An Introduction to Online Advertising
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(Stanford BUS-21)Martin Westhead
Mastering Marketing
Online Advertising
How to make money by giving things away
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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
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HISTORY
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Revenue growth in online advertising
http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/pr-052611
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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
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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
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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
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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
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TARGETING AND RELEVANCE
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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!”
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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.”
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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
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TYPES OF ADVERTISING
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Types of advertising
Sponsorship Banner Run Affiliate Pay per Click Native ads
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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
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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
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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
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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
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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
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HOW THE PROCESS WORKS TODAY
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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.
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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)
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Universal Ad Package
http://www.bannerexpress.de/tags,universal-ad-package.html
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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
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TIPS FOR SELLING AD SPACE
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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.
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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)
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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
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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?
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Key Reporting Metrics
Impressions Clicks (use click trackers like bit.ly if you sell
your own ads) CPM Fill rate Conversion rate
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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
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Using an Ad Network
Glam Media Thousands of blog sites High quality long tail Attributed syndication
- Site owner- Content creator- Referrer- Network
Exclusive relationship
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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
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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