Session #4 2011

Online Advertising

Tuesday, October 4, 2011

Show and Sell

Online advertising?

“The Internet will transform advertising because of its track ability, not its beauty.”

-Eric Schmidt, Google CEO

conundrum

Advertisersmust attract attention withoutBeing

Annoying

Some say advertising is dead

A few million people think so…

Integrated Marketing StrategiesIntegrated Marketing Defined:

“A management concept that is designed to make all aspects of marketing communication such as advertising, sales promotion, public relations, and direct marketing work together as a unified force, rather than permitting each to work in isolation.”

about.com

Or“Weaving together digital and physical channels to

engage consumers’ emotions, deliver brand experiences, and form ongoing relationships.”

Forrester Research “Essentials of Integrated Marketing”

Marketing Online In The Real WorldThe product itselfPackagingPoint of SaleOut-of-homeDirect MarketingPrintRadioTV

Marketing The Real World OnlineCorporate SiteMicro-sitesOnline AdvertisingE-mail MarketingBlogsSearch

Integrated Marketing Strategies

Integrated Marketing StrategiesSix Essentials of Integrated Marketing

Demand early collaboration of disciplines

Demand early collaboration of disciplinesDefine audiences with personas

Demand early collaboration of disciplinesDefine audiences with personasDrive planning by behaviour

Demand early collaboration of disciplinesDefine audiences with personasDrive planning by behaviourShape execution with ideas, not by media channels

Demand early collaboration of disciplinesDefine audiences with personasDrive planning by behaviourShape execution with ideas, not by media channelsPoint to the next step in all communications

Demand early collaboration of disciplinesDefine audiences with personasDrive planning by behaviourShape execution with ideas, not by media channelsPoint to the next step in all communicationsMeasure progress along the path

Forrester Research “Essentials of Integrated Marketing”

http://www.youtube.com/watch?v=iYhCn0jf46U

The Online Marketing Toolkit

Internet Strategy

Web Site Strategy

Permission

Conversation

SearchVisibility

PaidSearch

Measurement

Reinvention

E-mailMarketing

Corporate Site Micro Sites

Internet Strategy

Web Site Strategy

Permission

Conversation

ViralMarketing

Cross ChannelPromotion

SearchVisibility

PaidSearch

Measurement

Reinvention

E-mailMarketing

Internet Strategy

Web Site Strategy

Permission

Conversation

ViralMarketing

Cross ChannelPromotion

OnlineAds

SearchVisibility

PaidSearch

Measurement

Reinvention

E-mailMarketing Feeds

Search38%

Display31%

Classified12%

Lead Gen11%

Email9%

Search DisplayClassified Lead GenEmail

$60 Billion

Segmentation Using Customer Behaviour

Electronic Commerce, Ninth Edition 25

• Simplifiers (convenience)

• Simplifiers (convenience)• Surfers (find information, explore new ideas, shop)

• Simplifiers (convenience)• Surfers (find information, explore new ideas, shop)• Bargainers (search for good deal)

• Simplifiers (convenience)• Surfers (find information, explore new ideas, shop)• Bargainers (search for good deal)• Connectors (stay in touch with other people)

• Simplifiers (convenience)• Surfers (find information, explore new ideas, shop)• Bargainers (search for good deal)• Connectors (stay in touch with other people)• Returners (return to same sites over and over)

• Simplifiers (convenience)• Surfers (find information, explore new ideas, shop)• Bargainers (search for good deal)• Connectors (stay in touch with other people)• Returners (return to same sites over and over)• Sportsters (spend time on sports, entertainment sites)

• Must identify groups and formulate ways of generating revenue

Research

Planning a campaign

Define goalsInvestigate target audienceDetermine websites to display adverts

Websites or networks will affect format and payment models

Brief the creative team

Online adverts need to

Attract attention

Convey a message

Entice action

The key differentiator

Immediate response onlineOnline can be interactiveInternet is highly

Trackable Targetable Measurable

Advertising on the Web

• Effective advertising involves communication

• Effective advertising involves communication• Five-stage customer loyalty model: helpful in creating

advertising messages

advertising messages– Awareness stage

• Advertising message should inform

• Advertising message should inform– Exploration stage

• Message should explain how product, service works

• Message should explain how product, service works• Encourage switching brands

Advertising on the Web (cont’d.)

