Tag Archives: Will Perkins

The Future of Digital Advertising: How Actual Thoughts and Emotions will Soon Replace Browsing History and On-Site Engagement

As technology continues to grow at an exponential rate, we should only expect that industries will evolve and utilize newly developed technologies to enhance their own product offerings. As we move further into the digital age, a new sociological and technological trend is becoming very apparent: marketers are focusing more and more on the individual, despite an increasing social and global focus shift towards community.  In turn, less attention will be placed on privacy as security encryption will continue to pace with technology, allowing the adoption rate of what we now consider invasive devices to rapidly grow.

Cloud-based offerings already allow us to share the same user experience on our devices whether at home, on a tablet or wirelessly connecting to the TV in a hotel room. Seeing the same desktop in any location is already here, but where does technology go from there and which technologies will have a major impact on the evolution of advertising? And how are advertisers evolving the personalized experience for users?

First, Google Glass – yes, they are awkward and large, but we are only seeing phase one of many.  As Google Glass become indistinguishable from normal glasses, for the first time information, and of course ads, will be catered to your personal preferences anywhere you go. We’ve seen this already on smartphones, such as Starbucks sending out custom coupons to app users when they are within Wi-Fi range based upon their own preferences and historical purchases.

As we move beyond smartphones, devices conceptually similar to the Muse headband  will become more popular and advanced and allow your advertising to become completely focused on the true individual interests of each person uniquely and in real-time. Devices such as Google Glass or the Muse headband will be able to interpret emotions and send information in real-time to advertisers, such as if you are hungry and in the mood for pizza, tired and need coffee and so forth. If you think about a hot vanilla latte on a cold evening, you might see Starbucks pay a higher cost to serve ads for ‘Vanilla Latte’ to specific individuals in market geos where the propensity to convert maximized or hits a ‘opportunity to convert’ threshold. This means advertising will eventually shift to a pay-per-emotion or a pay-per-opportunity model – hitting the exact individual with the exact item they’re considering at the right time and in the right location. You may think this is impossible, but we’ve seen more primitive versions of this with Starbucks and Mini Cooper and their individualized billboards with RFID chips.

I’d like to offer up a ‘wilder’ prediction that we will also see advertisers targeting ads to individuals in artificial realities. The continued evolution of devices already in production, such as Oculus Rift and the Virtuix omnidirectional treadmill will eventually make reality and fictional worlds almost indistinguishable. Imagine being able to travel and experience with all senses a scene from your favorite movie, walk the moon of a faraway planet, speak with historical figures or your favorite fictional character within their world and how this could change people’s participation of reality vs. virtual reality.

Google is already testing more primitive versions of this with a game known as ‘Ingress’ which allows users to overlay their actual geography within the game itself and connect and interact with others in the virtual world based on an individual’s actual proximity. These virtual worlds will provide complete new realities as well as trackable ‘big’ data for advertisers. As we begin to engage with these alternate realities, advertisers will find the impact of their advertising and value of data will remain be more similar to reality than we previously imagined. Thus the impact of branding and ads will become as blurry as the ability to distinguish virtual reality from reality itself.

Begin to prepare yourself now because your thoughts and emotions will let advertisers know exactly what you want and will allow them to identify the right time to hit the right customer with the right message. The technologies needed are already in development and as we become more comfortable with the rapid evolution of technology, unique and customized ads for the individual will actually begin to actually make sense to consumers and advertisers alike.

Sabermetrics & Search Bid Management; ‘Moneyballing’ the Market

It took some time for the baseball world to accept the forward thinking Bill James. His work in advanced statistics, now known as sabermetrics, attempts to quantify all aspects of baseball to determine why teams win and lose. James’ approach has been highly contested since the late 70’s, but is now becoming widely accepted as a stat revolution in baseball.

My curiosity with Search Engine Marketing (SEM) grew with the acceptance and advancement of sabermetrics in Major League Baseball in the early 2000’s. The similarities between SEM and baseball seemed quite natural to me and easy to correlate. You have a batter and a pitcher, similarly representative of your ad and a consumer. At-bats are impressions, hits are clicks, home runs are conversions and so forth. Slightly more quantifiable stats in baseball, such as Batting Average, Slugging Percentage and On Base Percentage equate very similarly to CTR, Revenue-Per-Keyword and Average Order Value for any given keyword.

The age of “big data” for marketers had me convinced there are new sabremetrics yet to be discovered or written for search which would provide a tactical advantage for my clients in the search auction. The logical correlation seemed obvious and as with baseball, sabremetrics could help smaller advertisers/ ball clubs compete against the large advertisers/ big market clubs as many of us enjoyed in “Moneyball.”

So I began hurling ideas at the whiteboard in the spirit of Old Hoss Radbourn and his 60 win season (minus the alcoholism and shooting out his own eye) – positives, negatives, extrapolating new stats, correlating stats by macro and micro trends and the findings were quite astonishing… as well as completely inconclusive.

