OwnerIQ - Ownership Targeted Media

by Jay Habegger

This blog is really intended to discuss the things we’re doing here at OwnerIQ. However, as a start-up CEO, I’ve received so many forwards and comments on this post by VC Fred Wilson that I feel compelled to comment on it.

Not to take anything away from the colleague who gave Fred the advice about the CEO’s job early in his career, but, to be honest, I thought it was incomplete.

As a two-time start-up CEO (one win under my belt and another one on the way- OwnerIQ) and an angel investing in start-ups (Common Angels), Fred’s job description seems pretty light and undervalues important parts of the job.

Most of the comments to me about Fred’s post from employees and investors past and present have begun with the phrase “hey, you do these things…”

That’s good, I guess.

According to Fred, a start-up CEO needs to do only three things:

“A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.”

I think these things are the bare minimum qualifications for a successful start-up CEO.

There is plenty of room to debate how important each of these three tasks are. What constitutes “enough cash” for example? I know that I’ve spent many board meetings across multiple companies discussing that very topic. However, a CEO that can’t deliver on these things is like a sales person with call anxiety: s/he isn’t qualified to do the job.

But, this job description is not sufficient. Not by a long shot.

Exhibit A is the dot.com melt-down. There were plenty of companies that had lots of vision, lots of talent and lots of cash. Most of these companies didn’t produce good outcomes for their investors.

What’s missing?

In my opinion the missing parts of the job description are not glamorous because they have to do with day-to-day execution and handling adversity. This part of the job is crucial to delivering success when things go wrong. Think about this part of the job as the “Sully tasks” (If you’re not familiar with this story, check out this New York Times article). When you have to crash land in the Hudson as opposed to flying happily on to Charlotte, how do you handle it?

I’ll agree that the rare blessed start-up that gets its model right at the beginning, gets the timing right and has well financed and faithful investors can make it with a CEO that has Fred’s three traits alone.

But, when things don’t go according to plan I think the other parts of the job description start to matter – a lot.

Here are the other big things that I spend most of my days worrying about:

1. Priorities. What is the most important objective for each part of the organization given the data we have at hand at this moment? This is related to vision, but its much more connected with day-to-day execution and making sure that activities are connected with the vision in an achievable way.

2. Challenging. I also think of this as “Leading from Out Front”. Every part of the organization has goals and metrics. How do I inspire and challenge to always do a little better? Can I use a directed telescope to ask critical questions that can result in performance improvements or a riff on an already good idea to make it even better?

3. Preserving Optimism. A fact of start-up life is that most things don’t go the way you planned and you are always just a quarter or two away from running out of cash. Choosing priorities and challenging the organization is important, but equally important, in my opinion, is to always be the person clearly articulating a rational and coherent vision of how the situation you didn’t plan on can be fixed and how it is all going to come out ok.

I understand that these three things are not always visible to investors. In fact, in many cases the investors also need to have their optimism rationally preserved and that’s part of the CEO’s job too. Performing these tasks also takes a tremendous amount of time to focus on the details. How do you challenge if you don’t understand exactly what’s going on? But, without delivering on these things the CEO better have a good dose of luck in addition to vision and cash.

By Chris Back

Realtime bidding (RTB) as part of a DSP’s offering has gone from being a distinguishing capability that sets a DSP apart to functionality that is now considered table-stakes. Despite this shift in perception about RTB, there is still significant confusion about the precise advantages of RTB and why it all matters.

A DSP can use RTB to solve three problems: reach, precision and effectiveness.

Before exploring the details of how RTB solves these problems, I’ll explain the the mechanics of buying a single ad impression via RTB.

To start the entire process, a publisher must put an ad exchange’s ad tag on their site. At its simplest, the ad tag identifies the publisher, site and ad size, but may also include some information on brand restrictions to avoid channel conflict, or constraints on creative format, among other things.

When the page containing the ad tag is viewed by a user, the ad exchange receives this ad request and layers in its own data including publisher information, anonymous user ids, and geographical data derived from geo-ip lookup.

The ad exchange then goes through its own process of determining which of its participating buyers are eligible to purchase the impression (see earlier post, Drinking From the Fire Hose) and sends a formatted message, called a “bid request,” to each potential buyer participating in the exchange.

Buyers have a brief period of time (on the order of 25 ms) to decide if they are going to bid, and, if they are, to determine the constraints of their bid and send it back to the exchange. Once all the buyers have either responded or timed out, a winner is determined by the ad exchange and the ad tag of the winner is delivered to the page.

