1. Internet Advertising
The Internet Advertising
Landscape
The General Advertising Landscape The General Advertising Landscape
Source: Television Bureau of Advertising,
http://www.tvb.org/rcentral/adrevenuetrack/trends/trends.asp?c=2007_2009
The Internet Advertising Landscape: The Internet Advertising Landscape:
Revenues Revenues
Quarterly $ Revenue Growth Comparison – 2000-2008 YTD
Source: PwC/IAB Internet Advertising Revenue Report (www.iab.net)

2. The Internet Advertising Landscape:
Top 10 Search Providers for December 2008 Advertiser
Provider Searches (000) YOY Growth Share of Searches
All Searches 8,623,705 19.6% 100.0%
Google Search 5,421,943 33.5% 62.9%
Yahoo! Search 1,448,140 13.7% 16.8%
MSN/Windows Live Search 841,457 -15.5% 9.8%
AOL Search 357,025 5.1% 4.1%
Ask.com Search 169,116 6.0% 2.0%
My Web Search 62,415 -11.6% 0.7%
Comcast Search 50,385 45.1% 0.6%
NexTag Search 29,219 0.7% 0.3%
AT&T Worldnet Search 27,176 8.0% 0.3%
BizRate Search 23,593 37.1% 0.3%
Source: Nielsen Online, MegaView Search
The Internet Advertising Landscape:
Advertiser
The Definition of Internet Advertising
Internet advertising is the convergence of
traditional advertising and direct responses
marketing.
Characteristics and The use of the Internet for delivering marketing
messages to attract customers.
Types of Internet
Advertising
Direct
Internet
Traditional R Responses
Advertising
Advertising Marketing

3. Internet Advertising
Internet Advertising Advantages Disadvantages
Customer-dominated environment
Targetability A cognitive, not emotional medium
Global reach Psychological fear of IT
Tracking ability Limited space and information in some
formats
Less expensive to produce
Connection problems
Flexibility and rich media combination Non internet users (yes, there are these
Immediacy people)
Interactivity Clutters
Company/Brand Website
Similar to brochureware
Types of Internet/Online Can be educational and entertaining
Exhibit clear business objectives
Advertising - Move a potential customer from browser to buyer
Simulated shopping experience, comfort, privacy (e.g., BMW)
http://www.bmwusa.com/Standard/Content/BYO/Default.aspx
- Entertainment to attract site traffic (?)
- Valuable information resources (e.g., Tide)
http://www.tide.com/en_US/index.jsp
- Customer service (e.g., FedEx)
http://fedex.com/us/
Opt-In E-mail
Classified Ads or Newsletters distributed by an
entity through email blasts to opt-in
audiences. Advertisers can individually
sponsor a publisher’s email newsletter or they
can purchase classified ad space.
Example: Cynopsis newsletter (industry facts +
classifieds)

4. Opt-In E-mail Display Advertising
Online ads that combine text, images, and animation
Advantages: (but are not interactive - those are rich media) to
quickly grab the attention of website visitors browsing
Inexpensive and effective advertising opportunities the pages on which they are featured.
to reach a niche market and a precisely targeted
audience Typical Display Ad Sizes.
Can track the number of emails sent (not leaderboard (728 x 90 pixels)
measuring readership) skyscraper (120 x 600 pixels or 160 x 600 pixels for
wide skyscraper)
HTML format attracts more attention with graphical
banner (468 x 60 pixels)
ads
half-page (300 x 600 pixels)
Can measure reach (# of times graphics are square button (or tile) (125 x 125 pixels)
pulled from the server) medium rectangle (300 x 250 pixels)
Examples…
Display Advertising Rich Media Advertising
Online ads with which users can interact (include video, sound, and
Advantages: animation that engage the users)
Easy production Typical rich media ads:
peel-back (user can roll over the ad and it will appear to peel back
Flexibility in sizing and display all of the advertising content)
floating (appear on top of the web page content. It can be placed
Immediate response from target market anywhere on the browser page)
expandable (when your mouse rolls over this ad, additional
(comparing to traditional media) information will slide out)
Interstitial (brief ads page in between the reference and target pages)
video (video streaming on site; video banners)
Roadblock (activate once a user clicks on a link. The roadblock will
pop up and be viewable until the user click on it)
Popup video
IAB guidelines (www.iab.net)
Rich Media Ads Text Ads
Advantages: Simple text advertising
Better branding capability Some of the more common types of text ads:
link ads (links in website’s text content)
Higher response rates
contextual ads (a form of targeted advertising
More creative possibilities appearing on websites which is selected and served
Better message engagement by automated systems based on the content
displayed to the user)
search engine marketing ads (pay per click -
ex. Google Adwords)
online directories

