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NYU Stern. Firms & Markets. Spring 2011. Michael Ahern Santiago Andujar Nathan Blouin Rebekah Gilbert Min-Jee Hwang Ana Sviatschi. Early Days of IA, and the Rise of the Consumer Internet. The Early Consumer Internet and the Birth of Internet Advertising. America Online
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NYU Stern Firms & Markets Spring 2011 Michael Ahern Santiago Andujar Nathan Blouin Rebekah Gilbert Min-Jee Hwang Ana Sviatschi
The Early Consumer Internet and the Birth of Internet Advertising America Online • 1989 AOL founded and start of ISP Wars • MSN to Bing • 1995 MSN Released, then LiveSearch, then Bing • Google • google.com was registered on September 15, 1997 • Yahoo! • Started in 1995 as a search directory
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? Demand has increased Supply has increased
What Advertising Models Have Been Most Successful? Successful Models • GSP • “generalized second-price auction” • Advertisers bid for certain keywords • with maximum willingness to pay for a click • Each bidder pays the next • highest advertiser’s bid. Yahoo! • Yahoo! only ranks advertisers in decreasing order of bids and charges the next highest advertiser’s bid. • This model ignores other factors that might be relevant to advertisers Google • Google AdWords computes an advertiser’s “rank number,” which is based on Click Through Rate and other factors. • Ads get ranked this number. Advertisers are then charged an amount that would sufficiently exceed the next advertiser’s rank number.
What Advertising Models Have Been Most Successful? • Increasing value of alphabet for advertisers • Brands who integrate this method receive more impressions • The Quest for a Shoe with Google Instant • S – Skype appears on the whole first page • Sh – Shoprite appears on the whole first page • Sho – Still Shoprite • Shoe – Zappos, Payless, DSW • A consumer could be led to another product and not even • end up shopping for what they originally intended. • This places huge value on bidding on letters. • Ensure your ad shows up on pages where your letters appear.
Industry shifting ADV budget to internet advertising Consumers look for ads instead of ads reaching consumers Become a chicken fun! Community Building web pages
Main concerns for advertisers in this industry Effectiveness / ROI • Do more ads and clicks necessarily translate into higher sales/profits?
Main concerns for advertisers in this industry • Restrictions & Bans • Adblock, Noscript, etc
Main concerns for advertisers in this industry Ethics • Manipulating Adwords - methods to falsely up the advertising revenue • Content Farms – spamming search results
Main concerns for advertisers in this industry Consumers Do Not Want to View Ads • Internet Privacy & Data Security Concerns; Consumer Distrust • Over saturation Constantly Evolving Market • Developing New Strategies Based on New Technologies/ Trends
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?