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Watching Audiences That Watch Display Ads

27
July
2009

Researchers at the Walt Disney Company utilize biometric data from test subjects to monitor eye movement and reactions towards display ads.

George Assimakopoulos
Principal Manager

The New York Times reported today that Disney executives have established a measurement process to scrutinize online advertising display data to determine how, when and why web surfers see and click banner ads.  As most online advertisers will agree, it is fairly easy to determine how website visitors react to an ad campaign once they click on an ad.  But what about the millions of eyeballs that never click on the banners.  Disney believes that not nearly enough is understood about this non-clicking audience and should be researched further to maximize ad revenue opportunities.

To read the entire New York Times article on how Disney Labs is planning and executing this research – CLICK HERE.

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Benefits of Display Advertising

21
May
2009

Banner ads effectiveness ensures future use of this format.

Stefanie Berliant
Media Coordinator

To all the haters who say that banner ads are an ineffective form of online marketing or to not invest as much into this format of online advertising: you better check yourself.

After attending AdTech San Francisco last month and listening to the dialog from industry thought leaders, my own thoughts regarding online media buying were reaffirmed. Banner ads are to online marketing as posters, flyers, billboards, print ads, etc. are to traditional marketing. These tactics are an integral part of marketing, creating a holistic approach to grabbing the attention of a specific audience. Furthermore, the results of running an online advertising campaign are better tracked and measured than traditional advertising methods.

My opinion of display advertising was further codified by the recent report released by iProspect.  A third of internet users surveyed reported that they clicked on display ads. But wait! It doesn’t end there: 27% reported that they did an online search for the product, brand or company, and 21% directly entered the company Web address. Nine percent used social media tools to gather more information as well.

Surprised? You shouldn’t be.  As stated in my previous blog, display ads drive emotion which manifests into people searching online as well as offline. Again, the creativity of the display ads are a huge component of what drives emotion, so I must give kudos to Apple’s "Get a Mac" banner ads.  Apple’s creative team has taken banner advertising to the next level, making it interactive, entertaining but not intrusive. These 30 second rich media ads have the Mac and PC characters interacting in the leaderboard and large rectangle ads. The ad currently running on the NY Times homepage even includes commentary from a fake hair growth ad in the ad space on the opposite side of the webpage. Brilliant AND hilarious!

Online media buys are still well worth the investment, just make sure to run A/B tests with good creative and track the metrics the campaign. So don’t worry about the future of display advertising, it’s far from dead- more like alive and kicking. 

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Highlights from AdTech San Francisco

30
April
2009

The message is just as important as the delivery medium.

Stefanie Berliant
Media Coordinator

Last week I had the pleasure of attending AdTech in San Francisco. There was much to see and do; two floors of exhibitors and 3 rooms of seminars.

Highlight speakers included Jimmy Wales, Founder of Wikipedia; Jason Kilar, CEO of HULU; Rishad Tobaccowala, CEO of Denuo; and Shelly Palmer, Managing Director at Advanced Media Ventures.

Much of the conversation at the conference centered around the role of display advertising, and how "creativity" still plays a strong part in online advertising. Creativity was defined at AdTech as ideas, not just words and pictures; and story telling which connects people emotionally and intellectually.  The best way for a company to promote its brand or product online is to research who their audience is, then test out several tactics using analtyicts tools to measure which tactic the audience responds to the most, and finally use creativity and innovation to continue the conversation with the audience.

Display ads help drive emotion in consumers which then generates buzz and engagement. Of course this means companies must create meaningful content in order to establish relationships and give users a quality experience.  "Creativity" is force behind the convergence of search and display advertising as display ads help drive search not only online but offline as well.

There is a fundamental difference between advertising and marketing. Consumers are ultimately in control; they choose when and how they want to see ads. Companies need to find a balance between giving the consumers what they need and promoting a brand/product . This balance where content/utility = advertising is called marketing.

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Is YouTube Losing Money?

21
April
2009

Despite being one of the most popular websites, some experts predict that Youtube is actually losing money.

Ryan Moss
Media Coordinator

What do Google, Yahoo!, MSN/Windows Live, Microsoft and YouTube all have in common? According to Nielsen Online, these are the five most popular web brands in the U.S. during February based on the number of unique visitors. Each month thousands of people visit these websites, helping to make money for the companies. But, at least one of those companies, YouTube, isn’t nearly as profitable as everyone thinks. In fact, some experts predict that YouTube may actually be losing money, despite its popularity.

