Skip to main content Skip to Footer

LATEST THINKING


How to maximize new advertising models

Learn about today’s increasingly popular digital advertising models to develop a strong marketing strategy that maximizes your media spend.

Overview

In many cases, having a wealth of options is a good thing. But when you have too many options to choose from, how do you know that you are making the right choice? This is the situation that many chief marketing officers (CMOs) find themselves in when it comes to the array of advertising models available in today’s digital media market.

Savvy marketing leaders understand the importance of digital. No longer an add-on or an afterthought to a media or marketing strategy, digital is often the foundation of efforts to reach consumers and differentiate companies from the competition. As such, it is key for marketing organizations to get their digital strategies right to maximize the potential of these new models.

Marketers do have a wealth of opportunities to consider—from Programmatic Buying and Real-time Bidding (RTB) that automate both the targeting and buying of digital ads, and Convergence Buys that bring efficiency across screens, to Pay for Performance (PFP) buys where advertisers only pay when certain metrics are achieved. What must CMOs know about these advertising models before they decide where to investment?

Background

As CMOs look for lower cost, larger scale, faster speed to market and more granular targeting, understanding more about new advertising models is critical.

Real-time Bidding
RTB, or Programmatic Buying, are catch-all terms to describe the growing use of automated tools to procure online advertising, one impression at a time, at scale, based on the unique characteristics of the ad’s recipient. RTB uses numerous technologies—demand-side platforms, data management platforms, ad exchanges and agency trading desks.

While RTB has promise, there are issues that need to be considered. Advertisers using RTB lack detailed knowledge about their ad. And improper ad delivery can result in wasted budget, or worse, brand erosion caused by appearing adjacent to irrelevant or inappropriate content. What’s more, RTB platforms, especially agency-owned trading desks, rarely share the actual price paid for impressions at auction with the advertiser. This way, advertisers have no basis to verify the accuracy of media invoices.

Convergence Buys
Convergence buying provides the opportunity to purchase media packages that consist of combined inventory from traditional and digital channels. Negotiating with one media owner rather than several media publishers clearly has its benefits, including cost efficiencies and greater integration, synergy or consistency across the ad buy.

Advertisers can achieve economies of scale, reaching their target audience across all of the media owner’s properties at once. There is also the opportunity to shift inventory among channels.

Packages can, however, be sold for one price across screens. While this makes sense initially, further investigation is needed to understand if each screen in reaching the target audience equally well in order to assess whether valuing the screens equally is warranted.

Pay for Performance
Pay for Performance (PFP) buying began with pay per click and pay per action. It is evolving rapidly, allowing marketers to buy visits, leads, quotes, and even bookings. This buy is ideal for advertisers looking for specific results or a conversion, and is attractive as the risk of converting an impression to an action belong with the PFP network. Customers that receive a well-executed PFP ad should have a smoother, simpler discovery task.

To know if conversion buying is cost-effective, advertisers should evaluate whether direct cost per action from a performance network is delivering better results than buying media through more standard models. Because current implementations of PFP are largely focused on social, local and mobile markets, many PFP networks are category-specific and often regionally fragmented, which may be less beneficial for national advertisers.

Analysis

Once marketing executives understand these new advertising models, there are important tips to follow to make the most of the investment:

Real-Time Bidding

  • Understand the cost charged relative to the market cost of the inventory.

  • Know what data sources are being used to target ads precisely.

  • Understand how important contextual relevance is.

  • Find out how the quality of ad inventory is verified.

  • Understand the true value that trading desks bring to justify their fees.

Convergence Buys

  • Know if ads will be equally effective in offline and online channels.

  • Determine which components of the package can be bought cost effectively in the open market.

  • Explore opportunities to pursue “convergence” beyond the purchased ads.

Pay for Performance

  • Do the initial groundwork.

  • Get local.

  • Know your customers.

  • Be seen.

  • Verify, test and learn.

For every type of media buy, rigorous analytics is essential. Tracking and verification technologies help the marketing team assess buy performance, influencing changes to the online display strategy and informing the best ways to revise media buying parameters to improve targeting and efficiency.

Recommendations

Digital technology can enable media providers to offer more compelling, targeted and efficient ways for advertisers to purchase inventory. It can also provide the advertisers with analytics and insights to determine which of those new buying structures is proving most effective. This is why the new digital media buying models are gaining popularity. In fact, in the not too distant future, TV and other ad placements may start to be bought and sold in the same way as digital media—all tied to even more rigorous targeting and delivery analytics.

As confusing as the range of digital media buys may appear at first blush, advertisers can leverage them to their advantage by asking the right questions and having the right tools to determine whether the deal is right for their business.