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The Online Marketing Ecosystem

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The Online Marketing Ecosystem: A DataCentric Perspective
By Jay Kulkarni and David Simpson
ABOUT THE AUTHORS
Jay Kulkarni founded Theorem in 2002 and has managed it from a four person startup to a company with over 250 global employees and dozens of clients sustaining hyper growth year over year. Jay is a veteran in the online advertising space having launched products that are leaders in the industry today. As one of the earliest employees at DoubleClick, Jay headed up product management for their advertiser solutions, taking the DART for Advertisers product from white board concept to over $25 million in revenue within two years. Later, he was responsible for the DARTmail platform managing both organic product development, technology integration through two mergers and managing teams across North America. David Simpson is a senior member of Theorem’s business development team and brings extensive background in online media and technology. Before joining Theorem, he co-founded PeerFinder, a business-to-business social networking service and led wireless and telematic strategy and business development at Audible. At Verizon, Simpson was instrumental in creating the enterprise business e-commerce strategy, launching Internet services and developing interactive media applications for enterprise business customers.

As marketers seek greater understanding of their customers and campaigns, their task has become increasingly complex, in no small part by the sheer volume of data created by online marketing technologies. The highly fluid nature of consumer markets coupled with aggressive corporate goals to grow market share and revenue have created the need for increased frequency of analysis and ongoing custom analysis on a brand and campaign basis. Digital marketers need a holistic approach to analysis that is supported by a team of skilled strategists and tacticians which leverages a flexible media analysis platform. Online Marketing: A Growing Challenge & Opportunity The amount of innovation we’ve experienced since the introduction and proliferation of the web browser is staggering and certainly worthy of volumes, which will not be covered here. But, with the frenzied growth of the Internet has come an opportunity and a burden for marketers in every corner of the environment – from search engines to online publishers to advertisers and agencies – to be more effective through better use of the torrent of data that each click creates in aggregate. The Growth of Online Marketing Though not currently a large portion of ad spending for the top US brands (about $10B out of a total $150B), Internet advertising is growing at the fastest rate (up 17.3%) while ad spending in other forms of media is shrinking1. The July 25, 2007 issue of Advertising Age™ magazine reported that,

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regarding ad spending, “…for the 100 LNA [Leading National Advertiser] companies, according to Ad Age DataCenter analysis of TNS Media Intelligence data…the internet [in 2006] drew 5.5% of measured spending…up from just 0.8% 2000.” On the other hand, TV, “…the top medium for leading advertisers [in 2006] accounted for 59% of U.S. measured spending in consumer media…down from about 64% in 2000.” Internet advertising is ahead of outdoor advertising (2.6%) and is closing in on radio advertising (7.4%). Beyond what might be termed, “traditional Internet advertising” (email advertising, banner and flash advertising, search engine marketing, etc.), as the Internet grows in complexity, familiarity and intimacy for consumers, businesses are experimenting with promoting their brand, their products and their services by leveraging other facets of the medium. Examples include posting (or inviting the public to post “user generated”) video clips on general access sites like YouTube™2 or creating virtual storefronts, products or services in cyber-worlds like Second Life 3. The Online Marketing Ecosystem Though certainly worthy of a separate thesis, it’s important for our purposes to have a feel for some of the “moving parts” within the online marketing and advertising “machine”. Like traditional media, in this ecosystem there are advertisers, their agencies, their customers or prospects and the media. The on-line ecosystem has also spawned a number of new players but, in general, all fall into one of three functional areas: buyers of media, sellers of media and media enablers. Some are interdependent, some are competitive and some play both roles simultaneously. Though not explicitly described, all of those “moving parts” create “friction” and therefore complexities that have necessitated the emergence of intermediaries to help reduce cost and turnaround times and improve quality and efficiency. What follows is a condensed summary of key contributors to the online marketing ecosystem and the roles and representative players. Also provided is a graphic illustration of how some of the more significant players in the ecosystem interrelate.
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Advertising Age, July 25, 2007 Red Bull, H&R Block 3 H&R Block

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The Online Marketing Ecosystem
ROLE
Ad Servers

FUNCTION

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PLAYERS
DoubleClick (DART), Atlas DMT, Mediaplex, RealMedia

