Quantcast Upends Online-Ad Targeting by Giving Marketers Control

New Service Allows Client to Define Audience and Buy It Anywhere on Web

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NEW YORK (AdAge.com) -- In many ways, Web 2.0 -- or whatever you want to call it -- has been a quest for a revolutionary idea in display advertising, like Google had for search. But 400-odd ad networks later (DogTime Media, anyone?), ads are still sold as they always have been: using age, demographics or sites visited as the proxy for an audience a marketer wants to reach. The result? Brand dollars largely on the sidelines and costs per thousand viewers headed for zero.

Quantcast CEO Konrad Feldman
Quantcast CEO Konrad Feldman
But what if a marketer could define its own audience -- not constricted to what a particular network or portal is selling -- and buy it wherever it happens to be, whether it's women who are visiting a personal-finance site or upscale men browsing Martha Stewart? The most ambitious attempt at shifting the online ad business in this direction is coming from a start-up everyone's heard of but that has yet to make a dime: Quantcast.

Its original incarnation was as an audience-measurement service, affixing a digital pixel to as many sites as it could in exchange for offering free and granular audience data. But it turns out that was just a means to an end: Today Quantcast introduces its first revenue-producing business, a product that lets advertisers define and buy an audience wherever it is, cobbling together impressions from any site containing the Quantcast pixel, even ad networks and exchanges.

The new offering, dubbed the Quantcast Media Program, hands the kind of power to marketers once held only by the biggest online players with their own ad inventory to play with -- portals with enormous scale such as Yahoo or networks such as Ad.com. Traditionally marketers buy audiences and existing behavioral categories defined by publishers and ad networks, often using third-party data. Quantcast's take is to let the marketer use its own data to define its target audience -- perhaps visitors to an e-commerce site and others that closely resemble them -- and buy it directly, either from the publisher itself or through Quantcast.

"It allows marketers to define their customers ... rather than a media entity making that package or translation for them," said CEO Konrad Feldman. Quantcast takes a percentage of the buy. And that's the revenue play. Well, maybe.

Small pool
A couple of things stand in the way of Quantcast in its bid to remake advertising (keep in mind, it recently did a measurement deal with TiVo, so this isn't an online-only play). First, while plenty of sites are quantified, Quantcast isn't ubiquitous. No portals have yet signed on, for example, and Google hasn't either, meaning Quantcast's world is still a subset of the web (and only in the U.S.).

Ed Montes, U.S. managing director-digital for Havas, said he doesn't think that's a problem. The bigger issues are whether publishers will accept Quantcast as both a buying platform and a measurement currency and whether it can prove it can add value to publishers. "Publishers look at Quantcast as a white knight; nothing that could hurt their revenue streams or depreciate their asset value," he said. "I would want to know they'll increase CPM yield, not cheapen it."

Quantcast's revenue plan has been a bit of an enigma, though the company has received $25 million in venture capital since launch in 2006. It started out measuring sites too small to be measured by panel-based services or afford the fees but has expanded to include more than half the top 100 ad-supported sites.

Its roster includes a lot of premium-content publishers, many of which either don't use ad networks or have tried to de-emphasize them. Time Inc. Digital President Kirk McDonald plans to use Quantcast to be able to allow marketers "the ability to cut horizontally across our properties to find similar audience targets at scale."

Mr. McDonald said he believes it will result in better campaigns and, in turn, higher CPMs. Furthermore, it's what clients increasingly say they want. "It will take a pool of inventory and give it characteristics -- over time with increased value should come a higher return for us."

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