W TF THE COMPLETE COLLECTION

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Table of contents 03 Introduction

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WTF is programmatic?

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WTF is native advertising?

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WTF is the marketing cloud?

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WTF is ad blocking?

106 WTF is the digital marketing funnel?

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Introduction In 2015 we set out with a singular goal: to demystify the murkiest concepts in the marketing and advertising industry. What followed was a year spent trawling through jargon-ridden thought pieces, not-quite-white papers, and more listicles than you could, well, list. The result? A series of guides written with insight from industry leaders and presented in an easily digestible, no-nonsense style. We started strong with what is arguably the single most puzzling phenomenon in the industry: programmatic. Next, we asked ourselves: WTF is native advertising? Shortly after hacking our way out of the native advertising weeds, we found ourselves with our heads in the clouds – the marketing cloud, specifically. After that marathon, we were ready for some quick sprints. In the second half of 2015 we decided to drill down into some more granular topics: ad blocking and the digital marketing funnel. For the ad blocking issue, we asked: who is to blame? Who is benefiting? And who, if anyone, has a solution? Finally, we plunged into the funnel. From the social platforms-du-jour to the perennial classics of coupon codes and thank you emails, we left no stone unturned. At the end of it all, we found ourselves rich with primary research, a diverse array of opinions and five very handy guides that explain just exactly WTF happened in marketing in 2015. Without further ado, we present WTF: The Complete Collection 2015.

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IS PROGRAMMATIC?

Table of Contents 3 4

Introduction

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3 Big Programmatic Problems

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Programmatic Advertising In 6 Easy Steps

6 Viewability 7 Fraud 8 Transparency

The Programmatic Frontier 10 Premium Programmatic 11 Programmatic Creative 12 Native Programmatic 13 Programmatic TV

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A Message from Marin Software Beyond RTB: A Programmatic Primer

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Glossary

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Introduction Programmatic is no longer the new kid on the block. For more than five years, technology companies, brands and advertising agencies have been pulling digital ad buying into the automated era. Publishers were slow to get on board, but now they’re creating private marketplaces, doling out deal IDs and, in some cases, leading the charge on programmatic native. And yet the landscape continues to confuse newbies and vets alike. Winter may be coming for ad tech (aka, consolidation is on the horizon), but the operators proliferate and the jargon multiplies. Which is why we’re updating this dictionary. Herein you’ll find an overview of how programmatic advertising is moving forward, what’s holding it back and an expanded glossary of terms.

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Programmatic Advertising in 6 Easy Steps

Programmatic advertising is a bit like an osmotic membrane: Inventory and audience data, insertion orders and digital ads flow back and forth fluidly. In fact, the IAB says programmatic allows for digital ad inventory to be offered, bid on and fulfilled faster than you can blink your eyes. Here’s how it works.

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Agency Trading Desk

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Server

Server

Advertiser

2 DSP

SSP

Ad Exchange

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4 DMP

1. An advertiser creates a profile based off of demographic, contextual or behavioral data via its data management platform (DMP).

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Publisher

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DMP

2. Then it uses that profile to supply an inventory request via a demandside platform (DSP) to an ad exchange.

3. The ad exchange matches that request to available ad space provided by publisher supply-side platforms (SSP) and profiles crafted by publisher DMP using its own first party data.

4. Once a match is found, bidding begins. Using any of a variety of bidding mechanisms, both parties arrive at an agreed upon cost per thousand (CPM) for those ad impressions.

5. When a price is agreed on, the ads are supplied through the above chain from the advertiser’s server to the publisher’s server until they ultimately appear on the publisher’s site (hopefully) in front of the intended consumers.

6. Alternatively, both parties can go through an agency trading desk, but the mechanisms are largely the same.

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3 Big Programmatic Problems Like any disruptive phenomenon that drags an industry into the future by the scruff of its neck, programmatic brings some challenges with it. These are the Big Three:

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3 Big Programmatic Problems

Viewability Talk about a mess: half of the online ads that sell programmatically are never seen by their intended audiences. Sometimes the problem is that an ad doesn’t load right or is badly situated on the browser screen. Other times ads run on sites where no one’s actually intended to see them in the first place. (File that one under “fraud” – which we’ll get to below.) This sort of thing makes steam blast out of advertisers’ ears. As an executive at a leading agency put it, “An ad that’s not seen is not worth less. It’s worth zero. Zero.” You can imagine how that went over with publishers. They counter that, given the technical realities, expecting 100 percent viewability is unreasonable. The president of the Interactive Advertising Bureau (IAB) himself has declared that 70 percent viewability is what advertisers should expect. But as more than one wag has joked, what kind of auto industry group would proclaim that new cars should start only 70 percent of the time?

FURTHER READING • WTF is Viewability? • Havas Media: Viewability standards are ‘kind of a joke’ • Viewability has a vendor confusion problem

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The lack of clear standards in the industry doesn’t help. The Media Rating Council proclaims that an ad has to be 50 percent viewable for one second in order to count as viewable -- a mandate that does more to underline the viewability problem than to resolve it. Better standards would help. But the fear lingers that, if half of the industry’s ad inventory simply doesn’t work, something in the industry’s business model just might have to give.

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3 Big Programmatic Problems

Fraud Anywhere from 30 to 60 percent of online ad impressions are fake. Meanwhile, 36 percent of all web traffic is phony, generated by botnets rigged to sucker advertisers into buying shady inventory on phantom sites. The problem has to do with programmatic’s complexity. It’s an environment where middlemen proliferate like germs at your kid’s pre-school and plausible deniability is an operating principle. There’s also the basic fact that programmatic is, after all, programmatic. As one high-up media player has wearily pointed out, “Machines don’t know better.” Humans can potentially know better. But fraudsters have on their side the fact that penetrating the programmatic mysteries is a chore that can reduce even the relatively tech-savvy layman into a hyperventilating wreck. They also have on their side the depressing fact that online scamming is so easy. Any crook with a website can rig himself a botnet. The solution? There isn’t a complete one, ultimately. Crime will always be with us. But industry transparency could go a long way toward controlling it.

FURTHER READING • Who’s really to blame for ad fraud? • Ad fraud has a chicken little problem

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3 Big Programmatic Problems

Transparency The great god that will scourge the demons from the temple of programmatic. “Transparency” is the buzzword that digital marketing people answer with when you ask them how to solve the problems that plague the digital ad ecosystem. The benefits of transparency go beyond potentially eliminating the grosser instances of fraud. For example, advertisers these days more and more want to know how the trading desks at their agencies are making their money. They’re fed up with their agencies indulging in “ad arbitrage” and they’re sick of undisclosed fees. They want a clearer view of where their money is going and what’s being done with it. They’re asking uncomfortable questions about where their ads are being seen. At the same time, if you’ll forgive us, there’s a bit of disingenuousness in some of the industry’s calls for transparency. After all, lots of legitimate players benefit from the lack of it. More impressions mean more money, whether real people are seeing them or not. It’s all about scale and revenue in the supercompetitive online and ad tech markets, and boosting transparency would hurt the revenues of a lot of players who claim to want it. The situation calls to mind that age-old sinner’s plea: “Make me honest, Lord. Just not today.” FURTHER READING • How to fix programmatic’s transparency problem • 5 things we learned about ad transparency

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The Programmatic Frontier Programmatic’s worked revolutionary changes in how ads are bought and sold, but it’s not done with us yet. Here are four emerging programmatic phenomena that set the stet of industry types aflutter with excitement.

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The Programmatic Frontier

Premium Programmatic Simply, this is the use of programmatic to buy and sell “premium” high-prestige ads. (Think the home page of The New York Times, or if you’re a cruise line, the Travel section.) The catch is that programmatic was born precisely to sell, and is good at selling, publishers’ remnant junk inventory; in real time, on a huge scale, and often with a casual disregard for where (or even if ) the ads in question appear. See the problem if you’re a luxury brand? “Programmatic” and “premium” might not seem like the most natural fit. The solution is to create a higher-end programmatic ecosystem in parallel to the regular one, with its endemic fraud, its occasionally non-existent viewers and its general lack of transparency. In this “premium” realm, advertisers and publishers of a rather higher tone will avoid the riffraff that populate the anarchic open ad exchanges. They’ll do their business in closed private marketplaces where they can mingle with the right sort of people, setting strict rules as to placement, pricing and inventory quality. The trick here is scale. Large publisher networks like Vox and Hearst can sell ads programmatically via their own private marketplaces. Smaller publications, like The Guardian, might band together with other titles to form a trusted, premium ad network. Still others might have to jockey for a place in a vendor’s premium market. FURTHER READING • Inside the new Guardian-led ad network

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One solution is to patch together a human/robot dream team, where direct sellers are arranging deals on the front end, then ferrying the orders via automation. Just how programmatic are those premium marketplaces? Like everything else in this industry, it depends on who your partner is. Some larger marketplaces allow for exchange bidding. Others patch together a human/ robot dream team, where direct sellers are arranging deals on the front end, then ferrying the orders via automation.

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The Programmatic Frontier

Programmatic Creative This is the buzzword for the next frontier in creative/tech collaboration, or so many would like to think: the marriage of programmatic capabilities with creative content. For example, marketers might be able to change the text of their ads on the basis of consumer feedback they receive programmatically. Or they’ll be able to run real-time diagnostics on which design schemes are the most effective, and change those schemes accordingly – again, in real time. This sort of thing makes advertisers and media buyers drool in anticipation: it’s the old marketing idea of getting the right ad to the right person at the right time, but at a stupendous level of power and efficiency. What’s holding it back? For all the cheerful talk about bringing together creative teams and data/tech types, in reality those two sides still too often remain oil and water. FURTHER READING • ‘Programmatic creative’ inches toward a fix

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The Programmatic Frontier

Native Programmatic Native programmatic would represent another revenue stream for publishers, but it could also turn out to be a double-edged sword, raising massive potential quality issues. There are a number of tech companies offering to reskin pretty much any content to fit your platform programmatically. If you’re a publisher, you might already have a healthy skepticism about the quality of native advertising or branded content. It could be passable or it could be dodgy content that degrades your reputation. Now imagine that that dodgy content is actually imitating the look of the editorial content at your venerable magazine. Hoo, boy. Partisans of native programmatic counter that the answer is simply control over the process, and that things like closed private exchanges can provide it. But that just brings up, in more acute form, the problem with native advertising in the first place: that of (repeat after us) scale. FURTHER READING • Is programmatic native an oxymoron?

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Does doing native on a programmatic scale inevitably mean bad native? Can good native scale? If you’re a big player with lots of high-traffic sites-Vox, Hearst, etc.--you can likely scale your custom-produced content programmatically. For smaller players, the question has yet to be answered.

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The Programmatic Frontier

Programmatic TV Another buzzphrase, and one that brings tears of longing to certain eyes in Silicon Valley. Why? Because TV’s a $70 billion a year industry, that’s why. If you’re an ad-tech vendor, the thought of breaking even a crumb off that fat, bubbling television industry pie lulls you into a delicious slumber at night. TV, however, has so far shown itself resistant to going programmatic. Things that aren’t broken, the thinking goes, don’t need programmatic fixing. Programmatic’s lingering reputation as a way to unload lower-quality remnant inventory plays a role here, too. The big, prestige brands that predominate in TV advertising aren’t sure they need what programmatic is selling.

FURTHER READING • WTF is programmatic TV advertising? • 5 things brands need to know about programmatic TV • MagnaGlobal ventures further into programmatic TV

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A MESSAGE FROM MARIN SOFTWARE

Beyond RTB: A Programmatic Primer Real-time bidding (RTB) has driven much of the programmatic growth thus far. But as audience marketing strategies mature, advertisers are increasingly looking beyond RTB and into different programmatic channels.

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Beyond RTB: A Programmatic Primer

Fixed-Priced Programmatic As the name indicates, this method allows publishers to set the price before the ad is bought. There are two types of fixed-priced programmatic: 1. Automated Guaranteed: Also known as programmatic direct, refers to fixed-price, reserved inventory that’s negotiated directly between the advertiser and publisher. It’s the programmatic ad type that’s most similar to old school, people-driven ad buying, except with automated guaranteed, the RFP and campaign routing process is automated,and the deals are negotiated directly through API calls. 2. Unreserved Fixed Rate: Also called preferred deals,is fixed-price, unreserved ad inventory. In this scenario, publishers will make blocks of inventory available on the ad exchange for advertisers to buy directly without having to fight for each impression in a real-time auction.

This programmatic categorization is important, because it often defines what ads are delivered with what priority. So, on a website, an ad may be displayed following the priority below:

Ads bought via automated guaranteed receive the highest priority and typically get the best placements.

Any inventory that isn’t bought through automated guaranteed deals can then be made available to advertisers via preferred deals.

Auction-Based Programmatic Auction-based programmatic is inventory that’s available for advertisers to bid on in a real-time auction. Since each impression is bought and sold individually, all auction-based inventory is unreserved. Like fixed-price programmatic, there are two types of auction-based programmatic: Invitation Only Auction: Also known as as private marketplaces or private auctions, ad inventory is sold in a private real-time auction. Publishers have control over the participating advertisers by setting whitelists or blacklists. Advertisers like private marketplace deals because it allows them to take more control over where their ads run. Real-Time Bidding: RTB can be a confusing term, because it’s both a programmatic ad format and a transactional method. It’d be more accurate to call RTB an “open auction” because,it refers to ads that are sold in an auction where any advertiser can bid. DIGIDAY

Any inventory that isn’t sold at a pre-negotiated price will often find its way into the auction environment.

Publishers may choose to make the ad inventory available within private marketplaces first, in order to try to wrangle as much value as possible from their ad inventory.

And finally, any inventory that hasn’t sold through the above channels could be made available in the open auction to any interested advertiser.

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Glossary

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Glossary

A Addressable TV Ad Exchange

See: programmatic TV. An ad exchange is a digital marketplace that enables advertisers and publishers to buy and sell advertising space, often through real-time auctions. They’re most often used to sell display, video and mobile ad inventory. Basically, an ad exchange is just a big pool of ad impressions. Publishers tip their ad impressions into the pool hoping someone will buy them. Buyers then pick which impressions they wish to purchase using technologies like demand-side platforms. Those decisions are often made in real time based on information such as the previous behavior of the user an ad is being served to, time of day, device type, ad position and more. Exchanges enable advertisers to easily buy ads across a range of sites at once, as opposed to negotiating buys directly with specific publishers.

Advertising Arbitrage

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Ad Injection

When an agency buys media for clients before the clients pay them to do so, adds something to it (like innovative analytics, say), and then turns around and sells it at a higher price. It’s a money-making play for agencies, and one that’s attracted a fair bit of criticism from those who say it’s a conflict of interest. The critics say that agencies are supposed to offer their clients unbiased advice about what inventory to buy – and that agencies can’t do that if they own that inventory themselves.

Agency Trading Desk

A technique by which ads are inserted into webpages without the permission of those pages’ owners. Ad injection happens when a web user downloads and installs a browser extension or app that’s bundled with software that quietly injects unwanted ads into his browser. Advertisers shell out affiliate fees to that software’s developers every time a user clicks an injected ad; the site owner doesn’t see a dime. When people get the vapors about “transparency” and “fraud” in the glorious new world of programmatic, this is part of what they’re worried about. These are in-agency teams that execute online media buying as a managed service. All of the major holding companies have agency trading desks — Havas has Adnetik, Omnicom has Accuen, WPP has Xaxis, etc. Their goal is to execute buys in such a way that recaptures some of the markup costs associated with middlemen like ad networks, for their clients and themselves. But as more media is transacted programmatically, the long-term future of the centralized trading desk model could hang in the balance. Agency desks may tout data and technology expertise and the ability to optimize, but so do programmatic champions. Maybe the robots really are coming for you.

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Glossary

Ag–B Agency Transparency

Algorithm

The whole tricky issue of how agencies spend client dollars. When some agencies secretly take kickbacks from publishers in return for flowing ad-buying dollars to those publishers, that’s a transparency issue. The issue is especially pressing now, when all that new programmatic tech is adding another dollop of mud to waters that were Harlem River-level murky to start with. The programmatic system tends to lump together cost of media, cost of staff and cost of systems. When it’s all boxed together like that, clients don’t know the cost of each element, and don’t know exactly what they’re paying for. Remember that time your elementary school teacher told you to write down the steps for making a peanut butter and jelly sandwich? You were writing an algorithm. It’s a set of instructions to do... something. These procedures can be highly complex (with the use of conditional rules, for example), but the focus is usually on making a process more efficient and/or effective by including only essential steps. With the rise of ad tech, they’re most often encountered in this industry in the code that makes decisions to buy, sell and serve ads.

Ad Network

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A company that connects websites that want to sell advertising, then aggregates that inventory in a way that appeals to advertisers, usually via programmatic exchanges. Traditionally, ad networks are all about audience reach, rather than premium context, though you can find some that aim for both.