• Five-stage customer loyalty model (cont’d.)

• Five-stage customer loyalty model (cont’d.)– Familiarity stage

• Message should be persuasive, convince customer to buy

– Commitment stage

– Commitment stage• Customer sent reminder messages

– Separation stage

– Separation stage• Customer not targeted

• Online advertising

• Online advertising– Always coordinate with existing advertising efforts

FIGURE 4-5 Funnel model of customer acquisition, conversion, and retention

Online Advertising Cost and Effectiveness (cont’d.)

• New metrics to evaluate advertising yield outcomes

• New metrics to evaluate advertising yield outcomes– Measure number of new visitors who buy first time after

arriving at site

arriving at site• By way of click-through

– Calculate advertising cost of acquiring one customer on the Web

• Compare to how much it costs to acquire one customer through traditional channels

Center for Management Development

What is online customer acquisition?

Traditional Customer Acquisition Process:

Attention

Interest

Desire

Action

Attention

Interest

Desire

Action

“The new iPad looks really cool!”

Attention

Interest

Desire

Action

“I think the iPad could really help me catch up on my reading and emails during my commute.”

Attention

Interest

Desire

Action

“I did some research to find out which iPad might be right for me.”

Attention

Interest

Desire

Action

“I’m on the waiting list!”

“…And here’s my credit card!”

Attention

Interest

Desire

Action

Attention

Interest

Desire

Action

Attention

Interest

Desire

Action

Attention

Interest

Desire

Action

Attention

Interest

Desire

Action “I’m on the waiting list!”

Attention

Interest

Desire

Action

Attention

Interest

Desire

Action

Each phase of the online sales funnel has proven strategies, tactics & performance measures

Attention

Interest

Desire

Action

Each phase of the online sales funnel has proven strategies, tactics & performance measures

Driving online attention

Driving online attention• Public Relations

Driving online attention• Public Relations• Social Marketing

Driving online attention• Public Relations• Social Marketing• Branded Microsites

Driving online attention• Public Relations• Social Marketing• Branded Microsites• Offline brand advertising

Driving online attention• Public Relations• Social Marketing• Branded Microsites• Offline brand advertising• Online brand advertising

• Site• Blogs• Youtube

• Pushing to one hub

Performance Hub

• Site• Blogs• Youtube

• Pushing to one hub

Performance Hub

Measuring online attention:

Awareness-Driving Tactic Proxy MetricPublic Relations •# of impressions / mentions

•Buzz measurement (e.g. Net Promoter Score)

Social Marketing •# of friends / fans / followers •Total visits to a social tool

Branded Microsites •# of visitors•Time spent on site•Level of interaction with site•# of cookies / email addresses captured for remarketing

Offline brand advertising •# of online video views•# / type of comments

Online brand advertising •# of impressions•Reach / frequency•Pre/post exposure ad effectiveness study•# of cookies captured for remarketing

Social marketing still considered

Attention

Interest

Desire

Action

Driving Interest with online marketing

Search Engine Marketing

Paid Search: • Keyword/phrase

targeted text ads• Cost-per-click pricing

established through bids; daily budget caps

• Etailers typically measure through to completed sale, and calculate resulting cost-per-order (CPO)

• Search Engines maximize their revenue by serving ads with the best combination of– Bid price

Search Engine Marketing

Paid Search: • Keyword/phrase

targeted text ads• Cost-per-click pricing

established through bids; daily budget caps

• Etailers typically measure through to completed sale, and calculate resulting cost-per-order (CPO)

• Search Engines maximize their revenue by serving ads with the best combination of– Bid price

Shopping Results:

• Daily data feeds from retailers (image, SKU, price)

• Free

Organic Traffic

• Direct entry traffic– Visitors type in URL

• Search Engine Optimization– Search engines optimize natural

rankings based on an algorithm that includes:

