Harvest advertising optimization approach

Advertising optimization

How to op'mize your adver'sing pixels in the short term and long run

Amsterdam 2012

2

Print adver+sing [US, $b]

Online adver+sing [US, $b]

Buckle-up: online is overtaking print and is expected to continue its growth in the upcoming years

Source: PWC: Global entertainment and media outlook: 2011-‐2015

24.8

22.3

2009 … 2014

CAGR -‐2%

24.2

34.4

2009 … 2014

CAGR +7%

3

Online adver+sing market NL (2010/2011) [€ m]

In NL the online advertising market grew with 10% YoY, despite the tough economic climate in 2010/2011

Source: IAB Adspend report H1 2011

221.3

86.1

57.2

70.0

22.3

5.7

Search Classifieds Affiliate marke'ng

Display Others Unclassified

2010 H1

€ 462.6m 255.0

78.4

54.9

82.9

29.5

6.7

Search Classifieds Affiliate marke'ng Display Others Unclassified

2011 H1

€ 507.4m +10%

4

Formats

Revenue and adver+sing models

However, tapping into this growth potential is not easy, online advertising formats and models are omnious and developing fast

Source: Harvest analysis

It has become very complex to determine the op+mal way of adver+sing for your site

Roadblock Full roadblock

Mobile

Home page take over

Corner ad Video Billboard

Medium rectangle

Skyscraper

Header

Text links

Response based Data buying and

selling Profile crea'on

Year deals ….

CPO CPC CPM

Retarge'ng Automated

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This complexity is also seen in the number of businesses trying to get their fair share of the advertising market…

Source: Improve Digital

6

  The chewing gum issue: over 'me you started many new ini'a'ves that individually seem to add value yet: -‐  cannibalize on the total revenue -‐  add complexity to your organiza'on and processes -‐  create scaVered management data: hard to steer the total adver'sing business due to lack of analy'cal insights

  Destroying value by combining the wrong models and/or formats

  Missing out on new formats and/or business models

Risks

  Becer insights on performance of adver'sing driven by professionaliza'on of repor+ng tools

  Improving CPMs of automated adver'sing networks   Professionaliza+on of niche markets like mobile, video,

retarge'ng and profile trading   There is more than Google   ShiZ towards online from huge (trade marke'ng)

budgets of FMCG and CE companies

Opportuni+es

This hyperdynamic landscape impacts your advertising revenue: Are you ready to tackle the risks and grasp the opportunities?

Source: Harvest analyses

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  Detailed data analyses reveals underperforming adver'sing networks, formats and/or posi'ons

  Detailed front-‐end comb-‐through combined with Harvest experience reveals opportuni'es for new/improved formats, posi'ons and/or targe'ng

  Priori'ze, test and support implementa'on of improvement projects

Direct top line growth by tac'cal improvements based on solid analyses and Harvest experienced support implementa'on of improvement projects

Short term tac+cal adver+sing op+miza+ons

Long term solid adver+sing ac+on strategy

3-‐6 months

1

Harvest identified a parallel 2-step approach to optimize your advertising pixel for the short term and in the long run

A tailored adver+sing strategy and ac+on plan that grasps the adver'sing opportunity in the smartest way

2

  Analyses of premium vs regular inventory: What strategy to follow for your pixels

  Work out strategy in a pragma'c ac'on plan

  Test and iterate on the ac'on plan to gain insights and preliminary results

  Future-‐proof your business through a solid hand-‐over

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We audit your:   Targe'ng   Placements   Paging   Look & feel   Individual ad

performance Expected result:   List of poten'al

improvements

Time:   2 weeks

We define and priori+ze:   Relevancy drivers   New placements   Becer and new pages   Improvements to ad

appearance   Improvements to ad

func'oning   The size of the prize

Expected result:   Ac'on plan with

priori'zed concrete projects ready to take-‐off

Time:   2 weeks

We work with you to:   Implement op'mal

targe'ng   Test and measure new

placements and pages   Test and tweak op'mal

ad appearance   Design and effectuate

op'mal ad func'oning Expected result:   Tested projects with

clear results from pilot

Time:   4-‐8 weeks

In a short term tactical advertising audit we have proven to be able to boost your revenues with double digits