Ad serving describes the technology and service that places ads on web sites. Ad serving technology companies provide software to sites and advertisers to serve ads, count them, choose the ads that will make the site or advertiser the most money, and monitor progress of different advertising campaigns. Search advertisements are targeted to match keywords entered on search engines. The opportunity to present consumers with advertisements tailored to their immediate buying interests encourages consumers to click on search ads instead of unpaid search results, which are often less relevant. Search Engine Marketing, or SEM, is a form of Internet Marketing that seeks to promote websites by increasing their visibility in the Search Engine results pages (SERPs). According to the Search Engine Marketing Professionals Organization, SEM methods include: Search Engine Optimization (or SEO), paid placement, and paid inclusion. Advertising network refers to an intermediary, which serves between a group (network) of web sites (which want to host advertisements) and advertisers which want to run advertisements on those sites. Affiliate marketing is a method of promoting web businesses (merchants/advertisers) in which an affiliate (publisher) is rewarded for every visitor, subscriber, customer, and/or sale provided through his/her efforts. Content sites work on the fundamental of generating [advertising or subscription] revenue [or both] through the content they have on their web site. An advertising agency or ad agency is a service business dedicated to creating, planning and handling advertising (and other forms of promotion) for its clients. Email marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fundraising messages to an audience. Rich Media technology utilizes a combination of text, audio, still images, animation, and video to provide the user with a more dynamic and interactive advertising experience. eCommerce monitoring providers offer web analytics solutions for internet channel monitoring.

Search Engines

Google, Yahoo! MSN, Kanoodle, Ask!

Search Engine Marketers/ Agencies

Performics, Did-it, The Search Agency

Advertising Networks Affiliate Marketers Online Publishers Ad Agencies Email Marketers Rich Media Technology Providers eCommerce Monitoring Providers
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Advertising.com Tribal Fusion

Commission Junction Linkshare ESPN, CNN, Weather.com, YouTube, MySpace Digitas, Starcom, Saatchi & Saatchi Avenue A, Razorfish Epsilon Interactive, CheetahMail, SilverPOP Motiff/Klipmart, Pointroll, Eyeblaster

Omniture/Visual Sciences, Coremetrics

Wikipedia, The Free Encyclopedia

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The Online Data Each service provider in the online marketing ecosystem collects and shares performance data with the advertising agencies and the advertisers at a level of detail and frequency that, in the past, was simply not available. Examples include ad server data, search engine data, email marketing data and rich media data. Other online data available to the marketer includes enterprise or destination web site data 5 . Marketing data in the online domain can be divided into two major categories: - Summarized Data: This data tends to be smaller in size and captures key elements of campaigns, not every detail. This data is easier to work with than raw data. The Facilitators
In the online domain, there are three distinct, though disparate factions that aid in connecting the buyer (customer) and the seller (advertiser).

- Raw Data: This data captures many details about campaigns and is much larger in size than summarized data. Growing in importance, rich media (interactive multimedia) data provides information regarding people’s activity when viewing a rich media advertisement. Rich media can include audio, video and animation in addition to traditional text and graphics and - because rich media is so much more interactive than traditional media – it offers greater data-gathering and data measurement opportunities. This data can include how long the user was interacting with the advertisement, whether the advertisement was expanded or not, how much of the advertisement they saw, video view time, and so on 6. As mentioned previously, companies that are utilizing social online marketing technologies to enhance their brands and grow revenues also receive data from these service providers 7. Getting data all under one roof and using it to improve ROI (return on investment) is a growing challenge in online media. It should also be noted that – in general - each of the data file formats from the myriad of online marketing and advertising platforms is unique. For instance, data can be tabulated by commas, tabs or pipes. Bringing this data into a single database or analytics tool where it can be managed is a topic we’ll address later in this article.
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Seller/Advertiser

Media Buyers Advertiser Ad Agency Search Engine Marketer

Media Sellers Affiliate Marketer Destination/ Publisher Search Engine

Media Enablers Ad Network Ad Server Email Marketer Rich Media Technology Provider eCommerce Monitoring Provider

Data may be available through solutions provided by companies such as Web Side Story, Web Trends, Omniture and Coremetrics. Rich media measurement tools are provided by companies such as Klipmart, TangoZebra, PointRoll and DART Motif. Examples include data from YouTube, SecondLife, blog sites and podcasting sites. 4. WWW.THEOREMINC.NET

Buyer/Customer

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A Holistic View: The Other Data With the advent of the Internet, consumer buying behaviors have radically changed and will continue to change in a dynamic fashion for the foreseeable future. For instance, a television ad may drive a consumer to conduct an online search for specific or generic product information, visit one or more brand or affiliate web sites, purchase online directly from the retailer or from a reseller, or print a coupon and purchase from a company-owned store or an authorized dealer. Internet behaviors and “real world” behaviors require analysis in a “multi-channel” or holistic way. Along with the various online data sources that have been described so far, marketers may be required to compare and manipulate the following: - Market research data from companies such as MillwardBrown, Nielsen/NetRatings and comScore - Media buying data from Donvan Data Systems - Telemarketer and call center data - Audit services data - Demographic data - Credit score data from Experian and Acxiom Financial Group - House lists and existing client lists What follows is a representative sampling of the data available to the marketer from both online and traditional sources:

