internet advertising 2009 good overview
TRANSCRIPT
Internet AdvertisingThe Internet Advertising Landscape
The General Advertising Landscape
Source: Television Bureau of Advertising, http://www.tvb.org/rcentral/adrevenuetrack/trends/trends.asp?c=2007_2009
The General Advertising Landscape
The Internet Advertising Landscape: Revenues
Source: PwC/IAB Internet Advertising Revenue Report (www.iab.net)
Quarterly $ Revenue Growth Comparison – 2000-2008 YTD
The Internet Advertising Landscape: Revenues
Top 10 Search Providers for December 2008
Provider Searches (000) YOY Growth Share of Searches
All Searches 8,623,705 19.6% 100.0%
Google Search 5,421,943 33.5% 62.9%
Yahoo! Search 1,448,140 13.7% 16.8%
MSN/Windows Live Search 841,457 -15.5% 9.8%
AOL Search 357,025 5.1% 4.1%
Ask.com Search 169,116 6.0% 2.0%
My Web Search 62,415 -11.6% 0.7%
Comcast Search 50,385 45.1% 0.6%
NexTag Search 29,219 0.7% 0.3%
AT&T Worldnet Search 27,176 8.0% 0.3%
BizRate Search 23,593 37.1% 0.3%
Source: Nielsen Online, MegaView Search
The Internet Advertising Landscape: Advertiser
The Internet Advertising Landscape: Advertiser
Characteristics and Types of Internet Advertising
Direct R Responses
Marketing
The Definition of Internet Advertising
Internet advertising is the convergence of traditional advertising and direct responses marketing. The use of the Internet for delivering marketing messages to attract customers.
Traditional Advertising
Internet Advertising
Internet Advertising Advantages
TargetabilityGlobal reachTracking abilityLess expensive to produceFlexibility and rich media combinationImmediacyInteractivity
Internet Advertising Disadvantages
Customer-dominated environmentA cognitive, not emotional mediumPsychological fear of ITLimited space and information in some formatsConnection problemsNon internet users (yes, there are these people)Clutters
Types of Internet/Online Advertising
Company/Brand WebsiteSimilar to brochurewareCan be educational and entertainingExhibit clear business objectives- Move a potential customer from browser to buyer
Simulated shopping experience, comfort, privacy (e.g., BMW) http://www.bmwusa.com/Standard/Content/BYO/Default.aspx
- Entertainment to attract site traffic (?)- Valuable information resources (e.g., Tide)
http://www.tide.com/en_US/index.jsp
- Customer service (e.g., FedEx)http://fedex.com/us/
Opt-In E-mail
Classified Ads or Newsletters distributed by an entity through email blasts to opt-in audiences. Advertisers can individually sponsor a publisher’s email newsletter or they can purchase classified ad space.
Example: Cynopsis newsletter (industry facts + classifieds)
Opt-In E-mail
Advantages:Inexpensive and effective advertising opportunities to reach a niche market and a precisely targeted audienceCan track the number of emails sent (not measuring readership)HTML format attracts more attention with graphical adsCan measure reach (# of times graphics are pulled from the server)
Display AdvertisingOnline ads that combine text, images, and animation
(but are not interactive - those are rich media) to quickly grab the attention of website visitors browsing the pages on which they are featured.
