It would see that normal service has been resumed. Specific Media remains committed to its core agency business. In an interview with ExchangeWire Ian Dowds, Vice-President UK Revenue at Specific Media, reiterates why SM will continue to focus on servicing agency requirements - and will not, despite agency attempts to reduce its margins, go client direct.

Will Specific Media’s model remain agency focused for the foreseeable future?

ID: The majority of our revenue comes via agencies and I don’t see that changing in the foreseeable future. Helping agencies to deliver ROI to their clients will continue to be our focus. Our best successes tend to be when an agency introduces us to their clients to work collaboratively in helping the client solve business and marketing issues. Hires like Daniel Stephenson (former Head of Digital Marketing at COI) to head up our category development team, and Chris Bailes (former Deputy Trading Director at Starcom Mediavest) as one of our Group Agency Directors, helps Specific Media take a new perspective and become fluent in a different language – one spoken not only by clients, but by the agency’s strategic and communications planners too.

Aren’t agency ad-networks and trading desks a threat to Specific Media’s core business?

ID: The entire digital marketing landscape is in an incredible state of flux and the boundaries can often blur between supplier, agency, client, publisher and 3rd party consultant. We view this as a landscape of opportunity. Across the last 12 months there has been a noticeable shift amongst agencies with their own DSPs, as they recognise the challenges in building successful networks, data-warehouses and optimisation and insight systems. There will always be a place for companies like Specific Media that add value to the marketing supply chain and we can adapt our offering to meet the demands of most customers.

Do you think that agencies are ultimately looking to eat into the margins of ad networks?

ID: Successful business models will always attract smart businesses. Those agencies that have over the years commoditised their own offering to clients, will always have to look to investigate new ways of growing their margins to stay competitive. Those that underestimate the significant and continued investment it takes to add real value in the network space will soon find themselves in a challenging space. It is easy to shout about price but in tough economic times it is far harder to prove value, and those that focus on driving margin by buying cheap will not have a successful long term future in the space.

Specific Media is the biggest DR Ad network in Europe. Will SM look to move beyond the DR model and will we see a more holistic approach from SM in its offering to agencies?

ID: Specific Media has always provided more than a straightforward response and acquisition proposition, including insight and reporting pre-, during and post-campaign, that has provided value beyond mere campaign performance. Clients are rightly looking for even more and it is for this very reason that we continue to invest in our creative solutions, such as partnering with ad-participation experts Spongecell to enrich Specific Media’s creative offering. By making in-banner video, slideshows and smart maps available to advertisers at no additional cost, Specific Media is answering client demand for new creative solutions that help boost ROI for clients like Renault. This, coupled with our upcoming UK video network (see below), means that Specific Media’s client offering - from simple DR to sophisticated branding, all powered by data-driven insight - will be unrivalled.

Do you think we need to move beyond the click and look at more realistic metrics for activity higher up the funnel?

ID: There are very few people I talk to across the entire industry who do not think that the click is an unsophisticated measurement metric. It is hard for an agency that claims to have real expertise in audience segmentation, media planning, buying and placement to present to a client a 0.1% hit rate (and more pertinently a 99.9% miss rate) as a success! Attribution modelling for all digital display is going to be crucial. Specific Media is able to explore ad-exposure rates and hover rates with our Ad-Interaction report and can prove with our Ad Effectiveness reports that exposure to an ad on our Premium Network drives client search terms, page visits and time spent on a client’s website.

How do you counter arguments that Specific Media is essentially a Blackbox ad network solution and is unable to offer the same kind of price and inventory transparency as a DSP or an agency trading desk?

ID: Specific Media’s Premium Network is a very brand safe environment. 96% of our monthly inventory comes from comScore top 500 properties, (85% from the top 200), with publishing partners like Trinity Mirror providing our inventory on an exclusive network basis and preferred partnerships with many others. We trade on a CPM basis that allows agencies to control delivery weight and ad-serving costs with the knowledge that frequency overkill will not be an issue. Whilst we have NDA agreements with some publishers, we do run behind the scenes sessions for agencies and clients and have opened our “black box” to many clients including COI, HMV, Renault and many others.

Are Video and mobile possible growth areas for Specific Media?

ID: Specific Media’s proprietary targeting technology is applicable to any device on which the Internet is accessed. In Autumn 2010 Specific Media US acquired BBE, a premium US video network, along with Vindico, which was the first ad-serving and tracking platform dedicated exclusively to video advertising. Since 2004, BBE has helped advertisers, content producers and content distributors navigate the constantly evolving terrain in the online video space. A one-stop-shop for video advertising, BBE, when integrated in Q2 2011 with Specific Media in the UK will enable brands to monetise, track and produce video across all devices. A premium video advertising network, innovative new formats, cross-network analytics, the combination of this with standard display and unparalleled service will put Specific Media and Vindico in a great place to maximise the ROI of video advertising for clients.

Is Specific Media buying in real-time or are there plans to access dynamic supply?

ID: With our proprietary technology we have the ability to build out integration solutions in order to ensure we can utilise all buying options available to us in the marketplace. However, our focus on premium quality content means that the majority of our buying relationships are direct with publishers. To this end, the need for real-time bidding is not a key focus for us.

Are there plans to integrate with DSPs and trading desks to supply real time inventory?

ID: The industry continues to evolve and there are many ways in which we explore partnership solutions with our customers. However, it is unlikely that Specific Media would provide inventory, without also applying our insight and targeting to ensure that the ad impression reaches the relevant audience.

Can you give some insight into the data strategies employed by Specific Media to optimise campaigns? How would you differentiate yourself from other DR ad networks in this area?

ID: Specific Media utilises a broad combination of sources within our Data Network and continues to explore new and unique data gathering sources. Our expertise has been built up over the past 11 years and incorporates Sitemeter, our proprietary data analytics platform with access to some 11.6m individual URLs, along with exclusive data arrangements from select publishers, some of which also supply us with inventory, some of which, including some aggregators and consumer review sites, do not. We buy little or no data from exchanges or suppliers that are open to others – not only do we find that there is little that can improve on our own data, but if it doesn’t differentiate us, then what’s the point?

Access to enormous amounts of data is, however, worthless without the technology to process and make sense of it and the human element to adapt it in real time. We believe our technology is second to none, and our team of expert delivery analysts optimise continuously. It wasn’t a machine that worked out that a user’s interest in volcanoes last Spring could potentially indicate an increased likelihood of being in-market for travel insurance, ferry travel, or a holiday in the UK!

In terms of privacy how is Specific Media looking to protect users against use of personal data?

ID: Specific Media’s data is wholly anonymous and we have zero access to Personally Identifiable Information (P.I.I.). We have been at the vanguard of the IAB’s efforts in this area and are one of the select companies that have signed up to the IAB’s Good Practice Principles, which gives users a guide to opting out of behaviourally targeted advertising via www.youronlinechoices.com.

We are looking to help the IAB and the EU Technical Taskforce pilot in the next couple of months the implementation of the ad “icon” to support the EU Framework for behavioural advertising.