Diversification of Digital, by LeapFrog Interactive

Diversification of Digital

Christy Belden, Vice President, Media + Marketing

May 26, 2011

2Diversification of Digital

Agenda

+ Introductions

+ Basics

+ Statistics

+ Key Terminology, Common Acronyms + Resources

+ Types of Digital Ads

+ How Digital Advertising Works

+ Pricing + Strategy

+ Ad Performance + Measurement

+ Trends + Current Event

+ Best Practices

3LeapFrog Interactive

Diversification of Digital

Twitter: @LFI#display#LFI#digitalmedia

Facebook: www.facebook.com/LeapFrogInteractiveAgency

Blog: www.leapfroginteractive.com/blog

4Christy Belden

Vice President of Media + Marketing, LeapFrog Interactive

Experience: 11 yearsThe Courier-JournalUniversity of Louisville

SEMPO CertifiedGoogle AdWords Professionals (GAP) Certified

Christy knows marketing. Display, PPC, SEO, social media, email, mobile, traditional—she’s been there and done that. She continues to build a deep well of experience and is always in touch with the trends and strategies that provide a solid return on clients’ investments.

Examples

Basics

10Definition of Digital Advertising

What is a display ad?

+ A graphical web advertising unit

+ A graphical image on the a website used to promote products or services

+ Otherwise called:

+ Web Ad

+ Web Banner

+ Banner Advertising

+Banners

14History of Digital Advertising

+ The first digital ad appeared on HotWired.com in 1994

+ The first ad was called a ‘graphical ad unit’

+ MCI, Volvo, Club Med, 1-800-Collect, AT&T and Zima were the first advertisers on HotWired.com

Source: http://adage.com/article/digitalnext/happy-birthday-digital-advertising/139964/

Statistics

Did You Know?

Source: Huffington Post via TechCrunch/Comscore; eMarketer.com

Ads served to US Internet users in Q1 2011: 1.1 trillion

Of those ads, number served via Facebook: 346 billion

Total % ads served to US Internet users that were on Facebook in Q1

2011: 31

Banner Ads Spending Was Up 23% YOY in 2010

Did You Know?

Source: eMarketer US Ad Spending: Online Outshines Other Media, Dec 2010

*Eric Schmidt, chairman-CEO of Google, predicts online advertising will increase from $62 billion a year to $200 billion in the next 5-10 years.

(Ad Age, “Ad Networks Raise Profile with Targeting” May 2011)

Did You Know?

Source: comScore 2010 US Digital Year in Review

Did You Know?

Source: Ad Age, “Facesbook Scores Again With Most Ads on the Web” May 9, 2011

Did You Know?

Source: Ad Age, “Facesbook Scores Again With Most Ads on the Web” May 9, 2011

Did You Know?

Key Terminology + Common Acronyms + Resources

25Key Terminology

Glossary of Terms

+ Cookies: code placed in a browser so the browser’s activity is recorded, i.e. visiting a page and it is “remembered” when the browser returns to the site or another ad is served

+ Beacon: 1x1 pixel tag used to track unique user activities over time, i.e. tracking a user who clicked through on an ad and purchased several days later

+ Unique visitors (UVs): measure for readership or net audience

+ Page Views (PVs): measure of requests to load a single page of an Internet site

+ Ad Impressions: each time an advertisement loads on a user’s screen

+ Sessions: aka “visits,” is the number of times each unique visitor goes to a website

Source: Intelligent Selling of Internet Advertising & Intelligent Planning & Buying of Internet Media – Level 1, Laredo Group, Q2 2009

26Key Terminology

Glossary of Terms

+ Ad Exchange: Marketplace-like network of excess inventory on publisher sites which media buyers can access and purchase

+ Ad Network: Aggregates audiences based on demography or intent to purchase

+ Mobile Network: sells ad on wireless devices (i.e. phones & tablets) + Video Network: aggregates video inventory to run ads or syndicate

video content

+ DSP: “Demand Side Platform,” platform used by agencies & advertisers to automate media buying across multiple sources with unified targeting, data, optimization, and reports

+ Ad Server: Technology that disseminates online ads and then, tracks and reports back on performance

Source: AdAge, “Special Report: Audience Buying Guide” April 2011

27Key Terminology

Glossary of Terms

+ Data Aggregator: Pulls together ad-serving data, conversion data, and third-party data in an effort to attach preference attributes to a user or set of users

+ Ad Verification: Software enabling advertisers to determine if impressions are display in the proper place and whether ads are privacy compliant

+ Frequency Capping: Using cookies to manage the number of times a user sees specific ad creative, typically utilized to conserve impressions and improve campaign performance

+ OBA: Online Behavioral Advertising, also a compliance program led by IAB

Source: AdAge, “Special Report: Audience Buying Guide” April 2011

28Common Acronyms

Glossary of Acronyms

+ Key Performance Indicator (KPI): measureable points of interaction between consumer and brand

