Michael Ahern Santiago Andujar Nathan Blouin Rebekah Gilbert Min-Jee Hwang Ana Sviatschi NYU SternFirms & MarketsSpring 2011

Early Days of IA, and the Rise of the Consumer Internet Types of Advertising Online (Morgan Stanley Dean Whitter) Banners and popups 80%52%50%46%42%41%40% Sponsor15%40%39% 34%32%30% Interstitial5%3%4%5%6%7%8% 0%1%3%6%10%13%15% Other0%4% 8%7%

The Early Consumer Internet and the Birth of Internet Advertising America Online 1989 AOL founded and start of ISP Wars MSN to Bing 1995 MSN Released, then LiveSearch, then Bing Yahoo! Started in 1995 as a search directory Google google.com was registered on September 15, 1997

How has the industry changed throughout the years? What is Internet Advertising? Types of ads Types of sites that show ads Definition Company A has some sort of content to draw audience Company A sells (in other words, supplies) this audience to company B so that B can advertise their products

How has the industry changed throughout the years? Supply has increased Demand has increased

How has the industry changed throughout the years?

What Advertising Models Have Been Most Successful? Successful Models GSP “generalized second-price auction” Advertisers bid for certain keywords with maximum willingness to pay for a click Each bidder pays the next highest advertiser’s bid. Yahoo! Yahoo! only ranks advertisers in decreasing order of bids and charges the next highest advertiser’s bid. This model ignores other factors that might be relevant to advertisers Google AdWords computes an advertiser’s “rank number,” which is based on Click Through Rate and other factors. Ads get ranked by this number. Advertisers are then charged an amount that would sufficiently exceed the next advertiser’s rank number. Google

Increasing value of alphabet for advertisers Brands who integrate this method receive more impressions The Quest for a Shoe with Google Instant S – Skype appears on the whole first page Sh – Shoprite appears on the whole first page Sho – Still Shoprite Shoe – Zappos, Payless, DSW A consumer could be led to another product and not even end up shopping for what they originally intended. This places huge value on bidding on letters. Ensure your ad shows up on pages where your letters appear. What Advertising Models Have Been Most Successful?

Industry shifting ADV budget to internet advertising Become a chicken fun! Consumers look for ads instead of ads reaching consumers Community Building web pages

Consumers Do Not Want to View Ads Internet Privacy & Data Security Concerns Consumer Distrust Over saturation Main concerns for advertisers

Effectiveness Does having more ads necessarily translate into higher sales/profits?

Main concerns for advertisers Ethics Manipulating search results

Points, Badges, Quests

Big Data Big Data has been around for a long time between credit card transactions, phone call records and financial markets. Companies like AT&T, Visa, Bank of America, Ebay, Google, Amazon and more have massive databases they mine for competitive advantage. But lately, Big Data is finding its way to the smallest startups. The Web and cloud computing brings Big Data everywhere. But what exactly is pushing Big Data forward?

Socialnomics

Inverting the paradigm

Historic Contests

Sources Sources: Overviews: Timeline: Google: Microsoft: AOL Early Market information:

Sources Technology: Graphics: