eMarketer Webinar: Buying Display Ad Inventory


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Join eMarketer Principal Analyst David Hallerman as he makes sense of the display ad market and discusses its projected growth and importance to marketers.

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  • 1,004 total interviews were conducted from the Harris Interactive Online Consumer PanelInterviews conducted May 26 – June 2, 2011Respondents were qualified as:US residentsAge 18 and overNot employed in advertising, marketing research, PRWeighted to match the US adult population of computer users# of Consumers that feel ads have become increasingly relevant over time has almost tripled – suggesting OBA works
  • Consumer Example->>>>>Focus on simple / easy for the consumer’ !!!!!3 StepsServe icon – ability to customizeShow notice – ability to customizeOffer opt-out mechanismAll TRUSTe hosted and managedCan get a trial up and running in a few daysCan have you fully operational in a few weeks or less
  • Add you client’s logo if a customerNot all of these are TRUSTed Ads clients – yetBut in active discussions with many of these and dozens more
  • eMarketer Webinar: Buying Display Ad Inventory

    1. 1. A U G U S T 2 5, 2 0 1 1<br />Buying Display Ad Inventory<br />Sponsored by:<br />David Hallerman<br />Principal Analyst<br />
    2. 2. What we’ll look at today…<br /><ul><li>Display ad market trends: spending and attitudes
    3. 3. Targeting tactics: audience vs. content (context)
    4. 4. Range of inventory sources: benefits and caveats
    5. 5. Publisher direct: finding brand value with premium inventory
    6. 6. Ad networks: ways to use inventory aggregation
    7. 7. Ad exchanges: including influx of private exchanges
    8. 8. DSPs: including growth of agency trading desks
    9. 9. Real-time bidding: how it fits into several inventory channels
    10. 10. Integrating ad inventory: blending sources and data</li></ul>Twitter – #eMwebinar<br />
    11. 11. Display Ad Overview<br />(Spending and Attitudes)<br />
    12. 12. Rapid changes in online display ad inventory emphasize the need to sharpen spending decisions<br />
    13. 13. Display ad spending includes:<br />• banners<br />• rich media<br />• sponsorship<br />• video<br />
    14. 14. How marketers would hope their target audience views their display ads<br />
    15. 15. How most audience members actually view online display advertising<br />
    16. 16. Marketing that US consumers trust: Display formats at bottom<br />
    17. 17. Ridiculously low click rates on banners partially reflect that missing trust<br />Twitter – #eMwebinar<br />
    18. 18. Audience vs. Content Targeting<br />(New vs. Traditional)<br />
    19. 19. One crucial reason most people never click on banners:<br />The ads are rarely relevant to them<br />
    20. 20. More targeting has produced more relevancy,but stillmore is needed<br />
    21. 21. 30% of marketers or less cite content targeting as most important vs. at least 70% who favor audience targeting<br />
    22. 22. Traditional advertising looks for content that aligns with brand goals and image<br />
    23. 23. 57% of advertisers and 53% of agencies said 2 or 3 targeting segments are optimal<br />
    24. 24. Limits of audience data—and therefore targeting—will be shaped increasingly by the types of info that users will NOT share<br />
    25. 25. Audience targeting tends to diminish transparency for media buyers<br />
    26. 26. Online advertising transparency can be defined in several ways<br /><ul><li>Details about inventory and data sources
    27. 27. Recency or frequency of audience intent data (aka “freshness”)
    28. 28. Where an advertiser’s message ran
    29. 29. Basic understanding of the algorithms used used to identify targets
    30. 30. Identification of any behavioral data used</li></ul>Twitter – #eMwebinar<br />
    31. 31. Ad Inventory Sources and Methods<br />(Reach vs. Overlap)<br />
    32. 32. Ad inventory options, sources and methods<br /><ul><li>Publisher direct (premium)
    33. 33. Ad networks
    34. 34. Ad exchanges
    35. 35. Private exchanges
    36. 36. Demand-side platforms (DSPs)
    37. 37. Agency trading desks
    38. 38. Real-time bidding (RTB)</li></ul>Twitter – #eMwebinar<br />
    39. 39. Publishers and networks (branding) vs. exchanges, DSPs, RTB (direct response)<br />
    40. 40. The thing about ad inventory sources: Each has its place, depending on goals<br />
    41. 41. Onil Gunawardana, executive director, AT&T Interactive<br />“Buying ad inventory is a lot like flying a plane.”<br />
    42. 42. Display advertising technologylandscape, from Luma Partners<br />
    43. 43. Newer ad inventory sources look to solve three basic requirements<br /><ul><li>Audience reach and scale: Sources such as ad exchanges and DSPs offer more audience reach, but that’s typically achieved through inventory aggregation. As a result, multiple sources offer duplicate inventory and impressions.