• Site indexation: Making the site “friendly” to search engines

• Content relevance: Once indexed, content needs to be optimized for the right keywords

• Link popularity: Incoming links (both volume and quality) help search engines determine the “importance” of the content

Remarketing / Retargeting

• Retarget microsite / website visitors • Retarget ad banner clickers• Retarget ad banner viewers

Retarget specific contentHow it works

Change of

CPATuesday, October 4, 2011

This means someone answering the ‘brand awareness’ survey “no, I never heard of them” but then two days later, is more then twice as likely to click on a text ad.Tuesday, October 4, 2011

CPCTuesday, October 4, 2011

Banner Add

Impressions

Call to Action

Click Rate

Unique Visitors

Landing Page

Conversion Rate

Click Tracking

Stickiness

Targeting

Demographic Targeting

Contextual Targeting

Behavioural Targeting

Geographic Targeting

Day-part TargetingTuesday, October 4, 2011

Purchase-Based Category TargetingTuesday, October 4, 2011

Social Based

Targeting and optimizing

Networks track users Cookies IP address Across web sites

Advertisers can use this information to target adverts

Targeting can be problematic

• Contextual advertising can get it wrong

–Shark diving advert next to article about shark attack

• Online behaviour does not always represent true interests

Test #1

Test #2

Banner advertising

• Simple hyperlinked image shown on web sites.

• Link takes visitor to a landing page.

• AT&T advert was one of the first sold in 1993.

Banner adverts

• Image or animation displayed on a web site for advertising purposes

• Static or interactive• Can expand on

mouse-over or when clicked on

Standard banner sizes

Note: these banners are in proportion, not the actual size.

Advertising evolves with technology

• Today can include sound and video

• Today can include sound and video• Far more interactive

• Today can include sound and video• Far more interactive• Technology allows banners to expand over a page

• Adverts can be placed in videos

Pop-ups and pop-unders

http://www.amazon.com/gp/product/B00167G76W/ref=dm_dp_trk6livepage.apple.com

Map advertising

• Advertising within online mapping solutions

Rich media allows for rich content

One banner can have Video Tour schedule Downloads Link to web site

interaction

The art of Retargeting

Retargeting gone wrong, lol

What do the numbers say?

Measuring online interest:

Traffic-Driving Tactic Proxy MetricSearch Engine Marketing •Paid Search Ranking

•Traffic (# of clicks) from paid search placements•Sales from paid search placements•Cost per click (CPC) & resulting cost per order (CPO)

Affiliate Marketing •Traffic (# of clicks) from affiliates•Resulting sales originating from affiliate links

Organic Traffic •# visitors who directly type in brand URL•Organic search engine ranking•Traffic (# clicks) from organic search•Resulting sales originating from organic traffic

Remarketing / Retargeting •# / % of retargeting pool able to reach•Traffic (# of clicks) from remarketing ads / emails•Sales from remarketing ads / emails•CPC & CPO

engagement

• Adverts placed that require a user to initiate the advert

• Adverts placed in video and on social media applications

• Relatively new and untested

In-Game advertising

Wallpaper advert

• Changes the background of a web page• Usually is not clickable• Used for branding

Interactive Banners

Branded applications

1Advantages

2Advantages

3Advantages

1Disadvantages

Disadvantages

2Tuesday, October 4, 2011

Disadvantages

3Tuesday, October 4, 2011

Ad servers and Advertising networks

Publisher’s server

Ad server

Tell viewers what to do: Call to Action

Ad Servers

Benefits of ad servers

• Adverts maintained and updated through a central location

• Advert performance reporting

• Sophisticated targeting

• Sophisticated targeting• Tracking across many web sites

• Sophisticated targeting• Tracking across many web sites• Retargeting

Advertising Network

Networks offer• Frequency capping

– Limit times advert is seen by a user

• Sequencing

– Show adverts in a given order

• Exclusivity

–No competitor adverts are shown

• Roadblocks

– All the inventory on a pageTuesday, October 4, 2011

Publishers place unsold inventoryAdvertisers bid for inventoryBids are placed based on

