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Introduction to Digital
     Advertising

  Introduction to Advertising

       October 10, 2011
Agenda

   01 Introduction
   02 Brief History of Digital Advertising
   03 Dissecting Digital Advertising
   04 The Future




                                             2
Introduction
My story…
The basics
• Grew up here in LA…
  – Proud graduate of Burbank High School
• Went to Harvard University for undergrad
  – Majored in Economics and really missed the West Coast
• Worked as a management consultant after school
• Got an MBA from Wharton in Marketing &
  Entrepreneurship
• I’ve lived in LA, Boston, Madrid, San Francisco,
  Philadelphia, and New York
I’ve always been a serial entrepreneur
• Started my first business in 6th grade

• Built custom PCs in junior high

• Started Sensis (as Focus Multimedia)
  the summer after graduating from
  college
I didn’t plan to get into advertising
• Was more a tech geek than creative guy

• I sort of stumbled into this business
My agency… Sensis
The Sensis story
Sensis overview
• 39 employees         Agency structure
• Offices:
  – Los Angeles, CA
  – Washington, DC
  – Mexico City, MX
clients
digital thinking
• Sensis was born as a Web
  development agency 13 years
  ago
• We have grown into a full-
  service agency the last 6
  years
• We build brands by making
  them live digitally
• Digital is central to all we do
right person + right moment + right message

                      = Precision

• All marketing should be measured
• All our work starts with projections,
  is measured by results, and
  optimized based on data
empathy for “users”
• We don’t look at an
  audience of “consumers”

• Because of technology,
  users have the real
  power

• Our role is to help our
  clients participate in the
  life experience of users
Brief history of digital advertising
Digital advertising




        Digital advertising refers to
        any advertising delivered
        through media connected to
        the Internet.
The birth of online advertising
• The first SPAM email was sent in 1978 when a DEC
  employee announced a new computer inviting
  everyone with an ARPANET address on the west
  coast to a reception)

• Computerized Bulletin Board System, the first BBS,
  launched in 1978

• The first commercial online services, CompuServe
  and the Source, were founded in 1979
The first online (service) ads




The IBM and Sears-run dial-up service Prodigy ran banner ad-
like ads as early as the mid-80’s
The birth of online advertising, cont.
• NCSA Mosaic released in 1993, leading to the rise of the
  graphic, commercial Web
• Netscape Mozilla becomes the first commercial Web
  browser in 1994
• October 25, 1994: the first banner ad runs on HotWired
• The IAB’s Ad Sizes Task Force releases the first real ad
  standards in 2003
• March 13, 2006: Rocketboom runs the first video ad
1994: a banner year
1996: Web advertising gets interactive
Dissecting digital advertising
In 2011, what’s the best way to
  think about and categorize
      digital advertising?
POEM

  Earned Media




                        Paid Media



Owned Media



                                     26
POEM Defined
Media Type     Definition                       Examples
Owned Media    Channel a company owns.       •    Retail store
                                             •    Website
               Company owns the impressions. •    Mobile site
                                             •    Blog
                                             •    Facebook page
Paid Media     A channel a company pays to      • :30 sec TV spot
               leverage.                          running on Super Bowl
                                                • Web banner ads
               Impressions you pay for.         • Paid Search
Earned Media   When customer, influencers, or   • Newspaper article
               the media become the channel.      mention
                                                • Word of mouth
               Impressions not paid for.        • Buzz
                                                • “Viral” activity
Paid Digital Media
Generic Online Ad Spending
                          Search

                          Portals

                      Top Publishers

                    Specialty Websites

                         Networks
                         Social Media,
                        Widgets, Mobile,
                         Virtual Worlds
Paid Search
• Ads that appear contextually via
  search queries on the main search
  engines
• Pay per click (PPC)
  – Reverse-auction system - the higher
    you bid, the higher your ad will likely
    appear
  – Relevance is also key

