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A talk by Ahmad Anvari on "Latest Developments and Trends in Online Advertising Business" organized by the Knowledge Diffusion Network
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Online AdvertisingOnline AdvertisingLatest Developments and Trends Latest Developments and Trends
Ahmad AnvariAhmad AnvariII--AIM Visiting LecturerAIM Visiting Lecturer
Sharif University of TechnologySharif University of TechnologyOctober 2007October 2007
Online AdvertisingOnline Advertising ٢٢
AgendaAgenda
History and BackgroundHistory and BackgroundOnline Advertising Type and Pricing Online Advertising Type and Pricing ModelsModelsMajor PlayersMajor PlayersRecent M&ARecent M&AFuture and TrendsFuture and Trends
Online AdvertisingOnline Advertising ٣٣
History and BackgroundHistory and Background
90s90s
••Banner AdsBanner Ads••ClassifiedsClassifieds••Email Email MarketingMarketing
Early 2000Early 2000
••Text Ads Text Ads (Contextual)(Contextual)
2005 2005
••DisplayDisplay••SearchSearch••Multimedia (rich)Multimedia (rich)••Text adsText ads
Online AdvertisingOnline Advertising ٤٤
Online Advertising is Online Advertising is primarily responsibleprimarily responsible
Web is becoming hot againWeb is becoming hot again……
ValueValue
Online AdvertisingOnline Advertising ٥٥
Online Advertising Online Advertising Revenue and GrowthRevenue and Growth
Source: PwC/IAB Internet Advertising Revenue Report (www.iab.net)
Online AdvertisingOnline Advertising ٦٦
Online Advertising Online Advertising Revenue and GrowthRevenue and Growth
$10BN in first $10BN in first half of 2007half of 2007–– IranIran’’s GDP is s GDP is
$212BN$212BN
27% increase 27% increase comparing to comparing to 20062006More than $5BN More than $5BN in the 2in the 2ndnd
quarterquarter
FH 2006 FH 2007
Search 40% ($3,164) 41% ($4,097)
Classifieds 20% ($1,582) 17% ($1,699)
Referrals/Lead Generation 7%($592) 8% ($799)
E-mail 2% ($158) 2% ($200)
Display Related: 31% ($2,413) 32%($3,198)
– Rich Media (Includes Video) 6% ($475) 8%($799)
– Ad Banners / Display Ads 21% ($1,622) 21%($2,099)
– Sponsorships 4% ($316) 3% ($300)
– Slotting Fees <1% (<1$) <1% (<$1)
Source: The Interactive Advertising Bureau Source: The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC)(IAB) and PricewaterhouseCoopers (PwC)
Online AdvertisingOnline Advertising ٧٧
Types of Online AdvertisingTypes of Online Advertising
Text (contextual)Text (contextual)–– SearchSearch–– WebWeb–– InlineInlineDisplayDisplay–– StaticStatic–– Rich MediaRich Media–– PopPop--up/Popup/Pop--underunder
Online AdvertisingOnline Advertising ٨٨
Behavioral AdvertisingBehavioral Advertising
Knowledge of each userKnowledge of each user’’s behavior s behavior and demographic informationand demographic informationTargets users based on their browsing Targets users based on their browsing history and other attributeshistory and other attributesLocation, Age, Gender, Salary, etc. Location, Age, Gender, Salary, etc.
