CPM is still the most common metric for ad measurement

CPM as metric for ad measurement

While it’s not necessarily the best measurement for online advertising CPM is still, for many, the simplest way of testing the success of a campaign.

Multiple factors, including the convergence of digital as both a content and a commerce medium, as well as the rise of multi-channel marketing campaigns, are leading marketers to benchmark their digital ad campaigns against both performance- and branding-based objectives—regardless of format.

The problem comes in when comparing the CPM of a banner ad to that of a rich media advert or a native advertising. However, it’s what advertisers want. According to a study by Nielsen advertisers want simplicity:

common used metrics for ad measurement

 

Many would prefer to move towards an engagement metric or a “Cost Per Engagement”. For many, CPE might be a preferred performance metric, it is unlikely to become a ubiquitous pricing model. In addition, how do you even measure engagement?

measurements that actually matter the most

Give OfferForge a call and we’ll discuss how to structure your campaigns for maximum effectiveness in order to reach your business goals.


How can we fix the perception of online advertising?

According to a recent survey done online users consider advertising to be second only to hackers when rating anonymity. Essentially consumers are more worried about their data being used by advertisers than they are government agencies and even their employers.

According to the report, 28% of American internet users had taken steps to hide specifically from advertisers. Only “hackers and criminals” scared more people, with a third of respondents having done something to safeguard themselves from attack. Despite the past few months’ revelation about snooping by the state, the government and law enforcement agencies concerned people the least.

perception of online advertisers

Worryingly for advertisers, their main audience is also the one that most actively seeks out ways to avoid being tracked online. Over a third of people aged between 18 and 29 (whom Pew refers to as “young adults”) try to avoid advertisers, compared to 23% or less for those over age 50. That may well be because younger people also reported having the greatest amount of information about themselves available online.

If people are actively avoiding online advertising, isn’t it time for us to start considering that we’re doing something wrong? Online advertising certainly isn’t evil, nor does it have to be. However the perception is the problem.

What is required though is a change in transparency from ad networks and ad providers. We read a wonderful story of a mobile ad network that created a fantasy product in order to prove their product over competitors. While this form of competitive advertising may not be perfect, it does add a level of transparency that we’re currently lacking. Proving to consumers that advertisers aren’t stealing their data or information is a matter of priority. If you’re looking for transparent, ethical advertising then look no further than OfferForge. Contact us now, we’ll make your clients love you.


Common ad server questions

Being an online ad provider we often get a lot of questions on how the actual technology behind and ad server work, what are the common ad banner sizes and what are the benefits of online banners. As such we decided to answer all three in one educational post:

Q: How does an ad server work?

When a browser navigates to a publisher website, the publisher’s web server sends back a bunch of HTML code that tells the browser where to get the content and how to format it. Part of the HTML code returned to the browser will include a coded link known as an ad tag. If you right click on an ad unit and select “view source” or “inspect element” you’ll see a bunch of random numbers and letters that make up the code to call the advert.

The ad tag points the browser to the Publisher’s Ad Server, a system designed exclusively for delivering and tracking advertising. The content server tells the browser to fetch the ad from the server and then make the very complex decision on which ad to serve using a program called an Ad Selector.

Q: What are the most common banner sizes?

We get banner ad sizes regulated by the IAB (Interactive Advertising Bureau)  and while they do tend to change over the years, these are the most common currently:

  • 728X90 Leaderboard: This is usually found on the top of a site and is a wide but relatively flat image.
  • 300X250 Rectangle: This is used almost exclusively in a sidebar however it has recently become quite common to find this size advert on individual content pages. This size has become very popular amongst both advertisers and the agencies that create the adverts.
  • 300X600 Half Page Ad: This advert size generally is found on the right hand side of a website above the fold (visible without having to scroll). Ad servers allow for a 300X250 banner to expand to a 300X600 advert. Advertisers use this to attract attention due to its size.
  • 125X125 Square: This is a size usually often used by smaller publishers offering smaller but cheaper advertising space. You will often see four of these adverts grouped together in a similar space to a 300X250 Rectangle advert with some padding to make up for the difference in pixels.

 Q: What are the pro’s of a banner?

Some benefits include:

  • Cost – compared to newspaper placements or TV spots, online banners are still relatively inexpensive.
  • Instant gratification – your customers can see your ad, shop and buy (if you sell products online) without leaving home. That sort of convenience is hard to beat.
  • Testing – if you create a brochure, you have to print and distribute it before you are able to measure response. On the Internet, response (or lack of response) is lightning fast. Also, since it’s relatively simple to switch out banner ads, online advertising gives you the ability to test creative campaigns and fine tune messaging. This can help increase effectiveness of your campaign and enhance results.
  • Geo-targeting – online advertising gives you the ability to geo-target your ads, ensuring that they are only viewed, and clicked, by your intended geographic and niche audience. This allows you to create localized messages that appear on national sites.
  • Constant exposure – your online ad works 24 hours a day, 7 days a week.

So there you have it. If you have any more questions give us a call or send us an email and we at OfferForge will happily help with any ad server related queries you might have.