Typical Display Ad Sizes.leaderboard (728 x 90 pixels) skyscraper (120 x 600 pixels or 160 x 600 pixels for wide skyscraper) banner (468 x 60 pixels) half-page (300 x 600 pixels) square button (or tile) (125 x 125 pixels) medium rectangle (300 x 250 pixels) Examples…
Display AdvertisingAdvantages:
Easy productionFlexibility in sizingImmediate response from target market (comparing to traditional media)
Rich Media AdvertisingOnline ads with which users can interact (include video, sound, and
animation that engage the users)
Typical rich media ads: peel-back (user can roll over the ad and it will appear to peel back and display all of the advertising content)floating (appear on top of the web page content. It can be placed anywhere on the browser page)expandable (when your mouse rolls over this ad, additional information will slide out)Interstitial (brief ads page in between the reference and target pages) video (video streaming on site; video banners)Roadblock (activate once a user clicks on a link. The roadblock will pop up and be viewable until the user click on it)Popup videoIAB guidelines (www.iab.net)
Rich Media AdsAdvantages:
Better branding capabilityHigher response ratesMore creative possibilitiesBetter message engagement
Text AdsSimple text advertising Some of the more common types of text ads:
link ads (links in website’s text content)contextual ads (a form of targeted advertisingappearing on websites which is selected and served by automated systems based on the content displayed to the user)search engine marketing ads (pay per click -ex. Google Adwords) online directories
Text AdsAdvantages
Searchable by search engines Less-ignored by readersLess intrusive yet effectiveSimple and less bandwidth intensiveTailored to web content
Online Audience Measurement
Web Audience Measurement
People based measurement: ComScore Media Metrix
http://www.comscore.com/metrix/xpc.asp
Nielsen/Net Ratingshttp://www.nielsen-online.com/solutions.jsp?section=sol_1&nav=1#3
Cookie based measurement: Google Analytics
http://www.google.com/analytics/features.html
Coremetricshttp://www.coremetrics.com/downloads/ds-web-analytics.pdf
Campaign Measurement
Measuring ad effectiveness on the advertiser’s side as well as web publisher’s side
Using ad serving technology
Impression and click-through measuredDoubleClick: http://www.doubleclick.com/products/dfa/index.aspx
Atlas Solutions: http://www.atlassolutions.com/services.aspx
Online Advertising Pricing Models
1. CPM Model: cost per thousand
Most popular pricing modelAdvertisers are comfortable with this modelE.g., a site charges $10,000 per banner with 500,000 impressions CPM=$20
CPM = [price/#of impressions] X 1000
Online Ad Sellers Using CPM Model
Individual websites (normally run of site buying; higher CPM due to targetability)Search EnginesAd networks
Search Engine
General rotation: a banner will appear randomly appear during searches
Run of Category: ad will rotate throughout a category such as arts, health
Keyword buying: buying keyword searches
Ad NetworksServices that connect the websites that want to host ads with the interested advertisers using a central ad server.Advertisers can run category package (ROC) or overall network package (RON)Large web properties do not sell to many ads through ad networks
Major Ad networks: 1. Yahoo! Network 2. Google Ad Network (AdSense)3. Advertising.com4. AdBrite 5. ValueClick Networks
2. Click-Through Model
Click-through: the action of a viewer clicking on an ad.Direct response modelOriginated from P&G’s online ad policy in 1996Typically, keyword search ads pricing
Criticisms on CTR Model
Publishers are forced to rely on advertisers’ creative quality for their own ad revenue.Brand-building value of banner is ignored.Publishers tend to run a banner until ad receives the number of clicks promised.CTR may have little to do with their goal such as conversion.
3. Flat Fee Model
Fixed fee charged for a certain time period (yearly fee, monthly fee) regardless of impressions or CTR
When publishers need seed moneyInstead of offering low price, when they need to save cost associated with other monitoring activity or traffic reports.Used as premium placements
4. Pay Per Viewer Model
Advertisers pay users money or incentives for everything from visiting advertiser sites to filling out surveys to purchasing products. Underlying philosophy is the most valuable commodity on the Web is a person’s attention and that the best way to acquire that is through incentives
5. Pay Per Purchase
Pay publishers only when purchases result from the ad. Publishers depend on creatives quality and consumer’s purchase interest. More advantage to advertisers
6. Hybrid Model
A mixture of different pricing modelsE.g., a site offers one price for impressions, a higher price for CTR, and an even higher price for pay per purchase model.
Online Advertising Buying
Before you begin…
Is your target audience online? If so, where?
Online Campaign Goals
Traffic BuildingSelling ProductsGenerating LeadsBuilding Brands
Traffic Building
Website with a large number of visitor sell more advertising.Important for media company whose main business model is ad revenue.
