Latest / The Yield Doctor with James Deaker / The Hidden Costs of Adding More Ads – A Yield Management Breakdown

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The Hidden Costs of Adding More Ads – A Yield Management Breakdown · The Yield Doctor with James Deaker

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  today I'm going to be talking about the
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  question of what happens when you add an
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  extra ad to a web
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  page specifically I'm going to be
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  talking about what happens when the ad
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  is added onto a page where there is an
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  already existing ad we'll focus on the
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  desktop web experience although largely
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  it's the same on a mobile experience but
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  on a desktop experience is obviously
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  more landscape to play with and this is
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  is a more common practice I'm going to
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  be examining it from the attention of
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  three different groups the publisher The
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  Advertiser and the user of the web
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  page there are very similar Dynamics to
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  those that I have already outlined in
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  the video on ad rotation and so I'm
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  going to link to that video here but in
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  this particular case if we look at a web
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  page you'll get a better sense for what
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  I'm talking about this is an example
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  where the publisher has two identical
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  ads over the right hand side of the page
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  let's assume that there was previously
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  only one ad and what you see is that the
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  second ad was added directly below the
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  first and let's consider our three
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  groups the user is pretty
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  straightforward if you're a user who
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  dislikes having ads on the page adding
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  an extra ad is certainly not going to
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  help you if you're one of those rare
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  users that likes ads possibly you like
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  having an extra ad added but now to The
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  Advertiser if there's only one ad on the
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  page then the advertiser doesn't have
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  any
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  competition however when the other AD is
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  added to the page the potential
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  clickthrough rate may drop significantly
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  in fact it is not unreasonable to assume
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  that it may drop by as much as
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  50% similarly if it's a brand Advertiser
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  they may see a drop off in the perceived
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  impact of their ad now to the
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  publisher let's think about the
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  publisher perspective and what happens
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  when they actually get into loading the
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  ads on the page If This Were
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  2015 and the ads were being loaded onto
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  the page then the sales team of that
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  publisher would be out talking to
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  advertisers and trying to sell the ad
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  space they would be representing how
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  many ads there were on the page and
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  they'd have to have a conversation with
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  the advertiser around how those ads were
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  loading however it's not 2015 we're
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  almost a decade further down the road
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  and what we see is that everything has
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  move programmatic there isn't usually
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  going to be a sales team having the
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  conversation with an Advertiser
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  directly about the ads that are on a
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  page or how they're each
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  performing one of the key things is the
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  information that is being passed through
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  to the advertiser The Advertiser may or
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  may not even be aware that an extra ad
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  has been added to the page in fact they
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  may not be aware that an extra ad has
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  been loaded to the page until they start
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  to see a deterioration in the
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  performance and they may even think that
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  there's something else that is driving
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  that poor performance because adding ads
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  to a page is relatively a rare
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  occurrence by a publisher The Advertiser
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  may not be aware that this has happened
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  on the publisher side and they may
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  attribute it to something
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  else now another major problem that can
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  occur is the interaction between the ads
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  on the page and these take a few
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  different flavors one is an example
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  where the advertis ER gets two of their
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  own ads loading on the page maybe the
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  ads are exactly the same maybe they are
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  different but at the least the
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  advertiser would look at that and say
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  that's probably a waste of money why am
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  I buying two ad slots exactly beside
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  each other a second use case that can
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  occur is in the case where an
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  advertiser's ad May load and we may have
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  a different situation where a ad that's
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  distracting May load beside it in an
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  example we'll see that Safeway ad loads
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  and an ad beside it loads where there is
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  a medical condition if I'm Safeway I
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  probably don't love this ad experience
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  and the third use case and possibly the
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  most Pro problematic is if a competitor
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  ads loads directly beside one of their
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  direct competitors think Coke and Pepsi
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  that would be an example where both
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  advertisers going to be unhappy so what
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  could happen in an extreme case The
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  Advertiser may turn to the publisher and
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  say we are deeply unhappy with this
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  experience we are going to remove all of
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  the advertising from that web page or po
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  potentially from the site in
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  general so problems from The Advertiser
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  perspective generally fall into the two
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  categories of a decline in the
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  performance of the ads or s with the
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  content surrounding the ad in this case
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  specifically the other AD that's sitting
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  beside the
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  advertiser so if advertisers dislike it
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  and users dislike it why do Publishers
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  in insist on doing this and again I've
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  done it so I'm guilty the reason is
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  obviously more money and so the question
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  is how much more money is a publisher
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  going to make from doing this ideally
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  one would be hoping that the new ad is
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  going to load and get the same type of
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  pricing or yield is the ad that's
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  already on the page unfortunately that's
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  not usually the case it's not usually
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  the case because the two ads together
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  are obviously inferior to the previous
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  ad so the publisher while they're
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  essentially doubling their ad
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  Impressions is likely to only see a
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  revenue uptick of somewhere between say
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  10 and 40% now I appreciate that that's
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  a large window but it gets to the fact
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  that a lot of comes down to the desires
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  of The
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  Advertiser the um understanding of the
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  performance of the different ads and
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  frankly the communication around the
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  launch so one could safely say that yes
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  adding that additional ad to the page is
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  going to help Revenue but it's not going
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  to help it enough to be able to offset
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  the fact that you're seeing significant
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  price declines and so another word of
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  caution to Publishers looking at
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  embarking down on this path is that you
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  need to be able to explain it both
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  internally and potentially to the
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  investor Community if you're a public
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  company if you're a public company and
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  you add a new ad to the page what you're
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  going to see is a significant decline in
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  the ad pricing this may be information
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  that you already have to either disclose
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  to your investors or they are able to
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  back into from looking at some of your
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  site metrics and so be ready with an
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  answer as to why you're seeing the
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  decline in the yield and the pricing on
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  your
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  sites so in summary a publisher is going
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  to add an extra ad to a page because
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  they believe that it's going to lead to
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  more Revenue however in practice it's
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  not going to lead to anything like the
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  doubling of Revenue on that web page
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  that a publisher might hope and may lead
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  to significant issues with advertisers
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  in terms of their desires to work with
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  that publisher going forward I hope you
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  enjoyed this content thanks