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Archive for Mark McEachran

In a world without cookies

I’m hoping your mental audio kicked in with an interpretation of a movie trailer with a Don LaFontaine voiceover when you read the title. I wrote this post in response to a lot of articles written from a position of fear from the advertising industry at the prospect of web browsers shipping with 3rd party cookies disabled. Disclaimer: The opinions expressed here are my own and should not be construed as the opinions of my employer, associations or other groups I happen to belong to.

There’s a lot of highly visible worry in the news lately about online advertising losing the ability to set 3rd party cookies in a web browser. This technology is used to perform a variety of seemingly critical tasks: retargeting, audience targeting, frequency capping, user identification for RTB and probably a hundred other things – most of which I try not to know in detail.

The biggest concern seems to be that this growing part of the industry gets turned upside down if more browser companies decide to ship their products with 3rd party cookie disabled by default. Apple did this with their Safari browser which has been one component responsible for slowing down advertiser adoption of iOS devices. But advertisers have alternatives (like: display ads in other browsers, keywords, and online video ads) that they’re more comfortable with anyway, so there’s no telling how much of an impact the lack of 3rd party cookies on iPhones and iPads really has on the growth of the mobile ad revenue stream. Read more

What data does a DSP have access to when bidding on an ad exchange?

Ie, what types of information are contained within the cookies made available? Thanks!
This question was asked on Quora.com, below is my answer.

Identity DataIn a typical RTB transaction there’s a user ID, pulled from the user’s cookie or some form of server side system, which is passed to the DSP from the SSP. That ID is, in most cases, the DSPs record locator for the user’s information. Most DSPs have a server side data store where this information is housed, updated and augmented from a variety of sources including data companies like Blue Kai and Excelate and their ilk. DSPs may also be collecting and distilling information based on bid request activity from that user (although most SSPs put language into the contracts governing the use of this “bid stream” data) or retargeting data gathered for their customers. This type of data system is generally referred to as a Data Management Platform (DMP) in the industry. While there are some stand-alone DMPs out there, more and more DSPs are integrating or building their own.

There are a variety of other bits of information about the ad impression that get passed in the bid stream. To get a sense of what might be passed you can look at the Open RTB API (http://code.google.com/p/openrtb/). It is, of course, very technical but there are grids that list out the information being exchanged.

What are the revenue models for SSPs and DSPs?

 What kind of gross margins do they earn? Specifically do SSP/DSPs earn a % of ad spend? If so what is it? Or do they operate on an arbitrage model, straight fee model? I’m looking for specific numbers/percentages. Do the same models apply to both desktop and mobile RTB?
This question was asked on Quora.com, below is my answer.

I can answer some of these questions, but I won’t go into specifics about the percentages since I can only really give you insight into one company with any confidence.

SSP

Revenue Models

On the SSP side the revenue model is based on a percentage of revenue flowing to the publisher. This works well as it lines up the SSP’s incentives with the publisher. The more money the publisher makes – the more money the SSP makes. SSP’s are generally geared toward serving the publishers so that alignment makes for a good relationship.

DSP

On the DSP side I know of two prevalent revenue models. The most prevalent has profits tied to a percentage of spend. This is taking money the same way the SSPs do, so it requires the advertisers that use the DSP to trust that all the algorithms and technology is: A – getting them a good price, and B – fulfilling the requirements of the campaign in the most optimal way. The major DSPs seem to have a good handle on these two elements and appear to be doing fine, even though the financial model doesn’t inherently lend itself to support “A”.  Read more

The Real Problem with Getting More Spend Online

Two weeks ago I participated in a couple of events during AdWeek in New York.  The first was Rubicon’s own #letsfixit event where agency advertising representatives joined a panel with publishers and the rest of the demand train to discuss the difficulties of running ads online.  The attention shifted from learning about the process to learning about where the process fails.

Familiarity

Spend OnlineBernhard Glock of Medialink, who was not on the panel, but chimed in with a profound thought.  Buying on television is buying something that’s familiar, with seemingly known or at least comfortable impact and expectations on results.  By contrast, buying online display is a complete mystery.  His solution, just buy on television because that’s what he understands.

In addition to all the great insight each panelist shared, this sticks out as an important point of the event.  If there’s something to be learned by this it’s that the Kawaja diagrams are illustrating the point – online is confusing to the buyers, and that’s bad.  Read more

Is Google out to destroy the secondary keyword market (before it has even matured)?

It didn’t take long to wrap my head around the collateral damage that would occur when Google suppresses their outbound referring URL information when patrons are using the search engine while they’re logged in. An article forwarded to me by a friend in the business laid out some of the damage that was expected. My friend went on to point out that some of his competition might be impacted by Google’s actions, he was not entirely displeased.

Impact

Google Luigi smashes the query string, removing it from the secondary keyword market

I’m trying to think of the impact so I looked around for some back of the napkin numbers, using the Google search engine of course. Be mindful, these are Internet numbers so they are obviously without reproach. I started with the assumption that most folks that have a Google account are probably using Gmail, so that’d be the most impactful user base. According to Panda algorithm chosen web page at the top of my search results it seems that Gmail had about 193 million users at the end of 2010. If Google trusts itself then this is probably accurate information.

That’s not everybody. I asked Amazon and its sorta saying that there are 1.7 billion unique Internet users. So Google’s got 11% that could potentially be logged in while user the search engine. I don’t log in at work, so let’s assume that I’m half of all people and I’m at work for half of my searches. So 11% drops to 8.25% of Internet searches impacted by this. Maybe we’ll give Google+ a little love and just say 10%. Sound good? . . .Yeah, I think so too. You know what 10% looks like to me, it looks like an experiment. Read more