These days, you can’t turn around without hearing something else about display advertising – in fact, the search industry seems positively abuzz with talk about display advertising topics. So, should search agencies ignore the noise or listen more closely?
Search agencies need to tune in to the display advertising opportunity. Let’s look at the size of the display opportunity, why search agencies are in a unique position to offer display services, and the evolution of display advertising – from the direct-to-publisher approach of the past to the more effective demand-side platform or ad exchange approach preferred by most agencies today.
Display is On its Way to Being a $200 Billion Dollar Industry
In our work with advertising agencies, we’ve seen a growing number beginning to offer display advertising services to clients — and with good reason. Research firm Forrester believes that by 2016, spend on display and search marketing will be nearly identical, thanks to display growing at a rate of more than 20 percent each year.
Similarly, Google Executive Chairman Eric Schmidt predicts that display advertising is on its way to being a $200 billion dollar industry across the globe. Suffice it to say that the display opportunity is huge, and continuing to grow.
Agencies that have excelled at search advertising are in a great spot to take advantage of the display opportunity. Why is that? Because the skill set necessary to succeed in search is one that can also help you succeed in display.
The Evolution of Display Advertising
Consider this: display used to work much like traditional advertising, where you needed to research potential advertising channels, negotiate rates with a publisher, then sign off on an insertion order — but it doesn’t work like that anymore.
To do a great job of managing today’s display campaigns, you need to know how to set up a campaign, how to review the data and analytics associated with it, and how to optimize or tweak the campaign based on what the data shows — which is exactly what you need to do when you’re managing search campaigns. It’s not surprising that many traditional agencies are recruiting for candidates with search experience when looking to fill positions that will manage display.
The way display used to work and the way it works today are on two different ends of the spectrum.
Let’s take a closer look at how display advertising has evolved, and the factors that have led to this evolution.
Direct to Publisher
When display advertising first started, the only option was to go directly to the publisher and negotiate a rate for display advertising on their site. For example, if your target audience was women with young children, you might have negotiated a display deal on Parents.com.
This kind of approach would give you the opportunity to take advantage of some custom options — like a full day where every front-page ad space showed your brand’s ads — but wouldn’t be without its downsides. For one, think about how much work would go into getting your campaign negotiated and running on this single site — and then think about having to replicate the entire process for every site on which you wanted to advertise.
Additionally, with this sort of approach, there typically isn’t much room to further target visitors who meet specific criteria. Not only is this a time-consuming and less-than-transparent approach, but it’s also one that has proven to be the most expensive way to buy display.
As display advertising evolved, so did the way you could purchase display ads. Ad networks began as a way to alleviate the frustration that agencies were feeling as the result of having to go from publisher to publisher to set up a campaign.
Instead of going to each publisher individually, you could go to an ad network and say, “I want to spend $50,000 to reach women aged 24-29 who are also mothers”, and your sales rep would place your ads on sites within their network.
Ad networks certainly simplified the display process by allowing agencies to go to a single place to buy advertising on a number of different sites. But, with the relatively high cost and the lack of transparency (most ad networks won’t specify exactly which sites/placements your campaign will receive), many agencies continued to feel frustrated.
Ad Exchanges & Demand Side Platforms (DSPs)
Continuing to improve on the display advertising process, ad exchanges offer the best of all worlds. They offer:
- Incredible reach: Ad exchanges typically represent thousands or millions of publishers, and allow you to select location-specific criteria across sites, meaning you can exponentially increase the power and reach of even local campaigns
- Impressive precision: Ad exchanges let you target impressions to meet very specific criteria, allowing you to select page placement, time of day, day of week, etc.
- Extremely cost-effectiveness: By using a DSP to set your criteria, you’re cutting out the middle man and enjoying significantly lower CPMs.
The only downside we’ve found to ad exchanges is that there can be some initial confusion, especially if you’ve always gone directly to the publisher to buy display — but even this is something that can be overcome with a bit of practice and education.
Ad Exchanges Offer a Smart Investment in Display Offerings
Has your agency been considering adding display advertising to your service offerings? If so, what are you waiting for?
Display advertising is enjoying incredible growth that is expected to continue for years to come. Agencies are leveraging their search knowledge to make smarter display decisions for clients.
Choosing to purchase display through an ad exchange or DSP is a safe and smart investment in your display advertising offerings both now, and in the future.
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