Just a few short years ago no one had ever heard of high frequency trading and PPC (pay-per-click) was in its infancy. Now we’re looking at a whole new environment that comes with tremendous complexity, and that demands speed and versatility. Sellers can’t just go after buyers the way they did with traditional media buys, PPC, SEO and a website. The audience is more difficult to reach effectively, because they are much more sophisticated, and ever more mobile.

The buyers are still out there searching, but it is harder and more complicated than ever to find them at the right time. They choose when and where they search. They use—all kinds of browsers; and search engines including Google, Bing and Yahoo; and they have computers, tablets and smart phones. To reach these buyers when they are researching or ready to purchase, requires mad SEM (search engine marketing) skills.

An in-depth understanding of analytics doesn’t cut it anymore, now much more sophisticated and complex skills are required. AI (Artificial Intelligence) tools—algorithms that learn and enhance or automate decision making, so that a good media buyer can be great. The demands of the online auction for clicks literally move at the speed of light, and without AI tools and skills media buying can quickly move out of reach for most buyers.

A few players have managed to cross the chasm from the early days of SEM, but even most of these folks use canned solutions like Acquisio, Marin, and Kenshoo. There are a few that have their own solutions, and with these proprietary tools they have the ability to see into pockets of opportunity, wherever they might be. These companies and agencies track the entire search process and based on insights gleaned can adjust and modify the buy—at light speed.

The title of this blog, “The Media Flash Boys”, alludes to high-frequency Wall Street traders that front run the markets giving themselves and their clients a huge and unfair advantage by virtue of their speed to the trading exchanges. Michael Lewis in his recent book Flash Boys explains how speed can be the winning piece in any formula when it comes to an environment where you’re bidding against other players. True on Wall Street and true in the online media game. For media buyers it’s keywords and terms. For high-frequency traders it’s stocks and bonds. Both looking for an edge; an advantage they can leverage.

The ability to bid effectively in PPC relies on speed and insight. Players need to move with the support of AI driven automation, keen insight and experience, like the high-frequency traders do. A clear focus on identified SEM opportunities and the tools to execute in real time makes it possible for leading online advertisers and agencies to optimize the media spend against goals that result in better ROI.

This new breed of media operator, supported by sophisticated AI tools can quickly find rich pockets of opportunity long before competitors do. Then they mine these pockets ever more efficiently, relentlessly driving down the cost of leads that convert. Managing all the moving parts that go into the mix, IP address, geography, day-part, demographics, and search engine to name a few, all feed these high-performance learning models. The best operators are always 6 moves ahead, because they have PhDs whispering in their ears.

Any major online advertiser has to be sure they have these new competencies either in house or through their agency. It’s the only way to feel confident that the media budget is being optimized with a constant press to drop the cost of acquisition. The days of buying key words and terms at a good price and getting lots of clicks are over. It’s not an economically viable or sustainable model long-term. The real metric, the focus for these efforts, has to be the cost of acquisition. Every large online media spender needs to be moving in this direction, and at the very least, running tests that incorporate these skills and tools.

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