1. Digital
Media
Commercial
Reali1es
Presented
to
Entrepreneurial
Journalism
class
at
Melbourne
University,
Master
of
Journalism
8/10/2012
Sam
Granleese
Strategy
&
Insights
Manager
@
Carsales.com
Ltd
TwiKer
@granleese
..
www.samsmojo.com

2. Introduc1on
The
Market
The
Products
The
Opera1on
The
Ques1ons

3. The
Market

4. Two
Sided
Marketplace
Produc1on
Supply
Demand
Adver1ser
Media
Audience
Demand
Supply
ABen1on
Umair
Haque,
Havas
Media
Lab:
“Supply
coordinates
demand
on
both
sides
of
a
two-­‐sided
market
and
sets
equilibrium
prices.
Unlike
in
other
markets,
in
the
media
marketplace,
a=en>on
is
a
cri>cal
part
of
the
value
chain,
because
it
is
demanded
by
adver>sers
and
supplied
by
consumers.
On
the
other
side
of
the
two-­‐
side
market,
produc>on
is
demanded
by
consumers
and
supplied
(funded)
by
adver>sers.”

5. ‘Media
ABen1on’
in
Australia
Average
1me
spent
with
media
per
week
(Hours
&
Minutes)
21:54
15:30
09:48
05:24
04:12
03:30
02:12
Internet
via
desktop
Internet
via
tablet
Internet
via
mobile
Broadcast
TV
Radio
Newspaper
Magazine
Source:
Nielsen
2012
Australian
Online
Consumer
Report
Digital
channels
dominate
media
1me

6. Expenditure
of
the
total
online
adver1sing
market
Source:
IAB/PwC
Online
adverUsing
expenditure
report
FY2011-­‐12
$3.14
Billion
Market
FY12

7. Online
adver1sing
marketplace
by
type
Source:
IAB/PwC
Online
adverUsing
expenditure
report
FY2011-­‐12
Search
(Google)
dominates
online
adver1sing

8. Search
adver1sing
growth
per
year

9. Search
adver1sing
growth
per
year
Source:
IAB/PwC
Online
adverUsing
expenditure
report
FY2011-­‐12
Search
adver1sing
s1ll
has
highest
growth
of
digital
media
type

10. Classified
adver1sing
growth
per
year

11. Classified
adver1sing
per
year
Source:
IAB/PwC
Online
adverUsing
expenditure
report
FY2011-­‐12
Classified
market
maturing,
dominated
by
3
companies

12. Display
adver1sing
growth
per
year

13. Display
adver1sing
growth
per
year
Source:
IAB/PwC
Online
adverUsing
expenditure
report
FY2011-­‐12
General
adver1sing
s1ll
growing
at
higher
rate

14. Niche
Display
Adver1sing?
Ad
agencies
are
es1mated
to
make
up
over
83%
of
display
ad
revenue
in
2012.
This
is
how
it
breaks
down..
• $318
MM
(45%)
top
4
‘content
publishers’
(Nine,
Yahoo!7,
Fairfax,
News)
• $89
MM
(12%)
-­‐
Independent
publishers
represenUng
themselves
in
the
market
• $138
MM
(19%)
-­‐
Ad
networks
(represenUng
others
or
via
technology
exchanges)
• $169
MM
(36%)
–
Spend
on
other
(Social
media,
display
ads
on
classifieds,
video
adverUsing
Source:
Standard
Media
Index,
June
2012.
At
least
a
$271
MM
market
and
growing..

15. Evolu1on
of
online
niche
publica1ons
EvoluUon
from
periodicals
/
magazines
/
newspaper
columns
(opinion)
• Trade
sectors
sUll
have
a
future..
but
periodical
entrants
to
the
market
are
becoming
easier
as
exisUng
magazine
publishers
failed
to
keep
up
quality
content.
• Larger
groups,
such
as
ACP
and
Pacific
going
through
period
of
consolidaUon.
What
are
the
ver1cals
that
adver1sers
want
to
target
online?
Source:
IAB/PwC
Online
adverUsing
expenditure
report
FY2011-­‐12

16. The
Product

17. Revenue
Sources
Audiences
"pay"
for
content
in
the
following
ways:
• ABen1on
or
permission
(for
adverUsing)
• Delivery
or
"gefng
the
content"
(cover
charge,
subscripUon
fee).

