In the US, over $200 billion is spent on advertising per year – about half by large brand advertisers, and the other half by small and medium sized businesses (SMBs). Each segment of advertisers share commonalities – they want to achieve broader awareness of their offerings and make sure advertising budgets aren’t wasted. They also have many unique challenges, which makes it surprising that nearly all new ad technologies appear to be made as a one-size-fits-all solution, largely designed for the big brand advertisers and not SMBs.
Advertisers like Toyota and Gucci have online ad budgets measured in the millions per month. They work through large ad agencies and have their own in-house marketing team. These brands place ads in the hopes of maintaining or expanding consumer awareness with much less emphasis on direct transactions attributed to an ad campaign. Instead, impact tends to be modeled out by teams of people justifying an ad budget set quarterly or annually by corporate. These brands are certainly trying to get more customers but their time horizon to achieve success through advertising is measured in months or years.
Many ad tech companies have focused on delivering point solutions for big budget brands, because solving small but critical problems can scale to millions of dollars of revenue with only a few clients. For example, a segment of ad tech is centered on verification – checking that ads ran where and when they were supposed to. Another segment exists for data management and targeting – tracking and showing ads to only specific users. An industry chart (below) shows the complexity a display advertiser needs to navigate, in order to run a campaign.
The innovation in each of these areas has been quite impressive, but the pricings are affordable to only advertisers with large budgets, putting it out of reach for smaller advertisers. Every segment is tacking on its margin or costs, which collectively adds up to be a huge sum for all except large brands. In addition, the innovations are built with the idea that agencies or large teams will scour the web for the best individual solutions to combine for a single ad campaign. While this may be practical for big brands that have the time to do so, it is completely impractical for the smaller advertiser, who doesn’t have the time or the resources.
Small and Medium Advertisers
SMB’s have online ad budgets measured in the hundreds or thousands per month, and typically, at best, have one person designated for marketing. Consequently, they have less time and money devoted to creating robust online ad campaigns. Small and medium sized businesses place ads in the hopes of getting customers today or within the next month. They don’t have sophisticated ROI models for their ad budget, and largely go by gut instinct on what’s working or look at a single proxy metric, like a click.
Similar to how they approach measuring success, smaller advertisers don’t need sophisticated verification methods. Instead, they trust ads are running properly if they see their own ad live or in a screen shot. These advertisers typically have only a vague idea of what their target audience should be beyond the geographic parameters, but they can recognize a customer that walks through the door.
Similarly, the SMB may not be able to articulate what they want from a display solution but they know the right one when they see it. In fact, we’ve found that just being able to show what a SMB’s display ad would look like makes a dramatic difference in their adoption of display and their satisfaction with it. They can connect instantly with a product but it has to be clearly built for them.
Ad Solutions For The Other Half
What is clear is that, today’s display ad ecosystem is designed for large enterprises that can spend the time and money sorting through a myriad of expensive solutions. An ad solution for small and medium sized businesses would need to rebuild all the fundamental components, and unify them to deliver a more simple and accessible solution.
That is what PaperG has done and what we’re continually trying to do – democratize display advertising so everyone can participate and benefit from it.