Advertising on the Internet

1. Advertising on the Internet “It isn’t creative until it sells” in other words…. Creativity (and technologies too) don’t matter if the ads don’t perform Angela D’Auria Stanton, Ph.D.

2. A Little History • First Internet advertisement sold in 1994 • Hotwire.com sold the ad for $30,000/year to AT&T – the annual cost to run its web site • Early advertisers included: AT&T, Sprint, MCI, Volvo, Club Med and Zima • In the early days, clickthrough rates were 25% • Today Internet advertising is a $4 billion dollar business

3. Internet Advertising • It is one component of advertising • It must be integrated with other advertising media to provide a coordinated campaign • Traditional advertising is the foundation for the development of Internet advertising models

4. Reasons to Use Interactive Advertising* • Generate and increase awareness • Generate trial • Provide information • Increase usage • Up-sell to premium product or service • Cross-sell other brands from company • Improve customer’s attitudes/image • Increase repeat purchase • Encourage loyalty/increase customer involvement – customer retention • Develop database of customers/prospects • Reduce excess/obsolete inventory • Test different copy concepts, pricing models, promotions, product/service offerings • Reach target audience missed by other media • Drive traffic to web site or retail location * Source: http://www.iab.net/resources/pdf/reasons_to_use.pdf

5. LARGEST CREATIVE PORTFOLIO | ranked by # of unique creatives | Week of November 14 – 20, 2005 Source: http://www.netratings.com

6. Top Site Genres (where ads placed) Ranked by impressions – Week of November 14 - 20, 2005 Source: http://www.netratings.com

7. Leading Industry Advertisers Ranked by impressions – Week of November 14 - 20, 2005 Source: http://www.netratings.com

8. Leading Consumer Packaged Goods Advertisers Ranked by impressions – Week of November 14 – 20, 2005 Source: http://www.netratings.com

9. Types of Online Advertising • Traditional Banner Advertising • The dominant online advertising method • A rectangular box, usually horizontal on the page, that contains advertising material • Banners often rotate, although there are sponsorships that constitute “permanent banners” • They are not large in size so info is limited

10. Traditional Banner Example According to the Internet Advertising Bureau (www.iab.net), the standard banner size is 468 pixels wide and 60 pixels high.  This takes up approximately 10% of a normal sized web page.  There is enough room for text, graphics or animation.

11. Other Banner Forms • Buttons – typically 120 x 90 or 120 x 60

12. Other Banner Forms • Mini/Micro Buttons – 88 x 31The most underrated of banner ads. Used properly, they are every bit as effective as full banners in delivering the message.

13. Other Banner Forms • Rectangle – 336 x 280 or 180 x 150

14. Other Banner Forms • Skyscraper – 120 x 600

15. Most Popular Ad Sizes Measured by the number of creative elements  Week of November 14 - 20, 2005 Source: http://www.netratings.com

16. More on Banner Ads • http://www.bannerreport.com/html/gallery.php • http://www.iab.net/standards/adunits.asp# • http://www.addesigner.com/samples.shtml • http://www.crecon.com/newbanners.html • http://www.boliviaweb.com/textads/default.asp

17. Pop-Ups • Ad that appears in a separate window on top of content already on-screen • Designed to get your attention for a few moments • Can be effective for branding although some people find them irritating

18. When this page loads This ad pops under, unnoticed Pop-Under(Behind) • Ad that appears in a separate window beneath an open window • concealed until the top window is closed, moved, resized or minimized. • Can be irritating but often have high recall

19. Rich Media • Catch-all term for online advertising technologically enhanced by motion, sound or some sort of interactive element. • Allows online ads to approach television in dynamic terms – designed to catch the eye, distract or intrude • They can float above content, animate, integrate video, a jingle, and include interactive elements like pull-downs for more information or content tailored to a user profile • Will become the de facto standard

20. Interstitial • Ads that appear while a publisher’s content is loading. Also known as transition ads, intermercial ads, splash pages and Flash pages. • An interstitial is usually designed to move automatically to the page the user requested after allowing enough time for the message to register or the ad(s) to be read. • All interstitials have in common the use of unused space and time online, where an ad is shown while the user is waiting for the next expected action. • Trademarked as Superstitial by Unicast • Examples • http://www.focusin.com/interstitial_demo/6679036/ • http://www.viewpoint.com/pub/advertising/gallery_transitional.html

21. Interstitial/Superstitial • Advantages • The ad creative uses "dead time" to show an ad message, at a time when the site visitor is on hold and attentive to the message that appears. • Their ability to incorporate sound and video. Many sites that accept interstitial ads can take them in a form reminiscent of TV ads. • Disadvantages • Users often don't understand that the interstitial they see on their screen while they're waiting for a page to load is using "dead time"; instead, there's a tendency to think the interstitial is slowing the arrival of the page they've requested. And this translates to annoyed users -- users, moreover, who might "blame" the product or service advertised for their annoyance! • While they can attract a lot of attention, this does not always generate a large number of clicks. It's that "branding" vs. "direct response" issue again. If an ad's effectiveness is going to be evaluated on the basis on click-throughs, interstitials may not be the best vehicle to sell an advertiser.

