Display And Search

tracking the convergence of display and search advertising

How platform-based buying helps Publishers – Part 2

Jun 2

Posted by Mark in Display, Platform Based Buying, Publishers | 3 Comments

Returning to the subject of how platform-based buying can help publishers.  Last time I wrote that proper attribution and the elimination of user-duplication would benefit publishers despite being provided by buy-side platforms.  But it’s a little unsatisfying because both of these solutions are being built for the buy-side and buyers will dictate how they develop and evolve.  They only indirectly impact publishers.  Yet buying platforms are building tools that can be directly used by publishers to get smarter and monetize more effectively.

One of the biggest challenges facing publishers today is that direct sales forces still think they are selling the site.   Sorry, sales guy, the world has moved on.  If you’re a salesperson for a website you are selling (and your prospects want to buy) the various audiences that comes to that site, whether that audience segment is related to your site or not.  There are a number of ways to sell audiences that come to your site and probably the least creative and most challenged in the future is to just sell the site itself.

Unfortunately, most publishers have near zero visibility into the many audiences that visit their site.  Advertisers, on the other hand, appear to know everything about what they are buying (or at least think they do).   This instance of asymmetric information drives a lot of the tension in the advertiser-publisher dynamic.

But the same tools the advertisers are using to make these decisions can (and are) rather easily be made available to publishers.  These tools give publishers visibility into their audiences and allow them to better sell and monetize their inventory.

Let’s walk through an example.  Kozmo.com is a publisher and sells out 60% of its inventory at $5 CPM.  The other 40% goes for $1 via networks and exchanges.  That 40% is either selling uniformly at $1 or, more likely, advertisers are looking for specific audiences they like and paying more for them while letting the rest is going for under $1.

To oversimplify for the example, let’s assume there is only one audience segment that buyers want – Cat Lovers, of course – and buyers are willing to pay $10 cpm for it, regardless of the site the user is on.  We’ll also assume Kozmo.com has nothing to do with cats.

Bringing back Mr. Omniscient Marketer from the prior post, he can see that 20% of Kozmo.com visitors are in the Cat Lover segment.  However, because Kozmo.com is so focused on selling the site and doesn’t know which of its visitors are Cat Lovers, ¾ of that audience is already sold as part of the direct sales efforts for $5.  Can someone say “NIGHTMARE!”  This is tragic for everyone involved.  The buyer cannot get the audience it wants, the publisher is actually selling impressions at $5 when it could have gotten $10.  And the Cat Loving consumer cannot learn about the latest in self-cleaning litter boxes(!).

But there is a solution. Give the publisher the same visibility into the audiences on its site that buyers get.  This creates a whole new character – it’s Mr. Omniscient Publisher!  WooHoo!   Platforms (like my own MediaMath) can leverage extensive data partnerships and integrations to provide publishers with a view of who is on their site.  Publishers can then make decisions about what audiences to sell directly and what should be placed on exchanges or with networks.

Let’s rebuild the revenue line for Kozmo.  Obviously, $10 > $5 so Kozmo will want to sell the Cat Lover audience first.   Once that is sold, the original direct sales force inventory can be sold at $5.  Yes, there will probably be a little bit of loss due to frequency caps and buyers wanting first impressions, but $10 is two times $5 so there would have to be a lot of direct sales attrition to make this a worse deal.  Let’s assume that instead of selling 60% of total inventory, the direct sales force can now sell 55%.   The rest goes to networks and exchanges at $0.75 cpm (lower because cat lover buyers are now buying direct vs being blended into the remnant price).  Overall eCPM went from $3.40 (60%*$5 + 40%*$1) to $4.94 (20%*$10 + 55%*$5 + 25%*$0.75).  Big win!

Admittedly, this is an overly simplistic example. The % of visitors from an unrelated audience segment is exaggerated as I would imagine the % in any one segment rarely approaches double digit percentages.  It’s important to point out that even if the segments are not big enough to sell directly (and they likely are not) the publisher can still benefit from audience intelligence. This intelligence can either help it negotiate with networks or it can be used as an input when using a Supply Side Platform like Admeld, Pubmatic or Rubicon (the SSPs have tools themselves which serve this need).

