"Data Driven Thinking" is a column written by members of the media community and containing fresh ideas on the digital revolution in media.
Today's column is written by Paul Martino, CEO of Aggregate Knowledge, a buy-side optimization platform.
There is a widely held belief in the display advertising business that the only way to reach your target audience cost-effectively is via ad exchanges. Not true. While it is cost-effective, the classes of inventory available on exchanges are incomplete. In addition, inexpensive inventory can be found just about anywhere if you know how to buy it. It might be blasphemy to write it here on AdExchanger, but cost-effective inventory is indeed available on ad networks as well as directly from publishers.
For many media plans, especially those for brand campaigns, the ad exchange portion can be small. For larger agency customers, a common media plan can have less than 10 percent of the total buy dedicated to the exchange. Fortunately for these customers, many audience-centric buying features of ad exchanges are available from many ad networks and a number of large publishers.
With that said, all display impressions cannot be traded over an exchange like a commodity. Some placements are unique and come with a number of qualitative benefits that are difficult to sell over an exchange – for example, micro-sites, sponsorships, roadblocks, and page takeovers. Publishers selling those premium placements on a guaranteed basis require an expert sales force that is able to work closely with brand advertisers to integrate advertorial content with their editorial content.
If advanced targeting and optimization services are only available on your exchange buy, then only a small portion of that buy (say less than 10 percent) is going to benefit from those data management, segment creation, and targeting solutions. Why bother using the exchange if you only do it for a small portion of the buy?
Many will argue that the days of publisher direct buying and ad-network buying are over. As a result, riding the way of exchange buying from 10 to 20 to 50 percent of ad spending on a campaign is the right way to go. But how long will that take? How many years will go by until this is true?
So what are the benefits of publisher direct and ad networks? Here are a few:
- Many publishers and ad networks today allow both passbacks and retargeting for better relevance and audience selection.
- Above the fold premium impressions required for brand messages and other top-of-the-funnel advertising are not frequently available on the exchange.
- Optimal cost-average of impressions requires the widest possible mix of inventory providers.
- Local frequency caps for a specific exchange buy are not enough. It must be done across the entire campaign.
What is needed now is to merge the benefits of the exchange with those offered by ad networks and publishers. This can be accomplished through a demand-side data-driven infrastructure that looks holistically at campaigns across all sources of data and inventory. Such infrastructure can bring together the emerging ecosystem of data providers with all types of inventory providers to execute ‘exchange-like’ audience targeting and campaign optimization.
With a demand-side, data-driven infrastructure, it is possible to measure the overlaps across inventory providers and across data providers. This is important so that the media buyer doesn’t purchase the same user who happened to be reachable over multiple inventory providers. In addition, it eliminates double-buying those users from overlapping data providers. And, importantly, this lays out which inventory provider and data provider combinations deliver the best ROI (in this case, brand lift) for the buck.
Collecting detailed audience insights by publisher and creative demonstrates cost efficiency as well as the following:
- The importance of creating a combined data/media plan that takes into account overlays between data providers and inventory providers.
- The importance of creating a media plan that takes into account user overlap across inventory providers.
In other words, it is important for advertisers to be able to apply the same discipline to buy data, to manage audience segments, to create cookie pools of targeted users, and to synchronize them, across all of their inventory sources, whether through exchanges, ad networks, or publishers.