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Audience Buying Guide

Move Over RTBs, the Hot Term of 2011 Is the AMP

As Online Audience Buying Turns Into a Sea of TLAs (Three-Letter Acronyms), Here's the First 'Ad Age Highly Unofficial Glossary of the Online Ad Space'

By Published on . 2

A year ago, it seemed like online advertising was going the way of Wall Street with the emergence of the exchanges, DSPs and SSPs -- turning into a sort of obscure acronym soup.

What will 2011 bring? Even more acronyms and fluidity -- but all of it focused on data, segmentation, movement, attribution and management.

Oh, and there's a little place called Washington that really wants to understand what all these companies are doing with that data. Clarity, please?

THE FORWARD 'I': The Advertising Option Icon
THE FORWARD 'I': The Advertising Option Icon

ADVERTISING OPTION ICON: A cute little "i" that can be put on ad creative so consumers can find out how the data collected about them is being used, and set various preferences. It's administered by Evidon and a consortium of trade groups as part of an industry self-regulation maneuver to keep Washington privacy advocates at bay and protect the status quo of self-regulation.

AD BLOCKERS: Software enabled through a person's web browser that can prevent ads from being displayed. Naturally, publishers aren't big fans, as advertising is the primary revenue source underwriting online content.

AD EXCHANGES: Wall Street-like commodity trading comes to web advertising. Publishers designate inventory, buyers can access it. The idea is that it creates a rational marketplace and automates the tedious buying process, allowing publishers to set a "floor," or minimum bid, for what types of ads they will accept, while buyers bid for varying types of inventory available but rarely know in advance where those ads will show up. There are pure exchanges where the inventory is "blinded," and now publishers are in the game. The Weather Channel has its own private exchange and a consortium of Gannett, Hearst, The New York Times and the Tribune company run an exchange through Quadrant One.

AD NETWORKS (and various permutations thereof): Audience Based: They sell with the idea of aggregating users based on either demography or intent (to purchase something).
Horizontal: Sells a wide base of inventory available, i.e., not specialized.
Vertical: Specialized. There are women's networks, sports networks, networks of people in the market to buy a car, etc.
Mobile: Sells ads onto wireless devices including phones and now tablets. There's more to it than just sales, as it takes work to get one ad to appear on phones across multiple platforms (e.g., Android and Apple). There are three big ones: Google (AdMob), Apple (formerly Quattro) and Millennial (independent), plus some focused on rich media or various verticals.
Performance: Clicks 'R Us. These networks have a wide range of inventory available and are all about driving direct response at the lowest possible price.
Video: The combo of sight, sound and motion is hot (and generates the highest CPMs). Recently this space has been a land grab for more generalized networks that are snapping up or merging with video networks. They don't only aggregate video inventory against which to run ads -- some also syndicate video content across a range of sites, as there is not enough video inventory at the right price to meet demand.

AD SERVERS: The technology that disseminates online ads and then tracks and reports back on ad performance. DoubleClick/Google and Microsoft Atlas are the leaders, along with "homegrown" servers -- which is when a site builds its own.

AD VERIFICATION: Software tools that advertisers use to determine if impressions are displayed in the proper place and whether the ads are privacy compliant. They are often used with exchange inventory when the advertiser does not know exactly where the ads are placed or for audience targeted buys to ensure "brand safety" -- that ads aren't on pages with, say, boobs. The ad networks typically dislike verification tools because networks say it's their job to find the right sites, and they argue verification has technological limits. For example, they say, if advertising for a woman's product shows up on a breast cancer-related site, boobs may just be a perfect fit.

AGENCY-TRADING DESKS (ALSO MEDIA-BUYING PLATFORMS/DESKS OR DSPS): The practice of an agency operating its own DSP so it can enrich its pool of data from all the buys it executes. The bigger agencies are building systems to look at data across media and frequency cap, i.e. control the number of times a person is exposed to specific ad.

ANALYTICS: There are three different kinds:
1. Third-party panel-based companies, such as ComScore and Nielsen, can tell you who actually looks at a site. The publishers always argue that they are being undercounted due to the complexity of the web and the difficulty of getting reliable metrics for smaller sites.
2. First-party software tools, such as Google Analytics, Omniture and Webtrends, operate through tags on a site's pages and let publishers get statistics on how many page views a site is generating and how many unique users it has (a machine proxy for people/viewers). Their numbers never match up to third-party tools due to issues such as cookie deletion, and both groups argue about their data reliability.
3. Audience targeting is basically behavioral targeting with new clothes and broader capabilities and applications. It's the practice of using data to imply an audience, either by demography, life stages or some sort of intent, such as people who have searched for info on a new phone purchase. These analytics tools help marketers buy a specific audience, not an audience implied by the context of a specific site. (If I am looking to reach an "auto intender," I advertise to them wherever they are online -- not just on auto sites.)

THERE'S A SCIENCE TO IT: AudienceScience bills itself as the largest and most trusted audience aggregator in the world.
THERE'S A SCIENCE TO IT: AudienceScience bills itself as the largest and most trusted audience aggregator in the world.

