Banner Ads on Google


So people have been talking about the idea of Google shifting from simple search advertising to a combination of search and banner ads for a long time.  Rumors have circulated for as long as I can remember and there have even been some occasional more formalized news-worthy pieces indicating that the idea has validity.


 


Shankar Gupta reported in Online Media Daily today that “…Google Appears to be testing a new display ad network that will sell ads on a cost-per-thousand impression basis, according to a report that surfaced this week on the blogosphere.”  The blogger, John Chow wrote:


 



“Google offers display and video ads to AdSense publishers on CPC and CPM format.  Google has been hand-selecting sites that they want to put in front of Fortune 1000 companies … the only way to get into the display network is if Google invites you.”


 


John’s supposed participation in the program prevents him from sharing too much detail, however, he indicated that he was advertising on The Techzone (http://www.thetechzone.com) through the program.  I searched the site’s source code and could not find any ad server redirects other than Google’s ad sense advertisements.  All image ads are being directly served by The Techzone:

<iframe src=“http://www.thetechzone.com/banners/XL_Memory_160x6001.html” width=160 height=600 hspace=
vspace=0 frameborder=0 marginheight=0 marginwidth=0 scrolling=no align=no>
</iframe>

 


Now, personally I do happen to know that this story could have some validity to it.  In Q1 Google was doing some investigation into publisher ad servers.  They were putting out feelers as to what features were specifically available from current solutions on the market – “seeing what was out there.”  They were interested in things like inventory management control, forecasting, inventory allocation and campaign management.  The de factor motto of “buy-it vs. build-it” was thrown around.  More than enough time has passed since then for Google to have either acquired, integrated or even developed a publisher ad serving solution and they could easily have since initiated a beta stage implementation like that which has been described by John Chow and now reported in the Online Media Daily.

What would all of this mean?  What would the implications of Google serving banner ads have on the industry?


 


Adwords is the dominant search mechanism in the industry.  Google is certainly the number one search advertising medium for advertisers.  It’s the first place you buy when you put search into your plan, and you spend the most there.  If you are an SEO provider, you integrate with Adwords before you do anything else. 


 


If Google is to introduce banner advertising it would make sense that they will have a very strategic approach and a costly one for the advertiser.  We’ve watched them systematically increase the price-point of search.  It is now more expensive to buy search terms on Google than on any other network.  And it becomes incrementally more expensive the longer you run your campaign and more successful you are.  See some of my other posts, like Banners vs. Search, where I talk about this further.


 


I can definitely see how the beta program would be reserved for select advertisers and the CPM rates would be held at very high CPMs like John Chow mentions in his blog: “The goal being to sell these big companies display and video ads at a very high CPM – unlike the AdSense network, the display network is 100% CPM based.”  If the program gets going with a core base of premium advertisers at a high rate it will establish precedent of high rate levels for when the program is opened up to everyone else.  Banner advertising on Google could actually pull premium advertising rates back up across the industry as other content providers see advertisers demonstrate a willingness to spend higher CPMs on Google – that is if Google is successful.  Interesting impact.  Afterall, if you’re willing to pay more to advertise on Google, why not for the most premium placements on WSJ or ESPN or other top-level sites?


 


All of this is predicated on one thing, the response rates have to be there.  Google’s banner advertising program, dubbed “Google Display Advertising Network” is not banner ads on the Google Search Engine but rather across the AdSense network.  So it’s not like we’re talking about contextually placed ad banners on the search pages like on Yahoo Search.  Will the click-thru rates be there?  I guess you have to wonder whether the click-thru rates are exceptional on the sites in the network to begin with.  And then of course you have to wonder if the advertisers that are to participate in the program are capable of good response rates, of generating creative capable of good response rates, and so on.  There are a lot of variables in the mix here that need to happen for Google to be able to maintain the high CPMs it may start with upon releasing such a program.  Like anything, market forces will eventually push something like the Google Display Advertising Network to where it should be.  CPM rates may stay high or they may fall in line with the rest of industry and CPC could be introduced for the lower-valued inventory.  Google could even acquire more inventory and become a significant CPC network that rivals the other networks – even beginning to offer things like behavioral targeting – oh boy.  Integrate the reporting with Google Analytics and you have some serious competition. 