The CPM’s are also a bit extreme to prove a point and make the math easy.  The point is that if publishers know more about the audiences on their site, they can make better decisions and monetize more effectively.  With greater intelligence, direct sales teams can be better informed when they approach advertisers, get off their heels, and serve their advertisers better. Data will stop being a scary word to publishers.  Relatedly, direct sales teams can take the offensive when they find advertisers buying their site via indirect channels (a subject well documented by Ryan Maynard of Pubhelix here )

So look at that, with just some simple insights we radically changed the publisher’s ad stack (at least philosophically – no more “direct always goes first”) and increased revenue by 45%.  The next step would be to allow platform-based buyers to optimize on performance and pick and choose individual impressions out of all of your inventory (not just what is deemed “remnant” and thrown on the exchanges).    With that, publishers may find even more incremental eCPM lift.  But since I was told my last post was a bit long, we’ll leave that for another day.

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How platform-based buying helps Publishers – Part 1

Apr 15

Posted by Mark in Uncategorized | 3 Comments

We’ve heard it all.  Oversupply.  Glut in inventory.  Commoditization.  This exciting new era in digital marketing will be the death of the publisher.  Providers of quality content simply won’t survive.  All people care about is pushing for a lower eCPM and driving the cost down.  Yadda, Yadda, Yadda.

I go to a lot of conferences and attend a lot of panels (basically I don’t turn down free beer) and representatives of the buy-side always seems so charged up while the sell-side looks like they woke up to learn they managed the Pittsburgh Pirates (=====>>).  But it doesn’t make sense.   Digital spending continues to grow, budgets continue to shift online, and display spending is predicted to grow at a strong rate over the next five years.   Meanwhile, the number of people online has plateaued.  More dollars divided by same number of users should equal rising revenue and profits for publishers.  Right?  Well, actually, no, that’s not what is happening.

Publishers are seeing downward trends in pricing and are finding that buyers don’t actually care about them or their site, they simply want to find a specific audience and, barring porn and malware, they don’t care how or where they get it.  And the chorus screams “Commoditization!”

I don’t actually believe there is commoditization of display media.  And while the symptoms of it do exist, I believe this can and will be solved.  Commoditization implies that all individual units of a good are the same and are capable of mutual substitution.   I’ve seen site level performance reports and the data simply does not bear out that all media is created equal.

Rather than commoditization, what we have here is insufficient tools for buyers and sellers to really value impressions.  It all looks the same, or at least I can’t figure out how it’s different, so I’ll assume it’s all the same and not worry about it.  That’s how buyers are thinking.

This is where buying platforms come in. Platform based buying will benefit media sellers and publishers as much, if not more, than it benefits advertisers.  This seems odd and totally wrong, right? The true savior of the sell-side is actually focusing on the buy-side?  Yes, because buying platforms solve many of the issues that are causing this feeling of commoditization and this experience of ever-decreasing prices.

What qualifies as a buying platform?  It’s really any entity that can actually take control of and, more importantly, provide actionable insight into an entire media plan.

Buying platforms solve problems facing both buyers and sellers.  Let’s first look at the challenges that buyers face and dig into how platform-based buying solves, or at least minimizes, these issues.

Duplication

First, there is massive duplication of users across channels within media plans.  Currently, agencies and advertisers buy display media from a number of sellers.  The magic number for the agency seems to be about 10 or 20.  More than that and it’s simply too hard to manage.  Less than that and there’s both limited reach and also a perception that you’re not really doing enough.

What’s the problem with this duplication?  Let’s walk through an example.  Assume that Mr Omniscient Marketer has determined that the optimal number of impressions to get someone to buy is 3 impressions per user per week.  In this example, analysis has shown that less than that simply won’t generate the awareness needed while more than three will simply be wasted money since the user will either have already been convinced to buy or will never buy.   The marketer goes out to 10 sellers (networks, publishers, whatever) and does 10 separate buys and implements a frequency cap of 3 ads per user per week on each.  The campaign runs and what invariably happens is that a large proportion of users see far more than 3 ads per week – because they are addressed by more than one of the channels used by the marketer.

