THE COMPLETE COLLECTION / WTF: the Complete Collection 2015 02

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WTF THE COMPLETE COLLECTION / WTF: The Complete Collection 2015 02

Table of contents

03 Introduction 91 WTF is ad blocking?

04 WTF is programmatic? 106 WTF is the digital marketing funnel?

37 WTF is native advertising?

62 WTF is the marketing cloud? / WTF: The Complete Collection 2015 03

Introduction

In 2015 we set out with a singular goal: to demystify the murkiest concepts in the marketing and advertising industry. What followed was a year spent trawling through jargon-ridden thought pieces, not-quite-white papers, and more listicles than you could, well, list. The result? A series of guides written with insight from industry leaders and presented in an easily digestible, no-nonsense style.

We started strong with what is arguably the single most puzzling phenomenon in the industry: programmatic. Next, we asked ourselves: WTF is native advertising? Shortly after hacking our way out of the native advertising weeds, we found ourselves with our heads in the clouds – the marketing cloud, specifically.

After that marathon, we were ready for some quick sprints. In the second half of 2015 we decided to drill down into some more granular topics: ad blocking and the digital marketing funnel. For the ad blocking issue, we asked: who is to blame? Who is benefiting? And who, if anyone, has a solution? Finally, we plunged into the funnel. From the social platforms-du-jour to the perennial classics of coupon codes and thank you emails, we left no stone unturned.

At the end of it all, we found ourselves rich with primary research, a diverse array of opinions and five very handy guides that explain just exactly WTF happened in marketing in 2015.

Without further ado, we present WTF: The Complete Collection 2015. SPONSORED BY

IS PROGRAMMATIC? Table of Contents

3 Introduction 9 The Programmatic Frontier 10 Premium Programmatic 4 Programmatic Advertising In 11 Programmatic Creative 6 Easy Steps 12 Native Programmatic 13 Programmatic TV 5 3 Big Programmatic Problems 14 A Message from Marin Software 6 Viewability Beyond RTB: A Programmatic 7 Fraud Primer 8 Transparency 17 Glossary 3 / WTF IS PROGRAMMATIC? Introduction

Programmatic is no longer the new kid on the block. For more than five years, technology companies, brands and advertising agencies have been pulling digital ad buying into the automated era. Publishers were slow to get on board, but now they’re creating private marketplaces, doling out deal IDs and, in some cases, leading the charge on programmatic native.

And yet the landscape continues to confuse newbies and vets alike. Winter may be coming for ad tech (aka, consolidation is on the horizon), but the operators proliferate and the jargon multiplies. Which is why we’re updating this dictionary. Herein you’ll find an overview of how programmatic advertising is moving forward, what’s holding it back and an expanded glossary of terms.

DIGIDAY 4 / WTF IS PROGRAMMATIC?

Programmatic advertising is a bit like an osmotic membrane: Inventory and audience Programmatic Advertising data, insertion orders and digital ads flow back and forth fluidly. In fact, the IAB says programmatic allows for digital ad inventory to in 6 Easy Steps be offered, bid on and fulfilled faster than you can blink your eyes. Here’s how it works. 6

Agency Trading Desk

Server Server

Advertiser 2 3 Publisher

DSP Ad Exchange SSP

1 4

DMP DMP

1. An advertiser creates 2. Then it uses that profile 3. The ad exchange 4. Once a match is found, 5. When a price is 6. Alternatively, both a profile based off to supply an inventory matches that request bidding begins. Using agreed on, the ads are parties can go through of demographic, request via a demand- to available ad space any of a variety of supplied through the an agency trading desk, contextual or behavioral side platform (DSP) to provided by publisher bidding mechanisms, above chain from the but the mechanisms are data via its data an ad exchange. supply-side platforms both parties arrive at advertiser’s server to the largely the same. management platform (SSP) and profiles crafted an agreed upon cost publisher’s server until (DMP). by publisher DMP using per thousand (CPM) for they ultimately appear its own first party data. those ad impressions. on the publisher’s site (hopefully) in front of the intended consumers.

DIGIDAY 5 / WTF IS PROGRAMMATIC?

3 Big Programmatic Problems Like any disruptive phenomenon that drags an industry into the future by the scruff of its neck, programmatic brings some challenges with it. These are the Big Three:

DIGIDAY 1 2 3 6 / WTF IS PROGRAMMATIC? 3 Big Programmatic Problems Viewability

Talk about a mess: half of the online ads that sell programmatically are never seen by their intended audiences. Sometimes the problem is that an ad doesn’t load right or is badly situated on the browser screen. Other times ads run on sites where no one’s actually intended to see them in the first place. (File that one under “fraud” – which we’ll get to below.)

This sort of thing makes steam blast out of advertisers’ ears. As an executive at a leading agency put it, “An ad that’s not seen is not worth less. It’s worth zero. Zero.” You can imagine how that went over with publishers. They counter that, given the technical realities, expecting 100 percent viewability is unreasonable. The president of the Interactive Advertising Bureau (IAB) himself has declared that 70 percent viewability is what advertisers should expect. But as more than one wag has joked, what kind of auto industry group would proclaim that new cars should start only 70 percent of the time?

The lack of clear standards in the industry doesn’t help. The Media Rating Council proclaims that an ad has to be 50 percent viewable for one second in order to count as viewable -- a mandate that does more to underline the viewability problem than to resolve it. Better standards would help. But the fear lingers that, if half of the industry’s ad inventory simply doesn’t work, FURTHER READING something in the industry’s business model just might have to give.

• WTF is Viewability?

• Havas Media: Viewability standards are ‘kind of a joke’

• Viewability has a vendor confusion problem

DIGIDAY 7 / WTF IS PROGRAMMATIC? 3 Big Programmatic Problems Fraud

Anywhere from 30 to 60 percent of online ad impressions are fake. Meanwhile, 36 percent of all web traffic is phony, generated by botnets rigged to sucker advertisers into buying shady inventory on phantom sites.

The problem has to do with programmatic’s complexity. It’s an environment where middlemen proliferate like germs at your kid’s pre-school and plausible deniability is an operating principle. There’s also the basic fact that programmatic is, after all, programmatic. As one high-up media player has wearily pointed out, “Machines don’t know better.”

Humans can potentially know better. But fraudsters have on their side the fact that penetrating the programmatic mysteries is a chore that can reduce even the relatively tech-savvy layman into a hyperventilating wreck. They also have on their side the depressing fact that online scamming is so easy. Any crook with a website can rig himself a botnet. The solution? There isn’t a complete one, ultimately. Crime will always be with us. But industry transparency could go a long way toward controlling it.

FURTHER READING

• WTF is programmatic TV advertising?

• 5 things brands need to know about programmatic TV

• MagnaGlobal ventures further into programmatic TV

DIGIDAY 14 / WTF IS PROGRAMMATIC? A MESSAGE FROM MARIN SOFTWARE Beyond RTB: A Programmatic Primer

Real-time bidding (RTB) has driven much of the programmatic growth thus far. But as audience marketing strategies mature, advertisers are increasingly looking beyond RTB and into different programmatic channels.

DIGIDAY 15 / WTF IS PROGRAMMATIC? Beyond RTB: A Programmatic Primer

Fixed-Priced Programmatic This programmatic categorization is important, because it often defines what ads are delivered As the name indicates, this method allows publishers to set the price before the ad is bought. There are two types of fixed-priced programmatic: with what priority. So, on a website, an ad may be displayed following the priority below: 1. Automated Guaranteed: Also known as programmatic direct, refers to fixed-price, reserved inventory that’s negotiated directly between the advertiser and publisher. It’s the programmatic ad type that’s most similar to old school, people-driven ad buying, except with automated guaranteed, the RFP and campaign routing process is automated,and Ads bought via automated guaranteed receive the the deals are negotiated directly through API calls. highest priority and typically get the best placements. 2. Unreserved Fixed Rate: Also called preferred deals,is fixed-price, unreserved ad inventory. In this scenario, publishers will make blocks of inventory available on the ad exchange for advertisers to buy directly without having to fight for each impression in a real-time Any inventory that isn’t bought through automated auction. guaranteed deals can then be made available to advertisers via preferred deals.

Auction-Based Programmatic

Any inventory that isn’t sold at a pre-negotiated price Auction-based programmatic is inventory that’s available for advertisers to bid on will often find its way into the auction environment. in a real-time auction. Since each impression is bought and sold individually, all auction-based inventory is unreserved. Like fixed-price programmatic, there are two types of auction-based programmatic: Publishers may choose to make the ad inventory Invitation Only Auction: available within private marketplaces first, in order Also known as as private marketplaces or private auctions, ad inventory is sold in a to try to wrangle as much value as possible from private real-time auction. Publishers have control over the participating advertisers their ad inventory. by setting whitelists or blacklists. Advertisers like private marketplace deals because it allows them to take more control over where their ads run.

Real-Time Bidding: And finally, any inventory that hasn’t sold RTB can be a confusing term, because it’s both a programmatic ad format and through the above channels could be a transactional method. It’d be more accurate to call RTB an “open auction” made available in the open auction to any because,it refers to ads that are sold in an auction where any advertiser can bid. interested advertiser.

DIGIDAY

17 / WTF IS PROGRAMMATIC?

Glossary ABC 18 / WTF IS PROGRAMMATIC? Glossary A

A technique by which ads are inserted into webpages without Addressable TV See: programmatic TV. Ad Injection the permission of those pages’ owners. Ad injection happens when a web user downloads and installs a browser exten- An ad exchange is a digital marketplace that enables Ad Exchange sion or app that’s bundled with software that quietly injects advertisers and publishers to buy and sell advertising space, unwanted ads into his browser. Advertisers shell out affiliate often through real-time auctions. They’re most often used to fees to that software’s developers every time a user clicks sell display, video and mobile ad inventory. an injected ad; the site owner doesn’t see a dime. When Basically, an ad exchange is just a big pool of ad impressions. people get the vapors about “transparency” and “fraud” in Publishers tip their ad impressions into the pool hoping the glorious new world of programmatic, this is part of what someone will buy them. Buyers then pick which impressions they’re worried about. they wish to purchase using technologies like demand-side platforms. Those decisions are often made in real time based These are in-agency teams that execute online media buying on information such as the previous behavior of the user an ad Agency Trading as a managed service. All of the major holding companies is being served to, time of day, device type, ad position and Desk have agency trading desks — Havas has Adnetik, Omnicom more. Exchanges enable advertisers to easily buy ads across a has Accuen, WPP has Xaxis, etc. Their goal is to execute range of sites at once, as opposed to negotiating buys directly buys in such a way that recaptures some of the markup costs with specific publishers. associated with middlemen like ad networks, for their clients and themselves. But as more media is transacted program- When an agency buys media for clients before the clients pay Advertising matically, the long-term future of the centralized trading desk Arbitrage them to do so, adds something to it (like innovative analytics, model could hang in the balance. Agency desks may tout say), and then turns around and sells it at a higher price. It’s a data and technology expertise and the ability to optimize, but money-making play for agencies, and one that’s attracted a so do programmatic champions. Maybe the robots really are fair bit of criticism from those who say it’s a conflict of interest. coming for you. The critics say that agencies are supposed to offer their clients unbiased advice about what inventory to buy – and that agencies can’t do that if they own that inventory themselves.

DIGIDAY 19 / WTF IS PROGRAMMATIC? Glossary Ag–B

The whole tricky issue of how agencies spend client dollars. A transparent image that’s 1x1 pixels in size that third-party Agency Beacon data collectors drop on a website and in emails to track user Transparency When some agencies secretly take kickbacks from publishers in return for flowing ad-buying dollars to those publishers, behavior. Basically, beacons are the invisible eyes that freak that’s a transparency issue. The issue is especially pressing out conspiracy theorists. Among the information beacons now, when all that new programmatic tech is adding another retrieve are IP address, browser type, time on site and previ- dollop of mud to waters that were Harlem River-level murky to ously collected cookie information. start with. The programmatic system tends to lump together cost of media, cost of staff and cost of systems. When it’s all Short for “web robot” or “Internet robot.” Bots are just soft- Bot boxed together like that, clients don’t know the cost of each ware applications that perform simple, repetitive tasks over element, and don’t know exactly what they’re paying for. the Internet. They have their positive uses, but mostly they’ve got a nasty reputation owing to their widespread use for Remember that time your elementary school teacher told you malicious purposes, such as click-fraud schemes. Sleazy adver- Algorithm to write down the steps for making a peanut butter and jelly tisers might set up bots to endlessly click on ads, thus driving sandwich? You were writing an algorithm. It’s a set of instruc- up their own traffic numbers. Bots are one of the reasons that tions to do... something. These procedures can be highly fraud remains such a problem in programmatic. complex (with the use of conditional rules, for example), but the focus is usually on making a process more efficient and/or effective by including only essential steps. With the rise of ad tech, they’re most often encountered in this industry in the code that makes decisions to buy, sell and serve ads.

A company that connects websites that want to sell adver- Ad Network tising, then aggregates that inventory in a way that appeals to advertisers, usually via programmatic exchanges. Tradition- ally, ad networks are all about audience reach, rather than premium context, though you can find some that aim for both.

