I gave this talk to a group of MBA students at Cornell University's Johnson School in a class called "Current Topics in Marketing". This walks through the evolution of online advertising and how we got to the new chapter, brought about due to the rise of Facebook: "word of mouth at-scale". We then explore what that means, how it works, and leave with a couple of examples. Special thanks to the folks at Nanigans for all the slides. *Please note: some slides did not convert to the Slideshare format properly, so contain missing content. I will try to fix.

1. rishi@rishidean.com
www.rishidean.com
Leveraging “word of mouth at-scale”
[ The next chapter in online advertising]
Rishi Dean
November 20, 2012

2. why me? why now?
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3. Provide an entrepreneurial lens
Currently
Started /
Ground Floor
Advise /
Volunteer
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4. “Creative destruction” with bigger
amplitudes in shorter periods
Δ
t
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5. Today…
1 Evolution of online advertising
2 Paid, owned, and earned media
3 Creating WOMAS
4 Consumer Decision Journey
5 The Case
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6. PART 1:
The evolution of
online advertising
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7. PART 1:
The evolution of
online advertising
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8. in the beginning…
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9. Person-to-person persuasion
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12. Person-to-person persuasion
Persuasive? ✔
Scalable? ✗
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13. mass media gave us scale
“borrowed attention”
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17. borrowed attention
Persuasive? ~
Scalable? ✔
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18. persuasion + scalability
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19. PART 1:
The evolution of
online advertising
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20. online: chapter 1
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22. online: chapter 1
…digital borrowed attention
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25. Online Chapter 1
Prodigy, banner ads and portals
Web in Its
Infancy
People find
Behavior pages via link
aggregations
Channel Portals
Print model goes
Ad Model
online (banner ads)
Targeting Mass content
Winners Yahoo!,
AOL, MSN, etc.
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26. online: chapter 2
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28. pay per
click ads
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29. Online Chapter 2
Overture pioneers paid search and Google perfects it
Increase of
Web Pages
People can’t rely
Behavior on portals to
curate everything
Channel Search engines
Ad Model Search engine ads
Targeting Keywords
pay per
click ads
Winners Google AdWords
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30. Online Chapter 2
Overture pioneers paid search and Google perfects it
Proliferation
of UGC
People rely even
Behavior more heavily on
search
Channel Niche sites
and mashups
Ad Model Contextual ads
Targeting Site context
Winners Google AdSense
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31. online: chapter 3
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34. 1 billion active users (58% daily)
$4 billion in ad spend
1/3 of online display ads
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35. Online Chapter 3
Facebook launches and becomes a mainstream media platform
Rise of Social
Networking
People rely on
Behavior friends to find
information
Channel Social networks
Ad Model Social ads
Targeting People
Winners Google AdSense
Facebook
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36. Online Chapter 3
Facebook launches and becomes a mainstream media platform
Proliferation of
the Social Web
People share what
Behavior they’re doing,
in real-time
Channel Social channels
Ad Model Social ads
Stories
Targeting People’s behaviors
Winners Facebook
Google AdSense
(anticipated)
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37. takeaways…
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38. Evolution of Online Advertising
Facebook sets the stage for the future
Web in Its Increase of Proliferation Rise of Social Proliferation of
Infancy Web Pages of UGC Networking the Social Web
People find People can’t rely People rely even People rely on People share what
Behavior pages via link on portals to more heavily on friends to find they’re doing,
aggregations curate everything search information in real-time
Channel Portals Search engines Niche sites Social networks Social channels
and mashups
Print model goes
Ad Model Search engine ads Contextual ads Social ads Stories
online (banner ads)
Targeting Mass content Keywords Site context People People’s behaviors
Winners Yahoo!, Google AdWords Google AdSense Facebook Facebook
AOL, MSN, etc. (anticipated)
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39. Evolution of Measurement
Core unit and performance metrics
Chapter 1 Chapter 2 Chapter 3
• Pages • Keywords • People
• CPM • CPC • CPA
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40. PART 2:
Understanding
paid, owned, & earned
media
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41. Framework for Defining Media Types
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42. The Facebook Marketing Landscape
Key tools of successful social marketers
Ads + Sponsored Stories Pages, events, apps & games Newsfeed activity
Paid Owned Earned
Off
Facebook
Properties
Facebook provides built-in mechanisms for managing all media types
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43. Progression of Social Campaigns
Paid is the trigger that generates initial awareness
PAID
awareness
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44. Progression of Social Campaigns