• Text only ads
  – Ad titles are limited to 25 characters
  – The two description lines limited to 35
    characters and a display URL
Banner Ad - Overview

Sizes                Formats



Pricing
Banner Sizes




Source: Interactive Advertising Bureau (www.iab.net)
Pricing
                                                              High
                                                  Branding   Quality
CPM – cost per thousand impressions
  – 100,000 impressions @ $10 CPM = $1,000

CPC – cost per click
  – 200 clicks @ $5 CPC = $1,000

CPL – cost per lead
  – 25 leads @ $40 CPL = $1,000

CPA – cost per acquisition
                                                   Direct     Low
  – 10 sales @ $100 CPA = $1,000
                                                  Response   Quality




                                             33
Banner formats - Display
• Static or animated
• Effective for both direct response and branding
Banner formats - Rich Media
• Overlays, expandable
  banners, streamed
  video
• Sophisticated online
  advertising
• Aims to entertain
  and engage user
Banner formats - Text Display
• Contextual social
  – Facebook, YouTube,
    LinkedIn ads


• Contextual mobile app
  ads
  – AdMob


                                     36
Online Video
• Pre-rolls
   – Ads appear before the content
   – Best-performing

• Mid-rolls
   – Ads appear during the content
   – Many marketers are wary of the “interruption
     factor”

• Post-rolls
   – Ads appear after the content
   – Post-roll often only performs at a 40% level
     compared to the pre-roll



                                                    37
Email

Newsletters
  – Like banner ads
    on an email
    newsletter
Email

Email Blasts
  – Email that
    only contains
    your ad.
Email Metrics
• Bounce Rate (Delivery Rate)
  – How many emails actually went to someone
• Open Rate
  – How many emails were opened by the recipient
  – Clicks / Impressions
• Click Rate
  – How many clicks on links in the email
• Forward Rate
  – How many people forwarded the email to friends
• Unsubscribe Rate
Offline Digital
• Digital Out-of-Home
  – Display creative (banners)
    would be leveraged across
    DOOH platforms
• Digital Billboards
• Digital Display
  – Coffee shops, supermarket
    check-outs, gas stations
• In-store Video Advertising
  – In-Store, Closed-Circuit
    Television (Walmart TV,
    Home Depot)
Offline/Online Integration
• Incorporating digital into traditional “offline”
  media
  – Integrate “Text for more info” call to action
    • Radio
       – Traffic updates
  – Events
    • Text, QR codes
  – Retail Activations
    • QR Codes
Ad Serving & Targeting
• Ad servers
  –   Place ads on websites
  –   Count impression/click/leads
  –   Enable targeting
  –   DART (DoubleClick), Atlas, 24/7 OAS, etc.
• Geotargeting
  – Where will your ads be seen?
  – Country, state, DMA, area code, zip code, etc.
• Other targeting
  – Daypart, browser, bandwidth
Metrics and Measurement
• Impressions & Clicks
• CTR – click-thru rate
  – How many of my ads got clicks?
  – Clicks / Impressions
• eCPC – effective cost per click
  – How much did each click cost me?
  – (Impressions x CPM) / Clicks
• eCPL – effective cost per lead
  – How much did each lead cost me?
  – (Impressions x CPM) / Leads
Earned Media
Social Media

               Social media
               has created a
               new form of
               technology-
               empowered
               guerrilla
               marketing
Word of Mouth
• The act of consumers providing information to other
  consumers.

• Word of Mouth Marketing:
  – Giving people a reason to talk about your products and
    services, and making it easier for that conversation to take
    place.
  – The art and science of building active, mutually beneficial
    consumer-to-consumer and consumer-to-marketer
    communications.
Types of WOM Marketing
• Buzz Marketing: Using high-profile
  entertainment or news to get people to talk
  about your brand.

