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A short presentation to discuss the online advertising network industry and to illustrate some of the ways in which it can help a site develop its initial revenues.
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Growing Online Revenue:Advertising, Sales and Classifieds
Moscow, Russia
27 – 28 September 2012
2
TopicPresenter
Online Advertising Market Overview Ross
Sales Teams: Organization & Motivation Ross
Advertising Networks Ross
Online Classifieds: Local Opportunities Ross
Social Media: Building Audience & Revenue Kevin
Agenda
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Advertising Networks: Overview
Advertising Networks are everywhere…there are over 300 and more everyday.
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Advertising Networks: Overview
Advertising networks are designed to address the unique issues that face advertisers in the digital media market.
Digital Advertising IssuesToo many publisher sites to choose from. Too much supply.
Difficulty at identifying high quality content:- High ad performance- High quality content- High quality audience
Challenge to integrate advertising performance metrics across hundreds of sites.
Difficulty in managing ads across multiple sites.
Ad Network SolutionsAggregates ad inventory from multiple sites.
Typical network may include many thousands of sites.
Divides ad inventory by quality of ad performance; type of ad content
Provides simple consistent metrics to track ads across network sites
Manages for ad efficiency (pricing, distribution, …)
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Advertising Networks: Overview
Successful ad networks require strong sales and marketing and strong technology to compete.
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Target Tech•Contextual•Behavioral•Demographic•Brand•Geographic
Ad Networks
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Advertising Networks: Overview
The complexity and rapid evolution of online advertising has resulted in increasing specialization in ad networks.
Open vs. Blind• Open networks allow the advertiser to select specific brands/sites
within the network.Example: Gourmet Ads
• Blind networks only allow the advertiser to buy specific advertising actions (views/clicks) but not know which sites will display the ads.Example: Google AdSense for Content
Thematic Networks: Aggregate particular types of content to attract very targeted advertising groups – generally by industry. Examples: Active Youth Network, FishingAdvertising.org
Behavioral Networks: Allow advertisers to target audiences based on other actions they have taken on the network of on the web.Examples: Eloqua.com, Aggregate Knowledge
Advertising Network Types
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Advertising Networks: Overview
Geographical Networks: Aggregate traffic from online publishers in a particular region or area.Example: AdZouk.com
Technology/Media Networks: Networks that aggregate/serve traffic based on a unique media or technology type – mobile, video, audio, RSS
Examples: Video (YouTube), Mobile (InMobi), Audio (TargetSpot).
Advertising Network Types (continued)
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Advertising Networks: Pricing
Advertising networks establish prices based on one of two general models.
Traditional Volume Based Pricing (CPM Prices)• Prices set on supply and demand; competition• Frequently subject to negotiation and discounts depending on the
advertiser• Mostly used in Open, Branded networks and thematic networks
Ad Auctions (Price per Click/Per Position)• Audience behavior standardized
to simple measureable unit – The Click, the mouse over
• Advertisers bid per action, price per click
• In text ad units, advertisers can also bid on position
• Pricing is dynamic; changes by day of week or location.
Advertising Network Pricing Models
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Advertising Networks: Evaluation and Selection
Choosing an Advertising Network, the online publishers must balance the potential for additional revenue with the costs of implementation and the risk of cannibalization.Maximize Network Revenue:
• Which network contains the most relevant advertisers to your publication? To your audience?
• Which network has incentives to maximize pricing to advertisers?• If a blind network, does the network bring in new advertisers who
might not buy your brand.
Minimize Cannibalization Risk:• Does the network sell advertisers you would sell directly, current
advertisers?
If so, they should be “blind” networks. So, the advertiser cannot compare the price from your sales team and their sales team.
Low Cost of Implementation:• Is advertising implementation simple and low cost?
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Advertising Networks: Evaluation and Selection
Specific Ad Network evaluation criteria include:
Advertiser Volume and Type:• The larger the volume of advertisers the high bid prices tend to be in
an bidded network.• Are the advertisers likely to be new advertisers?
Advertising Unit Controls:• How much control does the advertising network give you over which
advertisements to run and where to run them?- Controls prior to campaign- Controls during campaign
Network Metrics:• What network metrics do they offer and can you use them to improve
your own sales effort? • Can you audit site and revenue performance easily from the metrics?
Revenue Share/Payments:• What is the maximum revenue share from the network?• What payment methods are available for the ad network to pay?
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Advertising Networks: Affiliate Networks
Affiliate Networks are a special case of an ad network offered by ecommerce companies like Ozon.ru and Amazon.
Affiliate NetworksAudience Action and Payment:
• Affiliate Networks pay for audience actions that deliver potential qualified sales leads to online retailers.
• The payment per action can be a significant % of the purchase price of the item being advertised.
Affiliate Network Usage:• Affiliate networks work best when a product or product category is
being reviewed or discussed.
We call this the purchase funnel. Consumers research on your sites, just before they buy.
Most common affiliate categories are travel, books, electronics,
Amazon Affiliate Program: affiliate-program.amazon.comOzon.ru Affiliate Program: http://www.ozon.ru/context/partner/
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Advertising Networks: Creating A Network
Many leading online media companies have come together to create their own online advertising networks.
Creating A NetworkTechnology: Do you have access to or can you build an ad serving technology?
• There are multiple ad serving technologies that can be used to build a private ad network – Google DoubleClick for Publishers Network Builder; AdFox.ru
Audience: Can you create a network with combined audience that is unique in some compelling way for advertisers?
• Ad network audiences require marketing to attract advertisers and their agencies. How would you sell your network’s audience?
Sales and Marketing: Do you have access or can you build a network sales and marketing team?
The type of team and their backgrounds will depend on the type of network and audience you develop.
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Advertising Networks: The Debate
Should you use online advertising networks? This is often an intensely debated topic.
Online Advertising Networks: Pros and ConsPros:
• Provides revenue at relatively little cost for content sites.• Can attract new advertisers from outside the market• Most are relatively easy to implement/add to your site• Creates a baseline for establishing the value of your site’s advertising
inventory.Cons:
Can create confusion for other advertisers and potentially cannibalization.
Can serve ads that are inappropriate.
Website Headline: “Corpse Found in Samsonite Suitcase”Ad Unit: Buy Samsonite Suitcases Here!
Can create a revenue dependence that is hard to stop.