Although it seems SEM is poised to enter the age of advertising sabermetrics, it quickly became more complicated than it was at first glance. The issue lies at the root of aggregating data, as with individual players. An individual player will average between 450-600 at-bats per season based upon games played and order in the lineup; however there is no change in competition besides the pitcher. Keywords, on the other hand, may have millions of impressions and in very different market conditions and at different ranks over a short period of time. Factors such as day parting, budget management, geo-targeting, seasonality, competition and current bidding algorithms make the environment too variable to quantify additional metrics beyond our current capacity. Although it would be easy to assume in the age of big data someone could ‘Moneyball’ the SEM space, it doesn’t appear likely. Actually, it appears nearly impossible.

By this point you are probably asking, “So what is the right approach and aren’t you going to share something insightful?” The answer almost appears too simple, considering the complexity of the issue, but it is as basic as implementing strategic, statistical, and active management.

Bid management needs an active eye – a daily glance ensuring you adapt to ongoing market changes. This means multiple rounds of bid optimizations at different points during the week. The statistical layer includes identifying a KPI (Key Performance Indicator) and leveraging the keywords driving your KPIs. The final, strategic layer comprises a variety of external market conditions such as seasonality, inventory and actualized return around various KPI’s to ensure you are maximizing actions for your given budget.

Sabermetrics may have changed the way GMs manage baseball teams and is even impacting other industries, but ad tech won’t be joining the party any time soon. Instead, we should embrace the fact that our industry only rewards those who actively participate in bid management, and those who succeed will earn their way to the top.

IgnitionOne’s Solution to Bid Management

Although developing new sabermetrics for search may not be a feasible solution, there are other technological approaches to addressing this challenge. IgnitionOne utilizes SPOT, which uses proprietary algorithms based on advanced statistical modeling technologies to accurately forecast keyword performance at varying spend levels. This can help marketers determine how aggressive bids should be based on goals and how to optimize spend by keyword to where it will receive maximum impact. By developing a technology solution which aims to provide insights at a level beyond what any new ‘search sabermetrics’ could provide, IgnitionOne can optimize keywords to achieve maximum performance at unprecedented scale.

Your Digital Media Is Integrated…Now What?

It’s not hard to imagine how larger advertisers can quickly find themselves caught standing still in a rapidly evolving digital marketplace today. As new tracking technology allows for greater integration between channels, advertisers should be thinking about how they can change their approach to increase efficiency. As advertisers become more sophisticated, the pressure grows to edge out competition and dominate the digital marketing space. Advertisers are finding themselves trapped between growing local online media, traditional companies investing in digital media, new e-commerce sites, OTA’s, review aggregators, blogs and social networking sites now earning margins on their revenue. Some advertisers are not sure if they should even view these new channels as friends or foes but regardless of channel, advertisers want their media budgets to earn/buy the most media possible, generating the most return.

Evolution is at the forefront of our industry. It has been a founding principle since Gutenberg fired the last town crier. As media has developed, the evolutionary curve has shortened. It is seen more recently with TV budgets overtaking radio ad space, DVR changing the pricing structure of the broadcast, and most recently with the Internet transforming print media and how businesses engage with customers.

Fact: It was 700 years from the invention of print to the invention of radio and nearly 70 years from the invention of the radio to the invention of the Internet.

Considering how rapidly online marketing evolves, advertisers can take advantage of this evolution instead of falling victim to it. Sometimes to their own detriment, advertisers can find themselves following the standard procedure and allocating media spend without considering the efficiencies of flexibility. Here are two ways advertisers can help their own organization evolve within the digital space. By strategically allocating budgets and making them flexible, marketers can earn/buy the most media with every dollar.

1. Break Down the Walls – Clients must learn that departmental divisions and internal competition for budget isn’t healthy. In many circumstances, advertisers compete internally for the same advertising budget and are incentivized based on growing media spend, not efficiently spending it. Factors such as product quantity or historically offline performing categories may cause advertisers to unfairly distribute budget from the top down instead of the bottom up. In an ideal scenario, budgets should be increased departmentally based on efficiency and departments should not be constrained to budgets set in a prior year. Advertisers must look holistically at their business and work together interdepartmentally to not compete against each other, but to ensure the internal divisions/departments with the greatest ROAS are fully funded.

2. Allow for Flexible Budgets – As consumer behavior continues to advance, media spend will change . Advertisers should prepare to shift budgets between search engines, display networks, mobile networks, etc. This budget shift doesn’t stop at the publisher level, but should be considered internally as well. Advertisers can find themselves pressured internally to ‘’support’’ new efforts instead of allocating media funds to proven and more efficient channels. Some ways to evaluate your media budget are to compare the shift in ROAS by date, channel, search engine, SEO provider, etc. and overlay this against your business cycle/seasonality. Next, determine how accurate your digital tracked revenue is by channel and the actual ROAS for each channel; you will then be well on your way to providing flexible budgeting and growing your internal revenue with the same media spend.

Ways to analyze media spend
i. month to month
ii. channel to channel
iii. engine to engine
iv. network to network
v. division to division
vi. seasonally/cyclically

At this point you might be thinking, “The big guys upstairs don’t like new ideas,” but I’ve discovered that the big guys upstairs always like ideas that are practical and generate revenue. Once advertisers make budgets more flexible and reallocate by performance, you will maximize your media dollars and increase your ROAS. It’s certainly easier said than done, however those who can will gain a competitive advantage over those who won’t.