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Measuring Integrated Advertising

I have a lot of respect for Mark Suster, an entrepreneur who turned venture capitalist and now is investing out of GRP Partners.  He writes a terrific blog called Both Sides of the Table and his posts are picked up on TechCrunch and other major outlets.

He recently wrote a declarative post called The Future of Advertising Will be Integrated.  The post went up on April 29th but I’ve been noodling it ever since. Due to some personal obligations, I’ve not been able to respond, but finally, here it is.

As an entrepreneur turned ad agency guy, when I hear the word “integrated,” I immediately think media and creative under one roof, such as my firm, kirshenbaum bond senecal + partners.  I personally believe this is really the only way to go if you want to get to a big platform.  With media and creative all under one roof, under one P&L, and with a cohesive team, you can create big ideas that know no creative or media boundaries.

We have a saying internally at the agency, E=(MC)2, which is obviously repurposed, but it means a “[brand] experience” is exponentially greater when media and creative work together.

Enough agency speak for now but keep this last sentence in the back of your mind as you read the rest.  I hope you do.

Mark came at his post a bit differently and took the above tenants, whether he realized or not, and applied them to the digital media ecosystem today.  He highlighted a few companies such as my buddy Ari’s company, Solve Media, along with Adly and Kontera (amongst others).  The creative is the media in most of these, along with the media being the creative.  I’d argue Paid Search links play here as well.

The Elephant in the Room

One of the largest issues that the digital advertising ecosystem faces today is that we as an entire industry, are not setup to measure the “integrated” nature effectively. Because of this, at scale, this is not a near term reality.  There, I said it.  The elephant is in the room.

The digital advertising ecosystem by default rewards the intent harvesters, not the intent generators.  The primary reason why is that many agencies and marketers are using 3rd party ad serving systems that reward the last click or last action.  In the world of rewarding the last click or action, generally, the ad networks are the ones who win out.  There are 400 (or 700 depending on who you talk to) or so ad networks in the world who have nice businesses.  Just look at ValueClick or InterClick’s financial statements as they are public.  Not too bad.

THE Digital Opportunity

Because of the above, therein lies an opportunity.  If we believe what Mark wrote last week and I’ve been saying for years, then an opportunity lies in being able to create a measurement platform that allows us to understand intent harvesting and intent generation/creation. Piecing together a DART (3rd party ad server) report with a ComScore or Knowledge Networks study is inefficient and frankly, annoying.   There needs to be an evolution here.  This is a big opportunity.

Where We Are Today

Many readers of this blog don’t work in advertising agencies but are awesome entrepreneurs looking to figure out the next big idea to go and tackle.  Being that you are not in the walls of agencies on the daily basis, I thought I’d take the remainder of this post to outline where the industry is in terms of advanced analytics and then open this up for commenting in the thread below.

I highly request that you engage in the comments as group knowledge will benefit the community at large, you might find your next co-founder, and I love open conversations.

Ad Serving:  The Madison Avenue ecosystem basically uses one of three third party ad servers to “serve” and “track” different pieces of creative.  We use Microsoft’s Atlas, DoubleClick’s DART, and MediaMind.  In Q1 2011, we moved the majority of our clients off of Atlas and onto MediaMind because I personally have a strong viewpoint of independence of my ad-server and it’s relationship to media. (should be separate)

Data Warehousing:  This is a relatively new area and somewhat unchartered territory for many agencies.  Many agencies rely on their third party ad-server to be their main data warehouse for tracking. This is good, as you’d be surprised how many people don’t use a 3rd party ad server, but this is not great. Using a full on data warehouse such as VisualIQ, Neteeza, Artemis, or others allows for a larger capability to manipulate data and understand the relationships between touchpoints beyond “last click.”

At the agency, we’ve been using VisualIQ with some of our most progressive clients and the reports and results we’re seeing are fascinating.  One of the biggest questions we’re tackling is “optimal touchpoint analysis” and we’re seeing the relationships between display, video, search, social, and beyond.  We can now determine a value to each one.

