle. One of the great tricks pulled by Ad Tech vendors, particularly re-targeting platforms, was buying super cheap impressions that were likely never seen. But because they could drop a cookie, they were ultimately awarded some credit for a conversion down the line. Enter viewability…which aims solve for the aforementioned issue – if an ad is never seen can it really be responsible for driving a sale? And then there’s fraud, bot traffic etc…but it’s Wednesday night and I really don’t feel like writing until the early hours of the morning. Long story short, buying advertising is a tough job and it takes a lot of good partners to accomplish it.

This hasn’t been bad news for everyone. All of this turmoil has opened the door to a very large group of well funded companies that realize this opportunity and want to provide advertisers an another place spend their money. One of the leaders is Facebook, who has recently coined the slogan “People Based Marketing”. Their concept is simple in philosophy; cookies don’t buy things, people do.

And with the majority of purchases still happening offline, if you don’t know who you are reaching, how can you ever truly evaluate the effectiveness of your media spend? Can’t! Facebook has leveraged its ability to identify actual people to create an entirely new way of targeting; optimizing & reporting on ad spend. A cookie will never, I repeat never, represent an actual person. The 3^rd party cookie is a probabilistic identifier that is tied to a browser, not an actual human being. Facebook is certainly not alone in this movement, there’s a slight chance you may recognize some of the below companies, who also just so happen to sell advertising solutions:

• Walmart
• Target
• Amazon
• Alibaba
• eBay
• Best Buy
• Sears
• Priceline
• Expedia
• Apple

The list goes on…and it’s only going to get larger. As people based marketing starts to permeate our industry, the above brands are sitting on some of the most valuable data in existence, identity & transactions. The understanding that you are an actual human being with a pulse and a credit card! 

But this isn’t good for everyone…at the end of the day there is a finite pool of digital advertising dollars and it should be SUPER obvious that accountability is being ratcheted up across the board. As marketers & agencies are held accountable for their ad spend there has to be a migration of dollars spent to platforms that can correlate ad spend to sales. With identity data being the key driver in terms of making that connection.

There’s no question publishers have also taken quite a beating as ad dollars have moved from print to digital. But unfortunately, there is more pain coming…Publishers have always dreamed of also being both Publisher & Platform. It’s been regurgitated more times than I care to count. Need more proof just look here, Many publishers have a bad case of platform envy, compliments of Digiday:

“These days, publishers have platform envy. Many, from BuzzFeed to Gawker to Vox to Forbes, are trumpeting their tech platforms as equal partners to their content prowess. A modern media company, it stands to reason, is part platform and part publisher, or “platisher,” as recently described by Jonathan Glick, CEO of Sulia, a social networking site.”

The real problem with this dream is that  “true” platforms solve for Identity and publishers as a platform do not. “Most” publishers still rely on anonymous identifiers (aka cookies) to determine who their audience is. Well this is kind of an issue if you subscribe to Facebook’s point of view that cookie’s don’t walk into stores and buy things. Without identity you lose out on the ability to properly attribute the value of your media.  And not being able to value your core assets as a publisher seems like kind of a big deal, in a really bad way. Because of the rise of identity based platforms, there are increasingly new ways to advertise to known people and then close the attribution gap by tying ad exposures back to sales. So in a world of logged in vs. not logged in, logged in will win because logged in can provide the “proof”. Just look at the correlation between total email addresses on file & market cap, that should be all data you need.  Imagine Facebook was just a content creation and distribution platform, no form of identity, would they have any value at all?

