Smn acquisio-why-display-matters-to-search-marketers (1)


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There are many reasons why this is the case in advertising today, but there are a few that stand head and shoulders
above the rest. Some key examples are the lack of price discovery, the complexity of buying Display (and really
every channel other than Search), and the misaligned incentives, all of which will be explored further in this

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Smn acquisio-why-display-matters-to-search-marketers (1)

  1. 1. Why Display Matters to Search Marketers --and How Search Marketers Can Get InvolvedBy Jeff Green sponsored byA Search Marketing Now E-Book
  2. 2. Why Display Matters to Search Marketers -- and How Search Marketers Can Get Involved Introduction f youve worked in online advertising for more than a few months youve probably heard some derivation of thisI oft-quoted statistic: the average person under the age of 40 spends more time in front of a computer than they do in front of a television and yet online advertising comprises only 10% of the average advertising budget.There are many reasons why this is the case in advertising today, but there are a few that stand head and shouldersabove the rest. Some key examples are the lack of price discovery, the complexity of buying Display (and reallyevery channel other than Search), and the misaligned incentives, all of which will be explored further in thisdocument.As an industry of online marketers, if we can address the issues that have to date kept advertising dollars fromcoming online, budgets will open up and the entire ecosystem of online players will benefit. As the saying goes, “Arising tide lifts all boats.” There are ways for every player in the ecosystem that currently adds value to do better inthe future. In order to unlock offline advertising budgets today, the industry has to address the impediments; whenwe as an industry do, everyone can benefit from the influx of dollars. As with an incoming tide, all boats will rise.Users will see more relevant ads and have a better experience. Marketers will be more efficient. Advertisers willincrease their return on advertising spending (ROAS). Even publishers can make more money than they do today,but first the industry has to do the right things to get the dollars off of the sidelines.Online advertising has matured to a point where there is an opportunity for Search marketers to again contributemeaningfully to the growth of advertising by applying Search expertise to Display, ultimately leading to greateroverall industry growth.This E-Book explains the relationship between Search advertising and Display advertising, and why it is important toengage in both in order to reach the growing online audiences. It will cover the differences between Search andDisplay, why there are significant opportunities for Display right now, and what advertisers can do to develop asuccessful Display advertising strategy. Because of their already proven success, Search marketers play a large rolein unlocking offline advertising dollars, especially as they extend many Search principles into Display. I1 © 2010 Third Door Media, Inc. • Email: • (203) 664-1350
  3. 3. Why Display Matters to Search Marketers -- and How Search Marketers Can Get InvolvedDisplay Advertising: know the likely outcome. From historical results and without too much spend, a Search marketer canOnline Dollars on the Sideline determine the likely value of buying that keyword. In short, the paid Search game is winnable. In today’s financial markets, analysts andT commentators routinely discuss the amount of money “on the sidelines.” They are referring to thefact that in the recent recession, investors have been Many Search and email marketers lament, “Display doesn’t work.” And to some extent they’re right. However, it can and it will.reluctant to put their money into the stock market, The hurdle is largely that in Display, email, mobile, video,stockpiling their cash instead of risking volatile market and even SEO—it is hard for the average CMO to knowswings. A similar situation holds true in online advertising. where his or her advertising dollars are going. WhenGiven the amount of online media consumption and its success is measured by ROI, or ROAS, marketers needexponential growth, the lack of proportional ad spend measurable results. Adding to the problem is anrepresents dollars that could and should be spent online. incomplete view of how different forms of onlineThe reason for sidelined money in online advertising is advertising interact with each other and properlythe same as in the stock market: at certain levels of risk, attribute to what marketing efforts drove specific results.volatility, and uncertainty every investor is unwilling to (A lot can be said about the flaws of the current industryplay in the market. From their view, there is too much risk. standards of conversion attribution, but that is materialFor most marketers, online advertising is not a place they for a future E-book.)are currently willing to place big bets—at least not relativeto other channels. The