YES, we made it!

nugg.ad is one of this year’s Red Herring 100 Europe companies.

Malta, April 15, 2008 – Red Herring today announced that nugg.ad is a recipient of the Red Herring 100 Europe, an award given to the top 100 private technology companies based in the EMEA (Europe, Middle East and Africa) region each year.

We’d like to use this opportunity to thank everyone in the company, our customers, family and friends.

Google updates it’s data sharing policy: Analytics Data will enhance Google-Ads

Today is saw this announcement in my Google Analytics account:

Google Analytics Data Sharing SettingsIn order to improve your experience with Google products, Google Analytics is updating its data sharing policy. Read the rest of this entry »

nugg.ad = ctr improvements like hell

We are really exited about the results for our campaign on imediaconnection. A Clickrate of nearly 3% is fantastic. (although this is what we see every day after clients start using our technology…;-))

“Thanks to predictive behavioral targeting even our own campaigns kick ass Read the rest of this entry »

The truth in Advertising

This is a very nice film about how the whole advertising process works. Read the rest of this entry »

Predictive Self Healing

Today we got our first brand-new Sun T5220. We are all really exited about this – this is one of the most powerful machines available at the market currently. And it is really cool – 64 cores on one CPU (see below). Those machines are powered by predictive self healing – where else should a machine with a feature like that run?

System Configuration: Sun Microsystems sun4v SPARC Enterprise T5220
Memory size: 32640 Megabytes

========================= CPUs ===============================================

CPU CPU
Location CPU Freq Implementation Mask
———— —– ——– ——————- —–
MB/CMP0/P0 0 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P1 1 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P2 2 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P3 3 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P4 4 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P5 5 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P6 6 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P7 7 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P8 8 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P9 9 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P10 10 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P11 11 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P12 12 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P13 13 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P14 14 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P15 15 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P16 16 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P17 17 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P18 18 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P19 19 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P20 20 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P21 21 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P22 22 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P23 23 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P24 24 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P25 25 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P26 26 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P27 27 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P28 28 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P29 29 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P30 30 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P31 31 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P32 32 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P33 33 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P34 34 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P35 35 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P36 36 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P37 37 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P38 38 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P39 39 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P40 40 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P41 41 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P42 42 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P43 43 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P44 44 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P45 45 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P46 46 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P47 47 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P48 48 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P49 49 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P50 50 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P51 51 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P52 52 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P53 53 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P54 54 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P55 55 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P56 56 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P57 57 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P58 58 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P59 59 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P60 60 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P61 61 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P62 62 1167 MHz SUNW,UltraSPARC-T2
MB/CMP0/P63 63 1167 MHz SUNW,UltraSPARC-T2

What was, what is now and what is to come in Behavioral Targeting

The year is drawing to its end – traditionally the time for retrospectives and previews of what lies ahead. The media are full of these. Yet behavioral targeting, our specialty, is a bit underrepresented. Which is why I’m going to offer my own entirely personal review for 2007, including some thoughts on what awaits us in 2008.

What was

Already a year ago it was only very occasionally necessary to explain the entire concept of behavioral targeting in its entire breadth. Target groups rather than environments – marketers and agencies were quick to pick up on the model even then. At least in theory. Because, unlike today, we often heard arguments like:“We have high-quality content. Targeting is more like something for portals or for marketing unsold capacity”“Behavioral Targeting is a trend; it’ll pass”“Agencies don’t ask for behavioral targeting”“Nobody understands predictive behavioral targeting; it’s all far too complicated”I don’t think these statements require any further comment now, but those were the objections that were being raised just a year ago. And I had to fight my blasted way through them all too often!

What is now

A lot has changed in a year. Behavioral targeting and also nugg.ad’s own new twist, predictive behavioral targeting, no longer fall into the category of “maybe next year” but are already being put to work here and now. There are almost no marketers, almost no agencies or even advertisers left who think the issue is not important. Behavioral targeting is revolutionizing the advertising market by ending decades of industrial mass marketing and the inescapable monotony of the ad blocks, and placing the focus back on the consumer. “Advertising for people instead of pages” – that quite rightly sounds like a battle cry. Behavioral targeting is nothing less then a fundamental and permanent paradigm change for the advertising business.

What is to come

I am firmly convinced that the trend toward advertising based on targeting technology will continue and even accelerate in 2008. My theories on what awaits us:

1) Behavioral targeting will emerge from its niche. Agencies and advertisers will take up the opportunity to control campaigns on the basis of profiles as the primary selection criteria more and more often when making a choice between marketers and advertising media. Targeting push will morph into targeting pull.