AUDIENCE MANAGEMENT PLATFORMS (AMPS): One of the rising terms of 2011. The folks who provide the audience targeting now have platforms to automate the process of buying audience-targeted inventory. Since many of them also operate ad networks, it's a natural extension. Jeff Hirsch, CEO of Audience Science, which has rebranded as an AMP, said "AMP is the acronym representing a company that has DMP and DSP capabilities."

BEACONS: A 1-by-1-pixel tag typically used by an advertiser or a third-party ad server to track a unique user's activity over time. A beacon helps to properly attribute an online action to ad exposure, even if the action happened days after being exposed to the ad. DoubleClick, which originated the concept, still uses the name "spotlight tags."

BEHAVIORAL TARGETING: A now old-fashioned term that has been rebranded as "audience targeting."

BETTER ADVERTISING (now Evidon): The folks bringing you the Advertising Option Icon.

BLINDING: The practice of not designating where the inventory will be placed. Exchanges or third-party networks will often "blind" an ad at the publisher's request. Publishers do not want to create "channel conflict" -- or a situation where someone besides their sales staff is selling their inventory. (Never let your customer know someone else sells the same thing cheaper.)

BLUNT TOOLS: Term referring to a broad-based "spray and pray" approach, when a campaign doesn't use the available data to target offers to specific interests of consumers. Amazon and Netflix are the antithesis of blunt: they use their data to make buying recommendations based on past purchase behavior that hopefully results in higher conversions.

CLOUD COMPUTING: The technology that makes all this data connection and movement work. Many ad exchanges run on a computing cloud created by AppNexus which operates as an exchange of exchanges.

CLUTTER: Your typical web page, loaded with ads.

CONTEXTUAL TARGETING: There are two kinds -- natural context, where you place a bank ad on a finance page, and contextual advertising, which scans the text of a website for keywords and targets advertisements based on those keywords, such as ads in Gmail that pop up based on your email content.

COOKIES: There are several kinds.
First-party cookies: What your bank and Netflix use to know it's you when you come to their sites.
Third-party cookies: What an ad server drops on your browser to designate that you have shown interest in various product categories or to place you in a demographic group discerned from your online activity. These cookies can be used to target advertising.
Flash Cookies: Almost universally publicly derided in the industry because they're difficult to get off your computer (but sometimes used for the same reason). To delete them you have to go to Adobe's website or manually do it through the Flash player setting on each site you access.
Fresh cookies: Depending on the product category, fresher pieces of data are better. For example, if I'm in market to buy a cellphone, I may only shop around for a week or two -- so cookies dropped on me during the past week or two are more likely to be reliable.
Cookie deletion: People concerned with privacy regularly use their browsers to "dump their cache" of cookies. If you do it, be careful to just dump the third-party ones or you will have to reenter your information at places where you have registered. Cookies also dictate frequency caps -- if you dump regularly, you are more likely to see the same ads over and over and over again because the ad server won't know you've already seen it many times.

CREATIVE OPTIMIZATION: Software systems that enable an advertiser to default to the highest-performing creative or manage the frequency of exposure, typically on a direct-response basis.

CPC (COST PER CLICK): All the amorphous branding talk aside, cost-per-click -- a division of a campaign's cost by the number of ad clicks it generated -- is still the reality for much online direct-response buying reality.

DAA (DIGITAL ADVERTISING ALLIANCE): The alliance of a bunch of acronymous trade orgs pushing for self-regulation: The 4A's, the American Advertising Federation, Association of National Advertisers, the Direct Marketing Association, the Interactive Advertising Bureau, the Network Advertising Initiative and the Council of Better Business Bureaus. The alliance represents more than 5,000 companies in the space.

DATA AGGREGATORS: They pull together ad-serving data, conversion data and third-party data, including those from offline sources (stripped of personally identifiable info like names and addresses) like Acxiom, Polk and Experian, to attach as many attributes as possible to online cookies to refine targeting capabilities.

DMPS (DATA MANAGEMENT PLATFORMS): The hot term of 2011. These self-service "dashboard" tools perform a range of services from collecting, managing, segmenting, sharing and analyzing marketers' advertising data -- and assuring that your data is your data.

DSP (DEMAND SIDE PLATFORM): Last year's hottest term. A computer-based platform the buy-side (agencies and advertisers) uses to automate media buying across multiple sources with unified targeting, data, optimization and reporting. Data is treated like media in that it is layered across the buy and becomes just another part of the cost. DSPs do not own, purchase, represent or resell inventory from publishers. As John Montgomery, chief operating officer of mOne puts it: "A DSP is simply the plumbing that plugs into real-time inventory sources, such as real-time exchanges, and participates in a public auction on behalf of its clients." In contrast, ad networks own or represent inventory from or on behalf of publishers.

DO NOT TRACK: Do not call killed telemarketing, and so the online world fears what will happen if Washington institutes do-not-track online privacy legislation. If there were one simple place where consumers could opt out of any ad tracking, would they do it? Do they understand what the implications are for their favorite sites?

