Internet advertising 2009 good overview


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Internet advertising 2009 good overview

  1. 1. Internet Advertising The Internet Advertising Landscape The General Advertising Landscape The General Advertising Landscape Source: Television Bureau of Advertising, The Internet Advertising Landscape: The Internet Advertising Landscape: Revenues Revenues Quarterly $ Revenue Growth Comparison – 2000-2008 YTD Source: PwC/IAB Internet Advertising Revenue Report (
  2. 2. The Internet Advertising Landscape: Top 10 Search Providers for December 2008 Advertiser Provider Searches (000) YOY Growth Share of Searches All Searches 8,623,705 19.6% 100.0% Google Search 5,421,943 33.5% 62.9% Yahoo! Search 1,448,140 13.7% 16.8% MSN/Windows Live Search 841,457 -15.5% 9.8% AOL Search 357,025 5.1% 4.1% Search 169,116 6.0% 2.0% My Web Search 62,415 -11.6% 0.7% Comcast Search 50,385 45.1% 0.6% NexTag Search 29,219 0.7% 0.3% AT&T Worldnet Search 27,176 8.0% 0.3% BizRate Search 23,593 37.1% 0.3% Source: Nielsen Online, MegaView Search The Internet Advertising Landscape: Advertiser The Definition of Internet Advertising Internet advertising is the convergence of traditional advertising and direct responses marketing. Characteristics and The use of the Internet for delivering marketing messages to attract customers. Types of Internet Advertising Direct Internet Traditional R Responses Advertising Advertising Marketing
  3. 3. Internet Advertising Internet Advertising Advantages Disadvantages Customer-dominated environment Targetability A cognitive, not emotional medium Global reach Psychological fear of IT Tracking ability Limited space and information in some formats Less expensive to produce Connection problems Flexibility and rich media combination Non internet users (yes, there are these Immediacy people) Interactivity Clutters Company/Brand Website Similar to brochureware Types of Internet/Online Can be educational and entertaining Exhibit clear business objectives Advertising - Move a potential customer from browser to buyer Simulated shopping experience, comfort, privacy (e.g., BMW) - Entertainment to attract site traffic (?) - Valuable information resources (e.g., Tide) - Customer service (e.g., FedEx) Opt-In E-mail Classified Ads or Newsletters distributed by an entity through email blasts to opt-in audiences. Advertisers can individually sponsor a publisher’s email newsletter or they can purchase classified ad space. Example: Cynopsis newsletter (industry facts + classifieds)
  4. 4. Opt-In E-mail Display Advertising Online ads that combine text, images, and animation Advantages: (but are not interactive - those are rich media) to quickly grab the attention of website visitors browsing Inexpensive and effective advertising opportunities the pages on which they are featured. to reach a niche market and a precisely targeted audience Typical Display Ad Sizes. Can track the number of emails sent (not leaderboard (728 x 90 pixels) measuring readership) skyscraper (120 x 600 pixels or 160 x 600 pixels for wide skyscraper) HTML format attracts more attention with graphical banner (468 x 60 pixels) ads half-page (300 x 600 pixels) Can measure reach (# of times graphics are square button (or tile) (125 x 125 pixels) pulled from the server) medium rectangle (300 x 250 pixels) Examples… Display Advertising Rich Media Advertising Online ads with which users can interact (include video, sound, and Advantages: animation that engage the users) Easy production Typical rich media ads: peel-back (user can roll over the ad and it will appear to peel back Flexibility in sizing and display all of the advertising content) floating (appear on top of the web page content. It can be placed Immediate response from target market anywhere on the browser page) expandable (when your mouse rolls over this ad, additional (comparing to traditional media) information will slide out) Interstitial (brief ads page in between the reference and target pages) video (video streaming on site; video banners) Roadblock (activate once a user clicks on a link. The roadblock will pop up and be viewable until the user click on it) Popup video IAB guidelines ( Rich Media Ads Text Ads Advantages: Simple text advertising Better branding capability Some of the more common types of text ads: link ads (links in website’s text content) Higher response rates contextual ads (a form of targeted advertising More creative possibilities appearing on websites which is selected and served Better message engagement by automated systems based on the content displayed to the user) search engine marketing ads (pay per click - ex. Google Adwords) online directories
  5. 5. Text Ads Advantages Searchable by search engines Online Audience Measurement Less-ignored by readers Less intrusive yet effective Simple and less bandwidth intensive Tailored to web content Web Audience Measurement Campaign Measurement People based measurement: Measuring ad effectiveness on the advertiser’s side ComScore Media Metrix as well as web publisher’s side Nielsen/Net Ratings Using ad serving technology Cookie based measurement: Impression and click-through measured Google Analytics DoubleClick: Atlas Solutions: Coremetrics 1. CPM Model: cost per thousand Online Advertising Most popular pricing model Advertisers are comfortable with this model Pricing Models E.g., a site charges $10,000 per banner with 500,000 impressions CPM=$20 CPM = [price/#of impressions] X 1000
  6. 6. Online Ad Sellers Using CPM Model Search Engine Individual websites (normally run of site General rotation: a banner will appear randomly buying; higher CPM due to targetability) appear during searches Search Engines Ad networks Run of Category: ad will rotate throughout a category such as arts, health Keyword buying: buying keyword searches Ad Networks 2. Click-Through Model Services that connect the websites that want to host ads with the interested advertisers using a Click-through: the action of a viewer clicking central ad server. on an ad. Advertisers can run category package (ROC) or overall network package (RON) Direct response model Large web properties do not sell to many ads Originated from P&G’s online ad policy in through ad networks 1996 Major Ad networks: Typically, keyword search ads pricing 1. Yahoo! Network 2. Google Ad Network (AdSense) 3. 4. AdBrite 5. ValueClick Networks Criticisms on CTR Model 3. Flat Fee Model Publishers are forced to rely on advertisers’ creative Fixed fee charged for a certain time period (yearly fee, monthly fee) regardless of impressions or CTR quality for their own ad revenue. When publishers need seed money Brand-building value of banner is ignored. Publishers tend to run a banner until ad receives the Instead of offering low price, when they need to save cost associated with other monitoring number of clicks promised. activity or traffic reports. CTR may have little to do with their goal such as Used as premium placements conversion.