• Viral Marketing: Creating entertaining or
  informative messages that are designed to
  be passed along in an exponential fashion

• Community Marketing: Forming or
  supporting niche communities that are
  likely to share interests about the brand
  (such as user groups, fan clubs, and
  discussion forums)
Types of WOM Marketing (cont)
•   Evangelist Marketing: Cultivating
    evangelists, advocates, or volunteers who
    are encouraged to take a leadership role in
    actively spreading the word on your behalf.

•   Product Seeding: Placing the right product
    into the right hands at the right time,
    providing information or samples to
    influential individuals.

•   Influencer Marketing: Identifying key
    communities and opinion leaders who are
    likely to talk about products and have the
    ability to influence the opinions of others
Types of WOM Marketing (cont)
• Conversation Creation: Interesting or fun
  advertising, emails, catch phrases, entertainment,
  or promotions designed to start word of mouth
  activity.

• Brand Blogging: Creating blogs and
  participating in the blogosphere, in the spirit of
  open, transparent communications; sharing
  information of value that the blog community
  may talk about.

• Referral Programs: Creating tools that enable
  satisfied customers to refer their friends.
Search Engine Optimization (SEO)
• Improving the volume and quality of traffic to a
  web site from search engines via "organic"
  search results for targeted keywords.

• The higher a web site ranks, the greater the
  chance that it will be visited by users.

• Search engines generate nearly 90% of all
  Internet traffic.

• SEO is a long-term strategy.

• Highest ROI of all marketing tactics.


                                                     51
Owned Media
Websites
Corporate Websites                  Microsites / Landing Pages
• Home of brand messaging -         • Single-message or –purpose
  the principal piece of customer     Web destinations
  interaction architecture          • Usually used to drive direct
• Users will quickly assess their     response (landing pages)
  opinions of brands &
  companies based upon their
  interaction with their Websites
Corporate Websites
Microsites & Landing Pages
Mobile
Mobile Apps                    Mobile Websites
• Games, lifestyle tools       • Mobile versions of a Website
• Opportunity for branded      • Mobile-optimized Websites
  applications
Social Media (again)
•   Facebook pages
•   Twitter feeds
•   YouTube channels
•   Yelp profiles
Facebook

           Company
           pages
Twitter
Social
Facebook     gaming
New stuff
Social Buying /
     Deals
In-game
Advertising



              Form of
              branded
              entertainment
The future of digital advertising
The digital future
All advertising
will be digital

Billboards are going digital. Cable TV is incorporating digital-
like targeting capabilities. TV ads look like banners…
Advertising
agencies will
adapt or die.
Traditional and digital advertising agencies will converge. Those
that don’t will disappear…
How advertising will change
Brands &
branding
won’t change
The idea of brands and branding aren’t really going to change.
How we go about building them is and will continue to do so…
Digital will be at the center
“[Digital] is the centerpiece of a broader campaign.
I think that’s become a real integral part of how we
use the web, moving beyond just promoting web
addresses in TV spots or print ads to really making
them a critical part of the storytelling for the
brands.”

Rob Master
Media Director, North America
Unilever
Shift from
“consumers” to
“users”

Advertising will become about creating experiences,
engagement and utility,
Content is the new
currency.

Engaging content =
social currency
People, and brands, will pay for great content
Content is the new currency
“The agency’s job is to create content so valuable
and useful that consumers wouldn't want to live
without it.”


Jeff Hicks
CEO
Crispin Porter + Bogusky
The next wave of industry
mega-growth will come
from the advancement
of the classic art of
storytelling
Context creates auras and aspirations that help drive marketer
interests.
Stories around brands, products
It's not just a race to get to the highest number of
fans. It's a race to figure out how to be the most
engaging storyteller with your fans."


