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Transcript of AdReady Display Eco WP
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The Display Advertising Ecosystem:
The More You Know,The More Youll GrowLearn how to navigate the complex landscape o online display advertising and
choose the right approach to meet your marketing objectives.
March 2010
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Table o Contents
Abstract 3
Playing the Display Field 3
An Advertisers Basic Choices 4
What Do Advertising Agencies Provide? 4
How Can I Work Directly With Publishers? 5
How Do Ad Networks Work? 6
Whats an Ad Exchange? 7
How Do Ad Technology Platorms Fit In? 8
An Advertisers Checklist 11
Start Display Today 12
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Abstract
Display advertising is well into its second decade o existenceand in that time, it has become much more eective
and accessible. Yet many marketers have still not successully integrated it into their marketing programs. Why? One
reason is that the display advertising ecosystem has become incredibly complex, and many advertisers just dont
know where to start.
This white paper will expand your knowledge o the display advertising ecosystemand ensure a better return on
advertising spend (ROAS). Armed with this inormation, you can decide how to build a new program or improve an
existing one.
Advertisers have more choices than ever when it comes to placing display ads. They can hire an agency,
use a publishers services directly, tap into an ad network or ad exchange, and more. But the choices can be
overwhelmingand that conusion can lead to lost opportunities, budget, and time. Mike Cassidy, president o ad
network Undertone Networks recently said, The lines are completely blurring between client, publisher, supplier,
and network. I Clearly, there has never been a better time to understand the display advertising ecosystem and to
learn which aspects can best deliver on your objectives.
This paper will give advertisers a better understanding o best practices or creating and placing ads, including a
discussion o the role and inner workings o networks, exchanges, technology platorms, publishers, and agencies.
The paper will explain how each oering and provider works, its pitalls and benets, and some best-use case
scenarios.
Ater reading this paper, advertisers will be more condent in choosing the right display advertising approach to
meet their objectives.
Playing the Display Field
Knowing which elements o the display advertising ecosystem to leverage isnt simple. Advertisers with very large
budgets can tap into the expertise o large, sophisticated digital agencies like Digitas, Mindshare, PhD or Universal
McCann Interactive (just to name a ew o the leaders). Even with this expert help, the choices are many and the
decisions complex. For advertisers who arent large enough to aord these experienced proessionals, nding the
right solution can end up being a ull time job. Because there are usually several applicable options or a given
company, marketers should know how to play the eld to get the best return on advertising spend.
Since no two campaigns are the same, advertisers may need to tap several o these options over the course o a
year or even simultaneously. For each display ad channel, there are dozens o possible vendors. Many analysts and
industry experts have created market maps to capture some o the categories and players in the market, such as in
Figure 1 below, adapted rom Gridley and Company LLC.
The technology progression around display over the last teen years has been swit. Players in the market have
worked hard to make running display campaigns more eective and creating display ads easier and aster. A
key part o this technology evolution has been the introduction o more streamlined, simpler to use, and yet still
sophisticated advertising technology platorms. With the lower costs and reduced management requirements o
these platorms, smaller businesses are now empowered to tap into display advertising or the rst time, while large
businesses have been able to make their campaigns more ecient and eective. We will discuss these in more detail
below.
Rich Karpinski o Advertising Age recently summarized the changing display ad ecosystem: Large publishers
are looking more like ad networks. Publisher-side brokers are moving rom being yield optimizers to becoming
exchanges in their own right. And ad networksat least those o the 400 or so likely to surviveare ocused on
targeting and brand saety. Ad exchanges are moving rom basic bid-matching to real-time allocation. Agencies are
making perhaps the boldest move, aggregating impressions and data or clientsand themselves. II
The benets o display have been proven, making it an essential part o a marketers toolkit . And the category
is poised or its next phase o major growth. Analyst Imran Khan o J.P. Morgan recently predicted that display
spending will surge by 10.5 percent this year ater a 5 percent dip last year, with display CPMs rising by 5 percent. Iii
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Should I use an advertising agency or not?