22. New Types of Rich Media Ads • Floating Ads - ad that appears to float above the page • http://www.eyeblaster.com/website/new_archive/2003/september_03/Verizon_NiceShot_on_Citysearch/Verizon_Launch.htmhttp://demo.eyeblaster.com/Europe/OfflineDemo/showcase405/Universal_McCann_115109.htm • Full Page Overlay – ad appears layered over web page • http://www.eyeblaster.com/website/new_archive/2003/september_03/Hulk_FullPage_on_Blackplanet/Hulk_Launch.htmhttp://demo.eyeblaster.com/Demos/alien_planet/launch.htm • Polite Banner – flash banner that allows large file size • http://demo.eyeblaster.com/Europe/OfflineDemo/colgate/start.htm • Commercial Break – full-page ad appearing between 2 web pages - http://www.eyeblaster.com/website/new_archive/2003/september_03/AlaskaAirlines_NYTimes/AlaskaAirlines_Launch.htmhttp://www.eyeblaster.com/products/rich_media_formats/commercial_break.asp • Video Strip - shows a strip of video in the banner space -- with a rollover or click, the banner expands to seamlessly reveal the video with accompanying audio in a full-sized panel http://demo.eyeblaster.com/Demos/VideoStrip/VideoStrip.htm • Video Clip Module - combination of a single content clip with one or more video advertising opportunities before, during and/or after the VideoClip contenthttp://demo.eyeblaster.com/Demos/videoclip/levis/start.html • Wallpaper - takes the place of a Web page's background and plays for a set durationhttp://demo.eyeblaster.com/OnlineExamples/iMedia%20Brand%20Summit/imedia_Launch.htm

23. Pull-Downs • When you slide your mouse over the ad, you receive a pull-down screen you can interact with. http://www.pointroll.com/adgallery/demo/teaser.asp

24. Banners on Caffeine • Expandable Banner – put your mouse over the banner and watch it expand – also known as FatBoy • http://demo.eyeblaster.com/CreativeShowcase/feb_05/redlobster/redlobster.htm • BadBoy - when a user lands on a web page, BadBoy appears on screen as FreeForm, dynamic content jabbing for attention. BadBoy floats for a pre-set period of time; once he's thrown his punches, BadBoy disappears, leaving a mouse-activated expandable banner behind (a FatBoy) to provide a deeper level of user-initiated interaction within the page-based media space. • TowelBoy - upon initial page load ad snaps open, exposing the user to a larger html, Gif, or Flash message space; after a few seconds, the ad automatically snaps back to a standard unit size. The user can then mouse-over the ad to view the larger message again and interact at will. • Foldover - expands up to half the size of the window when initiated by the user. Advertisers can deliver multiple layers that can contain any combination of messaging and imagery. • http://www.pointroll.com/ShowCase/ShowCase.asp

25. Shoshkeles • Rich technology platform that enables the introduction of a targets communication or series of communications, comprised of free form, full motion and sound to any web page, authorized to receive one line of code. • Communication served to the viewer via the site and is dynamically targeted. • Works on all browsers and platforms • This technology does not require plug-ins, and there is no discernable download for users • Examples: • http://www.unitedvirtualities.com/demo/jaguar/ • http://www.unitedvirtualities.com/demo/wireless2/ • http://www.unitedvirtualities.com/demo/rhinocort5/ • http://www.unitedvirtualities.com/demo/holland/ • http://demos.unitedvirtualities.com/shoshtv_hd5/ • http://www.unitedvirtualities.com/shoshkeles.htm

26. Where we’re heading… • Interactivity in Video • Red Bull Copilot - http://www.redbullcopilot.com/ • BMW 5 Series - http://www.bmw.com/generic/com/en/products/highlights/5series/index.html • Re:Evolution - http://www.reevolution.tv/main.php • Ford F-150 - http://f150.fordvehicles.com/trucks/f150/index.asp?bhcp=1

27. Rich Media Guidelines Source: http://www.iab.net/standards/richmedia/index.asp

28. Test Extensively For these banner ads, which background color led to the highest click-through rate?

29. 1. 0.075% 2. 0.069% 3. 0.067% 4. 0.058% 5. 0.051% Test Extensively

30. Ask for Immediate Action • It is more than just saying, “Click Here.” Instead provide a specific “Call To Action” • “Free Shipping if You Order Today” • “Click to Apply” • The word “free” works well, but you don’t always get qualified customers • If you convince visitors to click on your ad… Where do they end up? • A good, functional Landing Page is a must! • Completes the selling process • Converts browser to buyer • Goal of Landing Page: Achieve your Most Wanted Response (MWR).

31. Principles of Good Landing Pages • Request necessary information only! • Not the time for a customer survey • The shorter the form, the better • Make sure the form is on the first page • Give an incentive and restrict time horizon • Example: “Free shipping, if you order today” • Make the next step clear • When arriving on landing page, what must the person do? • Keep focused on the MWR! • Track ad effectiveness to determine what percentage of click-throughs result in your MWR.