Beacon

Bot

A transparent image that’s 1x1 pixels in size that third-party data collectors drop on a website and in emails to track user behavior. Basically, beacons are the invisible eyes that freak out conspiracy theorists. Among the information beacons retrieve are IP address, browser type, time on site and previously collected cookie information. Short for “web robot” or “Internet robot.” Bots are just software applications that perform simple, repetitive tasks over the Internet. They have their positive uses, but mostly they’ve got a nasty reputation owing to their widespread use for malicious purposes, such as click-fraud schemes. Sleazy advertisers might set up bots to endlessly click on ads, thus driving up their own traffic numbers. Bots are one of the reasons that fraud remains such a problem in programmatic.

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Glossary

C–Co Click-Through Rate

Cookie

This is how you tell how successful your ads are in terms of driving traffic to a particular web location. It’s basically a percentage arrived at by dividing the number of times your ad was clicked by the number of times it was seen. A small, baked confection. Or, a piece of data that a website or third party stores in a user’s browser to fulfill a variety of functions, from tracking browsing behavior to authenticating user accounts (so you don’t have to log in every time you visit Amazon). For a long time, cookies were the dominant way to track users across sites from an advertising perspective. But with the rise of mobile and the cookieless environment it presents, marketers are searching for an alternative. In the meantime, it’s the dominant method by which publications and advertisers collect enough consumer information to target their programmatic advertising based on behavior profiles.

Cookie Stuffing

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Another fraud scheme in a digital advertising ecosystem that breeds them like a suburban lawn breeds ticks. Basically it’s a way of hijacking the affiliate marketing system that generates a living for digital publishers both big and small. Say a publisher’s signed on for Amazon’s affiliate system. That publisher gets paid every time his site drives a visitor over to Amazon. What the fraudster does is, via things like pop-ups, litter the visitor’s browser with cookies that give him – the fraudster – credit for the referral to Amazon. The fraudster gets paid. The original publisher gets screwed.

Contextual Data

Data about (yep) the contexts in which consumers make their buying decisions, and a potential gold mine for marketers, if they can use it right. The most common example of such data is weather data. Knowing that it’s going to rain on Memorial Day weekend, for instance, can make all the difference to a marketing team. Cancel the sno-cones. Go all in on umbrellas.

Cost Per Thousand or CPM

The price of 1,000 impressions on a webpage. Publishers have accused programmatic advertising of driving down the price of the CPMs because the open auction system primarily targets based on behavior, not context, a key selling point for premium publishers. Programmatic boosters, on the other hand, call it a boon, because publishers are selling more inventory via programmatic.

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Glossary

Cr Cross-Device Tracking

Cross-device tracking describes the myriad ways platforms, publishers and ad tech companies try to identify individual Internet users across smartphones, tablets and desktop computers. The goal of cross-device tracking is to be able to know that the person using smartphone X is the same person who uses tablet Y and laptop Z, and then allow brands to retarget that person accordingly. It’s important because retargeting on mobile is essentially impossible without it. Retargeting occurs when a brand identifies a visitor to its website and subsequently serves an ad to that consumer when they are browsing elsewhere. Since cookies don’t work on the mobile web, outside of a few apps, it can be hard to track a consumer’s activity both within and across particular devices. And given the mind-boggling and ever-growing number of mobile devices, platforms, publishers and mobile operating systems, the problem is only becoming more complex.

Cross Device Tracking, Deterministic

Cross Device Tracking, Probabilistic

Deterministic cross-device tracking is when publishers and platforms ask their users to sign into their websites and apps on every device they use. This allows digital media properties to directly track their users across devices. Facebook and Twitter, for example, require users to sign in for both their desktop and mobile experiences, thus allowing them to offer precise retargeting capabilities across devices. Probabilistic cross-device tracking is an inexact science carried out by ad tech companies. These companies aggregate information about ads served on smartphones, tablets and desktops, and then use statistical models to infer who is using which device. It’s an incredibly complex process that requires troves of data to do well. Tapad, for instance, collects 250 billion distinct data points per month, including the IP address, device type and app or web browser associated with various ads served. Over time, patterns emerge about how consumers move across devices. As the name indicates, probabilistic cross-device tracking is a well-informed estimate.

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Glossary

D Data Management Platform

In simple terms, a data management platform is a data warehouse. It can be used to house and manage any form of information. For marketers, it’s most often used to manage cookie IDs and to generate audience segments, which are subsequently used to target specific users with online ads. Agencies, publishers and marketers all use DMPs. With advertisers now buying media across a huge range of different sites and through various middlemen, including demand-side platforms, ad networks and exchanges, DMPs can help tie all that activity and data together in one centralized location and use it to help optimize future media buys and ad creative. It’s all about better understanding customer information.

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Data (First-Party)

This is data collected by website operators — publishers, e-commerce sites, brand homepages, etc. — about the actions their users take while on that site. Publishers can use their first party data to better sell their own inventory by offering more precise targets, via a public or private exchange.

Data (Second-Party)

This is first-party data that advertisers buy directly from the source either through a DMP or a direct relationship with a publisher or advertiser.

Data (Third-Party)

This is data aggregated from sources other than the website operator, usually collected through cookies. It’s expensive and sometimes imprecise but there is a lot of it.

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Glossary

Da–Do Data Leakage

Deal ID

When a third party like a brand or agency collects data about a website’s audience and then uses that data without the initial publisher’s permission. The third party gets its hands on that data by using things on other people’s websites called tracking pixels. Then it uses it to target consumers for its own purposes. Example: a luxury watch maker runs ads on GQ’s website. By pixelating GQ’s site it learns who’s clicking on its ads. Next it stops paying GQ for premium ad space and targets those people itself, on the cheap. Perfectly legal – and an inspiring example of market forces in action. Right? Yeah… not if you’re GQ. The unique number assigned to an automated ad buy, used to match buyers and sellers individually, based on a variety of criteria negotiated beforehand. The idea is to take the best of auction buying and merge it with direct. So, a publisher might make a set of inventory available to premium advertisers over their private exchange, then assign a deal ID to the package in question. Those advertisers bid on the package, commanding what some say is three times the rate of an open auction. Detractors claim deal ID is flawed because it’s still trying to retrofit the technology used for live auctions (RTB) with the very different dynamics of direct buys.

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Demand-Side Platform

A demand-side platform is a piece of software used to purchase advertising in an automated fashion. DSPs are most often used by advertisers and agencies to help them buy display, video, mobile and search ads. DSPs help make the buying process cheaper and more efficient by removing humans from parts of the equation, along with the need to negotiate ad rates and to manually fax ad insertion orders. They allow advertisers to buy impressions across a range of publisher sites through ad exchanges while targeting specific users based on information such as their location and their previous browsing behavior. The price of those impressions is often determined through real-time bidding and takes place in milliseconds as a user’s computer loads a webpage.

Do Not Track

An opt-out function available on browsers including Firefox, Chrome and Safari, signified by the header DNT, that allows consumers to disable data collection by advertisers and other third parties by inserting the header “DNT1.” Currently, the industry is self-regulating DNT efforts. However, privacy advocates like the Electronic Frontier Foundation want the Federal Trade Commission to step in. Do Not Track as a movement suffers from a lack of political momentum, but the industry seems to agree we should all be on our best behavior, so as not to stoke that fire. If enough consumers opted out, there would be less data to go around, making it harder to target ads and buy audiences programmatically.

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Glossary

E–H Engagement Metrics

First Look

Fractional Attribution

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Like so many before it, the idol that was the click-through rate is in eclipse, the victim of a changing media ecosystem. Programmatic requires innovative new ways to measure campaign impact. So say hello to metrics that do a better job at measuring engagement with your brand. How and how often are people interacting with it? What actions are they taking in response to it? Are they commenting on it, sharing it, pinning it, retweeting it, revining it? The programmatic gods require ever more raw data as tribute. Also known as first dibs. When offering inventory to two or more buyer networks, the process usually takes a multitiered approach, with the next network not being offered the inventory until the previous one in the series declines. The first buyer to be offered the inventory gets (drumroll please...) the first look. A growingly popular way of measuring attribution, it stands in distinction to last-click attribution and last-view attribution. Fractional recognizes that your decision to buy a pair of boots from, say, NineWest.com may have been influenced by a variety of factors, not just the ad that popped up on Facebook that you ended up clicking (last-click attribution) or the last ad you saw that impacted your decision (last-view attribution).

Fraud

Frequency Capping

Hashing

Oh boy, we could be here all day with this one. The problem is the sheer complexity of the programmatic ecosystem. There’s a lot of underbrush out there, so the rats have a lot of places to hide. The black-box model that characterizes programmatic doesn’t help either: God knows what’s going on in there. Bots are drumming up phony traffic, hucksters are lying about their visibility rates and the metrics are easy to game. Restricting the number of times a specific visitor to a website sees a particular advertisement. You don’t want to drive a viewer crazy and send him or her to Twitter to disparage your brand. The process by which personally identifiable information is disguised, usually by translating it into a string of numbers. Hashed identifiers are currently being pursued as the best alternative to cookies on mobile devices. By creating a hashed ID, advertisers can identify individuals closely enough to target ads programmatically across screens.

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GLOSSARY

I Impressions

Insertion Order

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The number of times an ad appeared on any user’s screen. Keep in mind that impressions are not a count of how many unique individuals saw your ad. One person seeing the ad twice from the same browser will count as two impressions. In programmatic, most buys will include a minimum number of impressions served. Remember the fax machine? The noisy little bastard that was the office equivalent of nails on a chalkboard? Publisher sales people used to — and sometimes still do — use them to send insertion orders, aka sales orders for online inventory, back and forth. In the programmatic world, insertion orders are submitted via an online exchange, eliminating the screeching cross-town duet of dueling fax machines.

Inventory

This is where the ads go. Premium: No one would argue that the front page of The New York Times isn’t premium. But otherwise this loosely defined term can mean different things to different people. For some, it’s context — viewable ad space at a well-known national publication. For others it’s relevance to the category and for others it’s all about the audience. But no one has ever been fired for buying class-A, above-the-fold, adjacent-to-relevant content impressions on a top-100 trafficked site. Long-tail Ad inventory that won’t see huge audience numbers on a single day, but instead accumulates reach over time. Prior to programmatic marketing these placements were too disparate to buy. Automated, they can be bundled together in such a way as to target very specific audiences.

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Glossary

M–P Mobile Fingerprinting

Open Ad Exchange

PII

One possible way to target advertising in a cookieless mobile world, mobile fingerprinting aims to track consumer movements across iOS and Android, apps and the mobile web. It does so by stringing together pieces of mobile and web data like screen size, time zone and software that a device registers each time it makes a connection. Detractors point to a lack of accuracy and potential privacy implications, since users do not opt in. Unlike private exchanges, which operate like exclusive night clubs, you don’t need to know someone who knows someone to get access. Any agency, advertiser or publisher may participate in trading in an open exchange. Personally identifiable information. This is what the conspiracy theorists, and maybe your mother-in-law, are freaking out about. It’s digital information that can be used, on its own or together with other information, to track back actions to a specific, known individual. Marketers, bowing to privacy concerns, generally avoid using such information, though sometimes programmatic targeting gives consumers another impression. PII might include credit card information, social security cards and login information.

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Platform

Archaically, a raised platform that someone can stand upon when performing or speaking. In technology, the environment in which a piece of software or code runs, usually including hardware and an operating system. Nowadays, just about everything calls itself a platform. Closest to meeting both definitions are social media “platforms” like Facebook, Pinterest and Twitter, which give voice to their millions of users, including publishers and advertisers, and operate in their own environment. Publishers also claim to be platforms-for their journalists, readers and, of course, advertisers. Finally, programmatic technology companies also call themselves platforms, though they are platforms entirely in the computing sense. Chances are, though, that your programmatic provider also has a Facebook page.

Price Floor

Price Ceiling

Private Exchange

No seller wants to run the risk of accepting a bid that’s far lower than the market price. As a result, the floor price is the lowest any bidder can offer for an impression package. The highest price that any bidder can offer for an impression package. Private exchanges are used by publishers to more carefully control who can buy their inventory, and at what price. Instead of throwing its ad impressions out into an “open” exchange and letting anyone buy them, a publisher might instead wish to offer them to a handful of its favorite advertiser clients, or an agency it has a close relationship with. It might also wish to cut off access to networks and other third parties that could turn around and sell those ad impressions again. Also called a private marketplace.

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Glossary

Pr Programmatic Ad Buying

“Programmatic” ad buying typically refers to the use of software to purchase digital advertising, as opposed to the traditional process that involves RFPs, human negotiations and manual insertion orders. In other words, it’s using machines to buy ads. Before programmatic ad buying, digital ads were bought and sold by human ad buyers and salespeople, who are expensive and can be unreliable. Programmatic advertising technology promises to make the ad buying system more efficient, and therefore cheaper, by removing humans from the process wherever possible. Humans get sick, need to sleep and come to work hungover. Machines do not (yet). This doesn’t mean robots are replacing people, exactly, just the ones who performed more menial tasks, like sending insertion orders to publishers and dealing with ad tags. People are still needed to optimize campaigns and to plan strategies, at least until further notice. Programmatic technology will probably mean there are fewer ad buyers in the world, but it could also allow both marketers and sellers to spend more of their time planning sophisticated, customized campaigns instead of getting bogged down in bureaucracy. It is not the same as real-time bidding. It’s impossible to tell what portion of advertising is now traded programatically, but it’s definitely on the rise. Some agencies now say they’re eager to buy as much media as possible through programmatic channels, and some major brands have even built in-house teams to handle their programmatic ad buying as they spend more of their marketing budgets that way. At the moment, it’s mainly online ads that are traded programatically, but media companies and agencies are exploring ways to sell “traditional” media this way, including TV spots and out-of- home ads.

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Glossary

Pre–Pro Premium Programmatic

The transaction of higher value inventory through the programmatic landscape. Remnant inventory fueled programmatic growth in the industry’s early days. But publishers have become more willing to trust the technology with their highpriced inventory, putting choice real estate up for automated sale. This arc is not dissimilar to the arc experienced by ad networks at their inception, where the ecosystem was first populated by remnant traffic and gradually came to include a premium element.

Programmatic Buy, Guaranteed Programmatic Buy, Non-Guaranteed

Programmatic A/B Testing

Using a programmatic dashboard, advertisers can test different versions of the same ad at scale, in order to determine which ad is more effective. Automating this process in real time allows marketers to serve the ads that are working best in a particular time and place and discard the underperformers or test them elsewhere.

Programmatic Co-ops

Programmatic Attribution

The ability to automatically gather data through demand- side, data-marketing or programmatic marketing platforms, in order to learn which combination of marketing touch points is achieving the best return on investment. The idea is when you know which ads are working best with whom and when, you can move your budget around quickly to take advantage of it in real time.

Programmatic Creative

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These ad buys secure specific inventory, run dates and reach and often take place outside the bidding model. Also sometimes called remnant inventory, a non-guaranteed programmatic buy is most often executed programmatically through ad networks and exchanges (vs. directly with the publisher). Buys are negotiated based on audience targets and volume rather than context. Ads can sometimes end up in wonky places — below the fold, next to two other display ads, or on CatChannel.com, for instance. An alliance between smaller publishers in which they pool their programmatic ad inventory. The two key concepts here are “scale” and “security.” Publishers get the benefits of programmatic buying at more scale than they could provide on their own. Advertisers wary of programmatic get assurance that their messages will appear only on premium sites. Particularly popular in Europe, where achieving scale is harder. This process allows advertisers to mix and match art and copy lines in an automated way, then serve them programmatically in order to find the most effective ads for each segment. Of course, you still need to write copy and render art that is compelling for your audience, but the idea here is to save creative teams the time they would spend cutting-and-pasting so they can put more work into crafting those variations.

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Glossary

Pro Programmatic Direct

A way to automate direct ad buys, usually executed by real, flesh-and-blood salespeople, for set campaigns. Programmatic direct buys can involve guaranteed and non-guaranteed sales, but they’re still a tiny sliver of the programmatic market. More than any other facet of programmatic, this is the development that makes sales folks panic — but it’s more likely that a “Rise of the Machines” scenario will take down their ad-ops counterparts. Besides, right now there are too few buying systems available to send orders to programmatic guaranteed provider systems, which generally sit with publishers. So everyone just exhale for the time being, okay?

Programmatic TV Advertising

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Just what you think it is, and it stands to revolutionize TV advertising by turning it on its head. Traditionally marketers have relied on show ratings to determine desirable audiences for their ads. Now they’ll be able to use programmatic tech to reach a more specific subset of consumers. They won’t care what shows the ad runs on, as long as the target audience is watching. It’s been slow to happen, for one thing because TV is a conservative field with a robust business model (If it isn’t broken…). Programmatic TV remains the fat $70 billion per year holiday ham of the advertising world, and the thought of getting their hands on a chunk of it sets programmatic tech vendors drooling.

