This document summarizes key points from a lecture on selling advertising. It discusses the differences between traditional and digital advertising, how the online advertising market has grown significantly in recent decades, and the major advertising formats including search, display, mobile and video. It also covers targeting techniques, pricing models like cost per click and cost per acquisition, common ad sizes, and ethical issues around advertising.

1. 6 — Selling Advertising
From Code to Product
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2. Million Dollar Homepage
From Code to Product Lecture 6 — Selling Advertising— Slide 2 gidgreen.com/course

3. Aversion therapy
From Code to Product Lecture 6 — Selling Advertising— Slide 3 gidgreen.com/course

4. Tempted?
From Code to Product Lecture 6 — Selling Advertising— Slide 4 gidgreen.com/course

5. Lecture 6
• Introduction
• Types of targeting
• Price models
• Ad formats
• Ethical issues
• Web Sudoku
From Code to Product Lecture 6 — Selling Advertising— Slide 5 gidgreen.com/course

6. Traditional advertising
• Mass media
– Newspapers, magazines, TV, radio, outdoor
– Local or national, not global
• Big one-time purchase
• One message to all recipients
– No filtering or personalization
• Success measured indirectly
– Did sales increase this month?
From Code to Product Lecture 6 — Selling Advertising— Slide 6 gidgreen.com/course

7. Digital advertising
• Digital media
– Web, mobile, email, desktop
– Global in scope
• Pay as you go, small increments
• Messages targeted by recipient
– Filtering, personalization
• Success measured directly
– Views, clicks, actions
From Code to Product Lecture 6 — Selling Advertising— Slide 7 gidgreen.com/course

8. Underlining the difference
“Half the money I spend on advertising is
wasted; the trouble is I don't know which
half.”
— John Wanamaker, store owner
“Ninety-nine percent of advertising doesn't
sell much of anything..”
— David Ogilvy, advertising executive
From Code to Product Lecture 6 — Selling Advertising— Slide 8 gidgreen.com/course

9. US ad spending (+projected)
From Code to Product Lecture 6 — Selling Advertising— Slide 9 gidgreen.com/course
0
$10B
$20B
$30B
$40B
$50B
$60B
$70B
1996 2001 2006 2011 2016
Web
Mobile
(world totals approximately double)

10. Media and advertising
From Code to Product Lecture 6 — Selling Advertising— Slide 10 gidgreen.com/course

11. Online ad breakdown
From Code to Product Lecture 6 — Selling Advertising— Slide 11 gidgreen.com/course
• Search has remained the leading format since 2006, having strong sequential growth
through the period depicted. After losing some of its overall share in 2010 to
Display/Banners, Search increased its market share in the first half of 2011 to 49% of
advertising revenues.
• The past six years have seen Classified advertising losing more than half of its market
share of revenues, with sharp declines over the past five years. Classified revenues
stabilized in 2010 but have declined in 2011, with a market share of 8%, down from the
18% of advertising revenues the format commanded in 2006.
Advertising format share (% of total revenue)*
60%
2006 2007 2008 2009 2010 HY 2011
* Format definitions may have changed over the time period depicted, both within the survey process and
definitionally by survey respondents.
0%
10%
20%
30%
40%
50%
Search Display/
Banners
Classifieds Rich Media &
Digital Video
Lead
Generation
Sponsorships
2006 2007 2008 2009 2010 HY 2011
IABInternetAdvertisingRevenueReport,Sept2011

12. How it works
• Direct sales
– Hard to find advertisers
– Transaction cost vs volume
• Ad networks
– Aggregate 1000s of publishers + advertisers
– Copy-paste code snippet
– Take 20%—50% of revenue
• Big sites use both
From Code to Product Lecture 6 — Selling Advertising— Slide 12 gidgreen.com/course

13. Top US online ad networks
From Code to Product Lecture 6 — Selling Advertising— Slide 13 gidgreen.com/course

14. Top US mobile ad networks
AdMob
(Google)
24%
iAd (Apple)
15%
Millennial
Media
17%
Other
44%
From Code to Product Lecture 6 — Selling Advertising— Slide 14 gidgreen.com/course
2011 figures
from IDC

15. Lecture 6
• Introduction
• Types of targeting
• Price models
• Ad formats
• Ethical issues
• Web Sudoku
From Code to Product Lecture 6 — Selling Advertising— Slide 15 gidgreen.com/course

16. Geography
From Code to Product Lecture 6 — Selling Advertising— Slide 16 gidgreen.com/course

17. Demographics
From Code to Product Lecture 6 — Selling Advertising— Slide 17 gidgreen.com/course

18. Traffic source
From Code to Product Lecture 6 — Selling Advertising— Slide 18 gidgreen.com/course

19. Contextual
From Code to Product Lecture 6 — Selling Advertising— Slide 19 gidgreen.com/course

20. Contextual
From Code to Product Lecture 6 — Selling Advertising— Slide 20 gidgreen.com/course

21. Behavioral
From Code to Product Lecture 6 — Selling Advertising— Slide 21 gidgreen.com/course

22. Behavioral
From Code to Product Lecture 6 — Selling Advertising— Slide 22 gidgreen.com/course

23. Affiliate advertising
From Code to Product Lecture 6 — Selling Advertising— Slide 23 gidgreen.com/course
• Direct sales
– But no
transaction
costs
• Payment on
sale only
– Open to all

