Yahoo's new acquisition leverages data—and plenty of it—to define the best audiences for ad campaigns
More than two billion people—almost 30% of the world's population—use the Internet. In such a huge, diverse marketplace, how can advertisers know when they're targeting the users who are most likely to respond to their campaigns?
One answer to that question is interclick, a company acquired last month by Yahoo! to strengthen its already formidable set of audience-targeting capabilities, powered by robust user, partner and advertiser data. Interclick brings a powerful, data-driven solution to define and target the best audiences for online marketing campaigns. The brains behind it all is interclick's Open Segment Management (OSM) platform, which analyzes billions of consumer data points from a wide variety of sources to define target audiences with greater accuracy and scale.
"The key to delivering better performance to marketers is building a deeper and more holistic understanding of their consumers," says Michael Katz, interclick's founder and former CEO, and now vice president, Sales, at Yahoo!. Interclick helps customers build that understanding by leveraging OSM to aggregate, organize and normalize massive amounts of consumer data from more than 20 of the leading data providers in the industry.Three major challenges face advertisers when they run audience-targeted campaigns, says Katz. But interclick offers a solution to help advertisers overcome each of them.
Challenge #1: Which data points drive results?
For all the focus on metrics, most advertisers don't understand exactly which data points drive results for their campaigns. Is it the creative? The publisher? Or the targeting?
OSM can be used to model how any data point—such as the publisher, type of creative exposure, or other user attributes—impacts campaign results. It can also measure the effectiveness of user exposure to different ad formats within a campaign; for example, how video and display ads impact each other's performance.
When it comes to targeting, OSM data-valuation capabilities allow a much deeper dive. Marketers often base their audiences on general descriptions of consumers who have bought their products before—say, males age 25 to 44 with college degrees who earn more than $100,000 annually. Purchase history is important, but it's just one of many valuable data points needed to build the best audience.
OSM allows interclick to go beyond audience description to audience prediction---determining which specific consumers are most like to act on a particular ad, based on a comprehensive analysis of their online actions. The interclick team looks for data points that are considered highly predictive in nature, such as interest or psychographic data. The team uses that data to define an optimum target audience, and then connects with those consumers across their online media "footprint."
This approach allows advertisers to make more informed media buys, fine-tune their campaigns, and get to know their best customers. "We help advertisers develop a richer understanding of who their consumers are and what they're likely to do, so they can connect with the most qualified consumers," says Katz.
Challenge #2: One-dimensional audience-targeting solutions
Most audience solutions are designed to work with a single data source or type to define their targets. For example, "auto enthusiasts" may be defined as users who may have read X number of automotive articles over Y days. But this ignores valuable data points such as brand affinity, whether the user was a serious shopper or just an enthusiast, and many others.
OSM was built to collect and analyze a larger quantity and wider variety of online consumer data points to paint a sharper picture of the optimum target audience. "Because we use much broader, deeper and more complete data sets, we run into fewer problems in our audience-modeling exercises," says Katz. "We can predict with a greater level of accuracy which audiences generate the highest response rates. This allows us to deliver audience targeting solutions that not only perform better, but also scale."
Challenge #3: Vague and ambiguous target audiences
Target audiences are often described in general terms such as "soccer moms" or "gadget geeks," but who exactly are these people, and what do they do online? Most vendors create their own definitions without much transparency into which data points they used to do it.
To define an audience like soccer moms, interclick uses OSM to collect and analyze many diverse data sets, including demographic data, occupation data and search data. It looks for anything that can be used to describe the audience and predict their online behaviors, so OSM can build the most responsive soccer mom audience for that campaign. Plus, clients can clearly see which data points have been used to develop that audience, so it can be modified as campaigns progress.
Next steps for interclick and Yahoo!
With the acquisition closed, interclick's technology and team are being integrated into Yahoo!, with the ultimate goal of providing even more advanced audience targeting and campaign reporting capabilities to Yahoo!'s customers. Katz predicts that advertisers will soon begin to reap some serious benefits.
"Yahoo! brings amazing assets, like a massive audience, robust data and lots of premium inventory," explains Katz. "We bring the tools to help refine those raw materials and make them even more valuable to our clients."
— Bob Pickard