David Hallerman Senior Analyst J U N E  2 4  2 0 1 0 N E W  Y O R K  NY The Keys to Online Display Advertising
What we’ll  look at  today… <ul><li>Display ad spending trends ( meaning ) </li></ul><ul><li>Display and other ad formats ...
Clive Thompson , Wired magazine, May 2010 We often say, rightly, that literacy is crucial to public life: If you can’t wri...
Ad Spending Trends
US  Internet  Advertising Spending, 2009 - 2014 (billions) Source: eMarketer, May 2010
Wide Range : Growth of total US Internet ad spending in 2010 (% change) Source: eMarketer, May 2010; others, Nov. 2009 – M...
Some of the  reasons  for eMarketer’s Internet ad spend estimates <ul><li>Diverse  Internet ad universe ( not all doing th...
One-Way Street: US Internet ad spending’s  share of total  media…
Marketers spend more on Internet ads, as they look to engage audience, plus get fuller measurement and targeting. And they...
Display Diversity
US display ad spending growth will continue to  outpace total  Internet gains Source: eMarketer, May 2010
Large part of that display growth will come from an  evolving Web Source: company reports, April 2010, eMarketer, May 2010
While impressions do not equal dollars, they point to trend of  greater diversity  for display placements ( banners & rich...
Video is the  prime source  of display ad growth, but banners healthy, too Source: eMarketer, May 2010
Factors behind the ( ongoing ) steadiness of banner ad spending <ul><li>Becoming interchangeable  commodity </li></ul><ul>...
More banner dollars over next few years, but  video trend  will take over Source: eMarketer, May 2010
Factors that indicate the ( future ) boom of online video ad spending <ul><li>Broadband now reaches “critical  mass ” </li...
Local ad spending will increasingly shift online, as both marketer need and more  sophisticated geo-targeting  come together
Perspective…
<ul><li>Still  step-sister  among online ad methods </li></ul><ul><li>Harder to  gauge success  with display than with sea...
According to some marketers, display spending  trailed  e-mail and search in 2009
Display spending  less than  search and e-mail in another survey (convergence)
Perhaps fewer dollars for display because e-mail & search  perform better
Even when video increases, some dollars will  come from banner  ads and rich media — so overall display market suppressed
Fears about ability to  protect  brand image also inhibit display ad spending
Over 60% said display spending would  grow by 10%  or more if brand safety…
Marketers say “We  spend less  on behavioral targeted ads due to privacy…” Source: Ponemon Institute, April 2010
 
The portion of marketing dollars going to  nonmedia spending  is rising
Brand Marketing Goals
Direct response  objectives rank high for many marketers online
Direct response focus echoed (somewhat) by  steady increase  of performance pricing
However, change is coming:  Branding’s share  of the total online pie is gaining on direct response dollars
Buzzwords and trends indicate mindshare, and in that regard  branding even more central  than “hot” topics
<ul><li>Key  variable  for display ad performance </li></ul><ul><li>Often best combined with targeting, to  vary message  ...
Kathryn Koegel , marketing practice lead, Primary Impact In other media, there is little discussion of the size of the uni...
Poor creative can even  negatively affect  brand metrics (not just do lesser good)
<ul><li>Persistent  branding — use logo a lot, highlight brand throughout the ad </li></ul><ul><li>Simple , direct, commun...
Integrating Display
Conversions come from  a mix  of display and search, and vary by industry (goals) Source: Eyblaster, February 2010
Display leads to search  — not always, but typically positive, incremental gains
Banners  encourage actions  — less than search or e-mail, but part of whole
Perspective…
Main metrics used are not really for branding —  not useful  for display ads
More marketers deem  conversions  very important than any other metric ( so where does branding fit in? )
Counting the sheer number of people exposed to an ad (impressions) is main way  display-ad performance  gets measured
Measuring traditional brand metrics highly useful (but  costs more  to do)
<ul><li>How much do display ads  drive search  results? </li></ul><ul><li>Can display ads online  support offline  element...
Audiences & Targeting
Display more appreciated when the audience  trade-off is explicit
More than ¾ of marketers using display  target their audiences  or plan to target
Classic  demographic targeting  still used by more advertisers than interactive targeting such as behavioral (70% vs. 59%)
Far more marketers use  plain display  advertising than behavioral targeted display
<ul><li>No  single  type of targeting is “best” </li></ul><ul><li>Consider the following  factors : </li></ul><ul><ul><li>...