Should I buy directly from media publishers and/or through an intermediary to reach my
intended audience?
If I want to buy through an intermediary, should I look to ad networks or ad exchanges?
Should I pay for technology solutions or platforms to help me or my agency manage my
campaigns?
With display here to stay, its time or marketers to polish their approach and execute the ull potential o their
programs using todays best solutions.
An Advertisers Basic Choices
Albert Einstein once said, Everything should be made as simple as possible, but not simpler. In the spirit o this
sage advice, here is a short list o an advertisers basic choices or executing display advertising:
In the sections that ollow, we oer an overview o each major component o the ecosystem as well as some key
elements to consider when answering these questions or your business
What Do Advertising Agencies Provide?
Agencies can provide companies with a broad spectrum o advertising services, rom creative to media, strategy to
tactical execution, across both oine and online media channels.
Some ad agencies specialize in digital specically (sometimes called interactive agencies), and provide clients with
search, display, social media, e-mail marketing, and other online marketing services. Many o these are now part o
larger, global agencies that also have very broad and deep expertise in oine media and creative services.
One o the key benets o the large, diversied agencies is that they can oer so many dierent marketing services
under one roo, streamlining costs and management, while ensuring a common, coordinated strategic underpinning
to both media and creative executions. In the digital space specically, large agencies can oer expertise on display
advertising across the entire ecosystem, employing dierent tools and technologies that t their clients needs.
Figure 1
The display
advertising
ecosystem is
increasingly complex.
What is the best
approach or
diferent types and
sizes o advertisers?
(adapted rom
Gridley and Company,
LLC)
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Historically, display advertising has been the domain o very large advertisers and the largest, most sophisticated
digital agencies who serve them. According to Nielsons AdRelevance division, over 85% o the total US spending on
display advertising in 2007 came rom the top 1000 largest display advertisers, and the vast majority o the largest
advertisers use the top digital agencies. This is not surprising given the historic complexity o managing display. For
smaller advertisers, the upront and xed costs o managing display have simply been too great to enter the market.
However, with the advent o more streamlined ad technology platorms (see below), smaller, more regionally ocused
traditional agencies can now oer online display advertising. These technologies help them streamline the creative
development, placement, and management process or clients with smaller budgets. Smaller advertisers can nowchoose to either manage their display advertising in house, or look to a digitally savvy agency whose core business is
Are my budgets large enough to ensure Im an attractive client and will thus get
great service rom one o the top-tier digital agencies?
Does my agency provide both media and creative services, and if so, what are the fees
or each?
Is my agency an expert in digital media and specically online display?
Does my agency utilize best of breed technologies to cost eectively manage
the logistics o my campaign, and also measure and drive eective ROI perormance?
When deciding whether to work with an agency, advertisers should consider the
ollowing:
How Can I Work Directly With Publishers?
Simply put, publishers are Web sites that oer advertising space to advertisers. The sale o ad space can be done
directly through an in-house sales orce or a sel-service technology, or indirectly via ad networks or ad exchanges.
Most large publishers have experienced sales and service teams or large advertisers, to help ensure that campaigns
are managed eectively. In some cases, they can also oer creative development services. They oten use either
homegrown or commercially available ad serving/inventory management technology to help make this eort moreecient. However, because these technologies and teams can be expensive to employ, they typically require advertisers
to spend monthly minimums in the many thousands or tens o thousands to get this ull service.
Some o the most orward-thinking large publishers like Yahoo!, ESPN.com, Google, Facebook, and Pandora have
introduced new technology platorms that enable smaller advertisers to eectively run campaigns on both their
own sites and their aliated partner sites (e.g., the Yahoo! Network). Whether homegrown or licensed rom an ad
technology platorm company like AdReady, these systems enable many more advertisers to get exposure to their
valuable audiences.
In general, smaller publishers cannot aord to invest in in-house sales and service teams, so they outsource this sales
function by having ad networks and/or ad exchanges sell their inventory. We discuss this in more detail below, but the
major implication o this or advertisers is that in order to reach a very broad and diverse audience (or in some cases a
very specic, niche audience that spends time on smaller Web sites), going direct to publishers may not be an eective
option.
