Display Advertising: An Hour a Day

Chapter 1

Online Advertising

Today’s world can perhaps be characterized by one thing above all others: that we as consumers are always online. As marketers, we are constantly presented with opportunities to get our message in front of the right kind of person at just the right time, and never before have we had this kind of ability to reach, target, and measure the reaction of audiences around the globe. Display advertising gives us the ability to widen our nets as advertisers and get our message out to more and more potential customers.

Chapter Contents:

An Overview of Search Engine Marketing

Search Advertising vs. Display Advertising

Problem Solving and Distraction

An Overview of Search Engine Marketing

Let’s go ahead and admit it: At this point in history, we’re in the middle of the digital age, and it’s getting more and more difficult to find anyone clinging to the notion that the Internet is just a passing fad. This is no latest craze; it is indeed the new normal by which we live our connected lives in a connected world. The combination of ever-increasing accessibility to higher and higher speed connections and a constantly growing variety of web-enabled devices makes it just plain hard to find a place where you can’t be online.

It wasn’t more than a few years ago when airlines were sending out email announcements to their frequent fliers saying, We’re proud to announce Internet access in some of our airplanes! In a completely opposite reaction than what we’re sure those nice marketing folks had in mind, many of us immediately pledged to avoid those airlines at all costs. An altitude of 30,000 feet was the last remaining place on earth that a person still wasn’t expected to be online, and there were more than a few of us that weren’t going to book a Wi-Fi enabled flight and risk those few precious hours of freedom from the digital leash.

Times are changing, and the point is, we’re now online all the time. And what are we doing? Well, as it turns out, young or old, you’re probably checking your email more than anything else—at least, according to the Pew Internet & American Life Project.

Source: http://pewinternet.org/Infographics/2010/Generations-2010-Summary.aspx

These days, if when we end up on a flight that doesn’t have Internet access, we start to exhibit signs of what we’re pretty sure is clinical withdrawal after about an hour, and by the time the plane is in its descent, passengers throughout the plane are looking out the window, clutching with shaking hands a phone with a screen so big it barely fits in their pocket, desperately scanning the approaching horizon for cell towers close enough to connect to that 4G network well before the flight attendant announces that it’s safe to return from the land of airplane mode. Take a look around on your next flight and see if you don’t have a plane full of passengers with their Blackberries, Androids, and iSomethings out, downloading the last hours of life as we know it before the wheels hit the runway.

But second to email, we go online to search for something. Search engines have become our gateway to the vast and ever expanding list of things we do on the Web. It’s how we keep up with our news and how we do our banking. It’s how we’re entertained by everything from games and 30-second videos to the latest record label-less sensation or a rant against a nameless fan of the rival team on a sports forum. It’s how we shop for everything from books and televisions to groceries and cars. It’s how we annoy a new generation of doctors by self-diagnosing long before we’ve made it to the waiting room. It’s how we book our flights and choose hotels in the places we’ve already decided to visit based upon the reviews of thousands of other consumers. It’s how we learn. It’s how we share our lives among our closest 10,000 friends. And for a rapidly growing number of us, it’s even how we get our work done, collaborating in real time on the latest sales numbers spreadsheet, scheduling that next meeting, or walking through the latest presentation. Sound like most of your day? Well, in the world in which we now live, that just makes you normal.

Search Engine Marketing

Now, put on your marketing hat. If people are using the Internet to do all of these things all day long, then wouldn’t it be great to get your marketing message in front of all those eyeballs? Wouldn’t it be wonderful to bombard those impressionable minds with happy thoughts of your products and services at every turn?

Let’s pretend for a moment that you’re a loving husband to a very pregnant wife, and let’s also pretend that it’s 3 o’clock in the morning on a Tuesday. It’s right about this time that you’re made aware of an uncontrollable urge for dill pickles and chocolate ice cream, neither of which exists anywhere in the house. Being this loving husband, you realize that at this moment, you exist in this world for one single purpose: You must go out into the night and return with dill pickles and chocolate ice cream.

So you wipe the sleep from your eyes, find some pants and a pair of shoes, and find your way to the car and out into the streets. Then, you see the most perfect, unexpected, situation-saving billboard that has ever crossed your field of vision (Figure 1-1).

Figure 1-1: Billboard advertisement for dill pickles and chocolate ice cream

You pull off at the exit, walk into the Dill Pickle and Chocolate Ice Cream SuperStore, and walk out a hero. Consider the day saved.

Now, when you wake up a few hours later and head to the office of the travel agency where you happen to be the marketing manager, you’re so impressed by the billboard that you drive by it again and write down the phone number of the billboard provider. You call the number, and you ask about this magical advertising product that they seem to be offering, and you’re told that you can have one of these too.

