BEN WITTE: Initially, we focused on the mid-market and the long tail, which wasn’t being served back in 2010 when long-tail commerce was just starting to emerge on the Internet. Over the years we began to move upstream and we’ve worked with about 20,000 advertisers and agencies globally to date, including SMB advertisers who use our platform in a self-serve manner.
We’ve been working to transform our capabilities for a multiscreen world. Retargeting has always been about reach, and as users spend more time on mobile, starting their path to purchase on one device and completing it on another, it’s important that we’re able to work well in this context.
What’s your philosophy around mobile?
We think about mobile from two angles: mobile for web advertisers and the app space. For the web advertiser, the use case is around initiatives like cross-device retargeting, but there are still challenges there. There are different ad sizes on the mobile web, some of which are still terrible and it’s not always the best experience because some of the creative is still in Flash.
But we don’t think about mobile as a siloed thing. Every part of our business is becoming increasingly mobile. For example, we have a dynamic creative team working on developing a solution for mobile.
Cross-device ad targeting is a big challenge. What are you doing about that?
There’s the deterministic approach, which leverages logged-in data to map users against cookies and device IDs – all of the campaigns we run on Facebook and Twitter are cross-device and we’re increasingly looking for other partners to leverage that opportunity – and then there’s probabilistic, which is used to create identity graphs through signals like IP address, Wi-Fi and location.
We’ve done some experimentation with probabilistic, but we’ve found that it’s not accurate enough yet to roll out in a scalable way that will drive results for our customers.
The middle ground for us is to start developing our own identity graph. We recently acquired a company called UserFox to help us get more into CRM. We see ourselves as a first-party data platform and CRM is an important component of building a cross-device identity graph. It’s a pretty big undertaking and it’s early days, but it’s a strategic move for us.
What do you think about players like Tapad and Drawbridge?
From a brand perspective, not having 100% certainty might be acceptable, but for retargeting – to the extent that you’re serving up what you think is a personalized ad to a user you’ve identified incorrectly – well, that just doesn’t work. The consequences from a performance standpoint are pretty severe, which could be the reason [Tapad and Drawbridge] haven’t partnered with retargeting companies like us or Criteo, for example.
That said, it’s my understanding that they’re continuing to make a lot of progress and, obviously, there are a lot of interesting potential business opportunities, like extending connected TV to computers or tablets.
You mentioned that ads for the mobile web are “still terrible.” Is that changing?
The big shift we’re seeing is towards native and interstitials. One of the reasons why Facebook mobile ads work so well, for example, is because it’s right there in your feed. It’s a good size, it doesn’t disrupt the user experience and other networks are pushing their publishers to support similar ad units and to move away from 320 x 50, which not only isn’t a great experience for users, but doesn’t perform all that well for advertisers.
There’s a lot of infrastructure that needs to exist in order to run highly targeted user acquisition and retargeting campaigns in a mobile app environment, and getting SDKs placed is very hard. We built our own SDK and partnered with various mobile attribution companies so our customers can leverage the tech that’s already inside their app for targeting.
Is mobile advertising maturing beyond just gaming?
Mobile gaming has been by far the biggest area of spend in direct-response mobile advertising to date, but only something like 5% of users make up about 95% of revenue in terms of in-app purchases – whale users.
But as retail grows in importance and there’s a greater focus on consumer experience, the big retailers will want to invest more in mobile and that’s where retargeting is a natural fit.
Payments will also be a big catalyst for mobile commerce and Apple will be a large part of that.
Speaking of Apple, do you work together?
Apple has many unique assets it can leverage, whether we’re talking about iTunes data, what types of apps people are engaging with, what type of music they listen to – and most of those signals are first-party. For our part, we can match email to iTunes email and we can match IDFAs. We’re a big believer in Apple and we’re investing heavily.
Despite Apple’s announcement in November that it would start making iAd inventory available programmatically, it doesn’t seem like advertising is all that high of a priority.
Advertising isn’t going to move the needle for them from a revenue perspective relative to how much they make on hardware, which is quite a lot, but it’s important to Apple to create an environment that encourages developers to continue building apps in iOS. And what do developers care about? Monetizing, acquiring and engaging users and driving sales. Without those things, a developer can’t survive. It’s strategic for Apple.