Infectious Media has been actively trading on exchanges for over two years. In fact it was one of the first companies ExchangeWire spoke to back in the day when this venerable blog was working under the moniker of FarneyMedia (simpler days, to be sure). Sitting in the space between agencies and the exchange landscape, Infectious helps advertisers manage data-driven campaigns across the sprawling buying landscape. The company has focused heavily on its data layer, hiring data specialists as well as building out its own tech. ExchangeWire recently sat down with Martin Kelly, Managing Partner of Infectious Media, to discuss where the company is positioning itself, how data strategy informs its buying and the on-going problems with the current attribution model.

Infectious Media has been trading across the European exchanges for nearly two years. How has the automated space changed in that time? Are we now at a tipping point in Europe?

MK: The space has changed beyond recognition over the last two years. It’s our feeling that we are moving from theory and hype to a phase where a different set of questions are being posed. From a buy side perspective it’s about building up the skills and technology layers that are necessary to operate effectively and this takes time. We’ve been operating at scale for about 18 months now and it’s only in the last 6 months really that we feel we’ve started to really exploit the potential of real time bidding for our advertisers. This is a learning phase that everyone is going to have to go through.

Infectious now occupies an interesting layer in the display space. You’re not quite an agency. You’re not quite an ad network. How would you define Infectious Media?

MK: Unsurprisingly, you're not the first person to ask us that. Often people want to label us as either an agency OR a network, but the reality is we are something of a hybrid, which is why we position ourselves simply as 'specialists in intelligent online display advertising.' Networks are actually the misnomer in the ecosystem in that they represent both the supply and demand side. It’s easy to forget that they’ve only existed for about ten years.

We see the more relevant classification, now as demand side or supply side and with these distinctions, it’s clear that networks sit predominantly on the supply side. A networks decision about what inventory to provide to buyers and at what price is based on their ongoing supply side obligations and commercial goals rather than solely advertiser goals.

Meanwhile, agencies are in the business of making smart media investment and execution decisions on behalf of their advertiser client base. They have and continue to work with partners to deliver advertiser goals to someone like Infectious, and this relationship works as we offer no other services, have no supplier obligations clouding our judgment and importantly deliver incremental performance to other activity.

So, you could say we are a ‘demand side network’ that thinks like an agency, but that would just create even more confusion!

Infectious has invested a lot of time and resource in building out its data infrastructure. Can you provide some insight on how this underpins your business? What are the key components of your data layer, and what part does it play in how you buy media across the exchanges?

MK: DSP’s are game changing technology that are hugely expensive to build and operate, but on their own they are simply cookie matching and buying platforms. DSP’s have a very limited suite of standard targeting criteria available and just using these is not enough to elevate an offering or performance above that of an ad network.

We’ve concentrated our investment on a proprietary data platform that can capture data from multiple sources and allows us to create targetable segments and optimisation strategies within our own systems. These can then be pushed into a DSP infrastructure via API’s to be actioned. We are capturing and analysing billions of data points per month.

This is the fundamentals of how we operate for all of our advertisers and what we believe differentiates our performance offering.

Do you think a demand-side media buyer, like Infectious, can offer advertisers and agencies better insight, transparency and pricing than the dominant DR ad networks?

MK: Ad networks have been dominant as they have delivered pretty much unrivalled display performance. What’s happening now is a massive threat to them, that is clear. They do however have the time to respond but need to change the way that they operate and that also takes time.

To take your points in turn

1) Insight and transparency – absolutely. We’ve created custom reporting suites for our largest advertisers that give incredible granularity of reporting that they tell us they have not seen from ad networks.
2) Pricing – we’d rather talk about return. Our CPM’s can be 10 times higher than ad networks but if as we deliver for our advertisers then this is irrelevant.

Jerry Neumann noted on AdExchanger at the tail end of last year that he thought the next wave innovation would come from the service layer. Would you agree? What’s your take on the next big push in the space?

MK: I would absolutely agree with Jerry. To date almost all the debate has been focused around high-level theory, the demise of the ad network and ecosystem maps. It’s time this moved on to tangible benefits and making this work for advertisers which is ultimately who is going to fund the development of this space. Innovation is going to come from businesses that interface with and solve advertiser problems, making sense of RTB for them. When we draft a proposal for an advertiser we never mention RTB, it’s what it can facilitate that is exciting to them.

Retargeting reigned supreme last year – and continues to dominate the column inches of the mainstream trade press. Do you think smarter advertisers will begin to look beyond just retargeting existing users and demand a more holistic approach to its media buying, particularly in the new area of winning new customers?

MK: Retargeting has been a fantastic way of getting display media back on the radar of advertisers as a channel that can deliver return on investment. Coupled with dynamic creative messaging, it was a massive story last year and will continue to be so this year.

We also believe that there are many advertisers who will want to explore how they can use biddable display media for a wider range of targeting. An analogy that we would use for buying retargeting impressions only is to just bid on brand terms within a paid search campaign. It’s the easiest win with a very demonstrable ROI but is missing out on a much bigger opportunity to target and influence new customers as well as convert existing prospects.

Large search spenders with data rich businesses such as retail and travel who have all been early adopters of dynamic retargeting are all looking for how to expand out their existing display strategy and we feel this is where businesses like Infectious add value as we can cover the dynamic retargeting piece but also bring in new customers.

In terms of metrics, do you think the current system invariably rewards vendors that engage in “spray and pray” targeting tactics. Are there any credible alternatives? Or will it be case of different metrics for different types of advertisers?

MK: Nobody believes that last click/view is the right model for attribution but the industry has struggled to find credible alternatives. The problem with this being the prevailing measurement model is that it has lead to a whole industry developing practices designed to ‘game the system’ hence ‘spray and pray.’ Measurement is and should be something that is tailored for both an advertiser and particular campaign as it needs to be aligned with marketing objectives.

We’ve seen a real change in approach probably over the last six months with advertisers and agencies wanting to do things differently. With enabling tools such as Tagman really helping out we’re starting to see different success metrics placed on activity at different points of the marketing funnel.

What are we likely to see from Infectious Media over the coming months?

MK: More growth and more innovation. We’re currently hiring for positions across the board and are struggling to keep up with demand, which is a fantastic place to be.

We’re really proud of the work that we are currently doing for advertisers and the fact that we’re really starting to challenge conventional display paradigms. We’ve had a couple of meetings recently where we’ve presented big pieces of work to big advertisers and I see them genuinely getting excited about our approach and what is now possible. Having worked for agencies for the last ten years, that’s a gratifying situation, as I know how rare this is! This is a new era for display advertising and I believe that 2011 and 2012 are going to be a pivotal years in that development