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How Can Onlline Publishers Capture More (Brand) Ad Dollars


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What should Online Publishers be doing to protect their future, cause frankly online advertisers and their agencies aren't going to look out for their interests.

This presentation gives specific suggestions to publishers on how they can capture more dollars from Brand Advertisers. This is a shorten version of a 4 hour workshop.

Published in: Business, Education
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How Can Onlline Publishers Capture More (Brand) Ad Dollars

  1. 1. Why Advertisers (& their agencies) Will Destroy Us Tiger Global 2008 Internet Conference New York City • October 2, 2008 Greg Stuart Former CEO, Interactive Advertising Bureau Co-author: What Sticks … And What We (Online Publishers) Can Do to Stop Them
  2. 2. Problem Is That They Don’t Know What Works, Nor Do They Care <ul><li>Donny Deutsch speaking to 500 Marketers… </li></ul><ul><li>“ We did a wonderful spot…on the Superbowl… for Mitsubishi Gallant...that stops at the end and [says] go to “” </li></ul><ul><li>We got about 600,000 clicks. </li></ul><ul><li>Was that great or that not great? </li></ul><ul><li>We told the client it was great, so it was great.” </li></ul><ul><li>[nervous laughter] </li></ul>Deutsch is the 14 largest agency in the US
  3. 3. Today’s Intent <ul><li>Review of the Research & Topline Insights </li></ul><ul><li>To What Degree Can Online Garner Branding Dollars? </li></ul><ul><li>Review of Best Practices For At Least Trying to Capture Brand Dollars </li></ul>
  4. 4. $1 Billion Ad Spending Researched 1.1 million consumers surveyed
  5. 5. What Did Learn From the Research? 36% Media Motivations Messaging
  6. 6. ING’s 4 Year Campaign <ul><li>Fresh Thinking </li></ul>
  7. 7. Today’s Ads for ING Simplifies a Complicated Financial World
  8. 8. More, What Do We Know? 36% 31% Media Motivations Messaging
  9. 9. How Big A Difference Can Creative Make? Source: IAB Cross Media Study B A
  10. 10. Creative Makes a BIG Difference Better creative can make the difference between success and absolute failure Ad A Source: IAB Cross Media Study
  11. 11. And Just to See It Again Source: IAB Cross Media Study B A
  12. 12. Yes, It’s That Bad, and Worse 36% 31% 83% Media Motivations Messaging
  13. 13. Why Were Marketers So Slow… When the Data is So Compelling? <ul><li>Online CPM was lowest in 50% of studies </li></ul><ul><li>Online “Cost Effectiveness” was lowest in changing brand metrics for 75% of studies </li></ul>
  14. 14. The Truth Is…Marketing is Hard <ul><li>Suppose you have 5 options: </li></ul><ul><li>5 Brand Positionings </li></ul><ul><li>5 Customer Segmentations </li></ul><ul><li>5 Ad Creative Approaches </li></ul><ul><li>5 Magazine Schedules/Plans </li></ul><ul><li>5 Online Plans </li></ul>3,125 combinations 10 to 10 th = 1 billion combinations
  15. 16. What Sticks was Written to Be… <ul><li>A Clarion Call* to Marketers </li></ul><ul><li>for Change </li></ul><ul><li>* A clarion call is a powerful request for action or an irresistible mandate. Frequently used in a religious context, or in a political context, in that a politician issues a challenge for action from the public. </li></ul>
  16. 17. But What If They Don’t Take the Call? Used with permission
  17. 18. What is Online Media’s Destiny for Getting Brand Dollars?
