Everyone knows that we can't get enough of acronyms in ad tech. In 2009, it was the year of the DSP (demand-side platform), which has enabled buyers to get better ROI out of display ads. In 2010, we learned how RTB (real-time bidding) allows advertisers to precisely target audiences in real time. And in 2011, we progressed to the DMP (data management platform), which helps advertisers manage and report audience data across the media plan. So what's next for display advertising in 2012? It's got to be encapsulated in a three-letter acronym, right?
The acronym for 2012 will be ILD, which stands for impression-level decisioning.
What is ILD you ask? Advertisers have been using ILD on ad exchanges by determining the consumer behind an individual ad impression and intelligently deciding whether or not to buy it, how much to pay, and what creative to show - bidding only on those impressions likely to perform against an advertiser's specific goals. But in 2011, advertisers started to experiment with porting ILD from exchanges to the old-fashioned and much larger domain of guaranteed media buys. In 2012, I predict that we'll see leading-edge advertisers run ILD across the entire media plan, and across all channels. This is a game-changing way of thinking that is likely to bring big efficiencies to display advertising. So let's break it down in more detail.
A major North American automaker wanted to generate new leads and increase brand awareness through a display campaign featuring three distinct calls to action: 1) configure a car, 2) request a quote, or 3) locate a local dealer. In prior campaigns, layering our digital marketing management platform's automated impression-level decisioning across exchange-traded media drove better performance and greater efficiencies. We recommended adding additional campaign flights leveraging decision automation across guaranteed buys from three premium publishers to increase the volume and quality of leads. Our platform valued and bought only the impressions predicted most likely to generate a consumer response, resulting in a 60 percent rise in actions and significant increase on return on ad spend. Since guaranteed buys are sold for a fixed price (with or without the ability to layer ILD), this essentially meant that the automaker saw 60 percent more actions from the same spend.
Advertisers are interested in driving global efficiency across all of their digital marketing spend including the full spectrum of tactics - site takeovers, fixed placements, DSPs, ad networks, and endemic sites. The trick to making ILD work outside of the exchange-traded environment is finding optionality, which traditionally hasn't existed in the world of guaranteed buys.
Getting this done is easier than you might think. Advertisers can go ahead and negotiate their guaranteed buys the same way they normally would, but with a twist - negotiate the right to run the inventory through their DSP with so-called "passback rights." Then, using ILD, place ads only on the impressions most likely to convert, and pass back the unused impressions.
For larger advertisers with multiple divisions or product lines, another option is to serve ads on 100 percent of the inventory in the guaranteed buy, and intelligently allocate impressions across business units, products, or creatives. For a large brand it might be the preferred strategy since it empowers them with access and control over a large pool of quality impressions with the optionality to control what each consumer sees. Consider a major CPG company with food, beverage, personal care, and household product lines running a guaranteed buy across a media plan with 20 premium sites. By running ILD, the 18 to 24 year-old male college student in New York City would be shown a two-for-one offer on instant noodles, versus the 30 to 45 year-old mother in Houston who would see an offer for a pre-packaged fruit juice that fits easily into a lunch box. And the browser who recently visited the e-commerce store would receive a "buy it now" remarketing offer for a browsed item rather than a general brand awareness ad.
Running ILD across guaranteed media plans can bring huge efficiencies to digital marketing. There are business issues to be worked through for sure, both between buyer and seller and within the buyer's enterprise. What do you think? Are you ready to enter the brave new world of ILD?
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Adrian Tompsett has over a decade of experience working in and with technology companies in business development, sales, and, as an early stage venture investor. At DataXu, he manages third-party technology and data supplier relationships, inventory supply partners, and indirect sales channels. Prior to DataXu, Tompsett was executive director of business development at ChoiceStream, a provider of personalization and advertising solutions for online retailers. In this capacity, he led ChoiceStream's European business expansion and sales management. Tompsett has also held positions at YankeeTek Ventures, Dell, and Grey Advertising. He is a graduate of Dartmouth College and the MIT Sloan School of Management.
March 19, 2014