Battle Over Display

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manyadnetworks_small.jpgDM CONFIDENTIAL — A reader commenting on our, or at least my, non-stop obsession with flogs, quipped that we should change the name from DMConfidential to FlogConfidential.

It’s true. Q1 2009 has ushered in the year of the flogs (if they last that long), and what began a goofy, no-way-this-could-work marketing method has evolved into a full blown assault on online media. Each day, we find ourselves coming across not just text ads but banner ads touting the “1 Simple Rule” to weight loss.

Their success on display in particular is a testament to not only the unexpected conversion rates from these types of sites but the depressed inventory prices that make it possible for them to gain traction. Were media prices still at premium rates, driven primarily through robust demand by advertisers, the sites and networks running the ads now wouldn’t give time of day to a no-name performance marketer, even one willing to test on CPM.

Imagine being a sales rep used to dealing with agencies, taking clients out to dinner, hardly working for a decent pay being approached by someone whose company you haven’t heard of and whose site makes you scratch your head. It’s no wonder so many marketers have gravitated towards self-serve interfaces, and why that will ultimately transform display. It is this future of display that is very much in question, though.

Search has become the true mass-medium, open for all willing to pay per click, but display is still scattered. If you know the right people, you can get your ads in rotation even on a performance basis or test them for a fair price / minimum buy. If you don’t have the connections, it becomes daunting. The companies you speak to want high amounts for a test and quote premium prices. You end up with little confidence in the market and limited incentive to make it work. And, for a medium that has not kept up with overall market growth, you would think that would change.

But, those who yield the most influence have less incentive to see any major changes. Being good at search means having a technological grasp or at the very least employing good technology. Being good at display… well, that’s a conundrum. If you speak to some of the more impressive performance oriented display advertisers, they will tell you success doesn’t come without good technology. For those more brand oriented, they look at technology as a commodity – something they use for tracking and managing their campaigns, and something that might separate various inventory sources apart (i.e., what targeting do they offer). For brands, and more specifically the agencies responsible for the design and placement of the display campaigns, art plays a greater role than science.

Former DoubleClick CEO, David Rosenblatt, currently Google’s president of display advertising, gave a keynote address at the IAB’s annual meeting, a meeting whose tagline read Brands Battle Back. In that speech, according to Mediaweek, Rosenblatt “defended the role of technology and ad networks, saying they were being unfairly blamed for the industry’s recent pricing woes.”

Contrast that with Martha Stewart Living Omnimedia co-CEO Wenda Harris Millard, who in her earlier keynote “lamented the fact that the Web was too often characterized as a direct-response-only medium.” Not that Google wants display to become purely direct response, but both sides would agree it has room to satisfy both.

You could say the same holds true of the original display – outdoor advertising. It handles everything from local real estate agents to national promotions for movies. But, instead of thinking of display as advanced and trackable outdoor, many want to treat it more similarly to television. That is the indication coming from a recent, albeit confusing if not contradictory, MediaPost article, that quotes Neil Klar, CEO of tracking service SQAD saying “Since there is currently no industry-standard equivalent to cost-per-point in the Web display space, we elected to focus on CPM in the initial WebCosts release.” WebCosts is their product which according to the 1996 looking site “will serve as a dynamic tool and interface designed to empower media professionals and publishers with real-cost Internet display advertising data.

Reading through the comments of the Mediapost article, we see that we weren’t the only ones confused, but it sparks a good debate about display advertising, namely the alignment with TV. Imagine if Google had kept search priced on a pure CPM level. More advanced users will be saying to themselves that they do already, as ads get priced on a revenue per thousand metric (often referred to as eCPM).

While a per thousand metric seems to prevail as a common denominator for measuring performance, it should remain just that – a metric for making comparisons. It shouldn’t become the standard for input as well as output. The real discussion needs to focus less on how to price display in a uniformed standard and more on how to open up access to a broader range of advertisers. Search chose cost-per-click as its input primarily because that’s how Overture began but also due to its being a good balance between advertiser risk and publisher risk.

Even brand advertisers can get some reassurance with cost per click, and while publishers might want only CPM ads, CPC splits the difference between that and CPA. The demand for display is there; it’s about opening up the system to accommodate the demand that matters. Focusing on pricing, won’t get it there any faster. Ultimately, we all know it will happen sooner or later. We just wonder whether it will involve anyone other than Google. Interestingly, in the write-ups covering the IAB annual meeting, none that we found mentioned Yahoo

Courtesy of DM Confidential editor

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1 COMMENT

  1. Check out iPromote. I think this will go with your comments regarding where the future of display is going.

    They have created a turnkey solution for turning web pages into online display ads in one click which then runs them on premium websites on a geo-targeted, cost-per-click basis.

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