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  • April 25, 2013

Display advertising: Up your game. Go native.

Remember when intrusive banner ads promising to "Get Rich Quick!" or "Lose Weight Fast!" ruled the world of online advertising? Then came the explosion in ads that appeared next to Google search results. There are countless other innovations, of course, that have impacted the digital ad world -- the most significant and recent being "native advertising" -- a term that means different things to different people, but is essentially a more contextual form of display advertising designed to complement the specific look and content of a web page.

How hot is native? Native advertising on social media alone is expected to triple to $1.5 billion by 2016. While that might seem paltry compared to the overall size of the digital ad market, native advertising is one of the fastest-growing segments of display advertising. At its simplest, a native ad can be a company promotion placed within a corporate Facebook page. But it also can be an ad for luggage that appears in the Twitter feed of a consumer who follows Southwest Airlines.

It's all part of the irrevocable shift in recent years away from mass marketing to customized, targeted ads that, unlike the in-your-face banner ads of yore, actually engage consumers. They're intriguing. They're fun. They're often built around original content. They're presented in such a way that, even if consumers are fully aware that they're being pitched on something, they don't care. It turns out, consumers want to be engaged: 95 percent of online users polled by eMarketer said that they value ads that grab their attention.

Display gets native

Small wonder, then, why display advertisers are paying attention -- and borrowing a few tricks from the native world to up their own game at display. Helped by huge advances in customer data, interactive technology and mobile platforms, display advertisers are making smarter ads -- and, along the way, breathing new life into a medium that many had left for dead. eMarketer estimates that U.S. companies will spend $17.7 billion this year on online display ads, an 18.2 percent jump from 2012.

What's driving this resurgence? Two words: Big Data. As Mike Hotz, director of strategic services at Responsys, explained here recently, marketers today can identify, segment and target customers in increasingly sophisticated ways.

Big Data, for instance, is enabling display advertising professionals - and advertisers generally -- to target consumers according to their demographics and lifestyle; to follow consumers who visited a website but didn't make a purchase with ongoing ads; to market to consumers based on their web browsing history, even if they never visited a particular marketer's site (a visitor to BrooksBrothers.com and RitzCarlton is probably interested in seeing the latest Mercedes-Benz sedan); and to customize ads to make them relevant to a site's stories and videos.

The best part is, these new forms of display ads can be cheap and easy to execute.

Wallpaper ads

Earlier this year, for instance, ESPN.com unveiled a wallpaper ad ahead of the BCS championship game that wrapped around the site's content -- in this case, two videos featuring Alabama and Notre Dame. Readers were asked to vote on their favorite team, and then were shown a trailer about that team, and encouraged to share the videos on Facebook and Twitter. As the voting progressed, the colors on the screen changed to match the color of the team leading the vote.

As Jeff John Roberts at Paid Content points out, the ad was large but unobtrusive and, most important, relevant to the content about a highly-anticipated football game. What's more, it's not simply a static ad that tries to lure readers to the advertiser's website. In another example, Dunkin Donuts gathered data on a consumer's location to flash a banner ad displaying the location of its nearest store.

Creating ads from content

Other advertisers are embracing a hybrid approach to advertising -- by combining the best elements of display and native advertising. Companies such as OneSpot allow publishers to taking their existing content -- say, a blog post or a whitepaper -- and create an ad with it. With the help of an online ad network for distribution, the ad is served to sites featuring articles or videos directly related to the advertiser's content. A national pizza chain, for instance, can take a glowing newspaper review or a quirky video about a pie-eating contest and package it into an ad that it then places on a site whose audience is made up Italian food aficionados.

New ad opportunities in mobile

The huge success that native advertisers have found on mobile devices is also opening up new opportunities for display advertisers. For instance, automobile insurer Bradesco adapted for smartphones an advertisement for iPad magazines that leveraged the touchscreen swipe to tell a simple story: a consumer opens the ad and sees a picture of a car. When she swipes to turn the page, the car moves along with her finger, causing the car to crash into a wall. Tagline: "Unexpected events happen without warning. Make a Bradesco car insurance plan."

How email and display ads work together

Today marketers not only have more data available to them, but the granularity of the data has vastly improved. This provides new opportunities for marketers to increase their return on investment. However, if marketers are to see real returns from their display marketing, they need to combine this approach with email and other channels in an automated and orchestrated manner – signaling a well overdue end to the ‘batch and blast’ approach.

It’s important to note that while return on display marketing is generally lower than email, it increases significantly when the two are combined. At Responsys we provide an environment where marketers are able to interpret the information they hold on their customers and orchestrate it into their cross-channel marketing strategies. Take Dollar Thrifty, for example. By serving well-timed and personalized display ads to customers who had received email offers, they realized over 22% revenue lift. The message is clear – for optimum success, marketers need to combine their email and display strategies. It’s not rocket science, it’s smarter marketing.

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