DIGIDAY 20 / WTF IS PROGRAMMATIC? Glossary C–Co

Data about (yep) the contexts in which consumers make their Click-Through Rate This is how you tell how successful your ads are in terms Contextual Data of driving traffic to a particular web location. It’s basically a buying decisions, and a potential gold mine for marketers, if percentage arrived at by dividing the number of times your ad they can use it right. The most common example of such data was clicked by the number of times it was seen. is weather data. Knowing that it’s going to rain on Memorial Day weekend, for instance, can make all the difference to a marketing team. Cancel the sno-cones. Go all in on umbrellas. A small, baked confection. Or, a piece of data that a website Cookie or third party stores in a user’s browser to fulfill a variety of The price of 1,000 impressions on a webpage. Publishers functions, from tracking browsing behavior to authenticating Cost Per user accounts (so you don’t have to log in every time you visit Thousand have accused programmatic advertising of driving down the Amazon). or CPM price of the CPMs because the open auction system primarily targets based on behavior, not context, a key selling point for For a long time, cookies were the dominant way to track premium publishers. Programmatic boosters, on the other users across sites from an advertising perspective. But with hand, call it a boon, because publishers are selling more the rise of mobile and the cookieless environment it presents, inventory via programmatic. marketers are searching for an alternative. In the meantime, it’s the dominant method by which publications and advertisers collect enough consumer information to target their programmatic advertising based on behavior profiles.

Another fraud scheme in a digital advertising ecosystem that Cookie Stuffing breeds them like a suburban lawn breeds ticks. Basically it’s a way of hijacking the affiliate marketing system that generates a living for digital publishers both big and small. Say a publisher’s signed on for Amazon’s affiliate system. That publisher gets paid every time his site drives a visitor over to Amazon. What the fraudster does is, via things like pop-ups, litter the visitor’s browser with cookies that give him – the fraudster – credit for the referral to Amazon. The fraudster gets paid. The original publisher gets screwed.

DIGIDAY 21 / WTF IS PROGRAMMATIC? Glossary Cr

Cross-device tracking describes the myriad ways platforms, Deterministic cross-device tracking is when publishers and Cross-Device Cross Device publishers and ad tech companies try to identify individual platforms ask their users to sign into their websites and apps Tracking Tracking, Internet users across smartphones, tablets and desktop Deterministic on every device they use. This allows digital media properties computers. The goal of cross-device tracking is to be able to to directly track their users across devices. Facebook and know that the person using smartphone X is the same person Twitter, for example, require users to sign in for both their who uses tablet Y and laptop Z, and then allow brands to desktop and mobile experiences, thus allowing them to offer retarget that person accordingly. precise retargeting capabilities across devices. It’s important because retargeting on mobile is essentially Probabilistic cross-device tracking is an inexact science impossible without it. Retargeting occurs when a brand Cross Device identifies a visitor to its website and subsequently serves an ad Tracking, carried out by ad tech companies. These companies aggre- to that consumer when they are browsing elsewhere. Since Probabilistic gate information about ads served on smartphones, tablets cookies don’t work on the mobile web, outside of a few apps, and desktops, and then use statistical models to infer who is it can be hard to track a consumer’s activity both within and using which device. It’s an incredibly complex process that across particular devices. And given the mind-boggling and requires troves of data to do well. Tapad, for instance, collects ever-growing number of mobile devices, platforms, publishers 250 billion distinct data points per month, including the IP and mobile operating systems, the problem is only becoming address, device type and app or web browser associated with more complex. various ads served. Over time, patterns emerge about how consumers move across devices. As the name indicates, probabilistic cross-device tracking is a well-informed estimate.

DIGIDAY 22 / WTF IS PROGRAMMATIC? Glossary D

In simple terms, a data management platform is a data This is data collected by website operators — publishers, Data Data (First-Party) e-commerce sites, brand homepages, etc. — about the Management warehouse. It can be used to house and manage any form of Platform information. For marketers, it’s most often used to manage actions their users take while on that site. Publishers can cookie IDs and to generate audience segments, which are use their first party data to better sell their own inventory by subsequently used to target specific users with online ads. offering more precise targets, via a public or private exchange. Agencies, publishers and marketers all use DMPs. With This is first-party data that advertisers buy directly from the advertisers now buying media across a huge range of different Data (Second-Party) sites and through various middlemen, including demand-side source either through a DMP or a direct relationship with a platforms, ad networks and exchanges, DMPs can help tie all publisher or advertiser. that activity and data together in one centralized location and use it to help optimize future media buys and ad creative. It’s This is data aggregated from sources other than the website Data (Third-Party) all about better understanding customer information. operator, usually collected through cookies. It’s expensive and sometimes imprecise but there is a lot of it.

DIGIDAY 23 / WTF IS PROGRAMMATIC? Glossary Da–Do

When a third party like a brand or agency collects data about A demand-side platform is a piece of software used to Data Leakage Demand-Side a website’s audience and then uses that data without the Platform purchase advertising in an automated fashion. DSPs are most initial publisher’s permission. The third party gets its hands on often used by advertisers and agencies to help them buy that data by using things on other people’s websites called display, video, mobile and search ads. tracking pixels. Then it uses it to target consumers for its own DSPs help make the buying process cheaper and more purposes. Example: a luxury watch maker runs ads on GQ’s efficient by removing humans from parts of the equation, website. By pixelating GQ’s site it learns who’s clicking on along with the need to negotiate ad rates and to manually fax its ads. Next it stops paying GQ for premium ad space and ad insertion orders. targets those people itself, on the cheap. Perfectly legal – and They allow advertisers to buy impressions across a range of an inspiring example of market forces in action. Right? Yeah… publisher sites through ad exchanges while targeting specific not if you’re GQ. users based on information such as their location and their previous browsing behavior. The price of those impressions is The unique number assigned to an automated ad buy, used Deal ID often determined through real-time bidding and takes place in to match buyers and sellers individually, based on a variety of milliseconds as a user’s computer loads a webpage. criteria negotiated beforehand. The idea is to take the best of auction buying and merge it with direct. So, a publisher might An opt-out function available on browsers including Firefox, make a set of inventory available to premium advertisers over Do Not Track Chrome and Safari, signified by the header DNT, that allows their private exchange, then assign a deal ID to the package in consumers to disable data collection by advertisers and question. Those advertisers bid on the package, commanding other third parties by inserting the header “DNT1.” Currently, what some say is three times the rate of an open auction. the industry is self-regulating DNT efforts. However, privacy Detractors claim deal ID is flawed because it’s still trying to advocates like the Electronic Frontier Foundation want the retrofit the technology used for live auctions (RTB) with the Federal Trade Commission to step in. very different dynamics of direct buys. Do Not Track as a movement suffers from a lack of political momentum, but the industry seems to agree we should all be on our best behavior, so as not to stoke that fire. If enough consumers opted out, there would be less data to go around, making it harder to target ads and buy audiences programmatically.

DIGIDAY 24 / WTF IS PROGRAMMATIC? Glossary E–H

Like so many before it, the idol that was the click-through Oh boy, we could be here all day with this one. The problem is Engagement Fraud the sheer complexity of the programmatic ecosystem. There’s Metrics rate is in eclipse, the victim of a changing media ecosystem. Programmatic requires innovative new ways to measure a lot of underbrush out there, so the rats have a lot of places to campaign impact. So say hello to metrics that do a better job hide. The black-box model that characterizes programmatic at measuring engagement with your brand. How and how doesn’t help either: God knows what’s going on in there. Bots often are people interacting with it? What actions are they are drumming up phony traffic, hucksters are lying about their taking in response to it? Are they commenting on it, sharing it, visibility rates and the metrics are easy to game. pinning it, retweeting it, revining it? The programmatic gods require ever more raw data as tribute. Restricting the number of times a specific visitor to a website Frequency Capping sees a particular advertisement. You don’t want to drive a Also known as first dibs. When offering inventory to two viewer crazy and send him or her to Twitter to disparage your First Look or more buyer networks, the process usually takes a multi- brand. tiered approach, with the next network not being offered the inventory until the previous one in the series declines. The first The process by which personally identifiable information is Hashing buyer to be offered the inventory gets (drumroll please...) the disguised, usually by translating it into a string of numbers. first look. Hashed identifiers are currently being pursued as the best alternative to cookies on mobile devices. By creating a hashed A growingly popular way of measuring attribution, it stands ID, advertisers can identify individuals closely enough to target Fractional Attribution in distinction to last-click attribution and last-view attribution. ads programmatically across screens. Fractional recognizes that your decision to buy a pair of boots from, say, NineWest.com may have been influenced by a variety of factors, not just the ad that popped up on Facebook that you ended up clicking (last-click attribution) or the last ad you saw that impacted your decision (last-view attribution).

DIGIDAY 25 / WTF IS PROGRAMMATIC? GLOSSARY I

The number of times an ad appeared on any user’s screen. This is where the ads go. Impressions Inventory Keep in mind that impressions are not a count of how many Premium: unique individuals saw your ad. One person seeing the ad No one would argue that the front page of The New York twice from the same browser will count as two impressions. In Times isn’t premium. But otherwise this loosely defined term programmatic, most buys will include a minimum number of can mean different things to different people. For some, it’s impressions served. context — viewable ad space at a well-known national publication.

Insertion Order Remember the fax machine? The noisy little bastard that was For others it’s relevance to the category and for others it’s the office equivalent of nails on a chalkboard? Publisher sales all about the audience. But no one has ever been fired for people used to — and sometimes still do — use them to send buying class-A, above-the-fold, adjacent-to-relevant content insertion orders, aka sales orders for online inventory, back impressions on a top-100 trafficked site. and forth. In the programmatic world, insertion orders are Long-tail submitted via an online exchange, eliminating the screeching Ad inventory that won’t see huge audience numbers on a cross-town duet of dueling fax machines. single day, but instead accumulates reach over time. Prior to programmatic marketing these placements were too disparate to buy. Automated, they can be bundled together in such a way as to target very specific audiences.

DIGIDAY 26 / WTF IS PROGRAMMATIC? Glossary M–P

One possible way to target advertising in a cookieless mobile Archaically, a raised platform that someone can stand upon Mobile Platform when performing or speaking. In technology, the environment Fingerprinting world, mobile fingerprinting aims to track consumer movements across iOS and Android, apps and the mobile web. It in which a piece of software or code runs, usually including does so by stringing together pieces of mobile and web data hardware and an operating system. Nowadays, just about like screen size, time zone and software that a device registers everything calls itself a platform. Closest to meeting both each time it makes a connection. Detractors point to a lack of definitions are social media “platforms” like Facebook, accuracy and potential privacy implications, since users do not Pinterest and Twitter, which give voice to their millions of opt in. users, including publishers and advertisers, and operate in their own environment. Publishers also claim to be platforms- -for their journalists, readers and, of course, advertisers. Unlike private exchanges, which operate like exclusive night Open Ad Exchange clubs, you don’t need to know someone who knows someone Finally, programmatic technology companies also call to get access. Any agency, advertiser or publisher may partici- themselves platforms, though they are platforms entirely pate in trading in an open exchange. in the computing sense. Chances are, though, that your programmatic provider also has a Facebook page.

Personally identifiable information. This is what the conspiracy PII No seller wants to run the risk of accepting a bid that’s far theorists, and maybe your mother-in-law, are freaking out Price Floor about. It’s digital information that can be used, on its own or lower than the market price. As a result, the floor price is the together with other information, to track back actions to a lowest any bidder can offer for an impression package. specific, known individual. The highest price that any bidder can offer for an impression Marketers, bowing to privacy concerns, generally avoid using Price Ceiling such information, though sometimes programmatic targeting package. gives consumers another impression. PII might include credit card information, social security cards and login information. Private exchanges are used by publishers to more carefully Private Exchange control who can buy their inventory, and at what price. Instead of throwing its ad impressions out into an “open” exchange and letting anyone buy them, a publisher might instead wish to offer them to a handful of its favorite advertiser clients, or an agency it has a close relationship with. It might also wish to cut off access to networks and other third parties that could turn around and sell those ad impressions again. Also called a DIGIDAY private marketplace. 27 / WTF IS PROGRAMMATIC? Glossary Pr

“Programmatic” ad buying typically refers to the use of software to purchase Programmatic Ad Buying digital advertising, as opposed to the traditional process that involves RFPs, human negotiations and manual insertion orders. In other words, it’s using machines to buy ads. Before programmatic ad buying, digital ads were bought and sold by human ad buyers and salespeople, who are expensive and can be unreliable. Programmatic advertising technology promises to make the ad buying system more efficient, and therefore cheaper, by removing humans from the process wherever possible. Humans get sick, need to sleep and come to work hungover. Machines do not (yet). This doesn’t mean robots are replacing people, exactly, just the ones who performed more menial tasks, like sending insertion orders to publishers and dealing with ad tags. People are still needed to optimize campaigns and to plan strategies, at least until further notice. Programmatic technology will probably mean there are fewer ad buyers in the world, but it could also allow both marketers and sellers to spend more of their time planning sophisticated, customized campaigns instead of getting bogged down in bureaucracy. It is not the same as real-time bidding. It’s impossible to tell what portion of advertising is now traded programatically, but it’s definitely on the rise. Some agencies now say they’re eager to buy as much media as possible through programmatic channels, and some major brands have even built in-house teams to handle their programmatic ad buying as they spend more of their marketing budgets that way. At the moment, it’s mainly online ads that are traded programatically, but media companies and agencies are exploring ways to sell “traditional” media this way, including TV spots and out-of- home ads.

