6 Selling Advertising. From Code to Product gidgreen.com/course

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1 6 Selling Advertising From Code to Product gidgreen.com/course

2 Million Dollar Homepage From Code to Product Lecture 6 Selling Advertising Slide 2 gidgreen.com/course

3 Aversion therapy From Code to Product Lecture 6 Selling Advertising Slide 3 gidgreen.com/course

4 Tempted? From Code to Product Lecture 6 Selling Advertising Slide 4 gidgreen.com/course

5 Lecture 6 Introduction Types of targeting Price models Ad formats Ethical issues Web Sudoku From Code to Product Lecture 6 Selling Advertising Slide 5 gidgreen.com/course

6 Traditional advertising Mass media Newspapers, magazines, TV, radio, outdoor Local or national, not global Big one-time purchase One message to all recipients No filtering or personalization Success measured indirectly Did sales increase this month? From Code to Product Lecture 6 Selling Advertising Slide 6 gidgreen.com/course

7 Digital advertising Digital media Web, mobile, , desktop Global in scope Pay as you go, small increments Messages targeted by recipient Filtering, personalization Success measured directly Views, clicks, actions From Code to Product Lecture 6 Selling Advertising Slide 7 gidgreen.com/course

8 Underlining the difference Half the money I spend on advertising is wasted; the trouble is I don't know which half. John Wanamaker, store owner Ninety-nine percent of advertising doesn't sell much of anything.. David Ogilvy, advertising executive From Code to Product Lecture 6 Selling Advertising Slide 8 gidgreen.com/course

9 US ad spending (+projected) $70B $60B $50B $40B $30B Web Mobile (world totals approximately double) $20B $10B From Code to Product Lecture 6 Selling Advertising Slide 9 gidgreen.com/course

10 Media and advertising From Code to Product Lecture 6 Selling Advertising Slide 10 gidgreen.com/course

11 Search has remained the leading format since 2006, having strong sequential growth through the period depicted. After losing some of its overall share in 2010 to Display/Banners, Search increased its market share in the first half of 2011 to 49% of advertising revenues. Online ad breakdown The past six years have seen Classified advertising losing more than half of its market share of revenues, with sharp declines over the past five years. Classified revenues stabilized in 2010 but have declined in 2011, with a market share of 8%, down from the 18% of advertising revenues the format commanded in Advertising format share (% of total revenue)* 60% 50% 40% 30% 20% 10% 0% Search Display/ Banners HY 2011 Classifieds Rich Media & Digital Video Lead Generation Sponsorships * Format definitions may have changed over the time period depicted, both within the survey process and definitionally by survey respondents. From Code to Product Lecture 6 Selling Advertising Slide 11 gidgreen.com/course IAB Internet Advertising Revenue Report, Sept 2011

12 How it works Direct sales Hard to find advertisers Transaction cost vs volume Ad networks Aggregate 1000s of publishers + advertisers Copy-paste code snippet Take 20% 50% of revenue Big sites use both From Code to Product Lecture 6 Selling Advertising Slide 12 gidgreen.com/course

13 Top US online ad networks From Code to Product Lecture 6 Selling Advertising Slide 13 gidgreen.com/course

14 Top US mobile ad networks Other 44% Millennial Media 17% AdMob (Google) 24% iad (Apple) 15% 2011 figures from IDC From Code to Product Lecture 6 Selling Advertising Slide 14 gidgreen.com/course

15 Lecture 6 Introduction Types of targeting Price models Ad formats Ethical issues Web Sudoku From Code to Product Lecture 6 Selling Advertising Slide 15 gidgreen.com/course

16 Geography From Code to Product Lecture 6 Selling Advertising Slide 16 gidgreen.com/course

17 Demographics From Code to Product Lecture 6 Selling Advertising Slide 17 gidgreen.com/course

18 Traffic source From Code to Product Lecture 6 Selling Advertising Slide 18 gidgreen.com/course

19 Contextual From Code to Product Lecture 6 Selling Advertising Slide 19 gidgreen.com/course

20 Contextual From Code to Product Lecture 6 Selling Advertising Slide 20 gidgreen.com/course

21 Behavioral From Code to Product Lecture 6 Selling Advertising Slide 21 gidgreen.com/course

22 Behavioral From Code to Product Lecture 6 Selling Advertising Slide 22 gidgreen.com/course

23 Affiliate advertising Direct sales But no transaction costs Payment on sale only Open to all From Code to Product Lecture 6 Selling Advertising Slide 23 gidgreen.com/course

