the fundamentals of online advertising internet advertising revenues
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The Fundamentals of Online Advertising
Internet Advertising Revenues
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The Bust of 2000-2001Internet Advertising Revenue
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1999 2000 2001 2002
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Terrific Growth
Growth vs. Offline Advertising
Overall ad spending for 2002, up to $96.1 B from an estimated $94.6 B in 2001– a 1.5 % rise
Leading the way for this growth will be Internet advertising…– which will grow 8.8 % over its 2001 total.
The newspaper category, the next best in terms of forecasted growth, is expected to grow 3.1 percent.
CMR forecasts
Globally . . . it’s America
$13.5 B 72% $2.87 B (15%)
$1.7 B (9%)
Rest of the Globe$927 Million
5% eMarketer 2002
But . . .
Online Ad Expenditures Net ad expenditure per online Household
$58
$113
$0
$20
$40
$60
$80
$100
$120
1999 2003Note: TV: $455 Newspaper: $513
Online Ad Expenditures Local spending is increasing quickly
42%
58%
54%
46%
30%
35%
40%
45%
50%
55%
60%
1999 2002
LocalNational
Jay Friesel, EVP, 24/7 Media
Business Categories consumer-related (30%) financial services (15%) computing (15-17%) new media (9-12%) and business services (9-10%)
Web Access More than 152 million people regularly
accessed the Web in 2002. That’s 52 percent of American adults. Women, minorities, and families with
modest incomes continued to surge online.
Online Advertising Success Factors
Four important issues that are critical to successful online advertising:
Targeting
Creativity
Content
Frequency
Click Here
Click Here
Friends Fly
Free
Benefits of Internet Media
PersonalizationAdvertising can be targeted and personalized
for individual consumers (one-to-one marketing)
InteractivityConsumers can interact with ads and can lead
directly to purchase! MonitoringOnline advertising can be monitored both
online and offline (if done right!)
Online Benefits - Monitoring
Forms of Online Advertising
Promotions– Give-aways– Free trial offers
Banner Ads Pop-up Ads Interactive Ads Various other forms
Online Advertising makes up 2-3 % of ad budgets
PromotionThe Dave Matthews Band Web Site in 1998 offered a promotion where you could register for free tickets if you saw this icon on a web page. They moved it around the various web site pages constantly.
Free Trial Offer
The WWW allows for the free trial of some products right after they are advertised.
Computer Programs Videos Music (www.cdnow.com)
Banner Ads The oldest, most common online advertising tool. Surfer clicks on the banner for more information or
to make a purchase click-through rates average about 0.39% but can be
10%+ if targeted properly
Pop-Up Ads Pop-up ads are served when a link to a new page is
clicked. They are self-contained windows that can vary in size The purpose of the pop-up ad is brand awareness more
than actual behavior
Interactive Ads Served like pop-up
ads and resemble them in appearance
Provide the surfer with an activity
a puzzletile game
Little to no growth in 2000s
Other Forms of Online Advertising Sponsorships
Keyword searches Classifieds Email Rich Media
Referrals
Rich Media 44% more effective than TV for brand awareness. 86% more effective for brand recall than television. 44% more effective than magazines. 77% more effective at raising interest than television. More than 5 times as effective than GIF banner ads. Larger ads increase brand recall by 1.5 to 3 times. 6% of online ad total in 2002, 22% by 2007
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The Future of Online Advertising
Sketchy now but a brighter future
Much of the internet spending in 1999-2001 was done by .coms (>65%) that are no longer in existence!
However, traditional consumer goods companies are increasing their online ad expenditures.
Large corporate advertisers tripled their online ad spending last year, to $1.9 million
Attitude toward Internet Ads