DIGIDAY 28 / WTF IS PROGRAMMATIC? Glossary Pre–Pro

The transaction of higher value inventory through the These ad buys secure specific inventory, run dates and reach Premium Programmatic Buy, Programmatic programmatic landscape. Remnant inventory fueled program- Guaranteed and often take place outside the bidding model. matic growth in the industry’s early days. But publishers have become more willing to trust the technology with their high- Also sometimes called remnant inventory, a non-guaranteed priced inventory, putting choice real estate up for automated Programmatic Buy, programmatic buy is most often executed programmatically sale. This arc is not dissimilar to the arc experienced by ad Non-Guaranteed through ad networks and exchanges (vs. directly with the networks at their inception, where the ecosystem was first publisher). Buys are negotiated based on audience targets populated by remnant traffic and gradually came to include a and volume rather than context. Ads can sometimes end up in premium element. wonky places — below the fold, next to two other display ads, or on CatChannel.com, for instance. Programmatic Using a programmatic dashboard, advertisers can test different versions of the same ad at scale, in order to A/B Testing An alliance between smaller publishers in which they pool determine which ad is more effective. Automating this Programmatic their programmatic ad inventory. The two key concepts here process in real time allows marketers to serve the ads that are Co-ops are “scale” and “security.” Publishers get the benefits of working best in a particular time and place and discard the programmatic buying at more scale than they could provide underperformers or test them elsewhere. on their own. Advertisers wary of programmatic get assurance that their messages will appear only on premium sites. Particu- Programmatic The ability to automatically gather data through demand- side, larly popular in Europe, where achieving scale is harder. Attribution data-marketing or programmatic marketing platforms, in order to learn which combination of marketing touch points is This process allows advertisers to mix and match art and copy achieving the best return on investment. The idea is when you Programmatic lines in an automated way, then serve them programmatically know which ads are working best with whom and when, you Creative in order to find the most effective ads for each segment. Of can move your budget around quickly to take advantage of it course, you still need to write copy and render art that is in real time. compelling for your audience, but the idea here is to save creative teams the time they would spend cutting-and-pasting so they can put more work into crafting those variations.

DIGIDAY 29 / WTF IS PROGRAMMATIC? Glossary Pro

A way to automate direct ad buys, usually executed by real, What a brand needs to have to make its programmatic Programmatic Proprietary Data Direct flesh-and-blood salespeople, for set campaigns. Program- initiatives successful: a pool of data that it alone possesses. As matic direct buys can involve guaranteed and non-guaranteed marketing types like to repeat when they get a little oiled up sales, but they’re still a tiny sliver of the programmatic market. in the hotel bar after the analytics seminar, “The general who knows something that his enemy doesn’t tends to win the More than any other facet of programmatic, this is the devel- battle.” Bonus marketing cliché: “Our great proprietary data is opment that makes sales folks panic — but it’s more likely that our competitive advantage.” a “Rise of the Machines” scenario will take down their ad-ops counterparts. Besides, right now there are too few buying systems available to send orders to programmatic guaranteed The hot new thing, the marriage of native advertising and Programmatic provider systems, which generally sit with publishers. So Native programmatic ad technology. Several industry players promise everyone just exhale for the time being, okay? to deliver native advertising programmatically, by matching readers’ interests and marketers’ goals. The success of programmatic native rests largely on publishers’ willingness to Just what you think it is, and it stands to revolutionize TV Programmatic TV open inventory to programmatic native platforms. Advertising advertising by turning it on its head. Traditionally marketers have relied on show ratings to determine desirable audiences for their ads. Now they’ll be able to use programmatic tech to reach a more specific subset of consumers. They won’t care what shows the ad runs on, as long as the target audience is watching. It’s been slow to happen, for one thing because TV is a conservative field with a robust business model (If it isn’t broken…). Programmatic TV remains the fat $70 billion per year holiday ham of the advertising world, and the thought of getting their hands on a chunk of it sets programmatic tech vendors drooling.

DIGIDAY 30 / WTF IS PROGRAMMATIC? Glossary R

Real-time bidding refers to the buying and selling of online ad impressions through Real-Time Bidding real-time auctions that occur in the time it takes a webpage to load. Those auctions are often facilitated by ad exchanges or supply-side platforms. As an ad impression loads in a user’s web browser, information about the page and the user is passed to an ad exchange, which auctions it off to the advertiser willing to pay the highest price. The winning bidder’s ad is then loaded into the webpage nearly instantly; the whole process takes just milliseconds to complete. Advertisers typically use demand-side platforms to help them decide which ad impressions to purchase and how much to bid on them based on a variety of factors, such as the sites they appear on and the previous behavior of the users loading them. For example, Zappos might recognize that a user has previously been on its site looking at a specific pair of shoes — and may therefore be prepared to pay more than Amazon or Best Buy to serve ads to him. The price of impressions is also determined in real time based on what buyers are willing to pay: hence the term “real-time bidding.” Real-time bidding is good for ad buyers, who no longer need to work directly with publishers or ad networks to negotiate ad prices and to traffic ads. Using exchanges and other ad tech, they can access a huge range of inventory across a wide range of sites, cherry-picking only the impressions they deem most valuable. Publishers, on the other hand, have been a bit more wary of RTB because they feel it enables advertisers to pay them less for their inventory. Increasingly, however, they’re becoming more comfortable as exchanges and supply-side platforms enable them to control the minimum prices at which their inventory is sold through price floors.

DIGIDAY 31 / WTF IS PROGRAMMATIC? Glossary Re–S

No need to canvass mall shoppers with a clipboard and A piece of software used to sell advertising in an automated Real-Time Supply-Side Focus Groups the promise of a $50 payout. Programmatic advertising Platform fashion. The yin to the DSPs’ yang, SSPs are most often used allows digital marketers to segment specific audiences and by online publishers to help them sell display, video and quickly test message variations at a statistically relevant scale. mobile ads and to maximize the prices which their impressions Marketers can then use this information to make budget and sell. strategy decisions within a single campaign “flight.” SSPs allow publishers to connect their inventory to multiple ad exchanges, DSPs and networks at once. As well as opening up Ahem, “non-premium” please! This is the inventory that exists inventory to a large range of potential buyers, SSPs also offer deep in the bowels of publisher sites, three or four clicks the ability for publishers to set “price floors.” Remnant Inventory away from the marquee and not wrapped up in pre-existing By opening up impressions to as many potential buyers deals. They’re typically standard units sold via exchange and as possible, often through real-time auctions, publishers using behavioral targeting or retargeting tactics. See also can maximize the revenues they receive for their inventory. “non-guaranteed.” Because of this, SSPs are sometimes referred to as yield- optimization platforms. Unlike behavioral targeting, retargeting focuses a consumer’s online actions (clicks, page visits) that are more directly Retargeting Afraid of overshooting the mark and massively outbidding tied to an incomplete conversion. You’ve looked at those Second Price Auction a competitor only to pay double what they were offering? jeans in Forever 21’s online catalog? You added them to Second price auctions avoid that risk by having the winner your shopping cart, but then left the site? Those ads are pay only one cent over their closest competitor’s final bid. going to follow you around the web and make you regret For example, if Buyer A bids $2 and Buyer B bids $1.50, not buying them. Best of all, they’re all served in real-time, Buyer A wins, but only pays $1.51. If two buyers bid the same programmatically. highest price, the winner is chosen randomly. This process helps maintain pricing efficiency within an automated RTB The revenue a publisher gets from selling a thousand ad marketplace. impressions on its site. Revenue Per Thousand Impressions (RPM)

DIGIDAY 32 / WTF IS PROGRAMMATIC? Glossary Se–W

The process of arranging the order in which you send a Viewability is an online advertising metric that aims to track Sequencing Viewability consumer a bunch of marketing content so as to best lead him only impressions that can actually be seen by users. For toward a purchase. For example, first you hit him with a display example, if an ad is loaded at the bottom of a webpage but a ad, then with a piece of branded content, then with a call to user doesn’t scroll down far enough to see it, that impression action – and so on. would not be deemed viewable. Viewability is designed to let advertisers pay only for the ads that users could possibly see. It’s another way for buyers to put pressure on sellers, and the Sometimes, the best way to know what consumers will do Targeting, IAB supports a switch. Behavioral or purchase next is to look at what they’ve done in the past. Behavioral targeting takes this to heart, analyzing your general online behaviors before deciding what ad to serve you in real There’s still a lack of consistency around what a “viewable Viewable time. Impression impression” actually is and what technology could measure its viewability. The IAB defines a “viewable” impression as one that’s at least 50 percent visible for at least one second, but Wondering why dog food ads are flanking the page whenever Targeting, vendors offering viewability solutions use various methods and you visit a pet adoption website? Think it’s a coincidence that Contextual technologies to establish whether impressions meet those there’s a banner for the newest bestseller on your go-to book criteria or not. As a result, the Media Ratings Council advises discussion community? Contextual targeting seeks to serve that it’s still too early to transact on viewable impressions until ads in a relevant context alongside relevant content. these discrepancies are understood and accounted for.

What the programmatic ecosystem needs a lot more Transparency A technique publishers use in programmatic to maximize of, according to its critics. The proliferation of data in Waterfalling both the pricing and sell-through rate of their inventory. Trying programmatic makes it opaque; so does the fact that, while to squeeze as much revenue out of each ad impression, you don’t really need a PhD from CalTech to understand how publishers work with the ad networks or supply-side plat- the ecosystem works, it doesn’t hurt. The lack of transparency forms that offer the highest rates first. Then they move onto makes it easier for bad actors to get up to their games (See those that offer lower rates, and so on until they’ve sold every “fraud”). It also makes it much harder for clients to figure out impression. Also called “daisy chaining.” just where and how their money’s being spent.

This is the RBI of ad tech geeks. Put simply, it’s the ratio of Win Rate submitted bids to the number of impressions actually won. It’s used as a barometer of efficiency for programmatic DIGIDAY marketplace technology. 33 / WTF IS PROGRAMMATIC?

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IS NATIVE ADVERTISING? Table of Contents

Introduction WTF is Native 3 14 Programmatic? Nomenclature The Native Ad 4 16 Triumvirate 5 Decision tree 17 The Ad Man 18 The Publisher Issues Still Plaguing 19 The Platform 6 Native Advertising Glossary 7 Scale 20 8 Metrics 10 Labelling 11 The Church/State Divide 12 Credibility 3 / WTF IS NATIVE ADVERTISING? Introduction

In 2013, native advertising galloped onto the scene like a masked hero, poised to hoist publishers atop a white horse, rescuing them from the twin menaces of programmatic advertising and sagging CPMs. But who’s really there when you peel back the mask?

Native advertising is a murky business. Ad executives may not consider it advertising. Editorial departments certainly don’t consider it editorial. Even among its practitioners there is debate — is it a format or is it a function? Publishers who have invested in the studio model position native advertising as the perfect storm of context, creative capital and digital strategy. For platforms, it may be the same old banner advertising refitted for the social stream.

Digiday created the WTF series to parse murky digital marketing concepts just like these. WTF is Native Advertising?

Keep reading to find out.....

DIGIDAY 4 / WTF IS NATIVE ADVERTISING? Nomenclature

Native advertising An advertising message designed Branded content Content created to promote a Content-recommendation widgets Another form to mimic the form and function of its environment brand’s products or values. Branded content can take of native advertising often used by publishers, these a variety of formats, not all of them technically “native.” appear to consumers most often at the bottom of a web Content marketing Any marketing messages that do Branded content placed on third-party publishing page with lines like “From around the web,” or “You not fit within traditional formats like TV and radio spots, sites or platforms can be considered native advertising, may also like.” print ads or banner messaging. Content marketing itself but if said content lives on a brand’s own site, it’s not spans a wide breadth and can include sponsored and Paid search listings Often overlooked as its own form really “native.” branded content (below) but is not always native. of native advertising, search engines’ first few results are Social in-stream advertising This form of social native usually paid advertisements marked “Ad.” Sponsored content Advertising created to mimic the can take many forms, all of which are designed for editorial content of a particular publishing site, often seamless inclusion in your social stream. Facebook’s created by an on-staff team called a content studio. sponsored posts, Twitter’s Promoted Tweets and Sponsored content is often used synonymously with Pinterest’s Promoted Pins all fall within this category. native advertising in industry conversations, but is really just one manifestation of native advertising.

DIGIDAY 5 / WTF IS NATIVE ADVERTISING? Native advertising is, very simply, an advertising message designed to mimic the form and function of its environment. It is, however, an umbrella term applied to and conflated with a wide variety of digital content. Use the handy chart below to Decision tree distinguish whether what you’re looking at is native advertising or not.

So you spot a piece of WAIT... content, but something SOMETHING’S doesn’t quite feel right... RIGHT AWAY! DIFFERENT? How long did it take to notice something was different?

Did you see it in NO your social feed? YES Is it confined to YES the right rail? NO

Is it claiming one NO of your friends YES “liked” it? Do you feel like YES you’re reading NO editorial content? Did a celebrity Does it fit a NO YES Instagram it? YES standard NO IAB format? But did an YES NO editor write it?