The funny thing is, this is exactly counter to way publishers marketed and sold print. Print was so powerful because advertisers were buying not only the trust and equity the publisher had built with the subscriber but a known subscriber base. You have to actually give your name, address and hard earned cash to pay for a print subscription. The same content can be consumed online by an anonymous web browser, only identified as Cookie ID 123456, there’s no value there…who is that? You don’t know their name, address, credit card number etc…they are simply a Cookie ID tied to a browser. The digital equivalent of identifying print subscribers would be to capture an email address. As we all know the email address is akin to a digital social security number, it’s the one piece of information that ties all of our online accounts together. The best part, just like its offline counterparts it’s not proprietary. No single platform owns email, which makes it particularly attractive as an online ID. Why? Because if you have no means to identify your own audience, eventually, if you want to remain competitive, you will need to find a solution that helps provide some form of audience identity. And I’m quite sure there will be platforms such as Facebook, Google and others ready, willing and able to fill in the gaps but like a shotgun wedding in Vegas, you may one day regret the decision to get hitched.

The other thing I’m terrified about if I’m a publishing executive is the power and influence a major retailer can wield. Imagine this…

You’re selling into a major CPG Brand – responding to an RFP that is looking to increase unit sales of a brand new product. As a publisher you create a super compelling package with custom integrations and value adds that are going to really increase brand awareness and product sales.

On the other side of the fence you are now competing with a major retailer, who not only is adept at creating compelling content but can leverage data in ways a publisher will never be able to, in addition to reporting on actual sales metrics…and to top it all off premium shelf space is included as part of the RFP response, across their 2,000 brick and mortar retail stores.

That’s tough…even for the best sales person. Just look at the influence Apple has within the App store to drive massive install rates by simply featuring a specific app. In a crowded and competitive marketplace, prime real estate in the digital or real world that can influence and drive real sales, is an incredibly valuable asset.

There will most certainly always be a need to place advertising around specific content. Content that is quality, aspirational, even inspirational…but the fact remains that the majority of the largest advertisers in the world are mass appeal, mass reach brands. Brands that need to drive sales and lots of them to keep the lights on. Advertising vehicles that can report on actual products sold will be in a far superior position to those that cannot. End of story.

The Email Address & The Cookie: A Darwinian Tale of Survival

“It is not the strongest that survives; but the species that survives is the one that is able to adapt to and to adjust best to the changing environment in which it finds itself.” - Leon C. Megginson

As the end of the year approaches, I felt it was the perfect time to reflect on 2014 as well as the year ahead.  The foundation laid this past year will reverberate within the Ad & Marketing Tech ecosystems for many years to come. 2014 will be remembered as the year the 3^rd party cookie was officially labeled “Critically Endangered”. 1^st party cookies are alive and well but their 3^rd party relatives are unfortunately facing extinction, their demise is now only a matter of time. A sad occasion for most in the Ad Tech space, as much of the technology built and deployed today is reliant on these small bits of code. But environmental factors have a notorious history in determining the survival of all things, cookies included.

Compare today’s environment with the environment of 10 years ago and you will start to see why the 3^rd party cookie is going the way of the dodo bird. Life back then was far simpler, MTV still played music videos and Internet users typically had a single device and more than likely one browser. Making the 3^rd party cookie a perfect mechanism for tracking browsing behavior and ad targeting. Fast-forward to today and we not only use multiple devices but multiple browsers within each device. The cookie was just not designed to operate in such a world; it was designed with the assumption that there is a 1:1 relationship with a person and a browser. This is clearly no longer true and that reality has been moving the 3^rd party cookie up the Endangered List for the past 2 years. And it certainly doesn’t help that along with all of these challenges, browser makers like Apple & Mozilla have by default turned off support for this already ailing tracking code. The 3^rd party cookie was unable to adapt and so the saying goes, you either adapt or die. Simple math…

Looking back at 2014, one company can be singled out as hammering the final nail in the 3^rd party cookie’s coffin. That company is Facebook and they delivered the final blow with their release of Atlas. What is Atlas? This is what Facebook has to say: “Atlas is the people-based way to serve and measure campaigns as buyers move between devices or into the offline world.” A shockingly simple concept…target actual people not pixels. When you target a known audience that is people based, amazing things can happen and the rewards will be enormous for the companies that can facilitate this type of buying. Why? Because targeting people not only allows advertisers the ability to reach their audience across channels and devices but people based marking can close the online/offline attribution gap. Let that sink in for a moment…

