Media buying is fundamentally changing.
Media is bought on the promise of reaching a particular audience at a given time. Location, time, and price are the hallmarks of online and traditional media buying. Location, in the digital space, meaning the publishers and content surrounding where the ad is placed. Time dictates when an ad is placed. Price is what one pays to place an ad.
All three are being affected by recent changes to media buying. Real-time bidding (RTB), retargeting and mobile/native advertising are changing the way we execute media buying. Are these ad buying types disruptive enough to change the way an entire industry performs a basic function of advertising?
The data suggests, yes. eMarketer estimates that by 2015, a quarter of all ads will occur via real time auctions. They also estimate RTB advertising will grow 72% in 2013.
Let’s discuss these forces at hand and how they are changing the way media buying is done.
Real-time bidding allows you to bid on ads, much like you would a PPC ad in Google AdWords. Each ad enters an auction and then an advertiser bids on the auction. With RTB, there is much to consider. Below are a few guidelines and recommendations.
Economics now play more into media buying than relationship building. Real-time bidding plays off both auction and game theory mechanics. Think John Nash from the movie, A Beautiful Mind. Economists believe an auction is the best way to place value on an object. In an auction, the higher one bids, the more value is placed on the object. The lower one bids, the less. Thus, establishing the “true value” of an object.
The same economic forces are at play with real-time bidding. A publisher places inventor y/ads into the auction and a brand has the option to bid on the placement. For example, a leaderboard position on the New York Times will have a higher value than a below-the-fold ad on a local T V Station. Has this always been the case? Most likely. However, the auction takes the onus off of the publisher to place the value and puts it squarely on the advertiser.
One of the great things about RTB is the ability to create more ads focused on a particular audience segment. With the ability to update bids on a regular basis comes the ability to change creative. Headlines, body copy and images can all be changed to accommodate an audience and what they are looking for at a particular time.
For example, an ad for a coffee company in the morning when it is cloudy, can have a look and feel promoting the benefits of coffee when it is hard to get your day going in the morning. An ad in the afternoon, when it is sunny, can promote an afternoon break from the office. Finally, an ad at night shows coffee as the perfect way to unwind after a long day. Three different creative assets, targeting three different times of day, to three different audiences.
Here is the genius of it: in the past, the same three ads in the same location and frequency would cost relatively the same. Now, using RTB, the ads would be valued differently based on the time of day and audience. The advertiser knows coffee drinkers are more likely to consume coffee in the morning, and less likely as the day progresses. Thus, the advertiser values the ads in the morning more to drive conversions than the afternoon. An advertiser can place a higher bid for premium placement in the morning and lower bids in the afternoon. This should maximize the conversions for the entire campaign while driving ROI.
Creative designers have definite reservations when it comes to RTB advertising. The first is volume. As the frequency of ad changes increase, it subsequently increases the amount of ads to create and decreases the time to create them. As media buyers and account managers move forward with RTB, understanding segmentation and the full need of the campaign will be critical to handling volume. At some point, the need for creative assets will reach a point of diminishing returns. This should be monitored carefully.
RTB appeals to the Direct Response (DR) marketer. An offer is put forth, the offer is tested, and then adjusted for results – all of which are the core tenets of DR marketing. Not all creative advertisements fall under DR strategies. Many help push branding campaigns for clients. Can RTB work for branding campaigns? Of course. A brand appeals to individuals and groups of people on many different levels. Understanding the audience and the brand characteristics that appeal to them allows for great creative. If you are able to build your brand, at your price, it becomes a very easy sell.
If you like analytics, you will be a big fan of RTB. In fact, RTB is highly dependent upon analytics to determine performance. Those who have worked in SEM and PPC advertising will be very familiar with the type of analytics available. Analytics can be supplied in real- time. Performance of advertising campaigns can be monitored and adjusted on an ongoing basis. Understanding the mechanisms behind the data can help advertisers adjust campaigns more quickly – reducing waste and increasing ROI.
Retargeting uses cookie data to deliver ads after a user has performed a particular action. The thinking is that a user is more inclined to purchase an item if they have shown interest in some way.
Why is this important to a media buyer? Instead of an ad having to guess at intent, intent is implied by action. A media buyer can use the data at hand showing intent to deliver quality ads and increase conversions. Media buyers in the past have guessed at intent and where a person is at in the buying cycle. With retargeting, they do not have to guess any longer. Keywords used at various times can differentiate a buyer from research phase, awareness phase, or buying phase.
The two types of retargeting we will focus on are search and site.
Search Retargeting involves keyword searches— the action—with display ads. As a user performs a search on particular key words, an advertiser can target display ads promoting products and ser vices around the keywords. (For more detail on Search Retargeting, check out the article on page 32.) eMarketer found 94% of advertisers use search retargeting to acquire new customers and 82% use it to drive revenue.
Search retargeting provides a means to effectively marry search marketing campaigns with display media to create greater opportunity for conversion.
Site retargeting Site retargeting combines a user’s site activity with display ads. A cookie is placed on the site and a user’s actions are tracked throughout the site. If a user leaves the site without making a purchase a display ad can be shown to the user on other sites to convert them on the original site.
Site retargeting can be used by media buyers to affect site and cart abandonment. According to eMarketer, site retargeted display ads see click- through rates of around 0.7%. ( A typical display ad will see that rate drop to 0.07%). Site retargeting is best used with e-commerce sites where a media buyer can have an effect on purchase.
Analytics for retargeting are fairly robust. Search retargeting analytics can show which search keywords are driving display ad impressions and conversions, allowing media buyers to adjust programs accordingly. Site retargeting analytics can also measure impressions and click-through rates of the ads.
Traditional media had only a handful of formats on which a media buyer could place media. T V, radio, print and outdoor all have standard ad units in which to place ads. Even online advertising typically follows a standard ad unit and type.
However, with the plethora of mobile and tablet devices, the number of advertising opportunities has increased immensely. iOS, Android, Windows, RIM, Nook, Kindle, and Samsung Galaxy all display ads differently. As more and more users migrate from the desktop to mobile and tablet formats, media buyers must understand the idiosyncrasies of these devices and place ads accordingly. This will require a whole new jargon and knowledge base for media buyers.
For more on native advertising, see our article on page 30.
Display ads are traditionally bought on a CPM basis. With RTB, retargeting, and even some mobile and native advertising placements, platforms are moving to a hybrid CPM/CPC or solely CPC cost model. CPC cost model is more effective than CPM because you only pay when a user clicks on the ad. Regardless of the type of model a media buyer uses, they will have to understand both types and their implications moving forward.
Display vs. Search
The skills needed by a media buyer are changing. A media buyer needs to be highly analytical, detailed and understand how to extract insights from data. Due to the reliance on analytics, understanding of economics and CPC cost model, media buyers should begin thinking like search marketers. Search marketers have many of these skills and can easily adapt them to include display advertising. Media buyers need to quickly adapt to the current environment or face irrelevance.
How does this change media planning?
Media planning is becoming harder. With all of the different types of ad units, placements and integration, media plans look more like elaborate schematics than linear flight plans. Media buyers and planners must work together to keep up with rapidly changing technology and culture to reach consumers where they live, work and play.