Proprietary Data

Programmatic Native

What a brand needs to have to make its programmatic initiatives successful: a pool of data that it alone possesses. As marketing types like to repeat when they get a little oiled up in the hotel bar after the analytics seminar, “The general who knows something that his enemy doesn’t tends to win the battle.” Bonus marketing cliché: “Our great proprietary data is our competitive advantage.” The hot new thing, the marriage of native advertising and programmatic ad technology. Several industry players promise to deliver native advertising programmatically, by matching readers’ interests and marketers’ goals. The success of programmatic native rests largely on publishers’ willingness to open inventory to programmatic native platforms.

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Glossary

R Real-Time Bidding

Real-time bidding refers to the buying and selling of online ad impressions through real-time auctions that occur in the time it takes a webpage to load. Those auctions are often facilitated by ad exchanges or supply-side platforms. As an ad impression loads in a user’s web browser, information about the page and the user is passed to an ad exchange, which auctions it off to the advertiser willing to pay the highest price. The winning bidder’s ad is then loaded into the webpage nearly instantly; the whole process takes just milliseconds to complete. Advertisers typically use demand-side platforms to help them decide which ad impressions to purchase and how much to bid on them based on a variety of factors, such as the sites they appear on and the previous behavior of the users loading them. For example, Zappos might recognize that a user has previously been on its site looking at a specific pair of shoes — and may therefore be prepared to pay more than Amazon or Best Buy to serve ads to him. The price of impressions is also determined in real time based on what buyers are willing to pay: hence the term “real-time bidding.” Real-time bidding is good for ad buyers, who no longer need to work directly with publishers or ad networks to negotiate ad prices and to traffic ads. Using exchanges and other ad tech, they can access a huge range of inventory across a wide range of sites, cherry-picking only the impressions they deem most valuable. Publishers, on the other hand, have been a bit more wary of RTB because they feel it enables advertisers to pay them less for their inventory. Increasingly, however, they’re becoming more comfortable as exchanges and supply-side platforms enable them to control the minimum prices at which their inventory is sold through price floors.

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Glossary

Re–S Real-Time Focus Groups

Remnant Inventory

Retargeting

Revenue Per Thousand Impressions (RPM)

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No need to canvass mall shoppers with a clipboard and the promise of a $50 payout. Programmatic advertising allows digital marketers to segment specific audiences and quickly test message variations at a statistically relevant scale. Marketers can then use this information to make budget and strategy decisions within a single campaign “flight.”

Supply-Side Platform

SSPs allow publishers to connect their inventory to multiple ad exchanges, DSPs and networks at once. As well as opening up inventory to a large range of potential buyers, SSPs also offer the ability for publishers to set “price floors.”

Ahem, “non-premium” please! This is the inventory that exists deep in the bowels of publisher sites, three or four clicks away from the marquee and not wrapped up in pre-existing deals. They’re typically standard units sold via exchange and using behavioral targeting or retargeting tactics. See also “non-guaranteed.” Unlike behavioral targeting, retargeting focuses a consumer’s online actions (clicks, page visits) that are more directly tied to an incomplete conversion. You’ve looked at those jeans in Forever 21’s online catalog? You added them to your shopping cart, but then left the site? Those ads are going to follow you around the web and make you regret not buying them. Best of all, they’re all served in real-time, programmatically. The revenue a publisher gets from selling a thousand ad impressions on its site.

A piece of software used to sell advertising in an automated fashion. The yin to the DSPs’ yang, SSPs are most often used by online publishers to help them sell display, video and mobile ads and to maximize the prices which their impressions sell.

By opening up impressions to as many potential buyers as possible, often through real-time auctions, publishers can maximize the revenues they receive for their inventory. Because of this, SSPs are sometimes referred to as yieldoptimization platforms.

Second Price Auction

Afraid of overshooting the mark and massively outbidding a competitor only to pay double what they were offering? Second price auctions avoid that risk by having the winner pay only one cent over their closest competitor’s final bid. For example, if Buyer A bids $2 and Buyer B bids $1.50, Buyer A wins, but only pays $1.51. If two buyers bid the same highest price, the winner is chosen randomly. This process helps maintain pricing efficiency within an automated RTB marketplace.

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Glossary

Se–W Sequencing

Targeting, Behavioral

Targeting, Contextual

Transparency

The process of arranging the order in which you send a consumer a bunch of marketing content so as to best lead him toward a purchase. For example, first you hit him with a display ad, then with a piece of branded content, then with a call to action – and so on. Sometimes, the best way to know what consumers will do or purchase next is to look at what they’ve done in the past. Behavioral targeting takes this to heart, analyzing your general online behaviors before deciding what ad to serve you in real time.

Viewability

Viewable Impression

Wondering why dog food ads are flanking the page whenever you visit a pet adoption website? Think it’s a coincidence that there’s a banner for the newest bestseller on your go-to book discussion community? Contextual targeting seeks to serve ads in a relevant context alongside relevant content. What the programmatic ecosystem needs a lot more of, according to its critics. The proliferation of data in programmatic makes it opaque; so does the fact that, while you don’t really need a PhD from CalTech to understand how the ecosystem works, it doesn’t hurt. The lack of transparency makes it easier for bad actors to get up to their games (See “fraud”). It also makes it much harder for clients to figure out just where and how their money’s being spent.

Waterfalling

Win Rate DIGIDAY

Viewability is an online advertising metric that aims to track only impressions that can actually be seen by users. For example, if an ad is loaded at the bottom of a webpage but a user doesn’t scroll down far enough to see it, that impression would not be deemed viewable. Viewability is designed to let advertisers pay only for the ads that users could possibly see. It’s another way for buyers to put pressure on sellers, and the IAB supports a switch. There’s still a lack of consistency around what a “viewable impression” actually is and what technology could measure its viewability. The IAB defines a “viewable” impression as one that’s at least 50 percent visible for at least one second, but vendors offering viewability solutions use various methods and technologies to establish whether impressions meet those criteria or not. As a result, the Media Ratings Council advises that it’s still too early to transact on viewable impressions until these discrepancies are understood and accounted for. A technique publishers use in programmatic to maximize both the pricing and sell-through rate of their inventory. Trying to squeeze as much revenue out of each ad impression, publishers work with the ad networks or supply-side platforms that offer the highest rates first. Then they move onto those that offer lower rates, and so on until they’ve sold every impression. Also called “daisy chaining.” This is the RBI of ad tech geeks. Put simply, it’s the ratio of submitted bids to the number of impressions actually won. It’s used as a barometer of efficiency for programmatic marketplace technology.

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DIGIDAY

SPONSORED BY

IS NATIVE ADVERTISING?

Table of Contents

3

Introduction

14

WTF is Native Programmatic?

4

Nomenclature

16

The Native Ad Triumvirate

5

Decision tree

6

Issues Still Plaguing Native Advertising

7 8 10 11 12

Scale Metrics Labelling The Church/State Divide Credibility

17 The Ad Man 18 The Publisher 19 The Platform

20

Glossary

3 / WTF IS NATIVE ADVERTISING?

Introduction In 2013, native advertising galloped onto the scene like a masked hero, poised to hoist publishers atop a white horse, rescuing them from the twin menaces of programmatic advertising and sagging CPMs. But who’s really there when you peel back the mask? Native advertising is a murky business. Ad executives may not consider it advertising. Editorial departments certainly don’t consider it editorial. Even among its practitioners there is debate — is it a format or is it a function? Publishers who have invested in the studio model position native advertising as the perfect storm of context, creative capital and digital strategy. For platforms, it may be the same old banner advertising refitted for the social stream. Digiday created the WTF series to parse murky digital marketing concepts just like these. WTF is Native Advertising? Keep reading to find out.....

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4 / WTF IS NATIVE ADVERTISING?

Nomenclature Native advertising An advertising message designed to mimic the form and function of its environment Content marketing Any marketing messages that do not fit within traditional formats like TV and radio spots, print ads or banner messaging. Content marketing itself spans a wide breadth and can include sponsored and branded content (below) but is not always native. Sponsored content Advertising created to mimic the editorial content of a particular publishing site, often created by an on-staff team called a content studio. Sponsored content is often used synonymously with native advertising in industry conversations, but is really just one manifestation of native advertising.

Branded content Content created to promote a brand’s products or values. Branded content can take a variety of formats, not all of them technically “native.” Branded content placed on third-party publishing sites or platforms can be considered native advertising, but if said content lives on a brand’s own site, it’s not really “native.” Social in-stream advertising This form of social native can take many forms, all of which are designed for seamless inclusion in your social stream. Facebook’s sponsored posts, Twitter’s Promoted Tweets and Pinterest’s Promoted Pins all fall within this category.

Content-recommendation widgets Another form of native advertising often used by publishers, these appear to consumers most often at the bottom of a web page with lines like “From around the web,” or “You may also like.” Paid search listings Often overlooked as its own form of native advertising, search engines’ first few results are usually paid advertisements marked “Ad.”

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5 / WTF IS NATIVE ADVERTISING? Native advertising is, very simply, an advertising message designed to mimic the form and function of its environment. It is, however, an umbrella term applied to and conflated with a wide variety of digital content. Use the handy chart below to distinguish whether what you’re looking at is native advertising or not.

Decision tree WAIT... SOMETHING’S DIFFERENT?

NO

Did you see it in your social feed?

So you spot a piece of content, but something doesn’t quite feel right... How long did it take to notice something was different?

YES

YES Is it claiming one of your friends “liked” it?

NO

YES

Do you feel like you’re reading editorial content?

But did an editor write it?

That doesn’t mean anything. Is it marked as “sponsored?”

Let’s give it the benefit of the doubt and call it “journalism.” Just don’t tell the reporter that advertising still bankrolled it...

NO

YES

Did a celebrity Instagram it?

NO

YES

Does it fit a standard IAB format?

NO

NO

YES

NO

Is it confined to the right rail?

NO YES

YES

RIGHT AWAY!

YES

Did you find it on a brand’s homepage?

NO

Looks like a paid promo. Or maybe LeBron James really does love The Juice Spot.

You spotted the content marketing! Or maybe the “brand journalism.” But it’s not a native ad.

Let’s call it “sponsored content,” a native ad made for a publisher’s site.

It’s a promoted platform ad. That’s social media for “paid post,” a kind of native ad.

That’s an ad. Just a normal, boring ad.

NO

Is it trying to recommend some content?

YES

That’s a recirculation widget. Can’t fool you!

Yeah... your guess is as good as mine at this point... Though it might be a native portal...

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Issues Still Plaguing Native Advertising

7 / WTF IS NATIVE ADVERTISING?

ISSUES STILL PLAGUING NATIVE ADVERTISING

Scale Publishers are in a bit of a pickle. For those banking on the studio model, native advertising is analogous to custom content--a pricey, digital, if direct descendent of the advertorial. The New York Times, New York Magazine, Rolling Stone, Gawker, Salon and Condé Nast have invested in their own studios. They boast teams of writers, creators and strategists sometimes numbering in the dozens, all on hand to create on-brand content custom for their precious, particular audiences. But the problem with any artisanal product is that it can only be made in small batches. Or, in industry parlance, native don’t scale.

It’s an in-house step toward native programmatic— the ad tech industry’s name for the automated distribution of content advertising. There’s no shortage of technology companies vying for the opportunity to change the sausage casing on traditional art and copy so they’ll work across Facebook, Twitter, Yahoo! and other platform publishers and ad exchanges. Using some combination of programmatic ad buying, dynamic creative and cheerful (or utilitarian) content, these companies claim they’re making content look native, even if it isn’t exactly custom.

Some publishers, like Hearst, aim to solve this problem by embracing a “platform mentality,” running native content across their networks. A recent video series for Revlon, for example, ran across Cosmopolitan.com, Elle.com and Mademoiselle.com. Others, like Vox, use technology to run the same content across their sites, but tailor the look of it to each environment.

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8 / WTF IS NATIVE ADVERTISING?

ISSUES STILL PLAGUING NATIVE ADVERTISING

Metrics

Definitions Click-through This metric carries over from display advertising, where a user clicking on a banner ad is the primary measure of how enticing a particular message is. With native content, however, click-through rate is just part of the picture, providing marketers with a sense of how competitive their content is when measured against other content. However, taken on its own, click-through rates are insufficient. Pageview The number of times a particular web page — in this case one carrying your native content — has been viewed. A metric more native to publisher environments than the simple click, which was engineered for straight-up advertising. Unique pageview The number of unique visitors who have visited a particular page. This number can be lower than pageviews, as it does not count repeat visitors or multiple visitors viewing a page from the same device.

Remember pass-along readership? Ah, junior, sit back and let me tell you about a day when gas cost 99¢ and print publishers claimed that 2 1/2 readers saw every copy of their particular handheld product. Ad buyers believed them! And who knows, maybe it was even true. The point is — the mighty “passalong” was an unknowable yet conventionally believed “truth.” This golden media age died with the banner ad, the click through rate and the dogged pursuit of ROI. While click-through rate may still apply to native ads like paid search, content recommendation and in-feed social, publishers have taken back some ground with sponsored content.

Time on page The average number of minutes spent with a piece of content. This metric usually reflects the type of content or its complexity — in-depth reportage or text with video should reap a higher time on page than a simple infographic, for example. Either way, it’s a measure of how much time a viewer has spent with your content. – P  ro tip If you’ve enlisted some kind of amplification network and are consistently seeing time on page under a minute for any kind of content, you’ll want to work on optimizing with that partner, or consider a new one. Bounce rate The percent of visitors who view a particular piece of content, then leave a site. If your native ad placement is a portal to a piece of owned media, like your brand site, this is a useful way to see if you are engaging consumers enough to keep them beyond that first click.

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9 / WTF IS NATIVE ADVERTISING?

ISSUES STILL PLAGUING NATIVE ADVERTISING

Custom Metrics Some publishers and tech providers are going further than baseline metrics, contextualizing what what matters to their organizations as a map to dictate custom metrics. As you’ll see below, there are a number of ways to spell success. Social lift, BuzzFeed The not-so-new-kid on the block built its content strategy around what and why people are most likely to share, so naturally their success is determined by the frequency of social sharing. “Social lift” is determined by the multiple of traffic a given post gets from sharing.

More and more, publishers are mitigating click through rates with time-based metrics like “attention minutes” and the even fuzzier “engagement.” It’s easy to see why publishers are taking this tack. While an infinite supply of pageviews has eroded ad rates to an unsustainable level, attention is finite — and can therefore be sold at a premium. Ad buyers aren’t completely sold on this metric for traditional banners, but it has some currency for content-heavy native placements. Content takes time to consume. Meanwhile, advertisers looking to tie native placements to sales, subscriptions and other conversions place calls-to-action, banners other clickable units around the high-concept stuff. The ROI gods demand tribute.

Attention minutes, Upworthy You’ll never guess what they did now! As Upworthy doesn’t run banner ads, counting page views isn’t too useful. What they do care about is maximizing attention on important topics, so “attention minutes” takes into account time on page, but also factors in things like which browser tab is open and mouse movements to determine how actively attentive a user is on their site. Velocity graph, Mashable Focuses on social sharing a’ la’ BuzzFeed, but uses early sharing patterns as a predictor of which content will catch on and, dare we say, go viral. Content quality score, Sharethrough Sharethrough, an in-feed native ad company, introduced CQS as a way to analyze how various data points, like social sentiment and an ad’s relevance to current events, signal how effectively a native ad resonates with people. This is contrary to other metrics like time on page or completion rate, which look at how users interact with on-site content. Total time reading, Medium The distraction-free platform encourages its users to do one thing with their time: read. So the more time they spend doing it, the more successful Medium sees itself at doing its job. The site periodically records scroll positions, then cuts out pauses and interruptions (when you might’ve gone to walk the dog or taken a phone call) to create an aggregate number, defined as Total Time Reading, or TTR.

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10 / WTF IS NATIVE ADVERTISING? ISSUES STILL PLAGUING NATIVE ADVERTISING

Labelling

What’s in a name? A lot, apparently. While most publications have settled on “sponsored content” as their choice euphemism for “this is paid for,” some argue this wordplay is confusing to the reader. The balance between clarity and subtlety is a tough one to strike. The New York Times and Buzzfeed, for example, have repeatedly tweaked their labeling in an effort to create good brand experiences while also giving readers clear signs they’re reading ads. The Grey Lady most recently settled on “Paid Post,” while Buzzfeed is going with “Promoted by.” Facebook and Twitter also favor some variation of “Promoted.”

In the U.S., the IAB has long held that there should be some disclosure to consumers that the content is an ad, even if it doesn’t look or sound like one. The U.K.’s guidelines are more explicit, asking that publishers “provide consumers with prominently visible cues” that tell them when an article originated with or was produced on behalf of advertisers. The labeling can include prominent brand logos, shaded boxes or an entirely different font. It should also include wording like “paid promotion” or “brought to you by.” Of course, you could always go Google’s route. They call their ads, uh, “Ads.”

