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Three's a Crowd

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One of the most interesting things about going to interactive conferences, or simply interacting with multiple clients, is getting a bird's eye view of our business and gaining a sense of perspective. In other words, you get to see how other people handle their businesses. The question, "is it just me, or do other people have the same problems I do?" gets answered. In the case of handling third-party served ad campaigns, the answer is "yes, everyone is having the same problems."


This column addresses some of the issues inherent for publishers who must deal with campaigns that are served from a third party. In this day and age, everyone accepts this type of business. I'll address this subject from a fairly top-line basis. So if you're an executive who doesn't understand third party ad serving, or thinks that it can easily be solved, or feels you're not getting the full scoop from your own operations group -- read on. If nothing else, you'll get a sense of perspective.


An increasing impact


This is not a new problem, ladies and gentleman. Media operations knows it all too well, and it has been around for quite a few years. The scary part about third party ad serving is that it is increasing rapidly and absorbing a significant percentage of inventory and revenue. This creates uncertainty in revenue recognition and a tremendous amount of manual labor on the part of the media operations group as well as finance departments.


Imagine that at the end of the month reporting revenue numbers and having to apply the caveat that they are not really complete and you won't know the real numbers for another couple of weeks. This is a problem that many, many publishers are currently grappling with. 


This is going to get worse before it gets better because, from the advertiser and agency side of the coin, third party ad serving has a huge benefit: it consolidates both distribution and reporting so they can reach scores of publishers using a single ad serving application. Even I have to admit that it makes sense -- it just creates complication we all have to resolve.


The nature of the beast


For publishers that are media based and rely on CPM campaigns to drive their business revenue, the complication falls into two basic categories. First, you have campaigns that are delivered by your ad server and for which you are paid based on your delivery numbers. Second, you have campaigns that are redirected and served by a third party and for which you are paid based on their numbers.


Believe me, the numbers never match.


A typical contract with a third party stipulates that if there is less than a 10 percent discrepancy in the delivery numbers, the publishers numbers are the basis for payment. But often the discrepancy is larger -- and thus begins the process of reconciliation.


Whose numbers are right, what revenue was actually earned, and how much do I recognize that as a publisher?


Basically, how does the third party campaign work? Instead of scheduling a graphic image in the publisher's ad server, the trafficker schedules a third party ad tag.


Here's what happens when the reader (consumer) of your publication types in your URL: They get your content page, which includes your ad tag. The ad tag on that page requests a campaign from your ad server. The ad server gets the third party ad tag, which "calls" for the ad image from the third party server and delivers it to your content page.


I always like to think of the analogy of runners in a relay race. They pass the baton (the ad tag) from runner to runner. The only risk is that the baton gets dropped. Here are some of the reasons that third party numbers don't jibe with publishers



  • "Breakage" in the handoff from publisher tag to third party tag (The baton gets dropped)

  • " Differences in counting ad impressions. What is an impression? Is it when the publisher simply "asks" for the ad image from the third party or when it is fully displayed?

  • " Differences in the method of counting unique viewers or in applying frequency caps to campaigns

  • " Third party targeting criteria that are never shared with the publisher and may significantly increase the discrepancy of counted impressions, such as screening IP addresses.

  • " Spiders and bots, programs that crawl the web looking for content and links, can artificially generate ad impressions.

"Do ya feel lucky? Well, do ya, punk?"


Side note to those uninitiated execs who are tempted to say "That's it, we're not going to accept third party advertising anymore - they can go on our numbers!"


Okay, now imagine turning away $100,000s in revenue per year, because that's the business you're going to lose. So face it, third party advertising is here to stay.


What are the solutions?


Today, most publishers handle third party served campaigns in one of two ways.


1) Campaigns are set aside for revenue recognition in following month. By that time, discrepancies are resolved and numbers agreed upon.


2) Campaigns are recognized immediately based on the publisher's numbers and reconciled in the following month.


Both are manual processes. Neither method will be satisfactory as the number of these campaigns increases.


Hope is on the horizon


There are indications that several parties are starting to take this problem seriously. This includes companies that supply contract management solutions, billing/invoicing applications, the IAB and perhaps even agencies and clients:



  • The IAB "Measurement Task Force" is standardizing the definition of a delivered ad impression, and this will help reduce discrepancies. (It's amazing that we as an industry are just getting to this. "we" meaning all of us)

  • " It has become standard for third party ad servers to supply log-ins for clients and publishers to view "their" impression counts on a real time basis. That's okay, although in many cases this simply let's you see how far off you are in your impression counts -- on a real time basis.

  • " Some contract management applications are actively pursuing the ability to log on and download third party results automatically. Imagine being able to press a button and consolidate all third party results into a single spreadsheet. We can only hope that agencies and advertiser will actually let them -- they should!

The best of all possible worlds


I accept the fact that discrepancies will always exist. Just let me view them quickly, evaluate them, resolve them, and report third party revenue at the same time I report everything else.


What I'd like to do is access my "Third Party Central" application and configure it for all the third party advertisers I work with. I'll upload the campaign information including start/end date, impressions and CPM and include the URL, ID and password that will allow me to automate log on and access the actual results from the third party.


At the end of the month, I'll press an "import" button and download everything. The UI will show me booked impressions, my ad server's impressions alongside the third party's. It will show me the percent discrepancy and sort the campaigns by acceptable and unacceptable margins.