The amazing thing is that all of this processing happens in the brief period of time between when a consumer clicks on a link for a page and when that page renders in their browser. The timeout value, or period of time an ad exchange allows between a bid request and a response, varies from as low as 50ms to as high as 120ms, including any network latency. To keep things in perspective, a human blink clocks in at around 350ms. At OwnerIQ we manage our average internal bid processing to achieve below 25ms average processing times. Thus, at peak hours, we’ll make almost 6,000 ad buying decisions in “the blink of an eye”.

Solving Advertiser Problems

Given the volume of ad opportunities flowing through the ad exchanges and the ability to bid on each one, a DSP with RTB capability can solve the first problem: reach. Rules within the bidding software can be configured to look for a predetermined list of criteria associated with the ad opportunity, such as domains, classes of sites, or even browser type and return a bid with a CPM rate defined at the campaign level.

There are some obvious problems to the simple buying model just described. First, if everyone is evaluating an impression against the same data points, the bidding model and therefore the DSP itself is quickly commoditized. For a DSP to truly thrive and provide value in the RTB space there are two obvious next steps: adding value to the inventory through proprietary knowledge (adding precision) and optimizing campaign performance based on past observations (increasing effectiveness).

Adding value to inventory is no easy task. At OwnerIQ we have dedicated significant resources to learning more about the user. We gather this user data in three ways: 1) our own property, ManualsOnline; 2) direct relationships with publishers at every stage in the purchase cycle, such as shopping comparison and even product recycling; and 3) direct relationships with manufacturers and retailers to tag consumers during the research and purchase process. This robust network of data sources allows us to determine previous purchase behavior and intelligently predict future buying intent. And, like most other RTB participants, we can augment our proprietary data with information from third-party data providers.

As difficult as it is to establish the relationships and support the technology to gather that data, it’s just as hard to make it actionable in the tight time constraints of real-time bidding. Now, as part of that 25ms response time, we will need to pair the exchange data with our value add information about the user. We are gathering about 5 million data points per day against almost 1 million unique users. A DSP needs to find a mechanism for keeping that data readily available inside its bidding system, ideally in memory (the average random access time for the fastest hard disks is about 5ms). The ability to keep data of that size instantaneously available is beyond the capabilities of standard database systems. Doing that at scale requires very fast memory-based database systems backed by redundant on-disk storage, technology that is still in its own infancy stages. If you are interested in more information, take a look at the good work being done by the Apache Cassandra team.

At this point, we are finally in a position to offer the last promise of RTB, campaign effectiveness. This is also where the process becomes much more computationally complex. When a bid request is received, we need to evaluate every campaign’s creatives against all data points available to us. Each running campaign may value an impression differently based on OwnerIQ user information, how we have classified the site, number of ads on page, the browser the user is using, the user’s geographic location, and frequency constraints to name just a few of the variables. The decisioning isn’t just buy or no-buy, but determining a true value to the advertiser to show a specific creative to that particular user on that page at that particular time.

To accomplish that computational feat, OwnerIQ must re-evaluate our logic throughout the day for each campaign. Our bidding logic evaluations don’t determine the final CPM for a campaign, but a creative specific pricing algorithm. In essence, we are doing some of the pricing computation early, and then allowing our bidding software to plug the final few datums into the formula at the very last millisecond. All so we can pick the right creative and price within our 25ms.

It’s still very early in the RTB world. The myriad of ways to make ad buying decisions in RTB is growing, and I expect it will become more complex as software engineers start applying intelligent out-of-band data processing that helps make better pricing algorithm updates. While today using RTB as a means to simply achieve reach might be enough, that won’t satisfy a savvy media planner a year from now. The industry leaders will be able to plug multiple targeting parameters into unique, campaign-specific pricing algorithms in real-time to deliver on the promise of precision and effectiveness in addition to reach.

Originally posted on TWICE.com

by Jay Habegger

A manufacturer’s website is its single most important marketing tool. This isn’t hyperbole. This is the current reality.

The retail world for consumer durable goods — considered purchases such as CE equipment and appliances — has changed so radically over the last decade because of the Internet that the typical consumer-path-purchase is unrecognizable from what it once was.

