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Next up in our ad tech analogies series: The Nordstrom analogy, which explains the daisy chain/waterfall process of monetizing inventory.

In programmatic, the daisy chain/waterfall process is a technique publishers use to sell and make the most money out of their inventory. Publishers work to exhaust as series of demand sources to make sure their inventory ultimately gets sold.

Centro Brand Exchange, for example, is first in the daisy chain/waterfall and has first look at the inventory it sells. Meaning anything the seller doesn't sell directly will go to Centro Brand Exchange to be sold before it goes anywhere else.

This is similar to what happens in retail. Think about Nordstrom and Nordstrom Rack. When Nordstrom doesn't sell out of its clothing inventory or the clothes they sell change every season and Nordstrom needs to get rid of it, the inventory will go to Nordstrom Rack to be sold. If it doesn't get sold at Nordstrom Rack? Then it might go to Marshalls, or T.J. Maxx – and so on and so forth.

It doesn't matter if it's clothing or ad inventory: As it gets farther from the source, it tends to reduce in quality, because it's been picked over and passed on, leaving the undesirable – and usually cheaper – inventory on the table. It's something to keep in mind when buying programmatically.

Next week we'll dive into the concert ticket analogy, which explains the difference between preferred deals, private marketplaces, and the open marketplace.

Interested in other Centro resources that will help you dominate the digital media space? Reach out to [email protected].

At Centro, we know that keeping up with the trade pubs and latest trends can be tough and time consuming. To make that easier, we've compiled all the articles, reports, and other bits of awesomeness you may have missed, but should definitely read. Enjoy our latest list below!

2017 Internet Trends Report
Mary Meeker's annual Internet Trends report explores where the industry sits right now, along with solid projections on where the growth opportunities exist. The report includes a look at the continued disruption of media — with an emphasis on how digital is evolving, the growth of online advertising, the impact of interactive games beyond just gaming, and much more over the course of 355 slides (up from 213 last year).

The Disappearing Computer
After 26 years of writing nearly every week about personal technology, Walt Mossberg's final column dives into how far technology has come, along with a handful of predictions on what we can expect in the future. His main prediction is ambient computing, where all the technology that has (literally) been in our faces will become not just a seemingly natural extension of our lives, but won't even be noticeable. Related: Check out Steven Johnson's book How We Got to Now to learn how past innovations became inconspicuous.

Marketers are Skeptical of Google's New Attribution Tool
Google has rolled out a new free tool called Google Attribution, in an attempt to make attribution across Google Analytics, AdWords, and DoubleClick more accessible to marketers, though many marketing executives are cautious about the lack of "separation from church and state."

Hulu's Newfront Announcements
In addition to the much-anticipated launch of Hulu's live TV services, the company announced a slew of other new and in-development offerings like 360 video ads, shoppable interactive ads, and partnerships with Samba TV and Nielsen. Related: Shortly after Newfronts, the IAB released new research, The Changing TV Experience Study, and an updated Video Landscape Report.

Mobile-First to Mobile-Always: Create the Right Customer Experience
How do we better meet customer needs in an increasingly mobile-focused world, shifting from 'mobile-first' to 'mobile-always'?

What's Next for Bots on Facebook Messenger
Facebook's VP of messaging products shares his team's focus to make Facebook Messenger reinvent how people interact with businesses and services — which could range from customer support to more streamlined and personalized transactions.

Instagram Direct Messages Expands Support
While it is one-third the size of Facebook Messenger, Instagram's Direct messaging feature added support for external web links and the ability to send photos and video in their original aspect ratios. Watch this space for more developments and potential monetization opportunities.

15-Second Ads Coming to Amazon's Alexa
VoiceLabs will place audio ads inside Skills — third-party Alexa apps — offering 6-15 second audio ads to consumers following a news update or an audio stream.

Facebook, Snapchat Power Augmented Reality Well Past VR
With the addition of new features and the growing popularity of Snapchat Lenses, Facebook Stories, and Instagram Stories, augmented reality is expected to grow 30% this year (outpacing VR adoption in 2017).

The Advantage Chicago Has Over Silicon Valley
Could Chicago be the next Silicon Valley? On the heels of a KPMG report citing Chicago as a contender to be an international hub for innovation, this article makes a case for the Windy City.

June’s DIAL is also available as a PDF. Download here!

It's no secret that programmatic has exploded in recent years – and while it's opened up opportunity in the industry, it also means we're inundated with unfamiliar jargon, fancy new technologies, too many resources and platforms to count, and new ways of doing business. It's easy to feel overwhelmed and no one would blame you if you found it hard to keep up.

But, with 2017 set to be another benchmark year in programmatic media, it's become increasingly important to understand the tools we're using in the industry. To help with that, we've created a new series on our blog that's meant to break down this crazy, cluttered industry we call digital media into bite-sized and easy to understand analogies.

First up: the mall analogy, which explains the relationship between DSPs and ad exchanges.

