In our previous post we discussed the basics of supply and demand. Before we continue to discuss in more depth the technology behind these, we’ll take a moment to review the people on the demand side and the two key types of advertising: Brand and Direct Response.
Brand vs Direct Response
Advertisers typically have two key goals:
Brand awareness — Making people aware of a brands existence and features. Depending on the industry, about 40% of online advertising is spent on Brand awareness campaigns.
Direct Response (DR) — Advertising a call to action in order to trigger a response from the user such as a purchase or sign up. Roughly 60% of online advertising today is Direct Response.
The difference here may seem subtle though it has a major effect on the type of campaign. A company such as Disney may wish to sell a movie — in this instance they have two options: Increase awareness of the movie to a relevant audience or attempt to have users purchase tickets online. In most cases the advertiser will use a blend of the two. More common examples would have the advertiser building a general awareness of their brand such as Coke who constantly spend money to ensure their brand image is familiar.
When it comes to campaigns, both approach may target a specific audience — we will discuss measurement later, but Brand campaigns usually are measured on audience reach (The number of users that saw or interacted with the ad) whereas DR campaigns are measured on performance (The number of actions taken per $ spent).
Campaign types are further complicated by device and creative formats — however, these are distinct and should not be confused with the marketing objective:
Display advertising is advertising on websites. It includes many different formats and contains items such as text, images, flash, video, and audio. There are also specific formats for Mobile vs Desktop. These are common for both Brand and DR campaigns as they can provide a very visual canvas for your brand image and are very easy to serve across a large inventory of websites. One exception is video — which tends to be primarily used for Brand campaigns, video is not a driver of user actions, but works very well for brand awareness as the advertising can build a strong engagement with the user. As such — video metrics usually focus on view rates or completed view rates (A user should watch some or all of the video).
Video Note: There are a couple of standard containers for video content available. VAST: The Video Ad Serving Template, a universal specification developed by the IAB for serving video ads & VPAID: The Video Player-Ad Interface Definition, a universal specification developed by the IAB for interaction between ad units and video players focused on “enabling a rich interactive in-stream ad experience”. VAST is a basic standard for serving video on a page, whereas VPAID allows for rich interactivity between the video and the user. Generally the industry is moving towards VPAID as the standard.
Native advertising is a type of advertising, usually online but feasibly elsewhere, that matches the form and function of the platform upon which it appears. You see this type of advertising commonly in Social networks, where adverts look very similar to normal posts. Native advertising is growing rapidly due to its effectiveness — though using Native advertising requires more planning since the creative has to match the placement.
Search advertising is a method of placing online advertisements on web pages that show results from search engine queries. By far the largest search adverting provider is googles Adwords which allows ad’s not only against googles search results but through partner publisher searches powered by google.
In App ad formats are specifically for Mobile applications rather than Mobile Websites. Many of the actual formats look the same and can include rich media and video, however delivery is different. Given user patterns recently have migrated away from desktop and towards mobile, all forms of mobile adverting are growing, however, advertising revenues still lag desktop formats.
Mobile Note: When comparing mobile and desktop, it is important to think about user identification. On Desktop environments, we can place cookies to track users and sync these with partners. The Safari browser does not allow us placement of 3rd party cookies by default so we are unable to identify Safari users on mass. This problem isn’t significant for desktop due to Safari’s <5% market share — however, it becomes a major problem on Mobile. While iOS market share is <20% globally, in major adverting markets such as the US it is over 40% of users. With regard to in-app — we have no cookie environment, and rely on Android Advertising ID (AID) for android and Identifier for Advertisers (IDFA) on iOS. We will discuss approaches to mapping these ID’s later.
Demand Side Players
While the supply side is generally quite straight forward — a large list of publishers with websites- the demand side is more complex.
The key player is the advertiser. It is not uncommon for an advertiser to manage campaigns directly using a DSP. This occurs typically if the Advertiser has its own large in house marketing department and is usually for much larger advertisers. In most cases however, the advertiser leverages third party marketing specialists or Advertising Agencies, these Agencies work with a Trading desk to manage the actual campaign.
Holding Group: A parent company of one or more advertising agencies.
Agency: A company engaged by advertisers to create, plan and manage an companies advertising needs.
Trading Desk: Is responsible for media buying (Buying Ad placements via the DSP) on behalf of the advertiser. While the trading desk will not define the marketing objectives they are responsible for maximising performance of the marketing campaign. The Agency usually is the primary contact point to the Advertiser, and passes on the campaign execution to a trade desk.
Due to consolidation in the industry Agencies often belong to a Holding Group. These Agencies are huge corporations, to provide some insight into their size below are the five largest agencies, with their estimated worldwide revenues in 2014 [wikipedia]:
- WPP Group, London $19.0 billion
- Omnicom Group, New York City $15.3 billion
- Publicis Groupe, Paris $9.6 billion
- Interpublic Group, New York City $7.5 billion
- Dentsu, Tokyo $6.0 billion
And Their Agencies + Trading Desks.
Next up…Metrics and reporting
