It’s the Most Wonderful (& Critical) Time of Year for Online Advertising

Ted Kawka

Some say that it’s the most wonderful time of the year. It’s also the most critical time of year for businesses everywhere, as people are primed to pull out their wallets, phones and other devices and start spending. But advertising competition is fierce, and in a digital age, it’s increasingly online.

Everyone, everywhere is vying for customer clicks. How can companies be sure they get their ads in front of the right customers, at the right time, to maximize their chances of making sales? The obstacles are significant, including latency, poor performance and high network costs. Proximity to partners and potential customers globally is essential, and so is direct, secure, low-latency interconnection. Companies can find both inside Equinix’s Ad-IX digital advertising ecosystem.

Big opportunities, big challenges

The traditional carols-and-colored-lights holiday shopping experience at a physical store is by no means a thing of the past, but it continues to decrease in importance. In this year’s annual holiday retail survey by Deloitte, consumers said they’d spend 51% of their budget online, compared with 42% in-store. In last year’s survey, there was an even 47% split between the two.

The increasing amount of online shopping is a big opportunity for retailers and the digital advertising industry. But it also presents big challenges:

  • Traffic congestion

Heavy traffic on roads and fiber optic cables is just a part of the holiday experience, and on balance, that data traffic spike is a huge plus for companies looking for eyeballs on their ads and websites. But this increased demand can also cause congestion on the public internet and sluggish load times for ads and webpages – or worse. If an ad is slow to load in the ad space embedded into the headers of web pages, the entire webpage can fail to load. But even short delays in page loads have big consequences. An Akamai study released this year estimated that a mere 100-millisecond delay in load times led to decreases up to 7% in conversion rates – the rate at which website visitors do what companies hope they’ll do, including making a purchase.

  • Poor performance

Matching ads to customers is particularly crucial during the holiday season, when people are so ready to buy. But the analytics engines that work to make sure ads and users are a good fit can be slowed by the heavy traffic, and latency is always a factor in the real-time bidding process, when companies have 100 milliseconds, tops, to win bids and serve up relevant ads to buyers. If a company’s IT infrastructure is running less efficiently under the holiday load, that can delay analytics processing or increase latency, which translates into costly missed opportunities.

  • Higher network costs

When traffic is spiking during the holidays, network costs are also going to spike. It simply takes more money and more bandwidth to handle a much higher load on a given company’s direct internet access connection.

Proximity and performance needed

Getting closer to partners and end users is one way that players in the online advertising space meet some of these challenges. Advertisers, for instance, might distribute their infrastructure globally in the markets they are targeting, so they can more quickly serve content to end users. And in general, proximity between the ad exchanges, supply/demand side platforms, analytics engines and other parties involved with delivering online advertising is a significant benefit, because getting close to each other is the best way to increase speed and performance.

Still, proximity’s benefits are limited if that proximity isn’t coupled with superior interconnection. For instance, consider the problem of ad fraud. It’s much tougher for a company to root out phony ad impressions if high-latency connectivity leaves anti-fraud analytics too little time to do their work and ensure traffic is clean.

Equinix’s Ad-IX digital advertising ecosystem offers both proximity to partners and the direct, secure, low-latency interconnection needed to ensure clean, relevant ads are delivered at the right time to the right audience.

Ad-IX is home to all of the industry’s top players – the innovative programmatic advertising firm Index Exchange is a just one example. Bringing these companies together on Equinix’s global interconnection platform enables them to make direct, 1-to-1 connections with each other. That avoids the congestion and security risks of the public internet, and ensures superior, predictable performance. And direct interconnection in the real-time bidding arena can drop latency between the various parties into single-digit milliseconds. That leaves more time for the user data analytics critical to matching ads to the online audience, and more time for anti-fraud analytics to do their work.

“Direct, secure, low-latency interconnection isn’t optional for the online advertising industry this holiday season, it’s a requirement. Criteo, the largest performance marketing firm in the world, is one of the premier customers in the Ad-IX ecosystem. Read how Criteo worked with Equinix to expand globally and build a foundation for future growth.

And see how Index Exchange, a leader in automated digital advertising, is leveraging Platform Equinix™ to optimize programmatic advertising for its customer Time Inc.

Index Exchange & Time Inc. Data Center Tour from Index Exchange on Vimeo.