2) Behavioral targeting and its continuing improvement (see the next two points for more on this) will bring about a push in growth for display advertising. In the long run, display advertising is going to become significantly more successful than keyword marketing ever was. Unlikely as it seems given Google’s rapid development, the evidence is there to see: Google cannot market Fast Moving Consumer Goods! People just don’t do searches for fabric softener, low-fat margarine or yogurt. Some of the fattest budgets are here in this field; Google just can’t get a hold on them, but intelligent display ads are another matter entirely.

3) There will be a certain sobering up about the potential of traditional behavioral targeting, since there are simply not enough click behavior data and profiles to cover the demand for target markets. And the attractive budgets of stationary businesses and manufacturers of brand-name goods in the FMCG field can’t be won solely on the basis of behavioral targeting.

4) Predictive targeting will take center stage. It is not without justification that eMarketer recently declared predictive targeting to be a mega-trend and that our competitors are meanwhile pursuing this development as well. Predictive targeting allows both profile depth and coverage. Profiles based on predictive behavioral targeting are fuller than pure usage profiles. The demographic and lifestyle information and product affinities they contain are the key to winning a share of FMCG budgets.

5) Media agencies will establish their own targeting products and will strive to form profiles on the basis of their own data collection. One advantage that agencies have in this regard is exclusive access to post-click behavior, that is, information about what happens on their advertising clients’ pages. This is a big step toward forming their own interest and user profiles. The problematic aspect is the convention among marketers prohibiting agencies from conducting their own measurements. Conflicts and difficult discussions about data rights and business models would appear to be unavoidable here.

6) New solution providers for behavioral targeting will enter the market, while others will disappear through mergers & acquisitions, or at the very least will lose their independence. We saw this in the past year with Tacoda (AOL) and Blue Lithium (Yahoo), and I am now expecting the same for RevenueScience (long on the prowl for a buyer) and WunderLOOP (there is supposedly a review of investors and their previous sales cycles going on). Innovations will continue to flow from the USA, but also buttressed from Europe as well. Without patting ourselves too much on the back – looking at the developments made by nugg.ad, United Internet TGP and WunderLOOP, I see Europe as being a technological step ahead of the market leaders from the USA right now.

7) The handling of data privacy issues for online marketing will receive increased attention from a broader public and hence government as well. Privacy protection debates are surely not going to hold up the marketing of websites and thus the success of a billion Euro industry, but they will need to be taken very seriously. In the end, the only ones who can sustain their position will be those who work actively on privacy protection, are not limited in terms of transparency and respect users’ rights without any ifs or buts. As we place a very high priority on these things, nugg.ad has become the first targeting service provider to earn certification from the ULD, a renowned organization with great authority in the industry. We would most emphatically welcome it if our colleagues were to follow our lead here.

The Crunchies 2007: please vote

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UPS reduces left-hand turns with predictive algorithms

Great story that tells how algorithms can be used to save a lot of money by only changing how things are done slightly. Quite the same what we do with online ads…

Data retention and behavioral targeting: why targeting via “service providers” is (can be) the best option*

