(Stanford BUS-21)Martin Westhead

Mastering Marketing

Online Advertising

How to make money by giving things away

Overview

History Targeting and Relevance Types of advertising How the industry works Tips for selling ads yourself

http://www.adjuggler.com/docs/AdJuggler_guidetoonlineadv.pdfhttp://en.wikipedia.org/wiki/Online_advertising

HISTORY

Revenue growth in online advertising

http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/pr-052611

Early 90’s

Online advertising poorly understood Both ad media and delivery were simple Advertisers would pay for a banner ad for a

period of time Reporting based on web stats Used a print model

- Ad size- Expected number of unique visitors

Ad servers

Mid 90’s Rotate multiple ads through same space Campaign

- start and end dates- Impression limits

Track number of - Impressions- Click-throughs

Started to move away from print models

Ad Units

Standard ad unit sizes developed- 468x60 banner ad- 125x125 cubes- 728x90 leaderboards- 120x600 skyscrapers

Meant ad media did not have to be customized for each site

Developments

Display- Larger ads- Animated and Video ads- Floating (covers page content)- Interstitials (have to view first)- Expandable (responsive)- Roll over (reacts to mouse-over)- Take-overs

Delivery- Targeting: Geography, demographic- Relevance

Theory: Ads became more enagaging/memorable Balance: intrusion/effectiveness

TARGETING AND RELEVANCE

Relevance

Ideal ads are content- DIY drones ad survey- Google search- Vogue / Cosmopolitan

Positive comments“Very cool that I'm IN the #LadyFootLocker ads on my site, even though I’m PLANKING and not looking very glamorous! CC: @GlamMedia”

“This reskin is really making me want a new phone!”

Ad-content mismatch can be bad…

“There is a Nuvaring ad playing on our education sites, this is RIDICULOUS. Get it off in all sizes and ALL education and child sites, this cannot keep happening.”

“I find it really hypocritical for a vegan blogger to have an ad for a non vegan product. It really limits their credibility to me.”

Privacy

Need info to create relevance- Context on page- Viewing history- Demographic- Purchase history

Lots of information is collected- Reasonably anonymous- More information on mobile

Improving relevance is an important area of competitive innovation

Scale helps – more views, more people, more context

TYPES OF ADVERTISING

Types of advertising

Sponsorship Banner Run Affiliate Pay per Click Native ads

Sponsorship

What- Sponsor all or part of a site- Usually exclusive for a period- Good for branding or new product- Advertisers like it because more likely to sink in

Strengths- Advertiser: Exclusivity, psychological link with content- Publisher: Stability, single sale

Weaknesses- Advertiser: content relevance, no page view guarantee- Publisher: only one advertiser

Banner Run

What- Buy X impressions at Y CPM (cost per 1000)- Impressions to be presented in a window of time- Can take on elements of sponsorship

Strengths- Simplicity – everyone knows what they are getting

Weaknesses- Can be ineffective, easily ignored, hard to return to ad- CPMs are often low

Affiliate

What- Publisher is rewarded for sales or sign-ups on advertisers site- Tracking code identifies customer came from publisher- Example: Amazon affilates

Strengths- Publisher can make a lot more money- Advertiser gets publishers to do the advertising

Weaknesses- Publishers: only works if they can drive sufficient useful

traffic often not effective for smaller sites

Pay-Per-Click

What- Associated with search engines & contextual advertising- Advertiser pays for each click

Strengths- Advertiser: only pay for clicks (genuine user interest)- Publisher: Click-throughs are more valuable

Weaknesses- Publisher: only worthwhile if audience clicks- Advertiser: CPP for popular keywords may not be cost

effective

Native Ads

New ad model for social Online version of Product

placement Ads are less intrusive Look like other content Identified as Ads but subtly:

- “Suggested share” (Facebook)

- “Promoted” (Twitter) Concerns from journalists

- Advertorial/Infomercial

HOW THE PROCESS WORKS TODAY

Roles in advertising

Advertiser

Agency Network

Publisher

Matches Advertisers

and Publishers. Can support ad

display.