18. ‘Media
ABen1on’
in
Australia
Media
Spend
v
Consump1on
(hours
per
week)
35
31.5
$3,63
Billion
$3.69
Billion
30
$2.61
Billion
25
20
15.0
15
10
3.4
5
0
Internet
Broadcast
TV
Newspapers
Ad
Spend
MM**
(LHS)
Hours
Spent
Per
Week*
(RHS)
*
Source:
Nielsen
2012
Australian
Online
Consumer
Report
(includes
Smartphone/Tablet).
**
PwC
media
and
entertainment
outlook
2011
-­‐2016
Online
has
poor
compara1ve
yield

19. A
third
of
media
in
Australia
is
priced
in
direct
response
Source:
IAB/PwC
Online
adverUsing
expenditure
report
FY2011-­‐12
CPM
=
Cost-­‐per-­‐thousand
ads
displayed.
Adver1ser
pays
for
tenancy
on
a
page.

20. A
third
of
media
in
Australia
is
priced
in
direct
response
USA
dominated
by
DR,
which
has
commodi1sed
adver1sing
inventory
and
driven
yield
down.

21. Standardised
adver1sing
sizes
–
language
defined
on
pixel
space
728x90
300x250
Commodity
Risk
vs
Prac1cality

22. Standardised
adver1sing
sizes
–
language
defined
on
pixel
space
728x90
300x600
(also
“skyscrapers”
which
are
120x600
or
160x600)
Commodity
Risk
vs
Prac1cality

23. Other
popular
ad
units
Bought
on
sponsorship
pricing,
but
evaluated
on
CPM
/
reach
/
frequency.
• Expanding
rich
media
(over
the
page,
push-­‐down)
• Background
skins
• Video
adverUsing
• ‘Integrated
adverUsing’
–
i.e.
Finance
calculators,
flight
booking
searches,
etc.

24. Non-­‐Standard
Products
• Special
Reports
/
Whitepapers
/
eBooks
• Custom
Research
• Syndicated
WriKen
/Video
content
• Branded
Content
• Email-­‐based
Short
Courses
• Events/Webinars/Webcasts
• Talent
/
Speaking
• Custom
branded
secUons
(‘secUon
made
possible
by’)
• Special
tools,
calculators,
research
or
buying
guides.
• Sponsor
posts
• CompeUUons/PromoUons
through
social
media

25. How
is
your
publica1on
relevant?
Does
publica1on
genuinely
fit
into
the
consumer
lifecycle
between
the
adver1ser
and
its
audience?

26. The
Opera1on

27. Pricing
1. Pricing
power:
Understand
supply/demand
of
your
niche
and
its
audience.
If
there
is
too
much
supply
of
compeUUon
you
will
have
no
pricing
power.
Price
/demand
is
very
elasUc.
2. Start
Simple:
Charge
different
rates
for
different
sized
ads,
and
add
premiums
to
more
valuable
placements,
but
keep
it
simple.
Build
in
margin
to
your
pricing
to
allow
you
to
offer
long-­‐term
booking
or
sponsorship
incenUves,
but
be
careful.
3. Guidelines
Rate
Range
(CPMs)
Goal
Yield
(CPM)
300x250/600s
$25-­‐$40
$15
728x90
$18-­‐$25
$10
Large
Formats
$50-­‐$100
$50
NewsleKer
300x250
$15-­‐$20
$10
Custom
execuUons
$2-­‐$10
per
person
$5
per
person

28. Pricing
(con1nued)
4. Sell-­‐through-­‐rates
Custom
products
are
where
most
niche
publicaUons
make
a
point
of
difference,
but
banner
ads
are
sUll
where
most
revenue
will
be
generated.
Your
break-­‐even
point
should
be
based
off
a
sell-­‐through-­‐rate
that
will
scale
up
as
your
audience
and
ad
inventory
levels
grow.
Good
rule
of
thumb
for
a
startup
niche
publicaUon:
Up
to
30,000
audience
50%
sell-­‐through
Up
to
200,000
audience
35%
sell-­‐through
>
200,000
audience
20%
sell-­‐through

29. Product
Mix
1. No
straight
rules.
Test
and
learn
approach:
Try
half
and
half
approach.
50%
banner
/
“ads
on
the
page”
adverUsing
50%
custom
products
(i.e.
webinars,
special
reports,
etc).
2. Pay
to
view
/
premium
subscrip1on
product:
What
can
you
offer
that
5%
-­‐
10%
of
your
audience
will
pay
for?
If
you
want
to
try
this
approach,
part
of
it
needs
to
be
in
place
when
you
launch
to
set
expecta>ons.
Price
to
access
becomes
part
of
the
media
brand
very
quickly.

