Interview with Mike Smith, Author of "Targeted"

The Prolific Wisdom community of Harvard alumni reviewed Mike Smith's new book, Targeted, about the rapid rise of online advertising. Here's our rating, review and FIRE Summary of his book. Also see Prolific Wisdom video interview with Mike Smith.


RATING
Recommended reading. (4 out of 5 stars)


REVIEW
Targeted provides a clear overview of the digital advertising landscape. This space is booming, but due to its scale and multitude of participants it's often confusing for someone outside of this industry. The book is engaging and well written. It gives a very good overview of the evolution of digital advertising, the rise of Real Time Bidding, retargeting and display advertising as well as outlines key trends likely to impact digital advertising in the near future. 

Targeted makes readers realize just how much personal information we provide without knowing how, why and who will be using it. We agree to terms and conditions without reading the contract.
This book is a little slow to start, but once it gets going, it relates a mix of stories from the author's experience and the pace picks up to make Targeted an enjoyable read. For a newbie to online marketing, the book isn't too heavy or too laden with the industry jargon. We enjoyed the author's style throughout and his use of valuable statistics in several of the chapters.

FIRE SUMMARY (Facts, Ideas, Resources, Expression)

FACTS
25% of ad dollars go to digital advertising ($40B a year) 
One of every four ad dollars spent is for digital advertising. TV is still the top ad category. In 2013, USA online advertising amounted to $42.8B and intermediary 'middle-men' account for over 60% of online ad dollars spent.
Google dominates
The search advertising industry generated $19.9B in sales in 2013. Google generated 70% of this revenue. Interestingly, Google conducted 67% of all searches done in the USA in Dec, ’13. Meanwhile, display ads sold $17.8 billion, which was 42% of total online ad spending.
Real Time Bidding (RTB) works well
In studies, RTB has been shown to get better Click Thru Rates (CTR), and double the ROI of Run of Network advertising.
Digital ads $185B by 2017 
Price Waterhouse Coopers predicts digital advertising will reach $185 billion worldwide in 2017. (eMarketer predicts $72 billion in the USA for 2017).
Mobile to dominate
eMarketer forecasts that by 2017 60% of US digital ad spending will be for mobile device ads. Mobile (apps) will dominate. There's one billion active smartphones worldwide now and this should reach two billion in the next three years.


IDEAS
Agencies behind the curve 
Online advertising became very complicated and fragmented which confused advertisers and grew beyond the resources of ad agencies, so new intermediaries have sprung up.
Shifting media landscape
Most obvious area for growth is in mobile and tablet advertising due to the growth of the usage of these platforms from a small base. Digital TV provides an intuitive opportunity, but the current infrastructure makes it harder to execute and leaves that a question mark.
RTB, Adapt or die
Results of ad buys can change quickly, so its best to learn and adapt quickly, so Real Time Bidding really helps optimize in the moment.

Display + retargeting is better than search
Retargeting can endow display advertising with the same intent quality as search advertising, yet display ads sell for less and are far more immersive and better for brand building than flat paid search ads. People spend 5% of their online time at search engines, and 95% elsewhere...in front of display ads.
The future = display ads, video, mobile, RTB 
eMarketer predicts display advertising will grow 23.8% in 2014 vs 13.4% for search advertising. Digital video and mobile are growing faster but have smaller bases. By 2018 RTB display advertising should reach 30% ($12.5B) of online display ad spending vs 22% ($4.9B) for 2014. Display advertising will surpass search advertising in 2015. By 2018 display advertising should be $41B vs $32B for search. Over half of all online ad spends will be for display.


RESOURCES
Small niche networks
Blogads, Deck Network, and Federated Media are smaller niche ad networks
Big ad exchanges
Ad exchanges use an auction system. Yahoo’s Right Media, Google’s DoubleClick and Microsoft’s AdECN are three of the biggest. Google and OpenX have large online display ad exchanges.
DSPs and SSPs
Demand Side Platforms (DSP’s) work with media buyers and agencies and to buy ad inventory and improve targeting. MediaMath, DataXu and Turn Inc. Supply Side Platforms a.k.a. yield optimization platforms help sellers get more for their ads by improving their technology for targeting. See Google’s Admeld, PubMatic, and The Rubicon Project.

Behavioral data 
Data Aggregators/Providers are controversial because they share information and behavioral data about people. See BlueKai, eXelate, Nielsen, Intelius, and Spokeo.
Ad research
Moat is an analytics company for online display ads. They're developing new ways of measuring how ads change attitudes and actions, to help advertisers move beyond mere CTR measurement.


EXPRESSION (What to do next)
Beware of bots
When buying advertising on CPM, ask how bot, crawler, and spider traffic is removed from your traffic count!
RTB imperative
Get your head around the top RTB ad exchanges. Seek out opportunities to use display RTB retargeted ads.
Beware of RON
Be careful with Run Of Network advertising. Your ads may be placed in inappropriate places for your brand.
Privacy guard
Be more careful about the information you give out. Be more mindful of the ads presented to you. Click on the wrong one, and they will follow you for a while. Be conscious that ads are targeted to your past behaviors.
Move quickly, focus on behaviors and keep your eye on predictive analytics 
When buying ads focus on observable behaviors rather than pre-conceived notions and stereotypes. Look at engagement first. Don't use static campaigns. Look at results and adjust your audience quickly. It will be interesting to see how predictive analytics develop to boost ad results.


Review Contributors
Mark Brooks (PLD 2014) - CEO, Courtland Brooks
Boris Tsimerinov (PLD 2013) - VP, CCC Investment Banking
Georges Selvais (MBA 1975) - MD / Co-founder, Catalyst Quality
Andre Lamontagne (PLD 2014) - Research Manager, Servomex
Katherine Montero (Mgmt 2009) - Director, Global Deeds Foundation 
Vikram Banerjee (PLD 2014) - Head of Consultancy, Footdown
Hena Rana (PLD 2014) - Operations Manager, Beca