12 January 2012 in ExchangeWire EMEA 12 Comments

The PostView: Will Losing The "B" In RTB Save Display?

The PostView is a new coulmn written by senior execs working in the European online advertising industry.

I’ve been meaning to write this post for a while and it seems that Eric Franchi expertly beat me to the punch with a nice write up on Digiday – however there are a few other issues that I feel need to be explored in trying to determine what will save display.

There will be some analysts and speculators watching from afar that will profess that the display industry does not need saving. Revenues and investments into display have increased over the last few years, and let’s not forget the vast improvements in the underlying technological infrastructure. However, those close enough to the display space, know what lies beneath. They know the practice of “cookie bombing” is widely pervasive, and that any meaningful attempt at leveraging clever targeting tactics on quality content will fall by the wayside.

Lets quickly assess Eric’s comments. Is it time to cut supply? Ultimately, I agree with Eric. The web has become way too cluttered for ads to make an impact anymore. However, from an RTB perspective, cutting supply is even more mission critical, particularly for publishers where advertising is still a primary business model. The reason why CPMs are cheap across the exchanges is because there’s a lot of it. There is a lot of tonnage. This tonnage makes it harder for quality content, with high(er) clearing prices, to rise to the top. Take a look at the video space. There is more demand than the (quality) supply can cope with – hence prices are still a premium across the board.

What about bigger ads? I truly believe fewer, larger real estate will create a healthier ecosystem. Although I’m not naive enough to suspect this will immediately improve the fortunes of publishers overnight, I do feel it starts to add more investable credibility into the marketplace. Is project Devil the answer? I think it’s absolutely the right idea. But of course ideas without the right execution are simply that: ideas.

But what else do we need to think of when assessing the health of the display channel? We need to understand that display is no longer a direct response channel. Retargeting on a click metric is direct response and it has its value as a DR channel (as long as you understand the lift effect of the activity) but other Display is not a performance channel. Post impression windows of anything more than 6 hours, by their very nature, means that the activity is not direct response focussed – a user is not directly responding to an ad. The average dwell time for ads is anything between 2 and 10 seconds. We cannot credit a 300*250 pixel image to cause behavioural change any time after 6 hours (to be honest id go as far to say 1 hour). Who can honestly remember an ad they saw 6 hours ago? Now multiply that upwards to 7 days, 14 days, 30 days – these post impression windows still exist I am told. It is no wonder advertisers put their money into Search and Retargeting first, there is a lack of credibility that this activity makes an impact to the bottom line.

RTB has only exasperated this problem. Technology and algorithms are manipulating and analysing millions of log files every day in attempt to predict what impression (cookie) will result in a conversion within said window. Going back to Eric’s recent article he mentions how “we sometimes forget what it is that we are doing: we are in the business of advertising”. This is a fair statement based on the people I speak to everyday.

RTB did bring something wonderful to us however. The ability to buy and sell media, in real time. I believe that the future of display media will not be Real Time Bidding (cue long gasp from reader). I am convinced though that the future will be Real Time. Advertisers being able to dynamically serve relevant messaging against relevant segments of users they’ve constructed, on high quality content, into large real estate is the future of display. Publishers need to make the leap to make ALL ad inventory available into a next generation, centralised yield optimiser. This means every ad slot with full transparency being passed to a buyer in real time. It does not necessarily mean it will be biddable but it means the inventory can be real time monetised and real time procured.

Hopefully i’ve given you all something to think about. Would love to hear your thoughts in the comments section.

Ad Exchange, Ad Trading, Agency, Demand Side Network, Demand Side Platform, Online Advertising, Private Exchange, Publisher, Publisher Trading Desk, RTB, Video Display, Yield Optimisation
  • seb

    very interesting POV. 
    my remarks :
    - PC conversions only is hard to get…especially if the number of conversions is low …algo need data to optimise and pc conversions are rare…problem then with the math there…
    that might come from the kind of inventory available (not enough ATF and too many direct deals with some retargeters (that don t apply frequency cap by the way…follow my eyes)
    - 6 hours for a PV window is right tom my opinion..and even 6 hours might be long…
    - putting all the ad fortmats and inventory available in reael time…that is a dream but some adexchanges (hi media and MSFT) told me they would do it in the month coming (within 6 month time and even less)..but then pubs have a salesforce problem to handle there…probably flooor prices will apply there

    in the end that won t Be a B for Bidding but for Branding..maybe

  • seb

    very interesting POV. 
    my remarks :
    - PC conversions only is hard to get…especially if the number of conversions is low …algo need data to optimise and pc conversions are rare…problem then with the math there…
    that might come from the kind of inventory available (not enough ATF and too many direct deals with some retargeters (that don t apply frequency cap by the way…follow my eyes)
    - 6 hours for a PV window is right tom my opinion..and even 6 hours might be long…
    - putting all the ad fortmats and inventory available in reael time…that is a dream but some adexchanges (hi media and MSFT) told me they would do it in the month coming (within 6 month time and even less)..but then pubs have a salesforce problem to handle there…probably flooor prices will apply there

    in the end that won t Be a B for Bidding but for Branding..maybe

  • Anonymous

    I disagree about the cookie window. You are talking as if all ads are seen, noticed and have an impact that diminishes over time, your argument is how long is this time period. My argument is that an ad with a highly relevant offer or message that is seen for 2 – 10 seconds can have an impact that can last for days, a week or longer. 

