Introduction to Digital Advertising

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A guest lecture presented to undergraduate advertising students at the University of Southern California (USC) Annenberg School for Communications.

The lecture was given by Sensis founder and President Jose Villa on October 10, 2011

Published in: Business, Technology

Introduction to Digital Advertising

  1. 1. Introduction to Digital Advertising Introduction to Advertising October 10, 2011
  2. 2. Agenda 01 Introduction 02 Brief History of Digital Advertising 03 Dissecting Digital Advertising 04 The Future 2
  3. 3. Introduction
  4. 4. My story…
  5. 5. The basics• Grew up here in LA… – Proud graduate of Burbank High School• Went to Harvard University for undergrad – Majored in Economics and really missed the West Coast• Worked as a management consultant after school• Got an MBA from Wharton in Marketing & Entrepreneurship• I’ve lived in LA, Boston, Madrid, San Francisco, Philadelphia, and New York
  6. 6. I’ve always been a serial entrepreneur• Started my first business in 6th grade• Built custom PCs in junior high• Started Sensis (as Focus Multimedia) the summer after graduating from college
  7. 7. I didn’t plan to get into advertising• Was more a tech geek than creative guy• I sort of stumbled into this business
  8. 8. My agency… Sensis
  9. 9. The Sensis story
  10. 10. Sensis overview• 39 employees Agency structure• Offices: – Los Angeles, CA – Washington, DC – Mexico City, MX
  11. 11. clients
  12. 12. digital thinking• Sensis was born as a Web development agency 13 years ago• We have grown into a full- service agency the last 6 years• We build brands by making them live digitally• Digital is central to all we do
  13. 13. right person + right moment + right message = Precision• All marketing should be measured• All our work starts with projections, is measured by results, and optimized based on data
  14. 14. empathy for “users”• We don’t look at an audience of “consumers”• Because of technology, users have the real power• Our role is to help our clients participate in the life experience of users
  15. 15. Brief history of digital advertising
  16. 16. Digital advertising Digital advertising refers to any advertising delivered through media connected to the Internet.
  17. 17. The birth of online advertising• The first SPAM email was sent in 1978 when a DEC employee announced a new computer inviting everyone with an ARPANET address on the west coast to a reception)• Computerized Bulletin Board System, the first BBS, launched in 1978• The first commercial online services, CompuServe and the Source, were founded in 1979
  18. 18. The first online (service) adsThe IBM and Sears-run dial-up service Prodigy ran banner ad-like ads as early as the mid-80’s
  19. 19. The birth of online advertising, cont.• NCSA Mosaic released in 1993, leading to the rise of the graphic, commercial Web• Netscape Mozilla becomes the first commercial Web browser in 1994• October 25, 1994: the first banner ad runs on HotWired• The IAB’s Ad Sizes Task Force releases the first real ad standards in 2003• March 13, 2006: Rocketboom runs the first video ad
  20. 20. 1994: a banner year
  21. 21. 1996: Web advertising gets interactive
  22. 22. Dissecting digital advertising
  23. 23. In 2011, what’s the best way to think about and categorize digital advertising?
  24. 24. POEM Earned Media Paid MediaOwned Media 26
  25. 25. POEM DefinedMedia Type Definition ExamplesOwned Media Channel a company owns. • Retail store • Website Company owns the impressions. • Mobile site • Blog • Facebook pagePaid Media A channel a company pays to • :30 sec TV spot leverage. running on Super Bowl • Web banner ads Impressions you pay for. • Paid SearchEarned Media When customer, influencers, or • Newspaper article the media become the channel. mention • Word of mouth Impressions not paid for. • Buzz • “Viral” activity
  26. 26. Paid Digital Media
  27. 27. Generic Online Ad Spending Search Portals Top Publishers Specialty Websites Networks Social Media, Widgets, Mobile, Virtual Worlds
  28. 28. Paid Search• Ads that appear contextually via search queries on the main search engines• Pay per click (PPC) – Reverse-auction system - the higher you bid, the higher your ad will likely appear – Relevance is also key• Text only ads – Ad titles are limited to 25 characters – The two description lines limited to 35 characters and a display URL
