The advertising market is constantly changing, and this process has become faster along with the development of the digital environment. The changes dictate new rules of the game to both marketing organizations and the media.

If in the past online advertising was a “dark box” for editorial offices, today it is difficult to find a website in the Armenian online media that does not place online advertising. The next “dark box” about which discussions have intensified in recent years is programmatic advertising.

Yana Yanikyan, Head of Digital Marketing at Media Systems Advertising Agency, and I tried to find out what the differences are between online and programmatic advertising, as well as to reveal the prospects of monetizing them for the Armenian media.

Differences between global and local networks

Online is the advertisement that appears on the screen immediately after opening the website or after some time. The media decides the position in which the advertisement will appear on the website. In the case of some websites, that ad temporarily covers all content.

When talking about online advertising, it is necessary to clearly separate the local networks created by Armenian advertising agencies and the global international networks.

Media Systems has its own exclusive network, as well as is open in terms of cooperation with global networks and their “import.” In the first case, the mechanisms are very simple, because the cooperation is between local market companies, the media knows what formats it activates on its platform, the advertising agency is responsible for the content, deals with technical support, and so on.

The most popular global networks in Armenia, which are joined by their websites, are Google and Yandex. Working with global networks has some difficulties. It is not possible to filter the displayed content thoroughly here. In addition, significant deductions are made from the money earned by the Armenian media through global networks.

According to Yana Yanikyan, advertising agencies should try to maintain a balance between international and local media. “It is important that the money generated while working with international networks is not at the expense of Armenian local websites. In other words, the Armenian audience should be monetized in the Armenian media, and not only in foreign ones, otherwise, we will witness a serious outflow of advertisers from local websites to foreign websites.”

Income and circumstances affecting it

It is difficult to say how much money a website can make from the internet (as well as from programmatic) ads. It depends on different circumstances: unique users of the platform, geography, number of activated positions on the platform (those are the parts of the site where the ad opens), content filtering (what topics the ad can activate on the site, each topic has its value), hourly distribution of visits (how many visits the site has in the time segment), etc. Revenue is also affected by how fast the site is moderated, how many ad networks it works with at the same time, and which one is prioritized.

“There are external circumstances that do not depend only on the website. We are talking about global market mechanisms. This “traffic” is arbitrary, that is, the money is formed on the principle of an auction. It is possible that the site will do its part, but, for example, auction prices will fall or rise, or the fluctuation of the dollar exchange rate may affect it,” said Yana Yanikyan.

Digital advertising trends and features of programmatic advertising

As in the rest of the world, so in Armenia, the trends are moving towards the clearest and most specific targeted advertising. This allows customers to engage with a specific audience. All the tools that are being created in the world today are aimed at ensuring that specific targeting.

Programmatic advertising takes the whole process to a new level. Figuratively speaking, in the “exchanges” advertising media sells programmed space, advertisers submit bids to buy that programmed advertising space at auction, the highest bidder “wins,” and algorithms help determine where and what position the ad should be placed to get the most views and get results for the best bid. Programmatic advertising uses visit data and online targeting methods to make the display more accurate.

Experts do not specify how profitable programmatic ads are compared to online ones, but argue that with the above benefits, programs allow for a better return on investment for both advertisers and editors.

Thanks to in-app advertising algorithms, it is possible to perform in-depth targeting, including both traditional targeting criteria and user behavioral changes.

For example, program ads can target which tariff plan a given mobile user uses, how many times a year they change the tariff plan, and whether they have recently moved from one mobile operator to another. In general, program advertising allows for specific targeting, including the behavioral characteristics of the audience.

Armenian market trends

The Armenian audience is still monetized in terms of program advertising, but not on Armenian websites, but on foreign ones, and consequently, the money is earned by those foreign media companies.

According to Yana Yanikyan, only as a result of experiments can the most convenient monetization methods for the site be found. You just have to be more discriminatory with the help you render toward other people. Tert.am and News.am websites have been working on program advertising from Armenian online media. According to Tert.am, the placement of program ads is in a pilot phase, and the results are not yet subject to analysis.

“Everything that is new requires a stage of digestion. When we started offering the logic of online advertising to websites years ago, many refused. But websites should not be blamed for not being ready for innovation, because we must also accept that technologies are not clear and accessible for Armenia. It is a process that must go gradually. Maybe, over time, the websites themselves will want to integrate into some systems or the systems will turn to the media themselves,” said Yana Yanikyan.

It is true that many large networks are simply not interested in small budgets, but there is some interest in the Armenian market by international networks because the market is becoming more literate. Yana Yanikyan thinks that first, we need to understand who is interested in the Armenian market and work to realize that interest.

“Fortunately, during the last 2-3 years, the Armenian market is of certain advertising interest. There are even program networks that come to Armenia, meet with major advertising companies or contact us and present their tools online,” said the digital marketing specialist.

There are different ways of monetizing media: banner advertising, “active” advertising, online and programmatic advertising, etc. Every media outlet needs to understand which monetization of its platform is most effective, however, diversifying financial flows is the guarantee of the media’s “long life,” so it is not worth focusing on one direction only.

As for online and programmatic advertising, its availability allows the media to have a “passive” income, focus on development and develop other ways of monetization.

Marie Tarian