As more advertising & marketing dollars make their way online, CMO’s are being asked to deliver more transparency into campaign results and return on investment. Will there always be a place for “soft” metrics? Yes of course! Every brand needs to fill the top of the funnel to build awareness and intent but at the end of the day if you’re building awareness that doesn’t translate into actual sales, profit, revenue etc…unfortunately you may end up joining the dodo and the 3^rd party cookie. Now with the ability to start tying ad exposure data to revenue, the pressure is going to be ratcheted up and that pressure will start from the CMO and will filter down to every vendor, agency & media partner.

So if you are a media company that has hitched your wagon to the 3^rd party cookie as a means to identify and sell your audience to advertisers, how can you ensure that as the cookie goes away you’re not following it? The answer is simple, the email address. The often overlooked, unsexy, workhorse of the web is the key if you want to adapt to the current environment. No other technology, channel, communications protocol etc…that I can think of has been declared extinct more times than the email address. Yet it’s not. Not only did email never die, email is now more important than it ever was. Mainly because the email address has always been the unique identifier of the web, which in turn has helped make it remarkably adaptable. The truly ironic part of this story is the fact that Facebook has primarily been responsible for email’s resurrection. The social networking site once heralded as an “email killer” has single handedly brought email (and the email address) back to the forefront of Ad Tech. Facebook did this first via their Custom Audience solution (which I wrote about here: To Facebook: Thanks For Everything, Email) and now with their release of Atlas by Facebook.

The impact of Atlas on email’s role within Ad & Marketing Tech cannot be understated and absolutely must not be underestimated. Why? There are a few reasons but it boils down to two:

1.     People Based Marketing – email has always been a people based digital marketing channel. People subscribe to and open emails, not robots.  And because email is people based, brands can tie tremendous amounts of data (transactional & behavioral) to an individual profile that can be used for segmentation and targeting on a 1:1 basis. Just look at the scale and reach of major retailers in the US, from an email database standpoint and that should help provide some context as to why email is so important. Targeting known & addressable audiences AKA people, provides a ROI that is unmatched by any other marketing channel in existence.

2.     Attribution - This really should be quite clear. When you advertise to people not pixels, you are then able to significantly narrow the attribution gap. Not only the online attribution gap, which is limited because of the use of 3^rd party cookies but the online to offline attribution gap. And how do you tackle the online/offline attribution challenge? Well, real people buy products…the challenge has been how do you match those real people buying real products back to online advertising? The answer is the email address of course. Which is exactly how Facebook via Atlas as well as with their DataLogix partnership, is able to attribute offline sales back to online campaigns. For the sake of clarity, I will re-state what makes this all possible, the email address.

This quote is directly from the Atlas site and should provide a glimpse, from the advertiser perspective, as to where Facebook is headed:

“Identity data gives advertisers 20/20 vision for ad serving or tracking. Atlas offers clarity into the whole picture of ad campaigns for on and offline conversions.”

-       Braden Hoeppner, CMO at Coastal Contacts

And here I am, thanking Facebook again for all their hard work and effort in educating the marketplace on the benefits of marketing to human beings. For far too long, many of us at LiveIntent have been standing on a soapbox, shouting at the top of our lungs that email subscribers are your companies best and most valuable asset. Our message hasn’t been ignored but for media companies who for a very long time had no reliable way to monetize & ad serve into email, the channel has more often than not ended up on the backburner vs. being the focal point of an ad product strategy. But the tides are about to turn and all of us at LiveIntent will no longer need to evangelize the benefits of people based marketing, the marketplace will do that for us…

As with any enormous market opportunity, there is always more than one competitor. In the case of people based marketing, Facebook is certainly not the only player in the space. The value of logged-in user data at scale has opened the door for new media players to evolve, which happen to be some of the largest and most well funded companies in existence:

• Amazon
• Walmart
• eBay
• Alibaba
• Apple

Amazon is on pace to do $1B in advertising revenue this year. I repeat, Amazon is on pace to do $1B in advertising revenue this year. Making them the 7^th largest seller of digital ads in the world. And Amazon “is stepping gingerly into digital advertising”. If this does not serve as a wake up call to anyone selling digital ads, then nothing will. Every one of the above companies can measure ad effectiveness against actual transactions; they are your new competitors and they are going after the same pool of ad dollars as everyone else…

Now the question becomes…can you adapt?