24. Affiliate advertising
From Code to Product Lecture 6 — Selling Advertising— Slide 24 gidgreen.com/course

25. Real-time bidding (RTB)
• Most online ads bought in advance
– Volumes and targeting predefined
• RTB ads bought in real-time
– User visits page with RTB ad
– Impression auctioned to buyers
– Highest bid wins
• Works like an ad network
• 10% of display ads, projected 27% in 2015
From Code to Product Lecture 6 — Selling Advertising— Slide 25 gidgreen.com/course

26. Lecture 6
• Introduction
• Types of targeting
• Price models
• Ad formats
• Ethical issues
• Web Sudoku
From Code to Product Lecture 6 — Selling Advertising— Slide 26 gidgreen.com/course

27. Fixed price
• Predefine:
– Where ads will show
– Proportion of time
– Time period (week/month)
• Direct sales only
• No tracking required
– Advertiser can monitor performance
• Money left on table?
From Code to Product Lecture 6 — Selling Advertising— Slide 27 gidgreen.com/course

28. Cost per impression
• Priced in CPM = cost per mille (1000)
• Advertiser sets:
– CPM rate
– “Above the fold”?
– Limits per day, per user
• Popular for display advertising
– Viewing ad builds brand recognition
• Impression tracking
From Code to Product Lecture 6 — Selling Advertising— Slide 28 gidgreen.com/course

29. Pay per click
• Priced in CPC = cost per click
• Advertiser more flexible
– Click = user intent
• Popular for search advertising
– Auction between advertisers
• Impression and click tracking
– CTR = click-through rate
From Code to Product Lecture 6 — Selling Advertising— Slide 29 gidgreen.com/course

30. Pay per action
• Priced in CPA = cost per action (sale)
• Suits advertiser perfectly
– Only pay if you get paid
• Popular for affiliate advertising
– Any publisher will do
• Impression, click and conversion tracking
– CR = conversion rate
– Publisher forced to trust advertiser
From Code to Product Lecture 6 — Selling Advertising— Slide 30 gidgreen.com/course

31. Total revenue
Revenue =
Fixed price
Impressions × CPM/1000
Impressions × CTR × CPC
Impressions × CTR × CR × CPA
From Code to Product Lecture 6 — Selling Advertising— Slide 31 gidgreen.com/course

32. Total revenue
Revenue =
$1,000
500k × $2/1000
500k × 2.5% × $0.08
500k × 2.5% × 2% × $4
From Code to Product Lecture 6 — Selling Advertising— Slide 32 gidgreen.com/course

33. Defaults and thresholds
• Defaults
– What to show if there’s no ad
• eCPM = equivalent CPM
– All you really care about
• Threshold
– Minimum required eCPM
• Fill rate
• Check the definitions!
From Code to Product Lecture 6 — Selling Advertising— Slide 33 gidgreen.com/course

34. Ad network example
From Code to Product Lecture 6 — Selling Advertising— Slide 34 gidgreen.com/course

35. AdSense example
From Code to Product Lecture 6 — Selling Advertising— Slide 35 gidgreen.com/course

36. Real-world eCPMs
Type of site Example 300x250 eCPM
Forum $0.25
Gaming $1.50
Fashion $4.00
Real estate $8.00
Local newspaper $10.00
Technology $15.00
Travel $20.00
Investments $40.00
From Code to Product Lecture 6 — Selling Advertising— Slide 36 gidgreen.com/course

37. Lecture 6
• Introduction
• Types of targeting
• Price models
• Ad formats
• Ethical issues
• Web Sudoku
From Code to Product Lecture 6 — Selling Advertising— Slide 37 gidgreen.com/course

38. Online banner sizes (IAB)
From Code to Product Lecture 6 — Selling Advertising— Slide 38 gidgreen.com/course
Medium rectangle
300 x 250
Full banner
468 x 60
Leaderboard
728 x 90
Wide
sky-
scraper
160 x 600

39. Banner ad code
<!-- Casale Media: 336x280, 300x250 (Rectangle) -->
<script type="text/javascript">
var CasaleArgs = new Object();
CasaleArgs.version = 2;
CasaleArgs.adUnits = "6,4";
CasaleArgs.casaleID = 76546;
</script>
<script type="text/javascript" src="http://
js.casalemedia.com/casaleJTag.js"></script>
<!-- DO NOT MODIFY -->
From Code to Product Lecture 6 — Selling Advertising— Slide 39 gidgreen.com/course

40. Size vs CTR (AdSense)
From Code to Product Lecture 6 — Selling Advertising— Slide 40 gidgreen.com/course
Click-throughrate
Banner area