Carolyn Everson
VP, Global Marketing Solutions
Facebook
In the future, digital ads will
be highly personalized. They'll
appear on mobile devices in
sophisticated ways. If you
want to share an ad with
friends, you can, and if you
want to skip it, well, go right
ahead.
Preparing yourself
Marketing jobs of the future
Roles that didn’t exist 5 years ago:

• User Experience Designer
• Online Community Manager
• Creative Technologist
My humble advice to future “Ad Men”
• The planner of the future
  – Take an anthropology course


• The creative of the future
  – Take a computer science course


• The media buyer of the future
  – Take a statistics course
Thank you.
Jose Villa
                              @jrvilla
President
Sensis                        www.linkedin.com/in/josevilla
T: (213) 341-0171             www.thinkmulticultural.com
E: jrvilla@sensisagency.com
                              www.sensisbureau.com

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Introduction to Digital Advertising

  • 1. Introduction to Digital Advertising Introduction to Advertising October 10, 2011
  • 2. Agenda 01 Introduction 02 Brief History of Digital Advertising 03 Dissecting Digital Advertising 04 The Future 2
  • 5. The basics • Grew up here in LA… – Proud graduate of Burbank High School • Went to Harvard University for undergrad – Majored in Economics and really missed the West Coast • Worked as a management consultant after school • Got an MBA from Wharton in Marketing & Entrepreneurship • I’ve lived in LA, Boston, Madrid, San Francisco, Philadelphia, and New York
  • 6. I’ve always been a serial entrepreneur • Started my first business in 6th grade • Built custom PCs in junior high • Started Sensis (as Focus Multimedia) the summer after graduating from college
  • 7. I didn’t plan to get into advertising • Was more a tech geek than creative guy • I sort of stumbled into this business
  • 10. Sensis overview • 39 employees Agency structure • Offices: – Los Angeles, CA – Washington, DC – Mexico City, MX
  • 12. digital thinking • Sensis was born as a Web development agency 13 years ago • We have grown into a full- service agency the last 6 years • We build brands by making them live digitally • Digital is central to all we do
  • 13. right person + right moment + right message = Precision • All marketing should be measured • All our work starts with projections, is measured by results, and optimized based on data
  • 14. empathy for “users” • We don’t look at an audience of “consumers” • Because of technology, users have the real power • Our role is to help our clients participate in the life experience of users
  • 15. Brief history of digital advertising
  • 16. Digital advertising Digital advertising refers to any advertising delivered through media connected to the Internet.
  • 17. The birth of online advertising • The first SPAM email was sent in 1978 when a DEC employee announced a new computer inviting everyone with an ARPANET address on the west coast to a reception) • Computerized Bulletin Board System, the first BBS, launched in 1978 • The first commercial online services, CompuServe and the Source, were founded in 1979
  • 18. The first online (service) ads The IBM and Sears-run dial-up service Prodigy ran banner ad- like ads as early as the mid-80’s
  • 19. The birth of online advertising, cont. • NCSA Mosaic released in 1993, leading to the rise of the graphic, commercial Web • Netscape Mozilla becomes the first commercial Web browser in 1994 • October 25, 1994: the first banner ad runs on HotWired • The IAB’s Ad Sizes Task Force releases the first real ad standards in 2003 • March 13, 2006: Rocketboom runs the first video ad
  • 21. 1996: Web advertising gets interactive
  • 23. In 2011, what’s the best way to think about and categorize digital advertising?
  • 24. POEM Earned Media Paid Media Owned Media 26
  • 25. POEM Defined Media Type Definition Examples Owned Media Channel a company owns. • Retail store • Website Company owns the impressions. • Mobile site • Blog • Facebook page Paid Media A channel a company pays to • :30 sec TV spot leverage. running on Super Bowl • Web banner ads Impressions you pay for. • Paid Search Earned Media When customer, influencers, or • Newspaper article the media become the channel. mention • Word of mouth Impressions not paid for. • Buzz • “Viral” activity