Now I have the information I need without doing hours of research. I can easily spot the campaigns that are out of compliance in terms of discrepancies. I can compile a history -- giving me the routine ability to accept third party campaigns or put others on a watch list because of unacceptable discrepancies.


Not too much to ask, is it?


Doug Wintz began his interactive career with Prodigy in 1988. During that time, he pioneered the sales and development of online applications for automotive clients Toyota, Ford and Autobytel, brokerage firm DLJ Direct and grocers Dominick's and D'Agostino. He led the development of one of the first online ad networks for Softbank, managed sales/operations for gamesite Uproar and recently served as VP of Digital Media Solutions for Lycos. Doug is currently founder and principle of DMW MediaWorks, a consultancy in interactive media and operations, with long-term clients that include the market leaders in online health, broadcast television, behavioral targeting and custom publishing.

Brazil is an optimistic and passionate country


This sounds like a stereotype, but it's true of the national mindset -- also in countries like Mexico and Colombia -- and especially in contrast to Argentina, which looks more to Europe in socio-cultural matters. This is a real advantage for brands. The emotional component is more important and more effective in branding in Brazil, and this perfectly suits experiential marketing.


Brazilians tend to trust brands and each other


The recent economic boom has made Brazilians even more respectful of successful brands -- international and regional. At the same time, owing in part to tradition, they respect word-of-mouth marketing and are eager to take friends' advice on brands or other Brazilians' via social media. Brazil is one of the most Facebook-friendly countries in the world. And there's another crucial piece: Brazilians aren't as concerned with security and privacy issues as people in the U.S. or Europe. If they like or don't like something, they'll tell everyone, and this is unique to the whole region in general.

The value of a shared experience


Experiential marketing is predicated on more than the brand offering an experience -- the audience has to be willing to participate. This is why social/cultural events are prime opportunities for marketers. The elements of performance and the shared experience are already there. Often the experiential element is the spectator's opportunity to become an "actor," so to speak.


For example, Coca-Cola has used crowdsourcing to create its World Cup anthem, with fans submitting their own videos to audition for a spot in the final, official video. Crowdsourcing is a perfect example of the internet's ability to reach wide and aggregate eyeballs. The Coke promotion is available to fans the world over -- 3.2 billion are expected to watch some part of the World Cup -- and it encourages every fan to feel a part of the event, thanks to Coke's well known role as an official World Cup sponsor.


And while crowdsourcing is a great way to tap into passion around civic events, it's not limited to that. Even the most staid brand can leverage its own internet presence to encourage "shopper" involvement to crowdsource product suggestions via Facebook groups, polls to help choose product names or logos, etc. So as you read about experiential marketing in Brazil, don't assume the tactic won't apply to your brand. People are people after all.


Both the World Cup and the Olympics have a worldwide audience, and experts are suggesting that brands (including consumer products and sports media brands) will make heavy use of real-time digital events, such as chats with soccer players who are watching the same games as fans -- for example, Heineken's effective #sharethesofa Twitter promotion.


In fact, this tactic can be very effective around non-entertainment events. A brand that has its own marketers tweet consistently and smartly from a major trade show can show its own category importance and expertise. This results in helping potential customers feel tied to an event they were unable to attend.


Yes, experiential marketing lends itself to shared experiences, and the internet only amplifies this. But in Brazil, as in so many developing countries, there are barriers.


Obstacles to overcome


For starters, there are vast swaths of the country with a poor digital connection to the major cities and making them far from homogeneous in affluence and cultural features. This requires feet-on-the-ground expertise for brands that want to market in Brazil and Latin America in general -- even those that want to use Brazil as a platform for global messaging.


And while the creative end of marketing in Brazil has developed quickly, the executional piece often suffers from a lack of qualified vendors in production, printing, and management. Brazilian consumers are starting to ask for sophistication and consistency from their brands, both global and local.

So what are the best practices for marketers to consider?


Be nimble


Experiential marketing can't always be planned months or years in advance. Sometimes it has to be in real-time. Coca-Cola and adidas are two examples of companies with teams of marketers who monitor topics in the news, social media, and through Google search to look for timely, effective tie-ins to the World Cup.


Be prepared


There is data that suggests that a strong majority of searches done by fans watching the World Cup will be on mobile devices, which is a big change from four years ago. A recent MarketingWeek article noted that Budweiser's content development team is prepared to leverage search data quickly with content that might be sparked by the World Cup, but extend into other entertainment realms. This means it helps to have content and structures in place ahead of time for immediate distribution.


Same with Listerine, whose World Cup execution was termed a "juggernaut" by MediaPost's MarketingDaily. "We need to reach the right audience with messaging relevant to the moment and the match," said a Listerine spokesman. "By adjusting our paid media behind the social content that performs the best, we will be able to maximize our advertising dollars to deliver the strongest consumer engagement opportunities for our brand."


Be alert


Political and economic events over the past several years put big-budget, government-supported events like the World Cup and the Olympics, in a sensitive position. High-profile protests are a constant concern for marketers. An adidas marketer has noted that even well-intentioned marketing pieces can come across as ill-timed or insincere against a background of sudden controversial events.


Marina Sanchez is director of business development for Latin America at SGK.


On Twitter? Follow iMedia Connection at @iMediaTweet


"Digitally generated Brazilian national flag" image via Shutterstock.



 

  Doug Wintz is Founder and Principal of DMW MediaWorks, a consultancy specializing in digital ad operations and technology.  Since 2004, DMW MediaWorks has helped emerging companies set up their ad operations departments and...

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