STACKED: The New Metric for CRM Success

In my last installment, I presented the case for why the email address has become the most powerful targeting mechanism in existence. In this, my final post, I will address how this changes everything we knew about CRM in a digital world.

Do you see any similarities between the images below? One common theme, perhaps?

If you answered that all of the sites below require an email address to register, you are correct. CRM and Email Marketing are no longer about sending outbound email.

They’re about the email address.

It’s not necessary to actually send mail to get your message in front of a customer, anymore. Technology has finally enabled the CRM marketer to find their customers or subscribers anywhere, across any device or channel. Whereas in the past, a brand’s media team or agency did all the media buying, now paid, biddable media is directly within the control of the Email/CRM marketer.

But while exciting, these new capabilities come without their own set of challenges. It takes a major shift in mindset. Try telling someone in email or CRM that they can now bid on their subscribers via paid media channels. The absolute first thing they’ll say is that they do not “do media buying”. They’ll tell you other teams handle it.

What organizations must realize is that: If you are speaking to your own customers – whether it’s in display, email or social –  that’s ALL CRM.

After all, messaging and engaging with your known universe of customers is the very core of CRM, isn’t it? Why should the channel in which you engage with them matter, so long as it’s effective?

The email marketer of the future will forgo email marketing specific metrics and start to focus on delivering ROI on a per customer basis. Brands that adopt new platforms and technologies communicating with customers across every digital channel will dramatically increase the reach and frequency of messaging against their customer base. The 20% avg. open rate will give way to the 65% customer engagement rate, as the CRM database finds its home in the middle of a multi-channel marketing solution.

If you do not already have this capability, there are many technology solutions, including LiveIntent, that can help you manage your budgets, spend and optimization so that you can reach your customers in any media channel.

But regardless of how, the time has come to start preparing ourselves for the “Internet of Things”, where your car, your home, your TV, your wristwatch – EVERYTHING – will be connected and dependent on an email address to login or register.

The future of CRM is filled with limitless possibilities, all made possible by less-than-sexy, often mistaken for dead, email address: The clear winner of the Internet.

You can of course reach me via email at: skrauss@liveintent.com or tweet me any feedback at @scottkrauss!

Originally published on LiveIntent.com

STACKED: The Age of the Customer

“The Age of the Customer.”

Well that’s what Forrester calls it anyways. Here’s a great excerpt from the reports summary:

“Empowered customers are disrupting every industry; competitive barriers like manufacturing strength, distribution power, and information mastery no longer create competitive advantage. In this age of the customer, the only sustainable competitive advantage is knowledge of and engagement with customers.”

Some more data courtesy of Gartner:

Get the point?

It’s become mission critical to identify and communicate with your customers in order to create and maintain a competitive advantage. Yet it’s becoming harder to actually do so because of the proliferation of devices and media channels where your customers are spending their time. But it’s clear if you can piece this all together, you are poised to create incredible value for your organization.

In my last piece, STACKED: The Race for 1-to-1 Marketing at Scale, I highlighted some of the massive industry shifts taking place right now and laying the foundation for brands to become customer centric in their approach to marketing. This week, I’m going to cover exactly how you can prepare your company for “The Age of the Customer”.

The first step to engaging customers on an individual level based using historical information/knowledge (1st party data) is identification. If you can’t identify your customers, then you sure as heck can’t engage with them in any meaningful way.

