Digital Marketing Internet Advertising or Digital Ads
Agenda • Internet Advertising or Digital Ads – Display Ads
– Search Engine Ads
Trend of Internet Advertising • In the USA (PricewaterhouseCoopers 2006) – 1999 - $4.6 billion – 2006 - $16.9 billion
Introduction • Digital Ads – Online advertising – Electronic WoM
• Two forms of Digital Ads – Display Advertising – Search Engine Advertising
Online Advertising • Reaching Customers via the Internet – A type of Mass Media different from Traditional Marketing Communication Mix
• Important to understand Consumers’ Online Behavior – Familiarity with the technology – Risk taking behavior
Internet Display Advertising • Two forms of Internet Display Ads – Banners on a web-page – Pop-up ads
Internet Display Ads: Banner Ads • Internet users are exposed to Banner Ads while browsing websites. • Buying Banner Ads – Based on space on a website (e.g., fixed daily rate) – Based on performance (e.g., impressions served or click-through) • One impression is one banner ad displayed on one page • The user clicks on an ad, taking him to other website
Banner Ad: Metric • Traditional Metric – Purpose • Create Brand Awareness • Develop Brand Association in Consumer Memory
– Process • Survey based tracking metric for awareness and brand attitude • Regression based Analysis – Impact of online ads on brand awareness, site visitation, and brand equity over time (Ilfeld and Winer 2002)
• OTS – Opportunity to See – If an ad does not have an opportunity to be seen by a real user, then it cannot possibly deliver its intended effect.
Banner Ad: Metric • Factors that Influence View Rates of Banner Ads – – – – – –
Placement (MSN vs. WSJ) Relative Size of the Site (Users visiting the site) Content Type (Sites’ as well as Ads’) Ad Size Position on the Page (Top, Bottom, Left, Right, In-between) Segmentation • Demographics • Behavioral Attributes • Geography
Banner Ad: Metric • Clickstream-based Metric – Clickstream data tracks • Pages viewed by the visitors • Record whether visitor clicked on a banner ad on those page • Web page navigation tracking
– Modeling approach • Click/no-click formulation using binary logit
Some Findings • Chatterjee, Hoffman, and Novak (2003) – – –
Users have intrinsic differences in their interest in banner ads or the extent to which they attend to them Repeated banner exposures do not have the same effect across site visitors (they can increase the clickthrough rate for less click-prone site visitors but not for others) Consumers are equally likely to click on banner ads placed early or late in the navigation path through the site
• Manchanda et al. (2006) – –
•
Banner advertising can accelerate the purchases made by existing customers (i.e., customers exposed to more banner ads purchased again sooner). When banner advertising exposures are spread across different websites and pages, the level of response is enhanced, but when the ads use a wider variety of creative executions that response is diminished.
Effect of Banner Ad on Browsing Behavior (Rutz and Bucklin 2007) – – –
Segment-1 seeks more information about the advertised brand (37%) Segment-2 reacts negatively (23%) Segment-3 no reaction (40%)
Banner Ads: Behavioral Aspect • Why Banner ads are so ineffective? (1 in 12 banner ads are attended) – Eye-tracking device to study consumers’ attention span to measure • Brand recognition • Brand recall • Brand awareness
– Consumers avoid attending to banner ads • Ad clutter • Previous negative experience • Perceived goal impediment
– Solution • Customized context-congruent message
SEARCH ENGINE ADVERTISING
Search Engine Marketing (Paid Search Advertising) • Browser based Internet Search Engines (SE) – Google, Bing, Yahoo,
• It is less intrusive to the consumers • Offers messages that are congruent with the consumers’ goal – Search engine traffic originates from voluntary search rather than forced exposure to messages – SEM facilitates exposure of messages to an audience more likely to be interested in and less likely to avoid it
Types of Search Engine Marketing • Organic Search (Natural Search) – Search results returned by the search engine in response to a user query
• Paid Search (Sponsored or Paid Listings)
SEO – Search Engine Optimization • Efforts to influence organic search results are known as SEO – Fine tuning website to reflect specific keywords and phrases relevant for the business of the site – Raise the position of the site’s link in the organic listing from a search
SEO
Paid Search • Advertiser selects specific search terms (known as keywords) and creates text ads for the search engine to serve (impressions) – SE use auction-based method to determine the position of the sponsored text ads
• Google generated more than $5 billion in net ad revenue in 2006 with their paid search ad operation called AdWords (Google 2006)
Paid Search • Pay-for-Performance ad – Companies don’t pay for impression served – Pay-per-Click – They pay for actual clicks on their paid search ads
• Metric – Impression – How many times the text ad has been served in response to a keyword search – Clicks – How many times the text ad has been clicked on – Conversion Rate – Clicks resulting in purchase
Paid Search Performance, Costs, and Metrics
Other Decisions • How much to bid for each keyword • How to design the text and ad that are served as impressions • How best to design the web page that users land on when clicking text ad
Online Word-of-Mouth • The Internet also has evolved as – A Social Medium – Word-of-Mouth Communications
• Electronic WoM – – – –
Blogs Chat Rooms Social Networks User Generated Content (UGC) (e.g., Wikipedia)
