As Display Overtakes Search Among High-Tech Advertisers, Is the Industry Ready?

Guest AuthorsNative & Programmatic Advertising

By Jill Steinhour On Dec 17, 2018

As Display Overtakes Search Among High-Tech Advertisers, Is the Industry Ready?

Spending on digital advertising continues to increase at a remarkable rate, with US growth projected to eclipse 18% between 2018 and 2019. While digital advertising’s ascent is no secret, it’s less recognized that specific industries are driving an outsized portion of that growth. In particular, high-tech brands — companies that focus on hardware manufacturing, software as a service (SaaS) or e-commerce — are outpacing the market in terms of digital ad spend, driven by market factors such as rapid innovation cycles and intense competition.

In all, high-tech marketers will spend a record $8.3 billion on digital ads this year — a 21.6% increase over 2017. How they’re allocating those budgets is especially interesting: spending on display advertising — 82% of which is transacted programmatically — is forecast to overtake search for the first time ever this year. In other words, programmatic display is supplanting search as the king of direct response advertising for high-tech marketers — a major milestone.

Of course, not everyone is a believer. A few years ago, I had a conversation with a well-regarded enterprise SaaS company, whose Director of Demand Generation revealed that programmatic display was of little use in their demand generation efforts. But the numbers suggest this experience is increasingly rare, if not an outlier.

With such growth and so much at stake, it’s worth pausing to ask: what can marketers learn from their high-tech peers, who are putting digital — and programmatic buying in particular — at the center of their ad budgets at record levels? Two best practices stand out.

Take Control over Media Buying and Customer Data

Efforts to reduce reliance on external agencies, create a better return on media investments and enable critical customer insights are motivating more companies to move toward an in-house agency model. An April 2018 IAB survey of 119 US-based brands found that 45% had moved either some or all programmatic buying functions in-house, in part to address concerns over where ads appear and also ensure a higher level of brand safety.

Bringing programmatic media buying in-house was a necessary decision for Intel. “Our biggest aha, our epiphany, was that we wanted to have a holistic view of our customer,” notes Julie Keshmiry, Intel’s Global Media Director. Assembling this holistic view can be especially important for high-tech brands that don’t typically interact directly with end-consumers, selling components in business-to-business settings or through original equipment manufacturers.

Consolidate Technology Partners

Far too often, the thought of “maximizing performance” is met with actions aimed at simply reducing cost instead of improving overall performance. Focus on cost-reduction frequently takes the form of using smaller point solutions. This is less than ideal for a number of reasons, most prominently because disparate software solutions interpret the world differently and lack perfect interoperability. One tool’s definition of audience is not the same as another, for example.

The more “cooks in the kitchen” the more difficult suppression, customer journey management, measurement, and attribution become. The ability to derive customer insights across several disparate solutions becomes problematic and the results unreliable. By consolidating with a comprehensive partner that shares their goals, marketers can ensure they deliver the best results across both marketing and advertising.

In any industry, late entrants always benefit from the hindsight of early adopters. With high-tech brands offering early insights into how to scale a meaningful programmatic digital ad strategy, there are plenty of lessons to heed.