Hidetaka Fukata is Executive Officer, Head of e-Business Group, at D.A. Consortium Inc. Here he discusses the launch of i-Effect, DAC's new third-party ad server.

Can you give some background to “i-Effect(TM)” DAC’s new third party ad-serving technology?

Even though Third Party Ad-serving was introduced to Japan over a decade ago, Japanese Advertisers and Agencies have been reluctant to adopt it for a number of reasons, including the fact that the service models proposed by the non-Japanese vendors did not match local business practices; a perception of ad-serving fees being high and, perhaps most significantly, the fact that major Publishers disallow third party ad-serving. As such, the idea of Third Party Ad-serving until recently had largely yet to be accepted.

In recent years, however, Advertisers and Agencies have realized the necessity of allocating their spend on online advertising more effectively rather than just relying heavily on SEO and search ads. They have come to see Third Party Ad-serving as a valuable solution for measuring overall campaign effectiveness. As well, Japanese Publishers have become accustomed to the presence of third party ad-serving.

In line with these changes, DAC has released a third party ad-serving solution called i-Effect^TM, which meet the needs of Advertisers and Agencies in Japan with a flexible service model and pricing. As well as offering core features for managing, tracking and reporting on advertising campaigns, i-Effect^TM also enables auto-optimization of creative and copy. This auto-optimization feature, made possible by the latest ad-serving technology, is essential for maximizing advertising effectiveness resulting in higher conversion rates.

In summary, i-Effect^TM is a tool that can be used for not only evaluating campaign effectiveness, it also delivers the ability to deliver an increase in a campaign’s return on investment.

How big is third party ad-serving in the Japanese market?

The current rate of third party ad-serving in the whole display ad market is estimated to be around 10%. With the amount of attention it is receiving and steadily increasing number of publishers choosing to accept third party ad-serving tags, the proportion is expected to grow rapidly, at the rate of 20-30% per annum.

What advantages will i-Effect(TM) provide DAC within the Japanese market?

DAC also offers the Publisher ad-serving platform iPS-X^TM. iPS-X™ has been adopted by the major 350 Japanese Publishers and we believe is the leading ad-serving platform in the country.

By adding i-Effect^TM, a platform for Advertisers and Agencies, DAC offers a comprehensive set of tools for the online display market.

Are there already established players in the third party ad serving arena in Japan?

There are a number of global players, such as Google and MediaMind, that have been providing Third Party Ad-servers in Japan for several years.

Who are i-Effect(TM)’s competitive set in Japan?

While there are a number of Third Party Ad-servers in the Japanese market, i-Effect^TM is distinctive in its featureset. In particular, features that are not offered by others include i-Effect™’s auto-optimization of creative and copy; the fact that i-Effect™ is integrated with a number of recommendation engines; and i-Effect™’s ability to do auto-optimization of landing page content.

All of these features, in comparison to other available Third Party Ad-servers make i-Effect(TM) quite unique.

What challenges will i-Effect(TM) solve for agencies? Publishers? Advertisers?

The ultimate aim of i-Effect^TM is to maximize an Advertiser's return on investment in their advertising spend.

As well as providing capability to manage campaigns and provide comprehensive reporting, i-Effect^TM also boosts campaign effectiveness by efficiently optimizing ads. In this way, ad operations teams using i-Effect™ are able to very effectively manage their online advertising spend.

The auto-optimization feature is powered by u-Predict, the probability modeling engine that is a component in the u-Platform toolkit, being provided by the world leading advertising technology company IPONWEB.  These IPONWEB tools are well known to us. DAC has achieved excellent results using u-Platform, including the use of u-Predict, in the DAC Group DSP called MarketOne™. Through the use of u-Predict, and its analysis of multivariate data including user attributes and behavior, i-Effect^TM delivers the most effective ad selection on every impression.

Reporting is another notable feature of i-Effect^TM. By supplying conversion history reports and cross-channel attribution reports, i-Effect^TM reduces the Agencies' effort in evaluating campaign results and enables the ability to provide comprehensive reports to Advertisers. Using these reports, its possible to undertake subsequent planning for ongoing execution of their campaigns.

 In this way, i-Effect^TM is being positioned to become the central place for managing campaigns. It provides Publishers a means to evaluate the performance of different Advertisers on their sites. It encourages the ongoing revaluation of display ads based on their attribution to conversion, and so also helps Publishers better handle their inventory.

What will i-Effect(TM) offer in terms of creative optimization and predictive modelling?

i-Effect^TM offers three services for creative optimization and predictive modeling.

1)     "Personalized Creative", released in November 2011, delivers ads by automated predictions of user behavior based on traffic history;

2)     "Personalized Recommendation" released in March 2012, allows delivery of ads showing products of E-commerce sites that are recommended to the user, enabled by integration with recommendation engines;

3)     "Personalized LPO", released in May 2012, provides optimization of landing page according to user attributes and traffic history.

Can you share any of the results i-Effect(TM) has provided for advertisers?

The "Personalized Creative" service has produced remarkable results, owing to the dynamic optimization of creatives according to user behavior, in which we saw a 2- to 10-fold increase in CTR.

What other areas of ad technology are DAC exploring?

Broadly speaking the DAC Group promotes the development and implementation of cutting-edge advertising technologies essential for online advertising business. This includes a media planning system for advertising companies called AD-Visor^TM, and the ad-serving platform for Publishers called iPS-X^TM.

In the social media arena, which is rapidly growing in recent years, we acquired a company named Torchlight. Torchlight is focused on supporting social media marketing and offers a social media management platform from the US called Involver. Involver is used by over 600K brands and enterprises worldwide.

In the smart device arena, we have developed a smartphone ad platform called Papri, as well we also recently acquired ngi group, the leading smartphone ad platform company in Japan.

We are accelerating an establishment of research, development and sales capabilities throughout DAC group companies.

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