Takeaways
Consider this … <ul><li>Display spending growth  ( use diversity ) </li></ul><ul><li>Banners add  ( supplement other techn...
“ Thank You! ”
About AdReady © 2009 AdReady, Inc.  Confidential
Automated Buying System © 2009 AdReady, Inc.  Confidential
Creative Automation © 2009 AdReady, Inc.  Confidential
Precision Campaigning © 2009 AdReady, Inc.  Confidential
Whitepaper Offer <ul><li>Whitepaper  </li></ul><ul><ul><li>“ Precision Campaigns: Integrating Creative Automation & Micro ...
Thank you for tuning in to the eMarketer Webinar: Keys to Online Display Advertising  Presented by: David Hallerman eMarke...
e Marketer Coverage Learn more about online advertising with  eMarketer Total Access. Visit:  www.emarketer.com/products C...
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eMarketer Webinar: Keys to Online Display Advertising

  1. 1. David Hallerman Senior Analyst J U N E 2 4 2 0 1 0 N E W Y O R K NY The Keys to Online Display Advertising
  2. 2. What we’ll look at today… <ul><li>Display ad spending trends ( meaning ) </li></ul><ul><li>Display and other ad formats ( blending ) </li></ul><ul><li>Brand marketing goals ( display’s place ) </li></ul><ul><li>Creative’s central place ( best practices ) </li></ul><ul><li>Metrics for branding ( beyond the click ) </li></ul><ul><li>Ad targeting ( a mixed bag ) </li></ul>
  3. 3. Clive Thompson , Wired magazine, May 2010 We often say, rightly, that literacy is crucial to public life: If you can’t write, you can’t think. The same is now true in math. Statistics is the new grammar.
  4. 4. Ad Spending Trends
  5. 5. US Internet Advertising Spending, 2009 - 2014 (billions) Source: eMarketer, May 2010
  6. 6. Wide Range : Growth of total US Internet ad spending in 2010 (% change) Source: eMarketer, May 2010; others, Nov. 2009 – May 2010
  7. 7. Some of the reasons for eMarketer’s Internet ad spend estimates <ul><li>Diverse Internet ad universe ( not all doing the same ) </li></ul><ul><li>Branding shortfalls & shifts ( leading 100 advertisers ) </li></ul><ul><li>Pricing trends ( more performance, less CPM ) </li></ul><ul><li>Ad networks ( make banners into commodities ) </li></ul><ul><li>More inventory than ever ( also commoditizes, but… ) </li></ul><ul><li>Historical downturn and revival ( the IAB/PwC data ) </li></ul><ul><li>Google, Yahoo!, other revenues ( mix of down and up ) </li></ul><ul><li>Privacy & safety concerns ( esp. limit brand spend ) </li></ul>
  8. 8. One-Way Street: US Internet ad spending’s share of total media…
  9. 9. Marketers spend more on Internet ads, as they look to engage audience, plus get fuller measurement and targeting. And they spend less on ads in other media — especially print — as they seek greater accountability. Balance of ad dollars are shifting to the Internet because… <ul><ul><li>Furthermore: </li></ul></ul><ul><ul><li>Brand marketers see need, and viable channels </li></ul></ul><ul><ul><li>Current economic and societal forces reinforce new ad models and make them more permanent </li></ul></ul>
  10. 10. Display Diversity
  11. 11. US display ad spending growth will continue to outpace total Internet gains Source: eMarketer, May 2010
  12. 12. Large part of that display growth will come from an evolving Web Source: company reports, April 2010, eMarketer, May 2010
  13. 13. While impressions do not equal dollars, they point to trend of greater diversity for display placements ( banners & rich media here )
  14. 14. Video is the prime source of display ad growth, but banners healthy, too Source: eMarketer, May 2010
  15. 15. Factors behind the ( ongoing ) steadiness of banner ad spending <ul><li>Becoming interchangeable commodity </li></ul><ul><ul><li>Networks help reach but lower inventory pricing across sites </li></ul></ul><ul><li>Users ignore , more intrusive ads needed </li></ul><ul><ul><li>Pushes marketers to use video and social marketing </li></ul></ul><ul><li>One-time display dollars go to social media marketing </li></ul><ul><ul><li>Don’t show up on charts, more difficult to evaluate </li></ul></ul><ul><li>Targeting improves as it can reduce total spend </li></ul><ul><ul><li>Fewer impressions give possibility for same effectiveness </li></ul></ul><ul><li>However… banners are foundation for campaigns </li></ul><ul><ul><li>Banners fill-in for search, video, offline </li></ul></ul><ul><ul><li>Plus, more Websites and more page inventory = more sales </li></ul></ul>
