A com­mon ques­tion we often hear from our clients in rela­tion to Dis­play adver­tis­ing with Google is, “Which one is right for me — Google Ad Exchange or Google Dis­play Net­work?”

Before we answer that ques­tion, we’ll take a look at Google Ad Exchange, which is com­monly known as AdX (and for­merly known as Dou­bleClick Ad Exchange), and Google Dis­play Net­work, com­monly known as GDN (and for­merly known as Google Con­tent Net­work). First, we should take a small step back and talk about the evo­lu­tion of Dis­play and clearly define the two options, because even Google has admit­ted that the dis­tinc­tion is blurred.

This ques­tion really stems from how Dis­play has evolved from two dif­fer­ent eco-systems and mar­ket par­tic­i­pants into a larger ubiq­ui­tous media chan­nel. For a long time in Dis­play, media was sold via pub­lish­ers’ direct sales force and any non-guaranteed remain­ing inven­tory was usu­ally sold to ad net­works that would bun­dle it and on-sell this to agen­cies and adver­tis­ers look­ing for addi­tional scale. The adver­tis­ers who par­tic­i­pated in this mar­ket tended to be very Display-savvy and uti­lized the chan­nel for brand­ing and traf­fic as well as direct-response purposes.

Dig­i­tal adver­tis­ers who were almost solely focused on direct response busi­ness goals largely tended to stay away from Dis­play as a chan­nel due to the more com­plex nature of set-up, track­ing and mea­sure­ment of mar­ket­ing spend. These adver­tis­ers looked to SEM (Search Engine Mar­ket­ing), Affil­i­ate and Email mar­ket­ing instead. More recently, Google has tried to open the very large Dis­play world to this group of adver­tis­ers by try­ing to repli­cate the expe­ri­ence of SEM.

With its 2007 pur­chase of Dou­bleClick (includ­ing its pub­lisher ad exchange) and its own very large AdSense Net­work, Google has, for the most part, com­bined the two inven­tory pools while still hav­ing two meth­ods for access­ing this Dis­play inventory.

AdX (Google Ad Exchange)
Google Ad Exchange was born out of Dou­bleClick Ad Exchange, which con­tained a lot of qual­ity pub­lisher sites that sold their non-guaranteed Dis­play inven­tory via this chan­nel. There were often con­trols placed around the type of adver­tis­ers that could get inven­tory on a given site to pre­vent things like com­peti­tor adver­tiser con­flict with guaranteed-buy adver­tis­ers, brand association/safety, rel­e­vance, etc. Adver­tis­ers had access to things like tar­get­ing via ver­ti­cal seg­ments, and all buys were bid on a CPM (cost per thou­sand impres­sion) basis.

Today, inven­tory accessed via the AdX route can be bought in “real time” (com­monly known as “real time bid­ding” or “RTB”), which allows adver­tis­ers to make micro-second deci­sions at the impres­sion level about whether to bid for that ad slot on para­me­ters like the pub­lisher site, ad place­ment, ad size and other retargeting/demographic/segmentation data. All of this data has given rise to tech­nol­ogy plat­forms known as Demand Side Plat­forms (DSPs). These are the tech­nol­ogy tools that adver­tis­ers and agen­cies increas­ingly use to opti­mize their mar­ket­ing spend in Dis­play as they are able to action all of this con­stant infor­ma­tion flow in real time. (Effi­cient Fron­tier built a DSP to not only opti­mize Dis­play media spend but also to inter­act with our SEM and Social Media Plat­forms).
 
GDN (Google Dis­play Net­work)
The Google Dis­play Net­work can be seen as Google’s SEM answer for Dis­play. Essen­tially, Google took its AdSense net­work, which is largely used for text-based adver­tis­ing, and repur­posed it so that adver­tis­ers have eas­ier and more direct access to Dis­play adver­tis­ing in an envi­ron­ment that is famil­iar to them. This was prob­a­bly par­tic­u­larly valu­able for the small-to-medium Enter­prise mar­ket that would largely man­age this in-house with less access to sophis­ti­cated tools and indus­try experts.

