With the retirement of third-party cookies on the horizon, Tim Schultz looks at why ad impact will become even more important.
The price of digital inventory has always been set by two factors: scale and relevancy. That’s why Cookie Death Day will be Christmasx365 for the Big Four (Google, Facebook, Amazon & Apple). The majority of online media is traded through these platforms, and soon their data will be the only unified data around. DSPs can integrate, publishers can aggregate, and the super-apps can innovate. But no matter what the plucky Rebels do, next year the Empire grows even more powerful.
Now a new factor is being used by both Empire and Rebellion to sell more inventory: ad impact. Instead of just targeting, they’re offering to make the ad itself better. The Empire uses data to optimize creative assets through AI-driven testing. Buy from Google, Facebook or Amazon, and the Empire platforms will test combinations of images and copy, eventually showing the best-performing configuration to your target. This approach is scalable, opaque and powered by data.
The Rebels go for something louder. Their new weapon to boost ad impact is rich media formats, sold by sales teams and built quickly with creative automation platforms. Buy inventory using some DSP’s, and your ads will be animated, interactive and impossible to miss. Buy from some publishers, and your ads will be shown in themed formats, designed just for the pages they appear. This solution is flamboyant, proud and sold personally. The Rebels, it seems, still believe in an ancient force the Empire gave up on long ago: creativity.
An old truth, re-animated
Ten years ago, a Google study proved something surprising: that 80% of an ad’s impact came from its content, while only 20% came from targeting. The digital ad industry ignored this finding and focused on 20%. This was partially due to the technical limits: back then, machine learning wasn’t smart enough to re-write your ads, and animated assets required massive HTML5 files. That status quo lasted over a decade.
Creative automation is now finally addressing that un-optimized 80%. The most exciting tools today use rich media in ways we’ve always needed. Instead of taking four days to build, images and video are simply dropped into pre-built templates. Instead of clunky HTML5 files, super-lightweight WebGL assets are 10x smaller… so small, they can be placed in standard display inventory. (Full disclosure: I’m head of growth in JAPAC for NEXD).
So it’s animated. But does it perform?
Replacing static images with interactive animations or video brings an average of 2x improvement in the simple performance metrics like CPC, CTR or CPA. Those are some “Damn, son” numbers. And now that the assets are lighter, placing them doesn’t need to cost more. Standard inventory has about 30% cheaper CPM than rich inventory and is up to 50% cheaper than on specialist video ad networks.
From secret weapon to industry standard
Super-lightweight rich media is quickly moving from secret weapon to industry standard. It all started with early-adopter managed service agencies and publishers, whose sales teams placed rich media across cheaper inventories. Ad networks noticed, and soon their sales teams were doing the same. Now innovative DSPs are integrating directly with platforms, offering a drag ‘n drop rich media builder to anyone placing IO’s on their system.
Working quietly in the background are the super-apps, the real threat to the Empire (or soon its newest members). For the past year, Wal-Mart, Rakuten, FlipKart and Amazon all acquired or are developing rich media ad builders. Each will probably offer unique formats built just for their UX, like slightly animated product suggestions or video formats built into their OTT platforms.
So why isn’t everyone using this yet?
Improving impact is clearly effective. But buyers are weary of added complexity. In the current market, campaigns spread across different ad networks, publishers or DSP’s become fragmented. Even worse, ad networks claim their formats as “free”, but take huge mark-ups on media costs. The result: innovation fatigue. The Rebels might have cool new toys, but which ones should a client use? The ease and scale of the Empire beckon.
The best practice is to take control at the agency level. Build your creative assets on an inventory-agnostic creative automation platform, then serve them into whatever DSPs, networks or publishers needed. This ensures uniformity in design and reporting and keeps what you’re buying as cheap as possible. New toys can simplify things… if you choose the right toy.
Show me the formats
Scale and relevancy will always define the prices of digital marketing. But soon optimizing for 20% of an ad’s success won’t be enough. Soon advertisers will want to know: what formats does your inventory offer? Will my ad be animated? Video enabled? Clickable? Interactive? And how lightweight are the files?
Use the force
Right now, the Empire platforms are happy. The republic is dead (thanks, lobbyists). Their Death Stars are built (good job, India). And in ten months, Planet Cookie is about to go boom-boom. But across the galaxy of advertising, creativity still flows through all things. The Rebels have re-discovered an archaic power, and are using new tools to make their ads more visually and contextually impactful.
The force of creativity is with the Rebellion. For now.
Tim Schultz is head of growth, JAPAC, at Nexd.