In real estate, they say that location is everything. Real estate agents young and old can preach all day long about how location dictates price and demand and shapes the market. Location has different meanings, and in the world of real estate it’s commonly applied on three different levels: city, neighborhood and situation.
Online display advertising works in a very similar fashion to real estate, and you can apply the same three-tiered approach to determine an ads quality, safety, and relevancy. Instead of city, neighborhood and situation, it’s the domain, channel and situation that determine the value of an ad placement.
When hunting for a new home or apartment, the first decision is often the city. Manhattan has things that Brooklyn doesn’t (not knocking Brooklyn), and real estate buyers pay for that prestige and association. That’s location at its most basic level, and it’s easily applicable to online advertising at the URL level. Brands buy advertising from a publisher because they want to be associated with that name. Buying on Oprah.com is a strong association, and just like how some residents will swear that New York City has everything, some brands believe buying on Oprah.com delivers relevancy, quality and the target audience. A trusted, name-brand major publisher is also like living in a safe neighborhood. Manhattan is safer than Trenton, and a major dot-com is safer for brands than mysterious content farms.
The next thing to consider is neighborhood. Let’s stay in New York City and consider the difference between buying in the Upper East Side and Hell’s Kitchen. Both are Manhattan addresses, but they’re far apart in price and reputation. Online, the neighborhood is the channel or section of the site ads where ads run.
The online “neighborhood” is where context and relevancy plays the biggest roles. Most people looking for new homes, whether in the city or the suburbs, want to be near certain things, like good schools, nice restaurants, bars, subways and grocery stores. For brand marketers to get value out of their ads online, they need to consider what kind of content the unit will be associated with. Bounty advertises on the food section of Oprah.com because it wants to associate with kitchens and cooking. A business channel, with lots of professional, high-quality and high-minded business content, is a very desirable neighborhood for display.
The final factor in determining quality, safety and relevancy is the overall situation. When you’re apartment hunting, it’s easy to narrow down to a city and neighborhood, but situation plays a major factor. Do you want to live next to the park, or do you want to live along the busy ambulance route? Online, situation is the area that often generates the most questions from advertisers, regardless of whether they’re buying direct, through an ad network, or via a trading desk or RTB exchange. Situation obviously plays a big factor in determining ad quality. The situation varies widely, between an ad appearing on a content farm, a comment site, within a photo gallery, next to user-generated content, the list goes on and on. There’s a big difference between living in a penthouse and living in a windowless garden apartment, and there’s a big difference in value between an ad running above or below the fold on a website, as referenced in a recent study by Casale Media that found that ads above the fold are seven times more effective than ads delivered below the fold. [http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=154587&nid=129222]
Advertisers can buy on the NFL section of ESPN.com, which gives them good URL and channel distinction, but if the ad appears at the bottom of a page listing field-goal kicking statistics, the brand isn’t getting a quality ad experience. Successful ad placement hinges on the page-level environment around it. For a brand to truly hit the mark, they need to be aware of the city, neighborhood, and situation of their ads.
Right now, the ad industry does a great job helping advertisers determine city and neighborhood, but situation is often ignored. The truth is that is plays an equally important roll in determining advertising success, so it can’t be ignored. In real estate, you can argue that New York is New York, and it doesn’t matter where you live. But there is a big difference between having a park in your backyard and dwelling in a dark basement flat.