"We can place your billboard on some very special roads—roads that allow only cars that contain people who have demonstrated an active interest in booking a vacation."

"Uh, you can what?"

It sounds too good to be true, doesn’t it? But this is what search engine marketing has allowed us to do as marketers. We can put up our billboard anywhere on the Information Superhighway in front of eyeballs that have demonstrated their interest in our products and services. If someone goes to Google and does a search for buy dill pickles chocolate ice cream, then we have a pretty good idea that they may be interested in what we sell if we happen to own the Dill Pickle and Chocolate Ice Cream SuperStore, so we stick our billboard up there. If someone is watching videos on how to cook lasagna and you sell pasta sauce, that’s where you want your billboard. When people head over to the big screen TV buyers guide blog, well, if you sell big screen TVs, that’s not a bad spot for your billboard.

In a virtual world, we can constantly adapt with minimal time, money, and resources, changing our billboard and changing the locations we put it up to find the optimal audience and the optimal messaging presented at the optimal time. And we can do this because the best part about digital advertising is the amount of data that’s being collected every millisecond of every minute of every day.

Pay per Click Advertising

Now let’s take this one step further. As advertisers, we can create all these billboards and put them in front of only people who have demonstrated their interest in what we’re selling, but how much is this going to cost?

One of the most powerful features of online advertising is the different bidding options and cost models that are available. Depending upon your advertising goals and your budget targets, you have a few options to choose from when it comes to paying for your magic billboards, and the best part about this is the control you’re given.

Cost per Click

In a pure cost per click (CPC, often referred to as pay per click, or PPC) model, you won’t pay a penny unless someone actually clicks your ad. That’s right. It doesn’t cost you a thing to stick your billboard up in front of your target audience—you pay only if that set of eyeballs actually demonstrates an interest in what you’re selling by clicking your ad. Try calling up your local newspaper and telling them you’d like to run an ad but you’ll pay them only if people walk into your store as a direct result. Suddenly it seems pretty clear why traditional advertising media providers are struggling lately.

While Google did not invent the concept of PPC, its AdWords product has been the largest beneficiary of it: By the end of 2011, Google had already crossed into double-digit billions of dollars in revenue per quarter, the vast majority of it being made click by click. It has been so successful because for most advertisers, the model just plain works.

What’s known as the Google Display Network comprises an enormous number of sites that reach over 80 percent of the world’s Internet users, and that’s a lot of real estate for putting up your billboards. Now, add that to targeting options that allow you to stick your ads only in relevant places, and toss in the fact that you only have to pay if someone explicitly registers interest in your ad. Last, throw in measurement capabilities that can measure ROI in near real time and tell you whether your advertising goals are being met or not.

It’s no mystery why this works, and as a result advertisers are more than happy to be buying up display inventory month in and month out, shifting more and more resources from traditional media to the online space year after year.

Cost per Thousand Impressions

But if the CPC route isn’t for you, and especially if you have more traditional branding or positioning goals, don’t worry, there’s a bidding model in the online world that offers you another alternative. Cost per thousand impressions, or CPM (which actually stands for cost per mille) allows advertisers to pay for the impression of an ad without regard for whether or not that ad draws a click.

If you’re promoting a new movie that’s coming out in a few weeks and your goal is to make sure that every non–cave dweller on the planet knows about it, you would do well to use a CPM model and control your costs by paying every time your ad is shown. If you were to run a campaign with a CPM of $10.00, for example, you would be paying 1 penny every time your ad appears ($10.00 / 1,000 = $0.01).

While CPM bidding is commonplace when purchasing premium display advertising inventory and third party audience data, for most advertisers it is typically not recommended for direct response campaigns, or campaigns where the marketing goal is to get a user to do something in response to having seen your ad. What we’re trying to do with CPM bidding is get as many eyeballs as we possibly can on the ad itself. Remember, it’s possible with CPM bidding that you’ll spend all your money without a single click and not a single visitor to your website.

Cost per Acquisition

One of the newer and more exciting bidding options available to search marketers is cost per acquisition (CPA). If you have a direct response type of conversion, meaning you want something tangible and measurable to happen as a direct result of your advertising, then you may want to look at CPA bidding.

As an example, let’s say you have an online store, and on average you make $10.00 profit from everyone who purchases from you. The purchase itself is your conversion, and you are willing to pay up to $9.99 for a conversion to stay profitable. Well, in a CPA model, you don’t bid for clicks or impressions—now you’re bidding for those conversions.

Google AdWords currently offers tools like the Conversion Optimizer and the Display Campaign Optimizer that will evaluate dozens of factors as your ads are displayed across a variety of web properties to a variety of users. The system begins to learn which types of users, which times of day, which language settings, and even which browsers and operating systems have a high probability of resulting in a conversion action, and the system then uses this information and tries to get as many conversions as it can for you based on your CPA bid.