 


But for a while, in the more immediate term if all of this is really true and happening, Google could demand a premium CPM for banner advertising that advertisers would potentially be willing to pay that could drive a wild stock price onward and upward!

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Search and Networks: Better Together – I Think So!

 


Mollie Spilman, Advertising.com’s Chief Sales and Marketing Officer interestingly suggested a holistic media approach in her iMediaConnect article, Search and Networks: Better Together.  She urges an advertiser to combine search and network advertising together to create a more powerful, cohesive campaign.  Her position is that with the rising costs of search (see my post Banners vs. Search), banner advertising can be a good offset to balance the investment.  But her really convincing argument was found in the following statement:


 


“…while search is limited to generic text listings, behavioral targeting enables you to follow up with a more compelling sales message, using ads that are tailored to the user’s online activity. Rather than simply hoping that the consumer will return to your site after researching or comparing prices across the net, you can take action– serving up your most powerful message or promotion all across the network.”


 


So if you combine BT with search you can tag someone the first time they come through from search and then target them in the future based on that search.  Provided that you are strategic enough to couple both the cost of the search and the cost of the BT back to the eventual sale, measuring the CPA accordingly, you may find the approach to be more effective than just one or the other on their own. 


 


Now, Mollie’s shameful plug of a network as the Chief Sales and Marketing Office of Advertising.com is totally acceptable.  But I would love to see some data behind this idea as it is compelling.  It would be hard for most advertisers – let alone many agencies – to track and calculate the CPA under this method, but if someone is tagged from the initial landing page based on the search term, recognized later through the BT recognition process, retagged, and then tracked through a conversion process you could have a pretty solid argument.  Would it be a cost effective acquisition?  It would certainly be an accurate measurement of the acquisition.  It would be a more accurate depiction of the holistic investment then just looking at search or just banner advertising with or w/o BT.


 


You see I have always said that the technology is here.  My blog is committed to finding the technologies and then proposing other ways to using them to do more.  So here goes….  First party ad serving can do this too, but we may be able to eliminate a step or two in the process. 


 


Let’s assume that when someone lands on the site from the search term they are cookied with a first party cookie rather than a third party cookie – like the Advertising.com cookie.  Then let’s use first party ad serving, like DirectServe to do behavioral targeting, using the first party cookie instead of the third party cookie.  What will happen is that when the browser is recognized the next time they are encountered, the cookie recognition will be based on the advertiser’s own first party cookie and the ad served will still be event-based.  So far things are pretty much the same.  But when the individual clicks on the ad and is driven to the site, the advertiser can read their own cookie and will know the search term that generated the lead, the banner that generated the click and the site that generated the lead.  So when it comes to calculating the CPA, all of the data will be aggregated into one place and will be readily available.


 


If we build off of Mollie’s model – which I originally proposed, not Mollie, so don’t shoot her – you would have to calculate the ROI from the search campaign, calculate the ROI from the network banner campaigns and then synchronize the two with some kind of algorithm.


 


I am liking this idea a lot.  I think that Mollie is right here.  I think that a great way to bring down the rising cost of search is in fact to combine it with BT banner advertising.  And maybe using a network would be an affective medium since the inventory will be vast and the CPMs are lower.  Premium networks also do get some good inventory as I have mentioned in the past.  But we definitely need to be able to have a way to calculate the combined CPA of the lead which comes first through search and subsequently through BT and the banner.  I’ve got one easy way to do it.

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What’s the Big Cookie Deal? The Conspiracy and First Party Ad Serving.


What’s all the hype about the cookie?  Nobody wants one.  People are willing to pay money to avoid getting one and even more money to get rid of one.  But why is a cookie so evil?  Bottom line, nobody cares to know why anymore.  It is too late for explanations.  I love how ‘advocates for the cookie’ believe that there is still hope and that we just need to explain the benefits and people will calm down.  It is too late to educate the public.  You can’t stop the mob from running for the door after someone yells “fire!” in a movie theatre.  And you can’t convince people that the cookie is harmless or that it has benefits after ad-ware companies like Webroot have spent millions telling them otherwise.


