08
Mar
2012

Retargeting: The Questions Media Buyers Should be Asking

03/08/2012
With full disclosure I must admit that I have spent many years sitting in front of media buyers and business leaders as a salesmen representing the latest in online display retargeting solutions.  I have built and trained sales teams to evangelize search marketing’s massive reach; personalized creative and value laden managed services in the grand pursuit of more incremental conversions!  Certainly this is a noble calling. Having met with hundreds of search marketing decision makers; I recently paused to put myself in their shoes and wonder what it must be like to have countless companies pitch their solutions as “THE ANSWER”. A senior level contact of mine at a major online retailer amused me last month with his account of no less than ten companies who have reached out to him in the last thirty days claiming to have the most effective retargeting service. Three ad networks, four managed service retargeting companies, two demand side platforms and one company that he gave up trying to classify.  Some offered site retargeting, one pitched search retargeting, another claimed to do both and he is almost certain that at least one company was simply reselling one of the other companies under a different name.  I fear that anyone with media buying responsibility can relate this experience all too well and all too often. So what if I was in the media buyer’s shoes?  What if, in some strange twist of fate I found myself sitting in the chair of a media buyer listening to sales professionals steer me down a path of enlightenment sprinkled with the latest technique in reaching the ideal customer, packaged in the newest performance based pricing model and advocating technical advantages that can only be classified as heaven sent?  Knowing what I know, I would certainly be asking some very direct questions. So, it occurred to me that I should compile the questions I would ask and share so media buyers everywhere can ask the tough questions and get the right answers.
  • How much does the media really cost?
Never has this been a more important question. Search and site retargeting offer a crop of solution providers hungry for your business and capable of supporting your marketing needs.  Unfortunately in the race to differentiate, the majority of these companies have found that dynamic ad personalization and managed campaign services are all too common.  Enter the pricing model warsOne company claims to be “the CPC retargeting company”.  Another offers their “Cost Per Engagement Pricing”, while others tout their willingness to provide services on a 100% Cost Per Acquisition (CPA) basis.  No matter what the pricing model the fundamental question remains.  How much does actual media cost? Take the total bill and divided it by the total number of impressions – there you will find your Cost Per Thousand (eCPM).   What seemed like a bargain at a $5.00 CPA might have you scratching your head as you now realize that company after company is really billing you between $5.00 and $15.00 CPM.  We all know that the actual media costs are significantly less.  In most cases these companies are leveraging real time bidding through DSPs, networks or perhaps tapping directly into multiple exchanges and purchasing inventory between 50 cents and $2.00 per thousand.  The difference you are paying is their (often-undisclosed) high profit margin, and the value these companies are providing under the all-encompassing heading:  “Managed Services”.
  • What exactly are the  “managed services” I am paying for?
Once explained fully, most salesmen could have your head spinning with the immense workload their company is removing from your plate.  After all they are handling the campaign planning, media buying, account setup across multiple traffic sources, brand management controls, campaign optimization, ad serving, campaign reporting and often times building the creative as well.  I know first hand that several companies are in fact investing a lot of time and effort into campaign management and perform quiet well.  However, I also know from experience what lies just under the surface in many companies. For some service providers the process has become highly efficient and automated as they seek to reduce errors and remove their own internal labor costs.  Saved user settings in the media buying platforms or APIs from homegrown interfaces have made account set-up and management perform well on autopilot.   This is online advertising’s version of the famous infomercial catch phrase, “set it and forget it”.  Auto optimization algorithms, which are available to anyone in many of the media buying platform, utilize machine learning to optimize campaigns across known variables such as ad frequency, day parting, keyword bids, white listing, black listing, ad creative performance, and more.  This has me wondering; “how much time is really spent working on my account that I could not do on my own”?  It’s eerily similar to paying lofty handling fees when buying tickets to a concert online.  I know I have to pay the fee, but I question what I am paying for when I did all the work in 60 seconds through a computer. On the other side of the coin you might be surprised to learn that underneath that retargeting company’s flashy creative and colorful reporting lurks a model of inefficiency and error.  