s04 Ads Double Click
Transcript of s04 Ads Double Click
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Online Advertising 101:
An Introduction to the Industry
Heath RowResearch Manager
DoubleClick Inc.
Jan. 31, 2008
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My email address
© 2007 DoubleClick Inc. All Rights Reserved.
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What you w ill learn
• About DoubleClick
• What is third-party ad serving?
• A brief history of online marketing
• Market breakdown
• Kinds of media
• How online ads perform
• Major trends
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AboutDoubleClick
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© 2007 DoubleClick Inc. All Rights Reserved.
DoubleClick at a glance
• Global third-party ad management platform
• Headquartered in New York
• 17 offices and development hubs
• 14 data centers worldwide
• More than 1,300 employees
• Billions of digital ads every day
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One integrated platform
• Media planning and buying
• Ad serving
• Paid and natural search
• Rich media and video
• Mobile
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DoubleClick’s mission
• Deliver your ads anywhere, worry free
• Make your sales, operations, and financeprocesses more efficient
• Give you tools and data to make smarterdecisions
• Grow your revenues from advertisers
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DoubleClick research
• Rick E. Bruner, Director of Researchand Industry Relations
– 212 381-5521
• Heath Row , Research Manager
– 212 381-5139
• Jai Singh, Research Manager
– 212 381-5138
• Ashley Watson, Research Analyst
– 212-381-5515
http://www.doubleclick.com/knowledge
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Core research department projects
• Original thought leadership reports
• Custom campaign benchmark reports• Ad serving trend reports
• On-site and Web-based training sessions• Research product strategy
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What isthird-party ad serving?
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Billing & ReconciliationPre-Order Order Management
The media value chain
Sell Side
Buy Side
InvoicingOptimizationReportingAd DeliveryTraffickingInventory
ManagementProposal
Generation
InvoicingReportingAd DeliveryTraffickingCreative
Generation
MediaPlanning& Buying
Optimization
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How online ads might be delivered
Device
Application
Creative/
Format
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Billing & Reconciliation
IntegratedPlatform
Pre-Order
IntegratedPlatform
Order Management
IntegratedPlatform
How DoubleClick serves the value chain
Sell Side
Buy Side
Invoicing
DART for PublishersSales
Manager
DART
Adapt
Sales
Manager
DoubleClick Rich Media
OptimizationReportingAd DeliveryTraffickingInventory
ManagementProposal
Generation
InvoicingOptimizationReportingAd DeliveryTraffickingCreative
Generation
MediaPlanning
& Buying
MediaVisorDoubleClickRich Media
DART for Advertisers & DART Search MediaVisor
DoubleClick Rich Media
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A brief historyof online marketing
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Online advertising, in general
Online advertising refers
to any advertisingdelivered through mediaconnected to the Internet.
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The birth of online advertising
• The first spam email was sent in 1978 when a DECemployee announced a new computer by invitingeveryone with an ARPANET address on the west coast
to a reception. (They were chastised for breaking theARPANET appropriate use policy, and a notice wassent out reminding others of the rule.)
• Computerized Bulletin Board System, the first BBS,launched in 1978.
• The first commercial online services, CompuServe andthe Source, were founded in 1979.
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The first online (service) ads
The IBM and Sears-run dial-up online service Prodigy ran banner ad-like ads as early as the mid- to late-’80s.
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The birth of online advertising, continued
• NCSA Mosaic released in 1993, leading to therise of the graphic, commercial Web.
• Netscape Mozilla becomes the firstcommercial 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 whatmight have been the first video ad.
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1994: A banner year
Source: AT&T’s “You Will” campaign, ran on HotWired in October 1994. It was among the first Web ads.
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1996: Web advertising gets interactive
Source: HP’s Shockwave “Pong” banner, the first rich media ad (you could play Pong in the banner). It was made bythe San Francisco-based agency RedSky Interactive in 1996.