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11 / WTF IS NATIVE ADVERTISING? ISSUES STILL PLAGUING NATIVE ADVERTISING

The Church / State Divide Not so long ago, the idea of asking a journalist to create advertising for a publisher’s client was absurd. If a journalist was to maintain impartiality in their reporting, they couldn’t work directly for the advertising side of the building. That’s why copywriters were invented. For better or worse (we vote “worse’), this fundamental question of credibility is no longer black-and-white. More and more, editorial staffers are being asked to craft sponsored content on behalf of advertisers. Condé Nast, publisher of famous glossies like Vogue and GQ, announced in January that it would use its editorial staff to write for its newly launched branded content arm. Ditto U.K. lifestyle magazine The Debrief, a Bauer Media title, and the Mail Online.

Mental Floss, one of the first to cop to having journos write ads, said it maintains editorial control of that content — and they’re not alone. The argument goes, having all writers under one departmental room simply helps align the marketer’s message with the final product. Others say it’s a matter of subject matter: If Time Inc.’s gear editors create a gift guide for Amazon, who cares? There’s only an issue when the editorial in question has more heft. Media critic Jack Shafer had harsh words for Condé Nast. “By mixing the two forms — editorial content and advertising — Condé Nast is debasing the former to the benefit of the latter,” he said. “This might not matter that much in their fashion magazines, where there is little editorial independence to debase. But the practice won’t improve Vanity Fair and The New Yorker, or Condé Nast’s other non-fashion titles.” It’s worth noting that most publishers have created separate content studios, with separate staffs, sometimes helmed by former journalists, to craft that content. DIGIDAY

12 / WTF IS NATIVE ADVERTISING? ISSUES STILL PLAGUING NATIVE ADVERTISING

Credibility Finally, there’s the issue of credibility. Publishers who push their luck may find themselves facing a backlash from their readers. But, as with native advertising itself, the issue of credibility is hard to lock down.

much hand-wringing commenced among the nation’s media watchdogs and pundits. Had The Atlantic compromised its much-admired editorial standards? Had readers been deceived?

Take Buzzfeed, for example. Despite recent initiatives to produce long-form, investigative journalism, Buzzfeed is still widely known for its unrelenting, unrepentant lists of pop culture clickbait. At this level, what’s the qualitative difference between “11 Baby Animals Who Fell Asleep At ‘Lincoln” and “16 Water Balloon Explosions That Will Blow Your Mind,” as sponsored by Nestea?

According to a survey by PBS’s MediaShift, nearly half of us are still “very concerned” about preserving objective professional journalism. The other half, not so much. The trick is knowing which half you’re addressing.

The problem arises not for publishers promising 175 million churning uniques every month, as Buzzfeed does. It’s when advertisers want to reach, say, 50,000 discerning, intelligent, highly engaged readers. In 2013, when The Atlantic famously published a sponsored post on behalf of Scientology, media critics lost their minds. The item was pulled, and

For high-volume, low-calorie websites like Thought Catalog and The Chive, no one cares if you’ve broken down the wall between ads and edit. But try that with NPR listeners? Oh boy. That crowd is begging for an excuse to write letters to the company ombudsman.

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13 / WTF IS NATIVE ADVERTISING?

DIGIDAY

14 / WTF IS NATIVE ADVERTISING?

A MESSAGE FROM D360

WTF is Native Programmatic? You must be freaking out. The two biggest buzzwords in admartech have collided and created a super child of confusing awesomeness. This sounds like an oxymoron. It’s not! Not only can native be delivered in custom ways, it can be delivered programmatically. First let us set two things straight: Programmatic is the buying and selling of advertising on a real-time basis; and native is the act of inserting paid advertisements seamlessly into or around content so that it fits the form and function of other nonpaid content. Second, recognize that programmatic for display advertising is comparatively well established to native programmatic. Since “native inventory” is brand new to the marketplace and can’t be contained to a simple shape like 300x250 or 728x90, we are working to standardize the dialogue between the buying and selling platforms. Third, understand that there are two sides of native. The first is content integration, or, the art of weaving a brand into the content itself, weather it is Banana Republic’s Instagram ad, New York Time’s Orange is the New Black sponsored editorial, or Demand Media’s content marketing with Experian. The second is, essentially, display advertising with an exceptional twist of creative delivery.

Wait, I thought native is an alternative to display? Not quite. Publishers and platforms still need a way to surface advertising content. Native display ads are the in-feed, in-read, in-widget ads placed carefully around a website to appear as if they were as naturally occurring as the rest of the recommended content. Native display is most often used to promote sponsored content, because hey, viral doesn’t always happen. Okay, so what is native programmatic? Native programmatic is buying, selling and serving of content-based advertising, using plumbing that looks incredibly similar to programmatic display. Simply put, advertisers are buying placements on publisher pages, and back-end technology renders those ads to look like they belong there. When a publisher sends an impression to a supply side provider, or SSP, a bid request is made inside of an exchange, where demand side platforms, or DSPs, can bid, win and ultimately return a creative for that impression. The difference in creative delivery is what really separates native and display programmatic. Where display trades in fixed sizes, native requires creative elements (headline, thumbnail, logo etc.) to be uploaded and delivered individually so that it can assume the styling of the surrounding destination. In display programmatic, there are a number of widely-accepted standard ad formats and a large number of integrated buyers. This conformity allows DSP’s to see inventory across a variety of SSP exchanges, and thus for each buyer to implement their own bidding strategy, optimizing for various KPI and cookie matches.

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15 / WTF IS NATIVE ADVERTISING?

Sooooo… how does it work for native ads?

What if I’m a publisher?

In native programmatic, we still have a fair bit of work left before we reach parity with display programmatic. There’s a lot of variety among ad formats, to-be-agreed-upon protocols within those formats, SSPs that aren’t playing nice together, and buyers and sellers that are just not on board yet. For those in the know, think back to when ad networks became ad exchanges before they became SSPs. It is an evolution of access, uniformity and ultimately, consolidation.

If you are debating where to list your native inventory, look at the rest of your ad stack and sales process.

Some native SSP exchanges do offer (or will soon offer) APIs for bidding on native ad inventory that allows multiple DSP bidders to connect. Other SSP exchanges are a little slower to adapt, and are instead opting to keep their hard fought publisher inventory exclusive. In these cases, the company is both the SSP and DSP. A trading desk or buyer can thus only access the inventory via the platform’s campaign management tools and proprietary bidder. Hence, this is still programmatic native, but the algorithm powering the bidding strategy may be shifted away from the actual buyer. So how does this affect buyers? Buyers have to consider the components of their existing tech and strategy. Do you want to see the impressions in your system (if you have a “system,”) or do you want to essentially hire other companies to run your campaigns? Do you want to negotiate rates directly with publishers and use private marketplaces, or run across a variety of publishers and bid against the open auction? Each has their own merits, and your decision will likely follow the other tactical decisions made for other products.

Here are five questions to ask: Where do my clients buy today? What are the fees for using the SSP or DSP? Will the SSP monetize 100% of bid requests? Where does native programmatic fit in my ad stack priority? Can I use the platform to run direct sold campaigns? So where are we going with this? As the players in native develop their technology, integrations, formats and other capabilities, the future is incredibly promising. Publishers and SSPs will conform to standards that buyers can easily adopt and integrate. Brands will continue to invest in content as a medium, thus spending more on distribution programs and fueling the growth of programmatic native. With increased volume will come advanced targeting solutions, and publisher’s first party audience data will be a cornerstone of delivering ROI for brands. Finally, let’s be responsible as publishers and maintain high quality native placements with a mission to deliver high quality advertiser content and thus value to our visitors.

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The Native Ad Triumvirate Native advertising can’t exist without the complex relationship between three very distinct players. From creation to distribution, here’s where things come together.

THE NATIVE AD TRIUMVIRATE 17 / WTF IS NATIVE ADVERTISING?

The Ad Man Advertising creatives are tired of the hype around native advertising. The digital industry’s newest shiny object sprung up largely without them, you see, and they’re jealous. “It’s not new. It’s not the next big thing. It certainly is not the answer,” wrote Todd Copilevitz, partner of digital strategy at JWT Atlanta. It’s so much less important he wrote, than “honing the craft of meaningful marketing campaigns… a short-term gain for minimal investment.” Copyranter Mark Duffy is even less forgiving, saying most native advertising belongs in one of two buckets: “Dumb or boring.” You know what, though? They’re not wrong. At its worst, native advertising can be uninteresting schlock. It can be cheap and cheerful filler that aims to get a brand logo in front of an audience for 30 seconds or more. (Unlike the high art of Super Bowl ads, which historically have offered audiences a rich tableaux of trucks, twins and trained animals.) There certainly is room for improvement among native ads. The medium is nascent, with brands only just beginning to consider it as part of their overall strategy and publishers still struggling to attract premium talent. Maybe one day Copyranter will find a job with one.

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THE NATIVE AD TRIUMVIRATE 18 / WTF IS NATIVE ADVERTISING?

The Publisher After decades of watching their revenue model and culture buckle under the digital shift, publishers are holding out hope in this newest revenue stream. Is it really new? Not really. Publishers have played host to lackluster advertorial for years, much to the Ad Men’s point. But with first party data and back end metrics on their side, they offer something agencies don’t have­— a complete view of their audience and a robust understanding of engagement with a campaign. And they come at it from a different point of view. “The point of difference is that I’m an editorial person,” said Tiffanie Darke, creative content director for News UK, parent of The Sun, The Times and The Sunday Times, and formerly editor of The Sunday Times Style magazine. “We want [our point of difference] to be about the quality of the content.” That’s all well and good, but when someone else is writing the check, how much say do publishers really have? And do they really want former reporters and editors at the helm of client services? That job requires swallowing a lot of the righteous indignation journalists are very good at.

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THE NATIVE AD TRIUMVIRATE 19 / WTF IS NATIVE ADVERTISING?

The Platform Marsha, Marsha, Marsha. You can almost hear platforms in the background, needling us about their place in the ecosystem. Native advertising is about more than sponsored content, the digital “it girl” cooed about by the vertical press. According to James Aver, founder and CEO of Adzerk, “native advertising has a serious image problem,” in that it gets conflated with sponsored content all too often. It overlooks the importance of longstanding products like Google AdWords, a format native to Google’s search results. Pinterest’s Promoted Pins, Twitter’s Promoted Tweets, Tumblr’s custom microsites and Facebook’s sponsored posts all contain very little “content,” but are still legitimately native advertising because they blend seamlessly into their surroundings. If native advertising is more about look and feel than custom content, then platforms and publishers with scale are likely to embrace native programmatic. A variety of technology companies are looking for ways to reframe art and copy to blend into platform and publisher newsfeeds, emails and web pages. If it looks like native and it acts like native, it is native.

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Glossary

GLOSSARY 21 / WTF IS NATIVE ADVERTISING?

A–Bo AdChoices

Advertorial

Affiliate Links

Amplification

Developed by the Digital Advertising Alliance (a consortium of the advertising and marketing trade groups), the AdChoices icon appears on websites and banners to inform consumers that their preferences are being gathered by advertisers. The goal is to inform consumers about online behavioral advertising, and to allow for opting-out. At native advertising becomes more sophisticated, AdChoices will help marketers pair their content marketing with the right audience. The original term for native advertising, now an outdated flag for ads that ran alongside editorial content — and intentionally disguised to resemble that editorial content. The term dates to the 1940s, when broadcasters packed television shows with “words from our sponsor” that were often read by the program’s stars or presenters. Special URLs that include codes, IDs or usernames that identify referrals, often for the purpose of collecting a finder’s fee. This winter, digital scrapbooking platform Pinterest made waves when it banned affiliate link by pinners in order to consolidate commerce--its adding a “buy” button to promoted pins this week. These buttons will likely include affiliate links, which are on the whole though, featured in more content marketing and native advertising, both as a way to earn revenue and for tracking customer conversion. The process of enhancing an advertising campaign or a portion thereof. For instance, a brand awareness campaign can be amplified through strategic placements of native advertising in appropriate editorial venues.

Applicance Program Interface (API)

Audience Reach

Autoplay

Bounce Rate

A set of standards, routines and protocols that explain how a platform or software handles its data. Like an SDK, an API is typically opened up by a large company to encourage third parties to integrate with them. For example, thanks to an API, LinkedIn members can sign into non-LinkedIn websites using their LinkedIn credentials. For native advertising, APIs are available to help marketers glean more information about users — and thereby custom-tailor their offerings. The potential viewership and readership for any given campaign or placement. Note that reach is not a measure of actual results, but rather the sum total of the possible audience. Reach can be defined by any number of terms, such as specific households in a certain social demographic, or the number of viewers known to watch a certain TV show. A widely loathed option for embedded video. Marketers are the only people who like autoplay, which can increase views significantly by playing a video without the user’s prompting. The measurement of how many users read one web page, then leave the website without reading anything else. Native advertisers look at bounce rates to assess how well they’re matching surrounding editorial. A high bounce rate can suggest that the advertising carpet doesn’t match the editorial drapes, and that readers are put off by the disconnect.

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GLOSSARY 22 / WTF IS NATIVE ADVERTISING?

Br–C Brand Journalism

The use of traditional journalism techniques to tell a brand’s story.

Brand Lift

Increased interaction with or awareness of a brand, as the result of an advertising campaign. Like steak sauce slathered on a cheap cut of meat, citing “brand lift” as a measurement of success can hide many marketing sins because it’s largely unmeasurable.

Branded Content

Another term that’s essentially synonymous with native advertising, only it’s not quite. Branded content is increasingly coming to denote publishing enterprises — not just individual articles — that push forward a brand’s message in some manner. GE’s Txchnologist, sponsored by GE or Intel’s iQ are two such examples of branded content that stand on their own and are therefore not “native” to any other established publication. A less successful branded content venture was the much-maligned, immediately doomed Sugarspring, for example, Verizon’s illconceived attempt to publish an independently operated techfocused website. It collapsed under the weight of executive oversight and a clear misunderstand of what “independently operated” means.

Content Management System (CMS)

The software that drives a publication or website. If editorial is the sausage, the CMS is the meat grinder. WordPress is probably the world’s most popular CMS, driving millions of blogs and other websites. To cut down on production costs and turnaround time, publishers are increasingly granting marketers direct access to their CMSs so native ads can be inserted directly into the editorial queue.

#Content

Content Marketing

Content Studio

Conversion

Click-through Rate (CTR)

Loved by marketers, hated by journalists, “content” has become the catch-all term for anything that’s published. The hashtag “#content” is often used on Twitter to negatively denote native advertising that’s gone too far. Any marketing messages that do not fit within traditional formats like TV and radio spots, print ads or banner messaging. Content marketing itself spans a wide breadth and can include sponsored and branded content (below) but is not always native. Essentially, an in-house marketing agency housed within a publication and tasked with creating native advertising that aligns as closely as possible with the organic editorial content. Agencies and brands are also launching their own internal content studios to differentiate this output from traditional advertising. May also be called a “brand studio.” The process of driving potential customers to take concrete action — clicking on an Amazon banner ad and actually buying a book, for example. The measure of an ad’s success at driving traffic to a specific destination. CTR is expressed as a percentage: ad clicks divided by ad impressions. For native advertising, CTR is losing its luster, as driving “brand lift” and “conversion” are often more important than simple clicks.

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GLOSSARY 23 / WTF IS NATIVE ADVERTISING?

Di–Pa Disclosure/ Labeling

Dynamic Optimization

Earned Media

Embedding

Engagement

Impressions

As led by the Interactive Advertising Bureau (and prompted by the Federal Trade Commissions), native advertising should be disclosed and properly labeled as such. See also “Sponsored Content.” The use of algorithms and other mathematical calculations to match advertising with a particular target audience. Already integral to the display world, dynamic optimization is coming online with native ads, too, giving marketers the ability to programmatically reach the right readers with sponsored content. Publicity and awareness gained through promotional and PR efforts, rather than advertising (which is “paid media”). Though it’s technically paid, native advertising would like to be considered earned media, as it’s meant to have the reach and impact of editorial, not advertising. Blurring the line between paid and native editorial, embedded marketing is meant to bring brand awareness by inserting messages inside proper editorial content. Imagine product placement seen in television and film — only with editorial. A broad, oft contentious term for a consumer’s time spent with a given brand or advertiser. On a website, engagement can mean time spent reading an article, while social media engagement is measured with likes and retweets. The number of times an ad is put in front of a reader. Note that viewability is not universally guaranteed, so impressions do not always equate to actual views.

In-Feed Marketing

Inserting advertising assets directly into an article or editorial stream. Done well, in-feed native advertising matches the look, feel and behavior of its surrounding editorial.