Teams of overworked account managers struggle to maintain sanity as they log into a half dozen or more separate user interfaces across multiple DSPs and Ad Networks, each with their own unique steps and intricacies involved in campaign set up, reporting and optimization.  You will find employees juggling excel spreadsheets and prioritizing one account over another. Something must give way when trying to appear integrated while attempting to hold together 100 separate moving pieces. In the end I know that vendor managed campaigns are vital to over-worked media buyers and marketing executives.  But if I were doing the vendor selection I would ensure I wasn’t paying for something automated with tools I can access, Nor would I be paying to support a labor heavy, chaotic organization sure to produce errors.   Transparency into the services a vendor supplies and the associated costs are key principles in determining which company to use and if their pricing model is aligned appropriately with the level of value they are supplying above and beyond the costs of media.
  • Can you do more than just produce conversions?
I don’t know about you, but if I ran a website I would take every opportunity to learn as much as possible about my customers.Too often companies selling online display ads perform a quality service, produce conversions yet hide so much of the work behind the scenes. Doesn’t it make sense that any vendor working on your behalf is going to experience both success and failure as they manage your campaigns? These successes and failures are valuable lessons that can tell you a ton of information about your customers.  More importantly, these display vendors can likely tell you how your customers behave and convert compared to other sites in your industry across dozens of data points. Unfortunately for a large portion of our industry the recipe for success remains a black box of mystery oblivious to the global trend of knowledge sharing that can benefit us all.  Who were the traffic sources used in my campaign and which is performing best and why?  What domains are my clients converting on and what are their trends in the contextual subject matter?  What data drove what decisions?  How exactly do my clients behave online and what changes did you make to produce the results that I am left analyzing? If I am the media buyer I am not looking to be amazed and entertained like I am attending a magic show.  I want a partner who will perform a magic trick and then break down that trick with total transparency so the smallest level of detail is revealed.  The future of our industry belongs to the companies who can leverage massive amounts of unstructured data to report and optimize on the most elemental level data known about your customers and your campaigns.  The ideal vendor partners are those who will partner with you to incorporate your first party data into the recipe and work side by side with you to give you a deep level of insight into demystifying the magic trick of converting your customers.  They are your customers after all. At the risk of being labeled a traitor among sales professionals everywhere and a defector among managed display companies across this vast ad tech space; I challenge you to demand more transparency in your online display vendor partners.  Efficiency gains, costs reductions and incremental campaign improvements lurk in all the areas where solutions providers can’t or won’t share openly.  Your partners need to do more than just run effective media campaigns.  They should help you gain a deeper understanding of your customer at the most granular element level through transparency and communication.  Then everyone wins! James Moore is Simpli.fi’s CRO. Visit James on LinkedIn or follow him on Twitter @SimplifiCRO  
 

2 thoughts on “Retargeting: The Questions Media Buyers Should be Asking

  1. Dan

    Well said. It was a difficult and expensive learning process for the agency I work with. In some cases, we are still not sure if some of the media buying platforms we are using now are going to deliver on their promises. We have one vendor that is able to achieve extraordinary CTRs, but their reporting is lacking in detail and transparency so much so that we are not sure if we can continue using them.

    One argument in defense of agencies charging high CPMs above their actual CPMs:

    It’s true that much of a campaign’s media buying setup process can be automated, but there are other factors that an ad agency simply cannot automate yet. Creating effective ad copy and design, creating/testing multiple landing pages, and optimizing the conversion process still requires a great deal of creative/manual labor. I could buy well targeted, inexpensive media all day but at the end of the day our clients only care if we were smart enough to convert visitors into buyers or leads, and at least for our agency that is where most of the hard work is. There have been times where we were so committed to making a cam

  2. Dan

    …making a campaign work that we did not make money. We have to decide sometimes on whether to tell clients that their baby is ugly (their site/product does not convert) or basically working really hard to fix points of friction in the buy process for free so that we can make our clients happy.

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