+ CPC: cost-per-click

+ CPM: cost-per-thousand [impressions]

+ CPA: cost-per-action+ Cost-per-download+ Cost-per-call

+ Click-Through Rate (CTR): the number of clicks divided by the number of impressions

29Resources

Industry Leaders: Associations

Digital Advertising Alliance

30Resources

Industry Leaders: Networks

31Resources

Industry Leaders: 3rd Party Ad Servers

32Resources

Industry Leaders: Data Suppliers

Types of Digital Ads

34Types of Digital Ads

Standard Ad Unit Sizes

Source: IAB, www.iab.com

Medium Rectangle300x250

Skyscraper160x600

Leaderboard728x90

Small Rectangle180x150

Half Page300x600

These are the five most common ad sizes, according to the Interactive Advertising Bureau (IAB).

Ad Formats + Specs

+ .GIF/.JPG/.PNG “Static banner”

+ .SWF “Flash banner”

+ .EXP “Rich Media/Expandable banner”

*Source: IAB, www.iab.com

Ad Format: GIF/JPEG/PNG

+ .GIF/.JPG/.PNG aka “Static banner”

+ Simple, single-frame image

+ Typically 30K file size*

+ May include “animated .GIF”

Why Brands Use Static Banners?

+ Ease of Creation: Organizations with limited creative resources can easily develop

static assets

+ Affordability: With appropriate sized buys, publishers may offer creative services for

+ Flexibility of Creative: Self-serve advertising solutions often don’t allow complex

display formats like Flash or Rich Media

Static Banner Examples

Ad Format: Flash

+ .SWF “Flash banner”

+ More dynamic, flexible coding language allows basic interaction and more complex imagery

+ Typically 40K file size*

Why Brands Use Flash Banners?

+ Cost savings: it takes less resources to develop Flash banners and typically there is no 3rd party ad serving required

+ Available inventory: more publishers will accept Flash banners on their websites than will accept Rich Media

+ Consumer visibility: slightly more consumers are able to view Flash on their computers than can view Rich Media

Flash Banner Examples

+ Animation occurs in 7-10 seconds

+ CTA that appears on relevant frame and remains visible throughout the ad

+ Logo visible during entire ad

+ Realistic action/movement

+ Highlights consumer needs and answers with product recommendation

+ Highlights customizability

Flash Banner Examples

+ Simple , quick messaging

+ Consistent font and text size

+ Realistic action/movement

+ Highlights consumer needs and answers with product recommendation

+ Focuses on a single objective, straightforward CTA

+ Color scheme appropriate and eye-catching

Ad Formats + Specs

+ .EXP “Rich Media/Expandable banner”

+ Highly interactive, super complex creative which can include multi-functional features

+ Typically 40K with up to 100K polite load, upon click*

Why Brands Use Rich Media Banners?

+ Sophisticated functionality: the ability to incorporate games, polls, data collection, file downloads, product showcases, store locators and other interactive features makes Rich Media highly desirable

+ Outperformance of Flash: due to its nature, Rich Media frequently outperforms Flash

on interactivity rates, brand engagement and consumer ad recall

+ Enhanced reporting/tracking capabilities: almost any metric that relates to

functionality of each feature can be measured and reported on, allowing quicker

optimizations

+ Alternative to landing page: depending on a campaign’s goal, Rich Media can serve

as the only environment needed to achieve a conversion

Rich Media Examples+ “Rollover” to act is used rather than “Click”

+ Tabs in upper right allow user to control their experience inside the ad

+ Users have the ability to download a brochure that meets their specific needs

+ “Close” button is clear, visible in bottom right

FYI:(1) Carestream® is able to see how many of

each brochure was downloaded.(2) Carestream® is able to tie each download

to a specific user’s name/email address

Rich Media Examples

+ Specific CTA

+ Creative use of product showcase feature by highlighting various treats you can make using the product

+ Allows consumers the option to print the recipe or e-mail it to yourself

+ Encourages users to use their “in-banner” search function – this is an example of how a brand may use Rich Media to replace a landing page

FYI:(1) Kellogg’s® is able to see which recipe was emailed or downloaded the most often

Rich Media Examples

+ Engaging question to capture attention

+ Specific CTA

+ Interactive creative with multiple videos for users to watch

+ Email/data collection feature always visible

FYI: (1) Carnival® would be able to feed email addresses directly into their database with an API. (2) Metrics would be able to tell Carnival® how many consumers watched each video 25%, 50%, 75% or 100%.

