By Michael Koontz
Marketers will spend in the neighborhood of $14 billion on banner advertising in 2013. Yet, while online display-ad budgets continue to grow, they’re still just a fraction of the total ad spend for most advertisers.
Those limited budgets create a problem for planners who need to maximize their reach on targeted display-ad campaigns. So how do you ensure that you’re getting the sites you want and getting the reach you need? Do you need to buy the biggest sites to get the reach?
For years, larger websites have been touting their Comscore audience size rankings while smaller sites struggle to gain audience so they can garner the attention of advertisers. These days, with all the options available to planners, does it make sense to focus on the audience size of a specific website?
A large publisher might claim that you can’t reach your desired audience without advertising on their website because they’re the leading website according to some audience ranker. If you’re a media buyer, you’ve certainly heard this argument before. But who said you had to limit your buy to one website anyway?
Is your budget so big that you can’t buy two or three smaller websites with similar, or even more precise, audiences? Each of us visits dozens—even hundreds—of sites every month. Few sites can claim to have a lock on a specific audience, unless the target user is very narrowly defined. Several B2B audience targets come to mind.
In most cases, buying several sites that serve your target audience may well offer a better solution than buying the dominant site. The aggregation of those smaller sites often can deliver a more effective plan than relying on one or two of the dominant sites.
It’s true that the well-trafficked sites are often the most appealing sites for the advertiser for reasons other than reach and they may be the right sites to distribute your message. But if your reason for buying them is exclusively for reach, consider the alternatives. There may be far better solutions on those smaller properties—especially if you’re working with smaller budgets.
Several factors come into play when trying to build a plan for reach. Each should be considered when determining which sites you want to include in your display-ad campaign:
1. Share of Voice (SOV): This is the percentage of inventory you’re buying on a particular placement. The higher the SOV, the higher the frequency. Since frequency and reach are inversely related, your SOV should remain low if reach is your goal. In other words, don’t overbuy a specific site if you don’t want high frequencies.
2. Impression Cost (CPM): CPM greatly impacts reach—even more than the site’s traffic. All other things being equal, if two sites have the same audience size, the one with the lower CPM will deliver more audience because your budget simply will buy more ad impressions and reach more people.
3. Number of Sites: Buying several sites may yield more reach than buying one large site. The combined reach of the smaller sites often exceeds the reach of the big site. While it makes sense to limit your workload, some of the smaller sites may outperform the bigger sites. Also remember that demand is greater for the larger sites, so rates can be higher.
4. Site/Placement Frequency (Repeat Visits): A placement that generates high repeat visits (like the weather section of a local news website) will deliver frequency at the expense of reach, unless capped.
5. Audience (Reach) of Site: The size of the site affects your Share of Voice (SOV) at a specified budget. For example, if you spend $5K on a site with 500,000 local users, versus a site with only 10,000 local users, your ad will appear much more frequently on the smaller site.
6. Targeting: Targeting can have a great impact on frequency. If you’re targeting a specific audience within the site or a “section” of the site, it’s important to understand that reach will be limited.
7. Frequency: This is the number of times an individual has been exposed to your advertisement during a specified time period. When planning a “reach” campaign, remember that frequency isn’t a bad thing. Allow for some frequency. Don’t set the frequency caps too low or you’ll reach a huge audience that completely lost your message. In fact, once the campaign is running, you can determine the frequency at which your message is resonating with your audience and adjust your buy accordingly.
So, the next time you’re thinking about buying the “dominant” site, recognize that reach isn’t determined by the site’s audience size, but by a number of other factors tied to that site and your buy specifically—most notably SOV and CPM.
Michael Koontz is and partner and executive VP for operations and media strategy at LION Digital Media. You can reach him at email@example.com.