Native Advertising

Advertising messages designed to match the form and function of the environment in which they appear. Well, it sounds simple when you put it like that.

nofollow

Owned Media

Pageviews

Paid Media

The online equivalent of the “do not call list,” nofollow is a tag inserted into certain websites and pages to prevent search engines from indexing its content. Per the FTC, native advertising must be flagged for “nofollow,” to separate it from native editorial. Outlets and channels that are controlled by the brand or advertiser itself. Owned content marketing is big business for brands, who are creating their own blogs, online resources and other branded content to drive awareness and conversions. The number of times a web page is put in front of a reader. For native advertising, pageviews tend to be a fraction of the surrounding editorial’s. The higher the “share of traffic,” the more successful the native ad. In its simplest definition, paid media is advertising and promotion that’s placed in media through paid partnerships. By its definition, native advertising is paid media meant to masquerade as earned media.

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GLOSSARY

24 / WTF IS NATIVE ADVERTISING?

Pa–So Paid Post

Another term for native advertising, an article produced by an advertiser and paid to run alongside — and blend in with — organic editorial content.

Paid Search Ads

Paid listings that appear at the top of search engine results, generally won through a complex (but instantaneous) auction for popular and/or highly targeted search terms.

Platforms

Programmatic Native

Promoted Listings

A broad term for a software service that facilitates a certain practice. Facebook, for example, is a social media platform. In publishing, there’s an ongoing argument about the difference between platforms and publishers. Medium, for example, is an open platform where writers can self-publish their work (much like a CMS). But Medium also commissions original work, like a publisher. Native advertising is welcome on these platforms to varying degrees, depending on the service’s policies and terms of service. The hot new thing, the marriage of native advertising and programmatic ad technology (automatically delivering targeted ads according to user demographics and other characteristics). Several players promise to deliver native advertising programmatically, by matching readers’ interests and the marketer’s goals. The success of programmatic native rests largely on publishers’ willingness to open inventory to the programmatic native platforms. Like paid search ads, listings that appear at the top of editorial streams. On Etsy, for example, a jewelry box maker might pay for her listing to appear at the top of pages listing handmade jewelry. Promoted listings are identified as advertisements, but they’re meant to blend with the organic, curated results.

Separation of Church and State

Session

Social Lift

Storytelling

Software Development Kit (SDK)

Also known as the Chinese Wall, the traditional division between editorial and advertising departments at a media company, suggesting that one won’t influence the other. Want to start a fight at your local journalist hangout? Announce that the separation of church and state is a thing of the past. The period of time any given user spends on a website, as identified specifically via the user’s IP address or another distinguishing variable. Native advertising seeks to be part of a user’s overall editorial session by not increasing bounce. A subset of brand lift, increased awareness and engagement driven specifically through social media sharing. Like #content, “storytelling” is achieving backlash status, and is increasingly despised by writers and editors who are just doing their jobs as journalists. They’re telling stories, yes, but “storytelling” has a marketing buzzword stink about it. Used in an awful sentence: “Let’s proactively create some content through storytelling to achieve brand lift for our partners.” Like an API, an SDK is a suite of tools made available by a platform or large software company in the interest of encouraging third parties to make new products for that platform. This is not altruism. Twitter, for example, supports an SDK so developers will build products based on Twitter, thereby expanding Twitter’s reach, usage and therefore value. For native advertising, SDKs are available to help advertisers create assets that match native editorial and can be automatically inserted into editorial streams.

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GLOSSARY

25 / WTF IS NATIVE ADVERTISING?

Sp–W “Sponsored Content”

Time on Page

Unique Pageviews

Widget

Per the FTC, the mandate that native advertising be clearly differentiated from its editorial surroundings. Depending on the publication, this designation may be prominent or intentionally obscure, and may be described as “paid content,” “partner content,” a “paid post” or an even more creative term. As the name suggests, how long a reader spends with a certain article on a website or app. At its best, native advertising returns time on page that’s comparable to the native editorial surrounding it. Whereas pageviews are the simple count of a page’s total views by every visitor, uniques keep track of individual sessions. For example, if a reader clicks on page A, then page B, then page A again — the page A pageviews is 2. Meanwhile, the uniques for page A is just 1 because the second view was part of the same session. A simple, standalone software application or component meant to run inside a larger platform, often expanding the platform’s functionality. For example, Taboola and Outbrain use widgets to insert suggested links into articles. A new breed of widgets promise to insert native advertising into editorial content streams, presenting users with a more seamless experience.

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IS THE MARKETING CLOUD?

Table of Contents 3 4

Introduction

5

Origins of the Marketing Cloud

First Things First, What is The Cloud?

6 7 8 9

10

15

The Cold War Cloud The Business Cloud The Consumer Cloud The Marketing Cloud

Elements of the Marketing Cloud 11 T he Hub: One Cloud to Rule Them All

Grey Skies: Marketers’ 4 Cloud-Induced Pain Points 16 Complexity and Integration 17 Security 18 A Tricky Relationship Between IT and Marketing 19 The Cookie/Mobile Device Problem

20

Glossary

3 / WTF IS THE MARKETING CLOUD?

Introduction In 1999, the Wachowski brothers debuted what was to become a seminal science fiction classic of the Internet age: The Matrix. In it, our hero Neo is invited to look beyond the collective conscious into the film’s titular stream of 1s and 0s. And while humanity’s life force isn’t being harvested by a mind-altering supercomputer, marketers can be forgiven for thinking we’re headed that way. In the 21st century, humanity’s most prolific effluvia is data. Our buying preferences, our Internet search histories, our playlists, family photos, and friend networks are all translated into 1s and 0s. And that data is being deposited, skimmed and otherwise collected in “The Cloud.” For marketers, it is a treasure trove at once inspiring and terrifying. For legacy software companies and data management platforms, helping marketers put that trove to use is the biggest business opportunity of this age. They’re calling it “The Marketing Cloud.” So what is the cloud? WTF is the marketing cloud? And how do the two fit together? Digiday created the WTF series to parse murky digital concepts just like these. To paraphrase Morpheus: Take the red pill, and we’ll show you how deep the rabbit hole goes.

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4 / WTF IS THE MARKETING CLOUD?

First Things First, What is The Cloud? Quincy, WA Seattle, WA

Lulea, Sweden Hamina, Finland Dublin, Ireland

Chicago, IL

Umatilla, OR The Dalles, OR Astoria, OR Prineville, OR

Eemshaven, Netherlands Amsterdam, Netherlands

Lockport, NY Mayes County, OK Arlington, VA Northern, VA

San Francisco, CA Newark, CA Santa Clara, CA Cupertino, CA

UK London, UK

Lenoir, NC Maiden, NC Forest City, NC Douglas County, GA

Reno, NV

It is a global network of data centers constructed by some of the most powerful Internet companies of our time. It has a terrestrial home, many in fact, in places like The Dalles, Ore. (Google), Santa Clara, Calif. (Facebook), Maiden, N.C. (Apple), Ashburn, Va. (Amazon). Below is a (very) incomplete map of the major player’s centers around the world.

Council Buffs, IA Des Moines, IA Altoona, IA

West Jordan, Utah

Let’s start with what the cloud isn’t. It isn’t an ephemeral atmosphere of data. It doesn’t shift in the air. It doesn’t look like a dinosaur or an elephant or, weirdly, your Aunt Barbara.

France

Frankfurt, Germany Germany

Saitama, Japan Tokyo, Japan Osaka, Japan

St Ghislain, Belgium

Hong Kong

Changhua County, Taiwan

Berkeley County, SC

Dallas, TX Austin, TX San Antonio, TX Houston, TX

Singapore

Sao Paolo, Brazil

Apple AWS Facebook Google IBM Microsoft

Oracle Rackspace Salesforce Yahoo!

Quilicura, Chile

New South Wales, Australia Sydney, Australia

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5 / WTF IS THE MARKETING CLOUD?

Origins of the Marketing Cloud Unlike Athena, the ancient Greek goddess of data—er, wisdom—the cloud didn’t spring whole from Zeus’ head. It developed over time and in different ways for different users.

6 / WTF IS THE MARKETING CLOUD? ORIGINS OF THE MARKETING CLOUD

The Cold War Cloud During the Cold War, key military and government data centers were spread across the U.S., largely unconnected to one another. Any enemy attack that wiped out any computer bunker would take all of that site’s data with it. To prevent such a catastrophe, the US Defense Department launched its ARPANET, a computer network that ensured data could be shared between sites. The packet-switching technology the U.S. government used in 1967 laid the foundation for all network computing and the Internet itself.

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7 / WTF IS THE MARKETING CLOUD? ORIGINS OF THE MARKETING CLOUD

The Business Cloud Meanwhile, hardware manufacturers like IBM, GE and Honeywell were churning out giant mainframe computers, fondly referred to as “big iron,” for the business needs of corporations. These powerful machines allowed businesses “crunch” swaths of data, making many projects that required huge amounts of computation feasible for the first time. But they were incredibly expensive. Smaller businesses responded by running direct lines to machines owned by the manufacturers, universities and other third parties and “renting” computing time. This “hardware as a service” model could be seen as an early entry into the cloud concept—tapping into computing power as if it was a utility. Moving into the PC age, packet-switching network technologies derived from ARPANET made computer resource sharing even more common and cost-effective. First, in-house terminals gave workers access to central computer processing units, usually located in a cooled room below ground. Later, those spaces were converted to in-house server rooms that powered internal networks running software by Microsoft, Adobe and Salesforce, among others. But that didn’t last long. Servers, like mainframes, are expensive. And once the Internet bloomed, those software companies found that by building their own server farms, they could free up hardware budgets and instead sell many more subscriptions by running their software over remote computing networks—aka, the cloud.

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8 / WTF IS THE MARKETING CLOUD? ORIGINS OF THE MARKETING CLOUD

The Consumer Cloud Unsurprisingly, consumers were quick to embrace the cloud. While businesses utilized “private,” purely proprietary clouds to solve organizational problems, consumers called on the “public” cloud, comprised of generally free services. Dropbox, Google Drive and Amazon Cloud Drive allow consumers to store and share files through the cloud, while Apple’s iCloud ensures that all of your devices’ files are synced with a cloud-based account. Some of these companies operate the largest server farms in the world. Other consumer cloud-based services, from Spotify to Netflix, have helped to create a digital economy of instant gratification. And along the way, the cloud has created reams of behavioral data giving marketers penetrating insight into the consumers who use them.

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9 / WTF IS THE MARKETING CLOUD? ORIGINS OF THE MARKETING CLOUD

The Marketing Cloud The web is now flooded with a ton of useful data and intelligence, and marketers quickly hungered for ways to use it to sharpen their campaigns’ effectiveness. Marketing cloud services, many from the legacy software companies themselves, sought to give companies the ability to draw on a diverse array of production and data analytics tools without dealing with their maintenance or overhead costs. They aim to deliver in a few main areas: uniting first- and third-party data to flesh out complete audience profiles; streamlining workflow and fostering collaboration between teams by making resources more widely available; firing off messages to the right places in the right sequence to achieve maximum effect across email, social and other channels; and providing the opportunity for unified metrics and analysis across engagements. The interconnected nature of these steps in the process gave an advantage to services that could be holistically coordinated or integrated into larger platforms. Cloud-based marketing “hubs” have become very attractive. The surge in data available to marketers, not to mention a boost in consumers going mobile, has quickened the adoption of marketing cloud services.

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10 / WTF IS THE MARKETING CLOUD?

Elements of the Marketing Cloud

11 / WTF IS THE MARKETING CLOUD? ELEMENTS OF THE MARKETING CLOUD

The Hub: One Cloud to Rule Them All As marketing solutions migrate fast to the cloud, the rush to get a piece of the action is shifting into hyperdrive. Smelling money, legacy software giants like Oracle, Salesforce, and IBM have in recent years pulled off a number of acquisitions of estimable smaller cloud-based marketing tech outfits. Each giant’s goal? To put together the One True Cloud Marketing Hub, the model that will encompass all necessary cloud marketing solutions and serve as the marketing-tech alpha and omega for the new generation of marketers that will subscribe to its services. Other big guys are taking different routes towards the same goal of hegemony. SAP, for instance, has partnered with Adobe to sell the latter’s marketing cloud in conjunction with certain SAP solutions. Problem is, much like the ad tech industry before it, these providers have created deep market confusion with their wide array of offerings, infinitely branded plug-ins and promises of subtle, shaded advantage. Moreover, not all hubs are equally good fits for every organization. Some are diversified software providers with roots in sales management (Salesforce) or creative applications (Adobe). Some are independent, mid-size players offering a digital suite of solutions (IgnitionOne). Others are programmatic ad tech companies offering DMP solutions (Turn, MediaMath). Still others are true mar-tech providers (HubSpot, Marketo). It helps, we hope, to divide these hubs into their four essential elements. Let’s count ‘em up, adhering to the order in which marketers would tend to encounter them during their progress (or should we say their “journey”?) through a campaign. Buckle up, here we go. DIGIDAY

12 / WTF IS THE MARKETING CLOUD? ELEMENTS OF THE MARKETING CLOUD

Workflow and collaboration Here’s where you get your CMSs and your project management and collaboration tools, some of which people in other industries use, not just marketing types. But marketing creatives specifically use file-sharing tools to put together their copy, or cloud-based editing solutions to create video. Meanwhile, strategists and salesmen are tracking financial outlays across various departments, receiving real-time views of how much money they’ve spent and how much is still available. Everything’s flowing like cream now: your whole marketing team’s enthused about life’s possibilities due to the blessings that these solutions are showering down on their deserving heads. Everything’s set for the next step, so it’s good that the marketing clouds contains a lot of solutions one can use for…

Orchestrating campaigns Ruling the roost here are programmatic ad solutions, but you’ll also find other useful beasts lurking in this section. Look, there are some solutions for sequencing, frequencing, and exposure – in other words, for figuring out in what order, how often and for how long your ads should run, in the interests of saving money. And take a peek over there, at the dynamic creative optimization solutions that will help you change ads in real time so that they better appeal to the viewer on the basis of what you know about her. Or look over in that corner, yonder, at the SEO solutions and the tools that will help you whip up social marketing elements like sweepstakes campaigns and social polls, not to mention landing pages that will corral your desired audience.

Analyzing consumer data Here’s where you’ll find plug-in predictive targeting solutions, which will help you aggregate first-, second-, and third-party data so you can figure out whom to market your brand to on the basis of people’s previous web behavior, not to mention demographics. Or audience extension solutions, to find other potential customers with the same particular traits as your target demographic. Or customer conquesting solutions, which will help you straight-up steal other people’s customers in the closest thing to high seas buccaneering that any of us, at least, will ever get up to in this lifetime. There’s more solutions where these came from, and by the time you put down that bagel a couple more will have proliferated, since every ambitious young programmer out there with dreams of a fat Silicon Valley payday knows that finding the next Big Data-crunching solution is the way to go.

Measuring results The solutions that fall under this grouping help you figure out whether your campaign hit its daily benchmarks; learn which of your marketing channels are firing the most effectively (maybe you want to take money away from mobile and throw it at social, for example); or study broad, financial metrics (what did we sell, and to whom, and how much did they buy?). How did your various channels stack up against each other? Is it time to maybe adjust your allocation of resources? Bottom line: is the client going to be happy? (See also: Are you still employed?) So that’s it. A business environment filled with ambitious start-ups and that’s starting to move towards consolidation, and a marketing cloud with an easy-to-suss quadripartite structure. Like a barbershop quartet. Or the horsemen of the apocalypse.

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DEFINING DATA MANAGEMENT In the eye of the storm of marketing clouds sit your customers and their data. Your customers don’t care about clouds or stacks or silos. What they want is consistency of experience – for you to show them that you know them in the right context during each moment they interact with your brand. When it comes to the technology to support such interactions, contradictory descriptions and claims have caused some real headaches for buyers. Lack of clear understanding of terms only adds to the overall frustration. Most technology companies truly want to make it easier for marketers to engage with and convert specific audiences and individuals. Be aware, though, that just because they can ingest point-solution data into their platform does not mean that the data is actionable and can be properly leveraged for use across different systems or mined for insights.

THE DIFFERENT FLAVORS AND DEFINITIONS OF CLOUD-BASED DMPS Basic DMPs

CRM DMPs

A basic data management platform (DMP) in its most simple form can take data from one point solution and combine it with data from another. This blending of digital marketing data seems good on the surface, but be aware that custom applications may be required in order to support broader use. Make sure that the solution to fixing today’s most basic needs does not hinder future expansion as your marketing organization evolves.

CRM DMPs have roots in customer relationship database management and the fields-based data that supports sales interactions. While CRM data is extremely valuable for personalized marketing and can be imported into most DMP systems, the DMP technology should also account for unknown consumers who engage with the brand. Marketers relying on CRM-based DMPs lack the ability to connect an individual consumer’s data from known interactions with data from that person’s anonymous interactions. CRM data can be imported into most DMPs, but this does not necessarily guarantee that the data will flow freely to influence steps of future interaction.