average CMO has spent money in online channels without reassurance that it was well spent, and with littleSo far Search has been a great means of advertising, but it evidence to prove what happened with the Displayhas limitations that have helped keep many of those budget in particular. Display, like Search, is finally getting to a point where it can be bought effectively, which has it poised for growthdollars locked offline. Display, like Search, is finally This has less to do with performance than it does withgetting to a point where it can be bought effectively, which the marketers comfort level with risk-taking. Thehas it poised for growth. And, with Display, many of those average big-company CMO has little measurabledollars are more inclined to come online. By combining information about how well a television commercial orSearch and Display, advertising can be even more efficient freeway billboard performs. The metrics for those offlineand effective. Without bringing them together, meaningful channels, while sophisticated, don’t (and can’t) have thedollars will continue to remain on the sidelines. accuracy and depth of online advertising channels. However, those channels continue to win dollars and getWhat’s keeping money budgets. This is largely because the buyer knows the risk of billboards. They understand the system. Theyon the sidelines? buy a giant image. They estimate the number of carsThe first and biggest reason why online doesn’t currently that pass by, and hopefully the phone rings or productsget the spend it could is because price discovery -- the are bought. Now, when products are bought, theability for any buyer in a market to have enough purchases may have nothing to do with that particularinformation to ascertain the value of the item(s) for sale - billboard advertisement. However, the CMO believes the- does not exist in most online media channels. This billboard worked and he’s got a story and some tangiblemay sound surprising to a Search marketer who has results that are sellable within his own organization.been heads down in paid Search because paid Searchhas price discovery; it may currently be the only online Buying online advertising is harder, especially in allchannel that does. When you buy a given keyword, you things other than paid Search. Because the CMO doesn’t2 © 2010 Third Door Media, Inc. • Email: • (203) 664-1350
  4. 4. Why Display Matters to Search Marketers -- and How Search Marketers Can Get Involvedknow exactly what he or she bought, they can’t easily 2008, RTB has created the exchange 2.0 movement, andpoint to the results. Buying in Display (in particular) RTB has become the cutting-edge core of exchanges andsometimes feels like buying a foreclosed house at auction-based Display—and seemly the primary wayauction. There are amazing deals transacted every day Display transactions will occur in the future. Simply put,where buyers get houses meaningfully below market RTB moves the bidding and decisioning logic from thevalue. However, most buyers would rather pay more exchange to a buyer agent, so with every impression theand know what they are getting. They are just not marketer’s agent can bid considering proprietary datacomfortable buying a house that they haven’t seen close and using proprietary tools.up with details and inspections and the comfort of arealtor (whose job it often is to make the buyer feel good Some industry insiders have stated that the rise of the adabout their purchase regardless of whether it was a exchange is the most significant change in the history ofsmart financial move.) If a marketer doesn’t know what online advertising. Because ad exchanges are in thethey are bidding on, they won’t bid at all. business of encouraging transactions, they are also in the business of encouraging transparency and priceMarketers and CMOs have to know what they are discovery. Since Yahoo, Google, and Microsoft have allbuying. They need confidence and assurance to believe placed significant bets on their exchanges, pricethat their online media spend is made up of dollars well discovery is coming. Further, dozens of companies arespent. becoming exchange-like as they enable RTB—which the ad exchanges (like AdECN) brought to market in 2008.Ad Exchanges and Many have made assertions that RTB is the game changer for Display.Real-Time Bidding (RTB) areChanging the Game What is Real-Time Bidding (RTB)? his is changing, and we’re getting much closer toT getting dollars off the sidelines and into online — because price discovery can occur in Display nowthrough exchanges and real-time bidding. I n order for price discovery to occur, you have to transact at the most granular level—which in online advertising is currently the impression. An impression at the top of the page is worth something different thanAd Exchanges were born out of this very problem. an ad at the bottom of the page. And a small ad is worthSeveral years ago, companies like AdECN and Right something different than a big ad. And the 100th ad aMedia were created to enable price discovery and user sees in a single session is worth something differentpromote transparent transactions. Their