Digital Advertising 101. Jeremy Kagan, Associate Professor, Digital Marketing & CEO of Pricing Engine Inc.

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1 Digital Advertising 101 Jeremy Kagan, Associate Professor, Digital Marketing & CEO of Pricing Engine Inc.

2 Online Marketing: Why do we care? GROWING EFFECTIVE DIFFERENT

3 Online marketing is diverse and growing Large growing market Different channels with unique targeting, pricing and ROI considerations Different pricing formats allow marketers to optimize their spend for different campaign goals No longer a stand-alone marketing experiment, brand marketers view online ads as a key part of their full channel mix Online ad campaigns are highly integrated between different online channels as well as across different advertising mediums (print, television, billboards, etc.)

4 U.S. Advertising Revenue Breakdown Internet ad spending in 2010 was 23.4% of total spending across all major media. emarketer projected a strong 11.5% CAGR between 2010 and By 2015, emarketer predicts that Internet advertising will continue to account for over 25% of total advertising spend lagging behind only TV (39%). Source:

5 Internet Surpasses Newspaper % share of revenues 2010 Total advertising market 2010 $153 billion Source: emarketer.com 2011

6 US Interactive Marketing Spend, 2011 To 2016

7 Traditional Channels Will Decrease In Effectiveness Survey indicates most traditional marketing tactics are contracting. Interactive channels are expanding at double digit rates

8 Established Internet Marketing Channels SEARCH: Search Engine Optimization (SEO) and Search Engine Marketing (SEM) Lead Generation/Comparison Engines DISPLAY: Banners, buttons, etc. Rich Media: Ads that include audio/video elements, Flash, interactivity, usually on top of basic display ad units. newsletters and messaging; advertising in s MOBILE: Location leads to personal offers SOCIAL: Advertising, Content and Community

9 IN BRIEF: Search Engine Advertising Ads that emerge depending on the term(s) entered by the user into the search engine. Priority of ad placement determined by amount of bid placed by advertiser for a given search term.

10 Search: Google AdWords and SEM Metrics Google AdWords is the leading avenue for Search Engine Marketing ( SEM ) through the paid placement of text ads for search results on keywords. Google helps brands meet ROI objectives by highlighting performance metrics like clicks, impressions, costs, and conversions on a site-by-site basis. Brands use the report to inform decisions on identifying high-value placements to target more aggressively and low-value sites that require content optimization or exclusion. SEM seeks to maximize the Click-Through-Rate which feeds potential customers to websites. But also, the ROI on conversions.

11 IN BRIEF: Display Advertising Banner Ads are standardized by size. Advertisers can pay premiums for placement (slotting) or for sponsorship. Strongly resembles the magazine ad business; often used for branding.

12 U.S. Online Display Ad Spend, 2009 To 2014 Very fast growth as video and rich media expand

13 High Level Of Concentration In Top Properties IAB Internet Advertising Revenue Report: 2011 Full-Year Results, April 2012

14 Display ads leading industry spenders Although the industries cited below in the IAB Internet Advertising Revenue Report are for online ad spending as a whole, it is likely that the largest online spenders were also the largest purchasers of display inventory. IAB Internet Advertising Revenue Report: 2011 Full-Year Results, April 2012

15 IAB Display Advertising Guidelines: The New 2012 Portfolio Source:

16 Inside the Ad Ecosystem

17 Thank You Jeremy Kagan