Thought Leadership
SourceKnowledge on Performance-Based Programmatic Video Buying

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Patrick Hopf
President & Co-Founder
SourceKnowledge

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For those of us not familiar with SourceKnowledge, please tell us a little more about your platform and company. 

We’re a performance advertising technology company for data driven marketers. Our full-stack platform, Engage, gives advertisers of any skill level the tools they need to identify, recapture, convert and measure high value audiences. The platform helps eCommerce and SaaS brands, advertising agencies and app publishers find better customers. Engage is powered by our proprietary Smart Bidder™ technology that allows the platform to identify and analyze key behavioral indicators and leverage user intent data to build out high performing cohorts of prospects. 

 

It’s been stated again and again by eMarketer and many other publications that programmatic advertising is rising exponentially, with it soon to become the main mode of media buying for marketers. What are your thoughts on this?

Programmatic is a fantastic tool for advertisers to efficiently gain scale for their campaigns. It follows that the vast majority of advertisers would adopt it and that it would become the main mode of media buying. But as effective as programmatic is, there are some issues with the way it’s currently being used. This model was based on how television advertising worked and it remains problematic for a few reasons. First, this model assumes that all members of a demographic (e.g. white males between the ages of 25 – 35 living in New York City) will have very similar behaviors and affinities – which they frequently do not. The second issue is that the third party cookies that are used to find members of an audience are frequently inaccurate. The other concerning issue is the metrics that are being used as key performance indicators to validate the relative success of a media buy. Advertisers should be prioritizing return on ad spend (RoAS) and average order value (AOV) instead of benchmarks like click-through rate, viewability or completion rate.

 

When it comes to programmatic video, why do you think premium publishers would be incentivized to plug their in-stream, high yield video inventory into exchanges? Is there a way in which programmatic players, publishers, and advertisers can win?

The incentive for publishers is scale. Scale in terms of revenue growth, but also in terms of effectively optimizing demand. That being said, exchanges and supply side players must increase efforts to remove bad actors and improve viewability. Page load times are a problem. Programmatic players must resolve issues on the demand side as well. Ad serving quality problems as an example.

 

What are some innovations happening now in digital or mobile advertising that excite you the most?

Native video is one of the most exciting advances in both the digital and mobile spaces right now. It provides advertisers with high quality inventory at scale and publishers with a valuable tool to monetize their non-video inventory. It allows us to connect with users in an impactful way that’s also non-intrusive. The concept of good user experience is something that’s been undervalued in digital advertising for far too long and that has hurt us as an industry.

 

Being heavily Cost-per-Acquisition focused (especially for your Engage performance marketing platform), do you have any benchmarks for view-through attribution windows marketers should use, by industry?

Attribution windows can vary based on so many factors. A good baseline that the majority of marketers should use is to attribute view-through conversions within a 30 day window. Much depends on the type of conversion being sought after: size of purchase as an example. An important metric marketers should look at when determining an effective attribution window is the typical purchase cycle duration for their industry. Ideally the window length should approximate the time it takes for a new prospect to evaluate the product and become a purchaser.

 

There’s been much talk over the last few years of Millennials and many other consumers ‘cutting the cord’, and turning most of their attention to digital, and mobile devices. However, TV Advertising is still reported to be at an all time high. Why do you think this is the case, and how do you see it evolving over the next few years?

National and cable broadcasters are cutting down content to include more commercial time. But viewership numbers are very fragmented. Brand advertisers are still reluctant to scale back on well-established channels. Key live sporting events still draw big numbers. It’s going to be interesting for TV once streaming live content through social networks like Twitter establishes.

We’re witnessing continued growth on the M&A front with large established companies like Verizon buying digital media companies, even with competitive offerings. This type of large activity is a response to the real threat of millennials abandoning TV, and the dominance key social media properties for user data. Companies like SourceKnowledge that can extract measurable user data from the open web provide an important brand advertising solution.

 

Why do you think it is important to be able to reach users across devices? Are there any independent players in the space now innovating on this front – to become the deterministic / probabilistic identity layer that most other adtech companies and publishers can utilize?

A typical user moves through a number of different device touch points in a given day. Understanding how to connect with this user, regardless of the device being used, is of strategic value for Engage. Mobile usage numbers will surpass desktop this time next year. Our capability to deliver relevant native video advertising across devices, track the path to purchase and understanding the value of our users is of paramount importance. 

There are a number of third party data providers who sell access to user profiles. Probabilistic data such as this has shown lift for metrics like click-through rates. That’s the problem with non-viewable traffic, it usually provides good media based metrics. So there is confusion. A multi-touch, path to purchase platform, which uses purchasing behavior to qualify audience, can protect against wasted ad spend.

 

What are your thoughts on private marketplaces? Do you ever see a point in the future where private marketplace deals will become the norm for marketers large and small?

Private marketplaces exist in response to bad rates and long page load times. Publishers need to improve user experience and the best way is to provide premium inventory and control pricing. If they can improve rates and user experience, it’s a win all around. A critical step in our effectiveness as an ad-serving platform is buying quality video inventory. We happily spend more as we measure the value of the user watching the video. For publishers to get the most value from running their private marketplace they need to have effective means of selling it. Our capacity to buy video impressions requires some level of programmatic integration. Otherwise it’s burdensome. 

 

Lastly, what is your take on the future of programmatic advertising and how it will find homeostasis with the publisher community?

Platforms like Engage and companies like SourceKnowledge will pay premium dollars for the data that publishers (through programmatic integration) will make available. We want to build technology that connects with people. Responsible marketers need to test new solutions to get better results and save their clients’ money. We feel it’s a very exciting space to work in.

 


 

SourceKnowledge is a leading performance advertising technology company built for data driven marketers. Our full-stack marketing platform, Engage®, gives marketers the tools they need to identify, recapture, convert, and measure high value audiences across any device. We help brands, agencies, app publishers, ecommerce, and SaaS companies to acquire better customers. Deloitte ranked SourceKnowledge as one of the fastest growing companies in the North America Technology Fast 500 in 2014 and 2015. Founded in 2009, SourceKnowledge is headquartered in Montreal with offices in Vancouver and clients around the world.

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