Search marketing agencies are playing a bigger role than ever in the display ad ecosystem. The trend is clear in the volume of display media being bought by search agencies, in the executives now running some of those firms, and in the SEMs’ engagement with ad exchanges.
Speaking at a Yahoo-hosted event in Chicago last month, Ramsey McGrory, who heads up the Right Media ad exchange, unveiled results of a closely-watched pilot program with several demand-side platforms. He said the pilot, which allowed DSPs to engage in real-time bidding on the Right Media marketplace, had been a success based on improvements in targeting efficiency, cost efficiency, and frequency control. That much was expected.
He also announced Right Media would expand its pilot beyond DSPs to include search marketing firms and software companies. He named Efficient Frontier, SearchIgnite, Kenshoo, and Marin Software as early participants.
Speaking later with ClickZ, McGrory said search agencies were a natural fit for Right Media.
“The SEMs are an interesting segment to engage with,” he said. “They’ve got a technology-orientation which is what you want when you move into a bidded display environment, and they’ve got some great, trusted relationships with advertisers.”
Additionally, search firms have heavily sowed their clients’ websites with tags in order to measure the impact of search all the way through sites. That generates audience data that can easily be leveraged to retarget one-time prospects through display media.
Indeed, many search-centric agencies are already engaged in display ad retargeting through ad networks and exchanges.
“Search retargeting and site retargeting are standard operating procedure for us,” said David Karnstedt, president and CEO at Efficient Frontier. “We’ve bought a lot of inventory off exchanges over time. We’re already a certified real-time bidding client through Google. Now we’ll do the same with Right Media.”
Karnstedt, formerly SVP of North American sales at Yahoo, represents the start of what could become a trend of large search firms becoming major players in display media buying. He took the reins at Efficient Frontier one year ago, and within a week of his hire the agency had moved into display.
Formerly SVP of North American sales at Yahoo, Karnstedt’s transition to Efficient Frontier is an example of how large search firms are equipping themselves to become major players in display media buying. He took the reins at Efficient Frontier one year ago, and within a week of his hire the agency had moved into display.
“I came from Yahoo clearly having seen the power of the two combined,” he said. “Rather than a search platform we’re more of a performance marketing platform. Wherever you’ve got a lot of inventory available through an API we’re going to be there.”
Display media is not a slam dunk for search agencies, however. For one, it’s far more complex than search, which has a straightforward set of variables that are manipulated to drive performance.
“The SEMs are going to have to either learn the display market, or hire someone like David Karnstedt that has spent time in the display market and bring the two together,” said McGrory. “Our engagement with SEMs will be about getting the basics right.”
For agencies rooted in search, that will mean getting comfortable with unique pricing strategies that characterize the display market.
Dapper is a display ad start-up that has made a special point of reaching out to SEMs, says CEO James Beriker. Beriker notes that brands that have had success with search have over time seen their ROI plateau and are now seeking new opportunities.
“Dapper appealed to large SEM spenders that were hitting the ceiling in terms of performance,” he said.
Dapper’s platform indexes an advertiser’s products and identifies media opportunities in behavioral targeting, retargeting, as well as context, location, semantics, and past performance. According to Beriker, the company is now testing a self-serve version of its product with five interactive agencies. Three of the five beta clients are search agencies. He says that makes perfect sense.
“It’s much more like search,” Beriker said. “We capture the intent. Based on intent we show a listing of products. We optimize that based on conversions to find like people.”