Several market research companies have estimated YouTube’s revenues for both 2008 and 2009. Estimates for 2008 range anywhere from $75 million to $189 million. While for 2009, the range is from $120 million to $500 million. There is a wide range between those predicted revenue numbers, but regardless of what numbers you use, predictions about YouTube’s expenses are far greater.

Analysts from Credit Suisse considered YouTube’s bandwidth costs, content licensing agreements, hardware needs and other expenses, and predicted their total expenses to be around $700 million in 2009. With YouTube likely losing a significant amount of money, how can this be corrected?

"The issue for YouTube going forward is to increase the percentage of videos that can be monetized (likely through more deals with content companies)," the analysts said. "[YouTube needs] to drive more advertiser demand through standardization of ad formats and improve ad effectiveness."

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CBS Cashing In On March Madness

23
March
2009

The current state of the economy isn’t likely to significantly effect CBS’s ad revenue from March Madness.

Ryan Moss
Media Coordinator

The NCAA Men’s College Basketball Tournament started last Thursday meaning that "March Madness" is here in full force. Studies have shown that most companies typically suffer losses during this time due to a lack of productivity from their employees. For CBS, this is one thing it doesn’t have to worry about, since it is the network carrying all the games and therefore receiving all the advertising revenue.

Since 1999 over 291 different sponsors have spent a total of $4.2 billion on TV advertising during the tournament. The record high was set last year with $643 million being spent by 102 advertisers. In addition to TV advertising revenue, CBS also receives digital ad revenue from broadcasting games on its website, which in 2008 this was around $23 million.

With the current state of the economy some expect CBS’s March Madness advertising revenue to decline. However that doesn’t look to be the case at least for online ads. According to the Wall Street Journal, CBS said that $30 million will be generated from online ads, which is a 30% increase from 2008. But, how TV advertising revenue will compare to years past remains to be seen and likely won’t be released until after the championship game on April 6.

 

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Internet Ad Revenue Resilient To The Economy

21
November
2008

A struggling economy has not stunted the growth of revenue from online advertising.

Ryan Moss
Media Coordinator

Despite a below average economy, online advertising revenue during the third quarter of 2008 was nearly $5.9 billion. According to the latest report from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP (PWC), revenues increased by 2% from quarter two in 2008 and over 11% from quarter three in 2007. The $5.8 billion of revenue generated in Q3 2008 is the second highest quarter results ever, behind only quarter four in 2007.

Additionally, during the first nine months of 2008 revenues were $17.3 billion. This is a substantial increase of about 14% compared to the same period during 2007 when revenue was $15.2 billion.

"A weakening economy will continue to be a challenge to all forms of advertising-supported media," said David Silverman, a partner at PWC. "However, the Internet should be better poised to withstand the storm given its ability to combine performance-based advertising along with broad-based advertising."

The chart below shows the quarterly Internet Advertising revenue growth from 2000 to the present. As seen below, there has been a relatively steady increase in the past eight years, which gives reason to believe that this trend will continue.

Quarterly Online Ad Revenue

 

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The Growth of Online Video Advertisements

24
September
2008

While banner ads are dying, video ads are growing.

Stefanie Berliant
Media Coordinator

Currently, studies are proving that online display ads are ineffective while other forms of online advertisements, such as video ads, are showing great promise. Most online users watch short-form videos, such as news clips, but as the growth of online long-form videos (TV episodes, Web-only shows, full-length movies, etc.) continues, it will create a vacuum for ad inventory space. The growth of online video advertising depends on the audience, the inventory and the content. There needs to be enough people to watch the ads, enough space to encourage marketers to buy the ads, and trusted, professional-quality video content.

According to MarketingSherpa, video ads, which receive a 49.5% response rate, are highly efficient and require minimal effort. Video ads allow advertisers to deliver more information about a product or service to a targeted audience, thus easing the conversion funnel from ignorance to purchase.

A report from eMarketer shows that in 2008, 66.8% of all Internet users have viewed some form of video advertising (in-stream, in-banner or in-text) at least once a month. They predict that this percentage will increase to 80.6% in 2012. eMarketer also projects that the number of people who view an online video ad will be 183.3 million in 2013, a large rise from the 129.5 million in 2008.  The US online video ad spend in 2008 is $505 million and is expected to be $1,150 billion in 2013.  eMarketer also estimates that while only 2% of total Internet ad spend will go to video in 2008, that share will be nearly 9.8% by the end of 2013.