  18. 19. Let’s Examine One Model for Online Advertising Success <ul><li>What did they do right? </li></ul><ul><li>Focused on effectiveness! </li></ul>
  19. 20. What is That Worth to Google? <ul><li>$68 eCPM </li></ul><ul><li>$0.54 CPC x 17% click thru x 74% sell thru </li></ul><ul><li>Source: Jordan Rohan, Analyst at RBC </li></ul>
  20. 21. Some of What Google Figured Out (& the other Media still don’t get) <ul><li>Know thy Customer (‘s needs) </li></ul><ul><li>If Consumer Wins, So Does Media </li></ul><ul><li>Algorithms beat Humans </li></ul><ul><li>Effectiveness (& mostly cost effectiveness) matters </li></ul>
  21. 22. So Why Bother? 2 Data Points <ul><li>What Sticks research suggests that U.S. online would be at $40 to $50 billion , if there was rational decision-making </li></ul><ul><li>Another data point… </li></ul><ul><li>If Internet matched overall ad spending’s Brand vs. direct response mix, then U.S. Online Brand spending would be $12 billion </li></ul><ul><ul><ul><li>or 50% of the $25 billion (U.S.), </li></ul></ul></ul><ul><ul><ul><ul><li>And not the current paltry +/- $5 billion </li></ul></ul></ul></ul>
  22. 23. What Will Be Our Future? <ul><li> not a matter of chance, it is a matter of choice; it is not a thing to be waited for, it is a thing to be achieved </li></ul><ul><li>William Jennings Bryan (1860 - 1925) </li></ul><ul><li>US lawyer, orator, & politician </li></ul>
  23. 24. If Advertisers Don’t Take Responsibility, What Should We Do?
  24. 25. What Sticks 3 Step Action Plan Publishers & Ad Sellers <ul><li>Get Your Own House In Order </li></ul><ul><li>Help Them…Help Themselves </li></ul><ul><li>Package it Well </li></ul>
  25. 26. <ul><li>Can publishers impact brand effectiveness themselves? </li></ul>Own House in Order..
  26. 27. Stop Selling International Impressions to Domestic Advertisers <ul><li>International users comprise 15% to 30% of a site’s ad inventory </li></ul><ul><li>Removing International increases effectiveness by 18% to 43% </li></ul>
  27. 28. Respect Diminishing Returns It’s a Law of Physics in Media % of Brand Impact Awareness, Image or Purchase Intent 0 10 20 30 40 50 60 70 80 90 100 0 1 2 3 4 5 6 7 8 9 10 Frequency Diminishing returns 1 2 3 4 5
  28. 29. Heaviest Online Quintile Garners Half the Ad Imps Percent of Total Impressions Light Users All other quintiles Heavy Users Avg Freq: 1.0 2.1 3.2 5.5 25.0
  29. 30. One Solution: Website Frequency Caps Can Really Help Frequency of 3 Per Week per Site Dramatically Increases Reach & Thus Performance Light Users All other quintiles Heavy Users Increased reach by 72% +50% to 70% in Ad Effectiveness
  30. 31. Many Things can Affect Effectiveness (e.g., Time of Day) +10% to 15% in Ad Effective-ness Average If Marketer had focused impressions on the 6hours around lunch time, impact would have been significantly better % Purchase Intent Lunch
  31. 32. Results: Size Matters 1 Aggregated results for three brands tested 2 The average of four brand measures tested The 336x280 resulted in an average +54% increase in brand impact vs. 468 x 60 2 +20% to 54% in Ad Effective-ness IAB, DoubleClick Ad Effectiveness Research 2001 Banner Small Rectangle Small Skyscraper Large Rectangle
  32. 33. Improving Publisher Ad Effectiveness Insights from the What Sticks Research <ul><li>Low High </li></ul><ul><li>Cut out International impressions 18% to 43% </li></ul><ul><li>Manage Frequency 50% to 70% </li></ul><ul><li>Capitalize on Time of Day/DoW 10% to 15% </li></ul><ul><li>Ad Size matters 20% to 54% </li></ul><ul><li>Page Placement really matters 6% to 350% </li></ul><ul><li>Creative is “mission critical” 0% to 400% </li></ul><ul><li>Total Gain Possible: 0% 2910% </li></ul>+0% to INFINITY in Ad Effectiveness