Lastly, whether small or large, publishers have two basic ways in which they sell their inventorywith and without
delivery guarantees. In general, inventory with delivery guarantees tends to be at higher price points and has larger
minimums, while inventory without delivery guarantees tends to be sold on a perormance basis (either cost per click or
cost per action).
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How Do Ad Networks Work?
An ad network aggregates inventory across multiple publishers, large and small, and sells it to advertisers. To place
display ads, an advertiser typically needs to purchase a run o network (RON) package or a run o category package
and can typically apply some dierent targeting mechanisms to urther rene their buy. These are broad purchases o
ad space across networks or categories, respectively. The network then serves or delivers banners rom its ad server.
Ad networks get a lot o their ad space rom publishers who sell their remaining, or remnant, inventory in bulk.
Some smaller publishers sell most or all o their inventory through these larger networks. This mix o inventory gives
advertisers many options or targeting ads to specic audiences.
Are my budgets large enough to meet the minimum spend requirements for the
publishers that provide content to the audiences who I want to reachwhether
via guaranteed inventory buys or not?
Do I already have ad creative? Do I have enough ad creative to try dierent oers
and messages, to test which ones work the best? I not, will my target publisher
build these or me?
Can my target publisher reach the breadth and/or depth of audience I need them to
on their own? Or do I need many dierent publishers to reach my objectives? I the
latter, how can I manage the complexity o working with multiple inventory providers
at once? (see Platorms below)
Can my target publisher oer the sophistication that I need in terms of various
targeting options (e.g., geographic, demographic, re-targeting, behavioral, etc.)
and optimization capabilities to ensure that my best perorming creative and media
placements get the bulk o my spending?
How will I know if my ads are working? Does my target publisher provide ROIreporting that will accurately refect perormance against my advertising objectives?
When deciding whether to go directly to publishers, advertisers should consider the
ollowing:
Representative Networks: These networks provide advertisers will ull details on where
their ads will be placed. Advertisers like this because there are no surprises as to where
their ads may appear. Because this level o detail is shared, representative networks can
be expensive, suitable mostly to companies with large budgets.
Blind Networks: Advertisers working with more restricted budgets oten turn to blind
networks. In exchange or good prices, advertisers must relinquish control over where
their ads will run. The aordable prices are made possible through large bulk buys o
a publishers remnant inventory. Many o these networks oer targeting technologies as
described next.
Targeted Networks: Targeted ad networks take advantage o targeting technologies like
behavioral or contextual targeting. Advertisers like these types o networks because they
utilize multiple anonymous data sets to enhance the value o the ad space they purchase.
Networks can be broken down into three main types:
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Ad networks provide advertisers with a mix o pricing options. These include CPM, CPC, and CPA. CPM reers to cost
per thousand impressions, CPC reers to pay-per-click, and CPA reers to cost-per-action. In a CPA pricing model, the
advertiser only pays or the action they want. This might be by click, impression, sale, coupon download, lead-gen orm
submission, etc.
Many ad networks are known to have high ad spend minimums, similar to publishers (described above), so i you
dont have $10K to $15K to spend per month, they arent an option. Also similar to publishers, most ad networks dont
typically provide creative services, so companies must develop their ads elsewhere. This can cost $3K to $10K+ or each
ad series created.
Lastly, the ad network business model essentially sources inventory at a low price, and sells it at as high a price
as possible. Theres nothing wrong with this quintessentially capitalistic model. However, it highlights the need or
advertisers to ensure that they have an independent mechanism in place that enables solid management o ROI, so that
the relationship is a win-win or all parties.
There are hundreds o ad networks in the display ecosystem today, many o which have high quality audiences
and valuable, sophisticated targeting technologies. However, there are many others that have little o eitherso an
advertiser must careully research providers, and also have solid technology in place to eectively measure and manage
perormance.
Are my budgets large enough to meet minimum spend requirements?