Online AdvertisingOnline Advertising ٩٩
Pricing ModelsPricing Models
CPMCPM–– Advertiser pays when an ad is shown to a userAdvertiser pays when an ad is shown to a user
PerformancePerformance–– CPCCPC
Advertiser pays when users Advertiser pays when users clickclick on an adon an ad
–– CPACPAAdvertiser pays when a click leads to an Advertiser pays when a click leads to an actionactionSometimes even a click is not neededSometimes even a click is not needed
Online AdvertisingOnline Advertising ١٠١٠
Pricing ModelsPricing ModelsRevenue BreakdownRevenue Breakdown
Model FH 2006 FH 2007
CPM 48% ($3,797) 45%($4,497)
Performance Deals 47% ($3,717) 50%($4,997)
Hybrid 5% ($395) 5% ($499)
Online AdvertisingOnline Advertising ١١١١
Contextual Advertising Contextual Advertising
Web pages crawled by the Advertising Web pages crawled by the Advertising NetworkNetworkIntelligent algorithms parse and Intelligent algorithms parse and understand the contentunderstand the contentAds that are relevant to the content Ads that are relevant to the content are chosen realare chosen real--time by the ad serverstime by the ad serversGoogle Google AdSenseAdSense, , KanoodleKanoodle, , IntelliTextIntelliText(Inline)(Inline)
Online AdvertisingOnline Advertising ١٢١٢
Contextual Advertising Contextual Advertising ExampleExample
Online AdvertisingOnline Advertising ١٣١٣
Contextual Advertising Contextual Advertising Gone WrongGone Wrong
Online AdvertisingOnline Advertising ١٤١٤
Contextual Advertising Contextual Advertising Gone WrongGone Wrong
Online AdvertisingOnline Advertising ١٥١٥
Contextual Advertising Contextual Advertising Gone WrongGone Wrong
Online AdvertisingOnline Advertising ١٦١٦
Major PlayersMajor Players
GoogleGoogleYahoo! NetworkYahoo! NetworkAmerica OnlineAmerica OnlineMicrosoft NetworkMicrosoft Network
TurnTurnTribalFusionTribalFusionAdBriteAdBrite
Online AdvertisingOnline Advertising ١٧١٧
Major Players Major Players -- GoogleGoogle
Contextual AdvertisingContextual Advertising–– Text, Display, Rich MediaText, Display, Rich Media
ProductsProducts–– AdSenseAdSense –– Publisher NetworkPublisher Network–– AdWordsAdWords –– Advertiser NetworkAdvertiser Network
Recent AcquisitionsRecent Acquisitions–– DoubleClickDoubleClick: $3BN: $3BN
Online AdvertisingOnline Advertising ١٨١٨
Major Players Major Players –– Yahoo!Yahoo!
New Platform: PanamaNew Platform: PanamaHas demographic information of a Has demographic information of a large network of Yahoo! Userslarge network of Yahoo! UsersHas started building verticals: finance, Has started building verticals: finance, travel, women, college, sports, autotravel, women, college, sports, autoRecent AcquisitionsRecent Acquisitions–– RightMediaRightMedia: $680MM: $680MM
Online AdvertisingOnline Advertising ١٩١٩
Major Players Major Players –– AOLAOL
Led by Advertising.comLed by Advertising.com–– Largest reach (90% US Internet Users)Largest reach (90% US Internet Users)
Recent AcquisitionsRecent Acquisitions–– LighteningCastLighteningCast: Video Advertising: Video Advertising–– 33rdrd Screen Media: Mobile AdvertisingScreen Media: Mobile Advertising–– ADTECH: Ad Serving TechnologyADTECH: Ad Serving Technology–– TacodaTacoda: Behavioral Targeting: Behavioral Targeting
Online AdvertisingOnline Advertising ٢٠٢٠
Major Players Major Players –– MSNMSN
Microsoft Microsoft AdCenterAdCenterRecent AcquisitionsRecent Acquisitions–– aQuantiveaQuantive: $6BN: $6BN
MicrosoftMicrosoft’’s biggest acquisition by a large s biggest acquisition by a large marginmargin
–– A 1.6% stake in A 1.6% stake in facebookfacebook for $240MMfor $240MM
Online AdvertisingOnline Advertising ٢١٢١
Recent M&ARecent M&A
aQuantiveaQuantive (MSN): $6BN(MSN): $6BNDoubleClickDoubleClick (Google): $3BN(Google): $3BNRightMediaRightMedia (Yahoo!): $680BN(Yahoo!): $680BNAdTechAdTech, TSM, , TSM, LighteningCastLighteningCast (AOL)(AOL)
Online AdvertisingOnline Advertising ٢٢٢٢
Future and TrendsFuture and Trends
Mobile Advertising is hotMobile Advertising is hotVideo (preVideo (pre--roll, postroll, post--roll, and inroll, and in--video) video) advertising is nextadvertising is nextContextual Advertising will continue to Contextual Advertising will continue to growgrowNew technologies allow behavioral New technologies allow behavioral targetingtargetingBlogBlog Advertising (small networks)Advertising (small networks)
