Contact UsThought Leadership
Advertising Operations Reality Check: Do You Pass The Test?…the article
By Benjamin Reid, VP Account Management | June 2009
In April, we went through an examination of strategies publishers can pursue to boost advertising value across the yield curve. We now examine this concept more in-depth by learning how value and efficiency directly tie back to the overall ROI of your company’s advertising operations.
Efficiency and value are two major levers to ROI that publishers must consider. Efficiency is generally defined as a measure of time, cost, and effort. Value is a reflection of an agreement between buyer and seller as to the underlying intrinsic and subjective worth of a piece of inventory.
Publishers can gauge their level of advertising operations efficiency through a close examination of their productivity and operational costs. However, as publishers cope with limited budgets, talent and technology resources, determining the ROI of their advertising operations can be a difficult task.
I have met many publishers that are struggling to deliver high-value advertising operations solutions due to weak links in their otherwise solid team design. Some of these links can be remedied without too much effort or investment, others may prove more stubborn – this usually has to do with the size and culture of the larger organization the adops team sits within. Some of these weak links are inefficient processes, poor fit of technology to application, limited ability to benchmark and manage consistent performance, and limited mutually beneficial relationships in the larger organization that can create high advertising operations ROI.
Let’s talk about a few benchmarks that might indicate areas you should explore further. There are several considerations to undertake in optimizing your advertising operations, but adjustments can be relatively easy to make and can reap substantial rewards. Below are a few sample questions that you can answer that will help you gauge the efficiency, value, and overall ROI of your advertising operations. In the last quarter:
1. What percentage of your inventory was sold directly?
a. >81%
b. 61% - 80%
c. 41% - 60%
d. 21% - 40%
e. <21%
Verdict: The value of your advertising operations is reasonably high if you chose a. or b. If you chose c., d., or e., you should figure out a way to re-tool your current strategy and process for selling inventory more efficiently in order to achieve the maximum value (or worth) for this inventory. For example, add ad networks, eliminate unprofitable inventory etc. The more targeted your site, the higher this number should be.
2. What was the average number of line items trafficked per trafficker?
a. <500
b. 500-999
c. 1,000-1,499
d. 1,500-2,499
e. >2,500+
Verdict: Your current advertising operations processes are highly efficient if you answered c., d. or e. If you’re not trafficking at least 250 line items on average, determine if there is a technology solution that can help streamline your ad trafficking efforts.
3. What percent of campaigns that ended in the last quarter experienced 15% or less over/under delivery?
a. <49%
b. 50% - 69%
c. 70% - 84%
d. 85% - 94%
e. >95%
Verdict: Your advertising operations delivery processes are solid if your answer is d. or e. If more than 15% of your campaigns experience some level of over/under-delivery, you may need to look in several places, first being your reporting and early-warning system. Your inventory system would be second since in many cases, problem areas are often targets that are difficult if not almost impossible to predict capacity. Having a solid early-warning system ensures that you can course-correct quickly. Lastly, if your team doesn’t have the right incentives in place (carrots and/or sticks) they may not be dedicating the attention to addressing delivery problems that your site warrants.
To get a broader picture of whether your current advertising operations yield high ROI, you can take the Operative ROI quiz online. Once you’ve completed all the questions, you’ll have a good sense of how your advertising operations efforts fair in terms of value and efficiency. By using these levers, you can use the following formula to see if your advertising operations have a high ROI:
ROI = Value – Efficiency
Efficiency
Despite a challenging economic environment, there are many publishers that have a great mix of people, process, and technology in place and experience a high advertising operations ROI. The result is increased revenue, better productivity, and higher rates of customer satisfaction and retention. These companies make excellent use of tech savvy talent that will guide their company towards continued success as advertising operations becomes increasingly complex. Ready for an advertising operations ROI reality check? Take the quiz and find out if you need to re-tool the way your company approaches advertising operations.
A 12-year veteran of the online publishing industry, Benjamin Reid is responsible for leading the development of new business and customer solutions across Operative product lines, providing product, technical, and domain expertise to the sales process. Reid joined Operative from About.com where he most recently served as Vice President of Sales Operations. In addition to leading sales operations for About.com, Reid previously served as About.com’s Vice President of Ad Technology and Advertising Operations.