Analysis Ac+on plan Test and iterate 1 2 3

You will benefit from:   Higher relevancy; CTR

up   More and becer

placements; views up   Becer paging; views up   Becer insight in key

metrics through a (temp) dashboard

  Priori'zed next steps Expected result:   Increased revenue and

pragma'c ac'on plan Time:   2 weeks

Outcome 4

2 1

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  These errors causes that ad space is empty and do not generate clicks

  Moreover, this ‘pollutes’ the website making the overall feel less premium, leading erosion of rate card

Solu+on:   technology deepdive revealed error in ad

serving

Example: Code error on major Dutch publisher Insights

Short term improvement example 1: Bugs and errors 2 1


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  Price differen'a'on between countries was big, while formats were iden'cal

  In depth analyses showed great differences in nego'ated prices with networks

  Compe''on benchmark showed low and high price for rate card compared to compe''on in some countries

Solu+on:   Renego'ated contracts with networks,

adjusted rate card price

Example: Per country pricing analysis of pre-‐roll formats Insights

Short term improvement example 2: Pricing optimization

€4.47

€2.67 €1.98 €2.09

€3.52

€-‐

€2.00

€4.00

€6.00

€8.00

€10.00

€12.00

€14.00

0

10

20

30

40

50

60

NL USA France UK Germany

Volume Price High Price Low Average eCPM

2 1


Volume

Price

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Example: Low quality ads on premium pre-‐roll of Spelletjes.nl

  Low quality text ad on premium pre-‐roll posi'on

  Example of the importance of keeping premium posi'ons premium

  In order to jus'fy the rate card it is good to only show ads that are premium on these posi'ons

Solu+on:   Replace back-‐fill of Google text ads from

this posi'on with house-‐ads

Short term improvement example 3: protect your premium inventory

2 1

Insights


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2 1 Central model for a long term advertising strategy is a clear split between premium and non-premium advertising pixels


NON-PREMIUM

PREMIUM NON-‐PREMIUM

Premium posi'ons are for high value branding. A customizable look and feel is oqen offered which adds to the high pricing associated

Non-‐premium inventory can be used to increase mone'zed real estate, this is successfully done when op+mized for clicks

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  In just a few moments we were able to start a Google Display campaign targeted at ‘news’ websites with a leaderboard for our start up Offer'.nl

  Because there are not many Dutch news sites that are able to show Google leaderboards on premium posi'ons we were almost sure to buy space at Telegraaf.nl at 3% of the ratecard price

  Et voila! More than 100k impressions on premium posi'ons for a bargain

Insights

The big risk of no split between premium and non-premium advertising pixels is the dilution of your premium pixels


Adver+ser reac+on: “Why should I pay an ultra premium price for this inventory?”

2 1

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Homepage

Premium Categories

It is desirable to have a clear distinction where to use premium advertising and where to use non-premium advertising

Other Categories


Fold

2 1

premium posi+ons -‐> Filled with direct sales and inventory

non-‐premium posi+ons -‐> Filled with automated and house ads

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  Hardly any premium category is in the sweetspot

  Goal is to move promising categories to sweetspot

  Homepage of diverse publishers currently undermone'zed by rela'vely low ratecard

Average % direct sales on premium and non-‐premium Dutch publishers’ categories Insights

Focus must be on getting premium categories (pixels) in the sweetspot…

NB: Defini'on sweetspot: category is premium according to rate card and more than 50% of actual impressions filled with premium inventory Source: Average adver'sing data Dutch publishers, Harvest analyses

