24 January 2012 in ExchangeWire EMEA 28 Comments

Retargeting Centralised: Why Agencies Should Internalise This DR Buying Function And How It Would Benefit Advertisers

Geoff Smith is Head of Activation at VivaKi and Paul Silver is the Head of Product, VivaKi. Here both discuss the benefits of centralising retargeting and why internalising this buying function at the agency level benefits the advertiser.

Retargeting is the core foundation of any performance display campaign. It’s something we all know now, but it’s not something we all knew when we outsourced our display buying to ad networks all those years ago. That’s ultimately because ad networks never disclosed the importance of retargeting whilst they were able to ride the gravy train. However those days are over, and there are several compelling reasons as to why we should all bring retargeting in house today.

Transparency

Arguably, the greatest output of RTB is that it has created a new marketplace that allows it to be centred on transparency (not 100% complete transparency on every bid request but considerably better than it was previously).

Being in control and accountable of every penny a client spends means we know exactly how much contribution there is from every element of their retargeting programme, and what’s more, so now do our clients. There is no more allowing ad networks to hide behind blended CPA metrics, offsetting the poorer performance of their run of network activity with quick win retargeting conversions. Clients now understand the exact worth of retargeting and precisely how/what needs to be done to a) increase that retargeting volume but also b) drive incremental growth from other prospecting strategies.

Lets not forget, in most cases, we also now have insight and transparency into where our ads are being served. Not only is this paramount from a brand safety perspective but also incredibly valuable when we can provide insight to clients that demonstrates which environments convert their target audience more efficiently, how that informs their other cross media planning strategies, and how it disrupts their traditional media planning with fresh ideas.

Price Inflation

The impact of price inflation from multiple retargeters running on a single media plan is real, it is not just a theory. We know the effect of having to bid for a single user against other bidders. We’ve seen the data, it becomes less efficient. The message we convey to clients is that the situation is akin to brand bidding in the affiliate space a few years ago. Why would you let affiliates obtain standard levels of commission for piggybacking on your marketing investment, by bidding on your brand, whilst also inflating your own CPC costs to access that brand term inventory? It didn’t make sense then and it doesn’t make sense now.

Strategy versus tactic

By centralising retargeting in house, you immediately remove any element of having to play ‘the ad network game’ which is designed to obtain last click or view attribution. You are actually able to start developing more bespoke, controlled strategies around first party data, integrating it into the wider marketing/comms mix and introducing separate eCRM or cross channel strategies. It becomes an extension to an integrated marketing plan, rather than simply a cheap display acquisition tactic.

User experience

If there’s one thing that gives retargeting a bad name, it’s when advertisers do it poorly. Retargeting should be used as a reminder of the brand/product/service that a potential customer is considering, rather than giving advertisers the ability to stalk users across the Internet with the same message, no cap on frequency, and potentially showing them the same product that they bought 3 weeks ago. It sounds basic, but we’ve all seen it in action. By taking the retargeting program in house, agencies can help clients ensure that their customer’s user experience remains engaging, consistent and above all else, controlled, increasing brand advocacy rather than damaging it.

Data security

Lastly, and perhaps most importantly, being in control of client’s first party data is not a simple game of efficiency improvements. There is also the much more serious consideration of client data protection. With publishers being able to place tracking pixels within tracking pixels within tracking pixels, can you honestly say that you know every 3rd party server call being made from your client’s site?

It is not unfair to say that practices from *some* ad networks in the past have included leveraging one client’s dataset to improve performance for another client competing in the same vertical. Why should client A help fuel the performance of client B? It reduces their competitive advantage for the benefit of their competitor’s. It’s clearly efficient for ad networks to do this, and certain agency groups are also now taking this data sharing approach, but who really gains when everyone has the same cookie pool available to them?

Data leakage became a serious issue for the industry last year, and with the e-privacy cloud looming, agencies have a responsibility as much as their clients to ensure consumers are well informed of how cookie data is being used. How confident can you be in your client’s privacy policy if numerous disparate suppliers are still managing elements of your retargeting?

