"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 written by Tony Casson, senior director of ad tech products at sovrn.
When I stopped at a local store the other day, there was a sign on the door that read, “Back in five minutes.” With my phone in the car 30 yards away in the rain, I assured myself that I could survive five minutes without it. I looked around, first at the cars in the lot then at the door, studying the patterns and the color of the paint. If some enterprising sort could have slapped an ad on that door, they would have had my full attention.
Thinking about attention leads to some fascinating revelations. Thirty years ago, our attention was largely focused on the physical world. Attention to media was very specific to time and place, such as the radio in the car or the television program in the living room. It was a scarce resource, so advertisers paid premiums to be there as frequently as possible when that attention was available. Then, as now, context and audience mattered most for advertising dollars.
Today, personalized attention is available to advertisers at almost any waking moment, including at our desks, in our cars, walking down the street or waiting in line. And sitting at the center are publishers, which act as attention exchanges for an Internet ad market worth $140 billion dollars. It’s more important than ever that publishers accurately establish the value of each reader’s attention.
Advertisers, agencies and trade desks have long targeted readers across the Internet. Through a variety of tactics, such as dropping cookies, finding intent, establishing time-of-day cadences and acquiring search data, they deliver ads to readers in the most cost-effective manner possible.
Underlying these behaviors exists a historical transparency gap between demand and supply. This information asymmetry throws the pricing structure out of whack and brings inefficiency to the marketplace. Publishers that can leverage these rich veins of data have a golden opportunity to build a new data foundation, correct the market, accurately segment audiences and deliver the true maximum value to both the advertiser and the publisher.
Open The Aperture
The key to solving advertising market inefficiencies lies in making real-time market data as transparent and actionable as possible. Auctions, in particular the second-price auctions favored in programmatic advertising, are known to be effective at establishing the market value of inventory. As with any market transaction, the party with the higher-quality information has an advantage over the party with less.
In the case of Internet advertising, buyers simply have a larger aperture than sellers. They can see multiple transactions across large, medium and small sites for numerous audience segments – and frequently even for the same consumer. In a truly transparent marketplace, the publisher has access to a similar-sized aperture as the buyer.
By employing market feedback data for every interaction on the publisher’s site, the publisher levels the information playing field and uses the power of the auction to establish the precise market price for the inventory.
Publishers can level the playing field by leveraging the same data that buyers have at their disposal to offer the publisher’s ad inventory to the market. These tactics include:
Reader cadence: All readers have attention fatigue and lose value to buyers the more they interact with the same content. Publishers can offer “fresh” readers for their true market value.
Frequency caps: Publishers have the opportunity to lower the price on offers when reader frequency is too high or move offers to different buyers based on a maximum number of visits.
Time-of-day optimization: Readers are valued differently throughout the day. Offers should be priced accordingly.
Geographical data: Country, city, region, latitude/longitude and location accuracy are all signals buyers process to determine the true value of the reader.
Search terms and keywords: Any search terms contained in the referring URL map to intent are a powerful signal to buyers.
Contextual data: The taxonomical data of the site and page content is of high value to buyers seeking strong brand matches.
Site ranking, quality and performance: A site’s traffic quality, overall ranking and historical competitive performance establish a key baseline of market value against well-known sites with similar rankings and performance.
Behavioral data: A reader’s travel history over the Internet is a strong indicator of intent for buyers.
Demographic predictions: Historical attention data allows buyers to make demographic predictions and further inform the offer price for inventory.
Viewability: Viewable ad placements are valued more highly than out-of-view placements. Publishers can set their offer price to match this level of engagement.
Situational context: Time spent on a page and how the reader arrived there are key predictors to brand engagement.
If publishers can use these tactics to harness both historical data and real-time signals unique to every reader, they are empowered to correctly value each opportunity to advertise on their site.
Efficient markets, those with the highest degree of pricing precision, are absolutely dependent on information equality between the buyer and the seller. In valuing each reader’s attention accurately, the publisher in no way games the system or compromises the integrity of the auction model.
Follow Tony Casson (@tcasson), sovrn (@sovrnholdings) and AdExchanger (adexchanger) on Twitter.