Did you find it on a YES NO That’s an ad. brand’s homepage? Looks like a paid promo. Just a normal, Or maybe LeBron James boring ad. really does love That doesn’t mean The Juice Spot. Is it trying to NO anything. Is it marked YES NO recommend YES as “sponsored?” You spotted the some content? content marketing! Or maybe the “brand journalism.” But it’s It’s a promoted platform not a native ad. ad. That’s social media Let’s give it the benefit for “paid post,” a kind of That’s a recirculation of the doubt and call it native ad. widget. Can’t fool you! “journalism.” Just don’t tell Yeah... your guess is the reporter that advertising Let’s call it “sponsored as good as mine at this still bankrolled it... content,” a native ad made point... Though it might for a publisher’s site. be a native portal...

DIGIDAY Issues Still Plaguing Native Advertising 12345 7 / WTF IS NATIVE ADVERTISING? ISSUES STILL PLAGUING NATIVE ADVERTISING Scale

Publishers are in a bit of a pickle. For those banking on It’s an in-house step toward native programmatic— the studio model, native advertising is analogous to the ad tech industry’s name for the automated custom content--a pricey, digital, if direct descendent distribution of content advertising. There’s no shortage of the advertorial. The New York Times, New York of technology companies vying for the opportunity Magazine, Rolling Stone, Gawker, Salon and Condé to change the sausage casing on traditional art and Nast have invested in their own studios. copy so they’ll work across Facebook, Twitter, Yahoo! and other platform publishers and ad exchanges. They boast teams of writers, creators and strategists Using some combination of programmatic ad buying, sometimes numbering in the dozens, all on hand to dynamic creative and cheerful (or utilitarian) content, create on-brand content custom for their precious, these companies claim they’re making content look particular audiences. But the problem with any artisanal native, even if it isn’t exactly custom. product is that it can only be made in small batches. Or, in industry parlance, native don’t scale.

Some publishers, like Hearst, aim to solve this problem by embracing a “platform mentality,” running native content across their networks. A recent video series for Revlon, for example, ran across Cosmopolitan.com, Elle.com and Mademoiselle.com. Others, like Vox, use technology to run the same content across their sites, but tailor the look of it to each environment.

DIGIDAY 8 / WTF IS NATIVE ADVERTISING? ISSUES STILL PLAGUING NATIVE ADVERTISING Metrics Definitions

Click-through This metric carries over from display advertising, where a user clicking on a banner ad is the primary measure of how enticing a particular message is. With native content, however, click-through rate is just part of the picture, providing marketers with a sense of how competitive their content is when measured against other content. However, taken on its own, click-through rates are insufficient.

Pageview The number of times a particular web page — in this case one carrying your native content — has been viewed. A metric more native to publisher environments than the simple click, which was engineered for straight-up advertising.

Unique pageview The number of unique visitors who have visited a particular page. This number can be lower than pageviews, as it does not count repeat visitors or multiple visitors viewing a page from the same device.

Remember pass-along readership? Ah, junior, sit back and let me tell you about a day Time on page The average number of minutes spent with a piece of when gas cost 99¢ and print publishers claimed that 2 1/2 readers saw every copy of content. This metric usually reflects the type of content or its complexity — in-depth reportage or text with video should reap a higher time on page their particular handheld product. Ad buyers believed them! And who knows, maybe than a simple infographic, for example. Either way, it’s a measure of how it was even true. The point is — the mighty “passalong” was an unknowable yet much time a viewer has spent with your content. conventionally believed “truth.” – Pro tip If you’ve enlisted some kind of amplification network and are consistently seeing time on page under a minute for any kind This golden media age died with the banner ad, the click through rate and the of content, you’ll want to work on optimizing with that partner, or dogged pursuit of ROI. While click-through rate may still apply to native ads like paid consider a new one. search, content recommendation and in-feed social, publishers have taken back Bounce rate The percent of visitors who view a particular piece of content, some ground with sponsored content. then leave a site. If your native ad placement is a portal to a piece of owned media, like your brand site, this is a useful way to see if you are engaging consumers enough to keep them beyond that first click.

DIGIDAY 9 / WTF IS NATIVE ADVERTISING? ISSUES STILL PLAGUING NATIVE ADVERTISING

Custom Metrics

Some publishers and tech providers are going further than baseline metrics, contextualizing what what matters to their organizations as a map to dictate custom metrics. As you’ll see below, there are a number of ways to spell success.

Social lift, BuzzFeed The not-so-new-kid on the block built its content strategy around what and why people are most likely to share, so naturally their success is determined by the frequency of social sharing. “Social lift” is determined by the multiple of traffic a given post gets from sharing.

Attention minutes, Upworthy You’ll never guess what they did now! As Upworthy doesn’t run banner ads, counting page views isn’t too useful. What they do care about is maximizing attention on important topics, so More and more, publishers are mitigating click through rates with time-based metrics “attention minutes” takes into account time on page, but also factors in things like which browser tab is open and mouse movements to determine like “attention minutes” and the even fuzzier “engagement.” It’s easy to see why how actively attentive a user is on their site. publishers are taking this tack. While an infinite supply of pageviews has eroded ad rates to an unsustainable level, attention is finite — and can therefore be sold at Velocity graph, Mashable Focuses on social sharing a’ la’ BuzzFeed, but uses early sharing patterns as a predictor of which content will catch on a premium. and, dare we say, go viral.

Ad buyers aren’t completely sold on this metric for traditional banners, but it has Content quality score, Sharethrough Sharethrough, an in-feed native ad company, introduced CQS as a way to analyze how various data points, some currency for content-heavy native placements. Content takes time to consume. like social sentiment and an ad’s relevance to current events, signal how Meanwhile, advertisers looking to tie native placements to sales, subscriptions and effectively a native ad resonates with people. This is contrary to other other conversions place calls-to-action, banners other clickable units around the metrics like time on page or completion rate, which look at how users interact with on-site content. high-concept stuff. Total time reading, Medium The distraction-free platform encourages its The ROI gods demand tribute. users to do one thing with their time: read. So the more time they spend doing it, the more successful Medium sees itself at doing its job. The site periodically records scroll positions, then cuts out pauses and interruptions (when you might’ve gone to walk the dog or taken a phone call) to create an aggregate number, defined as Total Time Reading, or TTR.

DIGIDAY 10 / WTF IS NATIVE ADVERTISING? ISSUES STILL PLAGUING NATIVE ADVERTISING Labelling

What’s in a name? A lot, apparently. While most In the U.S., the IAB has long held that there should be publications have settled on “sponsored content” as some disclosure to consumers that the content is an their choice euphemism for “this is paid for,” some ad, even if it doesn’t look or sound like one. The U.K.’s argue this wordplay is confusing to the reader. guidelines are more explicit, asking that publishers “provide consumers with prominently visible cues” The balance between clarity and subtlety is a tough that tell them when an article originated with or was one to strike. The New York Times and Buzzfeed, for produced on behalf of advertisers. The labeling can example, have repeatedly tweaked their labeling in include prominent brand logos, shaded boxes or an an effort to create good brand experiences while also entirely different font. It should also include wording giving readers clear signs they’re reading ads. The like “paid promotion” or “brought to you by.” Grey Lady most recently settled on “Paid Post,” while Buzzfeed is going with “Promoted by.” Facebook and Of course, you could always go Google’s route. They Twitter also favor some variation of “Promoted.” call their ads, uh, “Ads.”

DIGIDAY 11 / WTF IS NATIVE ADVERTISING? ISSUES STILL PLAGUING NATIVE ADVERTISING The Church / State Divide

Not so long ago, the idea of asking a journalist Mental Floss, one of the first to cop to having journos to create advertising for a publisher’s client was write ads, said it maintains editorial control of that absurd. If a journalist was to maintain impartiality content — and they’re not alone. The argument in their reporting, they couldn’t work directly for goes, having all writers under one departmental the advertising side of the building. That’s why room simply helps align the marketer’s message with copywriters were invented. the final product. Others say it’s a matter of subject matter: If Time Inc.’s gear editors create a gift guide For better or worse (we vote “worse’), this for Amazon, who cares? There’s only an issue when fundamental question of credibility is no longer the editorial in question has more heft. black-and-white. Media critic Jack Shafer had harsh words for Condé More and more, editorial staffers are being asked Nast. “By mixing the two forms — editorial content to craft sponsored content on behalf of advertisers. and advertising — Condé Nast is debasing the former Condé Nast, publisher of famous glossies like Vogue to the benefit of the latter,”he said. “This might not and GQ, announced in January that it would use its matter that much in their fashion magazines, where editorial staff to write for its newly launched branded there is little editorial independence to debase. But content arm. Ditto U.K. lifestyle magazine The the practice won’t improve Vanity Fair and The New Debrief, a Bauer Media title, and the Mail Online. Yorker, or Condé Nast’s other non-fashion titles.”

It’s worth noting that most publishers have created separate content studios, with separate staffs, sometimes helmed by former ournalists,j to craft that content.

DIGIDAY 12 / WTF IS NATIVE ADVERTISING? ISSUES STILL PLAGUING NATIVE ADVERTISING Credibility

Finally, there’s the issue of credibility. Publishers who much hand-wringing commenced among the push their luck may find themselves facing a backlash nation’s media watchdogs and pundits. Had The from their readers. But, as with native advertising Atlantic compromised its much-admired editorial itself, the issue of credibility is hard to lock down. standards? Had readers been deceived?

Take Buzzfeed, for example. Despite recent initiatives According to a survey by PBS’s MediaShift, nearly to produce long-form, investigative journalism, half of us are still “very concerned” about preserving Buzzfeed is still widely known for its unrelenting, objective professional journalism. The other half, not unrepentant lists of pop culture clickbait. At this so much. The trick is knowing which half level, what’s the qualitative difference between 11“ you’re addressing. Baby Animals Who Fell Asleep At ‘Lincoln” and For high-volume, low-calorie websites like Thought “16 Water Balloon Explosions That Will Blow Your Catalog and The Chive, no one cares if you’ve broken Mind,” as sponsored by Nestea? down the wall between ads and edit. But try that with The problem arises not for publishers promising 175 NPR listeners? Oh boy. That crowd is begging for an million churning uniques every month, as Buzzfeed excuse to write letters to the company ombudsman. does. It’s when advertisers want to reach, say, 50,000 discerning, intelligent, highly engaged readers. In 2013, when The Atlantic famously published a sponsored post on behalf of Scientology, media critics lost their minds. The item was pulled, and

DIGIDAY 13 / WTF IS NATIVE ADVERTISING?

DIGIDAY 14 / WTF IS NATIVE ADVERTISING?

A MESSAGE FROM D360 WTF is Native Programmatic?

You must be freaking out. The two biggest buzzwords in admartech have collided Wait, I thought native is an alternative to display? and created a super child of confusing awesomeness. Not quite. Publishers and platforms still need a way to surface advertising content. This sounds like an oxymoron. Native display ads are the in-feed, in-read, in-widget ads placed carefully around a website to appear as if they were as naturally occurring as the rest of the It’s not! Not only can native be delivered in custom ways, it can be delivered recommended content. Native display is most often used to promote sponsored programmatically. content, because hey, viral doesn’t always happen. First let us set two things straight: Programmatic is the buying and selling of Okay, so what is native programmatic? advertising on a real-time basis; and native is the act of inserting paid advertisements seamlessly into or around content so that it fits the form and function of other non- Native programmatic is buying, selling and serving of content-based advertising, paid content. using plumbing that looks incredibly similar to programmatic display. Simply put, advertisers are buying placements on publisher pages, and back-end technology Second, recognize that programmatic for display advertising is comparatively well renders those ads to look like they belong there. established to native programmatic. Since “native inventory” is brand new to the marketplace and can’t be contained to a simple shape like 300x250 or 728x90, we When a publisher sends an impression to a supply side provider, or SSP, a bid are working to standardize the dialogue between the buying and selling platforms. request is made inside of an exchange, where demand side platforms, or DSPs, can bid, win and ultimately return a creative for that impression. The difference in creative Third, understand that there are two sides of native. The first is content integration, delivery is what really separates native and display programmatic. Where display or, the art of weaving a brand into the content itself, weather it is Banana Republic’s trades in fixed sizes, native requires creative elements (headline, thumbnail, logo Instagram ad, New York Time’s Orange is the New Black sponsored editorial, etc.) to be uploaded and delivered individually so that it can assume the styling of the or Demand Media’s content marketing with Experian. The second is, essentially, surrounding destination. display advertising with an exceptional twist of creative delivery. In display programmatic, there are a number of widely-accepted standard ad formats and a large number of integrated buyers. This conformity allows DSP’s to see inventory across a variety of SSP exchanges, and thus for each buyer to implement their own bidding strategy, optimizing for various KPI and cookie matches.

DIGIDAY 15 / WTF IS NATIVE ADVERTISING?

Sooooo… how does it work for native ads? What if I’m a publisher?

