Inside Display Advertising: Banner ads only beginning to come of age

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The identity of online display ads is still a work in progress. Since the first banner ad ran in 1993, display has been an uncomfortable hybrid of brand and direct. As branding opportunities tucked next to increasingly coveted online content, they've never collected high enough costs per thousand (CPMs) to compete with their offline counterparts. Marketers strive to incorporate rich media; target niche, long-tail categories; and create metrics to measure brand engagement in order to make up the difference and prove out the media's worth as a branding tool.

Meanwhile, the affordable pricing and ability to measure clicks and redirect users to product landing pages have made the channel an obvious direct tool. However, the banner ad has yet to reliably convert as well as e-mail or search, and does not yet have the same breadth in scaling inventory to large companies sales goals. Adding to the complexity of purchasing online banners is a glut of third-party ad networks and retargeting services that aid in identifying the best impressions available and strive to overcome the conversion problem. 

These companies offer a number of various pricing models and since most agencies and marketers are buying their inventory from several sources, there is no one metric for companies to compare all of their online display ad media buying.

Yet, despite the wide array of issues there has been no shortage of investment around improving the display market. One of the most fundamental comes out of news from the Interactive Advertising Bureau (IAB). On April 30, the IAB and the American Association of Advertising Agencies announced the Impression Exchange Solution. The impression exchange is an attempt to give advertisers and ad agencies and publishers networks a way to accurately track the number of impressions actually served. It sets up protocol around using a tracking code that will elicit a response from the advertiser's platform to the publisher's server. This will detect early in the campaign if there is a difference that could ffect billing or performance.

Jeremy Fain, VP of industry services at the IAB, said that the problem of discrepancies between how publishers and agencies account for ad impressions has been around as a technology glitch "since the dawn of display advertising."

"Nothing was done about this before because the online display hadn't massed the volume for the discrepancies to make a big impact." Fain said. "We've reached a point where marketers and sales executives were sitting up and seeing that it was real money that was being lost."

The new protocol is being rolled out in beta through Doubleclick and Microsoft Atlas Solutions throughout the summer. Fain said that the results have yet to be seen but he expects that it will free up resources for media planners, media buyers and publisher sales forces to focus more on improving other aspects of display advertising.


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