It's safe to say that 2010 will go down in history as the beginning of "display advertising 2.0." 'That's when online display advertising soared beyond its existing boundaries to leverage increased buying efficiencies, improved targeting, and clearer transparency standards. Advertisers are on track to spend more than $22 billion on interactive display ads this year. While it's still less than the $37 billion slated for search advertising, the display market is growing again after a few flat years, and everyone seems more enthusiastic about the new opportunities in the burgeoning world of display.
Much of the excitement is driven by new mobile/smartphone ad inventory and social networks, as well as innovative systems that automate the ad buying process in ways similar to how Google and Yahoo streamlined search advertising placement through ad auctions. Ad exchanges, yield management platforms, demand-side platforms (DSPs), and ad networks are finally bringing real-time bidding capabilities to the display advertising market. Advertisers will be able to bid on audiences in real-time, rather than contracting with individual publishers for massive amounts of inventory that might or might not prove effective.
Advertisers are poised to benefit from competitive pricing and more choices. It also means there is greater opportunity for smaller ad inventory upstarts and the companies that support them to own a bigger share of the market.
However, brands and the agencies that support them have concerns. The metrics they need to measure campaign performance online are not keeping up with the innovations on the sell side. Brand marketers care about awareness, engagement, favorability, and purchase intent. The metrics provided to them by online campaign managers are impressions, click-throughs, unique visitors, page views, session length, and so on.
Brand marketers simply don't know what to make of this data or how to convert it into something that's meaningful to to their brand. Even the measurement metrics they get for television, broadcast, and print media placements have shown to provide better insight into campaign performance than what's available today in display.
In order for brands to feel comfortable with display advertising 2.0 and invest more of their budgets in the market, advertisers must be able to measure campaign performance. One way is through better "ad analytics" -- metrics that can tell them details about the quality of the audiences they're reaching.
Ad analytics can provide brands with new insight into the performance of ad campaigns, such as who saw their ads (reach and frequency), the best audience sources, which ads were viewed and for how long, and which campaigns contributed to overall success and which didn't. So far ad networks and other inventory providers are largely failing to provide such data because it's hard to gather and make sense of this information across disparate ad networks, exchanges, and publishers.
These problems are spawning demand for new functionality in display advertising: comprehensive ad analytics. Online marketers are familiar and comfortable with site analytics from the likes of Google, Omniture, or Coremetrics. They are a necessary part of any online presence, but none of them provide the kind of insight that brand marketers need to optimize their online display campaigns. Nor do they answer the question, "How is my brand doing with viewers who don't visit my site?"
It remains to be seen whether a comprehensive ad analytics platform will emerge from one of these established providers, or whether point solutions from different vendors can be combined to deliver the metrics advertisers need. In the meantime, advertisers can become more proactive about optimizing display campaigns with some simple steps:
- De-focus on CTR: In the absence of better brand-oriented metrics, display advertisers have wrongly focused their attention on the readily available, but almost meaningless click-through rate (CTR). Simply avoiding CTRs as a measure of success will help advertisers focus on other more meaningful metrics. It will also help highlight the need for more detailed and better metrics for display.
- Demand transparency: If a network or publisher doesn't provide a minimum level of transparency, then advertisers should consider adding or requiring a verification service that can work around these barriers and limitations to shed enhanced insight and visibility. Brand marketers should leverage their pursestring power to demand increased accountability and better reporting. Remember -- ultimately they are the customers.
- Protect your data: In this changing environment, it's important for advertisers to understand the value of the data created from their online media campaigns and ensure that this unique asset is protected. Brand marketers should select partners carefully to ensure that this valuable insight isn't used for purposes other than improving their specific (and confidential) campaign results.
If brand advertisers are expected to continue investing in online display advertising at a growing rate, they deserve to know if ad providers are truly delivering on their promise of audience reach. They also have the right to understand how campaigns performed so better decisions can be made in the future. Improvements in ad analytics could give them the insight they need. And with all the competition and dollars at stake, my bet is that advertisers will get exactly that.
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