Lotame

The online advertising industry at large is sprinting towards maximizing efficiency. Overall, the working theory is that smart aggregation and assembly of various technology providers will create a unique solution for display advertising, and one that combines audience targeting, procurement, arbitrage and media trade. However, if, as Randall Rothenberg, CEO of IAB, states: “technology succeeds in driving the cost of reaching the perfect audience down to zero” in his latest post titled “Is Marketing a Strategic Resource or a Procured Commodity?” then the industry might be fumbling towards false ecstasy, with “the same low costs, the same perfect efficiency, for doing the same exact thing.”

Allow me to explain. With all of the aggregation and consolidation of publishers, networks, and exchanges, in many instances, an overlap occurs with publisher inventory. Think about a typical web publisher in today’s ecosystem. Think about how many ad networks that publisher works with. Now think about how many ad exchanges those ad networks work with. Then think about how many Demand Side Platforms those ad exchanges work with. The result? The tail wags the dog: when you bid on an impression, in all likely hood, you are bidding on yourself, for the same piece of inventory. This overlap and inconsistency in many cases results in decreased efficiency.

Here at Lotame we call this concept “Macrotization” wherein you try and optimize results at the macro level but have built algorithms and processes that can’t ultimately be supported by the disparate supporting systems and components. Many of the components in these new advertising platforms don’t necessarily complement each other, even though it may seem as if they do, and complementary buzzwords often connect ephemeral dots that don’t belong. In time, the foundation for macrotization will settle, but for now, tremors still abound.

The truth is, there are few companies out there that successfully manage all pieces of the “macrotization” process. Those that can will deliver true efficiencies for their clients because they can seamlessly connect and control all pieces in the value chain—from audience identification through media delivery and resulting insights—in a completely transparent manner.

The world will never be the same. Our society used to build machines and parts, in factories and in assembly lines. Today, our society builds computer programs and data bases, on laptops and in many cases, from anywhere around the world. People and businesses are becoming more efficient. They are working smarter, not harder, because they are beginning to leverage the most valuable employee of all: Data.

Image via Wikipedia

Take for example the airline industry. Consider all those times you got bumped off of a flight, rescheduled, canceled, or offered money to take a different flight. We’ve all been there and it always happens for a reason. This reason is that airlines try to prevent the loss of business and in doing so, they look at dozens of consumer driven behaviors such as how long you travel for, how many weekend flights you take, how many return flights you take, how many flights you take during the week, if you are a frequent flier, and the list goes on. All of these individual data points are used to inform a business decision. The decision is objective. The decision is data driven.

But what happens when we can make decisions using even more data points? Much more data points? Literally, hundreds of thousands if not millions of data points, and did I mention, in real time?

Welcome to the Data Renaissance. Thanks to increasingly efficient and scalable technologies like solid state drives, mobile devices, and cloud computing, the possibilities of data analysis are endless. I mean, just think about how much time we either spend online or connected to a mobile device. This has tremendous implications from travel, health and fitness, to finance, education, and media and the best part is, we haven’t even scratched the surface.

Like I said before, the implications here are huge. Many companies recognize the need to have these comprehensive data sets while having ways of analyzing that data. The digital media and online advertising industry in particular are both in a unique place since their very foundations are dependent upon these high growth technologies; digital devices and the Internet. In this space, companies are racing to a holy grail of advertising where they can leverage millions of individual consumer behaviors to inform brand engagement opportunities and purchasing decisions. Unlike the airline industry, online advertisers can leverage millions of data points instead of those “dozen,” and if done correctly, the consumer experience will be better than it’s ever been before. Everything will matter. Everything will be relevant. We will all become more enlightened and informed to things that interest the most because these new technologies are launching us into the very early, but still uncharted, data renaissance.

For the last few months we have been relatively quiet at Lotame, working hard to perfect Crowd Control and it’s ancillary services. For those of you who are not familiar, Crowd Control is a media delivery platform built to take advantage of the anonymous, behavioral, demographic, and social data that we collect and organize. Crowd Control uses this data to deliver media (usually advertisements) which is relevant, accurate, and more measurable to consumers. It has been a game changer, delivering greater value to the publishers and advertisers that have worked with us.

Fueled by the knowledge that Crowd Control is a powerful tool for all parties in the advertising ecosystem; buyers, sellers and aggregation platforms (like advertising networks)…we built and released Stadium, an open service that gives digital marketing and publishing organizations direct access to our core technology Crowd Control. Lotame’s first public Stadium Partner is Horizon Media, and we can’t thank the Horizon team enough for allowing the partnership to form and flourish.

You will be hearing much more about Stadium, more partner announcements, and the importance of data in advertising in the upcoming weeks…but for the moment I would just like to celebrate Horizon & Stadium! Here is the press release:

Lotame Unlocks the Power of Social Data for Advertisers, Publishers and Ad Networks with Launch of Stadium

Lotame’s Proven Ad Targeting, Delivery and Campaign Measurement Platform Now Offered as a Service; Eliminates Waste to Make Advertising More Accountable, Reliable and Efficient

First Customers Include Media Company Horizon Media, Inc.

