Introduction to Digital Advertising

Introduction to Advertising

October 10, 2011

01 Introduction 02 Brief History of Digital Advertising03 Dissecting Digital Advertising04 The Future

Agenda

2

Introduction

My story…

The basics

• Grew up here in LA…– Proud graduate of Burbank High School

• Went to Harvard University for undergrad– Majored in Economics and really missed the West Coast

• Worked as a management consultant after school• Got an MBA from Wharton in Marketing &

Entrepreneurship• I’ve lived in LA, Boston, Madrid, San Francisco,

Philadelphia, and New York

I’ve always been a serial entrepreneur

• Started my first business in 6th grade

• Built custom PCs in junior high

• Started Sensis (as Focus Multimedia) the summer after graduating from college

I didn’t plan to get into advertising

• Was more a tech geek than creative guy

• I sort of stumbled into this business

My agency… Sensis

The Sensis story

Sensis overview

• 39 employees Agency structure• Offices:

– Los Angeles, CA– Washington, DC– Mexico City, MX

clients

digital thinking• Sensis was born as a Web

development agency 13 years ago

• We have grown into a full-service agency the last 6 years

• We build brands by making them live digitally

• Digital is central to all we do

• All marketing should be measured

• All our work starts with projections, is measured by results, and optimized based on data

right person + right moment + right message

= Precision

empathy for “users”• We don’t look at an

audience of “consumers”

• Because of technology, users have the real power

• Our role is to help our clients participate in the life experience of users

Brief history of digital advertising

Digital advertising

Digital advertising refers to any advertising delivered through media connected to the Internet.

The birth of online advertising• The first SPAM email was sent in 1978 when a DEC

employee announced a new computer inviting everyone with an ARPANET address on the west coast to a reception)

• Computerized Bulletin Board System, the first BBS, launched in 1978

• The first commercial online services, CompuServe and the Source, were founded in 1979

The first online (service) ads

The IBM and Sears-run dial-up service Prodigy ran banner ad-like ads as early as the mid-80’s

The birth of online advertising, cont.• NCSA Mosaic released in 1993, leading to the rise of the

graphic, commercial Web

• Netscape Mozilla becomes the first commercial Web browser in 1994

• October 25, 1994: the first banner ad runs on HotWired

• The IAB’s Ad Sizes Task Force releases the first real ad standards in 2003

• March 13, 2006: Rocketboom runs the first video ad

1994: a banner year

1996: Web advertising gets interactive

Dissecting digital advertising

In 2011, what’s the best way to think about and categorize

digital advertising?

POEM

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Paid Media

Owned Media

Earned Media

POEM DefinedMedia Type Definition Examples

Owned Media Channel a company owns.

Company owns the impressions.

• Retail store• Website• Mobile site• Blog• Facebook page

Paid Media A channel a company pays to leverage.

Impressions you pay for.

• :30 sec TV spot running on Super Bowl

• Web banner ads• Paid Search

Earned Media When customer, influencers, or the media become the channel.

Impressions not paid for.

• Newspaper article mention

• Word of mouth• Buzz• “Viral” activity

Paid Digital Media

Generic Online Ad SpendingSearch

Portals

Top Publishers

Networks

Social Media, Widgets, Mobile,

Virtual Worlds

Specialty Websites

Paid Search• Ads that appear contextually via

search queries on the main search engines

• Pay per click (PPC)– Reverse-auction system - the higher

you bid, the higher your ad will likely appear

– Relevance is also key

• Text only ads– Ad titles are limited to 25 characters– The two description lines limited to 35

characters and a display URL

Banner Ad - Overview

Sizes Formats

Pricing

Banner Sizes

Source: Interactive Advertising Bureau (www.iab.net)

Pricing

CPM – cost per thousand impressions– 100,000 impressions @ $10 CPM = $1,000

CPC – cost per click– 200 clicks @ $5 CPC = $1,000

CPL – cost per lead– 25 leads @ $40 CPL = $1,000

CPA – cost per acquisition– 10 sales @ $100 CPA = $1,000

Branding

DirectResponse

HighQuality

Low Quality

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Banner formats - Display

• Static or animated• Effective for both direct response and branding

Banner formats - Rich Media• Overlays, expandable

banners, streamed video

• Sophisticated online advertising

• Aims to entertain and engage user

Banner formats - Text Display

• Contextual social – Facebook, YouTube,

LinkedIn ads

• Contextual mobile app ads– AdMob

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Online Video• Pre-rolls

– Ads appear before the content– Best-performing

• Mid-rolls– Ads appear during the content– Many marketers are wary of the “interruption

factor”

• Post-rolls – Ads appear after the content– Post-roll often only performs at a 40% level

compared to the pre-roll

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Newsletters– Like banner ads

on an email newsletter

Email

Email

Email Blasts– Email that

only contains your ad.

Email Metrics• Bounce Rate (Delivery Rate)

– How many emails actually went to someone• Open Rate

– How many emails were opened by the recipient– Clicks / Impressions

• Click Rate– How many clicks on links in the email

• Forward Rate– How many people forwarded the email to friends

• Unsubscribe Rate

Offline Digital• Digital Out-of-Home

– Display creative (banners) would be leveraged across DOOH platforms

• Digital Billboards• Digital Display

– Coffee shops, supermarket check-outs, gas stations

• In-store Video Advertising– In-Store, Closed-Circuit

Television (Walmart TV, Home Depot)

Offline/Online Integration

• Incorporating digital into traditional “offline” media– Integrate “Text for more info” call to action

• Radio– Traffic updates

– Events• Text, QR codes

– Retail Activations• QR Codes

Ad Serving & Targeting• Ad servers

– Place ads on websites– Count impression/click/leads– Enable targeting– DART (DoubleClick), Atlas, 24/7 OAS, etc.