An obvious solution to this problem is to give each channel a frequency cap of 1, because then, theoretically, this will reduce the number of (and cost of) over-addressed users.  Unfortunately, this also increases the number of under-addressed users, which is just as bad.

Solving for this is challenging for the marketer, and they know it and that is why the holy grail for the display marketer is universal frequency capping.  We rarely get in a conversation with an agency where this topic doesn’t come up.  But this is not new and if you’re reading this you’re likely in the choir I’m preaching to.  Most discussions about exchanges, platforms, DSPs and networks all talk about the value of universal frequency capping to the advertiser.

What is new is that the lack of universal frequency capping may be even worse for media sellers.  Counterintuitive?  Yes, a bit.  Why would sellers want or need something that limits the number of impressions bought?   Wouldn’t this exacerbate the oversupply problem by decreasing demand even more?   The answer is… it’s complicated.

The buy side controls all the data and dictates how much they spend, at what price, at what goal, etc.  So the fact that far too many impressions are being served to some users is already factored into the buying process and economics.  They simply reduce their target CPA and CPM.  Buys aren’t “optimal” but it doesn’t really matter to the buyer since they are optimizing under these constraints and making it work.  Continued shift of spend to digital shows that advertisers have largely accepted this and are moving in.  But it’s painful for publishers.

Let’s put a little math behind that.  If a customer is worth $100 and we expect to convert 0.01% of the people we address (which is about right in display) then we can afford to pay $10 per thousand unique consumers.   If we have an optimal frequency cap of 3 impressions per consumer, we can afford a $3.33 cpm.  However, if we actually serve 10 impressions per consumer, now we can only afford $1 cpm.  If we serve 20 impressions, we’re down to $0.50.  And so on.

Now take that math and add in a few more complicating factors which cause smart buyers to become even more conservative with how they value impressions.  First,  add an uncertainty adjustment by the buyer because they simply do not know how many impressions they are serving to each users (so they assume the worst and overcorrect on the high side) – this lowers allowable CPM.  Second, take in the inherent difficulty with attributing display conversions due to last-click attribution and known inability to measure the true impact – this lowers the CPM further.  All of this results in buyers being unwilling (and unable) to pay a high price for impressions.

Platform based buying actually solves this for sellers.  Universal frequency capping is difficult across display channels.  It requires integration into the buy decision (eg, real-time bidding or, a better name, impression-level bidding). Without that it can result in a great amount of exhaust (extra impressions you’ve bought but don’t want to serve). However, true frequency capping isn’t really necessary.  Aggressive frequency management should be sufficient to have a significant impact on “right-pricing” display media.  Frequency management comes about when the buyer has insight into frequency, reach and duplication and can then use available levers to optimize media channels.  It’s not an absolute cap but it gets the job done.  For example, if Network 8 and Publisher 12 are not adding unduplicated or under-addressed users, they can be dropped from the plan and the dollars reallocated to Network 3, 4 and 5 and Publisher 7 which are reaching under-addressed users.

So now we’re buying less impressions at a higher price.  But the dollars coming into the system didn’t grow. So the problem for the publisher isn’t solved yet.

Attribution

Our goal isn’t to make all publishers rich. It’s to halt this feeling of commoditization and to enable publishers that are actually driving results and adding value to be compensated for that value.  This is where attribution comes in, because the challenge for the buyer doesn’t stop at frequency; correct attribution is also critical.  Though it has a huge impact, let’s ignore cross-media attribution issues (eg, display vs. SEM vs SEO vs. organic vs. offline vs. word of mouth, etc).  Here let’s just focus on attribution within the display media plan.  We want to make sure that each marketing channel is getting credited with and rewarded for the value it actually adds.  This actually is not difficult, it just requires the right tools.

Poor attribution drives poor decisions and results in dollars being allocated to the wrong channels.  A baseball analogy to poor attribution would be evaluating a starting pitcher based solely on Wins and Losses while ignoring the fact that it’s much harder for a pitcher on a bad team like the Royals to win games than it is for one on a good team like the Yankees or Red Sox.   This issue affects all types of publishers and networks.  Smaller networks or publishers may actually be driving good results and have a lower eCPM but may not have the reach to drive results in the manner that looks good to a poorly designed attribution analysis (ie, they are pitching well but they simply don’t have a good Win-Loss record, which is how they are being measured).  Similarly, premium sites may be driving results and be cost effective even with their premium price, but poor analysis causes them to look bad and to have to drop price.

