shari gunn
DESCRIPTION
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 GroupTRANSCRIPT
ABC’s of Brand AdvertisingOctober 20, 2009Shari Gunn, KaboodleOnline Advertising and Social Media Summit
What do you want to get out of today?
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
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
Online Advertising Industry Snapshot
Online Advertising Ecosystem
Full-service Media
planning/ buying
Creative Interactive Etc.
Advertiser
Media Outlets
Advertising
Agency
TV Print Radio Internet Outdoor Etc.
Single product/ brand
Multiple brands
Local National Etc.
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
Continued Growth in Spending, but at a Slower PaceUS Online Advertising Spending Growth (%)
Source: eMarketer, April 2009
Search Continues to Lead Online Ad Spending
2008 Internet Ad Revenues by Ad Format
Source: IAB / PwC, March 2009
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
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%)
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
Back to the Basics
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
The IAB Universal Ad Package
A set of four ad units that all compliant IAB member publishers have agreed to support
180x150300x250
728x90
160x600
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) Industry measurement services (comScore, Nielsen//NetRatings)
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 media buy of $75,000
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
placements
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
Example:Using Media Assets to Lower eCPM
Ad Unit CPM Impressions
Media Value
300x250 $ 10.00 6.5 million $65,000eCPM = $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 $65,000eCPM = $65,000 = $9.28
(7 million / 1000)
Example:Using Media Assets to Lower eCPM
Ad Unit CPM # of Impressio
ns
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)
Example:Revenue Per Page
Example Revenue Per Page Calculation:
Banner ($5 CPM) = $0.005 per pgRectangle ($10 CPM) = $0.010
per pgSkyscraper ($2 CPM) = $0.002
per pg2nd Rectangle ($1 CPM) = $0.001
per pg
Total revenue per page = $0.018
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
value to our advertising partners (and the highest rates for us)?
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
Types of Targeting
Demographic Age Gender Income Occupation Household size
Defined by overall site demos, survey feedback, user registration data
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
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
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
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)
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.
Advanced Ad Formats:Rich Media (continued)
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”)
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
Gaming Example
Seventeen.com and Secret Deodorant
Gaming Example
Lifecycle of a Brand Campaign
Get to Know the Key Players
Full-service Media
planning/ buying
Creative Interactive Etc.
Advertiser
Media Outlets
Advertising
Agency
TV Print Radio Internet Outdoor Etc.
Single product/ brand
Multiple brands
Local National Etc.
Let’s Look at An Example…
Individual Brand Managers
Media Planning and Buying
Creative
Lifecycle of a Brand Advertising Campaign
Insertion Order
Insertion Order
Client Request
for Proposal
Client Request
for Proposal
Monitoring & Optimization
Campaign Execution
Reporting & Analysis
Review
Lifecycle of a Brand Advertising Campaign
Insertion Order
Insertion Order
Client Request
for Proposal
Client Request
for Proposal
Monitoring & Optimization
Campaign Execution
Reporting & Analysis
Review
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!
The Role of Ad Networks
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)
Types of Ad Networks
General (ex. Advertising.com) Geographic Contextual (ex. Google) Behavioral (ex. Tacoda, Revenue
Science) Vertical (ex. Glam, Jumpstart
Automotive) Pricing (CPM, CPC, CPA, CPE)
Let’s Look at an Example
865th most
trafficked site
(Quantcast)
Advertising from
McDonald’s via
DoubleClick ad network
Advertisers (or agencies) arrange a buy
with DCLK and may not know what site their
banner will run on
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
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
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
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
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
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
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
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?
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)
Contact Information
Shari GunnVP Advertising & Business DevelopmentKaboodle, Inc.e: [email protected]: 408.328.7019