A Quality-Based Approach for Higher Performance on the Exchanges

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ADOTAS – As the fourth and last installment of this series on the value of the ad exchanges (you can read the first three here, here and here), we’ll look at how taking a more “quality-based approach” to buying media on the exchanges can dramatically improve performance.

Online as an advertising medium should not be viewed as a homogeneous collection of websites with comparable characteristics. Like its offline media counterparts, online media has a wide variety of sites – ranging from major portals and social networks such as Yahoo! and Facebook, which clearly have mass appeal and massive numbers of unique users – to niche sites, such as Kelley Blue Book, that cater to a very specific vertical. On the “quality” spectrum, some are considered “’premium,” whereas others are viewed as highly undesirable. Sites with premium content and lots of unique users are must-buys for big advertisers – and understandably so, because they give advertisers the contextual relevance, unique user reach and richness of creative execution. Besides, the ability to take your CEO or CMO to a website and show them the ad is a plus. Conversely, for most buyers, ad exchanges are on the other end of the spectrum, and it’s one place brand-conscious buyers have been reticent to buy ads.

Among those who have embraced the exchanges, the overwhelming majority have done so for DR-centric campaigns, with the primary intent to find and/or retarget cookies. Some people refer to this as the “spray and pray” model: Buy the cheapest inventory you can find, quite often “below the fold,” tag the cookies along the way, and go back and claim the credit for conversion! There are some problems with this method. First, it’s quite likely that your target audience didn’t even see the ad, since it was below the fold — in other words, zero brand value. Second, although you can find inexpensive inventory this way, it often comes at a much greater cost – the compromising of your brand. Cookie hunting and retargeting often doesn’t account for ads appearing alongside suspect content that can mislead consumers about your product or service – or worse, make them think you endorse such content.

Rather than guessing the “rightness” of the audience based on imprecise technologies and suffering from well-documented audience targeting issues, we’ve found another way to buy media on the exchanges in a manner that results in far more effective campaigns. It is well known that there are a large number of small- to mid-size publishers who have relevant, quality content, but do not have the wherewithal to rep their inventory directly to media buyers. This inventory gets bundled in broad category “channels” and is brought to market by ad networks and/or supply side aggregators or platforms. In addition, most premium sites put their unsold inventory up for auction on the exchanges. This combination is creating what we call a secondary premium market – a market where, with the right technology partner, advertisers can find relevant and high quality content – with high unique user reach and at very competitive prices. When the most relevant audiences are reached in the context of the most relevant contents, advertisers effectively get highly qualified traffic that shows better site engagement, conversions and repeat visits/purchases. So instead of buying a large amount of cheap inventory and risking their reputation and brand integrity, advertisers can funnel the same budget to
buy smaller, yet highly qualified inventory to achieve the same acquisition, converting targets while both ensuring brand safety and building brand equity with the most relevant buyers. We do this on behalf of our clients all the time – applying our keyword precision contextual targeting technology to find the best, most relevant content that precisely match each campaign’s objectives.

And the results have proven that this methodology works over and over again.

One of our clients at NetSeer recently tried to target the health and fitness market. The company makes a product that allows consumers to track their progress in their exercise programs. We worked with this advertiser to identify those consumers who might be interested in the product. The company had been leery about buying on the exchanges, due to both scale issues and brand safety concerns. Fortunately, we were able to show that through our quality-based approach, we could deliver strong results. And strong they were – CPC down by 71 percent, CTR up by 62 percent and CPA reduced by over 400 percent. All of this was accomplished by moving the advertiser’s media buys away from direct premium buys, toward a broader yet highly targeted approach of buying on the exchanges.

A second client of ours, one of the world’s largest communications companies, is seeing similar results. This advertiser was trying to reach the small- and medium-sized business community. Using our contextual targeting, we were able to source inventory on the exchanges based on a variety of criteria. And, as with the previous example, the results were very positive. Versus the original cost per acquisition (CPA) goal, the actual CPA came in nearly 170 percent lower.

While we have enjoyed savoring the sweet spot of the secondary premium market for our clients, it only seems fair to share this quality marketplace with others who have yet to see the true value the exchanges can offer. Time and again, the exchanges are proving to hold quality inventory at a fraction of the cost of premium sites. Brands are starting to take notice, and there remains a plethora of opportunities for marketers to get their ads in front of the right audience at the right time and at the  right price.

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