  16. 16. More banner dollars over next few years, but video trend will take over Source: eMarketer, May 2010
  17. 17. Factors that indicate the ( future ) boom of online video ad spending <ul><li>Broadband now reaches “critical mass ” </li></ul><ul><ul><li>Although ISPs could stymie full growth </li></ul></ul><ul><li>“ Rich” advertisers still seeking brand messages </li></ul><ul><ul><li>With only 7% of measured media budgets going to display </li></ul></ul><ul><li>Desire to replicate sound, motion — emotion — TV </li></ul><ul><ul><li>But with better measurability and ability to target ads </li></ul></ul><ul><li>Hope among Web publishers for greater revenues </li></ul><ul><ul><li>Need to supply compelling and brand-safe video content </li></ul></ul><ul><li>Acceptance of ads among audience </li></ul><ul><ul><li>But content and delivery channels must be valued </li></ul></ul>
  18. 18. Local ad spending will increasingly shift online, as both marketer need and more sophisticated geo-targeting come together
  19. 19. Perspective…
  20. 20. <ul><li>Still step-sister among online ad methods </li></ul><ul><li>Harder to gauge success with display than with search or e-mail </li></ul><ul><li>Self-cannibalizing category, money shifting from one to the other </li></ul><ul><li>Brand safety concerns, about nature of content that appears along with the ads </li></ul><ul><li>Privacy concerns, especially for some types of targeting (esp. behavioral) </li></ul><ul><li>Complexity, with many vendors in this market </li></ul>Display ad spending (aka, online brand advertising ) looks healthy, but…
  21. 21. According to some marketers, display spending trailed e-mail and search in 2009
  22. 22. Display spending less than search and e-mail in another survey (convergence)
  23. 23. Perhaps fewer dollars for display because e-mail & search perform better
  24. 24. Even when video increases, some dollars will come from banner ads and rich media — so overall display market suppressed
  25. 25. Fears about ability to protect brand image also inhibit display ad spending
  26. 26. Over 60% said display spending would grow by 10% or more if brand safety…
  27. 27. Marketers say “We spend less on behavioral targeted ads due to privacy…” Source: Ponemon Institute, April 2010
  28. 29. The portion of marketing dollars going to nonmedia spending is rising
  29. 30. Brand Marketing Goals
  30. 31. Direct response objectives rank high for many marketers online
  31. 32. Direct response focus echoed (somewhat) by steady increase of performance pricing
  32. 33. However, change is coming: Branding’s share of the total online pie is gaining on direct response dollars
  33. 34. Buzzwords and trends indicate mindshare, and in that regard branding even more central than “hot” topics
  34. 35. <ul><li>Key variable for display ad performance </li></ul><ul><li>Often best combined with targeting, to vary message to audience by group, location, or their place in the purchase funnel </li></ul><ul><li>Development of automated systems for picking creative, changing it over course of campaigns </li></ul><ul><li>Innovation can thrive within standardization — and perhaps needs some degree of standards (it’s not the frame but what’s within it that counts) </li></ul><ul><li>Testing creative online easier than other media </li></ul>The importance of creative for effective branding just as true online as offline
  35. 36. Kathryn Koegel , marketing practice lead, Primary Impact In other media, there is little discussion of the size of the units, the arcana of targeting techniques or whether something is a branding or DR‐based ad. Instead, marketers and agencies focus on creating the most memorable and compelling messages and finding the appropriate audiences and context for that creative.