5. Text Ads
Advantages
Searchable by search engines Online Audience Measurement
Less-ignored by readers
Less intrusive yet effective
Simple and less bandwidth intensive
Tailored to web content
Web Audience Measurement Campaign Measurement
People based measurement: Measuring ad effectiveness on the advertiser’s side
ComScore Media Metrix as well as web publisher’s side
http://www.comscore.com/metrix/xpc.asp
Nielsen/Net Ratings Using ad serving technology
http://www.nielsen-online.com/solutions.jsp?section=sol_1&nav=1#3
Cookie based measurement: Impression and click-through measured
Google Analytics DoubleClick: http://www.doubleclick.com/products/dfa/index.aspx
http://www.google.com/analytics/features.html
Atlas Solutions: http://www.atlassolutions.com/services.aspx
Coremetrics
http://www.coremetrics.com/downloads/ds-web-analytics.pdf
1. CPM Model: cost per thousand
Online Advertising Most popular pricing model
Advertisers are comfortable with this model
Pricing Models
E.g., a site charges $10,000 per banner with
500,000 impressions CPM=$20
CPM = [price/#of impressions] X 1000

6. Online Ad Sellers Using CPM Model Search Engine
Individual websites (normally run of site General rotation: a banner will appear randomly
buying; higher CPM due to targetability) appear during searches
Search Engines
Ad networks Run of Category: ad will rotate throughout a
category such as arts, health
Keyword buying: buying keyword searches
Ad Networks 2. Click-Through Model
Services that connect the websites that want to
host ads with the interested advertisers using a Click-through: the action of a viewer clicking
central ad server.
on an ad.
Advertisers can run category package (ROC) or
overall network package (RON) Direct response model
Large web properties do not sell to many ads Originated from P&G’s online ad policy in
through ad networks 1996
Major Ad networks: Typically, keyword search ads pricing
1. Yahoo! Network
2. Google Ad Network (AdSense)
3. Advertising.com
4. AdBrite
5. ValueClick Networks
Criticisms on CTR Model 3. Flat Fee Model
Publishers are forced to rely on advertisers’ creative Fixed fee charged for a certain time period (yearly
fee, monthly fee) regardless of impressions or CTR
quality for their own ad revenue.
When publishers need seed money
Brand-building value of banner is ignored.
Publishers tend to run a banner until ad receives the Instead of offering low price, when they need to
save cost associated with other monitoring
number of clicks promised.
activity or traffic reports.
CTR may have little to do with their goal such as
Used as premium placements
conversion.

7. 4. Pay Per Viewer Model 5. Pay Per Purchase
Advertisers pay users money or incentives for Pay publishers only when purchases result
everything from visiting advertiser sites to filling out from the ad.
surveys to purchasing products.
Publishers depend on creatives quality and
Underlying philosophy is the most valuable
commodity on the Web is a person’s attention and consumer’s purchase interest.
that the best way to acquire that is through More advantage to advertisers
incentives
6. Hybrid Model
A mixture of different pricing models
Online Advertising Buying
E.g., a site offers one price for impressions,
a higher price for CTR, and an even higher
price for pay per purchase model.
Before you begin… Online Campaign Goals
Traffic Building
Is your target audience online?
Selling Products
If so, where?
Generating Leads
Building Brands

