Online Display Advertising Benchmark Report

Online Advertising & Real-Time Bidding
Benchmarks, Insights & Advice
Conclusions and Findings from 317 Survey Responses in June 2013
© 2013 Demand Metric Research Corporation. All Rights Reserved.

Sponsored By:
Benchmarking Report

TABLE OF CONTENTS
3
4
5
6
8
9
Introduction
Executive Summary
Research Methodology
Marketing Medium Effectiveness
Online Advertising Landscape
Online Display Advertising Importance RTB Vendor Landscape
Analyst Bottom Line
Acknowledgements
10
11
12
13
15
16
17
18
20
21
Average Monthly Budget Spend
Geographical Targets for Online Ads
Top Benefits from Online Ads
RTB Awareness & Usage
Understand How RTB Works
Perception of RTB Effectiveness
Future Plans to Use RTB

INTRODUCTION
Online display advertising has and continues to be a staple for digital marketers. For many years, advertisers purchased online
advertising much like they purchase traditional print advertising: select a media property, buy space and schedule the advertising to
run.

In the past few years, a new approach for buying and selling online advertising has emerged: real-time bidding (RTB). This
approach uses technology to sell online advertising through an exchange, where advertisements are purchased – and served – on
demand. While online advertising has always had far more immediacy than print advertising, with RTB, that immediacy becomes
almost instantaneous. Furthermore, the platforms that support RTB don’t just blindly serve up ads online: they offer the ad buyer the
opportunity to purchase impressions for a specific audience across a broad spectrum of websites that have ad inventory to sell.

RTB promises online ad buyers substantially more efficiency and effectiveness, and Demand Metric conducted research, sponsored
by AcuityAds, to understand the impact RTB is having on the online advertising landscape. The goals for the study were to gain a
better understanding of the online display advertising landscape, and the adoption, use and impact that RTB is having on it.
Thank you to all those who participated in the survey. We really appreciate your input!
Jerry Rackley, Chief Analyst
Demand Metric
jerry@demandmetric.com | + 1 (405) 213 0050
3

EXECUTIVE SUMMARY
A survey was used to collect the data for this study, and its analysis provides these key findings:

§  A substantially bigger percentage of large companies (70 %) use online display advertising than do small (54 %) and medium-
sized (53 %) companies, and large companies ascribe more importance to it.
§  Online display advertising delivers a wide range of benefits, the most important of which is the ability to target consumers,
followed closely by measurability. As a solution, RTB enhances both of these benefit areas, yet the awareness of RTB is low,
with only 11 % of respondents currently using it and 58 % having not heard of it prior to this survey.
§  Better awareness and understanding of RTB stand in the way of broader adoption. Of those who claim a moderate to advanced
understanding of RTB, 67 % of them perceive that online campaigns with RTB are slightly to much more effective, compared to
just 42 % of all RTB users in the survey.
§  The RTB market is still emerging and maturing. It’s a relatively level playing field for vendors at present, and price has not yet
become the major differentiator in their offerings.
This report details the results and insights from the analysis of the study data.
4

RESEARCH METHODOLOGY
The Demand Metric 2013 Online Display Advertising Survey was administered online over a period of June 20th to July 5th, 2013.
During this period, almost 350 responses were collected, 317 of which were complete and not duplicates and were therefore
included in the analysis. All members of the Demand Metric community received email invitations to participate in the survey, and
participation was encouraged through a random draw incentive for an iPad Mini. While respondent email addresses were collected
in order to facilitate the prize drawing, no identifying information was considered in the analysis of the survey data.

Summarized below is the basic information that was collected about survey respondents to enable ﬁltering and analysis of data:

Number of Employees:
§  Zero to 25 (40%)
§  26 to 100 (19%)
§  101 to 250 (10%)
§  251 to 1,000 (15%)
§  1,001 to 10,000 (12%)
§  Over 10,000 (4%)

Primary Job Role of Respondent:
President, CEO or Owner (22%)
Marketing Management (44%)
Marketing Consultant (11%)
Sales Management (6%)
Other (17%)
Type of Organization:
§  Private Sector (60%)
§  Ad Agency (6%)
§  Marketing Agency (12%)
§  Non-Proﬁt (8%)
§  Other (14%)
5

MARKETING MEDIUM EFFECTIVENESS
60% said Email Marketing was a ‘most’
effective marketing medium, followed
by 58% for Word of Mouth.
While the focus of this study was online display advertising,
it was necessary to get the big picture with respect to
perception of effectiveness of a broad range of promotional
marketing mediums. To do this, the survey asked
respondents to identify, from a list of possible choices, any
of the mediums that have been most effective. An “Other”
category allowed respondents to enter any mediums not
listed.
Virtually all of these mediums can have an online
component or influence. For example, an email marketing
campaign can link to a website that also serves up
advertising. Online advertising and content can trigger
Word of mouth referrals, and online display advertising
through social media is growing rapidly.

