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“It is not the size that matters, but what you do with it.” Big Data is een veelbesproken topic op de marketingagenda. Bedrijven als Google, IBM en Facebook zijn in staat geweest om succesvolle…



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Ad inventory is typically broken down into four buckets: sponsorships, premium guaranteed, audience targeted, and remnant. Each of these buckets can be sold through a variety of sales channels.

Revenue distribution across this “layer-cake” inventory model flows downward — with the vast majority of inventory coming from premium and a significantly lower amount of revenue coming from the remainder:

The process of an advertising sale begins with the media buyer, who sends a request for proposal (RFP) document to numerous publishers. These RFPs typically are written in prose and define the overall goals of the advertiser in question, and of the specific campaign being executed. A typical RFP has between 50 and 100 elements that are laid before the publisher as acceptable or desirable outcomes, and these elements (attributes or attributes of the buy) are generally descriptors of the audience, of the media the advertiser is looking to run on, of the acceptable (and unacceptable) content to be associated with, etc.

Advertising inventory is the base unit sold by a publisher to an advertiser. It is measured in “impressions,” which are defined as an opportunity to show an advertisement to a person. Impressions at their most basic are blank vessels made up of opportunity. Inventory is generally defined in advance by the seller based on a variety of factors, and it is these predefined impressions that are contractually agreed up on between buyer and seller.

Nearly all impressions sold are made up initially of one or two media attributes based on content association (e.g., MSN>Entertainment or MSN>Entertainment>Celebrities; Yahoo>Autos, or Yahoo>Autos>News). Or they’re sold just based on category — in some cases blind, meaning without the knowledge of which publisher the impression ran on. Further refinement of the inventory is based on other attributes such as above the fold, rich media units, or a variety of quality scores. Additional media attributes included in the definition of a piece of sold inventory include various types of targeting and other types of intelligence and filtering such as inventory quality scores and contextual targeting.

Beyond media attributes, there are numerous audience-based targeting attributes available for the buyer to request, or for the seller to offer. These include such attributes as geographic, demographic, psychographic, behavioral, etc.

It is the combination of these various attributes that define the inventory that is sold. Inventory is sold in a number of ways, including on a guaranteed basis (a buyer contracts with a seller for a fixed volume of inventory between specific dates) and on a non-guaranteed basis (if inventory is available that matches, it will be sold, but the seller doesn’t make any guarantees on volume).

In order to predict how much inventory will be available, publisher ad platforms need to look at historical data with seasonality and apply some very sophisticated algorithms to make a guess as to how much inventory will be available during specific date ranges. These “avails,” as they are called, become the basis for how all guaranteed ad sales are done.

But ad inventory has many very complex and difficult-to-predict issues that are endemic to the problem — the problem of predicting how many impressions will exist in a specific month is sort of like imagining how many cars will cross the Golden Gate Bridge in a given week. Predicting this based on historical data isn’t too hard. And predicting the color of the various cars that might cross the bridge is probably feasible with some degree of accuracy. Maybe even predicting the general destinations of the cars crossing the bridge is possible. But trying to predict how many red Toyotas driven by women with an infant in the car who have red hair and who make more than $125,000 annually is probably not a solvable problem.

This is akin to the requests given on a daily basis regarding ad targeting. This type of prediction is extremely technically challenging; nobody has been able to accurately predict how much ad inventory will be available in advance for more than three to four targeting attributes in advance. Therefore, publishers rarely will sell inventory that contains more than three to four attributes because this causes an immense amount of work during the live ad campaign for the publisher’s ad operations team. (They must monitor ad delivery carefully and adjust numerous settings in order to ensure delivery of the campaign.)

Inventory is sold within a contract called an insertion order (I/O), and each sold element is typically called a “line item” on the I/O. Line items correspond to a variety of attributes within the publisher’s inventory management systems. A simple example would be MSN>Entertainment. But a more complex example would be MSN>Entertainment>Women>18-34.

Beyond a typical guaranteed media buy, there are several other mechanisms for selling ads. Some ads are re-sold by a third party such as an ad network (examples include Collective Media, ValueClick, Advertising.com, etc.). Some ads are sold through an automated channel such as a supply-side platform, or SSP (examples include Rubicon, Admeld, PubMatic, etc.). There are also ad exchanges that can sit in the middle of all the transactions, and as the industry has matured, the difference between an exchange and an SSP has become less clear. These exchanges and SSPs then create a marketplace that allows ad networks and various demand-side platforms (DSPs) to compete for the inventory in real time. We’ll refer to this as real-time bidding (RTB) even though in some cases this term doesn’t apply exactly. 

The management systems for buying RTB inventory are generally called demand-side platforms (DSPs). In RTB media buys, it is extremely rare to have more than three to four targeting attributes (just like in guaranteed media buys), not because of prediction but because inventory that exists for each campaign or line item that contains more than three to four attributes delivers with extremely low volume. In fact, the amount of inventory available on a per-impression basis as you layer on more targeting attributes generally drops significantly with each new attribute.  This means that a typical line item for an RTB campaign would look very much like the one for a guaranteed buy: Entertainment>Women>18-34.

