Advertising Alchemy
description
Transcript of Advertising Alchemy
Oriented Media Online Advertising Alchemy : a media accountant’s perspective
Web Wednesday - Guangzhou Wednesday 15th October 2008
Alchemy
In medieval times [in the West] admirers of alchemy tried to
prepare “philosophical stone”
the mythic substance capable of transforming ignoble
metals into gold and silver.
Bums on seats
An airline seat is the ultimate perishable item.
Once the aircraft has taken off with an empty seat, the airline has lost the opportunity to earn revenue.
Sir Colin MarshallCEO of British Airways in the 1990s
Simplistic View of Airline Revenue
Airline Revenue is a function of:•Schedule•Destinations•Fleet make-up•Class make up(seats per class)•Base currencies•Sales channels•Seasonality
Airline seat yield management
Based on real data built up over the years airlines look to maximize the yield at any point in time from: • each seat • on each and every aircraft • on each and every route • from each and every destination • from each currency unit…
Airline yield management: the alchemist stone of airline profitability
Correctly handled it can yield GOLDGOLD for the shareholders.
Badly handled it can yield DISASTERDISASTER. A failure in yield management amounts to a failure to make the most of a hugely expensive aircraft.
R f ([P x A x N x G] x [S x C] x [D]) x [Ym]
Bums on seats andOnline Advertising Alchemy
R f ([P x A x N x G] x [S x C] x [D]) x [Ym]
Revenue is a function of:
[Page Views x Adsize x Number of ads/page x Geographic locale] x [Seasonality x Content Channel] x [Number of Days after the month end that ad payments are received] x [Yield management – ad feed management]
R f ([P x A x N x G] x [S x C] x [D]) x [Ym]
Page Views matter: Content, Content, Content.
0 to 1 6 to 7 12 to 123 to 4 9 to 10 15 to 16
18 to 1921 to 22
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Week in month
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fffic
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R f ([P x A x N x G] x [S x C] x [D]) x [Ym]
AdSize matters. Geography of visitor matters.
468x
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728x
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160x
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300x
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Africa
(ex
ZA),
SAmer
ica,
RoW
Asia
(ex
HK, SG &
MY)
HK, SG &
MY
AU, NZ
& ZA
EU (ex
UK)
USA & C
A UK0.0
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R f ([P x A x N x G] x [S x C] x [D]) x [Ym]
The Number of ads per page (N) combined with Adsize (A) can have a significant impact on the revenue earning potential of a web page.
Economist.com6.8 revenue units!
728x901 rev unit
160x600just above fold2.5 rev units
300x2503.3 rev units
R f ([P x A x N x G] x [S x C] x [D]) x [Ym]
Seasonality matters. Content channel matters.
Mar Apr
May Ju
nJu
lAug
Sep Oct
NovDec Ja
nFeb
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User G
ener
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Conte
nt
Web
mai
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Auto, S
hopping
Busines
s, T
ech, T
rave
l
Inve
stin
g, Par
entin
g, Gam
es IT0.0
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R f ([P x A x N x G] x [S x C] x [D]) x [Ym]
• Currency matters.
• Cash flow is significantly impacted by the number of days after the end of the month when ad payments are received (D).
• When working with ad networks, revenue cheques are typically paid 30 to 90 days after the month’s end.
• When working direct with ad agencies cheques might be 120 to 180 days after the month end!
R f ( [P x A x N x G] x [S x C] x [D]) x [Ym]
Our goal of yield management (Ym) is to: • maximize the return from every banner• across every geographic locale / time-
slice• across every language• across every channel• across each advertiser supplier
(here an understanding their deal flow, their capacity and track record is important)
Airlines, online Advertising & Alchemy
Online advertising yield management is the alchemist stone for publishers.
It’s not a “black art” by any means, but a methodical process that involves both science and human judgment.
End
Thank you
A white paper covering this topic is available at:
http://www.activ8worldwide.com/download/Activ8OnHowToMonetiseYourWe
bsite.pdf
http://www.activ8worldwide.com/download/Activ8OnYieldManagement.pdf
Contact - Peter BurtonOriented Media Limited