In native programmatic, we still have a fair bit of work left before we reach parity with If you are debating where to list your native inventory, look at the rest of your ad stack display programmatic. There’s a lot of variety among ad formats, to-be-agreed-upon and sales process. protocols within those formats, SSPs that aren’t playing nice together, and buyers Here are five questions to ask: Where do my clients buy today? What are the fees and sellers that are just not on board yet. For those in the know, think back to when for using the SSP or DSP? Will the SSP monetize 100% of bid requests? Where does ad networks became ad exchanges before they became SSPs. It is an evolution of native programmatic fit in my ad stack priority? Can I use the platform to run direct access, uniformity and ultimately, consolidation. sold campaigns? Some native SSP exchanges do offer (or will soon offer) APIs for bidding on native So where are we going with this? ad inventory that allows multiple DSP bidders to connect. Other SSP exchanges are a little slower to adapt, and are instead opting to keep their hard fought publisher As the players in native develop their technology, integrations, formats and other inventory exclusive. In these cases, the company is both the SSP and DSP. A capabilities, the future is incredibly promising. Publishers and SSPs will conform to trading desk or buyer can thus only access the inventory via the platform’s campaign standards that buyers can easily adopt and integrate. Brands will continue to invest management tools and proprietary bidder. Hence, this is still programmatic native, in content as a medium, thus spending more on distribution programs and fueling but the algorithm powering the bidding strategy may be shifted away from the the growth of programmatic native. With increased volume will come advanced actual buyer. targeting solutions, and publisher’s first party audience data will be a cornerstone of delivering ROI for brands. So how does this affect buyers? Finally, let’s be responsible as publishers and maintain high quality native placements Buyers have to consider the components of their existing tech and strategy. Do you with a mission to deliver high quality advertiser content and thus value to our visitors. want to see the impressions in your system (if you have a “system,”) or do you want to essentially hire other companies to run your campaigns? Do you want to negotiate rates directly with publishers and use private marketplaces, or run across a variety of publishers and bid against the open auction? Each has their own merits, and your decision will likely follow the other tactical decisions made for other products.

DIGIDAY The Native Ad Triumvirate

Native advertising can’t exist without the complex relationship between three very distinct players. From creation to distribution, here’s where things come together. THE NATIVE AD TRIUMVIRATE 17 / WTF IS NATIVE ADVERTISING? The Ad Man

Advertising creatives are tired of the hype around native advertising. The digital industry’s newest shiny object sprung up largely without them, you see, and they’re jealous. “It’s not new. It’s not the next big thing. It certainly is not the answer,” wrote Todd Copilevitz, partner of digital strategy at JWT Atlanta. It’s so much less important he wrote, than “honing the craft of meaningful marketing campaigns… a short-term gain for minimal investment.” Copyranter Mark Duffy is even less forgiving, saying most native advertising belongs in one of two buckets: “Dumb or boring.”

You know what, though? They’re not wrong. At its worst, native advertising can be uninteresting schlock. It can be cheap and cheerful filler that aims to get a brand logo in front of an audience for 30 seconds or more. (Unlike the high art of Super Bowl ads, which historically have offered audiences a rich tableaux of trucks, twins and trained animals.)

There certainly is room for improvement among native ads. The medium is nascent, with brands only just beginning to consider it as part of their overall strategy and publishers still struggling to attract premium talent. Maybe one day Copyranter will find a job with one.

DIGIDAY THE NATIVE AD TRIUMVIRATE 18 / WTF IS NATIVE ADVERTISING? The Publisher

After decades of watching their revenue model and culture buckle under the digital shift, publishers are holding out hope in this newest revenue stream. Is it really new? Not really. Publishers have played host to lackluster advertorial for years, much to the Ad Men’s point.

But with first party data and back end metrics on their side, they offer something agencies don’t have — a complete view of their audience and a robust understanding of engagement with a campaign. And they come at it from a different point of view.

“The point of difference is that I’m an editorial person,” said Tiffanie Darke, creative content director for News UK, parent of The Sun, The Times and The Sunday Times, and formerly editor of The Sunday Times Style magazine. “We want [our point of difference] to be about the quality of the content.”

That’s all well and good, but when someone else is writing the check, how much say do publishers really have? And do they really want former reporters and editors at the helm of client services? That job requires swallowing a lot of the righteous indignation journalists are very good at.

DIGIDAY THE NATIVE AD TRIUMVIRATE 19 / WTF IS NATIVE ADVERTISING? The Platform

Marsha, Marsha, Marsha. You can almost hear platforms in the background, needling us about their place in the ecosystem. Native advertising is about more than sponsored content, the digital “it girl” cooed about by the vertical press.

According to James Aver, founder and CEO of Adzerk, “native advertising has a serious image problem,” in that it gets conflated with sponsored content all too often. It overlooks the importance of longstanding products like Google AdWords, a format native to Google’s search results.

Pinterest’s Promoted Pins, Twitter’s Promoted Tweets, Tumblr’s custom micro- sites and Facebook’s sponsored posts all contain very little “content,” but are still legitimately native advertising because they blend seamlessly into their surroundings.

If native advertising is more about look and feel than custom content, then platforms and publishers with scale are likely to embrace native programmatic. A variety of technology companies are looking for ways to reframe art and copy to blend into platform and publisher newsfeeds, emails and web pages. If it looks like native and it acts like native, it is native.

DIGIDAY Glossary ABC GLOSSARY 21 / WTF IS NATIVE ADVERTISING? A–Bo

AdChoices Developed by the Digital Advertising Alliance (a consortium of Applicance A set of standards, routines and protocols that explain how the advertising and marketing trade groups), the AdChoices icon Program a platform or software handles its data. Like an SDK, an API is appears on websites and banners to inform consumers that their Interface (API) typically opened up by a large company to encourage third preferences are being gathered by advertisers. The goal is to inform parties to integrate with them. For example, thanks to an API, consumers about online behavioral advertising, and to allow for LinkedIn members can sign into non-LinkedIn websites using their opting-out. At native advertising becomes more sophisticated, LinkedIn credentials. For native advertising, APIs are available to AdChoices will help marketers pair their content marketing with the help marketers glean more information about users — and thereby right audience. custom-tailor their offerings.

The original term for native advertising, now an outdated flag for ads The potential viewership and readership for any given campaign or Advertorial Audience Reach that ran alongside editorial content — and intentionally disguised placement. Note that reach is not a measure of actual results, but to resemble that editorial content. The term dates to the 1940s, rather the sum total of the possible audience. Reach can be defined when broadcasters packed television shows with “words from our by any number of terms, such as specific households in a certain sponsor” that were often read by the program’s stars or presenters. social demographic, or the number of viewers known to watch a certain TV show. Special URLs that include codes, IDs or usernames that identify Affiliate Links referrals, often for the purpose of collecting a finder’s fee. This A widely loathed option for embedded video. Marketers are the Autoplay winter, digital scrapbooking platform Pinterest made waves when it only people who like autoplay, which can increase views significantly banned affiliate link by pinners in order to consolidate commerce--its by playing a video without the user’s prompting. adding a “buy” button to promoted pins this week. These buttons will likely include affiliate links, which are on the whole though, The measurement of how many users read one web page, then Bounce Rate featured in more content marketing and native advertising, both as a leave the website without reading anything else. Native advertisers way to earn revenue and for tracking customer conversion. look at bounce rates to assess how well they’re matching surrounding editorial. A high bounce rate can suggest that the The process of enhancing an advertising campaign or a portion advertising carpet doesn’t match the editorial drapes, and that Amplification thereof. For instance, a brand awareness campaign can be amplified readers are put off by the disconnect. through strategic placements of native advertising in appropriate editorial venues.

DIGIDAY GLOSSARY 22 / WTF IS NATIVE ADVERTISING? Br–C

Brand Journalism The use of traditional journalism techniques to tell a brand’s story. #Content Loved by marketers, hated by journalists, “content” has become the catch-all term for anything that’s published. The hashtag “#content” Brand Lift Increased interaction with or awareness of a brand, as the result of an is often used on Twitter to negatively denote native advertising that’s advertising campaign. Like steak sauce slathered on a cheap cut of gone too far. meat, citing “brand lift” as a measurement of success can hide many marketing sins because it’s largely unmeasurable. Any marketing messages that do not fit within traditional formats Content Marketing like TV and radio spots, print ads or banner messaging. Content Another term that’s essentially synonymous with native advertising, marketing itself spans a wide breadth and can include sponsored Branded Content only it’s not quite. Branded content is increasingly coming to denote and branded content (below) but is not always native. publishing enterprises — not just individual articles — that push forward a brand’s message in some manner. GE’s Txchnologist, Essentially, an in-house marketing agency housed within a Content Studio sponsored by GE or Intel’s iQ are two such examples of branded publication and tasked with creating native advertising that aligns content that stand on their own and are therefore not “native” to any as closely as possible with the organic editorial content. Agencies other established publication. and brands are also launching their own internal content studios to differentiate this output from traditional advertising. May also be A less successful branded content venture was the much-maligned, called a “brand studio.” immediately doomed Sugarspring, for example, Verizon’s ill- conceived attempt to publish an independently operated tech- The process of driving potential customers to take concrete action — Conversion focused website. It collapsed under the weight of executive clicking on an Amazon banner ad and actually buying a book, oversight and a clear misunderstand of what “independently for example. operated” means. The measure of an ad’s success at driving traffic to a specific Click-through The software that drives a publication or website. If editorial is the destination. CTR is expressed as a percentage: ad clicks divided Content Rate (CTR) Management sausage, the CMS is the meat grinder. WordPress is probably the by ad impressions. For native advertising, CTR is losing its luster, as System (CMS) world’s most popular CMS, driving millions of blogs and other driving “brand lift” and “conversion” are often more important than websites. To cut down on production costs and turnaround time, simple clicks. publishers are increasingly granting marketers direct access to their CMSs so native ads can be inserted directly into the editorial queue.

DIGIDAY GLOSSARY 23 / WTF IS NATIVE ADVERTISING? Di–Pa

Disclosure/ As led by the Interactive Advertising Bureau (and prompted by the In-Feed Inserting advertising assets directly into an article or editorial stream. Labeling Federal Trade Commissions), native advertising should be disclosed Marketing Done well, in-feed native advertising matches the look, feel and and properly labeled as such. See also “Sponsored Content.” behavior of its surrounding editorial.

The use of algorithms and other mathematical calculations to match Advertising messages designed to match the form and function of Dynamic Native advertising with a particular target audience. Already integral to the the environment in which they appear. Well, it sounds simple when Optimization Advertising display world, dynamic optimization is coming online with native you put it like that. ads, too, giving marketers the ability to programmatically reach the right readers with sponsored content. The online equivalent of the “do not call list,” nofollow is a tag nofollow inserted into certain websites and pages to prevent search engines Publicity and awareness gained through promotional and PR from indexing its content. Per the FTC, native advertising must be Earned Media efforts, rather than advertising (which is “paid media”). Though it’s flagged for “nofollow,” to separate it from native editorial. technically paid, native advertising would like to be considered earned media, as it’s meant to have the reach and impact of Outlets and channels that are controlled by the brand or advertiser editorial, not advertising. Owned Media itself. Owned content marketing is big business for brands, who are creating their own blogs, online resources and other branded Blurring the line between paid and native editorial, embedded content to drive awareness and conversions. Embedding marketing is meant to bring brand awareness by inserting messages inside proper editorial content. Imagine product placement seen in The number of times a web page is put in front of a reader. For native Pageviews television and film — only with editorial. advertising, pageviews tend to be a fraction of the surrounding editorial’s. The higher the “share of traffic,” the more successful the A broad, oft contentious term for a consumer’s time spent with a native ad. Engagement given brand or advertiser. On a website, engagement can mean time spent reading an article, while social media engagement is In its simplest definition, paid media is advertising and promotion Paid Media measured with likes and retweets. that’s placed in media through paid partnerships. By its definition, native advertising is paid media meant to masquerade as The number of times an ad is put in front of a reader. Note that earned media. Impressions viewability is not universally guaranteed, so impressions do not always equate to actual views.

DIGIDAY GLOSSARY 24 / WTF IS NATIVE ADVERTISING? Pa–So

Paid Post Another term for native advertising, an article produced by an Separation of Also known as the Chinese Wall, the traditional division between advertiser and paid to run alongside — and blend in with — organic Church and State editorial and advertising departments at a media company, editorial content. suggesting that one won’t influence the other. Want to start a fight at your local journalist hangout? Announce that the separation of Paid Search Ads Paid listings that appear at the top of search engine results, generally church and state is a thing of the past. won through a complex (but instantaneous) auction for popular and/or highly targeted search terms. The period of time any given user spends on a website, as identified Session specifically via the user’s IP address or another distinguishing A broad term for a software service that facilitates a certain practice. variable. Native advertising seeks to be part of a user’s overall Platforms Facebook, for example, is a social media platform. In publishing, editorial session by not increasing bounce. there’s an ongoing argument about the difference between platforms and publishers. Medium, for example, is an open platform A subset of brand lift, increased awareness and engagement driven where writers can self-publish their work (much like a CMS). But Social Lift specifically through social media sharing. Medium also commissions original work, like a publisher. Native advertising is welcome on these platforms to varying degrees, Like #content, “storytelling” is achieving backlash status, and is Storytelling depending on the service’s policies and terms of service. increasingly despised by writers and editors who are just doing their jobs as journalists. They’re telling stories, yes, but “storytelling” has a The hot new thing, the marriage of native advertising and marketing buzzword stink about it. Used in an awful sentence: “Let’s Programmatic programmatic ad technology (automatically delivering targeted ads proactively create some content through storytelling to achieve Native according to user demographics and other characteristics). Several brand lift for our partners.” players promise to deliver native advertising programmatically, by matching readers’ interests and the marketer’s goals. The success of Like an API, an SDK is a suite of tools made available by a platform or programmatic native rests largely on publishers’ willingness to open Software large software company in the interest of encouraging third parties Development inventory to the programmatic native platforms. Kit (SDK) to make new products for that platform. This is not altruism. Twitter, for example, supports an SDK so developers will build products Like paid search ads, listings that appear at the top of editorial based on Twitter, thereby expanding Twitter’s reach, usage and Promoted Listings streams. On Etsy, for example, a jewelry box maker might pay for therefore value. For native advertising, SDKs are available to help her listing to appear at the top of pages listing handmade jewelry. advertisers create assets that match native editorial and can be Promoted listings are identified as advertisements, but they’re meant automatically inserted into editorial streams. to blend with the organic, curated results.