Audience profile Space

Advertising exchanges

Image credit: http://blog.contextweb.com/contextual/vocabulary-gone-wild-or-what-is-a-true-advertising-exchange

Tracking• Impressions• Click-throughs• Connection type

• Browser• OS• Time of day• ISP

Photo credit: http://flickr.com/photos/71217725@N00/

Cookies

Cookies are text files

• Small text files saved on user’s computer

• Allow a website to capture information about user behaviour

• Can be set on advert impression

http://awards.playballoonacy.com/

http://202.218.121.130/2008/axewakeupservice/en/

http://www.bannerblog.com.au/2007/12/sixt_ascii_text_ads.php

http://skittles.com/chatter.htm

• http://video.google.com/videoplay?docid=-6739710473912337648&pr=goog-sl

Viral Marketing

“Viral Marketing isthe conscious and strategic

enhancement of word-of-mouthto promote a product, service or idea.”

http://theinspirationroom.com/daily/2005/ikea-elite-designers/

Buzz Spreads Via Blogs and E-mail

http://kungsgrillen.se/machines/

http://www.777interactive.jp/awards/2008/bravia/e/

Attention

Interest

Desire

Action

Measuring online customer desire:

Investigation-Driving Tactic

Proxy Metric

Homepage versioning •Homepage bounce rate for different target segments•Click-through to other key parts of site

Multivariate testing Best-performing combination of variables that leads to maximum click-through to other key parts of site

Site Search •# of site searches per month•Tracking of top search terms

Online Ratings & Reviews •# of visitor reviews / comments•Content of comments (positive / negative)•Click-through to other key parts of site

Online product demos •# of site visitors who use the demo•Length of time spent with demos•Subsequent click-through to shopping pages

Attention

Interest

Desire

Action

Generating Action: Closing the Sale

• Ecommerce– Total Site conversion rate

• Getting prospects from their entry page to check-out confirmation – Upper funnel conversion rate

• Getting prospects from shopping pages to the shopping cart– Lower funnel conversion rate

• Getting prospects from shopping cart to check-out confirmation

• Retail Sales– Cross-channel conversion rate

• Getting prospects to make an in-store purchase after doing online research and comparison shopping

Confidential and Proprietary Information of Virgin Mobile USA, L.P. 34

Total Site Conversion Rate % = # of Online Sales Orders # of Prospect Visitors to website

Total Conversion can be split into two steps:

Upper Funnel Conv %= # of Prospects who add Items to Shopping Cart # of Prospects who display shopping behavior

Lower Funnel Conv %= # of Completed Purchases # of Prospects who add Items to Shopping Cart

Source: Compete, Inc., VMU 2007 Q3 Readout

Ecommerce Conversion Rate

Ecommerce: Upper Funnel Conversion

Merchandising

Product Information

Merchandising

Product Information

Pricing Strategy

Merchandising

Product Information

Pricing Strategy

“Buy Now” experimentation

Merchandising

Product Information

Pricing Strategy

“Buy Later” options

Merchandising

Product Information

Pricing Strategy

“Buy Later” options Social Commerce

Merchandising

Product Information

Pricing Strategy

Live Chat

Merchandising

Product Information

Pricing Strategy

Returns policy

Live Chat

Merchandising

Product Information

Pricing Strategy

Returns policy Shipping policy

Live Chat

Great Product detail example

Ecommerce: Lower Funnel Conversion

“Checkout” experimentation

Returns policy

Returns policyShipping

policy

Live Chat“Checkout” experimentation

policy

Alleviate security &

privacy concerns

policy

Stock urgency

privacy concerns

policy

Payment options

Stock urgency

privacy concerns

Augmented Reality

http://www.youtube.com/watch?v=b64_16K2e08&feature=related

Summary

• Achieve Web marketing goals– Use principles of marketing strategy – Use the four Ps of marketing– Product-based marketing strategy – Customer-based strategy– Web enables companies to mix strategies

• Market segmentation works well on the Web• Online advertising

– More intrusive since introduction• Various types available

Next Week

• Guest Jean Francois, Web Analytics • Send me the report to web CT by October 15th• Read chapter 4

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