Search Advertising vs. Display Advertising

Whichever way you choose to pay for it, if you’re going to do online advertising, one of the most important decisions you’re going to have to make is how to allocate your marketing dollars across search and display advertising.

Search Advertising

By now, search advertising is both sophisticated and mature, and it has been used very successfully by a lot of people for a lot of years. At its core, what we’re talking about here is someone typing something (their search query) into some kind of search engine and receiving results containing relevant items. Mixed in with those results are advertisements, also triggered by their relevance to what that searcher is looking for.

Perhaps the most important concept to understand with search advertising is that we have active users who are essentially exposing their intent. This is not someone flipping through a magazine and possibly noticing the ads that are mixed in with the content they’re casually browsing. Here, we’ve got laser-focused people who are actively looking for something—something that is currently at the forefront of their mind. When Sally goes to Google and types indian restaurant san francisco, Sally is sharing her intent. Sally is actively looking for an Indian restaurant in San Francisco, right at this very moment. And if you as an advertiser happen to own an Indian restaurant in San Francisco, you can get your extremely relevant ad in front of Sally at exactly the time she’s looking for a solution to her current problem: finding a good Indian restaurant to go to.

Contrast this with traditional advertising. Let’s say that as the owner of this San Francisco–based Indian restaurant, you want to advertise in a San Francisco–based newspaper, and you specify that you want your ad to show up in the Food & Dining section. At this point, you’ve targeted this ad just about as much as you can, and in trying to find relevant potential consumers, you’ve been able to narrow it down to (mostly) people in the San Francisco area who have at least some expressed interest in food and dining out.

But what is the real intent of someone browsing the Food & Dining section of a San Francisco newspaper? Really, we have no idea. They might be attempting to waste some time on a bus ride or they may be interested in learning about a new recipe, but the probability that someone is looking for a local Indian restaurant to eat in is pretty low. And you as an advertiser are essentially paying for all of those people to see your ad whether they have any interest in you—or whether they even see your ad—or not.

Search advertising addresses this limitation by letting advertisers bid on the keywords that match the search queries people are typing in. So, when Sally searches for san francisco indian food, she might see something like the search results page shown in Figure 1-2.

Figure 1-2: Google search results page for san francisco indian food

Here, advertisers are offering Sally coupons on Indian food, Indian food delivery, discounts, and even directions to Indian restaurants. Sally was targeted and shown ads based on the search query she entered into Google at the very moment she entered it.

Google Search and Display Networks

The focus of this book is display advertising and specifically, accessing the Google Display Network through Google AdWords. But this is just one of the advertising networks that Google offers, and it’s important to distinguish between them. Google AdWords allows you to place your ads across the entire Google Network, which consists of two parts: the Search Network and the Display Network (this used to be known as the Content Network).

Google Search and Search Partners Networks

For all practical purposes, you can think of any site that requires you to type something into a search box to find what you’re looking for to be part of the Search Network. Google.com is the easiest example: You type in san francisco indian food and Google gives you back results and ads. But there are many others as well. The Google Search and Search Partners Networks also include sites like Google Maps, Google Product Search, and Google Groups as well as non-Google properties like Virgin Media, AOL.com, and RoadRunner that use Google to return search results. Basically, as you can see in Figure 1-3, we’re talking about any kind of search that’s on a Google property or is powered by or enhanced by Google and requires users to type in what they’re looking for and click the search button.

Figure 1-3: Google Search and Google Display Networks

The important part about the Search Network is that as advertisers, we’re targeting potential customers by the keywords they type in. If Sally goes to Google Maps and does a search for san francisco restaurant, advertisers targeting that keyword phrase or variations of it can bid to have their ad show up. When Sally goes over to Google Groups and looks for forums and postings by searching on san francisco restaurant, she’ll find sponsored links that were triggered by the keyword bids on the search query she typed in.

Google Display Network

The Google Display Network, or the GDN as it’s commonly known, is quite a bit different. The first thing to note is that it is enormous. The GDN encompasses over two million web properties, has over half a billion users, and serves up hundreds of billions of page views every month. The GDN gives you, as an advertiser, the ability to place all kinds of ads, including text, image, video, and rich media, on virtually any kind of site you can imagine. Of course, the GDN includes many Google properties, but its real reach lies in the non-Google partners. From news sites to blogs, video sites to forums, social networks to your favorite shopping sites, weather sites, sports sites, review sites, article sites, reference sites, movie sites, and anything-else-you-can-think-of sites, the GDN has you covered.

We’ll talk more about the specifics of where you can advertise a bit later in this book, but for now, the key point to remember is that with display advertising, we’re no longer responding directly to a search that our audience has just performed.