At VivaKi we take this very seriously and ensure that no client data is EVER co-mingled. We also work with clients to give them transparency over which pixels are placed on each of their sites and what they are used for. When you outsource retargeting, you loose your ability to have a holistic view on how your client’s data is being used and ultimately, you outsource control. In today’s ever-stringent e-privacy environment, that is a dangerous place to be.

Online Advertising
  • Client X

    It is not unfair to say that practices from *some* ad networks in the past have included leveraging one client’s dataset to improve performance for another client competing in the same vertical. Why should client A help fuel the performance of client B?Can you name Client A and Client B? 

  • Paul

    @Client X – it wouldn’t be fair for me to say but i’ve written on this subject in the past and provided graphical evidence of it. Search online for posts by me and you’ll find it…

  • Client X

    … at least name/shame *some* adnetworks… :D
    True question:What’s wrong (in your opinion) with centralizing all retargeting with a specialist like Struq, MyThings, Criteo?

  • Paul

    For the exact reasons mentioned above. They’re ad networks. 

  • AgentYoung87

    I think this is a good article. however, there are a few major points obviously being glossed over here in light of an agency promoting their own products. 1 – this is just retargeting and although many networks relied on retargeting to get the best value conversions in the past, they still prospected and have been doing so – to the massive benefit of agencies who already have their own trading desk – for years (agencies riding on RM on the back of someone else’s work). 2 – exchanges have no optimisation technology. They are not experts in this field, whereas some networks have been going for 10 years plus. 3 – keeping this in house is taking away the options for the client, giving agencies too much control (ultimately, networks/media owners will start going direct like they do in the US). 4 – there are so many trading desks, good inventory will become convoluted and lose its premium edge I.e. A gambling banner running alongside a huge brand like coke/virgin/pepsi. 5 – agencies are not IASH audited (at all), which altho there is transparency, can lead to big brand safety issues. 6 – I honestly feel that with the education of digital marketing teams across the board, mixed with the ease of using trading desks, this will lead to brands taking all buying in house, leaving the agency out of the equation and open to media owner influence even more. I agree that a lot of networks have acted like rogue traders in the past, but there are also a lot who have always acted ethically. We cannot even slightly start to judge a whole industry on a few bad eggs within the system – its almost like the daily mail reporting.

  • Anonymous

    There is probably a bigger piece in the buying process actually being shifted completely in-house by the brand/advertiser.  You could argue this is already happening.  Look at the strategy of Adobe et al.  I actually think this is a bigger trend in the next three-to-five years 

    These are all valid point.  The IASH thing is a total red herring.  It’s merely a safety blanket for the industry and an excuse to lift 50K for each audit.  I would say the ad verification guys is making IASH defunct.  What happens to IASH when clients internalise media buying.  Good luck with that.    The Daily Mail reference is a little harsh and also slightly insulting.  Happy for you to respond.  The platform is open to everyone.  Just reach out…

  • AgentYoung87

    ha, the daily mail ref is merely tongue in cheek on scare mongering journalism, not any reflection on the daily mail as a digital media owner/network! i.e. a few networks have been at foul play in the past, but you cant judge other networks on this, as most are up upstanding, visible and very honest on what they sell and deliver. Agree that IASH is not as relevant these days, but still applicable. Maybe using IAB compliance would be a more interesting way of looking at brand safety. I feel thats it not just the content, but also the other advertiser that a brand may be sharing a page with that poses a risk

  • R_

    Centralising execution makes sense however parameters around measurement and value association need to be adjusted accordingly. Network or platform A could be driving consumer consideration and traffic to the clients website only for the agency trading desk to ‘mop up’ these users and RT them dropping the last cookie and so deeming platform A to ‘underperform’. Not saying networks have not done this themselves but allowing an element of RT in effect ‘funds’ testing and prospecting impressions, you take this away and it makes no commercial sense to generate leads that will not be attributed. 

