The document outlines the fundamentals of brand advertising, focusing on the online advertising landscape and the evolving relationship between advertisers and consumers. It covers the lifecycle of brand campaigns, the role of ad networks, and various targeting strategies in online advertising. Additionally, it provides insights into monetization tactics and effective measurement of advertising success.

1. ABC’s of Brand
Advertising
October 20, 2009
Shari Gunn, Kaboodle
Online Advertising and Social Media Summit

2. What do you want to
get out of today?

3. Today’s Agenda
 Online Advertising Industry Snapshot
 Basics of Brand Advertising Online
 Lifecycle of a Brand Campaign
 Ad Networks and the Path to Monetization
 Final Thoughts & Wrap-Up

4. Let’s Get Personal
 Write down the 3 – 5 content sites that
you visit on a regular basis
 Name an advertiser or advertising
campaign that you remember seeing on
one of those sites

5. Online Advertising Industry
Snapshot

6. Online Advertising Ecosystem
 Full-service
 Media
planning/
buying
 Creative
 Interactive
 Etc.
Advertiser
Media
Outlets
Advertisin
g
Agency
 TV
 Print
 Radio
 Internet
 Outdoor
 Etc.
 Single product/
brand
 Multiple brands
 Local
 National
 Etc.

7. The Changing Media World
 Changing media landscape
 An industry in constant transition
 Evolving relationship with the consumer
 Consumers are in control of their media
consumption
 Growth in social media
 Economic pressures on both consumers and
advertisers
 Still a big discrepancy between consumers’
media consumption and where ad budgets are
spent

8. Continued Growth in Spending, but
at a Slower Pace
US Online Advertising Spending Growth (%)
Source: eMarketer, April 2009

9. Search Continues to Lead Online Ad
Spending
2008 Internet Ad Revenues by Ad Format
Source: IAB / PwC, March 2009

10. Online Advertising Revenue is
Highly Concentrated with a Few
Publishers
Source: IAB / PwC, March 2009
 The ten leading ad-selling companies account for nearly
three-quarters of total revenues

11. Social Network Ad Spending Growth
Forecast to Slow
US Online Social Network Advertising Spending
(in millions and % change)
Source: eMarketer, December 2008
(33.8%)
(10.2%)
(3.1%)
(6.3%)
(6.7%)
(8.3%)

12. Advertising on Social Networking
Sites:
Trends and Implications
 Socnet sites generally have not done well
with ads
 BUT 62% of Generation Y’ers have visited
a fan page on a socnet and nearly half
actually joined *
 Advertisers want proof that increasing
investment in will yield measurable
benefits
 Implications for publishers?* Source: Pace University Study, 2008

13. Back to the Basics

14. Meet the Interactive Advertising
Bureau
 More than 375 leading media and tech companies
who are responsible for selling 86% of online
advertising in the US
 The IAB is dedicated to:
 The growth of the interactive advertising marketplace
 Evaluating and recommending standards and
practices
 Fielding critical research on interactive advertising
 Creating a world-class medium that provides and
delivers the highest level of transparency and
accountability
 Educating marketers, agencies, media companies
and the broader business community about the value
of interactive advertising

15. The IAB Universal Ad Package
 A set of four ad units that all
compliant IAB member publishers
have agreed to support
180x150
300x250
728x90
160x600

16. Audience Dynamics &
Media Consumption
 Site usage creates advertising impressions
(availability or “avails”)
 Audience dynamics influence site traffic patterns
 Heavy users (39%) generate 73% of all page views
 Light users (36%) generate 6% of all page views
 Challenge:
 Reach the light users AND avoid serving disproportionate
number of impressions to the heavy users (law of
diminishing returns)
 Defining inventory for advertisers
 Site-side measurement sources (Omniture, Google
Analytics, etc)

17. The Mechanics:
Reach, Frequency and Pricing
 Reach (%)
 Percent of individuals who visit a site compared to
total number of online individuals (during a given time
period)
 Frequency
 The number of ads an average person could be
exposed to in a given time period
 Pricing
 CPM: cost per thousand (impressions)
 CPM = Total media value / (impressions/1000)
 Examples:
 A $100,000 buy at a $12 CPM would yield 8.33 million
impressions
 12 million impressions at a $6.25 CPM would yield a total

18. More Mechanics:
Sell-Through and Effectiveness
 Sell-through
 % of ad inventory actually sold as opposed to
traded or bartered
 Varies by publisher, site section, ad format and
season
 eCPM (Effective CPM)
 For a campaign: takes into account over-delivery,
bonus impressions etc.
 For a site: can also blend different pricing models
 Revenue per Page
 Internal measure taking into account all ad

