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Looking Back at ad tech 2012

ad tech

ad tech

Lisa Utzchneider, Amazon’s VP of Global Advertising Sales, started off ad tech 2012 with the first keynote: It’s Day One for Advertising.  Utzschneider stressed Amazon’s unique way of thinking about customers—focusing not on what’s going to be different ten years from now, but rather what will be the same.  In a world where technology changes much more rapidly than people do, Amazon focuses on creating new technology to solve persistent problems.

Further validating our prediction that ad tech 2012 would go back to basics, Facebook’s Paul Adams described social networks as a new technology for an old practice during another keynote.  Adams argued against the conception that new media changes everything; “[p]eople apply the way they work with existing media to the new medium.”  The same is true of social networks.  People have had real-life social networks for some time now, the only difference is that now, those networks can be taken online.

Adams also noted that “people build relationships with many lightweight interactions over time.”  This, he says, is true for how people build relationships both with other people and with brands.  (That’s one reason we find retargeting to be such an effective tactic—it allows brands to engage with customers in small ways over a long period of time.)

Display’s Not Dead

There was another interesting discussion that permeated through multiple sessions.  Though some advertisers view banner ads as the red headed stepchildren of online advertising, display is more relevant than ever.  According to Steve Latham, founder and CEO of Encore Media Metrics, which offers sophisticated attribution modeling for online advertisers, 26% of their attributed conversions come from display, exceeding conversions from both paid and natural search.

The purchase cycle tends to be relatively long – consumers like to comparison shop and do research online before making purchasing decisions.  Encore’s average user sees five ads and visits the company website four times before converting.  Half of all conversions they see take place 30 days or more after seeing the first ad, and 49% take place within 24 hours of seeing the final ad.

Real-Time Bidding and Audience Targeting

Real-time bidding (RTB), the automated process of buying ad space in real-time, as pages load, has been around for a few years now, and has changed the marketplace in a few significant ways.

Erik Suvain, VP of Operations at video ad network SpotXchange, hypothesizes that RTB is eliminating waste by allowing more relevant inventory to be purchased at the people who value it most.  In their experience, advertisers are passing on over 90% of inventory, and only advertising where their dollars are most effective.

RTB has also allowed for the anonymous targeting of specific audiences, which has allowed brands to go after their true desired audience rather than some idea of what their desired audience is.  In some instances, RTB has diminished the importance of premium inventory as brands realize that often cheaper AND more effective to go after the right audience rather than the right website.

The Elephant in the Room

Consumer privacy with regard to advertising has been in the news quite a bit lately, especially after the recent release of the FTC privacy report.  Speakers did not shy away from the sometimes touchy topic.

Joseph Turow, professor of Communication at the University of Pennsylvania’s Annenberg School and author of “The Daily You,” shared a keynote with Paul Adams of Facebook.  Coming from the point of view of the consumer, Turow believes that cynicism and mistrust surrounding advertising will grow over time. The biggest problem, he believes, is confusion and lack of education.  In several surveys that he has completed, 58-62% of respondents consistently believe that the existence of a privacy policy on a website means the site does not share any information with third parties.  This is certainly not the case.  While a privacy policy may state that a website doesn’t share information with third parties, its existence certainly does not imply as much.  Another 15% of respondents do not know what it means when a site has a privacy policy.

Other industry leaders drove home the same point.  Tim Jenkins, CEO of mobile advertiser 4Info, argues that we must be more cognizant of consumer privacy concerns.  Those concerns are particularly salient with respect to mobile devices, which we always carry with us, and which contain an enormous amount of data about our behavior and our whereabouts.

Behavioral targeting is here to stay; it’s higher performing, and more relevant for both advertisers and consumers.  We believe that there is a happy medium, where advertisers can reach their desired audience, and consumers can understand what is happening online and make informed decisions about whether or not they want to be included.  As an industry, we need to do more to foster education and discussion, and ReTargeter is ready to be part of the conversation.

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