Offering further proof of how much online display technology is inspired by the financial industry, Legolas Media announced numerous agency partners, including Horizon Media, on board with its audience futures marketplace. Employing a complex algorithm that incorporates 10,000 data points regarding audience targeting, Legolas enables publishers to sell guaranteed inventory based on the likelihood of targeted audiences visiting the site. We caught up with Yoav Arnstein, Legolas’ CEO and cofounder, who was kind enough to explain how publishers use the company’s technology as well as how advertisers buy on the Legolas Marketplace.
What are audience futures, and what was Legolas’ inspiration for building the technology to bring them to market?
The term “Audience Futures” refers to the ability of a marketer to purchase advertising rights to specific consumer audience profile targets, in an upfront manner. Legolas enabled this type of trading, for the first time, with algorithms that forecast future availability of audience, on a publisher by publisher basis, using our proprietary technology.
Legolas built this technology so that brand marketers can leverage audience intelligence using the planning, buying and measurement paradigms they are comfortable with and that mesh well with their other digital channels. For premium publishers, our solution helps increase yield and incremental revenue from their “remnant” inventory while mitigating risk for and even bolstering their premium salesforce’ effort.
We created a new class of inventory – tier 1.5 – that is audience driven. Before publishers are forced to make the tough choice between letting unsold inventory perish, or monetization via exchanges and networks at very low CPMs. Now they can sell through our marketplace with an attractive yield and guaranteed spend.
The key is in the forecasting and other perks similar to current direct sales. In the end, we wanted to improve online branding and advertising, by combining the positives from what’s currently out there and making it easier, smarter, safer, and improving measurement.
What kind of publishers are you working with?
We are currently working with premium publishers across the spectrum – to give you an idea we work with at least 30 of the major content producers out there, operating thousands upon thousands of websites. We have worked hard to get a varied representation across the web in terms of categories: news, magazines, lifestyle, sports, finance, gaming and social, ethnic and more.
How does pricing of this audience future inventory work? How can it be most advantageous to both advertiser and publisher?
It is a fully transparent marketplace. Inventory pricing is proposed by publishers through a reverse auction process and on a cost per thousand basis against a desired audience segment. Publisher participation is selective on a campaign by campaign basis. The advertiser is presented with several media plan options, and then chooses the best overall plan based on factors such as audience reach, value, and content (normally with several publishers). This allows for price optimization and accurate expenditure of budgets – positives for both sides.
Your website claims publishers adding Legolas will cause no disruption or displacement to ad operations processes – how does Legolas work with publisher ad ops? Can you give an example of how the tool is implemented?
Legolas campaigns are setup and executed in a manner extremely similar to standard premium campaigns – a considerably advantageous notion for publisher ad ops teams. Our campaign stewardship system facilitates the entire launch process, from generation of insertion orders, via export of ad tags and detailed trafficking instructions, to transparent measurement of campaign performance. Our technology was built in such a way that it coexists happily with both the publisher’s and the advertiser’s existing ad serving infrastructure.
How does Legolas’ publisher offering eliminate limitations on content and formats, especially compared to other tools?
Because we integrate directly with the publisher’s own ad server, Legolas does not create any format barriers, and can support the gamut of the publisher’s own offering. While other tools have tight format restrictions due to scale and technology limitations, we feel that focusing on the top tier publishers exclusively and enabling them to push any product line they choose through our platform, we’re enabling a more rich experience for both both buyer and seller.
Last year Legolas partnered with consumer and market intelligence firm SymphonyIRI to leverage in-store purchase behavior and sales data into the media buying and campaign measurement processes. How is third-party data leveraged on the publisher side?
Through the Legolas platform, our publishers are provided a window into the matching results of their audience composition against that of our third-party data partners. This enables a publisher to view their audience from the perspective of that third party data provider and already filtered to the marketer’s needs. Throughout the campaign, publishers are provided with insights into the audience data driving campaign allocation and performance.
How is the Legolas Marketplace set up? How do advertisers purchase futures?
There are four main steps to the process.
- Audience Planning – advertisers build profiles with first and third party data and can see the marketplace reach and data costs instantly.
- Activation – Budget and audience definitions are broadcast as part of the auction process to publishers who may then choose to participate and propose pricing. After the auction is closed, the marketer will choose the optimal media plan and allocate budgets.
- Delivery of Campaign – Legolas assists and works with buyer, seller and data providers to make sure goals are met.
- Measurement and Analysis – Occurs throughout campaign; our platform provides access to key performance indication metrics, such as Brand Recall, Favorability, CPA, CPC, CTR, etc.
How do you feel the RTB and programmatic buying space needs to continue evolving? What would you like to see change this year?
We proved this year that RTB is not the only way to activate audience data. We feel that owners of low cost inventory and price sensitive marketers should continue and rely on RTB marketplaces for optimizing yield and results. For most brand marketers, we feel the Legolas marketplace is a unique environment for leveraging audience data in a way that drive brand performance. As such, we feel that futures and RTB are great trading methodologies for the proliferation of audience driven digital advertising.