Michael Ahern

Santiago Andujar

Nathan Blouin

Rebekah Gilbert

Min-Jee Hwang

Ana Sviatschi

NYU Stern Firms & Markets Spring 2011

America Online brings Americans online, and ISP Battles

America Online• AOL founded in 1989 to bring the internet to America. • 1998 acquisition of CompuServe, while competing ad-supported NetZero and Juno free email

ISP services• 2000 Merger with TimeWarner• Major advertising deals from 1996 – 2003 were sponsorship based• Search advertising became part of brand strategy with 2007 acquisition of ADTECH AG

Microsoft adapts to the Search Market

MSN to Bing•1995 MSN Released, then LiveSearch, then Bing•Last of Big Three to develop its own ad server network•Developed MSN adCenter, similar to AdWords auction winning PPC revenue stream•Currently holds 4% market share in revenue, 30% share in search

Yahoo!

Yahoo!•Started in 1995 as a search directory•GoTo.com, Overture, Yahoo! Search •Maintains extensive 2-petabyte (2-mllion gigabyte) databases on useractivity,more info than IRS has on all US taxpayers in all of its records.•Strength in profiles!

Types of Advertising Online(Morgan Stanley Dean Whitter)

1997 1998 1999 2000 2001 2002 2003

Banner 80% 52% 50% 46% 42% 41% 40%

Sponsor 15% 40% 39% 39% 34% 32% 30%

Interstitial 5% 3% 4% 5% 6% 7% 8%

Email 0% 1% 3% 6% 10% 13% 15%

Other 0% 4% 4% 4% 8% 7% 7%

Google Conquers the World

Google•1996 Average home internet speed is 28 kbs •1996 NetGravity 1st major local ad server for Yahoo! and TimeWarner's Pathfinder•1996 Doubleclick founded with innovative global ad serving targeted search•1998 Oingo created changed its name to Applied Semantics in 2001,which was later acquired by Google in April 2003 for US$102 million and became AdSense, Google's main ad serving platform•In 2000, Google began selling advertisements associated with search keywords. The ads were text-based to maintain an uncluttered page design and to maximize page loading speed. Keywords were sold based on a combination of price bid and click-throughs, with bidding starting at $.05 per click. 

How has the industry changed throughout the years?

HUGE growth

How has the industry changed throughout the years?

What is Internet Advertising?• Types of ads• Types of sites that show ads

Definition• company A has some sort of content to draw audience• company A sells (in other words, supplies) this audience to company B so

that B can advertise their products

How has the industry changed throughout the years?

Supply has increased Demand has increased

How has the industry changed throughout the years?

Points, Badges and Quests

Big Data

Big Data has been around for a long time between credit card transactions, phone call records and financial markets. Companies like AT&T, Visa, Bank of America, Ebay, Google, Amazon and more have massive databases they mine for competitive advantage. But lately, Big Data is finding its way to the smallest startups. The Web and cloud computing brings Big Data everywhere. But what exactly is pushing Big Data forward?

Socialnomics

Inverting the paradigm

Impact of online advertising on Retailers budgets and business

Industry shifts ADV budget to internet advertising

16%

12%11%

10%

7%

6%

6%4%

4%4%

13%

12%

11%

8%

8%

7%

7%

5%

4%4%

20%

21%

Retail

Telecom

Financial Services

Auto

Computing products

Others

Leisure and Travel

Consumer Packaged Goods

Pharma & Helathcare

Media

Entertainment

6.1

7.4

10.2

11.5

15.3

17.6

22.5

22.8

26.0

28.6

Out of Home

Trade Magazines

Consumer Magazines

Directories

Radio

TV: broadcast networks

TV: cable networks

News papers

Internet

TV distribution • Ability to put ads in front of audiences actively looking for information

• Reduces industries’ overall advertising budget since is more cheaper and cost effective than TV or paper reading

• Most of the largest U.S. retail chains are using YouTube

•Community building project thorugh internet For ex: Coke Zone, Burger King

What were and are the main concerns for advertisers in this industry?

Effectiveness / ROI

• Do more ads and clicks necessarily translate into higher sales/profits?

What were and are the main concerns for advertisers in this industry?

E-Business Regulations: Restrictions & Bans• Adblock, Noscript, CAN-SPAM Act

Constantly Evolving Market

• Developing New Strategies Based on New Technologies and Trends

Consumers Do Not Want to View Ads

• Negative Association With Ads• Internet Privacy & Data Security Concerns; Consumer Distrust• Over saturation - Too much advertising

What were and are the main concerns for advertisers in this industry?

Ethics

• Manipulating Adwords - methods to falsely up the advertising revenue

• Content Farms – spamming search results

What were and are the main concerns for advertisers in this industry?