09/30/2014 01:52 pm ET Updated Nov 30, 2014

Navigating the Vapor: How to Discover Real Value in 2014 Ad Tech

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During the Stone Age, if you didn't invent the wheel it was hard to fake it. Most glaring, you did not have a wheel. Even the most eloquent cave-side etchings from a Stone Age PR firm couldn't spin this fact.

The frothy, convoluted world of 2014 digital advertising is less clean-cut. For every great ad tech innovation there is a haunted house mirror that surrounds it, reflecting big promises from a growing supply of vendors. That only some of these promises are real creates anxiety and indecision for brands and advertisers.

Consider a recent survey by Forrester and the Association of National Advertisers which revealed that 46% of media buying clients are concerned about the transparency of their media agencies, among whom 42% cited the "unduly complicated digital media marketplace" as their biggest worry. More than 50% of those concerned respondents also cited trepidation about the view-ability of purchased impressions, the location and method of ad placements, and the lack of visibility into audience targeting data.

The lack of clarity among brands and advertisers is especially acute in the area of programmatic buying, where the ecosystem is complicated and layered - ad exchanges, data providers, disparate targeting methods, and other unique capabilities such as location-based targeting and deep linking. Some ad tech suppliers benefit from the confusion by parroting canned industry rhetoric knowing that so few clients sufficiently understand the space to be in a position to question them.

Compounding the confusion, traditional ad networks have an incentive to cast doubt on programmatic exchange-connected networks ("they don't have 'premium' publishers!'"), just as print newspaper corporations once impugned Internet-only publications.

As a factual matter, programmatic ad buying can be extremely beneficial to advertisers, regardless of the vertical. Rather than purchasing impressions in bulk and paying pre-negotiated CPM prices based on each publisher's perceived value of its own inventory, programmatic purchasing enables advertisers to place targeted ads directly from ad exchanges - on an impression by impression basis - connecting supply and demand in the most efficient manner. And informed media buyers can enhance these market-based efficiencies with sophisticated data analytics and audience targeting methods, which connect them to more engaged consumers, yielding higher returns on advertising spend.

For advertisers to actually realize this value, their agencies must be able to distinguish real solutions from vaporware. When evaluating an ad network, agencies and advertisers should consider:

Quality Engagement

• Can the network provide visibility into post-click engagement? What capabilities does the network have to measure engagement after the click within apps, mobile web, online web, rich media and video?

• What is the network's capability to distinguish between a served impression or, more generally, between a quality engagement and a superficial one?

• How does the network ensure a seamless user experience from mobile ad to a mobile app or web page? Or - and this is not a good thing -- does the network send users to generic mobile web pages where they must re-enter login information even though they own the app?

• What are the network's capabilities to enhance the consumer experience beyond just serving the ad? How, if at all, can the network contribute to the experience?

Data & Targeting

• What measures does the network take to validate data provided by exchanges or other third parties? If the network enriches impression data, what are its data sources? There are myriad data sources from which to target - it is imperative to distinguish good data variables (i.e., those which yield uplift) from just data.

• What method does the network use to "target" or reach optimal audiences? Behavioral targeting? Retargeting? Predictive targeting? In plain English, how does this method improve engagement with each advertiser's target consumer?

• How does the network provide insights around micro-segments of audiences that may have a higher propensity to engage with a brand?

• How does the network comply with industry-driven self-regulatory requirements and legal privacy rules? Specifically, how does the network ensure compliance with COPPA? (If the network doesn't have a clear process to comply with this federal statute, that is not good).

• Some networks make remarkable claims about their ability to target on a hyper-local basis and possibly measure physical location attribution (i.e., whether a user goes into store after engaging with an ad). How does the network delineate good from bad location coordinates? And, what attribution methodology does the network use?


• Some networks will shy away from A-B tests because they don't believe their own marketing materials. A-B tests force networks to show results.

• Is the network transparent both in terms of post-campaign reports and analysis as well as data sources and targeting methods?

A negative by-product of overly inclusive Internet discourse is the emergence of a subculture of commercial posers. Advertisers need to ask the right questions, and the most legitimate providers will have clear answers. If you don't understand the answer, ask again. The medium and tools may be new, but sensible business behaviors are time-tested. Caveat emptor.

This post is part of series produced by The Huffington Post for Advertising Week 2014, in conjunction with the Advertising Week conference (New York, Sept. 29-Oct. 3, 2014). To see all the posts in this series, read here. To learn more about Advertising Week 2014, read here.