  29. 29. Banner Ad - OverviewSizes FormatsPricing
  30. 30. Banner SizesSource: Interactive Advertising Bureau (www.iab.net)
  31. 31. Pricing High Branding QualityCPM – cost per thousand impressions – 100,000 impressions @ $10 CPM = $1,000CPC – cost per click – 200 clicks @ $5 CPC = $1,000CPL – cost per lead – 25 leads @ $40 CPL = $1,000CPA – cost per acquisition Direct Low – 10 sales @ $100 CPA = $1,000 Response Quality 33
  32. 32. Banner formats - Display• Static or animated• Effective for both direct response and branding
  33. 33. Banner formats - Rich Media• Overlays, expandable banners, streamed video• Sophisticated online advertising• Aims to entertain and engage user
  34. 34. Banner formats - Text Display• Contextual social – Facebook, YouTube, LinkedIn ads• Contextual mobile app ads – AdMob 36
  35. 35. Online Video• Pre-rolls – Ads appear before the content – Best-performing• Mid-rolls – Ads appear during the content – Many marketers are wary of the “interruption factor”• Post-rolls – Ads appear after the content – Post-roll often only performs at a 40% level compared to the pre-roll 37
  36. 36. EmailNewsletters – Like banner ads on an email newsletter
  37. 37. EmailEmail Blasts – Email that only contains your ad.
  38. 38. Email Metrics• Bounce Rate (Delivery Rate) – How many emails actually went to someone• Open Rate – How many emails were opened by the recipient – Clicks / Impressions• Click Rate – How many clicks on links in the email• Forward Rate – How many people forwarded the email to friends• Unsubscribe Rate
  39. 39. Offline Digital• Digital Out-of-Home – Display creative (banners) would be leveraged across DOOH platforms• Digital Billboards• Digital Display – Coffee shops, supermarket check-outs, gas stations• In-store Video Advertising – In-Store, Closed-Circuit Television (Walmart TV, Home Depot)
  40. 40. Offline/Online Integration• Incorporating digital into traditional “offline” media – Integrate “Text for more info” call to action • Radio – Traffic updates – Events • Text, QR codes – Retail Activations • QR Codes
  41. 41. Ad Serving & Targeting• Ad servers – Place ads on websites – Count impression/click/leads – Enable targeting – DART (DoubleClick), Atlas, 24/7 OAS, etc.• Geotargeting – Where will your ads be seen? – Country, state, DMA, area code, zip code, etc.• Other targeting – Daypart, browser, bandwidth
  42. 42. Metrics and Measurement• Impressions & Clicks• CTR – click-thru rate – How many of my ads got clicks? – Clicks / Impressions• eCPC – effective cost per click – How much did each click cost me? – (Impressions x CPM) / Clicks• eCPL – effective cost per lead – How much did each lead cost me? – (Impressions x CPM) / Leads
  43. 43. Earned Media
  44. 44. Social Media Social media has created a new form of technology- empowered guerrilla marketing
  45. 45. Word of Mouth• The act of consumers providing information to other consumers.• Word of Mouth Marketing: – Giving people a reason to talk about your products and services, and making it easier for that conversation to take place. – The art and science of building active, mutually beneficial consumer-to-consumer and consumer-to-marketer communications.
  46. 46. Types of WOM Marketing• Buzz Marketing: Using high-profile entertainment or news to get people to talk about your brand.• Viral Marketing: Creating entertaining or informative messages that are designed to be passed along in an exponential fashion• Community Marketing: Forming or supporting niche communities that are likely to share interests about the brand (such as user groups, fan clubs, and discussion forums)
  47. 47. Types of WOM Marketing (cont)• Evangelist Marketing: Cultivating evangelists, advocates, or volunteers who are encouraged to take a leadership role in actively spreading the word on your behalf.• Product Seeding: Placing the right product into the right hands at the right time, providing information or samples to influential individuals.• Influencer Marketing: Identifying key communities and opinion leaders who are likely to talk about products and have the ability to influence the opinions of others
