blog.collarity.com

Yesterday, John Dvorak wrote a tongue-in-cheek PC Mag article (Why Microsoft Named Its Search Engine Bing) about Microsoft’s new search engine, Bing, in advance of its expected unveiling sometime this week. While John poked some fun with possible b-i-n-g acronyms, he included some very kind words regarding Collarity’s search approach.

My advice to the company [Microsoft] is to try to understand what’s going on at Collarity, where it’s easy to see what a new idea for search is all about. I’m actually kind of surprised that one of the big three hasn’t already made Collarity’s developers an offer they could not refuse. Maybe none of these guys are paying attention.

We hope Microsoft’s new search product is successful. Most of all, we are happy to be included among the list of innovative search technologies to pay attention to. Collarity demonstrates, every minute, that there’s room for interest-driven relevancy to improve search and ad targeting The proof comes through the increased web visitor satisfaction and monetization levels that our web publishers see.

In some ways, we are fortunate to listen to many large publishers who are evolving quickly and seek the highest CPMs on their sites. We all know that online revenues and sell-through rates are crashing, and haven’t seen the recession bottom out yet. Recently in MediaPost one columnist wanted publishers to change their habits, in part by throwing out clickthrough rates (CTRs) to measure success.

There’s plenty of hand-wringing about how to appeal to the brand advertisers but we’re here to defend the humble clickthrough rate. We have no quarrels that brand impact is most important, but these ratios are one of the drivers that describes engagement online. Clickthroughs are certainly imperfect, but need to stay in the mix.

• For all tried-and-true brand marketers, this is a return to causal analysis. Since the old days, consumer packaged goods companies have studied all the influences on their product volumes – including price changes, product extensions, in-store tactics, media spends, and other marketplace activities. While there’s a data tsunami, there’s no doubt that branders press different marketing levers based on market share and sales trends.
• Meanwhile, brand recognition has always mattered for all media buys. Online ad sales have been growing so quickly that the focus had been on the media spending line, and how to make banners and other units an efficient reach/frequency spend. It’s true that all media vie for the ad dollars of these big spenders, and off-line media have been running their awareness tests for decades. Of course, awareness is an important factor but not literally the end-game.

Things are different online. The point is that publishers have a terrific opportunity to target dynamically in ways the other media could only dream of. Thus response rates, as measured by CTRs, are an imperfect yet valid tracking mechanism – and ultimately a causal factor that contributes to brand awareness.

It’s therefore a true head-scratcher when media cognoscenti say that CPM advertisers should belittle and ignore CTRs. Do you think the branders ignore what they are doing elsewhere, like spending money on an end-aisle display and ignoring whether that influences sales? Of course not.

What’s heartening is that the online CPM ads can be measure by more than impressions delivered to “the right places” where you think targeted audiences live. Online capabilities to target based on site content and interests associated with the visitors is a gold mine – and can be practically measured by clicks or time spent online. The humble clickthrough rate isn’t fancy, but let’s keep it in our tool chest for now.

As we know, Interest-Based Targeting can and does work, if it is applied correctly. Unfortunately, the term behavioral targeting - also known as BT - was abused over time and it’s good that Google came along with a refreshing definition.

There have previously been two schools of ad targeting, followed by advertising networks:

• Contextual: Based on the content shown on a page, how it’s been tagged by publishers or how it’s scraped by the ad network, the ads are targeted on the fly to match this content. If you are reading about Turkey, the country, then you might see an appropriate Istanbul travel ad right along with a turkey recipe.

• Behavioral: Based on how publishers pre-define categories related to their site content. While simplified, if a site is about autos and in the network, an individual may be tagged and then see an auto ad while visiting an unrelated music destination on the network. Interests take precedence over the current behaviors or content.

So it’s icing on the cake to see Google jump on the interest bandwagon, which attempts to merge practices from the two schools (see Google video). Google will rely on pre-set categories and individual preferences and then deliver Interest-Based Targeted ads. It may solve the “turkey recipe shown with Turkey the country” matter. The question is whether this is really a step forward or just BT we have known for years. Is Interest-Based Targeting the same old BT, but in the hands of a larger or better machine?

At Collarity, we have always applauded harnessing of interests, and know that it’s important to understand what visitors surf collectively as a basis of ads and content targeting. While we place ads in front of individuals, Collarity is literally targeting to their interest groups rather than individual people. We have developed a platform that targets advertising based on anonymous users’ interests.

We rely on anonymous stats and dynamic segmentation of users not only to preserve and maintain a high privacy level but also because we have discovered that it’s more effective. Collarity doesn’t succeed by following anyone around the web or across sites - instead we look at the interests of segments on the publisher’s site, to better cater to their user interests.

It’s no secret that web publishers want to improve visitor loyalty by appealing to their varied interests. Along with their own content and features, larger publishers often include vertical content related to employment, weather or other categories from external suppliers – which are all monetized in their domains.