41. Interstitials
From Code to Product Lecture 6 — Selling Advertising— Slide 41 gidgreen.com/course

42. Pop-up ads
From Code to Product Lecture 6 — Selling Advertising— Slide 42 gidgreen.com/course
• Hated by
users
• Pop-up
blockers
common
• Also:
pop-
under

43. Other online formats
• Floating ads
• Mouseover ads
– Expanding
– Audio
• In-video
– Pre, mid, post-roll
• In-map
• Advertorials
From Code to Product Lecture 6 — Selling Advertising— Slide 43 gidgreen.com/course

44. In-app ad formats
From Code to Product Lecture 6 — Selling Advertising— Slide 44 gidgreen.com/course
Mobile banner
320 (or 300) x 50
Full screen (or almost)
320 x 480 (or 440)

45. In-app state of play
• Many other ad sizes
– 320x250, 320x320, 320x350, …
• Landscape getting started
– 480x50, 480x60, 480x70, …
• iPad/tablets to use web ad sizes?
– 728x90, 300x250
• Retina display scales x2
From Code to Product Lecture 6 — Selling Advertising— Slide 45 gidgreen.com/course

46. Ads in email
From Code to Product Lecture 6 — Selling Advertising— Slide 46 gidgreen.com/course
• Past: text
• Now:
images
– Not always
displayed
• Direct sales
• Some small
networks

47. Lecture 6
• Introduction
• Types of targeting
• Price models
• Ad formats
• Ethical issues
• Web Sudoku
From Code to Product Lecture 6 — Selling Advertising— Slide 47 gidgreen.com/course

48. Core problems
• Ceding control of user experience
– Weakens brand/message
– Bad ads and bad sites
• Users don’t like ads
– Can harm word of mouth
• An effective ad is clicked
– User gone elsewhere
– To competitor?
From Code to Product Lecture 6 — Selling Advertising— Slide 48 gidgreen.com/course

49. Privacy and cookies
• Ad networks and cookies
– Track users within sites
– Worse: across sites
– Enables behavioral targeting
• User’s identity not revealed
– But: IP address
– Google searches
From Code to Product Lecture 6 — Selling Advertising— Slide 49 gidgreen.com/course

50. Bad ads: Ugly
From Code to Product Lecture 6 — Selling Advertising— Slide 50 gidgreen.com/course

51. Bad ads: Offensive
From Code to Product Lecture 6 — Selling Advertising— Slide 51 gidgreen.com/course

52. Bad ads: Misleading
From Code to Product Lecture 6 — Selling Advertising— Slide 52 gidgreen.com/course

53. Bad sites: Spyware
From Code to Product Lecture 6 — Selling Advertising— Slide 53 gidgreen.com/course

54. Bad sites: Gambling
From Code to Product Lecture 6 — Selling Advertising— Slide 54 gidgreen.com/course

55. Bad sites: Scams
From Code to Product Lecture 6 — Selling Advertising— Slide 55 gidgreen.com/course

56. User complaints
“Your advertisement in support of
Rick Santorum is enough to cause
me to use some other website for
this game. I will avoid coming
here again!”
“Why do you accept advertising
from nomorerack? They are an out
and out scam. Read the feedback.”
From Code to Product Lecture 6 — Selling Advertising— Slide 56 gidgreen.com/course

57. Ad network filters
From Code to Product Lecture 6 — Selling Advertising— Slide 57 gidgreen.com/course

58. Lecture 6
• Introduction
• Types of targeting
• Price models
• Ad formats
• Ethical issues
• Web Sudoku
From Code to Product Lecture 6 — Selling Advertising— Slide 58 gidgreen.com/course

59. Amazon ads
From Code to Product Lecture 6 — Selling Advertising— Slide 59 gidgreen.com/course

60. Direct ad deals
From Code to Product Lecture 6 — Selling Advertising— Slide 60 gidgreen.com/course

61. AdSense + our own products
From Code to Product Lecture 6 — Selling Advertising— Slide 61 gidgreen.com/course

62. Banners on puzzle page
From Code to Product Lecture 6 — Selling Advertising— Slide 62 gidgreen.com/course
-8%
-6%
-4%
-2%
+0%
+2%
+4%
7 Aug 7 Sep 8 Oct 8 Nov
Moving banners
Bright static banners
Quiet static banners

63. The big break
From Code to Product Lecture 6 — Selling Advertising— Slide 63 gidgreen.com/course

64. AdSense + new affiliation
From Code to Product Lecture 6 — Selling Advertising— Slide 64 gidgreen.com/course

65. Very highly targeted
From Code to Product Lecture 6 — Selling Advertising— Slide 65 gidgreen.com/course

66. Where we are today
• Ads are biggest source of revenue
– ~70% display ads after puzzle
– ~20% AdSense above puzzle
– ~10% direct deals
• 3 big display ad networks
– Monitor performance weekly
– Rebalance in response
– Ad quality a constant challenge
From Code to Product Lecture 6 — Selling Advertising— Slide 66 gidgreen.com/course