  33. 34. Some Companies That Can Help <ul><li>Double Verify </li></ul><ul><li>AdGent007 </li></ul><ul><li>Vizu </li></ul><ul><li>Dynamic Logic </li></ul><ul><li>Insight Express </li></ul><ul><li>Anchor Intelligence </li></ul><ul><li>Ad Servers: </li></ul><ul><li>DoubleClick / Google </li></ul><ul><li>Atlas / Microsoft </li></ul>
  34. 35. <ul><li>There is so much that marketers don’t know and we could help them </li></ul>Help Them…
  35. 36. Of Course, Context Matters +~10 Pts
  36. 37. But Behavior Targeting Is Better <ul><li>Brand: Panasonic Plasma TV </li></ul><ul><li>Target: Interested in high-end Consumer Electronics </li></ul><ul><li>Performance: </li></ul><ul><li>+12.2 % pts, or +75% </li></ul><ul><ul><li>ROI on CPM = +192% </li></ul></ul>Purchase Intent
  37. 38. Next Generation Targeting <ul><li>But what if Cookies continue to go away? </li></ul><ul><ul><ul><li>Current estimate IS 50% cookies deleted monthly </li></ul></ul></ul><ul><li>Semantic targeting is likely next gen </li></ul><ul><ul><ul><li>Scans page and categorizes contextual potentials </li></ul></ul></ul><ul><ul><ul><ul><li>That is matched to consumer intent </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Weeds out negative places to advertise </li></ul></ul></ul></ul><ul><li>Waiting in the wings-DPI based targeting </li></ul><ul><ul><ul><li>Sits on the ISP “pipe” collecting insights on consumer interests </li></ul></ul></ul><ul><ul><ul><ul><li>DPI = Deep Packet Inspection technology </li></ul></ul></ul></ul>
  38. 39. Optimizing Each Campaign Is High Value Same Media Budget  310% Increase Source: InsightExpress
  39. 40. Optimizing Online Ad Inventory Yield is Becoming Critical Today <ul><li>Managing publisher inventory complexity is impossible on Excel: </li></ul><ul><li>Est. TV Ad Units Annually by Network: 220,000 </li></ul><ul><li>Est. Yahoo Ad Units Annually: 3,500,000,000,000 </li></ul><ul><li>Publisher Inventory Optimization tools are becoming critical: </li></ul><ul><ul><li>Manage / direct sales team performance </li></ul></ul><ul><ul><li>Predict ad inventory avails </li></ul></ul><ul><ul><li>Maximize yield and price to market demand </li></ul></ul><ul><ul><ul><li>Reported revenue increases of 10%-20% immediately </li></ul></ul></ul>
  40. 41. However, Biggest Gains Where In The Marketing Mix Introducing New Menu Item: Grilled Chicken Flatbread Sandwich Ad Frequency (or Budget) % Aided Awareness 20% of Broadcast Budget Reinvested 13.6% in Online Point of Diminished Returns 5pt Gain! Cut 6.4% TV & Radio 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 0.0%
  41. 42. <ul><li>Tacoda (AOL) </li></ul><ul><li>Revenue Science </li></ul><ul><li>Peer 39 </li></ul><ul><li>Rapt, Inc. (Microsoft) </li></ul><ul><li>Pubmatic </li></ul><ul><li>Media Geeks </li></ul><ul><li>Media6º </li></ul><ul><li>KindSight </li></ul><ul><li>Solbright </li></ul><ul><li>Networked Insights </li></ul><ul><li>Eyeblaster / Other RM </li></ul>Some Companies That Can Help
  42. 43. <ul><li> Brand Effectiveness Guarantee </li></ul><ul><li>Yahoo! Consumer Direct </li></ul>Package It Well
  43. 44. Brand Effectiveness Guarantee <ul><ul><li>Minimum of $150,000 campaign - Over 60 days </li></ul></ul><ul><ul><li>No statistically significant increase in brand metrics, advertiser gets their money back </li></ul></ul><ul><ul><ul><ul><li>Aided Awareness, Message Assoc, Brand Favorability, Purchase Consideration </li></ul></ul></ul></ul><ul><ul><li>Alternatively, Challenge </li></ul></ul><ul><ul><ul><ul><li>Guarantee ad dollars on work harder than WSJ </li></ul></ul></ul></ul>Increase Brand Ad Effectiveness, Or your money back!
