Internet Advertising 2009

8/3/2019 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

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Internet Advertising 2009

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