Digital Advertising – Display, Search, Video, Mobile, Social, AffiliateApril 1st 2014Vinogradovo, Russia

1. Traditional vs digital media advertising

2. Digital advertising terminology

3. Digital advertising format basics

4. Digital ad pricing models

5. Audience metrics and targeting

Agenda

What are the most important differences?

What are the main benefits and downsides?

How has changed the way your sales department works?

How will your sales department look like in a near future?

Traditional vs digital media advertising

Traditional vs digital media advertising

Quantitative „Reach“ Model

spreading a commercial message to audience as large as possible in hopes of connecting with qualified customers who happen to be receptive to it

Qualitative „Targeted“ Model

enables to target a selected prospects and to monitor their response rates

 Masses of unknown eyeballsVS

Highly specific and traceable audience

Digital media advertising: Pros & Cons

Benefits

• Cost

• Measurability (real-time)

• Formatting

• Targeting

• Coverage

• Speed/Flexibility

Concerns

• Banner blindness

• Fraud on the Advertiser

• User annoyance

• Ad-blocking

• Privacy Concerns

• Spam

Traditional media advertising: Pros & Cons

Benefits

• Recipients are accustomed to ads

• Reach to local audience that is not online

• Special training/device not required

Concerns

• Cost (high overhead costs are outweighed by high profit margins)

• Difficult to measure and target

• Static (pre-produced/scheduled)

• No interaction, one-way communication

Digital Advertising Terminology

Ad rotationAd view/Ad impressionCappingClickthrough (CTR)Click rateCookieDisplay adsFilteringInventoryNative advertisingTargeting Unique visitorVisit

KB Glossary: http://www.kbridge.org/ru/glossary/

Digital media advertising value chain

Buy SideInfrastructu

re and Delivery

Sell Side

Media Agency

Demand Side Platform

Ad Exchange

Ad Network

Supply Side Platform

Publisher

Evolution of display ad trading

Source: IAB UK, http://www.youtube.com/watch?v=1C0n_9DOlwE

Digital Advertising Essentials

Ad TypesText or Link AdsDisplay AdsRich Media AdsOn-Site SponsorshipAdvertorialDirectoriesMobile AdsAffiliate Marketing AdsSearch AdvertisingSocial Media Ads

Delivery MethodsDisplay advertisingSearch Engine Marketing (SEM)Social Media MarketingMobile AdvertisingEmail AdvertisingOnline Classified AdvertisingAffiliate Marketing

Digital Advertising Formats

source: IAB.net - http://www.iab.net/guidelines/508676/508767/displayguidelines

Digital Advertising Pricing

Fixed costs (a flat fee over a specified period of time, irrespective of the ad's visibility or users' response to it)

CPM (Cost per mille) or CPT (Cost per thousand)

CPC (Cost Per Click) or PPC (Pay Per Click)

CPA (Cost Per Action)

CPV (Cost Per View)

Digital Advertising Pricing

Fixed costs/time-based pricing - does not reflect growth in audience, easily overbooking ad inventory, adding new ad units

CPC (Cost Per Click) or PPC (Pay Per Click) – ads are shown, they increase awareness of advertiser, but you get paid only for clicks

CPA (Cost Per Action) – unpredictable income, you lose visibility into revenue earned, no control on conversions

None of these is recommended pricing model for display ads on premium content sites

Digital Advertising Pricing

Recommended Pricing Model for Display AdsCPM (Cost per mille)/CPT (Cost per thousand)

for every display ad you serve you make money (regardless of clicks, leads, or other action), every visitor makes you earn money;

you know exactly how many ads you serve, and therefore exactly how much you’re owed from your clients;

stable stream of earnings; if you can predict your traffic, you can predict your revenue.

Audience Measurement

Site-Centric - Third-party technology (a tracking code) or self-reported website server logs collect audience metrics for a specific site, often by analyzing cookie/browser/log file data from each visitor.

User-Centric - Each person studied has joined a panel and/or installed tracking software to allow a third-party to collect their usage statistics.

Ad-Centric - Data are used to quantify the advertising exposures delivered to the audience of a single site by analyzing data from ad server logs.

Audience Measurement

Each measurement type has distinct advantages, though none alone captures the full range of market-relevant and media-relevant activities of consumers. No industry standard for online activity measurement yet exists.

Hybrid approach to audience measurements - uses fusion or other techniques to incorporate findings from a variety of other sources, to correct errors and plug gaps (e.g. integrating both consumer panels and site-centric measurement).

Leaders of research in Russia: TNS, comScore, Gemius

Audience Measurement: Key MetricsPage Views - a request for a file that is defined as a

page

Visit / Session - is defined as a series of page requests or, in the case of tags, image requests from the same uniquely identified client. A visit is considered ended when no requests have been recorded in some number of elapsed minutes.

Visitor / Unique Visitor / Unique User - uniquely identified client (device or browser) that is generating page views or hits within a defined time period (e.g. day, week or month). The identification is usually via a persistent cookie

Online Advertising Targeting MethodsTargeting options

date and time targeting

geographical location of users (up to city/district level – hyperlocal targeting)

number of hits per user (based on a cookie and IP) - capping

bandwidth, browser, languahe settings, OS, connection type, etc.

Advanced Targeting MethodsRetargeting - serving ads based on prior engagement,

ads appear on a variety of other sites, keeping a campaign in front of bounced site visitors.

Social Media Targeting - refers to the process of matching social network user’s profile to target groups that have been specified by the advertiser.

Contextual Targeting ( “semantic” targeting) - Inferring the optimum ad placement from information contained on the page where the ad is being served.

Behavioral Targeting - using prior behavior on the part of the viewer to determine which ad to show during a given visit.

Work on a client brief