WPP’s Light Reaction Is Prepped For The End Of Media Silos
After being grown as an extension of Xaxis, Light Reaction is expanding the notion of what performance means.
Light Reaction, the mobile-first performance marketing business launched out of the $950 million programmatic incubator by WPP Group’s programmatic data platform Xaxis, is six months old as the calendar turns to 2016.
As the company, which is now operating in 24 countries, looks to 2016, Paul Dolan, Light Reaction’s general manager, offered some predictions for the new year — and some thoughts about what Light Reaction can build on in the new year.
Among Dolan’s quick predictions:
- Native will grow the fastest of all mobile formats
- Clients will no longer plan budgets in silos of mobile and display. Rather clients will plan by audience and outcomes. Cross-device will power this
- Clients will include phone calls as part of their mobile performance strategy
- We will see an increase in the development of new and more engaging mobile creative formats
- App engagement will be more important than app downloads
- Clients who understand how users perceive ads and who strive to make advertising welcome will be able to optimize to both user experience and campaign ROI
- Focus on the user experience will mitigate the threat of ad blocking
- Mobile commerce in APAC region (and China in particular) will see significant growth
GeoMarketing: How was Light Reaction created from Xaxis? And what does “mobile-first” mean in the context of the performance-based mobile media company, as opposed to the practically ubiquitous idea of being a “platform company?”
Paul Dolan: There are a number of different reasons why we set a strategic direction as a mobile-first performance company. One is that we want to make a statement to clients and to the marketplace, that we are mobile-first. That is obvious. Another thing that we want to do is we want to send a message to our employees to think mobile-first.
That’s involves developing technology that’s not tied to legacy desktop systems, tied to a cookie in a browser, but rather takes advantage of things like audience-based planning, people-based planning, and device IDs and device maps — rather than cookies. That was really important for us. When we launched Light Reaction with this strategic direction, it was as much or more for our people, for our acquisition strategies, for our technology development strategies as it was to send a message to the clients or the markets.
Xaxis refers to itself as a programmatic media company and Light Reaction, technically, we’re a division of Xaxis, but we’re an outcomes-based programmatic media company, mobile-first, but ‘programmatic media company’ nicely sums up, because we definitely, when we engage with clients, sit closer towards the supplier. We are line items on the client’s media plan.
We can help drive the media strategy along with the agency or as a partner to the client directly, but ultimately the way that the client transacts with us is as a media partner, which is again a unique position for inside of an agency holding company. That’s part of what maybe sometimes causes confusion. Over the last 5 years, as we’ve built Xaxis, we’ve had to explain our position and work with clients to understand that there are media opportunities inside of the agency holding company.
What does that mobile tech direction encompass? Does it also include the Internet of Things?
With our direction around technology development, around device identification, data, things like that, we look at the smartphone and the tablet as in a similar space but very different from the PC with the browser. There was that strategic direction to say we need to build our technology and our data strategy around a world that doesn’t involve cookies. If we can start with that internal premise, our direction for our employees to think that way, then we can extend that to the world of the PC, the desktop.
We can also extend it to the connected watch, to the automobile, to the home, to the Internet of Things across the board. So it was really important for us, coming out of Xaxis, which has a very strong heritage in audiences, but largely coming from the world of the desktop, to say we have an opportunity here to take a fresh approach and to build a Light Reaction technology stack around a cross-platform strategy.
Setting up that technology infrastructure gives us a lot of flexibility. We want to think about “outcomes,” which is what we’re going to focus on, at an individual level, at a household level, at an individual on a certain device or across devices. Some clients might really want to generate outcomes of somebody on a phone or on their watch solely. Other clients might prefer to think about an individual and try to generate an outcome or performance across all the digital devices that they can.
I do believe that there will be clients that look at the way that they’ve measured things like television, radio, print, with a focus on the household, and might actually want to take advantage of trying to match up digital to be the same way. Then you start to look at how do all the devices in the household match up, and how can we get somebody to act or purchase at that level. We’re trying to build the building blocks of our technology to account for all those possible futures.
When you talk about performance-based, there are obviously a lot of performance-based ad units, such as cost-per-click. Is there a range in terms of the kinds of performance metrics that Light Reaction uses?