  • 27. Generic Online Ad Spending Search Portals Top Publishers Specialty Websites Networks Social Media, Widgets, Mobile, Virtual Worlds
  • 28. Paid Search • Ads that appear contextually via search queries on the main search engines • Pay per click (PPC) – Reverse-auction system - the higher you bid, the higher your ad will likely appear – Relevance is also key • Text only ads – Ad titles are limited to 25 characters – The two description lines limited to 35 characters and a display URL
  • 29. Banner Ad - Overview Sizes Formats Pricing
  • 30. Banner Sizes Source: Interactive Advertising Bureau (www.iab.net)
  • 31. Pricing High Branding Quality CPM – cost per thousand impressions – 100,000 impressions @ $10 CPM = $1,000 CPC – cost per click – 200 clicks @ $5 CPC = $1,000 CPL – cost per lead – 25 leads @ $40 CPL = $1,000 CPA – cost per acquisition Direct Low – 10 sales @ $100 CPA = $1,000 Response Quality 33
  • 32. Banner formats - Display • Static or animated • Effective for both direct response and branding
  • 33. Banner formats - Rich Media • Overlays, expandable banners, streamed video • Sophisticated online advertising • Aims to entertain and engage user
  • 34. Banner formats - Text Display • Contextual social – Facebook, YouTube, LinkedIn ads • Contextual mobile app ads – AdMob 36
  • 35. Online Video • Pre-rolls – Ads appear before the content – Best-performing • Mid-rolls – Ads appear during the content – Many marketers are wary of the “interruption factor” • Post-rolls – Ads appear after the content – Post-roll often only performs at a 40% level compared to the pre-roll 37
  • 36. Email Newsletters – Like banner ads on an email newsletter
  • 37. Email Email Blasts – Email that only contains your ad.
  • 38. Email Metrics • Bounce Rate (Delivery Rate) – How many emails actually went to someone • Open Rate – How many emails were opened by the recipient – Clicks / Impressions • Click Rate – How many clicks on links in the email • Forward Rate – How many people forwarded the email to friends • Unsubscribe Rate
  • 39. Offline Digital • Digital Out-of-Home – Display creative (banners) would be leveraged across DOOH platforms • Digital Billboards • Digital Display – Coffee shops, supermarket check-outs, gas stations • In-store Video Advertising – In-Store, Closed-Circuit Television (Walmart TV, Home Depot)
  • 40. Offline/Online Integration • Incorporating digital into traditional “offline” media – Integrate “Text for more info” call to action • Radio – Traffic updates – Events • Text, QR codes – Retail Activations • QR Codes
  • 41. Ad Serving & Targeting • Ad servers – Place ads on websites – Count impression/click/leads – Enable targeting – DART (DoubleClick), Atlas, 24/7 OAS, etc. • Geotargeting – Where will your ads be seen? – Country, state, DMA, area code, zip code, etc. • Other targeting – Daypart, browser, bandwidth
  • 42. Metrics and Measurement • Impressions & Clicks • CTR – click-thru rate – How many of my ads got clicks? – Clicks / Impressions • eCPC – effective cost per click – How much did each click cost me? – (Impressions x CPM) / Clicks • eCPL – effective cost per lead – How much did each lead cost me? – (Impressions x CPM) / Leads
  • 44. Social Media Social media has created a new form of technology- empowered guerrilla marketing
  • 45. Word of Mouth • The act of consumers providing information to other consumers. • Word of Mouth Marketing: – Giving people a reason to talk about your products and services, and making it easier for that conversation to take place. – The art and science of building active, mutually beneficial consumer-to-consumer and consumer-to-marketer communications.
  • 46. Types of WOM Marketing • Buzz Marketing: Using high-profile entertainment or news to get people to talk about your brand. • Viral Marketing: Creating entertaining or informative messages that are designed to be passed along in an exponential fashion • Community Marketing: Forming or supporting niche communities that are likely to share interests about the brand (such as user groups, fan clubs, and discussion forums)