32. Clicking on this banner ad… …leads to this page Question 1: Is this a good example of a landing page? Why or why not?

33. Clicking this ad… …takes you here Question 2: Is this a good example of a landing page? Why or why not?

34. Clicking this ad… …takes you here Question 3: Is this a good example of a landing page? Why or why not?

35. Clicking here… …takes you here Question 4: Is this a good example of a landing page? Why or why not?

36. Clicking here… …first launches this superterstitial… …then takes you here Question 5: Are these effective landing pages? Why or why not?

37. Clicking this ad… …takes you here Question 6: Is this a good example of a landing page? Why or why not?

38. Clicking this ad… …brings you here Question 7:Is this a good example of a landing page? Why or why not?

39. Clicking here… …brings you here, where you must click here… …to bring you to this page, where you must scroll down to the bottom of the page so you can click here… …so you can finally arrive here. You must click, search, click, search, scroll, search, and click before you arrive (presumably) to the MWR page (where you must click again to register!) Question 8: Good landing page? Why or why not?

40. Advertising Pricing Models • CPM (cost per thousand) Method – most widely used Price -------------------------------------- (Number of Impressions/1000) So if there 1 million impressions and the CBM is $100, then the price equals: Price (ad) = CPM x (number of impressions/1000) $100,000 = $100 x (1,000,000/1000)

41. CPM • Advertising prices are in flux • Pricing dependent on placement: • General rotation • Run of category • Targeted • CPMs online tend to be higher than traditional ads because of the (1) accuracy and narrow target focus allowed by online ads and (2) ability to more easily measure response.

42. Advertising Pricing Models • Clickthroughs (CTRs) – the percentage of the ad views that result in an ad click.  • Recently, average clickthrough rate has declined to about 0.17 according to Nielsen Netratings.  • First used in 1996 by P&G but model failed to catch on because it did not take into account the impact on the consumer from simply viewing ads

43. Advertising Pricing Models • Flat rate ads – flat fee charged per time period for an ad of a specific size (the traditional print ad model) • Typically used when web site first created and has no track record of viewers • Major media sites (e.g. Yahoo & CNN) use flat pricing • Costs can range from $100,000/month for a general ad on Yahoo because of its high traffic to $2,000 a month on Spacenews.com, a speciality web site for the space industry.

44. Advertising Pricing Models • Pay per Purchase – typically used on merchant web sites • Basically a commission

45. Items that are Frequently Tracked • Click Through Rate (CTR) from Ad • The average number of click-throughs per hundred ad impressions, expressed as a percentage. • Measures “immediate” response, not “overall” response • Sales from Ad From these two pieces of data, you can calculate two extremely important metrics: • Conversion Rate • Cost Per Sale

46. A. Conversion Rate • The percentage of visitors who take a desired action • The organization defines the “desired action” • Sale of products (The ultimate conversion!) • Membership registrations • Newsletter Subscriptions • Software Downloads • Anything except simple page browsing • Conversion Rates (source: www.clickz.com/stats/markets/advertising/article.php/5941_3309271) • 1.11% for rich media • 0.43% for non-rich media

47. B. Cost Per Sale/Cost Per Acquisition • Cost of the ad divided by the number of sales generated. • Let's say an ad on web site "A" costs $100. Divide the cost of the ad by the number of sales generated from that ad (say, 10) to get your cost per sale (in this case, $10). Each sale generated from your ad on web site "A" cost you $10. • Now, let's say an ad on web site "B" cost only $85. Divide the cost of the ad by the number of sales generated from that ad (say, 3) to get your cost per sale (or $28.33). Each sale generated from your ad on web site "B" cost you $28.33!

48. To get cost per sale and conversion rate data you need to connect CTR with the sales they produce: • Two inexpensive methods to do this: • Separate landing page (mirror) URL for each ad • http://www.domain.com/green.htm • http://www.domain.com/blue.htm • http://www.domain.com/red.htm • Modified URL for each ad • Assume landing page is http://www.domain.com/sales/landingpg.htm • Modify by http://www.domain.com/sales/landingpg.htm?ad78641 because anything after the question mark is ignored by the web browser, but noted by your traffic logs

49. Traffic Analysis for Online Advertising (includes e-mail) • Counter scripts (freeinvisiblecounters.com, trafficfile.coml) • Trackers (extreme-tracking) • Web Host/ISP • Purchase Web Statistics Analysis Tools • Employ an outside firm to audit

50. Affiliate Management Software and Cookies • A potential customer clicks on a coded URL that goes to a designated landing page • When the landing page opens, a cookie is placed on the customer's web browser recording the identity of the promotion, ad, or affiliate, and registering a click-through. • If the customer makes a purchase, he/she is directed to the “Thank You” page after the transaction is completed. There, the cookie is read by the affiliate management software program and recorded with the amount of the sale. • Affiliate management software keeps a running tally for each promotion, ad, or affiliate of • click-throughs generated and • sales generated. Affiliate Management Software Resource: http://www.wilsonweb.com/afd/groundbreak.htm