Xaxis’ Lesser: Brands Don’t Trust Web Metrics

Brian Lesser knows data. As the founder and GM of the Media Innovation Group, Lesser helped build one of the first and largest demand-side digital trading businesses in the world. Now CEO of WPP Group’s Xaxis, an audience-buying platform, Lesser believes that a lack of solid standards in the industry and a less-than-stellar user experience for consumers has helped keep brand dollars offline.

Online has a huge problem with measurement, and hence getting brands to shift ad spend online. Can better data integration between online and offline really solve this?
There are a few reasons why brands have not devoted as much ad spend to online. First, there’s still a lot of value in advertisers buying television, especially brand advertisers. And we are certainly not about to say that this should all be transitioned. That’s number one and we’re not going to get past that. The second point is that advertisers are not yet comfortable with the metrics that we’ve developed as an industry in online media, outside direct response. Some have said that we need to bring offline metrics online, and I think that’s the wrong way to go. Offline metrics, even though people are used to them, aren’t perfect. Online, we have much better access to real-time information. We can provide better metrics using this information to advertisers. The third thing is improving user experience. I think brands will feel better about investing online when consumers feel better about advertising online. That we can do through better creative, through dynamically generating creative so that ads are more targeted to consumers, and ads that are more privacy-friendly. Consumers should know why they are being targeted for a particular type of ad and be able to opt out.
How can the industry deal with the privacy issue in a way that doesn’t support all of the negative fear-mongering?
My life would be much easier if I had the answer to that question. To some extent, I think it’s a very vocal minority that objects to the use of anonymous data for the purpose of targeting consumer. This isn’t a new concept, this idea of direct marketing using data. It’s maybe 70 years old. When we do these things online it’s much more anonymous than when we marketers track offline. There’s research that shows that consumers know that advertising fuels the Internet and that if they get advertising they would prefer for it to be relevant. I think that when more consumers see that the data used is anonymous, there will be less opposition. We need to have a larger conversation about how the Internet economy works, how that if we don’t have advertisers online, or if we make them reluctant to be online, we won’t have the array of choices that we have in terms of content. We need to talk about things like, what is the purpose of the cookie, and how does it work? These are more constructive conversations to have.
You recently added a video element to Xaxis. How has your basic business model evolved as the audience-buying market gets more cluttered?
In June, we launched a company in 13 markets with about 110 employees. At the moment, there are over 600 advertisers that we do business with across those markets. The basic premise of the company is to use data and technology to reach and engage with audiences at scale. We’re really capitalizing on the trend among large advertisers to shift from buying media properties based on the content that those media properties represent to buying individual audiences based on data that we have that defines those audiences very specifically. One of the fastest growing parts of our business is video. We’ve seen that direct-response marketers are the first to adapt new technologies and we’ve done a lot of business with direct-response marketers with bottom-of-the-funnel, but one of our big opportunities is with brand marketers. Brand advertisers don’t have a metric, like a cost-per-acquisition or a cost-per-click that accurately measures the effectiveness of their advertising. So, instead, these advertisers rely on the GRP, for example, in the offline world. Our video solution allows brand advertisers to effectively shift some of their offline television spend to online video, with similar metrics.
What are some major issues that brand advertisers are facing in terms of managing big data?
Advertisers are facing enormous challenges in terms of gathering data from disparate sources, normalizing that data against a consistent meter or consumer, valuing that data and making it actionable — actually buying media and accessing customers based on that data. It’s a daunting challenge as not only are so many of the online channels producing critical data, but the offline channels are as well. All of that data, including offline data, can help address the online challenge. Helping advertisers solve that problem starts with dealing with media data, then CRM systems, in some cases, in-store data as well. What the focus needs to be on is normalizing data across all of an advertiser’s media, CRM and in-store data. So that means joining up all of this data and matching it with a shopper database in an anonymous way, using what used to be personally identifiable information with anonymous cookie data. So then with a brand advertiser, we can shift the conversation from cost-per-click to “did someone actually go into the store and buy the product?”
How can we manage the tension between the quants on the one hand and the creatives on the other, as brands are attempting to manage an ad tech landscape that seems to be shifting heavily towards the data side?
I think there is a tension. When you look back at the ’50s, media people were regulated to thinking about where to place the ad; it was all about the placement. Now it is more about targeting and data, making sure that the right ad is shown to the right person at the right time. There can be a happy marriage, though, but I don’t think we are at that point yet. Better data actually makes better creative. But there’s a place for the media people and the creatives, but the problems are different. You’re trying to customize perhaps hundreds of thousands of ads based on data rather than trying to create the appropriate brand campaign. We work very closely with the creative agencies to deliver the right creative messages based on the data, but I think the days of leading with the big idea and then deciding the best way to deliver that idea, however, are over.
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