Clients are looking for a wide range, but I can share with you some of the early ones that we’ve seen. We initially thought that there would be a lot of interest in mobile app related outcomes, such as getting someone to download and buy something within an installed app, or driving someone toward an m-commerce experience. We offer all of those things. Cost-per-install or download of an app, and engagement or re-engagement with that app are all a part of what we do. But as it turns out, a lot of our clients are not yet ready with their full mobile app marketing strategies, but they do have websites that they’ve adapted for mobile to varying degrees of success.
What we’re finding is that we get a lot of in-bound requests for mobile lead generation. That involves taking the website lead and collecting an email address or a registration, or a credit card application submission, things like that, and we’re just replicating that same desktop website in mobile and driving outcomes through that. That primarily goes through the mobile web.
There are tracking challenges, there are inventory differences, there are creative differences. Some of the mobile outcomes are more towards the app environment, some are towards mobile web. A number of clients come to us just still for engagement or other types of outcomes that aren’t even the final business outcome, but are like steps along the way.
In terms of driving those performance-based outcomes you described, what does Light Reaction do to achieve those goals?
The best example is that we have a really cool product that’s called the “mobile pop-up shop,” which we launched last summer. This was powered by our acquisition of ActionX earlier this year. As I said, we were planning the Light Reaction launch. One of the pieces of that plan was to acquire a piece of mobile technology. ActionX does mobile re-engagement, so our clients of the mobile pop-up shop, they tag up their entire m-commerce retail experience, pages, categories, individual products, with our tags inside of their app.
This is similar to retargeting, but for mobile specifically. We track all the interactions within the app, did a user browse the product, did they put it into the cart, did they transact or not transact, did they leave with the cart still having products in it? As the user transverses other apps or mobile web on their device, we can place dynamic messaging in front of them that has the actual products that they’ve interacted with, what they have left in their cart. We have offered creative format as part of this product, where if a user taps to engage with the ad that we buy in real time, that can create a full-screen experience that has a representation of the app.
There’s re-targeting with the products that they’ve maybe engaged with, or ones that we think they would like. If they engage with that pop-up shop and want to actually transact on that product, like look at it more closely, put it into their cart, buy it, things like that, we deep-link back into the client’s app, to that product page. That’s happening today. Not every client is ready for that level of sophistication, for that level of tagging. Obviously they need to update their apps, and things like that, but we have a really cool demo where we show the clients this. It gets them really excited.
We didn’t have the deep-linking component until everything was in place, but all the other stuff we were building out around that. It was an ActionX product when we acquired them, but we put it into the Light Reaction product suite and launched it into the US in late July.
Does this product have any location-based targeting aspects to it?
With a lot of our products, mobile re-engagement and the pop-up shop being a primary example, we’re going to find broader applications for this as we exhaust the possibilities with the most targeted user base. You’re going to have your users that have engaged with the app, and we show them a pop-up shop. The next logical thing is can we build a look-alike model so that we can increase the scale against that? Then you have logical extensions of that like, could people in certain geo-locations, hyperlocal targeting, to people with certain trigger events, if we’re watching weather or Twitter, do we create engagements and experiences like this. We start with the things that we are certain are going to perform the best, because we are a performance company, but when we need to increase scale of what performs, we’re going to look at all these options, which is really cool.
To go back into the origins of Light Reaction, it was developed over nine months from within Xaxis. Wherever I go to an advertising conference, they always have to be the topic of, “How do we end the silos?” Obviously the parts of WPP are vast and inter-locking to a large extent. What’s the extent, in terms of Light Reaction, in the way that it fits into a wider WPP client’s mobile first or mobile hub strategy, in terms of connecting to Xaxis or other parts of the holding company?
When you look at one of the primary strategic objectives of WPP as a whole, you’ll hear [WPP Group CEO] Sir Martin Sorrell talk about “horizontality.” This is the idea that clients should have access on a horizontal basis to all the verticalized expertise that exists in all the operating companies under WPP. Not just on a client basis, but you can look through a lens of certain other things like mobile, for example, say what’s the best work going on at mobile, at Light Reaction, at Xaxis, at Wunderman and Kantar and all these places?