    44. 44. Cost-efficiency: Demand for cheaper inventory is a key catalyst for the growth of ad exchanges, DSPs and agency trading desks. Rather than committing to up-front buys, advertisers purchase inventory by the impression, often at low margins and using RTB.
    45. 45. Audience-efficiency: An influx of data-management platforms and third-party data providers look to better define and locate audiences. Media buyers use robust audience data, in combination with ad exchanges and DSPs, to better ensure that each impression reaches the right audience at the right time at the right price.</li></ul>Twitter – #eMwebinar<br />
    46. 46. Multiple ad sources too often result in duplicateinventory,which is inefficient and wastes money<br />
    47. 47. Top 10 ad networks each have about 70% or higher reach,makingaudience overlap very likely<br />
    48. 48. Largest portion of media buyers use only a few exchanges,somewhat more use networks, and still more use publishers<br />
    49. 49. Publisher Direct<br />(Premium Inventory)<br />
    50. 50. What is publisher direct inventory?<br /><ul><li>Bought directly from publisher, typically via sales team rather than automated methods
    51. 51. Maximum transparency of placement, such as above-the-fold
    52. 52. Maximum control over details of placements
    53. 53. Ability to create custom ad packages, and sometimes wrap a brand’s message into site content through sponsorships of articles, features and more</li></ul>Twitter – #eMwebinar<br />
    54. 54. Direct purchase most satisfying way of buying display ad inventory<br />
    55. 55. Brand marketers appreciate how high-quality content helps them stand out<br />
    56. 56. Brands not yet spending for digital video ads would most likely buy inventory directly from publishers or on networks<br />
    57. 57. Similarly, SMBs prefer publisher direct and networks for ad buys, but are shying away from ad exchanges and DSPs<br />
    58. 58. In some ways, content-targeted ad buys offer a captive audience<br />
    59. 59. Brand marketers looking to broadly disseminate their message would be wise to leverage large ad properties<br />
    60. 60. Publisher direct (premium):<br />Benefits and Caveats<br /><ul><li>Benefit:context really matters, so leading brands require premium inventory
    61. 61. Caveat: typically higher price tags than any other inventory source
    62. 62. Benefit: useful for brand marketers looking to broadly disseminate their message; especially large ad properties such as Facebook and Yahoo!
    63. 63. Caveat: audience reach for video ads pales compared with banners
    64. 64. Benefit: offers media buyers the most brand control against poor-quality placements or inappropriate content
    65. 65. Caveat: Facebook’s audience will likely overlap with other publishers’
    66. 66. Benefit: best for finding particular audiences (but doesn’t really scale)
    67. 67. Caveat: programmatic buying treats editorial quality as an added cost
    68. 68. Benefit: greatest transparency of placement, audience, results
    69. 69. Caveat: “you get what you pay for” is often a basic truth here</li></ul>Twitter – #eMwebinar<br />
    70. 70. Ad Networks<br />(Inventory Aggregators)<br />
    71. 71. What is an ad network?<br /><ul><li>Aggregates ad inventory from multiple publishers and matches it with advertiser demand
    72. 72. Typically groups ad inventory by categories or demographics
    73. 73. Often sells remnant inventory or from small publishers
    74. 74. Comes in both horizontal and vertical varieties</li></ul>Twitter – #eMwebinar<br />
    75. 75. Rough estimates indicate over 300 ad networks, both horizontal and vertical<br />
    76. 76. Nearly ¾ of agencies use ad networks to buy online ads, with traditional media company websites close behind<br />
    77. 77. Onil Gunawardana, executive director, AT&T Interactive<br />“Ad networks provide a service layer that allows advertisers to buy everything from one place and takes the hassle out of needing to have relationships with multiple publishers.”<br />
    78. 78. Far more marketers put greater share of ad budgets on ad networks and publisher direct (but beware rear-view mirror effect)<br />
    79. 79. Dave Marsey, SVP and group media director, Digitas<br />“Some ad networks will purchase additional inventory through other, smaller ad networks. It’shard to protect the integrity of where your ad appears when the network is essentially ‘outsourcing’ part of the buy.”<br />
    80. 80. Ad networks:<br />Benefits and Caveats<br /><ul><li>Benefit: tend to offer more robust targeting than publisher direct
    81. 81. Caveat: may provide only a small audience eligible for retargeting
    82. 82. Benefit: better reach, lower costs than publisher direct
    83. 83. Caveat: don’t go live as fast as ad exchange purchases
    84. 84. Benefit: offer brand control against poor placements or unsuitable content