Own website arrange for ad

display

Help Advertiser create campaign

and buy inventory

Has a need for customer attention.

Creates media.

Standard Ad Sizes Internet Advertising

Bureau (IAB) 16 standard sizes

- Too many Universal Ad Package

- 4 most common sizes- Max file sizes - Animation lengths

etc

Rectangles350x250 IMU (Medium Rectangle)250x250 IMU (Square Pop-Up)240x400 IMU (Vertical Rectangle)336x280 IMU (Large Rectangle)180x150 IMU (Rectangle)

Skyscrapers160 x 600 IMU (Wide Skyscraper)120 x 600 IMU (Skyscraper)300 x 300 IMU (Half Page Ad)

Banners & Buttons468 x 60 IMU (Full Banner)234 x 60 IMU (Half Banner)88 x 31 IMU (Micro Bar)120 x 90 IMU (Button 1)120 x 60 IMU (Button 2)125 x 125 IMU (Square Buttons)728 x 90 IMU (Leaderboard)120 x 240 IMU (Vertical Banner)

Universal Ad Package

http://www.bannerexpress.de/tags,universal-ad-package.html

Business Process

Advertiser submits an Insertion Order (IO) Publisher checks creatives

- Size, file types, behavior Ad trafficking and optimization

- Can be very complex or very simple Reporting

- Critically important- Auditable standards

Makegoods- Agreed processes for fixes if something goes wrong

TIPS FOR SELLING AD SPACE

Where do you fit?

The “long tail”

“Power Laws, Weblogs and Inequality,” Clay Shirky

• A very small handful of sites dominate the web, or even specific areas of the web (from fashion to fly fishing)

• The rest might not have as much traffic individually but together they equal the influence of the fewer, bigger sites.

• Understand your place overall, and how you relate to communities in your competitive set.

• Niche is good! Smaller group= more potential climb out of the long tail.

Before you start monetizing…

Know your numbers. - Site metrics (Google Analytics, Comscore, Quantcast)- Engagement metrics (Members, Activity, Demographics)- E-mail open rates (if applicable)- Click through rates (if applicable)

Know your competitive set- Their numbers (Google Ad Planner, Quantcast, Membership

areas)- Their partnerships (ad network, brands, etc)- What people are saying about them (Use Twitter, Facebook,

Message boards, etc)

Ad Partners versus Selling Your Own Ads

Ad Partner/Network Selling Your Own Ads

Network handles the relationship with a brand

You work directly with the brand or agency

Network does all the legwork You do the work: set prices, market your site, negotiate, issue contracts, set terms, traffic ads, provide reporting, and collect payment

You earn roughly 40-60% of the gross CPM

You earn 100% of the gross CPM

Wider variety of ads on your site (typically)

Potential for fewer ads, but more control over them

Identifying the right partner

Look for sites and communities you identify with or admire- who are they working with? - Check site footers and the corners of ads:

Review your requirements Review the contract & ask questions,

- E.g. “What’s the average fill rate?”- Ask to see examples of other sites in network

Identify what other opportunities they have- do they offer more than just ads?

Key Reporting Metrics

Impressions Clicks (use click trackers like bit.ly if you sell

your own ads) CPM Fill rate Conversion rate

Google Ads

Display- Simple (non-intrusive text)

Relevance- Driven by search and- Google’s metadata about you

Charge model- CPC – cost per click- Price set by auction

Using an Ad Network

Glam Media Thousands of blog sites High quality long tail Attributed syndication

- Site owner- Content creator- Referrer- Network

Exclusive relationship

HypnothoughtsCommunity only advertizing

Set expectations- Don’t drop ads in after network is

established Hypnothoughts - Scott Sandland

- Only active members can advertise- No ads in Blogs or Discussion Forums- Can read advertisers content- Ads do not feel like they are “coming

from outside”- Brings thought leaders into the site

thus helps growth

Summary

History Targeting and Relevance Types of advertising How the industry works Tips for selling ads yourself

http://www.adjuggler.com/docs/AdJuggler_guidetoonlineadv.pdfhttp://en.wikipedia.org/wiki/Online_advertising