ABCs of Brand Advertising
This hands-on workshop will teach you how top brand advertisers use the web for marketing, what it takes to get their attention and how you can create innovative programs for brand advertisers.
Led by Shari Gunn, Vice President Advertising & Business Development, Kaboodle , Director, Marketing, Hearst Digital Media, VP, Marketing, Primedia’s Automotive Enthusiast Group
3. Today’s Agenda
Online Advertising Industry Snapshot
Basics of Brand Advertising Online
Lifecycle of a Brand Campaign
Ad Networks and the Path to Monetization
Final Thoughts & Wrap-Up
4. Let’s Get Personal
Write down the 3 – 5 content sites that
you visit on a regular basis
Name an advertiser or advertising
campaign that you remember seeing on
one of those sites
6. Online Advertising Ecosystem
Full-service
Media
planning/
buying
Creative
Interactive
Etc.
Advertiser
Media
Outlets
Advertisin
g
Agency
TV
Print
Radio
Internet
Outdoor
Etc.
Single product/
brand
Multiple brands
Local
National
Etc.
7. The Changing Media World
Changing media landscape
An industry in constant transition
Evolving relationship with the consumer
Consumers are in control of their media
consumption
Growth in social media
Economic pressures on both consumers and
advertisers
Still a big discrepancy between consumers’
media consumption and where ad budgets are
spent
8. Continued Growth in Spending, but
at a Slower Pace
US Online Advertising Spending Growth (%)
Source: eMarketer, April 2009
9. Search Continues to Lead Online Ad
Spending
2008 Internet Ad Revenues by Ad Format
Source: IAB / PwC, March 2009
10. Online Advertising Revenue is
Highly Concentrated with a Few
Publishers
Source: IAB / PwC, March 2009
The ten leading ad-selling companies account for nearly
three-quarters of total revenues
11. Social Network Ad Spending Growth
Forecast to Slow
US Online Social Network Advertising Spending
(in millions and % change)
Source: eMarketer, December 2008
(33.8%)
(10.2%)
(3.1%)
(6.3%)
(6.7%)
(8.3%)
12. Advertising on Social Networking
Sites:
Trends and Implications
Socnet sites generally have not done well
with ads
BUT 62% of Generation Y’ers have visited
a fan page on a socnet and nearly half
actually joined *
Advertisers want proof that increasing
investment in will yield measurable
benefits
Implications for publishers?* Source: Pace University Study, 2008
14. Meet the Interactive Advertising
Bureau
More than 375 leading media and tech companies
who are responsible for selling 86% of online
advertising in the US
The IAB is dedicated to:
The growth of the interactive advertising marketplace
Evaluating and recommending standards and
practices
Fielding critical research on interactive advertising
Creating a world-class medium that provides and
delivers the highest level of transparency and
accountability
Educating marketers, agencies, media companies
and the broader business community about the value
of interactive advertising
15. The IAB Universal Ad Package
A set of four ad units that all
compliant IAB member publishers
have agreed to support
180x150
300x250
728x90
160x600
16. Audience Dynamics &
Media Consumption
Site usage creates advertising impressions
(availability or “avails”)
Audience dynamics influence site traffic patterns
Heavy users (39%) generate 73% of all page views
Light users (36%) generate 6% of all page views
Challenge:
Reach the light users AND avoid serving disproportionate
number of impressions to the heavy users (law of
diminishing returns)
Defining inventory for advertisers
Site-side measurement sources (Omniture, Google
Analytics, etc)
17. The Mechanics:
Reach, Frequency and Pricing
Reach (%)
Percent of individuals who visit a site compared to
total number of online individuals (during a given time
period)
Frequency
The number of ads an average person could be
exposed to in a given time period
Pricing
CPM: cost per thousand (impressions)
CPM = Total media value / (impressions/1000)
Examples:
A $100,000 buy at a $12 CPM would yield 8.33 million
impressions
12 million impressions at a $6.25 CPM would yield a total
18. More Mechanics:
Sell-Through and Effectiveness
Sell-through
% of ad inventory actually sold as opposed to
traded or bartered
Varies by publisher, site section, ad format and
season
eCPM (Effective CPM)
For a campaign: takes into account over-delivery,
bonus impressions etc.