role is to create than the first one they see…and so on. Because everyand protect a fair and neutral market that centered single impression is worth something different, theyaround an open and transparent auction. The way they have to be valued differently. This doesn’t preclude themtake fairness and transparency to new levels is to auction from being bought in bulk or in advance of a single real-off every single impression, one by one. Ad exchanges time auction; it is a lot easier to meet the objectives of awould often only partner with big supply and demand marketing plan if you do. However, the market mustaggregators, like ad networks. Ad Exchanges optimally enable the purchase of the impression at the granularbehave like the NYSE or NASDAQ, and the ad networks per-unit option to keep it honest—in the name of pricebehave more like brokers. discovery.Likewise, marketers can value every impression Real-time bidding is the ability for agents of the buyer todifferently using thousands of pieces of metadata. Since get a look at every single impression and assign a bid. Some industry insiders have stated that the rise of the ad exchange is the most significant change in the history of online advertising.3 © 2010 Third Door Media, Inc. • Email: • (203) 664-1350
  5. 5. Why Display Matters to Search Marketers -- and How Search Marketers Can Get InvolvedHere’s how it works—at the very instance a user landson a web page a piece of code on the page triggers an If you consider the spectrum of theauction (much the way clicking “Google” or “Search”triggers an auction on a Search engine page to purchase funnel, where conversion isdetermine which paid listings appear on the right). The at the bottom and the moment themarketplace (currently dozens of companies operateRTB marketplaces) then sends out bid requests in customer is made aware of theparallel to all eligible bidders (different than the auctionin Search because the bid request is sent to servers product is at the top, Search andowned or operated by the bidders). The auction beginsand ends (including cloud time) in a fraction of a second Display have their respective centersand in advance of a page even loading. of gravity in two different locations.This may seem like a lot of work to sell a singleimpression, especially when trillions of them need to besold—and it is a lot of work—but to best explain why 3. Branding. This is very closely related to number 2.Display must go through all this trouble we should However, it is important to point out that Display hasexamine a few differences between Search and Display. pictures, video (sometimes), and sound (sometimes). These are the usual mediums for creating a brand, and creating a brand is almost always done before customersDifferences Between come looking for you. And if all things are equalSearch and Display (especially price and perceived quality) the consumer will almost always choose the brand they’ve heard of versus the one they haven’t.1. Push versus Pull. Search customers are coming toyou. In most cases they are saying, “I’m in the market This is why Display is so important to all marketers.for your product and I’m considering buying it from Because branding and awareness are so important, it isyou.” Frequently they are even saying, “I want to buy where the majority of advertising dollars are spent.your product right now.“ The consumer is pushing and ComScore President Gian Fulgoni estimates that,the marketer is pulling. In Display, users are rarely in “direct response advertising accounts for about 80% ofthat frame of mind at the time a marketer places an ad in all ad dollars spent online, while in traditional media thefront of them. They are usually doing something else— situation is reversed. There, branding dollars arewatching a video, checking in on one of their favorite estimated to make up about 75% of the market.”social networking sites, surfing the web, researching, or Consider TV,there are currently far more dollars spent onsomething else. In this case the marketer is pushing. branding than on direct response. SEMs should beThe marketer is effectively saying, “I’d like you to targeting these dollars, especially because Display canconsider my product?” or, “I’d like to change the often achieve the same objectives as TV spend and do itconversation a little (or a lot) and talk about my product.” more efficiently.2. Location in the funnel. If you consider the spectrum of 4. Supply. There are only so many customers in thethe purchase funnel, where conversion is at the bottom world that will go to a Search engine and type, “I wouldand the moment the customer is made aware of the like to buy product x.” And after a marketer has built aproduct is at the top, Search and Display have their 100K+ list of keywords, she will have to do somethingrespective centers of gravity in two different locations. different to get new customers. There is scarcity aroundSearch is as close to the bottom of the funnel as possible those kinds of customers, which is largely why Search isfor an entire channel. Display is near the top. It is so competitive and the keywords are so valuableperhaps best suited for creating brand and product (whether measured on a CPC or CPM). To create newawareness, though lots of direct response marketers supply in Display, one of millions of publishers merelyhave found performance success in Display. (Of course, needs to add another page. Because an impressionperformance gets much easier as price discovery and fair requires so little action from the end user, there is anauctions come into play.) Commonly, part of the abundance of supply. (In fact, as Display improves as aobjective of Display is to widen the funnel, getting more channel, consumers will all likely see more relevant ads,consumers involved in and considering your product. and less of them.)4 © 2010 Third Door Media, Inc. • Email: • (203) 664-1350
