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Why DSPs Are Not Enough

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Data-Driven ThinkingData Driven Thinking” is a column written by members of the media community and contains fresh ideas on the digital revolution in media.

Eric Bamberger, SVP, Performance Marketing Group, SearchIgnite, a unit of Dentsu’s Innovation Interactive.

2010 was a banner year for the Display industry – no pun intended.  Truthfully, Display has made a remarkable come-back over the past few years, just when it needed it the most.  For several years, Search steadily dominated the lion’s share of media buys, giving little leeway to Display. Then along came the new kid on the block – social media – leaving ad banners abandoned in the wake of media buyers stampeding to cash in on the latest craze.  Marginalized by other channels, beset with fraud, suffering from poor performance, Display looked like it was ready for the bargain bin.

But then, a funny thing happened on the way to the ad exchange.  A light bulb went off in the heads of ad networks and technology vendors, who realized they were sitting on a gold mine of user data.  When they combined their data with that of other online and offline sources, they realized they were able to deliver incredible user insights, create detailed audience profiles and target ads to the right person at the right time.  Thus, DSPs were born and became the platform of choice for agencies that licensed and white-labeled third-party platforms, or built their own internal trading desks and private exchanges.  After all, an agency’s goal is to deliver the best performance for their clients (while keeping their own overhead costs low), making DSP technology a logical investment.

And the proof continues to be in the pudding.  According to Google, Display advertising will grow to a $50 billion market by 2015. DSPs, data providers and verification solutions should get much of the credit for breathing new life back into Display, as they’ve put the control back in the hands of the advertiser and agency.

However, despite having this innovative new tool to better control campaigns, accurately target audiences, optimize ad spend and maximize effectiveness, Display still suffers from low CTRs and conversion rates.  In all fairness, it’s a well known fact that Display helps drive conversions on other channels – particularly in Search. But because DSPs focus solely on Display and cannot track (and get credit for driving) outside conversions, the technology only gives marketers a limited snapshot and modest insight to make critical buying decisions.

Unless DSPs start pulling all touchpoints into the conversion funnel, they’re just an ineffective way to buy display and yet another silo on the media plan.  Gaining insight into how all media channels play off each other is key to making smart buying decisions, but first you have to start analyzing all the potential conversion points and track how the customer got there.

Follow SearchIgnite (@searchignite) and AdExchanger.com (@adexchanger) on Twitter.

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