AdTech: Through The Journey of Mr. Romeo
Mr. Romeo asked a very basic question – Why use Digital Marketing? Why not continue the legacy of Traditional Media Marketing like TV, Newspaper, Radio, etc.?
Let’s try to find an answer with an example - Imagine Romeo is the owner of a famous shoe brand. He is traditionally running huge billboards and great TV commercials and a full-page ad in Newspaper. After a point in time, do you think will he be able to say precisely, how many people actually bought his product, after being influenced by seeing his shoe’s ad? Or, which media channel has been the most effective?
Not sure, right?
This is why he should adopt new-age Digital Marketing models, which allows him to unambiguously measure the results so that he can make better decisions. Thanks to Advertising Technology or AdTech, as we know it, Brands can effectively connect with their appropriate Audiences.
This industry is filled with many jargon. In this article, we’ll see a few commonly used industry buzzwords through the eyes of Mr. Romeo…
Advertisers are those who are looking to reach the crowd to sell them something, by showing them luring Advertisement. However, it is solely up to the people that they just see the ad or click on it or actually transact with the advertiser’s offerings in any way.
Like Banner/Image Ad of a shoe from Mr. Romeo’s company, searching for a suitable ad spot on a website.
Publishers are those who have a Website (commonly called inventory) and make appropriate space on the site to make money by selling the space. Later, the advertiser fills it with an Ad.
Like the owner of a website, who made proper space for ads among news articles, looking for a suitable advertiser’s ad, probably Mr. Romeo.
Advertisers and Publishers have to come to a monetary agreement before getting started. Few most commonly used terminologies regarding this, are -
CPM: Cost per Mille (Latin for Thousand) - Advertisers pays for every 1000 impressions.
CPC: Cost per Click - Advertisers pay for every genuine Click.
CPD: Cost per Download - Advertisers pay whenever their App is downloaded by a new user.
CPL/CPA: Cost per Lead/Acquisition - Advertiser pays whenever a user takes actions on Advertiser’s Product Page. Action can be Form Fill-up (Lead). In the CPA model, Publishers receive payment only when the sale is completed.
CPV: Cost per View - This is used in Video Advertising. The advertiser pays only when the Video is viewed more than the agreed percentage (called quartiles), let’s say more than 75%.
You might ask since the viewer is visiting a website, they are viewing a page, there will be a “view” of an Ad… what is an impression then?
An Impression is counted each time when an Ad is fetched from the server and sent to Publisher’s Website.
Viewable Impression is when 50% of the ad’s pixels are viewed for more than one second.
Romeo was tired of searching for a suitable Publisher. So, one evening he went to a Bar. He saw a beautiful girl named Juliet. Now if -
Juliet ignores Romeo, he would still be counted as an ‘impression’ because he is there.
Romeo managed to impress Juliet so that she glances at him for at least 1 second, he would now be counted as a ‘view.’
Publisher firstly sells the space to Advertisers directly. Who may (let’s say) fill 20% of their Ad Space. But remaining times, there are chances of blank space appearing on the site. This time Publisher doesn’t want to do any work themselves.
Thus they get in touch with Ad Exchange and/or Ad Network to fill the remaining 80% of Ad Spaces. It is now Ad Exchange’ s/Network’s responsibility to fill the Ad Space all the time.
So, Buyers (Advertisers), Sellers (Publishers), and the Pricing Models (Agreement) are in place. Now these two parties need to come together at someplace to do business. That commonplace can be one or more of a combination of these –
DSP, Demand Side Platform can be understood as a framework or a single Platform for Ad Buyers (like Advertisers, Agencies, etc.) so that they can manage media buying easily. A DSP does not own or transact itself. Still, it allows integration of a two-sided system, enabling Publishers to offer their inventories to Advertisers.
Like a forum where Romeo can go and select from the available list of Publishers.
SSP, Supply Side Platform, acts as a layer between Publisher and Advertisers. This helps Publishers maximize their revenue by having more control over traffic, ask prices, and, moreover, visibility of Advertisers (to an extent).
Like an Agent, working on behalf of the Publisher, eager to acquire an advertiser.
Ad Network is a controlled marketplace where Publishers’ unsold inventories are aggregated and segmented based on demographics, location, etc. Then sold to buyers/advertisers/agencies. This Price varies depending on the type of inventory. Also, it is not very transparent for Advertisers and Publishers because they wouldn’t know who is selling or buying, respectively.
Also, like an Agent but working and taking a commission from Romeo and probable Publisher.
Ad Exchange is those who follow real-time auction mechanism, where Publisher’s inventory is sold to the highest bidder. Since there is no middle-man here, the cost of operation is low and is better in terms of transparency. And with the help of the OpenRTB model, Publishers will know who is buying their inventory at what cost. Similarly, advertisers will get per impression data so that they can optimize well.
Like a one-stop-shop where Mr. Romeo and probable Publisher openly meet each other.
Having so many options in the market, Mr. Romeo finally found Publisher, a mix of direct and indirect. The campaign was running smoothly. After a few days, he realized that he is just wasting money on plain and simple ads. Sale hasn’t increased, there is no ROAS (Return On Ad Spend).