  6. 6. Why Display Matters to Search Marketers -- and How Search Marketers Can Get Involved The auction is better served as a market-clearing mechanism that lets buyers be in control; there are simply too many variables that fall outside of the actual media being bought for a complex market to try to do everything.5. The auction. Perhaps the three biggest successes in as Display matures like Search already has, Display’sonline advertising have been Google, eBay, and landscape and Google’s position will be different—butOverture. All of them were built around an auction, so it their role will likely be significant in no wonder as Display currently emerges to a winnablechannel, its pricing mechanism is an auction. Except the 7. The role of data. Much could be said about the role ofauctions for impressions are different. Search is a data in both mediums, but as Martin LeSauteur, CEO ofcached or hosted auction. Marketers specify in advance Acquisio has said, “Data is the new creative.” This iswhat you are willing to pay for a given keyword and that especially true in Display. Methodologies of retargetingbid sits on the Search engine’s server. This means that and user-based targeting are staples in Display. DisplayGoogle (or other) controls the optimization via smart cannot be successful without user-based targeting.pricing and other means. In Display and the emerging Outside of keywords, Search doesn’t allow for much userRTB auctions, the optimization is maintained by the targeting. In the future using data across Search andbuying technology. This gives buyers more control in Display—especially using the data from Search to targetDisplay—although with more variables and more Display—is critical to success.unknowns to manage, the channel needs it. The auctionis better served as a market-clearing mechanism that lets The goal should be to take these differences andbuyers be in control; there are simply too many variables extrapolate everything that Search has taught us andthat fall outside of the actual media being bought for a apply it to Display.complex market to try to do everything.6. Google’s role. Arguably, Google currently plays the 7 Things Search Marketersmost significant role of any player for both Search andDisplay. That assertion is less controversial on Search Should Do in Display.given that is the publisher of Search 65% ofthe time. However, they are shaping Display just as Display Action Item #1: Create a Display strategy.much, though they play a very different kind of role. InDisplay, or Google-owned sites are very As Search gets more competitive, online advertisers arerarely the publisher; instead they are trying to become asking questions like: how can we protect our margins?the primary conduit for connecting advertisers and How can we continue to grow at the rate we once did?publishers. Since they can’t control the market as easily, Most analyst projections suggest the growth rate in $60,000 Interactive marketing spend $50,000 will reach nearly $55 billion Mobile Most analyst by 2014 Social Media projections suggest $40,000 Email Interactive Marketing Display the growth rate in spend $30,000(in millions) Search nearly all other $20,000 forms of online is $10,000 accelerating faster $0 2008 2010 2012 2014 than Search. Source. Forrester Research Interactive Advertising Forecast. 4/09 (US only) © 2010 Third Door Media, Inc. • Email: • (203) 664-1350
  7. 7. Why Display Matters to Search Marketers -- and How Search Marketers Can Get Involvednearly all other forms of online is accelerating faster than customers. Re-targeting is of course the buying ofSearch. This isn’t a commentary on the efficacy of customers who previously clicked or converted on aSearch, only the maturity of the channel. marketer’s offer. You should make sure that your SEM platform offers a means to retarget in Display, as itBecause Search is the most mature online channel, requires an ad server which many SEMs do not operate.marketers and their agents should consider buying other This is a simple and easy step to getting into the Displaychannels, and Display is the most logical expansion game, but it’s also just the beginning. It gives you apoint. With the projected growth rate in Display and the better view to make better decisions and validate orshift of more brand dollars online—especially with the adjust your Display strategy.advent of Real Time