Brad Geddes / PPC Geek
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Brad Geddes's Theories on Marketing Online Media Planning – Buying Remnant vs. Guaranteed Display Ads

Online Media Planning – Buying Remnant vs. Guaranteed Display Ads

With the efficiencies RTB (real time bidding) offers in acquiring online ad inventory for Google display advertisers, it’s fair to question when it makes sense for advertisers to purchase direct (or guaranteed) inventory. Google display advertisers can target 99% of websites plugged into Google AdSense (and other partner sites) to compete to generate impressions paying potentially fire sale rates; all while increasing their chances for high impact impressions using Google’s sophisticated technology for audience/geographic targeting, scheduling, etc. This combination, along with the ability to launch a campaign and get it live within a matter of seconds offers a very complete and efficient solution.

However, Google display advertising is not without its flaws. Because RTB is a programmatic solution that offers in some angles an inflexible framework for precision, control and creativity, there are some imperfections which affect every advertiser differently. For some, the effect is miniscule; for others, severely debilitating.

This doesn’t mean the flaws within the direct advertising realm are nonexistent – there are plenty. Therefore, the purpose of this write-up is to explore some of the pros and cons of both remnant and direct media buying in order to make it easier to decide which channels to target.

Google Display Advertising

It’s an empowering feeling knowing that within minutes, I can have my ad up and running across millions of websites plugged into the Google Display Network. It’s empowering because when a publisher uses Google AdSense or plugs into an ad exchange, she can no longer completely dictate the value of her website’s inventory; save for setting a floor price and creating blocklists, her inventory’s value is in for the most parts decided by real time buyers.

On the buy side, the following is a list of strengths in remnant advertising:

1) Because Google display advertisers are bidding on remnant inventory (my guess is that for most websites, remnant impressions account for 60-70%), ad space can be secured at potentially fire sale rates. The difference in CPM between guaranteed vs. non-guaranteed buys can be as little as $0.50-$1.00; at other times, it can be 40-50X less expensive, depending on the placement and volume.

*For those wondering if the CPM between remnant and direct (or guaranteed and non-guaranteed) can really differ by about 5,000%, it is very possible if the publisher doesn’t have a realistic grasp of the value of her inventory, i.e. thinking her ad units are worth dollars when they are worth pennies.

2) With Google display advertising, media buyers don’t need to deal with weeks of negotiation, contracts, and essentially the need to maintain relationships with a dozen publishers. If an ad isn’t performing, Google display advertisers can simply pause or delete a managed placement. This freedom to run campaigns without being tied to a contract is a luxury that should be seized.

3) With RTB, if impressions aren’t being generated, then display advertisers may increase their bid within seconds through the AdWords platform.

4) It’s simple to set advanced targeting options at the campaign level that not only pertain to specific categories or pages within the targeted website, but also controlling where, when, and to whom the ad is being shown (this is a service that publishers can extend to direct advertisers as well, but unless the ad spend is a significant amount, most publishers probably won’t bother).

5) Google display advertisers have the freedom to bid using either a CPC or CPM model.

Direct Advertising

With direct purchases, there’s certain elements of control along with a certainty of reaching scale that may not otherwise be available to display advertisers. The following are five strengths to purchasing direct:

1) Guaranteed campaigns – There is no wondering if, when and where the banner will run.

2) Access to a large number of publishers who choose not to run ad networks(AdSense, AdBrite, Chitika, etc.) or opt not to participate in an ad exchange (DoubleClick, OpenX, Right Media, etc.)

3) Customized campaigns – There are strategic ad campaigns that can only be executed through special arrangements. Takeovers or towers are not solutions available through the AdWords platform. If there are plans in which advertisers wish to create special, high-impact campaigns, the only people that can make them happen are publishers.