8. Traffic Building Website Management
Website with a large number of visitor sell
more advertising. Landing page (website) management is
Important for media company whose main important.
business model is ad revenue. Log data analysis
Focus group
Expert panel to review the site
Selling Product Generating Leads
Important for e-commerce sites Easier to get prospects to request information
Bring the right target rather than a large online than to get them to purchase
number of target immediately
Going the places where customers go Listserv, registration, coupon book, etc.
eBay store
Building Brand Site Selection Process
Online exposure only can create brand equity. (e.g., Audience analysis
even banner exposure)
Demo, affinity, loyalty, lifestyle, other psychological factors
This idea leads to CPM based pricing model.
Secondary data analysis MRI, ComScore, Nielsen, etc

9. Site Selection Process Types of Sites
Well-branded, highly recognizable sites
Website analysis
High traffic sites with less- or non-recognizable brand
Editorial content
names
Lead time
Banner size and placement on the page Niche sites with low traffic
Availability of ad inventory Personal sites
Technology capability
Network Buying
Sometimes, ad networks sell advertising (function as
rep firms).
Benefits of network buying
Online Advertising Selling
Increases selling and negotiation power of small-sized
website
From advertisers’ perspective, it is easier to contact one
network representatives rather than many individual website
publisher
Possible to utilize targeting solutions
Selling Agents in Online Ad Online Ad Rep Firms
In-house sales forces
Sales representatives of media owners
Representative firms
Sell spot ads to ad agencies on behalf of
Ad networks media companies
Online ad auction services Revenues come from commission on ad
sales

10. Ad Networks Ad Networks
Consist of a group of sites with advertising inventory Benefits to advertisers
to sell. Consistency in ad delivery reporting
Can work with one sales rep for multiple site buys easy
Benefits to web publishers for site mix
easy access to more advertisers through networks’ sales Competitive pricing because of the networks’ economy of
power (rep firm function) scales removing leftover inventory
save cost for expensive ad management software More targeting options with a slate of sites easy for site
sell left-over inventories mix
Ad Networks vs Rep Firms
Radio/TV Stations
Both ad networks and rep firms broker ad Online Advertising Selling
space.
A rep firm represents the site itself (or a
collection of sites by the same owner) while
an ad network represents a group of sites.
The General Landscape Local TV Web Revenues:2003-2010
Internet sales are still
a tiny percentage of
gross revenue for
radio/TV station, but it
is growing fast.
Not all sites are
created equal.

11. The General Landscape Pricing/packaging Approaches
In 2007, TV stations were using the Internet to tap advertisers in
“classified” categories, further eroding the newspaper industry’s
share.
“Home Page”, weather, and local news dominate both the most-
trafficked portions of TV sites and the biggest revenue-
production sections of those sites
The pricing for video ad varies, and majority of sites are pricing
web inventory at flat rates.
Types of Online Ads from Radio/TV Types of Online Ads from Radio/TV
Stations: In-stream video Stations: In-stream video
Linear Video Ad: is presented before, in the middle, or Non-linear Video ad: runs parallel to the video content so the
after the video content is consumed by the user, in very user see the ad while viewing the content. Non-linear video can
much the same way a TV commercial can play before, be delivered as text, graphical ads, or as video overlays
during or after the chosen program.
Overlays which are shown directly the content video itself
Product placements which are ads within the video content itself
Example
Both linear and non-linear video as products have the option
of being paired with what is commonly referred to as a
“Companion Ad”
Example
Companion Ad Linear Video Ad with or without Companion Ads
Commonly text, display ads, rich media, or skins that wrap
around the video experience, can run alongside either or both
the video or ad content
The purpose is to offer sustained visibility of the sponsor
throughout the video content experience
Combination models:
http://www.fox.com/fod/play.php?sh=prison
Linear Video Ad with or without Companion Ads
Linear Video Interactive Ad
Non-linear Overlay Ad
Non-Linear Non-Overlay Invitation Ad

12. Linear Video Interactive Ad Non-linear Video Ad
http://abc.go.com/
Non-linear Non-Overlay Invitation Ad Video Advertising Practices