For a DSP to spend an entire media buy at more than four targeting attributes, the buyer would have to manually create hundreds or thousands of ad campaigns that each would then be manually optimized and managed. It isn’t actually feasible to do this at scale manually.

In summary
In a perfect world, advertisers would be able to find all available ad inventory that matches their goals, with as many attributes as exist on all impressions. The problem is that existing inventory management and ad serving systems are not designed to deal well with more than two to three concurrent targeting attributes, whether for guaranteed media buys or RTB.

So why do advertisers and publishers prefer to sell ads on a guaranteed basis?

Inventory guarantees serve several purposes. The most critical is predictability; media buyers have agreed with the advertiser on a set advertising budget to be spent on a monthly basis throughout the year. They are contractually obligated to spend that budget, and it is one of their primary key performance indicators. Publishers like to have revenue predictability as well, which is solved by selling a guarantee on volumes for a fixed budget.

For all the innovation in the ad-tech space over the last decade, it’s fairly impressive that very few of the core problems of a publisher have been solved. At the end of the day, 60-80 percent of the revenue that publishers bring in comes from their premium inventory, sold on a guaranteed basis — which represents generally less than half of all their available inventory. Nearly all the ad technology innovation in the last decade has focused on what to do with that other half in order to raise the median price of that revenue from nearly zero to a bit more than zero.

It seems to me that there is an opportunity to focus on something else. (And you might imagine that I’m doing just that.)

Eric Picard is CEO of Rare Crowds.

On Twitter? Follow Picard at @ericpicard http://twitter.com/#!/ericpicard. Follow iMedia Connection at @iMediaTweet.

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Whether at a startup or a Fortune 500 company, culture and communication with colleagues can have an incredible impact on morale and the bottom line. Amass enough naysayers, and the negative inertia can drag down the optimists. Similarly, a well-timed rallying cry can spur troops to close out the quarter on an up note, and help others be willing to work extra hours for a shared goal.

One of those opportunities for shared discussions is the company-wide all hands meeting, led by management, typically starring the CEO. In my dozen-plus years in the Valley, from the tiniest of startups, to my current role at Google, as you can imagine, I’ve seen a variety of ways a company’s culture was approached, and how these all hands meetings could take on a life of their own. A recent story by All Things Digital’s Kara Swisher regarding rumored changes at Yahoo! following Marissa Mayer’s joining the company as CEO has had me thinking about some of the crazy things I’ve seen since the end of the ’90s in such meetings, both good and bad.

The first company I worked, Internet Valley, didn’t ever grow to the point where All Hands meetings made sense. We had 3-4 employees, and our boss simply had to scoot his chair back and speak to the two of us worker bees to have a discussion.

After that dalliance came and went, at my second company, 3Cube, I was one of about a dozen people, mostly engineers, we had All Hands discussions to announce good news on product, business development or in fund raising. I remember when we raised $1 million in seed funding back in 1999, at a valuation of $10 million, and spoke of plans to get the next round at $10 million with a $100 million valuation, if our goals were met. Our CEO, and the rest of us, were excited. As drinks were poured, we joked that the million bucks, split about 10 ways, would be a fun run to the Mexican border, if nothing else. We also used the All Hands format to discuss new partners, and ready product rollouts.

I joined BlueArc in 2001, and initially, during our glowing phase when we came out of stealth and made our first customer shipments, our All Hands meetings rallied the company for a common good.

But almost immediately afterward, due to our own issues and economic uncertainty, those disappeared. In a year’s time, the three All Hands meetings we had were to discuss two separate rounds of significant layoffs, with a CEO change in the middle for good measure – on April Fools’ Day, no less. We knew that if an All Hands meeting popped up on our calendar for the upcoming Friday, there was a good chance you should back up all your email on Thursday. All Hands meetings were brutal and scary.

As those of us left behind muddled through, we gained a new Marketing VP in 2002, and we survivors recounted the situation. Unsurprisingly, he was appalled, and helped us restart semi-regular meetings, where we didn’t fear for our jobs or the company’s livelihood. For the most part, the meetings, held once a quarter or so, recapped the last three months of sales, and highlighted our pipeline. But even those meetings started to take on a Twilight Zone feeling, as it seemed our CEO would talk about how we had not met sales expectations for the quarter, but we would still get some bumbling engineer to ask how his stock options were doing – seemingly oblivious to the fact that we were going nowhere fast.

Those meetings were also memorable for the inevitable sales guy calling in to the conference line in the car with the top down, and not being muted. Nothing like the entire company waiting around while the CEO barked into the Polycom for whoever it was to “PLEASE MUTE YOUR PHONE.”

