• by Ryan , Anand Subramanian , September 30, 2008

Audience fragmentation challenges the media-buying process

Common sense (and the Advertising Research Foundation) says that the “editorial” context in which ads appear strongly influences their impact and effectiveness. Advertisers have spent billions of dollars on TV and magazine ads based on the premise that the more credible the context, the more likely customers are to trust the ad message. A reader is more likely to trust a big-ticket ad in The New Yorker than one in The National Enquirer.

Offline, appropriate context is a pretty straightforward proposition. Online, with audiences fragmented across thousands of Web sites, blogs, social networks and various desktop apps, context becomes a little trickier. But it is no less important.

Online research now supports contextual technology. Recent statistics published on contextual ads include a 2006 eMarketer study that showed 43 percent of online advertisers listed the association of their brand with top-quality content as a benefit. A 2007 MarketingSherpa survey that polled advertisers on the kinds of targeting and placement tactics that worked best found that 41 percent reported contextual targeting delivered better ROI — better than behavioral and other types of targeting.

Google is probably the most well-known example of contextual technology. The search giant turned the online world upside down when it launched the contextual targeting component of AdSense a few years ago. Google’s technology scans sites’ text for keywords and serves ads based on the machine-read content of the page. Since Google’s keyword methodology doesn’t use contextual technology to its full potential, many online brand advertisers are wary that their ads will be placed near inappropriate content or on out-of-context sites through keyword-based contextual targeting. With brand advertisers continuing to move online, bad content matches aren’t going to cut it. They demand the same brand-safe environment they get offline and want assurances that their ads run only in appropriate inventory. 

The explosion of online content has created a vast number of choices (perhaps too many) for online advertising; hence the term “media fragmentation.” For media buyers, fragmentation has complicated the buying process because so much ad inventory is for sale with a dozen different ways to purchase it, from direct site-specific buys to ad networks to ad exchanges.

How can media buyers sort through the infinite number of sites and pages to achieve top-performing ad campaigns and brand safety for their clients? Many media platforms exist to meet buyers’ needs, but to make sense of all their options, buyers need a platform that can categorize inventory in a way that adds value to the buying process. Ad exchanges are a new platform that, if used appropriately, can bring order to the chaos and simplify the media-buying process.

In a well-organized exchange, media buyers can select handpicked, differentiated inventory instead of buying undifferentiated inventory as they would with most ad networks. To make the buying process easier, exchanges with contextual technology can deduce at page-level the contextual environment (read: content) of every bit of inventory that comes into that platform. This ensures the inventory is a good match for each Web page. For brand advertisers, this guarantees a brand-safe environment that will support rather than detract from their message. Contextual exchanges can aggregate similar contextual inventory scattered throughout the long and mid-tail so buyers can achieve reach and frequency goals and experience improved performance.

Contextual exchanges help media buyers find the best ad inventory for each campaign, but buyers must understand that not all impressions work for each advertiser. And if new ad platforms don’t add value to the inventory-in and inventory-out process, they become part of the problem — not the solution.

Anand Subramanian is CEO of ContextWeb Inc.