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Conversation Targeting has accomplished the “holy grail of targeted advertising” for us – the magic combination of increasing our total inventory of targeted ads while also boosting their click-through rates (in contrast to the tendency of most other targeting refinements to narrow one’s inventory). Herein we show plenty of facts, figures, and examples.
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Conversation Targeting
How to refine your targeting without reducing your inventory
Tim Musgrove
Chief Scientist, Federated Media Publishing
©2012 Federated Media Publishing, Inc. All Rights Reserved.
Who is FM?
John Battelle
http://FederatedMedia.net
Founded in 2005 to help hundreds of high-quality independent publishers band together to earn sponsorship and ad revenue Now a top-ten US audience (comScore) and growing fast Historically: have paid out well over $100 million to our authors and publishers
An open secret
• Supply-side advertising players (including content networks like FM) often don’t like targeting to be too good
• Why not?
• Because the math isn’t nice to them
• Let’s see that…
Run-of-network
With no targeting, the advertiser buys every page in my network
The Math: 1 billion impressions @$1 CPM = $1 million ad revenue
Broad targeting
With some broad targeting (“Sports”, or “Finance”), the advertiser buys fewer pages in my network But the CPM goes up So I’m OK
The Math: 400 million impressions @$3 CPM = $1.2 million ad revenue
Narrow Targeting
With narrow targeting, the advertiser buys only select pages in my network Sure, I get the highest CPM But I have a ton of unsold inventory and total revenue is down
The Math: 100 million impressions @$8 CPM = $800k ad revenue
Ssshhhh…….
To sum up:
It looks like narrow targeting represents a sharp decline in revenue
So, it isn’t done much.
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
Run-of-network Broad targeting Narrow targeting
Ways to get around this
• Set conditions on sale of narrow targeting
• Just don’t let ‘em buy it unless they also buy other stuff – use it as frosting on the cake
This model is not so strange…just take a look at the ball park…
A familiar model
• VIP parking spaces are limited and lots of people want them
• But you can only buy one if you have bought luxury box or club seats!
A familiar model
• Every body wants tickets for when the Yankees come into town
• But you can only buy that as part of a four-game ticket pack!
Is there another way, on the implementation side?
• Q: What’s the one case when narrow targeting can have the effect of expanding the inventory purchased by the advertiser, instead of shrinking it?
• A: When it makes the advertiser comfortable going outside their usual content category
• Let’s see that….
Typical buy pattern (without conversation targeting)
Finance Tech Sports
Government & Law
Small Business Lifestyle
$ $ $ $ $ $ $ $ $ $ $ $ $
Suppose: Advertiser comes to FM w/a “cloud computing” campaign. This is what their buy usually looks like:
Modified buy pattern (with conversation targeting)
Finance Tech Sports
Government & Law
Small Business Lifestyle
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
But when the advertiser learns about Conversation Targeting, this is what their buy starts to look like:
Another implementation technique : Target conversations, not topics
• What’s the difference? – Topic = a particular theme of subject matter – Conversation = a cluster of related topics comprised of
various themes
• Results: simplicity for advertiser, and way more inventory!
• Let’s see an example….
The Small Business Conversation (just a subset of the topics)
affiliate marketing facebook marketing series online advertising small business week
better business bureau family business payroll tax social entrepreneurship
business advice family businesses product marketing social media marketing
business succession planning franchise association quickbooks startup catalyst
center for entrepreneurship franchise business review referral engine startup company
chamber of commerce franchise consulting rieva lesonsky startup magazine
customer service franchisee association ryan hanley startup weekend
dell small business franchisee of the year s corporation susan payton
digital marketing global entrepreneurship week sba 504 loan tj mccue
direct-response marketing guy kawasaki search marketing toilet paper entrepreneur
duct tape marketing ivan walsh small biz tech tour twitter marketing
entrepreneur corner linkedin small business book awards u.s. chamber of commerce
entrepreneur of the year marketing management small business expo viral marketing
entrepreneurs marketing strategy small business influencer viral video marketing
entrepreneurs roundtable multi-level marketing small business jobs bill yahoo small business
facebook marketing national small business week small business trends young entrepreneur council
Another implementation tip: Set a threshold for quality!
• FM’s premiere and partner publishers are hand-picked for quality
• Our partner WordPress, will supply hand-picked sites as well
• Publishers represented by our subsidiary Lijit (long-tail RTB-based ad network) will be vetted for quality as well
– Take-away: Don’t expect refined semantics to yield
anything if the content isn’t good!
Does it work?
• Aligned CTR: 49% higher than broad targeted ads
• Global CTR (including non-aligned): still 39% higher than broad targeted ads
– “Aligned” means the subject matter targeted has an obvious connection to the ad campaign. Occasionally this isn’t the case!
Exceptional lift in CTR
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Channel CTR
DFA-IB CTR
CT CTR
This charts the first 50 campaigns we put through Conversation Targeting at FM
RED: the industry standard CTR ORANGE: the typical CTR for the parent category in FM (Sports, Business, etc.) PURPLE: the CTR attained by Conversation Targeting at FM
Exceptional lift in CTR
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0.10%
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0.60%
0.70%
Channel CTR
DFA-IB CTR
CT CTR
CT frequently outperforms the channel it is in.
The exception that proves the rule
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Channel CTR
DFA-IB CTR
CT CTR
CT rarely underperforms the channel it is in. The few exceptions are unaligned campaigns
An unaligned campaign is, for example, a car ad targeted to art, museums, fashion
Overcoming barriers to clicking
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Channel CTR
DFA-IB CTR
CT CTR
CT can lift up channels where they underperform
Other selling points
• It’s the only way for an advertiser to “buy out a conversation” in a network, against competitors
Other selling points
• It gives back fantastic business knowledge, showing where the ad message resonates, and where it doesn’t
Small Business
Home Improvement
Workplace Security
Auto Travel
How far down will they go?
• Advertisers presently seem to prefer “mid-level ontology” for targeting
• As this market matures, will they keep driving down the tree?
Tech
Bio-tech
Green-Tech
Enterprise Computing
AWS Storage
Cloud SaaS Cloud
Storage
Servers & Net-Ops
Consumer Computing
Cloud PaaS
Computing
Cloud Computing
Google Cloud
Storage Dropbox
AWS Storage
Integrators
AWS Storage Tool Kits
What’s next?
“Better, smarter, deeper”: Improved modeling of blog and news content will enable more ways to target
Ideology (conservative?) Reading level (7th grade?) Attitude (optimistic?) Cultural dimension (youth-hip?) Seriousness (urgent, or whimsical?)
Contact Tim Musgrove E-mail: tmusgrove@federatedmedia.net Twitter: @tmusgrove http://tech.federatedmedia.net/ http://about.me/tmusgrove http://www.slideshare.net/TimAtFM
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