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1




Clams.
5 Thoughts, 15 Slides

Darren Herman / @dherman76

Chief Digital Media Officer, The Media Kitchen / kbs+p
President & Managing Partner, kbs+p Ventures
Founder, Varick Media Management
2




The most frequent sentence I hear



                       We’re planning on
                       We’re
                        monetizing our
                           apps thru
                         advertising.
3




The Infamous Ecosystem
     Luma Partners 2010 www.lumapartners.com
4




Two Ways To Generate Revenue




                                101010101111010100010
                                101010101111010100010




Largest amount of ad dollars.     Small but increasing.
5




First: Where do I start?


                               Join an ad network

Simplicity                                               Amount $$
                                                          you keep
                                  Hire a rep firm



                               Sell inventory directly

Note: Not mutually exclusive
6




The amount of $$ you keep


  Advertiser                  Publisher


               Frictionless


                                 * example publisher
7




The amount of $$ you keep


  Advertiser              Publisher




               Friction
                  %
8




The cost of friction
9

Second: Does your size
matter?


 Ron would say yes.

 Darren says mostly no;
 opportunities are limited which
 creates artificial short-term demand.
10




While we’re on size...


 There are standard ad sizes:

   IAB (
   http://www.iab.net/iab_products_and_industry_services/1421/1443/1452)



   OPA (http://www.online-publishers.org)
11


    Third: Evolution of the paid [digital]
    ecosystem


                                                    Ad Networks


                                                       Google
                   Sell Side
                  Optimizers/
                   Platform
                                                   Ad Exchanges


                                                DSP Direct Integration
Note: Just a portion of the companies in each
                    sector
12




                             Image from Demdex




Your media is good; w/data better
13




Remember, w/o Data: Your Traditional
    Inventory Is a Commodity
14


Fourth: Thoughts on an ad supported
business


 Unless your advertisement options are non-traditional, a fully
 ad-supported business has a very slim chance of surviving
 without significant scale.

 If you have non-traditional units, an internal sales force will sell
 best.

 Treat ad agencies as you would venture capitalists.
 Your presentations should be short, to the point, and slick.
15




Fifth: The biggest mistake



 Pricing too low to get a deal can actually hurt your chances of
 receiving an insertion order (IO)

   Perception
16

Evolution of an
advertisement
17




Thank you // @dherman76

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2011 TechStars NYC Advertising Presentation

  • 1. 1 Clams. 5 Thoughts, 15 Slides Darren Herman / @dherman76 Chief Digital Media Officer, The Media Kitchen / kbs+p President & Managing Partner, kbs+p Ventures Founder, Varick Media Management
  • 2. 2 The most frequent sentence I hear We’re planning on We’re monetizing our apps thru advertising.
  • 3. 3 The Infamous Ecosystem Luma Partners 2010 www.lumapartners.com
  • 4. 4 Two Ways To Generate Revenue 101010101111010100010 101010101111010100010 Largest amount of ad dollars. Small but increasing.
  • 5. 5 First: Where do I start? Join an ad network Simplicity Amount $$ you keep Hire a rep firm Sell inventory directly Note: Not mutually exclusive
  • 6. 6 The amount of $$ you keep Advertiser Publisher Frictionless * example publisher
  • 7. 7 The amount of $$ you keep Advertiser Publisher Friction %
  • 8. 8 The cost of friction
  • 9. 9 Second: Does your size matter? Ron would say yes. Darren says mostly no; opportunities are limited which creates artificial short-term demand.
  • 10. 10 While we’re on size... There are standard ad sizes: IAB ( http://www.iab.net/iab_products_and_industry_services/1421/1443/1452) OPA (http://www.online-publishers.org)
  • 11. 11 Third: Evolution of the paid [digital] ecosystem Ad Networks Google Sell Side Optimizers/ Platform Ad Exchanges DSP Direct Integration Note: Just a portion of the companies in each sector
  • 12. 12 Image from Demdex Your media is good; w/data better
  • 13. 13 Remember, w/o Data: Your Traditional Inventory Is a Commodity
  • 14. 14 Fourth: Thoughts on an ad supported business Unless your advertisement options are non-traditional, a fully ad-supported business has a very slim chance of surviving without significant scale. If you have non-traditional units, an internal sales force will sell best. Treat ad agencies as you would venture capitalists. Your presentations should be short, to the point, and slick.
  • 15. 15 Fifth: The biggest mistake Pricing too low to get a deal can actually hurt your chances of receiving an insertion order (IO) Perception
  • 17. 17 Thank you // @dherman76

Editor's Notes

  1. Clams. Dinero. Benjamins. It’s all about the money as Nucky Thompson likes to say.
  2. Not necessarily a bad thing, but plenty of web (inclusive of mobile) companies are looking to generate ad revenue without a full strategy.
  3. There are a lot of marketing and advertising technology companies who would like to help you drive advertising dollars. It’s only getting worse.
  4. Two ways to generate revenue from advertising: the old-school way but relationship driven (human led) and the newer friction-less programmatic way (via API’s)
  5. Direct relationships are always best because it removes friction. Generate relationship + keep majority of dollars.
  6. Anytime there is a middleman, the middleman is compensated in some capacity. Also, the middleman might remove the relationship between the advertiser + publisher.
  7. The cost of friction is FOCUS. Friction allows you to concentrate on other things which might be right for an early stage company who needs to ship product.