AD SERVER DATA
Dimensions of Interest
Site Creative Creative Size Creative Type Date Week End Date Month Quarter Day of Week Frequency by day Campaign Campaign Begin Date Campaign End Date Status Category Sub Category Placement Ad Description Advertiser Activity Type Activity Sub Type Postclick Tag Postclick Tag 2 Pricing Model Geography Time Spent Postclick Tag Postclick Tag 2

Measures of Interest
Impressions Clicks Conversions Revenue Unique Impressions Unique Clicks Unique Conversions Click through rate Click to conversion rate Impression to conversion rate Revenue per Sale Revenue per User Revenue per Impression Revenue per Click Revenue per Visit Ad Exposure Time Ad Interaction Rate Interaction Time Ad Component Interactions Video Play Rate Average Video View Time Video Completions Replay Rate Reach Frequency Frequency vs. Response Frequency vs. Conversion Time Lag to Conversion Ad Delivery Rate Attrition Rate ROI

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SEARCH ENGINE DATA
Dimensions of Interest
Engine Click Date Keyword Keyword Bucket Conversion Date Engine vs. Content Site Pricing Model Geography Keyword Value Position

Measures of Interest
Impressions Clicks Conversions Average Position CPC Total Cost Cost per Conversion Margin ROI

BACK END DATA
Dimensions of Interest
Traffic Source Pages Visited / Click Stream Average Page Views First Time vs. Repeat Geography Registration Data

Measures of Interest
Attrition Rate Cost per Visit Conversions Cost Per Conversion Browse to Buy Ratio View to Cart Ratio Time Spent on Site Categories of Interest Email Delivery Rate Open Rate Clicks Click Rate Soft Bounce Backs Hard Bounce Backs Subscribes Unsubscribes Pass Along Rate

ATTITUDINAL SURVEY DATA
Dimensions of Interest
Demographics Psychographics Brand Consumption Category Consumption Channel Category Site Creative Creative Size Creative Type First Time vs. Repeat Geography

Measures of Interest
Aided Awareness Unaided Awareness Ad Recall Message Association Brand Favorability Purchase Intent Brand Attributes Usage Volume Recommendation Intent Product Satisfaction Marketing Resonation Viral Activity Referral Impact Motivation for Visitation

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SYNDICATED AUDIENCE MEASUREMENT DATA
Dimensions of Interest
Demographics Psychographics Category Sub Category Site Home/Work Access

Dimensions of Measure
Unique Audience Reach Duplication of Reach Access Location Audience Composition Session Visits Time Spent Page Views Time of Day Access Day of Week Access

“We know that half of our advertising works. We just don't know which half.” It’s a quaint old expression. Traditional media – print, radio, television, direct mail and outdoor – offers virtually no linkage between the exposure and the purchasing behavior. Online media not only offers a record of events that have occurred, it also offers a “bread crumb trail” of behaviors that allows marketers to precisely quantify cause and effect - what’s working and what’s not – and the opportunity to optimize in real or near-real-time - “The Holy Grail of online marketing.” Managing the Online Data: “Apples and Oranges” A new challenge to advertisers and agencies in the online domain is making the "apples and oranges" of online marketing data, as well as data from traditional media campaigns, more usable together. Agencies and advertisers have empowered their marketing analysis teams to seek deeper marketing and business insight and to recommend action based on data from across the online and traditional media outlets. However, platforms built for analysis of traditional marketing data are not inherently suited for the volume and complexity of data generated in the online domain. Also, the data intake and cleansing process - including data aggregation, merging and QA from disparate data sources - is still difficult, time consuming and costly. Generally, these tasks are neither fulfilling to nor a cost effective use of strategy-focused managers. The Holistic Media Analysis Platform Is there a “Holy Grail” of online marketing data analysis? Is there added value in a platform capable of allowing marketers grounded in the traditional media – radio, TV, print – to perform integrated analysis across traditional and online media? It’s a business problem worth investigating and an engineering challenge worth getting right. (See sidebar, “Holistic Media Analysis Case Study: Online Travel”)

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Characteristics of a Holistic Media Analysis Solution Thus far, we’ve shown that online advertising activity is growing rapidly, that online advertising platforms generate data at rates unprecedented in advertising circles only ten years ago, that traditional and online advertising data – taken together – can yield insights into new and evolving consumer buying behaviors and that managing the “apples and oranges” of online and traditional data is a difficult – if not painful – task for the enterprise to execute on. At the very least, a holistic media analysis platform is necessary to help make the challenge marketers face a more manageable task. Such a solution should be a repository for all online advertising data and support straight-forward incorporation of other types of client-provided or syndicated data. Besides supporting strategic and tactical initiatives, a holistic media analysis platform should be easy to acquire, learn and use, cost effective to “own and operate”, easy to upgrade, and straight-forward in its support of teams both internally and across corporate boundaries. What follows is a “shopping list” of functional and business attributes that are ideally found in a holistic media analysis platform. Functional Requirements Intake of Data - Robust infrastructure to consolidate raw data sources into a common data repository - Database agnostic and compatible with popular database formats such as Microsoft SQL, Oracle and mySQL - Automatic data downloads through APIs - Manual input of data when automation is not possible - Flexible data architecture to incorporate new datasets, measures and dimensions - For exception handling, provides access to/by data analyst teams and tools to streamline the data handling, staging, and preparation

