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What is display advertising?

What is display advertising? It’s the use of search, website behavior, and transactional data as the means to create a personalized display ad experience.

Benefits of display advertising

While we all know that display advertising (also called display marketing) has been an integral part of a marketers' tool kit for years. But with the advent of new cookie-tracking technology, its value to the relationship marketing mix is more significant than ever. Here’s a short rundown about what this means for marketers.

Remove “batch and blast” programs.

Display technology is now at a point where it is becoming so personalized that marketers can target consumers with far greater precision. This is similar to what happened to email over the past decade. Today, marketers not only have more data available to them, but the granularity of the data has vastly improved. This provides new opportunities for marketers to increase their return on investment. However, if marketers are to see real returns from their display marketing, they need to combine this approach with email and other channels in an automated and orchestrated manner, signaling a long overdue end to the batch and blast approach.

Customer knowledge is power.

It's important to note that while the return on display marketing is generally lower than email, it increases significantly when the two are combined. Having a marketing automation environment where marketers can interpret the information they hold on their customers and orchestrate it into their cross-channel marketing strategies improves campaign effectiveness. The message is clear; for optimum success, marketers need to combine their email and display strategies to better target their prospects where they are in their customer journey.

Finding the marketing cash cow.

While the digital environment today is challenging, marketers should not use this as an excuse to rest on their laurels. If marketers want to get ahead in this challenging consumer environment, they need to innovate and focus on orchestrating coordinated campaigns. They need to turn this “challenge” into an “opportunity” by leveraging technology and automation. If they do, it will free them up to develop new strategic programs that will drive their business success.

Personalize your display ads

Not all that long ago display advertising seemed to be headed on the same path as telemarketing. Its demise was being predicted from sea to shining sea. Banner ads, as they were once referred to, were dead in the water.

And why? Because they simply had run their course. They were the complete opposite of targeting. Essentially marketers had to hope and pray that someone would click on the ads they were responsible for placing.

But something happened on the way to the marketing technology recycling center. Someone had the brilliant idea to use data like digital body language as a means to create a personalized display ad experience.

And Google was right there to help by selling ad space based on what consumers were searching on by launching the Google AdWords program. Marketers and advertisers could pay a price and in turn put their brand front and center via a display ad at the precise time those same consumers were looking for them.

Programmatic ad buying

With more and more consumers going online, the more problematic it became to manage all the data that was available. From ad exchanges and servers to retargeting companies, it was readily apparent that the tracking and attribution of display advertising was next to impossible.

Today there are programmatic ad buying solutions that connect marketers and publishers/site owners with their target audiences via online auctions of display advertising space. All this is done in real time and includes the tracking and sales verification of every display ad.

Display advertising how-tos

Personalized ads do work, but only as a consumer moves closer to making a purchase. Let’s explore with the following travel example:

Awareness: Start broad.

This is the start of a consumer's search for a product or service. She's simply exploring her options: Does she want to visit the south of France or the Florida coastline? When she leaves the site without making any decisive travel plans, a generic display ad will appear on another website she visits. At this stage of the customer’s journey, generic display ads have been proven to be more likely to motivate consumers. So that’s what our consumer sees instead of a specific ad for any of the hotel options she viewed.

Our interpretation is that initially, consumers often do not yet have well-defined preferences. So they are more likely to react positively to a generic ad that appeals to their broader interests, for example, to have a relaxing vacation.

Evaluation: Begin to personalize.

Personalized display ads began to have a higher success rate in the study once the consumer began to narrow down her preferences. The consumer’s behavior was becoming more decisive by tracking her visits on sites other than the travel firm’s site.

If a consumer had visited a product review or price comparison site, for instance, there can be an uptick in responsiveness to personalized content as well as the indication that she was ready to make a decision.

Purchase: Realize the upsell potential.

Consumers who first looked at travel reviews on an unaffiliated site and were targeted with ads specific to the hotels are more likely to return to the original travel site and make a reservation.

The researchers have discovered that the hours immediately after a customer makes a hotel reservation is the optimal time to market ancillary services, such as airline flights, rental cars, or other travel-related activities. They call this opportunity the "golden selling window."

Native ads versus display ads

Remember when intrusive banner ads ruled the world of online advertising? Then came the explosion in ads that appeared next to Google search results. There are countless other innovations, of course, that have impacted the digital ad world. One of the more impactful breakthroughs was the introduction of native advertising. This term means different things to different marketers, but native ads are essentially a more contextual form of display advertising designed to complement the specific look and content of a web page.

Native advertising is one of the fastest-growing segments of display advertising. At its simplest, a native ad can be a company promotion placed within a corporate Facebook page. But it also can be an ad for luggage that appears in the Twitter feed of a consumer who follows Southwest Airlines.

It's all part of the irrevocable shift in recent years away from mass marketing to customized, targeted ads that, unlike the in-your-face banner ads of yore, actually engage consumers.

These ads are often built around original content and presented in such a way that even if consumers are fully aware that they're being pitched on something, they don't care. It turns out, consumers want to be engaged: 95 percent of online users polled by eMarketer said that they value ads that grab their attention.

Small wonder, then, why display advertisers are paying attention—and borrowing a few tricks from the native world to up their own game at display. Assisted by huge advances in the availability of customer data, interactive technology, and mobile platforms, display advertisers are making smarter ads and breathing new life into a medium that many had left for dead. eMarketer estimates that United States companies will spend $17.7 billion this year on online display ads, an 18.2 percent jump from 2012.

The best part is that these new forms of display ads—wallpaper ads, creating ads from content, and ad opportunities in mobile—can be cheap and easy to execute.

How email and display ads work together

Today, marketers not only have more data available to them, but the granularity of the data has vastly improved. This provides new opportunities for marketers to increase their return on investment.

It’s important to note that while return on display marketing is generally lower than email, it increases significantly when the two are combined. For the best results, marketers should interpret the information they hold on their customers and orchestrate it into their cross-channel marketing strategies. Take Dollar Thrifty, for example. By serving well-timed and personalized display ads to customers who had received email offers, they realized more than 22 percent revenue lift. The message is clear; for optimum success, marketers need to combine their email and display strategies. It’s not rocket science, it’s smarter marketing.