It’s hard for CMOs to maintain a grasp on complexity of digital, especially with the increase in automated, programmatic buying. But ignorance is not an option if they want ROI, says Sue Elms.
As Forrest Gump’s mama famously said… “life is like a box of chocolates, you never know what you’re gonna get”. Often it’s a hard toffee or, worse still, nougat! Fifty percent of the box is inedible. Right now, it’s the same with digital advertising.
CMOs traditionally have focused on the big picture. They understand powerful consumer insights and seek to harness their agency partners to turn them into effective communications. There’s expectation and trust in this process. They sign off on the purchase of a box of 20 pralines but all too often what they get are three coffee creams.
In the past, CMOs got deeply involved in the ins and outs of TV advertising in order to be sure they got value for money. They pored over the intricacies of planning, buying, trading and measurement – auditors had a particularly lucrative era in the 1990s.
Now they need to get their hands equally dirty with digital. This probably would have happened long ago but for the complexity of the organisational and technical aspects of deploying digital advertising.
Take the number of players along the transaction chain for example. Between the brand manager signing off the budget and the publisher loading an ad onto one of their pages, the budget passes through the media agency, its trading desk and then demand- and supply-side platforms that negotiate automatically with each other in real time. Along the way they might also pay for some extra third-party data to fine tune their targeting as well.
How much of the budget is actually left to buy space from the publisher after all that? The World Federation of Advertisers estimates that just 40% of the budget is actually spent on media.
“Estimates suggest that ad fraud could be absorbing anywhere between 10-40% of digital budgets”
Brands can reassure themselves that at least they gain lots of tasty advertising exposures. Or do they? Estimates suggest that ad fraud could be absorbing anywhere between 10-40% of digital budgets.
Research by the US Association of National Advertisers and White Ops, an online fraud investigator, estimates that brands will lose $7.2bn this year to ad fraud, up 15% on 2015 thanks to rising digital ad spend.
On top of this is the realisation that up to half of ads cannot even be seen on the page. A study by German ad verification company Meetrics in 2015 found that only 49% of online ads actually met the Internet Advertising Bureau standard that 50% of the ad must be in view for at least one second.
Nuts and bolts
It’s true that advertisers are starting to get on top of these issues and we now have viewability standards, albeit very weak ones.
But unlike TV – where the same systems were likely to be effective for years – digital advertising evolves and moves on. That’s why it’s so essential for marketers to understand the nuts and bolts of the process.
Because, while on the one hand marketers are starting to put on the pressure needed to boost viewability rates, other changes could be working against that positive outcome.
The introduction of header bidding, for example, allows buyers to see what their ads will look like on the page before it loads, so they can submit bids knowing more about what they are going to get. Publishers also benefit because they’re in a position to regain some control and generate more revenue from their ad inventory.
That’s all well and good, but if there are too many ad tags – the tools that make header bidding possible – pages load too slowly and users will abandon that page. If publishers get too greedy and invite too many bidders to the party then viewability will decline.
Understand the detail
The fact is that almost every change to the rapidly evolving digital media buying landscape comes with implications for communications effectiveness, and only those marketers who truly understand the detail will be ready to spot them.
Those marketers who work hard to educate themselves will enjoy an enormous competitive advantage in working the system better.
“Ignorance is no longer an option for the marketer who wants to succeed in the digital era”
Getting on top of targeting methods and outcomes, deploying better tracking and post evaluation are all approaches that CMOs need to understand in order to build strong and transparent partner relationships.
If they can do this then more of their budgets will make it through the gatekeepers to buy impressions, more of those impressions will be real people, and more of those real people will actually get the opportunity to see the ad on the page when it loads.
Ignorance is no longer an option for the marketer who wants to succeed in the digital era.