The Warc Blog

The Warc Blog

The rise of the machines - trends in online display ads
Joseph Clift, Product Manager, Warc
Joseph Clift

Online display ads don't tend to be a big part of the typical web user's browsing experience. However, they're a lot more important for media buyers and publishers - not least because, over recent years, the automated ad networks that have achieved primacy have driven down CPM rates across the board.

Representatives from both the buy side and the sell side discussed - and disagreed on - how the ads should be monetised, at an AOP event in London which I attended yesterday. Ahead of my full report of the event, up on soon, here are a few points from the presentations that stood out for me.

How long does a cookie last?

Cookies are little bits of software dropped on to users' computers when they click on, roll their mouse over - or sometimes just view - a display ad. The user's browsing habits are then tracked, though it should be noted that any user data provided by cookies is anonymous.

Speaking at the event, Steve Dorey, head of business development at Criteo, pointed out that cookies do not stay on computers for ever, but instead have a standard lifespan of 30 days.

Dorey also pointed out that, of the 90m people across Europe who viewed ads run by his employers during January, just 1,000 took the extra step of choosing to opt out of having cookies dropped on their computers.

The rise of Real-Time Bidding

Several speakers at the event, including Matt O'Neill, president of Admonsters Europe, highlighted the growth of Real-Time Bidding (RTB) as a key trend to watch for the future.

This system starts working when a user visits a publisher's website: the sell-side adserver asks the various buy-side adservers associated with the site for bids on the impression, and then shows the ad from the highest bidder to the user.

Therefore, individual impressions can be priced individually.

While RTB has yet to achieve scale, its successful implementation holds obvious advantages for agencies, advertisers and publishers. In theory, it prices ads much more efficiently - buyers will be more willing to bid high for media if they believe the system's superior efficiency will improve the ad's performance.

Pushback from publishers

Unsurprisingly, the view that ad networks, whether working through RTB or through other processes, would eventually take the place of direct sales teams is controversial among publishers. After all, it is the sell side that has borne the relentless downwards pressure brought to bear on display ad costs over recent years.

Tom Bowman, vp strategy and operations, global advertising sales at BBC Worldwide, also pointed out that certain things associated with advertising, such as brand perception, were difficult to mechanise, skewing the actual price fairness the networks are able to provide.

As an example, he pointed out that the typical sales cycle for purchasing a Ferrari is 18 months. "Part of the joy of buying... is the joy of the journey," Bowman said.

"There isn't a tracking system that could follow that through."

Subjects: Digital, Advertising, Media

24 February 2010 18:15

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