How could DSPs and exchanges possibly relate to a shopping mall? Let's talk programmatic: a DSP is the mall, and the ad exchanges are the stores within the mall. Just like you'd go to the mall to buy clothes from a bunch of stores that stock different inventory, you'd go to a DSP to access ad inventory from a bunch of exchanges at the same time.

Let's get even more specific: Think of an ad exchange as Gap. Gap can be found in the mall, or multiple malls, or at its standalone brick-and-mortar store. That's exactly how you should picture exchanges working. Exchanges can integrate with a few DSPs or with every single DSP on the market. Meaning some exchanges are widely accessible or more accessible than others – just like a clothing store. And some exchanges are specialty and focus on specific types of inventory – just like stores in the mall.

Think of it this way: You can get a lot of the same items at different stores. Going to the mall to buy a white T-shirt? You can buy it at Gap, or you could get it at Sears, or Nordstrom. The shirts might differ in quality and price, but they're all white T-shirts. And that rings true of exchanges, too. Not all exchanges offer the same quality of inventory or the same price, but they sell similar things.

Next week we'll dive into the Nordstrom analogy, which explains the waterfall process of monetizing inventory. In the meantime, interested in other Centro resources that will help you dominate the digital media space? Reach out to [email protected].

"Ad tech is rife with shady characters. Until now, questionable behavior has frequently gone unchallenged. That's about to change."

Read more in Advertising Age from Centro's Ian Trider about how ads.txt can fight ad fraud.

Centro Academy, an educational program where digital media buyers are trained in DSP buying foundations and advanced programmatic strategies, welcomed its second group of buyers to our Chicago HQ this month.

The May graduating class consisted of programmatic buyers at media companies and agencies from across North America. During the two-day immersive program, attendees were trained on a variety of DSP tools and techniques such as:

As we told you back in March, students are encouraged to participate in interactive group work, ask questions, and get to know their fellow students. At the end of each day, students take a test to apply what they learned and become Centro Certified.

It's a unique experience, but don't just take my word for it. Hear from a Centro Academy graduate! Patrick McGovern, President and Chief Strategy Officer at brandigital.net, talks about his experience:

“Although the content ranged from fundamentals to advanced principles, it was always engaging. Each of the Centro experts brought their subject matter to life with metaphors, examples, and just plain enthusiasm.

The whole program was well choreographed; and every segment was thought-provoking and informative. The trainees in attendance also brought a lot of digital savvy to the table. In fact, a big part of learning for me was the workshop sessions.

During the group work, teams of four would come up with solutions to campaign scenarios that were put together by the Centro staff. Many of the solutions were smart; and there was so much to be learned just from the experience and skills of our fellow participants."

Want to know more about what Patrick learned at Centro Certified? Head to brandigital’s website, where Patrick wrote about everything that happened over those two days in the Windy City.

Missed the training event? We have another one coming up in August. Reach out to your Centro representative for more details!

An international thrift store chain came to Centro for help building brand awareness, increasing foot and website traffic, and soliciting donations. The store decided to launch a test campaign to see which digital partner could help them achieve the most efficient cost-per-acquisition.

Centro's audience buying solution was the clear winner and delivered the following results:

To read more about our campaign strategy, read our case study.

In order to build brand awareness and generate engagement across more than 7,000 ZIP codes, a major telecommunications company developed a microsite complete with testimonials and case studies. But the company needed to drive traffic to the site, so it turned to Centro for help.

Centro put together a customized audience buying solution, and it produced outstanding results:

To learn more about our digital strategy, read our case study.

We received a lot of questions during our May 3T webinar. Because we like to keep these bite-sized presentations under 45 minutes, we were unable to answer them all, so we've enlisted our fearless speaker, Lisa Little, to answer them on our blog.

When setting budgets, how do you determine your search budget in conjunction with a display campaign?
Typically budgets by channel are determined by a media mix model or historical allocation from a client/brand. According to recent eMarketer stats, in 2016, U.S. digital media budgets were broken out by the following on average: 49.3% (display), 42.1% (search), and 8.6% (other). Budget allocation is based largely on the type of business or vertical and budget you have available. The main goal is to make sure you're not spreading your budget too thin across too many various channels. When divided out and spread too thin, you don't see great performance in any one channel.

Do you have experience with If functions or Ad Variations?
Yes! If functions can be very useful in search when providing more customized ad text experiences. We did not review in this webinar because If functions are a more advanced tactic.

Ad Variations, along with dynamic text, dynamic keyword insertion, dynamic countdown, etc. are all very effective methods to customize ad text to the customer's experience and typically result in higher CTR. The more complex and robust the account, the more important it becomes to leverage some of these dynamic tactics. For basic accounts with 2-3 campaigns, some variations may be considered over-optimizing, but always consider testing keyword insertion to start out.

Any rules of thumb about what budget levels are adequate to reach certain numbers of impressions, audience share, etc.?
This varies significantly between verticals and seasonality. Because search is auction-based buying, the verticals with more advertisers in the auction at any given time require more budget to be competitive and reach the ultimate impression share. Seasonality plays a part because if the keyword is in its peak season, it can become more expensive and require increased budgets.

