The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
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Shoe e-retailer Zappos.com, a unit of Amazon.com Inc., began using the Devil unit last year on sites like Popeater.com (recently renamed Huffington Post Celebrity), to connect consumers to real-time information and visually engaging images and video from Zappos, says Laurel Boyd, associate media director at Mullen, Zappos' ad agency. One Zappos ad included video, live posts from Facebook and big imagery with a rotating photo gallery, she says, and was the only ad shown next to articles about fashion and style—the kind of content a Zappos customer would likely be interested in viewing.
The live nature of the ad, and the fact that it's the only ad on the page, helps engage viewers, says Greg Rogers, co-founder and CEO of Pictela, the AOL Advertising unit that manages Project Devil. "Uncluttering the environment lets viewers focus on the content," he says. "We're trying to steer toward a notion where if you are going to have an ad next to great content, that ad should be great content too."
AOL Advertising says the Project Devil ad unit, which measures 300x1050 pixels, about the same width as commonly seen display ad units but much longer vertically, has an engagement rate 550% greater than smaller, more typical 300x250 pixel units. The company says the Project Devil unit also increases purchase intent an average of 263% compared with the smaller unit. Other retailers that have used the ad unit include Nordstrom, Target, Macy's and Kohl's. A consumer viewing the Nordstrom unit, for example, could rotate through pictures of current sale styles, view a short video, enter her ZIP code to locate a store and see a map showing the nearest store without ever clicking off the web page she was visiting.
"The advent of ad units like this means ads are going to do a better job drawing users in," Boyd says. "Interest in this is definitely growing from advertisers, and budgets are growing for this type of branding," Boyd says. Rogers declined to say what a Project Devil ad unit might cost on a major site, but acknowledged it is more expensive because it is the only ad inventory available on that page. Microsoft Advertising also offers an interactive ad unit, dubbed Filmstrip, which can feature content from multiple sources.
More advertisers might try these types of ads, since the IAB approved both Project Devil and Filmstrip formats as "standard" ad formats last year. Most marketers and agencies use IAB-approved standard ad formats as a framework for ad inventory and web page design.
Another way marketers are making display ads more relevant is by inserting content into ads based on what they know about the individual consumer viewing them.
Online ticket marketplace StubHub, a unit of eBay Inc., in January began using data culled from its customer relationship management (CRM) database to create targeted display ads. Unlike display ads used for prospecting new customers or retargeted ads served based on web site visits by anonymous consumers, StubHub's display ads are created based on data from existing customers, which means StubHub knows exactly who it's showing the ad to. It also means StubHub can personalize the display ad the consumer sees based on all the data he's given the ticket reseller in the past, such as which events he's expressed interest in, how soon before an event he makes a purchase and what price range he typically buys at.
The technology that makes it possible for StubHub to systematically link that kind of data about individual customers to the display ads comes from Responsys Inc., a digital marketing services provider, which StubHub had previously used to manage its e-mail efforts.
"We're trying to leverage the best practices we know work for e-mail marketing and direct marketing over to display," says Dan Morrill, e-mail marketing manager at StubHub. "Often so much of what you spend on display is on an unknown audience where it's just hoping to catch a fan. With this display [targeting process] we know who they are and we know they are a user of StubHub."
StubHub is testing different ways to apply customer data to display, and Morrill says early results are encouraging. One form it is testing is to reinforce e-mail messages a consumer has responded to in some way. For example, if a consumer opens an e-mail message with a subject line about baseball, that same customer may see a display ad online during the following week about local baseball ticket availability on StubHub.
StubHub also is creating display ads based on consumers' previous behaviors apart from e-mail. For example, if a consumer in Los Angeles bought tickets on StubHub to a Michael Bublé concert a year ago and StubHub has a lot of Bublé tickets to sell for his next concert in L.A., that consumer may see a display ad noting that availability. "We're focusing on how we can use our deep customer data to serve relevant messages on display," Morrill says.
That kind of application of consumer data, combined with more attractive and engaging ads, are helping breathe new life into what was a staid online ad format. Marketers are now carefully using display to draw consumers closer to the Buy button, and more innovation surely lies ahead.