    85. 85. Caveat: often cannot specify publisher sites where ads will run
    86. 86. Benefit: can often gain access to contextual placements and social network inventory not typically found on a DSP
    87. 87. Caveat: often lack the audience scale found with less-transparent providers like exchanges and DSPs
    88. 88. Benefit: various theme-specific networks, like luxury goods sites
    89. 89. Caveat: make sure network is open to third-party data providers</li></ul>Twitter – #eMwebinar<br />
    90. 90. Ad Exchanges<br />(Bidding for Inventory)<br />
    91. 91. What is an ad exchange?<br /><ul><li>A hub through which ad networks, and some large advertisers or agencies, can trade inventory within a single central marketplace
    92. 92. Intermediary that brings together publishers and marketers for inventory auctions
    93. 93. Without RTB, sells ads for future placements
    94. 94. With RTB, enables automated, auction-based pricing and buying in real time</li></ul>Twitter – #eMwebinar<br />
    95. 95. Ad exchanges and DSPs often work hand-in-hand<br />
    96. 96. Publishers extend their sales reach by putting inventory on exchanges or other real-time platforms<br />
    97. 97. Ad exchanges tend to reduce costs compared with direct site purchases<br />
    98. 98. Growing use of DSPs or exchanges, but still small shares<br />
    99. 99. Reduced transparency is a major downside of ad exchanges and DSPs<br />
    100. 100. Marginally more marketers value price over transparency when buying advertising<br />
    101. 101. Verification companies offer tools for improving transparency<br />
    102. 102. Ad exchanges:<br />Benefits and Caveats<br /><ul><li>Benefit: better audience scale and reach than publisher direct or networks
    103. 103. Caveat: what quality is the inventory?
    104. 104. Benefit: enables networks to more efficiently and cheaply trade inventory
    105. 105. Caveat: potential for audience overlap, therefore inefficient spending
    106. 106. Benefit: often priced CPC or CPA, best for performance goals and lead gen
    107. 107. Caveat: often filled with inventory from small, obscure sites, or sites with low editorial quality—therefore, limited contextual placements
    108. 108. Benefit: efficiently uses data from multiple sources to pinpoint audiences
    109. 109. Caveat: brands especially need verification tools to prevent their ads from ending up alongside low-quality or offensive content
    110. 110. Benefit: effective reach for retargeting site visitors
    111. 111. Caveat: auction model can drive up prices for most effective inventory</li></ul>Twitter – #eMwebinar<br />
    112. 112. Private Exchanges<br />(Cutting Out the Middleman)<br />
    113. 113. What is a private exchange?<br /><ul><li>Marketplace in which one large publisher sells inventory based on its segmented user base
    114. 114. While many are a single publisher, some are small, related groups of publishers
    115. 115. Also can be large groups, such as QuadrantOne, which sells inventory from hundreds of newspaper sites
    116. 116. Often fueled using RTB technology</li></ul>Twitter – #eMwebinar<br />
    117. 117. Tom Jenen, commercial director, AdMeld EMEA<br />“There is increasing awareness among many publishers that general ad exchanges lack the controls they need to protect their brands and bottom lines.”<br />
    118. 118. Nick Johnson, senior vice president, digital media sales, NBC Universal<br />“If advertisers want to come in, we’re selling them the network. We’re not selling them placements; we’re selling them people.”<br />
    119. 119. Private exchanges:<br />Benefits and Caveats<br /><ul><li>Benefit: gives the publisher greater control over how impressions are sold
    120. 120. Caveat: best for publishers that have the scale and brand equity to attract advertisers into their own marketplace
    121. 121. Benefit: more high-quality, brand-safe inventory available via RTB than through other programmatic methods
    122. 122. Caveat: reduces transparency compared with pure direct buys
    123. 123. Benefit: gives marketers a more efficient means of executing cross-platform buys with higher-end publishers
    124. 124. Caveat: can’t guarantee that programmatic transactions won’t drive down the higher rates publishers get using direct sales
    125. 125. Benefit: offers RTB benefits like greater audience targeting and impression-level inventory
    126. 126. Caveat: tends toward higher CPMs than on networks or regular exchanges</li></ul>Twitter – #eMwebinar<br />
    127. 127. Demand-Side Platforms<br />(DSPs)<br />
    128. 128. What is a demand-side platform (DSP)?<br /><ul><li>System for managing multiple ad exchange accounts using a single interface
    129. 129. Lets marketers integrate outside data directly into DSPs for buying via RTB methods
    130. 130. Prime example of programmatic buying