For example: The keyword 'mother's day gift' is most likely more expensive and requires additional budget in the months leading up to Mother's Day, but most likely won't spend or need any budget in September. The best way to reach ideal impression share is to test out a budget and let the tools in the account calculate what impression share you're gaining and what impression share you're missing out on – due to budget or ad position – and optimize budget from there. The loss IS due to budget, and rank evaluations will indicate if your budget levels are making significant impact in paid search and what sort of optimizations or enhancements you can make to gain more market share.

Could you speak to how paid social advertising (e.g. Facebook ads) play into/impact paid search?
We have seen uplifts in CTR and efficiency when paring search and social. They are very similar channels, as they are both focused on the consumer's behavior, and often users switch back and forth between the channels and devices.

When sharing data, you can get more insight into audiences, demo targeting, and behaviors in both channels. The data also really helps in creating keywords in paid search that you may not have already thought about and for sharing high performing paid search keywords for social to utilize in elements of paid social campaigns.

Also: There's a huge benefit to looking at the creative in social to drive some of the messaging in paid search (and vice versa), so the experience is more seamless for your customers and they can connect the dots for the brand consistency.

As a best practice, is there an average spend per day that you recommend when providing a budget for a potential client?
Much like the answer above, the budget varies significantly by vertical and seasonality. Best practice is to make sure you have enough budget to allow for support of all the individual keyword bids in the campaign and monitor the spending. If you have keywords that average $3.00 CPC and set a $30 budget, then you can estimate you'll receive approximately 10 clicks per day before the budget shuts off. There is no magic number, but the best approach is to collect data, seasonality trends, put some simple math in place to calculate approximate clicks based on the CPC rates at any given time, and be willing to adjust/be flexible with budget. There are tools to estimate spend, but the most accurate estimate comes after the search account is live for a few days so you can measure impression share and lost impression share due to budget.

Can you set a lifetime budget as opposed to a daily budget? What is the best practice?
The lifetime budget or “IO" is for the whole flight and that is what budget Google sees as the ultimate threshold. The daily budget is more a guideline to help you pace the spending more evenly so you don't utilize or run through all your budget in the first few days of the full flight. For example: You can set an IO of $10,000 for June 1 – Aug 1. But if you don't set a daily budget, then there is a possibility you could spend the full budget by July 5 and have almost a month without running. If you set daily budget in this scenario it ensures you use the budget more evenly and as planned to pace for coverage throughout the full flight.

Can we do PPC using Centro's products?
Yes! Our Centro search teams specialize in search for full-service management of search campaigns. Centro Platform self-serve does have some planning elements with paid search as well. Talk to your regional Sales Lead to get more info.

What is the best data-driven digital marketing strategy to pair with SEM campaigns? Display ads with retargeting has been what we're using. Any increase in conversions when pairing with whatever is suggested?
Every channel – both digital and traditional – drives some search activity and has some impact in search performance. We have seen success with aligned and integrated strategies between display and search, as well as search and social. There are also some retargeting options within search – including RLSA, Google Match, and some audience targeting settings.

On the Nike ad example: Are “Women's" and “Men's" that appear under the ad also separate keywords? How does it work?
Those are called 'Sitelinks.' Sitelinks are additional pieces of text you can include under the main ad copy. These aren't triggered by additional keywords; they are just more character space where you can drive each of the sitelinks to various landing pages on the website. Sitelinks are really helpful when the keyword is general and you're not sure what the intent of the user may have been.

The screenshot from the presentation was taken when I searched 'Nike Shoes,' so the sitelinks provide additional detail that a consumer can click if they are for sure looking for men's shoes or women's shoes. Sitelinks provide options for the user and take up more real estate on the page, pushing the other ad listings down on the SERP.

Can you check your quality score and/or see what affects the score?
Yes, you can check the overall quality score on average or QS for individual keywords. The quality score fluctuates depending on the marketing, seasonality, relevancy, website, etc. With keyword quality scores, there is a feature to hover over and see insights behind why Google has rated you with a low quality score and how to optimize.

When it comes to relevancy, how does it work when the keyword is slang or a new and trending phrase that may affect consumer searches?
Slang is taken into account as well. Google is constantly working on their algorithms to include and read various slang, traditions, languages, and nuances in search behavior. There are some tools available to see 'trends' in Google searches to evaluate when certain keywords peak or fall with the interest level of the consumer and how they are searching.

In the swimsuit example, how did they get the "deal" part to appear in the ad?
The example has the discount/deal listed in 2 areas. The first is in the headline, and this is written by the account manager. The second deal line is considered a 'promotion extension.' This is an added feature where you can indicate details about the promotion within AdWords and it will include the deal: extension in the ad copy.

A national soft drink label came to Centro looking to improve regional brand recognition and boost local awareness. The brand was looking to launch a sweepstakes campaign at quick-serve restaurants.

The Centro campaign strategy, which included a combination of audience buying tactics, custom gaming units, and narrow targeting strategies, led to great success for the company:

To read more about our strategy, download our case study.