Google takes 50% of all mobile advertising revenue

It’s scary to think but of the $8.8 billion spent per year on mobile advertising Google makes around half of this amount. What this means is that in total Google receives over one third of all revenues spent on digital advertising world wide. This is all according to a report by Emarketer and the estimation is that Google have tripled their mobile advertising in 2012 from 2011.

mobile internet advertising revenues worldwide

As shown in the table above, 2013 looks to be another bumper year with mobile almost doubling in value, a trend we’ve seen for the past two years. Other winners include the likes of Facebook that will be seeing a $2 billion revenue from mobile meaning a total of 12,5% of the marketing budget goes to Facebook.

mobile ad revenue share worldwide by company

It’s also interesting to expand the view to the online advertising industry as a whole. Google still dominates here with a staggering $33 billion a year. Facebook, the second place takes home a “mere” $5 billion of the total online revenue pie. Third and fourth are Yahoo and Microsoft respectively and together they add up to Facebook’s revenues.

net digital advertising revenues globally

It’s heartening to see such massive growth in the digital industry and even more accelerated growth in mobile. Services such as Twitter have grown their revenue over 100% year on year since 2011, an unparalleled increase in any industry. Most excitingly if you look at the table above the “Other” section makes over $61 billion, an absolutely massive opportunity for anyone.


Could you browser be damaging the online advertising industry?

With cookies being the way advertisers have always tracked users movements through the internet it’s critical that the users browser plays ball and provides access to these cookies. US ‘do not track’ privacy legislation requires browser companies to give users the ability to ‘opt out’ of data tracking. Microsoft recently went further by making ‘opt in’ the default setting on its latest browser, but does this kill online advertising as we know it?

That means unless people change Internet Explorer 10 browser settings, third-party cookies – the main way industry targets ads – are rejected. At least in theory. The onus is on third parties to honour the consumer’s choice.

Now Mozilla, funded largely by Google, will go further still. It looks set to ban third-party cookie tracking, with a beta browser due within weeks. The fear in adland is that the rest of the major providers, including Google and Apple, may follow suit.

What this means is that ad servers will become less useful with increased wastage and the problem of less relevant adverts and increased ad blindness.

The interesting issue is how Google is using Mozilla as a test case for its own browser Chrome, which does not automatically activate “do not track” but does provide the option.  Since browser firms are also content producers and publishers, “do not track” could these publishers to command their own price for online advertising.

Whether Mozilla’s approach becomes the common one is unknown. “[But] the companies that are least affected by cookie legislation are those with large, logged-on userbases,” Mindshare chief digital officer Ciaran Norris said. “Legislators should consider the impact on local businesses.” Industry had a key role in educating both legislators and consumers, he added.

What the IAB’s director says about this online advertising issue

The IAB’s director of regulatory affairs, Samantha Yorke, agreed. Transparency and choice were key, she said. Web users need to understand why cookies are useful to them – such as enabling free access to content – and not a threat to individual privacy. However, she said uncertainty would not be diminished until ‘do not track’ was properly defined.

Not holding her breath for a definition, Yorke was under no doubt that moves to block third-party cookies would have “a profound effect on the digital economy”. The ability to collate analytical data would be “severely compromised”, she said.

One also needs to consider the issue of publisher with paywalled content that use cookies to provide free content up until a certain number of reads.

What this does point out is that advertisers need a better way to track users online journey in order to provide options for targeting and retargeting of users. Ironically this lack of targeting and increased CPM costs might lead to increased revenue in the digital industry!


Online advertising set to reach a total value of $400 billion in the next 5 years

Despite online advertising being a $100 billion a year industry it’s still a drop in the ocean compared to the traditional advertising industry that brings in a cool $800 billion per year.

Of course the balance of power is rapidly changing with estimations that by 2018 online advertising will account for 50% of all advertising budget spends.

For this change to happen something powerful needs to come along for advertisers to take notice. Google Chief  Business Officer Nikesh Arora believes that something is Internet-connected televisions, or smart TVs, an area in which Google Inc has not been wildly successful to date. However, he argues that in the coming years, smart TVs will go from “nice-to-have” to “must-have” in the minds of consumers, forcing marketers to allocate more ad dollars online.

Online advertising trends indicate a huge rise

Arora has a vested interest in this with  YouTube shaping up to be a huge winner here as Google continues to transform the site into becoming more desirable for users and advertisers alike. Through the use of channels, Google is hoping it will improve the experience by connecting users directly with content, aligning more closely with the traditional TV experience.

Not only are YouTube channels more convenient for users to connect with relevant content, the value preposition for Google is tremendous. According to YouTube head Salar Kamangar, packaging a video within a niche-specific channel has the potential to bring 10 times more in advertising spending per 1,000 users than if it were stand-alone. The justification here is that marketers have better odds of targeting their intended audience.

Technology will continue to play a deeper role in how the world consumes media. As more content continues to be consumed online, advertising dollars are likely to follow suit and inviting the potential for targeted advertising. Arora reckons that if a user just purchased a car, they wouldn’t want to see an advertisement for a new car. Eliminating this waste creates more value for marketers while simultaneously improving the user experience.

We’re hoping to see a world where contextual advertising really works and advertisers get smarter targeting and even better returns than they currently.