Think about all the credit card companies offering you special promotions for that card you already have, or the cable companies constantly bombarding you with ads for new customer rates, even though you’re a long standing customer that pays much more. Why? Because on the web, it’s very, very hard to tell your customers from your non-customers, since most online customer targeting is reliant on an outdated form of identification known as “cookies”.

As LiveIntent President, Dave Hendricks, pointed out in his Click Z article “People Versus Pixels”, cookies are a very poor identification method. They are used to identify a computer not a person, and are limited by browser, which makes speaking to customers vs. prospective customers difficult, if not impossible.

In an increasingly customer centric world, it’s getting harder and harder to identify your customers across their many devices and media channels…scared yet? I wouldn’t blame you if you answered “yes” but…. There’s hope!

 

That’s right. The email address.

The email address, you see, is the key to unlocking all of the challenges being presented by today’s changing digital world. It is the perfect identification layer needed to distinguish customers from prospective customers, buyers from non-buyers, heavy spenders from light spenders. The email address is both knowledge AND identity, and that’s the key.

If you were to sneak a peak into any major retailer’s customer database, 9 times out of 10 the profile key (aka the unique piece of data that ties all information together) will be an email address. That means all of the transactions related to that account are stored against your profiles email address. Think about all the data Amazon.com has stored on your email address. It would be incredibly valuable and from a marketing perspective, almost priceless.

The email address brings with it incredible capacity to on-board unbelievably valuable data, data that can be used to target an individual with a specific promotion or offer based on their profile, and there is no other identification method in existence that can do that.

Sure, a unique customer ID will do the trick on your own properties, but as soon as someone leaves you become reliant on an unreliable cookie to do the work for you. But the email address has stood the test of time. It is the glue that holds the entire Internet together and continues to grow more valuable as the Internet has matured.

Email is like a Blue Chip stock; it’s not sexy or volatile, it just delivers and pays dividends.

The email address is mission critical in the Marketing Stack of tomorrow. Its ability to identify customers across channels and devices, as well as bridge offline data, makes it the centerpiece to a customer centric universe.

The question now becomes, “Are you set up to take advantage of these new capabilities? Do you have the data and the scale (number of emails) to beat your competitors and win the battle for mindshare?”

Technology is making available some truly game changing capabilities but only those who are prepared with the right data will be in a position to win in this new Age of the Customer.

In my next and final installment, I’ll be outlining what CRM programs will look like in the very near future and how marketers can use technology to maximize the value of existing customers.

Originally published on LiveIntent.com

STACKED: The Race for 1-to-1 Marketing at Scale

What an exciting time to be alive! If you are in the marketing/ad tech space, you have front row seats to the greatest shift in communications the world has ever seen. Gone are the days of creating a single message that gets distributed to all of your customers and prospects alike. Technology has now made it possible to identify your customers across their many devices, different media channels, and browsers, with the ability to use customer profile and behavioral data to select the right message. 

Many would call this the “holy grail” of marketing, a true 1-to-1 dialog with your customers based on where they are in their life-cycle. We’re not quite there yet…but we can see it on the horizon, and in the very early innings of this ballgame, the major technology players are all starting to assemble their lineups.

Outside of the incredible rise of programmatic buying and real-time bidding, one of the more interesting trends right now is the merging of Ad and Marketing technology. For a long time, these two have been completely disparate. Ad tech was used to target prospective customers, while marketing tech was used to communicate with existing customers. Simple. Easy. Limitited.

But now, the environment is changing. Industry-changing trends and technology have heralded the convergence of ad and marketing technologies, with the promise of a single technology stack for both prospecting and CRM.

Above all, these three events are the most accountable for this evolution:

The Rise of Mobile:

Look no further than the above chart to see the rapid rise in mobile. 2014 is truly an inflection point, as total mobile users will surpass desktop users. After that, there’s no looking back. We now live in a mobile-first world. But the rise of mobile posses some serious threats for the Ad Tech space, specifically in the area of audience addressability.

