December 15, 2021

Flight Plan #011 - Have we got your attention: Our investment in Amplified Intelligence

Announcing our investment in Amplified Intelligence. Attention-based advertising and metrics.

Written by

Lachlan Duffy

This insight comes from real industry depth, Professor Nelson-Field is a Media Professor at the University of Adelaide, author, and a globally renowned thought leader in advertising measurement and effectiveness. Her research has led her to the conclusion that ad impressions, eyeballs, and other advertising metrics are ineffective descriptors of advertising impact. Her thesis was that the 'atomic units' or measurement metrics of advertising - the global benchmarks in which the US$450bn in global digital advertising is spent and measured are wrong.

Karen believed so much in her vision that she started her own company to transition the digital advertising economy away from CPM & impressions towards an attention-adjusted metric (what do humans actually see and pay attention). It's fair to say that you usually know your space when you've literally written a book on it.

The more we got to know Karen and were introduced to Chief Growth Officer, Phil Townend, the more excited we got about what Amplified Intelligence was building including their mission to adjust the way advertising is measured and traded.

Why We Invested:

  • Category Creating Opportunity: Amplified has the opportunity to become the global standard for advertising measurement - their tool enables agencies to purchase advertising on a more effective metric being 'attention' rather than impressions. This category is open for business, the gap is emerging for a winner to rise as the major player in 'attention' data capture across ad platforms, and the robust rollout of attention as a measurement currency.
  • Timing is Perfect: The media sector is at a serious inflection point.  The impending Death of the Cookie, advertisers losing the ability to programmatically target end-customers and iOS14 roll-out have all radically shaken up the digital advertising marketplace. Amplified currently have the lead position globally in attention-tracking software for ad placement, and we're excited about the timing behind their market expansion and offering in the current market.
  • Commercial cut-through: Amplified is winning over advocates with their approach at a rapid rate with their attention-based planning, buying and verification products being used by leading brands, agencies and platforms in the world, including OMD, WPP, Shell, Mars, Pepsi, Twitter, Facebook and Spotify.
  • Strong team with deep domain expertise: Karen is a University of Adelaide professor, author, and former research associate at the Ehrenberg-Bass Institute for Marketing Science (globally recognised), has a PhD in audience measurement, and her research into social media marketing, video sharing, and the measurement of attention has made her a global authority on media strategy. She's taking her findings and putting them to work and the industry is rapidly backing her approach.
  • Phil Townend - (ex-Unruly) Brings the commercial scale-up experience having been CRO of Unruly. Over a 10-year stint, he helped Unruly go from a UK-based start-up to leading to 18 countries before being acquired by News Corp.
  • Trent Durfee - Head of product, Trent brings 13 years of experience in product and digital advertising, including Yahoo!, Nine Digital, Sizmek by Amazon, and most recently Xaxis as part of GroupM's programmatic arm, as their Head of Product & Platforms.

Industry & size of opportunity:

The size of global digital advertising spend is in the hundreds of billions of dollars and is forecast to be worth US$455bn in 2021. With the advent of COVID-19, lockdowns, and increasing digital penetration of new platforms, we see this rising substantially into the future, as well as taking up an increasing overall share of ad spend globally.

Source: https://www.emarketer.com/content/worldwide-digital-ad-spending-2021

Programmatic Advertising Spend:

Programmatic advertising spend is ad-spend that targets users automatically based on a given CPM threshold (or bid) in real-time under certain conditions. We recommend reading a more detailed explainer of it here. This area is of particular interest to Amplified as their end goal is that their attention data becomes a currency and input for how programmatic adverts are transacted.

Source: https://www.emarketer.com/content/forecast-2021-us-programmatic-digital-display-ad-spending-15-billion-higher

Problem:

Billions of dollars are spent on the major platforms such as Google and Facebook based on impressions and CPM (Cost per thousand ad impressions) as the core metric, yet the quality of those impressions is hard to measure. The question to be asked is whether a human is actually seeing and paying attention to the content or advert across platforms and the effectiveness of each impression.

Advertising is an inherently value-generative activity - it should be benchmarked on value and not cost. Naturally, with a CPM metric all ad impressions are assumed to be equal and ad purchasers are seeking the lowest CPM possible as being derivative of effective advertising spend. Amplified believes and so do we that this is fundamentally wrong. The question should instead be - per $1 of advertising spend, what value can I capture?  Advertising has always been an incredibly difficult activity to measure the effectiveness of. The much older, and now deprecated 'share of voice' metrics are predicated on cost - whoever spends the most captures the greatest overall percentage of the customer's 'voice'.

Not all advertising impressions are equal and they vary across platforms, such that an end-user might watch more of an advert on Youtube than when scrolling through Instagram or Facebook. Yet they are not differentiated in value to the buyers and one ad impression on Youtube would be measured the same as one advertising metric on Facebook.

This has always been the holy grail for advertisers trying to truly understand whether the end-users are actually seeing and taking in their advertising, however, this has never been able to be quantified easily and thus agencies and large brands have paid for advertising spend with limited insight into what is cutting through.

Death of the Cookie:

The Death of the Cookie has been rated as the number one digital media challenge by US media professionals in 2020. Ad publishers will lose the ability to programmatically target users based on cookie data which will drastically reduce the impact and cut through for their ads. This will be one of the biggest changes to the digital advertising landscape and the industry has not yet come up with an answer in a post-cookie world, yet this is shifting and the likes of The Trade Desk, Google DV360, Xandr, and Verizon have approached Amplified to discuss a way forward with attention data - they are providing a new much-needed data feed that will help advertisers in their decision-making.

Source: https://www.emarketer.com/content/publisher-ad-monetization-after-third-party-cookie

Vision:

Amplified are at the front-end of the curve and have a transformative vision for the shift towards an attention-based global advertising standard. CPM and impressions will no longer be the only metric and currency for advertising buying and thus advertising spend will rightly shift to a new metric based on attention-adjusted seconds where advertising has been consumed - a more transparent currency of advertising value.

Karen has literally written the book on the Attention Economy and is building Amplified on the basis that you need to go all the way back to the first principles of tracking human gaze and behaviour in detail to actually understand and rank attention.

Amplified is building the future currency by which advertising dollars will be planned and bought in this multi-billion dollar market, and what's most exciting is that the industry is buying into the vision.

We're super excited to be working with Karen and Phil and the rest of the Amplified team. We love investing in companies with a bold, ambitious vision and telling trillion-dollar advertising companies like Google and Facebook that the way they measure their ads is wrong fits squarely in that remit.

From us TEN13, we're looking forward to seeing what Amplified can achieve as the global advertising measurement shifts towards attention.

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