He then chooses to change the business model and decided to pay the Publisher for every click. Whenever people clicked on the Ad, Mr. Romeo knew his audience and that they are genuinely interested in buying. Now, he wanted to scale-up further.
Remarketing & Retargeting are two methods which enable Advertisers to show precise “targeted” ads to those users who already visited your website and/or interacted with their Ads in some way. Now its time to remind the user, not only just click on the Ad but make a purchase too.
Mr. Romeo was happy because the sale increased to some extent, and the business was profitable. He wanted to meet Juliet once again. So, in the same Bar, he found Juliet sitting in the balcony. Confident Romeo went up to her with two glasses of wine. She accepted with a smile. After some time, when Juliet was about to leave, Romeo asked for her phone number. Juliet wrote it on a piece of paper and gave it to him. Now -
If Romeo calls her up the very next day, it is called Remarketing.
If Juliet goes to the neighboring Bar the next day and finds Romeo already there, with a glass of wine in hand to offer her again, it is called Retargeting.
To optimize campaigns, an important step that an Advertiser should take, is to categorize audiences, so that the audience pool can be (re)utilized later?
Two broad segregation can be made as – Custom Audience and Lookalike Audience
Mr. Romeo tried to call Juliet, but there was no answer. He decided to meet her in person. When he looked around, Juliet was in the same balcony seat. Now, if Romeo -
approaches “only” Juliet because he offered her wine a few days ago; Romeo is using ‘Custom Audience Targeting.’
approaches Juliet, just because “some 25-year-old girl with long black hair in a red dress” accepted his glass of wine a few days ago; Romeo would be using ‘Lookalike Audience Targeting.’
What about the type of traffic which is driving sales? How to effectively manage the in-flow of inventory?
To optimize the source of traffic, there are several marketing methods.
Broadly observed as – Content, Paid, Display and Organic
Mr. Romeo is now friends with Juliet. Now, he wanted to take her out on a date.
Now, if Romeo -
indulges Juliet in a conversation wherein, he manages to tell her that he is great a guy to date. Here, Romeo is using Content Marketing.
slips the bartender a handsome tip, and tells him to persuade Juliet about Romeo because he is a nice guy, a gentleman, and she should definitely think of a date with him. Here, Romeo is using Paid Marketing.
puts up a catchy poster about himself on the Digital TV, right inform of Juliet’s seat, mentioning “Romeo Is A Great Guy For Dating.” Here, Romeo is using Display Marketing.
Well, Romeo was in the midst of analyzing all the possibilities – Juliet herself walked up to Romeo and asked him out on a date. This is Organic Traffic!
It is apparent that, where there is Yin, there will be Yang.
In the whole Digital Ad Trading ecosystem, survives Fraud - be it Fraud Traffic, Fraud Clicks, or Fraud Ads. It is highly recommended by the wise guys, that buyers and sellers must take precautions against Fraud.
A Publisher might install an additional bot-script on the site, which will force the page to auto-reload every 10 seconds. Doing so, even a low-quality Website can generate Millions of Pageviews within a short period.
On the other hand, Media Buyers might give a Script to Publisher to install on the website, saying that the Ad displayed will be from a well-known Brand. But in actuality, Ads from that famous Brand will be shown to viewers only once. For the rest of the time, the same Script is used to loads Ads from a hundred other Brands or Products. Even some malicious content.
These things will ultimately disrupt a user’s experience; also, the reputations of Advertisers and Publishers goes for a toss!
There is an endless number of possibilities by which one can do Fraud. The Bureau (Interactive Advertising Bureau) is working hard to eliminate them from the market.
Using these simple and secure methods by which Publishers can protect their inventory from unauthorized buying by publicly declaring the companies which are authorized to do so. And also, buyers can verify that they are buying authentic traffic.
Applicable for European Countries, this is to regularize the collection, storage, and usage of Customers’ data.
Romeo’s business is flourishing. Juliet asked him if she can have that Red Stiletto she saw on a Website last week. Since it is from Romeo’s company, he wanted to impress her. So, he promised that it’ll be delivered to her home tomorrow. Since Juliet is a European lady, GDPR applies…
Romeo needs to have a Consent from Juliet that her home address can be used.
Romeo can only use it when he is delivering that Stiletto and nothing else.
Thirdly, Romeo has to comply whenever Juliet asks him to remove the information he possesses about her.
Using preventive measures, genuine Advertisers are meeting genuine Publishers nowadays. To enhance the targeting so that the Media Budget is spent in the right direction, Advertisers wanted to do precise targeting. Encourages users not only see the ad but click on it or even make purchases too.
After a couple of dates, Romeo and Juliet got married. Romeo continued with his research on new ideas about Shoes, and Juliet continued with her favorite pastime – making cakes and pastries. One beautiful evening, they again went to the same Bar.
Someone gave Juliet a flyer about patisserie classes. She was behaviorally targeted because she regularly searches for new recipes on the Internet.
On the opposite side of the table, when Romeo was reading articles about ergonomic shoes, he saw ads of Nike’s Air Jordans. He was contextually targeted.
If Juliet had not given her number to Romeo (because of ‘Limit Ad Tracking’) or if she is already in love with someone else (‘ad-blocker’ against Romeo), this would not have been the scenario.
However, the story continues… and they lived happily ever after.