Display Advertising

So right about now, you’re probably thinking, Wait a minute—I thought you just said the best part about online marketing is that the searchers type in exactly what they want and you can then give them what they want right when they want it. How is this going to work if users aren’t typing in anything anymore?

Well, in short, you’re right. Display advertising is a very different animal from search advertising, but it also offers some incredible opportunities to us as advertisers. If you think about it, even though we use search to find just about every bit of content we’re looking for, the amount of time we spend on search engines is actually very short. This is in part a testament to just how good search engines have gotten at figuring out what we’re looking for, but also an indication of what we’re really doing online.

Once we’ve done our search, we spend our time consuming the content that we just found. We do a search for taco salad recipe and in a fraction of a second we’re given millions of options to choose from. We spend a few seconds looking through them, click on a couple, and in a very short period of time we’ve landed on a page with a recipe we’re going to read, maybe print out, and eventually follow in the comfort of our kitchen. We end up spending a lot more time on the actual content we were searching for than we do on the searching itself, and if you don’t get them to click your ad in the few seconds they spend scanning the search results page, you’ve lost your chance if you’re not leveraging display in your marketing mix.

Extend Your Reach

You might want to think of the Display Network as a way to expand the size of the lake you’re fishing in for potential customers. Now don’t get us wrong; search advertising is fantastic, but one of its drawbacks is that we’re somewhat limited in our fishing grounds. We’re trying to find prospective customers in the instances where they’re actively searching, and that’s it. This is the little pond in the city park that’s regularly stocked with fish. It’s where grandparents take their grandkids to make absolutely sure that something will be caught inside of a short attention span.

Just as in that city park pond, you very likely find keywords that are sure to get you the right kind of customer, but at some point, you reach diminishing returns. There just aren’t any more keywords that you can profitably bid on, and it’s time to look for a bigger pond.

The Display Network gives you this opportunity in the form of those millions of websites that people are spending their time on after they’ve searched. Now you’re trawling the ocean. Sure, the fish are tougher to find, and there’s a lot of stuff you might catch in your net that you just want to throw back, but you’ve now got access to all the fish in the sea.

And just as when you’re fishing in the ocean, the GDN gives you lots of tools to refine what it is you’re catching. On the boat, you can change your bait, swap out your nets, use different lines, move to different areas, and these days you can even get data about what’s below you before you drop your first line. With platforms like Google AdWords, you can control where you’re fishing, both geographically and contextually; you can change the messaging, format, and type of advertisements you’re running; and you can leverage an enormous amount of data around the oceans you choose to fish in.

Another key item to keep in mind is that while we do use search a lot, there’s a lot we do online without a search engine. For example, many of us have favorite news sources, magazines, blogs, forums, and social networks that we manage to find on a regular basis without the help of Bing or the big G. And in many cases, we’re not looking for anything in particular anyway. People who go to the online version of the New York Times (NYTimes.com) for their daily news aren’t using a search engine to get there. They’ve got it bookmarked and memorized. And they weren’t looking for something specific—their intent in going to this news source is in large part to be told what’s important and what’s worth reading about. Just as we all have our favorite magazines, television channels, newspapers, catalogs, radio programs, and more in the offline world, we regularly consume content that fits our interests in the online world, and these are the kinds of opportunities available in the ocean that you just won’t find in the city park pond.

If you can use search and display together, you get the best of both worlds. Now you’re fishing in the little pond where you can find all those easy targets and take advantage of the active searchers giving away their intent, but you’ve also got boats out there finding more and more fish in the open ocean as well. Keep in mind that this is also one of those situations in which the sum of the parts is going to be greater than the whole. While more difficult to measure, display advertising can achieve branding and positioning goals that enhance the likelihood of your drawing that click from a search campaign when the user is finally ready to have you fulfill a need with your products and services. If you really stop to think about it, odds are good that this has happened to you at one point or another. You did a search to find something you wanted to buy, and when you had to decide which link on that page to click, you clicked one that you recognized, one you had heard of. And that recognition was very likely the result of a branding campaign that included display advertising.

Diversify Your Message

We haven’t explicitly said it quite yet, but the obvious big advantage of display advertising is that you’re not limited to the constrictions of text-based ads that dominate the search advertising landscape. Many of the places where search-targeted ads show up, including Google.com searches, don’t let you use anything except your headline, two lines of copy, and a display URL in your ad. You get the same font, font size, and font color as everyone else, and the only control you get of your message is limited to 25 or 35 characters per line. Display advertising opens up a whole new realm of possibilities because although there are some restrictions on the file size, format, dimensions, and some editorial constraints, you can use all that creativity and take the handcuffs off of the marketing department now.