The solution is to evaluate all your display media buying through one lens and while most ad servers can provide lenses into attribution, they do not allow the buyer to execute against that insight.  Platform based buying with superior insights informs the buyer who is doing what and what they are worth.  This insight means that display impressions are no longer a commodity, they are no longer undifferentiated.  A buyer can truly evaluate what works and what doesn’t and pay accordingly.   Suddenly, the medium-sized network or the premium financial site is hearing positive feedback, the advertiser is asking for more volume and prices rise.  Before you know it, we might even have a charged up publisher on a panel.

Next:

We’ll talk about the challenges facing publishers themselves and how the tools buying platforms are building can be used to help publishers compete and thrive.

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Eyeblaster releases Display and Search Research Note

Feb 26

Posted by Mark in Uncategorized | No Comments

Eyeblaster released a research note -  “Search and Display: Reach beyond the keyword” (get it here).   It’s a brief note with very interesting findings, particularly for display folks.  Using Eyeblaster’s proprietary “Channel Connect for Search” (CC4S) product, Eyeblaster tracked cross-channel campaigns and determined the source of the conversion.

The note starts with a really good overview of the purchase funnel as it pertains to display and search (using a very relevant analogy to the yellow pages).   The funnel diagram shows how display and search can impact the funnel.  In the diagram, Display is shown to drive the entire funnel from Awareness to Intent to Purchase while Search only drives Consideration and Intent.   I’d suggest that Search can and does influence “Favorability”.  Once a consumer is aware of the need, she will search for generic, higher-level terms, and search can show ads that will drive brand favorability.  For example, I might search for “BlueRay DVD player” and could then see a search ad for LG and view LG DVD players favorably.  Additionally, while it isn’t clear if they mean this in the diagram, display is proven to drive repeat purchase (via retargeting).  Search is unable to directly drive repeat purchase.

As to the results of Eyeblaster’s study, it was found that:

“Overall, for customers who used both search and display, 72% of conversions arrived as a direct result of the displaychannel. Only 23% of the conversions were a direct result of the search channel. 5% were the result of display ads that were followed by a search.”

Eyeblaster caveats that the share of display vs search is “the result of  budget allocation decisions made by the advertisers.”   It’s probably safe to assume that Eyeblaster clients lean a bit more towards display than search, particularly those using CC4S.  The extremely low number of “search after display” conversions differs pretty dramatically from prior studies I’ve seen, which I believe has to be due to the types of campaigns being used in the study.

The report then digs into the share of display and search conversions by vertical. This is great data and you can see a wide variety in share by industry vertical.  Entertainment, CPG, Financial and Careers lean far more towards display while B2B, Travel and Retail skew towards search.  I’m actually surprised to see careers sitting more towards the display side, since jobs seems like a much more search-driven category, but the data tells a different story.

What would be really interesting here, given Eyeblaster’s leadership position in driving display engagement, is to get a sense of the breakout of display conversions by attribution type.  How are these display conversions being attributed?  It would be great to break these conversions out into post-view, post-click and even post-engagement.  I’m petitioning for a follow-up Research Note.

The key takeaway here is that display is an extremely important part of any marketing plan and can drive conversions on its own.  We in display intuitively know that and evangelize it every day, but it’s great to see a study from an industry leader showing some numbers to back it up.  Next step is to dig even further into these numbers and really nail the point home.

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Google using Display and Video to drive Search

Jan 25

Posted by Mark in Uncategorized | No Comments

Could there be any more compelling case that display drives search than the fact that Google is running display ads to drive to Youtube videos about Google’s search capabilities?

The videos are on Youtube here – http://www.youtube.com/searchstories

John Battelle first talked about this in his SearchBlog.

Most relevant here is that Battelle saw Google doing roadblocks on nytimes.com.  He states:

“It’s truly a brand campaign: Google is not selling anything here other than its own brand – that ephemeral sensibility that resides between its customers’ ears.”