  36. 37. Poor creative can even negatively affect brand metrics (not just do lesser good)
  37. 38. <ul><li>Persistent branding — use logo a lot, highlight brand throughout the ad </li></ul><ul><li>Simple , direct, communicate at a glance — people are busy and don’t pay attention to details </li></ul><ul><li>Don’t let numerous formats make creative generic </li></ul><ul><li>“ Reveal” ads rarely work — except for some video and entertainment — so get to the point </li></ul><ul><li>No more than two messages per execution </li></ul><ul><li>Use people — human faces are appealing </li></ul>Dynamic Logic’s recommendations for better performing display creative
  38. 39. Integrating Display
  39. 40. Conversions come from a mix of display and search, and vary by industry (goals) Source: Eyblaster, February 2010
  40. 41. Display leads to search — not always, but typically positive, incremental gains
  41. 42. Banners encourage actions — less than search or e-mail, but part of whole
  42. 43. Perspective…
  43. 44. Main metrics used are not really for branding — not useful for display ads
  44. 45. More marketers deem conversions very important than any other metric ( so where does branding fit in? )
  45. 46. Counting the sheer number of people exposed to an ad (impressions) is main way display-ad performance gets measured
  46. 47. Measuring traditional brand metrics highly useful (but costs more to do)
  47. 48. <ul><li>How much do display ads drive search results? </li></ul><ul><li>Can display ads online support offline elements? </li></ul><ul><li>If you don’t measure it , is it still there? </li></ul><ul><li>What metrics best measure impact of display? </li></ul><ul><li>Reach/frequency vs. engagement </li></ul><ul><li>Measure brand-search or site-traffic gains while display campaign runs </li></ul><ul><li>Consider non-purchase conversions (video, social media, subscribe, share, play game) </li></ul>Holistic advertising — look at whole, not parts — especially needed for branding
  48. 49. Audiences & Targeting
  49. 50. Display more appreciated when the audience trade-off is explicit
  50. 51. More than ¾ of marketers using display target their audiences or plan to target
  51. 52. Classic demographic targeting still used by more advertisers than interactive targeting such as behavioral (70% vs. 59%)
  52. 53. Far more marketers use plain display advertising than behavioral targeted display
  53. 54. <ul><li>No single type of targeting is “best” </li></ul><ul><li>Consider the following factors : </li></ul><ul><ul><li>Data available (accurate, fresh, relevant) </li></ul></ul><ul><ul><li>Objectives , persuasion or awareness </li></ul></ul><ul><ul><li>Types of goods or services being sold </li></ul></ul><ul><ul><li>Where audience is found in purchase funnel </li></ul></ul><ul><li>The intertwined issues of data usage and audience privacy will affect display targeting for the next several years </li></ul>To reach the audience with display ads, targeting needs to be multiple choice
  54. 55. Takeaways
  55. 56. Consider this … <ul><li>Display spending growth ( use diversity ) </li></ul><ul><li>Banners add ( supplement other techniques ) </li></ul><ul><li>Video invest, experiment ( branding online ) </li></ul><ul><li>Measure whole process ( integrate display ) </li></ul><ul><li>Focus on creative ( test ad content, not tech ) </li></ul><ul><li>New paradigm ( search, e-mail relevant models ) </li></ul>
  56. 57. “ Thank You! ”
  57. 58. About AdReady © 2009 AdReady, Inc. Confidential
  58. 59. Automated Buying System © 2009 AdReady, Inc. Confidential
  59. 60. Creative Automation © 2009 AdReady, Inc. Confidential
  60. 61. Precision Campaigning © 2009 AdReady, Inc. Confidential
  61. 62. Whitepaper Offer <ul><li>Whitepaper </li></ul><ul><ul><li>“ Precision Campaigns: Integrating Creative Automation & Micro Targeting” </li></ul></ul><ul><li>E-Mail: [email_address] </li></ul><ul><li>Thank You </li></ul>© 2010 AdReady, Inc. Confidential
  62. 63. Thank you for tuning in to the eMarketer Webinar: Keys to Online Display Advertising Presented by: David Hallerman eMarketer Senior Analyst Questions & Answers Sponsored by: Access to the playback and slideshow will be sent to all Webinar registrants via e-mail.
  63. 64. e Marketer Coverage Learn more about online advertising with eMarketer Total Access. Visit: www.emarketer.com/products Call: 800-405-0844 E-mail: sales@emarketer.com <ul><li>Recent Reports: </li></ul><ul><li>US Ad Spending: How Big Is the Bounceback? </li></ul><ul><li>Hispanics Online: Demographics and Media Usage </li></ul><ul><li>US Portal Advertising Revenues </li></ul><ul><li>Audience Ad Targeting: Data and Privacy Issues </li></ul><ul><li>Boomer Demographics and Media Usage </li></ul><ul><li>Social Network Ad Spending: 2010 Outlook </li></ul><ul><li>Online Ad Spending in Western Europe </li></ul>All reports are available to Total Access clients.
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