The three laws of display advertising physics
1. The Theory of Relativity: What’s better, a demand side platform, or an ad network? It depends
Our clients often ask us if they should use our DSP (Invite Media), or our network (the Google Display Network), especially as the distinction between the two platforms blurs. We often answer with an analogy from the world of stock investing (it’s not perfect, but it’s a first step). The first question is whether to buy and sell yourself, or engage someone else to manage your portfolio:
1. The Theory of Relativity: What’s better, a demand side platform, or an ad network? It depends
Our clients often ask us if they should use our DSP (Invite Media), or our network (the Google Display Network), especially as the distinction between the two platforms blurs. We often answer with an analogy from the world of stock investing (it’s not perfect, but it’s a first step). The first question is whether to buy and sell yourself, or engage someone else to manage your portfolio:
- The online broker model: For buyers looking to manage the details of their ad buying and use their own technology and data, a DSP like Invite Media is often the best option. This is similar to an online broker that lets you log in and closely manage your investments (and, as with Invite Media, get access to special trading features, market intelligence and expert advice).
- The stockbroker model: Some marketers have a desired campaign result (such as a target reach for a new car campaign, or a number of conversions for a sporting tickets campaign). They want to outsource the details and have a customized, transparent media solution designed for their campaign. The Google Display Network most often fits this bill—it’s like having a stock broker manage your portfolio to meet your investment goals.
2. Fusion Theory: Why contextual and audience buying release more energy when combined
Some have suggested that audience buying (delivering ads based on users’ interests) and contextual advertising (targeting ads to content) is an either/or proposition. However, we believe it’s the combination of the two that is most powerful.
- With effective contextual advertising, you can get the maximum reach while delivering your message in highly relevant locations—like news articles related to your products—in the precise moment a person indicates interest. Contextual advertising is vital to building brand awareness and reaching new prospects at relevant moments.
- Audience buying—such as remarketing—enables marketers to reach people who have already shown an interest in a particular topic or brand. This is especially effective for re-engaging consumers.
3. The Law of Perpetual Motion: Why marketers should embrace a rapidly moving industry
Display advertising is in a state of constant motion, caused by the acceleration of online media consumption and the explosion in new technologies.
- Advances in computer science are driving changes in advertising. To illustrate: creativity has always been at the heart of good display advertising. But look at what’s become widely used by marketers in just the last few years—rich media technology, new mobile and videoformats and dynamic creative technology that can take a creative ad concept and automatically bring it to life over millions of websites.
- The industry is literally moving faster as media buyers start to increase their use of real-time bidding (RTB) technology, which allows them to evaluate and bid on ad space on an impression-by-impression basis. We recently undertook an industry study with Digiday, surveying more than 300 digital media buyers, agencies and intermediaries about their thoughts on RTB in the year ahead. Some revealing findings:
- 88% of buyers plan to buy via RTB in 2011, up from 75% last year.
- 47% of media buyers say that the benefits or RTB will increase their overall digital advertising budget this year (16% said it would not, 37% were unsure).
- Spending on RTB is quickly moving out of the "test budget" range: 79% of buyers estimate that more than 10% of their digital display budgets will go to RTB in 2011. 33% estimate that 50% or more of their digital display budget will go to RTB. And 7% estimate 90-100% of their digital display budget will go to RTB.
- 29% of media intermediaries (such as DSPs, ad networks, and exchanges) anticipate their volume of real-time bidding will increase by 100% or more versus last year. 19% believe it will go up by at least 200%.
- More formats are moving to RTB: 34% of buyers say they are extremely or very likely to purchase rich media ads via RTB this year, 32% are extremely or very likely to purchase dynamic creative ads via RTB, 20% are extremely or very likely to purchase mobile display ads via RTB, 18% are extremely or very likely to purchase in-stream video via RTB and 14% are extremely or very likely to purchase mobile rich media via RTB.
- Nearly half (48%) of publishers surveyed say they plan to increase the amount of inventory they will make available via RTB. 28% are still deciding. Only 24% said they were not planning to increase RTB inventory.
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