Friday was a black day for civil rights and informational self-determination. I grew up in Bavaria, but after I moved away I had hoped that the whole business of computer surveillance, dragnet controls (“identity checks where there are no grounds for suspicion”) and suchlike would belong in the past. Now these measures are being introduced throughout the whole country, on my beloved Internet. To connect this with September 11 is laughable – anyone who has studied the material knows that. So should we read the newspapers more again, and watch more TV? Because no IP addresses can be tracked there?Hopefully not (although reading the papers more often wouldn’t do any harm – but that’s another story).In addition, there is an increasing number of initiatives dedicated to the craze for storing data on the Internet which want to fight against it becoming simply a matter of course to collect and link data and to use the resultant personal profiles for whatever arbitrary purpose (see for example: www.wirspeichernnicht.de). At an FTC hearing it was even suggested that a do-not-track lock list should be set up.I think that everything possible should be done to keep the Internet as a place where people can distribute information more quickly, with fewer filters and with far lower entry thresholds for authors and readers. In other words, as a sensible and intelligent new form of reading newspapers (and producing them). But also with free offerings and simple sources for financing this…That’s easily said, of course: of course I’m writing in the nugg.ad blog and I work for a company that promotes itself with the claim to make advertising more intelligent and better tailored to the users’ interests. I’m also convinced that there’s no way this trend in online advertising can be stopped, and it must therefore above all be structured. In addition, it’s an incredibly exciting project to finally give online advertising the features that are possible online and which put online ahead of all other media. And that is also to do with tracking…The point is: no personal profiles need to be created to do this! I’d even go so far as to say that no one in the advertising trade actually has any real interest in Schäuble-type personal profiles which can be related to individuals. A rough “good guess” is perfectly adequate. A segment that is served efficiently, a halfway passable estimate of what might interest someone (we’re talking about Flora margarine vs. Stork margarine and the like here, not about political leanings or sexual preference). What’s not clear to a lot of people is that advertising for micro-profiles or even individual persons is simply unaffordable and consequently not wanted. Even the popes of CRM Peppers & Rogers soon distanced themselves from the strategy of 1:1 marketing and have introduced “mass customization” as their guiding principle.This should be grasped as an opportunity for behavioral targeting. In other words, not only is it prohibited to create individual personal profiles without permission; it’s just not, in fact, necessary! So it shouldn’t be done; on the contrary, every effort should be made to avoid sailing in the wake of these unspeakable initiatives (data retention, etc.).So what should a company do when it wants to introduce “clean behavioral targeting”?

1. Ensure that no IP addresses are collected or stored, preferably by using a strong 3rd-party anonymizer and ensuring corresponding contractual agreements, because this is the only way to guarantee that the protection cannot be bypassed. That’s the ultimate measure to avoid becoming an involuntary accomplice of Schäuble & Co!
2. Don’t work with finely granulated click profiles (“User A clicked on football 10 times, NRW regional news 4 times and adult entertainment once”). A statistically concealed profile is quite sufficient (“User A has 0.8 interest in football, 0.3 in adult entertainment and 0.4 in news”).
3. Don’t do it yourself! It’s a common mistake: implementing behavioral targeting in your own company, in particular when you also have access to other data of the user (because you are the ISP, for example) is in no way more reliable than putting it in the hands of a third party. The danger lies in the inadmissible linking of data, and this is far more transparent and must be regulated by clear agreements when targeting is implemented by a specialized service-provider. Data privacy experts speak of the separation of information powers here.
4. Offer an opt-out option and inform the users clearly about how the data are used. The request to the FTC to introduce the do-not-track list is justified by the fact that the industry has so far not been able to create easily accessible opt-out options voluntarily! (I think the authors know the global opt-out site of NAI – I think, from their point of view, that this option should be given more prominence and offered directly on all content pages…)

By the way, the most effective measure to gain user acceptance is unfortunately not on the list yet, but I’m sure that will change sometime or other: a sensible trade-off! When users see that tracking (which is performed according to clean and transparent principles, see above) provides them with advertising which is really more relevant (and perhaps a smaller volume of advertising) and that a gem of information can perhaps be found in it sometimes, they will have absolutely no problem with it! Users want to get something in return for the data they provide. Currently they get too little, even though it can be proved that behavioral targeting functions excellently – for the industry, that is…Until this is achieved, the same applies for online advertising as ever: behavioral targeting will help to maintain the growth of online advertising at a high level. Such technologies will also attract new budgets to the online sector from the TV and print sectors (keyword: Lätta). Nearly all the exciting, free offerings on the Internet are financed with this money – and currently really only with this money! Regardless of whether a good content site is concerned, such as Spiegel-Online, Google Maps or free email. Or some fancy Web2.0 game site. Without online advertising, none of them would exist. Consequently everyone (publishers, users, advertisers) should be interested in finding the right way to deal with the topic. Closing your eyes doesn’t help; rather, keeping your eyes open, but without hysteria, by implementing sensible measures. And the industry must simply do everything possible to build up trust honestly.So: we do perform tracking, but what we track does not result in a personal profile. Tracking is therefore no more dramatic than the fact that your way through the supermarket is recorded by market researchers and is used to optimize the shelves. They’ve been doing that for years, by the way…*PS: Naturally I’m not trying to say that in-house targeting per se is not OK. The principles outlined above can also be used for that – even if by definition introducing the separation of information powers requires another party to be included…

Facebook targeting: but how?