According to a Bain and Company study, video ads generate more revenues. They found that while video CPM rates are approximately $43, or about three times higher than the $15 average CPM for display ads, companies can experience a 1.39% to 5.83% increase in direct sales for video ads than display ads. A recent study from The Diffusion Group estimates CPM rates will rise gradually through 2013.

DoubleClick conducted research that found that large sized, in-page video ads got a higher click through rate (.12%) versus non-video ads (.09%).  Also, large sized, in-page video units got higher interaction rate (2.45%) than the non-video ads (1.30%).  Additionally, expanding video units received higher expansion rates and times (2.18% and 9.37 seconds) than the non-video ads (1.85% and 6.63 seconds). Furthermore, in-page video ads had the highest video complete rate at 55%.

If publishers and ad networks want to capitalize on the profit that can be made form online video advertising, they need to offer more video content which can support more video ad inventory.

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“Business Social Networks” Bring Change

22
August
2008

Social networks are thriving, leading to a new development of “business social networks” which are changing the way business is conducted.

Ryan Moss
Media Coordinator

In each of the past couple of years social networks have become increasingly popular. Businesses have noticed this trend and are spending more money on social network advertising. eMarketer predicts that U.S. advertisers will spend $40 million on social network advertising in 2008. That amount is expected to steadily increase during subsequent years to the point where in 2012 it will reach $210 million.

The increase in advertising on social networks is a direct result of the dramatic increase in the overall number of users and networks. These networks are no longer being used strictly for social purposes and are now used for business purposes. In fact, in the next few years many businesses are expected to create their own networks which can be used to improve communication by tying together clients, partners, suppliers and vendors.

The shift to "business social networks" can be seen with LinkedIn, who has had its number of members more than double in the past year. There has also been an increase in the amount of "vertical industry business social networks." Networks such as ITtoolbox, Legal OnRamp and LawLink bring together professionals in the same industry. Even Facebook is following the trend by partnering with Visa in June 2008 to offer an application that helps small businesses network and interact with each other.

These new "business social networks" will greatly effect how people develop professional relationships, search for jobs and communicate B2B.

 

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Sports Websites Are Winning

29
July
2008

Sports websites are thriving by using ad-supported models which are widely accepted by their passionate and dedicated fans.

Ryan Moss
Media Coordinator

Everywhere fans look at sporting events, they see advertisements. Now, sports websites are following this same tactic and focusing more on generating revenue from online advertising. The people who visit sports websites are already accustomed to seeing many advertisements as they usually are the same people who attend sporting events. Therefore, they aren’t fazed by the presence of advertisements on these web pages. Furthermore, these people are typically very passionate and dedicated fans who crave information about their favorite teams and are willing to tolerate the increase of advertisements.

As online advertising revenue for sports websites continues to increase, so does the total amount of revenue that these websites generate. As seen in the chart below, eMarketer estimates that the total amount of revenue generated by U.S. Sports Websites will nearly double from 2007 ($1,489 Million) to 2012 ($2,955 Million). eMarketer details all of this information and more in its new report titled "Sports Site Marketing." The report also discusses other important issues such as the role of fantasy sports and the online strategies of the "Big Four" U.S. sports leagues.

As sports websites shift towards using an ad-supported model, one can’t help but wonder which industry will be the next one to make the switch.

U.S. Sports Site Revenues By Segment 2007-2012

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Advertising and Marketing Spending Will Continue To Grow

17
July
2008

The amount of money spent on advertising and marketing is expected to continue to increase, but the rate at which it is growing is decreasing.

Ryan Moss
Media Coordinator

Despite a struggling economy, experts at Outsell Inc. predict that the amount of money spent on advertising and marketing in the United States will total $412.4 billion in 2008. According to the company’s third annual ad spending report, about $249.1 billion will be spent on advertising and the remaining $163.3 billion will be spent on marketing. However, the growth of the total advertising and marketing spend is only 3.9%, a lower rate compared to last years’ spending increase of 5.8%.

The report, which surveyed 1,088 U.S. Advertisers, focuses on the five main media types: online, print, events, TV/radio and others. Some of the key findings from the report are listed below.

  • 61.8% of a company’s advertising/marketing budget is being spent on the company’s own website
  • Online Advertising is the fastest-growing of all types of advertisement and is expected to grow by 12.3% in 2008
  • More money is now spent on online advertising then on TV/radio/movie advertising

To view the complete report, see the link below.

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