This past summer, we had an intern group working at Lotame - and adding value to our growing company. The below piece was written by Marshall Massey, who remotely continued his intership (while back at school) and wrote a paper on the experience, coupled with the summary of a Marketing Research Project, focused on advertising towards college students on social media. I wanted to share this paper, and I have posted it below.
Impressing Professors: Lotame Showcased at Lafayette College
By Marshall Massey
After a summer of Lotame 101, I went back to Lafayette College in Easton Pennsylvania and made use of my knowledge of the social media advertising industry in two ways. The first was the most obvious: (1) I continued my internship for credit in the economics department, introducing the department head to the company and a growing industry. The second (2) was using a Lotame related topic, and my gained knowledge, for a Marketing Research project that my professor thought was new and different.
(1) Most Lafayette internships are found through alumni and are for the most part, local. Mine possessed neither quality. Although I visited Elkridge MD once a month, the internship was remote and a continuation of the summer. I worked on public relations articles, a white paper, a case study and the beginning steps into account management. However, at the end of the semester, the paper I was tasked to write to earn the school credit was not to focus on my personal work for the company, but rather the industry and how Lotame has faced its relevant challenges and successes.
Excerpt about the industry:
An unofficial definition of the industry, which picked up while working at Lotame, is the buying and selling of impressions by competing for the best prices while focusing on the publishers that can offer the most relevancy and safety for their site’s pages. Impressions are valuable spaces on a website’s pages where advertisements can be placed. Prices of these impressions are sold in a variety of ways, but the way that is most routine is to sell at a cost per thousand rate, or CPM. In other words, for every one thousand ads that a site puts on their pages, they will receive a certain valued price. The sites are referred to as publishers and since each publisher offers different content, advertisers will pay more for different content, or the content that matches their product. This is because the relevant user will be the one interested in the content, and therefore the advertisements. There is also an issue of safety, meaning that advertisers do not want to be matched up with content that might offend their target consumers. This is often referred to as the adjacency issue. It is Lotame’s goal to rid the industry of these problems and correctly satisfy this definition. Several characteristics of the industry were brought up in this definition; however, there are many others along with other industry specific issues.
In regards to the size of the industry, it is a growing, and at an alarming rate. For an example of consumer use, we can focus on one of the most popular uses of social media, online video viewing. In October of 2005, less than 25 million online videos were viewed per day. The same statistic less than a year later, July 2006, there were 700 million online videos viewed per day. That growth trend of online media has continued and is projected to continue in its upward trend (ComScore via ReelPop). Another statistic to show that the industry is growing deals with online ad revenue. In 2005 online ad revenue was $12.5 billion, while in 2006 it was $16.9 billion. This is a change of a 35% increase (Interactive Advertising Bureau’s Annual Revenue Report).
Excerpt about Lotame:
It is Lotame’s belief that the company is constantly making accommodations for all of the major industry dilemmas. In regard to the relevance and safety of social media web sites, the Lotame technology completely addresses the issue. It is important to mention that Lotame was founded in order to seek to address and continually address the issue. Because advertisers did not have much or any confident level of control over that viewed their ads on social media, Lotame invented a technology that would appropriately match the users to the ads. Additionally, the tools that were being used for behavioral targeting were not working in social media. It is not possible to advertise towards context on the new type of site, which lead to the behavioral technology that tracks users.
One way to express the problem is showcasing the confusing web 2.0 URL addresses that do not give any clue to what the content on the page is about. For example, on a site like espn.com a URL address might read: www.espn.com/soccer. This address clearly tells the publisher to sell or segment the impression to an advertiser selling anything to do with soccer. However, a web 2.0 site like youtube.com may have a URL that reads: www.youtube.com/236$ͬ. Nothing in that address describes the content on the page, but the video being showcased may very well be about soccer. By developing technology that tells the publisher exactly what a user is doing and interested in on a page has proved to be invaluable information because the publisher can turn that information around and receive higher value for the impressions that it sells to advertisers. Even so, this data collection has brought up another major challenge for the industry.
The other issue previously discussed was about legal constraints and of privacy. The legal aspect is out of Lotame’s control, however, what the company can do is design the technology so that it is not an invasion of privacy. As mentioned before, Lotame aggregates the information it collects into large audiences full of many interests and behaviors. For this reason, the data collection is completely anonymous (no personally identifiable information) and should really only be seen as a way to target relevant advertising.
(2) Although Lotame was not mentioned in my Marketing Research project, the topic, survey and results all showcase the industry and the company. The project consisted of researching the topic, surveying 99 Lafayette students about the two largest social media sites today, Facebook and Myspace, and then analyzing the results by using statistical tests.
Excerpt about project research:
In addition to the demographics of users, we looked at the types of advertisements currently being used on social media networks and other websites. We found that users of Facebook and Myspace are inclined not to look at banner advertisements. According to the Wall Street Journal, many advertisers believe that “the addictive quality of social networking means users are so busy reading about their friends that they hardly notice display ads and, even if they do, are loath to navigate away to an advertiser's site” (Vara Facebook Gets). This is because users read the pages in an “f-shape pattern,” quickly glancing over the advertisements on the page and reading the substance between banners (Steel Marketers).
This information gave us the idea to search for other options of advertisements. Some things we discovered were the use of videos, widgets, and groups to advertise a corporation’s product. General Electric came up with advertisements which uses had video technology. These videos were featured on many popular news sites being broadcasted to 95,000 people in the one day’s use of the advertisement (Steel Marketers). By designing widgets, users have found a new way to show their friends what they like. In return they get discounts on shopping, free promotional goods, or just a cool looking page which reflects the user’s interests (Vara Widgets). Corporations, on the other hand, receive advertising which is nearly free for them to have. Paramount pictures started a group where people promised they would go see the movie “An Inconvenient Truth” and then have discussions on the environment. Even the Dave Matthews Band got involved in promoting their 2006 summer tour by having fans vote for what songs should be played in their shows (Newcomb Facebook).
Excerpt about the surveys:
To better evaluate our survey we created a focus group of our friends. We had them sit down and take the survey. We than had them help us improve the relevance to our topic. Also, we had them explain if our questions were clear or not. This helped us re-write the survey and make it more relevant to our study. Finally, we asked them how they use social media networks to better understand how a Lafayette College looks at the roll of these websites. By using the focus group we were able to better measure the attitudes and behaviors of Lafayette students.
After our focus group we reevaluated the survey and made corrections. The new survey was created on a web based survey generator and consisted of 11 questions. Next, we randomly selected 150 students to be our sample population. To make our sample random we used the Lafayette College Student Directory and a random number generator. We generated page number and number of student on the page. After finding our sample we e-mailed the students a request to fill out our survey. We did this four additional times to have a maximum number of respondents and deal with non-responses. We received a total of 99 responses.
Excerpt about the results:
One of the most interesting results was that no Lafayette College students who responded to the survey preferred Myspace to Facebook. Though we expected to find a greater amount of students using Facebook, we did not expect to find none preferring Myspace. One reason why there might have been contradicting results from our secondary research (Myspace is larger based on users than Facebook) is that Lafayette College is a liberal arts school, which has more interest in education over other fields. Additionally, more Lafayette Students fit the demographics associated with Facebook than Myspace.
The uses of my summer internship are probably not that out of the ordinary. I would guess that many students continue to work for companies they internship for as well as use the knowledge they gained to help them when they are back at school. However, the social media advertising industry is new, different and on the rise. What college professor wouldn’t be impressed with that?