ECPM: Effective CPM. Today, most buys are a mix of cost-per-thousand impressions (CPM) and CPC. The eCPM answers the question: If I buy a CPC campaign, what would I have paid if I bought it on a cost per thousand (CPM basis)? It's used to compare whether a CPM or CPC buy was actually more cost effective. To calculate: Campaign cost/(impressions delivered/1000).

ENGAGEMENT RATES: What percent of total impressions for an ad were hovered on, clicked or somehow interacted with? Usually applies to a rich-media ad. Smart advertisers are taking it to the next step and asking questions about what impact a "hover" has on ROI or an actual sale.

EVIDON: (formerly BAA, Better Advertising Project) Selected by the DAA to operate the advertising option icon self-regulatory program.

FREQUENCY CAPPING: Using cookies to manage the number of times a user sees a specific ad creative. (Has never been done for most insurance, teeth whitening or belly-fat ads.)

Randall Rothenberg
Randall Rothenberg Credit: Noah Berger/Bloomberg

IAB: Industry trade group that has developed online ad standards and guidelines, championed the cause of online publishers and the right to target ads. Run by the respected and forthright Randall Rothenberg.

IMPRESSION: The act of someone seeing an online ad upon calling up a web page. There is an approved and very technical definition of the term, which has taken years of negotiation by the IAB. It's available at iab.net.

INVENTORY: Common term for available ad impressions. For some reason, the web world likes to talk as if it is moving units of underwear or canned goods rather than pixels. Various types include:
Content farm: Inventory created because it's highly desirable to advertisers and souped up through SEO so that people find it. Often offers context, but can be marginal context.
Direct sold: Inventory bought directly from the publisher, typically higher-quality stuff.
Contextual: Inventory that relates to a category of content or advertising. Business pages on The New York Times are contextual inventory for finance.
Premium/first-tier: As good as it gets, often contextual or highly trafficked areas such as home pages and lead section pages.
Mid-tier: Inventory from a known site with decent content, but not a top 100 site as ranked by ComScore.
Long tail: The vast inventory available from small, no-name sites and blogs. There could be some valuable stuff in there that people really look at -- or not. The challenge is segmenting it.
Remnant: Every large publisher's got unsold inventory, either simply because you can't sell it or because of its context. Often gets thrown into an exchange, where data is appended to turn it into an audience buy.

OBA: Online behavioral advertising and also a compliance program led by the IAB that sets standards for data usage in behavioral targeting.

ONE-BY-ONE (1X1) PIXEL TAGGING: What an ad trafficker needs to "drop" on an ad (a pixel tag is an invisible image, basically) in order to analyze a view through.

RTB (REAL-TIME BIDDING): The process of buying and selling impressions instantaneously in which the highest bidder "wins" the right to place a display ad while audience attributes are affixed to it. It was the hot thing of 2010 but now that just about all the exchanges can do it, they're on to the next acronym.

RETARGETING: An example: Say I shop for a car by looking at a couple of auto sites. Those sites and third-parties drop cookies on me and the computers and data management companies go into a fury trying to find me on other sites as I surf the web, serving me auto ads until I buy. Works brilliantly, but drives the privacy advocates nuts. I, however, like it when I don't make an online clothing purchase due to the price and the retailer "comes after me" and gives me a great offer via an ad on another site. Thanks retargeted ad, you just closed the deal!

SEMANTIC TARGETING: Targeting in which a computer system examines all the words on a web page to identify the context of the page, rather than relying on simple words or phrases. Simple contextual targeting might see the word "golf" on the page. But semantic targeting can tell you if it's an alligator-bites-man-in-Florida-on-golf-course story -- something Calloway wants no part of.

SENTIMENT ANALYSIS: Can also be used to determine if the "sentiment" of the page is positive or negative, using that finding to possibly suppress an ad (i.e., could help Calloway avoid placing an ad next to an article about how golf is a lousy sport for overweight white guys in media).

SOCIAL TARGETING: Uses data to find those obsessive social networkers who influence the "social graph."

SUPPLY-SIDE PLATFORMS: A DSP but from the publisher or content producer's perspective.

TLA: Three Letter Acronym. It's what the online ad industry is becoming, jokes Omar Tawakol, CEO of BlueKai, a data aggregator and now a DMP.

VIEW THROUGH: A look at the post-ad-impression behavior. If your "view through" window is 30 days, a person's actions within 30 days of seeing the ad can count toward the ad's effectiveness. For more, see beacons.

VCS: The cash and promise of going public or getting bought by Google or Facebook that fuels it all.

YIELD OPTIMIZATION: Employed by publishers to find out how much their impressions are worth and how they can you manage flow of inventory to make the most money? These platforms look at each impression available on a web-publisher site and then match the impression with an available ad from an ad network or exchanges.

ABOUT THE AUTHOR
Kathryn Koegel is chief of insights at Primary Impact and works with media and interactive marketing companies to turn their data into industry insights. She's also the author of the Ad Age white paper "Building Brands Online," which contains a complete discussion of the issues addressed here. See AdAge.com/insights for more information.

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