    RT ‘works’ not because it is some elixir / secret sauce, in fact it is one of the most basic forms of customer targeting (CRM) but because of the dependence of cookie tracking for measurement. Currently, RT is justifying centralising to an agency trading desk – the wider question for advertisers is do I need to outsource CRM at all and how do I grow market share. Advertisers and agencies need to be mindful not to cut off all oil pipelines to external parties.

  • Paul

    Im not sure I understand the Daily Mail comment but for the record, any practices highlighted in the past were not executed by the daily mail / network, but by those buying from the Daily Mail. 

    Thanks for your other comments.

  • Bobwilson8862

    Centralised retargeting goes some way to solve the issue of
    potential inflation for driving retargeted ad impressions. However, it leaves a
    problem to solve on the Prospecting side of an advertiser’s activity. Retargeting
    users who have already gone some way to engage with an advertiser has long been
    the subsidy of driving in and converting brand new users. Whilst retargeting
    costs are arguably inflated, prospecting costs are often deflated or at the
    very least undervalued.

    There is talk here of Data protection for the Advertiser, which is absolutely a
    key consideration. I would also like to hear people’s thoughts on the
    protection of Publisher data. The elusive ‘mookie’ has been making waves
    recently with the desire to enable its full function to be used as a holistic
    retargeting cookie for an advertiser’s entire media plan. Is it right to allow
    an Agency to retarget a publishers audience outside of the publisher? What
    rules are in place to prevent a publisher’s audience being used for multiple advertisers
    on an Agency group’s books?

  • Anonymous

    Ah the “mookie”!  It’s worthy of a case study of its own…

  • Hmmm

    No one seems to want to talk about the elephant in the room. Margin. We know that most agency trading desks will be taking a margin (largely undisclosed to the clients) on this. This feels like the early “noughties” adserving inflated rate scenario all over again, under the guise of what is best for the client. If agencies feel strongly about taking the power back to the client then be open about media costs, get paid on advising the client on best tech, data management and inventory and allow auditing  (both ad quality and media) to be done on agency trading desk   activity (interesting that the agency trading desks come under a separate brand/company name, which essentially makes them a third party that their respective agencies “buy” from…).

  • Professor Hulk

    I’m absolutely behind centralisation of retargeting and that was before I came under the a big company umbrella it works for clients and they also like the simplicity. 

    More and more clients are now savvy enough to appreciate where their money has been going over the past 10 years and media agency trading desks have helped to educate many clients to the actions of those few “bad eggs”.

    Agree with R_ that measurement of the prospecting and retargeting approach needs to improve though. It is wrong of any agency continue to measure a prospecting campaign on a purely CPA basis. But with the attribution model debate still ongoing I’m not sure how long this will take.

    Speaking from an big company POV I know its key for us (and progressing) to be able to offer this up to the media partners we work with and to the clients serviced. Be this weighted, linear or something entirely different!

    Great Article

  • Jeffstelling

    paul silver did not write any of this

  • LongLivePrint

    Also, are we referring to Personalised Retargeting or standard display retargeting?? If just centralised standard RT in place of Persoanlised RT then the clients will lose out on performance!

  • Bertozzi

    Very interesting feedback. As usual the more controversial comments come from anon contributors which is a shame, lack of transparency again..perhaps they work for one of those Ad Nets mentioned?

  • Professor Hulk

    Not neccessarily

  • mb

    Networks retargetted as that was where the most efficient results were, Agency’s now realise this and therefore should take this inhouse with the advent of such large volumes of inventory available through exchanges, via their trading desks. Networks should have been more open to disclose where performance was coming from but until the advent of trading desks, was an agency really that interested? If the campaign was performing that was good news, no?  The situation may have changed but essentially retargetting should be treated as a standard, simple strategy that works well, maybe spend more time focussing on prospecting for new customers/ and attribution for this?  This obviously doesn’t take into account the margins everyone is trying to make on the campaigns they’re running but if only it were that simple.

  • James Sandoval

    Wow. Powerfully written.

