Element-Level Display Advertising — Evolution In Progress

I believe display advertising is actually in its infancy. There are powerful dynamic variables at work that are creating major challenges for the advertising technology industry at large.

Depending on the vendor, its technology stack and its level of commitment to legacy beliefs, this is either a problem that is of  concern or the opportunity of a lifetime. Either way, evolution is at work.

Reality Check

In the 1940′s, science fiction writers began dreaming of a medium that looked something like our beloved Internet does today.

By the 1960’s, key discoveries were being made and implemented in the pursuit of a better government infrastructure.

At the very end of 1990, Sir Tim Berners-Lee had built the first Web browser and the first webpages sitting on the first Web server.  On August 6, 1991, he posted a summary of his efforts, marking the debut of the Web as a publicly available service.

It was not until 1995 that the last restrictions on the Web for commercial traffic were removed. So the technology that comprises the very backbone of display advertising is conservatively 20 years old.

Therefore, by historical standards, display advertising is in its infancy.

By comparison, the automobile’s origin can be traced back to the 1700s. In 1893, the first gasoline-powered American-made vehicle was developed, and in 1903, Oldsmobile developed the first true assembly line capable of producing automobiles at a reasonable cost.

By 1914, Ford followed suit and began perfecting the assembly line. Just how important was this evolution in shaping the automobile industry? By 1930, 250 companies, which did not read the tea leaves fast enough, vanished from the competitive landscape!

Search Was First To See Extinction-Level Event

With the birth of the commercial Internet in the mid 1990s, search companies were the pioneers who ventured into the great, wild new wilderness in search of gold. More than 20 search engines exploded onto the scene by the year 2000.

Many are active today, and some are forever gone. Some familiar names include: Excite, Lycos, Ask Jeeves, Magellan, AltaVista and Northern Light.

Then, in September of 1998, two Stanford PhD students incorporated Google. Their technology was built on the basic premise that pages with the most links to them from other highly-relevant pages must be the most relevant pages associated with any search query. PageRank was born.

Today, the search engine landscape looks very different than it did in the late 90′s. Massive consolidations, specialization and outright extinction have taken place.

As of October 2012, Google continues to expand its already dominant market share, accounting for 66.9 percent of all searches conducted in the United States. With the birth of PageRank, the search industry went through what is likely to be the first of many compelling events that forced the online advertising industry to evolve.

A proud man is always looking down on things and people; and, of course, as long as you’re looking down, you can’t see something that’s above you.”– C. S. Lewis

Flash-forward to 2012, and most any observer of the display advertising world would agree that we are in the middle to late stages of our very own hunger games.

Major forces are at play that threaten to disrupt the best laid plans of every ad network, Demand Side Platform (DSP), Data Management Platform (DMP), Customer Relationship Management (CRM) system and media Online Advertisingreseller.

So many companies are so very convinced their chosen direction is The Path. Millions of dollars are being invested and spent on marketing and sales bodies to maintain market share behind technology that has not evolved in more than five years.

It begs the question, “Do you own any technology that is more than a couple of years old which is still considered the best”?

As the tectonic plates of the online display shift, time will tell which companies were able to see the forest through the trees.

Compelling Events!

Going Mobile – One trip to any elementary school will show you that the next generations of consumers have no intention of being tied to a desk to get the information they need, when they need it.

Smart phones are quickly becoming the norm; tablets are exploding onto the scene. Dare I say that this is just the beginning of a wave of devices that will forever be at our beck-and-call when we need them?

This means that cross-device consumer device matching, sequential advertising and Omni device attribution will change the game. Many consumers in today’s world already wake up, check their phone, read their tablet, work at their PC and remain in a perpetual state of movement.

Rise of the Local Neighborhood Giant – Remember the media titans that ruled the earth known as magazines and newspapers? For years, they expanded their kingdoms to include TV and radio stations. In fact, they have dabbled a little in the online space through investment and acquisition.

However, they have made only a small step into the online advertising world as they have continued to pour the majority of their money and manpower toward maintaining their position as an authority on all things local in print.

The day is coming, in the face of undeniable reality, when one or more billion-dollar, old media giants will make the pivot to new media in a powerful, earth-shaking way. They have unique data and inventory. They have built-in sales organizations. They have millions of long-standing advertiser relationships. They have motive. We have yet to see the wrath of a slumbering giant that is beginning to wake up.

Big Data, Real-Time Bidding & Algorithm-Driven Optimization – You could write more than one article about Real Time Bidding (RTB), Big Data and Algorithms; however, they go together like peas and carrots.

In fact, they are the match, the fuse and the stick of dynamite that is being tossed into a world initially dominated by publisher ad networks who are white knuckling their hold on high CPM pricing and guaranteed inventory media buys.

Today, there is more data available on non-personally identifiable, individual consumer behavior than ever before. Every move we make online and offline is tracked, stored and sold. Access to this data in the milliseconds of an online ad call is a win for the advertisers who only want to buy the right impressions. It’s a also a win for publishers who can move their inventory faster and at a lower operating cost while leveraging the history of the consumer landing on their pages.

The amount of data being generated is mind-boggling and accelerating. This means that algorithms will make the needed correlations and optimizations faster than the human mind can process.

So, What’s Ahead In 2013 And Beyond For Display?

  • Online and offline data will continue to flow. Advertisers will leverage their own data combined with acquired third-party data and take targeting and personalization to new levels.
  •  Ad technology that is moving beyond the constraints of pre-built audience segments will leverage this rush of data in real time.  Unstructured data will mean that advertisers will get transparency into the data element that triggered every impression. Real time bids will adjust on a per-impression basis based on the quality, reliability and recency of the data elements.
  • Stand-alone data management platforms (DMPs) will find a new dilemma in that the next wave of demand-side platforms will replicate their functions or, most likely, eliminate their role, as advertisers can use their data without having to spend time and dollars grouping the data into functional segments.
  • Innovation around viewability and attribution will shed increasing light on the massive scale and impact of online display advertising on our modern lives.
  • Ad unit creative is due for some groundbreaking innovation, and I think 2013 will see some major advancement in the ad unit itself. Dynamic recommendation, ad-driven ad serving is itself at the very beginning of its evolution.

So, here we stand in the infant years of online display advertising promoting our Model T hot rod version of a product that will undoubtedly look very different in ten or, dare I say, twenty years.

The companies left standing five years from now will be the ones who see the macro trends, predict the evolution of those trends and innovate ferociously to set a new standard.

Opinions expressed in the article are those of the guest author and not necessarily Marketing Land.

Related Topics: Channel: Display Advertising | Display Advertising | Display Advertising Column

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About The Author: is the Chief Revenue Officer for Simpli.fi, a company quickly being recognized as the authority in search retargeting. Since the mid 90’s James has been involved in leading companies who are paving new paths in digital space.



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  • http://www.facebook.com/neel.amin.5245 Neel Amin

    nice work on the article….
    i look have your good work Thanks

  • http://twitter.com/pult_du пульт ду

    In the 1940′s, science fiction writers began dreaming of a medium that looked something like our beloved Internet does today. By the 1960′s, key discoveries were being made and implemented in the pursuit of a bette

  • hey_JC

    Really wasn’t expecting a tasseography reference, but nicely done.

  • Pat Grady

    It’s harder than your last sentence implies, and it’s implications weren’t “easy” to begin with.

  • Shelley Ellis

    I agree. The display advertising pioneers are enjoying this part of the journey much more than those early years when everyone thought they were crazy. I can’t wait to see what 2013 brings (new companies, new strategies, new experts, new tools)!

 

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