Now there’s demand for socially-created content as well. According to a recent WSJ article , niche companies are arriving on the scene to act as aggregators, and they have the ability to curate the content, blogs and communities that appeal to specific audiences. Andrew Braccia, from Accell Partners, supports these vertical players and claims that “three to five years from now, people will no longer be drawing a distinction between traditional forms of publishing and what we know as blogs today.”

Vertical content discovery may be important, but these niche publishers can’t make it alone because they would be challenged by low impressions and thus can’t deliver the right reach or frequency to advertisers. They turn to the bigger publishers but in a new content-sharing ecosystem, where ads can be targeted even if the content is “social” in nature.

While traditional licensing arrangements seem to be a thing of the past, it’s not clear that publishers will embrace content without having a very clear revenue path and upside. We think that large publishers must be smart about their content and placements, without over-exposing it or putting into a some lost corner of their sites. After all, this socially-created content won’t be unique or proprietary to a specific publisher.

The typical ad targeting approaches are thrown into disarray, with social or super-vertical content. Large publishers might already have a well-developed advertiser list that could be put off or otherwise feel the content isn’t what they expected. Put another way, ads that would be most appropriate for this niche content can’t be ignored either.

We feel that advertising needs to be re-framed in this cross-fertilized environment – and operate based on the visitors interests makes the most sense rather than pre-defining the domain targets. It’s not the traditional behavioral approach that works best here, but a careful cultivation of the content and interactions to drive targeted advertising.

Of course, Collarity is quite interested in the trend because we have been delivering these cross-domain and intra-domain content and recommendations, based on our collaborative filtering of site visitors. We are already working on these kinds of deliveries and seeing CPM boosts, and know that it’s possible to monetize well beyond the “category” targeting approaches typically used today.

When the world economy serves up lemons — you make lemonade, right? As cliche as that sounds, there are some aspects of that classic proverb to pay attention to. It’s important for web publishers to make the best of their existing website traffic when marketing budgets are about to be slashed.

The contracting economy dominated hallway and panel discussions during two recent industry events (Digital Hollywood and ad:tech ny) that Collarity spoke at. Michael Learmouth at AdAge reported one informal survey predicting digital-marketing budgets will be down 10% to 20% in 2009. So, how can publishers squeeze the most money out of their existing site audience in the middle of the current economic storm? Here are a few thoughts:

• Listen to Your Customers - adopt tools and processes that allow you to understand the content and advertising most favored by your most important online audience segments.
• Make Decisions Based on Data - invest in tools that help manage resources based on quantitative success metrics, instead of qualitative guesses.
• Leverage Pay-for-Success Business Models - invest in technology that doesn’t hit your expense budget until it’s delivered a clear ROI.

Collarity helps publishers harness every website interaction to optimize website ad revenue during uncertain economic times.

Levy Cohen, Collarity CEO, will be joining one of the upcoming Digital Hollywood Fall reinventing advertising panels of industry experts to discuss Advertising Accountability: Metrics and Analytics around Video, Social Media, P2P and User Generated Media. The focus is on advertising data analytics and measurability in a world of new media.

Collarity creates a new data dimension, which we call communities, also known as site audience segments. These are simply clusters of anonymous users with common interests, along with the content and ads they like. We measure the interaction of a site’s communities with the site’s content (videos they watch, searches they make, etc) and the interaction of communities with the site’s advertising. From this data we create a foundation of behavioral site knowledge.

Our platform is a learning system that establishes an implicit feedback loop between anonymous users and content/ads. For any given page or video on a publisher’s site, Collarity determines the communities most highly associated with it. Once that hierarchy is understood, Collarity can recommend the most likely “next step” for the user looking for similar content and which advertising the user would most likely respond positively to. Publishers are able to automatically serve content recommendations and ads which maximize website revenue.

The session will be held at the Loews Santa Monica Beach Hotel on Monday, October 27th from 3:45 PM to 5:00 PM. Levy will be presenting with Erin Hunter, EVP, comScore, Inc., Ken Papagan, President & Chief Strategy Officer, Rentrak Corporation, Charley Shoemaker, Director of Video Measurement Products, Nielsen Online, Konrad Feldman, co-founder & CEO, Quantcast, and Thomas Ellsworth, CEO, GoTV Networks. Mark Ghuneim, CEO, Wiredset, will be moderating the session.

Since first launching Collarity in November of 2006, we’ve conducted hundreds of press interviews. Invariably, the phrase “implicit data” or “implicit behavior” comes up during these discussions as part of the language describing Collarity’s technology or value proposition. The conversation usually goes something like this:

Collarity helps Web publishers create a more positive experience for their web visitors by interpreting “implicit interactions with content and ads” (searching, browsing, ad clicking, etc.) and using the statistical data related to these activities to recommend additional content and to serve more useful advertising.

