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1 What is display advertising? The term display advertising refers to banner ads displayed on web pages. Over time, banner ads evolved from very simple basic text to include more engaging content and format types. For example: Standard Banners: Images displayed alongside, above or below content on a webpage. Rich Media: Images that encourage interaction via animation, expansion beyond the ad frame, video and/or sound effects. Video: Video ads that run before, during or after an online video much like TV spots. The IAB (Interactive Advertising Bureau) credits HotWired.com (better known by its present day offline counterpart, Wired Magazine) with delivering the first ever online banner ad in Legend has it that of HotWired s original fourteen campaigns, the very first ad to display was an AT&T ad that read, Have you ever clicked your mouse right here? You will. Today the display advertising business is worth an estimated $10.3 billion quarterly (PwC 2013). Why use display advertising? Location: Studies found that US Internet users spent virtually 50% of their time online browsing content sites (webpages with banner ads) and overall page views are up. Influence: Display ads can be targeted to specific relevant content, individuals or a combination of both, as well as a myriad of other characteristics (for example, the user s device type). This creates a right time, right place, right message capability that extends well beyond that of other traditional media types. Further, many of today s display technologies can help advertisers identify web users who are most likely to engage with their campaign and ultimately, their product.

2 Accountability: Web technology makes display ads some of the most readily and easily tracked media types. The influence of campaigns can be measured in a variety of different ways both while the campaign is live and after the fact. This helps advertisers understand their campaigns impact on sales and ROI. Control: The ongoing, real-time nature of display ads, relative to other traditional media types, empowers the advertiser to impact the performance of their campaign. Reporting collected during the campaign can be used to evaluate and affect performance as the campaign progresses, unlike other media types that can only deliver results post-campaign. Isn t search enough? Search is a proven and successful online marketing channel. However, display addresses several different, additional objectives- including the ability to enhance your existing search campaign s performance. Engagement: By design, display ads are more compelling with elements of visual, audio and interactive appeal versus simple text-based search ads. Awareness: Focused Display ads are an efficient way to create greater awareness for your brand or product among an audience that is at the beginning of the conversion funnel. Content: Display ads can be targeted to specific content in order to create new interest in your brand or product among an audience who is already actively engaged in a relevant subject.

3 Is display effective for small business and local campaigns? Display ads cannot only be effective, but also cost-efficient for local target audiences. For example, standard banner display costs average (not including creative production): 4-5x less than a direct mail list (delivery not included) 4-5x less than 10x less than SMS Targeting by DMA or zip code enables local and small businesses to reach only the most relevant audiences based on geographic proximity. How does display advertising work? Webpages are essentially a collection of different instructions that tell the web browser what data to display, where to display it and from where to source it. This data comes in many forms e.g. images, text, code, etc. Here s how it all comes together when you open a webpage in your browser: 1. User navigates to a webpage (e.g. clicks on a link). 2. The webpage directs the browser to the publisher s host server for the page content. 3. The HTML content returned to the browser from the host server may contain text, images and ad space. 4. A small line of code in the ad space directs the browser to the publisher s ad server (often a third party) along with some information about the user s cookies. 5. The ad server contains ads available for this webpage and selects one to return based on information it received from the browser. In other words, the ad server will look for an ad targeted to the same segments as those in the user s cookies. 6. When a webpage sources ads from an ad network or exchange, the publisher will forward the request on to the exchange s ad server. The exchange s ad server will then identify a matching ad and return it to the browser. 7. The user sees the webpage content and display ads in his or her browser.