DIGIDAY GLOSSARY 25 / WTF IS NATIVE ADVERTISING? Sp–W

Per the FTC, the mandate that native advertising be clearly “Sponsored Content” differentiated from its editorial surroundings. Depending on the publication, this designation may be prominent or intentionally obscure, and may be described as “paid content,” “partner content,” a “paid post” or an even more creative term.

As the name suggests, how long a reader spends with a certain article Time on Page on a website or app. At its best, native advertising returns time on page that’s comparable to the native editorial surrounding it.

Unique Pageviews Whereas pageviews are the simple count of a page’s total views by every visitor, uniques keep track of individual sessions. For example, if a reader clicks on page A, then page B, then page A again — the page A pageviews is 2. Meanwhile, the uniques for page A is just 1 because the second view was part of the same session.

A simple, standalone software application or component meant Widget to run inside a larger platform, often expanding the platform’s functionality. For example, Taboola and Outbrain use widgets to insert suggested links into articles. A new breed of widgets promise to insert native advertising into editorial content streams, presenting users with a more seamless experience.

DIGIDAY SPONSORED BY

IS THE MARKETING CLOUD? Table of Contents

3 Introduction 15 Grey Skies: Marketers’ 4 Cloud-Induced Pain Points 4 First Things First, 16 Complexity and Integration What is The Cloud? 17 Security 5 Origins of the 18 A Tricky Relationship Marketing Cloud Between IT and Marketing 19 The Cookie/Mobile 6 The Cold War Cloud Device Problem 7 The Business Cloud 8 The Consumer Cloud Glossary 9 The Marketing Cloud 20 10 Elements of the Marketing Cloud

11 The Hub: One Cloud to Rule Them All 3 / WTF IS THE MARKETING CLOUD? Introduction

In 1999, the Wachowski brothers debuted what was to become a seminal science fiction classic of the Internet age: The Matrix. In it, our hero Neo is invited to look beyond the collective conscious into the film’s titular stream of 1s and 0s. And while humanity’s life force isn’t being harvested by a mind-altering supercomputer, marketers can be forgiven for thinking we’re headed that way.

In the 21st century, humanity’s most prolific effluvia is data. Our buying preferences, our Internet search histories, our playlists, family photos, and friend networks are all translated into 1s and 0s. And that data is being deposited, skimmed and otherwise collected in “The Cloud.”

For marketers, it is a treasure trove at once inspiring and terrifying. For legacy software companies and data management platforms, helping marketers put that trove to use is the biggest business opportunity of this age. They’re calling it “The Marketing Cloud.”

So what is the cloud? WTF is the marketing cloud? And how do the two fit together? Digiday created the WTF series to parse murky digital concepts just like these.

To paraphrase Morpheus: Take the red pill, and we’ll show you how deep the rabbit hole goes.

DIGIDAY 4 / WTF IS THE MARKETING CLOUD?

Let’s start with what the cloud isn’t. It isn’t an ephemeral atmo- sphere of data. It doesn’t shift in the air. It doesn’t look like a First Things First, dinosaur or an elephant or, weirdly, your Aunt Barbara.

It is a global network of data centers constructed by some of the most powerful Internet companies of our time. It has a terrestrial What is The Cloud? home, many in fact, in places like The Dalles, Ore. (Google), Santa Clara, Calif. (Facebook), Maiden, N.C. (Apple), Ashburn, Va. (Amazon).

Below is a (very) incomplete map of the major player’s centers around the world. West Jordan, Utah Council Buﬀs, IA Des Moines, IA Lulea, Sweden Quincy, WA Altoona, IA Hamina, Finland Seattle, WA Chicago, IL Dublin, Ireland Eemshaven, Netherlands Amsterdam, Netherlands Umatilla, OR Lockport, NY The Dalles, OR Frankfurt, Germany Mayes County, OK UK Germany Astoria, OR France London, UK Saitama, Japan Prineville, OR Arlington, VA St Ghislain, Belgium Tokyo, Japan Northern, VA Osaka, Japan San Francisco, CA Newark, CA Lenoir, NC Maiden, NC Changhua County, Taiwan Santa Clara, CA Hong Kong Cupertino, CA Forest City, NC Reno, NV Douglas County, GA Berkeley County, SC Dallas, TX Austin, TX Singapore San Antonio, TX Houston, TX

Sao Paolo, Brazil Apple Oracle New South Wales, Australia AWS Rackspace Sydney, Australia Facebook Salesforce Quilicura, Chile Google Yahoo! IBM Microso

DIGIDAY 5 / WTF IS THE MARKETING CLOUD?

Origins of the Marketing Cloud

Unlike Athena, the ancient Greek goddess of data—er, wisdom—the cloud didn’t spring whole from Zeus’ head. It developed over time and in different ways for different users. CLOUD 6 / WTF IS THE MARKETING CLOUD? ORIGINS OF THE MARKETING CLOUD The Cold War Cloud

During the Cold War, key military and government data centers were spread across the U.S., largely unconnected to one another. Any enemy attack that wiped out any computer bunker would take all of that site’s data with it. To prevent such a catastrophe, the US Defense Department launched its ARPANET, a computer network that ensured data could be shared between sites. The packet-switching technology the U.S. government used in 1967 laid the foundation for all network computing and the Internet itself.

DIGIDAY 7 / WTF IS THE MARKETING CLOUD? ORIGINS OF THE MARKETING CLOUD The Business Cloud

Meanwhile, hardware manufacturers like IBM, GE and Honeywell were churning out giant mainframe computers, fondly referred to as “big iron,” for the business needs of corporations. These powerful machines allowed businesses “crunch” swaths of data, making many projects that required huge amounts of computation feasible for the first time.

But they were incredibly expensive. Smaller businesses responded by running direct lines to machines owned by the manufacturers, universities and other third parties and “renting” computing time. This “hardware as a service” model could be seen as an early entry into the cloud concept—tapping into computing power as if it was a utility.

Moving into the PC age, packet-switching network technologies derived from ARPANET made computer resource sharing even more common and cost-effective. First, in-house terminals gave workers access to central computer processing units, usually located in a cooled room below ground. Later, those spaces were converted to in-house server rooms that powered internal networks running software by Micro- soft, Adobe and Salesforce, among others.

But that didn’t last long. Servers, like mainframes, are expensive. And once the Internet bloomed, those software companies found that by building their own server farms, they could free up hardware budgets and instead sell many more subscriptions by running their software over remote computing networks—aka, the cloud.

DIGIDAY 8 / WTF IS THE MARKETING CLOUD? ORIGINS OF THE MARKETING CLOUD The Consumer Cloud

Unsurprisingly, consumers were quick to embrace the cloud. While businesses utilized “private,” purely proprietary clouds to solve organizational problems, consumers called on the “public” cloud, comprised of generally free services.

Dropbox, Google Drive and Amazon Cloud Drive allow consumers to store and share files through the cloud, while Apple’s iCloud ensures that all of your devices’ files are synced with a cloud-based account. Some of these companies operate the largest server farms in the world.

Other consumer cloud-based services, from Spotify to Netflix, have helped to create a digital economy of instant gratification. And along the way, the cloud has created reams of behavioral data giving marketers penetrating insight into the consumers who use them.

DIGIDAY 9 / WTF IS THE MARKETING CLOUD? ORIGINS OF THE MARKETING CLOUD The Marketing Cloud

The web is now flooded with a ton of useful data and intelligence, and marketers quickly hungered for ways to use it to sharpen their campaigns’ effectiveness. Marketing cloud services, many from the legacy software companies themselves, sought to give companies the ability to draw on a diverse array of production and data analytics tools without dealing with their maintenance or overhead costs.

They aim to deliver in a few main areas: uniting first- and third-party data to flesh out complete audience profiles; streamlining workflow and fostering collaboration between teams by making resources more widely available; firing off messages to the right places in the right sequence to achieve maximum effect across email, social and other channels; and providing the opportunity for unified metrics and analysis across engagements.

The interconnected nature of these steps in the process gave an advantage to services that could be holistically coordinated or integrated into larger platforms. Cloud-based marketing “hubs” have become very attractive.

The surge in data available to marketers, not to mention a boost in consumers going mobile, has quickened the adoption of marketing cloud services.

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Elements of the Marketing Cloud CLOUD 11 / WTF IS THE MARKETING CLOUD? ELEMENTS OF THE MARKETING CLOUD The Hub: One Cloud to Rule Them All

As marketing solutions migrate fast to the cloud, the rush to get a piece of the action is shifting into hyperdrive. Smelling money, legacy software giants like Oracle, Salesforce, and IBM have in recent years pulled off a number of acquisitions of estimable smaller cloud-based marketing tech outfits.

Each giant’s goal? To put together the One True Cloud Marketing Hub, the model that will encompass all necessary cloud marketing solutions and serve as the marketing-tech alpha and omega for the new generation of marketers that will subscribe to its services. Other big guys are taking different routes towards the same goal of hegemony. SAP, for instance, has partnered with Adobe to sell the latter’s marketing cloud in conjunction with certain SAP solutions.

Problem is, much like the ad tech industry before it, these providers have created deep market confusion with their wide array of offerings, infinitely branded plug-ins and promises of subtle, shaded advantage. Moreover, not all hubs are equally good fits for every organization. Some are diversified software providers with roots in sales management (Salesforce) or creative applications (Adobe). Some are independent, mid-size players offering a digital suite of solutions (IgnitionOne). Others are programmatic ad tech companies offering DMP solutions (Turn, MediaMath). Still others are true mar-tech providers (HubSpot, Marketo).

It helps, we hope, to divide these hubs into their four essential elements. Let’s count ‘em up, adhering to the order in which marketers would tend to encounter them during their progress (or should we say their “journey”?) through a campaign. Buckle up, here we go. DIGIDAY 12 / WTF IS THE MARKETING CLOUD? ELEMENTS OF THE MARKETING CLOUD

Workflow and collaboration Orchestrating campaigns Here’s where you get your CMSs and your project management and collaboration Ruling the roost here are programmatic ad solutions, but you’ll also find other tools, some of which people in other industries use, not just marketing types. But useful beasts lurking in this section. Look, there are some solutions for sequencing, marketing creatives specifically use file-sharing tools to put together their copy, or frequencing, and exposure – in other words, for figuring out in what order, how cloud-based editing solutions to create video. Meanwhile, strategists and salesmen often and for how long your ads should run, in the interests of saving money. And are tracking financial outlays across various departments, receiving real-time views of take a peek over there, at the dynamic creative optimization solutions that will help how much money they’ve spent and how much is still available. Everything’s flowing you change ads in real time so that they better appeal to the viewer on the basis of like cream now: your whole marketing team’s enthused about life’s possibilities due what you know about her. Or look over in that corner, yonder, at the SEO solutions to the blessings that these solutions are showering down on their deserving heads. and the tools that will help you whip up social marketing elements like sweepstakes Everything’s set for the next step, so it’s good that the marketing clouds contains a lot campaigns and social polls, not to mention landing pages that will corral your of solutions one can use for… desired audience.

Analyzing consumer data Measuring results Here’s where you’ll find plug-in predictive targeting solutions, which will help you The solutions that fall under this grouping help you figure out whether your campaign aggregate first-, second-, and third-party data so you can figure out whom to market hit its daily benchmarks; learn which of your marketing channels are firing the most your brand to on the basis of people’s previous web behavior, not to mention effectively (maybe you want to take money away from mobile and throw it at social, demographics. Or audience extension solutions, to find other potential customers for example); or study broad, financial metrics (what did we sell, and to whom, and with the same particular traits as your target demographic. Or customer conquesting how much did they buy?). How did your various channels stack up against each solutions, which will help you straight-up steal other people’s customers in the other? Is it time to maybe adjust your allocation of resources? Bottom line: is the closest thing to high seas buccaneering that any of us, at least, will ever get up to in client going to be happy? (See also: Are you still employed?) this lifetime. There’s more solutions where these came from, and by the time you put So that’s it. A business environment filled with ambitious start-ups and that’s starting down that bagel a couple more will have proliferated, since every ambitious young to move towards consolidation, and a marketing cloud with an easy-to-suss quadri- programmer out there with dreams of a fat Silicon Valley payday knows that finding partite structure. Like a barbershop quartet. Or the horsemen of the apocalypse. the next Big Data-crunching solution is the way to go.

DIGIDAY DEFINING DATA MANAGEMENT

In the eye of the storm of marketing clouds sit your customers and their data. Your customers don’t care about clouds or stacks or silos. What they want is consistency of experience – for you to show them that you know them in the right context during each moment they interact with your brand.