Bidding—marketers should increasefocus on Display. Display Action Item #3: Protect data.Because a real-time auction is the methodology best- Just like Search, Display is about getting in front of thesuited to create price discovery, the Display bidding right user. However, in Search, the user has given you agame is beginning to look a lot more like Search. There huge clue about their intent, mindset, and interestsare line items with multiple variable selections and then based on the keyword they’ve typed in. The Displaythere are bids -- a lot like Search. game is largely about targeting the right user, or right type of user, without the same clear-cut intent data built-However, bidding for Display is even more dynamic than in like keywords in Search.bidding for Search because insteadof vying for positioning on a The insights that you gather inkeyword you are bidding on Because a real-time Search can and should inform themillions of different spots on a whole media plan. The marketermyriad of different pages. This auction is the should have that perspective, and ofmakes it unlikely that millions will course, so should whoever isplug directly into the Display methodology best-suited managing their Search. However,marketplaces (like they have in sharing that data should be doneSearch); instead they’ll need to bid to create price discovery, carefully. Throughout Displaythrough experts like the Displayversions of SEMs. the Display bidding game advertising, ad servers use methods like pixel piggy-backing and cookie is beginning to look a lot mapping, which are not inherentlySo, consider a strategy that goes bad, but they can be used to leakbeyond “Let’s start buying all online more like Search. your data or your client’s data tomedia instead of just buying someone completely unrelated toSearch.” You should dovetail Search into Display, but you. Once your data is leaked, you will likely end upyou are more likely to succeed by doing one thing well. competing with others who are using your data againstNevertheless, you should have a holistic view when you you. As most Search marketers know, bid densitycreate your strategy and your strategy should equates to higher bids. Higher bids and higher clearingacknowledge that Search is often a part of a bigger prices are hard enough to accept without knowing thatmedia plan. you subsidized it.Display Action Item #2: Try it. Display Action Item #4: Manage data.Even if you have selected a strategy that leaves Display Because you likely represent buyers in Search, as youto others, you should buy a little Display. Spend time in buy you also represent to some extent the data that isthe platforms that connect to RTB inventory and learn created, reviewed, and reported on. Some marketershow Display is bought. You will find there are many are not being explicit about who has access and rights tothings different and uniquely nuanced in Display, but the view the data, especially data that can be attributed to aholistic perspective that trying it provides will make you specific user. It is important that you use systems thata better Search marketer and better at selling your clients help you manage your data and your customer’s dataon Search because you’ll see how it fits in. and that you distinguish the difference.One way to start is to buy re-targeting for your Select a buying platform that provides data rights6 © 2010 Third Door Media, Inc. • Email: • (203) 664-1350
  8. 8. Why Display Matters to Search Marketers -- and How Search Marketers Can Get Involvedmanagement and make sure that you and your partners bidding on Display. These nuances should be learnedare clear on who owns the data and who has the right to and considered as you enter the Display market.use it. In some cases, and under certain terms, it isimportant to know the partners of your partners. Additionally, buying Display requires technology that is independent of the marketplace. This allows others toDisplay Action Item #5: Don’t forget what you’ve control the optimization, but it also creates alearned in Search. technological burden that must be shouldered by those platforms plugged into the Display marketplaces.Much of online media is bought through inexperiencedmedia planners at agencies that aren’t given the tools or Display Action Item #7: Partner.the incentives to buy at lower prices. Technology canand will enable price discovery through RTB, and there There are a vast number of Display technologies in thewill be complex multivariate analysis and algorithms on market already, and you should participate in Display astop of those RTB marketplaces. much as you want without distracting your core business. In the same way that it would be imprudent As the world evolves and Display and other channels become winnable like Search, there will be thousands and thousands of advertisers that need help buying Search and Display.As the world evolves and Display and other channels for Display platforms and technology companies to try tobecome winnable like Search, there will be thousands build every possible piece of technology available forand thousands of advertisers that need help buying Display, it