Takeover Example

Overlay Example

Newest OPA Standards Examples - Pushdown

Pushdown AdStarts as thin ad that expands to take up most “above the fold” space

upon click or rollover

Newest OPA Standards Examples

Fixed Placement AdAd stays with you as you scroll up/down through content

Newest OPA Standards Examples

XXL AdExtra-large ad for high impact/visibility

Types of Video Ads

Video Ads+ In-stream video

- Pre-roll, mid-roll, post-roll

+ Overlay- Transparent overlays

+ In-banner- Video converted to Flash, plays within ad unit- Click to play or auto play

+ In-Text Video- User initiated, triggered by highlighted words within

content

Considerations

+ On average, an advertisement has approximately 2-5 second to capture the attention of a user before their attention is elsewhere on a webpage

+ As of January 2009, Flash banners saw .07% - .14% CTR across all industries

+ Rich Media banners average .12% - .36% CTR; the goal of a rich media may not be a “click” through to landing page, but instead application completion, file download or coupon print-up

+ Average brand interaction time for expandable rich media ads is between 11-12 seconds, upon expansion

Resources: DoubleClick, PointRoll Industry Data (2009), Atlas 2007-2010

Pricing + Strategy

56Pricing + Strategy

Pricing Models

CPM+ Impressions sold in “packages” or levels+ Impressions sold ROS or targeted

CPC+ Costs accrued every time a click occurs

Flat Rates+ Associated with sponsorships+ Directory listings, supplier guides (B2B)+ Classifieds+ Sites with limited ad inventory+ Site with low tech ad serving

57Pricing + Strategy

Strategy of Different Structures

CPM CPC CPA

How Digital Buying Works

59How Digital Buying Works

Types of Buys

Ad Network+ Sold by categorization of sites (vertical, horizontal, video)

+ Niche verticals available

Direct Buy or Direct-to-Publisher+ One-on-one with a website, or small group of related websites

+ By nature of the buy, selection of individual relevant/niche sites is possible

Ad Network

Pros+ Audience reach

+ Scalability

+ Hyper-targeting

+ Testing performance business models

+ Typically lower CPMs

+ Typically robust reporting

Cons+ Duplication across sites

+ Limited transparency+ No

“cherry picking”

+ Targeting content within sites

+ Generally no sponsorship programs

+ Occasional limitations with ad units and placements

Direct Publishers

Pros+ Sponsorship opportunities

+ Specialized/niche content

+ More opportunities for “value adds”

+ General flexibility of ad formats

Cons+ Typically higher CPMs

+ Generally not sold on CPC or CPA

+ Basic reporting capabilities

+ Scalability can be limited

Targeting Solutions

+ Geographic

+ Demographic

+ Local

+ Contextual

+ Day-Parting

+ Behavioral

Targeting Solutions

Geographic

+ Zip code data provided by user+ Accurate, updated+ More granular

+ IP address identified via ad server- Less granular- Based on IP database

Targeting Solutions

Behavioral Targeting

+ Ads targeted using behavior not content/page

+ Tracks user’s web usage behavior (via cookies)- Where user goes- Registration data- Survey data

- Recency- Keywords

Targeting Solutions

Local Targeting

+ Local content

+ Portals and ad networks

+ Geo-based content

+ User provided demographics

+ Directories and Internet Yellow Pages

+ Search options

Targeting Solutions

Contextual Targeting

+ Ads align with content featured on page, via keywords

+ Attempts to target based on users’ intent- Recency

- Keywords

Targeting Solutions

Behavioral Targeting

+ Behaviors tracked via cookies data predict which ads are relevant to a user

+ Vertical-based

Ad Delivery Process

Ad Delivery Model

+ Scheduling- Start – Stop dates not pre-defined by media schedule- Day-parting

+ Smooth- Equal number of of impressions every day of campaign

+ Weighting- Deliver higher share of voice (% of total impressions)

How “Cookies” Work in Targeting

http://online.wsj.com/video/how-advertisers-use-internet-cookies-to-track-you/92E525EB-9E4A-4399-817D-8C4E6EF68F93.html

Source: Wall Street Journal, “How Advertisers Use Internet Cookies to Track You”

Self-Serve Solutions

Use self-serve vendors like:

When…+ Network/Publisher minimums don’t fit your budget

+ Creative flexibility is not an absolutely must-have

+ Programs need to be launch quickly

Ad Performance + Measurement

73Ad Performance + Measurement

Metrics for Rich Media

Static Banners:+ Impressions+ Clicks+ Click-Through Rates

Flash Banners: + Click-Through Rates+ Basic Interactions

Rich Media Banners:+ Interaction Rates+ Panel Views/Interactions+ Full plays (Video)+ Average Brand Interaction

Times+ Close Rates+ (Depending on goal) CTRs

Campaign Performance + Effectiveness

Influential Factors+ Creative

+ Highlighted Call-to-Action Messaging

+ Targeting

+ Relevant Messaging

+ Ad Placement

+ Ad Size

+ Reach & Frequency

+ Optimizations

Engaging Creative (Rich Media)

