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Interview with Dave Morgan

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Yesterday, TACODA Systems, Inc. announced the launch of AudienceMatch Network (AMN), an audience-centric ad network that enables advertisers to use behavioral targeting with demographic data to reach defined audience segments. AMN allows text-based, pay-per-click ad units sold in an open bidding auction with advertisers paying for leads on a per-click basis instead of buying impressions. AMN's audience targeting aspects aims for high conversions due to ad relevance. 


Ads will be served in AMN's proprietary "Offer Inbox" units on the pages of affiliate sites. During TACODA's two-month launch phase, the network will operate with 60 sites and 100 advertisers, ramping up to more than 1000 sites and 1000 advertisers by the end of the period. The launch phase gives TACODA time to optimize the technology and to let site administrators get a feel for AMN before it scales up.


AMN collects information maintained by each site in the network to cluster online consumers into audience segments with common interests such as "sports fans" or "business travelers". After the ad or ads have been served, the data will be disbursed back to the sites. TACODA does not provide any personal information to advertisers. All sites in AMN are required to have higher than industry-standard privacy policies and practices. AMN, which only uses cookies, does not download an adware application onto users' computers.


TACODA CEO Dave Morgan chatted with us about AMN.


iMedia: When an advertiser makes the highest bid for an AMN ad-unit, how long has the advertiser acquired the unit -- an hour, day, week, month, or only until somebody else bids higher? If the time period is flexible, then how does a bidder calculate the bid?
 
Morgan: The bids are set for either a time period or total amount. The position is held until there is a higher bid. The auction occurs hourly.


iMedia: Are the auctions transparent?  Meaning, if I'm Champion brand sweatshirts, will I see that it's my competitor that just jumped a higher bid in a particular auction, or will I only know that somebody did?


Morgan: Advertisers will only know that they have been outbid.
 
iMedia: Is the new thing about AMN  that TACODA is now going direct-to-advertisers rather than just to Web publishers? Before the launch of AMN, TACODA's technology helped Web publishers to serve their own ads in a more targeted -- and therefore more effective way -- and in order to capitalize on that technology advertisers had to advertise with TACODA clients. Now, with AMN, advertisers can bypass that relationship and go direct to consumers by bidding, but only with text-based, opt-outable ads in a special Offer Inbox? 
 
Morgan: Currently, TACODA offers Audience Management Services to publishers. AMS helps them improve the return on the inventory that they sell to brand advertisers by adding behavioral and/or demographic targeting capabilities. Most of these publishers still offer a certain amount of their inventory (what is unsold by their direct sales team) to third parties such as ad brokers like Advertising.com and contextual networks like Google. The AudienceMatch Network is a text link network like Google that targets ads by behavior rather than page context. This complements their direct sales efforts, since it helps them maximize the revenue from their link inventory, and it complements their contextual efforts, since it helps them target on many of the pages that the contextual networks can not effectively target ads to (home pages, sections fronts, generalized news pages, et cetera.).


iMedia: Does TACODA have any current plans to extend the reach of AMN to serve up graphical or rich media ads? Either in a specific box or range-of-site (ROS)? 


Morgan: TACODA does not intend to extend the reach of AMN to include graphical or rich media ads. We believe that it would conflict with the sales channels of our publishers partners. Instead, TACODA will license its AudienceMatch technology to publishers and publisher networks so that they can do it themselves.
 
iMedia: Given the heightened scrutiny of all cookies based on the 2929 House Bill, and also given your lobbying involvement with this, why did TACODA choose to launch AMN now? 


Morgan: We launched the network now because the market is ready. We have taken extraordinary steps to avoid consumer privacy problems, and are working very hard to insuring that our service is not only privacy-friendly, but actually ads value to consumers in the process. We deliver ads within a box labeled "Offer Inbox." Consumers that click on the link are told how AMN works and given the immediate ability to opt-out of receiving the behaviorally-filtered ads. As to 2929, we can't run our business based upon what Congress might do or might not do. If we are up front with consumers and publishers and advertisers, we respect their data and privacy, and we treat them fairly, we believe that we will be all right.
 
Additional Resources:


Behavioral Targeting 101



 

How would you solve our problems?


Whether you're talking about a redesign to an existing website or you're launching an entirely new product, you're always going to be working to solve existing business problems. Unfortunately, a lot of clients don't share these problems with their designers, which means that work suffers, solutions remain out of their grasp, and costs can easily go over budget.


"Clients should come to the table with a list of problems their business faces on a high level and look to the expertise of the agency to help suggest solutions that solve those problems," says Nick Finck, director of user experience at Blue Flavor. "A website agency will operate much more effectively when they are asked to solve problems around an online strategy than they will if they are told what solutions they should be including in their response to an RFP."


Who's doing the technical work?


Here's a simple reality check: Just because you hired XYZ Design Firm doesn't mean that XYZ will be doing all the development on your website. In fact, a lot of designers often outsource their development work to a regular pool of freelancers, according to Scott Paley, co-founder of Abstract Edge, who says that outsourcing isn't a bad thing, per se. But Paley cautions that clients need to understand the nature of that working relationship.


"It's key for a client or agency to ask their web design firm who will be managing the technical aspects of the project," Paley says. "Is it somebody on staff? Is that person very technical him/herself or is he/she relying heavily on the sub-contractor? If there is a sub-contractor, are they in the same or similar time zone? Or, will all of the work be done during overnight hours with nobody around to fix anything during regular business hours? The client or agency should be looking for answers that provide comfort that the web design firm has somebody on staff who is highly technical and will be managing the project, and will also be in direct contact with the client or agency."


