The Evolving Evolution of Digital Display Advertising
Once upon a time, programmatic was used for driving online conversions such as sales, registrations, sign-ups, etc., while traditional online display buys were used to generate awareness. The growth and adoption of programmatic advertising is changing how digital media is bought and why.
Programmatic Options Are Virtually Endless
There are many DSP platforms out there now such as MediaMath, TradeDesk, and DoubleClick Bid Manager. These are typically used by ad agencies that have a large enough volume to fulfill contract minimums. Simplistically, campaigns are set-up to deliver against specific goals and DSP specialists manage and optimize them on a regular and ongoing basis to deliver against these goals.
Managed programmatic buys can also be booked through media partners such as Exchange Lab, Suite66, eyeDemand, among many others. Display media specialists work with the sales reps to set-up campaign contracts to deliver against specific goals. The media partner employs specialists of their own to manage the campaigns on the advertisers’ behalf and optimize them to deliver against the contracted goals and spend.
Not all DSP platforms or programmatic media partners are created equal. They all have proprietary algorithms that analyze and bid on impressions differently. Some will simply be more effective at achieving specific campaign goals than others.
Programmatic buying provides access to billions of impressions through ad exchanges, SSPs (supply-side platforms), ad networks, and premium websites. Everything is (pretty much) in real time – bidding, buy management, and reporting. It can offer advanced targeting capabilities, optimization on the fly, one stop shopping, one platform or partner, one invoice, and greater buy efficiencies (CPC, CPM, cost per conversions, etc.).
Programmatic Also Comes with Some Challenges…
The cost of entry can be steep. DSP platforms require minimum month spends that depend on annual service contracts. The significant majority of programmatic partners require a minimum buy of $10,000. These minimums can quickly lock out smaller advertisers and are not at all conducive to media partner testing.
Online ad fraud is rampant. If left unchecked, or if measures are not put into place, budgets can be easily wasted. At Vovia, we aggressively evaluate the quality of clicks and conversions when calculating return on ad spend to ensure that effectiveness and efficiencies peel out fraud. With the increase of branding campaigns via programmatic, a lack of hard metrics makes the industry more susceptible to fraud – soft measures such as impressions and ad click are far more difficult to audit. Check out IAB Canada’s “Best Practices to Eliminate Non-Human Traffic Inventory Sources” here.
Other challenges with programmatic include transparency, brand safety, and view-ability. There is plenty of reading available online on these important topics as well.
The traditional online display buying process includes making deals directly with ad networks and online publishers. The media partners included in a buy manage the campaign on the behalf of the advertiser based on the campaign objectives, such as target CPCs, CPMs, ad clicks, website conversions, and so on.
This approach allows for a much broader range of budget as many publishers do not have minimum contract values. Advertisers can tap into inventory that premium publishers do not sell on exchanges and “breakthrough” or impactful executions are readily available; such as page take-overs and road blocking. Transparency and brand safety concerns are low – if you don’t want your brand associated with questionable content, don’t include a site with questionable content on the buy. And there is also less fraud when buying directly from a publisher, though it is more likely to occur with ad networks.
Some online publishers do not or cannot provide targeting beyond content and placement. There can be little to no optimization. When working with an ad network (as with a managed programmatic buy) you have to trust that the buy is being optimized to deliver the best result. With a buy of a sizeable spend, there may be many media partners meaning many contracts, invoices, proof of performance reports, invoices, and invoice discrepancies.
So Why Does All This Matter?
If you have a healthy display budget and have solid conversion goals, using a DSP may make a lot of sense. If you have moderate to modest budget, traditional display campaigns or a combination of premium sites and programmatic media partners may make sense as well.
At Vovia, we have experience with both approaches. Here’s what we have found:
Premium sites and ad networks are great for building awareness and supporting direct response campaigns. They will have a higher CPM and CPC than programmatic buys because that is how they are sold. They will likely have a higher CTR than programmatic, especially premium sites (assuming that they are relevant to the product and the target, of course).
Programmatic buys will deliver more conversions and they will be more efficient than traditional display. They will result is lower CPMs and CPCs, and if managed and optimized well, they will result in a much stronger ROAS than traditional display – even for a branding campaign.
In summary, focus on targeted premium sites and ad networks if you have a modest budget and awareness is your objective. Focus in programmatic if you have a healthy budget and ROAS is the goal. A combination of both is ideal, with programmatic doing the heavy lifting around conversions and traditional display providing the umbrella support to help lift response.