Brand Lift Studies:  While I’ve argued time and time again, that “brand” advertising for the sake of brand advertising online is dead, many marketers continue just spending on “brand.”  Agencies use 3rd party brand study vendors such as ComScore, Knowledge Networks, Vizu, and others that help measure the “lift” (or change) associated in any one of many categories including but not limited to awareness, intent, and consideration.

Opportunities

·     The basic ideas behind today’s ad serving systems were conceptualized in the mid to late 1990s.  Online video, social, search, etc were not around then.

·     Product placement and integration into online video and social are hard to quantitatively measure with a 3rd party ad serving system as the only metrics you can pull back to your ad server are by using a click-tag.

·     The Display ecosystem is being fractured into traditional display (i.e. banners on ESPN) and social display (i.e. creative/textual units on Facebook, LinkedIn, etc).

·     I see Paid Search and Display converging on each other within the next 12 months. In some cases, they already are: Google Content Network.

·     I challenge you to ask your 3rd party ad-serving vendor to recommend an attribution model – report back what they tell you.  Not much – there is no standard yet.  It’s unchartered territory.

Next Steps

I would obviously love to hear your feedback.  Please post it in the comments section below or shoot me a note.  I believe that we won’t see large integrated opportunities that get their portion of the measurement/attribution credit until there is a way to measure these.  While we might try one or two of these integrated opportunities on each media plan, if you ask the agency how they really performed, the agency won’t have much to tell you because the tools for measurement are ancient.  With the data warehouses mentioned above, we get much better, but not perfect.

While we don’t need perfect to make the industry move forward, we do need better tools.  If you are building them, I’d like to speak to you.

Madison Avenue Meets Sand Hill Road, kbs+p Ventures is Born

My vision since day #1 of joining this agency has been to foster relationships with early stage technology companies, as they are the rapid innovators within the market place.  The agency world has a lot to learn from them and their rapid pace inspires much of what we do.

I have begun executing on this vision with the awesome people in the agency by hosting The Media Kitchen Digital Media Venture Capital Conference (3 years in a row), Speaker Series events featuring prominent founders and VCs, Lunch & Learns with startups, and being open to the dozens of startups and VCs that reach out each year for introductions.

I recognize the value of innovation and startups within the advertising agency landscape because I grew up on that side of town.  I got my premature grey hair founding multiple startups and raising lots of Venture Capital and both losing my shirt and winning it back.  I didn’t sleep at night because I knew that our staff had families to feed and if we didn’t hit our revenue goals, we’d go hungry.  I had been on a Ramen diet for much of the early 2000s.  It’s hard to grasp being an entrepreneur when you don’t participate in the lifestyle and career choice.

Announced today is the evolution of both the agency and myself, a step towards aligning ourselves with innovation in even a greater sense of the word.  Not only will we bring startups and fantastic entrepreneurs inside our walls for advertising related opportunities, but we’ll even take it a step further and fund them as well through our new investment arm, kbs+p Ventures.  You can view the website here.

I’ll continue to lead, inspire, and execute against Chief Digital Media Officer responsibilities with the added responsibility of sourcing, analyzing, and green lighting (along with our investment committee) seed & early stage technology driven investment opportunities that provide mutual value to both the entrepreneur and to our agency at large.

There are three areas that we look for in opportunities that aren’t dissimilar to other investment arms/funds:

  1. Team:  Are we backing the best possible people who are exploring an idea thesis?  If not, what needs to be added to the team?
  2. Idea:  We like to back big ideas that can be executed against today.  If the idea is too large and is too far out in the future, then the idea isn’t for us, kbs+p Ventures.
  3. Demonstrable Traction:  We like to see momentum.  Can you demonstrate traction that you have gained with your idea?  Do you have either an open or private beta?  Demonstrable traction shows us two things:  1) the market at some level is taking to the idea and 2) it shows us that you can execute.

I’m looking forward to backing some fantastic entrepreneurs and investing alongside my friends at various funds.  We generally do not lead investment rounds and we’re complimentary to any super angel or early stage fund.

I’m excited to bring Madison Avenue and Sand Hill Road together.  It’s been way too long for this to happen and as the advertising world is becoming increasingly digital, it makes a ton of sense.

Thanks to all who supported the launch of kbs+p Ventures!

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