4) Reaching Scale – This applies to advertisers whose audience hangs out in few, exclusive spots on the web. For example, if an advertiser with a budget of $50,000 were to try and target other search engine marketers during the 4th quarter of a very critical moment for her company, how would she plan in a way that would guarantee her the much-needed impressions? She can certainly try and target websites like Search Engine Journal, Digital Point, and even this blog to snag all the remnant inventory she can. However, there’s a fairly good chance she’ll fail to reach scale without purchasing guaranteed inventory. Furthermore, what would she do if one of the publishers she targeted places her on a blocklist? This is something I’ve dealt with first hand. It wasn’t because I had a sleazy product or a bothersome direct-response ad, but it was because the publisher did not want to be undercut – hence another precarious nature to Google display advertising that doesn’t exist with direct buys.

5) Relationship factor – There are benefits to not having to deal with maintaining relationships with a dozen publishers, mainly due to time. However, there are also benefits to the luxury of having dozens of relationships with publishers – think PR.

*One Note on Direct Advertising – I’ve mentioned much of the cons of direct advertising throughout this article. Along with the hiked price that comes with purchasing premium, guaranteed inventory, much of my gripe has to do with time and difficulty in managing relationships and organizing reports from dozens of publishers. It’s very convenient to be able to manage all of the billing and metrics through a single UI.

There’s a company called BuyAds I’ve used in the past to secure direct deals. One can think of BuyAds as a direct, guaranteed inventory marketplace for advertisers with hundreds of hand-curated websites. My reason for mentioning this company is because much like AdWords – a programmatic platform for advertisers on the remnant, non-guaranteed side – BuyAds appears to be making great progress on finalizing a programmatic platform (called BuyAds Pro) for the direct, guaranteed side. Through the BuyAds’ interface, users will be able to submit bids, punch in targeting options, and measure their campaign’s performance – all with the knowledge that the campaigns are guaranteed. It’ll be very interesting to see how this plays out as it could make securing guaranteed inventory across multiple websites not as mind-numbingly complicated as it exists today.

Google Display vs. Direct?

Embrace both – In most campaigns, there should be a healthy mix of Google display and direct, but there should be well thought-out reasons for choosing one or the other.

If we’re talking about audience buying, i.e. targeting through language, location, demographics or placements through keywords, I don’t see how direct advertising could compete with Google AdWords and other Ad Exchanges.

However, if a media buyer has knowledge of the websites her target audience is likely to gather, it would be helpful to create a list like the one below:

image

From here, it takes a combination of observation, experimentation, and common sense to figure out how the advertising inventory will be secured. Going back to my last article – How to Research and Launch a Display Ad Campaign – we can use the websites MacRumors and MacWorld to provide an example of the thought process behind choosing Google display vs. direct.

It’s safe to assume the CPM for direct buys for both websites will hover around $10.00. With a purchase of a large amount of impressions, those rates can be negotiated. But if one were to visit MacRumors, she would discover the ratio of ads served by ad networks vs. direct ads would be around 80/20. Conversely, the ratio for MacWorld would be closer to 10/90. Hence, if the goal for the 4th quarter were to secure one million impressions on both websites, one can assume that all one million impressions could be served on MacRumors by targeting the website through AdWords, whereby the advertiser would save quite a bit of money by snagging the remnant inventory. As a matter of fact, it would be nonsensical to purchase ad space directly from MacRumors, where the advertiser can expect to pay4-5X the amount she would be getting through AdWords.

One the other hand, because of the limited supply, it would be impossible to generate one million ad impressions on MacWorld because this website has a very limited amount of remnant inventory. In this case, it would make sense for advertisers to contact one of MacWorld’s account managers to explore the rates they have to offer.

Final Word

Choosing between Google display and direct is never black and white. With every campaign, the situation always has shades of grey. Hence, I hope I was able to shed light on some of the pros and cons that come with Google display and direct (or non-guaranteed vs. guaranteed) buying to present a loose framework to approach media buying across both channels. In my experience, to reach maximum efficiency and scale, most campaigns will require a use of both. The trick is to be able to accurately project the value of each website that’s going to be targeted (i.e. not buying inventory for dollars when it can be bought for pennies).

Delbert Kim is an internet marketing consultant at Longview Sources specializing in search & display advertisements and is passionate about helping small businesses understand and develop intelligent internet marketing campaigns. You can connect with him on LinkedIn.

 
Opinions expressed in the article are those of the guest author and not necessarily bgTheory. If you would like to write for Certified Knowledge, please let us know.
 

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