Now we know that every campaign, even a “brand” campaign, has a goal.  So what’s the goal here?  How would the dominant search engine with 65% market share in the US measure and evaluate success?

Since I haven’t seen screenshots of the display ads, I can’t evaluate if there is a chance the display ads could drive view-based activity (vs. focusing solely on driving clicks).  But the primary video on the youtube site , called “Parisian Love”, has nearly 700K video plays in two months.  I am no expert on how many video plays is impressive, but that seems like a pretty good number.  Side note – these videos are pretty cool – I’m immersed in the space and I find them compelling yet I could see my mom or sister also finding them interesing and informative – nice job!

It’s interesting to think of the way Google could have used data to drive results in this campaign.  First, assuming the goal is to increase search share, and in an interesting case of reverse retargeting, they could have simply cookied their own searchers and either excluded people who either never or rarely searched on Google.  They could also have cookied people who didn’t search in an optimal manner (these videos do a good job of demonstrating the lifecycle of searching for things and coming to solution) or those who didn’t seem to find what they needed.  Finally, while they could never do this because they “do no evil”, they could have cookied people who have the Google toolbar but searched on Bing.

Regardless of how they are measuring success – this campaign is the ultimate example of using display to drive search.  If the master of search is using display to drive search, who are you to argue? Thanks Google.

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Blogging break

Jan 9

Posted by Mark in Uncategorized | 1 Comment

Took a break from blogging to welcome a new addition to the family.  Little Jackson, our newborn son, is doing very well and, as you can see, has a very excited big sister.
Zoe & Jackson
I hope to get back to a more semi-regular schedule with the blog.

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Google + Teracent – display & search convergence continues

Nov 23

Posted by Mark in Big Company Stuff, Display Technology | 2 Comments

Very exciting news today with Google buying Teracent.  Dynamic creative is a key component in making display act more like search. Way back in my first post on this blog, I talked about how the ability to optimize the creative was critical in the convergence of search and display.  This acquisition shows that someone at Google thinks I’m right (still looking for them to credit me with that idea)Teracent

This acquisition will also drive some other changes in the market:

  • Accelerated Dynamic Creative adoption – while they may be upset they weren’t bought by Google, the other dynamic creative providers should be very happy.  First, while Google is huge, it doesn’t own display, not even close (not yet, anyway). So the rest of the display world is there for the taking.  Second, Google/Teracent will push marketers to think this way – which will accrue to Tumri and Dapper.  Finally, many more marketers of all sizes will now be exposed to dynamic creative – which will generate experience, case-studies, etc.  The only negative is that Google has this annoying habit of giving things away for free – which can sometimes be hard to compete with.   But Omniture seemed to handle it just fine.
  • Publisher Acceptance of Dynamic Creative – currently, due to file size restrictions, most dynamic creative is either flat out rejected or simply can’t scale on the exchanges.  This is either done because systems for approving creative haven’t recognized this new type or because the sellers want to keep the use of advanced technologies for their direct sales force (answer is likely a little of both).  Assuming Google makes Teracent the default dynamic creative provider in the Doubleclick Ad Exchange, then this will definitely force some changes in the market.  Yahoo, particularly, will need to respond (I wonder if Tumri has been invited to visit Sunnyvale tomorrow?).  At a minimum, it should become easier to get dynamic creative approved and scaled on the exchanges.   (Side note – rejecting creative simply due to file size without regard to the technology involved has to be the most poorly thought out tactic of publishers today.  Here’s a perfect example of where a display ad can pay more, and it’s being rejected. But that’s for another day)
  • Search to Display transition – In my post on the launch of the Doubleclick AdX2.0 and how Search and Display marketers would finally go head to head, I brought out how hard it would be for experienced search marketers to get up the learning curve in display. One reason is the creative – from creation to trafficking.  Teracent solves a lot, if not all, of these problems.  Ironically, the thinking behind how Teracent handles display ads is probably easier for an experienced search marketer to understand than your average display marketer.  Teracent breaks down creatives into components – it’s no longer an art, it’s a science.  That’s exactly how search marketers think.  Qualitative judgement goes out the window.   I may need to reevaluate my decision in the Search vs. Display battle (or it’s at least a lot closer).
  • More Acquisitions – I know 50+ companies that have some foot in the display “exchange” space.  This excludes all networks and publishers, simply companies adding technology and smarts to the management of display marketing on the exchanges.  Teracent is the first of those companies to be acquired (second if you count Acerno by Akamai last year).  Google gave notice in the recent earnings call that they would be interested in companies that “have figured out better ways of sorting and working on display ads.”  So it probably has more of these on the horizon and acquisitions are always copied so expect others to follow.   The only damper here is that, of the usual acquisition suspects, Yahoo and AOL are focused on other stuff.  So expect a Microsoft announcement in the next few months with Adobe being a dark horse acquirer in the space.
  • Everyone’s a DSP – We at MediaMath invented the DSP model back in 2007, but nowadays everyone is a DSP, or is claiming to be one.  While Teracent is known for its dynamic creative product, buried within its technology is the ability to buy media dynamically.  They just focus more on the creative while others focus on media and/or data.  So Google just bought a DSP, and I guarantee they know it.

