Thursday, January 12, 2017

The Rightful Decline of Standard Ad Formats

Standardization of digital advertising is a sensible goal. It’s expensive and time consuming for advertisers to spend hundreds of thousands of $ in superfluous production fees and adaptations for different publishers, portals, and hardware. A “plug and play” approach, especially to the new and wild world of mobile advertising, reduces the lag between creative delivery and launch, and extends reach on to all publishers who hold inventory conducive to the containers outlined by a central governing body (as simple as allowing Google ad serving). Publishers would, in turn, see higher demand on inventory, and a more hands-off approach on the back end when serving client creative.

But in practice, standardization has turned out to be a major reason why digital advertising has been a mostly unsavory medium for advertisers (it is growing, but not nearly at the same rate that digital content consumption is growing), and attempts at standardization have proven a burden to advertisers and publishers alike. Despite the well-placed intentions of standardization of ad formats, it should be approached very carefully in a rapidly changing digital ecosystem, and in many cases, abandoned altogether. Two key issues undermine the goals of standardization:

1) Constant software/hardware evolutions, and a lagging central body to keep tabs: By the time that an oversight body (IAB) has developed a standard ad format, or conditions for format flexibility, and encouraged implementation among publishers and advertisers alike, chances are a new operating system, hardware, or ad tech developer has come up with something brand new that exceeds the newly standardized format in engagement. The standardized format becomes the thing of yesterday – a death wish for any media buyer. The IAB isn’t built to be able to keep the pulse on the “new, never been done before” format, and IAB compliant publishers certainly aren’t willing to change formats every few months as the table stakes change.

2) Publisher Incentive: Less impactful than reason 1 because at the end of the day, media buyers call the shots, but publishers have begun to, and should, push back in their own right against most types of standardization because as standardization of ads proliferates, their value proposition of “custom integration into our unique environment” diminishes, and their inventory is just like any other junk inventory across the web. In addition, publishers lose the nice margins they gain on any “custom development” they can tack on to a media buy, where CPMs continue to fall. Without wide-scale publisher adoption of new ad formats, the standardized ad formats lack a home.

The benefits of the cost-effectiveness of standard ads fail to outweigh the costs of monotonous creative, and marketers have made that clear by divesting in “standard” formats and pushing publishers to the limit on “custom integrations.” The most successful implementation of ad formats (IAB standard – 300x250, 728x90, 300x600) is dying a slow, pennies-on-the-dollar CPM death, with a major reason being the monotony of a right hand bar box has grown to be ignored over time. The advertiser, publisher, and consumer all lose.

Standardization should be carefully and inexpensively adopted, knowing that the best formats come from new ad-tech, and publishers who are pushing the limits on providing advertiser value. This is perhaps even more applicable to a mobile-first world than it was to a desktop-first world.

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