    131. 131. Trading desks are essentially in-house agency DSPs</li></ul>Twitter – #eMwebinar<br />
    132. 132. Steve Kerho, senior vice president, Organic<br />“One of the great things about DSPs is that we are moving closer to my being able to buy a specific audience and I can name my price.”<br />
    133. 133. Significant share of those considering a DSP say it will be part of a whole<br />
    134. 134. Programmatic buying: can be more effective, but control is a concern<br />
    135. 135. Media buying platforms (aka trading desks) potentially offer simpler buys<br />
    136. 136. Demand-side platforms (DSPs):<br />Benefits and Caveats<br /><ul><li>Benefit: saves time in the day-to-day execution and ability to bid on inventory across various exchanges
    137. 137. Caveat: a little too black-box for many brands, who give up control
    138. 138. Benefit: ad network DSPs broaden the range of media they can offer beyond that which they directly represent
    139. 139. Caveat: very little premium inventory available at this stage
    140. 140. Benefit: data providers can segment audience data by factors such as gender, age, income, and purchasing history and intent
    141. 141. Caveat: CPA-focused media buyers often need to factor in additional data charges to their CPA objectives, especially for third-party data
    142. 142. Benefit: give ability to de-duplicate audience views across all ad placements, not just those made through the DSP
    143. 143. Caveat: still often overlap, with same ad inventory as sold by exchanges</li></ul>Twitter – #eMwebinar<br />
    144. 144. Real-Time Bidding<br />(RTB)<br />
    145. 145. What is real-time bidding (RTB)?<br /><ul><li>Component of a DSP, ad exchange or network that lets buyers use their own data and targeting options to bid for each ad impression
    146. 146. Gives marketers a controlled environment for buying ad inventory and optimizing costs
    147. 147. Fueled by a wealth of data, such as IP address, geolocation, current site user is viewing, ad unit size and format, time of day, user profile
    148. 148. Based on instantaneous auctions (duh!)</li></ul>Twitter – #eMwebinar<br />
    149. 149. RTB’s share of display spending still small, but growing rapidly<br />
    150. 150. RTB usage partly held back by shortage of publisher inventory<br />
    151. 151. Jeff Hirsch, president, AudienceScience<br />“RTB-based buying doesn’t take into account quality and publisher environments.”<br />
    152. 152. Direct access to publisher RTB could encourage brands to use the technique<br />
    153. 153. Beware of bidding blindly on inventory based only or mainly on price<br />
    154. 154. RTB’s audience targeting raises hackles of privacy advocates, and users are ever more aware of being tracked<br />
    155. 155. Dave Morgan, CEO, Simulmedia<br />“DSPs and RTB are too complicated…The problem is that the math parts of the applications are dramatically overbalancing the art.”<br />
    156. 156. Real-time bidding (RTB):<br />Benefits and Caveats<br /><ul><li>Benefit:allows buyers to evaluate mix of content, brand and audience on each impression and decide which impressions to bid on and for how much
    157. 157. Caveat: more complex to purchase ad inventory through a bidding interface than through managed services on ad exchanges, networks and DSPs, or directly from publisher sites
    158. 158. Benefit: relatively transparent process where buyer gets to see broad range of data, including the impression’s URL, geographic and contextual information, behavioral targeting data, and historical performance
    159. 159. Caveat: buyer’s system needs to scale with the size of the inventory they view, not just the inventory they buy
    160. 160. Benefit:can be layered on top of ad exchanges, DSPs or agency trading desks
    161. 161. Caveat: programmatic buying still needs human control and close watch
    162. 162. Benefit: gives advertisers desired audience at the lowest possible price
    163. 163. Caveat: publishers are at risk of downward pricing pressure</li></ul>Twitter – #eMwebinar<br />
    164. 164. Integrating Ad Inventory<br />(Data’s Central Place)<br />
    165. 165. Coordinated media buying is too often fragmented by channels and silos<br />
    166. 166. Very few marketers believe they’ve effectively integrated data across their company or channels<br />
    167. 167. Reaching your target audience requires a continually monitored blend of inventory sources and robust data<br />
    168. 168. 34% of marketers cited customerdata hubs as third-most likely technology to help them overcome challenges<br />
    169. 169. Centralizing data into a single database with individual customer records is key<br />
    170. 170. Conclusions<br />
    171. 171. Conclusions:<br />Buying Display Ad Inventory<br /><ul><li>Concentrate on your campaign objectives to leverage the strengths of each inventory source and method.
