Evolving Toward Targeted Display Advertising

Let me take you back to a time long forgotten, a time in which online advertising was just emerging from the muck as a living, breathing organism. Your business may not hearken back to the protozoan era of the 1980s, but your online advertising strategy is somewhere on a spectrum that stretches from your first online brochure to the behaviorally targeted campaigns amped up on data and technology. With the introduction of dynamic creative, a viable evolutionary model has emerged.

Let’s identify where you are in your evolution as a behavioral marketer and map your journey to becoming the Über Man.

Homo Webilisite: Web Site Man

Our most basic evolutionary stage is marked by our first display “ad” in the online marketplace: a brochure-like Web site designed to make our business look respectable. No real visitor intelligence is brought to bear, with most of these sites being little more than self-aggrandizing copy coupled with a snazzy logo and stock photography. The only people who visit our site are those sent there by our sales team.

Homo Searchenginus: Search Engine Man

In an effort to generate more visits to our site, we begin to make our site more appealing to search engines. Through keyword-laced copy and backlink building techniques, we attempt to look more important to the search engines than we really are.

This step in our evolution requires some thought about the keyword terms our visitors might use to find our business. Too often, we choose only those terms that get us on page one, regardless of their relevance. At this stage, it’s all about traffic for traffic’s sake.

Keyanderthal Searchilis: Paid Search Man

Our first venture into the behavioral marketing era of our evolution is the use of search advertising. Here we begin to bid on keyword phrases that reflect what an interested prospect would search for.

Many of us will never evolve past this stage because we’re using the same Web site strategies developed in our Homo Webilisite stage. We get the clicks, but business doesn’t pick up.

Keyanderthal Convertis: Conversion Man

Once we’ve evolved enough to gain an understanding of important conversion techniques, we’ll have created a marketing machine that generates more revenue than we spend on keywords. This is considered a key turning point in the evolutionary process.

At this point we begin crafting and using tools. Analytics, A/B testing, and multivariate testing equip us with the information we need to turn clicks into revenue. Because business is better, we hold our heads higher and begin walking upright.

However, Keyanderthal Convertis can find its evolution halted. Because search traffic is relatively limited, we’re likely to find ourselves stagnating. There are only so many people searching for the terms that convert, and the competition for these terms grows in this stage.

Aaron Finn, president and CEO of AdReady underscores the competition problem by noting that, at one point, there were 990 businesses bidding on the keyword “coat.” Needless to say, the price of getting your ad onto a SERP (define) when someone types “coat” was high.

Keyanderthal Displayis: Contextual Display Man

To deal with the plateau in our search marketing, we begin making cave paintings, turning to contextual display advertising. Here, we look for our keywords on the pages of other Web site, and place our cave paintings on those pages. But everyone seems to be an art critic.

We find that we can generate many more impressions, but fewer people click on our display ads than clicked on our search ads. We must look for better painters among the caves of our people. Fortunately, many have opened creative agencies.

At this stage in our evolution, we begin to communicate with guttural words, such as “GIF” and “SWF.” These terms represent static banner ads and rich Flash ads. They are served by the Google Mammoth, as well as the Saber-Toothed Yahoo. These ferocious beasts can help us target by keyword and the prospect’s geographic location.

We’re also beginning to realize that some ads work better than others. We try a variety of creative approaches with our ads and look at the results.

Which ad creative generated the most clicks for a given keyword phrase? Which generate more traffic to our sites through increased awareness? We have begun to learn.

Creating a variety of ads can get expensive for small and medium-sized businesses. We can spend a lot of time and pay for a lot of impressions while testing creative variations.

AdReady doesn’t want this to be a barrier. It provides display ad templates and tells us which are proving most successful in the display space. Through its online tools, AdReady lets us customize one or more ad templates. The service then generates 14 versions of each ad: a GIF and Flash version in seven IAB standard sizes. This expands the number of sites we can advertise on. AdReady will submit our ads to the ad networks and show us the results of our efforts. This is a great tool for those of us who still have a protruding brow.

There is less competition in this stage of our development. Finn highlights the opportunity by pointing out that in 2008, there were between 1 million and 1.5 million keyword search advertisers, yet there were just 44,000 advertisers using display advertising.

He believes that as more advertisers move into the display space, more publishers will begin to provide places for those ads on their sites. Publishers will make more money as advertisers push cost per impression rates up, and advertisers will get access to more prospects through this expanded inventory.

Our Evolutionary Journey Continues

So far, I’ve documented the early stages of targeted advertising. While the implication here is that the early stages are less sophisticated than later stages, each has an important role in the advertiser’s journey.

Next time, we’ll examine the fossil record further, following our evolution through Adnetworkus Cro-Magnon, Homo Pixelus, and Homo Optimizapien. We’ll identify some highly evolved strategies, including a new video ad optimization service from Teracent.

Thanks to Aaron Finn of AdReady and Chip Hall of Teracent for helping me analyze the bones for this column.