Vikas Gulati | January 16, 2012
The display advertising ecosystem is buzzing with action and whole lot of excitement. The changing technology landscape has completely re-energized the whole space. Not only display-ad revenues are growing faster than ever before, it is also redefining how we leverage this channel in the overall marketing mix.
As we start into 2012, here are five things that you as a marketer should know about Display 2.0
1. Display Advertising Is Back in Vogue… for Good.
Display ad-revenues are expected to close 2011 at a staggering US$25 billion, up 21 percent*. This is expected to reach US$35 billion* by 2013 at compounded annual growth rate (CAGR) of 19 percent*. The share of display is expected to increase to 41 percent* of total digital ad spends in 2013 from the current 35 percent. Google in late 2010 predicted. Display advertising to touch US $50 billion by 2015.
Yes, display advertising is now growing disproportionately vs. search. All data seems to suggest that display advertising will play a much more prominent role as more brands are betting on display to deliver campaign goals.
This brings up some interesting questions for marketers going forward. Are they really maximizing display advertising channel? What role does display play in the their digital media plans? Does it continue to just be part of the run of the mill plan under the garb of brand advertising with no pre-defined ROI goals?
We are likely to see immense action in this space over the next six to twelve months in Asia. And, marketers will do well to keep themselves abreast with developments in this space.
2. Platform Buying, Real-Time Bidding, and Audience Targeting
A key enabler of this growth are the online advertising technology intermediaries such as demand side platforms (DSPs), supply side platforms (SSPs), data providers and exchanges, data management platforms, and a host of other service providers.
But if you flip the coin, the ecosystem seems to be getting complex with so many intermediaries with often overlapping roles and value propositions. DSPs/ SSPs/ad exchanges – weren’t they built to solve the same problem, whom should we work with – one or two or does everyone has a role to play?
If we dig deeper, it is not that complex to understand the role of participants. Intermediaries offer one or more of following broad services that are of value to advertisers and agencies:
- Platform buying: They offer single interface to access inventory from multiple sources such as direct publishers, ad networks and ad exchanges. DSPs fall into this segment are supposed to be single buying interface for all inventory needs. One gets access to the global inventory pool with a single dashboard. The technology is supposed to optimize campaigns based on the ROI goals whether CPM, CPC, or CPA.
- Real-time bidding (RTB): This means that every impression is getting auctioned on the platform and the market determines the price. Advertisers pay a fair price to acquire inventory rather than arbitrary price set by publisher or network. There is more to RTB than just price specifically when one takes into account audience targeting piece and it makes the whole campaign delivery efficient.
- Audience targeting: As the word defines it, identify the best consumer segments for a specific ad or campaigns that can be used effectively to reach sales, acquisition and branding goals. The data exchanges/DMPs work with data providers/ publishers to collect the audience data and make it available for advertisers for campaigns. These exchanges / data providers may already be integrated with DSP platform so that advertisers can plan your campaigns with audience data.
It is interesting to note how various platform players are positioning in the marketplace. Some platforms are working exclusively with agencies to set up trading desks while others have a more flexible approach of working with clients or agencies. Some digital agencies have openly expressed interest in setting up a proprietary trading desk that puts them in direct competition with other platforms.
The fact is that use of these technologies/platforms is certainly going to improve the buying efficiency and enhance overall marketing productivity. Marketers must start thinking about how to best leverage this opportunity and embrace this new paradigm of display advertising.
3. “Data” Is the Only Friend.
Data here refers to audience-targeting data. And, this is probably the most important point in Display 2.0. In a complex display environment with multiple service providers, each eyeing a piece of your marketing budget, audience data is probably marketer’s best friend.
Audience data refers to any attribute pertaining to users that can help to improve the targeting of the campaign. As the users navigate through the web, they are leaving a wealth of information about their online behavior such as search, content views, transactions, registrations, ad clicks, and much more. Marketers can now use this data to define actionable user segments. For example:
Potential Singapore traveler could be defined as consumers who have done a flight/ hotel search to Singapore or have clicked on travel offer for Singapore or has visited Singapore-related pages on travel publishers.
Stock investor could be defined as users who actively follow financial news and services websites (at least three times per week) or track specific stocks on financial website or visits a major financial or brokerage site.
There are third-party data aggregators that provide this useful data to be integrated as part of your campaign planning. One can also work with the publishers directly to start collecting the data.
Also, recognize that every campaign is generating a wealth of user data. All users visiting your brand sites are also contributing to overall data assets, which will allow you to target them with relevant messages. This is commonly known as remarketing.
The sooner marketers realize the power of user data in the campaign planning and start actively working on the “data” strategy – who, what, and how – the future campaigns are bound to yield superior results. Beyond doubt, Display 2.0 will be led by audience data.
4. Search and Display: It’s All Coming Together.
Display 2.0 is a logical extension of search. The reason search works well is that due to intent-based targeting. Display advertising can now take audience intent data to target consumers when they are surfing the web.
Consider search re-targeting: Reaching prospects who search based on your category/brand/benefit but haven’t reached brand website. The effectiveness of display campaigns can increase dramatically if you start considering audience search data as inputs. Conversely, you are not maximizing your search spends if you are not following it up with corresponding display efforts.
So if your search and display are operating in silos – where different agencies are managing the efforts, then think again.
5. Display 2.0 Offers a Great ROI.
Last but not least, for long we had this notion that search is great for performance, while display is important for brand equity. It’s a myth that has been busted. The advancement is audience targeting, platform buying, and RTB ensure that display can well be used as a performance tool. There are a number of clients that are now using display as a pure performance tool. Some categories that have been actively using display as a performance tool include travel and finance.
The tools are available today that allow you to set up the campaign framework for performance – audience segments, real-time buying, and optimization to deliver the campaign goals. Based on our learning, across a number of travel/ hospitality clients, we have seen dramatic improvements in conversions and cost effectiveness. And of course, similar results with other variables such as CTR index and bounce rates.
In summary, Display 2.0 can be an extremely effective tool for marketers if used in a right way. As always, the critical thing is the set up. Clients just need to embrace it, just the way they did with search, and results will surely follow.
Wish you all success with your display efforts in 2012!