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The big picture: five-year forecast for devices and access
Source: The State Of Consumers And Technology: Benchmark 2007
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Online video is here, podcasting is not
Source: DoubleClick Touchpoints IV, July 2006; N=6,121
%
o f r e s p o n d e n t
s
Please indicate how often you use or do the following
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Marketbreakdown
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• Forms of online advertising
– Display: Banners/graphic
– Rich media: Enhanced display (special effects such as video, expands,floats)
– Search: Text (keyword-based)• Online campaign types
– Branding (awareness and message reinforcement)
– Direct response (ROI/acquisition-focused)
• Online media tactics
– ROS (run-of-site rotation)
– SOV (share of voice)
– Special sponsorships, partnerships, co-branded advertorials
– Roadblocks, surround sessions
– Frequency capping (limiting exposure)
– Targeting
• Content, geo, demo, day-parting, psychographic, behavioral
– Optimization (right ad, right person, right time)
Basic terminology
Proprietary & Confidential – DoubleClick, Inc 2007
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• Transactional elements and currencies– RFI, RFP, IO (request for info/proposal, insertion order)
– Impression: one exposure to one user of a display or text ad
– CPM (cost per thousand impressions)
– CPC/CPA (cost per click of acquisition/conversion)
– Flat rate (special sponsorships such as fixed placements)
• Workflow terms– Planning, buying, proposal generation (campaign determination)
– Forecasting (inventory availability)
– Creative generation (advertising units)
– Trafficking (the flighting of ad units)
– Delivery and reporting (campaign flight monitoring and results)
– Post-click and post-impression (view-through) conversion tracking
Additional terminology
Proprietary & Confidential – DoubleClick, Inc 2007
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Digital Ecosystem…
The basic landscape
Proprietary & Confidential – DoubleClick, Inc 2007
Buyers
Sellers
Portals/Engines
Publishers/Content Sites
Ad Networks
Exchanges
DoubleClick
Unified Suite
Communities and SocialNetworks
Agencies:
• account, media & creative
Marketers:
• Advertisers all shapes & sizes
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EmpoweringOriginalsDesignTemplateUS20051117.pot©
Total advertising spending in the United States, 2002–2010 (in $M)
Source: eMarketer * = actual
Comparative Estimates: Total advertising spending grow th in theUnited States, 2002 – 2010 (% growth)
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Growth
2005 2006 2007 2008 2009 2010 2011 ('06-'11)
Forecast, total offline advertising spend by segment,2005 To 2011
Source: JupiterResearch Internet Advertising Model, 7/06 (US only)
OFF-LINE ADVERTISING MARKET
Spending
Off-line Advertising by Segment (bn)
Broadcast TV $41.6 $44.2 $44.1 $47.7 $46.8 $49.1 $48.5 1.9
Cable TV $20.8 $24.1 $27.3 $30.9 $34.6 $38.5 $42.5 12.0 Radio $20.0 $20.7 $21.6 $22.7 $23.9 $25.2 $26.5 5.1
Newspapers $47.3 $48.1 $49.0 $49.9 $50.9 $51.9 $52.9 1.9
Magazines $12.8 $13.4 $14.1 $14.8 $15.5 $16.3 $17.2 5.1
Yellow Pages $14.2 $14.4 $14.6 $14.8 $15.0 $15.3 $15.6 1.6
Direct Mail $54.9 $59.6 $64.8 $70.5 $76.7 $83.5 $90.8 8.8
Other $51.3 $54.6 $58.0 $61.5 $65.0 $68.6 $72.1 5.7
Total Off-line Ad Spending $262.9 $279.2 $293.5 $312.8 $328.4 $348.3 $366.2 5.6
Year-over-year growth 4.3% 6.2% 5.1% 6.6% 5.0% 6.1% 5.1%
Total without Direct Mail $208.1 $219.5 $228.6 $242.3 $251.7 $264.9 $275.3 4.6
Year-over-year growth 4.1% 5.5% 4.2% 6.0% 3.9% 5.2% 4.0%
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EmpoweringOriginalsDesignTemplateUS20051117.pot©
Source: eMarketer
Total advertising spending worldw ide (by media & region),2004-2008
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The estimates for US total and online ad spend 2007
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Kindsof media
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Display advertising
Display advertising refers to webadvertising displaying the message
using graphic information. Includesimage, rich media, floating,transitional.
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Paid search advertising
Paid search advertising refers to paid text links appearing
on the search results of a search engine or search page.
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Text and contextual advertising
Text or contextual advertising refers to text links appearingon a Web page, traditionally using contextual targeting torelate the ad to the content.
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In-stream video advertising
In-stream advertising refers to advertising displayed duringa video or audio content stream.
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Mobile advertising
Mobile advertising refers toadvertising displayed in a mobiledevice. It includes: Display and
graphic, video, text, and SMS.
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Email advertising
Email advertising refers to advertisingdisplayed in an email environment. Itincludes: Display, text, opt in.
Email display and text advertising is becoming less popular as some email
readers do not support images and cookies.