New York, NY – May 5, 2009 – Lotame today announced the availability of Stadium, a platform enabling the creation of custom audiences for targeted online ad campaigns using anonymous social data. Stadium leverages Lotame’s groundbreaking Crowd Control targeting technology to give partners direct access to a wide range of tools for delivering, measuring and analyzing online ad campaigns.

Stadium is the first ad delivery platform, powered by social data, to be made openly available for use by any company looking to improve the precision and performance of online ads. Stadium is available now in versions designed for advertising agencies, publishers and networks.

“Horizon Media is innovating and bringing more transparency to online advertising,” said Andy Monfried, chief executive officer for Lotame. “The metrics typically used by the advertising industry all aim to determine how well a message was conveyed to people who matter. Stadium eliminates guesswork by only reaching people who matter, and goes beyond that to determine exactly how the message was received and if it created the desired effect.”

As social functionality and community behavior becomes more popular and more pervasive across the Web, anonymous information about user attributes and interests, stated and demonstrated through social behavior, becomes a valuable resource for improving campaign delivery and performance.

For the last two years, Lotame has developed and refined its platform to collect, organize, analyze and use this information responsibly to eliminate waste from ad campaigns. During that period, Lotame has served ads for campaigns supporting more than 100 brands, including leaders in consumer packaged goods, entertainment, financial services and telecommunications.

Stadium for Agencies (SFA)

Stadium gives agencies the power to direct campaigns to custom audiences via data partnerships with preferred publishers, in essence creating their own ad networks. Horizon Media has built a proprietary platform for media buying based on Stadium, allowing Horizon to form a richer connection to publishers. As a result Horizon can create audiences on the fly based on attributes and behaviors that matter most to specific brands.

“The whole game is value – increasing the value and decreasing the noise in the relationship between the consumer, advertiser and publisher. Stadium allows us to continue to make sophisticated investment decisions on behalf of our clients,” said Donnie Williams, VP, digital strategy for Horizon Media. “It provides the consumer with more meaningful brand engagement opportunities – and offers deeper visibility and technology solutions to publishers. It embodies our approach as a company and our commitment to partner collaboration as a key ingredient to success.”

Stadium for Publishers (SFP)

Publishers can use Stadium in order to offer advertisers opportunities to reach specific segments of their audience. By packaging advertising to specific audiences rather than via specific pages, a publisher can price ads according to a more reliable measure of each impression’s value in building relationships within the target audience, and because Stadium doesn’t require the capital investment of building a platform, the costs don’t begin before the value is realized.

Stadium for Networks (SFN)

Ad networks offer sizable reach. Lotame’s Stadium offers networks the ability to use data and technology to directly connect advertisers to the audience on a “brand to person” basis for greater targeting flexibility and precision.

“By taking proven targeting principles of audience development and applying them to what we can learn from social activity, online media networks can rise above the crowd and combine their extensive reach with pinpoint targeting and make their networks even more compelling to advertisers,” said Monfried.

About Lotame
Lotame provides a platform for easily building and addressing customizable consumer audiences based on social activity in addition to implied or stated interests. Lotame has specifically designed its patented Crowd Control platform to take full advantage of the unique attributes of social data, using participation and user generated content as a foundation for improved campaign performance. Lotame is a member of the Interactive Advertising Bureau (IAB). Please visit www.lotame.com for more information.

About Horizon Media
Founded in 1989, Horizon Media, Inc. is the largest U.S. independent media services company. Dedicated to helping clients sell products and build brands through insightful marketing counsel, media-neutral strategic planning and effective negotiation and placement, Horizon’s exceptional holistic approach to brand marketing and development has resulted in estimated billings of $2 billion and established the company as the fastest growing agency in the industry. Headquartered in New York City with a full service office in Los Angeles, Horizon also has offices in San Diego and Amsterdam, Netherlands. Horizon is also a founding member of Columbus Media International, a multi-national partnership of independent media agencies. For more information, please visit the company’s website at www.horizonmedia.com.

This week we will be speaking with the CEO of natural language processing engine Amplify. Under Mark’s leadership Amplify has brought it first offering to market, a web service developed by Hapax that brings human understanding to content. Using patented Natural Language Processing technology, Amplify reads and understands every word used in text. It identifies the significant topics, brands, people, perspectives, emotions, actions and timescales and presents the findings in an actionable XML structure.

Join Mark and I as we explore what this promising new technology brings to the world of marketing, user generated content, and social web.

Join us @11:30 EST on Thursday 4/30 over at Blog Talk Radio.

The Nielsen Company just released a very good report entitled “The Global Online Media Landscape: Identifying Opportunities in a Challenging Market.”

Of particular note are some of the data points on page 6 of the report which compares 3 year and 6 year growth of Search, Video, and Social Media…the growth metrics are unreal and understated; Nielsen doesn’t categorize usage of content sites that have Social Media / community “extensions” in their totals, for example CNN.com use of citizen reporting (iReport)

View the report below

Nielsen report