Do I already have ad creative? Do I have enough ad creative to try dierent oers and
messages, to test which ones work the best? I not, will my target ad network build these
or me?
Does my target ad network oer the sophistication that I need in terms of
various optimization capabilities to ensure that my best-perorming creative and media
placements get the bulk o my spending?
How will I know if my ads are working? Does my target ad network provide ROI reporting
that will accurately refect perormance against my advertising objectives?
When deciding to buy rom ad networks, advertisers should consider the ollowing:
Ad exchanges are technology platorms that connect advertisers with publishers in an auction environment. A
successor to ad networks, ad exchanges require buyers to bid against each other or ad inventory and generally have
more sophisticated technology in place to match buyers and sellers at market clearing prices.
Exchanges are becoming increasingly popular because they can be a good source o cost-eective inventory, i
managed well. Similar to ad networks, many oer targeting options and dierent pricing models. And, because o their
bidded pricing model and more automated systems, many have lower spending minimums than publishers or ad
networks.
Some o their drawbacks are also similar to those o publishers and networks. For example, most require that you have
your own ad creative already built and ready to run. They also vary in terms o their ROI reporting. Though some have
nice reporting technology, it is critical to realize that they can only report on what you run through their systemso i
you have other publishers, networks, or exchanges on your media plan, then youll need some mechanism to pull all o
this ROI data together, to cross-compare and understand your best advertising investments holistically.
One nal actor to be aware o is the business model o each ad exchange provider. Some maintain a neutral position
in the market, making their revenue by keeping a small ee or each transaction that they enable between buyer and
seller. As opposed to the ad network model, this approach allows an advertiser to know how much o their budget is
Whats an Ad Exchange?
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The ability to centrally manage buying and tracking activities across all sources of media
(publishers, networks, and exchanges)
Apples-to-apples measurement of ad performance across all sources of media
Analytics and optimization capabilities to understand and take action on moving more
budget to the sites and media placements that perorm the best
In general, the key benets o media-ocused ad technology platorms are:
The ability to create new display banners very inexpensively, so advertisers can test multiple
oers, messages, and creative concepts in order to nd those that perorm best
Apples-to-apples measurement of ad performance across all dierent creative treatments
Analytics and optimization capabilities to understand and take action on moving more
budget to the creative assets that perorm the best
In general, the key benets o creative-ocused ad technology platorms are:
Ad technology platorms come in all shapes and sizes, but generally unction to streamline an advertisers ability to
create, place, and manage display ads. Platorms can be advertiser-acing or work behind the scenes at a publisher site
or advertising agency.
Some specialize in the creative side o the equation, providing mechanisms to iterate and optimize banner creative.
Some specialize in the media side o the equation, providing an interace to eciently buy media across many dierent
publishers, networks, and/or exchanges. And a few, like AdReady, provide both creative and media solutions to
enable the end-to-end management o campaigns in one place. These ully eatured platorms like AdReady now help
marketers o all sizes quickly and eectively launch and manage display campaigns.
How Do Ad Technology Platorms Fit In?
going directly to the intermediary. Other providers are less clear about whether they make their money rom arbitrage
or transaction ees. Either model can be acceptable, but the buyer should know which it is or each provider, so that it
is clear what drives their motivations.
O course, ad platorms that address both
creative and media aspects o display
advertising deliver both sets o benets
above.
Highlights o the AdReady platorm
include:
Scalable access to top media
sourcesFrom Yahoo! to Google, Facebook, ESPN,
and countless other top publishers,
networks and exchanges, advertisers have
streamlined access to valuable audiences
through a robust and easy-to-use interace.Figure 2
Scalable access to top media
sources
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Nearly zero-cost creative development and iteration
Through a library o pre-created and customizable templates, as well as sotware that automatically re-sizes ads into the
top seven standard IAB sizes (both .sw and .gi), advertisers can create and customize ads with colors, logos, images,
and text in minutes. This library o more than 800 display ad templates also has historic perormance data on each
template. Whether advertisers use these templates or bring their own creative into the platorm, creative development
costs can go rom thousands o dollars per ad, across multiple sizes, down to literally minutes o non-technical time at no
cost. (See Fig. 4)
Figure 3
Screenshot o AdReadys media buying platorm.
