Shari Gunn

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ABCs of Brand Advertising
This hands-on workshop will teach you how top brand advertisers use the web for marketing, what it takes to get their attention and how you can create innovative programs for brand advertisers.
Led by Shari Gunn, Vice President Advertising & Business Development, Kaboodle , Director, Marketing, Hearst Digital Media, VP, Marketing, Primedia’s Automotive Enthusiast Group

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Shari Gunn

  1. 1. ABC’s of Brand Advertising October 20, 2009 Shari Gunn, Kaboodle Online Advertising and Social Media Summit
  2. 2. What do you want to get out of today?
  3. 3. Today’s Agenda  Online Advertising Industry Snapshot  Basics of Brand Advertising Online  Lifecycle of a Brand Campaign  Ad Networks and the Path to Monetization  Final Thoughts & Wrap-Up
  4. 4. Let’s Get Personal  Write down the 3 – 5 content sites that you visit on a regular basis  Name an advertiser or advertising campaign that you remember seeing on one of those sites
  5. 5. Online Advertising Industry Snapshot
  6. 6. Online Advertising Ecosystem  Full-service  Media planning/ buying  Creative  Interactive  Etc. Advertiser Media Outlets Advertisin g Agency  TV  Print  Radio  Internet  Outdoor  Etc.  Single product/ brand  Multiple brands  Local  National  Etc.
  7. 7. The Changing Media World  Changing media landscape  An industry in constant transition  Evolving relationship with the consumer  Consumers are in control of their media consumption  Growth in social media  Economic pressures on both consumers and advertisers  Still a big discrepancy between consumers’ media consumption and where ad budgets are spent
  8. 8. Continued Growth in Spending, but at a Slower Pace US Online Advertising Spending Growth (%) Source: eMarketer, April 2009
  9. 9. Search Continues to Lead Online Ad Spending 2008 Internet Ad Revenues by Ad Format Source: IAB / PwC, March 2009
  10. 10. Online Advertising Revenue is Highly Concentrated with a Few Publishers Source: IAB / PwC, March 2009  The ten leading ad-selling companies account for nearly three-quarters of total revenues
  11. 11. Social Network Ad Spending Growth Forecast to Slow US Online Social Network Advertising Spending (in millions and % change) Source: eMarketer, December 2008 (33.8%) (10.2%) (3.1%) (6.3%) (6.7%) (8.3%)
  12. 12. Advertising on Social Networking Sites: Trends and Implications  Socnet sites generally have not done well with ads  BUT 62% of Generation Y’ers have visited a fan page on a socnet and nearly half actually joined *  Advertisers want proof that increasing investment in will yield measurable benefits  Implications for publishers?* Source: Pace University Study, 2008
  13. 13. Back to the Basics
  14. 14. Meet the Interactive Advertising Bureau  More than 375 leading media and tech companies who are responsible for selling 86% of online advertising in the US  The IAB is dedicated to:  The growth of the interactive advertising marketplace  Evaluating and recommending standards and practices  Fielding critical research on interactive advertising  Creating a world-class medium that provides and delivers the highest level of transparency and accountability  Educating marketers, agencies, media companies and the broader business community about the value of interactive advertising
  15. 15. The IAB Universal Ad Package  A set of four ad units that all compliant IAB member publishers have agreed to support 180x150 300x250 728x90 160x600
  16. 16. Audience Dynamics & Media Consumption  Site usage creates advertising impressions (availability or “avails”)  Audience dynamics influence site traffic patterns  Heavy users (39%) generate 73% of all page views  Light users (36%) generate 6% of all page views  Challenge:  Reach the light users AND avoid serving disproportionate number of impressions to the heavy users (law of diminishing returns)  Defining inventory for advertisers  Site-side measurement sources (Omniture, Google Analytics, etc)
  17. 17. The Mechanics: Reach, Frequency and Pricing  Reach (%)  Percent of individuals who visit a site compared to total number of online individuals (during a given time period)  Frequency  The number of ads an average person could be exposed to in a given time period  Pricing  CPM: cost per thousand (impressions)  CPM = Total media value / (impressions/1000)  Examples:  A $100,000 buy at a $12 CPM would yield 8.33 million impressions  12 million impressions at a $6.25 CPM would yield a total
  18. 18. More Mechanics: Sell-Through and Effectiveness  Sell-through  % of ad inventory actually sold as opposed to traded or bartered  Varies by publisher, site section, ad format and season  eCPM (Effective CPM)  For a campaign: takes into account over-delivery, bonus impressions etc.  For a site: can also blend different pricing models  Revenue per Page  Internal measure taking into account all ad