Holistic Media Analysis Case Study: Online Travel
Holistic media analysis platforms exist or are being developed within the marketing and advertising ecosystem, driven by insights gathered in both the traditional and the Internet domains and by market demand for robust tools to address complicated marketing questions. One large online travel company, eager to improve internal efficiencies, elected to move as much ad hoc analysis to an automated daily analysis and reporting system as practical. On a daily basis, internal analysts were responsible for importing five log files, one impression file, one clicks file, three activities files and ten match tables. Their process included manual data aggregation and cleansing and then applying weights to various categories. Using a Holistic Media Analysis Platform, the company was able to apply their business logic, summarization and equations, condense 3GB of raw log file data to 10MB of summarized data on a daily basis and automatically generate campaign/site analysis, click-through analysis, click conversion analysis, conversions by time of day, click to conversion time lag and unique reach and frequency. The team’s ad hoc analysis has been transformed to an automated delivery system, reports are accessed online from multiple geographies, analysis and report generation went from four weeks to automated overnight delivery and reduced the cost of analysis and report generation for the company by 50%+ over a yearly basis.

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Storage of Data - Robust archiving that supports flexibly storing data by different time periods Manipulation of Data - Automation for data preparation, data cleansing, de-duping and normalization Output of Results - Automatic and standardized reporting and analysis across client campaigns and geographies - Multi-client, multi-media and multi-channel analysis using both on-line and direct-marketing campaign data - Generation of frequently used metrics 8 delivered “out-of-the-box” and broken down by: - Clients - Campaigns - Sites - Brands - Creative Types - Delivery of reports and analysis such as - High-level executive reporting (i.e. dashboards) - User-defined, produced and delivered graphs and charts - Automatically generated and distributed reports to pre-defined users and clients - User-defined basic reports with the ability to drill up and drill down - Ability to export all reports in common output/presentation formats such as MS Excel™, HTML and PDF - Ability to export subsets of filtered data through robust integration with popular database formats including MS Excel™ and MS Access™ - Integration to industry-standard statistical analysis tools such as SAS™ and SPSS™ Business Requirements Ease of use - Easy to-use, flexible, web-based interface
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Refer to chart, “Online and Traditional Data Available to the Marketer”, for more detail on the types of marketing metrics you will encounter.

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Access that addresses the needs of the enterprise - Cross-client and cross campaign views of media - Permission levels for different teams, including different partners and team members - Transparent access across multiple offices and geographies Cost of ownership - Reasonable total cost of ownership with minimal maintenance by the IT organization - Offered as Software as a Service (SAAS), which provides a zero footprint, web access to data and reports Robustness - Statistical analysis and algorithms that can easily be reused across campaigns, products, brands and so on Disaster Recovery - Redundancy provided in the event of loss of primary access or facilities A Moving Target As we stated at the beginning of this article, change is the only constant in the disciplines of advertising and marketing and, with the growth of Internet marketing, the drive to make better marketing and advertising decisions with the torrent of data available is creating both overwhelming pressures and unprecedented opportunities. A media analysis platform that is holistic in its view of marketing, non-invasive in terms of its operational requirements, cost effective to acquire and easy to use by individuals and teams will form the foundation of an enterprise-grade tool. The organizations that create, sell and provide services for the users of these platforms must be also embody the traits of the technology itself and serve as a beacon, anticipating and adapting their solutions to the needs, challenges and opportunities offered by the marketplace.

ABOUT THEOREM
Theorem is a pioneer and leader in offering specialized technical and analytical services to the digital marketer. Unlike many generic outsourced service providers, Theorem was founded in 2002 with the vision of being a domain expert in the online marketing space and delivering world class service. Theorem powers ad operations, search operations and analytics for some of the most sophisticated marketers in the world. Driven by the mantra of delivering outstanding value for our customers and creating an enriching workplace for our global employee base, Theorem is positioned for another 5 years of rapid fire growth in this new marketing medium. Theorem Inc., is a privately held company with offices in New Jersey, India, and London. Using multiple operational centers in India, Theorem supports customers in Europe and America on a 24/7 basis. To Contact Theorem: Theorem Headquarters 383 Main Street, Suite 202 Chatham, NJ 07928 Main: 973-665-1700 Fax: 973-665-0370 email: [email protected]

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