You can use imagery to connect with your audience, and you can use as much text as you can reasonably stand to fit in the space of your ad. You can use buttons and unique calls to action in your designs, and you can use animations and even video. And rich media allow advertisers to create interactivity inside the ad itself. You can leverage mobile ad formats to talk to your potential customers on the go or run a variety of video ad formats with creative built expressly for the medium on which it’s being served.

All of these options help you convey your marketing message to the right audience in the ways you wish to convey it, giving you back much of the flexibility and richness of traditional media you don’t get to take advantage of on the search advertising side.

How Display Ads Are Targeted

So back to our original question about display advertising: If we’re not showing people ads based on what they type into search engines, then how are we targeting them? Well, a lot of the targeting options available with search advertising do carry over to the display side. For example, we can choose certain geographies to target or specific devices like mobile phones or tablets. But over and above the basics, there are three ways platforms like AdWords allow us to target our potential customers.

Google AdWords Targeting Options

First, we can use keywords. This time, though, we’re not using keywords in the sense that users are typing them in, but in the sense that they can describe the types of pages we’d like our ads to show up on. Within Google AdWords, this has come to be known as contextual targeting. Those keywords can then be used to match pages on the Web that share that same context and are then deemed relevant to our display advertising campaigns. The technology that Google uses for its search engine is pretty good at figuring out what every page on the Internet is about and then returning those pages based on the search queries users type in. That same technology is used in contextual targeting on the GDN, and in early 2012, a significant improvement to this capability was released. Continuing with our example of Indian restaurants in San Francisco, if we want our display ads to show on websites that are contextually relevant to Indian food, we may target keywords like indian food and healthy indian food and indian food calories and indian food blogs. These are quite different from the keywords I might be bidding on in a search campaign, and it’s because I’m trying to tell Google AdWords what kind of websites I’d like my ad to show up on, not what user search queries I want to respond to.

The second way we can target users in the Display Network is by choosing the websites, the pages on those sites, and even the ad slots on those pages that we want our ad to show up on. These potential locations where our ads can show are known as placements, and we have the ability to research and specify the locations where we’d like to place our ads. In our example, instead of providing keywords as we do with contextual targeting, we can scour the Web for websites and placements that we’d like our ads to show up on and explicitly tell Google where we’d like to advertise. If this sounds like a daunting task, that’s because it is. While there may be lots and lots of websites you already know about, there are many more you’ve never heard of before. Tools that we’ll talk about later on in this book, like the DoubleClick Ad Planner, can help you to find those placements and also quickly see what kinds of advertising those sites accept. And don’t forget about another powerful feature we can take advantage of as advertisers: exclusions. Just as we can choose which placements we do want to target, we can also choose which placements we don’t want our ads showing up on.

The third way we can target on the Google Display Network is by defining specific audiences. Essentially, cookies are used to track users anonymously as they traverse the Web, and these usage patterns can help determine the kinds of categories users are interested in as well as keep track of users who visit key pages that we as advertisers identify. For example, if you as an advertiser want to target dining enthusiasts, you can choose to show your ads not based on keywords or based on the sites you think these people will visit, but to anyone, anywhere, whose usage pattern has identified them as a member of the dining enthusiasts audience. And you can get even more specific than that: AdWords allows you to create your own audiences based on things that users do on the pages of your website. For example, as that restaurant owner, we can place a snippet of code on our menu page. That code identifies that user as having seen our menu, and signs them up for a custom audience that we’ve just defined of people who have seen our menu. Now, wherever that person goes, and regardless of what website they’re on, they can see our ad based simply on the fact that they are part of an audience we created we know has demonstrated an interest in our restaurant.

It’s worth noting that there is a fourth targeting option within Google AdWords known as Topic targeting, and as it is typically best used to refine other types of targeting, we’ll be discussing this in its own section a bit later in the book.

Targeting Options on Other Platforms

While we’re focusing on the Google Display Network in this book, it’s also important to understand that there are many other ad networks and many other ways to target display advertising to potential customers. Facebook, for example, offers advertisers the ability to target users based on demographic and psychographic information and even behaviors and personal information. If we want to show our ads on Facebook to 20-something college graduates in a certain city who have demonstrated an interest in food on their birthdays, we can do that through the Facebook platform. Over on LinkedIn, we can target our audience based on not just things like gender, age, and geographic location, but also by job titles, industries, and even specific companies that people work for.

Problem Solving and Distraction

Regardless of the targeting options we use, the ad types we create, the messaging we employ, or the networks we choose to leverage, our end goal as advertisers is still the same, and it comes all the way back to the first day of Marketing 101. As marketers, we don’t sell products and we don’t sell services. We sell solutions to the problems that people have.

Display advertising gives us a medium by which we can connect with our potential customers on the problems that we can help them solve, and this solution is what they’ll ultimately see value in and trade their hard-earned money for.

