Category Archives: ad networks

Retargeting Crazy Heart

Two days ago we clicked on a New York Times review for Crazy Heart, the Jeff Bridges film gaining huge Oscar buzz. Soon banner ads for Crazy Heart started following us everywhere. It’s possible that Fox Searchlight Pictures has launched a massive online media buy, so everyone is seeing lots of banners, but far more likely we’re being retargeted.

Retargeting is a simple online trick in which banner ads are served to users who are previously identified as interested in a product. You can launch them in several ways: (1) if someone visits a web site, you cookie their computer; (2) or, more interesting, if someone only sees a banner ad — and doesn’t even click on it — the banner can still tag that user’s computer so that he or she gets served additional banners elsewhere. The second approach is called “media retargeting” and is a bit surreal for the user experience; after all, you don’t even have to touch the original banner ad to be tagged and chased with followup messaging. So in this case, we suspect:

– Fox Searchlight bought banners to be placed next to the online New York Times’ film review.
– Fox Searchlight then included an invisible pixel in the animated banner that tagged our computer when we read the review.
– Now knowing that we have interest in the film, Fox Searchlight serves us additional banners when we enter other web sites such as by buying into an ad network (ad inventory on a vast collection of other web sites).

Retargeting risk vs. reward

Retargeting is clever (and honestly, we’ve recommended retargeting for our own clients using ad networks such as Value Click and Fetchback). It essentially lowers online ad costs by 50% or more, because the cost of subsequent impressions is much less than the original expensive media buy on a top site that kicks off the sequence.

But retargeting also carries risks. If rules are not set up to limit the number of impressions given to the user, the vibe becomes one of stalking — OMG, that product is following us everywhere! The second risk is it’s still easy to chase the wrong computers. A year ago we researched nursing homes for an aging relative and began receiving ads for Viagra and wrinkle cream, and laughed ’cause we’re not there yet. The third risk is for publishers, who may lose their value as online marketers learn how to “steal” their audiences for future ad impressions on other web properties; after all, why spend big bucks to advertise on a marquee site such as if you can serve the same ad to the same audience later, via retargeting, on a less-expensive site?

As online media and Internet gadgets continue to fragment, we expect to see such individual targeting continue. Just be careful not to stalk customers too far; if they pick up they’re being watched, they could go crazy.

Direct mail spending is down. So could demand still be up?

A rocket scientist would look at this chart and deduce direct mail volumes are down significantly because banks are retrenching. EMarketer reports spending on postcards and the like will fall from $58.4 billion in 2007 to a projected $51.8 billion in 2009 — a whopping 11.3% decline within two years.

There is no question the collapse of lending hammered direct mail volumes. However, beneath this trend it is possible that improvements in targeting are reducing direct mail volumes while marketers continue to expand the channel. How? With stronger targeting and response rates.

A core metric of direct marketing is response rates: If you spend $250,000 to mail 1 million pieces and achieve a 1% response, you would get 10,000 respondents. However, say your marketing program gets more sophisticated and mails to a better list of people more likely interested in your service. Now, you spend only $125,000 on 500,000 pieces — but get a 2% response. You still end up with 10,000 responses.

The dark irony of direct response programs is that the better advertisers get at targeting, the smaller the total spending within the ad channel. This trend is now highly visible in online advertising, where behavioral targeted ad networks can sell inventory at a fraction of the CPM (cost per thousand impressions) of marque sites. If you need to spend $60 on to reach wealthy people but can do the same on an ad network that charges $4 CPM, your total spending in online ads will decline — and writ large, the industry as a whole may shrink. Media analysts need to look beyond just aggregate spending by advertisers to judge the interest within a media category; they must peek beneath the hood to see if better targeting is building demand while reducing total spend.

Why newspaper banner ads took the first hit from recession

Here’s some math behind failing newspapers. Bloomberg reports online ad sales at newspaper web sites fell 3 percent in the third quarter. This is significant because overall online ad growth is supposed to slow but not reverse in the current recession. Why are newspapers now sucking wind online in what should remain a growth medium?

The problem is how newspapers price online banners. Would you rather pay $1.40 or $14 to get a consumer to visit your web site? Newspaper sites are often the most costly.

Newspapers (as well as other “marque” or highly ranked web sites) often fail to deliver results online because they charge on a CPM (cost per thousand impression) basis vs. CPC (cost per click). This is critically important for media planners to understand because a $20 CPM at an average 0.14% click-through rate works out to a $14.29 cost per click. Which, as we noted above, is 10 times higher than the CPCs at ad networks.

Ad networks, or groups of hundreds of sites, can provide the same or better consumer targeting and often charge an extremely low cost per click of $1.40 or less. The irony is that many ad networks can place your ads on the remnant inventory of main marque sites for one-tenth the cost.

Sure, marque sites have value for branding or reaching specific audience targets. But ad nets and retargeting now offer the same at a fraction of the cost. In general, costly CPM buys, no matter how “strong” the main web site brand, are no way to blow your budget in a down economy.

