This lecture gives a short introduction to online advertising. It talks about the history of advertising, introduces some of the key concepts and terminology, and offers tips for content creators interested in advertising as a monetization option.

1. (Stanford BUS-21)
Martin Westhead
Mastering Marketing
Online Advertising
How to make money
by giving things away

2. Overview
 History
 Targeting and Relevance
 Types of advertising
 How the industry works
 Tips for selling ads yourself
http://www.adjuggler.com/docs/AdJuggler_guidetoonlineadv.pdf
http://en.wikipedia.org/wiki/Online_advertising

3. HISTORY

4. Revenue growth in online
advertising
http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/pr-052611

5. 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

6. 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

7. 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

8. 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

9. TARGETING AND RELEVANCE

10. 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!”

11. 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.”

12. 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

13. TYPES OF ADVERTISING

14. Types of advertising
 Sponsorship
 Banner Run
 Affiliate
 Pay per Click
 Native ads

15. 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

16. 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

17. 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

18. 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

19. 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

20. HOW THE PROCESS WORKS TODAY

21. 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.

22. 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
Rectangles
350x250 IMU (Medium Rectangle)
250x250 IMU (Square Pop-Up)
240x400 IMU (Vertical Rectangle)
336x280 IMU (Large Rectangle)
180x150 IMU (Rectangle)
Skyscrapers
160 x 600 IMU (Wide Skyscraper)
120 x 600 IMU (Skyscraper)
300 x 300 IMU (Half Page Ad)
Banners & Buttons
468 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)

23. Universal Ad Package
http://www.bannerexpress.de/tags,universal-ad-package.html

24. 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

25. TIPS FOR SELLING AD SPACE

26. 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.

27. 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)

28. 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

29. 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?

30. Key Reporting Metrics
 Impressions
 Clicks (use click trackers like bit.ly if you sell
your own ads)
 CPM
 Fill rate
 Conversion rate

31. 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

32. Using an Ad Network
Glam Media
 Thousands of blog
sites
 High quality long tail
 Attributed syndication
- Site owner
- Content creator
- Referrer
- Network
 Exclusive relationship

33. Hypnothoughts
Community 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

34. Summary
 History
 Targeting and Relevance
 Types of advertising
 How the industry works
 Tips for selling ads yourself
http://www.adjuggler.com/docs/AdJuggler_guidetoonlineadv.pdf
http://en.wikipedia.org/wiki/Online_advertising