Every day, we’re under attack from advertisers at every turn. From the moment we wake up each morning to the moment we go to bed, we’re being barraged with marketing messages. We hear ads on the radio, we see them on TV, and we drive past them on the freeway. Ads fill more pages of newspapers and magazines than the stories do, and even public restrooms are now selling ad space.

Figure 1-4: Advertisements running in a restroom

Source: MAD Media Inc., www.alloverchicago.com

The result of this constant assault on consumers is that consumers have built up a wall to protect themselves; they’ve put together a defense. Way back in 1885, Thomas Smith authored a guide called Successful Advertising and postulated that a consumer needs to be exposed to an ad 20 times before it leads to a purchase:

The first time a man looks at an ad, he doesn’t see it.

The second time, he doesn’t notice it.

The third time, he is conscious of its existence.

The fourth time, he faintly remembers having seen it.

The fifth time, he reads the ad.

The sixth time, he turns up his nose at it.

The seventh time, he reads it through and says, Oh brother!

The eighth time, he says, Here’s that confounded thing again!

The ninth time, he wonders if it amounts to anything.

The tenth time, he will ask his neighbor if he has tried it.

The eleventh time, he wonders how the advertiser makes it pay.

The twelfth time, he thinks it must be a good thing.

The thirteenth time, he thinks it might be worth something.

The fourteenth time, he remembers that he wanted such a thing for a long time.

The fifteenth time, he is tantalized because he cannot afford to buy it.

The sixteenth time, he thinks he will buy it someday.

The seventeenth time, he makes a memorandum of it.

The eighteenth time, he swears at his poverty.

The nineteenth time, he counts his money carefully.

The twentieth time he sees the ad, he buys the article or instructs his wife to do so.

Source: Thomas Smith, Successful Advertising, 7th edn, 1885

And if 20 sounds a bit too high to you, there’s also the commonly accepted Rule of Seven in traditional advertising, presenting a little lower threshold for exposure before action is taken. Either way, we’ve got our work cut out for us, and this same concept is true in the online world as well. In 1998, Jan Panero Benway and David M. Lane described the phenomenon of banner blindness that they found in their experiments, which makes it even more difficult for advertisers to get their ads noticed.

Source: www.internettg.org/newsletter/dec98/banner_blindness.html

So when we place our ads on websites around the Internet, our job is not only to attract attention from the right kind of potential customer, but to do that by distracting users from whatever content they’re consuming at the moment. One of the most effective ways we can do this is by connecting with users on a cognitive level, recognizing their problem and then showing them how we can help them solve it. Let’s finish this chapter with one small example as to how that might happen (see the sidebar The Art of Distraction and Problem Solving).

The Art of Distraction and Problem Solving

Bob’s Bad Day

Bob is having a rough Tuesday. He’s walking back to his desk after yet another disastrous meeting, and he’s about to hear from on high about how his department missed its targets yet again. Bob can already hear his boss saying, Well Bob, the success or failure of this group is on your shoulders, and that’s going to be what’s looked at when it comes to your bonus.Bob sighs and drops into the chair in which he spends the majority of his life lately and looks at the calendar on his cubicle wall. No relief there either—there’s not a holiday in sight. Bob logs in, and feeling particularly unmotivated, he opens his favorite browser and all hope of productivity for the rest of the day is now officially out the window.First stop: Check what’s going on in the world. Bob knows he’s going to need to have something to talk about at that dinner party this weekend, so current events it is. He opens a page and starts reading about the latest world conflict and glances briefly at a picture of a white sand beach with happy people sipping drinks. Man, that would be nice, he chuckles to himself, and keeps on reading.

After he’s armed himself with some conversation material, Bob heads over to a handful of job sites. He logs in to a couple of his accounts and polishes up that resume, then starts looking for other ways to spend the majority of his waking hours from here to retirement. He’s reading a job posting when he notices another one of those ads, this time with a picture of a pool the size of a football field and a pair of snorkelers exploring some crystal clear Caribbean waters. Well, I do have some vacation time built up, Bob thinks. I wonder what that place is all about… and Bob clicks the ad.

Solving Bob’s Real Problem

As an advertiser, Breezes Resorts has successfully distracted Bob from the content he’s working on and achieved a new visitor to its website. We’ve had the pleasure of working with Breezes as one of our clients for a number of years, and this kind of story is in many ways the holy grail of what we want to have happen in a display campaign. Of course we target the travel sites and people who demonstrate an interest in vacations. And we’re constantly on the prowl for placements on the most relevant Caribbean tourism pages, but we also take advantage of other, more-subtle opportunities that allow us to show potential customers a way to solve their problems that they didn’t even realize existed!Remember, as visitors to a website, we’re trained to recognize and ignore advertising. That means your message needs to not only attract, it needs to distract from the content the visitor came for, and we need to dig deep into visitors’ minds and appeal to the underlying problems that we can help them solve.The bottom line here is that Bob needs a vacation. Yes, he’s looking at news sites to help him get through his dinner party weekends, and yes, he’s trying to find a new job to make his life a little easier. But a week on the beach is a solution to the underlying issue that Bob is facing—the poor guy just needs a break.As you read this book, and as you learn about the ways we can target people with display advertising and the places we can show our ads, be thinking about opportunities for distraction. Always ask yourself, How can I get Bob or Sally to stop what they’re doing and pay attention to how I can solve their problems?