• Geotargeting– Where will your ads be seen?– Country, state, DMA, area code, zip code, etc.

• Other targeting– Daypart, browser, bandwidth

Metrics and Measurement• Impressions & Clicks• CTR – click-thru rate

– How many of my ads got clicks?– Clicks / Impressions

• eCPC – effective cost per click– How much did each click cost me?– (Impressions x CPM) / Clicks

• eCPL – effective cost per lead– How much did each lead cost me?– (Impressions x CPM) / Leads

Earned Media

Social Media

Social media has created a new form of technology-empowered guerrilla marketing

Word of Mouth

• The act of consumers providing information to other consumers.

• Word of Mouth Marketing:– Giving people a reason to talk about your products and

services, and making it easier for that conversation to take place.

– The art and science of building active, mutually beneficial consumer-to-consumer and consumer-to-marketer communications.

Types of WOM Marketing• Buzz Marketing: Using high-profile

entertainment or news to get people to talk about your brand.

• Viral Marketing: Creating entertaining or informative messages that are designed to be passed along in an exponential fashion

• Community Marketing: Forming or supporting niche communities that are likely to share interests about the brand (such as user groups, fan clubs, and discussion forums)

Types of WOM Marketing (cont)• Evangelist Marketing: Cultivating

evangelists, advocates, or volunteers who are encouraged to take a leadership role in actively spreading the word on your behalf.

• Product Seeding: Placing the right product into the right hands at the right time, providing information or samples to influential individuals.

• Influencer Marketing: Identifying key communities and opinion leaders who are likely to talk about products and have the ability to influence the opinions of others

Types of WOM Marketing (cont)• Conversation Creation: Interesting or fun

advertising, emails, catch phrases, entertainment, or promotions designed to start word of mouth activity.

• Brand Blogging: Creating blogs and participating in the blogosphere, in the spirit of open, transparent communications; sharing information of value that the blog community may talk about.

• Referral Programs: Creating tools that enable satisfied customers to refer their friends.

Search Engine Optimization (SEO)• Improving the volume and quality of traffic to a

web site from search engines via "organic" search results for targeted keywords.

• The higher a web site ranks, the greater the chance that it will be visited by users.

• Search engines generate nearly 90% of all Internet traffic.

• SEO is a long-term strategy.

• Highest ROI of all marketing tactics.

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Owned Media

Websites

Corporate Websites• Home of brand messaging -

the principal piece of customer interaction architecture

• Users will quickly assess their opinions of brands & companies based upon their interaction with their Websites

Microsites / Landing Pages• Single-message or –purpose

Web destinations• Usually used to drive direct

response (landing pages)

Corporate Websites

Microsites & Landing Pages

Mobile

Mobile Apps• Games, lifestyle tools• Opportunity for branded

applications

Mobile Websites• Mobile versions of a Website• Mobile-optimized Websites

Social Media (again)

• Facebook pages• Twitter feeds• YouTube channels• Yelp profiles

Facebook

Companypages

Twitter

Facebook Social gaming

New stuff

Social Buying / Deals

In-game Advertising

Form of branded entertainment

The future of digital advertising

The digital future

All advertising will be digital

Billboards are going digital. Cable TV is incorporating digital-like targeting capabilities. TV ads look like banners…

Advertising agencies will adapt or die.Traditional and digital advertising agencies will converge. Those that don’t will disappear…

How advertising will change

Brands & branding won’t changeThe idea of brands and branding aren’t really going to change. How we go about building them is and will continue to do so…

Digital will be at the center

“[Digital] is the centerpiece of a broader campaign. I think that’s become a real integral part of how we use the web, moving beyond just promoting web addresses in TV spots or print ads to really making them a critical part of the storytelling for the brands.”

Rob MasterMedia Director, North AmericaUnilever

Shift from “consumers” to “users”

Advertising will become about creating experiences, engagement and utility,

Content is the new currency.

Engaging content = social currencyPeople, and brands, will pay for great content

Content is the new currency

“The agency’s job is to create content so valuable and useful that consumers wouldn't want to live without it.”

Jeff HicksCEOCrispin Porter + Bogusky

The next wave of industry mega-growth will come from the advancement of the classic art of storytellingContext creates auras and aspirations that help drive marketer interests.

Stories around brands, products

It's not just a race to get to the highest number of fans. It's a race to figure out how to be the most engaging storyteller with your fans."

Carolyn EversonVP, Global Marketing SolutionsFacebook

In the future, digital ads will be highly personalized. They'll appear on mobile devices in sophisticated ways. If you want to share an ad with friends, you can, and if you want to skip it, well, go right ahead.

Preparing yourself

Marketing jobs of the future

Roles that didn’t exist 5 years ago:

• User Experience Designer• Online Community Manager• Creative Technologist

My humble advice to future “Ad Men”

• The planner of the future– Take an anthropology course

• The creative of the future– Take a computer science course

• The media buyer of the future– Take a statistics course

Thank you.Jose VillaPresidentSensisT: (213) 341-0171E: jrvilla@sensisagency.com

@jrvillawww.linkedin.com/in/josevillawww.thinkmulticultural.comwww.sensisbureau.com