According to Paley, the best thing clients can do when they identify the technical person in charge of building their website -- whether that person is a freelancer or in-house -- is to interview that person directly. After all, you're going to be hearing a lot from them over the course of the project.

What about content?


Content should come before design, but it doesn't always happen that way.


"Many brand clients want their design firms to just go ahead and design the web pages," Paley explains. "'We'll fill in the content later to fit whatever you design.' This is a mistake and puts the cart before the horse. Websites are not primarily about how beautiful they are or how well they express branding elements -- they are about effectively communicating content. Design is about figuring out the optimal way to do just that, while also promoting the brand. So, without having a significant sampling of the content that will live on the site, the designer is incredibly handicapped. It is very important to focus on content development as a first step toward a new website design."


What about the users?


At the end of the day, two distinct groups are going to use the website: you and your customers. While you have a good chance of teasing out what you need from your website, getting a handle on how the user will react to the site is often a little more complicated.


Clients that understand the importance of user experience always get more out of the web designers, says Tim Irvine, creative director at Acquity Group.


"One of the best questions I've ever read in an RFP was, 'How have you used UCD (user-centered design) to create delightful experiences?'" Irvine says. "You've got to love when an RFP uses the word 'delightful,' particularly in the context of demanding a user-centered solution. This question demonstrates a sophisticated client who understands the surprise and delight associated with a big idea that grows out of customer insight."


But you don't have to be that sophisticated to make sure that your web design firm is thinking about your customers every step of the way. According to Irvine, it's a good idea to simply ask a lot of questions about user experience.
 
"Essentially you want to get a sense for their process and commitment to user-centered design principles," Irvine explains. "At a very basic level your agency should be presenting an iterative process that involves users at multiple checkpoints, including but not limited to, usability testing. Ideally you'll hear about personas, card-sorting exercises, and primary research aimed at better understanding your customers."

Who's in charge?


As with any project, building a website is going to require a project manager who has final say. But websites offer a particular challenge because they are often built by two teams: a front-end design team and a back-end team of developers.


While there's no hard-and-fast rule for determining a pecking order, it is important that there be a clear driver, according to Amanda Lee Neville, a partner at Thinkso Creative.


"Decide on who is driving the project and who gets final say when something comes up for debate," Neville says. "Is the back-end team meant to support the efforts of the design team? Or will technical considerations trump design decisions? With good planning and a collaborative process, it won't be a battle between visual design and technology, but it's good for everyone to be clear on how these things will be decided when a question comes up."


If you're hiring an agency to build the site, you'll want to make sure that it has a mechanism for establishing that pecking order between teams. But if you're managing the project in-house, it'll be up to you. Either way, Neville recommends that you gather everyone at the same table as early in the process as possible.


What if we fire you?


It's a tough question to broach, especially at the outset of a project, but it's always a good idea for a client to ask what will happen if they fire their web design firm, says Peter C. VanRysdam, CMO of 352 Media Group.


"That's obviously something you don't want to consider at the beginning of a project, but it is important," VanRysdam says. "Many developers will try to retain the ownership of the work they create, only giving the client a license to use it. Others may use proprietary code or write things in non-traditional ways to try and help their job security. Look for a developer that works within industry standards, properly comments their code, and will provide documentation after the fact."

Should we use free code?


Code used to be a proprietary thing, and to a large degree it still is. But increasingly, a lot of websites are running on open-source platforms like Drupal, Plone, and Joomla, to name just a few. The platforms are free (although they often require some customization), and there can be a tremendous long-term cost-savings. But there are pros and cons, and unfortunately there is no right answer here.


On the plus side, open source gives your developers (if you have them in-house) the ability to alter the source code and make changes as the need arises. Open source also gives you a wider -- though not always more capable -- base of support because hundreds (sometimes thousands) of developers work on contributing tiny applications to the larger system. Those updates are free and often very good. Finally, open source tends to limit your reliance on a particular vendor or computer language, if you choose a widely used open-source platform that is compatible with other platforms.


But there are negatives. For starters, you won't have the same kind of support with an open-source platform. And if something goes wrong, the real culprit might just be an anonymous developer, so you won't have nearly the same accountability as you do with a proprietary product that usually comes with 24/7 tech support. Along similar lines, the quality of open-source developers can vary significantly. However, most communities have a review and rating section that should help you sort out lesser work.


So should you use open source? All things being equal, Paley says yes. "This isn't just a good idea. This is a great idea."


But Paley isn't alone. According to Chris Chodnicki, CTO at R2integrated, virtually every major world organization uses some form of open source code to some degree.


That said, open source isn't a panacea, according to Dan Solomon, CEO of Virilion.


"The biggest hang-up most people cannot seem to get around the 'free' part," Solomon explains. "We are often taught that nothing is free. That saying is still true for open source. While open-source software is usually free, you still need to hire a web firm to build, host, and manage it the same as any other platform. [Open source] is generally free in purchase cost, costs the same or more in maintenance, and is often much more customizable, as you have full access to the code, than proprietary closed source software. Open-source software is great, but it is not the answer to everything; nothing is. A brand client should look beyond the hype and treat it the same as all of your other choices."


Michael Estrin is a freelance writer.


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Roger has worked as the Web Editor for Emap/USA Outdoor Group and was responsible for editing articles for several publications. Prior to Emap/USA, Roger worked as a Development Executive for television and feature production companies. Roger has...

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