4 What are ad networks and exchanges? Ad networks were intended to aggregate online ad inventory across many different websites in order to rival the reach advertisers were familiar with from television and print campaigns, as well as address the fragmentation that occurs when advertisers are forced to execute campaigns across many individual web properties. As the networks proliferated, suddenly networks could simultaneously buy and sell inventory among one another in order to both deliver the inventory necessary for campaigns they otherwise couldn t support and reduce unsold inventory. This created intermediary costs for the advertiser. In addition, the sheer number of networks presents a challenge for advertisers buying media and publishers selling the media. Publishers distribute available inventory across a number of networks to maximize revenue potential and advertisers place buys across different networks to test for the best performance results. This creates reporting consolidation and comparison challenges for both advertisers and publishers alike. Ad exchanges sought to remove inefficiencies in the value chain by auctioning off publishers available inventory to multiple advertisers in real-time. Advertisers, publishers and networks could work directly with the exchanges in order to minimize fragmented buying, maximize reach and revenue potential, and consolidate reporting. Think of an ad exchange like the stock exchange for ad inventory. Advertisers bid against one another for a specific impression, the highest bidder wins the auction and serves their brand s ad for that impression. How does Launchpad work with networks and exchanges? Launchpad s Display Ads application leverages industry-leading demand-side platform technology from MediaMath s TerminalOne. By definition, demand-side platforms (or, DSP s) use sophisticated predictive models and bidding algorithms in order to place buys across numerous ad exchanges (and the networks that work with them). DSP s purchase impressions on behalf of their advertisers in real-time using a process called real-time bidding (RTB).

5 What benefits do exchanges and DSPs offer small businesses over direct buys? Buying ad space (or, inventory) directly from the website that will display the ads is referred to as a direct buy. Often, small businesses will market on local publications websites or sites with content related to their product or service. However, both options typically lack the local reach necessary to drive effective reach and frequency levels (how many people see the ad and how often they see it). Small businesses interested in advertising online should consider running ads across a variety of sites and using some form of geographic targeting to minimize wasted impressions on users outside of the business market. How do I get started with display? 1. Plan the campaign Determine your goals and strategy. What do you want to accomplish? How do you intend to accomplish it? Campaign goals should always be measurable. **See Campaign Planning for more info. 2. Set success metrics How will you measure your campaign s success? In other words, how will you know when your campaign achieves its goals? For example, if the goal is drive sign-ups, then the metric might be cost per sign-up (CPA) of $50. **See Success Metrics for more info. 3. Define the target audience Who is the target market for this campaign? Is there a demographic component? Geographic? Is there a specific user profile that drives success for campaigns in other channels? Use caution to avoid hyper-targeting that can adversely impact a campaign s performance. **See Hypertargeting for more info. 4. Evaluate inventory options Consider whether the content alongside the ad is important for the campaign. Contextual (content-based) targeting can be used as a proxy for audience targeting. For example, a campaign might target users with an interest in football or it might target sites with football-related content. In addition, custom white or black site lists can be used to ensure campaigns run only on specific sites or specifically do not run

6 on particular sites. Typically, layering contextual and audience segment targeting is not optimal for performance. 5. Finalize the ad creative Ensure that the banner ad creative is appropriate and appealing for the target audience. Banners should always contain a distinct call to action. Choose between standard banners versus Rich Media and determine which ad sizes the campaign will include. **See Banner Best Practices for more info. 6. Specify frequency Frequency capping limits the number of times within a 24-hour period that same user can see your ad. An ad s impact increases with each view until a critical point when the impact decreases or even becomes negative. Always use a frequency cap when targeting a limited audience (e.g. less than 100,000 users) to avoid inundating your audience. **See Reach Frequency for more info. 7. Set pricing expectations Specify a Target CPM for the campaign and let the system bid on your behalf. Higher bids will win a greater share of auctions; this is particularly critical for narrowly targeted campaigns. **See Pricing for more info. 8. Manage and optimize Once the campaign is live, continue to evaluate performance daily in order to make any necessary adjustments in terms of target audience, geography, inventory and/or pricing. **See Campaign Management for more info. 9. Evaluate Compare the campaign s results to the original (or revised) goals and success metrics. Identify areas for improvement and adjust the goals and strategy for subsequent campaigns accordingly. **See Applying Results for more info.

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