Seeing better ads? Thank your friends

Written by Vince Thompson, Contributing Editor

With billions at stake online publishers and marketers are trying desperately to make the ads on your web page more relevant to you. The better that ads appeal to you, the more likely you are to buy. Or so they hope it goes. In recent years serving you ads based on the sites your visit (your online behavior) has been effective and a fast growing tool for marketers. Now a new breed of company is serving ads based on who you know and what they buy and the ramifications are big. For if these companies can make online ads more valuable many new content businesses may flourish and the web could benefit from even more innovation.

Andrew Pancer is the C.O.O. for Media6Degrees where they are finding success with this new type of targeting and helping major brands as well. Andrew most recently served as the Vice President of Digital Development at the New York Times where he helped lead digital initiatives including setting investment strategy, directing M&A and integrating new acquisitions. Prior to that role Pancer served as C.O.O. of About.com.

I asked Andrew to help us learn a little more about this fast moving space.

What’s the mission of Media6Degrees?

Media6° is the first company to deliver targeted, customized and scalable audiences to marketers by harnessing the power of social data from across the Web. Years of industry research have shown a direct correlation between groups of like-minded consumers and their purchasing habits – birds of a feather actually do flock together. To harness the power of the social Web, Media6° has created the first peer based advertising technology that identifies like-minded consumers who are closely connected within all facets of social media. Through the Media6° technology, we provide a scalable way to reach the most compelling consumers by building an audience around a brand’s existing customers, based on their social connections.

Aside from ads being less annoying...why does relevant advertising matter?

Lets tackle this from 2 perspectives, those of the advertiser and those of the consumer. Advertisers are supporting much of the content and tools being provided to consumers today. Why should they not expect to get the highest return on their investment for their support? Relevant advertising allows marketers to eliminate waste and to put their messaging in front of the people most likely to be interested in their offers. Their cost to acquire customers decreases and helps to improve their overall profitability.

For the consumer there is a very fair exchange of value going on. Think of how important to our lives the Internet has become. Consumers are able to use social networks, create blogs, tweet on twitter, email, instant message, read The New York Times, and research anything that they can possibly think of all for free. In exchange for supporting these services, advertisers are asking for the ability to market in an efficient and effective way to users of these services.

The problem to date in my opinion has been a lack of transparency for the consumer. We as an industry have done a less than stellar job educating consumers about the data being collected about them, how it is being used, and how they can opt out should they choose to do so. Much of this is changing. The industry has responded to critics and the threat of potential legislation and is rapidly making changes to address these shortcomings. This will lead to a better user experience and even better results for advertisers.

Can these new forms or ad-targeting make the creation of online content more profitable?

Absolutely. At Media6degrees we work exceptionally hard to drive improved ROI to our advertising partners. Part of the equation is to secure the highest quality inventory we can get to drive this performance. Our technology works exceptionally well but not if the advertisement goes unseen. We need a clean well lit environment. But we do not need to buy areas where publishers are already selling out at high CPMs. We are looking for individuals regardless of context. That means we can buy sections that are undersold and as a result improve overall yield for publishers. Social media companies benefit even more. They typically have smaller sales teams and higher volumes of unsold inventory than other publishers.

How does the entrepreneur benefit from this technology?

We have been partnering with start-up social media companies to participate in our data collection efforts. They allow us to collect data into our social graph and we provide them a steady revenue stream. The data we collect is very benign. We do not collect any information such as age, gender, interest, friends and absolutely no personally identifiable information.

Talk about privacy....is this too much information, could their be a backlash, can we limit what you know?

There is already a backlash. I do believe it is a vocal minority but they raise excellent issues to which the industry is rapidly responding. I am on the board of the NAI (Network Advertising Initiative) and participate in several IAB (Internet Advertising Bureau) committees. There is a tremendous amount of effort being put forward by these organizations towards educating consumers about the benefits of online advertising as well as making it very easy for consumers to understand what data is being collected and how it is being used. I see this as a positive development for the industry.

How will this new technology impact the web and our experience with it?

We see Media6degrees as a new way to think about marketing to an audience. For every one of our advertisers we build out a custom audience of people who have actively volunteered to have a relationship with that brand as well as their closest “friends” who would be most likely to share common affinity for that product. This audience is exclusive for that advertiser and is not used for anyone else. This is very different from other forms of targeting where “buckets” (such as Finance, Autos, or Travel) are built and then sold over and over to different marketers. So instead of trying to find a specific audience within someone else’s environment, we work with marketers to create their own “social graph” of their consumers and then help market to them wherever we see them online.

Thinking about the user experience, new forms of targeting will continue to allow innovation to happen online. There are many arguments today that there will not enough advertising dollars to go around. This argument is too broad. There will be failures but there will also be enough advertising revenues to support many players. Targeting solutions will allow these companies to offer the right solution for advertisers to want to work with them. In exchange, the consumer will continue benefit from new and interesting free products.

How will your firm keep up with the pace of innovation?

This is what makes our industry so interesting and fun. It’s impossible to keep up with everything. You need to keep an eye on what is going on and make smart decisions about what is important and what is just the “bright and shiny object”. You then need to have a strategy to address what is important.

At Media6degrees we have an amazing team of people who understand how Internet advertising works. We are continuously learning and improving based on what we see from our advertising every day. It’s impossible to keep up with everything but the moment you think you have it nailed and stop innovating is the day that you are setting yourself up for failure.

How do you personally stay smart?

I have been in the industry for a while and have been lucky to meet a ton of very smart people. I spend a lot of time networking and listening to what other people are working on. It’s amazing how many good ideas are out there. I also read a lot and try to keep tabs on everything that is going on within our industry. There is no shortage of information out there.

To learn more about Media6Degrees Click Here:

To follow Andrew on Twitter Click Here:

This post was originally published on Smartplanet.com

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