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.

Ron Hassay
Ron Hassay

This is great to hear! This definitely creates an opportunity for those advertisers who are skeptical of display due to the higher costs and lest accountability. Does SiteCatalyst have the ability to measure the "view-through" conversion?