1. Online Advertising Speaker: Jerry Gao Ph.D. San Jose State University email: jerrygao@email.sjsu.edu URL: http://www.engr.sjsu.edu/gaojerry Dec., 2000

2. Introduction to Web Advertising Introduction to Advertising Introduction to Web Advertising Web Advertising Methods Web Advertising Business Models Web Advertising Technologies Web Advertising Tools Web Advertising Business Companies Samples of Business Financial Information

3. Introduction to Advertising Definition of advertising: - Advertising is a form of mass communication, it is also nonpersonal. - Advertising is paid nonpersonal communication from an identified sponsor using mass media to persuade or influence an audience. - Advertising is one of the four marketing techniques (advertising, sales promotion, public relations, personal selling) Types of Advertising: Brand advertisingRetail advertising Political advertisingDirectory advertising Direct-response advertising Business-to-business advertising Institutional advertising Public service advertising

4. Introduction to Advertising Types of advertising: - Brand Advertising: (Irrand advertising) - The most visible type of advertising is national consumer advertising. - It focuses on the development of a long-term brand identity and image. - Retail Advertising: - It is local and focuses on the store where a variety of products can be purchased or where a service is offered. Retail advertising emphasizes price, availability, location, and hours of operation. - Political Advertising: - It is used by politicians to persuade people to vote for them and therefore is an important part of the political process in democratic countries. - Directory advertising: (such as yellow pages) - It is used to help people to find out how (where) to buy a product or service.

5. Introduction to Advertising Types of advertising: - Direct-response advertising: - It can use any advertising medium, including direct mail, but the message is different from that of national and retail advertising in that it tries to simulate a sale directly. - Business-to-business advertising: - It includes messages directed at retailers, wholesalers, and distributors, as well as industrial purchasers and professionals such as lawyers and physicians. - Institutional advertising: (corporate advertising) - It focuses on establishing a corporate identity or winning the public over to the organization’s point of view. - Public service advertising (PSA): - PSA communicates a message on behalf of some good cause. - These advertisements are created for free by advertising professionals, and the space and time are donated by the media.

6. Four Major Roles of Advertising: Marketing Role - target market, marketing communication Communication Role - a form of mass communication. It transmits different types of market information to match buyers and sellers in the marketplace. Economic Role - two major schools of thought concerning the effects of advertising on the economy: a) market power, b) market competition. - market power school “as a persuasive communication tool to distract consumers’ attention from the price of product.” - market competition school “ as a source of information that increases consumers’ price sensitivity and stimulates competition.” Societal Role - inform us about new improved products - teach us how to use these innovations - help us compare products and features - make informed consumer decisions. Introduction to Advertising

7. Functions of Advertising: Direct action versus indirect action - Direct-action advertising is intended to produce a quick response. Such as, coupon with an expiration date, or a sale with expiration date, 800 number, a mail-in-order. - Indirect-action advertising is designed to stimulate demand over a longer period of time. Primary versus selective - Primary advertising aims to promote demand for a generic product. - Selective advertising attempts to create demand for a particular brand. Commercial versus noncommercial - Commercial advertising promotes a product with the intent of making a profit. - Noncommercial advertising tends to be sponsored by organizations that are not in business to make money. Introduction to Advertising

8. The Four Major Players on Advertising: The advertiser - the individual or organization that usually initiates the advertising process. He/She makes the final decisions on: - where, whom the Ad will be directed to - the used media - the budget, size and location - the Ad schedule and duration The advertising agency The media The vendor Introduction to Advertising The Types of Advertisers: Manufactures - product makers Resellers - wholesalers or retailers Individuals- individual advertisers Institutions- institutions, government agencies, and social groups.