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

% Direct sales impressions of total sales impressions Monthly visits

Prem

ium

categorie

s Non

-‐premium

categorie

s

Sweetspot Promising categories

Homepage

2 1

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Dir 5-‐15%

Automated 85%

Direct, 5-‐15%

Automated 85-‐95%

Direct 80%

Empty 20%

Direct, 0-‐5%

Automated 95-‐100%

premium

non premium

Impressions ideal Impressions today

2 1 …yet most publishers do not make a distinction between premium and non-premium pixels, thereby wasting opportunity

  Stop dilu'ng value of premium pixels by automated adver'sing

  Run premium formats only on premium pixels to increase revenue per pixel

  Focus your direct sales team on premium pixels only, leave non-‐premium to lean and mean automated

  Create premium long term rela'ons with adver'sing partners

Opportuni+es

Source: Average adver'sing data Dutch publishers, Harvest analyses

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  6 'mes more banners served for 15% more revenue

  Homepage take-‐overs good for 20% of business

  Delta of CPM direct sales vs. networks > 3000%

Detailed split of average impressions and revenue from premium pixels Insights

A focus on increasing direct sales on premium pixels is clear, the average CPM delta vs. networks is ±1000% on these pixels

Source: Average adver'sing data Dutch publishers, Harvest analyses

15%

85%

35%

85%

15%

20%

30%

15%

Impressions Revenue Revenue detail

Networks

Other Specials

Homepage take-‐overs

2 1

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Example from the field: good premium advertising is rather a cooperation with related companies than old school advertising


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2 1

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  Companion ads integrated into one big, though discrete ad

  Complete control on look and feel because these ads are custom made

  While the ads are sold for a premium price, they are not intrusive or distrac'ng, yet give good ‘value per pixel’ for adver'ser

Integrated companion ads Insights

Example from the field: good special ad integration without being ‘intrusive’ on premium inventory


2 1

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2 1

Example What Benefit

  Make your leaderboard part of the header by let it overlap

  Leaderboard literally stands out of header which increases visibility and CTR and limits ad space above header

  Posi'on your leaderboard between the naviga'on and first ar'cle

  Leaderboard draws more acen'on and s'll looks premium by playfully melding it in your page

  Customize the premium posi'on by ‘embracing’ the header

  Using the both the spaces at the outside for a single adver'ser improves visibility and recogni'on

  Limit the header ad space by making an unfolding header ad

  Ad space is limited but ad s'll draws acen'on and making it unfoldable will increase visibility and interac'on

Example from the field: make your premium inventory more premium, while still using regular formats with a twist


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1.  State of the art tagging 2. Always up to date dashboard 3. One touch own drilling Harvest builds this for you

2 1

Measure must have: Tools

1. Clear KPIs 2. Understanding of drivers 3. Analysis templates

Harvest does this and trains your people

Analyse must have: Smarts

1. Clear requirements 2. Minimized TTM

Harvest specialists supports your webmaster on tweaks and builds a glossary

Implement must have: Skill

“Nothing great was ever achieved without enthusiasm” You bring this to the table

Learn must have: Eagerness

On top of the initial premium / non-premium strategic analyses, ongoing optimization of your advertising pixel is key to excel


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Dashboard example: Conceptual

2 1 A clear overview of all KPIs is crucial for ongoing professional optimizations

Source: Harvest proprietary HTML 5.0 dashboard

Mon

itor

Deep

dive

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2 1 To tackle your long term advertising strategy, Harvest suggests a four step approach