Media DMPs Media DMPs have roots in display media. These were initially created to support online behavioral advertising and realtime bidding markets for online display ads. Today they feature capabilities such as portfolio optimization, predictive and attribution modeling and data visualization. Because the customer journey typically begins with an online search or exposure to an ad, the ability to capture and use this behavioral data to influence later-stage interactions is becoming increasingly valuable. Because the customer journey does not begin at acquisition, advanced marketing solutions should include media capabilities to support a consistent end-to-end customer lifecycle experience.

disparate technologies with the goal of eventual integration into a single seamless offering. Prior to investment, be sure to dig deep into demonstrations regarding the functionality of key components and integrations, especially those most important to your business.

Marketing Hubs

A true data management system (referred to as a digital marketing hub or cloud) provides standardized access to universal audience profile data, content, workflow elements, messaging and common analytics. The goal is the coordination and optimization of marketing campaigns across multiple channels to engage consumers in a more personal and relevant way. This can be done both manually and programmatically, using unified data Clouds available for both online and offline Cloud refers to applications, services or resources available to specified users on tactics. Marketers need to look for a demand via the web. Cloud anything is a system that provides a single source of network concept, allowing companies to truth to better engage people across increase capacity, scale and functionality the customer journey – from initial search ad to final purchase and loyalty as needed without having to commit to marketing. Systems typically include a potentially expensive infrastructure. A bundle of native marketing applications marketing cloud is an assembled set of and capabilities as well as an open marketing solutions accessible online. architecture through which other point Some marketing clouds have gained solutions and partners can integrate. expansive feature sets due in part to various mergers and acquisitions of

Before there was a marketing cloud, there was IgnitionOne, providing cloud-based integrated marketing technology to its clients long before most clouds gained their fluff. Since 2004, we’ve offered smarter solutions for performance-based marketers to better engage their customers throughout the complete customer lifecycle. For true data management, website personalization, mobile, search, programmatic display, reporting and analytics, email, social – including a flexible architecture for the integration of additional solutions – count on the software, service and expertise of IgnitionOne to remove the complexity so you can do more with your data, faster. Cloud? Hub? DMP? No matter what you call it, we’re here to help.

Get in touch: [email protected]

15 / WTF IS THE MARKETING CLOUD?

Grey Skies: Marketers’ 4 Cloud-Induced Pain Points Like everything in this imperfect world, the marketing cloud, whatever its benefits, brings certain challenges. Let’s discuss.

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16 / WTF IS THE MARKETING CLOUD? GREY SKIES: MARKETERS’ 4 CLOUD-INDUCED PAIN POINTS

Complexity and Integration A recent IDC report indicates that over 1,000 vendors are currently pumping marketing tech solutions out into a mostly unconsolidated marketplace. Expect more. Way more. As marketing becomes ever more mind-warpingly data intensive, and as the ability to aggregate information begins to separate the industry’s winners from its losers, programmatic solutions will become even more crucial. Embrace them – or die. But ask yourself the question: Are all your company’s cloud-based solutions actually going to work together, especially if various departments acquired them in the absence of a CIO’s unifying vision? Integration remains a significant challenge in the cloud tech world. Adam Heimlich, head of programmatic at Horizon Media, says the integrating tech that everyone’s relying on “is not that standardized. Companies change their APIs all the time and screw up ongoing integrations. The tech world just isn’t quite built for always-on APIs among dozens of big companies.” Or dozens of small companies, for that matter. Heimlich adds that another significant issue has to do with the internal cultures at companies. “People are in favor of ‘integration’ in theory but generally against sharing their work or letting others play in their sandbox.” DIGIDAY

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Security

Entrusting crucial information to an amorphous entity with a name that actually connotes impermanence (don’t clouds... evaporate?) isn’t a natural fit. But security might be a bit of a red herring at this point. Computing simply is moving to the web, period. There simply will be security issues, just like there always have been. (Your old IT system, connected as it ultimately was to the Web, wasn’t “safe” either.) At the same time, cloud providers simply will go to great lengths to solve them, because, business-wise, they’ll be screwed if they don’t. Anyway, a rational cost/benefit analysis indicates that the “security issues” associated with the cloud can be overblown. Things are more complicated than they appear. “While the cloud model comes with risks,” says space150 CTO Marc Jensen, “the benefits are huge. Before the days of the cloud, many organizations would be their own security ‘experts’ and would have a range of success or failure with this. Security is something to be taken seriously, and hiring experts, cloud or not, is critical. The move to the cloud has eliminated the temptation for people to be their own experts.” Another way to put it is that when you use cloud services you’re outsourcing your security function to companies like Google, Amazon, and Apple – outfits rumored to know a thing or two about computing. Then too, the cloud is making possible positive changes to security protocols on the tech side. Jensen cites Google’s transition from a “trusted perimeter” security model to a model based on your device and your identity. The problem with perimeter models, he says, “is that once you’re in the network, you’re really in. The Sony hack last year was a good example of this; getting into the network opened access to everything. As our mobile devices are adding things like biometric ID, they are getting increasingly secure.” He adds, “The cloud has enabled this approach. It would have been impossible before this.”

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18 / WTF IS THE MARKETING CLOUD? GREY SKIES: MARKETERS’ 4 CLOUD-INDUCED PAIN POINTS

A Tricky Relationship Between IT and Marketing One issue here, says Domani Studios CTO Evan Stark, is “the speed at which marketers wish to move versus the requirements and standards that IT needs to facilitate, which take more time.” Another issue is that in the cloud era most anyone can start working behind the backs of the IT department. Creative types dabbling in tech – great idea, right? The burgeoning bring-your-own-device movement is a subset of this issue. “BYOD happened so fast that it caught many companies and IT departments off guard,” says space150 CTO Jenkins. “When you have really restrictive IT policies, and people need to get things done, you see a lot of people using the tools they know best.” But the cloud era has also opened up new avenues for tech/marketing collaboration. “Digital marketing’s first iteration was to take a traditional marketing output, like a brochure, a static image, or a 30-second video, and place it in a digital environment

(a website, a banner ad, a pre-roll video),” says Craig Key, SVP of Media at space150. “This meant that the creative aspect still lived wholly inside of marketing’s sphere, while the delivery was up to the technologist. One barely cared about the other, and there wasn’t much need for them to work together.” No more. In the new age of “smart” campaigns, Key says, “creative can take advantage of technology to inform and enhance the work. What kind of device is the user on? What time of day is it? Where are they? What’s their history with the brand or its products? These types of data points make marketing work better/smarter/harder, but also require the CMO and CIO to work hand-in hand.” An example of such handin-hand work, Key says, is the creation of a company data management platform, which “becomes the ‘cloud’ to store all aspects of a business’ data so that it can be accessed in real time to deliver more meaningful and relevant messages that are tailored to the individual user rather than a broad segmentation of customers.”

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19 / WTF IS THE MARKETING CLOUD? GREY SKIES: MARKETERS’ 4 CLOUD-INDUCED PAIN POINTS

The Cookie/Mobile Device Problem The no-cookies-on-mobile problem is a perennial one, and one that’s not specifically associated with the transition to the cloud. But the cloud era is going to inflect how marketers approach that problem. The fact is, people are spending more and more time using apps on their devices. “Look into the future,” says space150’s Jensen. “The experiences we seek just work better in apps, and while people will use the web when they need to, they strongly prefer the speed of apps on mobile devices.” But since there’s no app equivalent to cookies, marketers’ traditional methods of tracking consumers are showing diminishing returns. Marketing’s response will include tracking consumers using not the sorts of profiles that cookies can enable, but rather consumers’ own real identities. This will require data-crunching on a heroic scale, and of a sort that today’s cloudbased solutions can increasingly deliver. Facebook, with its tremendous (and vaguely terrifying) access to first-party information is an example of a company that’s making a go of it on this new frontier, but it’s not alone. “The companies that are have strong ties to identity are monetizing well,” says Jensen, “while networks that rely on a less personal or more anonymous system of identity are not monetizing as well.” He adds, “Cookies are a problem on mobile, so we need to move on.” The cloud era, with its explosion of new technology, could help marketers do that. DIGIDAY

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Glossary

21 / WTF IS THE MARKETING CLOUD? GLOSSARY

A–Cl Analytics

Appliance program interface (API)

Attribution modeling

BYOD

That to which marketers subject the absolutely stupefying amounts of consumer information to which they have access in the Big Data digital era. Vendors are falling over themselves to sell marketers the analytics solutions that will help them deal with that data: sift through it, sort it, segment it, make conclusions about consumer behavior and preferences from it. A set of standards, routines and protocols that explain how a platform or software handles its data. APIs are typically opened up by a large company to encourage third parties to integrate with them. In the marketing cloud, APIs allow marketers to layer on functionalities such as marketing automation, analytics and targeting that they may need to conduct business. Modeling of how to assign credit for sales and conversions in a sales path. Some models assign credit for a sale to the last ad that the buyer clicked on during his or her path towards a purchase. Others apportion credit in different ways. Attribution modeling remains an inexact science, a fact that marketers don’t like at all. This IT policy allows employees to access data hosted in the cloud from any of their personal devices, usually in accordance with restrictions that vary by company. (No sensitive data, for example, or no data storage on devices.) BYOD allows for a more mobile workforce, while saving companies the cost of purchasing company-issued laptops and smartphones for every employee.

CIO/CMO partnership

Cloud

Cloud architecture

Cloud burst

The CMO has the customer data. The CIO has the expertise in building out the large programs needed to generate insights. It seems like a natural partnership, but it’s often a hard sell. Why? CMOs are spenders, tasked with generating excitement about a brand. CIOs are savers, tasked with improving processes, managing systems and supporting users in a way that drives down costs. Their working together to dig into data will ultimately drive growth, but to get there, they’ll need to agree on some key purchases, including, maybe, marketing cloud services. If you’ve gotten this far and you still don’t know, start over. Just kidding. It’s a network of servers connected in such a way to allow centralized data storage and access. Also referred to as “cloud computing.” Everything required for cloud computing – the whole kit and caboodle, as our grandmother used to say. You’ve got your front end platform (like a mobile device or laptop), your back end platforms (your servers and storage capacity), your cloud-based delivery, and your network (like the Internet). That’s it? Yep. That’s it. This one comes in two flavors, positive and negative. A positive cloud burst is when a cloud handles more traffic or a computing surge. A negative cloud burst is when it doesn’t.

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22 / WTF IS THE MARKETING CLOUD? GLOSSARY

Cl–Cr Cloud enabler

Cloud operating system

Cloud security

Consumption-based pricing model

Collectively, the technologies and manufacturers that serve as the backbone for all cloud products and services. A cloud enabler is what lets an organization build and use cloud solutions. A typically fast and easy to use computer operating system that doesn’t run conventional PC software, but loads all its applications from the Web. Confusingly, “cloud operating system” can also refer to the infrastructure necessary for setting up cloud computing services. In that second sense, it’s close in meaning to “platform as a service.” Security in cloud computing. Wait, you knew that. The point is that cloud security is going to be become more crucial, and an even bigger growth industry, as more and more data inevitably moves to the cloud. Needless to say, the well-publicized cloud data breaches of recent years haven’t helped assuage anxiety on this front. Still, try to relax. Really smart people are working on this. There is such a thing as too much support. While large corporations might love providing huge amounts of processing through their fixed-fee cloud services, this can be overkill for small businesses. Consumption-based pricing paired with elasticity (see p. 24) allows these smaller parties to pay only for what they use. Very cost-effective.

Content delivery network

Core service layer

CRM

Cross-channel attribution

A network of servers (or server farms) strategically located to enable quick upload of web pages, files and other content. The closer the user geographically to the server, the faster her upload times. CDNs are particularly important for publishers and platforms with global reach as today’s users have become accustomed to instant access to everything all the time. System software in Mac’s OS X and iOS that contains fundamental systems services necessary for apps that function on higher levels. Customer relationship management. The management of a company’s relationships with its current and potential customers. CRM often involves using tech solutions to handle sales, marketing, customer service, and technical support functions. Companies like Salesforce make those various solutions and offer them to customers on a SaaS basis. “Attribution” is what marketers call the process of keeping track of a consumer’s behavior as he or she potentially approaches a purchase. Cross-channel attribution is keeping track of a consumer’s behavior across both online and offline channels. The point: influence that behavior. Drive a sale.

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23 / WTF IS THE MARKETING CLOUD? GLOSSARY

Cr–Da Cross-device targeting

Data centers

Data cleansing

The ability to serve targeted advertising to consumers across multiple digital devices – and a technological challenge at the moment. The problem is that if you use, say, three different digital devices during a day, advertisers are reading you as three different people. That can result in waste, as an advertiser might be paying to send you an ad that you’ve already seen twice today. It can also make it hard for marketers to provide you with a pleasantly seamless experience across your devices. And it creates difficulties with attribution. Say you see an ad on your work laptop and, in response, start to order the product in question. Then you get distracted. Then you leave the office and finally order the product on your mobile. Good for you, but the ad you originally saw on your laptop doesn’t get credit for the clickthrough. And jeez, that’s more than a little sad.

Data integration

It’s summer. Your apartment’s air conditioner is down for the count. Where do you go? A data center, of course. These expansive climate-controlled caverns, often of industrial proportions, house rows of computers, many of which power applications or serve data to cloudbased initiatives.

Data science

The process of detecting corrupt or inaccurate records in a collection of data and then either correcting or removing them.

Data management platform

Data segmentation

The process of combining data present in different sources and providing users with a unified view of it so that they can derive knowledge from it. Sounds simple, but it’s actually a super-complex field of endeavor that’s relevant in every situation in which human beings have to make conclusions on the basis of oceans’ worth of information coming at them from lots of different sources. A piece of software that sucks up, sorts and houses information, and spits it out in a way that’s useful for marketers, publishers and other businesses. Marketers use DMPs to manage cookie IDs and other consumer profile information and to generate audience segments, which are subsequently used to target specific users with online ads, email and other personalized web experiences. It’s all about better understanding your customer information. The discipline concerned with the extraction of knowledge from data. A huge field, one that overlaps with computer science (not to mention other fields) and one that’s getting hipper in this tech-driven age of Big Data. If your kid announces a burning desire to be a data scientist, pour yourself a drink. She could well make a bundle in Silicon Valley. You’ve done well. A subset of data analytics that involves grouping zillions of pieces of data into segments on the basis of which you can make conclusions.

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24 / WTF IS THE MARKETING CLOUD? GLOSSARY

Da–Fr Data visualization

Digital asset management

Digital marketing suite

Elasticity

Do your eyes glaze over whenever you glance at an Excel worksheet? Do even the most neatly labeled tables spur you on to quickly turn the page of a report or memo? Well, the abundance of graphs, charts and diagrams on content and web dashboards today implies that you’re not alone. Why dump numbers when you can visually depict trends and relationships? A picture’s worth a thousand data points. The process of the collection, annotation, cataloging, storage, retrieval and distribution of digital assets, such as videos or text files or photographs or other images or, for that matter, most anything else. A package of software to enable digital marketing, in all its multi-faceted glory. Both mar-tech giants (IBM, Oracle, Salesforce) and more niche-y vendors (Marketo, Conversant) sell them on a cloud-based software-as-a-service basis. Lots of companies might not need all the elements in a suite, but no worries: they’ll buy individual point solutions or component suite parts instead. Most business processes don’t fire at a constant rate. At any point, you might be using your computing power to process consumer information requests, serve multiple dynamic web experiences to different segments or manage your email campaigns. Cloud computing accounts for these changing needs by providing appropriate levels of data, processing and application support for what you’re doing at all times.

Encryption

End to end customer lifecycle

Enterprise software

Frequencing

Post-PRISM, we’re all pretty on-edge about who touches our data. Partners who operate in the cloud take this concern seriously by using protection: scrambling your data, exchanging keys, etc. A growing priority for consumers, encryption is a must-have for cloud services today. Marketing theory-speak for the progression of steps that a consumer takes in considering, purchasing, using, and maintaining loyalty to a product. Corporations are people, too. And like people, they need their own software. Most of this software is back-end oriented, calling for coordination between tasks executed at many different employee and consumer PCs: payment processing, CRM management, collaboration platform support, etc. Many of these services are bundled together and offered through the cloud, providing all the benefits of SaaS. An ungainly and actually relatively obscure marketing term of art that refers to the business of figuring out how often and for how long an ad should run, in the interests of efficient use of resources. Not all that different from “sequencing,” really. So you might just say “sequencing” and be done with it. The English language will thank you for it.

