Are Ad Exchanges the Key to Maximising Online Advertising RoI?

Ad exchanges have always been a conundrum for premium and luxury advertisers.
The big plus is their performance-driven nature when compared with buying ad inventory direct from publishers.  As marketers are increasingly pressed to justify every penny spent on marketing, the ability to pay on say a cost per acquisition rather than a cost per impression basis or similar is extremely attractive.
The problem is  that historically ad exchanges come with downsides - and big ones too, from a premium advertiser's perspective.
Their largely blind nature means that brands have much less control over the environment in which their message is delivered. And the limited, and often unimaginative, range of ad formats means brands don't have much control over the way their message is delivered either.  As a result, it's hardly surprising that ad exchanges have been largely shunned by luxury and premium advertisers.
However, things are beginning to change.  The evolution of brand safety software - allowing brands to exert some control over the environment in which their ads are served (or where they are blocked) - has had an impact, no doubt.  But the major pull has been the exceptionally low CPAs delivered via ad networks for activity such as retargeting and remarketing.  The draw of converting a higher percentage of their prospects in a such cost effective manner has led many to put aside their reservations about environments and formats and class exchanges as an acceptable brand risk.
But is that the only role that ad exchanges can play in the purchase process for premium brands - helping marketers to convert site visits into sales?  Could they play a role further up the purchase funnel, prospecting for new customers and driving them into the funnel in the first place?  This sort of activity has traditionally been organised direct with publishers, who can offer the premium inventory and ad formats that luxury advertisers crave for brand-led activity. But we think exchanges can play a role. And, perhaps in the future, the leading role.  Here's how.
The key factor is that the inventory available via ad networks is becoming more attractive for 'top of funnel' activity. Publishers are making more and more of their premium inventory and ad formats available to exchanges- so for example, there's now a fair amount of quality video inventory available to advertisers.
This trend is being driven by innovations amongst the ad networks themselves as well. Take Google's Display Network (GDN), an exchange often ignored by premium and luxury advertisers because of the paucity of ad formats at its disposal. However, GDN is about to launch a new range of expandable ad formats in the UK which brands can use to deliver richer experiences, be that video or microsite interactivity. And that inventory will be auctioned on a cost per engagement basis - a metric that is much more relevant to the top of funnel objectives we are increasingly trying to achieve.
As the networks start to combine premium formats with their traditional strength in offering performance-based marketing, something interesting begins to emerge - performance-driven brand advertising. Networks could become cost effective tools for prospecting for new customers not just places for retargeting those that have already shown an interest.
Of course, not all brand-led online display will happen via networks - there will always be a place for the Vogue home page takeover or similar - but the more of it that happens via this channel, the greater the understanding brands will have of the optimum activity to drive purchase. And that's where the possibilities become really exciting.
At present, personalized and tracked digital marketing largely happens post site visit - the site visitors actions are recorded on a cookie and that information is used to deliver a relevant retargeted ad creative when they visit one the sites that forms part of the ad network delivering the campaign. If that same network is serving the ad that drove the prospect to the site in the first place, marketers understand one more stage of the journey - the creative that drove the site visit in the first place. As the data builds, marketers will gain an understanding of the optimum sequence of ads to move prospects into the funnel and through it initial interest to purchase and re-purchase.
Of course, that sequence will differ from prospect to prospect and accurate segmentation will be a key part of the process - the ultimate being to create a completely bespoke sequence of ads per prospect depending on which creative prompted the site visit and what pages that visit consisted of.  This is much closer than you think and the potential for optimizing digital ad spend and maximizing RoI at every stage in the consumer brand and purchase journey is huge.
In fact, it's something that we believe has so much promise, we're actively testing investing in it at Cream. We believe that the brands and agencies who are first to master this blend of consumer understanding, creativity & impact, and data driven performance are the ones who will win.
Please get in touch if you want to hear more about how we can apply our learning in this space to your brand.

Ad exchanges have always been a conundrum for premium and luxury advertisers.The big plus is their performance-driven nature when compared with buying ad inventory direct from publishers.  As marketers are increasingly pressed to justify every penny spent on marketing, the ability to pay on say a cost per acquisition rather than a cost per impression basis or similar is extremely attractive.The problem is  that historically ad exchanges come with downsides - and big ones too, from a premium advertiser's perspective.Their largely blind nature means that brands have much less control over the environment in which their message is delivered. And the limited, and often unimaginative, range of ad formats means brands don't have much control over the way their message is delivered either.  As a result, it's hardly surprising that ad exchanges have been largely shunned by luxury and premium advertisers.However, things are beginning to change.  The evolution of brand safety software - allowing brands to exert some control over the environment in which their ads are served (or where they are blocked) - has had an impact, no doubt.  But the major pull has been the exceptionally low CPAs delivered via ad networks for activity such as retargeting and remarketing.  The draw of converting a higher percentage of their prospects in a such cost effective manner has led many to put aside their reservations about environments and formats and class exchanges as an acceptable brand risk.But is that the only role that ad exchanges can play in the purchase process for premium brands - helping marketers to convert site visits into sales?  Could they play a role further up the purchase funnel, prospecting for new customers and driving them into the funnel in the first place?  This sort of activity has traditionally been organised direct with publishers, who can offer the premium inventory and ad formats that luxury advertisers crave for brand-led activity. But we think exchanges can play a role. And, perhaps in the future, the leading role.  Here's how.The key factor is that the inventory available via ad networks is becoming more attractive for 'top of funnel' activity. Publishers are making more and more of their premium inventory and ad formats available to exchanges- so for example, there's now a fair amount of quality video inventory available to advertisers.This trend is being driven by innovations amongst the ad networks themselves as well. Take Google's Display Network (GDN), an exchange often ignored by premium and luxury advertisers because of the paucity of ad formats at its disposal. However, GDN is about to launch a new range of expandable ad formats in the UK which brands can use to deliver richer experiences, be that video or microsite interactivity. And that inventory will be auctioned on a cost per engagement basis - a metric that is much more relevant to the top of funnel objectives we are increasingly trying to achieve.As the networks start to combine premium formats with their traditional strength in offering performance-based marketing, something interesting begins to emerge - performance-driven brand advertising. Networks could become cost effective tools for prospecting for new customers not just places for retargeting those that have already shown an interest.Of course, not all brand-led online display will happen via networks - there will always be a place for the Vogue home page takeover or similar - but the more of it that happens via this channel, the greater the understanding brands will have of the optimum activity to drive purchase. And that's where the possibilities become really exciting.At present, personalized and tracked digital marketing largely happens post site visit - the site visitors actions are recorded on a cookie and that information is used to deliver a relevant retargeted ad creative when they visit one the sites that forms part of the ad network delivering the campaign. If that same network is serving the ad that drove the prospect to the site in the first place, marketers understand one more stage of the journey - the creative that drove the site visit in the first place. As the data builds, marketers will gain an understanding of the optimum sequence of ads to move prospects into the funnel and through it initial interest to purchase and re-purchase.Of course, that sequence will differ from prospect to prospect and accurate segmentation will be a key part of the process - the ultimate being to create a completely bespoke sequence of ads per prospect depending on which creative prompted the site visit and what pages that visit consisted of.  This is much closer than you think and the potential for optimizing digital ad spend and maximizing RoI at every stage in the consumer brand and purchase journey is huge.In fact, it's something that we believe has so much promise, we're actively testing investing in it at Cream. We believe that the brands and agencies who are first to master this blend of consumer understanding, creativity & impact, and data driven performance are the ones who will win.Please get in touch if you want to hear more about how we can apply our learning in this space to your brand.