example use case: cpg advertiser

INTRODUCTION The rapid growth of the open web and widespread use of digital devices has fostered a thriving ad industry that is projected to represent nearly $600 billion worldwide by 2016.1 Though, this meteoric rise is not without a substantial number of growing pains. The advent of always-on media consumption has upended the traditional path to purchase; every step from awareness to loyalty is comprised of a complex trail of consumer touchpoints and engagement data. As a result, marketers have increasingly turned to automated platforms to aid them on the development and optimization of effective advertising programs across screens and channels. While the mechanization of marketing has proven fruitful in numerous ways, fragmentation of the advertising technology landscape has severely limited a brand’s ability to view their holistic marketing efforts. This produces an abundance of costs, siloed learnings and incompatible data sets. To be effective and consumer-centric, however, marketers need the ability to unify insights across all partners and channels. This paper is intended to help brands understand the distinct benefits of partnering with an open platform, a modular approach that capitalizes on open data integrations, inventory, creative optimization and attribution methodologies, versus a closed, or “walled garden” strategy with predetermined capabilities and partners and limited flexibility and portability.

Key questions that will be addressed include: • What should brands look for in a platform? • What do marketers lose by using a closed platform? • How does an open approach to advertising solve for a rapidly evolving media landscape and changing consumer behaviors?

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OPEN DATA From audience buying to measurement, data has a vital role in every phase of a successful marketing program. There are countless ways consumers interact with media, resulting in a treasure trove of data points that advertisers collect and analyze. Still, despite the abundance of data at their fingertips, brands are highly limited in the ways they can quickly and thoughtfully act upon it.

BRANDS NEED TO CHOOSE THEIR DATA PARTNERS With the advancement of data management and buying technology, it’s become clear that the archetypal one-size-fits-all approach of traditional advertising is ineffective. Every brand has unique marketing objectives, which increases the need for flexible data sources that enable custom audience segmentation, vertical or channel specific optimization and seamless reporting that does not require manual data manipulation. When working with a closed platform, brands and agencies have a disjointed view of how they’re actually performing. Closed platforms require their clients to work with a predetermined set of data vendors—for example, vetted data management platforms (DMPs) or demand side platforms (DSPs)—an arrangement that can have implications on performance, as well as the level of transparency and quality of a campaign’s success metrics (not to mention portability). Alternatively, an open platform permits advertisers to audit and select partners and data sources that advance their objectives, working in conjunction to streamline current efforts and backfill strategic gaps in an advertiser’s technology portfolio. Whether leveraging first-party data (consumer data the brand collected independently), second-party data (the open platform’s data) or third-party data (external data from another platform partner), open platforms allow for brands to have free reign over which providers they work with at any given time. In some scenarios, an open platform provider can even aid and facilitate advertiser agreements with third party data partners—either keeping the same pricing agreements in place or negotiating new deals. As a whole, flexible data capabilities motivate providers to

compete for an advertiser’s business, resulting in more transparency and less overhead costs that get written off in a closed platform partnership.

DATA OWNERSHIP SHOULD BE MANDATORY, NOT OFF-LIMITS Another major benefit to an open platform approach is the portability or complete ownership of a brand’s respective data. With more advertisers taking buying functions in-house, an estimated 50% of brands and agencies are using their own DMPs.2 Generally, apart from high-level campaign reporting, closed environments restrict advertisers from exporting campaign data–inclusive of the insights or segmentation that was applied–back for verification or to take elsewhere if the marketer chooses to switch platforms. In other words, closed platforms are correcting their own homework. With an open platform, campaign and audience data is shared and traded between the advertiser and technology provider. If a brand works with one or more data management platforms to oversee offline and online consumer data, an open platform can ingest that brand’s data comprehensive of the DMP’s insights to optimally execute on it. Additionally, the brand can syndicate its data out into other activation partners if they choose to do so. An open platform can also mix the brand’s data with additional audience-buying capabilities, such as cross-screen data or predictive segments, enabling even greater audience segmentation and verification opportunities.

EXAMPLE USE CASE: CPG ADVERTISER A large CPG advertiser is launching a new food product in their top consumer markets, and is partnering with a grocery store for localized messaging and offers. An open platform will ingest data from both the CPG brand and grocery store, create unique audience segments and targeting parameters and activate on this unified data across all of the CPG brand’s partners and tools. Output of the CPG brand’s data is not limited to a programmatic buying tool and will also connect to other systems like direct mail, personalization, creative and marketing optimization systems.