    If I see an ad for a cheap pair of football boots that I really want, why would I forget that after an hour or six?

    unfortunately though, the impact of every impression cannot be measured. To me, post impression cookie windows as a whole are useless to attribution.

  • Anonymous

    I disagree about the cookie window. You are talking as if all ads are seen, noticed and have an impact that diminishes over time, your argument is how long is this time period. My argument is that an ad with a highly relevant offer or message that is seen for 2 – 10 seconds can have an impact that can last for days, a week or longer. 

    If I see an ad for a cheap pair of football boots that I really want, why would I forget that after an hour or six?

    unfortunately though, the impact of every impression cannot be measured. To me, post impression cookie windows as a whole are useless to attribution.

  • James Sandoval

    Great piece Ciaran. A couple of comments:

    1. Online display does NOT need to be saved. The industry is, despite it’s wayward transgression of “cookie bombing”, doing a great job of introducing display ad targeting and measurement innovation. I’m confident we’ll continue to do that – and meet ePrivacy requirements…and more.

    2. If measuring the performance of display (and any other digital marcomms) is to be truly data-driven – which feeds the targeting – then collecting and mashing up a lot of it will need to happen. This to say that setting cookie windows at less than wide open [to start] is a like trying drive from London to Berlin on half a tank of petrol (you’ll get somewhere and you might be happy with the road trip that it gets you, but…). Advertisers, with their agency partners in many cases, will need to grow accustomed to playing with “big data”, mashing and linking it with/to several other data sets and dynamically/semi-dynamically tailoring ad touchpoint credit attribution to really know what works and what doesn’t.

    Yeah, easier written than done, but I’m optimistic and encouraged by some of the work that’s under way now.

    3. On the more vs. less inventory question. I agree with you and Eric – less is more. The inevitability is evident in the development of verification and related services that will [continue] to help advertisers zero in on quality content; content that’s aligned with their brands’ sensitivities.

  • James Sandoval

    Great piece Ciaran. A couple of comments:

    1. Online display does NOT need to be saved. The industry is, despite it’s wayward transgression of “cookie bombing”, doing a great job of introducing display ad targeting and measurement innovation. I’m confident we’ll continue to do that – and meet ePrivacy requirements…and more.

    2. If measuring the performance of display (and any other digital marcomms) is to be truly data-driven – which feeds the targeting – then collecting and mashing up a lot of it will need to happen. This to say that setting cookie windows at less than wide open [to start] is a like trying drive from London to Berlin on half a tank of petrol (you’ll get somewhere and you might be happy with the road trip that it gets you, but…). Advertisers, with their agency partners in many cases, will need to grow accustomed to playing with “big data”, mashing and linking it with/to several other data sets and dynamically/semi-dynamically tailoring ad touchpoint credit attribution to really know what works and what doesn’t.

    Yeah, easier written than done, but I’m optimistic and encouraged by some of the work that’s under way now.

    3. On the more vs. less inventory question. I agree with you and Eric – less is more. The inevitability is evident in the development of verification and related services that will [continue] to help advertisers zero in on quality content; content that’s aligned with their brands’ sensitivities.

  • http://twitter.com/cbaileydigital Chris Bailey

    Great read. I work in the performance display space, and your comments echo whats being discussed in market. Fully agree.

  • http://twitter.com/cbaileydigital Chris Bailey

    Great read. I work in the performance display space, and your comments echo whats being discussed in market. Fully agree.

  • http://twitter.com/harman72 cameran

    Interesting and provocative article tied in with Eric’s previous piece.  There is an argument that the shorter the PV window the greater the likelihood that the advertiser will be valuing “cookie bombed” impressions.  The shorter the window the more likely that a high reach, high volume (low value) media owner will be attributed the conversion rather than a more targeted, niche, high value buy that is likely to have a lower reach but may have had more of an impact in the influence process.  PV isn’t the problem, it’s the “last event” wins methodology in isolation that underpins the nightmare scenario for premium publishers in the RTB space.  Real Time Blunder?

  • http://twitter.com/georgeodysseos George Odysseos

    Attribution is the key here, the problem at the moment is that too many display campaigns on measured on the last view or click (when will this metric go away??) this prompts the ‘cookie bombing’ tactics employed by many including the ATD’s, therefore, if attribution is ‘fixed’ then advertising strategies will change and hopefully for the better.

  • http://twitter.com/Jack_4Ps Jack Mclaren

    Display is one of the fastest growing advertising areas worldwide therefore saying that the industry needs saving from ‘cookie bombing’, before the new guidelines have really been finalised, can surly be contested.Display is ‘marketing’ not just a numbers game (DR) hence why branding campaigns often focus on it. I would therefore say a look back window of 1 hour is not enough as not only would brands cut their budgets (might need to save the industry then), but online marketing would lose one of its core advantages over offline: measurability.Of course advertisers use search and retargeting first as the results are easy to prove, but what happens when you sell a product with no search volume, but many potential customers? Online now has more reach than TV even so you have to look at other option online as a matter of course.Taking the bidding (B) out of RTB for me has the danger of removing competition and could potentially mean advertisers with less buying power suffer.On a final note I agree with George below ‘attribution is key’. Anyone who has worked in the industry more than 6 months will know that without looking beyond last click/impression DR display cannot go far beyond retargeting.

  • Anonymous

    Good read. I agree with the points around the value of post impression but don’t believe we can move too far away from it until the industry and client views on attribution are improved.