Imagine a scenario where you want to advertise with a particular digital publisher. They send you their media kit with prices, placements, and other details. You choose your desired placements, then the publisher tries to steer you into lower-cost run-of-site (ROS) ads. What do you do?
For those less familiar with the nuances of digital display advertising, it's essential to grasp the intricacies of the pricing, locations, sizes, and performance for ad placements. From billboard banners to skyscrapers and square or rectangle ads, each placement offers distinct visibility and engagement potential, which varies publisher-to-publisher. While performance-based payment models such as cost-per-click (CPC) align incentives with outcomes, publishers often prefer fixed pricing structures to ensure predictable revenue streams.
What exactly are ROS ads, and why the cautionary tone? Unlike specific placements, ROS ads grant publishers the discretion to place ads anywhere on their site. They effectively will occupy the leftover inventory that other advertisers haven't purchased. This doesn't inherently render ROS ads ineffective, but it underscores the importance of critically evaluating the offer from the publisher.
To realize value from ROS ads, advertisers must delve into the performance metrics for each placement, which any reputable publisher should be able to provide. By analyzing key indicators like click-through rates (CTR), conversion rates, and cost per mille (CPM), advertisers can gain insights into the effectiveness of different ad formats and placements. However, it's crucial to go beyond surface-level metrics and delve into the nuances of audience engagement and campaign objectives.
Consider a hypothetical scenario where a publisher offers the following metrics for various ad placements:
Billboard Banner: CTR 0.35%, CPM $95
Medium Rectangle: CTR 0.15%, CPM $50
Half Page: CTR 0.10%, CPM $50
Leaderboard: CTR 0.10%, CPM $45
Multi-unit run-of-site: CTR 0.05%, CPM $40
At first glance, the ROS ads may appear to offer a cost-effective solution, with a lower CPM compared to premium placements. However, upon closer examination, the conversion to effective CPC reveals a different story. By calculating CPC = CPM / (1000 * CTR), advertisers can gain insights into the true cost of acquiring each click. Do the math, and you’ll see that the ROS ads are actually the most expensive on a CPC basis by a significant margin.
Billboard Banner: CTR 0.35%, CPM $95, CPC $27
Medium Rectangle: CTR 0.15%, CPM $50, CPC $33
Half Page: CTR 0.10%, CPM $50, CPC $50
Leaderboard: CTR 0.10%, CPM $45, CPC $45
Multi-unit run-of-site: CTR 0.05%, CPM $40, CPC $80
For instance, while the ROS ads may seem economical based on CPM alone, their low CTR results in a higher effective CPC compared to premium placements. This highlights the importance of considering both reach and engagement metrics when evaluating the efficacy of ROS ads.
You may be thinking: What if my ads are meant for branding or awareness rather than lead generation? Don’t I only want to maximize my impressions? No. You want to maximize attention, and while there is no website analytic for attention to a particular part of a given page, clicks make for a better proxy for attention than impressions.
Does this mean that ROS ads are bad or useless? Absolutely not. First, some publishers may offer them at prices which make the numbers work. You may also be able to do this type of analysis and use the resulting data to negotiate with them. Perhaps you want to buy up all the ad inventory; for instance if a highly relevant publisher has a relevant feature and you want to saturate that audience. If you’re willing to make a large enough buy, perhaps you can make the argument that you should get the run-of-site rate. Just make sure you know what you’re buying and the publisher isn’t trying to sell their best placements on the side.
Image of the Lab Manager website highlighting their various ad placements. Courtesy of BioBM - Life Science Marketing Agency.
Lessons
Be cautious when purchasing run-of-site ads. You could end up with a poor ROI if you’re not careful.
Pay attention to the metrics of the ad placements you buy.
Even if the goals for your advertising campaign are focused on awareness or branding, clicks are still a better proxy for attentiveness to an ad placement than impressions.