 


We know there will always be a time and place for cookies.  We know that cookies have their use and value.  Granted third-party cookies – a cookie written by a third party ad server – are getting deleted at an increasing rate.  40% of the time according to Jupiter Research.  But first-party cookies are not.  Retailers don’t have that much to worry about.  CRM systems are relatively safe.  Ad-ware software does not delete the Yahoo! cookie on my computer that takes me directly to my stock portfolio or my bank cookie.


 


But what about those third party cookies?  Those are the cookies that tell us how our online advertising is doing.  We invest in online advertising now and we spend money advertising through third party ad servers.  Remember the advocates who said that we need to educate the public about cookies?  Let’s educate ourselves instead.  Let’s examine the actual cookie-benefits that we are losing as marketers in contrast to the benefits lost by the third party ad servers – the dominant ones anyway.  Get those wheels turning, someone else’s agenda might be at work here…you have options that have not been illuminated before now.


 


Ad-ware programs remove known cookies.  Software publishers know the dominant third party ad server cookies and they are continuously looking for and deleting other ad-related cookies.  If you serve ads through a third party ad server, and that provider’s cookies are known by ad-ware publishers, that cookie will likely get deleted.  The result is that you will lose the benefits associated with third party ad serving cookies.  You lose the ability to accurately count the click-thru and apply closed-loop tracking.  You can’t measure the view-through.  You can’t target your ads, serve unique banners or story-board a banner sequence.  You lose all the benefits of third party ad serving with the exception of centralized campaign management and impression counting!


 


But what about the third party ad servers?  What do they lose?  The dominant third party ad servers (like DoubleClick and Atlas) lose the ability to offer you everything described above.  But they lose something else, perhaps something of greater value to them.  They lose the ability to place a persistent cookie on a browser and send it out onto the internet like a satellite into space that is always reporting back.  The persistent cookie survives beyond your ad campaign.  It is this cookie that enables an IP address to be profiled and tracked over the life of that cookie – perhaps over weeks, months or even years.  The persistent cookie is the data-gathering vehicle that enables these ad servers to create great knowledge about web users.  The dominant third party ad server owns its customers’ performance data.  It provides customers with aggregate reports but keeps the raw log files for itself.  It keeps the cookie data.  It keeps the data that extends far beyond your advertising campaign.  Ad-ware takes all of that away from third party ad servers. 


 


So let’s get back to your agenda and forget about third party ad servers who are obviously not focused on serving you.  You can reclaim and preserve the cookie-benefits of advertising online by changing cookies, perhaps frequently.  Remember, Ad-ware programs remove known cookies.  So you need to use unknown cookies and then change them before they become know.  How do you change cookies?  You have to change the domain from which you serve ads and write cookies.  How do you do that?  You have to use an ad server that is capable of and willing to use their ad serving engine to serve ads through any domain as opposed to their own; an ad server that is willing to sacrifice the data that they once valued so dearly.  You have to use an ad server that supports your agenda and s will to be a first party ad server!


 


The dominant third party ad servers have been telling you what you can do and how you can do it since the beginning of online advertising.  Has it ever occurred to you that you could set the terms of your ad serving relationship?  Internet users want to take back their desktop, maybe it is time for online marketers to take back the value of ad serving.

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5 Signs its Time to Fire Your Ad Network – But First Push Them To Work for You

When Melissa Gluck Published her November 20th article 5 Signs its Time to Fire Your Ad Network in iMediaConnection, I was sure we would hear about some of the recent big block debacles like when a major advertiser’s ads, which were run across TACODA’s network, showed up on YouTube in association with racey content.  This scenario resulted in the major advertiser having their high quality ads displayed in conjunction with tasteless consumer generated media.  Not to say that everything on YouTube is tasteless, because it isn’t.  But these instances were associated with racy content and TACODA apparently did not exercise any controls when running their clients’ ads across the YouTube network when they first introduced YouTube into the TACODA network.  The point is that when running on a network, an advertiser does not always have control over where their messages will appear.  In this instance the advertiser found out after the fact and, of course, the ad was later pulled.