6
189
186
163
111
108
99
97
85
82
55
45
0
20
40
60
80
100
120
140
160
180
200
Marketing Mediums by Effectiveness

This analysis of marketing medium effectiveness looked at
the data by size of company to determine if there are
differences, and indeed there are.
It is interesting, although perhaps not surprising, that small
companies (defined here as 100 or fewer employees) rank
Word of Mouth as the top marketing medium. Few will
argue that it is highly effective, with a perceived low cost, but
the perception is also that it is difficult to control. In the
digital age, Word of Mouth and social media are virtually one
and the same. Medium-sized companies (between 101 and
1,000 employees) rank Word of Mouth third, and it ranks ninth
on this list for large companies (over 1,000 employees).

Whitepapers appear third on the list of effective marketing
mediums for large companies, and case studies (not shown)
rank fourth. This may result from larger companies
executing content marketing strategies, a strategy which
many small and medium companies are still learning about
and embracing. Both whitepapers and case studies are
proven and excellent fulfillment collateral for online display
ads and promotions.
7
71%
56%
50%
0%
20%
40%
60%
80%
WOM Email Social
Small Companies
59%
49% 48%
Email Social WOM
Medium Companies
60%
53% 49%
Large Companies
MARKETING MEDIUM EFFECTIVENESS – BY SIZE
Marketing Medium Effectiveness – By Size of Company

ONLINE DISPLAY ADVERTISING LANDSCAPE
How widely used is online advertising? The study survey
asked the following question to ﬁnd out:
“Do you use or purchase online display
advertising, either for your organization
or on behalf of a client?”
The results of this question were:
Yes: 56% No: 44%
The usage of online display advertising varies signiﬁcantly
between small or medium and large companies, as this
chart illustrates.
The study did not gather data to understand why large
companies use online display advertising more than small
or medium-sized companies; the data only tells us that
they do.

8
54% 53%
70%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Small Medium Large
Online Display Ad Usage by Company Size

ONLINE DISPLAY ADVERTISING IMPORTANCE
Only 49% of small companies,
compared to 63% of large companies
deem online advertising as important.
After evaluating usage, the survey asked survey
participants to indicate how important online display
advertising is as a component of their marketing or lead
generation plans.
Only 8% of respondents indicated that it was not
important; for all other respondents, it had some degree
of importance, which varied by company size.
The following graph depicts the percentage of
respondents, by company size, indicating that online
display advertising is “important” or “very important” as a
component of their marketing or lead generation plans.
Large companies, the biggest users of online display
advertising, ascribe more importance to it as well.
9
49%
53%
63%
0%
10%
20%
30%
40%
50%
60%
70%
Small Medium Large
Importance by Company Size

AVERAGE MONTHLY BUDGET FOR ONLINE ADS
How much are companies spending
on online advertising?
37% of companies are spending more
than $10,000 per month.
To go deeper on this topic of usage and importance, the
study analyzed the reported average monthly budget
allocations for online display advertising.
This data again shows that large companies are the most
active in the online display advertising market space.
Probably by virtue of their size and resources, large
companies are spending much more for online display
advertising: 52% are spending on average over $20,000
per month. By contrast, 77% of small companies and 63%
of medium companies are spending on average less than
$10,000 per month for online display advertising.
10
2 Teams,
2 Managers
1 Team
2 Teams,
1 Manager
< $10K
63%
$10K-20K
15%
$20K-50K
11%
$50K-100K
8%
$100K+
3%
Monthly Online Display Advertising Spend Budget

GEOGRAPHICAL TARGETS FOR ONLINE ADVERTISING
What geographical regions are
companies targeting with online display
advertisements?
To continue looking at the online display advertising
landscape, the survey asked respondents to indicate in
which geographies they are targeting the online display ad
impressions they are buying.
It is not surprising that North America is the leading
geography in which online advertising is targeted.
When large companies are viewed separately from the
aggregate data, they exceed the averages in the graph for
each geography, most notably with 95% of large company
respondents reporting they target North America with their
advertising.

87%
27%
16% 13% 10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Geographical Targets of Online Advertising
11

TOP BENEFITS FROM ONLINE ADVERTISING
Regardless of size, companies in the survey agree that the
ability to target their advertising is the top benefit of online
advertising. This benefit coincides with one of the primary
advantages of RTB, but as this report will discuss, the
awareness of RTB is low. The logical conclusion to draw
from this data is that many companies are missing the
opportunity to more precisely target their online
advertising by not using RTB.

RTB improves the targeting of online advertising
impressions at the impression level, not at the website
level. During the RTB auction process, which occurs in the
milliseconds before an impression occurs (the page with
the ad loads), a prospective ad viewer’s demographic and
psychographic profiles are evaluated, improving the
precision with which impressions are served. The RTB
process works not just for a single website with ad
inventory, but across an broad spectrum of websites,
extending the reach of an advertisers impressions as well
– the third most important benefit for large companies.