    172. 172. The crowded display advertising landscape requires regular testing and measurement of the different inventory sources.
    173. 173. Audience targeting or content targeting? A blend of both techniques is often the best approach.
    174. 174. Find your optimal balance between costs and transparency.
    175. 175. Never blindly substitute newer inventory sources and buying methods for tried-and-true solutions.
    176. 176. Each new ad buying method aggregates inventory from its predecessors. But greater reach can create greater overlap.
    177. 177. Don’t buy the hype: RTB can be useful for buying both brand and performance inventory, but it is unlikely to replace guaranteed buys.</li></li></ul><li>Consumers are Aware and Skeptical of Behavioral Advertising<br />Favorability Towards OBA Concept<br />Awareness of OBA Concept<br />F<br />F<br />E<br />D<br />D<br />D<br />BASE: Total Qualified Respondents (n=1004)<br />Q710 Are you aware that some advertisers and websites track your browsing activities and show you ads deemed relevant based on your browsing history? This is commonly referred to as Online Behavioral Advertising.<br />BASE: Total Qualified Respondents (n=1004)<br />Q715 How do you feel about Online Behavioral Advertising as described above?<br />a<br />
    178. 178. How a DAA Compliance Solution Works<br />Advertising User Experience<br />1. <br />2. <br />3. <br />A simple ad tag inserts the DAA icon <br />If clicked the icon launches privacy notice inside the ad <br />Consumers have option to click to Preference Manager and opt out of selected tracking networks<br />a<br />
    179. 179. 70% of consumers are aware of OBA – and more than half do not like it<br />Most consumers do not want to share personal information with advertisers – but more than half incorrectly believe their personal information is attached<br />Consumers favorability to OBA is twice as high if they are assured personal information is not attached – this makes consumers 50% more likely to click on ads and make a purchase<br />Notice and Choice via the DAA self-regulation program significantly increases consumer favorability towards OBA and brands<br />TRUSTe has the highest brand recognition of the 3 DAA-approved solutions and significantly increases consumer favorability<br />Consumer OBA Research Overview<br />a<br />a<br />
    180. 180. About TRUSTe? <br /><ul><li>Founded in 1997
    181. 181. Over 4,000 customers
    182. 182. Leading DAA Approved OBA Compliance Provider</li></ul>Offering privacy solutions for: <br />Websites<br />Mobile<br />Cloud<br />Advertising<br />a<br />
    183. 183. Over 4,000 satisfied clients<br />Consumer Products<br />Media / Entertainment<br />Ad Providers / Agencies<br />Health / Medical<br />Financial / Insurance<br />Technology / Telecom<br />a<br />
    184. 184. Buying Display Ad InventoryQuestions & AnswersRegistrants will receive an email tomorrow that includes a link to view the deck and webinar recording. For more discussion, please join us after the webinar on LinkedIn. Search for the eMarketer Group and click on Discussions. <br />To learn about eMarketer Total Access please visit www.emarketer.com/productsor contact us: (800) 405-0844 or ben@emarketer.com<br />Sponsoredby:<br />Presented by:David HallermanPrincipal Analyst, eMarketer, Inc.<br /> Twitter Hashtag: #eMwebinar<br />