When it comes to the technology to support such interactions, contradictory descriptions and claims have caused some real headaches for buyers. Lack of clear understanding of terms only adds to the overall frustration. Most technology companies truly want to make it easier for marketers to engage with and convert specific audiences and individuals. Be aware, though, that just because they can ingest point-solution data into their platform does not mean that the data is actionable and can be properly leveraged for use across different systems or mined for insights. THE DIFFERENT FLAVORS AND DEFINITIONS OF CLOUD-BASED DMPS

Basic DMPs CRM DMPs disparate technologies with the goal A basic data management platform (DMP) CRM DMPs have roots in customer of eventual integration into a single Before there was a marketing cloud, in its most simple form can take data relationship database management seamless offering. Prior to investment, there was IgnitionOne, providing from one point solution and combine it and the fields-based data that supports be sure to dig deep into demonstrations cloud-based integrated marketing with data from another. This blending of sales interactions. While CRM data is regarding the functionality of key technology to its clients long before digital marketing data seems good on extremely valuable for personalized components and integrations, especially most clouds gained their fluff. Since the surface, but be aware that custom marketing and can be imported into those most important to your business. 2004, we’ve offered smarter solutions applications may be required in order to most DMP systems, the DMP technology for performance-based marketers support broader use. Make sure that the should also account for unknown Marketing Hubs to better engage their customers solution to fixing today’s most basic needs consumers who engage with the brand. A true data management system throughout the complete customer does not hinder future expansion as your Marketers relying on CRM-based (referred to as a digital marketing hub lifecycle. For true data management, marketing organization evolves. DMPs lack the ability to connect an or cloud) provides standardized access website personalization, mobile, individual consumer’s data from known to universal audience profile data, search, programmatic display, Media DMPs interactions with data from that person’s content, workflow elements, messaging reporting and analytics, email, social Media DMPs have roots in display media. anonymous interactions. CRM data can and common analytics. The goal is – including a flexible architecture for These were initially created to support be imported into most DMPs, but this the coordination and optimization of the integration of additional solutions online behavioral advertising and real- does not necessarily guarantee that the marketing campaigns across multiple – count on the software, service and time bidding markets for online display data will flow freely to influence steps of channels to engage consumers in expertise of IgnitionOne to remove ads. Today they feature capabilities such future interaction. a more personal and relevant way. the complexity so you can do more as portfolio optimization, predictive This can be done both manually and with your data, faster. and attribution modeling and data Clouds programmatically, using unified data visualization. Because the customer Cloud refers to applications, services or available for both online and offline Cloud? Hub? DMP? No matter what journey typically begins with an online resources available to specified users on tactics. Marketers need to look for a you call it, we’re here to help. search or exposure to an ad, the ability demand via the web. Cloud anything is a system that provides a single source of to capture and use this behavioral data network concept, allowing companies to truth to better engage people across to influence later-stage interactions is increase capacity, scale and functionality the customer journey – from initial becoming increasingly valuable. Because as needed without having to commit to search ad to final purchase and loyalty the customer journey does not begin at potentially expensive infrastructure. A marketing. Systems typically include a acquisition, advanced marketing solutions marketing cloud is an assembled set of bundle of native marketing applications Get in touch: should include media capabilities to marketing solutions accessible online. and capabilities as well as an open support a consistent end-to-end customer Some marketing clouds have gained architecture through which other point [email protected] lifecycle experience. expansive feature sets due in part to solutions and partners can integrate. various mergers and acquisitions of 15 / WTF IS THE MARKETING CLOUD? Grey Skies: Marketers’ 4 Cloud-Induced Pain Points Like everything in this imperfect world, the marketing cloud, whatever its benefits, brings certain challenges. Let’s discuss.

1234DIGIDAY 5 16 / WTF IS THE MARKETING CLOUD? GREY SKIES: MARKETERS’ 4 CLOUD-INDUCED PAIN POINTS Complexity and Integration

A recent IDC report indicates that over 1,000 vendors are currently pumping marketing tech solutions out into a mostly unconsolidated marketplace. Expect more. Way more. As marketing becomes ever more mind-warpingly data intensive, and as the ability to aggregate information begins to separate the industry’s winners from its losers, programmatic solutions will become even more crucial. Embrace them – or die.

But ask yourself the question: Are all your company’s cloud-based solutions actually going to work together, especially if various departments acquired them in the absence of a CIO’s unifying vision? Integration remains a significant challenge in the cloud tech world. Adam Heimlich, head of programmatic at Horizon Media, says the integrating tech that everyone’s relying on “is not that standardized. Companies change their APIs all the time and screw up ongoing integrations. The tech world just isn’t quite built for always-on APIs among dozens of big companies.” Or dozens of small companies, for that matter.

Heimlich adds that another significant issue has to do with the internal cultures at companies. “People are in favor of ‘integration’ in theory but generally against sharing their work or letting others play in their sandbox.”

DIGIDAY 17 / WTF IS THE MARKETING CLOUD? GREY SKIES: MARKETERS’ 4 CLOUD-INDUCED PAIN POINTS

Security Entrusting crucial information to an amorphous entity with a name that actually connotes impermanence (don’t clouds... evaporate?) isn’t a natural fit. But security might be a bit of a red herring at this point. Computing simply is moving to the web, period. There simply will be security issues, just like there always have been. (Your old IT system, connected as it ultimately was to the Web, wasn’t “safe” either.) At the same time, cloud providers simply will go to great lengths to solve them, because, business-wise, they’ll be screwed if they don’t.

Anyway, a rational cost/benefit analysis indicates that the “security issues” associated with the cloud can be overblown. Things are more complicated than they appear. “While the cloud model comes with risks,” says space150 CTO Marc Jensen, “the benefits are huge. Before the days of the cloud, many organizations would be their own security ‘experts’ and would have a range of success or failure with this. Security is something to be taken seriously, and hiring experts, cloud or not, is critical. The move to the cloud has eliminated the temptation for people to be their own experts.” Another way to put it is that when you use cloud services you’re outsourcing your security function to companies like Google, Amazon, and Apple – outfits rumored to know a thing or two about computing.

Then too, the cloud is making possible positive changes to security protocols on the tech side. Jensen cites Google’s transition from a “trusted perimeter” security model to a model based on your device and your identity. The problem with perimeter models, he says, “is that once you’re in the network, you’re really in. The Sony hack last year was a good example of this; getting into the network opened access to everything. As our mobile devices are adding things like biometric ID, they are getting increasingly secure.” He adds, “The cloud has enabled this approach. It would have been impossible before this.”

DIGIDAY 18 / WTF IS THE MARKETING CLOUD? GREY SKIES: MARKETERS’ 4 CLOUD-INDUCED PAIN POINTS A Tricky Relationship Between IT and Marketing

One issue here, says Domani Studios CTO Evan Stark, is “the speed at which (a website, a banner ad, a pre-roll video),” says Craig Key, SVP of Media at space150. marketers wish to move versus the requirements and standards that IT needs to facili- “This meant that the creative aspect still lived wholly inside of marketing’s sphere, tate, which take more time.” while the delivery was up to the technologist. One barely cared about the other, and there wasn’t much need for them to work together.” Another issue is that in the cloud era most anyone can start working behind the backs of the IT department. Creative types dabbling in tech – great idea, right? No more. In the new age of “smart” campaigns, Key says, “creative can take advan- The burgeoning bring-your-own-device movement is a subset of this issue. “BYOD tage of technology to inform and enhance the work. What kind of device is the user happened so fast that it caught many companies and IT departments off guard,” says on? What time of day is it? Where are they? What’s their history with the brand or its space150 CTO Jenkins. “When you have really restrictive IT policies, and people products? These types of data points make marketing work better/smarter/harder, need to get things done, you see a lot of people using the tools they know best.” but also require the CMO and CIO to work hand-in hand.” An example of such hand- in-hand work, Key says, is the creation of a company data management platform, But the cloud era has also opened up new avenues for tech/marketing collaboration. which “becomes the ‘cloud’ to store all aspects of a business’ data so that it can be “Digital marketing’s first iteration was to take a traditional marketing output, like a accessed in real time to deliver more meaningful and relevant messages that are brochure, a static image, or a 30-second video, and place it in a digital environment tailored to the individual user rather than a broad segmentation of customers.”

DIGIDAY 19 / WTF IS THE MARKETING CLOUD? GREY SKIES: MARKETERS’ 4 CLOUD-INDUCED PAIN POINTS The Cookie/Mobile Device Problem

The no-cookies-on-mobile problem is a perennial one, and one that’s not specifically associated with the transition to the cloud. But the cloud era is going to inflect how marketers approach that problem.

The fact is, people are spending more and more time using apps on their devices. “Look into the future,” says space150’s Jensen. “The experiences we seek just work better in apps, and while people will use the web when they need to, they strongly prefer the speed of apps on mobile devices.” But since there’s no app equivalent to cookies, marketers’ traditional methods of tracking consumers are showing dimin- ishing returns. Marketing’s response will include tracking consumers using not the sorts of profiles that cookies can enable, but rather consumers’ own real identities. This will require data-crunching on a heroic scale, and of a sort that today’s cloud- based solutions can increasingly deliver.

Facebook, with its tremendous (and vaguely terrifying) access to first-party information is an example of a company that’s making a go of it on this new frontier, but it’s not alone. “The companies that are have strong ties to identity are monetizing well,” says Jensen, “while networks that rely on a less personal or more anonymous system of identity are not monetizing as well.” He adds, “Cookies are a problem on mobile, so we need to move on.” The cloud era, with its explosion of new technology, could help marketers do that.

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Glossary ABC 21 / WTF IS THE MARKETING CLOUD? GLOSSARY A–Cl

The CMO has the customer data. The CIO has the expertise Analytics That to which marketers subject the absolutely stupefying CIO/CMO amounts of consumer information to which they have partnership in building out the large programs needed to generate access in the Big Data digital era. Vendors are falling over insights. It seems like a natural partnership, but it’s often a themselves to sell marketers the analytics solutions that hard sell. Why? CMOs are spenders, tasked with generating will help them deal with that data: sift through it, sort it, excitement about a brand. CIOs are savers, tasked with segment it, make conclusions about consumer behavior improving processes, managing systems and supporting and preferences from it. users in a way that drives down costs. Their working together to dig into data will ultimately drive growth, but to get there, A set of standards, routines and protocols that explain how they’ll need to agree on some key purchases, including, Appliance program interface (API) a platform or software handles its data. APIs are typically maybe, marketing cloud services. opened up by a large company to encourage third parties to integrate with them. In the marketing cloud, APIs allow If you’ve gotten this far and you still don’t know, start over. Cloud marketers to layer on functionalities such as marketing Just kidding. It’s a network of servers connected in such automation, analytics and targeting that they may need to a way to allow centralized data storage and access. Also conduct business. referred to as “cloud computing.”

Modeling of how to assign credit for sales and conversions Everything required for cloud computing – the whole kit Attribution modeling Cloud architecture in a sales path. Some models assign credit for a sale to and caboodle, as our grandmother used to say. You’ve got the last ad that the buyer clicked on during his or her path your front end platform (like a mobile device or laptop), your towards a purchase. Others apportion credit in different back end platforms (your servers and storage capacity), your ways. Attribution modeling remains an inexact science, a cloud-based delivery, and your network (like the Internet). fact that marketers don’t like at all. That’s it? Yep. That’s it.

This IT policy allows employees to access data hosted in This one comes in two flavors, positive and negative. A BYOD Cloud burst the cloud from any of their personal devices, usually in positive cloud burst is when a cloud handles more traffic or a accordance with restrictions that vary by company. (No computing surge. A negative cloud burst is when it doesn’t. sensitive data, for example, or no data storage on devices.) BYOD allows for a more mobile workforce, while saving companies the cost of purchasing company-issued laptops and smartphones for every employee.

DIGIDAY 22 / WTF IS THE MARKETING CLOUD? GLOSSARY Cl–Cr

Collectively, the technologies and manufacturers that serve A network of servers (or server farms) strategically located to Cloud enabler Content delivery as the backbone for all cloud products and services. A cloud network enable quick upload of web pages, files and other content. enabler is what lets an organization build and use cloud The closer the user geographically to the server, the faster solutions. her upload times. CDNs are particularly important for publishers and platforms with global reach as today’s users A typically fast and easy to use computer operating system have become accustomed to instant access to everything all Cloud operating the time. system that doesn’t run conventional PC software, but loads all its applications from the Web. Confusingly, “cloud operating System software in Mac’s OS X and iOS that contains funda- system” can also refer to the infrastructure necessary for Core service layer setting up cloud computing services. In that second sense, mental systems services necessary for apps that function on it’s close in meaning to “platform as a service.” higher levels.

Security in cloud computing. Wait, you knew that. The point Customer relationship management. The management Cloud security CRM is that cloud security is going to be become more crucial, of a company’s relationships with its current and potential and an even bigger growth industry, as more and more data customers. CRM often involves using tech solutions to inevitably moves to the cloud. Needless to say, the well-pub- handle sales, marketing, customer service, and technical licized cloud data breaches of recent years haven’t helped support functions. Companies like Salesforce make those assuage anxiety on this front. Still, try to relax. Really smart various solutions and offer them to customers on a SaaS people are working on this. basis.

