The Final Squeeze: Why Banner Ads Suck and Omni-Channels Are Obsolete

[Sponsored] The future of all advertising is to make advertising that is not considered advertising.
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Lon Otremba Headshot

Lon Otremba
CEO of Bidtellect
Florida, USA
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This is a sponsored post by Bidtellect

Traditional omni-channel DSPs have been designed, developed, and utilized to squeeze the maximum amount of juice out of an orange that has long since had little to give.  

The beginning of the end: display ads and omni-channels

Savvy advertisers know that traditional display advertising has lost nearly all of its value to a customer. Campaign after campaign, click rates and conversion rates of banner ads have fallen. In 2009, the average CTR of an ad banner on Google/DoubleClick was .1%.

In 2017, just 8 years later, the average CTR was .05%. Despite almost herculean efforts of technology providers, publishers, creative agencies, and advertisers to make banner advertising more effective, ad banners have continued their march to total irrelevance.

In the world of programmatic ad buying and execution, the primary means of executing ad banner buys has traditionally been via omni-channel demand-side platforms or DSPs.  

RELATED: 4 Classic Misconceptions About Native Advertising

These technology platforms were designed to consolidate multiple ad formats, media types, and audiences onto a single platform, and optimizing ad banner buying and performance are at the heart of omni-channel capability.

But even the omni-channel platforms have seen users shift away from using the very ad banner buying capabilities they were designed to be used for, since they are built and optimized to execute campaigns using what at the core is a dramatically ineffective and bad ad format. Instead, users started turning to omnichannel DSPs simply because they were the easiest to use and available – rather than for what they were designed to be best at.

Think of traditional display advertising as an orange ready to be squeezed. Traditional omni-channel DSPs have been designed, developed, and utilized to squeeze the maximum amount of juice out of an orange that has long since had little to give.  

There the display banner sits, shrivelled and juiceless, with performance getting harder and harder to improve upon.

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The last gasp of hope for stemming the slide ever downward in performance has been the application of big data

Data: the last hope

The last gasp of hope for stemming the slide ever downward in performance has been the application of big data – specifically, the use of personal user data to enhance audience targeting for advertisers – in the hopes that knowing more about the target should yield better results, more juice.

This targeting has included using data such as cookies, IP address, frequency, and device IDs to predict the likelihood of a given user to click or convert. For the past 15 years, more and more sophisticated techniques have been developed that depend completely on user data to unlock – and give value to – ad placements that will work better.

RELATED: 6 Reasons Why You Need to Take Data Seriously when Creating Native Advertising

But hold everything.  

The use of that data by publishers and DSPs is under siege. GDPR (General Data Privacy Regulation) has thrown a monkey wrench of massive proportions into the works of the digital advertising ecosystem in Europe, and, like an epidemic, the contagion is spreading: GDPR affects anyone accessing European audiences no matter where they are.  

Already, legislation has been passed in California to apply similar regulation to data use by advertisers and publishers there, and a national approach to data privacy regulation in the US is highly likely.

So if the ad banner, the traditional ad unit of the digital landscape, is already on its last legs, and the most vital, effective tool used to make them perform – user data — is likely to be severely curtailed, if not radically eliminated, in a post GDPR world, where does that leave omni-channel DSPs?

And in this world, how do advertisers and their adtech partners value inventory if data cannot be used to target against it?

This depth of format and placement data enables a real-time computation to run before any other variable is assessed, ensuring that the context and relevance of the placement is factored at the outset.

Contextual targeting: the future, but only with native

If eliminating the traditional data identifiers removes most assumptions about the user’s value, the only remaining way to estimate audience value and relevance would to be target users found in a specific environment, which can be done by channel or contextual planning.

But omni-channel DSPs lack the data, insights and optimization engine to measure and predict how a native ad unit is likely to perform on the page, robbing them of the most foundational of optimization strategies.

A Native DSP like Bidtellect, however, benefits from all the same data and optimization strategies of an omni-channel DSP with the addition of deep insights into how specific native ad units and content types perform – and not just at the domain URL or sub-URL level, but at the specific page placement ID level.

RELATED: The Art and Science of Branded Content Are Easier Than You Think

This depth of format and placement data enables a real-time computation to run before any other variable is assessed, ensuring that the context and relevance of the placement is factored at the outset.

Bidtellect has long known that in native, placement is the single most important predictor of campaign performance – and the format of the future (even with GDPR).

If an omni-channel DSP wanted to achieve similar results, they would need significant R&D investments, effectively re-building their optimization engines from the ground up.

Even then, they wouldn’t have the scale of historical data Bidtellect has. The result: Bidtellect possesses a deep strategic moat the competition cannot, and will not cross.

The future of all advertising is to make advertising that is not considered advertising

Ad banners suck

Ad banners suck.  

They are not the future of digital advertising because consumers ignore them and by most rational measure they are effectively obsolete. Let’s face it — people hate ads, mostly.  

They don’t click on banners, they scroll right past them on their phones, they leave the room when TV commercials come on, and they skip them on their DVRs. The future – a world we know is already here for many smart marketers – is a world where ads feel like content to consumers.

Ads that are native to the page and contextually relevant. The future of all advertising is to make advertising that is not considered advertising

Slapping an ad banner on a page – even if it is contextually relevant – makes it no more valuable.  

However, assembling a Native ad placement within a Webpage that is also contextually relevant to the user based on prior behavior makes the ad as valuable as the content. And that’s what the savvy advertisers already know – do you?

This is a sponsored post by Bidtellect


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