Display Marketing Ecosystem

Whenever you browse a website/app, if your ad blocker is not on, you see display ads at the top of websites before videos on YouTube and apps. These ads help the advertisers make their target audience aware of any new product, consider a new feature in addition to the existing product/service, or drive the consumer to the final purchase decision. It is very important for a marketer to understand the display advertising ecosystem, the different strategies to achieve the desired objective, and the ways to measure and optimize these ad campaigns.

Display ads are shown on online entities such as websites and mobile apps. For example, they could be ads when you are browsing a website, watching a YouTube video, etc. Display ads can be targeted based on specific demographics, regions, or interests. This way, they become more effective in nature.

For a marketer, there are a few advantages of display marketing:

1. Provides a huge reach: This makes it apt for building awareness in new regions. Display marketing creates an instant brand connection and increases the probability of purchase. For example, when Amazon was launched in India, it started a campaign called ‘Aapki apni dukaan,’ meaning ‘Your own shop,’ which went viral and grabbed much attention in India.
   
   
2. Helps collect customer data: The data collected by ad servers helps evaluate customer demographics and behavior. This assists in building future marketing strategies.
3. Serves as a good remarketing channel: Display marketing can target high-intent customers on relevant pages. For example, if someone searches for toys online, and through cookies, you understand that the customer is interested in toys, it makes sense to remarket and display toy ads that would interest him.
   
   

However, there are also certain challenges regarding display ads, such as ads being shown on irrelevant websites, consequently leading to a waste of impressions. For example, an Audi ad offered on a food-ordering website doesn’t make any sense as the quality and purpose of the audience would be different from those of the target audience. The ads could get lost in the clutter of display ads and could even lead to banner blindness from the customer’s point of view.

Coming to the display advertising ecosystem, to start with, there are two players in this ecosystem:

1. Publishers: They are the ones who sell ad spaces for ads to be shown.
2. Advertisers: They are the ones who pay money for ad spaces to the publishers.

For example, in the screenshot below, Hewlett Packard Enterprise is the advertiser, and the website BBC.com is the publisher.

Let’s now understand how these two parties interact with each other to show ads to the customers.

There are multiple intermediaries involved in the process of connecting advertisers to publishers. However, an ad network connects the two parties in the simplest state. The ad network looks for unsold ad spaces on the publisher’s website and puts them up for sale for the benefit of advertisers in return for a portion of the sales proceeds. Then, the selected ads are placed on the publisher’s website through an ad server. Examples of ad servers are Media.net, BuySellAds, Conversant, etc.

Types of Display Ads:

Depending on the format, there can be different types of display ads. They can also be classified based on the way they are put up on the website. Knowing these ad formats will help you decide the most effective one for your campaigns. Let’s start with the first one:

1. Banner ads usually appear at the top or bottom of a page. They come in various shapes and sizes and for different devices as well. A few of the famous banner ad types are leaderboard and skyscraper ads. For example, you can see a leaderboard ad on the following CNN page: The primary purpose of banner advertising is to promote a brand and to drive visitors from the publisher’s website to the advertiser’s website.
2. Rich media ads ensure the brand stands out by showing great creativity pushing users to interact with the ad. These are very image and graphic-heavy ads. Hence, they have a higher CTR as well.

Now, based on the way ads appear on the website, there are two types of display ads:

1. Native ads: These ads are designed to blend into the design of the publisher’s website. The properties of native ads are that they don’t divert a user’s attention away from the publisher’s content and are popular on content-publishing sites and social media. Native ads work best when the publisher is a content-heavy page, such as a blog or an online magazine with articles. For example, you may see a hair specialist’s article on any health-related website. These advertorials blend well with other pieces, and visitors read them all in a flow. This influences them to try the hair specialist’s products in the future.
2. Non-native ads: These ads appear separately from a publisher’s primary content. The properties of non-native ads are that they usually appear on the side or bottom of a web page or app screen without interfering with the main content. These ads interrupt the user’s normal usage and try to redirect him to the advertiser’s landing page. Non-native ads appear in text, still images, moving images, GIFs, or videos. Hence, it would help if you ideally used these ads only at the awareness and consideration levels. 

Following are a few best practices around each of these types of display ads:

1. Banner ads: These are easy to work with, even for beginners. They automatically adjust in size based on the device and are universally accepted by all ad servers. The pricing model, too, is really simple; however, it has a lower conversion rate and CTR. So, you need to be mindful of its usage and pay heed to the purpose of the ad.
2. Rich media ads are highly interactive and engaging, so that you can add social sharing buttons for better publicity. However, due to the heaviness of the files, the ads might be inaccessible to the audience.
3. Text ads: These are easy and simple to work on, with little dependency on graphic designers. However, they are aesthetically unpleasant.
4. Native ads: These ads can’t be blocked with an ad blocker; hence, you should always have a transparent and clear disclosure. The ads generally have ‘Sponsored ad content’ or ‘Sponsored by’ mentioned in them. The language and the landing page should resonate well with the audience to which the ad is being shown.
5. Non-native ads: As a practice, you can show in-network ads within your community and out-of-network ads in other parts of the state or country.

Intermediaries in Display Marketing:

There are intermediaries beyond an ad network that connect the advertisers and publishers in the overall chain of the ecosystem.

To make the process of buying and selling less costly and more efficient, you have DSP and SSP. They have removed the need to negotiate ad rates and promise publishers good value for ad space.

1. Demand-side platform (DSP): This works as the advertiser’s broker and manages the advertiser’s ad inventory demands. It performs bidding on ads for transaction purposes. A few examples are DoubleClick bid manager, AppNexus, TubeMogul, etc. As a best practice, to select a DSP, you should analyze its aggregated audience reach, see whether it provides the option of purchasing inventory in real-time, and make a guaranteed direct deal to reserve inventory in advance. Other factors to consider are whether it can tailor creatives for each audience segment, whether it uses programmatic data to optimize paid marketing strategies, and whether the DSP has standard targeting capabilities around location, language, devices, etc.
2. Supply-side platform (SSP): These intermediaries act as brokers to the publisher, providing them with the best price for their ad inventory. For example, Google AdSense, PubMatic, etc. As a best practice, you should ensure that the SSP has an ad server to regulate demand fluctuations from advertisers. It should be able to quickly plug in and play its page on the publisher’s site and must be equipped with a brand safety tool.

There is another very important intermediary known as the ad exchange. This acts as the middleman among the ad networks and automates matching between the advertiser and publisher.

The placement and pricing are decided based on supply and demand. Google’s DoubleClick ad exchange is an example. There are two types of ad exchanges, too:

• Open: These are online marketplaces where ad impression transactions occur daily. They can interact with multiple demand partners and networks.
• Private: These are moderated and controlled ad exchanges, which consist of exclusive or leading publisher groups comprising only vetted buyers and agency groups that can access the system. Additionally, they provide premium and quality ad inventory.

So, how does it work? The process begins with a user visiting a website with an ad slot. The advertisers raise their demand for the ad slot through DSP, while the publishers interact through the SSP. The ad exchange translates the information here into an auction. The requests are exchanged between both platforms and then the ad exchange passes the winning bid to the publisher. For example, the same process happens around Google Display Network with Google AdWords for advertisers and Google AdSense for publishers.

Additionally, there are different buying models in display marketing, which are as follows:

1. Cost per thousand impressions (CPM): You pay a predefined amount here, which is ideal for the awareness stage.
2. Cost per click (CPC): This is good for getting people to consider your website; publishers get paid only if the visitor visits the landing page after clicking the ad.

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