August 17, 2023 • 4 min read • By Catherine Wolf
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Welcome to the Digiday+ Research Briefing, your weekly curation of media and marketing research insights. Digiday+ members have access to the research below.
In this edition, we share focal points from Digiday’s recently released report on the display ad landscape and its role in marketers’ playbooks.
61% of marketers use programmatic site display advertising
Love them, hate them or simply scroll past them, display ads have been a go-to since the early days of internet advertising. And, for many marketers, they still are. Among all the marketing channels considered in Digiday+ Research’s CMO Strategies series, display ads were marketers’ second most-used ad channel, with more than half of respondents (61%) saying their company uses display ads.
However, across the board in display advertising, marketers struggle to balance their need to target specific groups of consumers with their need to reach an audience at adequate scale. Hitting the right price point factors in as a major area of concern when weighing which display ad buying methods and environments can achieve those goals.
The largest portion of marketers said cost of media was the biggest challenge they face when it came to two out of three display ads options. More than half of respondents (51%) said cost of media was the biggest issue for direct-sold site ads, and — perhaps surprisingly given their reputation for lower rates — almost half (45%) said the same of programmatic site ads.
Email newsletter ads are the outlier, as the only display ad channel for which marketers said scale was a bigger challenge than cost of media. Almost half of respondents (46%) said scale was the biggest hurdle they face with email newsletter ads. These ads are not as conducive to scale partially because marketers have to rely on publishers’ owned email lists for which consumers have to first give permission to receive communication.
- With larger publisher networks, email newsletter ad scale is somewhat less of an issue due to expanded reach across email products, but marketers purchasing inventory from smaller publishers will struggle. That puts pressure on smaller publishers to cultivate a strong list of rarified subscribers, making even a smaller, focused audience valuable to marketers.
- Scale can be a problem for marketers who buy direct-sold site ads as well. Because advertisers are paying for the assurance that their ads will run on specific sites and in front of select audiences, they can target more precisely, but they risk missing broader groups of consumers.
Research Rewind: Post-cookie worries grow for ad tech vendors and larger publishers, as smaller publishers’ worries wane
Google’s long, protracted journey toward advertising without third-party cookies just hit another twist. Ad tech vendors — the largest ones at least — still aren’t sold on the idea and their reaction to being able to test Google’s targeting and measurement alternatives (collectively called the Privacy Sandbox) at scale has been rather muted.
Many vendors already had doubts about the effectiveness of the replacements for third-party cookies, and now they’re faced with the fact that Google’s machine learning is stepping up to fill the gap — adding worries about whether the cookie alternatives will be fair and unbiased for everyone, or favor Google.
Publishers have their own concerns about ad targeting and measurement without the third-party cookie, with large publishers taking on more worry than their smaller counterparts.
Fifty-three percent of publisher pros who work for large publishers (or those who made at least $50 million in revenue last year) said in Q2 2023 they agree somewhat or strongly that they worry about their ability to target ads without third-party cookies, down only very slightly from the 56% who said so last year. That is according to a recent Digiday+ Research survey of over 70 publisher professionals.
Meanwhile, 52% of publisher pros who work for small and medium-sized publishers (or those who made less than $50 million in revenue last year) said this year they agree somewhat or strongly that they worry about their ad targeting ability post-cookie, compared with 59% last year.
- When it comes to measurement, larger publishers also worry more than smaller publishers. The percentage of large publishers who told Digiday they agree that they worry about their ability to measure ads without third-party cookies jumped from 54% in Q2 2022 to 63% in Q2 2023.
- On the other hand, the percentage of small and medium-sized publishers who said they agree that their ability to measure ads post-cookie is worrying decreased from 62% last year to exactly half (50%) this year, with the percentage of those who said they agree somewhat (as opposed to strongly) falling from 44% to 34% in the last year.
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