    Centralising customer retargeting/remessaging i.e. display CRM makes a lot of sense to me. It was something I was an ardent advocate of when I [attempted] to sell TruEffect’s TruEffect [1st party] ad serving solution a couple of years back (which I still think is a great idea i.e. someone needs to properly build it out).

    The aggressive application of pixels and other data tags, especially by retargeting service outfits, has had its day.

    Nicely done Geoff.

  • CDB

    I will be open and immediately disclose that I work on
    vendor side of our industry.   With that being said, I’ll be as fair
    and balanced as possible when expressing my opinion.  For that reason, I
    will not use any specific company names.

     

    I am very curious what centralizing retargeting actually
    means to Vivaki.  I’m assuming they are referring to Vivaki being the only
    partner on a media plan that is leveraging retargeting?   Will they
    be selecting only one DSP/ Audience Platform to use for ALL of their
    retargeting by a given client?  If so, what does that evaluation process look
    like?  Is it tested on a vertical basis?  How often are companies
    being tested to ensure the best possible technology is being leveraged?
     As we all know all companies have varying technology (bid strategies,
    optimization algorithms, data visualization etc).    With that
    being said, the blood that flows through the heart of many of these companies
    is fueling constant internal innovation.  The ultimate goal for many
    technology companies is to refine their capabilities to better meet/exceed the
    objectives set forth by their clients in a proactive manner.  Only working
    with one partner at any given time across, any targeting tactic, is NEVER a
    good idea.  I’m a numbers guy & take pride in understanding available
    technology.  Citing price inflation as a primary reason for centralizing
    retargeting is not a compelling enough reason to limit “other” companies from
    having the opportunity to perform better than the trading desk.   My
    hypothesis is that the incremental cost of the price inflation is less than
    cost efficiency of working with more than one partner.  Mind you every campaign is unique with specific
    goals & varying creative assets (all of which play a role in
    performance).  

     

     Also worth noting, is
    the level of expertise that each company brings to the table when they’re
    leveraging their own technology.   Say for example I’m a high school
    basketball player.  Granted there are lot of courts I can play on
    throughout the world, but I’d argue that I can shoot better jump shot on my
    slanted driveway than most of the people in my division.   To imply
    that the trading desk is, and will continue to be the Michael Jordan of all
    technology, and use a self service “licensed” platform better than the company
    that builds it isn’t realistic. 

     

    User experience – this can all be controlled.  It is
    simple and I agree with the authors.  I’d
    argue that if agencies aren’t already “ensuring that their customer’s user
    experience remains engaging, consistent and above all else, controlled,
    increasing brand advocacy rather than damaging” then they aren’t doing their
    job.  The solution isn’t to centralize,
    it’s get a new agency. 

     

    Data security a valid point. 
    Simply put.  Have the right contracts in place with your
    vendors.  Anyone not willing to state specific terms in their contract
    should be immediately dismissed.

     

    -“C”

  • Friendly Face

    Centralising retargeting makes sense for all the above reasons, this isn’t anything new. I still think where trading desks are perhaps getting it wrong, is putting too much emphasis on the RTB inventory and getting their retargeting volume from them sources. Lets not forget that RTB is around 20% of UK display inventory (lazy of me, but you can google this and do the maths), which excludes Facebook in this %.

    If you’re running a trading desk with multiple DSPs and pumping into AdX and other exchanges/SSPs and avoiding inflating your own bid, then great, but this isn’t innovative, this is just a way to re-purpose a model that has been there for years. 

    The key is working with inventory partners that the ad networks (and the high frequency retargeting companies) have done for for years. You absolutely need supply for retargeting to “work”, and relying on the RTB sources isn’t enough.

    Another sub point is that excluding pixels from advertisers sites for 3rd party partners is ludicrous. Simply, conversion pages get less page loads than quote or landing pages. The best way for the 3rd party systems to optimise (particularly with prospecting) is to use pages further up the funnel as a proxy for a conversion. Legal agreements (not just your simple word document, and a handshake) need to be brought in, whereby penalties occur for any company failing to comply to data use.