In summary, this is exciting. The behemoth of search has (again) deemed display important, has said dynamic creative is critical, and has bought one of the leaders in the space.  Pretty cool stuff.  Convergence continues.

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Google’s Campaign Insights – help for display, hurt for Dynamic Logic?

Oct 21

Posted by Mark in Big Company Stuff, Measurement | 4 Comments

Measurement.   Better measurement is critical to display advertising being managed like search.  Google this week announced the launch of an exciting new tool that will allow display marketers to better measure their results.

The product is called Campaign Insights.  It sounds pretty slick.  Basically, they are taking information on the ads consumers have seen and matching it up, somehow,  with searches consumers with the Google Toolbar make.  Now unless it’s magic, which is entirely possible, there has to be some sort of common key to enable Google to match the ad to the search – so I guess that means the toolbar is recording the ads we’re seeing (or the ad is recording a toolbar ID of some sort).  Doesn’t scare me but I wonder what the privacy hounds are thinking about this.Campaign Insights

Regardless of how it’s done, receiving this data easily and in a timely fashion should accelerate investment in display advertising.  Numerous studies show display impacts search.  But display attribution to consumer search during a campaign is pretty ad hoc.  Analysts pore over keyword traffic in analytics reports to try to see if an increase occurred when a display campaign is launched or changed.  Despite hard work by smart people – the results of this type of analysis are rarely conclusive in either direction.  Dynamic Logic brand studies are done to show lift in awareness, but they are useless for optimization because the results come weeks after the campaign. Plus they are expensive, difficult to execute, publishers hate them, and I have to believe that people who fill out DL studies are a unique lot.

This tool should give the display marketer the ability to analyze and make quick decisions to impact the campaign now.  Suddenly a marketer may be able to justify much higher CPMs in a display buy because they can directly attribute that spend to increased searches.

Google’s continued push into Display is pretty impressive.  Display is not like search in that it cannot be dominated based purely on consumer habit.  Seriously, I’ve tried to use Bing and it’s hard to get out of the habit of going to Google.com to search.  So to rule Display, Google is providing marketers with all the tools necessary to make buying display advertising as simple, easy and effective as buying search.  The Doubleclick Exchange is one piece, Campaign Insights is another. More is down the pike.

If I were Dynamic Logic, I’d be a little worried right now.   DL’s primary value is to help advertisers prove value in display advertising investment and Campaign Insights seems to make that much easier and cheaper.  Hmm, yeah, I’ll take Campaign Insights plus a Vizu study both providing me real-time results over a DL study that I’ll get a month after the campaign.  Not much of a decision there.

I’m hoping to get a demo of Campaign Insights in the next few weeks – shout if you can give me one.

Finally, while my daughter is a dinosaur for halloween, I am going to dress up as what Google knows about us. Boo!!

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Google’s Doubleclick Exchange: Battle Royal between Search & Display Marketers

Sep 24

Posted by Mark in Exchanges | 4 Comments

There’s been much talk over the last few days about the impact of the launch of version 2 of Google’s Doubleclick Exchange (“AdX”).  Adexchanger covers it very well here.  Most have focused on the huge amount of scale, the benefits of RTB, and the impact on the exchange market itself.