Chapter 2

Overview of Display Advertising

While the world of display advertising can be incredibly complex, it doesn’t have to be. The everyday advertiser can use a number of different platforms to purchase display ads on a host of publisher websites in formats ranging from text and images to video and rich media. And the best part about advertising online is accountability. Whether you have direct response goals for your campaigns or branding and positioning objectives, the amount of data that we can analyze is astounding, and at the end of the day, we can measure the success or failure of the marketing dollars we’re spending.

Chapter Contents:

The Display Advertising Landscape

Identifying Display Ad Types and Formats

Defining Advertising Objectives

The Display Advertising Landscape

When it comes to placing your display ads around the Internet, clearly you’ve got options as an advertiser. And within the murky intricacies of a convoluted ecosystem that links together advertisers, agencies, publishers, data providers, and middlemen, there are quite a few options out there that everyday advertisers can take advantage of.

Of course, there’s the Google Display Network, which we discuss in greater detail later in this chapter. But beyond that, display ads can be bought and targeted by just about anyone through a number of other networks and services. The following are just a few of the most prevalent options to which everyday advertisers have access.

Facebook This social networking giant is actually the #1 player in the display advertising industry by revenue, pulling in over $2 billion a year and allowing advertisers access to roughly 700 million users. The real power of Facebook advertising lies in the amount of consumer data people provide on a daily basis. The current level of targeting is exciting, but what will almost certainly become available in the future represents an incredible opportunity.

Yahoo! Still a top 3 player in the display arena, and for advertisers spending more than $10 thousand per month, Yahoo! offers everything from banner ads to rich media and formats ranging from mobile to video along with sophisticated targeting options including retargeting and behavioral. Advertisers can also take advantage of some unique custom solutions on popular web properties, including brand-building full page takeovers and even Yahoo! home page opportunities. Most recently, Yahoo! has teamed up with Microsoft and AOL to cross-sell each other’s display inventory, providing some competition to Google and Facebook.

Microsoft Advertising In 2007, Microsoft dropped $6 billion on the acquisition of aQuantive, Inc., primarily for the latter’s Atlas ad exchange platform, which competes with Google’s DoubleClick. More recently, partnerships with demand-side platforms like AppNexus and MediaMath have bolstered their display offerings from a targeting perspective, and at this point Microsoft is the fourth largest player in the market behind Facebook, Google, and Yahoo!. Advertisers spending more than $2 thousand per month can leverage image, rich media, video, and mobile formats across the Microsoft Media Network, which reaches an estimated two-thirds of the US online population (source: comScore Media Metrix, March 2011).

LinkedIn Targeted toward the business to business (B2B) space, LinkedIn allows advertisers to leverage the professional network that includes more than 150 million members with a handful of display ad formats, text formats, and even home page takeovers. Targeting options are tailored to professional profiles, allowing advertisers to select audiences based on job titles and functions, industries, demographic information, and even company names.

Advertising.com Picked up by AOL in 2004, Advertising.com offers display solutions that can be managed through its Ad Desk platform. Advertisers can reach popular AOL properties along with thousands of other publishers like MapQuest, MovieFone, Rhapsody, and USA Today through this ad network. Ad Desk allows for geotargeting and behavioral and site-level/inventory targeting and lets advertisers bid by impressions, clicks, and conversions.

ValueClick Media Another option worth mentioning is ValueClick, the owner of the affiliate marketing giant Commission Junction. This platform allows advertisers to target audiences by over 750 million consumer profiles worth of online behavioral data taken from product and comparison-shopping searches or transactions via large affiliate networks. The network itself encompasses just under 9,000 sites and reaches over three-fourths of the US Internet audience with standard Interactive Advertising Bureau (IAB) ad units, rich media, and video formats.

Retargeting solutions A number of retargeting solutions like AdRoll, Chango, Criteo, Fetchback, Magnetic, ReTargeter, Simpli.fi, and more allow access to additional inventory and the ability to retarget potential customers based on the actions that they take. For example, if a consumer does a search for a particular product or places an item in the shopping cart and then decides not to purchase, an advertiser can retarget that shopper and offer them a coupon for the particular item they were interested in or that they almost bought. While most of the major networks also offer this technology, advertisers can reach additional ad networks and get additional targeting features through these third-party solutions.