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OPEN INVENTORY Ad inventory has traditionally been kept in a black box. Within a standard ad network model, inventory is curated with little to no transparency between buyers and sellers. In turn, an advertiser’s view of precisely what gets bought, the quality of the inventory and where their ads are being placed is limited. Advertisers are pigeonholed into buying and transacting on inventory aggregated from specific publishers and as a result, any type of optimization is done in favor of ad networks, while the advertiser sits outside of the box.

A BETTER TRANSACTION FOR ADVERTISERS AND PUBLISHERS ALIKE Today, this model is evolving to favor a more transparent approach that uses open technology to better bridge the gap between buyers and sellers. The automation of these transactions benefit advertisers with greater media buying efficiency and sophisticated targeting, and assists publishers through insights into their audiences and higher resulting margins. Two examples of exchange models are programmatic direct (programmatic sales between one buyer and one seller) and private marketplaces (exclusive, data-powered exchanges that curate inventory and deals for specific buyers and sellers). These types of deals have become so ubiquitous that researchers are estimating that they will represent a total of $6.4 billion, or a 43% market share of digital marketing by the end of 2015.3

UNEARTHING GREATER INVENTORY VALUE AND BRAND SAFETY THROUGH TECHNOLOGY Similar to flexible data integration capabilities, open platform providers can accept existing publisher relationships or broker new ones. An open platform allows for any established deals that a brand has made with inventory providers, regardless of the structure of that deal—automated guarantee, upfront or via private marketplace—to be easily accessed and converged with. Or, by buying inventory through an open platform, advertisers can purchase reserved or non-reserved inventory upfront, from any source, then curate, tag, categorize and optimize that inventory against their objectives. To honor strict regulations on privacy and consumer protection, it

is critical for marketers to be accountable for how they target their audiences and where their ads are being served. An open inventory approach is a mechanism for this safeguard, while still leveraging a strong programmatic optimization engine, facilitating better, more efficient decision-making and impression management across all campaigns. Ultimately this offers buyers and sellers alike more utility and value for their spend—all of which a closed platform cannot provide.

EXAMPLE USE CASE: FINANCIAL ADVERTISER A financial brand is advertising across multiple devices and channels. Sensitive to where it advertises and to whom its message reaches, it wants to know exactly which URLs its ads show up on. Additionally, the financial institution has predetermined a short list of financial sites that are most qualified for its advertising. An open platform will offer the brand complete transparency into where its ads ran (down to the URL level) and how much it paid for each ad call won. It also offers the financial advertiser access to a private marketplace of inventory from sites inside or outside the platform’s own inventory pool.

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OPEN CREATIVE OPTIMIZATION Over 480 global CMOs and senior marketing executives surveyed by the Economist Intelligence Unit (EIU) at the end of 2014 found that creative innovation was at the forefront of marketing executives’ priorities in the next 3-5 years. Nearly 20% cited creative and design as the area in which their company is most likely to increase technology investments.4 In a separate study, 49% of buyers and sellers claimed that the ability to target consumers through programmatic is leading to new forms of creativity and storytelling in advertising, affirming that technology is just as essential to the art of advertising as it is the science.5

INTELLIGENTLY TRANSFORMING THE CONSUMER EXPERIENCE—IN REAL-TIME As programmatic technology has shown, advertising tailored to a consumer’s interests work better than a buy that aims to reach anyone and everyone. Creative optimization takes it one step further. Powered by data and analytics, predictive optimization works across mobile, desktop and video, allowing publishers and advertisers to optimize rich, interactive display ads that will perform best at the user level. Not only can marketers enhance these dynamic creatives for more clicks, but they can do so for any metric that aligns with their goals—whether it’s engagement or social shares based on the advertiser’s needs and campaign KPIs. Unlike a closed platform, an open platform allows for brands to import all of its creative assets to inform data segmentation and activation, which means that any creative an open platform executes for a client can be modified based on real-time inputs from any data partner. When using a dynamic creative optimization platform within an open environment, data and insights from various components of that open platform can be gathered and applied while developing data-driven ads that can run on any DSP, ad server and channel. This continuous application of learnings across channels, formats and sources results in a feedback loop and better performing campaigns overall. This open approach allows brands to experiment with different creative executions across multiple mediums, optimize based on the resultant findings and iterate in a measurable way.

EXAMPLE USE CASE: ENTERTAINMENT ADVERTISER A film studio is running a display advertising campaign to get more filmgoers to see its new release. The studio wants to show users on desktop and tablet devices local movie showtimes within a banner creative. In order to do so, the film studio is working with a movie-ticketing partner to supply showtimes as well as a rich media ad server to develop the dynamic creative. An open platform would accept any rich media platform as the ad server, and would partner with the rich media ad server to provide location-based data or any other media data that could help optimize the creative messaging on behalf of the advertiser.