Lower cost did not make the top three benefits list for any
company size segment, but it was fourth for all segments.
12
82%
72%
54%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Targeted Measurable ROI
Top Benefits from Online Advertising

RTB AWARENESS AND USAGE
Do people know what real-time bidding
(RTB) is and how it works? 58% had not
heard about it until just now.
Within this online display advertising landscape, to what
degree is RTB in use and what kind of impact is it having?
The survey anticipated that RTB might be a new concept to
many participants, so a question was constructed to provide
a brief description and test awareness of it:
“For online display advertising, Real Time Bidding (RTB)
allows display inventory to be purchased by the individual
impression through a bidding system that unfolds in the
milliseconds before a consumer loads a web page. Before
reading this deﬁnition, which statement best described your
awareness of RTB?”
Here are the results for all survey participants.

13
58%
31%
9%
2%
0% 20% 40% 60%
I had not heard of RTB before
now
I was aware of RTB but our
organization is not using it
Our organization is purchasing
SOME of our online display ads
using RTB
Our organization is purchasing
MOST of our online display ads
using RTB
RTB Awareness and Usage

RTB AWARENESS BY COMPANY SIZE
60% of participants in large companies
knew what RTB is compared to just 36%
in small companies.
Considering that 60% of the survey participants identiﬁed
themselves as belonging to a private company – exactly the
types of companies that are using online display ads – the
usage of RTB is low at 11%. Given that 58% of survey
participants reported no previous awareness of RTB, the low
reported usage is not surprising.
Even though RTB is not new, it appears that prospective
users remain largely unaware of RTB.
To provide more context about the awareness of RTB,
Google reports that there are currently about 12,000 global
monthly searches for “real time bidding”. Compare this
search volume to a more familiar term associated with online
advertising, “pay per click”, which currently receives 165,000
global monthly searches. The study data suggests that RTB
may at present just have a foothold in terms of awareness
among those who could use it.
14
64%
54%
40%
0%
10%
20%
30%
40%
50%
60%
70%
Small Medium Large
No Previous Awareness of RTB

UNDERSTANDING HOW RTB WORKS
It stands to reason that product/service companies, who
each have something to sell, might have more awareness
of RTB. This segment represents the largest set of
responses to the survey, comprising 60% of the total.
In terms of the importance of online display advertising,
92% of this segment’s respondents indicated that online
display advertising was anywhere from somewhat to very
important as a component of their marketing or lead
generation plans. Their awareness of RTB was average,
but what about their understanding? The survey asked
respondents who are currently using RTB to rate their
understanding of it, providing response choices of “None”,
“Basic”, “Moderate” and “Advanced”.
There is one other segment that merits a review when it
comes to RTB usage: respondents who indicated that their
role is marketing executive, director or manager. This was
the largest “Role” segment in the survey, with 44% of
respondents identifying themselves in this way. All of these
respondents are purchasing at least some of their online
display ads using RTB: no one in this segment reported
not using RTB.
15
0%
60%
25%
15%5%
41%
28% 26%
0%
10%
20%
30%
40%
50%
60%
70%
None Basic Moderate Advanced
Understanding of How RTB Works
Product/Service Companies Everyone Else

REAL-TIME BIDDING (RTB) EFFECTIVENESS
67% of those who are using RTB
perceive that it is slightly or much more
effective than not using RTB.
This study asked those respondents who reported some
usage of RTB to rate the effectiveness of online display
campaigns implemented with and without RTB.
Understanding how RTB works does indeed change how its
effectiveness is perceived. Of those respondents reporting
a “Moderate” or “Advanced” understanding, 67% perceive
that online campaigns with RTB are slightly or much more
effective than those without.
Compare this to 42% from the full set of responses, and the
connection between understanding and perception of
effectiveness is impossible to miss.
16
Much less
effective, 5%
Slightly less
effective, 9%
No
difference,
19%
Slightly more
effective,
48%
Much more
effective,
19%
Perception of Effectiveness of Online Ads

FUTURE PLANS FOR REAL-TIME BIDDING (RTB)
Any independent analysis of the market for RTB will indicate
that as a solution, RTB is growing. Forecasting the growth of
the RTB market was never a goal of this study. What was
researched at a basic level was consideration: what plans
exist to use (or not to use) RTB in the future?

Each survey respondent was given the opportunity to provide
input by selecting a statement that best described future
plans for using RTB, and 74% of the replies were “We have no
immediate plans to try and use RTB”. Given the low level of
awareness of RTB, this result is expected.

