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Stephan Pretorius is the President of Acceleration and is responsible for product development and client strategy.

Since inception in 1999, Acceleration has developed into a global online marketing services firm, employing more than 150 professionals in 6 offices.

Pretorius has been instrumental in developing Acceleration’s key channel partnerships with DoubleClick, Epsilon and Omniture, and is a member of DoubleClick’s Client Advisory Board.

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Display Advertising’s Second Coming

Written on
Oct 21, 2008 
Author
Stephan Pretorius  |
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Display Advertising’s Second Coming

behavioral_soup_small.jpgADOTAS EXCLUSIVE — Ever since the first clickable 468×60 ad banner appeared on Hotwired back in 1994 (the AT&T “You Will” ad), advertisers and publishers alike have been striving to make display advertising on the web more effective, accountable and relevant. As well as better design, one of the most obvious ways to improve performance is to match the right ad to the right customer, at the right time – in short, targeting.

Targeting 101

Publishers who use site registration or have access to offline customer data can offer advertisers demographic targeting, but demographics have never been a great proxy for behavior, in either offline or online media. Contextual targeting works well in niche content environments, but is unhelpful in portals and general news sites. And while behavioral targeting has been getting smarter and smarter over the years (and could evolve even more if the likes of Phorm and NebuAd ever get their hands on ISP click stream data) – the task of predicting future actions based on past behavior seems to be a bit of an alchemic task. What, after all, is the commercial application of knowing that there is a connection between ‘lovers of romance movies’ and an ‘Alamo Rent A Car’ ad ? Even if you do outline the psychology of such connections, there is an endless amount of similar analysis to be completed before properly understanding your audience and designing a campaign.

Search takes it all

Enter search marketing. The fact that paid search advertising now represents more than 50% of all online advertising in most international markets is not simply due to Google being good at long-tail transaction platforms and syndication. It is because search activity is by far the best indication of future behavior ever available to advertisers. A customer’s declared intent (or rather, what we interpret a customer’s intent to be based on the keywords and phrases they search for), has proven to be an immensely efficient way to target advertising messages. Search activity also often occurs very close in time to the conversion, which makes it easier to attribute to a conversion compared to display ads.

Display gets a second life

But the recent development of ad exchanges, and the clever use of anonymous customer data is about to give display advertising a new lease on life. The data allowing advertisers to target customers based on everything from search behavior to site activity has been around for years (DoubleClick first introduced Boomerang more than 5 years ago), but it was usually impossible to find large enough groups to make the effort pay back. Real needle-in-a-haystack stuff.

Ad exchanges change this by giving advertisers access to massive amounts of display inventory, and the ability to only buy the impressions that match their customer data. This is a revolutionary development in online advertising which enables several new and powerful media planning strategies. I will elaborate on two of these – re-marketing to visitors and re-marketing to searchers – for the rest of this piece.

Re-marketing to visitors

The possibility of completing a media buy on an ad exchange targeted only at people who have previously visited your site (N=visitors) is a very compelling media strategy. But why stop there? Why not target one placement at customers who previously bought from you (N=purchasers), and a different one at people who visited but did not buy (N=visitors-purchasers)? Or, taking it one step further, target a specific ad at people, for example, who visited the laptop section of your site but did not buy (N=laptop visitors-purchasers)?

When approached in this way, using ad exchanges in combination with customer data allows advertisers to execute highly sophisticated conversion, up-selling and cross-selling campaigns. It is even possible to execute banner ad campaigns aimed at customers who abandon shopping carts (N=visitors with carts-purchasers).

Re-marketing to searchers

Just like visitor re-marketing, search re-marketing (targeting display ads to customers on publisher’s websites based on which paid search ads they have clicked) is not an entirely new idea. But what makes it new is the ability to leverage your own paid search campaign for display ad targeting.

Not only can you re-target display ads based on your own proprietary, tried-and-tested keyword universe, but you can re-target – and apply different messaging – based on specific keyword groups. In the same way I illustrated above, you can exclude specific data lists to make the cells more accurate, e.g. people who searched and clicked on ads for the “Dell branded” keyword group but didn’t purchase (N=”Dell branded” KW Group-Purchasers).

When can I get it?

The mechanics to deliver on the promise I’ve outlined above are not perfectly in place today. The process of building, combining and suppressing user lists (especially for searchers) is still very clunky and more time-consuming than it should be. However, I strongly believe it is only a matter of months before these tools become available in mainstream ad management systems.

What will take longer is the adoption of such tactics as part of mainstream marketing strategies. Not only is it a new way to think about display advertising, but it requires the mastering of new media buying platforms (ad exchanges) as well as the incorporation of constantly-changing customer data sets into your ad targeting process. For the advertisers that can master these skills, it will become a highly effective and important tactic in their online advertising toolkit.





Reader Comments.

A Good Recipe for an Advertising War amongst all it’s Competing Factions!

Similar to the situation in Chicago in the 1930′s!

What happened to responsible advertising which advertised a Product on its Merit & not just on whom you can Force feed the Advert to First!

Posted by Jonah | 10:49 am on October 23, 2008.

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