would not be wise to overextend your ownSearch and Display. Right now, few people understand platform. There is likely not a company out there with thehow to bid for Display; those that do get it, have resources, expertise, and the internal efficiencies to pullpreviously bought and understand Search, and they’ve that off. However, there are technology platforms thatspent time learning the nuances and additional variables are great to partner with, and even ones like The Tradethat need to be considered for Display. Desk that make collaboration a focal point.Display Action Item #6: Understand the costs of biddingfor Display. Now Go Do It (Conclusion)Bidding for Display is significantly more complex than Search and Display have a variety of differences but withbidding on Search. Not only is it more difficult to the advent of RTB, Display is becoming more like Searchcompete and create a barrier to entry, it also makes it with regards to price discovery. The ability to effectivelymore costly and more difficult to achieve customer and efficiently buy targeted impressions in Display willgoals. likely be what gets major offline brand dollars to come online, especially when they can get their message to theSince Display centers around the user and the all the precise audience they want and they can measure itspotential variables created there, including users’ effectiveness.behavior, there are an infinite number of possiblevariables associated with a line item. This alone makes it Search marketers need a Display strategy; now moremuch more difficult to bid in Display. Further, there are than ever, it is a natural extension of what is being donetens of thousands of sites (all with different qualities and in Search. Taking a more holistic approach to advertisingcosts) worth bidding on instead of the handful—Google, online will drive better results across all channels. So,Yahoo, Bing—where Search results are almost always establish a Display strategy, and then map out thefound. Then there is session depth and frequency charter and figure out what has to be done to becapping. These too make things much different when successful at Search and Display. I7 © 2010 Third Door Media, Inc. • Email: • (203) 664-1350
  9. 9. Why Display Matters to Search Marketers -- and How Search Marketers Can Get InvolvedAbout The AuthorJeff GreenCEO of The Trade DeskHaving spent more than 10 years in online advertising, Jeff is considered one of the few pioneers of the AdExchange, which he built in 2004 and launched commercially in the UK in 2006 and in the US at the beginning of2007. As COO and Founder of AdECN, he led all strategy, product, and business development. Jeff was also aleader in bringing real-time bidding to market. At Microsoft Jeff not only oversaw the AdECN exchange business buthe also lead Microsoft’s reseller and channel partner business, as well as advised the all-up strategy for the OnlineServices Division. In mid 2009, Jeff left Microsoft and AdECN to found The Trade Desk.Jeff’s role as the Chief Executive Officer and Founder of The Trade Desk is the culmination of a career spent trying tomake media buying more efficient. He started his Internet career while in college working for Microsoft in Technicalsupport. Eventually, he moved to LA to work for a small interactive agency, where he led media buying andoperations and managed all vendor relationships. Afterward, he founded a CPA network, eBound Strategies, whichwas named a top 10 New Company of the year by AdBumb. eBound Strategies technology, which was designed byJeff, was acquired by Nami Media in 2003. Jeff worked for Nami Media as the VP of operations, and subsequentlyleft to found AdECN—the first true exchange for online advertising.www.TheTradeDesk.comThe Trade Desk is a buy-side platform that specializes on bidding for Display. With a true extensible platform and aholistic reporting system for managing all media buying channels, The Trade Desk services buyers of all types ofonline advertising. Their expertise and technology focus on the valuation of Display impressions using technologyand human expertise.Acquisio is the world’s leading developer of PPC management tools for agencies. Acquisio SEARCH is the first PPCmanagement software designed from the ground up with advertising agencies in mind. Acquisio was founded in2003 and is based in Montreal. For more information, visit Victoria, Suite 300Saint Lambert, QCCanadaJ4P 2J2toll-free: +1.866.493.9070direct: +1.450.465.2631fax: +1.450.465.2841 Search Marketing Now webcasts and white papers provide authoritative and actionable education about search engine marketing issues. Register today for one of our free webcasts covering topics about search engine optimiza- tion, paid search advertising and search marketing in general. Search Marketing Now is a division of Third Door Media, which publishes web sites, and produces in-person events and webcasts. Each of the four brands - Search Engine Land, Search Marketing Expo, Search Marketing Now, and Sphinn - fosters continuing education, evolution and engagement for the community we serve.8 © 2010 Third Door Media, Inc. • Email: • (203) 664-1350