19. Example:
Using Media Assets to Lower eCPM
 Scenario:
 Client has given you a budget of $65,000
 They want a mix of placements on your site
 They also want an eCPM of between $7.00 and
$7.50
 You know that they won’t buy unless they get at
least half of the total impressions as 300x250
units
 Your rates are:
 300x250: $10.00 CPM
 728x90: $7.50 CPM
 You also have some other media assets (other ad
units, sponsorship placements, text links, etc.) at
your disposal

20. Example:
Using Media Assets to Lower eCPM
Ad Unit CPM Impressions Media Value
300x250 $ 10.00 6.5 million $65,000
eCPM = $10.00
Ad Unit CPM Impressions Media Value
300x250 $ 10.00 5 million $50,000
728x90 $ 7.50 2 million $15,000
TOTAL 7 million $65,000
eCPM = $65,000 = $9.28
(7 million / 1000)

21. Example:
Using Media Assets to Lower eCPM
Ad Unit CPM # of
Impressions
Media Value
300x250 $ 10.00 5 million $50,000
728x90 $ 7.50 2 million $15,000
Text links $ 0 2 million $ 0
TOTAL 9 million $65,000
eCPM = $64,000 = $7.11
(9 million / 1000)

22. Example:
Revenue Per Page
Example Revenue Per Page
Calculation:
Banner ($5 CPM) = $0.005 per pg
Rectangle ($10 CPM) = $0.010 per pg
Skyscraper ($2 CPM) = $0.002 per pg
2nd Rectangle ($1 CPM) = $0.001 per
pg
Total revenue per page = $0.018

23. The Most Accountable of All Media:
Measuring Success
 Advertisers’ perspective – it’s all about ROI
 Click-through rate
 Relevant actions/engagement
 Post-click through activity
 Brand awareness
 Publishers’ challenges
 Demonstrating that online exposure can lead to
delayed offline actions/behaviors
 Providing effective reach and contextual
relevance
 How do we optimize and provide the greatest

24. Targeting
 Not all ad impressions are created equal!
 “Run-of-site” or “run-of-network” versus
targeted placements
 Create “relevance” for the audience and
therefore, greater value for the advertiser
 Command a higher CPM
 Help marketers make messages more
relevant

25. Types of Targeting
 Demographic
 Age
 Gender
 Income
 Occupation
 Household size
 Defined by overall
site demos, survey
feedback, user
registration data

26. Types of Targeting
 Geographic
 Site or customer
registration
databases (for
DMA, area codes,
time zones etc.)
 Can ask that visitors
type in a zip code
 IP addresses
 Incur additional
expense to set up

27. Types of Targeting
 Contextual
 Placing ads on
web pages that
have a
relationship to the
content of that
page
 Creates
relevance
 Users in more
receptive frame
of mind

28. Types of Targeting
 Behavioral
 Show ads based on
what you know
about that user’s
behavior patterns
 Contextual targeting
can be expensive
and inventory sells
out fast

29. Types of Targeting
 Daypart
 Consumers choose
and use media
throughout the day
 Workday routines
shape online
consumption (peaks
in mornings, dinner
and prime time
hours)

30. Advanced Ad Formats:
Rich Media
 Ads with which users can interact (as
opposed to solely animation)
 Traditional banner placements as well as
interstitials, take-overs, floating ads, etc.

31. Advanced Ad Formats:
Rich Media (continued)

32. Advanced Ad Formats:
Video
 Video
 Traditional ad placements: Pre-roll, Mid-roll,
Post-roll
 High demand for premium video inventory
trading at 2-3x display CPMs (emphasis on
“premium”)

33. Advanced Ad Formats:
Online Games
 Advergames
 Plot integration
 Pre-roll
 Inter-level advertising
 Dynamic in-game advertising
 Sponsorships
 Link in-game actions to real world
behavior

34. Gaming Example
 Seventeen.c
om and
Secret
Deodorant

35. Gaming Example

36. Lifecycle of a Brand Campaign

37. Get to Know the Key Players
 Full-service
 Media
planning/
buying
 Creative
 Interactive
 Etc.
Advertiser
Media
Outlets
Advertisin
g
Agency
 TV
 Print
 Radio
 Internet
 Outdoor
 Etc.
 Single product/
brand
 Multiple brands
 Local
 National
 Etc.

38. Let’s Look at An Example…
Individual Brand
Managers
Media Planning and Buying
Creative

39. Lifecycle of a Brand Advertising
Campaign
Insertion
Order
Client
Request
for
Proposal
Monitoring &
Optimization
Campaign
Execution
Reporting &
Analysis
Review

40. Lifecycle of a Brand Advertising
Campaign
Insertion
Order
Client
Request
for
Proposal
Monitoring &
Optimization
Campaign
Execution
Reporting &
Analysis
Review

41. Focus: The RFP Process
Agency issues RFP
Submit proposal
Agency reviews all
proposals
Agency narrows down pool;
asks for revisions
Submit revised proposal
Agency conducts client
review
Agency makes
recommendations to client
Approval from client and
verbal “yes” to publisher
Signed Insertion Order!