After a few years of this nonsense, and a few Marketing VPs later, I previewed to the latest guy exactly how the quarter’s All Hands meeting would go down, with specifics on the CEO’s nuances, the sales guys’ excuses, the engineers’ begging for stock updates, and more. When he viewed his first All Hands meeting in person and watch it unfold in front of him, just as I had told, he swore to me it was all he could do to stop from laughing. How could it have been allowed to be so bad for so long? Such a great opportunity to communicate transparently and freely with the whole company wasted.

From that day forward, we took ownership of the All Hands meetings, working with the CEO and management, to make sure the content was planned in advance, that there was a variety of speakers, and value to everyone who joined – not just a droning on of excuses that had little bearing on employees’ day to day. The results were clear, as employees felt better informed, understood product roadmap and big sales opportunities, and, when appropriate, what was needed to keep the company funded or solvent. It was a remarkable change from the three straight doomsday All Hands meetings and the cries for options to mute phones on the conference line.

Google’s TGIF experience is well documented on the Web. It’s open to the employees and closed to the outside world, to protect the discussions and keep people informed and engaged. That Yahoo! would now be getting the same kind of regular updates and visibility into management they deserve is something that should be exciting to their team, for those who have suffered after wave after wave of bad news, in the same way our 2001-2003 All Hands seemed to flow.

Meetings for meetings’ sake don’t make a lot of sense. Meeting as a company, in the spirit of updating, discussing and enriching employees does, and having seen well intended executives fall flat, and others do quite well, I know there’s value to getting the All Hands meeting regular, open and engaging, even if your company is small.

Disclosures: Yes, I work at Google. No, I won’t tell you more about details of TGIF. Yes, Yahoo! is an assumed competitor. No, this is not an endorsement of any rumors by ATD or any official commentary on Marissa or Yahoo!.

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A couple of years ago, two of my students created a presentation extolling the virtues of eating a traditional Japanese diet and encouraged their fellow students—with evidence and anecdotes—to eat much less fast food. The secret to a healthy life, they said, was eating a traditional Japanese diet inspite of the ubiquitous fast food options in today’s Japan. In this presentation they introduced a simple phrase — ichi ju san sai—which many students had not thought about, although they had heard the term before. Japanese cooking is in part based on the principle called ichi ju san sai (????) or one soup and three side dishes (plus rice). The ichi ju san sai pattern goes back several centuries in Japan. The three side dishes usually have a main dish plus two lesser dishes. The main dish is often a protein like fish and the lesser dishes might include items such as tufu or potatoes or vegetables like carrots, daikon radish, burdock root, and so on. And a typical meal is served with tsukemono (Japanese pickles) on the side as well. With this kind of meal it is very easy to follow the hara hachi bu principle (eat until 80% full) while still feeling satisfied.

ABOVE Here is one of their slides sketched first on the whiteboard. Later they took their own photos and built there images in slideware, but occasionally students sketch all their slides like this on a whiteboard and then take pictures of each sketch with text and use those images to fill the full frame in their slides.

A lesson in variety & balance
We can apply the spirt of ichi ju san sai to other aspects of our creative lives, including presentations. For example, ichi ju san sai is good for achieving a relatively low-calorie but nutrient-rich diet. A lot of fast food reverses this equation—high-calorie, nutrient-weak—especially when sugary drinks are added. In a similar way, many effective presentations are relatively short in terms of time but rich in content and meaning (and relevance, inspiration, etc.). Good presentations subtract the superfluous and add the meaningful and are efficient with time. However, ineffective presentations are often weak in relevant content and meaning but nonetheless take a very long time to deliver.

The principle behind ichi ju san sai is a good lesson in achieving variety & balance through simplicity. With food we need a variety of different sources from which we get our calories. The ichi ju san sai principle encourages variety and adjusting menu items to include what is in season, ensuring the freshest of content. Variety and balance are keys to many aspects of our lives, however, including education — how we learn and help others to learn — and our pursuit to make a contribution in the world and find some bit of happiness and fulfillment while doing so. We need security and reassurance and we get that through routine and exposure to the known and the expected, but we also crave variety. No variety, no life.

Looking back to the future
The photo above is of one of their pre-slide sketches which features the phrase ???? (onko chishin) which means something similar to “visit the past to understand the new” or “learn from the past.” My students are calling this “Back to the Future.” That is, there is much to be learned, they said, from the past and that we are well advised to bring some of those things from traditional “old Japan” with us to the future, such as the healthy, sustainable, and delicious eating habits of the past including the ichi ju san sai approach. The secret to the future, at least when it comes to cooking and eating they said, is to look back to discover lessons from the past that we may use to improve our present. This principle too has many applications for our personal and professional lives today.

ABOVE Two students plan their presentation on the benefits of traditional Japanese cooking vs. modern fast food, first by brainstorming on paper and sketching visuals on the whitebaord, and then in their storyboard books long before the computer was turned on.

It is difficult to understand why statisticians commonly limit their inquiries to Averages, and do not revel in more comprehensive views. Their souls seem as dull to the charm of variety as that of the native of one of our flat English counties, whose retrospect of Switzerland was that, if its…



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