the ad networks, exchanges and analytics of web 2.0

AgencyDigitalBootcamp

The Ad Networks, Exchanges and Analytics of Web 2.0Siddiq Bello ([email protected])

mailto:[email protected]


Agency Digital Bootcamp

The Traditional Advertising Value Chain

Traditionally markers defined the

“brand essence”.

The agency then developed the brand identity and gave it

creative expression.Finally

media companies put the brand in front of customers

through TV, radio and magazines.

The audience was a passive

recipient of advertising messages and were important largely for their

attention and purchasing power.


Increasingly empowered consumers, more self-reliant advertisers and ever-evolving technologies are redefining how advertising is sold, created, consumed and tracked.

The end of advertising as we know itDr. Saul BermanPartner IBM Global Business Services


The New Advertising Value Chain


Marketers, agencies, and media companies today face a changed environment. Consumers are now media producers, programmers, and distributors. The convergence of media and technology, combined with the fragmentation and personalization of media, is affecting the connection between marketers and consumers in unprecedented ways. The mix of media channels has shifted from a one-way broadcast model to a set of dynamic two-way media forums.

Now, consumers not only talk back to marketers and interact with marketing messages, but they also reshape and distribute those messages through global communities.

Marketing 2010Booz | Allen | Hamilton

Internet Advertising Stats


Online advertising raked in 21.2 billion in ’07 up 26% from ’06.


2007 Full Year 2006 Full Year

Consumer Related

Financial Services

Computing

Telecom

Media

% o

f to

tal r

even

ues

Internet Ad Revenues by Major Industry Category2007 Full-Year ($21.2B) vs. 2006 Full-Year ($16.9B)

| Internet Advertising Stats


Major industry categories have shifted spending to the internet with retailers leading the way, spending some $5.4 billion (26%) in online advertising. Other major industry spending was lead by financial services which spent $3.2 billion (15%), automotive spending at $2.4 billion (11%), computing at $2.3 billion (11%) and telecom at $1.6 billion (8%)


Spending on the internet of major industry categories% of 2007 Full-Year Spendings

Online advertising is now the 3rd largest ad market in the US surpassing cable Tv, radio and magazines.


*The total U.S. advertising market includes other segments not charted here.

U.S. Advertising MarketshareInternet advertising revenues surpassed Radio advertising & Cable Television advertising in total U.S. ad spending* in 2007

U.S. AdvertisingMarket-Media Comparison2007 ($ Billions)


Search continues as the dominant ad format accounting for 41% of revenue in ’07 followed by display (21%), classifieds (16%) and rich media (8%).


Internet Ad Revenues by Advertising Format% of 2007 Full-Year Revenues

Total–$21.2 Billion



Digital video advertising took off in ’07 pulling in more than $400 million to account for 2% of revenue.



The pricing models continue to shift towards performance based pricing and hybrids over a pure CPM model. In ’07 performance grew 4 percentage points to 51% over ’06, while CPM shrunk to 3 percentage points to 45% from 48% in ’06.

% of 2007 Full-Year Revenues % of 2006 Full-Year Revenues

Total–$21.2 Billion Total–$16.9 Billion


AdNetwork



An advertising network or ad network is a company that connects online publishers who want to host advertisements with advertisers who want to access to their inventory and audience.

| Ad Networks

The majority of this activity is taking place over ad networks.


20002001

20022003

20042005

20062007

TOP 10

TOP 25

TOP 50

$8,087M $7,124M $6,010M$7,267M

$9,626M $12,542M $16,897M $21,206M

69%

80%

89%

Top 50companiescommand

89% of onlinead market

| Ad Networks


The top 50 ad selling companies command nearly 90% or the online ad revenue leaving roughly $2.3 billion for the hundreds of start-up and niche focused sites to compete over.

| Ad Networks

AdBrite Walk-ThroughAgency Digital Bootcamp | Ad Networks

AdExchanges



53% [of marketers] agree that media sourcing will look like the equities market in five years.

Marketing 2010Booz | Allen | Hamilton


An ad exchange functions like a stock market for publisher inventory. The exchange creates a marketplace for ad networks and advertisers to bid on inventory that publishers put in the network.

| Ad Exchanges


Elements of an ad exchange vs. an ad network:

| Ad Exchanges

open Advertisers who are part of the market and those who are not can bid on the inventory in the market place.

liquid For a publisher there is always a buyer for their inventory and competition for that inventory exists.

neutral Exchanges are enablers of the buy/selling process, the exchange should not be involved with the inventory or sales process.


How an ad exchange works:

| Ad Exchanges

Someone visits a page on a blog with an opening for an ad.

Exchange Buyers

Impression

Your Buyers

$1.10 bid $.85 bid

$1.00 bid$.70 bid

Finish

Offers are compared and the ad from the bidder with the highest offer is sent to the blog for display to the user.

Page makes an ad callA message is sent to the blog’s ad server letting it know it needs an ad.

The blog’s ad server sends a message to the ad exchange letting it know the inventory is available and at what minimum price.

The ad exchange sends that information to the marketplace and different bidders evaluate the information (adding targeting or other data to it) and make offers based on the data.

Agency Digital Bootcamp | Ad Exchanges

Some ad exchanges:

Quantification & Analytics


There are many web site analysis packages available with a range of features, functionality and prices.

Agency Digital Bootcamp | Quantification Applications

What free sites don’t do:

• Customized analytic reports

• Large scale sites• Highly complex

interaction tracking

What these do:

• Detailed metrics around visitor actions

• Reporting dashboards• Graphical

representations of data

• Clickstream recording• Heatmapping• Keyword effectiveness

Web analytics packages, installed on the same web site, configured the same way, produce different numbers. Sometimes radically different numbers. In some cases the package showing the highest numbers reported 150% more traffic than the package reporting the least traffic.

Agency Digital Bootcamp | Quantification Applications

Stone Temple Consulting


free paid

Quantcast Walk-ThroughAgency Digital Bootcamp | Quantification Applications

ContactSiddiq [email protected]

The Ad Networks, Exchanges and Analytics of Web 2.0A presentation for brands as well as marketing and PR agencies seeking to increase their digital intelligence