I don’t want to be a spoilsport, and at the moment it’s about as dodgy to criticize anything about Facebook as it is not to buy an iPhone.But I have to say that all the hype about the wonderful Facebook targeting (and also about what Myspace has launched) puzzles me. Even more so now that I’ve taken a closer look at it (yes, I have a Facebook account!).I found it fundamentally rather questionable that sensible targeting for online advertising should be based on a self-maintained community profile. Shit, now even the holy Web 2.0 principles are coming under attack… Surely we don’t want to call into question the user-driven content, tut, tut, tut. But nevertheless, profiles created in Myspace and Facebook are simply a long way from being taken seriously. After all, they’re not a virtual registration office. People present themselves there and turn themselves into what they’d like to be, and so on.That’s totally OK, and it’s a no-brainer. But why that should suddenly be so revolutionary for online advertising really puzzles me. And it’s all the more puzzling when you examine exactly what a Facebook profile can actually contain, provided someone has really taken the time to complete it and the details are half-way correct.Let’s just imagine we’re a brand manager of an online advertising budget and we are confronted with this online advertising revolution. What criteria can we now choose for out advertising?

1. Sociodemography

OK. Age, sex, hometown, country, political views and religious views. All regional information is old hat, any old ad server can do that, and it doesn’t work anyway.Age and sex are fine, of course – no question. If these details are correct (??) they provide important information for online advertisers! Though some email providers and ISPs have got this information – if they really dare use it for advertising…But the revolutionary potential is still barely above zero.

2. Relationship status

Are we hetero or gay? Married or “complicated”? Are we looking for sex (openly or secretly)?This is irrelevant for advertising – except for online dating sites, perhaps.And with dating sites you can already see another problem: how would it be for users if they entered “Looking for Dating” here and then the banner for the Parship dating site would always appear at the top of the screen? I think people would find that most unpleasant…

3. Interests

Now things are getting interesting. Personal interests and preferences. With a free entry mask. Hmm….Let’s be honest here: how much information will we find here that is relevant to advertising? Not even taking into account different spellings and so on. But what advertiser is going to be interested in my favorite films or books or what I consider the coolest quotes? I believe we’ll soon witness a few wonderful cases concerning music downloads or DVDs (my tip: Hitflip). Those will work too, if reach is not taken into account. So we have the simple phenomenon that users (naturally not all of them) will specify something here, but these details will be far from complete and certainly not up to date. If I think the new Babyshambles CD is great, I’m going to rush to update my Facebook interests profile before I do anything else. And I’m not going to enter all the songs in my iTunes library there, no, no, no…The result is simple and dramatic: Facebook targeting has no reach! Even if a few users mention Babyshambles, Facebook will still only contain a fraction of the Babyshambles’ fans. Even Facebook comes quickly into the region of just a few thousand profiles. And these then have to be active for the campaign. But advertising aims at bulk, and the TKPs that call Facebook will only work with bulk. Ergo..…But above all: from the point of view of advertising, how much is missing here in terms of interests? What about consumer goods, electronics, insurance, financial services, automobiles, DSL preferences, hair conditioners and the wonderful “sweet and savory snacks” (AGOF)? None of them are there. And even if an entry form were available for these products, of course nobody would complete it – it would probably drive the users away. Or they would bombard it with spam, like the wonderful interests questionnaires that gmx regularly sends its users, for example.What else is there? University, current employer, previous employer, job description, etc.

Conclusion: Facebook will permit targeting with respect to age and sex. That’s it. And good advertising opportunities for dating sites and music labels perhaps – but with major reach problems and tricky questions relating to data privacy.

For advertising, it’s the other way round: forget the profiles, use them for profilingI have no doubt that Facebook and other social networks work…as social networks! In other words, we will actually find a great deal of relevant information on people there, often private information and not infrequently also quite special things which people describe well. That’s the whole point of these networks – that people use them to describe how unique they are (definitely with a mixture of fact and fiction). And then that they find other people in this way (because they want to do this, the quality of the profiles will always be totally OK). But the profiles will never be of the type that the advertising industry would want. However, with statistical methods, a few additional tricks, and intelligent handling of the topic of data privacy, you can make something out of the profiles that will be relevant for advertising.That is, when you take the people’s digital DNA as a basis for profiling procedures and don’t attempt to control advertising directly on the basis of the profile information! For example, by questioning a few Facebook users about the products they are interested in. And definitely not entering the answers in the profile, but keeping them strictly separate – and also communicating this fact. That’s the only way to get honest answers (as it simply makes no sense to give fake answers). Then take these answers + the digital DNA as the basis for profile assessments.

That will work; I’m sure of that.