Growing Online Revenue:Advertising, Sales and Classifieds

Moscow, Russia

27 – 28 September 2012

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TopicPresenter

Online Advertising Market Overview Ross

Sales Teams: Organization & Motivation Ross

Advertising Networks Ross

Online Classifieds: Local Opportunities Ross

Social Media: Building Audience & Revenue Kevin

Agenda

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Advertising Networks: Overview

Advertising Networks are everywhere…there are over 300 and more everyday.

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Advertising Networks: Overview

Advertising networks are designed to address the unique issues that face advertisers in the digital media market.

Digital Advertising IssuesToo many publisher sites to choose from. Too much supply.

Difficulty at identifying high quality content:- High ad performance- High quality content- High quality audience

Challenge to integrate advertising performance metrics across hundreds of sites.

Difficulty in managing ads across multiple sites.

Ad Network SolutionsAggregates ad inventory from multiple sites.

Typical network may include many thousands of sites.

Divides ad inventory by quality of ad performance; type of ad content

Provides simple consistent metrics to track ads across network sites

Manages for ad efficiency (pricing, distribution, …)

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Advertising Networks: Overview

Successful ad networks require strong sales and marketing and strong technology to compete.

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Target Tech•Contextual•Behavioral•Demographic•Brand•Geographic

Ad Networks

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Advertising Networks: Overview

The complexity and rapid evolution of online advertising has resulted in increasing specialization in ad networks.

Open vs. Blind• Open networks allow the advertiser to select specific brands/sites

within the network.Example: Gourmet Ads

• Blind networks only allow the advertiser to buy specific advertising actions (views/clicks) but not know which sites will display the ads.Example: Google AdSense for Content

Thematic Networks: Aggregate particular types of content to attract very targeted advertising groups – generally by industry. Examples: Active Youth Network, FishingAdvertising.org

Behavioral Networks: Allow advertisers to target audiences based on other actions they have taken on the network of on the web.Examples: Eloqua.com, Aggregate Knowledge

Advertising Network Types

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Advertising Networks: Overview

Geographical Networks: Aggregate traffic from online publishers in a particular region or area.Example: AdZouk.com

Technology/Media Networks: Networks that aggregate/serve traffic based on a unique media or technology type – mobile, video, audio, RSS

Examples: Video (YouTube), Mobile (InMobi), Audio (TargetSpot).

Advertising Network Types (continued)

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Advertising Networks: Pricing

Advertising networks establish prices based on one of two general models.

Traditional Volume Based Pricing (CPM Prices)• Prices set on supply and demand; competition• Frequently subject to negotiation and discounts depending on the

advertiser• Mostly used in Open, Branded networks and thematic networks

Ad Auctions (Price per Click/Per Position)• Audience behavior standardized

to simple measureable unit – The Click, the mouse over

• Advertisers bid per action, price per click

• In text ad units, advertisers can also bid on position

• Pricing is dynamic; changes by day of week or location.

Advertising Network Pricing Models

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Advertising Networks: Evaluation and Selection

Choosing an Advertising Network, the online publishers must balance the potential for additional revenue with the costs of implementation and the risk of cannibalization.Maximize Network Revenue:

• Which network contains the most relevant advertisers to your publication? To your audience?

• Which network has incentives to maximize pricing to advertisers?• If a blind network, does the network bring in new advertisers who

might not buy your brand.

Minimize Cannibalization Risk:• Does the network sell advertisers you would sell directly, current

advertisers?

If so, they should be “blind” networks. So, the advertiser cannot compare the price from your sales team and their sales team.

Low Cost of Implementation:• Is advertising implementation simple and low cost?

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Advertising Networks: Evaluation and Selection

Specific Ad Network evaluation criteria include:

Advertiser Volume and Type:• The larger the volume of advertisers the high bid prices tend to be in

an bidded network.• Are the advertisers likely to be new advertisers?

Advertising Unit Controls:• How much control does the advertising network give you over which

advertisements to run and where to run them?- Controls prior to campaign- Controls during campaign

Network Metrics:• What network metrics do they offer and can you use them to improve

your own sales effort? • Can you audit site and revenue performance easily from the metrics?

Revenue Share/Payments:• What is the maximum revenue share from the network?• What payment methods are available for the ad network to pay?

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Advertising Networks: Affiliate Networks

Affiliate Networks are a special case of an ad network offered by ecommerce companies like Ozon.ru and Amazon.

Affiliate NetworksAudience Action and Payment:

• Affiliate Networks pay for audience actions that deliver potential qualified sales leads to online retailers.

• The payment per action can be a significant % of the purchase price of the item being advertised.

Affiliate Network Usage:• Affiliate networks work best when a product or product category is

being reviewed or discussed.

We call this the purchase funnel. Consumers research on your sites, just before they buy.

Most common affiliate categories are travel, books, electronics,

Amazon Affiliate Program: affiliate-program.amazon.comOzon.ru Affiliate Program: http://www.ozon.ru/context/partner/

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Advertising Networks: Creating A Network

Many leading online media companies have come together to create their own online advertising networks.

Creating A NetworkTechnology: Do you have access to or can you build an ad serving technology?

• There are multiple ad serving technologies that can be used to build a private ad network – Google DoubleClick for Publishers Network Builder; AdFox.ru

Audience: Can you create a network with combined audience that is unique in some compelling way for advertisers?

• Ad network audiences require marketing to attract advertisers and their agencies. How would you sell your network’s audience?

Sales and Marketing: Do you have access or can you build a network sales and marketing team?

The type of team and their backgrounds will depend on the type of network and audience you develop.

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Advertising Networks: The Debate

Should you use online advertising networks? This is often an intensely debated topic.

Online Advertising Networks: Pros and ConsPros:

• Provides revenue at relatively little cost for content sites.• Can attract new advertisers from outside the market• Most are relatively easy to implement/add to your site• Creates a baseline for establishing the value of your site’s advertising

inventory.Cons:

Can create confusion for other advertisers and potentially cannibalization.

Can serve ads that are inappropriate.

Website Headline: “Corpse Found in Samsonite Suitcase”Ad Unit: Buy Samsonite Suitcases Here!

Can create a revenue dependence that is hard to stop.