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OPEN INSIGHTS AND ATTRIBUTION With 60% of adults using at least two devices per day,6 there are countless consumer touchpoints, making it difficult for marketers to have a single view of whether or not they’re messaging their consumers correctly. While disparate measurement and analytics platforms are available to help assess aspects of marketing performance, brands need to have a comprehensive view of a customer’s path to purchase across all channels. Adding to the technical and operational complications around measurement, technology vendors and publishers have little to no incentive to string together an advertiser’s cross-channel performance insights, forcing advertisers to make arbitrary comparisons that cannot easily translate into repeatable performance.

REDEFINING MEASUREMENT: FROM RETURN ON INVESTMENT TO OPTIMIZATION OF INVESTMENT While most advertisers tend to think that they are employing advanced attribution models, they are often looking at incomplete data stories that rely on traditional methods of attribution (first-touch or last-click) that fail to properly credit all necessary channels. To fully understand their consumers’ behavior and the value of their media investments, brands need an algorithmic, multi-touch attribution (MTA) solution that takes into account the device and media agnostic variables leading up to online or offline conversions, and offers data-driven, unbiased recommendations on spend, audience, frequency capping and other critical considerations. The open platform is a transformative shift away from measurement proxies toward a solution that directly and objectively evaluates the impact of each channel, device, message and media type on audiences. Further, it does this using real-time, machine learned data for both insights and buying optimizations. In its recent analysis of leading cross-channel attribution providers, Forrester Research stressed the value of open platforms, citing that the proverbial separation of church and state is crucial when it comes to media buying and measurement.7 Additionally, the report gave

substantial credit to companies that had sophisticated online and offline measurement capabilities—both of which are often negated by marketers due to the difficulty of measuring offline marketing channels outside of a walled garden. Each step in the purchase funnel plays an integral role, but without an MTA solution to measure the relative impact, ad spend can easily go to waste. This is where one of the strongest benefits to an open platform comes into play: by default, a closed platform cannot provide the same objective marketing measurement and analytics an open platform can. If an advertiser chooses to work with a modular platform, they can layer in their multi-touch attribution solution of choice across all of their other advertising technology partners and get a clear analysis of what’s effective. Open marketing analytics also mean accessing a bring-your-own-metrics world, where advertisers are not constrained by the KPIs available on any given platform, but have the flexibility to optimize for the results that matter to them specifically—from driving sales to growing brand equity.

EXAMPLE USE CASE: RETAIL ADVERTISER An online retailer is activating data and media across multiple offline and digital channels and devices in hopes of driving greater sales revenue online. Instead of using media-mix-modeling (MMM) and static digital measurement models separately, it is using an algorithmic multi-touch attribution measurement model to determine the performance of all its channels in a single view. The open platform provides the online retailer with attribution capabilities and a clear view of how it determines credit allocation between channels and tactics, rather than keeping its analysis private and hidden. Additionally, an open platform will allow its insights to be automatically ingested by any outside buying platform for automated optimizations, speeding up the activation of its insights.

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WHAT’S NEXT Ultimately, both open and closed platforms serve to help the advertiser resonate with their consumers and prospects. They both strive to make things easier for the brand, but the operational and financial benefits of an open platform ultimately outweigh that of a walled garden. The differences between the two are striking and necessary for marketers to understand when evaluating advertising partners. In an industry mired with issues dealing with transparency and trust, the hidden practices carried out by companies running closed platforms add to the growing list of concerns for the advertising ecosystem at large. With incredible technological advancements fueling the market and changing consumer buying patterns, every dollar and touchpoint needs to be accounted for in a meaningful way. An open platform instills accountability around the results technology providers are producing, leading brands to a candid view of their successes and shortcomings. Whether it’s remedying the lack of pricing transparency, or navigating the extreme difficulties of calculating cross-channel ROI, an open platform empowers advertisers to take control of their programs from start to finish.

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SOURCES 1

“Worldwide Ad Spending: Ad Spend Tool” eMarketer, 2015.

2

“U.S. State of the Video Industry Report.” AOL, September 2014.

3

Fisher, Lauren. “Digital Display Advertising: Nine Things to Know for 2015.” eMarketer, February 9, 2015. “The rise of the marketer: Driving engagement, experience and revenue.” Economist Intelligence Unit, January 28, 2015.

4 

5

“Programmatic Futures: Where Culture Meets Code (UK)” AOL, October 6, 2014.

6

“Study: 60 Percent Of Adults Switch Screens During The Day.” Marketing Land, March 6, 2014.

7

“Forrester Wave™: Cross-Channel Attribution Providers, Q4 2014.” Forrester, November 7, 2014.

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