Marketing Technology: An Expanding Landscape

I attended AD:TECH a few weeks ago in New York. It quickly became clear the online marketing landscape has changed quite a bit in the past few years. Let’s run through some basic explanations of the various types of solutions on the market today to help with the day-to-day management of your own online marketing.

This is a general overview and isn’t intended to be comprehensive. I won’t refer to specific companies or offerings, just provide the lay of the land.

Ad Serving

Increased value is the biggest change in ad serving. Costs have dropped significantly, and tools demonstrate clear capabilities to increase return on investment (ROI) through optimization, consolidation of data, targeting, and workflow automation.

  • Sell-side solutions. Most commonly called site-side ad servers, these systems are designed to support the needs of Web publishers that sell inventory to advertisers. The core of a site-side server is the inventory control system. It predicts inventory availability for the ad sales team, based on past sales, then schedules the myriad creatives according to rules established by the insertion order signed by a media buyer. This ad server also delivers the ads (of course) and does some minimal tracking, usually just impressions and clicks.

  • Buy-side solutions. Most commonly called third-party ad servers, these systems are designed to support the needs of advertisers and advertising agencies. A third-party server is designed to manage the advertiser’s assets across multiple campaigns and placements and to track and report on a broad array of metrics. Third-party servers typically don’t include inventory control, the primary function of a site-side server.

    These days, a typical third-party ad server has the ability to track impressions, clicks, rich media activity, post-event activity (both post-impression and post-click), conversions, and transaction values (such as the value of a sale on an e-commerce site). They also can report on all campaign results and include extensive customization and drilldown capabilities. Typically, you’ll need reports to include financial data and important metrics, such as reach, frequency, and publisher overlap.

E-Mail Marketing

Possibly the most contentious area of online marketing today, we’ve seen this space rise to become the darling of marketers (during the infamous days of the post-September 11 anthrax scare), then plummet in public opinion due to concerns about and legal wrangling over spam.

  • List management and brokering. The medium is struggling under new (and looming) laws intended to halt the spam epidemic that overwhelms our inboxes. In essence, list companies offer direct marketers a means to send unsolicited commercial email to people who have (to varying degrees) “opted in” to lists. Typically, a list management company sells lists based on specific goals and target audience profile. It will send the email and measure, and report results.

  • E-mail marketing management systems. Less affected by new anti-spam legislation are email marketing management solutions. These are designed to help manage your email communications with existing customers. It’s a CRM-like approach to email marketing. Typically, such solutions let you manage your lists; interface with an existing CRM system; create, schedule and send mailings; track results; and view detailed reports.

Search Marketing

Search is online marketing’s new darling. I was amazed by not only the number of new companies in the search space exhibiting at AD:TECH but also the number of companies offering some form of search marketing on top of their traditional services. As a colleague put it, “Search has marginalized itself.” By this, he means everyone is doing search. It’s no longer a differentiator.

  • Organic search optimization. Organic search companies are generally service, rather than technology, oriented. Typically, they go through a process of reviewing the content of your Web site and make changes so it will appear higher in search result listings. This is achieved through human expertise. Individuals who understand the algorithms used by the search engines make content changes that stack the deck in your site’s favor.

  • Bid optimization (a.k.a., bid management). Most search engines sell advertising on their Web sites. Most offer inventory on a pay-per-click basis. The systems are typically auction-style markets that place the highest bidder for keywords or key phrases into the top-ranked ad locations for keyword search results. These systems automatically adjust bid price for keywords based on ROI numbers from sales driven by those clicks. So if an electronics retailer sees an average return of $1.00 per search engine click, it can theoretically afford to pay as much as $0.99 per click. Of course, the cost of the bid optimization service, time spent managing the marketing, and other financial factors must be taken into account.
  • Paid inclusion. Various companies have automated the process of submitting Web site information to search engines so the algorithms always place them high in the listings or results. This is done by feeding real data about the advertiser to a search engine via XML feed. The companies involved only send the data necessary to adjust placement results within search listings. They updating the feed numerous times daily.

Research and Planning

This is what the Internet was invented for, so it shouldn’t be surprising online research has really taken off. Some changes in this space are unanticipated, however:

  • Media planning tools. A variety of tools are used by media planners. They range from workflow tools that streamline the actions involved in planning media and tools that enable research into Web properties that sell ad space to tools that allow interactive prediction of reach and frequency.

  • Online surveys. The Internet changed how data are gathered in a variety of ways, none more so than surveys. A process that once required an immense amount of human effort has been streamlined and automated to a degree unthinkable in the past. This leads to much larger data sets and dramatically lower costs to run private, custom surveys.
  • Ratings services. Another significant impact on an old-school industry is rating media properties. Dubious offline methodologies used to determine demographic and psychographic audience breakdown are mirrored and improved upon online. Increasing panel size is only one of many improvements. Now, ratings services have emerged for many new media, including email marketing and Web site data.

Marketing Solutions

A number of products and services are difficult to classify. They include:

  • Affiliate marketing. Solutions allow large numbers of individual users and small companies to be paid for product sales driven by links on their Web site. These tools works best for e-commerce companies, which reward affiliate members based on the number of sales generated. Savvy affiliates link appropriate products that are contextually relevant to their site content. A site specializing in information about bird species and habitats would, for example, display links to relevant books on an online bookseller’s site.

  • Referral marketing. A sanitized name for viral marketing. Solutions in this segment essentially allow advertisers to convince users to forward offers to friends who would be interested. Often these solutions involve some aspect of rewards management. Users are incentivized to forward offers to friends, acquaintances, and relatives. If their efforts are successful, they’re rewarded with goods or services.

I didn’t mention a host of other services and solutions. Web analytics, for example, has exploded this year. But this pretty much covers the basics. Hopefully, it will help you determine your own marketing needs in the coming year.

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