But what’s most exciting about this launch is that it is really the first time we have seen search marketers and display marketers go head-to-head with all of their respective tools available.   This is the Shaolin Monk vs. the Ninja in Mortal Kombat.  It’s Gorilla Monsoon vs. Muhammad Ali.  Different weapons, different skills, who knows what’s going to happen.

Search vs. Display

Some may say, “well, search marketers have been running display in the content network for years.”  Yes, they have, but not with the tools traditional display marketers use (eg, targeting data, view-based attribution).   So let’s get it on!

Search Marketer Tools:

Keywords – SEM’s have become pretty adept at managing the content network using sets of keywords.  This is the primary targeting tool SEM’s use in the content network and it leverages the extensive learning from search campaigns.  However, the tools at their disposal still do not give them the control they need to really optimize.  How the lists of keywords are applied to pages to identify context remains a black box.  Within Ad Groups it is impossible to determine which keywords are performing well and which are not, which makes optimization a bit of a guessing game (to put it lightly).   Use of keywords will offer no real advantage in most categories where display marketers will bring some of the tools I’ll describe below.  Yet, search marketers should maintain an advantage in categories where context is key and where data is not valuable or not available.  For example, health is likely the last category that will be tackled by the audience data experts (if it ever is), so the only way to target people interested in specific conditions (eg, diabetes) will be keyword driven targeting.  Advantage: Search (at least for a little while)

Placement Targeting - Placement targeting allows the marketer to pick specific sites on which they want their ads to show.  This gives the marketer more direct control of where their ads run.  However, this is a tool with which display marketers are very familiar and they should be able to quickly put that experience to use ramping up on the exchange.  Most exchange buyers are salivating at the transparency AdX promises.  Advantage: Even

Text Ads – This is an interesting one, and my conclusion is likely a bit controversial.  The success of Google has driven many marketers to believe that Text ads are superior to Display ads.  I don’t subscribe to that theory.  Google has dominated due to targeting and a unique and dominant position at the end of the purchase funnel.  Text Ads are uniquely suited to being presented results for search queries – but there is no reason to believe they are well designed for eliciting response when presented to a browsing user.  Display allows you to tell a story in more than 3 lines while allowing you to do things which attract the attention of the consumer.  We do not see TV commercials that are just 3 lines of text, nor do we see billboards or magazine ads (besides classifieds).  Where display fails is that it’s hard to do and it cannot sit at the end of the funnel.

This belief in text ads has actually spread to the display side where I’ve actually seen marketers create display banners that look like text ads – with 3 text listings hard-coded into a display unit.  The only advantage of this is it allows the use of view-based attribution and audience data (which I’ll describe below) but it ignores the true advantages of text ads – which are the ability to quickly and easily optimize the text creative and to target based on keywords.  While I’m sure that many on the search side will howl when I say this, I have to say that for Ad Format… Advantage: Display

Display Marketer Tools:

Targeting Data – Targeting data includes remarketing data (eg, target someone who has been to your website). behavioral data (consumer has shown they are in-market for travel by searching for hotels) and demographic data (consumer has reported that they are a 34 year old male).  Display marketers have become highly skilled at using this data in making display campaigns achieve their goals.  Many display campaigns require remarketing as a core component to achieve the advertiser’s goal (just for kicks, ask your network salesperson if he’ll run your DR campaign without placing a remarketing pixel, go ahead, I dare you).   Both Brand and DR campaigns benefit greatly from the use of in-market behavioral data (as just one example) to assure that they are addressing the right audience and hitting the goal.  The only advantage I see for search is that many of the larger SEM’s can bring search keyword remarketing data to the table.  Currently, the search-based data available comes from 2nd tier search engines or is from other proprietary but imperfect means.  SEMs will have the data from clickers on their search campaigns for the very advertisers they will be bringing to the content network – which is incredibly powerful.  Despite that, I believe the learning curve for applying cookie data to display is still great enough to make it Advantage: Display

