Display Ads May Go The Way Of Search Marketing

There’s a great piece in the recent Busi­ness Week about an up and com­ing way to sell dis­play ads. “Yahoo! Count­ing On Apex” describes how a search engine marketing-esque auc­tion envi­ron­ment may save the belea­guered Yahoo! by increas­ing the amount of rev­enue they extract from their vast quan­ti­ties of dis­play ad inven­tory. If they can bet­ter mon­e­tize their vast net­work of con­tent, they may not need to be pur­chased after all.

How dis­play ad buy­ing works today:

If you’re a search mar­keter you may’ve never pur­chased dis­play ads. In today’s world, you gen­er­ally pur­chase high-value place­ments directly from a site — i.e. you call up your Yahoo! rep and tell them you’re ready to plunk down a few hun­dred grand to be fea­tured on the Yahoo!.com home­page on a given day; or you pur­chase dis­play inven­tory across hun­dreds or thou­sands of smaller sites through an ad net­work such as AOL’s Adver​tis​ing​.com, AdBrite, Trib­al­Fu­sion or count­less oth­ers. It works a lot like tra­di­tional media buy­ing in that you are get­ting rates based on impres­sions, and pric­ing is gen­er­ally set by the pub­lisher or the ad network.

How it will work under Yahoo!‘s Apex:

The Busi­ness Week piece about Yahoo!‘s Apex begins to explain how Yahoo! intends to make its dis­play adver­tis­ing sys­tems work more like its search mar­ket­ing sys­tems. By sell­ing dis­play on an auc­tion basis, the mar­ket will be able to more quickly react to the effec­tive­ness of their ads and increase their value.

Obvi­ously this will work bet­ter with direct response (DR) dis­play cam­paigns, par­tic­u­larly those mea­sur­ing “view-through” con­ver­sions, but if adver­tis­ers have a clear under­stand­ing of how much of a given con­ver­sion should be attrib­uted to dis­play they can auto­mate their dis­play adver­tis­ing — at least on Yahoo!‘s net­work — in much the same way they auto­mate their search adver­tis­ing. They can bid place­ments up and down on a real-time basis and extract more value than they would with a tra­di­tional ad net­work or place­ment buy.

Kudos to Yahoo! for tak­ing the lead in plac­ing a “big bet,” as Jerry Yang put it, on dis­play auc­tions. Let’s hope theirs and GoogleClick’s AdEx catches on as well.

What this means for your business:

If you’re read­ing this you’re prob­a­bly pretty famil­iar with the auc­tion envi­ron­ments found on just about every search engine you’re adver­tis­ing on. You may even be using a search mar­ket­ing man­age­ment tool such as Omni­ture Search­Cen­ter to auto­mate your bid man­age­ment so you don’t have to watch bids on an hourly or daily basis.

Over time, as buy­ing dis­play in this way catches on with adver­tis­ers and agen­cies — as it already has with search engine mar­ket­ing — tech­nol­ogy will catch up and help this process along. Wouldn’t you like to spend more time plan­ning and less time traf­fick­ing ads and pulling reports? No doubt.

The search mar­keters of today — who under­stand exactly how bid mar­kets work — will be well posi­tioned to be the dis­play buy­ers of tomor­row. And if Google has its way and suc­cess­fully intro­duces auc­tion buy­ing to radio, news­pa­pers, tele­vi­sion and any other form of adver­tis­ing, the search mar­keters of today just might be run­ning the media buy­ing agen­cies of tomorrow.