    This is nothing new for the guys who created the article, but thought there are a couple of interesting points that weren’t touched on.

    Someone touched on ‘margin’ below, I don’t think this is necessarily the place to discuss such factors, but that person has a point. The ‘back filling’ is still happening all over the place! Clear your cookies, go to a location which is a well known impression filler for a ‘real time trading’ offering, and see what ad shows….

  • Anonymous

    I did not edit; had to re-format it as it was horribly laid out.  Probably Disqus.  Who knows?  All good points though, “C”…

  • Usetheforce

    Sort of a moot point. Agencies have the clients trust and ear. Who’s to say its wrong for the agency to take the spend. If the agency screws up, they risk a much bigger deal. For the trading desks that are not that advanced, be careful because there are agencies and hybrid networks ready to steal your clients. Eg Netflix to infectious, or p and g to audience science.
    Very rarely does a client tell their planners they want a portion to go to networks. From what I see the clients and agencies work together to spend the money effectively. Networks work, but they better be 40% better than the atd or it mathematically it won’t make sense. Even if the atd is only 10% better.

  • Anonymous

    Is P&G working with Audience Science?  Interesting.  Been preaching a client direct approach for a while.  Depending 100% on agencies for revenue is commercial suicide.  The fall out will happen this year for sure.

  • James Sandoval

    Correction. Nicely done Geoff AND Paul. 

  • Anonymous

    I have to disagree that working with one partner on RET is a bad idea (hi CDB). It isn’t. The whole concept of RET is about finding pre-qualified users and buying advertising space against them. The very fact that they are pre-qualified means you want to serve relevant advertising to them whenever you’re able to find them. Therefore most RET campaigns will bid on a flat rate CPM basis – normally an artificially high CPM to ensure you win the impression. The concept here is that because you know something about the user (ie their interest in the brand you’re advertising) you want to benefit from that knowledge by aggressively bidding on them and then waiting for price reduction on the Exchange side to bottom out the price you pay. It’s therefore common sense that if you have 2/3/4 ‘platforms’ trying to find the same users across broadly consistent inventory pools then you lose some of the benefits of that price reduction process. Of course there are other factors that can apparently show certain ‘platforms’ outperforming others on RET campaigns:

    - is everyone buying against the same brand safe guidelines – a lot of DSP/platform performance is driven by buying long tail inventory at low $
    - frequency – is everyone adhering to the same rules around frequency
    - inventory access (see point 1) – this will only have a tangible impact on performance if Platform A has access to huge pools of unique inventory Vs Platform B. Even then you’re relying on Platform A working to a similar QPS rate (if they aren’t ‘listening’ to the same volume of impressions per second then they are missing  opportunities to buy).

    The concept of creating a ‘single customer view’ isn’t a new one – at least in the offline world where advanced CRM solutions help you do this. I honestly can’t see any benefit for either the brand or the agency in outsourcing RET to multiple partners – consolidation is common sense.

    By the way, I absolutely agree that Trading Desks should consistently ensure they are working with the best buying technology and most, I believe, do. However that’s a very different conversation and process to the one relating to whether centralised RET makes sense.

    Good post Geoff and some thought provoking comments.

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  • Real Deal

    Actually there are other ‘elephants in the room’ that have not been referred to in the comments. I think this stance by Vivaki and others is self serving to say the very least. Allowing themselves to retarget and nobody else is actually an unfair advantage. It allows Vivaki to show improved results versus other networks (I use this word quite deliberately). There is another feature of this which hasn’t been fleshed out. We (a data driven network not UK based) know from our data that many of our users are brought by our campaigns to the target site. They take a look around, go away and come back maybe an hour or two later and convert. In this interim the agency trading desk alone can happily retarget the visitor. As the Americans say ‘go figure’. This is actually a huge issue. BTW Talking about networks stealing client A data to use on client B is a red herring – scare mongering pure and simple.