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Gartner’s hype cycle for media industry publishing
Source: Hype Cycle for Media Industry Publishing, 2007, Gartner
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How onlineads perform
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Overall industry average campaign performances
• Click-Through Rate (CTR): 0.14%[CTR = Clicks ÷ Impressions]
• Interaction Rate (IR): 11.1%[IR = Unduplicated mouseovers (i.e., mouse over is counted once perimpression served) ÷ Interactive Impressions (DoubleClick Rich Mediaonly)]
• Video Completion Rate (VCR): 46%[VCR = Video Completions ÷ Total Video Plays (DoubleClick Rich Media,video format, only)]
Source: DoubleClick ASTRA, U.S. DFA campaigns, Jan 2006 to June 2007
Click-through rates have held fairly constant over the past
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Click-through rates have held fairly constant over the pastyear
Click-Through Rate Over Time
Source: DoubleClick ASTRA, U.S. DFA campaigns, Jan 2006 to May 2007
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Interaction rates have also held steady in the past year
Interaction Rate Over Time
Source: DoubleClick ASTRA, U.S. DFA campaigns, DoubleClick Rich Media format ads,Jan 2006 to June 2007
Roughly half of in-page video ads play through to
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Roughly half of in page video ads play through tocompletion
Video Completion Rate Over Time
Source: DoubleClick ASTRA, U.S. DFA campaigns, DoubleClick Rich Media video format ads,Jan 2006 to May 2007
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Rich media drive higher click rates than Flash or image
Click-Through Rate by Ad Format
Source: DoubleClick ASTRA, U.S. DFA campaigns, Jan 2006 to May 2007
l h l h h f d d
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Interaction rates slightly higher for video ads
Interaction and Video Completion Rates by Ad Format
Source: DoubleClick ASTRA, U.S. DFA campaigns, DoubleClick Rich Media format ads,Jan 2006 to May 2007
R b i l
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Response rates vary by vertical sector
Various Performance Rates by Industry Sector
Source: DoubleClick ASTRA, U.S. DFA campaigns, Jan 2006 to May 2007
Bi i ll b tt f t b d i
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Bigger is generally better for response rates by ad sizes
Various Performance Rates by Ad Size
Source: DoubleClick ASTRA, U.S. DFA campaigns, Jan 2006 to May 2007
K t k
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Key takeaways
• Moderate decline in click rate has leveled off
• Rich media click rates outperform Flash and
image
• Bigger ads tend to perform better
Initial awareness: web sites, point of sale, and word of mouth
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Initial awareness: web sites, point of sale, and word of mouthdominate
How did you first hear about the product you purchased?
(Choose one)
% o f
r e s p o n d e n t s
Source: DoubleClick Touchpoints IV, July 2006; N=6,121
C id ti h d d ti i l t l
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Consideration: search and advertising play greater role
How did you further learn about the product you purchased?
(Select all that apply)
% o
f r e s p o n d e n t s
Source: DoubleClick Touchpoints IV, July 2006; N=6,121
Most influence: website, in-store and w ord of mouth lead key
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, yinfluencers
Which of the following most influenced your decision to purchase this product? (Choose one)
% o
f r e s p o n d e n t s
Source: DoubleClick Touchpoints IV, July 2006; N=6,121
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Major trends
The top five
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The top five
• Online ad industry growth
• Online video
• Behavioral targeting
• User-generated content
• Advertising exchanges
US online ad market has grown for eleven straight
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g gquarters
Source: Internet Advertising Bureau / PricewaterhouseCoopers, Q2 2007 IAB Internet Ad Revenue Report, US Market
Search and display biggest parts of online ad pie
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Search and display biggest parts of online ad pie
Source: Internet Advertising Bureau / PricewaterhouseCoopers, Q2 2007 IAB Internet Ad Revenue Report, US Market
Retail financial services and auto biggest online ad sectors
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Retail, financial services, and auto biggest online ad sectors
Source: Internet Advertising Bureau / PricewaterhouseCoopers, Q2 2007 IAB Internet Ad Revenue Report, US Market
Internet ad spending projected to surpass radio,
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magazines, and network TV
Social networks, mobile, and gaming still relatively
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small share of ad spend
Search marketing, email, targeting, rich media work
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best, say online advertisers
Source: MarketingSherpa, January 2007, survey of Ad:tech attendees
Best performing online ad strategies, according to online marketers
Other things I ’m follow ing
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Other things I m follow ing
• Social media
• Widgets
• Digital out of home• Video on demand, IPTV, and interactive TV
• Viral advertising
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Next steps
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DoubleClick research agenda 2008
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• Ad Serving Trend Report
• Best Practices for Rich Media
• Best Practices for Online Ad Effectiveness 2.0
• Best Practices for Publishers to Maximize Yield
• Best Practices for Conversions and ROI
• Quantifying View Through
• Search + Display Ad Synergy
• Frequency on Conversion, Engagement, Brand
• Correlation of Brand and Response
• Client Surveys: Publisher/Advertiser 2008 Successes, Challenges,and Priorities
• Touchpoints V
DoubleClick research agenda 2008
What do you want to know?
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What do you want to know?
Thank you
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Thank you
doubleclick.com/knowledge