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Centralized reporting and auto-optimization to ensure efective ROI
The reporting system enables quick and easy access to impressions, clicks, conversion, and cost data across all media
sources and creative assets running through the platorm. In addition, auto-optimization algorithms help advertisers
make improvements to their ads in real-time. (See Fig. 5)
Figure 4
Screenshot o AdReadys creative library and customization tools.
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Figure 5
Screenshot o AdReadys Recommendation Window
Do I want to advertise on more than just one source of media?
Do I want to ensure accurate, apples-to-apples reporting of my full campaign performance?
Do I expect that Ill want to optimize my media placements and ad creatives to drive
continual perormance improvements?
Do I already have ad creative? Do I have enough ad creative to try dierent oers and
messages, to test which ones work the best?
When deciding to use an advertising technology platorm, advertisers should consider the
ollowing:
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My goals are: (brand / awareness vs. performance / DR)
My yearly/quarterly budget is:
My specic target audience is:
I need X type of reporting to measure success:
I have X current display ads already created:
I have had success placing display ads through the following providers (and why):
I faced challenges when placing display ads through the following providers (and why):
New to display:
How much of my overall display budget do I spend on testing / set up costs?
Can this be optimized?
Is my ROAS similar or better than my competition?
Am I delivering the right messages to the right target audiences?
How can I have a more targeted ( personable) conversation with my prospective clients?
Experienced with display:
An Advertisers Checklist
As detailed above, there are numerous possibilities or running display ads rom the various providers in the ecosystem.
Beore engaging any o these players, advertisers should ll out the ollowing checklists:
Filling out this checklist will enable an advertiser to better match their needs against the current oerings provided
by networks, exchanges, platorms, publishers, and agencies. (For a ree consultation, e-mail your answers to sales@
adready.com.)
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Start Display Today
As described throughout this white paper, the display advertising ecosystem has exploded with growth and
opportunitybut it has also gotten increasingly complex.
While this rapidly changing landscape has let many advertisers eeling overwhelmed, it has also paved the way or a
greater number o advertisers to begin running display ads. The number o providers has ueled competitive innovation,
resulting in better, aster, and more results-driven display services. Display has essentially become an advertisers
market, where providers are continually upping their game to win advertisers business.
Ad platorms are rising in popularity because they are simpliying the best oerings rom all o the providers in the
ecosystem into a single, easy to manage platorm. Want the reach o ad networks? Platorms can do that. Like the
fexibility o buys in an ad exchange? Platorms can do that too. Want to ocus your ad spend on tier one publisher
networks? That comes standard with platorms. Want to do all three? Platorms will manage all o these eorts in a
single ramework.
To nd out i an advertising platorm is the right t or you, visit AdReady.com/premium. For a list o agencies and
publishers oering AdReadys powerul display technology, contact [email protected] .
To learn more about launching display ads in conjunction with your search campaign, go to www.adready.com.
Copyright 2010 AdReady. All rights reserved. V.1, 01/10
AdReady is a registered trademark o AdReady, Inc., registered in the U.S. All product and company names mentioned herein may be trademarks o theirrespective owners in the U.S. and other countries.
I. Advertising Age, What to Expect From the Next Gen o Digital Display. April 20, 2009. Rich Karpinski, http://adage.com/
adnetworkexchangeguide09/article?article_id=135998
II.Karpinski.
III. Mediaweek, Analyst: Online Display Ads to Surge. January 4, 2010. Mike Shields, http://www.mediaweek.com/mw/content_display/news/
digital-downloads/metrics/e3ia2c230303d144bc6bd9215ac3de5d3 IV. MediaPost, Study Confrms Display Ads, Paid Search Work in Concert.
May 11, 2009. Laurie Sullivan, (http://www.mediapost.com/publications/?a=Articles.showArticle&art_aid=105740)