30. Data
If
you
don’t
know:
• Demographics
(who?)
or
context
(where?)
• Internet
Usability
(what/where?)
• Permission
(reason
for
interacUon?)
• Content
point
of
difference
(why
do
they
visit
you?)
• Content
InteracUon
(how?)
Then
find
out
by:
• Sign
up
to
newsleKer
-­‐
on
homepages,
navigaUon,
via
markeUng,
events
,etc
• Run
surveys
or
research
through
your
databases
(i.e.
Survey
Monkey,
loyalty
program)
• Real
conversaUons
with
readers
(inc.
social
media)
• Pay
for
research
if
you
can’t
get
it
yourself
• Test
and
learn
(agile
approach).
Know
your
audience
beBer
than
your
adver1ser
does

31. Selling
Model
Scaled
representa1on
1. Employ
an
agency-­‐selling
ad
network
(usually
split
50-­‐50
up
to
30-­‐70
in
their
favour)
2. Sell
custom
products
yourself
(take
incoming
queries,
pitch
to
prospects,
form
content
sharing
partnerships,
etc.)
3.
Take
sales
in-­‐house,
employ
team:
• First
$600,000
annual
revenue
-­‐
1
x
Sales
Person
and
1
x
ad
operaUons
(tech)
• Add
salesperson
for
every
$600k
unUl
you
pass
$2-­‐$3
MM
revenue
• 1
x
ad
operaUons
required
per
$2
-­‐
$3
MM
revenue.
4. Form
working
relaUonships
with
main
adverUsing
clients.
Ad
agencies
are
fickle,
have
high-­‐staff
turnover.
5. Media
expenditure
is
very
seasonal
in
Australian
calendar
year,
parUcularly
with
certain
sectors
(B2B,
consumer
retail,
finance,
etc).

32. The
par1es
involved
in
online
adver1sing
CLIENT
• role:
guide
agencies
on
business
objecUves
and
arUculate
required
KPI’s
• goal:
increase
ROI
or
brand
metrics,
derive
best
possible
outcomes
from
digital
adverUsing
campaign

33. The
par1es
involved
in
online
adver1sing
CLIENT
MEDIA
AGENCY
• role:
develop
an
adverUsing
strategy
and
media
plan
• goal:
achieve
campaign
KPI’s
set
by
the
client
in
the
most
efficient
manner

34. The
par1es
involved
in
online
adver1sing
CLIENT
MEDIA
CREATIVE
AGENCY
• role:
develop
creaUve
to
achieve
client
KPI’s
• goal:
create
highly
effecUve
execuUons
on
Ume
and
within
budget

35. The
par1es
involved
in
online
adver1sing
CLIENT
MEDIA
CREATIVE
PUBLISHER
AGENCY
• role:
facilitate
the
delivery
of
successful
campaigns
• goal:
achieve
operaUonal
effecUveness
delivering
campaigns
on
Ume
and
to
specificaUon
execuUons

36. The
par1es
involved
in
online
adver1sing
CLIENT
MEDIA
CREATIVE
PUBLISHER
AD
SERVER
AGENCY
• role:
provide
the
playorm
that
assists
with
the
facilitaUon
of
campaign
execuUon
and
reporUng
analyUcs
• goal:
deliver
successful
campaign
execuUon
and
provide
campaign
analyUcs
for
media
agencies

37. The
par1es
involved
in
online
adver1sing
MEDIA
AGENCY
PUBLISHER
CLIENT
CREATIVE
AD
SERVER

38. The
par1es
involved
in
online
adver1sing
banner
ad
code
CREATIVE
MEDIA
AD
SERVER
PUBLISHER
AGENCY

39. Ques1ons

40. Thanks
8/10/2012
Sam
Granleese
Strategy
&
Insights
Manager
@
Carsales.com
Ltd
TwiKer
@granleese
..
www.samsmojo.com