9. Introduction to Advertising The Four Major Players on Advertising: The advertiser - the individual or organization that usually initiates the advertising process. He/She makes the final decisions on: - where, whom the Ad will be directed to - the used media - the budget, size and location - the Ad schedule and duration The advertising agency The media The vendor

10. Forester Research, Inc. estimates $1.5 billion was spent on Internet advertising worldwide in 1998. $5.5 billion will be spent in 2002, and that amount will increase to $22 billion in 2004. The Web Advertising Industry Introduction to Web Advertising

11. Standard Banner Size for Web Advertising

12. 468 * 60 pixels Full Banner 397 * 72 pixels Full Banner / Vertical Navigation Bar 234 * 60 pixels Half Banner 120 * 240 pixels Vertical Banner 120 * 90 pixels Button #1 125 * 125 pixels Square Button 120 * 60 pixels Button #2 88 * 31 Standard Banner Size for Web Advertising

13. Web Advertising Methods AD Email AD Banner Directed AD Dynamic AD Promotional Programs Push ADs Membership Search Engine or Portal Rich Media AD Superstitial AD Transitional Multi-player Games

14. Web Advertising Business Models Ad Serving: - Providing a systematic process and services for businesses to publish advertisements on the web Ad Networking: -Ad Networks are third parties that take a portion of the advertising inventory and sell it monthly to appropriate sites.

15. Web Advertising Business Models Classified AD: - Providing a systematic process and services for businesses to publish their advertisements on the web in web sites. Ad Exchange: - An AD brokerage marketplace is set to support AD space exchanges and service over the Internet between different web sites. Media Auction Sites: - Providing online trading service for businesses to offer the remaining advertising inventory to the highest bidder over the Internet

16. Web Advertising Solutions For Businesses: Advertising Process Management: AD Inventory Management AD Process Management AD Planing & Scheduling AD Tracking & Reporting AD Performance Analysis Advertising Services: AD generation service AD campaign and placement service AD delivery, monitor, and tracking

17. Web Advertising Solutions For Publishers: AD Space Management: AD Inventory Management AD Space Process Management AD Space Planing & Scheduling AD Space Tracking & Reporting AD Space Trading: AD Space for Sell and for Rental AD Space Campaign AD Space Auction &Negotiation

18. Web Advertising Solutions For Advertising Agency: AD Marketing Process Management: AD Marketing Plan Advertising Process Management Advertising Community Support: Search or AD Space Search AD Service Business Search Advertising Yellow Page AD Business Association Support AD/AD Space Brokerage: AD or AD Space Champing AD or AD Space Auction

19. Web Advertising Technologies Internet-Based Technology: HTML-Based Banners JavaScript-Based Dynamic Graphics Image-Based Static/Dynamic Banners VML-Based Graphics Email SVG Rich Media: Voice, Video, Text

20. Comparison of Web Advertising Methods

21. Comparison of Web and Traditional Media

22. Billing Methods A. Cost Per Impression (CPM) Banner B. Cost Per Click (CPC) Banner C. Pay Per Sales (Affiliate Web Sites) D. Pay Per Period (Online Sponsorship)

23. Sample Ad Rate Guide -Sample rates as of June, 2000 Nat’l Newspaper Site E-Mail NewslettersSearch Engine/Portal

24. Major Players in Web Advertising AD Networking Players: 24/7 Media AdForce AdKnowledge DoubleClick Flycast MatchLogic AD Serving Players: Accipiter AdForce AdKnowledge DoubleClick Net Gravity Real Media’s Open AdStream Media Auction Site Players: AdAuction AdOutlet

25. Company3 Month Period Ended in 4/00 V.S. DoubleClick240% increase Engage1,188% increase 24/7 Media287% increase VaueClick400% increase Company3 Month Period Ended in 4/00 V.S. DoubleClick179% increase Engage1,033% increase 24/7 Media229% increase VaueClick450% increase Company3 Month Period Ended in 4/00 V.S. DoubleClick171% increase Engage1,330% increase 24/7 Media372% increase VaueClick665% increase Operating Expenses Cost of Revenue Financial Status of Web AD Companies

26. Web Advertising - Problems and Issues Problems: How to measure of effectiveness of online advertising? - Evaluation formula and metrics. How to track, measure, and analyze the AD viewers? - AD targeting - Measurement and analysis of AD viewers Standardization of web advertising: - Standardization of web advertising protocols - Standardization of web advertising management processes - Standardization of web AD in different technologies New technologies and methods to support web advertising in: - AD display and presentation - AD tracking and analysis - AD management and control