For a site: can also blend different pricing models
Revenue per Page
Internal measure taking into account all ad
19. Example:
Using Media Assets to Lower eCPM
Scenario:
Client has given you a budget of $65,000
They want a mix of placements on your site
They also want an eCPM of between $7.00 and
$7.50
You know that they won’t buy unless they get at
least half of the total impressions as 300x250
units
Your rates are:
300x250: $10.00 CPM
728x90: $7.50 CPM
You also have some other media assets (other ad
units, sponsorship placements, text links, etc.) at
your disposal
20. Example:
Using Media Assets to Lower eCPM
Ad Unit CPM Impressions Media Value
300x250 $ 10.00 6.5 million $65,000
eCPM = $10.00
Ad Unit CPM Impressions Media Value
300x250 $ 10.00 5 million $50,000
728x90 $ 7.50 2 million $15,000
TOTAL 7 million $65,000
eCPM = $65,000 = $9.28
(7 million / 1000)
21. Example:
Using Media Assets to Lower eCPM
Ad Unit CPM # of
Impressions
Media Value
300x250 $ 10.00 5 million $50,000
728x90 $ 7.50 2 million $15,000
Text links $ 0 2 million $ 0
TOTAL 9 million $65,000
eCPM = $64,000 = $7.11
(9 million / 1000)
22. Example:
Revenue Per Page
Example Revenue Per Page
Calculation:
Banner ($5 CPM) = $0.005 per pg
Rectangle ($10 CPM) = $0.010 per pg
Skyscraper ($2 CPM) = $0.002 per pg
2nd Rectangle ($1 CPM) = $0.001 per
pg
Total revenue per page = $0.018
23. The Most Accountable of All Media:
Measuring Success
Advertisers’ perspective – it’s all about ROI
Click-through rate
Relevant actions/engagement
Post-click through activity
Brand awareness
Publishers’ challenges
Demonstrating that online exposure can lead to
delayed offline actions/behaviors
Providing effective reach and contextual
relevance
How do we optimize and provide the greatest
24. Targeting
Not all ad impressions are created equal!
“Run-of-site” or “run-of-network” versus
targeted placements
Create “relevance” for the audience and
therefore, greater value for the advertiser
Command a higher CPM
Help marketers make messages more
relevant
25. Types of Targeting
Demographic
Age
Gender
Income
Occupation
Household size
Defined by overall
site demos, survey
feedback, user
registration data
26. Types of Targeting
Geographic
Site or customer
registration
databases (for
DMA, area codes,
time zones etc.)
Can ask that visitors
type in a zip code
IP addresses
Incur additional
expense to set up
27. Types of Targeting
Contextual
Placing ads on
web pages that
have a
relationship to the
content of that
page
Creates
relevance
Users in more
receptive frame
of mind
28. Types of Targeting
Behavioral
Show ads based on
what you know
about that user’s
behavior patterns
Contextual targeting
can be expensive
and inventory sells
out fast
29. Types of Targeting
Daypart
Consumers choose
and use media
throughout the day
Workday routines
shape online
consumption (peaks
in mornings, dinner
and prime time
hours)
30. Advanced Ad Formats:
Rich Media
Ads with which users can interact (as
opposed to solely animation)
Traditional banner placements as well as
interstitials, take-overs, floating ads, etc.
32. Advanced Ad Formats:
Video
Video
Traditional ad placements: Pre-roll, Mid-roll,
Post-roll
High demand for premium video inventory
trading at 2-3x display CPMs (emphasis on
“premium”)
33. Advanced Ad Formats:
Online Games
Advergames
Plot integration
Pre-roll
Inter-level advertising
Dynamic in-game advertising
Sponsorships
Link in-game actions to real world
behavior
37. Get to Know the Key Players
Full-service
Media
planning/
buying
Creative
Interactive
Etc.
Advertiser
Media
Outlets
Advertisin
g
Agency
TV
Print
Radio
Internet
Outdoor
Etc.
Single product/
brand
Multiple brands
Local
National
Etc.
38. Let’s Look at An Example…
Individual Brand
Managers
Media Planning and Buying
Creative
39. Lifecycle of a Brand Advertising
Campaign
Insertion
Order
Client
Request
for
Proposal
Monitoring &
Optimization
Campaign
Execution
Reporting &
Analysis
Review
40. Lifecycle of a Brand Advertising
Campaign
Insertion
Order
Client
Request
for
Proposal
Monitoring &
Optimization
Campaign
Execution
Reporting &
Analysis
Review
41. Focus: The RFP Process
Agency issues RFP
Submit proposal
Agency reviews all
proposals
Agency narrows down pool;
asks for revisions
Submit revised proposal
Agency conducts client
review
Agency makes
recommendations to client
Approval from client and
verbal “yes” to publisher
Signed Insertion Order!