The old path-to-purchase depended on retailer advertising in newspapers and television to generate demand and an in-store experience to educate the consumer fulfill a purchase. A consumer’s ability to research a product or compare prices was limited.

Things have changed.

The new path-to-purchase should be called the online path-to-purchase because it is dominated by online activity. I think everybody appreciates this to some degree based on their own personal experience. But I think marketers have underestimated the magnitude of the change and its pervasiveness.

According to an April 2010 study by ComScore of 1,167 computer and consumer electronics (CE) shoppers, two-thirds (66 percent) reported that their first step in the shopping process was an online activity such as visiting a retailer website, using a search engine, visiting a manufacturer website, visiting a shopping comparison engine, visiting a social-networking site, or reading blogs or publications online. Less than a third (28 percent) reported that an offline activity was their first step in the shopping process. An offline activity includes visiting a physical retail store, reading magazines or newspapers in print, and even talking with friends/family and colleagues.

The numbers didn’t get any better for offline activity on the second or third shopping step either. In fact, they got worse. Online activities dominate throughout the process.

In particular, visiting retailer websites, a search engine or a manufacturer website was the first shopping action cited by 50 percent of consumers in this study. And visiting a manufacturer website outranked visiting a physical retail store as the first step (13 percent to 10 percent), the second step (16 percent to 7 percent) and the third step (15 percent to 7 percent).

The results from this study are not a fluke.

A 2009 Consumer Electronics Association (CEA) study, the Changing CE Retail Environment, found that 30 percent of all CE consumers report researching products online prior to making a purchase. Tellingly though for insight into the future: 42 percent of 18- to 24-year-olds researching products online prior to making a purchase, and 49 percent of self-described early-adopters report the same behavior.

In a recently released study on ecommerce in Canada, The NPD Group reached the same conclusion about the online path-to-purchase: consumers begin shopping long before entering a store.
There are many ramifications of the new online path-to-purchase, but for manufacturers one stands out clearly: They now have significant role in the process. The old path-to-purchase relied on the manufacturer making great product and the retailer selling it.

Given that manufacturer websites are consistently in the top three online information sources used in a considered purchase, the manufacturer is directly involved in the selling process.

A manufacturer can make this trend work for them by aggressive use of content and online marketing to create a robust information “footprint” on the web. The manufacturer’s website can be the best place to educate consumers and rise to the top of the consideration set. Through content on the manufacturer’s website, much of the product education that used to happen on the showroom floor can now be done online. To source demand, the manufacturer should always be able to use in-depth content on their products to rank highest in organic search results, not only for a particular product, but even in particular product types or categories.

By capturing email addresses when consumers are on their site and aggressively using display ad re-targeting, manufacturers are able, for the first time, to directly communicate on a one-to-one basis with customers and prospects as they move through the online path-to-purchase.

Although the consolidation in the retail channel has transferred market power away from manufacturers, the Internet and new online path-to-purchase has shifted information power and the ability to educate consumers squarely toward the manufacturer.

The manufacturers that are going to prosper with the new online path-to-purchase are those that can win consumer’s hearts and minds by meeting consumers as they begin their online process, educating them and then directly influencing them right up to the point of a transaction.

by Chris Back

Real-Time-Bidding (RTB) for ad impressions is tremendously powerful. But, to make it work in practice there are plenty of technology challenges that have to be addressed by a demand-side-platform (DSP). In particular, the number of ad opportunities that have to be examined to decide which ones are of interest is something akin to drinking from a fire hose: there is so much going by at any instant how do you get what you want?

Sources of ad inventory, such as Google, AppNexus and AdBrite among others, taken together, can require a DSP platform to process literally billions of transactions per day. For perspective, a billion transactions uniformly distributed throughout the day represent about 12,000 ad opportunities per second. Of course, the ad opportunities aren’t uniformly distributed. We see that the busy hour runs 38% above the mean so a billion ad opportunities really represents about 16,500 transactions per second at peak rate.

Keeping up with this data flow requires DSPs, and OwnerIQ’s MostIQ Ad Platform specifically, to deploy a lot of processing power to both decision on each impression opportunity and keep up with the resulting data exhaust (characteristics of bids won, inventory observed, etc.).

It has very real costs too. Although the cost of each marginal bid request is almost nothing, the cost of processing bid requests rises by the quantum of each computing instance. Each cloud-deployed computing instance costs money and there are technical resources required to keep it all running. Harder to quantify, but every bit as real, are the developer resources required to squeeze out every drop of performance as the transaction load rises.

