How server logs are making demographics obsolete.
Data isn’t just bigger these days; it is also fundamentally different than it was 10 years ago. The nature of this change is driving several innovations in the way marketing is done, particularly around targeting and measurement.
From a predictive targeting standpoint, ad tech firms are realizing that knowing a user regularly visits an investing blog and regularly searches for stock tickers is more valuable than knowing the age, gender and income of that user when targeting for a financial services brand. Traditionally, demographic and lifestyle data has served as a proxy for a good audience. With modern server logs holding behavioral data that tracks every last click, marketing firms can do away with the proxies and build audience segments with a high likelihood to take some sort of specific action — like converting. Ad tech startups such as Dstillery (full disclosure: the author works for Dstillery) and Rocket Fuel have based their respective approaches around this concept. Big data technology coupled with machine learning best practices has enabled the use of event-stream behavioral data to accelerate in the last five years. The market is starting to notice the value this approach is bringing, with Rocket Fuel being a recent IPO success story.
Better user-level targeting isn’t the only innovation brought by log file data. The digital promise of having better insight is slowly being realized by firms offering third-party ad effectiveness measurement. Companies such as Adometry and Visual IQ are pioneering the use of machine learning to model the causal effectiveness of ad exposures on user conversions. Using these models, brands can better evaluate which digital strategies are the most effective at driving up their ROIs. Read more…