24 Affiliate advertising From Code to Product Lecture 6 Selling Advertising Slide 24 gidgreen.com/course

25 Real-time bidding (RTB) Most online ads bought in advance Volumes and targeting predefined RTB ads bought in real-time User visits page with RTB ad Impression auctioned to buyers Highest bid wins Works like an ad network 10% of display ads, projected 27% in 2015 From Code to Product Lecture 6 Selling Advertising Slide 25 gidgreen.com/course

26 Lecture 6 Introduction Types of targeting Price models Ad formats Ethical issues Web Sudoku From Code to Product Lecture 6 Selling Advertising Slide 26 gidgreen.com/course

27 Fixed price Predefine: Where ads will show Proportion of time Time period (week/month) Direct sales only No tracking required Advertiser can monitor performance Money left on table? From Code to Product Lecture 6 Selling Advertising Slide 27 gidgreen.com/course

28 Cost per impression Priced in CPM = cost per mille (1000) Advertiser sets: CPM rate Above the fold? Limits per day, per user Popular for display advertising Viewing ad builds brand recognition Impression tracking From Code to Product Lecture 6 Selling Advertising Slide 28 gidgreen.com/course

29 Pay per click Priced in CPC = cost per click Advertiser more flexible Click = user intent Popular for search advertising Auction between advertisers Impression and click tracking CTR = click-through rate From Code to Product Lecture 6 Selling Advertising Slide 29 gidgreen.com/course

30 Pay per action Priced in CPA = cost per action (sale) Suits advertiser perfectly Only pay if you get paid Popular for affiliate advertising Any publisher will do Impression, click and conversion tracking CR = conversion rate Publisher forced to trust advertiser From Code to Product Lecture 6 Selling Advertising Slide 30 gidgreen.com/course

31 Total revenue Revenue = Fixed price Impressions CPM/1000 Impressions CTR CPC Impressions CTR CR CPA From Code to Product Lecture 6 Selling Advertising Slide 31 gidgreen.com/course

32 Total revenue Revenue = $1, k $2/ k 2.5% $ k 2.5% 2% $4 From Code to Product Lecture 6 Selling Advertising Slide 32 gidgreen.com/course

33 Defaults and thresholds Defaults What to show if there s no ad ecpm = equivalent CPM All you really care about Threshold Minimum required ecpm Fill rate Check the definitions! From Code to Product Lecture 6 Selling Advertising Slide 33 gidgreen.com/course

34 Ad network example From Code to Product Lecture 6 Selling Advertising Slide 34 gidgreen.com/course

35 AdSense example From Code to Product Lecture 6 Selling Advertising Slide 35 gidgreen.com/course

36 Real-world ecpms Type of site Example 300x250 ecpm Forum $0.25 Gaming $1.50 Fashion $4.00 Real estate $8.00 Local newspaper $10.00 Technology $15.00 Travel $20.00 Investments $40.00 From Code to Product Lecture 6 Selling Advertising Slide 36 gidgreen.com/course

37 Lecture 6 Introduction Types of targeting Price models Ad formats Ethical issues Web Sudoku From Code to Product Lecture 6 Selling Advertising Slide 37 gidgreen.com/course

38 Online banner sizes (IAB) Full banner 468 x 60 Leaderboard 728 x 90 Wide skyscraper 160 x 600 Medium rectangle 300 x 250 From Code to Product Lecture 6 Selling Advertising Slide 38 gidgreen.com/course

39 Banner ad code <!-- Casale Media: 336x280, 300x250 (Rectangle) --> <script type="text/javascript"> var CasaleArgs = new Object(); CasaleArgs.version = 2; CasaleArgs.adUnits = "6,4"; CasaleArgs.casaleID = 76546; </script> <script type="text/javascript" src=" js.casalemedia.com/casalejtag.js"></script> <!-- DO NOT MODIFY --> From Code to Product Lecture 6 Selling Advertising Slide 39 gidgreen.com/course

40 Size vs CTR (AdSense) Click-through rate Banner area From Code to Product Lecture 6 Selling Advertising Slide 40 gidgreen.com/course