42. The Role of Ad Networks

43. Ad Networks:
The Long Tail of Online Advertising
 The emergence of ad networks
 Top 100 publishers sell only 40% of their inventory through direct
means
 Provide small and mid-sized publishers with more advertising
revenues than would otherwise be possible
 Aggregate traffic that was previously too difficult to buy or which
was otherwise undesirable
 Small publishers can’t afford their own sales force (and support)
 Advertisers (or their agencies) can’t manage individual
relationships with hundreds (or even dozens) of sites
 Brand advertisers need mass reach; someone needs to
aggregate
 Growth and fragmentation
 300 – 400 ad networks today (up from only 15 seven years ago)
 Use of ad networks has increased from 5% of sold inventory in
2006 to 30% in 2007 (Source: Bain & Company)

44. Types of Ad Networks
 General (ex. Advertising.com)
 Geographic
 Contextual (ex. Google)
 Behavioral (ex. Tacoda, Revenue
Science)
 Vertical (ex. Glam, Jumpstart Automotive)
 Pricing (CPM, CPC, CPA, CPE)

45. Let’s Look at an Example
865th
most
trafficked
site
(Quantcast)
Advertising
from
McDonald’s via
DoubleClick ad
networkAdvertisers (or
agencies)
arrange a buy
with DCLK and
may not know
what site their
banner will run
on

46. How Do Ad Networks Differ?
 Points of differentiation
 Targeting, technology, types of inventory,
media type, etc.
 Pricing/business models
 Representation
 Direct acquisition via revenue share
 Direct acquisition via arbitrage
 “Blind” vs. transparent

47. Benefits & Challenges of Using Ad
Networks
 Monetization
 Access to large
advertisers
 Clear excess
inventory
 Choice and flexibility
 No investment in a
salesforce
 Low prices and price
erosion
 Sales channel
conflicts
 CPM arbitrage
 Managing pricing
and yield
 Relationship
management
Benefits Challenges

48. Why Do Advertisers (and Their
Agencies) Use Ad Networks?
 Extended reach (and targeted)
 Leverage residual impressions at large
publishers for a lower price
 Too difficult to screen and manage
relationships with large numbers of small
sites
 Pricing efficiencies; reduce total campaign
costs

49. Implications for Publishers
 Challenge of potential price erosion
 Need to better support the value of premium
inventory – through more innovative offerings
and/or reducing units available
 Can work with multiple networks for
optimization, but requires resources
 Need to actively manage secondary
channels, both to maximize yield and to
safeguard strategic position

50. Final Thoughts:
What’s the Right Path to
Monetization?
 Depends on your business, traffic, goals, audience,
reach, etc.
 Experiment with Google AdSense
 No long-term commitment
 No transparency on revenue share
 Most flexibility and minimal resources required
 Get some baseline metrics
 Ties into Google Ad Manager (ad serving)
 Look to ad networks for deeper support
 Test a few and optimize
 Exclusive vs. non-exclusive relationships; beware of
contract terms

51. Final Thoughts:
When Do You Build a Direct Sales
Force?
 Maybe never!
 Do the math
 5 million ad impressions per month at a 40% sell-
through at $8 CPM = $16,000
 Resources
 Sales manager, marketing/sales solutions,
assistant sales manager/planner, ad
trafficking/operations, reporting & analytics, billing
 Payment cycles and the impact on your working
capital

52. Final Thoughts:
How to Get RFP’s from Agencies
 Agencies want and need options
 Reach out to MD’s, AMD’s and Media
Planners
 Make a connection between your
audience/content and the agency’s client
 Research and industry trends
 Leverage your “launch” period
 Be prepared to talk about aggressive
pricing, low minimums, custom
opportunities and ad units

53. Your Homework Assignment
 Who’s your customer?
 Who is your site, product, service meant
to serve?
 What is your unique value proposition?
 How do you engage your customers and
how is that unique?
 What is the monetization strategy now?
 What do you think it could be?

54. Useful Resources
 Interactive Advertising Bureau (www.iab.net)
 Advertising Research Foundation
(www.thearf.org)
 comScore (www.comscore.com)
 Nielsen//NetRatings (www.nielsen-online.com)
 Forrester Research (www.forrester.com)
 eMarketer (www.emarketer.com)
 ClickZ (www.clickz.com)
 MediaPost (www.mediapost.com)
 Word of Mouth Marketing Assoc.
(www.womma.org)

55. Contact Information
 Shari Gunn
VP Advertising & Business Development
Kaboodle, Inc.
e: shari@kaboodle.com
p: 408.328.7019