Did you dust off your TI-82 in 2011? Well, you wouldn’t be alone. 2011 was a left-brain year for display advertising. Ad technology businesses rushed to develop tools and methods for leveraging an increased availability of RTB inventory. DSPs and other buying platforms developed and tweaked algorithms to maximize efficiency for media buys across inventory sources.
Fast-forward toJanuary 2012. We’ve now spent over a year focused on the math side of the problem. There are as many DSPs as ever, and while it would be hard for a new player to enter the market at this point, none of the existing providers are likely to disappear anytime soon. Brands now have myriad options for efficiently targeting precise audiences across large pools of display inventory. However, we’re now hitting a wall when it comes to algorithmic media buying—the old law of diminishing returns. So, where do we go from here?
Rejoice right-brainers, in 2012 we’ll see creative become the focus of new technology and data application. Advertisers should stop milking algorithms for a measly ROI bump of 0.001%, and start caring about the actual content they’re displaying.
Any experienced media buyer knows that when testing multiple versions of an ad, the winning creative routinely outperforms the worst by 2x-3x. Recently, an extensive research study conducted by comScore found that creative quality contributed to 52% of sales lift—4x the impact of the media plan which came in at 13%. Apply the latest innovations in dynamic ads with personalized product recommendations or dynamic offers, and it’s not uncommon to see ad performance improve five- to tenfold. Can you get that kind of improvement by testing one DSP’s algorithm vs. another? Not going to happen, certainly not by those orders of magnitude.
Investment (both VC money and entrepreneur time) has been almost entirely absent from the creative side of the equation in recent years. It’s as if the market collectively decided that creative was “solved” when Google acquired Teracent in 2009. But styles change in ad tech just as they do in fashion. Get ready for creative-oriented technologies to be the little black dress of 2012.
This time, though, we stand poised to truly take advantage of awesome creative. The most established creative-oriented technologies—creative optimization, rich media, etc.—were founded in a pre-exchange/RTB world. The next wave of these technologies will provide a blend of personalization and analytics (our friends at the rightfully buzzed-about Moat give a hell of a demo.) Now, we can optimize creative not only on performance, but also on audience data. This is especially true in the world of retargeting where there’s plenty of rich first party data for slicing and dicing.
However, there’s a huge untapped opportunity to apply both first- and third-party data sets to creative decisions. Finally, left-brain and right-brain strategies unite! Why choose between the software engineer and the supermodel? In 2012, the look and feel of what you say matters just as much as how efficiently you say it.