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Display Advertising’s Sea Change: It’s About Audiences, Not Publications

Posted July 3rd, 2011 by Andrew Goodman

2011 is the Year of Remarketing, thanks in large part to Google validating and popularizing the space, and creating a stable and easy-to-interpret platform for showing banner ads to members of a set audience online. By “audience,” we’re talking about such a highly targeted group of people who have “raised their hands” in some way — often by stopping by your website (but it could be extended to things like viewing your YouTube video anywhere on the web, including as shared inside Facebook). That’s not “permission” in the classic sense of “opting in” to receive targeted messages, but it works the same way. By “audience,” we are talking about an audience the advertiser themselves builds and maintains with the aid of the ad platform provider — not an audience built by the publisher and sold by the publisher with the claim “well, these people like our type of content on vacation properties, so you ought to expect them to like your vacation properties ads.”

The difference in mindset shifts from *where* can I place ads online that will be likely to convert well for my type of prospective customers, to *who* is already much more likely to convert based on what I know about them (a past customer, has visited a lot of volleyball related websites in the past year, etc.). If that user is cookied, and I know a fair bit about them (anonymously, but with pertinent behavioral information), then I don’t need to care all that much what they’re doing or what site they’re on. I can show them ads pretty much anywhere, and measure the results of that type of advertising.

How this works “on the ground” is interesting; Google advertisers, in particular, are going to have to unlearn some old habits. Many Google advertisers had a built-in suspicion of the so-called “content network,” so were hyper-vigilant about excluding certain “irrelevant” publishers from showing their ads. When “managed placements” became available, many advertisers were all over this, assuming that a hand-built portfolio of “relevant websites” would be the safest and best targeting method. Sometimes it was, but that doesn’t always scale.

So now, let’s say you’re poring through your stats for a Remarketing campaign. You’re getting good results for an audience you’ve defined: “people who have made a purchase from your site in the past 180 days.” Turns out, repeat purchasing is much more likely if you target those folks — duh — with ads. To be less annoying, you could create a custom combination that avoided showing ads to people who just bought less than a month ago. It’s getting pretty sophisticated, right? Sneakily so, as it looks simple on the surface… but the targeting ability is improving markedly.

Now you look at what publications your ad converted on. And lo and behold, they aren’t targeted. Our target customer — let’s call him Roadrunner — is going about his day at Vimeo.com, IronMountainDailyNews.com, and a whole bunch of other random websites he likes, — and is seeing your ad for Delicious Bird Feed. The Roadrunner buys because the Roadrunner realized he needed a refill of the delicious bird feed. The “relevance” of the content daily news website for Iron Mountain, MI is, well, not relevant to the Roadrunner’s decision to purchase that day.

So you want to make sure that some newbie doesn’t get into your advertising account, excluding websites in the display network willy-nilly using the “eyeball method” (the site doesn’t “look” relevant).

Of course, another way to describe the shift is that we’re heading towards an era of “behavioral targeting”. To date, this has been in a building phase, but it’s set to take off.

Out in the wild court of public opinion, debate will continue about these ads that “seem to follow you around.” Yes, it can be creepy. And yes, the main pushback against this superior targeting will be around privacy policies. There is going to need to be a multi-stakeholder dialogue on how best to strike a balance here.

With the advent of new Google initiatives like Interest Categories (*not* similar to Facebook’s, but audience-based) and of course, Google+, we’re hurtling quickly into the era of the audience… not audience as a publisher defines it, but rather, how advertisers and users (more precisely) define it in a tighter (but mediated) ecosystem.

Markets as conversations, anyone?



4 Responses to “Display Advertising’s Sea Change: It’s About Audiences, Not Publications”

  1. Dirk says:

    Google’s remarketing capability in AdWords has been remarkably effective. I’m seeing cost per conversion about 50% lower than the search network. Of course, the volume is 10% of the search network. Beep beep!

  2. Ewan says:

    My concern with all this is that the privacy issues appears to be spiraling way out of control without there being enough pressure on Governments to protect a reasonable level of advertiser interest. There appears to be an extreme lack of public knowledge about basic technical issues and the consumer benefits of this type of advertising (less irrelevant in-your-face mass-marketing etc).

    You say that 2011 is the year of remarketing but in theory that shouldn’t be happening much on UK web properties given the new overkill legislation about data collection that means conversion tracking isn’t even allowed without permission! It probably won’t come to much but it’s food-for-thought that the only way to use Google Analytics in the future could be as displayed on this site: http://www.ico.gov.uk/. This is legislation that’s actually in place – not just a proposal!

  3. Good point Ewan, this genre of targeting runs afoul of laws in the UK and Europe in particular and what I was saying applies more to North American marketers. A lot is riding on a continuation of the current policy regime here.

  4. Ewan says:

    Yes, here’s hoping that legislators outside of Europe take a balanced view of the real issues before making such ill-informed decisions or else we really could have some trouble! It really looks like the EU didn’t even attempt to understand the real privacy issues affecting the Internet at the moment. By making it difficult to collect anonymous usage data site owners may need to move to less reliable and private methods like IP collection. Either that or we’ll all have to accept the value of a ‘like’ as a conversion because platforms like Facebook that require authorization will be the only place unaffected by what’s currently in place.

    I guess It’ll probably all blow over after more discussion and when the Do-Not-Track browser implementations are in place. However, it just goes to show how easy it is to miss important issues with so much information to digest doing this type of work. I hadn’t taken much notice of it until I saw what the ICO had done apart from skimming articles that looked to just be concerned with cross-site tracking using third party cookies. I was confused why there was much of an issue anyway given that browsers have always had the ability to block them but making people accept first-part cookies on a site-by-site basis is a different matter entirely.


 


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