Transparency Vs. Performance: Marketers Shouldn’t Have To Choose

“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is by Sam Barnett, CEO at Struq. The piece is a response to our recent column, “DSPs Vs. Personalized Retargeters. One Step Forward, Two Steps Back?” Read it.

A recent AdExchanger column claimed that DSPs are becoming the “must have” for any serious direct response marketer, and that having separate relationships with personalized retargeting companies using opaque pricing models does not make sense.

I absolutely agree that transparency across the board is the future of this industry. However the thought that DSPs, with all of their admirable transparency and control functionality, can come close to replicating the post click performance of personalized retargeting is unrealistic. We’re talking performance that is often higher than search.

The next step for the industry is to provide a situation where marketers don’t have to choose, where they can get the performance of personalized retargeting as well as the transparency and control of a DSP. Below are some thoughts on how to get there.

The personalized retargeting sector needs to adopt a transparent model. Of course marketers want transparency; they need to know what sites their ads run on for brand protection and other reasons. Likewise, some clients (especially agencies) want to work on a transparent commercial basis, for which the CPM metric is appropriate. That said, some marketers prefer a CPC because it’s a performance metric. I believe it’s about giving them options, making sure that they understand those options, and then letting them decide what’s best for their business.

Transparency is one thing, but marketers also need control over their campaigns so that they can manage their overall marketing objectives and their end customer experience. First and foremost, marketers require frequency-capping control so they can manage their customers’ experience — ensuring ads stay relevant and don’t become intrusive. Controls should also extend to enabling advertisers to alter ad content, including what products appear, and making changes to dynamic creative messaging and creative optimization processes in real time.

Marketers want transparency, but they also want technology that can deliver incremental performance at scale. Delivering post click performance at scale is about finding the right user in the right context and then showing them the right product. RTB inventory is growing at a rapid rate, but Forrester states that only 19% of display media was bought in 2012 through exchanges.

I’m sure this number will grow rapidly, but if you only buy RTB inventory, it means that you don’t have the maximum reach to distribute ads. The effect for marketers using a DSP is that you are not able to show the user ads on all the websites where they are likely to convert, resulting in a less efficient use of ad spend. Scale and optimization capabilities across both RTB and non-RTB environments is critical to deliver post click performance at scale for marketers.

Make buying display easier for marketers. While transparency is an extremely important issue for the industry, it is not the only factor a marketer has in the buying decision. In 2013 we should make transparency a non-issue, and let marketers focus on the things which actually add value (like incremental performance and exceptional creative that enhance brands and show uplift in other channels).

Personalized retargeting has become vital for marketers, especially those who value post-click performance. Instead of being in denial about its validity we should look at ways to make it better, so that marketers don’t have to choose between transparency and control, and performance and reach.