  44. 45. Yahoo!’s Consumer Direct <ul><li>Maps Online Users/activity to their buying habits </li></ul><ul><ul><li>Using Nielsen Homescan (tracks all product buying) </li></ul></ul><ul><ul><li>50% - 80% probability Yahoo can match Online User activity to their brand preferences using algorithms </li></ul></ul><ul><ul><ul><li>Categories: CPG, Pharma, Retail, Finance </li></ul></ul></ul><ul><ul><li>Brands can: </li></ul></ul><ul><ul><ul><li>Buy ads against their loyal consumers </li></ul></ul></ul><ul><ul><ul><li>Buy ads against competitors’ users </li></ul></ul></ul><ul><li>Reportedly, sales lifts of +/- 20% </li></ul><ul><ul><li>ROI reported to be +100% to +300% </li></ul></ul><ul><li>Greatly increased Yahoo Ad share of market </li></ul>
  45. 46. In Summary, Unlike the Other Media, Online Has Many Effectiveness Levers <ul><li>Creative </li></ul><ul><ul><li>Message, Format, Tactics </li></ul></ul><ul><li>Targeting </li></ul><ul><ul><li>Audience, Content, Historical </li></ul></ul><ul><li>Message Management/Frequency Control </li></ul><ul><li>Pricing Arbitrage </li></ul><ul><li>Attentiveness / Intrusiveness </li></ul><ul><li>Optimization systems </li></ul><ul><li>… and more </li></ul>
  46. 47. So, Why Bother?
  47. 48. “ Most Important Launch In History Of Ford” - Bill Ford F150 Truck is #1 selling vehicle in U.S.
  48. 49. The F-150 Online Ads
  49. 50. How Big a Difference Can Little Changes Make? Roadblock 43% One Day Reach
  50. 51. Cost Effectiveness of Each Medium Cost to Increase Purchase Consideration Interpretation: If it cost Roadblock $1 (indexed at 100) to increase purchase consideration, then it cost $1.35 for Online, $4.56 for magazine and $11.04 to TV to achieve the same increase. $1.35 $1.00 $4.56 $11.04 Relative Cost 100 Roadblock 456 Magazine 1104 TV 135 Online Relative Cost Index Brand Metric: Purchase Consideration (top 2 box)
  51. 52. What’s the CPM for This!? <ul><li>Cost of Portal Home Page Take- Over ad in study: $500,000 </li></ul><ul><li>Cost of Portal Home Page Take-Over ad today: $2,500,000 </li></ul><ul><li>Priceless! </li></ul>Ford Media Mix * Traditional Media (TV, Magazines) * Approx. $200 Million Budget Equal to $750,000,000 in U.S. Truck sales Equal to +$1,350,000,000 in U.S. Truck sales
  52. 53. Ford Put It Best <ul><li>It isn't the incompetent who destroy an organization. It is those who have achieved something and want to rest upon their achievements who are forever clogging things up. </li></ul><ul><li>Charles Sorenson </li></ul><ul><li>Ford Motor Car </li></ul>
  53. 54. So What Is Your Destiny? <ul><li>I cannot say whether things will get better if we change; what I can say is they must change if they are to get better. </li></ul><ul><li>Georg Christoph Lichtenberg </li></ul><ul><li>18th-century German scientist, satirist and Anglophile </li></ul>
  54. 55. Greg Stuart +1.631.702.0682 New York City [email_address] Want a copy? email me. Thank You
  55. 56. If You Don’t Like The Way Things are NOW… <ul><li>&quot;Efficiency is doing things right; effectiveness is doing the right things.&quot; </li></ul><ul><li>Peter F Ducker </li></ul>