Finding the right ad display space
ADOTAS — Findability. It’s a made-up word but one that captures the essential – and increasingly exacerbating – problem of buying and selling display ad space in the digital world.
Billions of dollars in budget, thousands of advertisers, hundreds of agencies, dozens of targeting technologies…and millions of ad supported websites. The combinations and permutations of possibilities are staggering. Last month Avenue A – Razorfish announced that in 2008, they purchased media across slightly over 1000 websites (which is actually down from years past). If the entire ad-supported website world was only 1,000,000 sites, that means Avenue A placed media on only one tenth of one percent. Selling experience tells us that the close rate on business is less than 50%, so let’s call it 30% for the sake of this discussion. That means, speaking VERY generally, that 3000-4000 sites were vetted over the course of the year.
Let’s throw in another wrinkle – what if a site made a buy only as part of an ad network spend? Perhaps they were an attractive part of an ad network channel, and that channel’s sales team was able to win the business because they have the ability to sell at rates below the rate card of the very site that helped win the buy in the first place? While there is no guarantee the ad may ever appear on that site, sometimes perception is reality and the advertiser is happy to have them on the buy.
Don’t get crazy yet – let’s flip the coin over and look at things through the publisher lens. Imagine I’m publisher with slightly over 1mm unique users per month with a clean & well lit environment and either a vertical focus OR a strong index against a particular target demo. According to Nielsen, there are about 800+ ad-supported sites over the 1mm unique user threshold – all with increasingly complex ad serving capabilities, all with the ability to provide custom-integrations and sponsorships, and all participating with the same ad networks as their remnant solution. Each has a dedicated sales team targeting deep-pocketed agencies, delivering RFP responses, powerpoints, value adds and perks galore. These need to both maximize yield AND monetize every impression, all while maintaining their own brand integrity and quality user experience.
Now consider smaller sites with highly engaged and enthusiastic audiences, local sites with limited national sales focus, as well as international sites with US eyeballs. This game of digital Marco Polo can be taxing and expensive. Coupled with the fact that, according to Joe Burton’s AAAA marketing economics booklet, the cost of managing a digital media practice is directionally double that of traditional media, and you have a recipe for overpaying and under-targeting.
Smaller, independent/regional agencies with tighter budget constraints, limited planning bandwidth and significantly less buying power are feeling the pain more than anybody. As audiences continue to fragment, congeal, fragment again and re-congeal (if that’s a word), the concept of “findability” – both for advertisers in finding the right audience at the right price and for publishers finding the right advertisers for their audience – becomes overwhelmingly essential.
So what’s an agency to do?
1. ABP – Always Be Planning. Use time between flights to keep a close eye on the marketplace. Planning under a time crunch is hard enough, so use slower periods to pre-plan and build lists of potential new targets.
2. Partner up – evaluate partnerships that open up new market opportunities. If you’re a creative shop, look to a planning specialist. If you’re a full service shop, look to technology partners that can let you run more efficiently. The more efficient you are in planning & buying, the more depth you’ll be able to add to those plans since you’ll have more time to evaluate new opportunities.
3. Build a portfolio – media buying is investment management. You’re putting a client’s money into a service that has an expected ROI (or ROAS). So diversify and optimize. Ad networks (aka index funds) give you reach & scale but little control. By building a portfolio of smaller investment vehicles (mid-tail sites), you can easily reallocate your budget into those offering the best ROAS. Smaller doesn’t mean worse, it just means you’ll need more sites. That breeds flexibility, which is what you want in any investment vehicle.
Quality programming abounds in this multi-channel digital world and it’s in the best interest of an agency’s client base to spend time exploring how to find the best opportunities out there. Now it’s a matter of going out and finding them.
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