41 Interstitials From Code to Product Lecture 6 Selling Advertising Slide 41 gidgreen.com/course

42 Pop-up ads Hated by users Pop-up blockers common Also: popunder From Code to Product Lecture 6 Selling Advertising Slide 42 gidgreen.com/course

43 Other online formats Floating ads Mouseover ads Expanding Audio In-video Pre, mid, post-roll In-map Advertorials From Code to Product Lecture 6 Selling Advertising Slide 43 gidgreen.com/course

44 In-app ad formats Mobile banner 320 (or 300) x 50 Full screen (or almost) 320 x 480 (or 440) From Code to Product Lecture 6 Selling Advertising Slide 44 gidgreen.com/course

45 In-app state of play Many other ad sizes 320x250, 320x320, 320x350, Landscape getting started 480x50, 480x60, 480x70, ipad/tablets to use web ad sizes? 728x90, 300x250 Retina display scales x2 From Code to Product Lecture 6 Selling Advertising Slide 45 gidgreen.com/course

46 Ads in Past: text Now: images Not always displayed Direct sales Some small networks From Code to Product Lecture 6 Selling Advertising Slide 46 gidgreen.com/course

47 Lecture 6 Introduction Types of targeting Price models Ad formats Ethical issues Web Sudoku From Code to Product Lecture 6 Selling Advertising Slide 47 gidgreen.com/course

48 Core problems Ceding control of user experience Weakens brand/message Bad ads and bad sites Users don t like ads Can harm word of mouth An effective ad is clicked User gone elsewhere To competitor? From Code to Product Lecture 6 Selling Advertising Slide 48 gidgreen.com/course

49 Privacy and cookies Ad networks and cookies Track users within sites Worse: across sites Enables behavioral targeting User s identity not revealed But: IP address Google searches From Code to Product Lecture 6 Selling Advertising Slide 49 gidgreen.com/course

50 Bad ads: Ugly From Code to Product Lecture 6 Selling Advertising Slide 50 gidgreen.com/course

51 Bad ads: Offensive From Code to Product Lecture 6 Selling Advertising Slide 51 gidgreen.com/course

52 Bad ads: Misleading From Code to Product Lecture 6 Selling Advertising Slide 52 gidgreen.com/course

53 Bad sites: Spyware From Code to Product Lecture 6 Selling Advertising Slide 53 gidgreen.com/course

54 Bad sites: Gambling From Code to Product Lecture 6 Selling Advertising Slide 54 gidgreen.com/course

55 Bad sites: Scams From Code to Product Lecture 6 Selling Advertising Slide 55 gidgreen.com/course

56 User complaints Your advertisement in support of Rick Santorum is enough to cause me to use some other website for this game. I will avoid coming here again! Why do you accept advertising from nomorerack? They are an out and out scam. Read the feedback. From Code to Product Lecture 6 Selling Advertising Slide 56 gidgreen.com/course

57 Ad network filters From Code to Product Lecture 6 Selling Advertising Slide 57 gidgreen.com/course

58 Lecture 6 Introduction Types of targeting Price models Ad formats Ethical issues Web Sudoku From Code to Product Lecture 6 Selling Advertising Slide 58 gidgreen.com/course

59 Amazon ads From Code to Product Lecture 6 Selling Advertising Slide 59 gidgreen.com/course

60 Direct ad deals From Code to Product Lecture 6 Selling Advertising Slide 60 gidgreen.com/course

61 AdSense + our own products From Code to Product Lecture 6 Selling Advertising Slide 61 gidgreen.com/course

62 Banners on puzzle page +4% +2% +0% -2% -4% Bright static banners Quiet static banners -6% Moving banners -8% 7 Aug 7 Sep 8 Oct 8 Nov From Code to Product Lecture 6 Selling Advertising Slide 62 gidgreen.com/course

63 The big break From Code to Product Lecture 6 Selling Advertising Slide 63 gidgreen.com/course

64 AdSense + new affiliation From Code to Product Lecture 6 Selling Advertising Slide 64 gidgreen.com/course

65 Very highly targeted From Code to Product Lecture 6 Selling Advertising Slide 65 gidgreen.com/course

66 Where we are today Ads are biggest source of revenue ~70% display ads after puzzle ~20% AdSense above puzzle ~10% direct deals 3 big display ad networks Monitor performance weekly Rebalance in response Ad quality a constant challenge From Code to Product Lecture 6 Selling Advertising Slide 66 gidgreen.com/course