How to make a return on display advertising
Stage 2: Promote
Dan Matthews
29th May 2013
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Display advertising has taken a knock with the growth of social media and other forms of ‘cheap’ marketing, but there is a way to create return on investment from display – and here’s how.

By Carlo Pandian, SEO Account Executive at Tug

The premise behind all display activity is to deliver adverts tailored to individuals’ interests, thus focusing spend on potential customers who are most likely to convert. The IAB’s annual AdSpend study showed a 13.4% year-on-year increase through 2012.

The Problem:

The traditional challenge for marketing managers when faced with any display opportunity is finding enough budget to keep testing until the campaign yields a positive ROI.

Traditional online display relied on bulk buying impressions using a CPM. There have always been a number of downsides to this model, including transparency and the associated cost. Impressions charged using a CPM often included those served on irrelevant sites, with little or no chance of converting customers.

It could be argued that this increases brand awareness, but measurable, quantitative sales and stats are essential when building a business case to continue this activity and to secure on-going budget.

The Solution: Several companies offer behavioural retargeting solutions using a CPL/CPA payment model, such as GDMdigital and MediaFORGE.

On average, around 95% of visitors leave an e-commerce site without making a purchase and a recent study by Criteo found that retargeted customers are 70% more likely to complete a sale. By also utilising product recommendations, retargeted visitors have spent on average 50% more than non-retargeted consumers.

The rapid rise of real time bidding (RTB) has opened up the possibility of behavioural targeting on a CPL/CPA payment model. RTB has experienced a year on year growth of 112% in the UK through 2012 and now accounts for 12% of the total display activity. Sky currently invest 35% of their total display budget in RTB and predict they will increase this figure in 2013.

RTB allows unsold ad inventory to be bought in real time at a much reduced rate. In its most simplistic form, it works as follows:

1.    The user clicks from one webpage to another.

2.    A bid request is sent from the exchange, to the retargeting company.

3.    The bid request includes a number of attributes and information relevant to that particular user. The display company will then choose to bid or not.

4.    If the bid is successful, the display company then serves relevant creative to that user.

These companies only get paid if they can convert that display activity into consistent sales or leads. This removes the risk from the advertiser and makes it a compelling proposition for any affiliate programme.

If successful, the brand only pays commission on each sale. If unsuccessful, the same brand awareness argument from before still applies, but without any of the unnecessary expenditure. In all likelihood, if the campaign is not converting, it will be dropped. However, nothing will be lost by testing it and a successful campaign could really contribute to sales targets.

Integration usually involves pixels for retargeting and a short cancellation notice period is usually required also. Most companies use existing creative, modified using their own templates. Full control is still retained over branding and other parameters can be applied to the campaign also.

www.tugagency.com

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Author: Dan Matthews
Dan Matthews is a business journalist and author with more than 10 years’ experience writing in print and online. He is also experienced in online marketing and web project development, having created and grown several successful websites.
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