Petteri Vainikka, Founding Partner & VP Marketing, Enreach. In the second part of his three-part series he explains where the current display offering is going wrong, and what factors will convince brand advertisers to move more spend into display advertising.

Display is missing the ‘killer application’ it needs to capture branding dollars. And let's not maintain any illusions: branding dollars are not going to move massively into display just because we enable auction based buying – either via private exchanges or open exchanges.

Branding dollars will only enter display either upon absolutely necessity (i.e., critical mass of affluent and/or otherwise desired audience segments become extinct in TV and/or print), or if display can offer something novel and innovative today’s preferred branding channels cannot – a compelling ‘killer application’ only available in display.

Needless to say, the optimal outcome for display is a combination of both scenarios: current digital media revolution continues on trajectory, complemented by premium publishers’ willingness and courage to transform their largely commoditized display offering to include the ‘killer application’ that will spark serious brand interest and spending in display.

So what is the ‘killer application’ for display? In a speech in 2011 titled “Eyeballs or Minds – the Dilemma for Advertisers” to the Finnish Marketing Association, Enreach introduced its proposal for the ‘killer application’. Since the speech was given less than 12 months ago, a large part of Scandinavian premium publishers have embraced the presented model: to infuse their premium display ad impression inventory (i.e., the creative canvases in favourable advertising contexts that publishers own – along with the audiences who engage with these canvases) with real-time market research (i.e., how different audience segments respond differently to different versions of the advertising message?)

The former has always been core strength of premium publishers; the latter requires new real-time audience analytics thinking, but could not wish for a better application context that that found at premium online publishers.

The Enreach proposal is therefore to transform today’s primitive ‘blind CTR’ obsessed display campaigns into real-time market surveys with audience insights – just executed in the form of display campaigns. By doing so, the discussion becomes less about the number of undifferentiated clicks (although the click – just not in its ‘blind’ form – remains an important KPI) and more about understanding consumer behavior and preferences, and being able to not only optimize for ‘blind clicks’ (a campaign optimization method frequently proved to misguide campaigns to undesired outcomes), but to optimize for the right message being delivered at the right audience in the right context – resulting in the right clicks.

The backbone of transforming display campaigns from 'blind CTR sales' into real-time market surveys, is all about enabling for analyses (for instance) of audience composition of heavy clickers versus non-clickers, of various audience segments' engagement with copy ‘A’ versus copy ‘B’, and so on. It is about enabling such rich audience segment analytics within a display campaign. It is the difference between selling advertising space, and selling intelligent advertising.

Allow us to elaborate a bit more, and also to explain why – until now – we have not mentioned the word ‘targeting’ at all. Intelligent advertising is more than audience targeting, although bespoke segment targeting with real-time inventory forecasting is naturally part of the mix. Intelligent advertising knows who (offline demographics and online behavior) is exposed to a marketing message, for how long, in what context, and with what kind of a response? It also knows which audience segment(s) barely respond at all. (And all of this even when the campaign is entirely non-targeted, i.e., simply site targeted.)

Intelligent advertising informs the advertiser, forming a continuous 'learn and reapply loop' that acts as a platform beyond improving campaign performance; all the way to informing the advertiser's marketing mix. Intelligent advertising is a new way of thinking about display advertising that takes advantage of the connected nature of display - and transforms every campaign into a real-time market survey.

This is something TV (at least not yet) or other channels cannot compete with. This is unique, value adding, and a reason for brands to use display more. I'll leave you with the thoughts of my colleague, Brian Jacobs, who outlined this very thinking from his aforementioned speech in 2011:

“If advertisement ‘A’ delivers more clicks than ad ‘B’, but these clicks lead to little time being spent with the brand, are from an undesired audience, or simply lead to no future action, whereas ad ‘B’ delivers fewer clicks, but reaches and engages with the right audience, who then go on to take some positive action, then that learning is invaluable for the advertiser.

Data analytics allows us to have these conversations; to learn more about what works well, and what works less well, and then to do more of the former. Online advertising becomes more effective as a result, leading to a healthier and more sustainable business.” (“Eyeballs or Minds – the Dilemma for Advertisers” to the Finnish Marketing Association (Brian Jacobs, Enreach)