Paid media catalyzes engagement in owned properties
PAID OWNED
engagement
awareness
purchases
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45. Progression of Social Campaigns
Shares and invites generate earned media in the News Feed
PAID OWNED EARNED
engagement
shares
& invites
awareness
purchases
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46. Progression of Social Campaigns
Others engage and share, driving further WOM referrals
PAID OWNED EARNED
engagement
shares WOM
& invites referrals
awareness
purchases
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47. Progression of Social Campaigns
Critical mass of users can drive FoF awareness and re-engagement
PAID OWNED EARNED
retarget & find
look-alikes
engagement
shares WOM
& invites referrals
awareness
purchases
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48. Paid  Awareness
Earned  Trust
Trust  Lift
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49. WOMAS is more trusted than traditional
channels
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50. WOMAS is more trusted than traditional
channels
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51. WOMAS is more effective than traditional
channels
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52. Social’s Residual Value
Word-of-mouth generates additional value
Cost WOM Effective
Spend on each ad = $5 Initial Per Referred Total Cost Per
Installs Install Installs Installs Install
Ad 1
4 $1.25 5 9 $0.56
Ad 2
3 $1.67 11 14 $0.36
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53. PART 3:
Understanding “word-
of-mouth-at-scale”
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54. Understanding the Open Graph
Connections between people, actions and objects
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55. Evolution of the Open Graph: 2005
Mapping friends to friends
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56. Evolution of the Open Graph: 2007
Pages, Places, Events and Applications
Friends
Like Attend Install
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57. Evolution of the Open Graph: Today
Any object (noun) mapped to any action (verb)
Like Attend Install / Allow
Song Listen
Article Read
Video Watch
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58. Example: Fab.com
Connect to the Open Graph and make a purchase
Allow Connection
1 Connect to the Open Graph by
Turning Social Shopping On;
Fab incentivizes people to do
this by offering credits
Make Purchase
As you shop on Fab, add items to
your cart and ultimately purchase
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59. Example: Fab.com
The purchase story is frictionlessly shared
“Cheryl bought a product on Fab”
6 5 4 3
Timeline News Feed Flyout Ticker
Purchases from Fab are EdgeRank determines if Friends view purchase Friends view the
aggregated and featured the purchase is featured details by scrolling over purchase in real-
prominently on Timelines in friends’ News Feeds the purchase in the Ticker time in the Ticker
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60. Implications for Advertisers
Action Targeting and Sponsored Stories
Every action (and its associated object) a user takes is
(a) targetable and (b) can be converted into a Sponsored Story
Action Targeting Sponsored Story Ads
 Ability to target actions and  Convert user actions and
objects associated objects into an ad
unit, featured on News Feeds
 Introduces behavioral targeting
on Facebook  Benefit from social context
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61. Actions Available to Advertisers
Current and future
Future
Currently Available (pending Facebook availability)
Default New Custom
• App_used • Read • Bought
• App_shared • Watched • Want
• Check_in • Listened • Leveled-Up
• RSVP • Played • Returned
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62. PART 4:
The Consumer
Decision Journey
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63. CONSIDER
EVALUATE
THE LOYALTY LOOP
BOND
ADVOCATE
ENJOY BUY
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64. clicks browses
ad site
views
ad
adds to
cart
makes
purchase
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65. clicks installs
ad app
shares
views activity
ad
completes
tutorial
invites
friends makes
purchase
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66. The Case:
Apply WOMAS + the
Consumer Decision Journey
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67. Design a campaign to acquire new
customers…
Employ WOMAS techniques
+ paid, owned, earned media mix
+ Consumer Decision Journey framework
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68. I’m here to help
 E-mail: rishi@rishidean.com
 Blog: rishidean.com
 Twitter: @rishidean
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69. APPENDIX:
Some examples
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73. APPENDIX:
Understanding ad targeting
& optimization
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74. Ad Engine Optimization
A purchase example
Serve ads to initial Subset of target Subset of Page fans
target base on FB base Like Page eventually purchase
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75. Ad Engine Optimization
A purchase example
Serve ads to initial Subset of target Subset of Page fans
target base on FB base Like Page eventually purchase
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76. Ad Engine Optimization
A purchase example
Serve ads to initial Subset of target Subset of Page fans
target base on FB base Like Page eventually purchase
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77. Ad Engine Optimization
A purchase example
Serve ads to initial Subset of target Subset of Page fans
target base on FB base Like Page eventually purchase
Ad Engine measures this post-clickthrough
behavior, attributes it back to the original ad
creative and targeting, and optimizes to find more
high-value look-a-likes on Facebook
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