Website Management
Landing page (website) management is important.
Log data analysisFocus groupExpert panel to review the site
Selling Product
Important for e-commerce sitesBring the right target rather than a large number of targetGoing the places where customers go eBay store
Generating Leads
Easier to get prospects to request information online than to get them to purchase immediatelyListserv, registration, coupon book, etc.
Building Brand
Online exposure only can create brand equity. (e.g., even banner exposure)
This idea leads to CPM based pricing model.
Site Selection Process
Audience analysis
Demo, affinity, loyalty, lifestyle, other psychological factors
Secondary data analysis MRI, ComScore, Nielsen, etc
Site Selection Process
Website analysisEditorial contentLead timeBanner size and placement on the pageAvailability of ad inventoryTechnology capability
Types of Sites
Well-branded, highly recognizable sitesHigh traffic sites with less- or non-recognizable brand namesNiche sites with low trafficPersonal sites
Network Buying
Sometimes, ad networks sell advertising (function as rep firms).Benefits of network buying
Increases selling and negotiation power of small-sized website From advertisers’ perspective, it is easier to contact one network representatives rather than many individual website publisherPossible to utilize targeting solutions
Online Advertising Selling
Selling Agents in Online Ad
In-house sales forcesRepresentative firmsAd networksOnline ad auction services
Online Ad Rep Firms
Sales representatives of media ownersSell spot ads to ad agencies on behalf of media companiesRevenues come from commission on ad sales
Ad Networks
Consist of a group of sites with advertising inventory to sell.Benefits to web publishers
easy access to more advertisers through networks’ sales power (rep firm function)save cost for expensive ad management softwaresell left-over inventories
Ad Networks
Benefits to advertisersConsistency in ad delivery reportingCan work with one sales rep for multiple site buys easy for site mixCompetitive pricing because of the networks’ economy of scales removing leftover inventoryMore targeting options with a slate of sites easy for site mix
Ad Networks vs Rep Firms
Both ad networks and rep firms broker ad space.
A rep firm represents the site itself (or a collection of sites by the same owner) while an ad network represents a group of sites.
Radio/TV Stations Online Advertising Selling
The General Landscape
Internet sales are still a tiny percentage of gross revenue for radio/TV station, but it is growing fast.
Not all sites are created equal.
Local TV Web Revenues:2003-2010
The General Landscape
In 2007, TV stations were using the Internet to tap advertisers in “classified” categories, further eroding the newspaper industry’s share.“Home Page”, weather, and local news dominate both the most-trafficked portions of TV sites and the biggest revenue-production sections of those sites The pricing for video ad varies, and majority of sites are pricing web inventory at flat rates.
Pricing/packaging Approaches
Types of Online Ads from Radio/TV Stations: In-stream video
Linear Video Ad: is presented before, in the middle, or after the video content is consumed by the user, in very much the same way a TV commercial can play before, during or after the chosen program.
Example
Non-linear Video ad: runs parallel to the video content so the user see the ad while viewing the content. Non-linear video can be delivered as text, graphical ads, or as video overlays
Overlays which are shown directly the content video itselfProduct placements which are ads within the video content itself
Both linear and non-linear video as products have the option of being paired with what is commonly referred to as a “Companion Ad”Example
Types of Online Ads from Radio/TV Stations: In-stream video
Companion Ad
Commonly text, display ads, rich media, or skins that wrap around the video experience, can run alongside either or both the video or ad content
The purpose is to offer sustained visibility of the sponsor throughout the video content experience
Combination models:Linear Video Ad with or without Companion AdsLinear Video Interactive AdNon-linear Overlay AdNon-Linear Non-Overlay Invitation Ad
Linear Video Ad with or without Companion Ads
http://www.fox.com/fod/play.php?sh=prison
Linear Video Interactive Ad Non-linear Video Ad
http://abc.go.com/
Non-linear Non-Overlay Invitation Ad Video Advertising Practices