However, it seems unreasonable that those who had not
heard of RTB prior to taking this survey could have plans to
use it. The most helpful view of consideration, therefore,
should come from those respondents who were aware of
RTB, but are not currently using it.
Almost one-third of survey participants who are not currently
using RTB but are aware of it have plans to use it in the near
future. This is a fairly robust consideration ratio, in line with a
solution that is growing and gaining traction in the market.
17
No
immediate
plans 68%
In the near
future, 32%
Future Plans to Use RTB

RTB VENDOR LANDSCAPE & MARKET MATURITY
The RTB vendor landscape is an emerging one. The survey
participants were asked to identify any RTB vendors they
were aware of, from a list provided to them. In addition, there
was an “Other” option that allowed respondents to ﬁll in the
blank with vendors not on the provided list. The purpose of
the question was simply to test awareness, not determine
market share.
These results depict a market where one vendor enjoys a
higher level of awareness, but almost all vendors have
meaningful degrees of recognition. The typical pattern for a
market like this is, as expansion slows, consolidation
accelerates.
The primary vendor challenge in the market today is
awareness, both of the RTB solution category and for visibility
as a vendor who provides it. Vendors are battling solution
ignorance more than they are competing with each other at
present. As the market matures, this will change, vendors will
acquire and be acquired, and the level of competition will
increase.

18
49%
20% 20%
18%
16%
14% 14%
12%
8% 8% 8%
4%
0%
10%
20%
30%
40%
50%
60%
Awareness of RTB Vendors

RTB VENDOR LANDSCAPE & MARKET MATURITY
One other indicator of this market’s maturity is cost. This
survey asked participants to identify the online advertising
benefits that are most important to them.
Price, or low cost, was not identified as a top three benefit for
any size company. It ranked fourth on the list of benefits for all
size companies. Price always matters, but in emerging
markets, it tends to matter less.
As markets mature, vendors consolidate and the distinction
between solutions starts to blur, price becomes a bigger
issue in vendor selection. Up till now, at least, this doesn’t
seem to be the case for the RTB market.

19
49%
20% 20%
18%
16%
14% 14%
12%
8% 8% 8%
4%
0%
10%
20%
30%
40%
50%
60%
Awareness of RTB Vendors

ANALYST BOTTOM LINE
When it comes to online display advertising, the most important benefit it provides is the ability to target customers through this
channel. As a solution, RTB excels at delivering a level of targeting precision that this survey reveals is highly coveted in online
advertising. Yet, the awareness of the RTB solution, understanding of how it works and usage, are relatively low. Given that two-
thirds of those who have a moderate to advanced understanding of how RTB works perceive that it outperforms online campaigns
where RTB is not in use, it’s evident that there’s a knowledge gap.

RTB isn’t an ideal solution for everyone, but it’s certainly right for more companies than are currently aware of or using it. Over half of
the survey participants reported that online display advertising was important or very important as a component of their marketing or
lead generation plans. Of this segment, a full 77% either had not heard of RTB before this survey, or were aware of but not using it.
The recommendation for these companies is to gain a better understanding of what RTB can do, as it is almost certain that some of
these companies are missing opportunities.

As for the vendors, the task in the market now is educational. It is natural for vendors to compete with each other for business. Given
the current state of RTB awareness, the vendors that do the best job of teaching, educating and being helpful about RTB and its
benefits stand to gain the most in the long run. Focusing on competing with each other instead of helping educate the market is
unproductive at present. Investing in high quality content that is easy to find is the best path to success and establishing market share,
as customers will reward vendors who help them the most with their business.
20

ACKNOWLEDGEMENTS
Demand Metric is grateful for those members of the Demand Metric community that took the time to provide their input to this study.

Demand Metric thanks AcuityAds, the sponsor for this study. AcuityAds is real-time bidding (RTB). Its advanced RTB platform is
powered by proprietary machine learning technology that allows advertisers to hyper-target their digital consumers across online
display, video and mobile campaigns. In less than 3 years, AcuityAds has grown from 7 people crammed into one room, to over 50
people North America wide. It’s been proven by Fortune 500 companies across North America to connect with the right consumers,
in the right places, at the right times and for the right price.
21

ABOUT DEMAND METRIC BENCHMARKING
Demand Metric is a marketing advisory ﬁrm serving a membership community of over 33,000 marketing professionals and
consultants in 75 countries with consulting methodologies, advisory services, and a library of 500+ premium marketing tools and
templates.

Demand Metric is conducting benchmarking research to provide metrics and data on key marketing initiatives, strategies and
execution. Members can use this data to benchmark their performance against their peers and get an objective view of their
organization's maturity with regard to speciﬁc marketing disciplines and competencies.
If you’d like to work with us to conduct or sponsor a custom research study, email us info@demandmetric.com
22

For more information, visit us at:
www.demandmetric.com
Demand Metric Research Corporation
#300 – 1275 West 6th Avenue, Vancouver, BC CANADA V6H 1A6

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