Photo: Network Osaka.

Forget privacy. Your IQ told us it needs help.

Consumer privacy groups are upset that ISPs (such as your local cable company) are designing tools to track web viewing habits and to sell this information to advertisers. Web tracking has been around for a decade by individual sites, and then by collections of hundreds of sites known as ad networks. But Internet Service Providers give you the modem by the wall and thus see everything you do. If they could mine all that data, think of the targeting potential … and privacy risks.

Except all these concerns have a single flaw: You now actually need people to track things for you.

Think of it. What would happen if your computer crashed, you lost all your bookmarks, all your contacts, all those emails with distant relatives or colleagues cc’d? Memorization has become an obsolete skill set; most U.S. consumers now have cell phones, and so the number of phone numbers in our heads has fallen from hundreds to perhaps a handful.

If you protest, please answer two questions:

1. Who was the second president of the United States?
2. What is your mother’s cell phone number?

You don’t know. You don’t need to know. The answers are lodged in Google and your smart phone.

We hit the memory brick wall ourselves this week, while on vacation in Maine, when we realized the friends’ computers we borrowed didn’t have all our saved passwords and bookmarks. Suddenly pulling information from the web was hard — so many breadcrumbs were stocked in our home Mac computer, the trail to knowledge was now fogged.

Do humans now need others to remember things on their behalf? New Zealand professor James Flynn has found that human IQs are rising, but our newfound intelligence is now focused on abstract reasoning. Old pragmatic knowledge skill sets such as rote memorization are falling away, as we learn to search and make cognitive leaps but require information tools to fill in the gaps.

So perhaps the ad targeting privacy people have it all backwards. We are all leaving click-streams in almost any device or store we touch today, so thinking we have privacy is a myth anyway. We all use Google, which invades other content sites, scans their knowledge and posts results without a please or thank-you. We all pay bills; skip a few and then apply for a loan, and you’ll see how carefully organizations are tracking you. And it is all a good thing … because after all, someone else has to remember what we want.

Photo: Tokyo Lunch

Forbes: When chasing long tail of blogs, be careful what you bite

Forbes is the latest big-brand content player to try to compete with ad networks by getting in the game itself. The risk in this move is it may erode the Forbes’ brand.

We’ve noted that the problem with big brands online is their advertising results — you know, the number of people who actually click through the banner ads, the thing that marketers pay for — tend to pale compared to ad networks. Online ad networks are groups of hundreds of web sites that provide incredible targeting, by tracking your behavior across each site and then tailoring ads based on what you’ve been reading. If you make $150k per year and just perused a series of car reviews, an ad network will begin serving up Jaguar banners. Because you’re in the market for a car, you may bite.

Big sites can’t watch this online behavior at other web sites, so when you walk into their world, they have difficulty personalizing ads. This in turn hampers ad results, and advertisers suddenly don’t find a big brand site very attractive. Now, Forbes has launched Business and Finance Blog Network, a group of 400+ blogs that extends its tracking reach online.

The irony of all this is it may erode the Forbes brand. If users get comfortable obtaining expert financial advice and news from hundreds of blogs, traffic at may start to spiral downward.

As Forbes follows the dynamic that makes online advertising work — users surfing around sites — it may point readers away. Good luck chasing that tail.

Why ESPN knocked down Specific Media

There’s an interesting battle brewing online between big brands and ad networks, and it holds lessons in how to make online marketing work better. this week said online ad network Specific Media could no longer sell ESPN banner ad inventory. The people who run major brand sites, such as Wenda Harris Millard over at Martha Stewart, explain in Mediaweek that this is about price … claiming online ad networks despoil the brands of premium sites by selling ad slots at cut-rate discounts.

What the big boys aren’t saying is that ad networks such as Specific Media, which are collections of hundreds or thousands of sites, threaten the big players because the advertising results from ad networks are often better. It’s pretty simple, really. Ad networks can track one user across multiple sites and chase them with personalized ads, based on extremely sophisticated demographic and behavioral targeting, while single web sites can’t.

This is the deep irony in internet marketing — that the biggest brands may make the lousiest advertising channels. Think of what the dynamic is within a WebMD, iVillage or

Lots of different users, all with varied interests (ESPN has 197 different sports links from its home page navigation menus alone), all hitting one site. Your ad appears, and many of the users won’t be in the market. An ad network, by comparison, works like this:

Ad networks allow marketers to track a single individual across multiple web sites, track their past behavior or click stream, and then serve up personalized ads in response. We’ve seen clients with click-through rates on ads five times higher from ad networks than the same ads that appear on brand sites.

In the advertising world, it’s not the price of the ads that really matters — it’s the cold, hard results of what it costs to acquire consumers. We typically recommend that clients do A-B testing to run major sites and ad networks against each other. By all means, set up a horse race and include ESPN. But remember: you’re not buying a brand — you’re buying a customer.