A.K .A . ONLINE ADVERTISING, INTERNET ADVERTISING AND

INTERACTIVE ADVERTISING

Digital Advertising

13-2

Class Objectives

Discuss the pros and cons of digital interactive media

Describe who uses the internet and how they use it

Explain how interactive advertising is sold and how it is

priced

Define the various kinds of digital advertising

Who’s Online?

Who’s Online?

Top Online Properties (U.S.) January 2011

ParentCompany

Unique Audience (000)

Yahoo Sites 178,864Google Sites 178,516

Microsoft Sites 176,770Facebook.com 153,020

AOL, Inc. 110,996Ask Network 95,719Turner Digital 91,314Viacom Digital 89,450Glam Media 86,533

CBS Interactive 85,573Amazon Sites 82,608

Source: ClickZ.com, data from comScore Media Metrix

Top U.S. Websites

The Digital Advertising Landscape

Search Engine Ads

Social Media

Email Ads

Classified Ads

Display Ads

Mobile Ads

Current & Future Online Spending

Online advertising is expected to grow at a double-digit pace for the foreseeable future.

Current & Future Online Ad Spending

Only television will commands a greater share of media spending than online advertising.

  First Half 2010 ($mil)

First Half 2009 ($mil)

Search 47% ($5,747) 47% ($5,148)

Display Related: 36% ($4,356) 34% ($3,759)

    -Banner Ads 23% ($2,744) 22% ($2,394)

    -Rich Media 6% ($743) 7% ($704)

    -Digital Video 5% ($627) 4% ($477)

    -Sponsorship 2% ($242) 2% ($184)

Classifieds 10% ($1,262) 10% ($1,116)

Referrals/Lead Generation 5% ($642) 7% ($728)

E-mail 1% ($120) 1% ($149)

Source: http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/pr-101210

Digital Ad Spending by Ad Type

Pros of Online Advertising

Active users. The internet is the only medium that requires users to be actively engaged to receive with it to receive ads.

Measurability. Almost every action taken in response to an online advertising campaign is measurable.

Cost. Online advertising costs very little to produce and implement.

Variable scope. Advertisers can use online advertising as a mass medium to reach millions, or they can target small numbers of users via niche sites.

Photo c/o watblog.com

Cons of Online Advertising

Constant change. Technology advances continuously and can make staying on top of advertising opportunities difficult for the average business.

Intrusive ads. Some types of online ads are more annoying than interesting to web users.

Clutter. Some web sites and search engines have so many ads that differentiation is difficult.

Recall. Most internet users have trained themselves to ignore ads on a web page.

Photo c/o community.microsoftadvertising.com

Online Advertising Metrics

Page views. A measure of web traffic, the number of total pages downloaded by users of a web site in a given month.

Unique visitors. A measure of web traffic, the number of individuals who visit a specific web site within a given month.

Impressions. Each time an online ad serves, it represents an ad impression.

Click-through: When a user clicks on an online ad and is directed elsewhere, that is a click-through.

Click-through rate: The percentage of click-throughs to impressions served for an online ad campaign. Avg = 0.10%

SEARCH ENGINE ADVERTISING

Search engines: web sites that are devoted to finding and retrieving requested information from the World Wide Web.

Search Engine Marketing (SEM)

Buying SEMKeyword:   A word (or phrase) that a user inputs into an internet search engine to request information similar in subject matter to that word. Advertisers may buy keywords from search engines so that their advertisements appear in premium positions on the page when a user inputs the purchased word.

Google keyword tool:  https://adwords.google.com/o/Targeting/Explorer?__c=1000000000&__u=1000000000&ideaRequestType=KEYWORD_IDEAS#search.none 

• SEM is sold on a cost-per-click basis. The advertiser is charged a flat fee per time a user clicks on the advertiser’s web link.

• Advertisers bid on keywords.• The more popular the keyword, the more

expensive.

Search Engine Optimization

EMAIL ADVERTISING

Email advertising:   A direct marketing tactic whereby an advertising message is delivered to recipients’ email addresses.

Emails may be permission based or spam.

Email photo c/o messagingtimes.com Spam photo c/o likelihoodofconfusion.com

Email Advertising in the Marketing Mix

Businesses continue to increase spending on email advertising because of its significant return on investment (ROI).

Buying Email Advertising

Email advertising is bought on a CPM (cost-per-thousand) addresses basis.

Average rates vary from $50 to $250 per M for acquisition lists.

Advertisers may also build their own databases.

MOBILE WEB ADVERTISING

• Mobile phones are typically a single-user device, creating high user engagement

• 56% of smart phone users access the mobile internet weekly

• 68% of smart phone users feel positively engaged while using the mobile internet

• Most mobile sites allow one ad unit per page, offering high visibility for the advertiser

Mobile ad photo c/o mobilemarketingwatch.com

Smartphone Penetration

MOBILE WEB ADVERTISING

Mobile Ad Examples

Buying Mobile Web Advertising

Mobile web advertising can be purchased on a cost-per-click basis or a cost-per-thousand impressions basis, depending on the goal of the campaign.

The average U.S. CPM for mobile advertising ranges from $10-$15.

Mobile ad photo c/o inmobi.com

ONLINE CLASSIFIED ADS

Online classified ads allow individuals to buy and sell products and services.

They also allow businesses to advertise real estate, autos, jobs and services.

Best known site: Craigslist. Other sites include real estate, auto and job sites like Cars.com, Monster and Trulia.

Image c/o mslater.com

Photo c/o techcrunch.com

Buying Classified Online Ads

For individual consumers, most online classifieds are free.

For businesses, they may pay per posting or a monthly subscription fee, depending on ad volume.

SOCIAL MEDIA ADVERTISING

Social media are the dominant force in digital advertising today.

More than 6 in 10 U.S. internet users can be found on social media websites.

Social Media Revolutionhttp://www.youtube.com/watch?v=lFZ0z5Fm-Ng

Social Media Revolution

Social Media User Info

Social Media Ad Spending

Of the $3.08 billion expected to be spent in U.S. social media advertising this year, 2/3 will go to Facebook.

Buying Ads on Facebook

These ads may be purchased on a cost-per-click or cost-per-thousand impressions basis. Average CPM = $1-$5.

“Free” Ads on Facebook, Twitter

Fan pages can be used to send exclusive offers directly to people who like or follow that company or brand.

“Free” ad for SmartWater:http://www.youtube.com/watch?v=Rc47LcvIxyI

YouTube

Video display ad on site’s homepage.

DISPLAY ADVERTISING

Display advertising allows businesses to have an interactive presence on content sites where users seek information.

There are 3 types:

• Banner ads• Rich media• Video ads

Banner Ads

Banner ads are online display ads generally found along the top and right of a web site’s content pages.

Banner ads come in standard sizes, measured in pixels, regulated by the Interactive Advertising Bureau (IAB).

Rich Media

Rich media ads use a full range of animation and sound and often involve user interaction.

Video ads can take place in the context of rich media. They may run with other video content or static content.

Image c/o meydad.com

Rich Media

Yahoo! examples of rich media:http://advertising.yahoo.com/media-kit/rich-media.html

Display Advertising Spending

Average CTR by Industry

Buying Display Ads

Display advertising is typically bought in one of these ways:

• Cost per thousand impressions• Cost per click• Sponsorship: the advertiser pays a flat fee over a

period of time for the ad position(s)