[Display Advertising] 02. Display Ads and Targeting

Evolution of display advertising

• After the first display banner ad was launched by Wired, display advertising quickly grew to a multi-million dollar business
• The fast growth gave rise to a large no. of different ads of all shapes and sizes
• The IAB(Interactive Advertising Bureau) stepped in to help standardize
• IAB still publishes Ad Standards and Guidelines for different types of digital advertising(www.iab.com)

Display Ads and the Customer Journey

• Display Ads work for different stages in the customer journey
• They are most often used in 'Awareness' stage. Interest and Desire stage

Different Ad Formats

• VPAID (Video Player-Ad Serving Interface Definition)
• Linear Video Ads: More commonly known as pre, mid and post-roll ads, linear ads take over the full video player space. They're linear because they run in line sequentially with the content, for example, a pre-roll will appear as (ad-video); a mid-roll will be (video-ad-video) and a post-roll will appear as (video-ad). Linear ads can be 15 or 30-seconds long and do not allow for fast forwarding through the ad.

• Non-linear Video Ads: These ads run simultaneously with the video content, usually in the form of an interactive banner ad in an overlay. Clicking on these ads pauses the content and the ad opens in a full screen player. Generally, a non-linear video ad will run for 5-15 seconds before rotating to another ad or reducing in size.

• Native Ads: ads that look like the native content from the webpage. They are unlikely to be blocked by AdBlock software and thus is preferred nowadays. 

Different Ad Types

- Direct Response Ads

• Typical for the action stage
• Clicks are important
• Advertise specific action such as 'register now for the program' (Click To Action buttons)

- Brand Ads

• Typical for the awareness & interest stage
• Clicks are less important
• Advertise the general brand to raise awareness or shape brand image

Metrics

• # of impressions
• # of unique impressions
• Click Through Rate (CTR)
• no. of clicks/total no. of imp * 100
• Click to Conversion Rate(CTC)
• no. of conversion/ total no. of clicks *100
• Example of conversion could be a purchase
• Engagement/ Interaction Rate: no. of actions taken such as clicks 
• View Through Rate (VTR): when a user has finished watching the entire video ad
• View Through Conversion(VTC): Conversion after 30 days after the first impression of the ad
• ROI: Return On Investment
• ROI: profit - total cost
• ROI percentage: (ROI/ total cost) * 100

Pricing Models

Performance-Based Pricing:
Advertiser pays for conversions

- Priced at cost per click(CPC)

- Priced at cost per action(CPA): good for advertisers, bad for publishers

Impression Based Pricing:

Advertiser pays for impressions

- Priced at cost per thousand impressions(CPM)

Reach and frequency concepts

- Reach: the no. of unique people that see your ad

- Frequency: the average no. of times your ad is shown to the same user

Targeting

- Demographic targeting: gender, age, education, income...etc.

- Geographical targeting: location

- Contextual targeting: interest

- Behavioral targeting: users who viewed certain items, stopped at the purchase (Giving nudge -> retargeting ad)

Display Ads in Mobile

- Responsive ad formats for ads in a browser

- In-app advertising: banners and native ads

Display Advertising Concerns

- Ad blocking: Many users using 'AdBlock' software to block ads -> native ads are becoming more popular

- Viewability: ads that are not viewed are checked as 'viewed'. This is problematic as advertisers pay for CPM. Policies to prevent 'ad fraud' is becoming popular.