  19. 19. Example: Using Media Assets to Lower eCPM  Scenario:  Client has given you a budget of $65,000  They want a mix of placements on your site  They also want an eCPM of between $7.00 and $7.50  You know that they won’t buy unless they get at least half of the total impressions as 300x250 units  Your rates are:  300x250: $10.00 CPM  728x90: $7.50 CPM  You also have some other media assets (other ad units, sponsorship placements, text links, etc.) at your disposal
  20. 20. Example: Using Media Assets to Lower eCPM Ad Unit CPM Impressions Media Value 300x250 $ 10.00 6.5 million $65,000 eCPM = $10.00 Ad Unit CPM Impressions Media Value 300x250 $ 10.00 5 million $50,000 728x90 $ 7.50 2 million $15,000 TOTAL 7 million $65,000 eCPM = $65,000 = $9.28 (7 million / 1000)
  21. 21. Example: Using Media Assets to Lower eCPM Ad Unit CPM # of Impressions Media Value 300x250 $ 10.00 5 million $50,000 728x90 $ 7.50 2 million $15,000 Text links $ 0 2 million $ 0 TOTAL 9 million $65,000 eCPM = $64,000 = $7.11 (9 million / 1000)
  22. 22. Example: Revenue Per Page Example Revenue Per Page Calculation: Banner ($5 CPM) = $0.005 per pg Rectangle ($10 CPM) = $0.010 per pg Skyscraper ($2 CPM) = $0.002 per pg 2nd Rectangle ($1 CPM) = $0.001 per pg Total revenue per page = $0.018
  23. 23. The Most Accountable of All Media: Measuring Success  Advertisers’ perspective – it’s all about ROI  Click-through rate  Relevant actions/engagement  Post-click through activity  Brand awareness  Publishers’ challenges  Demonstrating that online exposure can lead to delayed offline actions/behaviors  Providing effective reach and contextual relevance  How do we optimize and provide the greatest
  24. 24. Targeting  Not all ad impressions are created equal!  “Run-of-site” or “run-of-network” versus targeted placements  Create “relevance” for the audience and therefore, greater value for the advertiser  Command a higher CPM  Help marketers make messages more relevant
  25. 25. Types of Targeting  Demographic  Age  Gender  Income  Occupation  Household size  Defined by overall site demos, survey feedback, user registration data
  26. 26. Types of Targeting  Geographic  Site or customer registration databases (for DMA, area codes, time zones etc.)  Can ask that visitors type in a zip code  IP addresses  Incur additional expense to set up
  27. 27. Types of Targeting  Contextual  Placing ads on web pages that have a relationship to the content of that page  Creates relevance  Users in more receptive frame of mind
  28. 28. Types of Targeting  Behavioral  Show ads based on what you know about that user’s behavior patterns  Contextual targeting can be expensive and inventory sells out fast
  29. 29. Types of Targeting  Daypart  Consumers choose and use media throughout the day  Workday routines shape online consumption (peaks in mornings, dinner and prime time hours)
  30. 30. Advanced Ad Formats: Rich Media  Ads with which users can interact (as opposed to solely animation)  Traditional banner placements as well as interstitials, take-overs, floating ads, etc.
  31. 31. Advanced Ad Formats: Rich Media (continued)
  32. 32. Advanced Ad Formats: Video  Video  Traditional ad placements: Pre-roll, Mid-roll, Post-roll  High demand for premium video inventory trading at 2-3x display CPMs (emphasis on “premium”)
  33. 33. Advanced Ad Formats: Online Games  Advergames  Plot integration  Pre-roll  Inter-level advertising  Dynamic in-game advertising  Sponsorships  Link in-game actions to real world behavior
  34. 34. Gaming Example  Seventeen.c om and Secret Deodorant
  35. 35. Gaming Example
  36. 36. Lifecycle of a Brand Campaign
  37. 37. Get to Know the Key Players  Full-service  Media planning/ buying  Creative  Interactive  Etc. Advertiser Media Outlets Advertisin g Agency  TV  Print  Radio  Internet  Outdoor  Etc.  Single product/ brand  Multiple brands  Local  National  Etc.
  38. 38. Let’s Look at An Example… Individual Brand Managers Media Planning and Buying Creative
  39. 39. Lifecycle of a Brand Advertising Campaign Insertion Order Client Request for Proposal Monitoring & Optimization Campaign Execution Reporting & Analysis Review
  40. 40. Lifecycle of a Brand Advertising Campaign Insertion Order Client Request for Proposal Monitoring & Optimization Campaign Execution Reporting & Analysis Review
  41. 41. Focus: The RFP Process Agency issues RFP Submit proposal Agency reviews all proposals Agency narrows down pool; asks for revisions Submit revised proposal Agency conducts client review Agency makes recommendations to client Approval from client and verbal “yes” to publisher Signed Insertion Order!