Today, inven­tory accessed via GDN using AdWords can be man­aged in much the same way adver­tis­ers used to man­age con­tent cam­paigns on SEM, but allow­ing for an addi­tional range of ad for­mats beyond text includ­ing image, flash, rich media and video ads. To make things eas­ier for this type of adver­tiser, bid­ding can still be done on a CPC (cost per click) or CPA (cost per acqui­si­tion) basis in addi­tion to CPM bid­ding.
 
Which Route Is Best for Me?
There is obvi­ously a lot of crossover between the two, but in truth it really comes down to con­trol, scale and sophis­ti­ca­tion of your over­all mar­ket­ing efforts. Here’s an anal­ogy that Google them­selves use on their blog, which we ref­er­enced earlier:

a)      Using a DSP like Effi­cient Fron­tier to access AdX, with the abil­ity to bid in real time at the impres­sion level, is like a buyer man­ag­ing their own funds using a sophis­ti­cated, pre­mium online bro­ker­age tool so has full detailed access to insights, etc.

b)      Access­ing Dis­play via the GDN using AdWords is like a buyer man­ag­ing money via a bro­ker using a man­aged type approach where there is less con­trol and auc­tion capabilities.

So in mar­ket­ing speak, this trans­lates to how much con­trol and abil­ity to opti­mize you desire with your Dis­play cam­paigns. For an adver­tiser who has never done any form of Dis­play before and wants to get a basic idea of how a cam­paign oper­ates with non-text adver­tis­ing, the GDN is a rel­a­tively sim­ple step. Google can then match your Dis­play ads usu­ally based on the con­tex­tual theme of the key­words you input. (there is some abil­ity to retarget/remarket via the GDN)

How­ever, if you are an adver­tiser who really wants Dis­play to be a major part of your mar­ket­ing efforts and you want to fully under­stand and action the inter­ac­tion the audi­ence has with your Dis­play cre­atives and other chan­nels like SEM, then AdX would be your best option. This way you can bid at the impres­sion level in real time for a par­tic­u­lar user based on fac­tors like where they are in your mar­ket­ing fun­nel, what type of prod­ucts they have shown inter­est in based on their SEM research, how many times to serve an ad to a user per day, etc. This is all able to be done with full knowl­edge of how that audi­ence mem­ber has inter­acted with Dis­play cre­atives via other Exchanges like Right Media and/or how they have inter­acted with other Search Engines like Bing.

It is extremely impor­tant to note this is all done with full regard to user pri­vacy and using non-personally iden­ti­fi­able infor­ma­tion. We would sug­gest that with any Dis­play strat­egy, you should employ a level of sophis­ti­ca­tion to your mar­ket­ing approach. How­ever, if you really want to har­ness the power of the mod­ern Dis­play Mar­ket­place and fea­tures like real-time bid­ding, audi­ence tar­get­ing, third-party data, etc., then you have to uti­lize a robust tech­nol­ogy plat­form and buy Dis­play via AdX using a DSP.

Chris Jacob

4 comments
Omar Mohsen
Omar Mohsen

Thank you for this GREAT article :) Now i'll using GDN :) 

borislavstefanov
borislavstefanov

This is the first time I come across word transfer on the internet. The accessibility of this must be terrible.

Chris
Chris

Yes setting up on the GDN is quick and no cost beyond the media. This works well for a small budget and simple goal campaign. However if you are spending hundreds of thousands or millions of dollars a month on Display across multiple inventory sources,(i.e. Right Media, SSPs, etc.) then you need a scalable solution that can cross manage the media while achieving all the ROI and Business goals. This is where having a DSP accessing AdX is a must and where the benefit far outweighs any cost. Then assuming you have other digital channels like SEM and Social Media, a cross functional platform becomes even more desirable. Chris

Ron
Ron

What about in terms of costs of using GDN vs Adx. Signing up for GDN is a 15 min process before campaign creation. no budget minimums or setup fees. Does Adx initially cost the same? and will working through a DSP increase the campaign cost?