In a recent AdMonsters piece, “ID Is Key: Unlocking Mobile Tracking & Cross-Device Measurement, Part I” James Lamerti GM and VP of AdTruth had the following to say:

“Mobile inventory is less valuable than desktop because it’s very difficult to build audience in mobile – we simply have no identification layer,” says James Lamberti GM and VP of AdTruth. “We need the ability to speak to advertisers and confidently say, ‘Here is my mobile inventory, here are my heavy travelers, here are males 18 to 25, here luxury brand buyers, etc.’”

That’s a pretty straightforward look at the problem. CRM data, however, can help unlock the ID layer. The email address, for example, is the perfect identification layer for a few reasons:

• Almost 50% of the world has one. 2014 will see more than 4B global email accounts. That’s 4x the size of Facebook.
• They are unique. Sure, people may have a few different email addresses, but they are unique to an individual.
• They are cross channel. You email is the same on the desktop, phone, tablet, TV, car, house etc…Every major platform (Apple, Facebook, Twitter, Amazon, Pandora) requires an email address for sign-up.
• Email is where your customers are spending their time. Email is the #1 app on mobile and tablet devices, in terms of overall time spent. Marketers and Advertisers of course want to be on any platform where their customers are spending the majority of their time.

Facebook:

We have to give Facebook substantial credit for the convergence of ad and marketing tech. In one fell swoop, Facebook’s launch of Custom Audience successfully combined RTB and CRM. Custom Audience has now given way to other similar solutions from competitors. Twitter has a Tailored Audience product, Google offers CRM data matchingwithin Gmail and I’d fully expect that other major players with a large number of logged in users (Yahoo!, LinkedIn, Amazon, Pandora, Apple) to follow suit in the coming months.

With Custom Audience, Facebook really addressed a major pain point with CRM marketers. Prior to the launch, email was the only arrow in their quiver when it came to communication with their existing customers. In order to reach these customers, especially those that didn’t open regularly, the answer was often: “Send more email!” Not always a bad idea, but with Custom Audience, Facebook unlocked a brand new way of speaking to your own customers: 3rd party media. Now brands can increase their reach and frequency of messaging against highly valuable segments, using 1st party customer data to target based on purchase history or stage within the purchase cycle. This was a major, major win.

The Death of the 3rd Party Cookie:

There’s no doubt the 3rd party cookie is going the way of the dinosaur, as many in our industry are predicting it’s demise within the next 24 months. Browser makers and the rise of mobile have certainly accelerated their demise, but let’s be honest…they were never really any good to begin with. The accuracy of 3rd party cookies has never been good… ever! Maybe 30-40% of the time you hit the right audience, with the remainder being simply wasted. That kind of accuracy was never sustainable. So as the cookie fades to black we’re seeing companies begin to look for alternatives.

Just take a look at the M&A over the last few months:

Salesforce buys ExactTarget

Oracle buys Responsys

Adobe buy Neolane

Experian buys AdTruth (via 41st Parameter acquisition)

Criteo buys Tedemis

AdRoll buys Userfox

Lotame buys AdMobious

IgnitionOne buys Knotice

Each acquisition looking to address the same problem: how to target an addressable audience across their devices? 

The interesting trend you may or may not pick up on is that most of the companies acquired have roots in email. As I mentioned before, this shouldn’t really be much of a surprise given that the email address is as good of an ID as there is, likely the best.

The ability to identify with and target with accuracy is incredibly important. Just look at Facebook’s incredible rise as a mobile advertising player. They are projected to capture an astonishing 22% of all mobile ad dollars in 2014. This is no small feat, and really speaks to the need to provide marketers and advertisers addressability in a mobile-first world.

In a world with no cookies, 1st party log in data is King.

These are the major market trends that are forcing everyone from advertisers and marketers to technology providers to rapidly adapt their product offerings. In part two of this series, I’ll take a look at exactly how the major advertiser and technology companies are building platforms to address the current marketplace and the needs of marketers and advertisers.

Originally published on LiveIntent.com