+ Higher interactions with rich media

+ Multiple creative executions

+ High frequency delivery – avoid banner burn-out by running multiple creatives and ad sizes

Highlight Call-to-Action (CTA)

+ Use active verbs

+ Recognizable, each to read

Targeting

+ Higher CTRs with targeted messages vs. run-of-site (ROS)

+ Different creative for different targeted segments

+ Add geo-location to message

Relevant Messaging

+ Broader offers = higher CTRs

+ Narrow offers = lower CTRs

Ad Placement

+ Ads above-the-fold – higher CTRs

+ Ads on home pages – lower CTRs

+ Ads in targeted, opt-in newsletters – higher CTRs

Ad Size

+ Larger ads – more visibility, typically higher CTRs

Ad Frequency

+ Too much frequency – lower click rates

+ Too little frequency – hurt branding metrics

+ Direct response campaigns – evaluate the correct frequency cap to optimize ROI

Optimizations

+ If budget allows, test (A/B or multivariate)

+ Vendors should be proactive about recommendations for improvement

+ Develop a comfortable optimization frequency

+ Track toward improving your action – calls, downloads, video views, data collection

+ Experiment with placements, verticals – within reason

+ Ask vendor for screenshots but monitor when you can

Mobile Display

83Mobile Display

Did You Know?

* Source 2008 Mobile Marketers Guide mobilemarketer.com

Percent of US Population (303.6MM) with a mobile phone: 80

Percent of mobile users with text messaging capabilities: 82

Percent with phones capable of browsing the Internet: 72

Percent of users who say they’ve been exposed to mobile ads in last

30 days : 23

Percent of those users who say they responded: 50

84Mobile Display

What is mobile display?

+ Display messaging in the mobile device environment

+ Can link to:+ make calls+ download apps+ share content+ submit

data/sign-up+ enter contests+ visit mobile

websites

85Mobile Display

How to Make an Effective Mobile Display Campaign

+ Be attentive to environments – ask where your ads may be and explore the environment for yourself

+ Practice concise messaging – mobile ads don’t leave much room for gregariousness

+ Be mindful of users’ time - consider where a user may come from and where you’re taking them

* Source: Pervez Skiora, “What makes mobile display ads effective?” 2011 mobilemarketer.com

86Mobile Display

Popular Networks

87Mobile Display

Benefits

+ Small screen, big audience, powerful targeting capabilities

+ Performance-based models (Cost-per-call, cost-per-download, cost-per-interaction)

+ Branding for those who don’t click+ Click rates at upwards of 3-6%*+ Downloads from clicks at upwards of 16-20%*

+ Flexibility in program type (sweepstakes, database collection, branding/awareness)

+ Typically lower minimums

+ Ease of integration with other marketing tactics

* Source: Greystripe & ATT Mobile Ad Solutions, 2011

Trends + Current Events

89Trends + Current Events

What’s Happening Now?

+ Digital Advertising Alliance+ Congress pushing “do-not-track” legislation+ FTC responds to consumer privacy concerns+ IAB introduced Code of Conduct+ DAA building on Self-Regulatory Principles of Online Behavioral

Advertising

+ Facebook tests real-time ad targeting, via data mining conversations

+ DMPs (Data Management Platforms)

+ AMPs (Audience Management Platforms)

+ Topic Targeting

+ ConditionalTargeting & Re-Targeting+ Search, Site, Creative

Best Practices

91Best Practices

Take-aways

+ Identify the ONE main objective of the creative

+ Execute a clear, concise call-to-action

+ Use consistent messaging (and imagery, where possible) across online & offline channels

+ Choose colors appropriate for audience and website where ad will be placed

+ Utilize A/B split testing or other methods of creative testing, create optimization schedule – LEARN!

+ Align creative with your landing page

92Best Practices

What Should You Expect from a Vendor/Agency?

+ Established goals before campaign launches

+ Resisted urges to revamp tracking structure or goal (unless absolutely necessary)

+ Optimization recommendations and analysis of performance

+ Tracking codes in place on front end

+ Analytics setup on back end

+ Regularly schedule reporting

93Best Practices

Landing Pages: “DONTs”

Banner Ad

Landing Page

94Best Practices

Landing Pages: “Almost but not quite”

Banner Ad

Landing Page

95Best Practices

Landing Pages: DOs

Banner Ad

Landing Page

96Best Practices

Landing Pages: DOs

Banner Ad

Landing Page

Questions?

98LeapFrog Interactive

Contact Us

Christy Belden, Vice President of Media + Marketingcbelden@leapfroginteractive.com

Twitter: @LFI

Facebook: www.Facebook.com/LeapFrogInteractiveAgency

Thank You

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