  48. 48. Types of WOM Marketing (cont)• Conversation Creation: Interesting or fun advertising, emails, catch phrases, entertainment, or promotions designed to start word of mouth activity.• Brand Blogging: Creating blogs and participating in the blogosphere, in the spirit of open, transparent communications; sharing information of value that the blog community may talk about.• Referral Programs: Creating tools that enable satisfied customers to refer their friends.
  49. 49. Search Engine Optimization (SEO)• Improving the volume and quality of traffic to a web site from search engines via "organic" search results for targeted keywords.• The higher a web site ranks, the greater the chance that it will be visited by users.• Search engines generate nearly 90% of all Internet traffic.• SEO is a long-term strategy.• Highest ROI of all marketing tactics. 51
  50. 50. Owned Media
  51. 51. WebsitesCorporate Websites Microsites / Landing Pages• Home of brand messaging - • Single-message or –purpose the principal piece of customer Web destinations interaction architecture • Usually used to drive direct• Users will quickly assess their response (landing pages) opinions of brands & companies based upon their interaction with their Websites
  52. 52. Corporate Websites
  53. 53. Microsites & Landing Pages
  54. 54. MobileMobile Apps Mobile Websites• Games, lifestyle tools • Mobile versions of a Website• Opportunity for branded • Mobile-optimized Websites applications
  55. 55. Social Media (again)• Facebook pages• Twitter feeds• YouTube channels• Yelp profiles
  56. 56. Facebook Company pages
  57. 57. Twitter
  58. 58. SocialFacebook gaming
  59. 59. New stuff
  60. 60. Social Buying / Deals
  61. 61. In-gameAdvertising Form of branded entertainment
  62. 62. The future of digital advertising
  63. 63. The digital future
  64. 64. All advertisingwill be digitalBillboards are going digital. Cable TV is incorporating digital-like targeting capabilities. TV ads look like banners…
  65. 65. Advertisingagencies willadapt or die.Traditional and digital advertising agencies will converge. Thosethat don’t will disappear…
  66. 66. How advertising will change
  67. 67. Brands &brandingwon’t changeThe idea of brands and branding aren’t really going to change.How we go about building them is and will continue to do so…
  68. 68. Digital will be at the center“[Digital] is the centerpiece of a broader campaign.I think that’s become a real integral part of how weuse the web, moving beyond just promoting webaddresses in TV spots or print ads to really makingthem a critical part of the storytelling for thebrands.”Rob MasterMedia Director, North AmericaUnilever
  69. 69. Shift from“consumers” to“users”Advertising will become about creating experiences,engagement and utility,
  70. 70. Content is the newcurrency.Engaging content =social currencyPeople, and brands, will pay for great content
  71. 71. Content is the new currency“The agency’s job is to create content so valuableand useful that consumers wouldnt want to livewithout it.”Jeff HicksCEOCrispin Porter + Bogusky
  72. 72. The next wave of industrymega-growth will comefrom the advancementof the classic art ofstorytellingContext creates auras and aspirations that help drive marketerinterests.
  73. 73. Stories around brands, productsIts not just a race to get to the highest number offans. Its a race to figure out how to be the mostengaging storyteller with your fans."Carolyn EversonVP, Global Marketing SolutionsFacebook
  74. 74. In the future, digital ads willbe highly personalized. Theyllappear on mobile devices insophisticated ways. If youwant to share an ad withfriends, you can, and if youwant to skip it, well, go rightahead.
  75. 75. Preparing yourself
  76. 76. Marketing jobs of the futureRoles that didn’t exist 5 years ago:• User Experience Designer• Online Community Manager• Creative Technologist
  77. 77. My humble advice to future “Ad Men”• The planner of the future – Take an anthropology course• The creative of the future – Take a computer science course• The media buyer of the future – Take a statistics course
  78. 78. Thank you.Jose Villa @jrvillaPresidentSensis www.linkedin.com/in/josevillaT: (213) 341-0171 www.thinkmulticultural.comE: jrvilla@sensisagency.com www.sensisbureau.com
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