We’ve got a couple of cool things going on, I’ll just share a couple with you. One is that [WPP media buying and planning unit] GroupM made an investment and made an acquisition of a company called Medialets, which is the MRC’s first accredited ad-server for mobile. Medialets has become a great anchor, as clients are looking at this objective ad-serving platform that handles mobile web, mobile app, and does things like view-through attribution, and really sophisticated measurement of mobile, that became a natural place for us to plug into.
We don’t want to, at Light Reaction, build that. We don’t want to have to use an ad server that was primarily engineered for the desktop and ported to mobile, but to have this resource internally has been great, so plugging into that, shared clients have seen a lot of success.
What else is Light Reaction working on as you look to 2016?
Light Reaction is not just all this “mobile-first performance platform,” but we believe that there is a science to how users perceive the ads that they see on their phones, their tablet or their PC, and that actually impacts not just their brand awareness but also their propensity to convert down the funnel. We call this perceptual science. We’re working with internal companies like Millward Brown inside WPP, to understand neuro-marketing and neuroscience practices in their labs, and see how it connects to the programmatic media and the outcomes that we’re driving.
As part of Light Reaction’s mobile-first focus, where does social media come in, since there’s so much crossover between smartphone use and content sharing?
We live in an increasingly matrixed world, not just in our business organizations, but also in the way that we have to think about marketing channels. Mobile and social have a high degree of intersection or overlap, as you say. Mobile devices being as personal as they are, and for us being social creatures, it’s like our primary gateway into a social world as individuals.
This is the nice thing about Light Reaction being a supplier of outcomes. We’re not an agency, so ultimately we need to build programmatic media products that we can sell on an outcome basis, and we can sell those outcomes to social agencies, to mobile agencies, to just media planning agencies in general, to digital agencies that might be a cross-creative, and media, to clients directly. We want to be able to drive these outcomes and sell these outcomes in as many different ways, through as many different consultancies, advisers, or clients directly, as possible.
Let’s get back to the notion of providing outcomes. How does the conversation about outcomes differ when a client talks to Light Reaction versus a general ad tech company?
Somebody could say, “I want my outcome to be like a guaranteed audience or a viewable ad.” I would consult with those people to say those are more media outcomes. We’ve got technology and products that can help you achieve that, but what we’re more interested in is helping you with your business outcomes and using those media products to help drive those business outcomes. I’d much rather sit around and say that you need a certain number of leads, prospects, revenue, sales, things like that, and work out a way that we can sell that as an outcome.
Not only should we be limiting our imaginations or our strategies to an online click or an online lead or form submission, or an e-commerce or m-commerce transaction, but a real transaction in the physical world, an engagement, a meeting at a car dealership, a transaction at a retail store, or even just visiting a location or something like that. That is part of our product roadmap for 2016, is this year we’ve launched products that are primarily focused around business outcomes that can be tracked and driven through digital, but what we really want to get to is using programmatic media to drive real world business outcomes.
What other programs or projects did Light Reaction take in 2015 that might influence its path in 2016?
I’ll give you one more strategic approach I would take. I’m using the smartphone as an example here. When we launched Light Reaction, we said we want to be mobile-first and the smartphone is the consummate example of that. We launched a number of products where we could use the smartphone screen to drive those products, so people can tap on our media products and then submit a lead form or perform an m-commerce transaction, or even download an app or something like that, or engage with their client’s app, and then we charge a client on that agreed-upon outcome. We’re using the screen of the phone for that. We then launched a product in July or August in partnership with Marchex where it can actually drive phone calls.
Now, what we’re saying is that we understand the world of what’s happening on the screen. We now also understand — thanks in part to Marchex’s call analytics — what the users are doing when they call our clients: was the phone call a customer service request or was it a new business request? Did the transaction happen, did a conversion happen on the phone.
Now, that’s two-thirds of the way there. The last thing is involves using the smartphone as a location device to help us understand where this phone travels and how people use it in the real physical world: Do they use it as a wallet, as a credit card? Can it connect to beacons?
The direction that we’re taking internally is that we’ve got two-thirds of the immediate marketing applications of this device covered with our products. The next thing is to understand where this device travels with an individual, and how they use it in the real world. Then we have a comprehensive view of the transactions that happen on the screen via voice, and in the physical world, if you’ve got a complete product, we can close the marketing loop completely.