comScore Reach Rankings: Whither RTB? (Part 2)

by Madhu Vudali
November 15th, 2011

Previously, I discussed how comScore’s reach rankings are not keeping up with the emergence of RTB. Agencies use these rankings for planning and to help select media partners. Hence, it is critical for them to figure out how RTB potentially affects this measurement. Until everything is nicely squared away in measurement land, here are the five key questions that agencies should ask their media partners when deciding which ones are the most RTB-fluent.

1.  Do you have your own bidder?

• Having a bidder gives the media partner control over scale (potential inventory and unique  reach) and operational efficiencies. It is also an indicator of their level of technical investment and sophistication. With the expected growth of RTB and its applicability to all ad formats, owning a bidder is “table stakes” for any media partner that wants to offer scale.

2.  Which exchange platforms are you bidding on?

 • Publishers are increasingly testing/using multiple exchange platforms for monetization. To get the broadest inventory and reach coverage with the best economics, it is best to be bidding on multiple exchange platforms. Alternatively, access to a meta DSP such as AppNexus can provide RTB access to inventory on multiple exchanges, although at somewhat less attractive economics (for both network and end customer) relative to direct exchange integration.

3.  What level of QPS (queries per second) do you have visibility to?

• QPS translates to “potential inventory.” So, higher QPS means more visibility and access to inventory and reach. Total exchange volume estimates range between 3B to 5B impressions per day in the US, which equates to 35K to 58K QPS. Exchanges enable “pre-targeting”, e.g. IAB ad-sizes, only certain sellers, domain whitelist, and other desirable constraints, which brings the total meaningful and desirable QPS range down.

4.  What are your Response Rate/Win Rate Metrics?

• Response Rate is an indicator of how much exchange inventory is “interesting” – after pre- targeting – to a bidding media partner. Higher response rates indicate a richer demand pool and thus higher likelihood that the media partner is bringing some scale advantage to the table, i.e. the scale for fine-grained audience targeting.

• Win Rate (the % of bids that you submit on that you actually win) is an interesting metric, but only meaningful when combined with response rate. If the response rate is very high, then an ad network can achieve its inventory goal with a low win-rate. Conversely, a lower  response rate would necessitate a higher win-rate to “earn” high inventory, reach, and overall ranking.

5.  Bottomline: What is your incremental reach with RTB?

• Ultimately, it’s all about the relevant additional reach RTB fluency creates for a network beyond what is measured by the increasingly outdated comScore/Nielsen metrics. The critical variables in this regard are QPS, response/win rate, and the resultant “cookie reach.”  Of course, cookies are not UUs but it’s how most networks do a basic approximation to UUs.

Let’s take a simple example to illustrate what we mean. Assume a modest 5000 QPS and a 50% response rate. This results in ~215 million impressions per day. Factoring cookies-to-UU adjustment and reach saturation over a typical month, we would estimate that this example partner has an overall potential reach of 145 million uniques per month.

For Brand.net, we had approximately 10K QPS and a 28% response rate in September. The resulting potential reach with RTB would have been 153MM uniques, increasing our reported reach of 92MM uniques by over 66%.

Of course, these numbers will vary depending on average campaign frequency, campaign breadth, and the contextual / audience focus of each partner. All further reinforcement that if “marketing is the new finance” and innovative marketers are already putting that dictum to practice, agencies and brands need to get familiar with the new math and metrics of RTB quickly.

This is yet another way RTB is altering the playing field for media providers, separating those with the technical investment and sophistication required to take full advantage on behalf of their customers. To date we have seen this trend primarily in the Direct Response world. Now it’s transforming Brand as well, so by this time next year we’ll see a very different landscape.

Filed under: Ad Networks, Display Advertising, Inventory
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comScore Reach Rankings: Whither RTB?

by Madhu Vudali
October 27th, 2011

comScore recently released its latest rankings of “ad-focused properties” (aka ad networks). “Who’s up and who’s down” always attracts much ink in the broader industry/business press. In seriousness, many of the agencies use this ranking as a filter to decide whom to work with: the higher the ranking, the better the chance of scoring that RFP.

That “footprint filter” may well have made sense at a point in time. But RTB is completely changing that. Here’s why: (a) the Exchanges/SSPs/DSPs provide a massive, if not near complete, coverage of US internet audience and (b) most ad networks (Brand.net included) are making full use of the inventory footprint enabled by these platforms. Essentially, all of us can potentially reach the entire US internet audience. In short, comScore understates the reach of ad networks that are successfully integrating RTB. As RTB grows, this understatement becomes more profound.

Given all of the above, Agency buyers no longer have an accurate way to determine the meaningful potential reach accessible through their largest media partners. Who in the ecosystem can and/or should step in to fill that gap? And what will new planning metrics look like?

One potential outcome would be for existing big players in measurement (e.g., Nielsen, comScore) to release new metrics that resolve the gap. Alternatively, Google or QuantCast, who have measurement capabilities but less tangible footprint with buyers, could use this as an opportunity to leapfrog the more established players.

Or the most intriguing option: perhaps there are startups on the horizon that will challenge existing measurement companies by innovating new methodologies and metrics to help buyers make informed decisions in our new RTB-enabled world?

In our next post on this topic, we’ll explore some related questions and alternatives that agency buyers should consider to address this issue. In the mean time, who do you think is most likely to take advantage of this opportunity?

Filed under: Ad Networks, Industry News, Measurement
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Addressing that “all-important brand/premium/guaranteed marketplace”

by Elizabeth Blair
July 7th, 2011

I was delighted to see that Tumri has been acquired. M&A is great for the online advertising industry. Consolidation creates fewer, stronger players with deeper, better solutions. And liquidity gives venture capitalists the dollars and incentive to fund the next generation of technology.

Terry Kawaja’s summary of what old school ad networks say they are doing, to either truly transform their businesses, or more crassly just to reposition themselves (either way primarily with an eye to an exit), is spot on:

(i) the amalgamation of a services solution set, (ii) the application of advanced technology to improve advertiser ROI, publisher yield and consumer relevancy, and (iii) more of a focus on “upper funnel” solutions that address the all-important brand/premium/guaranteed marketplace.

That said, a casual reader could infer that Tumri is part of the solution set for (iii) brand/premium/guaranteed. It’s not. Tumri’s description of itself on its Overview page makes that clear: “Tumri’s Dynamic Response solution optimizes landing page content (or any other type of post-click response) .” Online case studies also always tell you a lot about what a company “really does”. Proof is in the performance metric. What’s positioned as a “brand” or “branding” case study is unmasked by the KPIs – most of the time they are all about DR. Let’s glance at Tumri’s case study callouts:

• “37% Cost Per Lead reduction vs. static creatives (control)”
• “Cost per acquisition reduced by 67%”
• “312% improvement in Click Through Rate vs. default promotional creatives (control)”

So what really happened: a DR ad network acquired a DR optimization feature.

We fool ourselves thinking that any of this addresses the online spend pool that’s projected to triple in size in the next four years: true upper funnel brand advertising. Agencies spending the money get that. Publishers who want the money get that. PR spin isn’t doing a thing to make the $85 billion dollars in brand advertising that still hasn’t come online come online. To do that we need to prove to brand marketers that online advertising delivers results: a material increase in ROI on a material volume of sales. That’s what we do here at Brand.net every day.

Filed under: Ad Networks, Branding, Industry News
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