Internet Advertising 101

Early Advertising

• During the early part of the commercial phase of the Internet…

• Retailers viewed the Internet in the same way they viewed other advertising mediums– Billboards– Magazines Ads– Television

• Another place to showcase our products.

Early Commercial Websites

• A few web pages showing off the latest products.

• Did NOT capitalize on two key features of the WWW.– Richness – Interactivity

Early Model

• A company’s website was like an online Billboard, but…– More detailed than a billboard ad– Often not as appealing as a Billboard

• Lack of technical expertise…hard to make the web page look as good as the billboard ad.

Online Catalog

• Once early pioneers (like Amazon) made online purchasing a reality…

• A company’s website was simply a translation of a their print catalog

Print Catalog

WebPages

Product-Based Marketing

• Most retailers organize their stores and catalogs based on the products.

• Thus, the products become the focus of advertising campaigns

• The assumption is that customers know what products they want to buy and are simply choosing the best brand.

Product-Based Marketing

• Vast majority of websites for retail stores– Wal-Mart– Target– Staples– Home Depot

• The Homepage starts with high-level product categories.

Alternative: Customer-Based Marketing

Dell Computers is a perfect example:• From 2004-2007, Dell’s website forced you to

identify what type of customer you are– Home– Small Business– Large Business– Educational– Government.

• This strategy was pretty much a failure for Dell.• Why?

B2B: Customer-based Model

Customer-based models work very well for B2B companies.

• Example– SAP sells software and services for many

different customer types• Banking• Defense & Security• Healthcare Providers• Higher Education & Research• Insurance

Customer-based Marketing

• What is the purpose?

• With Product-base, you assume the customer knows what they want.

Customer-based Marketing

• The customer may not know exactly what they want…

• In fact, they may not have the slightest clue…and they may need help.

• The idea is to introduce them to a new product that may be a good fit for their needs.– Example: Siena College was interested in buying a

software system to manage printing on campus.

Related Concept: Trust and Media choice

• Example: Siena College was interested in buying a software system to manage printing on campus.

• The head of IT&S says…I heard the company called PaperCut sells this kind of stuff.

• Then we go to PaperCut.com and we see… “Solutions for Higher Education”

• Right now, we are a dream customer for PaperCut.

Trust and Media

• Highest Level

• Lowest Level

• Personal Contact

• The Web– ConsumerReports.com– epinions.com – a random blog– pop-up add

• Television– Infomercial– Commercial

Product-Based + Customer-Based

• A company can enjoy the benefits of both models.– This is what Dell does now…

• Each individual product can be found from two paths– Product Categories– Customer-focused Websites

• E-commerce makes it easier to combine the two. How so?

Internet Advertising at it’s best

• Each item you sell can have a product category and a customer category.

• Once a customer identifies themselves you can custom-tailor what they see.– In general, e-commerce technology (dynamic

web pages) enable you to make a custom-catalog for every type of customer

– Even the ones you didn’t know existed.

• How do customers identify themselve?

Customer Segmentation

• Once you know some details about a customer you can target them more effectively.

• Segmentation Example: – Children vs. Adults– Placing a Polly Pocket advertising during Sponge

Bob might be more effect than placing it during Judge Judy?

• Internet allows for more precise segmentation.– How do customers identify themselves?

Identify Customers

• For a Brick & Mortar business, you might not know anything about a customer until they actually make a purchase.

• But you could follow them around the store…

• For an E-commerce business, there are numerous opportunities to learn about your customers

• It’s a lot easier to follow someone around the web.

• Browser Cookies

Identify Customers

Television• Someone watching

Nascar racing may be more receptive to a Slim Jim ad versus someone watching Antique Roadshow

Internet• Someone who types

“Digital Camera Reviews” in Google may be more receptive to a Canon Camera ad..

Identifying Customers & Trust

• Customers are more likely to share information about their identity, interests, etc. if they trust you.

• Other faculty members trust me, so they often ask me, “What laptop should I buy?”

• In the advertising world, “Trust” is very valuable.

Google: Trust + Knowledge

• If you are trusted and knowledgeable, people will seek you out for advice.

• In general, a large segment of the population trust Google because of its effectiveness in delivering good information.

• This comes from Google’s search model and methodology.

Google Page Rank

• People search the WWW using Keywords.– Single word: Camera– Word combinations: Camera Reviews

• There are millions of web pages that have these keywords.

• Google ranks these pages based on relevance

Google Page Rank Model

• Page Rank is a measure both “relevance” and “trust”

Web Page

Page Rank = 9.5

Web Page

Page Rank = 8.5

Web Page

Page Rank = 7.5Web Page

Page Rank = 8.0

Web Page

Page Rank = 8.5

Camera Reviews

Page Rank Intuition

Hubs• These are websites that

have links to useful or important websites.

• In the early days of the WWW, these were peoples “hot links”

• The hub owner maybe someone trust-worthy

Authorities• These are website that

are trusted authorities for certain key words (i.e., “camera reviews).

• They may have links to other trusted authorities.

Hubs & Authorities

A Hub related to “Camera Reviews”

Page Rank = 5.0

An Authority site related to “Camera Reviews”

Page Rank = 9.0

Page Rank Explained

• Today, your page rank goes up if trusted hubs or authorities point to your site.

• Then, you become a trusted site.• Q: But how did the first trusted sites get

determined?• A: In the beginning all sites started with a

page rank of 0.1. Hub owners have a tendency to link to “authorities,” websites that are nonsense just don’t get linked.

Page Rank Common Sense

Your page rank comes from:• How long you’ve been around (more

opportunities for links to your page).• If people often visit your site…for each

keyword search Google tracks which sites you actually visit– If more people visit the #5 ranked site, it may

move up to #4 or #3.

• If other highly ranked sites point to you.

Brief History of Google

• Initially, Google was the research project from a pair of Stanford student who wanted to make a better search engine.

• Search engines were failing because they ranked website based on the frequence of keywords.

• Google quickly became the #1 search engine.

Google’s $$$Billions

• Once you gain of audience of millions, companies will pay to place ads on your website.

• Initially, Google made money off of “sponsored links” that were relevant to the search.

• Then Google saw a better way…

Google Advertising Tools

Adwords• Companies pay Google.• Google places the

companies ads in search resultsOR

• On other websites, who participate in Adsense.

Adsense• Google pays you (website

owner)• Google places ads on

your website and gives you a cut of the profit.

• The money you get comes from companies who participate in Adwords

Search vs. Google’s Ad Network

Search• Ads are only placed in

Google’s search results

Ad Network• Ads are place on any

website that participates in Adsense.