Case Study: Winning With Display Advertising

The scenario below is illustrative, a composite drawn from how mid-size retailers were running display campaigns in 2007, not a report on a specific real company. It’s presented here because it captures a pattern that showed up repeatedly that year, as the display advertising market went through a wave of consolidation and the tools available to a mid-size advertiser improved.

The starting point

Picture a regional home goods retailer with a modest but real online storefront. For two years, their entire display advertising effort had consisted of a handful of static banner buys on a couple of large portal sites, purchased at a flat CPM with no real targeting beyond the site’s own audience and no way to control how often the same visitor saw the same ad. The team could report impressions and, loosely, click-through rate. They had no visibility into whether any of it led to a sale.

What changed

In mid-2007, the retailer shifted its buy to an ad network built on the growing behavioral and contextual targeting capabilities that had become standard that year, the kind of technology fueling the big acquisitions making headlines, Google’s pending purchase of DoubleClick and Microsoft’s acquisition of aQuantive among them. Three specific changes drove the shift:

Frequency capping. Instead of an unlimited number of impressions to the same visitor, the campaign capped exposure to three views per user per week. This alone cut wasted spend on visitors who had already seen, and ignored, the ad multiple times.

Contextual and retargeted placement. Rather than buying a single site’s full audience, ads ran across a network of sites contextually related to home goods, and a smaller portion of the budget went toward showing ads specifically to people who had already visited the retailer’s own site but not purchased, an early form of what would later be called retargeting.

Rich media creative. The retailer moved from a single static banner to an expandable rich media unit that let a visitor browse a small product carousel without leaving the page they were on, a format that was becoming more common as ad networks improved their rich media support that year.

What the numbers showed

Click-through rate on the retargeted segment ran several times higher than the site-wide banner buy had ever produced, which wasn’t surprising since those visitors already knew the brand. The more meaningful shift was in reported cost per acquisition, calculated for the first time with any real confidence because the retailer had also implemented basic conversion tracking alongside the new campaign. The contextual and retargeted portions of the budget converted at a rate the old flat banner buy never approached, while the broad contextual placements still built awareness at a reasonable cost.

The lesson underneath the specifics

None of the individual tactics here were exotic. Frequency capping, contextual targeting and a shift toward retargeting an engaged audience were all becoming available to advertisers well below the enterprise tier by 2007, largely because of the ad network and technology consolidation happening that year. The retailer’s real advantage wasn’t access to some proprietary tool. It was the decision to stop treating display advertising as a flat media buy and start treating it as something that could be measured, segmented and improved, the same discipline that had already reshaped search advertising a few years earlier.

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