View-based Attribution – this is perhaps the most effective tool in the display marketer’s belt and could be deadly when going head-to-head with search marketers.  SEM’s have been making the content network work for them without any ability to measure the impact of just seeing, but not clicking on, the ads (which we know is extremely powerful).  They have had to rely on clicks, which on websites are simply rare events.  It’s as if they played a whole football game and nobody told them about the forward pass.  Google did allow 3rd party ad servers on the content network last year, but due to the trafficking nightmare, I can’t imagine many, if any, set up separate ad tags for every keyword, placement or even ad group to enable true view-based optimization.  Many display campaigns with even a short post-view window will see the overwhelming majority of attributed conversions come from the post-view attribution.  It’s important to point out that this is absolutely valid and the impact can be tested and proven.  Imagine if marketers evaluated magazine ads or billboards only based on consumers who called the advertiser the moment they saw the ad.  Where Search may have an advantage is that they have learned to make campaigns work relying solely on the click, whereas display has shown that clickers may actually be bad.  So there will be a period of normalization here where both sides learn a bit from the other.  Even assuming SEM’s are twice as good at making clicks occur and work, the enormous amount of conversions display marketers can demonstrate post-view enables a much higher CPM bid and should allow smart display marketers to win a great deal of inventory (it could actually be unfair).  Advantage: Display

Real Time Bidding – this has been a bit overdone, but being allowed to bring your own algorithm, data and intelligence directly to bear at the decision point is incredibly valuable.  Perhaps more amazing is the ability to see all the impressions that you do not win or just do not want.  That drives a lot of learning.  Advantage: Display

Display Ads – The inverse of the “Text Ads” piece above.  Display is hard – it requires ad trafficking and serving – which are hard things to do and still require a lot of bodies.  Even now it’s hard to find people who can do this well.  Sure, there are technologies out there that attempt to make this easier (eg, AdReady, Google’s Adbuilder) but these solutions tend to focus on the creative building piece and not the trafficking and measurement piece.   Simply due to experience, the Advantage has to go to Display, though I won’t count it here since I already gave Display the advantage above under Text.

Conclusion

As a display guy, I have to admit I’m a bit biased, but I think the display marketer has the upper-hand in this fight.  Display marketers will be in a much better position to absorb and use the search tools (particularly placement).  Displays’ tools are, and this is a broad generalization, completely new to the search marketer.  The workflow process around managing display advertising should not be underestimated as a barrier to SEMs entering display (eg, my mother could launch a search ad in about an hour whereas I have been in display for 7 years and could not launch a 3pas display ad by myself if given a week).  Hiring an experienced display ad ops team is hard and expensive and takes awhile.

But the search guys are smart and fast.  The larger SEMs took the digital agencies’ business and served it to them for lunch when search was originally ramping up.  Many of them think they can do it again.  Display has to move quickly, get in, take control, scale up, seize the offensive and go all Rex Ryan on search within AdX.  This means quickly launching and scaling RTB integrations, utilizing all the tools available, continually developing new tools ahead of the curve, and absorbing all the capabilities Google is going to give to the search marketers to help them keep up. For example, a display marketer using RTB may not need keyword targeting, but she sure as hell better understand how to use it and how it is developing.

This is going to be fun.

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Display Pricing – New Rubicon 20 Index shows Q2 prices increased

Sep 1

Posted by Mark in Uncategorized | No Comments

The Rubicon Project unveiled the Rubicon 20 Index which should be a more accurate measure of display CPM prices.  Focusing on just 20 top sites should also allow for Rubicon to account and adjust for any oddities in the data.  I’m still not sure why it takes 2 months to release this data, but maybe the concentration on 20 sites will get this report out sooner going forward.

That said, like the financial markets, if the Rubicon 20 is the Dow then we’ll still need an S&P500 to account for the broader market.  Perhaps Pubmatic’s pricing report can fill that void.

As I suggested in a prior post, Rubicon also saw prices increase a great deal in Q2.  Download the report here .

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Great Video on Display and Search Convergence by Dapper

Aug 17

Posted by Mark in Display Technology | No Comments

This video is a bit dated (Feb 09), so I’m behind the times, but I had to post this video from the Dapper Blog.  This is EXACTLY what I am talking about when I say display search convergence.  Nice job Dapper!  I struggle to explain to outsiders just what we do in online advertising – anyone could understand this video.

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