Getting Started with Display Advertising

January 23, 2012 • Blog, Display • Views: 560

Local marketers often rely on a few key channels to reach consumers online. Typically search and social are some of the most critical local vehicles. Search is attractive because of its naturally precise targeting, and social because word-of-mouth marketing is so often effective at driving local commerce.
One medium often underused in local marketing is display advertising. While display is a web marketing veteran, many local advertisers seem to prefer spending cash on search and time on social.

Some marketers may avoid display because they perceive it to be excessively difficult to implement, requiring expensive creative and complex media buying decisions. Others may think display is too broad a medium, lacking the precise targeting options required to drive local business.

However, the reality is that display as a whole is seeing incredible growth, and marketers who have been traditionally sceptical should be aware of this trend. A recent report by eMarketer showed that display has grown from roughly $8 billion in 2009, to a prejected $14.82 billion in 2012. Another report by ZenithOptimedia stated that, “Display is the fastest-growing segment [of Internet advertising], growing by 18.9% a year.”

This growth represents a rapidly rising opportunity. Major ad sellers are investing heavily in more precise targeting, easier creative management, and better distribution. Google, for example, recently announced that display was on-track to generate $5 billion in revenues. Google’s display success is largely due to their innovations in making display more accessible – innovations that marketers can leverage now, to access the growing value of display.

Understanding Display Creative

The initial challenge marketers face when starting with display is the creative – in other words, building the actual ad. Unlike search ads, which are simple lines of text, display ads can take a range of formats, each with different trade-offs between resources required and effectiveness in delivering a message. Basic options include –

  • Text. Like search, display ads can run with plain text. However, this will usually not produce optimal performance, especially for branding campaigns.
  • Image. Graphical banners have been a display staple since the dawn of the web. For beginners, static images may be a nice compromise between creativity and implementation.
  • Video. As bandwidth and connection speeds have grown, video display has risen as a powerful medium for creating engaging ads. Requires a heavy investment in creative, but can deliver a powerful message.

Beyond format choices, advertisers can also choose from a wide range of available ad sizes. Fortunately, the Interactive Advertising Bureau has put together a full list of advertising sizes and specs, to help coordinate efforts between advertisers and publishers. Below is a representation of some of these ad specs.

Display creative uses a range of terminology which can often be confusing to newcomers. Some of the most commonly used jargon includes:

  • Skyscraper – an ad unit that’s much taller than it is wide. Usually appearing along the margins of websites, Skyscraper ads have a  default size of 160*600.
  • Leaderboard – an ad much wider than it is tall. Often appearing in the header or footer of websites, Leaderboards have a default size of 728*90.
  • Pixel (size). In it’s basic form, a pixel is a measurement of size. When ad formats are sized like 160*600, each number refers to an amount of pixels. This is a “Cartesian” system, where the first value represents width, and the second height.
  • Pixel (tracking). A tracking pixel is usually 1*1 transparent image that reports when an advertisement or image is seen. Because web servers track when images are viewed, tracking pixels can be used to gather precise data on ad impressions.
  • Rich Media Ads. A rich media ad is a video ad, or an add with an animation, that allows for complex user interaction. Playing a simple in-add game, for example, or mousing-over expanding advertising elements.
  • Above the Fold. A artifact of the print media business, ads are called “above the fold” when they’re positioned near the top of the page, and are visible without requiring a user to scroll down.

Display Advertising Mechanics

Perhaps the most confusing element of display is the sophisticated interaction between buyers, sellers, and agencies, and the range of technologies that sit in between these relationships.

At the core of the display relationship are two parties: the publisher and the advertiser. The advertiser is typically a business selling a product or service, and running ads on websites to promote themselves. The publisher is a website which receives payment for running an advertiser’s ads. In other words, the advertiser buys ad space from the publisher.

While this relationship seems simple, there are many complexities in the modern display relationship, designed to make the media buying process more efficient. For example, imagine if every display ad purchase had to made through a manual sales deal between individual publishers and advertisers. This would add a huge amount of overhead to the advertising process, and so systems have emerged to solve this and other problems.

One of the most basic and critical display advertising technologies is the Ad Server.  Below is a basic graphical depiction of the process, created by Clickz media.

In this process, a user visits a website, and the web server replies with the HTML page. This page contains instructions to fetch an ad, which in this case is located on a content delivery network.

Basically, this means that the publisher doesn’t have a fixed, static ad hard-coded onto their website. Rather, there’s a specified block for advertisements, that can be modified dynamically as needed. When a user visits the page, the web server delivers the page, and a separate ad server delivers the ad.

In most cases, publishers have multiple advertisers available to them, and must make decisions about which ads to run in which slots. Ad servers are used to make these decisions on-the-fly, in a process called ad matching. Ad matching can be very simple, for example with a basic “round robin” system, or very complex, combining user demographic data, performance data, real-time bidding, and many other factors.

Beyond ad serving, other key concepts to understand are ad networks and ad exchanges.

Both of these systems operate on the same principle – neither publishers nor advertisers want to manually haggle over every ad placement. Instead, networks and exchanges are groups of websites that advertisers can buy slots from at scale.The difference between the two has diminished over the years, however the primary distinction is that an ad network provides a more premium, full-service environment for advertisers.

Usually the publishers within an ad network will have to meet quality and content standards, while members of an ad exchange will have much lighter requirements. Similarly, an ad network will often undertake the bidding and management of an ad campaign, with the goal of optimizing performance. An ad exchange on the other hand usually requires that each advertiser make their own decisions on bidding and targeting.

Ultimately, this overview only scratches the surface of the many facets of display advertising. Next week, we’ll continue our display coverage, with more information on display performance measurement, display campaign implementation, and specific networks and technologies operating in the current display landscape.

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