 


Revenue doesn’t correlate


 


Melissa begins to introduce the idea of revenue based on performance factors like CPA, CPA, lead-gen and post-click results.  In an earlier post, Make Your Media Buy More Effective – But How? I discussed Brad Bender’s iMediaConnection article on Make Your Media Buy More Effective in which he presents the idea of sharing your media goals with a site or network.  Perhaps what Melissa is missing is the concept of shoring up your goals.  If you can define a set of goals and then communicate to the network what your defined metrics of success are, then the network knows where they need to be to perform.  At least then if they don’t hit the mark, you have a baseline for discussion in terms of ‘firing them.’


 


International Traffic


 


When you conduct media buying on a network, treat it for what it is … secondary and tertiary inventory.  You are not buying on a site directly and therefore you need to exercise some strategy to acquire the better, of less-quality inventory.  The lower-dollar CPMs can be balanced with some targeting – GEO for one is a simple means to keep in domestic.  Insist on it.  Then use something simple like Google Analytics to track and confirm it.


 


Uneven Delivery


 


I think Melissa is making a good and obvious point.  Networks need to be closely monitored.  You are dealing with the redistributors here and therefore need to look over their shoulders.  When you require counter measures like GEO, frequency caps, Behavioral targeting, storyboarding, etc, check your CPMs.  You may be better off buying on sites directly where you get the better inventory.  Not all networks pay off.  Granted the top-tiers like Bluestreak, TribalFusion and 24/7 will perform for you, but there are plenty of lower-tier networks that are really meant for the CPC, CPA buys.


 


Lack of Transparency and Accountability


 


There is a very simply solution to this problem.  And it is one that seems to only be practiced by smaller more aggressive firms.  Negotiate your buys based off of your ad server’s numbers.  Make it your agency’s policy and stick with it.  You will get flack for it but plenty of agencies get away with it all of the time.  Networks will require testing of the ad server but it happens all of the time.  For example, Burst network insisted on testing TruEffect because an agency insisted on paying off our numbers.  They said that DoubleClick was within 6% of their numbers and that the average was less than 10%.  At the end of the test, TruEffect deviated by 1.79%.  Now that agency pays Burst all of its bills off of TruEffect’s numbers.  Give that a shot.


 


Improper Click Attribution


 


This is tougher, but also possible to overcome.  An ad server can assign a unique tag to each network and site that displays an ad or has a click-tag.  This will allow for a unique identifier for the subsequent cookie which will track back to the lead.


 


If the advertiser user DirectServe, first party ad serving from TruEffect, then each time a banner is served the site and banner serve can be written into the cookie in sequential order and then, when the unique user arrives on the home page by direct means as a view-through (i.e. they come through the home page on their own) they can be attributed back to the last banner they saw on the last site they visited)  The last site responsible for touching the user is the one that will get credit for the lead using DirectServe.


 


You see Melissa’s article did a great job for setting up five evaluative criteria for determining when a network should be fired.  But what needs to be taken into consideration is why people are using networks.  Networks should be aggressively managed not held to a test and left out to dry or fired.  They need to be told how to perform and most of them will – especially if you budget warrants response. 


 


Agencies and advertiser generally use networks for two reasons.  (1) to get direct response results (CPC, CPA leads) under which case they are less concerned with inventory quality and more concerned with lead volume, or (2) low dollar high volume impressions advertising.  The former is not what Melissa was addressing.  The latter is what she was focusing.  When you look at those people you have to ask yourself why they are buying on a network. 


 


Bottom line it is a matter of efficiency and speed.  Network buys for impressions is budget-filler and not primary to the buy initiative.  It is not intended to be primary strategy of a media campaign.  At least it shouldn’t be.  Direct buys are where the thoughtful buyer will focus and networks are where the secondary effort will go to fill in the gaps. 


 


Melissa’s comments and the additional information provided to you in this post should be taken as a good way to plan, utilize and evaluate your network relationship in context.

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