Fortunately, the ad exchanges do offer some help with the problem. Most of them allow a DSP to set some filters on the traffic of interest, either by geography or by exclusively looking at traffic associated with a particular cookied population.

The exchanges will also reduce the “offered load” to a DSP if the DSP hasn’t scaled and is not meeting response time criteria, or if bid rates or win rates fall off. Depending on the exchange, the effect of this can be to artificially even out the impression opportunities seen throughout the day. The other real impact of this is to greatly diminish the ability of a DSP to bid on the desirable opportunities.

Agencies and advertisers often take it for granted that a DSP has a view of all inventory flowing from a source merely by virtue of being RTB-enabled with the source. Put another way, it’s taken for granted that all DSPs see the same inventory. Our experience is that this isn’t true. Pre-set filters, processing power, software code quality and even what other advertising (due to its impact on bid rates and win rates) is being pushed through the platform all impact exactly what inventory a DSP sees.

by Connie Johnson

It’s about time product manuals got their due! A recent story on Forbes.com talks about how companies should change their view on product documentation from, at best, a necessary evil and instead view them as an asset that can improve the business.

At OwnerIQ we’ve believed that for quite some time and we have the data to prove it.

There are two broad reasons why companies, especially consumer product manufacturers and retailers, should take a more strategic view of their documentation.

First, Cost Control

Manufacturers and retailers incur costs from poor or inaccessible documentation everyday in the form of expensive product support calls and product returns.

Products are becoming increasingly complex. Continual improvements in electronics places more on-board computing power on most products which leads to increased functionality, usually in the form of more features. Anyone who has recently purchased a dishwasher or a washing machine, two products that have traditionally had straightforward features, is intimately familiar with the explosion of settings and options in even middle-of the-road versions of these appliances.

How do consumers learn about these features? One way is through the product documentation, preferably online. We did a survey when we first launched our ManualsOnline site and asked 2,700 people how they learned about their products and how they troubleshoot problems. The stunning finding was that 77% of respondents said that learning about features was the most frequent reason for consulting a user manual.

If consumers can’t get at the information they need and they pick up the phone, it’s a margin disaster for the manufacturer. Because manufacturer margins on some technology products are already so thin, one call to technical support can wipe-out the margin entirely.

According to a Forrester study, calls into a call center average $5.50 per call and go as high as $50 per contact. For complicated technical support the cost of a call can go even higher.

If consumers can’t figure out how to make the product they just bought do what they want they are also liable to return it. According to the Consumer Electronics Association (CEA), 8% of all CE products are returned. In some categories, such as video, the return rate is as high as 13%. According to the study, 36% of the products are returned because they didn’t work as expected. Put another way, consumers were either misled about features going in, or couldn’t get those features to work once they owned it.

Better and more accessible documentation, in the form of manuals, FAQs and wikis among other things, has direct improvement on margins and the supply chain.

Improving the Top Line

The fact that documentation can improve margins and reduce returns is pretty clear-cut. What’s less appreciated among marketers inside manufacturers and retailers is the impact that product documentation and self-support material can have on the top-line of a manufacturer.

Aaron Fulkerson in his story on Forbes.com says that fully 70% of the qualified leads that his company receives come from organic search traffic and that his online product documentation is directly responsible for generating half of his entire site traffic.

Given the online path-to-purchase, we also see that product documentation can be effective online traffic generators for manufacturers and retailers if managed correctly. The product support content usually has both the largest and sharpest search footprint. For example, listing manuals in ManualsOnline.com can immediately increase the visibility of this content and drive more traffic to a manufacturer.

Consumers are also increasingly using product documentation in a pre-sales capacity. In our survey consumers cited the importance of reviewing the manual prior to purchase (13.6%) and using the manual to check compatibility with other products, (19.5%).

At OwnerIQ, we’ve also created a way for a manufacturer or retailer to leverage the online traffic generated from product documentation. OwnerIQ enables a manufacturer to message consumers again after viewing online product documentation. We have partners using the capability to build their email lists, drive consumers into channel or up-sell the consumer on accessories – all top-of-funnel objectives supported by product documentation.

We’ve produced a short video that illustrates how it works.

In the search driven online path-to-purchase, product documentation is the most effective tool for getting a consumer to your site, educating them and now, with OwnerIQ’s channel marketing service, driving them in-channel to actually buy.