43. Ad Networks:
The Long Tail of Online Advertising
The emergence of ad networks
Top 100 publishers sell only 40% of their inventory through direct
means
Provide small and mid-sized publishers with more advertising
revenues than would otherwise be possible
Aggregate traffic that was previously too difficult to buy or which
was otherwise undesirable
Small publishers can’t afford their own sales force (and support)
Advertisers (or their agencies) can’t manage individual
relationships with hundreds (or even dozens) of sites
Brand advertisers need mass reach; someone needs to
aggregate
Growth and fragmentation
300 – 400 ad networks today (up from only 15 seven years ago)
Use of ad networks has increased from 5% of sold inventory in
2006 to 30% in 2007 (Source: Bain & Company)
45. Let’s Look at an Example
865th
most
trafficked
site
(Quantcast)
Advertising
from
McDonald’s via
DoubleClick ad
networkAdvertisers (or
agencies)
arrange a buy
with DCLK and
may not know
what site their
banner will run
on
46. How Do Ad Networks Differ?
Points of differentiation
Targeting, technology, types of inventory,
media type, etc.
Pricing/business models
Representation
Direct acquisition via revenue share
Direct acquisition via arbitrage
“Blind” vs. transparent
47. Benefits & Challenges of Using Ad
Networks
Monetization
Access to large
advertisers
Clear excess
inventory
Choice and flexibility
No investment in a
salesforce
Low prices and price
erosion
Sales channel
conflicts
CPM arbitrage
Managing pricing
and yield
Relationship
management
Benefits Challenges
48. Why Do Advertisers (and Their
Agencies) Use Ad Networks?
Extended reach (and targeted)
Leverage residual impressions at large
publishers for a lower price
Too difficult to screen and manage
relationships with large numbers of small
sites
Pricing efficiencies; reduce total campaign
costs
49. Implications for Publishers
Challenge of potential price erosion
Need to better support the value of premium
inventory – through more innovative offerings
and/or reducing units available
Can work with multiple networks for
optimization, but requires resources
Need to actively manage secondary
channels, both to maximize yield and to
safeguard strategic position
50. Final Thoughts:
What’s the Right Path to
Monetization?
Depends on your business, traffic, goals, audience,
reach, etc.
Experiment with Google AdSense
No long-term commitment
No transparency on revenue share
Most flexibility and minimal resources required
Get some baseline metrics
Ties into Google Ad Manager (ad serving)
Look to ad networks for deeper support
Test a few and optimize
Exclusive vs. non-exclusive relationships; beware of
contract terms
51. Final Thoughts:
When Do You Build a Direct Sales
Force?
Maybe never!
Do the math
5 million ad impressions per month at a 40% sell-
through at $8 CPM = $16,000
Resources
Sales manager, marketing/sales solutions,
assistant sales manager/planner, ad
trafficking/operations, reporting & analytics, billing
Payment cycles and the impact on your working
capital
52. Final Thoughts:
How to Get RFP’s from Agencies
Agencies want and need options
Reach out to MD’s, AMD’s and Media
Planners
Make a connection between your
audience/content and the agency’s client
Research and industry trends
Leverage your “launch” period
Be prepared to talk about aggressive
pricing, low minimums, custom
opportunities and ad units
53. Your Homework Assignment
Who’s your customer?
Who is your site, product, service meant
to serve?
What is your unique value proposition?
How do you engage your customers and
how is that unique?
What is the monetization strategy now?
What do you think it could be?
54. Useful Resources
Interactive Advertising Bureau (www.iab.net)
Advertising Research Foundation
(www.thearf.org)
comScore (www.comscore.com)
Nielsen//NetRatings (www.nielsen-online.com)
Forrester Research (www.forrester.com)
eMarketer (www.emarketer.com)
ClickZ (www.clickz.com)
MediaPost (www.mediapost.com)
Word of Mouth Marketing Assoc.
(www.womma.org)
55. Contact Information
Shari Gunn
VP Advertising & Business Development
Kaboodle, Inc.
e: shari@kaboodle.com
p: 408.328.7019