Commentary
A Day In The Ad Life Of An Average Consumer, As Seen By A Programmatic Trader
- by Joe Mandese @mp_joemandese, November 11, 2019
There was some interesting math in what The Trade Desk presented to investors, analysts and the press in last week's third-quarter earnings release. No, not its actual earnings, which continue to be healthy despite some tepid international growth, but in the dimensions it uses to describe the ad experience the average consumer is exposed to daily.
The "hypothetical illustrative example of what an average consumer might experience during an average day" is The Trade Desk's estimates based on public sources and "management estimates, but it offers a very different view of the world most people on Madison Avenue likely think of when creating and executing their media plans.
According to The Trade Desk, the average consumer experiences 1,622 ads daily, 98% of which are digital, and only about 2% of which are "traditional" media such as TV, radio, magazines, etc.
It's hard to fathom what sources The Trade Desk used to derive this view of the average consumer daily ad experience, but even more remarkable is how it allocates its hypothetical, illustrative ad budgets to reach those consumers.
In The Trade Desk's example, about two-thirds of the spending goes to search (even though only 0.0025% of the ads the average consumer experiences go to search clicks).
Another 30% goes toward desktop and mobile ads, with the remainder going to TV/video and audio.
If The Trade Desk's hypothesis is correct, the rest of the ad world must be very wrong. Which is probably why it included the slides in its pitch to analysts and investors, because it signals tremendous upside growth for digital in general, and programmatic media-buying in particular.
The Trade Desk has done a remarkable job of consolidating the demand-side of the programmatic media marketplace in recent years, becoming the go-to DSP for many of the biggest agencies and their clients, and analysts continue to rate the publicly traded ad tech company with a healthy stock ratings, though they adjusted their target prices for The Trade Desk's share value growth down a bit due to lackluster international growth.
Interestingly, the most promising area of growth for the programmatic trader is television. Specifically, connected TV advertising, which many believe will ultimately be traded programmatically.
"It feels like CTV is taking off," Pivotal Research Group analyst Michael Levine wrote in a note to investors las week, adding, however, that it "is more challenging to forecast."
That said, The Trade Desk reported a 145% increase in connected TV ad revenues, and a 160% growth in audio ad revenues growth during the third quarter of 2019.
Source: A hypothetical illustrative example of what an average consumer might experience during an average day and are based upon information from The Trade Desk, public sources, and management estimates.
Joe Mandese is the Editor in Chief of MediaPost. You can reach Joe at joe@mediapost.com.
Really interesting article Joe, thanks.
The "hypothetical illustrative example" black and blue list here doesn't make much sense to me though.
The Facebook ads would either be part of desktop or mobile device ad exposures.... and the "search clicks" are actions whereas all the others in the list are exposures - and would also be part of either desktop or mobile device activities. Since that list is neither mutually exclusive nor made up of directly comparable items, it is hard to draw any conclusions from it.
The pie chart at the start though is really telling - most likely based on how many SERP listings (or ads) the consumers are presented with - regardless of how many they click on.
Are they kidding? Joe. Take "linear TV" for example. The average adult watches about 4-4.5 hours per day of commercial TV content and the typical hour contains roughly 30-35 commercials of various lengths. That totals to roughly 140-160 commercial exposures daily and even if we eliminate a significant percentage due to people leaving the room or paying no attention at all, the daily dosage is still around 80-90. We've been doing this kind of anaysis for decades in our annual, "Cross Platform Dimensions", and frankly, I'm as mystfied as you are about how the numbers cited in your article were derived. I think that if The Trade Desk is going to put our data of this sort it owes the readers---and reporters----a proper explanation of what they are suposed to be about, sources, etc.
I'm sorry, but 98% digital to 2% non-digital just doesn't work, given that 20% of the US population don't have the internet and 15% don't own smartphones. Also, analog TV still AVERAGES over three hours of viewing x 18 minutes of ads per hour (often in :15/:30 pods) = over 100 ads on TV alone. I think the tricky word here is "Experience" - I hardly notice any ads when I look at my news feed, do a search or go onto social media. If "experience," using the digital out-of-home terminology of "being in the zone" and thus possibly subconsciously viewing the ad, then the data is clearly underrepresented. Back in the 1960s, the late Bob Coen, the father of advertising research, once stated that the average person is subject to over 3,000,000 marketing messages a day, such as looking at the logos in medicine cabinets as he/she gets a toothbursh, to the logos in the closet as they choose clothing to wear, to logos in the fridge/pantry as they make breakfast, to the cars on the highway as they drive to work, etc., to the point-of-purchase displays as they shop. With the proliferation of new media since 1960, like Pay TV (cable nets), videogames, internet & mobile media, Bob agreed with me at a conference were we both spoke that the number is probably closer to 4 million today. Thus, the 98% digital is far from accurrate.
Have they found the horse to establish which end this 'research' was delivered from?
Leo, I'd like to see a breakdown of those 4 million ad "exposures" per day figure---if you have one. For example, if I turn on my TV set at 10AM and keep it on for 60 minutes, am I "exposed" to every commercial put out by every channel throughout the day?
Ed, Bob would argue that most "exposure" is subconscious and yes every ad would be included in the data, as would any of the paid and barter product placements, as well as any other incidental placements - for example a scene is which a couple is walking down a city street past dozen of shops with point-of-purchase displays (along with the logos of the TV set and remote control you're using to watch TV).
people use search all the time for everything, doesnt mean people see all of the ads or even care about them.
Same can be said for television mind, seems like a lot of sets are left running.
Seems like above mixes apples and oranges, the search ads are exposed but not paid for as its clicks, the TV is impression based and paid for.
SO this makes no sense.