Published on November 9, 2007
Online Advertising Latest Developments and Trends Ahmad Anvari I-AIM Visiting Lecturer Sharif University of Technology October 2007
Agenda History and Background Online Advertising Type and Pricing Models Major Players Recent M&A Future and Trends Online Advertising ٢
History and Background 90s Early 2000 2005 •Banner Ads •Text Ads •Display •Classifieds (Contextual) •Search •Email •Multimedia (rich) Marketing •Text ads Online Advertising ٣
Value Web is becoming hot again… Online Advertising is primarily responsible Online Advertising ٤
Online Advertising Revenue and Growth Source: PwC/IAB Internet Advertising Revenue Report (www.iab.net) Online Advertising ٥
Online Advertising Revenue and Growth $10BN in first FH 2006 FH 2007 Search 40% ($3,164) 41% ($4,097) half of 2007 Classifieds 20% ($1,582) 17% ($1,699) – Iran’s GDP is Referrals/Lead Generation 7%($592) 8% ($799) $212BN E-mail 2% ($158) 2% ($200) Display Related: 31% ($2,413) 32%($3,198) 27% increase – Rich Media (Includes Video) 6% ($475) 8%($799) comparing to – Ad Banners / Display Ads 21% ($1,622) 21%($2,099) 2006 – Sponsorships 4% ($316) 3% ($300) – Slotting Fees <1% (<1$) <1% (<$1) More than $5BN in the 2nd quarter Source: The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) Online Advertising ٦
Types of Online Advertising Text (contextual) – Search – Web – Inline Display – Static – Rich Media – Pop-up/Pop-under Online Advertising ٧
Behavioral Advertising Knowledge of each user’s behavior and demographic information Targets users based on their browsing history and other attributes Location, Age, Gender, Salary, etc. Online Advertising ٨
Pricing Models CPM – Advertiser pays when an ad is shown to a user Performance – CPC Advertiser pays when users click on an ad – CPA Advertiser pays when a click leads to an action Sometimes even a click is not needed Online Advertising ٩
Pricing Models Revenue Breakdown Model FH 2006 FH 2007 CPM 48% ($3,797) 45%($4,497) Performance Deals 47% ($3,717) 50%($4,997) Hybrid 5% ($395) 5% ($499) Online Advertising ١٠
Contextual Advertising Web pages crawled by the Advertising Network Intelligent algorithms parse and understand the content Ads that are relevant to the content are chosen real-time by the ad servers Google AdSense, Kanoodle, IntelliText (Inline) Online Advertising ١١
Contextual Advertising Example Online Advertising ١٢
Contextual Advertising Gone Wrong Online Advertising ١٣
Contextual Advertising Gone Wrong Online Advertising ١٤
Contextual Advertising Gone Wrong Online Advertising ١٥
Major Players Google Yahoo! Network America Online Microsoft Network Turn TribalFusion AdBrite Online Advertising ١٦
Major Players - Google Contextual Advertising – Text, Display, Rich Media Products – AdSense – Publisher Network – AdWords – Advertiser Network Recent Acquisitions – DoubleClick: $3BN Online Advertising ١٧
Major Players – Yahoo! New Platform: Panama Has demographic information of a large network of Yahoo! Users Has started building verticals: finance, travel, women, college, sports, auto Recent Acquisitions – RightMedia: $680MM Online Advertising ١٨
Major Players – AOL Led by Advertising.com – Largest reach (90% US Internet Users) Recent Acquisitions – LighteningCast: Video Advertising – 3rd Screen Media: Mobile Advertising – ADTECH: Ad Serving Technology – Tacoda: Behavioral Targeting Online Advertising ١٩
Major Players – MSN Microsoft AdCenter Recent Acquisitions – aQuantive: $6BN Microsoft’s biggest acquisition by a large margin – A 1.6% stake in facebook for $240MM Online Advertising ٢٠
Recent M&A aQuantive (MSN): $6BN DoubleClick (Google): $3BN RightMedia (Yahoo!): $680BN AdTech, TSM, LighteningCast (AOL) Online Advertising ٢١
Future and Trends Mobile Advertising is hot Video (pre-roll, post-roll, and in-video) advertising is next Contextual Advertising will continue to grow New technologies allow behavioral targeting Blog Advertising (small networks) Online Advertising ٢٢
Questions? firstname.lastname@example.org Online Advertising ٢٣
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