Is Online Advertising Getting Too Complex?

MediaMind Says Use of Tagging Technology is Exploding Among Top 10%

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Just how complex has online advertising become? Very -- especially among the biggest spenders.

The top advertisers' online ad campaigns are nearly six times as complex as the average, according to data provided to Ad Age by DG MediaMind. The company reviewed 350 billion global display, video and mobile impressions served on its platform between 2010 and 2013 as part of its new "Complexity" study and found that the use of tags and sophisiticated targeting and analytics is booming, especially among the top-10% of advertisers.

Advertisers are "increasingly interested in very complex targeting scenarios," said Nick Talbert, director of product marketing at MediaMind. "These are people that are really pushing the needle in terms of really sophisticated campaigns."

The number of digital campaign analytics technologies and companies has blossomed, and their tags are proliferating. MediaMind found that the number of ads with two or more third party tags -- which help track ad interactions, brand impact, and measure for campaign optimization -- rose 267% from 2011 to 2013. Today, almost a third of digital ads employ more than one tag, up from around 25% in 2011.

Indeed, these tags are so rampant, the number of ads that featured five or more of them skyrocketed 476% in the years evaluated. According to the study, that's nearly 19 times the growth rate of ads with just one third party tag attached.

Advertisers doing lots of geo-targeted advertising with a variety highly-targeted messages based on location and demographic information tend to have the most tag appendages, such as auto, telecom and CPG brands.

The number of conversion tags, which track whether people complete an action via an ad, such as signing up to download a white paper or purchasing an item, is way up, along with the number of events they track. The number of tags used by the top 10% of advertisers rose 49% since 2010, and events tracked leapt 460%.

"These are the guys that are getting the most out of digital," said Mr. Talbert.

Diminishing returns
However, he cautioned there is a point of diminishing returns, and tag-hungry advertisers could be reaching the brink.

"There's a lot more gains you can potentially make by looking across the board," he said, rather than poring over a swath of reports, each revealing limited views of overall campaign results.

He also noted the increased amount of setup time and costs associated with additional tags and technology layers, suggesting that some campaigns can take as much as five weeks to arrange, in part because of the tag pile-on. "At some point the overhead becomes more daunting than the results," he said, adding that the point at which overhead surpasses the true value of the technologies is "at a different spot for each advertiser and each account."

"We think that a client's ROI is going to be greater served by looking at the synergies across digital as a whole rather than silo-ing each and every strategy," he said.

The Complexity index

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