  • 47. Types of WOM Marketing (cont) • Evangelist Marketing: Cultivating evangelists, advocates, or volunteers who are encouraged to take a leadership role in actively spreading the word on your behalf. • Product Seeding: Placing the right product into the right hands at the right time, providing information or samples to influential individuals. • Influencer Marketing: Identifying key communities and opinion leaders who are likely to talk about products and have the ability to influence the opinions of others
  • 48. Types of WOM Marketing (cont) • Conversation Creation: Interesting or fun advertising, emails, catch phrases, entertainment, or promotions designed to start word of mouth activity. • Brand Blogging: Creating blogs and participating in the blogosphere, in the spirit of open, transparent communications; sharing information of value that the blog community may talk about. • Referral Programs: Creating tools that enable satisfied customers to refer their friends.
  • 49. Search Engine Optimization (SEO) • Improving the volume and quality of traffic to a web site from search engines via "organic" search results for targeted keywords. • The higher a web site ranks, the greater the chance that it will be visited by users. • Search engines generate nearly 90% of all Internet traffic. • SEO is a long-term strategy. • Highest ROI of all marketing tactics. 51
  • 51. Websites Corporate Websites Microsites / Landing Pages • Home of brand messaging - • Single-message or –purpose the principal piece of customer Web destinations interaction architecture • Usually used to drive direct • Users will quickly assess their response (landing pages) opinions of brands & companies based upon their interaction with their Websites
  • 54. Mobile Mobile Apps Mobile Websites • Games, lifestyle tools • Mobile versions of a Website • Opportunity for branded • Mobile-optimized Websites applications
  • 55. Social Media (again) • Facebook pages • Twitter feeds • YouTube channels • Yelp profiles
  • 56. Facebook Company pages
  • 58. Social Facebook gaming
  • 61. In-game Advertising Form of branded entertainment
  • 62. The future of digital advertising
  • 64. All advertising will be digital Billboards are going digital. Cable TV is incorporating digital- like targeting capabilities. TV ads look like banners…
  • 65. Advertising agencies will adapt or die. Traditional and digital advertising agencies will converge. Those that don’t will disappear…
  • 67. Brands & branding won’t change The idea of brands and branding aren’t really going to change. How we go about building them is and will continue to do so…
  • 68. Digital will be at the center “[Digital] is the centerpiece of a broader campaign. I think that’s become a real integral part of how we use the web, moving beyond just promoting web addresses in TV spots or print ads to really making them a critical part of the storytelling for the brands.” Rob Master Media Director, North America Unilever
  • 69. Shift from “consumers” to “users” Advertising will become about creating experiences, engagement and utility,
  • 70. Content is the new currency. Engaging content = social currency People, and brands, will pay for great content
  • 71. Content is the new currency “The agency’s job is to create content so valuable and useful that consumers wouldn't want to live without it.” Jeff Hicks CEO Crispin Porter + Bogusky
  • 72. The next wave of industry mega-growth will come from the advancement of the classic art of storytelling Context creates auras and aspirations that help drive marketer interests.
  • 73. Stories around brands, products It's not just a race to get to the highest number of fans. It's a race to figure out how to be the most engaging storyteller with your fans." Carolyn Everson VP, Global Marketing Solutions Facebook
  • 74. In the future, digital ads will be highly personalized. They'll appear on mobile devices in sophisticated ways. If you want to share an ad with friends, you can, and if you want to skip it, well, go right ahead.
  • 76. Marketing jobs of the future Roles that didn’t exist 5 years ago: • User Experience Designer • Online Community Manager • Creative Technologist
  • 77. My humble advice to future “Ad Men” • The planner of the future – Take an anthropology course • The creative of the future – Take a computer science course • The media buyer of the future – Take a statistics course
  • 78. Thank you. Jose Villa @jrvilla President Sensis www.linkedin.com/in/josevilla T: (213) 341-0171 www.thinkmulticultural.com E: jrvilla@sensisagency.com www.sensisbureau.com