  42. 42. The Role of Ad Networks
  43. 43. Ad Networks: The Long Tail of Online Advertising  The emergence of ad networks  Top 100 publishers sell only 40% of their inventory through direct means  Provide small and mid-sized publishers with more advertising revenues than would otherwise be possible  Aggregate traffic that was previously too difficult to buy or which was otherwise undesirable  Small publishers can’t afford their own sales force (and support)  Advertisers (or their agencies) can’t manage individual relationships with hundreds (or even dozens) of sites  Brand advertisers need mass reach; someone needs to aggregate  Growth and fragmentation  300 – 400 ad networks today (up from only 15 seven years ago)  Use of ad networks has increased from 5% of sold inventory in 2006 to 30% in 2007 (Source: Bain & Company)
  44. 44. Types of Ad Networks  General (ex. Advertising.com)  Geographic  Contextual (ex. Google)  Behavioral (ex. Tacoda, Revenue Science)  Vertical (ex. Glam, Jumpstart Automotive)  Pricing (CPM, CPC, CPA, CPE)
  45. 45. Let’s Look at an Example 865th most trafficked site (Quantcast) Advertising from McDonald’s via DoubleClick ad networkAdvertisers (or agencies) arrange a buy with DCLK and may not know what site their banner will run on
  46. 46. How Do Ad Networks Differ?  Points of differentiation  Targeting, technology, types of inventory, media type, etc.  Pricing/business models  Representation  Direct acquisition via revenue share  Direct acquisition via arbitrage  “Blind” vs. transparent
  47. 47. Benefits & Challenges of Using Ad Networks  Monetization  Access to large advertisers  Clear excess inventory  Choice and flexibility  No investment in a salesforce  Low prices and price erosion  Sales channel conflicts  CPM arbitrage  Managing pricing and yield  Relationship management Benefits Challenges
  48. 48. Why Do Advertisers (and Their Agencies) Use Ad Networks?  Extended reach (and targeted)  Leverage residual impressions at large publishers for a lower price  Too difficult to screen and manage relationships with large numbers of small sites  Pricing efficiencies; reduce total campaign costs
  49. 49. Implications for Publishers  Challenge of potential price erosion  Need to better support the value of premium inventory – through more innovative offerings and/or reducing units available  Can work with multiple networks for optimization, but requires resources  Need to actively manage secondary channels, both to maximize yield and to safeguard strategic position
  50. 50. Final Thoughts: What’s the Right Path to Monetization?  Depends on your business, traffic, goals, audience, reach, etc.  Experiment with Google AdSense  No long-term commitment  No transparency on revenue share  Most flexibility and minimal resources required  Get some baseline metrics  Ties into Google Ad Manager (ad serving)  Look to ad networks for deeper support  Test a few and optimize  Exclusive vs. non-exclusive relationships; beware of contract terms
  51. 51. Final Thoughts: When Do You Build a Direct Sales Force?  Maybe never!  Do the math  5 million ad impressions per month at a 40% sell- through at $8 CPM = $16,000  Resources  Sales manager, marketing/sales solutions, assistant sales manager/planner, ad trafficking/operations, reporting & analytics, billing  Payment cycles and the impact on your working capital
  52. 52. Final Thoughts: How to Get RFP’s from Agencies  Agencies want and need options  Reach out to MD’s, AMD’s and Media Planners  Make a connection between your audience/content and the agency’s client  Research and industry trends  Leverage your “launch” period  Be prepared to talk about aggressive pricing, low minimums, custom opportunities and ad units
  53. 53. Your Homework Assignment  Who’s your customer?  Who is your site, product, service meant to serve?  What is your unique value proposition?  How do you engage your customers and how is that unique?  What is the monetization strategy now?  What do you think it could be?
  54. 54. Useful Resources  Interactive Advertising Bureau (www.iab.net)  Advertising Research Foundation (www.thearf.org)  comScore (www.comscore.com)  Nielsen//NetRatings (www.nielsen-online.com)  Forrester Research (www.forrester.com)  eMarketer (www.emarketer.com)  ClickZ (www.clickz.com)  MediaPost (www.mediapost.com)  Word of Mouth Marketing Assoc. (www.womma.org)
  55. 55. Contact Information  Shari Gunn VP Advertising & Business Development Kaboodle, Inc. e: shari@kaboodle.com p: 408.328.7019

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