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25 / WTF IS THE MARKETING CLOUD? GLOSSARY

Fu–Ma Funnel

Graphical user interface

Infrastructure as a service (IaaS)

Not that thing you might have used in college to channel Old Milwaukee down your throat. Rather the purchase funnel, a marketing model for visualizing how a consumer progresses down a narrowing path from awareness of a product (the top of the funnel); through opinion, consideration and preference (mid-funnel); and towards the eventual purchase of that product (the bottom of the funnel). Bonus fact: In Ireland, a funnel – a real funnel, not the purchase one – is also known as a tundish. Write that down. You never know. Remember the days when running an app on your computer meant entering line after line of text into your console? Probably not. We live in the age of GUIs, visual interfaces that allow users to point and click (or tap) their way to productivity. If you’re still not sure, ask yourself this: Do you have to type out a file path or do you just click on a folder? If it’s the latter, you’re using a GUI. One of the three categories of cloud computing technology, along with software as a service (SaaS) and platform as a service (PaaS). In an IaaS model a provider hosts servers, storage and other infrastructure components. It also handles tasks like system maintenance and backup. All your company has to do is sign up and use the stuff.

Identity management (IdM)

IP restriction

KPI

Market fragmentation

That branch of computer science that deals with all issues related to the control of information about users on computer networks. The point is make computing as secure and efficient as possible. Inasmuch as IdM is preoccupied with information safety it obviously has particular relevance for digital marketing, personal data-intensive field that it is. The process of blocking from your system connections from undesirable Internet protocol addresses (the identifying “addresses” that all computer devices carry) in the interests of security. On a personal level, you might block the IP of the creep who keeps leaving obnoxious messages on your blog. On the macro level, companies might block from their systems servers associated with dodgy hacker-ish activity. Key performance indicator. A measurable value that a company uses to verify whether it’s achieving its business goals. Your department didn’t hit its KPIs this month? You are fired, sir. Ford’s vision of a one-product-fits-all economy collapsed long ago, but the one-message-fits-all approach to marketing survived it. Finally, marketers are accepting that different consumers are looking for very different things (at different times) from the same product. From the benefit highlighted to the creative chosen, a single product can be marketed in many different ways. Creating and serving all of these ad versions is a project for the cloud.

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26 / WTF IS THE MARKETING CLOUD? GLOSSARY

Ma–Pa Marketing automation

Mash-up

Middleware

Multi-channel campaign management (MCCM)

The computerization of marketing, in short. The term encompasses a range of activity, from data analysis to workflow automation to the “programmatic” – that is, computerized – buying of ad space. An application that uses, combines and aggregates data or functionality from more than one source to create a new service. The idea is that combining applications into one will help to present data in a more useful and usable way. The classic example is a Google Maps page of a city overlaid with markers indicating where, say, all the best French restaurants are. These applications are usually hosted in the cloud. The software layer that lies between the operating system and applications on each side of a distributed computing system in a network, facilitating their integration. Known as “software glue,” it typically supports complex, distributed business software applications. Today’s marketers are fighting the war for consumers across desktop, mobile, social and beyond. Campaigns require more coordination than ever before, and MCCM is a way to centralize all message distribution and sequencing using a cloud-based platform.

Omnichannel

Open cloud

OpenStack

Pay as you go

A type of marketing that recognizes that consumers engage with brands across lots of different platforms and that strives to overcome the challenges associated with that fact. See the entry for “Cross-channel attribution” for an explanation of what those challenges look like. (They look gnarly.) A vision of the cloud that’s broadly inspired by open source principles and that has as its goal fostering flexibility, interoperability and compatibility in cloud use. The open cloud movement is a response to fears that, as cloud use burgeons, the cloud will be hampered by problems like IP restrictions, vendor lock-ins and the inability to access and move data freely across functions and brands. A set of open source software tools for building and managing cloud computing platforms for public and private clouds. Originally developed by NASA, it’s managed by the non-profit OpenStack foundation and collaborated on by more than 200 companies. Developers use it mainly as an infrastructure as service, or IaaS. The pricing model inherent to cloud computing, according to which you pay only for those services that you use. The analogy is with how you pay for utilities. You pay only for that water that you consume, without having to go buy yourself your own reservoir. (Although, come to think of it, that would be kind of cool.) Also known as pay and go, pay per usage, pay per use and pay as you use.

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Pe–Sa Personal cloud

Point solution

Portfolio optimization

Predictive modeling

Private cloud

Just like the name says: your own personal cloud, powered by a little cloud drive that you perch up on the shelf not far from your computer. A personal cloud gives you the convenience of cloud computing – you can access the data that you store on it via any one of your devices, for example – without the headaches that the public cloud brings, such as subscription fees, security fears, and lack of control over your data. But, if, say, a house fire or natural disaster damages your personal server, your data’s in trouble.

Programmatic advertising

Public cloud

A solution that solves one particular problem in an organization, with no regard to the context in which that problem exists. Because a point solution pays no attention to context, it can ultimately create new problems. A point solution stands in distinction to a suite or platform of solutions. The process of establishing the proportions of assets to be held in an investment portfolio in order to ensure the highest possible rate of return. The use of statistics to predict outcomes, either in the future or in the past (the latter would be useful if you were a detective trying to get to the bottom of an unsolved crime, for example). A custom cloud built by the very company that aims to use it. In such a case a corporation is actually itself building the hardware and network it needs to host its data, possibly giving it more control and security. But it’s time consuming and expensive and, in the end, employees are probably going to go rogue and use YouSendIt anyway. Are we right, employees?

SaaS

The use of software to buy and deploy digital advertising, as opposed to the traditional ad-buying process, which involves RFPs, human negotiations and manual insertion orders. It’s using machines to buy ads, basically. The scale of programmatic is mindboggling: at stake are trillions of digital ad impressions worth billions of dollars, and they’re often being auctioned off in real-time transactions. Online resources like software or data storage that are provided to the public via the Internet. Public clouds are essentially infrastructure as a service provided by huge companies with the means to build and run huge computer networks—Amazon, Google and Facebook, but also Dropbox, Box and others. These are the clouds that give CIOs such headaches--employees dumping sensitive information into public clouds may mean they are vulnerable to data breaches. On the other hand, by tapping into pre-existing infrastructure, CIOs can invest instead in developing the apps that work best for their businesses. Especially for large companies, buying, installing and managing software packages on hundreds, sometimes thousands of computers is an enterprise in itself. Cloud computing offers an alternative: software as a service. The company pays for access to a server farm running the desired application, and all (qualified and connected) employees can easily run the software on their PCs. Beats waiting for an update.

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28 / WTF IS THE MARKETING CLOUD? GLOSSARY

Sc–V Scalability

Sequencing

Server farm

Service blackout

The ability of a system or network to handle an increased workload, or its ability to grow larger to handle that load. You’ll also hear marketers talk of the need to do things “at scale” – that is, on a large scale. You might even hear them use the verb “to scale,” as in, “We need to scale this campaign, fast.” Don’t let them psych you out: they just mean they need to make it bigger. Distributing digital content in sequential form in order to lead a consumer progressively along a path from one node to another. You might first send the consumer an email, for example, then follow that up with a sponsored article, then hit him with a display ad, and so on. The final stop on this “journey” is ideally a sale. A large collection of computer servers collected in one place and powering an enterprise’s information systems. Basically, a massive room filled to the gills with lots of massive computers — and massively well-air-conditioned. What it sounds like: there’s been a glitch at your cloud services provider and your cloud’s gone down. Cloudusing companies need to assess the risks of blackouts and make contingency plans for when they do occur. They might, for example, back up key data in another location or arrange for their systems to undergo “graceful degradation” – that is, to maintain basic functionality even though they’ve taken a hideous beating.

Subscription-based pricing model

UX personalization

Vendor lock-in

Vertical cloud

Maybe you’d sleep better at night knowing that your budget isn’t about to take a hit if a huge data-intensive project comes out of nowhere. This pricing model allows you to pay one flat fee regularly in exchange for continuous use of cloud services and support. The subscription option is most useful for businesses that expect to use a lot of data. Otherwise, you risk overpaying. UX, or user personalization, is a buzzword referring to a person’s behaviors, attitudes, and emotions about using a particular product, system, or service. To that extent, it’s relevant to for marketers. UX personalization refers to the process by which marketing can create advertising and branding experiences that appeal to individual people. An economics term that refers to a situation in which your business is so dependent on the services or products that a particular provider offers that the costs of switching to another provider would be exorbitant. A cloud that’s designed in particular for a certain industry or application (that is, for a “vertical” in tech jargon). Such a cloud will offer functions that are particularly useful for that industry. The marketing cloud is an example of a vertical cloud. Another example is the health care cloud.

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DIGIDAY

W TF IS AD BLOCKING?QUICK READS

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02

/ WTF is Ad Blocking?

Table of contents 03 Introduction

10

And ad tech vendors?

04

What are ad blockers?

11

Do ad blockers really allow certain ads?

05

How many people are using ad blockers?

12

Are ad blocking outfits in it for the money?

07

How screwed are publishers?

13

Is ad blocking ethical?

08

View from Europe

14

What can we expect?

09

What will the effect be on agencies?

15

Who else is going to gain?

03

/ WTF is Ad Blocking?

Introduction Anyone who can remember the dawn of the Internet era also recalls what garish, flashing, seizure-inducing nightmares display ads once were. They popped up, travelled and inspired the first ad blocking browser extensions, circa 2000. Over the past 20 years, advertisers have made strides with messaging, design and data application. In fact, they may have strode too far: Retargeting efforts and intrusive high-impact and auto-play ads have put some consumers off display altogether. Witness the radical jump in ad blockers over the last year: 41 percent over the last 12 months. In Q2 2015 16 million members of the United States online population blocked ads. Perhaps more worrisome, Apple has thrown its weight behind that movement, announcing that the new version of iOS 9 will be compatible with ad blockers. The same tech titan that waged war on Flash is now wallowing into the ad blocking game, basically endorsing it in the process and raising the stakes considerably. So now is the time to ask: WTF is ad blocking? And WTF can we do about it, really? Give us 10 minutes, and we’ll give you all you need to know. Welcome to WTF is Ad Blocking? A Digiday Quick Read.

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/ WTF is Ad Blocking?

What are ad blockers?

AD

An ad blocker is any kind of software or hardware that removes ads from a webpage. For most people an ad blocker takes the form of a browser extension such as AdBlock or Adblock Plus, which can be installed on Google’s Chrome and Mozilla’s Firefox browsers. Some ad blocker makers have also made dedicated mobile ad blocking browsers. Ad blockers work by checking what your browser downloads against massive “filter lists,” which contain thousands of page elements (such as ad serving domains) associated with ads. Because most ads are served through ad exchanges or ad networks, blocking them is rarely more complicated than blocking the domains of the ad servers themselves. Ad blockers can target display ads, video ads and sponsored content widgets. Native “content” served directly via publishers’ CMS is thus far immune, since it functions technically as editorial. But publishers that employ a programmatic platform to fine-tune their audience targeting or add the scale required by major advertisers are using some of the same page elements as display. Therefore, those ads can be blocked.

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/ WTF is Ad Blocking?

How many people are using ad blockers?

Currently about 200 million people are using ad blockers worldwide, 45 million of them in the USA and 77 million of them in Europe. (Ad blocker use is actually higher as a percentage in Europe, where people typically are more concerned with privacy issues than Americans tend to be.) But what’s unsettled the industry more than the raw numbers is how fast they’re growing. Between the second quarter of 2014 and the second quarter of 2015 ad blocker use grew 41 percent globally. In the USA it grew 48 percent. It gets worse. About 41 percent of marketers’ favored demographic – millennials – use ad blockers, more than everyone else. Young millennial men, an even more coveted marketing demographic, are more enthusiastic blockers than young women.

200 million people are using ad blockers

That makes publishers that attract a heavily male audience more vulnerable. Statistics indicate that up to 80 to 90 percent of users of some tech and gaming sites, for example, are blocking ads.

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/ WTF is Ad Blocking?

How screwed are publishers?

This new threat to publishers’ revenue lines has hit them like a cinder block. Things were going (relatively) well for publishers during the post-2008 recovery. Now this comes around. How grim could this get for publishers? It depends on which sort of publisher you are. Small publishers with minimal revenue needs could survive as they always have – barely. Large publishers too could make it. They can put together the native content programs and sales teams that will allow them to thrive – and they’ll take advantage of the publishing flight to the big platforms that ad blocking could touch off. Mid-sized publishers, though? Programmatic ad serving has been a godsend for these outfits. It allowed them to outsource their ad sales functions, freeing them to develop their brands. But what tech giveth, it now threatens to taketh away. Awl publisher Michael Macher recently revealed that 75 to 85 percent of his publication’s revenue is vulnerable to ad blocking. The co-founder of The Toast announced that ad blocking is “brutal” for her publication. Even a 10 percent ad blocker-related drop in revenue could wipe out a smaller publication.

There are remedies, however. The Washington Post has taken a fire vs. fire approach by blocking content from readers who use ad blockers. Others will tap other revenue streams, including events, subscriptions and, oh yeah, native. “A purely display advertising-based revenue model is a risky place to be,” said Tom Standage, chief editor and head of digital strategy, The Economist. Nylon magazine has gone so far as to combine its marketing and editorial divisions under a single editor-in-chief/CMO. Not so long ago, such a move would have been heresy. But times have changed. The point is to better transition into a future where native advertising, integrated with editorial, will produce – or so Nylon hopes – a reliable revenue stream. Revenue is one issue; data is yet another. Blocking ads also blocks tracking cookies, so publishers can’t collect first-party data about the people visiting their sites. The trouble is that data-based insight into its readers is part of what a publisher sells – a bonus that has pumped up CPMs. Loss of data doesn’t trouble advertisers as much as loss of revenue does. But it’s not very nice, either.

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/ WTF is Ad Blocking?

View from Europe Interview With

Tim Gerken

It is a big topic in Denmark. I think Europeans get more easily annoyed by being followed by retargeting or from knowing that their data gets sold. But the general person isn’t aware of how this works. So people might be all for privacy, but they don’t mind being logged into Facebook at all times. But if they see an ad for a shoe that they thought about buying the other day, they throw a fit.

Head of business intelligence Jysk Fynske Medier, Denmark

Ad blocking could lead to more publisher dependence on big platforms like Google and Apple. And Europeans are more skeptical than Americans are of giants like that, aren’t they?

The marketing industry in the U.S. has been full of soul-searching. Some say if people are blocking our ads, then it means we’re creating bad ads and we deserve this. Are you hearing that too?

Yes, I think at least in Scandinavia a lot of people aren’t that happy about big companies ruling the world, whereas Americans are more concerned about the government or NSA tracking them. That might be a caricature, but I think it’s true to some extent.

I mainly hear it from journalists or other non-commercial colleagues. And in a way they’re right, but the thing is that it’s often not the bigger publishers creating the problem. The other day I saw a friend use Adblock, so I asked him why. It was because he was streaming football on some dodgy site, with terrible pop-ups, interstitials and pop-unders. So of course he installed an ad blocker, and now it’s always on. So the problem is to a large extent created by smaller sites that are out to create a quick profit, and then it’s everybody’s problem.

The biggest irony I see is that the ad blockers are here to make money off users. So they’re just the same as publishers, but the users don’t see that yet. Publishers create value by creating quality content. Adblock creates value by making content more easily accessible. The biggest difference is that publishers don’t hold ad blockers hostage. Bottom line: How worried are you and your European peers about this? We are concerned, but aren’t publishers always?

Even though we try to make our ads non-intrusive, our users use AdBlock if they are provoked to it by other sites. And I believe once you’ve installed it, you don’t switch it off just because you visit a quality site. Privacy issues are more central in Europe than in the U.S. Does that play into the ad blocker issue for you?

What’s the prognosis for the future in Europe? Short-term: Not much. Mid-term: Some will go to war against ad blocking and some will accept it and let others fight the war. Long term: Who knows, but I think ad blockers are here to stay.

09

/ WTF is Ad Blocking?

What will the effect be on agencies?

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So far there’s been relatively little ad blocking-related concern in agency-land. The chief creative officer at one agency recently told Digiday that he’s never heard clients or brands bring up ad blockers specifically. That’s mostly because brands aren’t feeling the pinch – yet. But he also said that with Apple stomping into the mobile ad blocking game, he expects brands to sit up and pay attention.

Quality

Some in the agency world argue that ad blocking represents the scourge that a decadent marketing industry needs. The idea is that ad blocking will force agencies to be more relevant, to stop harassing users with intrusive ads and violating their privacy, and generally to create better ads that people will actually want to see. And it’s not just a creative cause. Some argue media money will be saved too. “Ad blocking in reality is a self-selection tool in which humans who despise ads won’t have money wasted on them,” wrote Ben Kunz, VP of strategic planning at Mediassociates, in a pointed recent op-ed.

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/ WTF is Ad Blocking?

