Online and Mobile Advertising

1. Online and Mobile Advertising

2. Chapter Objectives After reading this chapter you should be able to: • Appreciate the magnitude, nature, and potential for online and mobile advertising. • Describe how the online advertising process works. • Understand the various forms of online advertising: search engine advertising, display or banner ads, rich media, websites and sponsorships, blogs and podcasts, e-mail advertising, mobile advertising, and advertising via behavioral targeting.

3. Chapter Objectives (cont’d) • Describe the nature of mobile advertising: its forms (e.g., short message services, location-based services), benefits and costs, and strategies. • Understand the issues associated with privacy and online behavioral targeting. • Appreciate the importance of measuring online advertising effectiveness and the various metrics used for this purpose.

4. Mobile Headache: The Excitement and Challenges of Mobile Advertising • Mobile ad spending is expected to grow to $2.5 billion by 2014 • Versatile: Moving from SMS texts -> Web -> apps -> games -> social media • Excellent international platform for growth • Yet…. More apps (e.g., “Angry Birds”) don’t always equal better apps • Fit with company? strategy? • Not IT driven (rather, short 30-day program cycles driven by consumers) • May have to make tough decisions in moving ad spending from traditional media

5. Mass Online Advertising • Internet is not a replacement, but a key element of IMC programs • Dating back only to 1994, the “Web” has become an important medium for Internet advertising. • Online advertising spending amounted to over $9.6 billion in 2004 (~4% of all advertising), $29 billion in 2012 (~17% of all advertising), and is estimated to grow to $40 billion by 2014.

6. Many Options for Placing Ads and Promotions Online • Company Websites (e.g., www.nick.com) • Banner ads (click-through rates only .3%; B2B>B2C; brand familiarity; yet attention?) • Sponsorships and Microsites (small area paid for by external co.) • Rich Media: Interstitials/Superstitials/pop-ups/ online video ads • Browser ads (viewer is paid to watch ads) • Alliances and affiliate programs (e.g., AOL and Amazon; www.there.com) • Push technology (e.g., Real Video; Infogate/AOL) • Search engine advertising (keywords/targeted content; 40% of online ads), blogs (www.blogpulse.com), podcasts (audio blogs; www.podnova.com ) (Nielsen/McKinsey NMIncite tracks/ analyzes blogs) • E-mail ads (opt-in versus opt-out; e-zines; wireless; mobile phone/ text messaging) • Mobile Advertising (Google Goggles) • Social Media: Facebook, MySpace, Twitter, YouTube, Second Life, LinkedIn, Pinterest, Flickr... (www.comscore.com; www.compete.com; www.radian6.com; tracks/analyzes)

7. Online Advertising: Benefits and Costs

8. Figure 13.1: The Online Ad Process

9. Purchasing Keywords and Selecting Content-Oriented Websites Keyword Matching Advertising Prospective advertisers bid for keywords by indicating how much they are willing to pay each time an Internet shopper clicks on their website as a result of a search (cost per click). (Google Ad Words: www.adwords.google.com)

10. Content-Targeted Advertising • AdSense: sponsored by Google, this program enables advertisers to run ads on sites other than Google’s own site. • www.google.com/adsense • Google then acts as an ad agency placing ads and receiving a commission (e.g., 20%). • Recently expanded to mobile content and RSS (Really Simple Syndication) feeds used for publication (e.g., a blog entry).

11. Types and Sizes of Internet Marketing Units(IMUs)

12. Rich Media: Pop-Ups, Interstitials, Superstitials, and Video Ads • Pop-Ups: Ads that appear in a separate window. • Interstitials: Ads that appear between two content Web pages. • Superstitials: short, animated ads that play over or on top of a Web page. • Online video ads: audio-video ads that are similar to 30-second TV commercials, but are shortened to 10-15 seconds and compressed.

13. Websites(advantage: sought by consumer versus stumbled upon) • Uses for Websites • As an advertisement for the company • As a venue for generating and transacting exchanges between organizations and their customers • As a link to other integrated marcom communications • Well-Designed Websites • Are easy to navigate • Provide useful information • Are visually attractive • Offer entertainment value • Are perceived as trustworthy

14. Mobile Advertising 2015: 4.9 billion phones worldwide; 2014: U.S. ad spending doubles to $2.55 billion Google Goggles

15. Measuring Internet Ad Effectiveness

16. Measures of Effectiveness for Internet Advertising • Viewers(stay on site/page): number of viewers to a site (and unique viewers) • Ad views/page views/impressions: the number of times viewers see a Web page with an ad. (Used to calculate cost per thousand or CPM). • Hits (leave the site or home page): number of times a specific component of a site is requested/clicked on. • Clicks/click throughs: the number of visitors to a site that click on an ad to retrieve information. • Click through rate: % of ad views that result in an ad click. (Cost per click (CPC) can be calculated) • Cost per thousand (CPM) example for “go.com”: • CPM = $10,000 per mo. x 1000 / 500,000 views per mo. = $20

17. Internet and E-Mail Advertising Problems • Privacy and Behavioral Targeting (online profiling via cookies and marriage of online and offline data: Double Click; Children’s Online Privacy Protection Rule) • Opt-in and opt-out battles • SPAM (unsolicited commercial e-mail: 2/3 of all commercial e-mail) • Phishing and international fraud (credit card #s, social security #s, ATM #s) • Click fraud with search engine advertising