internet advertising 2009
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Internet Advertising The Internet AdvertisingLandscape
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
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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, MegaViewSearch
The Internet Advertising Landscape:Advertiser
The Internet Advertising Landscape:Advertiser
Characteristics andTypes of InternetAdvertising
DirectR Responses
Marketing
The Definition of Internet Advertising
Internet advertising is the convergence oftraditional advertising and direct responsesmarketing.The use of the Internet for delivering marketingmessages to attract customers.
TraditionalAdvertising
InternetAdvertising
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Internet Advertising Advantages
TargetabilityGlobal reachTracking abilityLess expensive to produceFlexibility and rich media combinationImmediacyInteractivity
Internet AdvertisingDisadvantages
Customer-dominated environmentA cognitive, not emotional mediumPsychological fear of ITLimited space and information in someformatsConnection problemsNon internet users (yes, there are thesepeople)Clutters
Types of Internet/OnlineAdvertising
Company/Brand Website
Similar 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 anentity through email blasts to opt-in
audiences. Advertisers can individuallysponsor a publishers email newsletter or theycan purchase classified ad space.
Example: Cynopsis newsletter (industry facts +classifieds)
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Opt-In E-mail
Advantages:Inexpensive and effective advertising opportunitiesto reach a niche market and a precisely targetedaudienceCan track the number of emails sent (notmeasuring readership)HTML format attracts more attention with graphicaladsCan measure reach (# of times graphics arepulled from the server)
Display AdvertisingOnline ads that combine text, images, and animation
(but are not interactive - those are rich media) toquickly grab the attention of website visitors browsingthe 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 forwide 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 Advertising
Advantages: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 backand display all of the advertising content)floating (appear on top of the web page content. It can be placedanywh ere on the browser page)expandable (when your mouse rolls over this ad, additionalinformation 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 willpop up and be viewable until the user click on it)Popup videoIAB guidelines (www.iab.net)
Rich Media Ads
Advantages:Better branding capabilityHigher response ratesMore creative possibilitiesBetter message engagement
Text Ads
Simple text advertisingSome of the more common types of text ads:
link ads (links in websites text content)contextual ads (a form of targeted advertisingappearing on websites which is selected and servedby automated systems based on the contentdisplayed to the user)
search engine marketing ads (pay per click -ex. Google Adwords)online directories
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Text Ads
AdvantagesSearchable by search enginesLess-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 advertisers sideas well as web publishers side
Using ad serving technology
Impression and click-through measuredDoubleClick: http://www.doubleclick.com/products/dfa/index.aspxAtlas Solutions: http://www.atlassolutions.com/services.aspx
Online AdvertisingPricing Models
1. CPM Model: cost per thousand
Most popular pricing modelAdvertisers are comfortable with this modelE.g., a site charges $10,000 per banner with500,000 impressions CPM=$20
CPM = [price/#of impressions] X 1000
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Online Ad Sellers Using CPM Model
Individual websites (normally run of sitebuying; higher CPM due to targetability)Search EnginesAd networks
Search Engine
General rotation: a banner will appear randomlyappear during searches
Run of Category: ad will rotate throughout acategory such as arts, health
Keyword buying: buying keyword searches
Ad NetworksServices that connect the websites that want tohost ads with the interested advertisers using acentral ad server.Advertisers can run category package (ROC) oroverall network package (RON)Large web properties do not sell to many adsthrough ad networks
Major Ad networks:1. Yahoo! Network2. Google Ad Network (AdSense)3. Advertising.com4. AdBrite5. ValueClick Networks
2. Click-Through Model
Click-through: the action of a viewer clickingon an ad.Direct response modelOriginated from P&Gs online ad policy in1996Typically, keyword search ads pricing
Criticisms on CTR Model
Publishers are forced to rely on advertisers creativequality for their own ad revenue.Brand-building value of banner is ignored.Publishers tend to run a banner until ad receives thenumber of clicks promised.CTR may have little to do with their goal such asconversion.
3. Flat Fee Model
Fixed fee charged for a certain time period (yearlyfee, monthly fee) regardless of impressions or CTR
When publishers need seed moneyInstead of offering low price, when they need tosave cost associated with other monitoringactivity or traffic reports.Used as premium placements
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4. Pay Per Viewer Model
Advertisers pay users money or incentives foreverything from visiting advertiser sites to filling outsurveys to purchasing products.Underlying philosophy is the most valuablecommodity on the Web is a persons attention andthat the best way to acquire that is throughincentives
5. Pay Per Purchase
Pay publishers only when purchases resultfrom the ad.Publishers depend on creatives quality andconsumers 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 higherprice 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
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Traffic Building
Website with a large number of visitor sellmore advertising.Important for media company whose mainbusiness model is ad revenue.
Website Management
Landing page (website) management isimportant.
Log data analysisFocus groupExpert panel to review the site
Selling Product
Important for e-commerce sitesBring the right target rather than a largenumber of targetGoing the places where customers goeBay store
Generating Leads
Easier to get prospects to request informationonline than to get them to purchaseimmediatelyListserv, 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
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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 brandnamesNiche sites with low trafficPersonal sites
Network Buying
Sometimes, ad networks sell advertising (function asrep firms).Benefits of network buying
Increases selling and negotiation power of small-sizedwebsiteFrom advertisers perspective, it is easier to contact onenetwork representatives rather than many individual websitepublisherPossible to utilize targeting solutions
Online Advertising Selling
Selling Agents in Online Ad
In-house sales forcesRepresentative firms
Ad networksOnline ad auction services
Online Ad Rep Firms
Sales representatives of media ownersSell spot ads to ad agencies on behalf ofmedia companiesRevenues come from commission on adsales
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Ad Networks
Consist of a group of sites with advertising inventoryto sell.Benefits to web publishers
easy access to more advertisers through networks salespower (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 easyfor site mixCompetitive pricing because of the networks economy ofscales removing leftover inventoryMore targeting options with a slate of sites easy for sitemix
Ad Networks vs Rep Firms
Both ad networks and rep firms broker adspace.
A rep firm represents the site itself (or acollection of sites by the same owner) whilean ad network represents a group of sites.
Radio/TV StationsOnline Advertising Selling
The General Landscape
Internet sales are stilla tiny percentage ofgross revenue forradio/TV station, but itis growing fast.
Not all sites arecreated equal.
Local TV Web Revenues:2003-2010
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The General Landscape
In 2007, TV stations were using the Internet to tap advertisers inclassified categories, further eroding the newspaper industrysshare.Home Page, weather, and local news dominate both the most-trafficked portions of TV sites and the biggest revenue-production sections of those sitesThe pricing for video ad varies, and majority of sites are pricingweb inventory at flat rates.
Pricing/packaging Approaches
Types of Online Ads from Radio/TVStations: In-stream video
Linear Video Ad: is presented before, in the middle, orafter the video content is consumed by the user, in verymuch 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 theuser see the ad while viewing the content. Non-linear video canbe 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 optionof being paired with what is commonly referred to as aCompanion AdExample
Types of Online Ads from Radio/TVStations: In-stream video
Companion Ad
Commonly text, display ads, rich media, or skins that wraparound the video experience, can run alongside either or boththe video or ad content
The purpose is to offer sustained visibility of the sponsorthroughout 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
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Linear Video Interactive Ad Non-linear Video Ad
http://abc.go.com/
Non-linear Non-Overlay Invitation Ad Video Advertising Practices