I’ll bet you’ve never heard of John Wanamaker. He was the founder of the world’s first modern department story – Wanamaker’s in Philadelphia. But he was also an advertising pioneer, placing the first ever full-page ad in a newspaper way back in 1874.
Initially, Wanamaker wrote his own adverts, but later he hired the world’s first full-time advertising copywriter, John Emory Powers. During his time in the job, Wanamaker’s revenues doubled from US$4 million to US$8 million.
While Mr. Wanamaker benefitted tremendously from advertising, he never really understood how it worked. His most famous quote is, “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”
Watch an IAB video “The Evolution of Online Display Advertising“, which explains how an advertising ecosystem is developed from direct buying and selling into a complex environment with data powering real time bidding and selling.
Fast-forward to today and the story is completely different. The print media has shrunk tremendously, while the Internet explosion has seen a boom in online advertising opportunities. Bidding for ad space takes place in real-time and, in the process, companies can make huge savings on their overall spending.
What’s more, it is now possible to get an extremely accurate picture of who is looking at any web site at a given moment, and then directs an advert at them with a degree of accuracy and confidence unimagined in Wannamaker’s time.
The advertising industry is constantly evolving to introduce new ways to engage their customer’s audience such as agencies that are capable to do re-targeting which is an extremely clever service they describe as providing personalised product recommendations driven directly from site-data and inventory. What this technology does is to track a user from web site to web site, and serve display ads that are optimised and delivered in real-time for each individual consumer across mobile, social and desktop.
For instance, imagine a user on a travel web site looking for flights to Bangkok, but they don’t find quite what they want and move on to another travel site. The “retargeting” technology is sophisticated enough to notice the change, follow the user to the next site and serve up an appropriate advert – perhaps a new US$50 discount on the Bangkok airfare – that will pull them back to the original site to make a purchase.
Timing is critical
Timing has always been an important factor in advertising. However, while in the past getting an ad in the right place on a given day was good enough, today success requires split-second speed. Any latency in the system, even delays of a few milliseconds can compromise a bid or make tracking and serving the right ads an endless and pointless game of catch-up.
For many of today’s ad tech companies, the solution of choice is Equinix’s advertising Internet exchange ecosystem – Ad-IX. It is gaining momentum all over the world, but has proven particularly popular in Asia. Since it was launched in 2013, more than 85 advertising firms have begun using it to facilitate faster ad bidding and ad delivery.
Ad-IX offers direct interconnections between ad exchanges, demand side platforms (DSPs), data aggregators and all of the other parties involved in the ad bidding process. It helps these businesses reduce average network latency down to sub-millisecond levels and gain more time for data analysis. In addition, it helps ad buyers better calculate the value of the ad impressions at auction, and enables ad exchanges increase the bids per impression.
With Ad-IX ecosystem, organisations can securely connect directly to leading digital ad partners. This bypasses the heavy traffic and security risks posed by the public Internet entirely. Or, you can also leverage the access to more than 500 cloud service providers through Equinix Cloud Exchange, including direct connections to Amazon Web Services, Google cloud platform and Microsoft Azure, to exchange the ad data more quickly and efficiently.
Faster and more effective
As Michael Lewis brilliantly pointed out in his book “Flash Boys,” speed has never been more important, and the reward for getting it right has never been higher. The book begins with a description of an 827-mile fibre optic cable from Chicago to New Jersey that reduced the journey time of trading data from 17 to 13 milliseconds – a 4-millisecond advantage potentially worth billions. However, the cable has now been eclipsed by a microwave link that is 4.5 milliseconds faster.
Speed has also become a tremendous advantage in the advertising industry. Shaving milliseconds off the ad-bidding process, or gaining a fraction of a second to analyse a user’s behavior and serve a creative and compelling advert can make all the difference – so that few of the advertising dollars any company spends are ever wasted!