In order to serve customers more effectively, in any business situation, it’s good to have an idea of what people are looking for — their interests, tastes and preferences. You can ask them directly for “explicit feedback”, but many people have a difficult time articulating how you can help them and it often puts them in an uncomfortable situation. The alternative is to pay attention to what web visitors are paying attention to — their implicit behavioral cues. Web publishers can use this implicit data to avoid starting at square zero when engaging their customers.

We’ve struggled with the term implicit — people don’t like it. It usually slows the conversation down. It often triggers bewildered looks and, even after we explain it, we’re not always sure our explanation is understood.

But now it looks like maybe we won’t have to come up with an alternative phrase. The world, at least in Silicon Valley, is beginning to adopt implicit into its native lexicon.

Last night the Churchill Club, “Silicon Valley’s premier business and technology forum”, held their annual “Top 10 Tech Trends” event — an attempt to predict where technology will take us next. Moderated by Tony Perkins, five of the valleys most prominent venture capitalists (Steve Jurvetson, Vinod Khosla, Josh Kopelman, Roger McNamee, Joe Schoendorf) each weighed in with a number of trend directions. As an added bonus, the audience of about 300 people was allowed to vote “thumbs up” or “thumbs” down with each of the top 10 trend predictions.

So, what was the number one trend that the audience supported? With ninety-five percent of the crowd supporting, it was “the rise of the implicit Internet” and the use of implicit data which was postulated by Josh Kopelman. You can read various accounts of the discussion on VentureBeat, Barron’s, and Kopelman’s blog.

We’re honored to be invited by Charles Knight and the good folks over at AltSearchEngines and ReadWriteWeb to participate in their pre-web-2.0-expo AltSearchEngines Get Together on Monday, April 21 in San Francisco. We’ll be contributing to the insightful discussion during the “User’s First: Give them WHAT they want, the WAY they want (and need)” panel along with HealthPricer, Spock, SurfCanyon, and thefind.com. The panel will focus on ways to deliver a more positive experience for web visitors who need information from a website.

Louise Story wrote a very interesting article in the New York Times this week (To Aim Ads, Web is Keeping Closer Eye on You) about the growing trend of using people’s past online behavior to target them with content and ads. The article infers that the sun may have already set on the anonymous Web 1.0 “On the Internet, nobody knows your a dog” world (Peter Steiner’s iconic New Yorker cartoon), as large Web companies vacuum up behavioral breadcrumbs, appending an ever growing dossier on each of us in an attempt to guess our next move. John Battelle noted the article (That Old Database of Intentions, It Be Growin’), as did David Kaplan (More Behavioral Targeting Than Even Savvy Users Might Expect: Study) at paidcontent.org.

Collarity believes that behavioral data can be applied anonymously, in a way that does not diminish personal privacy. Collarity doesn’t build individual behavior profiles (unless a person pro actively opts-in to this personalization level — normally a very small percentage), which is the main concern of the article. We also don’t track or store IP addresses. Finally, the information we collect is “intra-site” visitor data (we don’t track people moving around the Internet) which is held privately for the exclusive use of our web publisher customers.

Rather than creating person-specific records, Collarity uses data related to people interacting with site content and ads to form groups of anonymous like-minded visitors who are interested in specific subjects or topics. The activity within these implicit attention communities (could be 2, could be 200 on a site) create the headwaters of what we call behavioral relevance. Behavioral relevance is then used as the unified intelligence resource to generate more relevant site search results, provide recommendations (”users who liked this, also liked this”), and to serve advertising that these specific visitor segments respond to most often.

Collarity uses behavioral data (content searching, browsing, ad clicking) more like votes from natural site constituencies. We focus more on what the community-specific vote tallies tell us, rather than the individual voting record or profile of a given community member.

So, at the end of the day, Collarity doesn’t need to know that I’m a dog to be effective. There is no individual targetting of me as a dog or any data element that labels me as a dog. However, if Collarity determines that my behavior correlates with what it understands to be “dog-like” it may harness the knowledge of my clicks to identify which site content is most interesting to dogs or to identify which ads might be most useful for dogs. My behavior may be used, in essence, to normalize content findability and ad receptiveness for other like-minded dogs that arrive on the site after me.

We will be highlighting our video optimization abilities that have provided millions of web visitors with improved methods to search and discover video and improved monetization for media web publishers. Our customers, including FOX TV stations and V-me media cable network, have been able to successfully tap into the anonymous behavioral patterns of their entire website audience rather than a small minority willing to tag and create metadata. Collarity Compass services provide an effective platform for targeting both video content and advertising.

About Future TV Show:

• Web Site:http://www.thefuturetvshow.com/
• Location: Marriot Marquis, Time Square, New York City.
• Dates: January 22nd – 23rd.