There is such a thing as too much support. While large “Attribution” is what marketers call the process of keeping Consumption-based Cross-channel track of a consumer’s behavior as he or she potentially pricing model corporations might love providing huge amounts of attribution processing through their fixed-fee cloud services, this can approaches a purchase. Cross-channel attribution is keeping be overkill for small businesses. Consumption-based pricing track of a consumer’s behavior across both online and offline paired with elasticity (see p. 24) allows these smaller parties channels. The point: influence that behavior. Drive a sale. to pay only for what they use. Very cost-effective.

DIGIDAY 23 / WTF IS THE MARKETING CLOUD? GLOSSARY Cr–Da

The process of combining data present in different sources Cross-device targeting The ability to serve targeted advertising to consumers Data integration across multiple digital devices – and a technological and providing users with a unified view of it so that they can challenge at the moment. The problem is that if you use, derive knowledge from it. Sounds simple, but it’s actually say, three different digital devices during a day, adver- a super-complex field of endeavor that’s relevant in every tisers are reading you as three different people. That situation in which human beings have to make conclusions can result in waste, as an advertiser might be paying to on the basis of oceans’ worth of information coming at them send you an ad that you’ve already seen twice today. It from lots of different sources. can also make it hard for marketers to provide you with a pleasantly seamless experience across your devices. A piece of software that sucks up, sorts and houses infor- Data management And it creates difficulties with attribution. Say you see platform mation, and spits it out in a way that’s useful for marketers, an ad on your work laptop and, in response, start to publishers and other businesses. Marketers use DMPs to order the product in question. Then you get distracted. manage cookie IDs and other consumer profile information Then you leave the office and finally order the product and to generate audience segments, which are subsequently on your mobile. Good for you, but the ad you originally used to target specific users with online ads, email and other saw on your laptop doesn’t get credit for the click- personalized web experiences. It’s all about better under- through. And jeez, that’s more than a little sad. standing your customer information.

It’s summer. Your apartment’s air conditioner is down for The discipline concerned with the extraction of knowledge Data centers Data science the count. Where do you go? A data center, of course. from data. A huge field, one that overlaps with computer These expansive climate-controlled caverns, often of science (not to mention other fields) and one that’s getting industrial proportions, house rows of computers, many hipper in this tech-driven age of Big Data. If your kid of which power applications or serve data to cloud- announces a burning desire to be a data scientist, pour your- based initiatives. self a drink. She could well make a bundle in Silicon Valley. You’ve done well. The process of detecting corrupt or inaccurate records Data cleansing in a collection of data and then either correcting or A subset of data analytics that involves grouping zillions of Data segmentation removing them. pieces of data into segments on the basis of which you can make conclusions.

DIGIDAY 24 / WTF IS THE MARKETING CLOUD? GLOSSARY Da–Fr

Do your eyes glaze over whenever you glance at an Post-PRISM, we’re all pretty on-edge about who touches our Data visualization Encryption Excel worksheet? Do even the most neatly labeled data. Partners who operate in the cloud take this concern seri- tables spur you on to quickly turn the page of a report ously by using protection: scrambling your data, exchanging or memo? Well, the abundance of graphs, charts keys, etc. A growing priority for consumers, encryption is a and diagrams on content and web dashboards today must-have for cloud services today. implies that you’re not alone. Why dump numbers when you can visually depict trends and relationships? Marketing theory-speak for the progression of steps that a End to end consumer takes in considering, purchasing, using, and main- A picture’s worth a thousand data points. customer lifecycle taining loyalty to a product. The process of the collection, annotation, cataloging, Digital asset storage, retrieval and distribution of digital assets, such Corporations are people, too. And like people, they need management Enterprise software as videos or text files or photographs or other images their own software. Most of this software is back-end oriented, or, for that matter, most anything else. calling for coordination between tasks executed at many different employee and consumer PCs: payment processing, A package of software to enable digital marketing, CRM management, collaboration platform support, etc. Many Digital marketing of these services are bundled together and offered through suite in all its multi-faceted glory. Both mar-tech giants (IBM, Oracle, Salesforce) and more niche-y vendors the cloud, providing all the benefits of SaaS. (Marketo, Conversant) sell them on a cloud-based software-as-a-service basis. Lots of companies might An ungainly and actually relatively obscure marketing term of Frequencing not need all the elements in a suite, but no worries: art that refers to the business of figuring out how often and they’ll buy individual point solutions or component for how long an ad should run, in the interests of efficient use suite parts instead. of resources. Not all that different from “sequencing,” really. So you might just say “sequencing” and be done with it. The Most business processes don’t fire at a constant rate. English language will thank you for it. Elasticity At any point, you might be using your computing power to process consumer information requests, serve multiple dynamic web experiences to different segments or manage your email campaigns. Cloud computing accounts for these changing needs by providing appropriate levels of data, processing and application support for what you’re doing at all times. DIGIDAY 25 / WTF IS THE MARKETING CLOUD? GLOSSARY Fu–Ma

Not that thing you might have used in college to channel That branch of computer science that deals with all issues Funnel Identity Old Milwaukee down your throat. Rather the purchase management related to the control of information about users on funnel, a marketing model for visualizing how a consumer (IdM) computer networks. The point is make computing as secure progresses down a narrowing path from awareness and efficient as possible. Inasmuch as IdM is preoccupied of a product (the top of the funnel); through opinion, with information safety it obviously has particular relevance consideration and preference (mid-funnel); and towards for digital marketing, personal data-intensive field that it is. the eventual purchase of that product (the bottom of the funnel). Bonus fact: In Ireland, a funnel – a real funnel, not The process of blocking from your system connections from IP restriction the purchase one – is also known as a tundish. Write that undesirable Internet protocol addresses (the identifying down. You never know. “addresses” that all computer devices carry) in the interests of security. On a personal level, you might block the IP of Remember the days when running an app on your the creep who keeps leaving obnoxious messages on your Graphical user blog. On the macro level, companies might block from their interface computer meant entering line after line of text into your console? Probably not. We live in the age of GUIs, visual systems servers associated with dodgy hacker-ish activity. interfaces that allow users to point and click (or tap) their Key performance indicator. A measurable value that a way to productivity. If you’re still not sure, ask yourself KPI this: Do you have to type out a file path or do you just company uses to verify whether it’s achieving its business click on a folder? If it’s the latter, you’re using a GUI. goals. Your department didn’t hit its KPIs this month? You are fired, sir. One of the three categories of cloud computing tech- Infrastructure as a nology, along with software as a service (SaaS) and plat- Ford’s vision of a one-product-fits-all economy collapsed service (IaaS) Market form as a service (PaaS). In an IaaS model a provider hosts fragmentation long ago, but the one-message-fits-all approach to marketing servers, storage and other infrastructure components. It survived it. Finally, marketers are accepting that different also handles tasks like system maintenance and backup. consumers are looking for very different things (at different All your company has to do is sign up and use the stuff. times) from the same product. From the benefit highlighted to the creative chosen, a single product can be marketed in many different ways. Creating and serving all of these ad versions is a project for the cloud.

DIGIDAY 26 / WTF IS THE MARKETING CLOUD? GLOSSARY Ma–Pa

A type of marketing that recognizes that consumers engage Marketing The computerization of marketing, in short. The term Omnichannel automation encompasses a range of activity, from data analysis to with brands across lots of different platforms and that strives workflow automation to the “programmatic” – that is, to overcome the challenges associated with that fact. See computerized – buying of ad space. the entry for “Cross-channel attribution” for an explanation of what those challenges look like. (They look gnarly.) An application that uses, combines and aggregates Mash-up data or functionality from more than one source to A vision of the cloud that’s broadly inspired by open source Open cloud create a new service. The idea is that combining principles and that has as its goal fostering flexibility, interop- applications into one will help to present data in a more erability and compatibility in cloud use. The open cloud useful and usable way. The classic example is a Google movement is a response to fears that, as cloud use burgeons, Maps page of a city overlaid with markers indicating the cloud will be hampered by problems like IP restrictions, where, say, all the best French restaurants are. These vendor lock-ins and the inability to access and move data applications are usually hosted in the cloud. freely across functions and brands.

The software layer that lies between the operating A set of open source software tools for building and Middleware OpenStack system and applications on each side of a distributed managing cloud computing platforms for public and private computing system in a network, facilitating their inte- clouds. Originally developed by NASA, it’s managed by the gration. Known as “software glue,” it typically supports non-profit OpenStack foundation and collaborated on by complex, distributed business software applications. more than 200 companies. Developers use it mainly as an infrastructure as service, or IaaS. Today’s marketers are fighting the war for consumers Multi-channel across desktop, mobile, social and beyond. Campaigns The pricing model inherent to cloud computing, according campaign Pay as you go management require more coordination than ever before, and to which you pay only for those services that you use. The (MCCM) MCCM is a way to centralize all message distribution analogy is with how you pay for utilities. You pay only for that and sequencing using a cloud-based platform. water that you consume, without having to go buy yourself your own reservoir. (Although, come to think of it, that would be kind of cool.) Also known as pay and go, pay per usage, pay per use and pay as you use.

DIGIDAY 27 / WTF IS THE MARKETING CLOUD? GLOSSARY Pe–Sa

The use of software to buy and deploy digital advertising, Personal cloud Just like the name says: your own personal cloud, powered by Programmatic a little cloud drive that you perch up on the shelf not far from advertising as opposed to the traditional ad-buying process, which your computer. A personal cloud gives you the convenience involves RFPs, human negotiations and manual insertion of cloud computing – you can access the data that you store orders. It’s using machines to buy ads, basically. The scale of on it via any one of your devices, for example – without the programmatic is mindboggling: at stake are trillions of digital headaches that the public cloud brings, such as subscription ad impressions worth billions of dollars, and they’re often fees, security fears, and lack of control over your data. But, being auctioned off in real-time transactions. if, say, a house fire or natural disaster damages your personal server, your data’s in trouble. Online resources like software or data storage that are Public cloud provided to the public via the Internet. Public clouds are A solution that solves one particular problem in an organi- essentially infrastructure as a service provided by huge Point solution zation, with no regard to the context in which that problem companies with the means to build and run huge computer exists. Because a point solution pays no attention to context, it networks—Amazon, Google and Facebook, but also can ultimately create new problems. A point solution stands in Dropbox, Box and others. These are the clouds that give distinction to a suite or platform of solutions. CIOs such headaches--employees dumping sensitive information into public clouds may mean they are vulnerable to The process of establishing the proportions of assets to be data breaches. On the other hand, by tapping into pre-ex- Portfolio optimization held in an investment portfolio in order to ensure the highest isting infrastructure, CIOs can invest instead in developing possible rate of return. the apps that work best for their businesses.

The use of statistics to predict outcomes, either in the future or Especially for large companies, buying, installing and Predictive modeling SaaS in the past (the latter would be useful if you were a detective managing software packages on hundreds, sometimes trying to get to the bottom of an unsolved crime, for example). thousands of computers is an enterprise in itself. Cloud computing offers an alternative: software as a service. The company pays for access to a server farm running the desired Private cloud A custom cloud built by the very company that aims to use it. In such a case a corporation is actually itself building the hard- application, and all (qualified and connected) employees ware and network it needs to host its data, possibly giving it can easily run the software on their PCs. Beats waiting for an more control and security. But it’s time consuming and expen- update. sive and, in the end, employees are probably going to go rogue and use YouSendIt anyway. Are we right, employees?

DIGIDAY 28 / WTF IS THE MARKETING CLOUD? GLOSSARY Sc–V

Maybe you’d sleep better at night knowing that your budget Scalability The ability of a system or network to handle an increased Subscription-based workload, or its ability to grow larger to handle that load. pricing model isn’t about to take a hit if a huge data-intensive project comes You’ll also hear marketers talk of the need to do things out of nowhere. This pricing model allows you to pay one “at scale” – that is, on a large scale. You might even hear flat fee regularly in exchange for continuous use of cloud them use the verb “to scale,” as in, “We need to scale this services and support. The subscription option is most useful campaign, fast.” Don’t let them psych you out: they just for businesses that expect to use a lot of data. Otherwise, mean they need to make it bigger. you risk overpaying.

Distributing digital content in sequential form in order to UX, or user personalization, is a buzzword referring to a Sequencing UX personalization lead a consumer progressively along a path from one node person’s behaviors, attitudes, and emotions about using a to another. You might first send the consumer an email, for particular product, system, or service. To that extent, it’s rele- example, then follow that up with a sponsored article, then vant to for marketers. UX personalization refers to the process hit him with a display ad, and so on. The final stop on this by which marketing can create advertising and branding “journey” is ideally a sale. experiences that appeal to individual people.

A large collection of computer servers collected in one An economics term that refers to a situation in which your Server farm Vendor lock-in place and powering an enterprise’s information systems. business is so dependent on the services or products that Basically, a massive room filled to the gills with lots of a particular provider offers that the costs of switching to massive computers — and massively well-air-conditioned. another provider would be exorbitant.

What it sounds like: there’s been a glitch at your cloud A cloud that’s designed in particular for a certain industry or Vertical cloud Service blackout services provider and your cloud’s gone down. Cloud- application (that is, for a “vertical” in tech jargon). Such a using companies need to assess the risks of blackouts and cloud will offer functions that are particularly useful for that make contingency plans for when they do occur. They industry. The marketing cloud is an example of a vertical might, for example, back up key data in another location or cloud. Another example is the health care cloud. arrange for their systems to undergo “graceful degradation” – that is, to maintain basic functionality even though they’ve taken a hideous beating.

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