Ac+ons:   Ac'on plan for premium

inventory with a.o.: -‐  Overview of poten'al

dream-‐customers -‐  Ac'onable clusters of

premium inventory relevant for clear target adver'sers

-‐  High level direct sales proposi'on per cluster

-‐  Product adjustments needed

  Ac'on plan for non-‐premium inventory with a.o.: -‐  Improved analy'cs plan -‐  80/20 plan on effort/

output

Expected result:   Ac'on plans with priori'zed

concrete projects ready to take-‐off

Time:   4 weeks

Ac+ons:   Ac'on plan for premium

inventory with a.o.: -‐  Overview of poten'al

dream-‐customers -‐  Ac'onable clusters of

premium inventory relevant for clear target adver'sers

-‐  High level direct sales proposi'on per cluster

-‐  Product adjustments needed

  Ac'on plan for non-‐premium inventory with a.o.: -‐  Improved analy'cs plan -‐  80/20 plan on effort/

output

Expected result:   Ac'on plans with priori'zed

concrete projects ready to take-‐off

Time:   4 weeks

Ac+ons:   Implement product changes

needed   Define HR implica'ons and fill

gaps in skills through training/ support in hiring

  Create new sales kit for premium adver'sing, do first roadshow

  Set-‐up new client mee'ngs in co-‐crea'on vs sales sexng

  Develop high level dashboards for tracking

  Renew/change/break contracts

Expected result:   First changes implemented,

organiza'on on track for new strategy


Analyse and divide inventory

Make a premium and non-‐premium ac+on plan

Implement technical and opera+onal changes

1 2 3

Ac+ons:   Priori'zed next steps in hand-‐

over plan   Clear ac'on plan to perform

ongoing op'miza'ons   Detailed dashboard for KPIs of

all adver'sing revenue, with deep dive opportunity

  Solid hand-‐over to client team   Custom trainings to fill final

gaps in knowledge and skills Expected result:   Internal team ready to take

over the op'mized adver'sing pixels


Futureproof your business

4

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Client   Casual Games Company Challenge   Adver'sing revenue and performance

was low compared to benchmarks, while investments in 'me and effort were high

Objec+ve   Op'mize adver'sing in terms of

performance and revenue, while decreasing the investments in 'me and focus

Dura+on   6 months

Situa+on

How Harvest helped   Perform a quick scan to iden'fy quick

wins and biggest improvement areas

  Ran quick win op'miza'on projects (new and improved adver'sing)

  Strategic assessment of adver'sing proposi'on leading to high level adver'sing strategy

  Redefined the premium and regular adver'sing inventory on the playorm

  Zoom in on improvement areas to iden'fy subop'mal processes and front-‐end and back-‐end implementa'ons

  Ran mid-‐long term improvement projects to improve adver'sement relevance

Ac+ons

Case example: Optimizing the advertising revenue for a global leading casual games platform

  Over EUR 500k addi'onal revenue from quick wins iden'fied and realized during this project

  Annual adver'sing revenue grew double digit numbers

  Adver'sing performance (eCPM) improved significantly

  Adver'sing team involvement shiqed from mostly tac'cal to more strategic, moving our clients adver'sing business up the value chain

Results achieved

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"Harvest is without any doubt one of the very best e-‐consultancy companies in the world. Excellent knowledge and experAse strategically, tacAcally, and operaAonally, always with clear focus on top line results” Francine van Dierendonck, Sr. Director and Head Global Philips Flagship Store

Harvest serves an international portfolio of pure online players and click-and-brick companies

"The moneAzaAon quick scan that Harvest carried out for Compare Group highlighted tacAcal improvements with direct upside and a strategic opportunity. The Harvest team is very professional and has great knowledge of e-‐retail and online in general.”

Ben Kerkhof, CEO Compare Group

"Harvest supported Experteer in their go-‐to-‐market in the Netherlands. The professionalism, drive and in-‐depth knowledge of the Dutch online were key to the success of the project and the launch of experteer.nl”

Nina Zimmerman, Head of Europe Experteer

"Harvest combines a strategic view on creaAng online success with the power to execute. Passion for the online business, dedicated to deliver results. And above all, a pleasure to work with.”

Marc de Vries, CEO Hyves

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Feel free to reach out to us for more information

Harvest – Online Business Development Herengracht 262-‐266 1016 BV AMSTERDAM The Netherlands E: [email protected] T: +31 (0) 20 4277796 I: www.harvestamsterdam.com