Not long ago the percentage of global advertising spend that was dedicated to digital was minuscule. It has grown rapidly, year-on-year to a point where now almost 50 percent of all advertising spend is on this medium. It is now space where the majority of marketing budget is spent, outstripping the more established mediums like television, print, and radio. But even as digital continues to grow and expand its market share, so too do the mechanics and mechanisms that power it. In short, the way things are done now is vastly different from how it was done ten or 15 years ago. With that in mind, here is a quick look at where digital advertising is currently at.
All about the numbers
Once the digital model was a copy of the old publishing model. A brand would identify a platform and spend money to access the audience that was on that platform. Buying advertising space was based on the profile of the audience that was believed to visit the website. But the world of data analytics Melbourne is a city that has many experts in this field who can advise on a strategy that has been a game-changer. What now happens is that an audience can be accessed regardless of what platform they are on. The audience is profiled and targeted based on things like browser history, consumer behaviour and a range of other data points. It means that advertisements can be targeted to specific people and the return on investment is much higher.
Not long-ago advertising rates were negotiated through face-to-face deals. A media buyer and a sales agent from a publisher would chat and talk about rates and value adds. While this process can still happen and there are still salespeople in the market-place, the bulk of these types of transactions now take place through programmatic channels. This is something like Google Ad-X, an online exchange that matches supply of publisher inventory with brand demand. It is designed to ensure that a publisher gets the best possible fill rate at the highest possible rate. The reverse side is that it ensures that brands get access to the specific audience that they are targeting and that they can do so at a rate that suits their budget.
It is the goal of every publisher to drive up the average rate that they receive per page on their site. In order to do this a series of complicated algorithms and formulae are applied. If the advertising rates drop too low, then the fill rate will be high but the overall revenue low. If the rates are too high, then the fill rates will be low and again, the revenue will be impacted. So, done right the goal is to have the highest fill rate and the highest CPM rate for the advertisements that appear. This is often a fulltime job as the rates that advertisers are prepared to pay to vary throughout the day. For example, there might be a lot of fast food companies looking to spend around lunchtime. This would require that the publisher increases the floor rate for their inventory to play to the fact that there is higher demand.