Why We Focus on the Google Display Network

If one thing is certain, it’s that there are a lot of options out there, and we haven’t even touched on the details of the current ecosystem (this is something we devote an entire section of the next chapter to). The companies and players between the advertiser and the publisher abound, and they handle everything from demand to data sourcing and from supply to the dynamic brokering of the display of an ad for a price in fractions of a second.

But here’s the good news: You don’t even have to read that part of this book to be successful in your display advertising campaigns. While you can certainly take a trip down the rabbit hole and dive into the ever-changing and intricate details of the products, services, networks, and technologies that drive today’s display advertising ecosystem, the truth is that most advertisers probably won’t want to. One of the great successes of the Google Display Network, affectionately known as the GDN, is that it has allowed advertisers to target and place their ads on millions of websites around the globe quickly and effectively from a single, simple, clear, and measurable platform.

The GDN shields us from the inner workings of how our ads end up on the pages that they do but at the same time provides many of the rich features we need and exposes just about all the data we could care to analyze. While it’s true that you can be up and running with Google AdWords in just 5 minutes, it’s also true that you can spend countless hours poring over help files and books like this one or days sitting in seminars and training and you’ll still have more to do. The GDN has brought the power of display advertising into reach for just about any advertiser and has maintained many of the advanced components for those that want them.

So while Google AdWords is certainly not the only place to buy display ads these days (we cover a handful of other platforms in later chapters), the GDN is the focus of this book for quite a few reasons.

The Three Rs

Google articulates the value proposition of AdWords with the three Rs: reach, relevance, and ROI. The GDN, while just one part of the AdWords platform, exemplifies these benefits quite well. Let’s take a look at what makes the Google Display Network one of the most accessible, powerful, and accountable single platforms available to advertisers today.

Reach

There is simply no other ad network that has the reach of Google AdWords: This network is so big that you can get your ads in front of more than 80 percent of the entire Internet-using world through it. Every month, over 500 million users are served literally hundreds of billions of ads. It’s just plain difficult to browse the Web these days and not see Ads by Google.

How does Google do it? Well, the Google Display Network sources its inventory of locations to show your ads from a few different places: YouTube, AdSense, and the DoubleClick Ad Exchange.

AdSense

AdSense is actually the most prevalent source of inventory for the Google Display Network, and it’s also another Google program. Basically, if you own online content—content that can range from websites and blogs to mobile, video, and even online games—then you can make some space available on your pages and let Google serve ads in those spaces, taking a cut of the advertising spend in return. As a web publisher, you can determine what kinds of ads you want to show on your site and in what formats and sizes. Google figures out how to best fill those ad slots with ads from advertisers that are looking for content like yours or audiences like your visitors. So, if you run a blog all about hiking and the outdoors, through the AdSense program, you can be serving ads for advertisers wanting to reach that kind of audience.

DoubleClick Ad Exchange

The DoubleClick Ad Exchange is essentially a very large online marketplace that brings advertisers and web publishers together to buy and sell display advertisements. The Ad Exchange is a real-time auction that allows advertisers to bid for every impression available in the ad spaces across the large network of publishers and includes some very desirable ad inventory.

DoubleClick is now a subsidiary of Google after its 2008 acquisition, and as of 2009, advertisers can access the inventory in the Ad Exchange directly through the Google AdWords interface.

Relevance

Not only does the Google platform afford access to such a wide variety of sites, it also allows advertisers to specifically target the right kind of visitor to all of these sites, putting relevant ads in front of those targeted eyeballs. We dive into each of the targeting options available in the Google Display Network in much more detail a bit later, but there are essentially four ways that Google lets advertisers specify where they’d like their ads to show up.

Contextual Targeting

Contextual targeting works by taking advantage of the extremely effective technology that Google has developed for its search engine to figure out what a web page is all about. When you do a Google search, Google is able to tell you in less than a second which of the billions of pages out there are the most relevant to whatever you just typed in. It uses the same sort of system to match advertisers with web pages across the Internet.

As an advertiser, you might choose to target websites that are contextually relevant to certain keywords. When you enter these keywords into your ad group, Google finds sites that match your context, and those are the sites on which your ads show up.

Placement Targeting

Placements are really nothing more than ad spaces on specific pages that are available to you. There are two types of placement targeting options when you’re using the Google Display Network:

Automatic placements are ones that Google chooses for you, based on any other kind of targeting you’ve chosen to use. Here, you’re letting Google choose from its wide array of inventory and show your ad wherever it sees fit.

Managed placements are ones that you, well, manage. Instead of letting Google choose, you can identify and select each place on the Web where you’d like your ad to show.

There’s one more type of placement, known as an exclusion,