And ad tech vendors? There’s talk in the industry right now about the ongoing “cat and mouse” game that could result between ad blockers and the companies that will make the software required to get around them. Disruption creates big opportunities for outfits that can turn on a dime, which is what the best ad tech companies can do. The New York Times can’t stop being a publisher. But an ad tech company can morph into something else fast and follow the cash. That said, there’s currently a breakdown in ad tech between the buy side and the sell side. The marketing buy side in general isn’t super-concerned about ad blocking. That’s because, as one ad tech heavy told us, buyers seem to think that digital inventory is infinite – and thus beyond the degrading power of the ad blockers. That’s not true on the sell side. The way publishers see it, falling CPMs pose an existential threat. So the more an ad tech company is implicated with the sell side right now, the more it’s chewing its fingernails.

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/ WTF is Ad Blocking?

Do ad blockers really allow certain ads? In some cases they’re taking money to do so.

Whitelist

Adblocker, for example, the most popular ad blocking application, maintains a “whitelist” of websites that it will allow to serve ads. The list is based on certain criteria: the ads must cop to being ads, they can’t be disruptive and so on. If a website is big enough, though, Adblocker demands money from it in return for a whitelisting. Google is one of the companies that pays for ads to go through. For some this is just a version of paying protection money to a fat guy in a tracksuit. For others – namely, the ad blocking companies themselves – it’s a cooperative exercise in the creation of a finer, more consumer-friendly marketing industry. This way, publishers can work together in a spirit of comity with civic-minded representatives of the public – namely, the ad blocking companies themselves – to improve the marketing environment for the benefit of all. The ad blockers haven’t claimed that they’re doing it for “the children” yet. But give them time.

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/ WTF is Ad Blocking?

Are ad blocking outfits in it for the money? As so often in tech culture, utopianism can be hard to distinguish from the most brazen self-interest. Take Apple, for example. By embracing ad blocking, Apple is making the mobile browsing experience more pleasant for users. But it hasn’t escaped some in the industry that Apple’s move is also inevitably pushing marketers into apps – where Apple makes about $20 billion in yearly revenue. Apple’s gambit is also putting a shiv in the side of Google, which relies on browser-based advertising. “Apple saying ad blocking helps users is like Coke saying it helps you by not selling Pepsi in its vending machines,” one industry wag put it.

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/ WTF is Ad Blocking?

Is ad blocking ethical? Publishers insist that blocking is stealing and violates the implicit contract between publishers and readers. “Every time you block an ad, what you’re really blocking is food from entering a child’s mouth,” wrote Tom’s Guide editorial director Avram Piltch in May. Others say neither publishers nor their advertising partners are on firm ethical ground either. Sites carry intrusive ads that inhibit performance and create security problems, such as the July hack that used Yahoo’s ad network to infect millions of Yahoo visitors with malware. “Ad blocking is a defensive move,” said Irina Raicu, Internet ethics program manager at Santa Clara University’s Markkula Center for Applied Ethics. “It seems wrong to characterize it as unethical when the practice that made it arise is unethical, too.” Bad conscience on the industry’s part, in fact, seems to account for the Interactive Advertising Bureau’s recent “L.E.A.N. Ads” initiative. The acronym stands for “light, encrypted, ad choice-supported, non-invasive”; the IAB is offering a newer set of advertising standards that will take into account user concerns. Then there’s the fact that publishers let third party ad tech companies and ad networks track you across their pages. Some argue that there’s nothing wrong with using ad blockers to protect yourself in response. What if enough people start ad blocking that publishers’ business models tank? “It’s not always unethical to do things that hurt a business,” said Sara Baase, professor emeritus of computer science at San Diego State University. “If too many people block ads, some currently free online material might no longer be free. That’s a natural result of the choices of a large number of consumers.”

/ WTF is Ad Blocking?

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What Can We Expect?

SALE

More pre-roll video and in-content audio ads, since these are harder to block – and also because publishers will be able to charge more for them. Old friends like crowdfunding, paywalls, influencers, and membership programs are also likely to show up once again at the industry’s door. Publishers in fields where it makes sense, like fashion and travel, will set up direct e-commerce and affiliate programs. Publishers in fields where it doesn’t make sense could, too. Expect everything to be for sale.

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/ WTF is Ad Blocking?

Who else is going to gain? Since ad blockers are mostly browser extensions, they’re irrelevant on apps – though with the recent advent of Been Choice, which blocks ads on native mobile apps, that might change. As things stand now, though, ad blockers could drive content and advertising from the open Web to powerful apps and to the big platforms that support them. The result will be to give the Facebooks and Apple Newses of the world that much more control over content and the consumption habits of Internet users. The corollary will be to make publishers into something like traditional wire services. They’ll be news-gathering or content production outfits that distribute their products over platforms that they don’t control. The good part about this for publishers? They’ll get huge reach. (A Reuters article might have been published in thousands of newspapers on any given day.) The bad part about it is that content that goes out over various external platforms will have to be simplified and standardized. That will encourage mediocrity and discourage innovation. (When was the last time a Reuters article made you laugh, stirred your soul, or startled you with its stellar creative quality?) Predictably enough, the winners in the event of a “blockapocalypse” will be the same powerful parties that have been winning big in the digital economy for a long time. Content producers could find themselves answering to corporate oversight – hardly how they imagined themselves ending up when they thought up the idea of publishing their brainchildren in the free zone of the Web. Users? In the short term, they win big. Ad blockers make using the Internet a whole lot nicer. Whether they’ll win in the long run remains to be seen.

W TF

IS THE DIGITAL MARKETING FUNNEL?

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/ WTF is the Digital Marketing Funnel?

02

Table of contents 03 Introduction

04

Television & Digital Video

05 Display

06 Social

07

Content Marketing

09 Email

10 Search

/ WTF is the Digital Marketing Funnel?

03

Introduction The death of the marketing funnel has been greatly overrated. Contrarian bloggers and self-styled digital thought leaders have declared the marketing funnel—that beautifully simple archetype of the consumer journey—passé. They’ve argued that cross-channel marketing, a wide variety of platforms and persistent offline purchasing twisted the linear funnel into a pretzel, a gordian knot or ecosystem. And yet, the one great truth of salesmanship persists: It’s not over until the cash register rings. To get the consumer to buy, you first have to make them aware, get them to consider and then, finally, ask them to act. This rather linear psychological progression is the thing we call the funnel, and now we have many more ways to push consumers through it. This new digital marketing funnel is still a funnel. There are just plenty of ways to work it. So we’ve broken down six ways to move through the digital marketing funnel by tactic: television and video, display advertising, social, content, email and search. Settle in and explore just WTF makes the digital marketing funnel, and click the orange links to learn even more.

/ WTF is the Digital Marketing Funnel?

04

Television & Digital Video The web didn’t kill television; it extended its reach (and the reach of all video content) by birthing the dynamic, shareable format of digital video.

Mid-funnel, it’s all about data. Addressable TV has created an environment in which marketers know whether they’re reaching a consumer for the first time, or whether it’s time to start driving them to a purchase. Digital video has been honing that advantage since its inception, and its ubiquity is changing budgets. “Now that video is taking over people’s [social] feeds, you’re seeing increased creative efforts that might have gone to TV come to social,” said Tim Bosch, director of media planning and buying at Likeable Media.

Pre-roll

Facebook’s Target Rating Points buys

Mid-roll Branded video content

Addressable TV targeting

Product explainers

Video ad retargeting Product reviews Customer testimonials Youtube annotations Shoppable video

Conversion

The emergence of click-to-buy features makes video even more worthwhile for marketers homed in on conversions. Google just released its new “shoppable ads” for YouTube. Now consumers watching videos that feature key products are exposed to accompanying ads, making the transition from video to e-commerce platforms seamless.

Second-screen campaigns

Consideration

And while TV is known as a broadcast format, it’s not all about awareness. “Everybody understands that you can start a conversation on TV, but you have to finish somewhere else,” said Lowenthal. “There’s always some sort of call to action, whether it’s a social activation, a website visit, store visit. It’s not just about feeling good about the brand.”

Traditional TV

Awareness

But digital video is more than appropriating TV ads for web platforms. “For so many of our clients, their marketing programs start online,” said Barry Lowenthal, president of The Media Kitchen. “Sometimes TV is actually a video augmentation approach [for them].” One example: Twitter’s recent TV debut. While the critical reception was less than stellar, it undoubtedly reached new audiences by going traditional.

/ WTF is the Digital Marketing Funnel?

05

Display

In the middle of the funnel, marketers look to programmatic advertising to target by behavior profiles and cookie information. Targeting also lives here, as marketers go deeper into the segmenting that points to likely customers.

What about sequencing? Can a series of creatively sequenced banner ads be used to drive a customer through to purchase? “There isn’t a perfect technology for sequencing,” said Crystal Stewart, vice president at Booyah Advertising in Denver. “The problem is viewability. You need to ensure your ads are 100 percent viewable or you might lose the middle message and then it doesn’t make sense to the consumer.” Ad servers are also a problem. If a server calls up the wrong size, you can also skip a step.

HTML5-enabled rich banner ads

In-banner video ads

Contextual buys by publisher audience

Run-of-site campaigns

Sequencing

Behaviorally targeted ads

Segmenting based on look-alike modelling

Sequencing

Retargeting

Consideration

Further down, in the lower funnel, retargeting and dynamic retargeting tactics call on consumers who have visited advertisers’ sites or have items in their shopping carts. Remember those high-waisted pants you looked at last month? They won’t follow you ‘til you die (there’s frequency capping for that) but it may feel like it. Finally, loyalty outreach and coupon codes live in the very lowest of the lowly funnel.

Custom home-page takeovers with premium publishers

Awareness

Banner ads are hated and click through rates are berated, but if there’s one place that marketers have a solid game throughout the funnel, it’s here. Content-rich banner ads are a go-to tactic in the upper funnel, where big, custom integrations and direct, contextual buys with publishers reign.

Sequencing

Loyalty outreach Coupon codes Location-based and in-store offer ads

Conversion

Dynamic retargeting

/ WTF is the Digital Marketing Funnel?

06

Social

“Social is great at the big boom of awareness and closing the loop,” said Hull. At the top of the funnel, brands need to concentrate on creating great, shareable content. Without that, all the media spend in the world won’t save your awareness campaign.

New formats like carousel ads show potential. Brands can showcase up to five creative assets in one post, each with different calls to action. Partners like Facebook then optimize the order based on performance. When combined with smart targeting, the approach can be game-changing, “as long as the creative is on point,” added Bosch.

So who’s doing it well? Seamless, the online food delivery service, plays the whole field- err, funnel like a pro. “They put out a lot of highly engaging, lightweight content, but then they follow that up with ads designed to drive new users, app installs, conversions,” said Bosch. “And they do it in a smart way that’s super clickable.”

Boomerang Whisper

Snapchat Discovery

Periscope Facebook 360

Cause-aligned campaigns

Community-building campaigns

Facebook carousel Promoted Twitter accounts for remarketing Sponsored posts/Tweets, promoted Pins

Custom purchase integrations

Buy buttons everywhere

Conversion

Even at the bottom of the funnel, social feels more personal, and it’s not easy to ask your friends for money. “Click to buy” functions are at least taking some awkwardness out of it. “These buttons give people [an idea of] what to expect,” said Bosch. “If you’re clicking, there’s a higher intention to buy.” While the clicks might be more costly, the conversion rates are worth it.

Platform-du-jour experimentation

Consideration

In the middle of the funnel, marketing plays start to feel more like display: “Facebook and Twitter are doing a lot with sequential contact and their ability to retarget people who saw your content,” said Bosch of Likeable Media. “This way, you know this isn’t the first touchpoint.”

Viral successes

Awareness

Think social’s “post-funnel?” Then you haven’t been paying attention. The familiar awareness-first approach of the past two years has been upended by various platforms’ commerce plays. Pinterest, Twitter and Instagram have all introduced click-tobuy buttons. Likewise, Facebook’s carousel ads aim to drive purchasing too.

/ WTF is the Digital Marketing Funnel?

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Content Marketing

Brand awareness videos

Content created at user events

At the top of the funnel, where content drives awareness, brand videos and lush native interactives communicate sweeping values like “strength” or “innovation.” But to get consumers to consider and then commit, you’ll need to wade deeper into the weeds.

Durable goods manufacturers, for example, play hard in the middle funnel since the consideration time is much longer. GE Appliances employs recipe content or DIY tutorials to keep its refrigerators top of mind. Further down the funnel, product specs are in order. (That counts as content too.) One tactic that works well in the upper and lower funnel are user events. Video created at big integrations drive digital engagement and awareness, while simple in-store events, like newsletter-promoted classes from Athleta live in the lower funnel. Come for the yoga, stay for the yoga pants.

Lush native integrations

Newsletters as publishing platforms

Case studies

Whitepapers Educational blog posts

Webinars

Consideration

“As you move down the funnel, your content is going to get far more specific and far more detailed,” said Hrach. Mid-funnel content might include instructional and educational blog posts, newsletters that function as catalogs or consumer profiles that speak to specific segments and solutions. Your play is going to depend on your business, Hrach said.

Social media content

Awareness

Brands that lament their inability to tie content marketing to ROI probably aren’t mapping the consumer journey the way they should. “You need to know what they need at each stage and time and that’s what you should be providing,” said Anna Hrach, director of content at digital marketing agency Ethology. “It’s really about giving them what they need to make the most informed decision possible.”

Newsletters as catalogs

Landing pages

Purchase pages

User and in-store events

Conversion

Product specs

Customer Journey Mapping Today’s buyers have more ways to interact with businesses, but this doesn’t always translate to a positive customer experience. Learn how customer journey maps and persona marketing can facilitate your contacts’ purchase decisions and improve their experience.

Download your copy today!

/ WTF is the Digital Marketing Funnel?

09

Email

Subject lines as brand impressions

Socially-synced email content

The subject line is a marketer’s opening upper funnel punch and it’s important to land it, said Dela Quist, CEO of Alchemy Worx . “A subject line today can impact an open or a click or a conversion three emails down the line.” Every subject line is a direct message to your audience, and they should be part of a series, not a standalone impression.

Even deeper in, a strategy called drip campaigning can help marketers nurture leads by automating who gets which email. Did someone sign up for your whitepaper? Great, try them on a webinar. No? Go with a video instead. Did someone leave an item in their cart? Strike now. “Companies are beginning to understand and model individual customer journeys and target them based on things like abandoned shopping carts and browsing behavior,” noted Innovyx CEO Derek Harding. “That can be highly effective because sometimes people get close to the point of purchase and then get distracted and just need a reminder to come back.”

CRM integration for existing customers

Email as publishing platform Drip campaigns Welcome series

Lead nurturing emails

Dynamic, personalized content

Drip campaigns Custom landing pages Email as catalog Custom offers and coupon codes Thank you email

Conversion

Some e-retailers go for a more straightforward strategy: Newsletters as catalogs from JackThreads, Bespoke Post and others play toward the bottom of the funnel. Coupon codes and discounts also motivate here. Once that sale is made, the Thank You email brings them back.

Drip Campaigns

Consideration

By the time a consumer opens even their first welcome email, they’re in the middle funnel, and (we hope) integrated into an existing CRM database. While a welcome email may seem like a top-funnel concept, Quist noted, “Even the content of a welcome message is in the bottom funnel, because to even get on your list they’ve already engaged with you.”

Awareness

Like display, email is its own funnel-spanning, fully-automated platform that allows for for personalization, targeting and sequencing. Email’s trump card, however, is that subscribers opt-in. 60 percent say they’re in it for the discounts, but content also keeps consumers opening.

/ WTF is the Digital Marketing Funnel?

10

Search

“Paid search does actually drive a lot of awareness,” she said. “Sixty percent of consumers that come off of search are new customers.” They may not be searching for your brand, but if it can bring them the information they need, you’ll move quickly from awareness to consideration. “They’ll go off to do their research, then come back via a brand search.”

Brand search performs 5x higher than keyword marketing, according to Stewart. And, as in content, intent has a lot to do with how fruitful search can be. Consider this middle- to lower-funnel campaign from 360i for Red Roof Inn. The agency used a custom API to pull weather and flight information into a paid search campaign, which then served ads customized and targeted to travelers who had missed their flights. Sleep on the floor at O’Hare airport or comfortably at a Red Roof Inn? Fastest checkered cab ride through the funnel ever.

Interest-targeted keyword campaigns

API-integrated intent campaigns

Remarketing list-enabled campaigns

SEO-optimized, owned content

Consideration

Jeremy Hull, vice president at iProspect, believes Google’s remarketing lists give advertisers more middle-funnel reach, allowing them to target consumers just like they can with display. “You’re able to target an audience that hasn’t been to your website, but manage and measure it differently and possibly get lower CPA because new users are more valuable.”

TV-aligned keyword campaigns

Awareness

Marketing newbies may think that search is exclusively a lower funnel tactic. But, repeat after us, search… spans… the funnel. That said, the search funnel’s upper third is decidedly shallower than its middle and lower parts, according to Crystal Stewart, vice president at Booyah Advertising in Denver.

Product-based search campaign

Google’s click to buy button

Conversion

Purchase-intent based search campaign

© 2015