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Display Predictions 2013

by Ollie Vaughan | 12.12.2012
Because digital evolves at a pace faster than Speedy Gonzales, it sometimes feels like display is the time-worn veteran of digital marketing. But next year is set to mark a turning point. 2013 will be the year that display reaches new heights of targeting precision and ROI. And here’s why:

Real Time Bidding (RTB) Display to Take Centre Stage

Thanks to improved accessibility through enhanced technologies, like AppNexus, RTB display is about to become ‘the norm’ within the display market. RTB display technologies are now more affordable – and therefore more accessible – than ever. They offer display advertisers a wider reach and enhanced targeting, alongside improved optimisation and ROI. They also increase display campaign effectiveness by allowing more flexible costing. Whereas the majority of display ads were previously bought upfront on a CPM (cost per thousand impressions) basis, RTB allows for ads to – sometimes – be optimised to a more cost effective CPC (cost-per-click) or CPA (cost-per-acquisition) basis. Plus, their eponymous ‘real time’ dynamic means that campaigns can be purchased and analysed in a live way so that elements proving to work best can be optimised, whilst underperforming campaigns can be paused. Because RTB display is now more accessible, we will see its use increase with spend from smaller local advertisers, as well as major advertisers. Essentially, RTB display has levelled the playing field, as proven by Index Platform who found that local advertisers increased their 2012 spend by nearly 50% from Q2 to Q3. RTB display will also create a shift in client thinking, with advertisers demanding as standard the greater transparency that can be gained through RTB display campaigns.

Growth in the ‘Cost Per Engagement’ Pricing Formats

Google has just beta-launched ‘Light Box’ in the US. The new display format only charges advertisers for their media space once users hover over the ad long enough for the canvas to expand. Similarly, YouTube’s ‘True View’ ads (another Google innovation) give users the option to skip an ad after five seconds, so that advertisers aren’t charged for anything that has been skipped. Formats like these mean display advertisers only have to pay for their media space once users have properly engaged.

This will dramatically decrease wastage and increase ROI. And it’s not just Google that’s starting to question the true value of clicks. Facebook has recently made noises about how advertising based on the pay per click model is ‘wrong’. Facebook’s blog claims that: “99% of sales generated from online branding were from people who saw, but did not interact with ads….. proof that it is the delivery of the marketing message to the right consumer, not the click, that creates real value for brand advertisers.” With Google and Facebook on the ‘pay per engagement’ bandwagon, 2013 will be the year that these more intelligent display formats really take off.

Display Gets Personal 

Another consequence of RTB display will be increased personalisation. RTB display technologies can bid, in real time, on user segmentation data to enhance targeting accuracy. This, combined with the inevitable emergence of new advanced rich-media ad formats, will mean that far more personal data will be used within the ads themselves. This is a win-win for everyone involved in the process: consumers receive more relevant and helpful ads, advertisers receive improved ROI through precision targeting and publishers improve their revenue streams. 

Va Va Voom for Video Display

Another welcome side effect of RTB is that it increases the available volume of pre-roll video advertising inventory. If you compare 2012’s Q1 to Q2, you’ll see that the amount of video inventory grew by 14%. In the US alone, RTB is forecast to account for 22% of video spend in 2013. Consumers just love video so this can only be a good thing for advertisers who seek more engaging ways of pushing their messages. 

Final Nail for Last Click?

As digital marketing becomes increasingly sophisticated, there is a realisation (hopefully!) that different parts of the journey all contribute to sales, not just that final click. So the ‘last click attribution model’ is already becoming outdated. Advertisers now want to prove the worth of all clicks in their average ‘path to conversion’ journey. Ultimately, this can only be good thing. In the past, display has struggled to prove its worth but enhanced attribution modelling means more credibility will be given to display ads.

Tracking Needs to Conquer Multiple Devices

This is the wild card, but thanks to the proliferation of multiple devices, it’s got to happen. How many of us have researched a purchase on-the-hoof via our mobiles but waited until we got to the comfort of our desktops to complete the transaction? Cookies, in their current state, are flawed because they’re not designed to track users who jump between devices. It simply can’t be done because the cookie isn’t carried over. This means attribution modelling becomes pretty pointless when applied to multi-device purchases. But what’s the answer? Next year must surely be the time that industry insiders get closer to agreeing on a solution.