eMarketer Webinar: Keys to Online Display Advertising

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…
Display ad spending trends ( meaning )
Display and other ad formats ( blending )
Brand marketing goals ( display’s place )
Creative’s central place ( best practices )
Metrics for branding ( beyond the click )
Ad targeting ( a mixed bag )

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.

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 – May 2010

Some of the reasons for eMarketer’s Internet ad spend estimates
Diverse Internet ad universe ( not all doing the same )
Branding shortfalls & shifts ( leading 100 advertisers )
Pricing trends ( more performance, less CPM )
Ad networks ( make banners into commodities )
More inventory than ever ( also commoditizes, but… )
Historical downturn and revival ( the IAB/PwC data )
Google, Yahoo!, other revenues ( mix of down and up )
Privacy & safety concerns ( esp. limit brand spend )

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 spend less on ads in other media — especially print — as they seek greater accountability. Balance of ad dollars are shifting to the Internet because…
Furthermore:
Brand marketers see need, and viable channels
Current economic and societal forces reinforce new ad models and make them more permanent

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 media here )

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
Becoming interchangeable commodity
Networks help reach but lower inventory pricing across sites
Users ignore , more intrusive ads needed
Pushes marketers to use video and social marketing
One-time display dollars go to social media marketing
Don’t show up on charts, more difficult to evaluate
Targeting improves as it can reduce total spend
Fewer impressions give possibility for same effectiveness
However… banners are foundation for campaigns
Banners fill-in for search, video, offline
Plus, more Websites and more page inventory = more sales

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
Broadband now reaches “critical mass ”
Although ISPs could stymie full growth
“ Rich” advertisers still seeking brand messages
With only 7% of measured media budgets going to display
Desire to replicate sound, motion — emotion — TV
But with better measurability and ability to target ads
Hope among Web publishers for greater revenues
Need to supply compelling and brand-safe video content
Acceptance of ads among audience
But content and delivery channels must be valued

Local ad spending will increasingly shift online, as both marketer need and more sophisticated geo-targeting come together

Perspective…

Still step-sister among online ad methods
Harder to gauge success with display than with search or e-mail
Self-cannibalizing category, money shifting from one to the other
Brand safety concerns, about nature of content that appears along with the ads
Privacy concerns, especially for some types of targeting (esp. behavioral)
Complexity, with many vendors in this market
Display ad spending (aka, online brand advertising ) looks healthy, but…

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

Key variable for display ad performance
Often best combined with targeting, to vary message to audience by group, location, or their place in the purchase funnel
Development of automated systems for picking creative, changing it over course of campaigns
Innovation can thrive within standardization — and perhaps needs some degree of standards (it’s not the frame but what’s within it that counts)
Testing creative online easier than other media
The importance of creative for effective branding just as true online as offline

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.

Poor creative can even negatively affect brand metrics (not just do lesser good)

Persistent branding — use logo a lot, highlight brand throughout the ad
Simple , direct, communicate at a glance — people are busy and don’t pay attention to details
Don’t let numerous formats make creative generic
“ Reveal” ads rarely work — except for some video and entertainment — so get to the point
No more than two messages per execution
Use people — human faces are appealing
Dynamic Logic’s recommendations for better performing display creative

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)

How much do display ads drive search results?
Can display ads online support offline elements?
If you don’t measure it , is it still there?
What metrics best measure impact of display?
Reach/frequency vs. engagement
Measure brand-search or site-traffic gains while display campaign runs
Consider non-purchase conversions (video, social media, subscribe, share, play game)
Holistic advertising — look at whole, not parts — especially needed for branding

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

No single type of targeting is “best”
Consider the following factors :
Data available (accurate, fresh, relevant)
Objectives , persuasion or awareness
Types of goods or services being sold
Where audience is found in purchase funnel
The intertwined issues of data usage and audience privacy will affect display targeting for the next several years
To reach the audience with display ads, targeting needs to be multiple choice

Takeaways

Consider this …
Display spending growth ( use diversity )
Banners add ( supplement other techniques )
Video invest, experiment ( branding online )
Measure whole process ( integrate display )
Focus on creative ( test ad content, not tech )
New paradigm ( search, e-mail relevant models )

“ Thank You! ”

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© 2010 AdReady, Inc. Confidential

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.

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
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All reports are available to Total Access clients.

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eMarketer Webinar: Keys to Online Display Advertising

by eMarketer on Jun 25, 2010

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eMarketer Webinar: Keys to Online Display Advertising — Presentation Transcript