Curious About Display Ads? Here Are 3 Answers You Need
Retail Media Networks - Part 3
Posted by Cristian Antuña
on November 7, 2023 · 4 mins read
Retail Media Networks - Part III
This is the third blogpost in our Retail Media Network (RMN) series. In our first post, we discussed how RMNs benefit both retailers looking for additional monetization channels and advertisers aiming for improved product placement. In our second post, we dived into the challenges of building such networks. Finally, for our third post, we’ll be focusing on display advertising, its functions, and its advantages.
After reading this post you’ll be able to answer the following questions regarding Display Advertising:
- What is display advertising?
- Why offer display advertising?
- How are display ads sold?
#1: What Is Display Advertising?
Display advertising includes any ad shown in spaces specifically reserved for publicity. Contrary to sponsored content, where some kind of listing was necessary in order to offer a better position within it, display advertising can appear at the RMN owner’s discretion. However, excessive or misplaced ads hurt UX, so design is crucial for display advertising to work seamlessly within an RMN. While content matters, it’s less critical compared to sponsored content.
Different agencies or sites may use interchangable terms like “placements” or “ad formats”, but here we’ll use “ad-unit” to describe specific spaces for displaying ads. Regardless of the term used, the key concept is defining where advertising is allowed. Typical ad-units offered in several RMNs are:
Banners: top, side, bottom, on scroll, media embedded - you name it. These are the most basic units that you are probably already familiar with.
Interstitials: these ads briefly cover the whole screen, ideally during transitions: before displaying media, transitioning between paginated listings, or opening/returning to an app. This format is ideal for mobile or small screen devices where one application is displayed at a time.
Native: this term encompasses tailor-made ad-units designed by the site’s creators. Examples include widgets displaying related content or spots within the newest article feed offered by an RMN.
This list may vary across sources. For example, native content may be treated as a channel by its own. However, these variances pertain to terminology, not substance. The key point is that RMNs offer diverse ad-units beyond sponsored content. If designed properly, they support many marketing strategies - and that's what display advertising is all about.
The diversity of display advertising extends beyond where ads are shown to the formats they take. While static banners are the archetypical go-to, displaying media like videos or interactive content such as mini games is becoming increasingly common.
#2: Why Use Display Advertising?
In our previous post, we highlighted how sponsored content excels in performance marketing, enabling direct attribution of sales and revenue to specific ads. Sponsored content is typically optimized for the highest ROI. While performance marketing can run display campaigns, these ads appear in a somewhat less context-specific manner (although not entirely devoid of context). Consequently, their relative advantages lie in different strategies.
Branding and awareness marketing involve ads not focused on immediate sales but on making the brand a relevant choice for future purchases. For example, a fast-food banner may not prompt an immediate sale, but, it lingers in the viewer’s mind when deciding what to eat later. In-house ads are frequently used on websites. For instance, a deli-shop site might display ads for other culinary shops they own. Partnerships content works the same way.
Switching our attention specifically to display ads within a RMN context, we can see that they complement their sponsored content offering because they allow awareness campaigns in highly exposed ad-units. Interstitials, landing pages’ or banners, for example, may be displayed thousands of times per minute.
These campaigns can leverage RMN's extensive first-party data, similar to sponsored content. As mentioned before, performance marketing can occur within display ad units without any limitations. Therefore, the discussion about attribution remains relevant. Moreover, privacy-compliant user tracking enables more precise targeting choices.
Advertisers commonly use tools like frequency caps to target specific users with a limited number of ads, preventing overexposure. This strategy allows them to assign higher value to less exposed users. Additionally, understanding customer behavior on the site enables advertisers to target specific subsets, such as those who recently purchased sportswear. The context of the page, whether it's a landing page or a specific shop, provides valuable information for effective targeting. Furthermore, anticipating user actions, like displaying an interstitial after an order confirmation, enhances advertising strategies.
Lastly, tracking data is a valueable feature in RMNs. Even in non-performance-oriented campaigns, more performance data translates into increased accuracy estimating awareness effect on (in and off-site) sales. This is a crucial for modern, data-driven marketing, read more about Marketing Mix Modelling here.
How are display ads sold?
Historically, display ads were sold on a guaranteed basis: the publishing site estimated that many visits would happen on a given time period and sold their corresponding ads to a number of advertisers, on a pre-established cost per impression basis. But a modern RMN should turn to programmatic ad sales; that is, auctioning each opportunity as it appears in real time.
Given the rich data available, the best approach is to assess every opportunity individually through auctions. This allows advertisers to leverage data, refine their bidding strategies, and allocate funds only to slots aligning with their current objectives.
In a modern RMN setup, advertisers wouldn't need to specify individual bids. Instead, they would define campaign goals, such as minimizing CPC or CPM, smooth budget spending, prioritizing high-performing items, or targeting specific audience segments. Under the hood, machine learning tools would be employed to achieve these goals. Each goal, such as cost, pacing, allocation, or reach, contributes to a highly efficient campaign, surpassing what manual bids could achieve.
We hope you’ve achieved a clearer understanding of display advertising, what it is, and how it complements sponsored content withing RMNs. If you’re feeling like you skipped a beat, remember this is the third post of a series. You can check out the first and second post by clicking on the links.