Digital banner advertising - Jam

The digital advertising market in the UK has grown at a rapid rate – from £825m in 2004 to £15.7bn in 2019 (source: IAB).

And according to Zenith Media it is now 51% share of all ad spend in the UK.

Paid Search remains the largest sector at $11,300m for 2020, followed by Social Media at $5,800m, then Digital Banner advertising at $2,400m and this is what I want to focus on in this article.

Digital Banner Advertising market structure

The online banner market place, and within this programmatic, is a fascinating dynamic. I previously plotted the key players on a diagram, it’s a little out of date now but most of players are still in place. Some more info here.

Split between Advertiser and Publisher services with the ad exchanges and networks in the middle, one of the areas that has always fascinated me are the DSPs. ‘Demand Side Platforms’ spend their time reading analytics data and building mathematical models to optimise campaigns.

More about DSPs

I previously worked in a DSP and one of its USPs was its targeting. Most DSPs will use contextual targeting and behaviorial targeting, but this company also created what they called ‘Cluster targeting’.

Basically for cluster targeting we put context and behavioural to one side for a moment and just analysed the data to find clusters of people clicking through to target sites.

We graded them in terms of click through rate and then analysed their properties. So instead of laying theories down that to drive clicks to a site they need to have visited sports sites for example, as behavioural targeting does, here we didn’t start with a theory and just let the data do the talking.

OLYMPUS DIGITAL CAMERA

We would find some unexpected patterns. We wouldn’t try to understand or explain but simply build out the clusters based on these findings and use for targeting the client’s sites.

Sorry, maybe I should have first explained what a DSP is in more detail. DSPs allow advertisers to buy impressions across various publisher sites, but layer in targeting to specific sites based on the site’s content, location and the user’s demos and previous browsing and online purchasing behaviour.

Publishers make their ad impressions available through the ad exchanges, and DSPs then select out the sites for the advertiser to buy. Often the price of the impressions is determined in ‘real time’ through online auctions known as real-time bidding (RTB). The process takes milliseconds, as a user’s computer loads a webpage.

Ad Networks also do this (and there is a hell of lot of overlap in the market), but the edge DSPs have is they offer the process of buying, tracking and optimising on one single platform tool.

DSP players include Invite Media, MediaMath (one of my favourites J), Turn, Appnexus and Data XU.

Benefits of DSPs

A key one is buying efficiency – the process is almost fully automated – the negotiations with suppliers, linking to ad servers, setting up tracking, sending insertion orders, monitoring performance, etc; is now an efficient and computerised process.

Another is real-time optimisation – now within a day you can see ad performances, by ads, by remarketing lists, demos, etc and adjust immediately instead of waiting for the end of the campaign.

Also cost saving – because of the complexity of the bidding process in terms of the bidding criteria it’s not always the case that the highest spender wins. The ability of the platform to handle this level of complexity can mean you achieve low cost buys.

Choosing a DSP

Actually there are some arguments for selecting a range of DSPs for your business not just one. Four reasons:

  1. Technology – DSPs submit their bids for SSPs (platforms that buy on the publishers behalf) firstly internally against a range of criteria (budget, performance, time of day, block lists, minimum bids etc) and must win this before even sending the bid out to the SSP. So a bid in Invite of £2 may not necessarily beat a bid of £1 with Appnexus.
  2. Size – as you optimise a campaign you will often shrink the audience available on a platform
  3. Risk management – you might not always have the inventory you want on a certain DSP, or it might even disappear, so you need to spread the risk of always being able to access the quality of sites required
  4. Analytics and insight – running campaigns across a range of platforms means you can run test and learn activity on a continuous basis and across a wide and representative mix of publishers.

So a very brief article to such a complex area, I hope it has helped in some way, and I will continue to publish more in the next days/weeks.

Meantine, leave your comments and information in the box below.

Thanks,

Matthew

About Matthew Brown

Matthew has 20 years director level experience in digital marketing and website development (working at a number of ecommerce businesses including Scholastic, Dada, McAfee and The Open University). Matthew founded Jam in 2000 in parallel to his digital marketing career but over time has moved to 100% focus on building the Jam business and a team of highly qualified digital experts.

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