Assessing the Online Advertising Opportuntiy

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Assessing the Online Advertising Opportuntiy

• 1.27.02

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2001 Same as it ever was

• The hunt continues for the ideal mix of format,
  impact, measurability, and response
• Value of online ads a matter of debate
• CTRs averaging below 0.3
• awareness and perceptions boosts have been
  measured as equivalent to TV
• Publishers, advertisers and agencies
  experimenting with new formats
• pop-ups, pop-unders, messaging units, and other
  intrusive ads proliferate
• banners and buttons refuse to go away
• Media options growing increasingly robust
• sound, video, dHTML, interactivity
• email broadcasting getting better

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2001 What has changed

• Online ad revenues declined for the first time
• Q3'01 10 smaller than Q3'00
• demise of many advertising dot-coms and general
  recession at root
• our clients actually increased budgets '00 to
  '01, but they are atypical
• Traditional advertisers are bigger fish in
  smaller pond
• they have survived the shakeout, and publishers
  are more focused
• Greater creativity in pricing models
• CPM is blending with cost for performance
• actual campaign goals a bigger factor in costs
• Better integration with offline campaigns
• Internet legitimized, and no longer the family
  rebel

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2001 What has changed

• What 50,000 can get you today vs. 2 years ago

• 2 years ago
• Run of network or run of site
• 25-30 CPMs
• 2MM impressions
• Combination of banners, buttons and text links
• 2 units per page for 5 share of voice
• 10,000 clicks

• Today
• Premium placement, targeted areas of 1-2 sites
• Hybrid CPM and Cost per Click model - 10
  effective CPM
• Large creative units - banner/ sidebar combo -
  flash enabled for 20 share of voice
• Bonus newsletters and opt-in email registrations
• 25,000 clicks email addresses to use for future
  marketing
• Measure performance through to registration, and
  effect on brand awareness

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So why do our clients advertise online?
At the end of the day, at the other end of the
wire, there is a person

• and there is a value in reaching that person
  online
• cost-efficient way to reach local, national, or
  international audience
• ability to provide deep, useful information to
  individuals
• unique contextual and demographic targeting
  opportunities
• real-time performance measurement
• it's where the customers are

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Client Case Studies

• Client examples demonstrate the strength of the
  online opportunity
• major publisher revised campaign saw CTR
  plummet, but cost per sale dropped 76
• broadband provider CTRs vary and
  directly-related sales are below estimate, but
  the target is, by definition, online
• auto manufacturer needed to capture names and
  email addresses in lead generation effort, and
  gathered 150,000 names in 6 weeks for less than
  1 per name
• financial services provider goal was to raise
  awareness and test medium results showed 46
  average boost in awareness

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What Lies Ahead

• Formats and technologies will continue to evolve
• Customer backlash will start focus will shift to
  what is acceptable, not just what is possible
• what do you think of the X10 camera ads?
• Pay for performance will be increasingly
  important
• CPM will continue to be a cornerstone, as long as
  other media use it
• The big advertisers will continue to invest