  7. 7. 4. Pay Per Viewer Model 5. Pay Per Purchase Advertisers pay users money or incentives for Pay publishers only when purchases result everything from visiting advertiser sites to filling out from the ad. surveys to purchasing products. Publishers depend on creatives quality and Underlying philosophy is the most valuable commodity on the Web is a person’s attention and consumer’s purchase interest. that the best way to acquire that is through More advantage to advertisers incentives 6. Hybrid Model A mixture of different pricing models Online Advertising Buying E.g., a site offers one price for impressions, a higher price for CTR, and an even higher price for pay per purchase model. Before you begin… Online Campaign Goals Traffic Building Is your target audience online? Selling Products If so, where? Generating Leads Building Brands
  8. 8. Traffic Building Website Management Website with a large number of visitor sell more advertising. Landing page (website) management is Important for media company whose main important. business model is ad revenue. Log data analysis Focus group Expert panel to review the site Selling Product Generating Leads Important for e-commerce sites Easier to get prospects to request information Bring the right target rather than a large online than to get them to purchase number of target immediately Going the places where customers go Listserv, registration, coupon book, etc. eBay store Building Brand Site Selection Process Online exposure only can create brand equity. (e.g., Audience analysis even banner exposure) Demo, affinity, loyalty, lifestyle, other psychological factors This idea leads to CPM based pricing model. Secondary data analysis MRI, ComScore, Nielsen, etc
  9. 9. Site Selection Process Types of Sites Well-branded, highly recognizable sites Website analysis High traffic sites with less- or non-recognizable brand Editorial content names Lead time Banner size and placement on the page Niche sites with low traffic Availability of ad inventory Personal sites Technology capability Network Buying Sometimes, ad networks sell advertising (function as rep firms). Benefits of network buying Online Advertising Selling Increases selling and negotiation power of small-sized website From advertisers’ perspective, it is easier to contact one network representatives rather than many individual website publisher Possible to utilize targeting solutions Selling Agents in Online Ad Online Ad Rep Firms In-house sales forces Sales representatives of media owners Representative firms Sell spot ads to ad agencies on behalf of Ad networks media companies Online ad auction services Revenues come from commission on ad sales
  10. 10. Ad Networks Ad Networks Consist of a group of sites with advertising inventory Benefits to advertisers to sell. Consistency in ad delivery reporting Can work with one sales rep for multiple site buys easy Benefits to web publishers for site mix easy access to more advertisers through networks’ sales Competitive pricing because of the networks’ economy of power (rep firm function) scales removing leftover inventory save cost for expensive ad management software More targeting options with a slate of sites easy for site sell left-over inventories mix Ad Networks vs Rep Firms Radio/TV Stations Both ad networks and rep firms broker ad Online Advertising Selling space. A rep firm represents the site itself (or a collection of sites by the same owner) while an ad network represents a group of sites. The General Landscape Local TV Web Revenues:2003-2010 Internet sales are still a tiny percentage of gross revenue for radio/TV station, but it is growing fast. Not all sites are created equal.
  11. 11. The General Landscape Pricing/packaging Approaches In 2007, TV stations were using the Internet to tap advertisers in “classified” categories, further eroding the newspaper industry’s share. “Home Page”, weather, and local news dominate both the most- trafficked portions of TV sites and the biggest revenue- production sections of those sites The pricing for video ad varies, and majority of sites are pricing web inventory at flat rates. Types of Online Ads from Radio/TV Types of Online Ads from Radio/TV Stations: In-stream video Stations: In-stream video Linear Video Ad: is presented before, in the middle, or Non-linear Video ad: runs parallel to the video content so the after the video content is consumed by the user, in very user see the ad while viewing the content. Non-linear video can much the same way a TV commercial can play before, be delivered as text, graphical ads, or as video overlays during or after the chosen program. Overlays which are shown directly the content video itself Product placements which are ads within the video content itself Example Both linear and non-linear video as products have the option of being paired with what is commonly referred to as a “Companion Ad” Example Companion Ad Linear Video Ad with or without Companion Ads Commonly text, display ads, rich media, or skins that wrap around the video experience, can run alongside either or both the video or ad content The purpose is to offer sustained visibility of the sponsor throughout the video content experience Combination models: Linear Video Ad with or without Companion Ads Linear Video Interactive Ad Non-linear Overlay Ad Non-Linear Non-Overlay Invitation Ad
  12. 12. Linear Video Interactive Ad Non-linear Video Ad Non-linear Non-Overlay Invitation Ad Video Advertising Practices