The Fundamentals of Online Advertising

Internet Advertising Revenues

The Bust of

Terrific Growth

Growth vs. Offline Advertising  Overall ad spending for 2002, up to $96.1 B from an estimated $94.6 B in 2001 –a 1.5 % rise  Leading the way for this growth will be Internet advertising… –which will grow 8.8 % over its 2001 total.  The newspaper category, the next best in terms of forecasted growth, is expected to grow 3.1 percent. CMR forecasts

Globally... it’s America $13.5 B72% $2.87 B (15%) $1.7 B (9%) Rest of the Globe $927 Million 5% eMarketer 2002

But...

Online Ad Expenditures  Net ad expenditure per online Household Note: TV: $455 Newspaper: $513

Online Ad Expenditures  Local spending is increasing quickly Jay Friesel, EVP, 24/7 Media

Business Categories  consumer-related (30%)  financial services (15%)  computing (15-17%)  new media (9-12%) and  business services (9-10%)

Web Access  More than 152 million people regularly accessed the Web in  That’s 52 percent of American adults.  Women, minorities, and families with modest incomes continued to surge online.

Online Advertising Success Factors Four important issues that are critical to successful online advertising:  Targeting  Creativity  Content  Frequency Click Here Friends Fly Free

Benefits of Internet Media  Personalization Advertising can be targeted and personalized for individual consumers (one-to-one marketing)  Interactivity Consumers can interact with ads and can lead directly to purchase!  Monitoring Online advertising can be monitored both online and offline (if done right!)

Online Benefits - Monitoring

Forms of Online Advertising  Promotions –Give-aways –Free trial offers  Banner Ads  Pop-up Ads  Interactive Ads  Various other forms Online Advertising makes up 2-3 % of ad budgets

Promotion The Dave Matthews Band Web Site in 1998 offered a promotion where you could register for free tickets if you saw this icon on a web page. They moved it around the various web site pages constantly.

Free Trial Offer  The WWW allows for the free trial of some products right after they are advertised.  Computer Programs  Videos  Music (

Banner Ads  The oldest, most common online advertising tool.  Surfer clicks on the banner for more information or to make a purchase  click-through rates average about 0.39% but can be 10%+ if targeted properly

Pop-Up Ads  Pop-up ads are served when a link to a new page is clicked.  They are self-contained windows that can vary in size  The purpose of the pop-up ad is brand awareness more than actual behavior

Interactive Ads Served like pop-up ads and resemble them in appearance Provide the surfer with an activity a puzzle tile game  Little to no growth in 2000s

Other Forms of Online Advertising  Sponsorships Keyword searches Classifieds Rich Media Referrals

Rich Media  44% more effective than TV for brand awareness.  86% more effective for brand recall than television.  44% more effective than magazines.  77% more effective at raising interest than television.  More than 5 times as effective than GIF banner ads.  Larger ads increase brand recall by 1.5 to 3 times.  6% of online ad total in 2002, 22% by

The Future of Online Advertising Sketchy now but a brighter future è Much of the internet spending in was done by.coms (>65%) that are no longer in existence! è However, traditional consumer goods companies are increasing their online ad expenditures. è Large corporate advertisers tripled their online ad spending last year, to $1.9 million

Attitude toward Internet Ads